BEFORE THE ADMINISTRATOR UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

In the Matter of: The Final Rule Published at 76 Fe d. Reg. 53,057 (Aug. 25, 2011), entitled “Change to the Reporting Date for Certain Data Elem ents Required Under the Mandatory Reporting of Greenhouse Gases Rule,” Docket No. EPA -HQ-OAR-2010-0929, RIN 2060- AQ80 (“Inputs Deferral”)

PETITION FOR RECONSIDERATION

Pursuant to Section 307(d)(7)(B) of the Clean Air Act, 42 U.S.C. § 7607(d)(7)(B), Environmental Defense Fund, Sierra Club, Natural Re sources Defense Council, Clean Air Task Force, and Center for Biological Diversity (“Petiti oners”) petition the Administrator of the Environmental Protection Agency (“the Administrator ” or “EPA”) to reconsider the final rule referenced above (“Inputs Deferral” or “rule”). Th e grounds for the objections raised in this petition arose after the period for public comment and are of central relevance to the outcome of the rule. The Administrator must therefore “conven e a proceeding for reconsideration of the rule and provide the same procedural rights as would hav e been afforded had the information been available at the time the rule was proposed.” 42 U .S.C. § 7607(d)(7)(B).

I. EPA’s Extension of the Inputs Deferral Provides Pro per Grounds for Reconsideration

EPA has frequently recognized the importance of ens uring that the Reporting Rule produces robust, high-quality data. See, e.g. , 74 Fed. Reg. 56,260, 56,265 (Oct. 30, 2009) (“Accurate and timely information on GHG emissions is essential for informing many future climate change policy decisions.”). Data that the agency has classified as inputs to emission equations are particularly central to this enterpri se, as such data are necessary to help verify the accuracy of emissions that are calculated based on equations. EPA’s proposal to defer reporting of these inputs for three years, to March 31, 2014, therefore raised serious concerns. See 75 Fed. Reg. 81,350 (Dec. 27, 2010). Petitioners submitted comments opposing this proposal and, in response to EPA’s simultaneous Call for Information

, see 75 Fed. Reg. 81,366 (Dec. 27, 2010), submitted extensive information concerning publicly -available data included in EPA’s proposed deferral.

EPA’s final Inputs Deferral exacerbates the errors of EPA’s proposal in ways which Petitioners could not have anticipated when comment ing upon the proposed rule and Call for Information. Specifically:

· Despite proposing a three year deferral, EPA fina lized a four -year deferral for the vast majority of inputs. 76 Fed. Reg. at 53,061. It di d not seek comment on this change, which will significantly further delay full reporting. Moreov er, although EPA did shorten the deferral to2

two-years for a small subset of inputs, see id. , it did not take comment on which inputs belonged on which timeline.

· Although EPA issued its Call for Information as a “critical part of EPA’s consideration of treatment of inputs” and did so to both “evaluat e which inputs to equations, if any, could result in serious business harms if made available to the public,” 75 Fed. Reg. at 81,368, and to “fully evaluate” its options, 75 Fed. Reg. at 81,35 5, the agency declined to use this information to shape the final deferral. Petitioners and other s submitted extensive information demonstrating that there were no confidentiality or competitivene ss concerns with many inputs, but EPA did not account for this information in its deferral de cision. 1 See Response to Comments (“RTC”) at 11 (declining to address this information in the de ferral rulemaking).

· EPA added further inputs to the deferral, includi ng, for instance, Subpart W inputs, which include critical data on the number of hydrau lically-fractured well completions operators perform annually (which are a dominant methane sour ce) – even though no commenter had advocated for including these inputs in the deferra l and Petitioners submitted evidence that Subpart W inputs generally did not warrant deferral . 76 Fed. Reg. at 53,062. This is a matter that warrants urgent attention.

The final rule extends the deferral beyond what was proposed, splits inputs between two deferral time periods without seeking comment, does not respond to information which is relevant to the extent and nature of the deferral, and unexpectedly adds additional inputs to the deferral. Petitioners could not have practicably o bjected to these changes, as the grounds for objecting to them arose after the comment period pa ssed. See 42 U.S.C. § 7607(d)(7)(B). Moreover, these changes are of central relevance to the outcome of the rule. They fundamentally reshape the deferral’s temporal scope and subject m atter coverage and they demonstrate that EPA failed to account for the record before it, con sideration of which would have led to a very differently designed deferral, if any.

II. The Final Deferral Rule Is Contrary to the Act and Lacks Support in the Record

Further, the extension is contrary to the Clean Air Act, which requires public disclosure of all “emissions data.” 42 U.S.C. § 7414. In its proposed confidentiality determinations, EPA characterized the inputs data at issue here as “emi ssions data,” 75 Fed. Reg. 39,094, 39,108 (July 7, 2010), which is appropriate given the inputs are “information necessary” to determine, inter alia , the amount and characteristics of reporters using emissions equations to report their emissions. See 40 C.F.R. § 2.301(a)(2)(i) (defining emission data as including such information). Indeed, whether or not EPA formally recognized the inputs as such emission data, the terms of the Act, and of its regulations, are s elf-executing: the information is automatically public, and must be disclosed. The agency cannot ci rcumvent the Act’s clear requirements by simply refusing to collect the data required by the Reporting Rule.

The extension is likewise unsupported by the record . EPA justifies four years of delay by stating that its evaluations of data elements have proven to be “more complex and timeconsuming than EPA had anticipated.” The agency pr ovides two reasons for this complication:

1 Our comments are attached, and are incorporated by reference.3

that it did not receive as much information as it h ad anticipated through the call for information and that the agency must perform detailed evaluatio ns for more data elements than it anticipated. EPA, however, provides no rationale for why four years – more than twice the time needed to draft the entire Reporting Rule – are necessary to complete these evaluations, and absent such a reasoned basis, the extension is arbitrary and capr icious. Nor, as we discuss above, did EPA give consideration to the information it received which included substantial evidence that many deferred inputs are already public or for other rea sons simply do not constitute protectable confidential information. This information is rele vant to shaping the nature and extent of any deferral – even if such a deferral is legally permi ssible – yet EPA did not consider that information. EPA likewise failed to consider that the absence of information supporting deferring many inputs demonstrates that no deferral is necessary, instead extending the duration and coverage of the deferral. This decision is who lly unsupported by the record. See Motor Vehicle Mfrs. Ass’n. v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983); Motor Vehicle Mfrs. Ass'n v. EPA , 768 F.2d 385, 397 (D.C. Cir. 1985).

Finally, the extended deferral further complicates data verification efforts. It is input data which EPA and the public must rely upon to determin e emissions because reporters using equations are, by definition, not directly measurin g their emissions. The only emission data available to EPA are the inputs and verification da ta. As EPA explained, “once a facility selects a calculation method [using emissions equations], the n the equation becomes the only way for determining such emissions,” and so “these inputs t o the equation are information ‘necessary to determine’ the calculated emissions.” 75 Fed. Reg. at 39,109.

EPA’s Response to Comments discusses how EPA will c onduct verification in the interim, see RTC at 309-311, acknowledging that it will be more difficult to check for some types of error and to conduct regular on-site audit s. EPA’s discussions suggests that the agency may be able to detect large reporting errors, but d oes not demonstrate that EPA will readily be able to identify more subtle, though equally import ant, errors, inaccuracies, and biases. For instance, though EPA may be able to detect true out liers – data reports that are well out of the range of possible emissions for a given source cate gory – it may be challenging for the agency to detect variations within a range of superficially “ reasonable” emissions reports. These in-group variations are critical to ensuring reported emissi ons are accurate, and as a result, the verification weaknesses created by the deferral frustrate Congre ss’s mandate to establish a robust, highquality GHG reporting regime.

III. Petitioners Request that EPA Reconsider the De ferral

Given these significant issues, Petitioners request that EPA reconsider its final Inputs Deferral. To the extent the agency retains any def erral, Petitioners recommend the following changes:

Limit the scope of the deferral . The record supports narrowing the scope of the d eferral and limiting its duration. Deferring all inputs da ta requires the agency to undertake extensive analyses – analyses that are further dela yed because the agency did not receive any information concerning competitive harms for nu merous deferred data elements. Limiting the deferral to only those inputs for whic h EPA received information that4

clearly demonstrates a competitive concern will exp edite review and allow the agency to significantly shorten the deferral. As such, we re quest that the Agency narrow the scope of the deferral and limit any such deferral to no l onger than 18 months.

Ensure that inputs data are subject to third-party verification during the deferral

. Reporters are required to collect and maintain inpu ts data during the pendency of the deferral. During the deferral, EPA should require deferred operators to contract with
third

‐ party verifiers to check their data. EPA can draw upon an extensive network of
third

‐ party verifiers already trained and accredited for the California Air Resources Board’s and other state and private registries. Ul timately, using third-party verifiers will help to ensure the accuracy of emissions data – an especially critical task given EPA’s extension of its deferral.

Rely on direct measurement to replace inputs data . Measurement choices principally determine data quality, and direct measurement gene rally produces the lowest uncertainty in most emissions measurements. 74 Fed. Reg. at 16 ,477. Continuous emission monitoring systems (“CEMS”), for instance provide s ignificant accuracy improvements when compared to default emissions factors. Direct ly measuring emissions likewise avoids the need to collect and report inputs data. As such, EPA must expeditiously deploy direct measurement in situations where the r eporting rule identifies such measurement as an alternative or when direct measur ement methodologies are otherwise available. Where direct measurement is not current ly available, the agency should help develop and implement direct measurement techniques to maximize data accuracy and to eliminate any competitiveness concerns. Extending the deferral is particularly unwarranted where the Reporting Rule currently cont ains alternatives that would avoid disclosure of allegedly sensitive information.

Promote transparency . Given the critical nature of inputs data, the im pact the data have on verification efforts, and the agency’s commitmen t to transparency, we respectfully request that the agency clearly identify facilities that are withholding reporting of data elements under the deferral and that the agency dis close any verification efforts that the agency has taken with respect to facilities covered by the deferral and the results of those efforts. The agency has identified transparency as critical to “building public confidence in the quality of the data collected,” 74 Fed. Reg. at 56,349, and transparency is particularly critical here to identify the scope an d breadth of facilities withholding data.

Narrowing the deferral in this manner, ensuring emi ssions are verifiable in the interim, and substituting direct measurement techniques for sensitive inputs data will promote data accuracy and transparency while eliminating any con cerns regarding disclosure of sensitive data elements. These actions will ensure the accountab ility Congress envisioned when it directed EPA to put in place a comprehensive greenhouse gas emissions reporting program and will ensure rigorous data is available to inform policy- making.5 CONCLUSION

It is critical that the Reporting Rule produces acc urate, high-quality data, and as such, EPA must stop delaying and deferring reporting of v ital greenhouse gas emissions data. EPA has not justified its additional delay in terms of its duty to issue the Reporting Rule by 2009, Consolidated Appropriations Act of 2008, Pub. L. No . 110

‐ 161, § 6, div. F, tit. II, 121 Stat. 1844, 2128 (2008); Consolidated Appropriations Act of 200 9, Pub. L. No. 111

‐ 8, §5, div. E, tit. II, 123 Stat. 524, 729 (2009), and likewise failed to addre ss the harm that additional delay will cause the public. EPA has acknowledged the importance of pub lic disclosure in “building public confidence in the quality of the data collected,” 7 4 Fed. Reg. at 56,349, and yet EPA failed to explain how its deferral addresses this harm to pub lic disclosure. Congress provided for this data to ensure members of the public, including Petition ers and their members, have greater transparency and accountability in understanding th e scope and dimensions of greenhouse gas

emissions and the data will likewise aid Petitioner s’ advocacy for future greenhouse gas measures. As such, Petitioners respectfully urge t he agency to reconsider the Inputs Deferral and to take expeditious corrective action as described above.

DATED: October 24, 2011

Respectfully submitted,

Peter Zalzal Staff Attorney

Environmental Defense Fund 2060 Broadway, Suite 300 Boulder, CO 80302 (303) 447 7214 pzalzal@edf.org

Craig Holt Segall Attorney Sierra Club Environmental Law Program 50 F St NW, Eighth Floor Washington, DC 20001 (202)-548-4597 Craig.Segall@sierraclub.org

David D. Doniger Policy Director, Climate and Clean Air Program Natural Resources Defense Council6 1152 15th Street, NW, Suite 300 Washington, DC 20005 (202) 289-2403 ddoniger@nrdc.org

Helen D. Silver Attorney

Clean Air Task Force 18 Tremont St., Suite 530 Boston, MA 02108 (617)

‐ 624

‐ 0234

hdsilver@catf.us

Kevin P. Bundy Senior Attorney Center for Biological Diversity 351 California Street, Suite 600 San Francisco, CA 94104 Phone: (415) 436-9682 x 313 http://www.biologicaldiversity.org