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MONTANA SULPHUR & CHEMICAL COMPANY, Petitioner, v. UNITED 

STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. MONTANA 

SULPHUR & CHEMICAL COMPANY, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

No. 02-71657, No. 08-72642

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

666 F.3d 1174; 2012 U.S. App. LEXIS 1056; 42 ELR 20019; 73 ERC (BNA) 1961

August 31, 2011, Argued and Submitted, Seattle, Washington 

January 19, 2012, Filed

SUBSEQUENT HISTORY: US Supreme Court certiorari denied by Mont. Sulphur & Chem. Co. v. Epa, 2012 

U.S. LEXIS 7260 (U.S., Oct. 1, 2012)

PRIOR HISTORY: [**1] 

 On Petition for Review of an Order of the Environmental Protection Agency. EPA No. 

EPA-R08-OAR-2006-0098.

DISPOSITION: PETITIONS DENIED.

COUNSEL: Robert K. Baldwin, Goetz, Gallik & Baldwin, PC, Bozeman, Montana, for the petitioner.

Martin F. McDermott, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C., for the respondent.

Leslie Sue Ritts, Ritts Law Group, PLLC, Alexandria, 

Virginia, for Amicus National Environmental Development Association's Clean Air Project.

Russell S. Frye, FryeLaw, PLLC, Washington, D.C., for 

Amicus American Petroleum Institute.

JUDGES: Before: Michael Daly Hawkins and M. Margaret McKeown, Circuit Judges, and John W. Sedwick, 

District Judge.* Opinion by Judge Hawkins.

* The Honorable John W. Sedwick, United 

States District Judge for the District of Alaska, 

sitting by designation.

OPINION BY: Michael Daly Hawkins

OPINION

[*1180] HAWKINS, Senior Circuit Judge:

In these appeals, consolidated for decision,1 we address the propriety of various actions taken by the United 

States Environmental Protection Agency ("EPA") under 

the Clean Air Act with respect to Montana air quality 

from 1993 to 2008. In No. 02-71657, Montana Sulphur 

& Chemical Company ("Montana Sulphur") seeks review of the EPA's [**2] final rule which partially disapproved a proposed revision to Montana's State Implementation Plan ("SIP") governing sulfur dioxide ("SO2") 

emissions. 67 Fed. Reg. 22,168 (May 2, 2002). Montana 

Sulphur also seeks review of a prior EPA action in 1993 

known as a "SIP Call," which preceded the formal SIP 

revision and started the review process. 58 Fed. Reg. 

41,430 (Aug. 4, 1993). The final agency action incorporated documents supporting its SIP Call--in particular 

EPA reliance on various modeling calculations--into the 

administrative record for partial disapproval of the SIP.

1 We initially denied the EPA's motion to 

consolidate case No. 08-72642 with 02-71657, 

but ordered the cases be calendared together after 

briefing. Montana Sulphur now acknowledges 

that the cases involve "many of the same issues" 

and that relief on the 02-71657 petition "might 

wholly or partially moot" the FIP challenge. We 

have therefore decided to address both appeals in 

a single opinion.

In No. 08-72642, Montana Sulphur seeks review of 

the EPA's April 2008 final rule promulgating a Federal 
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42 ELR 20019; 73 ERC (BNA) 1961

Implementation Plan ("FIP") for the State of Montana's 

SO2 emissions. 73 Fed. Reg. 21,418 (April 21, 2008). 

The FIP is designed [**3] to fill perceived gaps the 

EPA identified in the SIP. This later appeal focuses on 

the EPA's authority to promulgate the FIP and the reasonableness of certain specific requirements set forth 

therein. Because we conclude that the agency did not act 

arbitrarily or capriciously with respect to either the SIP 

or FIP, we deny both petitions for review.

STATUTORY BACKGROUND

The Clean Air Act directs states to develop implementation plans--SIPs--that "assure" attainment and 

maintenance of national ambient air quality standards 

("NAAQS") through enforceable emission limitations. 42 

U.S.C. §§ 7407(a), 7410(a)(2)(A). The EPA has developed a list of pollutants that cause or contribute to air 

pollution that "may reasonably be anticipated to endanger public health or welfare." 42 U.S.C. § 7408(a)(1)(A). 

For each criteria pollutant, the EPA sets NAAQS sufficient to protect public health with an adequate margin of 

safety and to protect the public welfare, 42 U.S.C. § 

7409(b), pursuant to which it has promulgated NAAQS 

for SO2, 40 C.F.R. §§ 50.4 & 50.5.

A SIP must "provide for the performance of such air 

quality modeling as the Administrator may prescribe for 

the purpose of predicting the effect on ambient [**4] air 

quality of any emissions of any [NAAQS-regulated] air 

pollutant." 42 U.S.C. § 7410(a)(2)(K)(i). As reflected in 

relevant regulations, emissions limitations may be 

demonstrated through modeling. 40 C.F.R. § 

51.112(a)(1) ("adequacy of a control strategy shall be 

demonstrated by means of applicable air quality models, 

data bases, and other requirements specified in appendix 

W . . . (Guideline on Air Quality Models)"). There is also 

a Federal Reference Method for measuring ambient 

[*1181] levels of SO2 pollutants. 40 C.F.R. § 58.1. The 

EPA uses this data and engages in formal notice-and-comment rulemaking to designate "attainment 

areas," "nonattainment areas," and areas that are not 

classifiable. 42 U.S.C.§ 7407(d).

The Clean Air Act gives the EPA significant national oversight power over air quality standards, to be exercised pursuant to statutory specifications, and provides 

the EPA with regulatory discretion in key respects relevant to SIP calls and determinations about the attainment 

of NAAQS. Yet, the Act also anticipates states' shared 

responsibility for air quality control. 42 U.S.C. §§ 

7407(a), 7410 (giving states duty of developing implementation plans). The Clean Air Act "left with [**5] 

the states, so long as the [NAAQS] were met, the power 

to determine which sources would be burdened by regulation and to what extent." Union Elec. Co. v. EPA, 427 

U.S. 246, 269, 96 S. Ct. 2518, 49 L. Ed. 2d 474 (1976) 

(emphasis added); see also Train v. Natural Res. Def. 

Council, Inc., 421 U.S. 60, 98, 95 S. Ct. 1470, 43 L. Ed. 

2d 731 (1975). A state must develop implementation 

plans that will satisfy national standards; if it does so, it 

may "adopt whatever mix of emissions limitations it 

deems best suited to its particular situation." Train, 421 

U.S. at 79. But when the state plan is inadequate to attain 

and maintain NAAQS, then the EPA is empowered to 

step in and fill any deficiencies with a FIP. 42 U.S.C. § 

7410(c).

PROCEDURAL BACKGROUND

The dispute between Montana Sulphur and the EPA 

is long-standing, spanning over seventeen years and centering on regulations governing emissions from industrial

facilities located near Billings, Montana. Montana Sulphur operates a sulfur recovery plant northeast of

Billings. The plant is located next to a petroleum refinery 

owned by ExxonMobil. Pipes from the refinery bring a 

continuous stream of high sulfur gas--a by-product of the 

refining process--to Montana Sulphur. Montana Sulphur 

recovers 95-98% of the sulfur [**6] as a marketable 

product. The remainder is emitted in the form of SO2. 

SO2 is a "highly reactive colorless" gas primarily derived 

from fossil fuel combustion, "best known for causing 

'acid rain' at elevated concentrations in the ambient air." 

American Lung Ass'n v. EPA, 134 F.3d 388, 389, 328 

U.S. App. D.C. 232 (D.C. Cir. 1998).

In 1978, the EPA made a formal determination that 

the Billings area met the primary standards for SO2. 43 

Fed. Reg. 40,412 (Sept. 11, 1978). Neighboring Laurel 

was designated "nonattainment" in 1978, due to measured and modeled violations of the primary SO2 standards. 43 Fed. Reg. 8,962 (Mar. 3, 1978). Dispersion 

modeling conducted by the EPA during the 1970s, however, indicated that potential violations of the SO2 

standards were also occurring in the Billings area due to 

SO2 emissions from a variety of sources, including 

Montana Sulphur.

In 1980, the EPA approved Montana's SIP for attaining and maintaining SO2 NAAQS in the 

Billings/Laurel area. 45 Fed. Reg. 2,034 (Jan. 10, 1980). 

Actual monitoring subsequent to that approval showed 

some individual "exceedances" of the 24-hour SO2 

standard and one 3-hour "violation" in 1985. Based on 

monitored emissions, SO2 levels remained relatively 

[**7] constant throughout the 1980s, decreasing slightly 

in 1983-86, then rising again in 1989.

In 1990, the City of Billings ("Billings" or the 

"City") hired a contractor to perform dispersion modeling for the Billings area. The Montana Department of 

Health and Environmental Sciences ("MDHES") reviewed the contractor's report, which indicated [*1182] 
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42 ELR 20019; 73 ERC (BNA) 1961

"potential violations of federal SO2 standards at both 

actual and allowable emissions levels" and predicted 

"high concentrations in areas where ambient monitoring 

had not been conducted." One year later, Yellowstone 

Energy Limited Partnership performed dispersion modeling for its permit application and similarly identified 

potential violations of national SO2 standards in the 

Billings area.

Citing these studies, the EPA advised MDHES in 

1992 that its SIP might be inadequate and in need of revision. MDHES in turn notified the City that the emissions from industrial process units were not adequately 

regulated by the existing SIP. It also noted that "current 

monitoring sites are not at the highest predicted locations, nor could we locate enough monitors to provide 

the spatial coverage represented in the model." A revised 

SIP, it noted, would ease permitting [**8] of new industries in the Billings/Laurel area.

The EPA then issued a formal SIP Call in 1993, 

finding the existing SIP "substantially inadequate" to 

attain and maintain NAAQS and asking MDHES to 

submit revisions within eighteen months; the EPA noted 

that the SIP Call was "a preliminary step in an ongoing 

process" and "not subject to judicial review." Notice of

the SIP Call was published August 4, 1993. 58 Fed. Reg. 

at 41,430.

MDHES thereafter developed a protocol for the SIP 

revisions that incorporated EPA-approved models. 

MDHES submitted various revisions of the SIP to the 

EPA in 1996, 1997, 1998, and 2000. 67 Fed. Reg. at 

22,171, 22,175.

In 1999, the EPA proposed action on the SIP revisions, 64 Fed. Reg. at 40, 791, and took final actions on 

the SIP on May 2, 2002 (67 Fed. Reg. 22,168) and May 

22, 2003 (68 Fed. Reg. 27, 908), approving most of the 

SIP, but disapproving a number of specific items affecting Montana Sulphur, including (1) the attainment 

demonstration due to issues with emission limits, inappropriate stack height credit, and lack of submitted emission limits on flares; (2) the emission limits for Montana 

Sulphur's Sulfur Recovery Unit 100-meter stack and the 

stack height [**9] credit supporting those limits; and 

(3) the emission limits for Montana Sulphur's 30-meter 

and auxiliary vent stacks.

Montana Sulphur petitioned for review of the EPA's 

May 2, 2002 SIP action. That case, No. 02-71657, was 

stayed pending the EPA's promulgation of a FIP to remedy the SIP. In 2006, the EPA published its proposed 

FIP. 71 Fed. Reg. 39,259 (July 12, 2006). Montana Sulphur and others commented on that proposal. In 2008, 

the EPA promulgated its final FIP. 73 Fed. Reg. at 

21,418. In case No. 08-72642, Montana Sulphur challenges, among other things, the timeliness of the FIP, the 

limits on flares, and the feasibility of flare monitoring 

technology required by the FIP. Neither the State of 

Montana nor any party other than Montana Sulphur has 

challenged the SIP Call or the EPA's SIP or FIP actions.

STANDARDS OF REVIEW

When reviewing the EPA's decision regarding a SIP 

or its promulgation of a FIP:

 [T]he court may reverse any such action found to be--(A) arbitrary, capricious, 

an abuse of discretion, or otherwise not in 

accordance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdiction, authority, or limitations or short 

[**10] of statutory right . . . .

42 U.S.C. § 7607(d)(9)(A)-(C). We afford [*1183] 

Chevron2 deference to issues of statutory construction; if 

the statute is ambiguous, we ask whether the agency's 

answer is based on a permissible construction of the statute. MacClarence v. EPA, 596 F.3d 1123, 1130 (9th Cir. 

2010).

2 Chevron U.S.A., Inc. v. Natural Res. Def. 

Council, Inc., 467 U.S. 837, 842-43, 104 S. Ct. 

2778, 81 L. Ed. 2d 694 (1984). Agency actions 

which have gone through notice and comment are 

typically reviewed for Chevron deference, see 

United States v. Mead Corp., 533 U.S. 218, 230, 

121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001), but 

those which have not are still afforded Skidmore

deference, which focuses on whether the agency 

has taken a position that has the "power to persuade," see Skidmore v. Swift & Co., 323 U.S. 

134, 140, 65 S. Ct. 161, 89 L. Ed. 124 (1944).

We also give deference to an agency's interpretation 

of its own regulations, Wickland Oil Terminals v. 

Asarco, 792 F.2d 887, 891-92 (9th Cir. 1986), and to the 

evaluation of complex scientific data within its area of 

expertise, Envtl. Def. Ctr., Inc. v. EPA, 344 F.3d 832, 

869 (9th Cir. 2003). However, we do not simply rubber 

stamp an agency's decision, but "must carefully review 

the record to ensure that agency decisions are founded on 

a reasoned [**11] evaluation of the relevant factors." 

Vigil v. Leavitt, 381 F.3d 826, 833 (9th Cir. 2004) (citation omitted).

DISCUSSION

I. The SIP Call
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A. Justiciability

One of Montana Sulphur's primary arguments concerns the EPA's authority to make the SIP Call in the first 

place, because, in its view, the existing SIP was not substantially inadequate because there were no monitored 

violations of NAAQS in the area, only predicted violations based on computer modeling. This issue, however, 

raises a number of threshold justiciability concerns. The 

SIP Call is not a final agency action and did not impose 

any specific obligations on Montana Sulphur. The SIP 

Call was only an "act of limited consequence preliminary 

to other events anticipated by the [Clean Air] Act." Illinois v. EPA, 621 F.2d 259, 261 (7th Cir. 1980). As the 

Sixth Circuit has elaborated:

 [T]he issuance of notice of deficiency 

and the request for a revised SIP is not final agency action subject to judicial review. It in no way alters the obligations of 

the parties in either a practical or legal 

sense. It is impossible to anticipate which 

of the many available alternative strategies the State and the EPA will pursue. . . 

. Until the State responds [**12] to the 

EPA's request for revision, and the EPA's 

subsequent actions become real rather 

than merely speculative, no legally cognizable harm has been visited.

Greater Cincinnati Chamber of Commerce v. EPA, 879 

F.2d 1379, 1383 (6th Cir. 1989).

Thus, the EPA is correct to the extent it argues that 

at the time of the SIP Call there was no final agency action, see Bennett v. Spear, 520 U.S. 154, 177-78, 117 S. 

Ct. 1154, 137 L. Ed. 2d 281 (1997), the issue was not yet 

ripe, see Abbott Labs. v. Gardner, 387 U.S. 136, 148-49, 

87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967), and Montana 

Sulphur had not suffered an "actual or imminent" as opposed to a "conjectural or hypothetical" injury that would 

suffice for standing, see Friends of the Earth, Inc. v. 

Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180, 

120 S. Ct. 693, 145 L. Ed. 2d 610 (2000); see also Bova 

v. City of Medford, 564 F.3d 1093, 1095-96 (9th Cir. 

2009) (noting how ripeness and the injury prong of

standing are interrelated).

This does not, however, mean that the alleged problems with the SIP Call are [*1184] forever beyond 

challenge. Montana Sulphur filed its petition for review 

after the EPA both made the SIP Call and issued its partial approval/partial disapproval of the SIP. There is no 

dispute that the SIP disapproval was a final agency action [**13] and that Montana Sulphur has standing to 

challenge this action.

The EPA's 2002 disapproval, in turn, is necessarily 

predicated on the validity of the initial SIP Call and the 

modeling assumptions made therein, which Montana 

Sulphur also seeks to challenge. Compare 58 Fed. Reg. 

at 41,430 with 67 Fed. Reg. at 22,173, 22,183-22,189. 

Because Montana Sulphur's claim that the EPA exceeded 

its statutory authority by issuing the SIP Call in the first 

place would necessarily invalidate the 2002 SIP disapproval as well, its challenge to the SIP Call may be 

brought at this time. See Virginia v. EPA, 108 F.3d 1397, 

1414, 323 U.S. App. D.C. 368 (D.C. Cir. 1997), as modified, 116 F.3d 499, 325 U.S. App. D.C. 155 (D.C. Cir. 

1997) (striking down a SIP Call which was based on a 

final agency rule that exceeded the EPA's authority under 

the Clean Air Act); see also Greater Cincinnati, 879 

F.2d at 1382 (holding claim regarding SIP Call was 

premature "[u]ntil the State responds to the EPA's request for revision, and the EPA's subsequent actions become real rather than merely speculative") (emphasis 

added).

B. Merits

Although Montana Sulphur has standing to challenge the underlying SIP Call as part of its challenge to 

the final agency disapproval in 2002, [**14] we conclude that the EPA did not exceed its authority under the 

Clean Air Act by issuing the SIP Call. The EPA lacks 

authority to issue a SIP Call unless the SIP is "substantially inadequate." 42 U.S.C. § 7410(a)(2)(H), (k)(5). 

The thrust of Montana Sulphur's argument is that the SIP 

Call was improper because the Montana SIP was not 

"substantially inadequate to attain or maintain" the SO2 

NAAQS, and did satisfy all of the statutory criteria of 42 

U.S.C. § 7410(a)(2).

Montana Sulphur contends that the EPA could not 

properly rely on predicted violations of NAAQS that 

were modeled in the Billings/Laurel area, because the 

EPA did not provide any reason to believe that there was 

an actual, monitored SO2 violation in any location in the 

Billings area. Specifically, Montana Sulphur argues that 

the EPA's reliance on dispersion modeling "provides an 

unrealistic picture of reality because it assumes that every single facility is always emitting as much pollution as 

it can possibly emit during every hour of the modeling 

run" and under "worst case" weather conditions.

Contrary to Montana Sulphur's contentions, the EPA 

did not ignore actual SO2 monitoring data when it issued 

the SIP Call. Rather, [**15] the EPA expressly addressed these results and explained their shortcomings. 

In its Technical Support Document ("TSD"), which explained the rationale for the call, the EPA explained that 

it was "not practical, given the number and complexity of 

sulfur dioxide sources, to install a sufficient number of 

monitors to provide the spatial coverage provided by air 
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42 ELR 20019; 73 ERC (BNA) 1961

quality dispersion models." In fact, much of the data collected prior to the call (throughout the 1970s and '80s) 

came from a monitoring network of just three to four 

sites in the Billings and Laurel area. The EPA further 

explained that the existing monitors were not located in 

areas of maximum concentration, and that areas "with the 

most severe exceedances according to the studies have 

never been monitored--or were once monitored but no 

longer."

The EPA further addressed Montana Sulphur's complaint when it partially disapproved the SIP in 2002:

 [*1185] Monitoring is not more accurate than computer modeling, except for 

determining ambient concentrations under 

real-time conditions at a discrete location. 

Monitoring is limited in time as well as 

space. Monitoring can only measure pollutant concentrations as they occur; it 

cannot predict future [**16] concentrations when emission levels and meteorological conditions may differ from present 

conditions. Computer modeling, on the 

other hand, can analyze all possible conditions to predict concentrations that may 

not have occurred yet but could occur in 

the future.

67 Fed. Reg. at 22,185. See Northern Plains Res. Council v. EPA, 645 F.2d 1349, 1362-63 (9th Cir. 1981) (reliance on model without validation arbitrary only if "EPA 

ignored reliable data that so undermined the EPA model 

projections . . . that reliance on the model was irrational"); Republic Steel Corp. v. Costle, 621 F.2d 797, 805 

(6th Cir. 1980) (approving use of modeling to predict 

future violations and incorporating "worst-case" assumptions regarding weather and full-capacity operations of 

pollutant sources).

As the EPA also points out, the Clean Air Act expressly recognizes modeling as an appropriate regulatory 

tool. 42 U.S.C. § 7410(a)(2)(K)(i) requires SIPs to provide for "the performance of such air quality modeling as 

the Administrator may prescribe for the purpose of predicting the effect on ambient air quality of any emissions 

of any air pollutant for which the Administrator has established a national ambient air quality [**17] standard."

Montana Sulphur argues that the 1990 amendments 

to the Clean Air Act indicate a Congressional intent to 

eliminate the use of modeling. Section 7501(2) formerly 

defined a "nonattainment area" as "an area which is 

shown by monitored data or which is calculated by air 

quality modeling (or other methods determined by the 

Administrator to be reliable) to exceed any [NAAQS]." 

In 1990, Congress deleted both the references to monitored data and air quality modeling, replacing them with 

a cross-reference to air quality designations in § 7407(d). 

Montana Sulphur would have a better argument if Congress had deleted the reference to modeling and left the 

reference to monitored data intact, but that is not what 

happened. In any event, the legislative history underlying 

the 1990 amendment clarifies that the EPA may rely on 

any "sound data" that is available, and that "where appropriate and necessary, the Agency may rely on modeling or on statistical extrapolation." S. Rep. No. 101-228, 

at 15 (1989).

Although the available evidence did not point unambiguously in any one direction, the EPA had plausible 

reasons for concern in 1993 about attainment given the 

proximity between Laurel (a nonattainment [**18] area) and Billings, the limitations of the existing monitoring methods, the indications from the modeling studies 

available, and the gravity of the health issues that SO2 

NAAQS seek to prevent. The EPA therefore did not act 

arbitrarily or capriciously by relying on predictive modeling to make the SIP Call in 1993.3

3 Montana Sulphur also contends that the EPA 

had no statutory authority to demand a new attainment demonstration from the State of Montana because the relevant area was not officially 

designated as a "nonattainment area." In its view, 

the EPA may only require attainment demonstrations when they are needed to assure that nonattainment areas will attain the NAAQS, and that 

the EPA should have first sought to re-designate 

the Billings area to "nonattainment" via the statutory process. 42 U.S.C. § 7407(d)(3).

However, § 7410(a)(1) requires states to 

submit SIPs that provide for the maintenance of 

NAAQS regardless of whether a nonattainment 

area has been designated; similarly, the EPA's 

authority to declare a SIP "substantially inadequate" to attain or maintain NAAQS does not 

hinge on an area's designation. 42 U.S.C. § 

7410(k)(5). We have already determined that the 

EPA did not [**19] exceed its authority by 

making the SIP Call, and it necessarily follows 

that a new attainment demonstration is a logical 

and lawful part of responding to the SIP Call.

Finally, we note that the burden of producing 

a new attainment demonstration fell solely on the 

State of Montana's shoulders, and the State did 

not object. It is unclear how Montana Sulphur 

was injured by the attainment demonstration itself, as opposed to the specific disapprovals of 

the revised SIP which are discussed below.
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[*1186] II. 2002 Partial Disapprovals of Montana 

Revised SIP

Montana Sulphur next challenges several aspects of 

the 2002 partial EPA disapproval of the revised SIP.

A. Stack Height Credits

One of the most vigorously contested issues in this 

protracted dispute is whether the EPA's computation of 

stack height was irrational. Montana Sulphur has a 

100-meter high flue stack which was constructed after 

the 1993 SIP Call. Under EPA regulations, the EPA concluded the appropriate credit for that stack should be 

only 65 meters, and that the State of Montana's modeling 

assumptions using a greater stack height were therefore 

invalid. 67 Fed. Reg. at 22,209-22,238.

The basic concern with stack height is this: a pollution [**20] source can lower ground-level, measured 

concentrations of pollution by raising the height of its 

stack and dispersing the pollution further into the atmosphere. Concerned that such a dispersion technique 

does not actually reduce the amount of pollution but 

merely spreads it around, Congress adopted 42 U.S.C. § 

7423 to regulate the use of tall stacks. See Sierra Club v. 

EPA, 719 F.2d 436, 441, 231 U.S. App. D.C. 192 (D.C. 

Cir. 1983) (discussing legislative history). Rather than 

completely prohibiting the use of tall stacks, which do 

prevent some harmful downwash of pollutants near the 

source, the statute and regulations seek to strike a balance between elevating stack height to disperse pollution 

away from a source and preventing relocation of pollution from one site to others.

The formulas thus restrict a source from receiving 

credit for stack height that is higher than a Good Engineering Practice ("GEP") figure. The applicable federal 

statutory provisions provide that emission limitations 

under an implementation plan "shall not be affected in 

any manner by . . . so much of the stack height of any 

source as exceeds good engineering practice (as determined under regulations to be promulgated by the 

[EPA.]." [**21] 42 U.S.C. § 7423(a)(1). GEP is "the 

height necessary to ensure that emissions from the stack 

do not result in excessive concentrations of any air pollution in the immediate vicinity of the source as a result of 

atmospheric downwash, eddies, and wakes which may be 

created by the source itself, nearby structures or nearby 

terrain obstacles." 42 U.S.C. § 7423(c).

The EPA regulations provide three possible options 

for calculating GEP stack height, and allow use of the 

greatest resulting number: (1) 65 meters ("de minimis" 

height); (2) the height calculated using one of two formulas ("formula height"), or (3) the height demonstrated 

using fluid modeling or field study ("above-formula" 

height). 40 C.F.R. § 51.100(ii). In the SIP, Montana had 

approved a modeling demonstration for Montana Sulphur's 100-meter stack under Option 3, and concluded 

the creditable stack height was 97.5 meters. [*1187] 

However, the EPA rejected Montana's calculations and 

maintains that the de minimis 65 meters is the proper 

stack height figure. Montana Sulphur disagrees with 

several steps in the process which led the EPA to this 

conclusion.4

4 Montana Sulphur does not directly challenge 

the calculation of "formula height" because 

[**22] Montana and the EPA addressed the stack 

height under Option 3 in the SIP. However, it 

does assert in passing that the only formula 

height in the record is 97.5 meters. This assumes 

that an 8-foot-wide, 310-foot-tall cylindrical steel 

structure which supports the flue stack can be 

considered a "nearby structure" under the regulations. The EPA, however, rejected this position. 

67 Fed. Reg. at 22,223-22,229. Because the 

opening brief contains no argument as to why this 

determination regarding the support stack is arbitrary or capricious, we deem the issue waived. 

Harger v. Dept. of Labor, 569 F.3d 898, 904 n.9 

(9th Cir. 2009). Even if we were to consider the 

issue, the EPA has fully and persuasively explained why the stack support structure is 

properly considered part of the stack itself, rather 

than a nearby structure. 67 Fed. Reg. at 

22,223-22,229.

Without inclusion of the support structure, 

the formula height is 47.8 meters. 73 Fed. Reg. at 

21,446. Thus, Montana Sulphur could achieve 

greater stack height option only through Option 1 

de minimus height or Option 3 above-formula 

modeling.

1. New Source Performance Standards ("NSPS")

The EPA rejected Montana's fluid modeling calculation of [**23] GEP stack height because, even though it 

used NSPS for the modeling, the SIP did not actually 

require Montana Sulphur to meet the NSPS emission 

rate. 67 Fed. Reg. at 22,209. Montana Sulphur concedes 

that NSPS may be used for modeling purposes, but contends that NSPS cannot be used as a substantive emissions limit, noting that the EPA regulations themselves 

state that the "allowable emission rate to be used in 

making demonstrations under this part shall be prescribed by the [NSPS] that is applicable to the source 

category . . . ." 40 C.F.R. § 51.100(kk)(1) (emphasis 

added).

The EPA's interpretation of its own regulation, 

however, is not unreasonable. The EPA explains that 
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42 ELR 20019; 73 ERC (BNA) 1961

"allowable emissions" is a term of art it uses to denote an 

enforceable emission limit, not a mere assumed emission 

rate that may be disregarded later. The EPA claims it has 

always interpreted this language to require ongoing 

compliance with the NSPS, and notes that the term is 

used elsewhere in the stack height regulations as a substantive limit. 67 Fed. Reg. at 22,210.

The EPA further points out that § 51.100(kk)(1) allows a source to demonstrate that the NSPS emission rate 

is "infeasible," and that there would be [**24] no reason to include this provision if the NSPS rate were a 

mere assumption in fluid modeling that need never actually be met. 67 Fed. Reg. at 22,212. We must review the 

provision as a whole and, where possible, effectuate 

every word. See Boise Cascade Corp. v. EPA, 942 F.2d 

1427, 1432 (9th Cir. 1991).

The EPA's interpretation is also consistent with the 

views expressed in the preamble to the EPA stack height 

regulations, which states that the applicable section "has 

been revised . . . to specify that an emission rate equivalent to NSPS must be met before a source may conduct 

fluid modeling to justify stack height credit in excess of 

that permitted by the GEP formulae." 50 Fed. Reg. 

27,892, 27,898 (July 8, 1985) (emphasis added); see Las 

Vegas v. FAA, 570 F.3d 1109, 1117 (9th Cir. 2009) (if 

regulation is ambiguous, "we consult the preamble of the 

final rule as evidence of context or intent of the agency 

promulgating the regulations").

Our conclusion is also consistent with that of the 

D.C. Circuit, which addressed [*1188] the issue of 

stack height and the use of NSPS and concluded that the 

EPA has the discretion to impose NSPS requirements in 

the "above formula" context. Natural Res. Def. Council, 

Inc. v. Thomas, 838 F.2d 1224, 1241, 267 U.S. App. 

D.C. 274 (D.C. Cir. 1988). [**25] The court noted that 

above-formula credit should be granted with the "utmost 

caution" and that the selection of the NSPS baseline was 

consistent with this admonition. Id. (internal quotation 

marks omitted).

In light of the foregoing, we conclude it was neither 

arbitrary nor capricious for the EPA to require the SIP to 

include NSPS limits consistent with the modeling 

demonstration.5

5 To the extent Montana Sulphur argues it was 

treated differently from the ExxonMobil refinery 

because that source was not required to comply 

with NSPS rates in modeling or in reality, the 

EPA explains that the different treatment was 

because ExxonMobil performed fluid modeling 

to obtain credit for a within-formula stack height 

credit, not an above-formula stack height credit. 

67 Fed. Reg. 22,215-22,216. NSPS are applied by 

EPA only in cases involving modeling to obtain 

credit for above-formula stack height credit. 67 

Fed. Reg. at 22,215; see also Thomas, 838 F.2d at 

1238-41; id. at 1232 (noting regulation's preference for within-formula stacks).

2. Ambient Air Quality Standards

In calculating stack height credit, the regulations 

only permit a source to use stack height that is necessary 

to avoid an exceedance [**26] of "an ambient air quality standard." 40 C.F.R. § 51.100(kk)(1). Therefore, 

lower exceedance standards can be used to justify a 

higher "stack height credit." A source seeking to justify a 

higher stack will seek to establish that the downwash 

pollution effects of the stack are "excessive." In such 

cases, a higher stack--which redistributes pollution over 

a wider area--is justified in order to prevent excessive 

local pollution effects. Thus, it matters whether NAAQS, 

versus more stringent state standards, control in calculating "excessive" local concentrations.

Montana Sulphur argues that Montana's emission 

rates ("MAAQS") properly could be used as benchmarks 

for ambient air quality under § 51.100(kk)(1), because 

the regulation refers only to "an ambient air quality 

standard" whereas the regulations elsewhere describe 

"primary," "secondary," and "national" standards. 40 

C.F.R. § 51.100(kk)(1) (emphasis added); 40 C.F.R. § 

51.100(c), (d), (e). The EPA, however, insists that national standards, not Montana's state-only annual SO2 

standard, should apply to the determination of what is an 

"excessive" concentration of SO2 that exceeds an "ambient air quality standard" [**27] under these regulations.

The regulation is ambiguous because it does not 

specifically identify which "ambient air quality standard" 

exceedances may be used to support the stack height. 

The preamble to the regulation, however, frequently refers to the use of NAAQS in addressing above-formula 

stack height and supports the EPA's interpretation that 

national standards should provide the benchmark. 50 

Fed. Reg. at 27,898-27,899; see Las Vegas, 570 F.3d at 

1117-18.

Again, the EPA's interpretation of its own regulation 

is reasonable. Using NAAQS versus the MAAQS as the 

applicable benchmarks for the exceedance analysis 

comports with the purposes of 42 U.S.C. § 7423: using 

NAAQS prevents states from setting standards that might 

enable local industry to justify above-formula stack 

height credits that do not meet national standards, and 

better assures that the EPA will fulfill its obligations. See 

Sierra Club, 719 F.2d at 450 (EPA must make certain 

"the standard it derives in fact fairly approximates the 

stack height level needed to protect local health and 
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42 ELR 20019; 73 ERC (BNA) 1961

[*1189] welfare; in doing so, moreover, it should err on 

the side of reducing stack height, in keeping with Congress's command that credit for stack [**28] heights 

above [formula] height be granted with 'utmost caution'").

3. Conclusion

The applicable statutory provisions leave room for 

interpretation, and the applicable stack height regulations 

lend support to the EPA's determinations on these complex points. We defer to the agency's judgment in these 

technical matters, and conclude the EPA did not act arbitrarily or capriciously by rejecting Montana's stack 

height credit calculation.

B. Flare Emissions

The EPA also disapproved the revised Montana SIP 

in part because it failed to include any numerical emissions limits on flares. "Flaring" is a practice that provides 

for equipment to immediately release gases to a device (a 

flare) for incineration. It is used in emergencies (malfunctions) and some routine circumstances, such as 

startup, shutdowns and maintenance (collectively, 

"SSM").

Montana included an emission rate assumption for 

each flare in its attainment demonstration, assuming limitations of 150 pounds of SO2 per 3-hour period.6 However, in its revised SIP, Montana imposed instead a work 

practice standard during SSM that required "best practices" be used to minimize flaring, and eliminated any 

numerical emission limitations on flares. [**29] Montana concluded it was technically infeasible to regulate 

flares through numerical limits, but agreed with the EPA 

"that the SIP is incomplete without enforceable emission 

limitations applicable to flares, and that such limitations 

should correspond to the emission rates used in the attainment demonstrations."

6 Although Montana Sulphur suggests the selection of these figures was itself random and arbitrary, the record indicates that the rates included in this modeling were the product of discussion and investigation and based on area refineries' run estimates.

Disapproval of the SIP was not arbitrary or capricious in these circumstances. Under the EPA's regulations, a proposed SIP "must demonstrate that the 

measures, rules, and regulations contained in it are adequate to provide for the timely attainment and maintenance of the national standard that it implements." 40 

C.F.R. § 51.112(a); see also Hall v. EPA, 273 F.3d 1146, 

1158 n.8 (9th Cir. 2001) ("An 'attainment demonstration' 

is a formal demonstration . . . that the pollution control 

measures contained in an implementation plan are adequate to provide for the timely attainment and maintenance of NAAQS."). Here, Montana demonstrated 

[**30] the control strategies contained in the SIP plus a 

150 lb/3-hour limit on flares would attain the NAAQS. 

The SIP itself, however, was missing the second part of 

the equation. Although Montana Sulphur contends flaring is not a significant source of SO2 emissions, the EPA 

points to modeling evidence that the flare emissions 

likely were significant (219 tons/year/source)--well 

above the 100 tons/year threshold that can trigger major 

source permitting requirements. 67 Fed. Reg. at 22,182. 

Flare emissions can affect attainment, and limits on them 

reasonably can be required, particularly where the state 

has relied on such limits to demonstrate attainment. See 

Michigan Dep't of Envtl. Quality v. Browner, 230 F.3d

181 (6th Cir. 2000) (holding EPA properly disapproved 

Michigan SIP revision that permitted automatic exemption for source that violates emissions standards if violation results from SSM and meets other standards).

[*1190] Note that at this point, we consider only 

whether the EPA acted rationally in disapproving the SIP 

for failing to include emission limitations that were otherwise part of the state's attainment demonstration. We 

discuss in further detail below, in the context of the FIP, 

[**31] whether the EPA can rationally limit flaring during SSM periods.

C. Auxiliary Vent Stacks and 30-Meter Stack

The last set of challenged SIP disapprovals involves 

Montana Sulphur's five auxiliary vent stacks and its 

30-meter stack. The SIP included a SO2 limit of 12 

lbs/3-hour period for these stacks. The EPA disapproved 

the limit because it did not restrict the sulfur content of 

the fuel burned, and because the SIP lacked a monitoring 

method that would make the limit practically enforceable. 67 Fed. Reg. at 22,170.

Montana Sulphur argues that the limit was not required because the emissions from these stacks are too 

small to have any practical effect on air quality; thus, it 

claims, monitoring methods to assure that the limit is met 

are unnecessary. While the EPA cannot require a state to 

adopt a particular control measure, see Virginia, 108 

F.3d at 1407-08, the EPA has the power to assure that a 

SIP will achieve NAAQS, 42 U.S.C. § 7410(a)(2), and 

the Clean Air Act prohibits it from approving a SIP that 

would interfere with attainment, see Browner, 230 F.3d 

at 185.

The State of Montana included the limit in its SIP as 

a control strategy. The EPA is thus not requiring Montana to adopt a [**32] particular control measure, but 

requiring Montana to include a monitoring method only 

where it relies upon such limits in its SIP for an attain-
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42 ELR 20019; 73 ERC (BNA) 1961

ment demonstration, which in turn was designed to assure that it achieved NAAQS. Thus, it was reasonable for 

the EPA to insist that the limit be enforceable. See also 

Pennsylvania v. EPA, 932 F.2d 269, 272 (3d Cir. 1991) 

("[S]tandards cannot be maintained unless the measures 

taken to achieve them are enforceable.").

III. The FIP

A. Timeliness

Montana Sulphur argues that the EPA lost its authority to promulgate a FIP when it failed to act within 

two years, as set forth in 42 U.S.C. § 7410(c).7 Section 

7410(c)(1)(B) indicates that the EPA "shall promulgate a 

Federal implementation plan at any time within 2 years 

after" disapproval or partial disapproval of a SIP. While 

this is certainly an "explicit deadline," as opposed to a 

more general requirement such as "after reasonable notice and public hearings," see generally General Motors 

Corp. v. United States, 496 U.S. 530, 110 S. Ct. 2528, 

110 L. Ed. 2d 480 (1990), it does not follow that the 

agency loses authority to act if it fails to meet that deadline. Rather, the Supreme Court has declined to treat a 

statutory requirement that an [**33] agency "'shall' act 

within a specified time, without more, as a jurisdictional 

limit precluding action later." Barnhart v. Peabody Coal 

Co., 537 U.S. 149, 158, 123 S. Ct. 748, 154 L. Ed. 2d 

653 (2003). "When, as here, there are less drastic remedies available for failure to meet a statutory [*1191] 

deadline, courts should not assume that Congress intended the agency to lose its power to act." Brock v. 

Pierce Cty., 476 U.S. 253, 260, 106 S. Ct. 1834, 90 L. 

Ed. 2d 248 (1986).

7 Although the EPA argues Montana Sulphur 

has waived this argument, we find Montana Sulphur sufficiently preserved the issue during the 

comments on the FIP proposal, where Montana 

Sulphur noted that the EPA failed to promulgate 

a FIP within two years, claimed that the EPA had 

"clear[ly] disregard[ed]" its requirement to do so, 

and asserted that numerous circumstances had 

changed, including modeling technology and 

cleanup, rendering the current action arbitrary 

and capricious.

As the Court noted in General Motors Corp., the 

Clean Air Act provides remedies for EPA inaction, including a suit to compel agency action or a request for 

reduction or elimination of penalties during any period of 

unreasonable agency delay. 496 U.S. at 542 n.4 (citing 

42 U.S.C. §§ 7604(a)(2) & 7413(b)). We hold that in 

[**34] the absence of any Congressional indication otherwise, the failure to act within two years does not utterly 

deprive the EPA of authority to promulgate the FIP. See 

Nat'l Petrochemical & Refiners Ass'n. v. EPA, 630 F.3d 

145, 155-56, 394 U.S. App. D.C. 1 (D.C. Cir. 2010).

B. Limits on Flares during SSM

Montana Sulphur contends that the EPA acted arbitrarily and capriciously by imposing numerical limits on 

flaring emissions during periods of unusual operations 

such as SSM. The FIP requires that emissions not exceed 

150 lbs/3 hrs and also provides an affirmative defense to 

penalties for emissions that are beyond the company's 

control, such as during unusual events like SSM. See 73 

Fed. Reg. at 21,431-21,437 (addressing comments to 

FIP); 73 Fed. Reg. at 21,459 (flare requirements); 73 

Fed. Reg. at 21,464-21,465 (affirmative defense).

Montana Sulphur argues that: a numerical limit on 

flaring emissions is infeasible and violations will assuredly occur, see Bunker Hill Co. v. EPA, 572 F.2d 1286 

(9th Cir. 1977); the EPA is acting inconsistently with its 

history of exempting flaring during SSM; the 150 

lb./3-hour figure is based on unsupported state modeling; 

no deference should be given to the EPA's internal excess [**35] emissions policy (the "EEP")8

; and enforcement discretion cannot compensate for infeasible 

requirements, see Marathon Oil Co. v. EPA, 564 F.2d 

1253 (9th Cir. 1977).

8 EPA, Sept. 20, 1999, State Implementation 

Plans: Policy Regarding Excess Emissions During Malfunctions, Startup and Shutdown (the 

"EEP" or the "Herman Memorandum").

In turn, the EPA responds that it must provide for 

attainment of NAAQS at all times so a total exemption 

for SSM during flaring is inadequate, see Sierra Club v. 

EPA, 551 F.3d 1019, 384 U.S. App. D.C. 96 (D.C. Cir. 

2008); it is reasonable to encourage minimizing flare 

emissions, whether they are routine or during SSM; the 

numerical requirements are generally consistent with 

longstanding internal policies such as the EEP, see Ariz. 

Public Serv. Co. v. EPA, 562 F.3d 1116, 1129 (10th Cir. 

2009); and the FIP provides relief for truly unavoidable 

emissions with an affirmative defense to penalties, 73 

Fed. Reg. at 21,464-21,465.

Although not always consistently employed, as early 

as 1983, the EPA adopted a policy requiring continuous 

compliance with the Clean Air Act requirements but acknowledging that some leeway might be necessary for 

unusual events such as SSM.9In 1999, the EPA's EEP 

[**36] identified several SIPs that did not comply with 

its policy and urged regions to review for compliance; 

this later memo also clarified that while outright exemptions for SSM were not acceptable, states could adopt an 

affirmative defense to penalties for unforeseeable and 

unavoidable exceedances, although noting that this may 
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42 ELR 20019; 73 ERC (BNA) 1961

not be appropriate for SO2 emissions where attainment 

problems are caused by one or only a few sources.

9 EPA, February 15, 1983, Policy on Excess 

Emissions During Startup, Shutdown, Maintenance and Malfunction.

[*1192] The FIP here contains such an affirmative 

defense, and the EPA indicates that other regulatory 

agencies, including the State of Colorado and Maricopa 

County, Arizona, have adopted similar criteria. 73 Fed. 

Reg. at 21,432. The EPA explains that although including the defense in the FIP is a slight deviation from the 

EEP (because in the Billings/Laurel area one or more 

sources may have the potential to cause an exceedance of 

the SO2 limits),10 experience since the time the EEP was 

issued led the agency to conclude that the elements of the 

affirmative defense provide "a very significant incentive 

for facilities to do all they can to comply with their emission [**37] limits" and that this approach--numerical 

limits plus the affirmative defense--"appropriately and 

reasonably addresses industry concerns" regarding safety. 73 Fed. Reg. at 21,435.

10 We note, therefore, that to the extent the 

EPA is being inconsistent with its prior policy, it 

actually enures to Montana Sulphur's benefit by 

providing an affirmative defense to penalties 

where the 1999 memo suggests one should not be 

provided.

Other circuits have endorsed the EPA's position that 

the Clean Air Act requires continuous compliance, including during SSM. The Sixth Circuit rejected a challenge to the EPA's disapproval of a Michigan SIP which 

had provided an automatic exemption from emission 

limits during SSM. Mich. Dep't of Envtl. Quality v. 

Browner, 230 F.3d 181 (6th Cir. 2000). The Sixth Circuit 

deferred to the EPA's interpretation of the Clean Air Act 

that broad exclusions from compliance with emissions 

limitations during SSM could jeopardize ambient air 

quality and upheld the SIP disapproval. Id. at 185; see 

also Ariz. Public Serv. Co., 562 F.3d at 1127, 1129 (rejecting challenge to EPA's "refusal to exempt excess 

emissions caused by malfunctions," and concluding that 

the policy "is a reasonable [**38] interpretation of the 

Clean Air Act" because "excess emissions resulting from 

malfunctions are violations of the Clean Air Act, for 

such emissions can interfere with attainment of the national air standards" ).

In fact, when the EPA attempted to be more lax under another section of the Clean Air Act by permitting 

good work practices for emissions during SSM events 

rather than imposing numerical emission limits, the D.C. 

Circuit concluded that the "SSM exemption violates the 

[Clean Air Act's] requirement that some section 112 

standard apply continuously," and vacated the exemption. Sierra Club, 551 F.3d at 1028.

Montana Sulphur also contends that the actual numerical limits imposed by the EPA are arbitrary, going 

beyond what is necessary to satisfy the NAAQS, claiming the EPA simply "seized upon" and accepted Montana's decision to impose a 150 lb/3-hour limitation on 

flares. However, in response to a similar comment, the 

EPA explained in its final rule:

 Emission inputs to the model were established using criteria contained in 40 

CFR part 51, Appendix W, Section 8. The 

emission limits set by the modeling analysis are based on emission rates that 

would just meet the NAAQS. They are 

not based [**39] on "arbitrary limits" 

that go "far beyond protecting the 

NAAQS". For example, with the limits 

we are establishing and the SIP limits we

approved, our modeling resulted in a high 

value of 354 [#x3bc]g/m which would 

exactly meet the 24-hour SO2 NAAQS of 

365 [#x3bc]g/m when background concentrations of 11 [#x3bc]g/m are considered.

73 Fed. Reg. at 21,439 (emphasis added).

Finally, the EPA acknowledges that violations are 

likely inevitable, but relies on the provision of an affirmative defense to [*1193] compensate for the infeasibility problem. Montana Sulphur claims that the possibility of "enforcement discretion" is insufficient to require 

compliance with an infeasible limitation. However, here 

the EPA does not rely on enforcement discretion alone, 

but specifically promulgates an affirmative defense in the 

FIP, which clearly defines the requirements to avoid 

penalties.

Although Montana Sulphur argues that there is no 

rational basis to limit the affirmative defense to penalties 

and that the defense should extend to injunctive relief as 

well, the EPA persuasively explains that "[t]here could 

be instances in which malfunctions are unavoidable 

based on current plant layout and operating parameters 

but in which some [**40] form of corrective action 

would still be appropriate" and that "it is reasonable to 

retain the authority to seek injunctive relief for all exceedances of emission limits so that we remain able to 

protect the NAAQS, regardless of source 'culpability' for 

any specific exceedance." 73 Fed. Reg. at 21,435-21,437.

In sum, we conclude that the EPA reasonably interpreted the Clean Air Act to require continuous limits on 
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42 ELR 20019; 73 ERC (BNA) 1961

emissions and that the actual numerical limits imposed 

by the FIP are neither arbitrary nor capricious.

C. Flare Monitoring Technology

Montana Sulphur further argues that the EPA acted 

arbitrarily and capriciously by requiring implementation 

of flare monitoring technology that does not exist. It 

contends that it is technically infeasible to monitor low 

rates of flow to flares during routine operations, and that 

the required "total sulfur" monitors exist only in pilot 

testing.

However, Montana Sulphur repeats its objections to 

the initially proposed FIP without addressing the modifications the EPA made in the final FIP to accommodate 

these concerns. With respect to the concern that flare 

flow monitors cannot monitor accurately at low flow 

velocities (under 1.0 fps), the EPA responded [**41] 

that: (1) it had based the requirement on what it saw was 

achievable in vendor literature and required in at least 

two other areas, 73 Fed. Reg. at 21,425; (2) it modified 

the accuracy requirement from +/- 5% to +/- 20% when 

dealing with low flows between 0.1 and 1 fps, 73 Fed. 

Reg. at 21,426; and (3) it implemented a secondary 

means for companies to determine whether flow is 

reaching the flare when the flow monitor indicates low 

flow, 73 Fed. Reg. at 21,426.

With respect to the total sulfur monitors, Montana 

Sulphur is correct that these monitors appear to have 

primarily been in pilot testing at the time of the FIP, 

though the EPA does identify two sources where analyzers are on lines leading to refinery flares, and did revise 

the FIP to give industry a full year to install the monitors. 

73 Fed. Reg. at 21,427-21,428. Moreover, the EPA also 

revised the final FIP to allow other methods to determine 

total sulfur concentration, including "grab" or "integrated" sampling. 73 Fed. Reg. at 21,429. Thus, the availability of total sulfur concentration monitoring is something of a red herring since the company can use an alternate means to measure sulfur. 40 C.F.R. § 

52.1392(h)(3). Montana Sulphur [**42] does not point 

to any evidence in the record that grab sampling is technically infeasible.

D. Variable versus Fixed Emission Limits

Montana Sulphur contends that the EPA acted arbitrarily and capriciously when it granted variable emission 

limits to a nearby power plant and the ExxonMobil refinery, but imposed fixed emission limits on it instead. In 

Montana's SIP, the state [*1194] used a variable emissions limit for all three sources, which involved a computer dispersion model that required Montana to run 

1,320 modeling scenarios. 73 Fed. Reg. at 21,444. However, as discussed above, in that modeling, Montana had 

improperly calculated the stack height credit for Montana 

Sulphur's primary 100-meter stack (see section II.A., 

supra). Because the EPA disapproved the SIP's use of 

the stack height credit in the modeling calculation, it was 

left with no fixed or variable emissions limit for Montana Sulphur; thus, it needed to fill this gap with the FIP. 

67 Fed. Reg. at 22,170, 22,206.

The EPA explained that it considered fixed emissions limits to be easier to model, monitor and enforce, 

71 Fed. Reg. at 39,268, and that this was the type of limit 

used at virtually every other source in the country (with 

[**43] the exception of the other two Montana sources). 

73 Fed. Reg. at 21,444-21,445. The EPA also notes that 

based on past reporting data, it appeared Montana Sulphur would be able to attain the fixed limit without the 

need for any additional pollution controls. 71 Fed. Reg. 

at 39,268.

Because the EPA would have primary enforcement 

responsibility regarding the FIP and the Montana Sulphur emissions, it chose what it perceived as a simpler 

method. Although the EPA approved Montana's use of 

the variable limits with respect to the other two sources, 

the emission limits at play there did not involve improper 

stack calculations, and, in addition, the State was primarily responsible for ensuring the other sources' compliance 

with the variable limits. Montana Sulphur does not point 

to any other source in which the EPA itself imposed variable limits in a FIP. Moreover, the EPA expressed reservations about the State's use of the variable limits as to 

the other sources; it indicated it would be monitoring the 

situation closely and might reconsider its approval of 

those conditions if doubts arose about the accuracy of the 

monitoring and/or reporting under that system. 67 Fed. 

Reg. at 22,207.

Thus, contrary [**44] to Montana Sulphur's argument, this is not a case where the EPA "depart[ed], sub 

silentio, from its usual rules of decision to reach a different, unexplained result in a single case." See Western 

States Petroleum Ass'n v. EPA, 87 F.3d 280, 284 (9th 

Cir. 1996) (quotation marks omitted). Rather, it offered a 

reasonable explanation for why it selected a different 

type of emissions limit than the State had chosen, and, in 

fact, explained that fixed emissions limits are the norm 

and the preferred method. 73 Fed. Reg. at 21,444-21,445.

E. Auxiliary Stacks/30-Meter Stack

Montana Sulfur next argues that the EPA acted arbitrarily and capriciously by imposing emission limits and 

monitoring requirements regarding Montana Sulphur's 

auxiliary stacks and 30-meter stack. Montana Sulphur 

argues that the requirements are unnecessary to comply 

with the NAAQS because the emissions are extremely 

small and have no practical effect on NAAQS.11 It also 
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42 ELR 20019; 73 ERC (BNA) 1961

contends that the "worst case scenario" calculation by the 

EPA ignores reality because Montana Sulphur cannot 

vent all five boilers to the auxiliary stacks and still operate its plant.

11 These general arguments about the necessity of regulating these small stacks [**45] overlap with Montana Sulphur's objections to the SIP 

Call and partial disapproval of the SIP and, to the 

extent they do, are governed by the discussion in 

Sections I and II above.

As discussed above, the EPA partially disapproved 

Montana's limitations on the auxiliary stacks and the 

30-meter stack because there was no restriction on the 

sulfur content of the fuel when exhausting through these 

stacks and because the SIP lacked a monitoring method 

to make the [*1195] mass emission limits practically 

enforceable. 67 Fed. Reg. at 22,170. The FIP adopted the 

same mass emission limits that the state had imposed in 

the SIP--12 lbs/3 hours--and added monitoring requirements to ensure compliance with the limits. 73 Fed. Reg. 

at 21,451-21,452.

As for the arbitrariness of the actual limits and monitoring requirements, it was reasonable for the EPA to 

use the state's original emission limitations for consistency because they were a piece of the state's overall 

control strategy supporting attainment. The EPA further 

points out that (1) the final FIP was revised to allow 

Montana Sulphur to use its existing "length-of-stain detector tubes" for monitoring rather than requiring the 

portable analyzers suggested [**46] in the initial proposal, 73 Fed. Reg. at 21,446 (noting that the final FIP 

was similar to the state operating permit requirements 

that already applied to Montana Sulphur); and (2) the 

final FIP increased the concentration limits on the fuel 

burned in the units from 100 ppm/3 hours to 160 ppm/3 

hours to accommodate Montana Sulphur's concern that it 

was too restrictive, noting that modeling using 160 ppm 

for up to three hours would still meet attainment requirements (but not if emissions were at this level for the 

entire day) and that evidence indicated Montana Sulphur 

should already be within these limits in light of the SIP's 

requirement of burning only "low sulfur" gas and the fuel 

gas scrubbing technology it uses. 73 Fed. Reg. at 

21,446-47.

The EPA also explains that its modeling assumption 

that all units were venting to the stacks, whether this 

would ever happen, was a way of simplifying monitoring 

and compliance for Montana Sulphur. Under this model, 

Montana Sulphur needed only to measure H2S ppm 

concentration (using its existing monitoring device) to 

determine compliance, whereas direct compliance per 

boiler stack would either require additional monitoring 

equipment or methods [**47] or be unreliable due to 

potential variation in boiler use and venting practices. 73 

Fed. Reg. at 21,446-21,447 & 21,452. The EPA sums up 

its decision in its final FIP:

 We believe additional monitoring 

equipment would need to be installed, or 

additional monitoring would need to be 

performed, at greater expense to [Montana Sulphur], to achieve adequate method to determine direct compliance with 

the mass emission limits. The concentration limits we are imposing are reasonable, can be monitored at reasonable cost, 

and will ensure protection of the NAAQS.

73 Fed. Reg. at 21,447.

Thus, the specific emission limits and monitoring 

requirements imposed by the FIP, based on revised 

emission models and that allow Montana Sulphur to use 

existing technology, were not arbitrary or unreasonable.

F. Proper Stack Height Credit

This issue is addressed in Section II.A above, regarding the 2002 SIP disapproval. Because we previously concluded that the EPA properly rejected Montana's 

calculated stack height credit in the SIP and that it was 

proper to use the 65-meter de minimis figure instead, see

40 C.F.R. § 51.118, we likewise hold here that the EPA 

did not act arbitrarily in using that figure in the FIP.12

12 We [**48] further note that, in its 2006 

comments to the proposed FIP, Montana Sulphur 

merely summarized and reiterated its objections 

from the SIP disapproval process and the EPA 

incorporated by reference the reasons it had already articulated for rejecting those arguments. 

73 Fed. Reg. at 21,445; 67 Fed. Reg. at 

22,223-22,229; see also 73 Fed. Reg. at 21,446 

("We have not received any new information to 

indicate formula height should be higher than 

47.8 meters, nor have we received a valid 

demonstration for above-formula stack height 

credit."). Although Montana Sulphur criticizes 

the EPA for failing to respond to its additional 

comments and data, the EPA points out that these 

comments were not presented to the EPA until 

March of 2008, many months after the comment 

process had closed and only a few weeks before 

the final FIP was issued. Thus, the EPA was not 

required to consider these untimely comments. 

See Bd. of Regents of Univ. of Wash. v. EPA, 86 

F.3d 1214, 1222, 318 U.S. App. D.C. 220 (D.C. 

Cir. 1996).
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666 F.3d 1174, *; 2012 U.S. App. LEXIS 1056, **;

42 ELR 20019; 73 ERC (BNA) 1961

G. Emission Limits from Consent Decrees

Montana Sulphur claims the EPA acted arbitrarily 

and capriciously because the FIP did not take into account the [*1196] reduced emission limits resulting 

from certain consent decrees [**49] and Montana air

quality permit changes entered into between sources such 

as ExxonMobil, CHS Refineries, and the State of Montana. Montana Sulphur contends it was irrational for the 

EPA to ignore the effects of these consent decrees, which 

were entered into after the 2002 SIP disapproval but before the 2006-2008 FIP.

The EPA offered three justifications for declining to 

consider the emission reductions that resulted or will 

result from those consent decrees and permit changes. 

First, it noted that Montana did not actually make any 

revisions to the SIP to address the flaws in that document, and, having disapproved portions of the SIP, the 

EPA was required to fill those gaps. 73 Fed. Reg. at 

21,421. Second, the EPA noted that even though federally enforceable, some of the state permits can be revised 

without EPA approval and the consent decrees have a 

"limited lifespan"; it opined that stationary source emission limits necessary to demonstrate attainment must be 

included in the FIP or approved SIP so that changes to 

those limits may only be made with its approval. Id. Finally, the EPA explained that the emission limits within 

the consent decrees and permit actions do not contain 

limits [**50] that are consistent with the averaging 

times of the NAAQS, specifically the 3-hour and calendar-day averaging periods. 73 Fed. Reg. at 21,422. For 

example, the CHS permit and decree impose ppm limits 

for 7-day and 365-day rolling averages instead of mass 

pound limits per 3-hour and calendar-day periods. Id. 

The EPA pointed out that "[n]one of the commenters has 

suggested these limits be converted to FIP mass limits 

that would apply over a 3-hour averaging period, and the 

State has not submitted a SIP revision with such limits." 

Id.

In light of the specific procedures in place for SIP 

approval or disapproval and the responsibility of the 

EPA to promulgate a FIP when the state plan is inadequate in some respect, we conclude the EPA's position is 

justified. The EPA correctly reads 42 U.S.C. § 

7410(a)(2) as requiring states to include enforceable 

emission limits and other control measures in the plan 

itself. Whatever requirements may exist in the consent 

decrees and construction permits (which may or may not 

be equivalent to the requirements of the FIP, since they 

are measured by different means over a different time 

frame), they are not part of the underlying SIP and the 

EPA here has authority [**51] to fill the gaps in the 

portions of the SIP it had previously disapproved.

H. Outdated Modeling Methodology

Finally, Montana Sulphur argues that the EPA acted 

arbitrarily and capriciously because it used outdated 

modeling in the FIP. In the FIP, the EPA used the Industrial Source Complex ("ISC") model, which was the preferred model at the time Montana proposed its SIP. In 

2005, the EPA revised its Guideline on Air Quality 

Models and recommended use of a new dispersion model--AERMOD. 70 Fed. Reg. 68,218 (Nov. 9, 2005). 

However, the [*1197] rule grandfathered ISC models 

for one year (through Nov. 8, 2006), and indicated that 

during that time AERMOD could, but was not required 

to, be substituted for ISC for appropriate applications.13

The EPA proposed the FIP in July 2006, within the 

one-year transition period.

13 In addition, even after the one-year transition period, applications of ISC with approved 

protocols were still acceptable under the regulations. 70 Fed. Reg. at 68,226.

In issuing the final FIP in April 2008, the EPA further defended its choice to stick with the ISC dispersion 

model:

 The commenter is correct that a newer 

model is now available. For new SIPs, we

would require states to use [**52] EPA's 

most recent model. However, this is a 

unique situation. The State developed the 

Billings/Laurel SO2 SIP using the ISC 

model, which was current at that time, and 

we approved various source-specific 

emission limits in the SIP based on the 

State's modeling effort. The purpose of

this FIP is to fill gaps in the approved SIP. 

We are not intending or required to re-do 

the entire SIP. . . .

We note that MDEQ tested the performance of the ISC model when the 

Billings/Laurel SO2 SIP was being developed, and the results showed that the 

model performance exceeded the performance criteria for models of this type. . . .

We also note that ISC remained an 

accepted EPA model at the time we proposed our FIP, and it is reasonable to finalize the FIP based on the same model. 

Switching models after our proposal 

would have required us to re-propose the 

FIP and would have delayed the FIP further.
Page 14

666 F.3d 1174, *; 2012 U.S. App. LEXIS 1056, **;

42 ELR 20019; 73 ERC (BNA) 1961

73 Fed. Reg. at 21,437-21,438.

The EPA's continued use of the ISC model was not 

arbitrary or capricious. The model was properly employed at both the time of the state SIP and the proposed 

FIP. The FIP did not replace the entire SIP, but only the 

limited portions the EPA had disapproved; because use 

of a different [**53] model could have yielded results 

that did not comport with the remainder of the SIP, it 

was not arbitrary or capricious for the EPA to continue 

with the existing model despite some later technological 

improvements.

CONCLUSION

For the foregoing reasons, we conclude the EPA did 

not act arbitrarily or capriciously or abuse its discretion 

by making the SIP Call, disapproving portions of the 

revised SIP, or promulgating the requirements set forth 

in the FIP. We therefore deny the petition for review in 

both 02-71657 and 08-72642.

PETITIONS DENIED.