Exhibit 16

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 1
UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Case No. 10-1131

(Consolidated with Nos.

1132, 1145, 1147-1148,

1199-1203,1205-1213,

1215-1216,1218-1222;

Pending 10-1073, 1083,

1099,1109-1110,1114-

1115,1118-1120,1122-

1129)

Petitioners,

Respondent.

v.

SOUTHEASTERN LEGAL FOUNDATION, )

FOUNDATION, ET AL., )

)

)

)

)

)

)

)

)

)

)

-------------~)

DECLARATION OF ANDREW GINSBURG IN OPPOSITION

TO MOTIONS FORA STAY OF EPA'S GREENHOUSE GAS

TAILORING RULE

I, Andrew Ginsburg, declare as follows:

1. I am presently employed as the Air Quality Division

Administrator ofthe Oregon Department of Environmental Quality (DEQ).

I have been employed by DEQ since 1990, for over twenty years.

2. In my capacity as DEQ's Air Quality Division Administrator, I

am directly responsible for managing DEQ's efforts to protect Oregon's air

by controlling, reducing and preventing air pollution.

3. Oregon statutes and administrative mles authorize DEQ to

conduct a comprehensive program to address air pollution. See Oregon

Revised Statutes chapters 468 and 468A; Oregon Administrative Rules

chapter 340, divisions 200 to 268. Many ofthese statutes and mles have

1

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 2
been submitted by DEQ, and approved by the United States Environmental

Protection Agency (EPA), for inclusion in Oregon's State Implementation

Plan (SIP). Oregon's SIP implements a vaJiety offederal Clean Air Act

programs in Oregon, including the Clean Air Act Prevention of Significant

Deterioration (PSD) program. In addition, EPA has delegated to DEQ the

authority to implement the Clean Air Act Title V Operating Permit program

in Oregon pursuant to certain Oregon statutes and rules.

4. Earlier this year, EPA adopted a rule that is commonly known

as the "Tailoring Rule." Prevention o/Significant Deterioration and Title V

Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31514 (June 3, 2010). The

Tailoring Rule applies the Clean Air Act PSD and Title V permitting

programs to greenhouse gases. Pursuant to the Tailoring Rule and the Clean

Air Act, each state must incorporate greenhouse gases into its SIP to

implement the Clean Air Act PSD program by January 2, 2011, and must

also incorporate greenhouse gases into its Clean Air Act Title V program.

5. Oregon's PSD and Title V permitting programs do not currently

authorize DEQ to implement the Tailoring Rule in Oregon. Specifically,

Oregon administrative rules do not include greenhouse gases in the list of

"regulated pollutants" that are subject to the Clean Air Act PSD and Title V

permitting programs administered in Oregon by DEQ.

6. As a result, EPA has proposed a finding ofsubstantial

inadequacy and a SIP Call concerning Oregon's SIP, on the basis that

Oregon's current PSD program will not apply to greenhouse gases beginning

on January 2, 2011. Action To Ensure Authority To Issue Permits Under the

Prevention o/Significant Deterioration Program to Sources o/Greenhouse

Gas Emissions: Finding o/Substantial Inadequacy and SIP Call, 75 Fed.

Reg. 53,892 (Sept. 2, 2010).

2

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 3
7. DEQ is working cooperatively with EPA to implement the

Tailoring Rule in Oregon, by revising both the Oregon SIP (concerning

Oregon's PSD program) and Oregon's Title V program. By letter dated

October 1,2010 (copy attached as Exhibit A), DEQ responded to EPA's

requests for information concerning EPA's proposed finding and SIP call.

In the letter, DEQ explained that it planned to propose adoption ofrules by

the Oregon Environmental Quality Commission (EQc) in February 2011

that would amend the Oregon SIP to allow DEQ to implement the Tailoring

Rule.

8. DEQ initiated the rulemaking process referenced in paragraph 7

on October 14,2010. DEQ is currently conducting a public comment

process on the proposed rules. The proposed rules would incorporate

greenhouse gases into Oregon's PSD and Title V permitting programs.

9. Until the EQC adopts rules, DEQ will not be authorized to

implement the Tailoring Rule in Oregon. Therefore, from January 2,2011

(the first date the Tailoring Rule applies) until the EQC adopts rules, there

will be a gap in DEQ's PSD and Title V permitting authority. During that

interim period, DEQ will lack authority to issue PSD or Title V permits for

greenhouse gases. In order to prevent harm to air pollution sources that may

need PSD permits for greenhouse gases before they can build new facilities

or expand large facilities during that interim period, DEQ has worked

cooperatively with EPA to ensure that EPA will be able to fill the pennitting

gap. Specifically, DEQ's October 1, 2010 letter referenced in paragraph 7

above agreed to a SIP revision deadline ofDecember 22, 2010. This will

allow EPA to implement a Federal Implementation Plan (FIP) in Oregon

beginning January 2, 2011 so that EPA may provide any PSD permits for

greenhouse gases that may be needed by air pollution sources in Oregon.

3

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 4
10. Pursuant to DEQ's current legislatively approved

appropriations and expenditure limitations, DEQ has adequate resources

both to conduct the rulemaking described in paragraphs 7 and 8 above, and

upon adoption ofthose rules to implement PSD and Title V permitting for

greenhouse gases in Oregon.

11. Because the Tailoring Rule justifies higher regulatory

thresholds to phase in PSD and Title V permitting requirements for

greenhouse gas emissions than the statutory Clean Air Act thresholds for

other pollutants, the Tailoring Rule will save DEQ significant resources by

requiring DEQ to issue many less permits than would otherwise be required

under the statutory Clean Air Act thresholds for other pollutants.

12: DEQ is supportive of EPA's goal ofreducing greenhouse gas

emissions from station31y sources, because the state ofOregon faces

significant harm from climate change. Pursuant to Oregon Revised Statutes

468A.200, the Oregon legislature has found that:

• "Global warming poses a serious threat to the economic wellbeing, public health, natural resources and environment of

Oregon;"

• "Oregon relies on snowpack for summer stream flows to

provide energy, municipal water, watershed health and

irrigation. Also, a potential rise in sea levels threatens

Oregon's coastal communities. Reduced snowpack, changes in

the timing ofstream flows, extreme or unusual weather events,

rising sea levels, increased occurrences ofvector-bome diseases

and impacts on forest health could significantly impact the

economy, environment and quality oflife in Oregon;"

4

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 5
• "Global warming will have detrimental effects on many of

Oregon's largest industries, including agriculture, wine making,

tourism, skiing, recreational and commercial fishing, forestry

and hydropower generation, and will therefore negatively

impact the state's workers, consumers and residents;" and

• Actions taken by Oregon in concert with complementary

actions ofthe federal government and other states will reduce

the impacts of greenhouse gas emissions.

I declare under penalty of perjury under the laws ofthe United States

that the foregoing is true and correct.

Executed on OctoberZ, 20 10, at the Oregon Department of

Environmental Quality, 811 SW 6th Avenue, Portland, Oregon 97204.

Andrew Ginsburg

Air Quality Division Administrator

Oregon Department of Environmental Quality

5

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 6
regon

Theodore R. Kulongoski, Governor

October 1, 2010

Dennis McLerran

Regional Administrator

U.S. EPA, Region 10

Regional Administrator's Office, RA-140

1200 Sixth Avenue, Suite 900

Seattle, WA 98101

Department of Environmental Quality

Headquarters

811 SW Sixth Avenue

Portland, OR 97204-1390

(503) 229-5696

FAX (503) 229-6124

TTY (503) 229-6993

OFFICE.OF THE EXEClITiVE

RE: Request for Submission ofInformation from States Regarding Permitting

Authority for Greenhouse Gas Prevention of Significant Deterioration

Dear Mr. McLerran:

The United States Environmental Protection Agency (EPA) has proposed a finding of

substantial inadequacy and State Implementation Plan (SIP) Call under Clean Air Act

section 110(k)(5) concerning Oregon's SIP, on the basis that Oregon's current SIP

Prevention of Significant Deterioration (PSD) program will not apply to greenhouse

gases beginning on January 2, 2011. Action To Ensure Authority To Issue Permits Under

the Prevention ofSignificant Deterioration Program to Sources ofGreenhouse Gas

Emissions: Finding ofSubstantial Inadequacy and SIP Call, 75 Fed. Reg. 53,892 (Sept.

2, 20 I 0). This letter responds to the requests in EPA's proposal.

EPA asked Oregon to inform EPA ofthe period oftime that Oregon would accept as the

deadline for submittal of Oregon's SIP revisions in response to a SIP Call. EPA has

proposed a finding ofsubstantial inadequacy and SIP Call under Clean Air Act section

11 O(k)(5) concerning Oregon's SIP PSD applicability provisions. Further, EPA has

proposed a deadline for Oregon's submittal of a corrective SIP revision. EPA has

requested Oregon's comments on the proposed deadline. In light ofthe importance of

having in place as soon as possible PSD permitting authority for any greenhouse gasemitting sources that may be subject to PSD requirements, Oregon does not object to

EPA's establishment ofa deadline of December 22, 2010.

The remainder ofthis letter responds to the EPA requests listed below.

raJ Confirm. with citations and a copy o(the relevant language. that the SIP PSD

applicability provisions do not explicitly include GHG sources,

Oregon's SIP PSD program applies to "regulated air pollutants" as defined in OAR 340-

200-0020(99):

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 7
Dennis McLerran

Regional Administrator

U.S. EPA, Region 10

Page 2

"Regulated air pollutant" or "Regulated Pollutant":

(a) Except as provided in subsections (b) and(c) ofthis rule, means:

(A) Nitrogen oxides or any VOCs;

(B) Any pollutant for which a national ambient air quality standard has been

promulgated;

(C) Any pollutant that is subject to any standard promulgated under section 111 of

the Act;

(D) Any Class I or II substance subject to a standard promulgated under or

established by Title VI ofthe Act; or

(E) Any pollutant listed under OAR 340-244-0040 or 340-244-0230.

(b) As used in OAR 340 division 220, regulated pollutant means particulates,

volatile organic compounds, oxides of nitrogen and sulfur dioxide.

(c) As used in OAR 340 division 224 any pollutant listed under OAR 340-244-

0040 or 340-244-0230 is not a regulated pollutant.

The list ofregulated air pollutants does not include greenhouse gases; therefore, Oregon's

SIP PSD program currently does not apply to greenhouse gas emissions from greenhouse

gas sources.

l

(hi Identify and provide a copy o(any provision that specifically precludes PSD

applicability for GHG sources.

There are no provisions in Oregon law that specifically preclude PSD applicability for

greenhouse gas sources.

1 To be precise, Oregon's SIP PSD program applies to greenhouse gas sources, but not to

emissions of greenhouse gases from greenhouse gas sources. That is, Oregon's program

applies to emissions of criteria pollutants and other non-greenhouse gas pollutants from

greenhouse gas sources. However, it is our understanding that EPA's question was

primarily aimed at confirming whether Oregon's program applies to greenhouse gas

emissions from greenhouse gas sources, as opposed to non-greenhouse gas emissions

from greenhouse gas sources.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 8
Dennis McLerran

Regional Administrator

U.S. EPA, Region 10

Page 3

ec) IdentifY and provide a copy ofany provision ofstate constitution or other law,

including the SIP, that may be read to limit the applicability ofthe PSD program to

pollutants identified at a certain point in time, and therefOre not to GHGs.

The Oregon Environmental Quality Commission (EQC) has adopted administrative rules

to implement the Clean Air Act PSD program in Oregon, and EPA has approved those

rules as part of Oregon's SIP. However, the EQC's rules limit the applicability ofthe

PSD program to "regulated pollutants" identified in rule by the EQC, and the rules do not

currently include greenhouse gases. Unlike the administrative rules ofsome states, the

EQC's rules do not purport to incorporate by reference future EPA rwes. The relevant

EQC rule is found at Oregon Administrative Rule (OAR) 340-200-0020(99) and is

included above.

ed) Indicate, with citations and a copy ofthe relevant language, i[any, whether the SIP

includes general authority for the state to issue PSD permits that meet EPA requirements.

The Oregon SIP does not include general authority for Oregon to issue PSD permits that

meet EPA requirements for applying the PSD program to greenhouse gases.

ee) Indicate, with citations and a copy ofthe relevant language, any other provisions of

the SIP or state law that may bear on the applicability ofthe PSD program to GHGemitting sources.

There are no other provisions in the Oregon SIP or Oregon law that bear on the

applicability ofthe Oregon PSD program to greenhouse gas emissions from greenhouse

gas sources. See answers to (a) and (c) above,

co Indicate the state's interpretation as to whether the SIP, read as a whole, does or does

not apply the PSD program to GHG sources or authorize the state to issue PSD permits

fOr GHG sources that meet EPA requirements. This statement should be made by the

commissioner or general counsel ofthe state environmental agency. or by the

counterpart at the local or tribal level, or by the state Attorney General.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 9
Dennis McLerran

Regional Administrator

U.S. EPA, Region 10

Page 4

The state's interpretation is that the current Oregon SIP, read as a whole, does not apply

the Oregon PSD program to greenhouse gas emissions from greenhouse gas sources or

authorize Oregon to issue PSD permits for greenhouse gas sources, based on greenhouse

gas emissions, that meet EPA requirements. 2

wi Ifthe SIP, read as a whole, does not apply the PSD program to GHG sources or

authorize the issuance ofpermits to GHG sources, indicate whether the state plans to

develop adequate authoritv to apply the PSD program to GHG sources and to submit it

to EPA as a SIP revision by December 1, 2010, which is shortly before the date on which,

as discussed below, EPA intends to finalize its finding ofinadequacy and finalize the SIP

Call.

Oregon plans to develop adequate authority to apply the Oregon PSD program to

greenhouse gas emissions from greenhouse gas sources and to submit it to EPA as a SIP

revision by the end ofFebruary 2011. As explained above, DEQ and the EQC must

undertake a regulatory process to develop adequate authority. Oregon's PSD program

applies to regulated pollutants, and Oregon's administrative rules define regulated

pollutants by specifically listing the pollutants included in that definition. Currently, that

definition does not include greenhouse gases. Therefore, to develop adequate authority,

DEQ and the EQC must amend Oregon's administrative rules accordingly. DEQ plans to

propose that the EQC amend its rules, in order to apply Oregon's PSD program to

greenhouse gases. The draft proposed rulemaking package was sent to your office in

early September for review, It is anticipated that the public comment period will begin

sometime between mid-October and early November, with public hearings scheduled the

week ofNovember 15th• DEQ plans to propose that the EQC adopt the rule amendments

2 Because I am the Director ofthe Oregon Department of Environmental Quality (a

position commonly referred to as "commissioner" in other states), and because I am

signing this letter, this statement is therefore made by the head of Oregon's primary

environmental agency.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 10
Dennis McLerran

Regional Administrator

U.S. EPA, Region 10

Page 5

on February 17,2011. Ifthe EQC amends the rules, DEQ will submit a SIP revision for

EPA approval.

Thank you for the opportunity to comment.

Sincerely,

J/(vL ~e{/lUMl;.Y !J$uJ}

Dick Pedersen

Director, Oregon Department ofEnvironmental Quality

cc: Andrew Ginsburg, Oregon Department of Environmental Quality

Paul Logan, Oregon Department ofJustice

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 11
Exhibit 17

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 12
UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

SOUTHEASTERN LEGAL FOUNDATION,) Case No. 10-1131

ET AL.,

Petitioners,

v.

UNITED STATES ENVIRONMENTAL

PROTECTIO AGENCY,

Respondent.

)

) (Consolidated with os.

) 1132,1145,1147-1148,

) 1199-1203,1205-1213,

) 1215-1216, 1218-1222;

) Pending 10-1073, 1083, 1099,

) 1109-1110,1114-1115,1118-

) 1120,1122-1129)

)

)

)

)

DECLARATION OF RHODE ISLAND IN OPPOSITION

TO MOTIONS FOR A STAY OF EPA'S GREENHOUSE GAS

TAILORING RULE

I, Douglas L. McVay, declare as follows:

1. I am currently employed as Acting Chiefofthe Office ofAir Resources

for the Rhode Island Department of Environmental Management ("OEM"). I have

been employed by the OEM for over 33 years.

2. I have primary responsibiliry at the Rhode Island OEM to oversee the

protection and improvement ofthe air quality for the citizens ofRhode Island. This

oversight includes maintaining, reviewing and updating the State regulations related to

air pollution. Additionally, in the majority of my 33 years with OEM, I have

supervised and managed the air pollution pemlitting programs.

3. On August 3, 20 I0, I sent a letter to H. Curtis Spaulding, Regional

Administrator for the U.S. Environmental Protection Agency (EPA), outlining Rhode

Island's response to the Prevention of Significant Deterioration and Title V

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 13
Greenhouse Gas Tailoring Rule (75 FR 31514; June 3, 20 I0) (the "Tailoring Rule").

(Letter to U.S. EPA dated August 3, 2010 attached as Exhibit A)

4. The August 3, 2010 letter states OEM's plans to incorporate and

implement greenhouse gas permitting requirements into Rhode Island's federally

approved Title V and new source review prevention ofsignificant deterioration (NSR

PSD) permitting programs.

5. Rhode Island OEM has already begun the process to revise both the Title

V and New Source Review permit program regulations to provide authority to issue

permits for greenhouse gas emissions sources, consistent \vith the Tailoring Rule. We

have drafted our initial proposal and plan to publish public notice on or about

November 12, 20 IO.

6. The EPA has found that the current and projected concentrations ofthe

six greenhouse gases - carbon dioxide (CO,), methane (CH4), nitrous oxide (N,O),

hydrofluorocarbons (GFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF,)-

in the atmosphere threaten the public health and welfare of current and future

generations. Consequently, if not mitigated, Rhode Island's environment will be

impacted.

7. The Tailoring Rule is a good step in the direction oflimiting greenhouses

gas emissions from new or modified major stationary sources in Rhode Island and

throughout the country in an effort to protect the environment.

8. Rhode Island could face significant harm from climate change.

Inundation and periodic storm surges and flooding events may cause significant

detrimental impacts on coastal communities - where a majority of the State's

population is located - and substantial loss ofthe State's coastal property, including

infrastructure, public facilities, and habitat that is vital to rare and threatened species.

Elevated temperatures may cause dangerously hot conditions in Rhode Islands' cities

and could aggravate air pollution from ground level ozone and other components of

smog. As a result, Rhode Island is committed to curbing GHG emissions and has

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 14
made substantial efforts to do so within its borders through participation in the

regional greenhouse gas initiative.

J)aJf!.rl7lfJ=

Dougl L. McVay

Acting Chief

DEM Office of Air Resources

STATE OF RHODE ISLA D

COUNTY OF PROVIDENCE

Subscribed and sworn to before me this 29"' day of October, 2010.

No ry P blic

My Commission expire.

RIChard M Bianculli Jr.

Notary PublIC # 58013

My CommissIon Expires

4-17-2014

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 15
Exhibit A

RHODE ISLAND

DEPARTMENT OF ENVIRONMENTAL MA AGEMENT

235 Promenade Slreef. Providence. Rl 02908-5767 TDD 401-222-4462

3 August 2010

H.Curtis Spalding, Regional Administrator

EPA New England. Region 1

5 Post Office Square-Suite 100

Boston, MA 02109-3912

Dear Mr. Spalding:

This letter is to inform you that the Rhode Island Department of Environmental Management. Office of

Air Resources (OAR) intends to apply the meaning ofthe term "subject to regulation" consistent wIth

EPA's definition ofthe tcrm in implementing both the PSD and Title V permitting programs for

greenhouse gases in Rhode Island.

No statutory changes will be necessary to implement this approach. The definition of "air contaminant"

in state law (Rhode Island General Laws §23-23-3(1» reads:

"Air cOlllami"anl" means Sool. cinders. ashes, a"y dusl.fumes, gas. misl, smoke.

vapor, odor, loxic or radioactive malerial. paniculale molter. or any

combination oflhese.

This definition is sufficiently broad to allow OAR to regulate greenhouse gases.

In order to undertake this approach, OAR will need to amend the two state regulations implementing the

PSD and Title V programs; AIr Pollution Control RegulatIon 10 • 9 and Air Pollution Control Regulation

No. 29. h is our intention that the regulatory changes we adopt will be consistent with the applicability

thresholds in the Tailoring rulc in both programs. We anticipate that the necessary regulatory changes will

be adopted before January 2. 2011.

If you or your staff has any questions concerning approach. feel free to contact me at (401)·222·2808, x·

7011.

Sincerely,

~~?tr ActlOg Chief

Office of AIr Resources

o post-eonsllmt:f fibe,

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 16
Exhibit 18

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 17
UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

SOUTHEASTERN LEGAL FOUNDATION, ) Case No. 10-1131

ET AL., )

) (Consolidated with Nos. 

Petitioners, ) 1132, 1145, 1147-1148,

) 1199-1203, 1205-1213,

v. ) 1215-1216, 1218-1222;

) Pending 10-1073, 1083, 1099,

UNITED STATES ENVIRONMENTAL ) 1109-1110, 1114-1115, 1118-

PROTECTION AGENCY, ) 1120, 1122-1129)

)

Respondent. )

)

_____________________________________)

DECLARATION OF RICHARD VALENTINETTI IN OPPOSITION 

TO MOTIONS FOR A STAY OF EPA’S GREENHOUSE GAS 

TAILORING RULE

I, Richard Valentinetti, declare as follows:

1. Since 1970, I have been employed by the State of Vermont. From 1973 

until the present, I have served in the position of Director of the Air 

Pollution Control Division (APCD) of the Department of Environmental 

Conservation (DEC) within the Vermont Agency of Natural Resources. 

2. The DEC has the primary responsibility to administer air pollution control 

programs authorized by federal and state laws. In my capacity as the APCD 

Director, my responsibilities includes maintaining, reviewing and updating 

Vermont’s Air Pollution Control Regulations and signing permits for the 

construction and operation of stationary sources of air emissions.

3. On July 22, 2010, DEC Commissioner Justin Johnson sent a letter to H. 

Curtis Spalding, Regional Administrator for the U.S. Environmental 

Protection Agency (EPA), outlining Vermont’s response to the Prevention of 

Significant Deterioration and Title V Greenhouse Gas Tailoring Rule (75 

FPR 31514; June 3, 2010) (the “Tailoring Rule”). (Letter to U.S. EPA dated 

July 22, 1010 attached as Exhibit A).

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 18
4. Amendments to Vermont’s air pollution control laws and regulations are 

necessary to ensure the permitting thresholds for greenhouse gases (GHGs) 

in Vermont are consistent with those established by EPA’s Tailoring Rule. 

The necessary statutory amendments were adopted as part of Act 146 on 

June 1, 2010 and took effect on July 1, 2010. The APCD anticipates 

adopting the necessary regulatory amendments to implement EPA’s tailoring 

approach for GHGs by the end of this year or shortly thereafter. 

5. The APCD does not anticipate any halt to, or significant delays of, 

permitting come January 2, 2011 as a result of EPA’s Tailoring Rule.

6. The APCD has adequate resources to process permits for stationary sources 

of GHGs in Vermont, at the emissions thresholds established in the 

Tailoring Rule. 

7. The burden to the APCD would be much greater than without the Tailoring 

Rule because applying the lower statutory thresholds for GHGs would result 

in more permit applications. 

8. The APCD is generally supportive of goals of EPA’s GHG regulations as 

applied to stationary sources. It is in the interest of the citizens of Vermont 

to reduce GHG emissions to help to prevent negative impacts of climate 

change. In Vermont, climate change will, for example, harm hardwood 

forests in a manner that will negatively affect Fall tourism and threaten the 

maple sugar industry. See Green Mountain Chrysler Plymouth Dodge Jeep 

v. Crombie, 508 F.Supp.2d 295, 321-25 (D.Vt. 2007) (bench trial findings of 

fact). 

I declare under penalty of perjury under the laws of the United States that 

the foregoing is true and correct. 

Executed on October 26, 2010, at Waterbury, Vermont. 

__________________________ 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 19
~.VERMONT LXIIIBIT A

Agency of NatlJral ResOl1rces

802-241-3808

802-244-5141

[phone]

[fax]

Vennont Department ofEnvironmental Conservation

Commissioner's Office

103 South Main Street, 1 South

Waterbury, VI' 05671-0401

July 22,2010

H. Curtis Spalding, Regional Administrator

EPA New England, Region 1,

5 Post Office Square - Suite 100

Boston, MA 02109-3912

Re: Vermont's Implementation ofthe Tailoring Rule

Dear Regional Administrator Spalding:

I am writing in regard to the U.S. Environmental Protection Agency's (EPA's) "Prevention of Significant

Deterioration and Title V Greenhouse Gas Tailoring Rule," which phases in Prevention of Significant

Deterioration (PSD) and Title V permitting requirements for stationary sources of greenhouse gases. See 75

Fed. Reg. 31,514 (June 3, 2010).

Beginning on January 2, 2011, EPA's Tailoring Rule requires a stationary source that would already be subject

to PSD and/or Title V pennitting requirements due to emissions of non-greenhouse gas pollutants to also

comply with the PSD best available control technology (BACT) and other program requirements for greenhouse

gas emissions ifthe source increases its greenhouse gas emissions by at least 75,000 tons per year (tpy) carbon

dioxide equivalent (C02e) and/or to amend the source's Title V permit to incorporate any greenhouse gas

requirements. Id at 31,523. Effective July 1, 2011 , EPA's Tailoring Rule expands the PSD and Title V

permitting requirements to any stationary source with the potential to emit at least 100,000 tpy C02e and any

modification of a major source that would result in an increase of greenhouse gas emissions ofat least 75,000

tpy C02e, independent of whether the source exceeds the permitting thresholds for a non-greenhouse gas

pollutant. Id. at 31,523-24.

With respect to implementation, EPA decided to incorporate the permitting thresholds for greenhouse gases by

codifying a definition ofthe- phrase "subject to regulation" so that the greenhouse gases emitted by sources that

fall below the thresholds are not treated as "subject to regulation" and therefore do not trigger PSD and/or Title

V. 75 Fed. Reg. at 31,579-81 and 31,583-84. EPA explained that such an approach would allow many states to

immediately implement EPA's permitting thresholds for greenhouse gases without having to make any changes

to state laws or regulations. Id at 31,580-81. In addition, EPA asked permitting authorities to submit a letter to

EPA that explains whether the permitting authority will adopt an interpretation ofthe term "subject to

regulation" that is consistent with EPA's interpretation, and, ifso, whether the permitting authority intends to

adopt such interpretation without undertaking a regulatory or legislative process. Id. at 31,582 and 31,584.

The Vermont Department ofEnvirorunental Conservation's Air Pollution Control Division ("APCD") intends

to adopt EPA's interpretation ofthe term "subject to regulation." However, amendments to Vennont's air

pollution control laws and regulations are necessary to ensure the permitting thresholds for GHGs in Vennont

are consistent with those established by EPA's Tailoring Rule. The necessary statutory amendments were

adopted as part ofAct 146 on June 1, 2010 and took effect on July 1, 2010. The relevant provisions of Act 146

To preserve, enhance, restore, and conserve Vermont's natural resources, and protect humull heCllth,Jor tile !>elle{it o(thL~ wtd(uture generations.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 20
are enclosed. The APeD anticipates adopting the necessary regulatory amendments to implement EPA's

tailoring approach for greenhouse gases by the end ofthis year.

If you have any questions, please feel free to contact Richard Valentinetti, APeD Director, at (802) 241-3840 or

dick.valentincniCd'state.vt. us.

Cc: Richard Valentinetti, APeD Director

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 21
Exhibit 19

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 22
UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

SOUTHEASTERN LEGAL FOUNDATION,) Case No. 10-1131

FOUNDATION, ET AL.,

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Petitioners,

Respondent.

v.

)

) (Consolidated with Nos.

) 1132, 1145, 1147-1148,

) 1199-1203, 1205-1213,

) 1215-1216, 1218-1222;

) Pending 10-1073, 1083, 1099,

) 1109-1110, 1114-1115, 1118-

) 1120, 1122-1129)

)

)

)

---------------~)

DECLARATION OF STUART A. CLARK IN OPPOSITION

TO MOTIONS FOR A STAY OF EPA'S GREENHOUSE GAS

TAILORING RULE

I, Stuart A. Clark, declare as follows:

1. I am now and at all times mentioned have been a citizen ofthe United States

and a resident ofthe state of Washington, over the age of eighteen years, .

competent to make this declaration, and I make this declaration from my own

personallmowledge andjudgment.

2. I am the Manager ofthe Washington State Department ofEcology (Ecology) Air

Quality Program. As Manager ofthe Air Quality Program, I oversee the work of

Ecology's entire Air Quality Program throughout the state of Washington,

including the air operating permit program. I have worked in this position five

years. I have worked with Ecology on air quality issues for more than 30 years.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 23
3. Ecology is in the process of amending the state's general air permitting rule

(WAC 173-400) and its air operating permit rule (WAC 173-401) to enable the

state to comply with the U.S. Environmental Protection Agency (EPA)

Tailoring Rule for greenhouse gases. Ecology is on track to have these

rulemaking efforts completed, and the amended rules in effect, by January 2,

201l.

4. The Tailoring Rule significantly reduces the need for Title V permits and new

source review prevention ofsignificant deterioration permits for greenhouse gas

emissions. Ecology has adequate resources to implement the greenhouse gas

permitting that will be required under the Tailoring Rule, and does not

anticipate any halt to, or signif1cant delays in, permitting come January 2, 201l.

Without the Tailoring Rule, the burden on Ecology permitting staff would be

significantly greater.

5. Washington is especially vulnerable to climate change because ofthe state's

dependence on snow pack for summer stream flows and because the expected

rise in sea levels threatens our coastal communities. Extreme weather, a

warming Pacific Northwest, reduced snow pack, and sea level rise are four

major ways that climate change is disrupting Washington's economy,

environment, and communities.

6. Washington has been working to mitigate greenhouse gas emissions in the state

since 2004 and is supportive ofEPA's efforts to regulate greenhouse gas

emissions from stationary sources. In 2008, the Washington State legislature

adopted ESHB 2815, a law that requires the state to reduce state-wide

greenhouse gas emissions to 1990 levels by 2020, to 25% below 1990 levels by

2035, and to 50% below 1990 levels by 2050.

7. Washington has also adopted the California "clean cars" standards, which will

reduce greenhouse gas emissions from motor vehicles by 30% by 2016.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 24
, 2010, at _----->-l"",,-Dc"""'C:"-\:'J--l,V_C\---,~ __

8. Regulation of greenhouse gas emissions from stationary sources under the

Tailoring Rule will advance the efforts made by the State ofWashington to

achieve its greenhouse gas emission reduction requirements and combat climate

change.

I declare under penalty ofperjury under the laws ofthe United States that

the foregoing is true and correct.

Executed on 101 }(\lb

STUART A. CLARK

Manager, Air Quality Program

Washington State Department ofEcology

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 25
Exhibit 20

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 26
DECLARATION OF JOHN ARENSMEYER; CEO OF SMALL BUSINESS MAJORITY

I. I, John Arensmeyer, founder and CEO of Small Business Majority, make this Declaration

in support ofthe response filed by the Environmental Defense.Fund, the Natural Resources

Defense Council, and other environmental intervenors in opposition to motions filed by various

parties to stay various actions ofthe U.S. Environmental Protection Agency (EPA) relating to the

control of greenhouse gas (GHG) emissions under the Clean Air Act. The purpose ofthis

Declaration is to express Small Business Majority's support for EPA's decisions to move

forward with controls on emissions of GHGs under the Act and to oppose motions to stay EPA

actions in order to further delay implementation ofthe Act as to GHG emissions. The EPA

decisions at issue here include (I) determinations that the emissions of greenhouse gases from

mobile sources cause or contribute to air pollution that endangers human health and the

environment, (2) regulations limiting GHG emissions from motor vehicles; (3) an interpretative

rule addressing when pollutants become "subject to regulation" for purposes ofthe Act's

Prevention of Significant Deterioration and Title V permitting programs, and (4) a Tailoring

Rule limiting application ofthe permitting requirements to the largest sources of GHG

emissions during the initial phases ofthe program. If all ofthe motions were granted, the effect

would be to delay application ofthe Act to mobile and stationary sources during this litigation.

2. I am the founder and CEO of Small Business Majority. Prior to starting Small Business

Majority, I was the founder and CEO ofACI Interactive, an award-winning international ecommerce company. Earlier, I was the chief operating officer of a pioneering multimedia

business, and prior to that was a practicing attorney.

Small Business Majority

3. Small Business Majority (SBM) is a national nonprofit small business advocacy

organization founded and run by small business owners to focus on solving some ofthe biggest

problems facing America's 28 niillion small businesses today. We are heavily involved in clean

energy policy and comprehensive healthcare reform, as well as working on strategies to promote

entrepreneurship and small business growth, including legislative provisions for job creation, tax

credits and access to capital. We speak for the nearly 28 million Americans who are selfemployed or own businesses of up to 100 employees. We conduct extensive opinion and

I

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 27
economic research and work with small business owners, policy experts and elected officials

nationwide to bring nonpartisan small business voices to the public policy table..

A Stay of EPA's GHG Regulations Could Hamper the Growth of the Clean Energy Sector

ofthe Economy

4. SBM opposes a stay ofEPA's GHG regulations because it would delay and

disrupt efforts to achieve controls of greenhouse gas emissions under the Clean Air Act. The

clean energy economy is a sector that a majority ofsmall business owners view as important to

their ability to compete, and as one area that - in a time when globalization and consolidation

have limited small businesses' opportunities in many areas - represents promising opportunities

for small business growth and innovation. Indeed, a June 2010 survey commissioned by SBM

and two other organizations found that 61 percent ofthe 800 small business owners surveyed

across the nation agree that moving the U.S. toward clean energy is a way to restart the economy

and help small businesses create jobs. l

5. EPA's GHG regulations can be an important first step toward long-term

investment decisions that will help the transition to low-carbon, cleaner technologies and

stimulate business for small businesses as well as clean energy jobs. SBM, together with the

Main Street Alliance, recently released a report on the occasion ofthe 40th anniversary ofthe

Clean Air Act, documenting that the Act has yielded enormous benefits, at a small fraction ofthe

costs originally predicted, and that it has been a major driver oftechnological innovation? As

highlighted in the report, studies show that the economic benefits ofthe Act have far exceeded

the costs ofimposed on businesses. According to the Office ofManagement and Budget, the

total economic benefits ofthe Clean Air Act are estimated at more than four to eight times the

costs of compliance. Clean energy laws in individual states already show that clean energy

standards create tremendous opportunities for small businesses. For example, California's clean

energy standards (commonly referred to as AB 32) provide many opportunities for small

1 See Small Business Majority, Press Statement, New Polls Finds Support for Clean Energy Policies Among Small

Businesses (June 9, 2010) (available at http://www.smallbusinessmajoritv.orglnews-and-events/press-roomview.php?id~54). See also "Small Business and Clean Energy Policy." http://smallbusinessmajority.orglenergy/

2 See Small Business Majority and Main Street Alliance: The Clean Air Act's Economic Benefits: Past, Present

and Future (October, 2010) (available at http://www.smallbusinessmajority.orgfpdflBenefits of CAA 10041O.pdf).

2

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 28
businesses to gain a financial edge in the burgeoning clean energy sector, according to an

economic report recently released by SBM.

6. Ifthe EPA actions at issue in this case are stayed by the Court, some investors

could delay investments in small businesses that would be important sources ofinnovation in

areas such as greenhouse gas emissions control and energy efficiency and could reduce

opportunities for small businesses in these areas.

7. I declare under penalty of perjury under the laws ofthe United States ofAmerica

that the foregoing is true and correct. Executed in Sausalito, California on Oct. 25, 2010.

AC~ C. Arensmeyer v

3

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 29
Exhibit 21

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 30
·DECLARATION OF MICHAEL J. BRADLEY, PRESIDENT OF M.J. BRADLEY &

ASSOCIATES LLC AND EXECUTIVE DIRECTOR OFTHE CLEAN ENERGY

GROUP'S CLEAN AIR POLICY INITIATIVE, ON BEHALF OF CALPINE

CORPORATION, EXELON CORPORATION, NATIONAL GRID, NEW YORK

POWER AUTHORITY, NEXTERA ENERGY, PG&E CORPORATION, AND SEATTLE

CITY LIGHT

1. I, Michael I. Bradley, President ofM.I. Bradley & Associates LLC and Executive

Director ofthe Clean Energy Group's Clean Air Policy Initiative, make this Declaration in

support ofthe response filed by the Environmental Defense Fund, the Natural Resources Defense

Council, and other environmental intervenors in opposition to motions filed by various parties to

stay various actions ofthe U.S. Environmental Protection Agency (EPA) relating to the

permitting of greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act.

The purpose ofthis Declaration is to express the view ofCalpine Corporation, Exelon

Corporation, National Grid, New York Power Authority, NextEra Energy, PG&E Corporation,

and Seattle City Light, who are among the members ofClean Energy Group's Clean Air Policy

Initiative, that, while there will be costs associated with regulating GHGs from stationary

sources, the regulations and their implementation can be designed to manage those costs, and a

stay ofEPA's actions concerning GHG emissions for stationary sources would only exacerbate

and prolong uncertainty associated with GHG regulation. Rather, the Tailoring Rule identifies

which sources would be subject to the PSD permitting requirements for GHGs and which would

not, and thus provides regulatory relief for many sources, while also establishing ground rules

that will govern the PSD program's application to the large GHG sources that will initially be

covered by PSD.

2. I am the President ofM.I. Bradley & Associates LLC (MJB&A) and the Executive

Director ofthe Clean Energy Group's Clean Air Policy Initiative. I formed MJB&A in 1994 and

.the Clean Energy Group in 1997. MJB&A provides private industry, nonprofit organizations,

and government agencies with insightful advice on air quality and climate change policy. I have

served on a number of national air quality and climate change committees, including the

National Academy of Sciences, EPA's Clean Air Act Advisory Committee, and other EPA and

state advisory groups. Prior to founding MJB&A, I was Executive Director ofNortheast States

I

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 31
for Coordinated Air Use Management (NESCAUM) for 12 years. In addition, I founded the

Northeast Advanced Vehicle Consortium to promote advanced vehicle technologies in the

Northeast.

The Clean Energy Group's Clean Air Policy Initiative

3. The Clean Energy Group's Clean Air Policy Initiative (CEG) is a coalition of electric and

natural gas companies that share a commitment to responsible enviromnental stewardship.

Among the members are some ofthe largest electric and natural gas utilities, serving over 25

million electric customers and over six million natural gas customers. The companies include

some ofthe nation's largest generators of electricity, with over 177,000 megawatts of generating

capacity throughout the U.S. (16 percent ofthe U.S. total).

Reasonable Implementation of EPA's Greenhouse Gas Regulations

4. Based on the science underlying climate change, the companies on behalf ofwhom I am

making this declaration agree that climate ·change is a significant problem that must be addressed

now. These companies have long supported federal climate and energy legislation because it can

be designed to achieve the lowest cost reductions. However, in light ofCongressional inaction

on climate legislation, these companies believe that EPA regulation of GHG emissions under the

Clean Air Act can be an important first step in reversing the current trend ofincreasing GHG

emissions. Further, these companies believe that EPA can design regulations for GHGs as well

as air quality to facilitate efficient and long-term investment decisions that can help the transition

to low-carbon, cleaner technologies. For these reasons, these companies support EPA's

implementation ofreasonable regulations governing GHG emissions from the electric sector

under the Clean Air Act.

5. EPA designed the Tailoring Rule in order to phase in the application ofthe PSD program

to sources of GHGs, with the purpose ofminimizing burdens on permitting authorities and

sources. The companies on behalfofwhom I am making this declaration support this approach.

Without the Tailoring Rule, smaller sources, including sources at these companies' facilities,

would be subject to PSD and Title V starting on January 2,2011, which would likely lead to a

significant permitting backlog, creating more uncertainty and barriers for new projects. EPA's

2

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 32
final Tailoring Rule aptly refers to the "permit gridlock" that would occur without the Tailoring

Rule.

6. Consistent with established EPA regulations and policies for criteria pollutants, the CEG

companies have recommended to EPA that permitting authorities should limit best available

control technology (BACT) determinations for GHG emissions to technologies and practices that

are available for implementation at the emissions unit being constructed, replaced, or modified.

Given that GHG emissions control technology is in its infancy, improving thermal energy

efficiency is likely the most effective means at this time to minimize GHG emissions from a new

or modified emission unit at an electric generation unit, and the appropriate metric for setting a

BACT limit is heat rate calculated as the unit's heat input (Btu) per electricity output (kWh),

adjusted for unit-specific variability and degradation. This approach is warranted under the

Act's definition of "best available control technology," which provides that such technology is to

be determined on a "case-by-case basis, taking into account energy, environmental, and

economic impacts and other costs." 42 U.S.C. § 7479(3).

The Implications of Application of the PSD Program to Sources of Greenhouse Gases

7. Under the Tailoring Rule, sources that must undergo PSD permitting anyway, based on

their emissions of other pollutants, and would increase emissions by 75,000 tons per year of

C02e or more, will become subject to PSD for their GHG emissions beginning January 2,2011.

A larger category ofnew and modified sources of GHG emissions - new sources with the

potential to emit 100,000 tons per year, and source modifications that will result in a net

emissions increase of75,000 tons per year ofC02e - will be subject to PSD permitting

beginning July I, 2011. See, e.g., 75 Fed. Reg. 31523. The companies on behalfofwhom I am

making this declaration own facilities that are anticipated to trigger these thresholds and are,

therefore, likely to be subject to PSD starting in January 2,2011 and/or July I, 2011. These

companies also own other facilities that would be excluded from permitting requirements as a

result ofthe Tailoring Rule. While the inclusion of GHGs will add new elements to the

permitting process for new and modified facilities, these companies are committed to working

with EPA and states to ensure that consideration ofGHGs can proceed without disruption ofthe

permitting process.

3

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 33
8. These companies have also been constructively engaged with EPA through, for example,

the individual companies' participation on the Climate Change Workgroup for the Clean Air Act

Advisory Committee and through submissions to EPA to explain to the Agency how the

Tailoring Rule could be implemented most effectively for the electric sector.

A Stay of the Tailoring Rule Would Create New Uncertainty for the Electric Sector'

9. The electric sector continues to face significant uncertainty as to how GHGs will

ultimately be regulated. That uncertainty was not created by EPA's actions during the last year.

The electric sector has long known that its GHG emissions would be regulated and many

companies have made investments in anticipation ofsuch regulations. While the companies on

behalf ofwhom I am making this declaration prefer Congressional action to place a price on

carbon emissions from the sector, the likelihood of Congressional action in the near future is

unclear. Without knowing the ultimate statutory framework for such regulations, long-term

company decision making has been stymied.

10. EPA's decisions in the Tailoring Rule and the Johnson Memo Reconsideration, 75 Fed.

Reg. 17004 (April 2, 1010), will help sources understand what is required prior to Congressional

action on climate legislation, and will make clear which sources are required to comply with

PSD for GHG emissions and which are not, and when the obligations of covered sources take

effect. Without the Tailoring Rule, the electric sector will face continued uncertainty and

anticipate facility-specific litigation from various parties. Thus far, EPA has demonstrated a

careful, measured approach, seeking input from industry and otherstakeholders, and limiting the

initial scope ofregulation through the Tailoring Rule. EPA has demonstrated the ability to

design GHG regulations to help reduce uncertainty, and a stay ofEPA's regulations will only

exacerbate the current uncertainty.

11. Ifthe EPA actions that the moving parties have sought to stay in this case, including the

Tailoring Rule, are stayed by the Court, it is likely th~t companies would delay investments until

the conclusion ofthe litigation and wait for more clarity on the final shape ofthe regulations. A

stay may also slow the development oftechnologies and improved energy efficiency processes

that, if allowed to develop under the incentives created by application ofthe BACT standard,

would reduce the costs of compliance with GHG regulations.

4

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 34
12. 1declare under penalty ofperjury under the laws ofthe United States ofAmerica that the

foregoing is true and correct. Executed in Concord, Massachusetts on October 28,2010.

5

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 35
I

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Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 36
Exhibit 22

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 37
1 

DECLARATION OF STEPHEN G. BRICK 

I, Stephen G. Brick, hereby declare and state under penalty of perjury the 

following: 

1. This declaration is based on my personal knowledge. I am over the 

age of 18 (eighteen) and suffer from no legal incapacity. I submit this 

declaration in support of the State and Environmental Intervenors’ Response to 

Motions to Stay in Case Numbers 10-1131, 10-1073, 10-1092, 09-1322, 10-

1234. 

2. I live at 5714 Tolman Terrace, Madison, Wisconsin 53711-3443. I 

received a Bachelor of Arts in U.S. History from the University of Wisconsin in 

1979 and received a Masters in Science in Energy Analysis and Policy from the 

Gaylord Nelson Institute of Environmental Studies at the University of 

Wisconsin in 1989. For the past 30 (thirty) years, my work has focused on 

various aspects of energy, climate change, and air quality policy, as well as 

other environmental issues. Most recently, from March 2009 to the present, I 

have served as Senior Fellow Climate and Energy Consultant at the Chicago 

Council on Global Affairs. In that capacity, I direct efforts to develop a 

regional program on climate and energy policy, and I also assist private and 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 38
2 

nonprofit clients in matters pertaining to energy economics, energy efficiency, 

environmental policy, and utility regulatory and technology assessment issues. 

3. From November 2005 to March 2009, I served as Environmental 

Program Manager at The Joyce Foundation. My responsibilities included 

oversight of a $10 million (ten million dollars) per year environmental program, 

which focused on energy, global warming, Great Lakes protection, and river 

restoration. I also managed the foundation’s initiative to accelerate 

development of integrated gasification combined cycle technology in the 

Midwest. I also was charged with evaluating all aspects of the foundations 

environmental program and to design and recommend new program strategies. 

4. From September 2002 to November 2005, I served as Associate 

Director for Research and Technical Programs at The Energy Center for 

Wisconsin. There I directed the work of 15 (fifteen) engineers and economists 

employed on a variety of projects related to energy efficiency, renewable 

energy, and new energy technologies. In addition, I conducted due diligence on 

a wide variety of early stage technologies and worked with academics and 

others to support commercialization of such efforts. I also advised state and 

regional policy-makers on a range of energy and environmental issues. 

5. I served as the Director of External Relations and Environmental 

Affairs for PG&E National Energy Group from July 1998 to September 2002. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 39
3 

In that capacity, I analyzed the potential economic impacts of future 

environmental legislation on existing fossil fuel plants as part of acquisition due 

diligence. I also coordinated environmental permitting and regulatory licensing 

for development of combined-cycle power plants in Wisconsin and Illinois. In 

addition, I managed state and local government relations for power plant 

developments in Wisconsin and Illinois. 

6. From September 1996 to 1998, I served as Technical Director for the 

Clean Air Task Force, in which capacity I conducted technical and economic 

analyses of a wide range of state and national air quality policies and developed 

an analytic approach for analyzing costs and benefits of eliminating of old-new 

source distinction in national air quality policies, which ultimately supported 

the passage of the Clean Air Interstate Rule. From 1988 to 1996, I was Vice 

President of MSB Energy Associates, which serves a wide range of public and 

private clients with regard to utility economic and environmental regulations. 

7. From 1979-1988, I worked for the Wisconsin Legislature, Resource

Management Associates (consulting), and the Wisconsin Public Service 

Commission. 

8. The purpose of this declaration is to respond to the declaration of 

Jennifer White Gradnigo for the Corn Refiners Association contained at Exhibit 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 40
4 

24 of the Motion to Stay filed by the National Association of Manufacturers et 

al. in the above-captioned cases (“Gradnigo declaration”).

9. The Gradnigo declaration asserts that members of the Corn Refiners 

Association will suffer harm due to the current determination by the U.S. 

Environmental Protection Agency (“EPA”) that biogenic CO2 emissions will be 

counted in determining whether a stationary source must comply with certain 

permitting requirements of the Clean Air Act beginning on January 2, 2011. As 

set out below, in my expert opinion, these assertions of harm are wholly 

unsupported. First, only a small amount of biomass is used at currently 

operating ethanol facilities, as the primary fuel source for these types of 

facilities is natural gas. In addition, there will likewise be very little use of 

biomass at ethanol facilities slated to come online. Second, the members of the 

Corn Refiners Association exclusively use a wet milling process. However, of 

the existing ethanol production facilities, only a small percentage use the wet 

milling process and only one new facility (out of 11 (eleven)) slated to come 

online) will use the wet milling process. Therefore, the effect of this rule on the 

Corn Refiners Association’s members will be minimal. 

10. In responding to this declaration, I have reviewed the following 

information: 

• The Gradnigo Declaration; 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 41
5 

• Environmental Protection Agency, “Regulation of Fuel and Fuel 

Additives: Changes to Renewable Fuel Standard Program” at 75 

Fed. Reg. 14,670 (Mar. 26, 2010) (“Renewable Fuel Standard 2”) 

and the accompanying Regulatory Impact Analysis (February 

2010), available at 

http://www.regulations.gov/search/Regs/home.html#home

(Document ID No. EPA-HQ-OAR-2009-0472-1132) (“Renewable 

Fuel Standard 2 Regulatory Impact Analysis”); 

• Environmental Protection Agency, “Technical Support Document 

for Ethanol Facilities: Rule for Mandatory Reporting of 

Greenhouse Gases” (June 24, 2010), available at 

http://www.regulations.gov/search/Regs/home.html#home

(Document ID No. EPA-HQ-OAR-2008-0508-2308) (“Technical 

Support Document for Ethanol Greenhouse Gas Reporting”); 

• Environmental Protection Agency, “Regulation of Fuels and Fuel 

Additives: 2011 Renewable Fuel Standards; Proposed Rule” at 75 

Fed. Reg. 42,238 (July 2010) (“Proposed 2011 Renewable Fuel 

Standards”); 

• The Renewable Fuel Association’s Biorefineries Locator available 

at http://www.ethanolrfa.org/bio-refinery-locations/ (updated 

September 30, 2010) (“Renewable Fuel Association Biorefineries 

Locator”)1; 

• The state construction permits and other documents for the ethanol 

facilities identified on the Renewable Fuel Association 

Biorefineries Locator as being currently under construction2. 

 

1

 I am relying on the Renewable Fuel Association Biorefineries Locator solely because it was a source of 

information upon which EPA relied in the Renewable Fuel Standard 2. 75 Fed. Reg. at 14,746 n.60. My reliance on 

this information does not indicate any agreement with any position, legal, policy, or otherwise, that the Renewable 

Fuel Association has taken. I realize that EPA relied upon other sources that I have not or could not have reviewed, 

as some were not publicly available. However, my review is indicative of the current state of the industry. 

2

 These include the permits and other documents for the following facilities: Aventine Renewable Energy, LLC 

(Mount Vernon, IN), Clean Burn Fuels, LLC (Raeford, NC), E Caruso (Goodland Energy Center) (Goodland, KS), 

Range Fuels (Soperton, GA), the AE Advanced Fuels Keyes (Keyes, CA) (previously known as Cilion Ethanol), 

Aventine Renewable Energy (Aurora, NE), and Ag Energy Resources (Benton, IL). 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 42
6 

11. It is my understanding that the relevant period for assessing harm in 

the context of a motion to stay the rule pending the outcome of litigation is the 

time period over which the stay will be in effect, that, is the time period during 

which the court will confirm whether the rule(s) are lawful. Put differently, I 

know that a stay could be granted if those seeking it can show that the rule is 

likely to be found unlawful. And if the rule is found to be unlawful, then there 

will be no harm after that point, as the rule will no longer be in effect. So my 

discussion relates only to the time period between the grant of a stay, if any, and 

the final disposition of this litigation. 

12.At the outset, I would like to note that predictions of how many new 

facilities are expected to come online, during the period a stay is in place, and 

when they will come online is necessarily a difficult task and one that the 

Gradnigo declaration did not undertake. In the Proposed 2011 Renewable Fuel 

Standards, EPA itself noted: 

Announcements of new projects, changes in project plans, project delays, 

and cancellations occur with great regularity. Biofuel producers face not 

only the challenge of the scale up of innovative, first-of-a-kind technology, 

but also the challenge of securing funding in a difficult economy.

3

 

In fact, EPA has required all registered producers and importers of renewable fuels 

to submit annual Production Outlook Reports describing their expectations for new 

or expanded biofuels supplies to assist EPA in developing percentage standards of 

 

3

 75 Fed. Reg. at 42,243. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 43
7 

renewable fuels for each year under the Renewable Fuel Standard 2.4 Therefore, 

while I reviewed publicly available construction permits and the Renewable Fuel 

Association’s website, it is possible that other new ethanol refineries have been 

proposed or modifications requested to the permits of currently operating plants 

that did not come to my attention. In spite of this possibility, my review is 

indicative of the state of the industry at present and a small number of additional 

new plants or plant modifications, during the relevant year or two that a stay might 

be in place, would not change my conclusions. 

I. Current use of biomass by ethanol facilities and future projected use 

13.The Gradnigo declaration claims that the current inclusion of biogenic 

CO2 emissions would harm the members of the Corn Refiners Association, 

[B]y creating a perverse incentive for waste in our industry and a 

disincentive for efficiency and environmentally-friendly processes which our 

corn refiners have already adopted. Corn refiners create biogenic emissions 

from the treatment of wastewater, fermentation processes, and burning 

biomass (from corn milling process and other external sources) and biogas. 

. . . If biogenic emissions are treated in the same manner as fossil fuel 

emissions, the GHG Tailoring Rule serves as a disincentive to build or 

modify combustion sources to utilize agricultural or corn processing residual 

fuels. There may also be disincentives to developing fermentation processes 

that produce green feedstocks to replace chemical feedstocks currently 

obtained through the processing of oil and natural gas. Some facilities may 

otherwise choose to switch to biogenic fuels to avoid coverage under Title V 

 

4

Id. at 42,242 (citing 40 C.F.R. § 80.1449). These reports were due as of September 1, 2010 for the 2011 

compliance year. Id. They have not, however, been made publicly available through EPA’s website or the docket 

for that rulemaking and therefore were not reviewed. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 44
8 

permits, but this option would not be available under the current rule which 

again would remove incentives to fuel switch from fossil fuels.5 

14. The Gradnigo declaration identifies 3 (three) potential harms to the 

members of the Corn Refiners Association and, as I understand, the ethanol 

industry more broadly: 

• A disincentive to use agricultural or corn processing residues as a 

fuel; 

• A disincentive to replace fossil fuel derived feedstocks currently 

used in ethanol production with biomass; and 

• A disincentive to switch from fossil fuels to unidentified “biogenic 

fuels” in ethanol production. 

15. First and foremost, I note that the Gradnigo declaration provides 

absolutely no evidence to demonstrate that this claim of potential harm to the 

members of the Corn Refiners Association, or the ethanol industry more 

generally, actually exists. The Gradnigo declaration provides no evidence as to 

1) the current amount of biomass/bioenergy used by the Corn Refiners 

Association members or the ethanol industry more broadly or 2) any concrete 

plans by any ethanol production facilities to use biomass/bioenergy at any stage 

of the ethanol production process. In fact, of the facilities currently under 

construction, only 1 (one) is permitted to use any amount of biomass energy at 

all. This facility, the Range Fuels facility located in Soperton, Georgia, uses 

 

5

 Gradnigo declaration at 6-7. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 45
9 

wood waste, not corn, as its feedstock, and is allowed to burn some of its 

process residue in only 1 (one) of its 8 (eight) boilers. 

16. In fact, there is no evidence from any other source that I reviewed 

that the Corn Refiners Association’s members or the ethanol industry as a 

whole currently uses any significant amount of bioenergy at any stage of the 

ethanol production process. As demonstrated in the previous paragraph, there is 

no evidence that the Corn Refiners Association’s members or other ethanol 

production facilities intend to use any significant amount of biomass in the 

future. 

17. For the promulgation of the Renewable Fuel Standard 2, EPA

compiled an extensive record of the current technologies and fuel used at 

ethanol production facilities and the projected technologies and fuel use at new 

ethanol production facilities. This analysis also shows that only a small 

quantity of biomass is currently used in existing and operating ethanol 

production facilities and that the vast majority of new facilities will not use 

biomass. 

18. In the analysis of the current operating ethanol industry for the 

Renewable Fuel Standard 2, EPA concluded that “[t]he ethanol industry 

primarily relies on natural gas.”6 Indeed, according to the Renewable Fuel 

 

6

 75 Fed. Reg. at 14,745. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 46
10 

Standard 2 rulemaking, of the 180 (one hundred and eighty) currently operating 

ethanol production facilities, “an estimated 151 burn natural gas (exclusively), 

three burn a combination of natural gas and biomass, one burns natural gas and 

coal (although natural gas is the primary fuel), one burns a combination of 

natural gas, landfill biogas and wood, and two burn natural gas and syrup from 

the process.”7 Therefore, less than 2 (two) percent of existing facilities use 

biomass even as a portion of their fuel. I am not aware of any plant using 

biomass as its exclusive source of fuel. 

19. Moreover, according to EPA, “the majority of new [ethanol] 

production is expected to come from natural gas.”8 EPA estimates that 

approximately 11 (eleven) new ethanol production facilities and 2 (two) 

expansion projects at existing facilities will come online.

9

 Of these, only 3 

(three) are expected to use bioenergy as a fuel feedstock.10 Two of these new 

plants are expected to be coal-fired.11 

II. Corn Refiners Association membership and member facilities impacted 

20. I understand that the members of the Corn Refiners Association 

include those corn refining facilities that exclusively employ the wet milling 

 

7

Id. 

8

Id. at 14,746. 

9

Id. 

10 Id. This includes 2 (two) manure biogas plants (one that, at the time of the promulgation of the Renewable Fuel

Standard 2 was idled and one new plant) and 1 (one) biomass-fired power plant. 

11 Id. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 47
11 

processes.

12 In my expert opinion, the impact of the Tailoring Rule on wet 

milling facilities – and thus on the Corn Refiners Association’s members – is 

speculative and likely to be minimal, if any impact actually occurs. This is 

because, as described below, wet milling is employed at only a very few of the 

existing ethanol production facilities and is not expected to be employed at the 

vast majority of new ethanol production facilities. 

21.The Gradnigo declaration identifies a total 27 (twenty-seven) such 

plants, which process various types of products such as sweeteners, ethanol, and 

corn oil, among others.13 There is some confusion as to the extent that existing 

ethanol production facilities use wet mill processing. Based on information 

compiled by EPA for the Renewable Fuel Standard 2, only 11 (eleven) of the 

173 (one hundred and seventy-three) plants14 currently operating and processing 

corn and/or other similar processed grain for the production of ethanol (as 

opposed to other products) use wet mill processing.15 The rest use dry mill 

processing. 16 However, EPA indicates in another document, the Technical 

 

12 See Corn Refiners Association website, http://www.corn.org/ (identifying the industry represented as those 

refiners using wet milling processes. 

13 Gradnigo declaration at 2. 

14 The Technical Support Document for Ethanol Greenhouse Gas Reporting estimates that there are approximately 

170 (one hundred and seventy) ethanol refineries in the United States and its territories. Technical Support 

Document for Ethanol Greenhouse Gas Reporting at 3. 

15 75 Fed. Reg. at 14,744. There are a total of 180 (one hundred eighty) ethanol plants, 7 (seven) of which process 

waste sugars/starches and employ different operations processes than plants processing corn and/or similar grains. 

Id. at 14,745. 

16 EPA’s analysis did not address the 26 (twenty-six) ethanol production facilities that, as of the rulemaking, it 

determined were not operating. Id. at 14,746; see also Renewable Fuel Standard 2 Regulatory Impact Analysis at 

130. These numbers from the Renewable Fuel Standard 2 are based on EPA’s November 2009 corn/starch ethanol 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 48
12 

Support Document for Ethanol Greenhouse Gas Reporting, that 25 (twentyfive) ethanol facilities use wet milling processing.17 This confusion may result 

from the fact that some plants both ship wet distillers grains to local markets but 

also have drying capacity to enable reaching more distant markets. It is fair to 

say, overall, that exclusive wet mills constitute a minority of current US ethanol 

capacity, and that for economic reasons, new construction heavily favors dry 

mills. 

22. It is also my understanding that with the exception of one facility, all 

new corn ethanol production facilities will employ dry mill processing18 and 

thus would not be among the Corn Refiners Association’s members

19. The 

reason dry mill processing is favored stems from the ability to ship dried 

distillers grains further than wet grains. In sum, the vast majority of existing 

and currently operating ethanol facilities use dry mill processing and the vast 

majority of new ethanol facilities will also use dry mill processing. Therefore, 

the effect of the Tailoring Rule on the members of the Corn Refiners 

Association is likely to be limited to existing facilities that propose major 

modifications. 

 

characterization. 75 Fed. Reg. at 14,746. EPA notes in the Renewable Fuel Standard 2, however, that at least 1 

(one) of the 27 (twenty-seven) plants has since come back online. Id. 

17 Technical Support Document for Ethanol Greenhouse Gas Reporting at 4. 

18 I base my understanding of the technology that new facilities will use on the record compiled by the EPA for the 

RFS2. 75 Fed. Reg. at 14,746. 

19 See Corn Refiners Association website, http://www.corn.org/ (identifying the industry represented as those 

refiners using wet milling processes). 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 49
13 

23. In addition, I note that the Gradnigo declaration states that “[e]xisting 

corn wet milling facilities already are subject to PSD and Title V 

requirements[.]”20 Therefore, these facilities will already be experienced in the 

PSD and Title V permitting processes, and the additional challenge posed by 

adding a new pollutant to an already familiar process is minor. Indeed, over the 

years, new pollutants have been regularly added to Prevention of Significant 

Deterioration and Title V reviews, ammonia (NH4) being an example of a 

relatively recent addition. 

III. Economic State of the Ethanol Industry Generally 

24. The ethanol industry is currently in a slump. There are several 

reasons for this. First, the global economic recession has constrained access to 

capital for new industrial facilities. Second, the ethanol blend ceiling, which 

was until very recently set at 10 (ten) percent, constrained the market for new 

ethanol facilities.21 Finally, uncertainty over the ethanol tax credit is an 

 

20 Gradnigo declaration at 4. 

21 On October 13, EPA recently approved a waiver allowing the use of 15% (fifteen percent) ethanol blend ceiling in 

light duty and other motor vehicle types after model year 2007. More information is available at 

http://www.epa.gov/otaq/regs/fuels/additive/e15/. There is little reason to believe, however, that this action will 

induce a rapid expansion of the ethanol industry, as there are many obstacles to making E15 widely available. First, 

to provide pumps for E15 for cars, the gasoline industry would have to construct a new parallel gas infrastructure to

accommodate the fuel. Second, it is my understanding that gas stations currently do not have the ability to store 

another fuel formulation and that E15 would damage the hoses at gas pumps. Finally, refiners have indicated that 

they are reluctant to sell E15 without congressional liability protection as E15 could lead to engine damage. For

instance, a spokesman for Valero, one of the nation’s largest refiners, stated that “[w]e would be hesitant to sell a 

fuel that does not have some sort or warranty protection or has been accepted by engine manufacturers or equipment 

manufacturers.” Bloomberg, Valero, Refiners Reluctant to Sell Higher Ethanol-Blend Gas (Oct. 12, 2010), 

available at http://www.bloomberg.com/news/2010-10-12/valero-refiners-reluctant-to-sell-higher-ethanol-blendgas.html. Similarly, a spokesman for Marathon Oil Co. has also stated that it will be cautious about selling E15. Id. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 50
14 

impediment for new market entrants. According to the Renewable Fuel 

Standard 2, currently there are approximately 26 (twenty-six) idled ethanol 

production facilities.22 In addition, based on our review of the plants identified 

Renewable Fuel Association Biorefineries Locator, at least 4 (four) of the 

facilities that are currently under construction have declared bankruptcy and are 

not currently operational. 

25. In addition, we understand, according to the Renewable Fuel 

Standard 2, that only 11(eleven) new corn ethanol production facilities are 

slated to come online along with two facility expansions.23 As was noted 

above, projecting the number of new facilities that will come online in a given 

year or expansions at existing facilities that will occur is inherently difficult. 

As EPA explained in the Proposed 2011 Renewable Fuel Standards and as 

noted above, this difficulty stems from several factors, including difficulties 

and/or delays in securing necessary funding and delays in permitting and/or 

construction.24

Conclusion 

26.For the reasons stated above, it is my expert opinion that the 

assertions of harm in the Gradnigo declaration are wholly without foundation. 

Very little biomass is currently used at operating ethanol production facilities 

 

22 75 Fed. Reg. at 14,746 & n.58. 

23 Id. at 14,746. 

24 75 Fed. Reg. at 42,245. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 51
15 

and very little is expected to be used by plants coming online during the 

relevant year or two that a stay might be in place. Moreover, the Corn Refiners 

Association’s members exclusively employ the wet milling process. However, 

very few currently operating plants employ that process and instead use the dry 

milling process, and the overwhelming majority of facilities that may come 

online are expected to use the dry milling process. Finally, all of the 

documentation I have reviewed indicates that there will be very few new 

facilities or expansions at existing facilities coming online. 

I declare under the penalty of perjury that the foregoing is true and correct. 

Executed on October 29, 2010. 

_________________________ 

Stephen G. Brick 

5714 Tolman Terrace 

Madison, Wisconsin 53711-3443 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 52
Exhibit 23

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 53
1

DECLARATION OF DALLAS BURTRAW

1. My name is Dallas Burtraw and I am a senior fellow at Resources for the 

Future, a nonprofit and nonpartisan organization headquartered in 

Washington, D.C., that conducts independent research rooted primarily in 

economics and other social sciences on environmental, energy, natural 

resource and environmental health issues. I hold a Ph.D. in economics 

and a master’s degree in public policy from the University of Michigan 

and a bachelor’s degree from the University of California, Davis. My 

research includes the design of environmental regulation, the costs and 

benefits of environmental regulation, and the regulation of the electricity 

industry. I have recently estimated the change in value of electricity 

generation companies, and the incidence of cost on households, of 

alternative approaches to implementing carbon dioxide emissions trading 

programs in the US. I have examined the cost-effectiveness of trading 

programs for nitrogen and sulfur dioxide in the US, and of carbon 

dioxide emissions trading in the EU. I have also recently analyzed the 

opportunities for regulatory approaches to reduce carbon dioxide. I have 

conducted integrated assessment modeling of nitrogen and sulfur dioxide 

emissions from the power sector including health and ecosystem effects 

and valuation. I am a co-author of the Pizer et al. paper,1the conclusions 

of which are misrepresented in one of the declarations to which I am 

responding.

2. I submit this declaration to respond to errors in three declarations put

forward in support of the stay motions: the declarations of Richard 

Bezdek, Margo Thorning, and Steven Peterson, exhibit attachments 13, 

19, and 11 to the National Association of Manufacturers’ (NAM) motion 

for a stay.

3. Exhibits 13 and 19 offer inappropriate comparisons between 

fundamentally different policies and reach conclusions that cannot be 

sustained based on the cited evidence. As a result, the exhibits provide no 

 

1 William Pizer, Dallas Burtraw, Winston Harrington, Richard Newell, and James 

Sanchirico, 2006. “Modeling Economy-wide vs. Sectoral Climate Policies Using 

Combined Aggregate-Sectoral Models,” The Energy Journal. 27(3), 135-168. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 54
2

meaningful information on the costs or economic impacts of the policies 

that NAM seeks to stay.

4. The stay motion sought by NAM seeks to block two regulatory policies 

of limited scope that address a fraction of the sources of greenhouse gas 

emissions: (1) emission standards applicable to a fraction of the vehicle 

fleet (affecting only new cars and light trucks built in model years 2012-

16) and (2) a preconstruction review requirement for a fraction of the 

stationary source fleet (out of a population of tens of thousands of large 

stationary sources in the United States, the review is expected to add 

approximately 900 projects per year to the number of projects required to 

undergo preconstruction review).

5. Exhibits 13 and 19 infer the impacts of these limited policies from their 

assessment of the impact of much larger and more far-reaching 

legislative proposals for an economy-wide emissions cap and trade 

program that would cover approximately 85 percent of the greenhouse 

gas emissions in the U.S., including the emissions from more than 10,000 

stationary sources and the emissions associated with gasoline and other 

refined oil products when they are eventually combusted. These 

legislative proposals have not yet been enacted.

6. As I will explain below, the costs attributed to the legislative proposals 

for an economy-wide cap and trade program have little relation to the 

costs attributable to the regulatory policies at issue in this case. 

Moreover, the description of costs attributed in exhibits 13 and 19 to the 

legislative proposal is inaccurate and misleading. In other words, even if 

exhibits 13 and 19 had provided a reasonable estimation of the costs and 

benefits of an economy-wide cap and trade program (and they have not), 

that would tell us nothing about the costs and benefits associated with the 

more limited regulatory policies for new cars and the largest new or 

expanded industrial sources that EPA is actually implementing.

7. One of the two regulatory policies in consideration in this case is the 

EPA’s vehicle emission standards, issued jointly with the National 

Highway Traffic Safety Administration’s fuel economy standards, that 

require reductions in the emissions of carbon dioxide, methane, nitrous 

oxide, and hydrofluorocarbons from new cars and light trucks (SUVs, 

minivans, and pick-up trucks) built in model years 2012 through 2016. 

Model year 2012 begins in January 2011. The standards ramp up over 

the five years, allowing manufacturers lead-time to make improvements 

in their vehicles. The EPA has shown that by model year 2016, the 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 55
3

greenhouse gas emissions of the new vehicle fleet will be 30 percent

lower than the emissions of comparable vehicles built a few years ago. 

8. The benefits of the EPA and NHTSA standards are substantial. 

According to the two agencies, the average owner of vehicles built under 

these standards will receive net savings of approximately $3,000 due to 

reduced fueling costs. These savings take into account the extra initial 

cost of the vehicles. This does not account for the additional benefits of 

reducing greenhouse gas emissions. It is difficult to see how, as exhibits 

13 and 19 suggest, that this policy can be characterized as imposing 

excessive costs on the U.S. economy. The evidence is to the contrary –

the net cost of this regulation is negative and the U.S. economy, 

measured in terms of gross domestic product and balance of trade, is 

likely to benefit from the introduction of the regulation.

9. The other policy at issue in this case is the inclusion of carbon dioxide 

and other greenhouse gases as part of the preconstruction review 

requirement applicable to the largest new and modified major stationary 

sources. This review procedure leads to the identification of an 

emissions performance level that the permitting agency (usually a state 

agency and in some cases EPA) determines to reflect use of the best 

available control technology (BACT). Under the Clean Air Act, the 

determination of BACT explicitly takes costs into account, ensuring that 

regulation does not impose costs that are excessive and does not require 

the adoption of technologies or processes that are not available. 

10. Further, the preconstruction review policy will be phased in slowly, so 

that over the time period pertinent for analysis of a potential judicial stay 

(the 12 to 18 months following January 1, 2011), it will affect only a 

limited number of sources. According to EPA, during the first half of 

2011, the only sources affected will be ones that already are required to 

undergo preconstruction review because of other pollutants. They will be 

required to meet a BACT limit for greenhouse gases only if those 

emissions will increase by 75,000 tons per year of carbon dioxide (or an 

equivalent amount of another greenhouse gas). Over the following two 

years, EPA expects preconstruction review to affect an additional 900 

large projects per year out of the population of tens of thousands of 

sources. These are projects that are not now subject to review for other 

pollutants. The 900 additional projects per year will consist of (1) new 

sources that will emit at least 100,000 tons per year of carbon dioxide and 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 56
4

(2) modifications of existing sources that will increase their carbon 

dioxide emissions by at least 75,000 tons.2 

11. Because the emission limitation reflecting BACT will be determined in 

the future for each covered source on a case-by-case basis, taking costs 

into account, it is impossible to demonstrate now that the costs of those 

requirements will be excessive for the sources or burdensome – or even 

noticeable – for the overall economy.

12. These two policies are what is at issue in this case. But Exhibits 13 and 

19 present selected, upwardly-biased estimates of the costs associated 

with an entirely different policy framework – a cap and trade proposal 

that would affect the entire economy. They present estimates of the costs 

they claim would be imposed by the implementation of legislation such 

as the American Clean Energy and Security Act (H.R. 2454), which 

passed the House of Representatives in 2009 but has not been enacted, 

and the American Power Act, a legislative proposal in the Senate which 

has been circulated as a discussion draft but also has not been enacted. 

13. The two bills would have established a cap on the greenhouse gas 

emissions of covered sources, beginning in 2012, with the cap declining 

annually through the year 2050. Generally speaking, the bills would 

have covered more than 10,000 stationary sources – both new and 

existing sources – that emit at least 25,000 tons per year of greenhouse 

gases. The bills would also have covered oil refiners and importers for 

the emissions occurring upon the combustion of fuel that they distribute. 

This broad scope contrasts sharply with the limited coverage of 

preconstruction review program described above, which in the next 18 

months will apply to only about 900 large projects not already subject to 

review, none making less than a 75,000 tons per year increase in 

greenhouse gas emissions. Even if exhibits 13 and 19 provided a valid 

estimate of the costs of implementing these bills, affecting more than 

10,000 sources each year over the next 40 years, that estimate would 

have no reasonable bearing on the cost of implementing the much smaller 

preconstruction review program during the next 18 months, the period 

most likely to be affected by a potential stay.

14. It is also noteworthy that an EPA program of regulations would lead to a 

smaller change in product prices than the cap and trade approach, over at 

 

2

Environmental Protection Agency, Final Rule: Prevention of Significant Deterioration

and Title V Greenhouse Gas Tailoring Rule, FACT SHEET,

http://www.epa.gov/nsr/documents/20100413fs.pdf. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 57
5

least the next decade. The legislative cap-and-trade proposals described 

above would have limited greenhouse gas emissions by issuing a number 

of “emissions allowances” (each worth one ton of carbon dioxide 

emissions) equal to the emissions cap in each year through 2050. Each 

year, each covered source would have been required to surrender one 

emissions allowance for each ton of carbon dioxide emissions (or the 

equivalent amount of each other covered greenhouse gas). This policy 

design creates a new market for tradable emissions allowances and 

introduces a market price on emissions of carbon dioxide. This 

introduces a new cost on production processes that cause the release of 

carbon dioxide emissions. Product prices in the economy would increase 

by an amount reflecting the price of emissions allowances (the amount of 

emissions associated with the product’s production multiplied by the 

price of emissions allowances) plus the cost of the resources (i.e., capital 

and operating costs) directed to reducing those emissions. In a recent 

study, my research colleagues and I estimated that about 86 percent of 

the change in product prices associated with a cap and trade program in 

2016 would arise from the price of these emissions allowances, and just 

14 percent of the change in product prices would arise from the resource 

costs expended to achieve emissions reductions.3 Thus, an economywide regulatory approach that successfully identified and imposed a 

comparable set of emissions reduction measures without a requirement to 

surrender emissions allowances would lead to a change in product prices 

that is comparable to the resource costs, or just 14 percent of the change 

in product prices that would result from a cap and trade program. 

Further, the preconstruction review program actually being implemented 

covers only a small fraction of the sources that would have been covered 

by a cap and trade program. 

15. Although assertions in exhibits 13 and 19 regarding the economic 

impacts of a cap and trade program are irrelevant to assessing the impacts 

of the more modest vehicle standards and preconstruction review 

 

3 Allowance value is expected to constitute the major share of costs resulting from the 

introduction of a price on carbon dioxide for the first couple decades of the program. For 

example, Burtraw et al. (2009) show that resources costs (including the cost of offset 

purchases) account for 13.5 percent of the total costs in 2016 of an allowance price of 

$20.91. The remaining share (86.5 percent) is associated with the value of emissions 

allowances that would be introduced under a trading program. See: Dallas Burtraw, 

Richard Sweeney and Margaret Walls, 2009. “The Incidence of U.S. Climate Policy: 

Alternative Uses of Revenues from a Cap-and-Trade Auction,” 2009. National Tax 

Journal, LXII (3):497-518.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 58
6

requirements, it should be noted that exhibits 13 and 19 present a highly 

exaggerated picture of the impacts of the cap and trade proposals. The 

industry-funded studies upon which they rely make assumptions that 

result in estimates far higher than those derived from analyses by wellrespected nonpartisan institutions including the Environmental Protection 

Agency, the Energy Information Administration, and the Congressional 

Budget Office. Specifically, the studies on which exhibits 13 and 19 rely 

include some or all of the following flaws: 

a. Assuming that the economy already uses energy with perfect 

efficiency, which is widely recognized in the economics literature 

to be a false assumption;

b. Capping production capacity for cleaner energy resources at very 

low and sometimes even current levels; 

c. Excluding from the analysis the impact of provisions in the 

proposed legislation to reduce costs or to help affected entities (for 

example, low-income individuals or vulnerable industries), such as 

rebates to energy intensive manufacturers, rebates to low-income 

households, energy efficiency programs, or opportunities to reduce 

greenhouse gases other than carbon dioxide (some of which are 

much cheaper to reduce than carbon dioxide). 

d. Obscuring the fact that future incomes (as opposed to today’s) are 

projected to grow much faster than future energy costs in the 

presence or absence of the policies. The result is that energy 

expenditures as a fraction of income go down over time, because 

economic growth is much faster than increases in energy costs, 

even under their extreme assumptions.

16. As a result of these errors, the more detailed assertions in exhibits 13 and 

19 about secondary consequences of cap and trade policies, such as 

impacts on low income Americans, and the assertions in exhibit 11 about 

impacts on international competitiveness of American manufacturing, are 

also unreliable. The Congressional Budget Office, for example, 

concluded that the House-passed cap and trade bill (H.R. 2454) would 

actually improve the economic position of the lowest income quintile (the 

20 percent of Americans with the lowest income), because the revenue 

from auctioning a portion of the emissions allowances would be rebated 

to low-income Americans through the tax code and other mechanisms, 

and the amount rebated would exceed the costs borne by low-income 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 59
7

Americans through direct and indirect increases in energy costs.4 

Research by my colleagues and me buttress this finding. We find that 

distributional impact of the cap and trade bill would be progressive over 

the bottom four-fifths of the income distribution under alternative sets of 

assumptions about how various provisions of the legislation might be 

implemented. The average household in the lowest income quintile 

enjoys a net gain (negative burden), due to provisions in the bill itself and 

also to the indexing of social security benefits to changes in the price 

index. The indexing of social security also helps protect seniors across 

the income distribution, a fact that is not recognized in exhibit 13 (see 

page 2, paragraph 6). Historically the earned income tax credit also has 

been revised to reflect changes in the price index.5

17. Likewise, a federal interagency report on the impacts of the House bill on 

the manufacturing sector found that allowances allocated to that sector 

would cover the compliance costs for that sector well past 2020.6 As a 

result, cap and trade legislation would not have created significant 

international competitive disadvantage with foreign suppliers of 

manufactured products. In my judgment, the much more limited policy of 

requiring BACT for a fraction of the largest new and expanded industrial 

projects will also have no discernible impact on firms’ international 

competitiveness, especially as this program does not impose any cost for 

emissions allowances. For these reasons, the predictions in exhibit 11 are 

unreliable.

18. In summary, the emission reduction requirements of an economy wide 

cap-and-trade program as designed in the proposed legislation would 

have negligible impacts on low-income Americans or the American 

manufacturing sector. The EPA’s preconstruction review program –

which will be imposed on far fewer sources and without allowance costs 

 

4 Congressional Budget Office, The Economic Effects of Legislation to Reduce 

Greenhouse-Gas Emissions (Sept. 2009),

http://www.cbo.gov/ftpdocs/105xx/doc10573/09-17-Greenhouse-Gas.pdf. 

5

Joshua Blonz, Dallas Burtraw and Margaret Walls, 2010. “Climate Policy’s Uncertain 

Outcomes for Households: The Role of Complex Allocation Schemes in Cap-and-Trade,” 

B. E. Journal of Economic Analysis and Policy, forthcoming. See related RFF Discussion 

Paper 10-12-REV.

6

The Effects of H.R. 2454 on International Competitiveness and Emission Leakage in

Energy-Intensive Trade-Exposed Industries, An Interagency Report Responding to a 

Request from Senators Bayh, Specter, Stabenow, McCaskill, and Brown (Dec. 2, 2009), 

http://www.epa.gov/climatechange/economics/pdfs/InteragencyReport_CompetitivenessEmissionLeakage.pdf.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 60
8

– would have only a small fraction of the impact on product prices of a 

cap and trade program. And as noted, the vehicle standards will save 

consumers money.

19. Exhibit 13 fundamentally misrepresents the conclusion of work by my 

colleagues and me in the Pizer et al. paper cited on page iii and page 1 of 

the declaration. The Pizer et al. paper hypothesized two programs of 

equal economy-wide scope, one implementing a cap and trade 

mechanism, and another regulatory approach attempting to achieve the 

same amount of emission reductions through a fuel economy standard 

and a renewable electricity standard. In modeling the regulatory 

approach, the Pizer et al. paper assigned about two-thirds of the 

emissions reductions to the renewable electricity standard. However, the 

renewable electricity standard modeled in that paper has no relation to 

the preconstruction review requirements at issue here. The renewable 

electricity standard is a requirement that all electricity suppliers 

incorporate a specified percentage of electricity from renewable sources 

(such as wind turbines) into the electricity that they deliver. In contrast, 

the preconstruction review requirement under consideration is of a totally 

different nature, and applies to only a fraction of those electricity 

generating sources. For these reasons, the preconstruction review 

requirement would very likely involve only a fraction of the costs of the 

renewable electricity standard we analyzed. The Pizer et al. paper does 

not analyze a program resembling the one at issue here. Thus the paper’s 

conclusion – that a cap and trade program would be less expensive than

the combination of a renewable electricity standard and a fuel economy 

standard – is inapplicable to the program at issue here.

20. In conclusion, the exhibits 11, 13 and 19 assess a fundamentally different 

kind and scope of greenhouse gas emission reduction program than the 

ones at issue in this case, and are flawed even as analyses of that different 

program. As such, it is my judgment as an economist that they do not 

provide support for NAM’s allegations of economic harm from the EPA 

actions at issue here.

I, Dallas Burtraw, declare under penalty of perjury under the laws of the 

United States of America that the foregoing is true and correct to the best of 

my knowledge.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 61
9

Executed this 25nd of October, 2010.

Dallas Burtraw

Senior Fellow

Resources for the Future

1616 P Street, NW

Washington DC 20036

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 62
Exhibit 24

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 63
DECLARATION OF THOMAS A. CACKETTE IN SUPPORT OF JOINT

OPPOSITION OF STATE AND ENVIRONMENTAL INTERVENORS TO

PETITIONERS' MOTIONS TO STAY

I, Thomas A. Cackette, declare the following of my own knowledge:

1. I am currently the Chief Deputy Executive Officer of the California

Air Resources Board (ARB or the Board), and have held that position since 1992.

2. The Board consists of 11 appointed members, including a full-time

chairperson. The Board makes regulatory decisions on emissions standards for

new motor vehicles sold in California, and delegates consequent implementation

and enforcement issues to ARB staff.

3. In my current position, I oversee the development of California's

new motor vehicle emissions control regulations for presentation to, and

consideration of approval or adoption by, the Board. I also manage ARB staff's

implementation of adopted new motor vehicle regulations. And I monitor federal

agency regulatory developments, including those affecting passenger vehicle

standards in particular.

4. When the Board approves or adopts regulations regarding

emissions from new motor vehicles, the Board delegates to its Executive Office

the responsibility to forward the adopted regulations to the U.S. Environmental

Protection Agency (U.S. EPA) to request either a waiver of federal preemption

pursuant to Clean Air Act (CM) section 209(b) (also known as a "new waiver"),

or confirmation by U.S. EPA that the adopted regulations fall "within the scope" of

an existing U.S. EPA waiver.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 64
5. Well before EPA began to regulate greenhouse gas emissions in

response to Massachusetts v. EPA, 549 U.S. 497 (2007), in 2002 California

determined unchecked anthropogenic greenhouse gas emissions to be a

pressing concern for California's natural and human resources and directed ARB

to reduce such emissions from passenger vehicles beginning in the 2009 model

year. AB 1493 (Pavley), Stats. 2002, Chap. 200. A separate declaration in this

matter executed by ARB's Research Director, Mr. Bart Croes, addresses these

ongoing resource concerns in more detail.

6. I was and remain ARB's Executive Officer overseeing the 2002-

2004 regulatory development, 2004 Board approval, 2005 EPA waiver request,

and implementation thereafter of California's greenhouse gas emission standards

for 2009-2016 model year passenger vehicles. These standards require

automobile and light-duty truck manufacturers to reach a gradually more

stringent fleet-wide average of greenhouse gas emissions for the vehicles sold in

California. These standards have been adopted by thirteen other States and the

District of Columbia under Clean Air Act section 177. EPA's 2009 approval of

California's request to waive Clean Air Act preemption of these standards is the

subject of a separate petition in this Court, Chamber of Commerce v. EPA (No.

09-1237 and consolidated cases). I also oversee for California the coordination

with federal agencies of studies and pre-regulatory work that may lead to a

continuation of the type of coordinated federal and state greenhouse gas

emission reduction program for 2017 through 2025 model year passenger

vehicles

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 65
7. As part of my duties, I was the principal ARB officer involved in

discussions leading to the May 2009 Rose Garden announcement of a National

Program to regulate passenger vehicle greenhouse gas emissions for the 2012-

2016 model years. The resulting EPA standards, which are essentially

equivalent by the 2016 model year to California's, are among those for which the

Petitioners here seek a stay, Coalition for Responsible Regulation v. EPA (No.

10-1092 and consolidated cases).

8. The Rose Garden announcement represented an historic policy

breakthrough after a decade of federal inaction in response to the growing

climate crisis. For the first time - and seven years after California embarked on

its regulation of greenhouse gas emissions - the federal government recognized

the critical importance of also reducing greenhouse gas emissions at the national

level and taking affirmative steps toward doing so by federal regulation. The

announcement also acknowledged the vital pioneering role that California played

in developing the first greenhouse gas emission standards and recognized

California's ongoing role in setting future standards. And the announcement

showed that a cooperative spirit between the federal government, California, and

the automobile manufacturing companies - instead of confrontation and litigation

- could achieve great progress for our Nation.

9. In furtherance of the Rose Garden announcement, ARB staff

committed to propose and consider for Board approval amendments to its 2009-

2016 model year standards that would permit regulated automobile

manufacturers to comply with California's program by demonstrating their

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 66
compliance with the National Program. The proposal allowed manufacturers to

submit to ARB the compliance documentation that will be submitted to EPA

under one of Petitioners' stay targets, EPA's MY 2012-2016 greenhouse gas

emissions vehicle rule, by May of the year after each particular model year ends.

The Board adopted these amendments adding this National Program compliance

option in March 2010, and in June 2010 ARB staff submitted them to EPA to

confirm ARB's within-the-scope determination.

10. The Board committed to accept National Program compliance for

the 2012-2016 model years in part to reduce the further expense and uncertainty

of ongoing automobile industry appeals and litigation over California's standards.

Equally important, the Board was persuaded that because the federal

government will have caught up to California's stringent numerical greenhouse

gas emission limit in 2016 but would apply its standards leading to that limit

nationally - Le., in substantially more states than California's standards would

apply under Clean Air Act Section 177 - the net effect was greater greenhouse

gas emission reductions to mitigate ongoing and accelerating resource impacts

in California.

11. Under federal and California regulations, the 2012 model year can

begin as early as January 1, 2011, depending on a manufacturer's production

onset. California's greenhouse gas emission standards require manufacturers to

state their compliance option choice no later than the start of the model year.

12. I understand that at least two of the seven largest manufacturers

have formally declared to ARB that they will exercise the National Program

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 67
option to show compliance in California for the 2012 model year, and that at least

one of the other five manufacturers has informally told ARB staff members that

they would also use the National Program option. In addition, all seven

manufacturers supported the National Program at the Rose Garden

announcement. Therefore, it is likely that every major automobile manufacturer

intends to exercise the National Program option in California for model year

2012.

13. If the National Program rule for model year 2012 is stayed before a

given manufacturer begins model year 2012 production, it is unclear if that

manufacturer can continue to choose the National Program option in California

due to the uncertain availability of its later use. If the National Program rule is

stayed at any time after a given manufacturer begins model year 2012

production, it is unclear if ARB will be able to accept that manufacturer's later

National Program compliance demonstration as compliance with California's

2012 model year standards. This is because, for example, manufacturers may

not be generating the necessary compliance data for the National Program for

the entire model year, that compliance data may not be verifiable, and the

emissions credits and/or debits based on that compliance data may not be

created (ensuring the benefits envisioned under the National Program). Thus,

the manufacturers' use of the National Program compliance option is at

substantial risk if EPA's vehicle regulations are stayed.

14. It is unknown whether ARB could accept voluntary compliance with

the National Program for model year 2012 during a stay of the National Program

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 68
rule. Voluntary compliance would at minimum raise potentially insurmountable

enforcement concerns for the Board and ARB staff, potentially precluding its use,

and may instead require further rulemaking.

15. It is unknown whether all manufacturers could show compliance in

California for the 2012 model year without exercising the National Program

option.

I declare under penalty of perjury that the foregoing is true and correct. Executed --.

this 2 0lffi-day of October, 2010, at Sacramento, California.

hOmas A. Cackette

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 69
Exhibit 25

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 70
DECLARATION OF JASON COLLETTE, ENVIRONMENTAL PROJECT DIRECTOR

FOR THE MAIN STREET ALLIANCE

I. I, Jason Collette, the Environmental Project Director for The Main Street Alliance, make

this Declaration in support ofresponse filed by the Environmental Defense Fund, the Natural

Resources Defense Council, and other environmental intervenors in opposition to motions filed

by vatious parties to stay various actions ofthe U.S. Environmental Protection Agency (EPA)

relating to the control of greenhouse gas (OHO) emissions under the Clean Air Act. The purpose

ofthis Declaration is to express The Main Street Alliance's support for EPA's decisions to move

forward with controls on emissions ofOHOs under the Act and to oppose motions to stay EPA

actions in order to further delay implementation ofthe Act as to OHO emissions. The EPA

decisions at issue here include (I) determinations that the emissions ofOHOs from mobile

sources cause or contribute to air pollution that endangers human health and the environment, (2)

regulations limiting OHO emissions from motor vehicles; (3) an interpretative mle addressing

when pollutants become "subject to regulation" for purposes ofthe Act's Prevention of

Significant Deterioration and Title V permitting programs, and (4) a TailOling Rule limiting

application ofthe pennitting requirements to the largest sources ofOHG emissions during the

initial phases ofthe program. EPA's Tailoring Rule identifies which sources would be subject to

the PSD pennitting requirements for GHGs and which would not, requiring only the largest new

or moditied emitters to begin addressing GHGs as part oftheir PSD pennits beginning January 2,

20 II. Thus, a stay of EPA's actions concerning GHO emissions for stationary sources would

exacerbate and prolong uncertainty concerning the impact of GHG pemlitting requirements for

small businesses.

2. With over three years of experience working with membership organizations on a host of

campaigns, I am currently the Environmental Project Director for The Main Street Alliance. At

The Main Street Alliance, my responsibilities include implementing member-driven campaigns

and helping membership understand complex issues that atfect small businesses, including clean

energy, climate legislation, and EPA regulatory actions.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 71
The Main Street Alliance

3. The Main Street Alliance is a national network ofsmall business coalitions in 15 states

supporting small business owners to bring their values into the public dialog on pressing policy

issues. Members ofThe Alliance network share a vision of public policies that work for small

business owners, their employees and the communities they serve. The Alliance and its member

coalitions create opportunities for small business owners to speak for themselves on issues of

common concem.

EPA's Greenhouse Gas Regulations Create Clarity fot· Small Businesses

4. EPA's GHG regulations establish a mechanism for the implementation ofGHG

pennitting starting with the largest sources. Under the Tailoring Rule, sources that must undergo

PSD pennitting anyway, based on their emissions of other pollutants, and would increase

emissions by 75,000 tons per year ofCOle or more, will become subject to PSD for their GHG

emissions beginning January 2, 20 II. A larger category of new and modified sources ofGHG

emissions - new sources with the potential to emit 100,000 tons per year, and source

modifications that will result in a net emissions increase of75,000 tons per year ofCOle - will

be subject to PSD pennitting for GHGs beginning July 1,2011. See, e.g., 75 Fed. Reg. 31523.

5. A stay would create the situation where small businesses would not know whether or not

their sources would be subject to PSD. Ifthe Tailoring Rule remains effective during the

litigation, small businesses whose emissions are expected to be below the Tailoring Rule's

thresholds can be confident that they are not subject to PSD during that period oftime.

A Stay of EPA's GHG Regulations Could Hampe.· the Growth of the Clean Energy Sector

of the Economy

6. The Main Street Alliance also opposes a stay because it would delay and disrupt efforts

to achieve controls ofGHG emissions under the Clean Air Act, thereby creating regulatory

uncertainty for business and deferring the development of clean energy opportunities and

investment. The clean energy economy is a sector that a majority ofsmall business owners view

as providing important job and growth opportunities and one that is essential to their ability to

compete.

7. EPA"s GHG regulations can be an important tirst step toward long-teml investment

decisions that will help the transition to low-carbon, cleaner technologies and stimulate

2

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 72
opportunities for small businesses and clean energy jobs. Indeed, The Main Street Alliance, with

the Small Business Majority, recently released a report on the occasion ofthe 40'h anniversary of

the Clean Air Act, documenting that the Act has yielded enormous benefits, at a small fraction of

the costs originally predicted, and that it has been a major driver of technological innovation. I

As highlighted in the report, numerous studies show that the economic benefits ofthe Act have

far exceeded the costs of controlling air pollution emissions. According to the Office of

Management and Budget, the total economic benefits ofthe Clean Air Act are estimated at more

than four to eight times the costs of compliance.

8. lfthe EPA actions at issue in this case are stayed by the Court, it is likely that some

investors would delay investments in small businesses that would be important sources of

innovation in areas such as GHG emissions control and energy efficiency. A stay would send

signals that could dampen innovation and investment in the green technology area more

generally and would be a source of uncertainty for small businesses.

9. I declare under penalty of perjury under the laws ofthe United States of America that the

foregoing is ITue and correct. Executed in Seattle, Washington on /0/2 S/iO . I

ISec Small Business Majority LInd The Main Street Alliance: The Clean Air Aer's Economic Benefits: Pasl. Present

and Future (Oclober, 20 I0) (available al hnp://www.smaJlbusinessmajority.org/pdf/Benefils of eM 1004 JO.pdD.

3

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 73
Exhibit 26

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 74
1.

DECLARATION OF BART E. CROES IN SUPPORT OF JOINT OPPOSITION 

OF STATE AND ENVIRONMENTAL INTERVENORS TO PETITIONERS’ 

MOTIONS TO STAY 

I, Bart E. Croes, declare the following of my own knowledge:

1. I am currently the Chief of the Research Division of the California 

Air Resources Board (ARB or the Board), and have held that position since 2000.

I am a Professional Engineer in Chemical Engineering certified in California, and 

hold advanced degrees with a Master of Science in Chemical Engineering from 

the University of California at Santa Barbara and a Bachelor of Science in 

Chemical Engineering from the California Institute of Technology. I am 

responsible for California’s health, ecosystem, atmospheric processes, emission 

control, and economics research programs for air pollution. I was the program 

manager for the 1997 Southern California Ozone Study (SCOS97-NARSTO), the 

SCOS97-NARSTO Aerosol Program and Radiation Study, California's Particulate 

Matter Research Program, the California Acid Deposition Monitoring Program, 

atmospheric chemistry and modeling research, and California Clean Air Act 

ozone transport research. I am a former member of the National Research 

Council Committee on Research Priorities for Airborne Particulate Matter (1998-

2004), and have been a peer reviewer for the National Research Council, the 

U.S. Environmental Protection Agency (EPA), and numerous scientific journals.

2. The Board consists of 11 appointed members, including a full-time 

chairperson. The Board makes regulatory decisions on emissions standards for 

new motor vehicles sold in California pursuant to state law authorizing ARB to 

reduce air pollutants including greenhouse gases.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 75
2.

3. In my current position I oversee ARB’s research program which 

investigates the causes of and human health and natural resource impacts from 

air pollutant emissions, and the potential for reducing those impacts through 

potential emission reduction strategies. In that role, for 10 years I have studied, 

reviewed, contributed to, and have been apprised of innumerable international, 

national, regional, and California state studies on the causes and effects of global 

warming, particularly as they affect California human and natural resource 

impacts. I am familiar with research cited in the paper of Dr. Michael 

MacCracken entitled “Prospects for Future Climate Change and the Reasons for 

Early Action,” and agree with his summary of the global warming science.

4. In 2002, well before EPA began to regulate greenhouse gas 

emissions in response to Massachusetts v. EPA, 549 U.S. 497 (2007), the 

California Legislature determined unchecked anthropogenic greenhouse gas 

emissions to be a pressing concern for California’s natural and human resources,

and directed ARB to reduce such emissions from passenger vehicles beginning 

in the 2009 model year (AB 1493 (Pavley), Stats. 2002, Chap. 200). Results of 

the Research Division’s review of later additional global warming science formed 

the scientific basis for the Board’s new motor vehicle regulations approved in 

2004. EPA’s 2009 approval of California’s request to waive Clean Air Act 

preemption of these standards is the subject of an extensive EPA waiver docket 

and separate petition in this Court, Chamber of Commerce v. EPA (No. 09-1237

and consolidated cases).

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 76
3.

5. Our submissions to EPA in the aforementioned waiver docket 

catalogued a growing list of observed and projected impacts from climate change 

in California. See e.g., Docket ID No EPA–HQ–OAR–2006–0173-9006.1, dated 

April, 2009, available at

http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQOAR-2006-0173. As described and referenced in that docket, and as I describe 

below, these California-specific impacts include: human and economic impacts 

of sea level rise, exacerbation of harmful ozone (smog) levels, impacts on human 

health from increased smog and soot due to wildfires , increased hospitalization 

and mortality from severe heat, reduced water availability, agricultural impacts 

from extreme heat and decreased freezing events, and negative impacts to 

California’s unique biodiversity. 

6. Sea level rise is one of the most obvious and severe impacts of a 

warming world, leading to displacement of human populations and severe 

economic impacts. California has about 1,800 kilometers of coastline, numerous 

estuaries including the San Francisco Bay and Delta, wetlands, and coastal 

aquifers. These water bounded lands are susceptible to harmful effects if sea

level rises too much or too fast. As global warming continues, California’s 

coastal regions will be increasingly threatened by more intense storms and 

warmer water temperatures. As described and referenced in the docket, results 

of studies indicate that by 2050, sea-level rise could range from 30 to 45 cm (11 

to 18 inches) higher than in 2000, and by 2100, sea-level estimates could be 60 

to 140 cm (23 to 55 inches) higher than in 2000. As sea level rises, there will be 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 77
4.

an increased rate of extreme high sea-level events, which can occur when high 

tides coincide with winter storms and their associated high wind wave and beach 

run-up conditions.

7. Future temperature trends combined with historical statistical 

relationships suggest that California would experience an additional 10–30 days 

per year conducive to unhealthy ozone levels by the year 2050. 

8. Under future climate scenarios wildfire acreage in California would 

increase statewide by 57-169 percent, and over 100 percent in Northern 

California. A study of Southern California wildfires in 2003 found significantly 

increased hospital admissions for respiratory illnesses, especially asthma. 

Studies of climate change impacts on wildfire indicate that wildfires increase the 

likelihood of exceeding the ozone standard in the Western United States. 

9. Elevated temperatures were linked with increased mortality in 

California and several populations that appear to be particularly vulnerable are 

people with cardiovascular disease, the elderly, infants, young children, and 

African Americans. Hospitalizations for directly heat-related causes, such as 

heat stroke and dehydration, increased as temperature increased. In addition, 

hospitalizations for ischemic stroke, respiratory disease, diabetes, acute renal 

failure, and intestinal infectious disease also increased as temperature 

increased. The results highlight the conclusion that there is an association 

between temperature and hospital admissions in California, even without 

extreme temperature events. 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 78
5.

10. Several studies conclude that the changes already observed in the 

historical record regarding temperatures, timing of runoff, and snowpack levels in 

the Western United States are most likely due to the increased concentration of 

greenhouse gases in the atmosphere. Climate change impacts on water supply 

are more likely in the American West, including California as “it is likely that 

droughts will continue to be exacerbated by earlier and possibly lower spring 

snowmelt run-off in the mountainous West, which results in less water availability 

in late summer.” 

11. For the Central Valley of California, “climate change will decrease 

crop yields in the long-term, particularly for cotton,” and stone fruits will be 

affected by a loss of chilling hours. 

12. Climate change threatens biodiversity in California, “the flora of 

California, a global biodiversity hotspot, includes 2387 endemic plant taxa.” “With 

anticipated climate change, we project that up to 66% will experience >80% 

reductions in range size within a century.” The United States Climate Change 

Science Program report concludes that “Climate change has very likely 

increased the size and number of forest fires, insect outbreaks and tree mortality 

in the interior west, the Southwest, and Alaska, and will continue to do so.” 

13. As greenhouse gas emissions continue to increase, both warming 

and the commitment to future warming are presently increasing, with projections 

that the rate of warming will further increase if emission controls are not put in 

place. Such warming and the associated changes are likely to result in severe 

impacts on key societal and environmental support systems. See

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6.

Dr. MacCracken’s summary paper, Prospects for Future Climate Change and the 

Reasons for Early Action; available at: http://www.climate.org/PDF/MacCrackenAWMACriticalReview.pdf. Scientists estimate that tipping points for abrupt 

climate changes (e.g., severe sea level rise, large-scale forest dieback) could be 

passed this century, or even this decade. Under a “business-as-usual” scenario, 

where atmospheric CO2 concentrations are increasing 2 to 3 parts per million 

(ppm) per year, the question is not whether abrupt climate change will occur, but 

rather how soon. See Dr. James Hansen’s statement, available at 

http://www.igsd.org/docs/TPACC%2011Nov08.pdf.

14. The scientific record developed after the above April 2009 waiver 

docket submission has only heightened the need for immediate greenhouse gas 

emission reductions to reduce apparently accelerating human and natural 

resource impacts in California. The Pacific Institute report, “The Impacts of SeaLevel Rise on the California Coast” (2009; available at 

http://www.pacinst.org/reports/sea_level_rise/report.pdf), concludes that sealevel rise will inevitably change the character of the California coast. A wide 

range of critical infrastructure, such as roads, hospitals, schools, emergency 

facilities, wastewater treatment plants, power plants, and wetlands is also 

vulnerable. In addition, $100 billion (in year 2000 dollars) worth of property is at 

risk of coastal flooding. Wildfires in California are increasing in frequency and 

intensity due to higher temperatures from greenhouse gas emissions, which also 

exacerbates the historic climate, topography, and population factors conducive to 

air quality problems (Global warming-induced forest fires to increase health risks 

in western U.S, 2009, available at http://news.mongabay.com/2009/0728-

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7.

fires.html). Additional research on the regional assessment for California 

identified several key impact areas that would pose the most important 

challenges to the state. For example, Schoups et al. (2010; available at 

http://www.engr.scu.edu/~emaurer/papers/Schoupsetal_ClimaticChange_paper.p

df) examines potential regional-scale impacts of climate change on sustainability 

of irrigated agriculture, focusing on the western San Joaquin Valley in California.

They concluded that “the greatest threat to agricultural sustainability in the study 

area appears to be the continued salinization of down-slope areas, jeopardizing 

crop production and requiring future land retirement.” Millstein and Harley (2009; 

available at http://www.atmos-chem-phys.net/9/3745/2009/acp-9-3745-2009.pdf) 

concluded that globally driven climate changes will lead to ozone increases in 

urban cities in California; “These effects contribute to a climate change penalty 

for air quality management: additional controls on anthropogenic emissions will 

be needed to offset undesired effects of climate change on ozone.” A study by 

Mahmud et al (2010; available http://www.atmos-chem-physdiscuss.net/10/2985/2010/acpd-10-2985-2010-print.pdf) indicates that annual 

average concentrations of particulate matter (PM2.5), which ARB staff estimates 

contribute to 9,200 (uncertainty range of 7,300 to 11,000) premature deaths per 

year in California (see http://www.arb.ca.gov/research/health/pm-mort/pmreport_2010.pdf), were predicted to increase at certain locations within the San 

Joaquin Valley and the Sacramento Valley due to the effects of climate change.

Kapnick and Hall (2010; available at 

http://journals.ametsoc.org/doi/pdf/10.1175/2010JCLI2903.1) concluded that 

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 81
8.

“taken together, this study and previous studies paint a picture of a California 

Sierra Nevada snowpack responding rapidly to the changing climate of the past 

few decades. These trends are likely to continue and may be accelerating.” The 

early melting of the snow packs in the Sierras is one of the major contributing 

factors to the severe water supply and quality problems in California.

15. ARB staff’s review of available scientific research makes clear that 

while greenhouse gas emission reductions California can obtain through its 

independent authority are critical to reducing global warming impacts in 

California, additional reductions at the national and international level from both 

mobile and stationary sources are needed to significantly reduce the potential 

breadth and severity of impacts in California.

16. I am familiar with the May 2009 Rose Garden announcement of a 

National Program to regulate passenger vehicle greenhouse gas emissions for 

the 2012-2016 model years. In committing to accept National Program 

compliance, the Board was persuaded that because the federal government had 

caught up to California’s stringent numerical greenhouse gas emission limit in 

2016 but would apply its standards leading to that limit nationally – i.e., in 

substantially more states than California’s standards would apply under Clean Air 

Act Section 177 – the net effect was greater greenhouse gas emission reductions 

to mitigate the aforementioned ongoing and accelerating resource impacts in 

California.

17. I understand from the Declaration of Mr. Thomas A. Cackette that a 

stay in this matter raises various uncertainties regarding manufacturers’ ability to 

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9.

exercise their option for National Program compliance to serve as compliance 

with California’s standards for the 2012 model year. It seems reasonable that a 

stay of the National Program would also potentially delay implementation of 

greenhouse gas emission reduction standards nationally, in turn delaying 

greenhouse gas emission reductions from vehicles sold in most U.S. states.

18. Should a delay in National Program implementation occur that 

would permit greater greenhouse gas emissions than the status quo, California 

can expect the human health and natural resource impacts identified in the 

above paragraphs to occur more quickly. California would also need to consider 

greater greenhouse gas emission reduction regulations on passenger vehicle 

and other greenhouse gas emission sources to attempt to counteract the effects 

of any delay in reductions from a stayed National Program.

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 83
I declare under penalty of perjury that the foregoing is true and correct. Executed

this 23'd day of October, 2010, at Sacramento, California.

Bart E. Croes

Case: 10-1131 Document: 1274851 Filed: 11/01/2010 Page: 84