IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

)

ENERGY RECOVERY COUNCIL, )

) v. )Petitioner, )

)

U.S. ENVIRONMENTAL PROTECTION ) AGENCY, )

)

Respondent. )

)

No. 09-1326

SETTLEMENT AGREEMENT

WHEREAS the Energy Recovery Council in No. 09-1326 (referred to as

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

captioned above that challenges the regulation titled "Mandatory Reporting of

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

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

Protection Agency ("EP A");

WHEREAS No. 09-1326 has been consolidated with other petitions

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

petition;

WHEREAS EP A intends to undertake a rulemaking to make certain

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

raised by Petitioners in their petition for review;

WHEREAS the EP A and Energy Recovery Council (collectively the

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

protracted and costly litigation and to preserve judicial resources;

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

hereby stipulate and agree as follows:

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

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

described in paragraph 7 below, and wil request that No. 09- 1 326 be severed from

lead No. 09- 1 325 and the other consolidated cases and be held in abeyance

pending finalization and completion of the terms of their settlement, with EPA to

file status reports on 120-day intervals.

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

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

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

Attachment A to this Agreement.

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

GHG Reporting Rule that includes changes that are substantially the same

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

promptly file a stipulation of dismissal with prejudice of No. 09-1326, or in the

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

No. 09- 1 326 for the issues that correspond to such changes that were made, with

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

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

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

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

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

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

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

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

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

Agreement.

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

GHG Reporting Rule that includes changes that are substantially the same

substance as set forth in Attachment A to this Agreement, Petitioner's pending

administrative petition for reconsideration of the GHG Reporting Rule, or the

issues raised in that petition that correspond to such changes in the event not all

such changes are made, shall be deemed withdrawn.

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

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

address other matters or provisions than that set forth in Attachment A or that in

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

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

cause the final changes referenced in paragraphs 2, 3 and 4 above not to be the

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

6. IfEPAdoes not take action in accordance with the terms of this

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

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

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

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

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

opportunity for comment pursuant to Clean Air Act section 1 13(g), 42 U.S.C. §

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

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

an opportunity for notice and comment, the Administrator andlor the Attorney

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

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

accordance with section 1 13(g) of the Clean Air Act. This Agreement shall

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

Petitioner.

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

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

of administrative law.

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

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

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

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

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

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

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

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

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

terms of this' Agreement.

IGNACIA S. MORENO

Assistant Attorney General

Environment and Nat. Resources Division

DAVID 1. KAPLAN

U.S. Department of Justice

Environmental Defense Section

PO Box 23986

Washington D.C. 20026-3986

(202) 514-0997

DA VID FRIEDLAND

Beveridge & Diamond, PC

1350 I Street, N.W.

Suite 700

Washington, DC 20005-3311

(202) 789-6047

Counsel for United States

Environmental Protection Agency

Counsel for

Energy Recovery Council

Dated: Dated:

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A TT ACHMENT A

Fossil fuel means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel

derived from such material, including for example, consumer products that are derived from such

materials and are combustedfor purpose of creating useful heat.

Fossi!fblc!fìrcd means powered by combustion of fossil fuel, alone or in combination with any

other fuel, regardless of the percentage of fossil fuel consumed.

40 C.F.R. 98.6

Table C-L of Subpart C-Default CO2 Emission Factors and High Heat Values for Various T fF i . ypes 0 ue

Fuel Type Default High Default CO2 Emission Factor

Heat Value

Fossil Fuel deriyed Other Fuels (Solid) mmBtu/short kg CO2 /mmBtu

ton

Municipal Solid Waste+ 9.951 90.7

Tires 26.87 85.97

40 C.F.R. Part 98 Subpart C, Table C-L

(A) The unit has a maximum rated heat input capacity greater than 250 mmBtu/hr, or if

the unit combusts municipal solid waste and has a maximum rated input capacity

greater than ~600 tons per day of MSW.

40 C.F.R. § 98.33(b)( 4)(ii)(A)

(iii) Shall be used for a unit with a maximum rated heat input capacity of 250 mmBtu/hr

or less and for a unit that com busts municipal solid waste with a maximum rated input capacity

of~600 tons ofMSW per day or less, if the unit meets all of the following three conditions:

40 C.F.R. § 98.33(b)(4)(iii)

(iii) If the CO2 concentration is measured on a dry basis, a correction for the stack gas

moisture content is required. You shall either continuously monitor the stack gas moisture

content as described in §75.11(b)(2) of this chapter or, for certain types offuel, use an

appropriate default moisture percentage. For coaL. wood, and natural gas combustion, you may

use the default moisture values specified in-f §75.11(b)(l) of this chapter. Alternatively, for

any type of fueL. you may determine an appropriate site-specific default moisture value (or
values), using measurements made with EPA Method 4 - Determination Of Moisture ContentIn

Stack Gases, in appendix A-3 to part 60 of this chapter. If this option is selected, the sitespecific moisture default value(s) must represent the fuel(s) or fuel blends that are com busted in

the unit during normal, stable operation, and must account for any distinct difference( s) in the

stack gas moisture content associated with different process operating conditions. For each sitespecific default moisture percentage, at least nine Method 4 runs are required. Moisture data

from the relative accuracy test audit (RATA) of a CEMS may be used for this purpose.

Calculate each site-specific default moisture value by taking the arithmetic average of the

Method 4 runs. Each site-specific moisture default value shall be updated whenever the owner

or operator believes the current value is non-representative, due to changes in unit or process

operation, but in any event no less frequently than annually. Use the updated moisture value in

the subsequent CO2 emissions calculations. For each unit operating hour, a moisture correction

must be applied to Equation C-6 of this section as follows: * * * *

40 C.F.R. §98.33(a)(4)(iii)

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