IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMIA CIRCUIT

)

THE FERTILIZER INSTITUTE, )

) v. )Petitioner, )

)

U.S. ENVIRONMENTAL PROTECTION ) AGENCY, )

)

Respondent. )

)

No. 09-1329

SETTLEMENT AGREEMENT

WHEREAS the The Fertilizer Institute in No. 09-1329 (referred to as

"Petitioner") filed in the Court of Appeals for the D.C. Circuit a petition for review

captioned above that challenges the regulation titled "Mandatory Reporting of

Greenhouse Gases," 74 Fed. Reg. 56,260 (Oct. 30, 2009) ("GHG Reporting

Rule"), which was promulgated under the Clean Air Act by the Environmental

Protection Agency ("EP A");

WHREAS No. 09-1329 has been consolidated with other petitions

challenging the GHG Reporting Rule, with No. 09-1325 designated as the lead

petition;

WHEREAS EP A intends to undertake a rulemaking to make certain

amendments to portions of the GHG Reporting Rule that may resolve the concerns

raised by Petitioners in their petition for review;

WHREAS the EP A and The Fertilizer Institute (collectively the "Parties")

wish to implement this Settlement Agreement ("Agreement") to avoid protracted

and costly litigation and to preserve judicial resources;

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NOW, THEREFORE, the Parties, intending to be bound by this Agreement,

hereby stipulate and agree as follows:

1. Promptly after execution of this Agreement, the Parties wil notify the

Court that they have reached a settlement, subject to required notice provisions

described in paragraph 6 below, and wil request that No. 09-1329 be severed from

the other consolidated cases and be held in abeyance pending finalization and

completion of the terms of their settlement, with EP A to file status reports on 120-

day intervals.

2. EP A shall as expeditiously as practicable publish a notice of proposed

rulemaking on the issue of whether the GHG Reporting Rule should be amended

by the inclusion of proposed amendments of the same substance as set forth in

Attachment A to this Agreement.

3. If and when EP A promulgates in final form an amendment to the

GHG Reporting Rule that includes changes that are substantially the same

substance as set forth in Attachment A to this Agreement, then Petitioner shall

promptly file a stipulation of dismissal with prejudice of No. 09-1329, or in the

event not all such changes are made, a stipulation of dismissal with prejudice of

No. 09-1329 for the issues that correspond to such changes that were made, with

the creation of a new docket for those issues that were not resolved. Such

stipulation of dismissal shall be in accordance with Rule 42 of the Federal Rules

of Appellate Procedure, with each party to bear its own costs and attorneys' fees.

In addition, Petitioner shall not challenge the validity of the portion of the final

rule adopting such amendments of substantially the same substance as set forth in

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Attachment A in any court or administrative proceeding, and the right to raise such

challenge is waived, provided that Petitioner reserves any rights it may have to

challenge in any court or administrative proceeding any portion of such final rule

that is not of substantially the same substance as set forth in Attachment A to this

Agreement.

4. For purposes of this Agreement, EPA and Petitioner recognize that

the publication of new or modified regulations in the proposed or final rule that

addresses other matters or provisions than set forth in Attachment A or that in the

proposed or final rule are otherwise substantially more detailed, extensive and

comprehensive than that set forth in Attachment A would not on that basis alone

cause the final changes referenced in paragraphs 2 and 3 above not to be the same

substance or substantially the same substance as set forth in Attachment A.

5. If EP A does not take action in accordance with the terms of this

agreement then Petitioner's sole remedy under this Agreement regarding the rules

under review in these cases shall be the right to request that the Court lift the stay

of proceedings and establish a schedule for briefing and oral argument.

6. EP A and Petitioner agree and acknowledge that before this

Agreement is final, EP A must provide notice in the Federal Register and an

opportunity for comment pursuant to Clean Air Act section 113(g), 42 U.S.C. §

7413(g). EPA shall submit said notice of this Agreement to the Federal Register

for publication as expeditiously as possible. After this Agreement has undergone

an opportunity for notice and comment, the Administrator and/or the Attorney

General, as appropriate, shall promptly consider any such written comments in

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determining whether to withdraw or withhold her consent to the Agreement, in

accordance with section 113(g) of the Clean Air Act. This Agreement shall

become final on the date that EP A provides written notice of such finality to

Petitioner.

7. Nothing in the terms of this Agreement shall be construed to limit or

modify the discretion accorded EP A by the Clean Air Act or by general principles

of administrative law.

8. Any obligations ofEPA to obligate or expend funds under this

Agreement are subject to the availability of appropriations in accordance with the

Anti-Deficiency Act, 31 U.S.C. § 1341. This Settlement Agreement shall not be

construed to require the United States to obligate or pay funds in contravention of

said Anti-Deficiency Act, 31 U.S.C. § 1341.

9. Except as provided in this Settlement Agreement, none of the parties

hereto waives or relinquishes any legal rights, claims or defenses it may have.

10. The undersigned representatives of each party certify that they are

fully authorized by the party that they represent to bind that respective party to the

terms of this Agreement.

IGNACIA S. MORENO

Assistant Attorney General

Environment and Nat. Resources Division

DA VID J. KAPLAN

U.S. Department of Justice

Environmental Defense Section

PO Box 23986

Washington D.C. 20026-3986

(202) 514-0997

CHRS S. LEASON

Gallagher & Kennedy, P.A.

2575 E. Camelback Road

Suite 1100

Phoenix, Arizona 85016

Phone: 602-530-8059

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Counsel for United States

Environmental Protection Agency

Dated:

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Counsel for

The Fertilizer Institute

Dated:
A TT ACHMENT A

(a) CO2 process emissions from steam reforming of a hydrocarbon or the gasification of

solid and liquid raw material, reported for each amonia manufacturing process unit following

the requirements mofthis subpart (CO? process emissions reported under this subpart may

include CO? that is later consumed on-site for urea production, and therefore is not released to

the ambient air from the ammonia manufacturing process unit).

40C.F.R. § 98.72(a)

C02, CH4, and N20 emissions from each stationary fuel combustion unit. You must report these

emissions under subpart C of this par (General Stationary Fuel Combustion Sources), by

following the requirements of subpart C, except that for ammonia manufacturing processes

subpart C does not apply to any CO? resulting from combustion of the waste recycle stream

(commonly referred to as the purge gas stream).

40 C.F.R. § 98.72(b)

(b) Calculate and report under this subpart process CO2 emissions using the procedures

in paragraphs (b)(1) through (b)(é~) of this section for gaseous feedstock, liquid feedstock, or

solid feedstock, as applicable.

40 C.F.R. § 98.73(b)

Where:

C02 = Annual combined C02 emissions from all amonia processing units (metric tons)

40 C.F.R. §98.73(b)(5) (CO? process emissions reported under this subpart may include CO? that

is later consumed on-site for urea production, and therefore is not released to the ambient air

from the ammonia manufacturing process unites)).

40 C.F.R. §98.73(b)(5)

Delete 40 C.F.R. §98.73(b)(6)

Delete 40 C.F.R. § 98.74(f)

1
"

(a) For missing data on monthly carbon contents of feedstock or the waste recycle

stream, the substitute data value shall be the arithmetic average of the quality-assured values of

that carbon content in the month preceding and the month immediately following the missing

data incident. If no quality-assured data are available prior to the missing data incident, the

substitute data value shall be the first quality-assured value for carbon content obtained in the

month after the missing data period.

(b) For missing feedstock supply rates or waste recycle stream used to determine

monthly feedstock consumption or mpnthly ',yuste reoycle stream quantity, you must determine

the best available estimate(s) of the parameter(s), based on all available process data.

40 C.F.R. §§ 98.75(a) and (b)

Delete 40 C.F.R. §§ 98.76 (b)(12)-(b)(15), (b)(17) and (c)

(13) CO? from the steam reforming of a hydrocarbon or the gasification of solid and liquid

raw material at the ammonia manufacturing process unit used to produce urea and the method

used to determine the CO? consumed in urea production.

40 C.F.R. §§ 98.7(b)(13)

Delete 40 C.F.R. § 98.226(0)

(a) Except as allowed in paragraph (b) of this section, calculate the anual mass of CO2

captured, extracted, imported, or exported through each flow meter in accordance with the

procedures specified in either paragaph (a)(1) or (a)(2) of this section. If multiple flow meters are

used, you shall calculate the anual mass of C02 for all flow meters according to the procedures

specified in paragraph (a)(3) of this section.

40 C.F.R. § 98.423(a)

(1) For each mass flow meter, you shall calculate quarterly the mass of C02 in a C02

stream in metric tons, prior to any subsequent purification, processing, or compressing, by

multiplying the mass flow by the composition data, according to Equation PP-L of this section.

Mass flow and composition data measurements shall be made in accordance with §98.424 of this

subpar. * * *

(2) For each volumetric flow meter, you shall calculate quarerly the mass of C02 in a

C02 stream in metric tons, prior to any subsequent purification, processing, or compressing, by

2
~~...¿

multiplying the volumetric flow by the concentration and density data, according to Equation PP2 of this section. Volumetric flow, concentration and density data measurements shall be made

in accordance with §98.424 of this section. * * *

40 C.F.R. §§ 98.423(a)(1) and (a)(2)

(b)

As an alternative to paragraphs (a)(1) through (3) of this section for CO? that is supplied

in containers, calculate the anual mass of co? supplied in containers delivered by each CO?

stream in accordance with the procedures specified in either paragraph (b)( 1 ) or (b )(2) of this

section. If multiple CO? streams are used to deliver CO? to containers, you shall calculate the

annual mass of CO? supplied in containers delivered by all CO? streams according to the

procedures specified in paragraph (b)(3) of this section.

(1) For each CO? stream that delivers CO? to containers, for which mass is measured,

you shall calculate CO? supply in containers using Equation PP-L of this section.

Where:

CO?u Annual mass of CO? (metric tons) supplied in containers delivered by CO?

stream u.

CC02.o.11 = Quarerly CO? concentration measurement of CO? stream u that delivers CO?

to containers in quarter p (wt. %CO?l

Qß! Quarerly mass of contents supplied in all containers delivered by CO? stream

u in quarter p(metric tons).

p Quarer of the year.

u CO? stream that delivers to containers.

(2) For each CO? stream that delivers to containers, for which volume is measured, yOU

shall calculate CO2 supply in containers using Equation PP-2 of this section.

Where:

CO?u Annual mass of CO? (metric tons) supplied in containers delivered by CO?

stream u.

3
"

CC02.0.u Quarerly CO? concentration measurement of CO? stream u that delivers CO?

to'containers in quarter p (voL. %CO?1

QQ = Quarerly volume of contents supplied in all containers delivered by CO?

stream u in quarer p (metric tons) (standard cubic meters).

DQ Quarterly CO? stream density determination for CO? stream u in quarter p

(metric tons per standard cubic meter).

p Quarer of the year.

u CO? stream that delivers to containers.

(3) To aggregate data, sum the mass of CO? supplied in containers deliverd by all CO?

streams in accordance with Equation PP-3 of this section.

Where:

CO? Annual mass of CO? (metric tons) supplied in containers delivered by all CO?

streams.

CO?u Annual mass of CO? (metric tons) supplied in containers delivered by CO?

stream u.

u CO? stream that delivers to containers.

40 C.F.R. § 98.423(b)

Propose to renumber 40 C.F.R. § 98.423(b) to read 98.423(c)

(a) Determination of quantity.

(1)

Reporters following the procedures in paragraph (a) of section 98.423 shall determine

quantity using a flow meter or meters located in accordance with this paragraph.

(i) If the CO? stream is segregated such that only a portion is captured for commercial

application or for injection, you must locate the flow meter after the point of segregation.

(m Reporters that have a mass flow meter or volumetric flow meter installed to measure

the flow of a CO2 stream that meets the requirements of paragraph (a)(1)(i of this section shall

base calculations in §98.423 of this subpar on the installed mass flow or volumetric flow meters.

4
(2-iii) Reporters that do not have a mass flow meter or volumetric flow meter installed to

measure the flow of the C02 stream that meets the requirements of paragraph (a)(1)(i of this

section shall base calculations in §98.423 of this subpart on the flow of gas transferred off site

using a mass flow meter or a volumetric flow meter located at the point of off-site transfer.

(2) Reporters following the procedures in paragraph (b) of &98.423 shall determine

quantity in accordance with this paragraph.

(i Reporters that supply CO? in containers using weigh bils, scales, or load cells shall

measure the mass of contents of each CO? container to which the CO? stream delivered, sum the

mass of contents supplied in all containers to which the CO? stream delivered during each

quarer, sample the CO? stream delivering CO? to containers on a quarerly basis to determine the

composition of the CO? stream, and apply equation PP-l.

(ii Reporters that supply CO? in containers using loaded container volumes shall

measure the volume of contents of each CO? container to which the CO? stream delivered, sum

the volume of contents supplied in all containers to which the CO? stream delivered during each

quarer, sample the CO? stream on a quarterly basis to determine the composition of the CO?

stream, determine the density quarterly, and apply equation PP-2.

40 C.F.R. §§ 98.424(a)(1) and (a)(2)

(d) Whenever the quality assurance procedures in &98.424(a)(2) of this subpart cannot be

followed to measure quarerly quantity of CO? in containers, the most appropriate of the

following missing data procedures shall be followed:

(1) A quarterly quantity of CO? in containers that is missing may be substituted with a

quarerly value measured during another representative quarter of the current reporting year.

(2) A quarterly quantity of CO? in containers that is missing may be substituted with a

quarterly value measured during the same quarter from the past reporting year.

(3) The quarterly quantity of CO? in containers recorded for puroses of product tracking

and biling according to the reporter's established procedures may be substituted for any period

during which measurement equipment is inoperable.

40 C.F.R. § 98.425(d)

(a) If you use Equation PP-L of this subpar, report the following information for each

mass flow meter or CO? stream that delivers CO? to containers: * * *

40 C.F.R. § 98.426(a)

(2) Quarterly mass Ilin metric tons of C02,

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40 C.F.R. § 98.426(a)(2)

(5) The location of the flow meter in your process chain in relation to the points of CO? 

stream capture, dehydration, compression, and other processing.

40 C.F.R. § 98.426(a)(5)

(b) If you use Equation PP-2 of this subpar, report the following information for each

mass flow meter or CO? stream that delivers CO? to containers: * * *

(2) Quarterly volume tricflowin standard cubic meters of CO2. * * *

(7) The location of the flow meter in your process chain in relation to the points of CO?

stream capture, deyhdration, compression, and other processing.

40 C.F.R. § 98.426(b), (b)(2) and (b)(7)

(c) If you use Equation PP-3 of this subpart, report the annual C02 mass in metric tons

from all flow meters and CO? streams that deliver CO? to containers.

40 C.F.R. § 98.426(c)

(1) The type of equipment used to measure the total flow of the CO2 stream or the total

mass or volume in CO2 containers.

40 C.F.R. § 98.426(e)(1)

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