Clark Waddoups, Esq. (3975) 

Carolyn B. McHugh, Esq. (3733) 

Steven J. Christiansen, Esq. (5265) 

D. Kyle Sampson, Esq. (8112) 

PARR WADnoups BROWN GEE & LOVELESS, PC 

i85 South State Street, Suite 1300 

Salt Lake City, Utah 84111-1536 

Telephone: (801) 532-7840 

Attorneys for Phillips Petroleum Company 

IN THE UNITED STATES DISTRICT COURT
 

DISTRICT OF UTAR, NORTHERN DIVISION
 

) 

UNITED STATES OF AMERICA, ) PHILLIPS PETROLEUM 

) COMPANY'S MOTION FOR 

Plaintiff, ) PARTIAL SUMMARY JUDGMENT 

) 

vs. ) (Oral Argument Requested) 

) 

PHILLIPS PETROLEUM COMPANY, ) Civil No. 1:97CVOl44S 

) 

Derendant. ) Hon. David Sam 

) 

Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, Defendant Phillips 

Petroleum Company ("Phillips") hereby moves for swnmary judgment on Counts I and II of the 

Amended Complaint filed in this action by the United States of America ("EPA"). 

Phillips is entitled to summary judgment on Counts I and II on the following grounds: 
1. Phillips has complied with continuous emissions monitoring ("CEM") requirements 

at its Woods Cross refinery as a matter of law because the State of Utah determined, to the State's 

satisfaction, that Phillips' CEM equipment malfunctions were unavoidable and therefore excused. 

2. Phillips has complied with the daily emissions limit for sulfur dioxide ("SOn at 

its Woods Cross refInery as a matter of law because the hourly S02 emissions limit EPA contends 

applies to Phillips would unconstitutionally discriminate against Phillips and therefore would be 

unenforceable as a matter of law. 

3. Phillips has complied with the daily emissions limit for sulfur dioxide ("S02") at 

its Woods Cross refmery as a matter of law because the hourly S02 emissions limit EPA concends 

applies to Phillips would be arbitrary and capricious and therefore unenforceable as a matter of 

law. 

This Motion is supported by the Memorandum in Support of Ph.illips Petroleum 

Company's Motion for Partial Summary Judgment, which is filed concurrently herewith; the 

Affidavits of Jeff Dean, David J. Prey and Walter F. Kramer, each of which is filed concurrently 

herewith; and the record, pleadings, exhibits, depositions, affidavits and other documents on file 

in this action. 

[c:l...IpIlilJips1,5£>.mot.wpd) 2 
RESPECTFULLY SUBMITTED this 1"'1'day of August, 1998. 

PARR WADDOUPS BROWN GEE & LOVELESS, PC 

Attorneys for Phillips Petroleum Company 

(c:l...Iphillip.lr56- mol.wpd] 3 
CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on the ~day of August, 1998, a true and correct copy of the 

foregoing PHILLIPS PETROLEUM COMPANY'S MOTION FOR PARTIAL SUMMARY 

JUDGMENT was mailed, postage pre-paid, to the following:. 

Eric A. Overby, Esq. 

U.S. ATTORNEY'S OFFTCE
 

185 South State Street, Suite 400
 

Salt Lake City, Utah 84111-1506
 

William A. Hutchins, Esq. 

Senior Attorney, Environmental Enforcement Section 

Environment and Natural Resources Division 

U.S. DEPARTMENT OF JUSTICE 

P.O. Box 7611
 

Ben Franklin Station
 

Washington, D.C. 20044
 

Kathryn Schmidt, Esq.
 

Environmental Enforcement Section
 

U.S. DEPARTMENT OF JUSTICE
 

999 18th Street
 

Suite 945, North Tower
 

Denver, Colorado 80202
 

[e;I...Iphillipslr56-mol.wpdJ 4 
Clark Waddoups, Esq. (3975) 

Carolyn B. McHugh, Esq. (3733) 

Steven J. Christiansen, Esq. (5265) 

D. Kyle Sampson, Esq. (8112) 

PARR WADDOUPS BROWN GEE & loVELESS, PC 

185 South State Street, Suite 1300 

Salt Lake City, Utah 84111-1536 

Telephone: (801) 532-7840 

Attorneys for Phillips Petroleum Company 

IN THE UNITED STATES DISTRICT COURT
 

DISTRICT OF UTAH, NORTHERN DIVISION
 

) 

UNITED STATES OF AMERICA, ) MEMORANDUM IN SUPPORT 

)
 OF PHll..LIPS PETROLEUM 

Plaintiff, ) COMPANY'S MOTION FOR 

)
 PARTIAL SUMMARY nJDGMENT 

vs. ) 

)
 

PHILLIPS PETROLEUM COMPANY, ) Civil No.1 :97CV0144S 

) 

Defendant. ) Han. David Sam 

)
 

Defendant Phillips Petroleum Company ("Phillips") respectfully submits the following 

Memorandum in Support of its Motion for Partial Summary Judgment against Plaintiff United 

States of America ("EPA"). 
TABLE OF CONTENTS 

TABLE OF AUTHORITIES	 iii
 

INTRODUCTION	 v
 

FACTUAL BACKGROUND	 vii
 

STATEMENT OF UNDISPUTED FACTS	 xvii
 

ARGUMENT	 1
 

1.	 PHIllIPS HAS COMPUED WITH CEM MONITORING REQUIREMENTS AS
 

A MATTER OF LAW 1
 

A.	 CEM Unavailability Caused by CEM Equipment Malfunction Is Excused
 

Ifthe State Detennines to Its Satisfaction That the Equipment Malfunction
 

Was Unavoidable. . ; 1
 

B.	 It Is Undisputed That Phillips Demonstrated to the Satisfaction of the State
 

That the CEM Unavailability EPA Complains of Was Caused by
 

Unavoidable CEM Equipment Malfunctions. . 5
 

C.	 The State Did Not Abuse The Discretion Granted it in Determining That
 

Phillips' CEM Equipment Malfunctions Were Unavoidable. . 6
 

II.	 PH1U1PS HAS COMPUED WITH S02 EMISSIONS LINllTS AS A MATTER
 

OF LAW 9
 

A.	 As Interpreted by EPA, the PM10 SIP and the Approval Orders Would
 

Unconstitutionally Discriminate Against Phillips and Therefore Would Be
 

Unenforceable as a Matter of Law. . 9
 

B.	 Under EPA's Interpretation, the State's Action in Promulgating the PMIO
 

SIP and Issuing the Approval Orders Would Have Been Arbitrary and
 

Capricious. 18
 

CONCLUSION	 23
 

Id...lphjllip~\r56-mem3.wpdl	 ii 
TABLE OF AUTHORITIES
 

~:

Amax Magne~ium Corp. v. Utah State Tax Comm'n, 

796 P.2d 1256 (Utah 1990). . 10, 11, 14 

Anderson y. Liberty Lobby, 1llc;.~, 477 U.S. 242, 106 S. Ct. 2505 (1986) 1 

Bowman Transp" Inc. v. Arkansas-Best Freight Sys" Inc., 

419 U.S. 281, 95 S. Ct. 438 (1974) 19 

Broadbent v, Gibson, 140 P.2d 939 (Utah 1943). . 10 

Caribbean Petroleum Corp. v. EPA, 28 F.3d 232 (lst Cir. 1994) , .. 21 

Crowell v. Benson, 285 U.S. 22, 52 S. Ct. 285 (1932). . 17 

Dodge Town. Inc. y. Rom~, 480 P.2d 461 (Utah 1971). . 10 

Florida Power &; Light Co. v. Costle. 650 F.2d 579 (5th Cir. 1981).. , 2 

Greenwood y. City of North Salt Lake, 817 P.2d 816 (Utah 1991) 10 

Gronlum1 v. Salt Lake City, 194 P.2d 464 (Utah 1948). 10, 11 

llUnois v. Celotex, 516 F. Supp, 716 (C.D. Ill. 1981) , 11 

Malan v. Lewis, 693 P,2d 661 (Utah 1984) 10, 11, 13 

~u.nt Evans Co. y. Madigan, 14 F.3d 1444 (lOth Cir. 1994) , 7 

NavlstaLlnt'l Traost'. Corp. v. EPA, 941 F.2d 1339 (6th Cir. 1991).. , .. , , . . . . . .. viii 

Olenhouse v. Commodity Credit Corp., 42 F.3d 1560 (10th Cir. 1994) 18, 20, 21 

Rocky MQuntain Helicopters. Inc. v. FAA, 975 F.2d 736 

(10th Cir. 1992). . , ,................... 14, 18, 19,20
 

(c,\...\phillip'lr56-mcmJ.wpd) iii 
Sierra Club v, Indiana-Kentucky Eke, CQrp., 

716 F.2d 1145 (7th Cir. 1983). .. I •• I I •••• I ••••••••••••••••••••• 11

State v. Bayer, 97 P. 129 (Utah 1908) 10 

State v. Holtgreve, 200 P. 894 (Utah 1921) 10 

State v. I.B. & R.E. Walk~L....1.IJ&..., 116 P.2d 766 (Utah 1941) I •••••••••• 11

State Tax Comm'n v, Dep't of Finance, 576 P.2d 1297 (Utah 1978) 10 

Thomas Brooks Chaltered v. Burnett, 920 F.2d 634 (lOth Cir. 1990). . 7 

Train v. Natural Resources Defense Council Inc., 421 U.S. 60, 

95 S. Ct. 1470 (1975) I ••••••••••••••••••••••••••••• 22

United States v, Ford Motor Co., 736 F. Supp. 1539 (W.D. Mo. 1990). . 2 

United Stat~.Lv, General Motors Corp" 702 F. Supp. 133 

(N.D. Tex. 1988). . I ••••••••••••••••••• 2 

United States v. Solar Turbines, Inc., 732 F. Supp. 535 

(M.D. Pa. 1989) '; 14 

Unterrnyer v. State Tax. Comm'n, 129 P.2d 881 (Utah 1942) 10 

Virginia v. EPA, 108 F.2d 1'397 (D.C. Cir. 1997) 22 

Weber Basin Home Builders Ass'n v, Roy City, 

487 P.2d 866 (Utah 1971) 10 

Woods PetrQl~um Corp. v, Pep't QfIntcriQr, 

47 F.3d 1032 (lOth Cu. 1995). . 19 

Constitutional PrQvisions: 

Utah Const., Article I, § 24 I ••••••••••••••••••••••••••• 9, la, 13

!e:\, ..IphillipslrS6-mcm3. wpd) lV 
Statutes: 

Clean Air Act, 42 U.S.C. §§ 7401 passim 

Utah Code Ann. § 19-2-106 (1995) 17 

Regulations: 

Utah Admin. R. 307-1-4.7 (1996) xv 

Utah Admin. R. 307-13 (1996) : 3. 4 

•

40 C.F.R. Pt. 51, App. P, § 1.0 (1997) 4,5 

40 C.F.R. § 56.3 (1997) 13 

40 C.F.R. § 56.4 (1997) " 13 

40 C.F.R. § 81.345 (1997). ix 

INTRODUCTION 

This case concerns a dispute between the Utah Division of Air Quality ("DAQ" or the 

"State") and the United States Environmental Protection Agency ("EPA") over the manner in which 

the State should enforce Utah's State Implementation Plan for PMIO (the "PMIO SIP"). PMIO is 

particulate matter 10 microns or smaller that is suspended in the atmosphere and contributes to the 

air quality condition commonly referred to as smog. EPA contends that Phillips Petroleum 

Company ("Phillips") has violated the PMlO SIP on numerous occasions. Specifically, EPA 

contends that Phillips has failed to comply (1) with the PMIO SIP's continuous emissions 

monitoring ("CEM") requirements and (2) with the PMLQ SIP's sulfur dioxide ("SO/) emissions 

[c:I...Iph illipslr56-mem3 wpd] v
limits. l Although EPA contends that the~e S02 emissions limits are lill.Yr1x, the State agrees with 

Phillips that S02 emissions were to be measured on a basis for compliance purposes. 

After reviewing all of the evidence, the State has determined that Phillips has complied 

with the requirements of the PMIO SIP. Indeed, the State has determined (1) that Phillips' failure 

to operate its CEM within specified calibration parameters during certain periods of time was 

excused because such failure was due to unavoidable CEM equipment malfunctions and (2) that 

•

Phillips has complied with the Qaily S02 emissions limits imposed by the PMIQ SIP. In sum, the 

State has already reviewed the allegations set forth by EPA and has found them to be without 

merit. Furthermore, EPA's interpretation of the PMIQ SIP unconstitutionally discriminates against 

Phillips and is arbitrary and capricious. As a result, EPA's interpretation is unenforceable. 

Despite the State's objection, EPA initiated this enforcement action. This action 

unlawfully infringes upon state prerogatives and unconstitutionally discriminates against Phillips. 

Importantly, EPA's interpretation of the PMIQ SIP would not advance the objectives of either the 

Clean Air Act or the Utah PMlO SIP. Instead, EPA's interpretation of the PMIQ SIP and its 

instigation of this action serve only to work a substantial injustice upon Phillips. The material 

facts bearing upon Phillips' compliance with the PMlO SIP are undisputed. Consequently, Phillips 

is entitled to the entry of partial summary judgment in its favor. 

I EPA has recently filed an Amended Complaint which sets forth three additional claims for relief. The additional 

claims for relief pleaded by EPA in the Amended Complaim are not addressed in this Motion for Partial Summary 

Judgment. 

{c:\...\phillips\r56-mem3. wpdl vi 
FACTUALBACKGRQUND 

Phillips submits the following factual background for the convenience of the Court. 

Phillips recognizes that some of the facts presented in this factual background may be disputed by 

EPA, but offers this section to assist the Court in understanding the context surrounding the 

material facts which are not in dispute. Phillips' Statement of Undisputed Facts necessary to 

sustain summary jUdgment is set forth immediately following this introductory section. 

The Regulatory Context 

Pursuant to the Clean Air Act Amendments of 1970, Congress required states to attain 

certain National Ambient Air Quality Standards ("NAAQS"), to be adopted by the United States 

Environmental Protection Agency ("EPA"). A "NAAQS" is a limit on the amount of a specified 

pollutant that may be present in the atmosphere under the Clean Air Act. Although EPA was to 

establish the NAAQS for certain criteria pollutants, each state 'was granted the authority to 

determine how those NAAQSs would be attained. In July of 1987, EPA adopted the NAAQS for 

particulate matter ten microns or smaller (UPMJO"). 

The NAAQS for PMIO establishes only daily and annual standards. There is no NAAQS 

which sets an hourly standard or PMJO. Under the Clean Air Act, states are required to determine 

whether they are in compliance with the daily and annual PMIO NAAQS. If the state, or some 

region of the state, is not in compliance with the NAAQS, then the state must adopt and submit 

to EPA a State Implementation Plan ("SIP") establishing the manner in which the state will 

vii [c: I...Iphillipslr56-memJ .wpd] 
implement, maintain and enforce the NAAQS. 

The Development of Utah's PM1~

In the late 1980s, the State of Utah determined that Salt Lake County and Utah County 

were not in compliance with the NAAQS for PM10' In Salt Lake County and Utah County, under 

certain winter inversion conditions, sulfur dioxide ("SOn, along with other pollutants, is trapped 

by stagnation near the valley floor and converts, over a period of several days, into sulfate - a 

form of PMlO • These winter inversion conditions occur primarily during the months of December, 

January and February, and, prior to the adoption of the PMlO SIP, caused Salt Lake and Utah 

Counties to exceed the NAAQS up to twenty days per year. 

The State based its determination that "exceedances,·2 of the NAAQS occurred in Salt Lake 

and Utah Counties up to twenty days per year on data collected from air quality monitors located 

along the Wasatch front. The air quality monitors, which are operated by the State, contain filters 

which are weighed daily (or less frequently) to determine whether the amount of PMIO in the air 

exceeds the PMIO NAAQS. Because the State determined that Salt Lake and Utah Counties 

2 An "exceedance" of the PM 10 NAAQS does not necessarily constitute a "violation." [Deposition of Lee Hanley 

("Hanley Depo.'') at 230 (cited portions of the Hanley Depo. are attached hereto as Exhibit "A''); Affidavit of David 

J. Prey ("Prey Aff. ") 1 9 (the Prey Aft. is filed concurrently herewith).] The NAAQS provide that a state is in 

compliance "when the expected number of days per calendar year with a 24-hour average concentration above 150 

.ug/rnJ .•. is equal to or less than one." 40 C.F.R. pI. 50.6(a) (1997). Thus, one exceedance of the PM 10 NAAQS 

per year does not constitute a violation. U Navistar lot'! TranstJ. CoW, v. EPA, 941 F.2d 1339, 1350 (6th Cir. 

1991) (discussing argument that although "there had beenexceedances of the ozone [NAAQS] since 1984, ... no 

viol::tior1s of the standard occurred in the period from 1984 to 1987" (emphases added». In this case, EPA has not 

always properly distinguished between "exceedances" and "violations" of the NAAQS. U i!.L. at 1353 n.16 (noling 

that EPA failed, "at times, to properly distinguish between 'violations' and 'exceedances"'). 

[c:\ ...\phillips\r56-mcmJ. wpdJ viii 
exceeded the NAAQ5 for PMIO up to twenty days per year, the State began the process of 

adopting a SIP (the "PMlO SIP") that would establish a control strategy for PMIO and permit the 

State to demonstrate compliance with the NAAQS. 

The State requested that Phillips Petroleum Company ("Phillips") provide an inventory of 

the S02 emissions from Phillips' Woods Cross petroleum reflnery located in Davis County, Utah. 

Phillips complied with the State's request and provided emissions inventory data to the State that 

was stated in a pounds per day, tons per day and tons per year format. In addition to acquiring 

emissions inventory data from Phillips and the other major industrial sources of S02 emissions, 

the State performed air quality modeling to serve as the technical foundation of the PMlO SIP. All 

of the air quality modeling performed by the State for the SIP was conducted on a daily basis. 

The State promulgated its PMlO SIP on June 28,1991, the first such SIP promulgated in 

the nation. EPA approved the PMIO SIP in 1994. In developing the PMlO SIP, the State focused 

on reducing the 502 emissions of major industrial sources in Salt Lake and Utah Counties because 

the State believed that regulating major industrial sources would be the most cost-effective way 

to achieve attainment of the NAAQS. The State also included in the PMlO SIP certain major 

industrial sources in Davis County because the Slate believed that 502 emissions from Davis 

County were contributing to the amount of PMIO in the air in Salt Lake County. 3 The Geneva 

3 Although the State of Utah also has an S02 SIP, the Woods Cross refinery is not regulated by the SOl SIP and 

Davis County, where the Woods Cross refinery is located, has been designated as "better than national standards" by 

EPA with respect to 502 emissions. 40 C.F.R. § 81.345 (1997). SOl emissions regulated under the PM IO SIP 

are regulated solely as a "precursor" of PM,o (1.&.. a substance that may conven to PM ,o in the atmosphere over time). 

(0:\ ...\phillips\rS~mem.J.wpdl IX 
Steel mill in Utah County ("Geneva"); the Kennecott Copper smelter ("Kennecott") and the Amoco 

and Chevron petroleum refmeries in Salt Lake County; and the Crysen. Flying "J" and Phillips 

petroleum refmeries in Davis County were the major industrial sources of S02 emissions on which 

the State primarily focused. The Amoco, Chevron, Crysen. Flying "J" and PhiUips petroleum 

refineries (the "Five Refineries") are grouped together near the Salt Lake and Davis County 

border. Phillips is located the furthest north of the 'Five Refineries and, as a consequence, is the 

greatest distance from the point of non-compliance with the NAAQS. 

The Requirements of Utah's PM1u.-S.I£ 

To assist with the attainment of PM10 standards in Salt Lake and Utah Counties, the PM10 

SIP required that the Five Refineries, Kennecott and Geneva install S02 control equipment to 

reduce the amount of S02 emitted from their facilities. The PM,o SIP further provided that the 

specific values of the S02 emissions limits would be established by the State pursuant to its 

approval order or permitting process. The State issued approval orders to Phillips in 1992, 1993 

and 1995 (the "1992, 1993 and 1995 Approval Orders") which established operating requirements 

and limitations for the Woods Cross refinery with respect to S02 emissions. The other major 

industrial sources of S02 emissions were issued approval orders as well. 

Under the approval orders, the Five Refmeries. Kennecott and Geneva each were required 

to reduce S02 emissions by greater than sixty percent. Phillips (and the other major industrial 

sources of SO,) spent tens of millions of dollars to design, install and operate S02 control 

[c:\, ..\(>hillips\r56-memJ, wpd] x 
equipment. Indeed, Phillips alone spent in excess of $21. 7 million designing and installing its 

sulfur recovery unit ("SRU"). The PMlQ SIP also required that the Five Refineries, Kennecott and 

Geneva install continuous emissions monitoring ("CEM") equipment to measure S02 emissions. 

EPA has recognized that CEMs have an accepted accuracy in the range of ±20 percent. 

Since the installation of S02 control equipment by the Five Refineries, Kennecott and 

Geneva, the State of Utah has experienced a significant improvement in air quality. According 

to air quality monitoring data collected by the State and EPA's own admissions, there have been 

no violations of the NAAQS for PMIO in the entire State of Utah for over four years. 

The Five Refineries 

The refining of crude oil is a variable process because the level of S02 emissions may 

fluctuate depending upon the type of crude oil that is being refined. To address this inevitable 

variability, among other things, the State adopted a separate petroleum refining section in the PMIO 

SIP which provided that daily and annual S02 emissions limits would be established for the class 

of sources within the "refinery category," namely, the Five Refineries. At the time the refinery 

section was initially drafted, neither the State nor the Five Refineries had sufficient technical 

information to detennine the specific values for the final S02 emissions limits that would be 

adopted. Nevertheless, the State recognized that the fmallimits must allow for variability in the 

refining process. 

(c:I...Iphillip$lr56-mem3. wpdj xi 
During this time, several of the refineries complained to the State that they were being 

treated unfairly as compared to the other refmeries and requested that the state equitably distribute 

the regulatory burden occasioned by the adoption of the PMIO SIP. The State assured the Five 

Refineries that it would impose fair and equal requirements upon each of the refineries and would 

treat the refineries equitably with respect to the PMlO SIP and S02 emissions limits. Like the 

State, EPA considered the Five Refineries (and Kennecott and Geneva) as a class to be treated 

fairly vis-a-vis each other under the PMlO SIP. The Five Refineries, Kennecott and Geneva, as 

a class, were considered to be largely responsible for the industrial S02 emissions affecting the 

Salt Lake and Utah County air shed. 

Phillips' Unavoidable CEM Equipment Malfunctions 

The State has long had an administrative rule relating to continuous emissions monitoring 

(the "Utah CEM Rule"). The longstanding Utah CEM Rule was incorporated by the State, with 

EPA's approval, as part of the PM10 SIP. Additionally, the 1992 and 1995 Approval Orders 

issued to Phillips specifically provided that the CEM installed and operated at Phillips' Woods 

Cross refinery was to comply with the Utah CEM Rule. The Utah CEM Rule incorporates by 

reference an EPA regulation found at 40 C. F.R. Pt. 51, App. P (1997). This EPA regulation 

allows the States to exempt sources from CEM monitoring and reporting requirements during 

periods of unavoidable CEM malfunction. 

Ie:I...Iphillipslr56-mem3.wpd] xii 
•
 

The installation of Phillips' SRU and CEM was completed, and tested for compliance with 

EPA and State guidelines, in September of 1994. Thereafter, Phillips experienced difficulties with 

the CEM equipment which resulted, on occasion, in Phillips failing to obtain properly calibrated 

sample data from the CEM. Pursuant to the PM lO SIP and the Utah CEM Rule, Phillips notified 

the State each time it experienced difficulties with the CEM equipment. After investigating these 

problems, the State detennined, to its satisfaction, that Phillips' CEM equipment malfunctions 

were unavoidable and therefore were excused. Since that time, Phillips' CEM has operated 

properly and has produced valid sample data nearly 100 percent of the time. Indeed, the CEM 

operated properly 100 percent of the time during the fourth quarter of 1997. 

Phillips' SOl Emissions 

According to the State, the Five Refineries may demonstrate compliance with S02 

emissions limits, which are expressed as pounds per hour or ppmdv limits in approval orders, by 

averaging emissions over a 24-hour period of time. 4 The PM10 SIP contains headings for S02 

emissions limits stated as ulbs/hr, tons/yr and ppmdv,· in addition to general language indicating 

that compliance is to be measured based on daily averaging of CEM data. The imprecise language 

4 During the development of the PM IO SIP, EPA - like the State - recognized that "(c]ompliance with any 

standard set for the PM-lO SIP should be detennined on a basis, due to the 24-hour PM-I0 {National Ambient 

Air Quality] standard." [Memorandum from Mindy Mohr, EPA, to Lee Hanley, EPA (Nov. 3, 1989) (emphasis 

added) (a copy is attached hereto as Exhibit "B"); Memorandum from Catherine Collins, EPA, to Marius 

Gedgaudas and Lee Hanley, EPA (Jan. 25, 1991) ("For Phillips, a PM10 emission limit needs to be included." 

(emphasis added» (a copy is attached hereto as Exhibit "C"); Memorandum from Catherine Collins. EPA, to Marius 

Gedgaudas and Lee Hanley, EPA (Mar. 18, 1991) (".Q.aily limits must be set for all pollutants (PM I0, SOx, NOx) 

and all sources." (emphasis added» (a copy is attached hereto as Exhibit "D").] 

It:\...\phillipslr56-mcrrU. wpd] xiii 
of the PMlO SIP resulted in some confusion regarding the measuring and reporting of S02 data to 

the State. On October 15, 1993, the State sent a letter (the "1993 Approval Order") to the Five 

Refineries clarifying that under the PMIO SIP and related approval orders, S02 emissions were to 

be averaged on a daily and an annual basis for compliance purposes, even though the emission 

rates or limits in the PMIO SIP and approval orders were expressed in pounds per hour for CEM 

and stack testing purposes. 

From 1991 until 1996, neither the State nor EPA ever suggested that the major industrial 

sources of S02 emissions regulated by the PMIO SIP were not permitted to demonstrate compliance 

with "pounds/hour" SRU emissions limits for S02 by averaging those emissions over 24 hours. 

Indeed, the Amoco portion of the PMlO SIP, which was modified in 1992, states expressly that 

the Amoco refInery's compliance with S02 emissions limits is to be measured by a daily average. 

Similarly, the Approval Order issued to Amoco in 1992 provides daily S02 emissions limits. 

Chevron's Approval Order also permits daily averaging of Chevron's S02 emissions. 

Furthermore, both Geneva and Kennecott demonstrate compliance with the PMIO SIP by averaging 

502 emissions on a daily, not an hourly, basis. The S02 emitted by the Five Refineries, Geneva 

and Kennecott - the class of industrial sources of S02 that bear the bulk of the regulatory burden 

under the PMIO SIP - is trapped and intennixes in the same air shed and only converts to PM IO , 

if at all, after several days. 

Ie: \... Iphill ip'lr56-mcmJ. wpd] xiv 
Phillips has been and continues to be in compliance with the Qail.x emissions limits 

contained in the 1992 and 1995 Approval Orders.s Since 1991, the Phillips refinery has emitted 

less than one-half of the total amount of S02 that it is permitted to emit under the PMl() SIP. 

Although the PMIO SIP allows Phillips to emit 2,016 tons of S02 per year, Phillips has emitted 

only approximately 900 tons of S02 per year since 1991. 

EPA's Allegations 

In 1996, EPA informed the State that it was adding Phillips to its "significant violators" 

list and requested that the State issue a Notice of Violation C"NOV") to Phillips. EPA's demand 

5 Since September of 1994, Phillips SOl emissions, when measured on a daily basis, have exceeded the S02 

emissions limit just thirteen times. These thirteen exceedances occurred on the following dates for the following 

reasons: 

I. 7/15/95 Malfunction of SRU tail gas analyzer 

2. 7/22/95 Malfunction of SRU tail gas analyzer 

3. 12/12/95 Malfunction of SRU tail gas analyzer 

4. 12/16/95 Malfunction of SRU tail gas analyzer 

5. 3/3/96 Malfunction of air demand analyzer on SRU 

6. 3/4/96 Malfunction of air demand analyzer on SRU 

7. 1119/97 Upset in unit upstream from SRU 

8. 1/20/97 Upset in unit upstream from SRU 

9. 2/13/97 Lost SRU and Amine units due to problem with instrJment air 

10. 4/2/97 Major Power Failure 

II. 7/25/97 Malfunction of Amine unit resulting in pump failures 

12. 8/19197 Sulfur drip lag developed a plug 

13. 9/19/97 Major Power Failure 

Under the Utah Unavoidable Breakdown Rule, which is enforceable as part of the PM 10 SIP, the State may grant 

exemptions from liability for exceedances caused by breakdowns of control and process equipment. Utah Admin. 

R. 307-1-4.7 (1997). The State granted such exemptions to Phillips for (he thirteen occasions on which Phillips 

exceeded (he daily Sal emissions limits sel forth in the 1992 and 1995 Approval Orders. 

I \...\phillips\rS6-mcmJ. wpd] xv
that the State issue an NOV was directed to Norm Erikson ("Erikson"), DAQ's CEM specialist. 

At EPA's urging, Erikson drafted a proposed NOV in January of 1997. The proposed NOV listed 

each instance during the third quarter of 1996 when the CEM operated by Phillips recorded an 

"exceedance" of the Approval Order emissions limits for 802' on an basis without allowing 

for averaging over a 24-hour period. Jeff Dean ("Dean"), DAQ's Compliance Manager, reviewed 

the proposed NOV and instructed Erikson not to issue it. Dean determined that it would be 

impermissible to issue such an NOV to Phillips, since the State had always intended and had 

previously issued approval orders to clarify that Phillips was allowed to average S02 emissions 

from its SRU, as measured by its CEM, on a Qgfu. basis for -compliance purposes. Dean also 

determined that such an NOV would be inconsistent with the original intent of the PMlO SIP, 

would violate the State's ongoing policy of treating the Five Refineries in a non-discriminatory 

fashion, and would not be fair to Phillips. 

Thereafter, despite the protestations of the State and Phillips, EPA issued two NOVs to 

Phillips. Additionally, notwithstanding efforts by the State and Phillips to convince EPA that its 

interpretation of the PMIO SIP was erroneous, EPA filed the Complaint in this action on 

November 18, 1997 - nearly two years after adding Phillips to its significant violators list and 

more than three years after Phillips began operating under the PMlO SIP. EPA's Amended 

Complaint was filed on July 15, 1998. 

Id ...\phillips\r56-mcmJ.wpd) xvi 
STATEMENT QF UNDISPUTED FACTS 

Pursuant to Rule 56-1 (b) of the Rules of Practice for the United States District Court for 

the District of Utah, Phillips submits the following statement of material facts as to which no 

genuine issue exists. These material and undisputed facts are sufficient to require the entry of 

partial summary judgment in favor of Phillips in this action. 

Utah's pi\t1to.-SIf 

1. Utah promulgated the PMlO SIP in 1991. The PMlO SIP established control 

strategies for the S02 emissions of certain stationary sources, including Phillips' Woods Cross 

petroleum refmery located in Davis County, Utah. [Utah PMlO SIP, § 9, App. A, § 2.2.00 (June 

28, 1991 version) (cited portions of the PMIO SIP are attached hereto as Exhibit "E").] EPA 

approved the Utah PMIO SIP in 1994. [Amended CompI. 1 12; Plaintiff the United States of 

America's Responses to Defendant's First Requests for Admission ("EPA's Admissions") No. 20 

(a copy of EPA's Admissions are attached hereto as Exhibit ifF").] 

2. The PMIO SIP required Phillips to install and operate a sulfur recovery unit ("SRU") 

at its Woods Cross refinery to reduce Phillips' S02 emissions. [Amended CompI. 123.] The 

PMlO SIP also required Phillips to install and operate a continuous emissions monitor (lfCEM") on 

its SRU. [Amended Compi. 125.] 

3. The PMIO SIP also required Amoco, Chevron, Crysen, Flying IfJ," Geneva and 

Kennecott to install and operate S02 control equipment and CEMs. [Utah PMlO SIP, § 9, App. 

le:I...Iphillipslr5&-mem3. wpdJ xvii 
A (June 28, 1991 version); EPA's Admissions Nos. 2-4.] The S02 emitted by Amoco, Chevron, 

Crysen, Flying "I," Phillips, Geneva and Kennecott is trapped and intermixes in the same air shed 

and only converts to PMIO , if at all, after several days. [Affidavit of David J. Prey ("Prey Aff.") 

1 45 (stating that the S02 emissions of the major industrial sources of S02 emissions are 

indistinguishable in the atmosphere) (the Prey Aff. is filed concurrently herewith); Hanley Depo. 

at 548 (conceding that S02 emissions from Geneva and S02 emissions from the Five Refineries 

react identically in the atmosphere).] 

4. The PMIQ SIP provided that S02 emissions limits for the S02 control equipment 

installed by Amoco, Chevron, Crysen, Flying "J" and Phillips would be established by the State 

pursuant to its approval order or permitting process. [Amended CampI. , 12; Utah PMIO SIP, 

§ 9, App. A, § 2.2.00.5.C (June 28, 1991 version); Hanley Depo. at 634.] In fact, 

the PMIQ SIP had been intentionally left blank in certain places (e.g., the S02 

emission limits for the SRUs at the five refmeries) because of the lack of adequate 

information at the time the SIP was adopted in 1991. On this latter point, the PMIQ 

SIP explicitly left it to DAQ to establish these SRU emission limits through issuing 

Approval Orders to the refineries. 

[Affidavit of Jeff Dean ("Dean Aff.") , 11 (the Dean Aff. is filed concurrently herewith).] For 

example, the language of the original SIP sets Amoco's S02 emissions limit as follows: 

Point Source tQns/vr 

Sulfur Plant 

Incinerator ????? 250 ??? 

[pM11I SIP, § 9, App. A, § 2.2.A.2.D (June 28, 1991 version).] Approval orders issued by the 

Ic:\.·.\phillips\r56-~mJ.wpdl xviii 
State are enforceable as part of the PMlO SIP. [Amended CompI. , 12; EPA's Admissions No. 

13.) 

5. The State issued an approval order to Phillips on October 29, 1992 (the "1992 

Approval Order"). [Approval Order No. DAQE-690-92 (Oct. 29, 1992) (a copy is attached hereto 

as Exhibit "G").) A second approval order was issued to Phillips on October 15, 1993 (the "1993 

Approval Order"). [Letter from Russell A. Roberts,' Executive Secretary, Utah Air Quality Board, 

to Max Staples, Phillips Petroleum Company (Oct. 15, 1993) (a copy is attached hereto as Exhibit 

"H").] A third approval order was issued to Phillips on July 13, 1995 (the "1995 Approval 

Order"). [Approval Order No. DAQE-623-95 (July 13, 1995) (a copy is attached hereto as 

Exhibit "I").] 

6. The 1992 and 1995 Approval Orders set forth operating requirements and 

limitations for Phillips' Woods Cross refmery with respect to S02' [Amended CompI. 1 12.] 

7. There were no violations of the NAAQS for PM10 in the State in 1994,1995, 1996 

and 1997.	 [EPA's Admissions Nos. 28-31.] 

Phillips' CEM Equipment Malfunctions 

8. In 1978, the State adopted an administrative rule relating to continuous emissions 

monitoring (the "Utah CEM Rule"). ~~ Utah Admin. R. 307-13 (1997) (forrnerly Utah Admin. 

R. 307-1-4.6). 

[e:l ...Ipl\lllipslrS6-mem3. wp<l] xix
9. Pursuant to the Clean Air Act, 42 U.S.c. §§ 7401 tl..~. the Utah CEM Rule was 

submitced to EPA and approved as part of the PM10 SIP. 40 C.F.R. § 52.2320(c)(6) (1997). 

10. The 1992 and 1995 Approval Orders provide that Phillips "shall install, calibrate. 

maintain and operate a continuous 502 emissions monitoring system on the Sulfur Recovery Unit 

Incinerator stack." [1992 Approval Order § 15; 1995 Approval Order § 20.] 

11. The 1992 and 1995 Approval Orders further provide that the CEM installed and 

operated by Phillips "shall comply with all applicable sections of [Utah Administrative Rule] 307­

1-4.6," the Utah regulation governing CEM systems (the "Utah CEM Rule"). lQ... 

12. The Utah CEM Rule states: "Minimum performance specifications for all 

continuous monitoring systems are those contained in 40 CFR. Part 60 Appendix Band 40 CFR, 

Part 51, Appendix P." Utah Admin. R. 307-13-4 (1997). The Utah CEM Rule therefore 

incorporates 40 C.F.R. Pt. 51, App. P, which provides: 

The State plan [i&.... the SIP] may provide a temporary exemption from the 

monitoring and reporting requirements of this appendix during any period of 

monitoring system malfunction, provided that the source owner or operator shows, 

to the satisfaction of the .State, that the malfunction was unavoidable and is being 

repaired as expeditiously as practicable. 

40 C.F.R. Pt. 51, App. P (1997) (emphasis added). 

13. EPA recognizes that the State of Utah has an unavoidable breakdown rule for CEM 

equipment. [Hanley Depo. at 611.] 

[c :1...IphillipslrS6-memJ.wpd] xx 
14. Phillips experienced difficulties with its CEM equipment. Phillips notified the State 

and provided information to the State regarding its CEM equipment malfunctions. & l.n...the. 

Matter of Phillips PetroleJilll Company, Utah Air Quality Board Administrative Determination 

(Apr. 9, 1997) (a copy is attached hereto as Exhibit "J"). Phillips worked with the State to 

improve its CEM equipment malfunctions. According to Norm Erikson, the State's CEM 

specialist, 

Phillips was actively engaged in following procedures to ensure that there was no 

data loss and the monitors were available to the maximum extent possible, and that 

when problems occurred they would upgrade the quality assurance program and 

implement a quality control program to ensure that those problems would not 

reoccur, that they would address them in the future and upgrade operational 

maintenance procedures. 

[Deposition of Norman Alfred Erikson ("Erikson Depo.") at 152 (cited portions of the Erikson 

Depo. are attached hereto as Exhibit UK"); see also kl at 77 ("I reviewed their data and came away 

with the conclusion that they had reported everything accurately and represented themselves 

truthfully. ").] 

15. The State reviewed the information provided by Phillips and conducted independent 

inspections and investigation of Phillips' CEM equipment malfunctions. In the Matter of 

Phillips Petr.Q!s::um Comp<JIn, Utah Air Quality Board Administrative Determination (Apr. 9, 

1997). The State's independent inspections and investigation of Phillips' CEM equipment 

malfunctions were thorough: 

Ie: \ ...\phill ips\r56-mcm3. \lIpd) xxi 
[W]e start in the office, we go over safety requirements of the facility, and I 

outline what the purpose of the audit's for, and the agency conducting the audit, 

and that the report will be forwarded to EPA. And then I go in to the - I ask for 

the data log material, all the emissions data, and see if they have records that go 

back for two years. I pull that information out, and then I will be in on the data 

log and see if I can find anything that appears to be a violation or monitor 

unavailability, and also daily calibrations. And if I see an anomaly, I will see if 

that had been reported in the quarterly report, and then I will - if it's in a 

quarterly report, I'll see what the description was. We'll go into the operation log, 

control equipment logs, CEM logs, basically the plant records, to find out how it 

was logged in and see if that correlates with the quarterly report. Look for work 

orders, work orders have order dates and completion dates, and we evaluate the 

accuracy of the quarterly report to see that it's being truthfully reported. 

After that we go out to the facility that has the monitor and we'll audit the 

monitor, we will either flow gasses through it, we'll do neutral density filter 

audits, we'll check current lubes, basically just go over the analyzer to ensure that 

the signal loop's being generated and an accurate signal is being generated and 

recorded on the data logger. 

[Erikson Depo. at 150-51.] EPA did not conduct any independent inspections or investigation of 

Phillips' CEM equipment malfunctions. [Hanley Depo. at 691,699.] 

16. On April 9, 1997, the State issued an Administrative Determination which stated: 

It has been determined by DAQ that Phillips' reported CEM unavailability was the 

result of unavoidable breakdowns, malfunctions, and equipment checks and 

adjustments, and that Phillips properly noticed DAQ and has taken prompt action 

to identify problems and implement corrective actions to prevent future problems, 

as required by the approval orders and rules. Phillips has kept DAQ informed of 

the CEM monitoring problems as they have occurred. Primary problems reported 

included a defective computer chip, corrosion in the probe and pumps, and system 

pluggage. Also reported were unexpected electrical power surges which caused 

data collection system shutdown and reset problems on startup. DAQ's review of 

this matter included review of the excess emissions reports and CEM operational 

records of Phillips' monitoring program. 

In the Matter of Phillips Petroleum C..Q.ill.l2ii1lj:, Utah Air Quality Board Administrative 

Ie :\... \~hillips\15()..m"mJ. wpd) xxii 
Determination (Apr. 9, 1997); see alsQ EriksQn DepQ. at 158-59 ("1 detennined that they were 

legitimate breakdQwns.... I dQn't see how they eQuId have aVQided any Qf thQse."). 

17. The Administrative Detennination further stated that "no Notice of ViolatiQn was 

warranted fQr reported excess emissions of sulfur oxides and CEM unavailability." In the Matter 

of Phillips Petroleum Compan)!, Utah Air Quality Board Administrative Detennination (Apr. 9, 

1997). 

18: The State of Utah and Phillips held meetings during the fall of 1996 wherein 

breakdowns at Phillips' Woods Cross refinery were discussed. EPA representatives were invited 

but declined to attend such meetings. [EPA's Admissions No. 54; Hanley Depo. at 612.] EPA 

contends that the State did not evaluate Phillips' CEM equipment breakdQwns "adequately," but 

has stated that its contention in this regard is "strictly speculation." [Hanley Depo. at 702; s'e.e...allQ 

ill..,. at 720 ("[SJpeculating - totally speculating, I don't believe the State did the evaluation 

adequately Qn the breakdowns. ").] 

fhillips' S02 Emissions 

19. The majority of S02 emissions from industrial sources in Utah, Salt Lake and Davis 

Counties CQmes from seven sources: Geneva, Kennecott, Amoco, Chevron, Crysen, Flying "1" 

and Phillips. [Utah PMIO SIP, § 9, Table 9.A.13 at 4-5 (June 28, 1991 version); Dean Aff. 16.J 

The Amoco, Chevron, Crysen, Flying "J" and Phillips petroleum refmeries (the "Five Refineries"), 

are grouped together near the Salt Lake and Davis County border. 

Ic:\ ...\rhlllip,\rS6-memJ.wpdl xxiii 
20. In developing the PMIO SIP, the Stare requested that Phillips provide an inventory 

of the S02 emissions from its Woods Cross refinery. [Affidavit of Walter F. Kramer ("Kramer 

Aff.") 1118,25 (the Kramer Aff. is filed concurrently herewith).] 

21. The emissions inventory data Phillips provided to the State "in support of the SIP 

process was in a pounds/day, tons/day or tons/year format. Moreover, all of the modeling ... 

[the State] performed of the petroleum refineries to serve as the technical basis for the PMIO SIP 

was performed strictly on a daily basis." [Kramer Aff. 125; see also Hanley Depo. at 640-41 

(stating that the State only conducted CMB and micro-inventory modeling and that both types of 

modeling do not reflect hourly measurements, but only 24-hour measurements).] 

22. In developing the PMIO SIP, the State also performed air quality modeling. [Prey 

Aff. 112; Hanley Depo. at 640.] During the development of the PMIO SIP, David Prey was the 

only air quality modeler working for the State. [prey Aff. 17; Hanley Depo. at 242.] According 

to Prey, 

modeling serves as the technical foundation for the entire SIP. In brief, modeling 

identifies the responsible sources (or parties), modeling quantifies the extent of 

their contribution to the air quality violations, and modeling justifies the emission 

reductions (Le. emissions limitations) imposed on the responsible parties. Without 

valid modeling, or modeling techniques, the SIP emission limitations cannot be 

justified or supported. 

[Prey Aff. 112.) 

23. Air quality modelers "for state agencies must use only EPA approved models for 

SIP development purposes. [Prey Aff. 113.] The State relied on "receptor modeling," also called 

[c:\ ...\phillips\r56-memJ. wpd) xxiv 
Chemical Mass Balance ("CMB") modeling, after EPA rejected the use of "dispersion modeling." 

[Prey Aff. 117 ('rEPA disapproved the use of dispersion models, and receptor models were used 

as the primary modeling tool for the PMIO SIPs in both Salt Lake (including Davis) and Utah 

Counties."); Kramer Aff. " 21-25; Hanley Depo. at 640, 643-44, 647-48 (agreeing that 

dispersion modeling could not in any way predict the impact of S02 in terms of contributing to 

PMIQ).] Indeed, the State and 

EPA Region vrn officials came to the same conclusion on the PMIO SIP modeling 

question - dispersion models were not to be used as the technical basis for the Salt 

Lake County PM IO SIP because they were not reliable and not applicable to the 

stagnant air conditions associated with PM,o problems in Salt Lake County. 

[Kramer Aff. 123.] 

24. Receptor, or CMB, modeling is simply a "technique which looks at the PMIO 

collected on the filters of PM10 air quality monitors on a daily bfcis and attributes responsibility 

for that PMIO to various sources in the area surrounding that monitor. Thus, CMB looks only at 

d..a.ili: emissions and PMIO responsibility." [Kramer Aff. 124 (emphases added); see alsQ 

Prey Aff. " 22, 33-37 ("[U]nlike dispersion models, receptor models are capable of modeling 

only one day at a time. In the case of PMIO , the filters are collected over a 24-hour period, and 

are therefore, not available on an hourly basis."); Hanley Depo. at 641 ("My understanding from 

the various modelers is that [CMB modeling] collect[s] a composite over 24 hours./I).] 

25. All of the modeling for the PMlO SIP was conducted on a daily basis: "[T]he only 

modeling conducted of the Phillips Woods Cross Refinery for PMlQ SIP purposes was CMB 

'c:\ ...\phill ips\r:56-memJ.wpd] xxv 
modeling performed on a daily basis. No one (i.e. Phillips, DAQ or EPA) performed any 

modeling of the Phillips refinery on an hourly basis for PM IO or S02 ...." [Kramer Aff. , 24; 

see also Hanley Depo. at 649-50 (agreeing that no modeling was perfonned on an hourly basis); 

Prey Aff. " 45-46 ("In the case of the PM 10 SIP, all of the modeling was performed on a daily 

basis (i.e. CMB).... I am not aware of any modeling, as approved for SIP purposes, that was 

performed by anyone of the refineries on any basis other than daily or annual.").] 

26. The technical support documents upon which the PMIO SIP is based consist of daily 

emissions inventory data and daily receptor or CMB modeling data. [Prey Aff. " 38, 46, 50; 

Kramer Aff. " 18-25.] 

27. A primary objective of the State "in adopting and enforcing the PMIO SIP has 

always been to protect the environment, in a maMer which would not be unfair, discriminatory 

or anti-competitive as far as the regulated community and individual companies are concerned." 

[Dean Aff. , 10.] 

28. During the time the PMIO SIP was developed, EPA considered the Five Refineries, 

Kennecott and Geneva to constitute a class of major industrial sources of S02 emissions. [Hanley 

Depo. at 186; Memorandum from Mindy Mohr, EPA, to Lee Hanley, EPA (Nov. 3. 1989); 

Memorandum from Catherine Collins, EPA, to Lee Hanley, EPA (Aug. 14, 1990) (a copy is 

artachedhereto as Exhibit "L"); Memorandum from Catherine Collins, EPA, to Marius Gedgaudas 

and Lee Hanley, EPA (Oct. 30, 1990) (a copy is attached hereto as Exhibit "M").] 

[c:\ ...Iphillip,\rS6-mc:m3.wpdl xxvi 
29. EPA's position, like the State's, was to treat the Five Refineries, Kennecott and 

Geneva in a fair and non-discriminatory manner under the PMIO SIP. [Memorandum from 

Catherine Collins, EPA, to Marius Gedgaudas, EPA (Sep. 10, 1990) (discussing "how to 

equitably distribute the emission reductions required for the Utah PM10 SIP to the Five Refineries 

in the Salt Lake/Davis County area" and "the fairest way to equitably handle the refineries") (a 

copy is attached hereto as Exhibit "N"); Memorandum from Catherine Collins, EPA, to Marius 

Gedgaudas and Lee Hanley, EPA (Jan. 25, 1991) (listing inconsistencies in not-yet-promulgated 

PMIO SIP that "exist between various refineries"); Memorandum from Catherine Collins, EPA, 

to Marius Gedgaudas and Lee Hanley, EPA (Mar. 18, 1991) (noting that SIP provisions need "to 

be consistent among the refineries" and that "[t]he refineries should be treated eqUitably"); 

Memorandum from Catherine Collins, EPA, to Marius Gedgaudas and Lee Hanley, EPA (May 

31, 1991) (stating that stack testing methods for refineries in PMIO SIP "must be consistent with 

the methods used for Geneva") (a copy is attached hereto as Exhibit "0").] 

30. On October 15, 1993, the State sent a letter to the Five Refmeries. In relevant part, 

the letter states: 

w~ feel that there may be some confusion with the method of detennining these 

12-month limits [on S02 emissions set forth in the PMlO SIP and approval orders] 

because the EPA reference methods for testing use mass and gravimetric rates, 

such as IJ.g/m3

, ppm, or pounds/hour. By necessity, testing is only conducted for 

short periods of time.. A test of one day or one year would be difficult or 

impossible. Therefore, the following language will be included in all future AOs 

[i&,., approval orders] specifying annual emission limits in tons/year, to avoid any 

misunderstanding in the future: 

[e:\ . Iphillips\r56-memJ ......pd] xxvii 
Compliance with emission limitations shall be verified by EPA reference 

test methods, continuous emission monitors, or alternative test methods 

approved by the Executive Secretary. The duration of the compliance tests 

for time and/or volume collected shall conform to EPA reference test 

method requirements. 

The following shall be used for the purpose of demonstrating compliance 

with emission limits which are based on averaging periods of longer 

duration than those specified in the reference test methods: 

The emission rate calculated as the average of the number of 

reference tests conducted shall be assumed valid for the duration of 

the averaging period associated with the particular emission limit, 

Le., daily, monthly, quarterly, and annually. This procedure 

assumes the process is constant, which it is not, but will be 

acceptable for compliance purposes. The actual 12-month limit 

shall be determined by summing the daily emissions determined by 

CEMS, mass balances, or other alternative methods approved by the 

Executive Secretary. 

Please attach a copy of this letter to your appropriate AOs. 

[Letter from Russell A. Roberts, Executive Secretary, Utah Air Quality Board, to Max Staples, 

Phillips Petroleum Company (Oct. 15, 1993) (the "1993 Approval Order").] 

31. According to Jeff Dean, the State's Compliance Manager, 

the letter was issued by DAQ as an Approval Order (i.e., "1993 Approval Order") 

and as a clarification of the PMIO SIP and Approval Orders for the petroleum 

refmeries on the issue of demonstrating compliance with S02 emission limits at the 

refinery SRUs. The purpose of the language has always been to allow refineries 

to average their S02 emissions from their SRUs, as measured by CEMs, on a daily 

and annual basis for all compliance demonstration purposes. Under this language 

the refineries may show compliance with emission limitations expressed as 

pounds/hour or ppmdv (Le. parts per million) by averaging over a 24-hour period 

of time. My understanding and intent was that this 1993 Approval Order would 

apply to both existing and future refinery Approval Orders. 

[c:I..Iph II Iipslr56-memJ.wpd I xxviii 
[Dean Aff. 120.] 

32. The Amoco portion of the PMlO SIP, which was modified in November of 1992, 

expressly establishes a daily S02 emissions limit for Amoco's SRU. [EPA's Admissions No. 18; 

Dean Aff. 1 13 ("[T]he AMOCO PMlO SIP revisions included language which clarified 

specifically that S02 emissions from their Sulfur Removal Unit ("SRU") would be totaled or 

averaged on a daily basis, not an hourly basis, for all compliance purposes.").] In addition, 

Amoco was issued an approval order by the State which establishes a _ S02 emissions limit 

for Amoco's SRU. [Approval Order No. DAQE-llOl-92, , 9.B.2 (Nov. 20, 1992) (a copy is 

attached hereto as Exhibit "P").] 

33. On November 4, 1992, the Utah Air Quality Board discussed modifying the Amoco 

SRU S02 emissions limit in the PMIO SIP from pounds per hour to tons per day. [EPA's 

Admissions No. 10.] Lee Hanley of EPA was in attendance at the meeting and did not object to 

such a modification. [EPA's Response to Request for Admission Nos. 11-12.] According to Jeff 

Dean of the State, 

[a]fter receiving public comments on the proposed AMOCO revisions, including 

written comments from EPA Region VIII which registered no objection to setting 

a daily S021imit for the emissions from the tail gas incinerator at AMOCO's SRU. 

the UAQB [i.&.., the State] approved the revisions during its regularly scheduled 

meeting on November 4, 1992. Representatives of the refineries, Utah Petroleum 

Association and EPA were in attendance at both the August and November 1992 

UAQB meetings. 

[Dean Aff. , 12.] 

[c:\ ... \philtips\rS6-mem3. wpdl xxix 
34. In November of 1992, the State informed Chevron that the mass and concentration 

based limits for S02 set forth in the PMIO SIP were daily and annual limits because the focus of 

the PMIO SIP is attainment of the 24-hour PMIO NAAQS: 

[T]he Approval Order does not explicitly state the time period over which the 

[SRU] S02 limits apply. A conversation with Dutch Nellenstein of your staff on 

November 9, 1992 indicated that the mass and concentration based limits (as 

measured by a Continuous Emission Monitqr) were daily limits because the focus 

of the PM IO SIP is the 24-hour standard. Thus, the mass limit in [the Chevron] 

Approval Order ... should be changed to 2.135 tons/day .... Chevron also 

requests that the Approval Order explicitly state that the ppmdv limit is a daily 

limit. 

[Letter from T. Panchyshyn, Chevron, to Burnell Cordner, Director, Division of Air Quality 

(Dec. 11, 1992) (emphasis added) (a copy is attached hereto as Exhibit "Q").] 

35. In 1996, Chevron was issued an approval order by the State which establishes a 

daily S02 emissions limit for Chevron's SRU. [Approval Order No. DAQE-330-96, , 7.D (Mar. 

21, 1996) (a copy is attached hereto as Exhibit "R").] 

36. The PMIO SIP establishes a S~ emissions limit for Kennecott's smelter main 

stack. [Utah PMIQ SIP, § 9, App. A, § 2.2.V.B.1.B. (June 28, 1991 version); EPA's Admissions 

No.5; Hanley Depo. at 537.] 

37. The PMlO SIP establishes a Q.aili: S02 emissions limit for Geneva's SRU. [Utah 

PMIO SIP, § 9, App. A, § 1.2.F.2.K.1 (June 28, 1991 version); EPA's Admissions No.6; Hanley 

Depo. at 547, 549.] 

[c:\...\phillipslr56-mem3.wpd] xxx 
38. The 1995 Approval Order issued to Phillips requires that Phillips perform a mass 

balance of the acid gas streams passing through the SRU to determine the SRU's efficiency "[i]f 

a daily (24-hQur) SRU Incinerator S02 emissions limit, as specified in this AQ and measured by 

a Continuous Emission Monitoring (CEM), is exceeded (either Ih/da! or ppmdv)." [1995 

Approval Order § 5.C.2 (emphases added).} 

39. The ·capped" emissions of S02 at Phillips' Woods Cross refinery from point 

sources other than the SRU are to be averaged on a 24-hour basis. [Hanley Depo. at 410-11.] 

These "capped" emissions constitute approximately 75 percent of Phillips' total S02 emissions. 

40. On May 6, 1997, the State responded to Phillips' inquiry regarding the proper 

method for determining compliance with S02 emissions limits: 

The DAQ has reviewed Phillips understanding of the AO [i..Jt., approval order] 

limits and agrees with Phillips conclusion on calculating compliance with their AO 

and SIP daily emission limits. 

. . . [T]he AO and relevant portions on the SIP establish a daily limit to protect the 

National Ambient Air Quality Standards. For historic and practical reasons, the 

Phillips' daily limit for the tail gas incinerator of the Sulfur Recovery Unit (SRU) 

is expressed in terms of pounds per hour. It is however a daily limit calculated by 

averaging the emissions of the day by the nwnber of hours of operation in the day. 

Phillips exceeds its 114.42 lb/hr limit when the daily total emissions divided by the 

number of hours of operation of the SRU tail gas incinerator in the day exceeds the 

average hourly rate. 

Condition 6 of the [1995 Approval Order] provides that compliance is determined 

on a daily and annual basis. The hourly emissions specified in Condition 6 must 

be met when averaged for the day. Furthermore, Section IX, Part H.2, Subsection 

C (Compliance Demonstration) of the SIP provides the methodology for 

determining compliance with S02 limits imposed on refinery SRUs. Consistent 

rc:\...lphillips\r56-memJ.wpd] xxxi 
with the AO, the SIP provides that compliance is detennined on a daily basis. 

[Letter from Ursula K. Trueman, Director, Utah Division of Air Quality, to Richard J. Walsh, 

Phillips Petroleum Company (May 6, 1997) (a copy is attached hereto as Exhibit "S").] 

41. On November 20, 1997, the State again stated, in a letter to Phillips, that the S02 

emissions limits in the 1992 and 1995 Approval Orders were daily limits: "[T]he correct method 

of calculating compliance for the Sulfur Reduction Unit ... (is] to take the daily emissions 

divided by the number of hours of operation and compare that to the emission limit." [Letter from 

Ursula K. Trueman, Executive Secretary, Utah Air Quality Board, to Anthony W. Benedict, 

Phillips Petroleum Company (November 20, 1997) (a copy is attached hereto as Exhibit "T").] 

42. The letter from the State to Phillips of November 20, 1997, also states: 

At the time the SIP was written, it was determined that daily emission limits would 

be established. This was absolutely the clear intent of the staff who wrote the SIP. 

the basis of our negotiations with all of the industrial sources in developing the 

SIP, and the intent of the Utah Air Quality Board who approved the SIP. This was 

based on the following: 

1. The National Ambient Air Quality Standard (NAAQS) for PMIO which the 

State violated and for which the SIP was written is a 24-hour standard. 

2. The EPA reference method monitor used to establish compliance with the 

NAAQS for PMlO is incapable of analyzing data representing anything less than a 

24-hour period. 

3. The modeling tools used to establish the impact various sources had on the 

monitor were based on annual or seasonal emissions and operational data adjusted 

to represent average winter weekday emissions. There was no actual data for the 

specific days when the NAAQS was violated. 

[0:\ ...\~hillips\r56-mc:m3.wpdl xxxii 
4. The Technical Support Document for the SIP contains an infernal EPA 

memorandum dated November 5, 1989, from Mindy Mohr to Lee Hanley of EPA 

Region VITI. Item No.2 on page 2 of this memo states that "Compliance with any 

standard set for the PM-10 SIP should be determined on a daily basis, due to the 

24-hour PM-I0 standard." 

Not only is there plain language in Section IX.A (PMI0) demonstrating that the 

attainment demonstration is based on 24-hour emission limits, but one cannot read 

Section IX.H.2.a.M (petroleum Refineries) and find any mention of an hourly 

emission limit. However, 24-hour and annu~l emission limits are repeatedly cited. 

M... (emphasis in original). 

43. The State, "through compliance inspections and reports, has consistently interpreted 

the refinery S02 emission limits for SRUs as allowing for daily and annual averaging." [Dean 

Aff. 21.] Indeed, 

from 1991 to 1996, no one at DAQ or EPA Region VIII ever suggested that the 

refineries, including Phillips, could not demonstrate compliance with 

"pounds/hour~ SRU emission limitations for S02 by averaging on a daily and 

annual basis. Daily and annual averaging always has been the accepted 

understanding and interpretation of the PMIO SIP since it was promulgated by the 

State of Utah in 1991. 

[Dean Aff. , 22.] 

44. According to EPA, there is no difference between an hourly S02 emissions limit 

and a daily S02 emissions limit when it comes to achieving attainment of the PM10 NAAQS. 

[Hanley Depo. at 588.] David Prey, the State's air quality modeler during the development of 

the PM 10 SIP, agrees: 

Technically speaking, it would make no sense to regulate, or average, S02 

emissions from some refineries for SIP purposes on an hourly basis and others on 

(e;I...Iphillipslr56-memJ.wpdl xxxiii 
a daily basis. Such a distinction (hourly v. daily) as between refineries could not 

have been demonstrated to show any beneficial environmental purpose consistent 

with the modeling. 

[Prey Aff. 45; see aJjQ id. at 50 (liMy own technical conclusion is that an hourly averaging 

time for refinery S02 emission limits in the PM10 SIP is inconsistent with the modeling and history 

of the SIP. In addition, even if an hourly interpretation were appropriate, it would serve no 

beneficial environmental purpose. ").] 

EPA's Allegations 

45. On March 6, 1997, EPA issued to Phillips a Notice of Violation ("NOV") for 

alleged violations of CEM monitoring requirements and S02 emissions limits contained in the 

PM IO SIP and the 1992 and 1995 Approval Orders. & In the Matter of Phillips 66 Company. 

Woods Cross Utah, Docket No. CAA(113) VIII-96-13 (Mar. 6, 1997). EPA issued a second 

NOV to Phillips on August 13, 1997. The second NOV again alleged that Phillips violated CEM 

monitoring requirements and S02 emissions limits. s..~ In the Matter of Phillips 66 Company. 

WOOds Cross, Utah, Docket No. CAA(1l3) VIlI-97-09 (Aug. 13, 1997). 

46. On November 18, 1997, EPA filed the Complaint in this action. On July 15. 1998, 

EPA filed the Amended Complaint in this action. EPA alleges that Phillips violated the CEM 

monitoring requirements and an hm!rlJ!. S02 emissions limit contained in the PMIQ SIP and the 

1992 and 1995 Approval Orders. [Amended Compl. "25-41.] EPA seeks civil penalties against 

Phillips of up to $27,500 per day. [Amended CompI., Prayer for Relief 3.J 

[c: \ ... \phillipslr56-m<m3. wpd] xxxiv 
ARGUMENT 

Phillips is entitled to summary judgment on Counts I and II "if the pleadings, depositions, 

answers to interrogatories, and admissions on fIle, together with the affidavits, if any, show that 

there is no genuine issue as to any material fact, and the moving party is entitled to judgment as 

a matter of law." Fed. R. Civ. P. 56(c). Whether a fact is "material" is determined by the 

substantive law defining the claims. AndersQn v. Liberty LQbby. Inc., 477 U.S. 242, 106 

S. Ct. 2505, 2510 (1986). Summary judgment must be granted if no reasonable trier of fact could 

find for the non-moving party. id.. The facts material to Phillips' compliance with the SIP 

and related approval orders are undisputed. Thus, Phillips is entitled to summary judgment. 

I.	 fl{ILLIPS HAS COMrLIED WITH CEM MONITORING REQUIREMENTS 

AS A MATIER OF LAW. 

In Count I of the Amended Complaint, EPA alleges that Phillips failed on numerous 

occasions to operate within specified calibration parameters the CEM located on the stack of the 

SRU incinerator at Phillips' Woods Cross refinery. [Amended CompI. " 28, 36.] As 

demonstrated below, application of the law to the facts material to Phillips' compliance with CEM 

monitoring requirements warrants the entry of summary judgment in favor of Phillips. 

A.	 CEM Unavailability Caused by CEM Equipment Malfunction Is. 

Excused If the State Detennines to Its Satisfaction That the Equipment 

Malfunction Was Unavoidable. 

As a matter of law, under the PMlO SIP and the 1992 and 1995 Approval Orders, Phillips 

is exempt from CEM monitoring requirements during periods of CEM malfunction, provided that 

(c:I...lphillipslr5l>-mem3.wpd]	 1 
Phillips shows, "to the satisfaction of the State," that the malfunctions were unavoidable and were 

repaired as expeditiously as practicable. Where EPA has delegated discretion to the state to 

detennine whether a source is complying with the SIP, EPA's recourse - if it believes the SIP 

as enforced by the state does not reduce pollution as much as is necessary to achieve compliance 

with the NAAQS - is to pursue revision of the SIP through administrative procedures. 

United States v. Ford Motor Co., 736 F. Supp. 1539, 1548-49 (W.n. Mo. 1990) ("[B]ecause 

EPA delegated authority to Missouri to approve [alternate compliance plans ("ACPs")], . . . 

EPA's only recourse if it believes the ACP is substantially inadequate to attain NAAQS is to 

pursue revision of the ACP through administrative procedures."); United States v. General Motors 

.QmL, 702 F. Supp. 133, 137 (N.D. Tex. 1988) ("If the EPA believes that the discretionary 

authority vested in the [state] ... is undennining national ambient air standards, then it may seek 

a revision of the SIP under 42 U.S.C. § 7410(a)(2)(H)."); If the SIP provision granting discretion 

to the state is ambiguous, then the state's interpretation of the SIP provision must controL 

General Motors, 702 F. Supp. at 138; see also Florida Power & Li~ht Co, v. CQstle. 650 F,2d 

579,588 (5th Cir. 1981) (holding that "EPA is to be accorded no discretion in interpreting state 

law" and that "the United States should defer to the state's interpretation of the terms of its air 

pollution control plan when said interpretation is consistent with the Clean Air Act"), Here, there 

can be no argument that a daily S02 emissions limit is inconsistent with the Clean Air Act because 

EPA admits the State has been consistently in attainment of the PMIQ NAAQS since 1994, despite 

(c:I ... Iphillip,1r56-mcm3. wpd] 2 
the allowance of 24-hour averaging. Moreover, the federal PMlO NAAQS, adopted pursuant to 

the Clean Air Act, is a 24-hour standard. 

The PMIO SIP required Phillips (1) to install and operate an SRU to reduce S02 emissions 

and (2) to install and operate a CEM on the SRU incinerator stack to monitor S02 emissions. 

ent of Undisputed Facts ("Undisputed Facts") 12.] The PM10 SIP further provided that 

:ing requirements and limits for the Phillips refmery with respect to S02 would be established 

by the State through the issuance of approval orders. [Undisputed Facts 1 6.] Accordingly, 

pursuant to the PMIO SIP, the State issued approval orders on October 29, 1992, October 15, 1993 

and July 13, 1995 (the "1992, 1993 and 1995 Approval Orders"), which set forth the CEM 

requirements and S02 emissions limits applicable to Phillips. [Undisputed Facts l' 5-6.] 

The 1992 and 1995 Approval Orders, in confonnance with the PMIO SIP, provide that 

Phillips "shall install, calibrate, maintain and operate a continuous S02 emissions monitoring 

system on the Sulfur Recovery Unit Incinerator stack." [Undisputed Facts' 10.] The Approval 

Orders further provide that the CEM installed and operated by Phillips "shall comply with all 

applicable sections of [Utah Administrative Rule] 307-1-4.6," the Utah regulation governing CEM 

systems (the "Utah CEM Rule"). [Undisputed Facts 111.] The 1992 and 1995 Approval Orders 

are enforceable as part of the PMIO SIP. [Undisputed Facts 14.] 

The Utah CEM Rule, which has been renumbered to Utah Admin. R. 307-13 (1996), 

applies to sources required to install continuous emission monitoring system 

equipment and report to the executive secretary any emissions or operating 

(c:I...IphiIJip5\r56-mcm3. wpd] 3 
parameters as required by the following documents: 

(1) Federal, New Source Perfonnance Standards (NSPS); 

(2) State Implementation Plan; 

(3) Approval Orders; 

(4) Consent Decrees; or 

(5) Administrative Orders and Agreement. 

Utah Admin. R. 307-13-5.A (1996). Imporrantly, the Utah CEM Rule provides that "[m]inimum 

perfonnance specifications for all continuous monitoring systems are those contained in ... 40 

CFR, Part 51, Appendix P." Utah Admin. R. 307-13-4 (1996). 

The EPA regulation cited in the Utah CEM Rule and incorporated by reference into the 

1992 and 1995 Approval Orders, 40 C.F.R. Pt. 51, App. P ("Appendix P"), is entitled "Minimum 

Emission Monitoring Requirements." "This appendix P sets forth the minimum requirements for 

continuous emission monitoring and recording that each State Implementation Plan must include 

in order to be approved ...." 40 C.F.R. Pt. 51, App. P, § 1.0 (1997). Appendix P provides 

that SIPs 

may provide a temporary exemption from the monitoring and reporting 

requirements of this appendix during any period of monitoring system malfunction, 

provided that the source owner or operator shows, to the satisfaction of the State, 

that the malfunction was unavoidable and is being repaired as expeditiously as 

practicable. 

40 C.F.R. Pc. 51, App. P, § 1.4 (1997) (emphasis added). 

In summary, the 1992 and 1995 Approval Orders, which are enforceable as part of the 

PM IO SIP, incorporate by reference the Utah CEM Rule, Utah Admin. R. 307-13 (1996) 

(fonnerly Utah Admin. R. 307-1-4.6), which, in tum, incorporates by reference Appendix P, 40 

le:\..•lnhillipslr56-memJ.wpcl] 4 
C.F.R. Pt. 51, App. P (1997). Appendix P gives the State the discretion to exempt sources from 

CEM monitoring requirements during periods of unavoidable CEM malfunction. Accordingly. 

under the PMIO SIP (and provisions incorporated therein), Phillips is exempt from CEM 

monitoring requirements during periods of CEM equipment malfunction, provided that Phillips 

shows, to the satisfaction of the State, that the malfunction was unavoidable. 

B.	 It Is Undisputed That Phillips Demonstrated to the Satisfaction of the 

State That the CEM Unavailability EPA Complains of Was Caused by 

Unavoidable CEM Equipment Malfunctions. 

EPA does not dispute that the State has determined, to the State's satisfaction, that 

unavoidable CEM equipment or calibration malfunctions caused Phillips' CEM to generate 

improperly calibrated and invalid data on a nwnber of occasions. Phillips experienced mechanical 

and calibration difficulties with its CEM equipment, rendering that equipment inoperable during 

portions of certain quarters. [Undisputed Facts 1 14.] Phillips notified the State of the CEM 

malfunctions, which were caused by a variety of problems, including a defective computer chip, 

corrosion in the probe and pumps, plugging of the system, several unexpected electrical power 

surges and lack of calibration gas, and worked with the State to improve the operation of its CEM. 

[Undisputed Facts 1 16.] Indeed, according to the State's CEM specialist, Norm Erikson, 

"Phillips was actively engaged in following procedures to ensure that there was no data loss and 

the monitors were available to the maximum extent possible." [Undisputed Facts' 14.] 

Ic:I...Iphillips\r:i6-mem3. wpd]	 5 
The Scate reviewed the information provided by Phillips regarding the CEM equipment 

malfunctions and conducted independent investigations of the periods of CEM unavailability and 

inspections of the CEM equipment. [Undisputed Facts' 15.] The State's investigation of 

Phillips' CEM equipment malfunctions was extremely chorough. [Undisputed Facts 1 15.] In 

contrast, EPA conducted no on-site investigacions or inspeccions and refused to attend meetings 

held by the State and Phillips wherein Phillips' breakdowns were discussed. [Undisputed Facts 

" 15, 18.] On April 9, 1997, the State issued an Administrative Determination which stated: 

It has been determined by DAQ that reported CEM unavailability was the result of 

unavoidable breakdowns, malfunccions, and equipment checks and adjustments, 

and that Phillips properly noticed DAQ and bas taken prompt action to identify 

problems and implement corrective actions to prevent future problems, as required 

by the approval orders and rules. 

[Undisputed Facts 116.] The State further determined that uno notice of violation was warranted 

for reported excess emissions of sulfur oxides and CBvI una~ai1ability. Jt [Undisputed Facts 117.]

Thus, it is undisputed thaC Phillips has shown, to the satisfaction of the State, that the CEM 

unavailability EPA complains of was the result of unavoidable CEM equipment malfunctions. 

C.	 The State Did Not AQYSf The Discretion Granted it in Determining 

That Phillips· CEM Equipment Malfunctjons Were Unavoidable. 

The State did not abuse irs discretion when it determined that Phillips' CEM unavailability 

was caused by equipment malfunctions that were unavoidable. To show that it did not abuse its 

discretion, all the State must do "is demonstrate it considered relevant factors and alternatives after 

a full ventilation of the issues, and that the choice it made was reasonable based on those 

(c:\...\phillips\r56-mcmJ.wpd)	 6 
considerations." Thomas Brooks Chartered v, Burnett, 920 F.2d 634,643 (lOth Cir. 1990). An 

agency has abused its discretion when it "entirely failed to consider an important aspect of the 

problem, offered an explanation for its decision that runs counter to the evidence before the 

agency, or is so implausible that it could not be ascribed to a difference in view or the product of 

agency expertise." Mount Evans CO. v, Madigan, 14 F.3d 1444, 1455 (10th Cir. 1994). 

Here, the Scate's detennination that the CEM equipment malfunctions experienced by 

PhiHips were unavoidable was not an abuse of discretion. The State reviewed the information 

provided by Phillips regarding the CEM equipment malfunctions and conducted independent 

investigations of the periods of CEM unavailability and thorough inspections of the CEM 

equipment. [Undisputed Facts "15-16.J The State did not base its administrative determination 

on flawed data, nor did it fail to explain the bases for its decision. g:" Mount Evans, 14 F.3d at 

1455-56 (rejecting assertions that agency decision was based on flawed data and that agency failed 

to explain adequately the reason for its decision). Furthermore, pursuant to the State's 

instructions, Phillips took prompt action to identify problems with the CEM and was "active 

engaged" in implementing corrective action to prevent future problems. [Undisputed Facts " 14­

16.] EPA contends that the State did not evaluate Phillips' CEM equipment breakdowns 

"adequately I II but frankly admits that its contention is "strictly speculation." [Undisputed Facts 1 

18 ("[S]peculating - totally speculating, I don't believe the State did the evaluation adequately on 

the breakdowns. ").] 

(e,I". Iphilhpslr56-memJ, Wpd] 7 
Permitting EPA to pursue the alleged "monitoring violations" against Phillips, which 

simply acted in accordance with the State's directives, would result in substantial injustice to 

Phillips. Moreover, permitting EPA to press these alleged monitoring violations would 

unnecessarily consume valuable judicial resources. EPA contends that "[e]ach day that Phillips 

failed or fails to comply with the requirements of the SIP by not having th~ monitor operating 

properly constitutes a separate violation of that SIP." [Amended Compl. 1 37.] The State has 

already reviewed the numerous alleged monitoring violations and determined that the breakdowns 

EPA complains of were unavoidable and therefore are excused. EPA, however, contends that all 

of the State's work should be ignored and that this Court should review again. one-by-one, the 

numerous breakdowns and then supplant the State's technical expertise by fact-finding and entry 

of a judgment. Phillips contends only that the State's determination excusing the breakdowns 

should be upheld. 

As a matter of law, under the PMIO SIP and the 1992 and 1995 Approval Orders, Phillips 

is exempt from CEM monitoring requirements during periods of CEM malfunction if the State 

is satisfied that the equipment malfunctions were unavoidable and that Phillips repaired the 

equipment as expeditiously as practicable. It is undisputed that Phillips has met these 

requirements to the satisfaction of the State. [Undisputed Facts n 16-17.] Accordingly, Phillips 

is entitled to summary judgment in its favor on Count I of EPA's Amended Complaint. 

[c:\ ...\phillips\r56-memJ, wpdI 8 
II.	 fHILLIPS HAS COMPLIED WITH S02 EMISSIONS LIMITS AS A 

MATTER OF LAW. 

In Count II of the Amended Complaint, EPA alleges that Phillips violated the PMtu SIP 

and the 1992 and 1995 Approval Orders "by emitting more than the amounts of sulfur dioxide 

permitted" on over 1,000 occasions. [Amended CompI. 140.] The Complaint further alleges that 

(e]ach instance in which Phillips failed to comply with the requirements of the SIP 

by emitting excess amounts of sulfur dioxide constitutes a separate violation of that 

SIP ... [and] is subject to a 'penalty of up to $25,000 for each violation prior to 

January 30, 1997, and a penalty of up to $27,500 for each violation after that date. 

[Amended CompI. 141.] Application of the law to the facts material to Phillips' compliance with 

S01 emissions limits warrants the entry of summary judgment for Phillips. 

A.	 As Interpreted by EPA, the PM1n-SlP and the Approval Orders Would 

Unconstitutionally Discriminate Against Phillips and Therefore Would 

Be Unenforceable as a Matter of Law. 

Under EPA's interpretation of the PMlO SIP and the 1992 and 1995 Approval Orders, 

Phillips is subject to an S02 emissions limit. 6 [Amended CompI. 1 27 (alleging that 

"Phillips exceeded the b.om:lx limit established in the SIP and Approval Orders for sulfur dioxide 

emissions" (emphasis added».] Article I, § 24 of the Utah Constitution provides that U[a]ll laws 

6 In conU'3St, both the State and Phillips interpret the PM ,O SIP and the Approval Orders to impose a limit stated 

in pounds per hour that is determined by taking only a Qaili: average of Sal emissions from the SRU. Furthermore, 

the PM 10 SIP unquestionably establishes that compliance demonstrations for SOl emissions are to be conducted on a 

daily basis. This issue - whether the PM ,O SIP and the Approval Orders should be interpreted so as to impose daily 

or hourly Sal emissions limits - is hotly disputed and is not ripe for disposition at the summary judgment stage. 

Phillips in no way concedes that it is subject to an hourly SOl emissions limit, but contends that even assuming the 

PM IO SIP and the Approval Orders can be construed to impose an hourly S01 emissions limit, such an hourly limit 

would be unconstitutional and, as a result, is unenforceable. 

[c:\ ...\phill ips\r56-memJ. wpd]	 9 
of a general nature shall have unifonn operation. ,,7 This constitutional provision requires (1) "that 

a law must apply equally to all persons within a class" and (2) "that statutory classifications must 

have a reasonable tendency to further the objectives of the statute." QreernvQQd v. City of North 

Salt Lake, 817 P.2d 816,821 (Utah 1991).8 

A law is unconstirutionally discriminatory if it does not "apply equally to all persons within 

a class." Malan v, Lewis, 693 P,2d 661,671-71 (Utah 1984). Accordingly, "persons similarly 

situated should be treated similarly." M.. at 669. Article I, § 24 of the Utah Constitution 

intends simply that the effect of general laws shall be the same upon all persons 

who stand in the same relation to the law. It has been repeatedly held that a law 

is general which applies to all of a class - the classification being a proper one ­

and that the requirement of uniformity is satisfied if it applies to all of the class 

alike. 

Untermyer v. State Tax Comm:n, 129 P.2d 881, 886 (Utah 1942) (quotation omitted). 

A law unconstitutionally classifies if there is "no basis for the differentiation" of persons 

and the differentiation does not bear "a reasonable relation to the purposes to be accomplished by 

7 Article I, § 24 of the Utah Constitution "acts as Utah's equal protection clause." Amax rvla~nesium Corp. v. 

Utah State Ta.t; Comm'n, 796 P.2d 1256, 1261 n.23 (Utah 1990) (citing cases), but provides greater protection than 

the Equal Protection Clause of the United States Constitution, ill Greenwood v. City of NQrth Salt Lake, 817 P.2d 

816,821 (Utah 1991). 

8 The Utah Supreme Court has not hesitated to strike down laws that violate Article I, § 24. See c.~ . ~,

796 P.2d at 1261 (tax statute); Malan v. Lewjs. 693 P.2d 661,675 (Utah 1984) (automobile guest statute); Srilte Tax 

Comm'n II. D(lV'( of finance, 576 P.2d 1297, 1298 (Utah 1978) (tax statute); Weber Basin HQme Builders Ass'n II, 

Roy City, 487 P.2d 866, 869 (Utah 1971) (city ordinance increasing building permit fee); Dodge Town, Inc. v, 

~, 480 P.2d 461. 462 (Utah 1971) (Sunday closing Ijlw); Gronlund II. Salt Lake Citv. 194 P.2d 464, 468 (Utah 

1948) (same); BrQadbent v, Gibson, 140 P.2d 939, 946 (Utah 1943) (same); Slate v. HQltgreve, 200 P, 894, 896 

(Utah 1921) (Trading Stamp Act); Slate v, Bayer. 97 p, 129. 132 (Utah 1908) (statute prohibiting "hawking or 

peddling" without a license). 

[e:I ... lphillipslr56-mcmJ.wpdl 10 
the act" State v, 1,'6, & R.E, Walker. Inc., 116 P.2d 766, 769 (Utah 1941). Furthermore, a law 

may not create classes of persons and then apply "differently to each classification without a 

reasonably related legitimate government purpose." Amax Magnesium Corp v. Utah State Tax 

Comm'n, 796 P.2d 1256, 1261 (Utah 1990). "The objects and purposes of a law present the 

touchstone for determining proper and improper classifications." Gronlund v. Salt Lake City, 194 

P.2d 464, 466 (Utah 1948); see also Malsn, 693 P.2d at 670 ("Whether a statute meets equal 

protection standards depends in the first instance upon the objectives of the statute and whether 

the classifications established provide a reasonable basis for promoting those objectives. "). 

A SIP provision that is found to be invalid under state law is unenforceable, notwithstanding the fact that EPA has approved the provision. Sierra Club v, Indiana-Kentucky EleQ. 

CQm,., 716 F.2d 1145, 1151-52 (7th Cir. 1983); Illinois v, Celotex, 516 F. Supp. 716, 718 (c.n. 

Ill. 1981). Otherwise, "the Clean Air Act would be construed to reach the inconsistent result that 

an implementation plan, the product of a joint federal and state effort under the same Act, would 

be enforCeable in the courts of one level of government but not the other. n Sierra Club, 716 F.2d 

at 1151; see alsQ CelQtex, 516 F. Supp. at 718 ("It would be an anomaly, if not a denial of . . . 

due process rights, to allow ... full enforcement of those invalid regulations. "). 

In this case, it is undisputed that the Five Refineries, Kennecott and Geneva constitute the 

class of major industrial sources of S02 emissions regulated by the PM 10 SIP. [Undisputed Facts 

" 19, 27-29.] In addition, it is undisputed that both the State and EPA intended to treat this class 

(c:\...Irhi1Jips\rS6.mcmJ. wpd] 11 
equitably under the PM10 SIP and related approval orders. [Undisputed Facts 1127-29.] Indeed, 

a primary objective of the State "in adopting and enforcing the PM10 SIP has always been to 

protect the environment, in a manner which would not be unfair, discriminatory or anticompetitive as far as the regulated corrununity and individual companies are concerned." 

[Undisputed Facts 1 27.] To that end, the State imposed.dillly S02 emissions limits on all the 

members of the class. [Undisputed Facts 1130-37.] 

However, under EPA's interpretation of the PMlO SIP and the 1992 and 1995 Approval 

Orders, parties similarly situated would not be treated similarly. For example, it is undisputed 

that Amoco, Chevron, Kennecott and Geneva - parties within the class of sources regulated by 

the PMlO SIP that emit S02 into the Salt Lake County air shed9 - are permitted to average S02 

emissions on a daily basis. [Undisputed Facts" 32-37] In November of 1992, the Amoco 

portion of the PMIO SIP was revised, without objection'from EPA, to clarify expressly that S02 

emissions from the Amoco SRU were to be totaled or averaged on a basis for all compliance 

purposes. [Undisputed Facts 1132-33.] Amoco was also issued an Approval Order by the State 

in 1992 which established daily S02 emissions limits. [Undisputed Facts f 32.] In December of 

1992, the State informed Chevron that the mass and concentration based limits for S02 set forth 

in the PMlO SIP were illill:i limits because the focus of the PM ,o SIP is attairunent of the 24-hour 

9 The 502 emitted by the Five Refineries, Geneva and Kennecott is trapped and intennixes in the same air shed 

and only converts to PM IO• if at all, after several days. [Undisputed Facts 13.1 Thus, the hourly 502 emissions limits 

EPA contends for are irrelevant to the protection of the environment. 

[c:I...lphillipslr56-memJ.wpd] 12 
PMIO NAAQS. [Undisputed Facts 134.1 Indeed, the NAAQS for PMIO establishes only daily and 

annual limits; EPA has never promulgated a NAAQS for PM IO for a time period shorter than 

twenty-four hours. In 1996, Chevron's Approval Order was clarified to permit !la.i.ly averaging 

of Chevron's S02 emissions. [Undisputed Facts 135.] And, it is undisputed that both Kennecott 

and Geneva demonstrate compliance with the PM10 SIP by averaging 502emissions on a lliilly 

basis. [Undisputed Facts f' 36-37.] EPA admits that the ~capped" emissions of 502at Phillips' 

Woods Cross refinery from point sources other than the SRU are to be averaged on a 24-hour 

basis. These ~capped" emissions constitute approximately 75 percent of the 502 that enters the 

air shed from Phillips. [Undisputed Facts' 39.} Finally, Phillips' own 1995 Approval Order 

refers to "a QIDly (24-hour) SRU Incinerator S02 emissions limit." [Undisputed Facts , 38 

(emphases added).] Nevertheless, EPA contends in this lawsuit that Phillips is subject to an 

S02 emissions limit. [Amended Compi. 127.] 

EPA's contention plainly violates Article I, § 24 of the Utah Constitution. 10 ·When 

persons are similarly situated, it is unconstitutional to single out one person or group of persons 

from among a larger class on the basis of a tenuous justification that has little or no merit." 

M.lla.n, 693 P.2d at 671. EPA has put forth no justification, let alone a meritorious one, for 

10 In addition, treating similarly situated parties differently may very well violate EPA's own regulations. Fair 

and uniform implemenlation and enforcement of the Oean Air Act and state implementation plans is plainly mandated 

by EPA regulations. 40 C.F.R. § 56.3 (1997) (stating EPA's policy to "[a]ssure fair and uniform application . 

. . of the criteria, procedures, and policies employed in implementing and enforcing the act"); 40 C.F.R. § 

56.4 (1997) (outlining "mechanisms to assure that the rule or regulation is implemented and enforced fairly and 

uniformly''). 

!c: I...Iphillipslr56-mcm3. wpd] 13 
singling out Phillips. II Indeed, EPA's singling out of Phillips in its ongoing battle with the State 

over the manner in which the State should enforce the PMIO SIP (and how the PMIO SIP should 

be interpreted) is simply not fair to Phillips. CL United States v, Solar Turbines. Inc;" 732 F. 

Supp. 535, 539 (M.D. Pa. 1989) ("EPA cannot as a matter of law pursue enforcement action 

against an owner/operator who has committed no violation that can be attributed to it other than 

to act in accordance with a pennit it received from an authorized pennit-issuing authority, but 

which pennit EPA beJieves the issuing authority improperly granted. "). 

Furthermore, if the PMIO SIP and the 1992 and 1995 Approval Orders impose an hourly 

S02 emissions limit on Phillips, but only daily emissions limits are imposed on even one of the 

other sources of S02, then the PMIO SIP has created two classes and arbitrarily discriminated 

against one class for no apparent reason. Such "disparity does not pass ... constitutional muster." 

A.InM, 796 P.2d at 1261. Indeed, there is no reasonable basis for classifying Phillips differently 

than the other refineries, Kennecott or Geneva. U kL. Furthennore, there is no reasonable 

relationship between such classification and the purpose of either the PMIO SIP or the Clean Air 

Act, which is to enforce the federally adopted NAAQS for PM IO • cr. id... at 1261-62. This is 

II In addition to being unconstirutional, applying the PM10 SIP and the Approval Orders in the manner EPA 

contends for would also be arbitrary and capricious. An agency's inconsistent treatment of similarly situated panies 

that is unexplained in the administrative record constitutes arbitrary and capricious action, Rocky MQuntain 

HeljCQDter~. Inc, v, fAA, 975 F.2d 736,737-38 (10th Cir. 1992). In this case, the administrative record fails to 

explain why, as EPA contends, J:!.mlrlx 501 emissions limits should be imposed on Phillips while emissions limits 

are imposed on similarly siruated parties, namely the other refineries, Kennecott and Geneva. U Section II.B., infra 

(discussing why an hourly Sal emissions limit would be arbitrary and capricious). 

le:\, ..\phillips\r56-mem3. wpd) 14 
particularly true in light of EPA's admission that there have been no violations of the PMlO 

NAAQS in the State since 1994. [Undisputed Facts 17.] 

In recognition of the fact that the Five Refineries, Kennecott and Geneva must be treated 

fairly under the PMIO SIP and approval orders, EPA bas recently taken the position, for purposes 

of this litigation, that III of the refineries are subject to an S02 emissions limit. Indeed, 

EPA took this litigation position fur the first time in the deposition of Leonila Hanley, taken less 

than two weeks ago. [Hanley Depo. at 586 ("[A]B of the refineries are to have pounds per hour 

for the SRU."); kL at 595 ("[T]he Utah SIP specifies a pounds per hour for all the refmeries for 

the tail gas incinerator. ").] EPA's most recent litigation position is without merit for two reasons. 

First, EPA concedes that Kennecott and Geneva - two members of the class of major industrial 

sources of S02 emissions regulated by the PMlO SIP - are subject to daily, not hourly, S02 

emissions limits. [Undisputed Facts "36-37] Given this concession, EPA likely will argue that 

Kennecott and Geneva (which produce copper and steel) are not in the same class as the Five 

Refmeries (which produce petroleum). Such an argument should be rejected. It is undisputed (1) 

that the Five Refmeries, Kennecott and Geneva are responsible for the majority of S02 emissions 

from industrial sources along the Wasatch Front [Undisputed Facts' 19]; (2) that the S02 emitted 

by the Five Refmeries, Kennecott and Geneva is trapped and intermixes in the same air shed and 

only converts to PM\o, if at all, after several days [Undisputed Facts 13]; and (3) that the Five 

Refineries, Kennecott and Geneva were required by the PMIO SIP to bear the bulk of the 

[e:\ ...\ph<llips\rS6-mem3.wpd] 15 
regulatory burden and install expensive S02 control equipment [Undisputed Facts 13]. Thus, it 

is clear that Kennecott and Geneva, which are subject to S02 emissions limits, are within the 

same class of sources regulated by the PMIO SIP as are the Five Refineries, which EPA now 

contends are subject to b.Q.w:l.x S02 emissions limits. 

Second, even if the class is narrowed to include only the Five Refineries (which compete 

in the same petroleum refining market and are grouped along the Salt Lake and Davis County 

border), EPA cannot plausibly argue that Amoco is subject to an hourly 502emissions limit. The 

PM,o SIP provides that 502emissions limits for the SRUs installed by the Five Refineries would 

be established by the State pursuant to its approval order process. [Undisputed Facts' 4.] On 

November 20, 1992, the State issued to Amoco an approval order (the"Amoco Approval Orden 

which established a Qailx S02 emissions limit for Amoco's SRU. [Undisputed Facts' 32.] EPA 

officials attended the State meeting in which the Amoco Approval Order (and its daily 502 

emissions limits) were approved and did not object to the Approval Order's issuance. [Undisputed 

Facts at "32-33.] Thus, in Novem'ber of 1992, EPA received notice that Amoco was subject 

to a S02 emissions limit. Now, nearly six years later, EPA contends - without any factual 

basis - that Amoco is subject to an bm!!:.ti. 502emissions limit. [Hanley Depo. at 729 ("[T]he 

SIP specified ... that a pounds-per-hour value would be specified for Amoco.").r2 Because 

12 Indeed, the PM 10 srp intentionally left blank tbe SOl emissions limit for the Amoco SRU. [Undisputed Facts 

, 4.J Thus, Amoco is subject either to the daily S02 emissions limit established by the approval order issued in 

November of 1992 or to no limit whatsoever. The actu31language of the original PM ,O SIP relied upon by EPA sets 

Amoco's S01 emissions limit from its SRU as follows: 

[c; I...Iphillipslr56-mem3.wpd) 16 
Amoco is subject to a daily S02 emissions limit, and because Amoco and Phillips are members 

of the same class, imposing an hourly S02 emissions limit on Phillips would be unconstitutional. 

This Court should reject EPA's interpretation of the PM LO SIP and the 1992 and 1995 

Approval Orders imposing an hourly S02 emissions limit on Phillips. A law should not be 

construed in a manner which leads to unconstitutional results. Crowell v. Benson, 285 U.S. 

22, 52 S. Ct. 285, 296 (1932) ("[I]f a serious doubt of constitutionality is raised, ... this Court 

will first ascertain whether a construction of the statute is fairly possible by which the question 

may be avoided."). Under EPA's interpretation, the PMIQ SIP and the 1992 and 1995 Approval 

Orders would be unconstitutional. 13 Accordingly, Phillips is entitled to summary jUdgment on 

PQint Source 

Sulfur Plant
 

Incinerator ????? 250 ???
 

[Undisputed Facts' 4.} 

13 In addition, under EPA's interpretation, the PMIO SIP and the 1992 and 1995 Approval Orders would be void 

pursuant to state law. The Utah Code provides: 

(l) Except as provided in Subsection (2), no rule which the [Utah Air Quality Board] 

makes for the purpose of administering a program under the federal Clean Air Act may be more 

stringent that the corresponding federal regulations which address the same circumstances.... 

(2) The board may make rules more stringent than corresponding federal regulations .. 

. . only if it makes a written finding after public comment and hearing and based on evidence in the 

record, that corresponding federal regUlations are not adequate to protect public health and the 

environment of the state. Those findings shall be accompanied by an opinion referring to and 

evaluating the public health and environmental infonnation and studies contained in the record 

which fonn the basis for the board's conclusion. 

Utah Code Ann. § 19·2-106 (1995). Here, the PM 10 SIP and the 1992 and 1995 Approval Orders promulgated by 

the State, as interpreted by EPA (with their hmI.rlY Sal emissions limits), would be more stringent than the 

corresponding federal NAAQS for PM 10 (with its s1ail:l. standard). Moreover, the State has made no "written finding 

le:\ ... Iphillip!\rS6-mcm3.wpdl 17 

c 
Count II of the Amended Complaint. 

B.	 Under EPA's Interpretation. the State's As.:tiQn in Promulgating the 

llilO SIP and Issuing Approval Orders \Vould Have llfen Arbitrary 

and Capricious. 

The hourly limit on S02 emissions that EPA contends applies to Phillips (and that EPA 

recently contends applies to the other refineries), in addition to being unconstitutional, would be 

arbitrary and capricious because the technical analysis forming the basis for the PM10 SIP and the 

1992 and 1995 Approval Orders consists exclusively of daily emissions inventories and daily air 

quality modeling. Indeed, the administrative record is utterly devoid of evidence supporting an 

hm!J:.IY limit on S02 emissions. A state's action in promulgating a SIP is arbitrary and capricious 

if the state "has failed to provide a reasoned explanation for its action, or if limitations in the 

administrative record make it impossible to conclude the action was the product of reasoned 

decisionmaking." Q15:nhQuse v, COmmodity Credit Corp., 42 F.3d 1560, 1575 (10th Cir. 1994) 

(emphasis added). In addition to requiring a reasoned basis for agency action, the "arbitrary or 

capricious" standard requires an agency's aceion to be supported by the facts in the record. 

iQ.,.; see also Bocky MQuntain Helicopters. Inc, v, FAA, 975 F.2d 736, 737 (lOth Cir. 1992) 

("[A]gency action is arbitrary and capricious if the agency fails to demonstrate in the reCQrd that 

it has examined the relevant data and articulated a satisfactory explanation for its action." 

after public comment and hearing and based on evidence in the record" that the federal PMIO NAAQS "are not adequate 

to protect public health and the environment of the state." Utah Code Ann. § 19-2-106(2). Thus, as interpreted by 

EPA, the PM,o SIP and the Approval Orders would violate not only the Utah Constitution, but also the Utah Code. 

le:l ...lphillipslr56-mcmJ wpdJ	 18 
(emphasis added)). Furthermore, a state agency's action in promulgating a SIP would be 

"arbitrary and capricious ifthere is no rational connection between the facts found and the choice 

made./I Woods Petroleum Corp. v. Dep't of Interior, 47 F.3d 1032, 1037 (10th Cir. 1995) 

(quotation omitted). Accordingly, a state agency's conclusions that do not follow from the 

premises the agency relied upon are arbitrary. 

In Rocky Mountain, 975 F.2d at 736, the plaintiff challenged as arbitrary and capricious 

a determination by the Federal Aviation Administration ("FAA/I) that the removal and replacement 

of oxygen cylinders used in medical oxygen systems installed on aircraft could only be performed 

by certified mechanics. s.e~ kL. at 736-37. After noting that the administrative record revealed 

that the FAA's order applied to "attached" oxygen systems but not to "portablen oxygen systems, 

which the FAA conceded "may be exchanged by the pilot or any other properly trained person, n 

the Court stated that "[t]he record contains no satisfactory explanation for the discrepancy in 

treatment of portable and attached systems. n ld.... at 737. The Court further stated that the record 

contained an FAA study "which determined that the exchange of oxygen cylinders was a simple 

procedure for which Rocky Mountain personnel other than certified mechanics had been properly 

trained," that the study itself found Rocky Mountain's position "to be 'reasonable, '" and that "[t]he 

FAA offered no evidence refuting the study's conclusions./I ld... Based on this review of the 

administrative record, the Court concluded 

that the record contains no adequate explanation for requiring that a mechanic, 

rather than any other adequately trained Rocky Mountain employee,exchange the 

(d...\phillip!\rS6-mcmJ. wpdj 19 
oxygen cylinders. Without further explanation from the FAA, we cannot uphold 

the agency's decision. 

We therefore hold that the FAA has acted arbitrarily and capriciously in this 

instance. Consequently, we must set aside the FAA's action .... 

IQ... at 738. 

In this case, as in Rock'" Mountain, the administrative record is devoid of evidence 

supporting the agency's determination. Nothing. in the administrative record supports EPA's 

contention that the PMlO SIP requires hourly, as opposed to daily, S02 emissions limits on Phillips 

and the other refIneries. In addition, nothing in the administrative record supports treating Phillips 

differently than Kennecott and Geneva - the other major industrial sources of S02 emissions. CL 

Olenhouse, 42 F.3d at 1576 (holding that district court, when reviewing agency action, "must 

examine the administrative record and ... find and identify facts that support the agency's 

action"). To the contrary, evidence in the administrative record establishes that the PM10 SIP and 

the 1992 and 1995 Approval Orders impose daily and annual S02 emissions limits on all of the 

major industrial sources of S02 emissions, including Phillips. 14 

14 EPA admits that there is no difference between an hourly SO, emissions limit and a daily SO, emissions limit 

when it comes to achieving attainment of the PM\o NAAQS. [Undisputed Facts 144.J David Prey, the State's air 

quality modeler during the development of the PM 10 SIP, agrees: 

Technically speaking, it would make no sense to regulate, or average, SO, emissions from some 

refineries for SIP purposes on an hourly basis and others on a daily basis. Such a distinction 

(hourly v. daily) as between refineries could not have been demonstrated to show any beneficial 

environmental purpose consistent with the modeling. 

{Undisputed Facts 144.] 

le:\...\philIips\rS~~m3.wp<ll 20 
During the development of the PMIO SIP, the State requested that Phillips provide an 

inventory of its S02 emissions. [Undisputed Facts' 20.] All of the emissions inventory data 

Phillips provided to the State, upon which the PMIO SIP was based, was in a pounds per day, tons 

per day or tons per year format. None of the emissions data was provided by Phillips in a pounds 

per h.Qyr format. [Undisputed Facts "21, 25-26.] In addition. none of the air quality modeling 

performed by the State for the PMIO SIP was conducted on an hourly basis. [Undisputed Facts 

, 25.] At EPA's instruction, the State relied exclusively on receptor modeling, which, by its very 

nature, can only model Qafu: emissions. [Undisputed Facts n 23-25.] Thus, the technical 

foundation of the PMlO SIP - everything in the administrative record - supports da.ilx S02 

emissions limits and nothing supports hQ.w:ly S02 emissions limits. [Undisputed Facts "25-26.] 

Because the State relied exclusively on emissions inventories and air quality 

modeling, the State was without the authority to impose 1:lm.!r1Y S02 emissions limits when it 

promulgated the PM IO SIP and issued to Phillips the 1992 and 1995 Approval Orders. Indeed, 

such an imposition would constitute arbitrary and capricious agency action. CL. Qlenhouse, 42 

F.3d at 1581 (holding that agency action was arbitrary because it was "not supported by substantial 

evidence in the record"). In sum, the State was without the authority, and did not intend. to 

impose an hourly SQ2 emissions limit on Phillips based on the administrative record. EPA's 

assertions to the contrary are arbitrary and simply make no sense. U Caribbean Petroleum Corp. 

n uPA. 28 F.3d 232,235 (1st Cir. 1994) (agency action is arbitrary if it "makes no sense ). 

le:\ ...\phillips\r56-mcmJ. wpdl 21 
Independent of the state of the administrative record, EPA itself is without the authority 

to insist on hourly S02 emissions limits. The Supreme Court has made clear that so long as 

compliance with the relevant SIP is resulting in attairunent of the NAAQS, the State has absolute 

discretion to determine the means by which the NAAQS will be met. I(ain v. Natural 

Resources Defense Council. I.nc~, 421 U.S. 60, 95 S. Ct. 1470, 1481-82 (1975). There have been 

no violations of the NAAQS for PMIO in the entire State of Utah for over fOUf years. (Undisputed 

Facts 17.] As the I.rnin coun stated: 

[EPA] is plainly charged by the (Clean Air] Act with the responsibility for setting 

the (NAAQS]. Just as plainly, however, it is relegated by the Act to a secondary 

role in the process of determining and enforcing the specific, source-by-source 

emission limitations which are necessary if the national standards it has set are to 

be met. . . . The Act gi yes the A£ency no authority to questjon the wisdom of a 

State's choices of emission limitations if they are part of a plan which satisfies the 

standards of § 1l0(a)(2) .... Thus. so long as the ultimate choice of emission 

limitations is in compliance with the [NAAQSJ, the State is at liberty to adopt 

whatever mix of emission limitatjons it deems best suited to its particular situation. 

95 S. Ct. at 1481-82 (emphases added); see also Virginia v. EPA, 108 F.2d 1397,1410 (D.C. 

Cir. 1997) (reaffinning Irain and stating that the Clean Air Act "does not enable EPA to force 

particular control measures on the state"). 

Thus, two independent and sufficient reasons exist for granting sununary jUdgment for 

Phillips on the alleged emissions violations. First, under EPA's interpretation, the PMlO SIP and 

the Approval Orders would unconstitutiQnally discriminate against Phillips. Second, under EPA's 

interpretation. the State's action in promulgating the PMlO SIP and in issuing the Approval Orders 

[c:\...\phillips\rSf>.mem3.wpd] 22 
would have been arbitrary and capricious. For either of these reasons, Phillips is entitled to 

summary jUdgment in its favor on Count II of EPA's Amended Complaint. 

CONCLUSION 

Consistent with federal regulations. EPA agreed that a source could be exempted from 

operation of CEM equipment if it proved, "to the satisfaction of the State," that an exemption was 

warranted. The State has investigated the CEM equipment malfunctions reported by Phillips and 

concluded that no violation of CEM requirements bas occurred. If EPA is unhappy with the 

authority it has delegated to the State, its remedy is to change the CEM breakdown rule after 

proper notice and corrrrnent. Instead, EPA is attempting in this litigation to engage in rulemaking 

by enforcement. Because Phillips bas ·satisfied" the State that its CEM equipment malfunctions 

were unavoidable, EPA's claims for penalties relating to CEM unavailability should be denied. 

Likewise, neither EPA nor the State was free to adopt a PMIO SIP that treated businesses 

within a class differently. Despite EPA's belated attempts to distance itself from the Amoco 

Approval Order, approved with EPA's knowledge in 1992, Amoco, Geneva and Kennecott are 

permitted to average S02 on a basis. As a result, the PMIO SIP and the approval orders 

issued to Phillips, as interpreted by EPA (to impose an hourly S02 emissions limit), would violate 

Article I, § 24 of the Utah Constitution. Therefore, to be enforceable at all, the PMIO SIP and the 

Approval Orders must allow for daily averaging of S02 emissions by Phillips. 

(c;\ ...Iphil! ipslr56-mem3 INpdl 23 
Furthermore. imposing upon Phillips (and the other refineries) a never to be exceeded 

pounds per hour limit at the SRU would be arbitrary and capricious. Despite the fact that the Five 

Refineries have been operating under daily S02 emissions limits the State enforces, there have 

been no violations of the PMlO NAAQS since 1994. The modeling to support the S02 controls 

used in the PMIO SIP to demonstrate attainment of the PM ,O NAAQS. was conducted on a daily 

basis. Sulfur dioxide does not convert into PMlO within hillm, in converts to PMIO • if at all within 

several~. And. EPA admits that much of the same chemical compound, S02, emitted into the 

Salt Lake and Utah County air shed is only regulated on a daily basis. Because it would make no 

sense to impose hourly S02 emissions limits upon Phillips. EPA's position is arbitrary and 

capricious. For the foregoing reasons. Phillips respectfully requests that the Court enter summary 

judgment on Counts I and II in favor of Phillips and against EPA. 

DATED this \,\1\- day of August, 1998. 

PARR WADDOUPS BROWN GEE & LOVELESS. PC 

By:--'7'---t-f--'~--+

Attorneys for Phillips Petroleum Company 

[C:\...Iphillips\rS6-memJ. wpd] 24