### Date: May 18, 2009

To: Docket ID No. EPA-HQ-OAR-2007-0011

From: Kristin Parrish

Subject: NSPS Subpart J Review: Meeting Mi nutes for February 2, 2009, Conference Call

Between the U.S. EPA and Representa tives of Valero Energy Corporation

On February 2, 2009, representatives of th e U.S. Environmental Protection Agency

(EPA) and their contractor (RTI International) pa rticipated in a stakehol der conference call with

representatives of Valero Energy Corporation (Valero). The names and affiliations of the

participants are included in Att achment 1. The information provided by Valero prior to the call

is included as Attachment 2. The representatives from Valero requested th e call to discuss two

issues: (1) whether coke gasifiers are refinery process units and (2) the timing of the flare

requirements in subpart Ja.

The representatives from Valero stated that gasifiers are not refine ry process units and

should not be regulated in subpa rt J or Ja. They cited a 2000 decision from the United States

Court of Appeals for the Third Circ uit, included within Attachment 2, stating that th e gasifiers at

the Delaware City refinery (formerly Star Enterp rises, then Motiva, now Valero) are not refinery

process units subject to 40 CFR pa rt 60, subpart J (subpart Ja did not exist at that time). If the

EPA wants to regulate gasifiers, th e Valero representatives noted th at gasifiers should be covered

in a separate rulemaking because they cannot meet the fuel gas limits in the NSPS. The syngas

includes reduced sulfur compounds such as ca rbonyl sulfide (COS), and while the unit in

Delaware City does use amine treatment for H 2 

### S, amine treatment alone does not reduce the H 2 

### S

levels enough to meet the subpart J limits. The EPA representatives noted that the decision in

the cited court case was based mostly on the location of the gasification unit ( i.e. , it is outside the

facility boundary and therefore not part of the petroleum refinery ). They also requested that

Valero provide as much detail as possible in their public comments, including the composition of

the syngas and what would be needed to meet the NSPS limits if their gasification unit was

located at the petroleum refi nery rather than offsite.

The Valero representatives also stated that 2 years is not enough tim e to install flare gas

recovery, especially for companies with multiple re fineries that have installation dates negotiated

through consent decree. They stated that some inst allations at their refine ries took up to 5 years

to complete. As an example, they noted that the South Coast Air Qualit y Management District

originally required recovery to be installed w ithin a year and a half but later extended the

deadline to 3 to 5 years. They specified that th ey are not opposed to installing recovery systems

and are, in fact, choosing that op tion for many flares at their refi neries, but they want to make

### 2

sure the schedule is reasonable. The EPA representatives requested that the Valero

representatives provide suggestions for a timelin e that would be workable in their comments on

the proposed amendments.

For more detail on the issues discussed at this meeting, see Attachment 2 and Valero’s

public comments in the docket at EPA-HQ-OAR-2007-0011-0310.

### Attachment 1

Participants in February 2, 2009, Conference Call

Valero Representatives

Matthew Hodges

Deepak Garg

Richard Walsh

Darren Stroud

U.S. EPA Representatives

Patrick Foley

K.C. Hustvedt

Bob Lucas

Brenda Shine

Susan Stahle

RTI International (EPA contractor)

Jeff Coburn

Kristin Parrish

### Attachment 2

Valero Background Information and Meeting Planning

"Hodges, Matt"

<Matthew.Hodge s@valero.com>

01/30/2009 02:49 PM To: Brenda Shine/RTP/USEPA/US@EPA, Ken

Hustvedt/RTP/USEPA/US@EPA, Bob

Lucas/RTP/USEPA/US@EPA

cc:

Subject: Call-in number for teleconference Monday, Feb

2, 1:00 EST

Please find below the call-in number for our meeting next Monday. We have 5 ports, as I expect you’ll

need to forward this on to a few other people. If ther e are any questions, please let me know. Thanks.

-Matt Hodges

Valero Energy Corporation

210-345-4620

February 02, 2009 12:00 PM America/Chicago {21046201}

Date/Time: February 02, 2009 at 12:00 PM America/Chicago

Length: 150 (minutes)

Frequency: once

Phone Number: (210) 345 5959

Meeting ID: PRESS OPT 1 > 21046201#

Number of ports: 5

TOLL FREE NO.: 800-333-3377 > EXT 5959 > PRESS OPT 1 > MTG ID NO. 21046201#.Ken Hustvedt/RTP/ USEPA/US

01/16/2009 11:31 AM To: "Hodges, Matt" <Matthew.Hodges@valero.com>,

Brenda Shine/RTP/USEPA/US@EPA

cc: Bob Lucas/RTP/USEPA/US@EPA, "Stroud, Darren"

<Darren.Stroud@valero.com>, "Garg, Deepak"

<Deepak.Garg@valero.com>, "Tiemeyer, Eric"

<Eric.Tiemeyer @valero.com>

Subject: Re: Motiva Court Ruling, Coke Gasification,

Subpart Ja

today is the deadline for the refinery RTR. our br ains cannot handle any more today. We can talk next

week. thanks for following up.

kc hustvedt

"Hodges, Matt"

<Matthew.Hodge s@valero.com>

01/16/2009 11:17 AM To: Ken Hustvedt/RTP/USEPA/US@EPA, Bob

Lucas/RTP/USEPA/US@EPA

cc: "Tiemeyer, Eric" <Eric.Tiemeyer@valero.com>, "Garg,

Deepak" <Deepak.Garg@valero.com>, "Stroud,

Darren" <Darren.Stroud@valero.com>

Subject: Motiva Court Ruling, Co ke Gasification, Subpart Ja

Morning, Bob and K.C. During the industry call early this month, I promised to provide a copy of a court

ruling specific to Gasifiers and Subpart J applicability. Please find attached a copy of the Motiva Court

Case concerning the Coke Gasification Process, whic h I believe you will find speaks directly to the issue

of Subpart J.

Additionally, per the voice mail I left this morning, I would like to arrange a meeting with you to discuss

several aspects of the new Subpart Ja proposal t hat are important to Valero, particularly coke

gasification. Please let me know your availability for a meeting at your offices the week of February 2.

While I think a face-to-face meeting is always more productive, if time is scarce we can arrange a

conference call at your convenience.

Thanks for your attention to this matter. I look forward to hearing from you.

Matthew H. Hodges

Senior Manager, Regulatory Affairs

Corporate Health, Safety, and Environmental

Valero Energy Corporation

Matt.hodges@valero.com

210-345-4620

210-601-4297

(See attached file: Motiva ruling on Subpar t J applicability to gas ifier 12-7-2000.docx)Filed December 7, 2000

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 98

‐ 6321

STAR ENTERPRISE; TEXACO INC.,

Petitioners

v.

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Respondent

On Petition for Review of a Final Action by The United States Environmental Protection Agency

Argued July 15, 1999

Before: ROTH and RENDELL, Circuit Judges POLLAK, 1 District Judge

(Opinion filed: December 7, 2000)

William H. Lewis, Jr., Esquire

Michael W. Steinberg, Esquire (Argued)

Morgan, Lewis & Bockius LLP

1800 M Street, N.W.

Washington, D.C. 20036

‐ 5869

Jeffrey N. Hurwitz, Esquire

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

‐ 2921

Counsel for Petitioners

Lois J. Schiffer

Assistant Attorney General

Norman L. Rave, Esquire (Argued)

United States Department of Justice

1 Honorable Louis H. Pollak, United States District Court Judge for the Eastern District of Pennsylvania, sitting by designation

.Environmental Defense Section

P.O. Box 23986

Washington, DC 20026

‐ 3986

Diane McConkey, Esquire

Office of General Counsel

United States Environmental

Protection Agency

Charles McPhedran

Senior Assistant Regional Counsel

United States Environmental

Protection Agency

Counsel for Respondent

OPINION OF THE COURT

ROTH, Circuit Judge:

The United States Environmental Protection Agency (EPA) determined that the "Standards of

Performance for Petroleum Refineries," promulgated under the Clean Air Act and codified at 40 C.F.R. SS

60.100

‐ 60.109 (1999) (Subpart J), applied to two stationary gas turbines located in an electrical power

plant complex in Delaware City, Delaware. The petitioners challenge this determination. Because we

conclude that the stationary gas turbines at issue in this case are not "in" a "petroleum refinery," we

hold that these turbines are not "affected facilities" as defined at 40 C.F.R. S 60.100(a) and therefore are

not subject to regulation under the "Standards of Performance for Petroleum Refineries." For that

reason, the EP A erred in determining that these performance standards are applicable to the gas

turbines at issue in this case.

I. FACTS

Petitioners, Motiva Enterprises, LLC, and Texaco, Inc., challenge a final agency action, issued on July 21,

1998, by the Environmental Protection Agency 2

. This final action, entitled "New Source Performance

Standards Subpart J Applicability Determination for the Star Enterprise Petroleum Refinery in Delaware

City, Delaware," set forth the EPA's conclusion that two stationary gas turbines, owned by Motiva and

located in an electrical power plant complex adjacent to Motiva's petroleum refinery in Delaware City,

are subject to regulation under the New Source Performance Standards (NSPS) for Petroleum Refineries,

codified at 40 C.F.R. SS 60.100

‐ 60.109.

Before addressing the merits of the petitioners' challenge, we will discuss the relevant regulatory

framework. The emission of sulfur dioxide (SO2), which causes acid rain and has serious adverse health

effects, particularly among asthmatics, is regulated by the EPA under the Clean Air Act. See, e.g.,

American Lung Ass'n v. Environmental Protection Agency, 134 F.3d 388, 389

‐ 90 (D.C. Cir. 1998). Section

111 of the Clean Air Act, codified at 42 U.S.C. S 7411, authorizes the EPA to promulgate performance

2 On October 1, 1998, all assets of Star Enterprise, including the facilities at issue in this case, were transferred to Motiva. Petitioners filed a

motion on July 15, 1999, to formally substitute Motiva for Star Enterprise in this litigation. The motion was unopposed and was granted. Thus,

Motiva and Texaco became the petitioners and parties of interest. We refer to both Motiva and Star throughout this opinion as appropriate.standards for new and modified sources of pollution that the EPA concludes cause or significantly

contribute to air pollution. See 42 U.S.C. S 7411(b) (2000). These standards, the NSPS's, must:

[R]eflect[ ] the degree of emission limitation achievable through the application of the best

system of emission reduction which (taking into account the cost of achieving such reduction

and any non

‐ air quality health and environmental impact and energy requirements) the

Administrator determines has been adequately demonstrated.

42 U.S.C. S 7411(a)(1) (2000). NSPS's apply only to "affected facilities" that were constructed, modified

or reconstructed after the publication of the applicable proposed regulation 3

. Each NSPS explicitly

defines and describes the "affected facilities" to which it applies.

The EPA has issued NSPS's for over 70 "source" categories. Most of these NSPS's relate to specific

industries such as glass manufacturing, see 40 C.F .R. SS 60.290

‐ 60.296 (1999), nitric acid

manufacturing, see 40 C.F.R. SS 60.70

‐ 60.74 (1999), ferroalloy production, see 40 C.F.R. SS 60.260

‐

60.266 (1999), copper smelting, see 40 C.F.R. SS 60.160

‐ 60.166 (1999), and the NSPS at issue here,

Subpart J, petroleum refining, see 40 C.F.R. SS 60.100

‐ 60.109 (1999). The EPA has also issued NSPS's for

generic source categories. These generic source NSPS's apply to specific types of industrial equipment

regardless of the purpose for which the equipment is used. Examples of generic source categories

include incinerators, see 40 C.F.R. SS 60.50

‐ 60.54 (1999), recently constructed fossil

‐ fuel

‐ fired steam

generators, see 40 C.F.R. SS 60.40

‐ 60.46 (1999), and stationary gas turbines, see 40 C.F.R. SS 60.330

‐

60.335 (1999) (Subpart GG) 4

.

NSPS Subpart J, "Standards of Performance for Petroleum Refineries," was designed to r educe SO2

emissions from petroleum refineries. As set forth in S 60.100, the provisions of Subpart J" are applicable

to the following affected facilities in petroleum refineries: fluid catalytic cracking unit catalyst

regenerators, fuel gas combustion devices, and all Claus sulfur recovery plants except Claus plants of 20

long tons per day (L TD) or less." 40 C.F.R. S 60.100(a) (1999) (emphasis added). Subpart J goes on to

define a "petroleum refinery" as "any facility engaged in producing gasoline, kerosene, distillate fuel oils,

residual fuel oils, lubricants, or other products through distillation of petroleum or through redistillation,

cracking or reforming of unfinished petroleum derivatives." 40 C.F.R. S 60.101(a) (1999). At issue in this

case are two stationary gas turbines, turbines that the EPA contends are "fuel gas combustion devices"

and thus "affected facilities" (as set forth in S 60.100(a)), subject to regulation under Subpart J 5

.

The EPA initially proposed the NSPS for petroleum refineries in 1973 and issued the corresponding final

regulation, what is now Subpart J, on March 8, 1974. Recognizing that petroleum refineries process

numerous gases that contain significant amounts of hydrogen sulfide (H2S) and that the uncontrolled

combustion of these gases resulted in significant SO2 emissions, the EPA's primary goal in promulgating

Subpart J was the reduction of SO2 emissions from petroleum refineries. Subpart J prohibits the owner

3 See 40 C.F.R. S 60.1(a) (1999) ("[T]he provisions of this part apply to the owner or operator of any stationary source which contains an affected

facility, the construction or modification of which is commenced after the date of publication in this part of any standard (or, if earlier, the date

of publication of any proposed standard) applicable to that facility.").

4 See supra Part IV C for further on Subpart GG

5 The term "fuel gas combustion device" is defined in Subpart J as "any equipment, such as process heaters, boilers and flares used to combust

fuel gas, except facilities in which gases are combusted to produce sulfur or sulfuric acid." 40 C.F.R. S 60.101(g) (1999). The term "fuel gas" is

further defined in Subpart J as "any gas which is generated at a petroleum refinery and which is combusted." 40 C.F.R. S 60.101(d) (1999).or operator of a "fuel gas combustion device" located in a petroleum refinery from combusting any "fuel

gas" that contains H2S in excess of 230 milligrams per dry standard cubic meter. See 40 C.F .R. S

60.104(a)(1). Compliance with this standard can be established either by monitoring the amount of H2S

in the fuel being burned or by monitoring the amount of SO2 emitted from the fuel gas combustion

device in question 6

.

Consistent with the goal of reducing SO2 emissions from petroleum refineries, the definition of "fuel

gas" in Subpart J was modified on two separate occasions to exclude gases that do not contain

significant amounts of H2S. Originally, in 1974, "fuel gas" was defined as "any gas which is generated by

a petroleum refinery process unit and which is combusted, including any gaseous mixture of natural gas

and fuel gas which is combusted." 39 Fed. Reg. 9308, 9315 (Mar. 8, 1974). In March 1979, the EP A

modified the definition of "fuel gas" to include:

[N]atural gas or any gas generated by a petroleum refinery process unit which is combusted

separately or in any combination. Fuel gas does not include gases generated by catalytic

cracking unit catalyst regenerators and fluid coking unit coke burners.

44 Fed. Reg. 13,480, 13,481 (Mar. 12, 1979). The definition was changed in 1979 to explicitly exclude

gases generated by "catalytic cracking unit catalyst regenerators and fluid coking unit coke burners"

because such gases do not contain significant amounts of H2S.

By changing the definition of "fuel gas" in 1979, the EPA arguably brought within the scope of the

regulation natural gas produced off

‐ site and transported to a petroleum refinery via pipeline. The EPA

had not intended to subject such natural gas to regulation under Subpart J because natural gas

transported to a petroleum refinery via pipeline contains only trace amounts of H2S due to

specifications established to minimize pipeline corrosion. See 45 Fed. Reg. 13,991, 13,991 (March 3,

1980). The EPA, however, did intend to regulate natural gas that was both produced and combusted on

‐

site at a petroleum refinery:

In a few cases, however, a refinery may [itself] generate natural gas. There may be no legal or

technical requirement that this gas be desulfurized before combustion. If this gas contains

appreciable hydrogen sulfide and sulfur constituents, significant emissions of sulfur dioxide

would result when it is burned. The existing standards of performance were intended to cover

these types of gases.

Id. The EPA further noted that the "intent of the existing standards of performance for refinery fuel gas

has always been to prevent the emissions of sulfur dioxide resulting from the burning of gaseous fuels

containing hydrogen sulfide." Id. To clarify this distinction (the distinction between natural gas produced

on

‐ site at a petroleum refinery and natural gas transported from an off

‐ site location via pipeline), the

EPA proposed revising the first sentence of the definition of "fuel gas" to read: " `Fuel gas' means natural

gas generated at a petroleum refinery or any gas generated by a refinery process unit, which is

combusted separately or in any combination with any type of natural gas." Id. The EPA ultimately

received several comments indicating that this proposed language was confusing because gases

6 In October 1990, the EPA established an"SO2 equivalence level" to allow regulated entities to monitor the amount of SO2 emitted after

combustion in lieu of monitoring the amount of H 2S in the "fuel gas" prior to combustion. See 40 C.F.R.S 60.105(a)(3)(ii) (1999). Based on the

investigation "of typical fuel gas compositions and their combustion products," the EPA determined that the "SO2 equivalence level" set forth

in S 60.105(a)(3)(ii) (20 parts per million (ppm), dry basis, zero percent excess air) was equivalent to an H2S level of 230 milligrams per dry

standard cubic meter. 55 Fed. Reg. 40,171, 40,172 (Oct. 2, 1990).produced at a refinery were not generally considered "natural gas" even if their chemical composition

was similar to that of natural gas. See 45 Fed. Reg. 79,452, 79,453 (Dec. 1, 1980). In response to these

comments, the EPA modified the definition of fuel gas one last time to include "any gas which is

generated at a petroleum refinery and which is combusted." Id. The EPA indicated that this final

definition was meant to encompass "any gas which has the composition of natural gas." Id.

The stationary gas turbines at issue in this case are to be located in an existing electrical power plant

complex adjacent to the Motiva petroleum refinery in Delaware City. This power plant complex was

originally owned and operated by Delmarva Power & Light Company 7

. At the time of its construction in

the mid

‐ 1950's, Delmarva entered into an agreement with Star, Motiva's predecessor in interest, to

provide steam and electricity to Star's adjacent petroleum refinery. Delmarva owned and operated the

power plant for 35 years. In January 1989, Star exercised its option to purchase the power plant from

Delmarva, and actual ownership of the power plant was transferred in January 1992. Following the

transfer of ownership, there was no change in the purpose or operation of the power plant, and

Delmarva has continued to operate the power plant. In connection with its acquisition of the power

plant complex, Star entered into an agreement with Delmarva to supply electrical power on demand to

the Delmarva power grid from one of the boilers in the power plant.

The stationary gas turbines are part of a larger project being designed and constructed within the

existing power plant complex in Delaware City. This project, known as the Repowering Project, is

designed to replace and/or upgrade certain existing power plant units at the power plant complex. Once

operational, the Repowering Project will convert high

‐ sulfur petroleum coke produced at Motiva's

adjacent petroleum refinery into synthesis gas, which will then be burned in the stationary gas turbines

at issue to produce steam and electricity. The steam and electricity will power Motiva's adjacent

petroleum refinery; excess electricity will be sold to Delmarva and others on the commercial power grid.

On July 17, 1997, pursuant to 40 C.F.R. S 60.5, Star requested a determination of Subpart J non

‐ applicability from the EPA Region III office. In essence, Star asked the EPA to issue a ruling stating that

Subpart J does not apply to the Repowering Project's stationary gas turbines. Approximately one year

later, the EP A responded by issuing an action entitled "New Source Performance Standards Subpart J

Applicability Determination for the Star Enterprise Petroleum Refinery in Delaware City, Delaware" in

which the EPA concluded that Subpart J applies to Motiva's Repowering Project, and, more specifically,

applies to the two stationary gas turbines that are part of the Repowering Project and will burn

synthesis gas to produce steam and generate electricity. In reaching its conclusion, the EPA relied

primarily on three facts: (1) the power plant that houses the Repowering Project is adjacent to Motiva's

petroleum refinery, (2) the Repowering Project will provide electricity and steam to the Motiva's

adjacent petroleum refinery, and (3) Motiva owns not only the electrical power plant complex which

houses the Repowering Project but also the Repowering Project itself and the adjacent petroleum

refinery 8

.

7 In 2000, Delmarva changed its name to Conectiv. In this opinion, however, we will continue to refer to the company as Delmarva.

8 The EPA also determined that because the aforementioned "synthesis gas," which was to be combusted in the stationary gas turbines at issue

in this case, was generated "at" a petroleum refinery, this gas was a "fuel gas" as defined in Subpart J. See 40 C.F.R. S 60.101(d) (1999). The

parties to this action argue extensively as to whether the "synthesis gas" burned in these stationary gas turbines is indeed "fuel gas" and as to

whether the stationary gas turbines at issue are "fuel gas combustion devices" as these terms are defined in Subpart J. As discussed infra, we

hold today that Subpart J is inapplicable to the stationary gas turbines at issue in this case because the turbines are not located "in" a

"petroleum refinery." We therefore need not reach the question of whether the "synthesis gas" burned in these stationary gas turbines is a

"fuel gas" or whether these turbines are "fuel gas combustion devices" as these terms are defined in Subpart J.The EPA's determination was initially communicated not to Star but to the EPA Region III office. When

Star learned of EPA's decision, it sought to withdraw its request for a determination of non

‐ applicability.

However

, the State of Delaware asked the EPA for a final determination because certain conditions to

the issuance of a state construction permit were based on EPA's decision that Subpart J was applicable

to the two stationary gas turbines.

The EPA finalized its determination on July 21, 1998, and Star timely filed petitions for review with both

this Court and the U.S. Court of Appeals for the District of Columbia Circuit. On January 19, 1999, the

U.S. Court of Appeals for the District of Columbia Circuit granted the EPA's motion to dismiss on venue

grounds. The petition then proceeded before us.

II. JURISDICTION

We have appellate jurisdiction over this petition for review pursuant to S 307(b)(1) of the Clean Air Act.

See 42 U.S.C. S 7607(b)(1) (2000). Moreover, we note that despite earlier concerns about the

justiciability of the present controversy, we are now persuaded that all the necessary prerequisites to

adjudicating this dispute have been met. Indeed, it is undisputed by the parties that the EPA

determination at issue is a final agency action, see, e.g., Bennett v. Spear, 520 U.S. 154, 177

‐ 78 (1997), 9

that the EPA determination at issue is ripe for review, see, e.g., Ohio Forestry Ass'n v. Sierra Club, 523

U.S. 726, 733 (1998), 10 and that at least one of the petitioners, Motiva, has standing to challenge the

EPA's determination, see, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) 11

.

III. STANDARD OF REVIEW

9 As the Supreme Court noted in Bennett :

[T]wo conditions must be satisfied for agency action to be "final": First, the action must mark the "consummation" of the agency's

Decision making process, Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 113 (1948)

‐‐ it must not be of a

merely tentative or interlocutory nature. And second, the action must be one by which "rights or obligations have been

determined," or from which "legal consequences will flow," Port of Boston Marine Terminal Ass'n. v. Rederiaktiebolaget T

ransatlantic, 400 U.S. 62, 71(1970).

Bennett, 520 U.S. 177

‐ 78. As the parties concede, and as the facts detailed above clearly indicate, the two conditions set forth in Bennett have

been met. Thus, the EPA's determination is a final agency action and is reviewable by this Court

10 As the Supreme Court stated in Ohio Forestry:

In deciding whether an agency's decision is, or is not, ripe for judicial review, the Court has examined both the "fitness of the issues

for judicial decision" and the "hardship to the parties of withholding court consideration." Abbott Laboratories v. Gardner, 387 U.S.

136, 149 (1967). To do so in this case, we must consider: (1) whether delayed review would cause hardship to the plaintiffs, (2)

whether judicial intervention would inappropriately interfere with further administrative action, and (3) whether the courts would

benefit from further factual development of the issues presented.

Ohio Forestry, 523 U.S. at 733. As the parties concede, and as the facts detailed above clearly indicate, evaluation of the three factors

delineated in Ohio Forestry clearly demonstrates that the EPA's determination is ripe for judicial review.

11 As the Supreme Court held in Lujan :

Over the years, our cases have established that the irreducible constitutional minimum of standing contains three elements. First,

the plaintiff must have suffered an "injury in fact"

‐‐ an invasion of a legally protected interest which is (a) concrete and particularized

and (b) "actual or imminent, not `conjectural' or `hypothetical.' " Second, there must be a causal connection between the injury and

the conduct complained of

‐‐ the injury has to be "fairly ...trace[able] to the challenged action of the defendant, and not... th[e] result

[of] the independent action of some third party not before the court." Third, it must be "likely," as opposed to merely "speculative,"

that the injury will be "redressed by a favorable decision."

Lujan, 504 U.S. at 560. As the parties concede, and as the facts detailed above clearly indicate, the three requirements set forth in Lujan have

been met with respect to Motiva. Because Motiva has standing to bring suit, we need not reach the question of whether Texaco has met the

necessary constitutional and/or prudential standing requirements. See, e.g., Director, Office of Workers' Compensation Programs v. Perini N.

River Assocs., 459 U.S. 297, 303

‐ 05 (1983); Village of Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252, 263

‐ 64 & n.9 (1977). See

generally Lujan, 504 U.S. at 560 (constitutional standing); Hazardous Waste Treatment Council v. Thomas, 885 F.2d 918, 921

‐ 27 (D.C. Cir. 1989)

(prudential standing).A necessary precursor to determining the appropriate standard of review in this case is deter mining

whether the agency action in question is an "interpretive rule" or a "legislative rule." Although

petitioners contend that the EPA's determination is an "interpretive rule" rather than a "legislative rule,"

and thus that the determination is entitled to little or no judicial deference, we conclude that the EPA's

determination is a legislative rule. See, e.g., Wisconsin Elec. Power Co. v. Reilly, 893 F .2d 901, 904

‐ 05

(7th Cir. 1990) (en banc); National

‐ Southwire Aluminum Co. v. EPA, 838 F.2d 835, 838, 841

‐ 42 (6th Cir.

1988); Potomac Elec. Power Co. v. EPA, 650 F.2d 509, 513 (4th Cir. 1981).

An agency determination is a "rule" under the Administrative Procedure Act if it is a "statement of

general or particular applicability and future effect [and] designed to implement, interpret, or prescribe

law or policy

. . . ." Dia Navigation Co. v. Pomeroy, 34 F.3d 1255, 1263 (3d Cir. 1994) (quoting 5 U.S.C. S

551(4)). Such a "rule" may be an "interpretive rule" or a "legislative rule." Id. at 1264. As we stated in

Dia:

If the rule is based on specific statutory provisions, and its validity stands or falls on the

correctness of the agency's interpretation of those provisions, it is an interpretive rule. If,

however, the rule is based on an agency's power to exercise its judgment as to how best to

implement a general statutory mandate, the rule is likely a legislative one.

Id. (quoting United Techs. Corp. v. EPA, 821 F.2d 714, 719

‐ 20 (D.C. Cir. 1987)).

Courts will reject an agency's interpretive rule if it is contrary to clear congressional intent. See Chevron,

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 n.9 (1984); American

Ambulance Serv. v. Sullivan, 911 F.2d 901, 908 (3d Cir. 1990). If a statute is silent or ambiguous with

respect to congressional intent, courts must defer to an agency's determination if the determination is

consistent with a permissible construction of the statute. See Chevron, 467 U.S. at 843

‐ 45; see Beatty v.

Danri Corp., 49 F.3d 993, 997 (3d Cir

. 1995). "Varying degrees of deference are accorded to

administrative interpretations, based on such factors as the timing and consistency of the agency's

position, and the nature of its expertise," Batterton v. Francis, 432 U.S. 416, 425 n.9 (1977), and an

interpretive rule is not binding on the agency or this Court, see Armstead v. United States Department of

Housing and Urban Development, 815 F.2d 278, 282 (3d Cir. 1987). In contrast, a legislative rule, an

agency's interpretation of its own regulation, is "controlling unless `plainly erroneous or inconsistent

with the regulation.' " Auer v. Robbins, 519 U.S. 452, 461 (1997) (quoting Robertson v. Methow Valley

Citizens Council, 490 U.S. 332, 359 (1989)); see Beatty, 49 F .3d at 997; Rodriguez v. Reading Hous. Auth.,

8 F.3d 961, 965 (3d Cir. 1993).

Although the Third Circuit has yet to review an EPA determination under the Clean Air Act, the Fourth,

Sixth, and Seventh Circuit Courts of Appeals have engaged in such review, with all three Circuits

concluding that Congress, through the Clean Air Act, directed the EPA to promulgate New Source

Performance Standards. See Wisconsin Elec. Power Co., 893 F.2d at 904

‐ 905; National

‐ Southwire

Aluminum Co., 838 F.2d at 838, 841

‐ 42; Potomac Elec. Power Co., 650 F.2d at 513. The Fourth and

Seventh Circuit Courts of Appeals have held that EP A determinations made with respect to New Source

Performance Standards are controlling unless plainly erroneous or inconsistent with the regulation at

issue. See Wisconsin Elec. Power Co., 893 F.2d at 907; Potomac Elec. Power Co., 650 F.2d at 513. The

Sixth Circuit, in contrast, has held that EPA determinations made with respect to New Source

Performance Standards are controlling unless "arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law." National

‐ Southwire Aluminum Co., 838 F.2d at 836.Section 111 of the Clean Air Act provides:

The Administrator shall...publish (and from time to time thereafter shall revise) a list of

categories of stationary sources. He shall include a category of sources in such list if in his

judgment it causes, or contributes significantly to, air pollution which may reasonably be

anticipated to endanger public health or welfare.

42 U.S.C. S 7411(b)(1)(A) (emphasis added). Section 111 further provides:

Within one year [of making a list according to the above provision], the Administrator shall publish

proposed regulations, establishing Federal standards of performance for new sources within such

category.

. . . [After opportunity is given for public comments and the comments are considered], he

shall promulgate

. . . such standards with such modifications as he deems appropriate.

42 U.S.C. S 7411(b)(1)(B) (emphasis added).

These provisions clearly indicate that the EP A was directed by Congress to promulgate regulations

necessary to implement the Clean Air Act. Thus, we conclude that EPA determinations interpreting New

Source Performance Standards, once handed down, constitute "legislative rules." Consistent with our

reasoning in Dia, as well as with Supreme Court jurisprudence and opinions in the Fourth, Sixth, and

Seventh Circuit Courts of Appeals, the EPA determination at issue in this case is a "legislative rule," and

therefore must be upheld unless plainly erroneous or inconsistent with Subpart J. See, e.g., Auer v.

Robbins, 519 U.S. 452, 461 (1997); Beatty, 49 F.3d at 997; Rodriguez, 8 F.3d at 965.

IV. DISCUSSION

A. Subpart J & "Affected Facilities in Petroleum Refineries"

As detailed above, each New Source Performance Standard promulgated under the Clean Air Act applies

to specific "affected facilities," and each New Source Performance Standard explicitly sets forth and

defines the "affected facility" or "affected facilities" to which it applies. Consistent with this regulatory

framework, Subpart J states in relevant part:

The provisions of this subpart are applicable to the following affected facilities in petroleum refineries:

fluid catalytic cracking unit catalyst regenerators, fuel gas combustion devices, and all Claus sulfur

recovery plants except Claus plants of 20 long tons per day (LTD) or less. The Claus sulfur recovery plant

need not be physically located within the boundaries of a petroleum refinery to be an affected facility,

provided it processes gases produced within a petroleum refinery.

See 40 C.F.R. S 60.100(a) (1999) (emphasis added).

In determining that the stationary gas turbines located at Motiva's Repowering Project are fuel gas

combustion devices subject to regulation under Subpart J, the EPA concluded that the turbines are

"affected facilities" as defined by 40 C.F.R. S 60.100(a). However, as 40 C.F.R. S 60.100(a) expressly

indicates, Subpart J does not apply to all "fuel gas combustion devices," but rather applies only to "fuel

gas combustion devices" located "in petroleum refineries." Thus, the key question, upon which the

outcome of this petition hinges, is: Are the stationary gas turbines here "in" a "petroleum refinery?"Subpart J defines a "petroleum refinery" as "any facility engaged in producing gasoline, kerosene,

distillate fuel oils, residual fuel oils, lubricants, or other products through distillation of petroleum or

through redistillation, cracking or reforming of unfinished petroleum derivatives." 40 C.F.R. S 60.101(a)

(1999). While the EPA readily concedes that the Repowering Project and the larger electrical power

plant complex, in which the Repowering Project is located, are not a "petroleum refinery," 12 the EPA

nonetheless contends that the Repowering Project's two stationary gas turbines are "in" a "petroleum

refinery" and are subject to regulation under Subpart J.

In originally determining that the stationary gas turbines are subject to regulation under Subpart J, the

EPA stated:

Star's [Repowering] Project is located adjacent to the remainder of the refinery and is under

common ownership and control; therefore, it is considered part of the refinery. Further

evidence that the[Repowering] Project is integrated into refinery operations is that the

[Repowering] Project will supply most of the refinery's steam and all power requirements, has

the ability to combust other fuel gas from the refinery, and

. . . will help Star manage its solid

waste from the refinery. Because the [Repowering] Project is part of the refinery, fuel gas

combustion devices associated with the [Repowering] Project are "in" a refinery and fuel gas

generated at the [Repowering] Project is generated at a refinery.

NSPS Subpart J Applicability Determination for the Star Enterprise Petroleum Refinery in Delaware City,

Delaware, Memorandum Dated July 21, 1998 (Star Applicability Determination). In short, the EPA

concluded and now contends that because Motiva's Repowering Project "is located adjacent to" a

"[petroleum] refinery [that] is under common ownership and control," it should be "considered part of

the [adjacent] refinery," and thus that the stationary gas turbines at issue in this case, turbines that are

an integral part of the Repowering Project, are "in" a "petroleum refinery."

This reasoning alone cannot, however, provide the basis for concluding that the Repowering Project's

stationary gas turbines are subject to regulation under Subpart J. Indeed, were the EPA's reasoning

sufficient to establish that the Repowering Project is part of Motiva's adjacent petroleum refinery, it

would also be sufficient to establish that any independent, free

‐ standing facility owned by Motiva and

built on land adjacent to Motiva's petroleum refinery is part of Motiva's petroleum refinery. For

example, EPA's reasoning would also be sufficient to establish that a McDonald's restaurant, owned by

Motiva and built on land adjacent to Motiva's petroleum refinery for the convenience of refinery

workers, is part of Motiva's adjacent petroleum refinery. Under this interpretation, the EPA would be

able to regulate, under Subpart J, fuel gas combustion devices inside the McDonald's. Even though these

fuel gas combustion devices would not be located "in" a "petroleum refinery," such devices would be

subject to regulation under Subpart J under the EPA's interpretation because they would be treated as

"affected facilities in [a] petroleum refinery[ ]."

Were we to accept the EPA's reasoning (assuming "common ownership and control"), any fuel gas

combustion device located in a facility adjacent to Motiva's petroleum refinery would be subject to

regulation under Subpart J because such devices would be treated, inappropriately, as "affected

facilities in [a] petroleum refinery[ ]." This conclusion is untenable.

12 It is undisputed that Motiva's Repowering Project is a cogeneration facility that will gasify petroleum coke and combust the resulting

synthesis gas to generate only electricity and steam.As detailed above, it is undisputed that Motiva's Repowering Project is a cogeneration facility that will

gasify petroleum coke and combust the resulting synthesis gas to generate electricity and steam.

Moreover

, even though Motiva's Repowering Project is adjacent to a petroleum refinery that Motiva

owns, the Repowering Project is located in a free

‐ standing building, an electric power plant complex

that is physically separate and distinct from Motiva's petroleum refinery. Neither the Repowering

Project nor the electric power plant complex in which the Repowering Project is to be constructed and

operated is a "petroleum refinery." We therefore fail to understand how the EPA concluded and now

contends that the Repowering Project's stationery gas turbines are themselves "in" a "petroleum

refinery." Furthermore, if these turbines are not "in" a "petroleum refinery," they are not "affected

facilities" and thus are not subject to regulation under Subpart J.

The EPA also argues that the Repowering Project will be an integral part of the refinery's operations and

for that reason the stationary gas turbines at issue are "in" a "petroleum refinery." The EP A asserts that:

[The Repowering Project] will take low value material from the refinery, i.e., petroleum coke,

convert it into a different low value material, i.e.

, a combustible gas, burn the gas in a

combustion turbine, and use the steam and electricity produced by the turbine to provide

energy for other refinery processes. The [Repowering] Project is thus a integral part of the

refinery's operations both because it is part of the refinery's process of manufacturing usable

products from crude oil and because it uses refinery products to provide a valuable input, i.e.

energy [in the form of electricity and steam] to the refinery's operation.

Star Applicability Determination. While much of the above is accurate, the Repowering Project is neither

part of the adjacent petroleum refinery nor necessary to the refinery's operations. Indeed, as the EPA

concedes, Motiva could as easily have chosen to power its refinery by purchasing electricity from the

local electric company's commercial grid 13

.

If we were to follow the EPA's reasoning that the Repowering Project is part of Motiva's adjacent

petroleum refinery, we would also be required to conclude that any building that is located on land

adjacent to Motiva's petroleum refinery and has a mutually beneficial relationship with the petroleum

refinery

‐‐ be it to provide food to the workers or energy to the machinery

‐‐ is part of the petroleum

refinery. Following this reasoning, the EPA would be able to regulate facilities within any such building as

if they were located "in" the petroleum refinery.

The EPA acknowledges that the term "petroleum refinery" is clearly defined in Subpart J as "any facility

engaged in producing gasoline, kerosene, distillate fuel oils, residual fuel oils, lubricants, or other

products through distillation of petroleum or through redistillation, cracking or reforming of unfinished

petroleum derivatives." 40 C.F.R. S 60.101(a). Moreover, the EPA concedes that Motiva's Repowering

Project is a cogeneration facility that generates only electricity and steam and that the Repowering

Project resides in a separate, free

‐ standing electric power plant complex. The EPA also concedes that

none of the processes described in the definition of "petroleum refinery" set forth in S 60.101(a) takes

place as a part of the Repowering Project or even within the building in which the Repowering Project

resides. Nonetheless, the EP A contends that a "broad definition" of "petroleum refinery" to include

operations essential to its purpose is consistent with the language of Subpart J. Using this broad

definition, the EPA concluded:

13 As we have already noted, Motiva's Repowering Project produces more than enough electricity to power the adjacent petroleum refinery and

that surplus electricity will be sold to Delmarva and/or other customers on the commercial power grid.The Star [petroleum] refinery is engaged in the processes described in the NSPS Subpart J

definition of "petroleum refinery." The [Repowering] Project is an integral part of the refinery. It

gasifies coke generated by refinery process units, producing synthesis gas, combusts the

synthesis gas and is also capable of combusting other types of refinery fuel gas. The sulfur

compounds (mainly H2S) stripped during the gasification process will be sent to the modified

Claus sulfur recovery plant. The steam and most of the electricity produced by the project will

be routed back to other refinery process units.

Star Applicability Determination. The EPA's reasoning is flawed because the Repowering Project is not

essential to the operation of Motiva's petroleum refinery. Were the Repowering Project essential to the

operation of the refinery, the EPA might be able to convince us that the Repowering Project was part of

Motiva's petroleum refinery and that the stationary gas turbines located in the Repowering Project are

"in" a "petroleum refinery." However, as mentioned above, Motiva does not need electricity from the

Repowering Project to power its refinery. Motiva could just as easily purchase electricity from the local

power company. Nor is the Repowering Project necessary for coke disposal. Rather than using the

petroleum coke, produced in its refinery, to power the turbines at issue here, Motiva could ship the

coke off

‐ site for use at other industrial facilities or for disposal. Indeed, because Motiva's petroleum

refinery operated for many years prior to the conception of the Repowering Project, it is hard to

understand how the EPA concludes that the Repowering Project is essential to the operation of the

adjacent petroleum refinery 14

. Moreover, the EPA's claim that"[i]f the current power plant did not exist,

Star would not be able to operate the refinery at its current capacity" is also inaccurate for the reasons

articulated above. Presumably, the only limitations on refinery capacity would be limitations on

available power and available raw materials. The Repowering Project in no way affects the availability of

raw materials, and although the Repowering Project would supply power to Motiva's petroleum

refinery, Motiva could just easily purchase that power (and any additional power needed) from a

commercial supplier

.

Finally, in support of its initial determination, the EPA contends that:

The coke gasification project is not a stand

‐ alone facility.

. . . In Star's case, the refinery in its

current form could not operate without the current "power plant" or without the planned

Project, and it is not likely that the current "power plant" or planned Project would exist (they

certainly would not exist in their current or planned form) without the remainder of the

refinery.

Star Applicability Determination. For the same reasons detailed above, this argument is unpersuasive.

Put simply, the Repowering Project is a stand

‐ alone facility and could operate absent the existence of

Motiva's petroleum refinery by obtaining petroleum coke from another commercial supplier (rather

than Motiva's adjacent petroleum refinery) and selling all of the steam and electricity produced by the

Repowering Project to commercial customers such as Delmarva.

14 Were we to accept the EPA's logic, if Motiva purchased electricity from the local electric company, generated by a generator located in a free

‐ standing building on land adjacent to its petroleum refinery, and then, at a later date, Motiva purchased outright the entire local electric

company, any stationary gas turbines that were a part of the aforementioned generator facility would (quite suddenly) become subject to

regulation under Subpart J, since these turbines would be literally transformed into "affected facilities in [a] petroleum refinery[ ]." This sort of

reasoning, and the outcome dictated by it, are untenable.While it is undisputed that a mutually beneficial relationship exists between Motiva's Repowering

Project and Motiva's petroleum refinery, the EP A's determination that the stationary gas turbines at

Motiva's Repowering Project are subject to regulation under Subpart J is not only plainly erroneous but

also inconsistent with the language of Subpart J itself. In short, the EPA's determination that the

stationary gas turbines at Motiva's Repowering Project are "affected facilities" subject to regulation

under Subpart J ignores the requirement that regulated turbines be located "in" a "petroleum refinery."

B. Physical Location as the Touchstone of S 60.100(a)

Despite the EPA's arguments to the contrary, in determining what facilities are "affected facilities" that

can be regulated under Subpart J, and, specifically, in determining what facilities are "in petroleum

refineries," the touchstone of such a determination is the physical location of the facilities in question.

As noted above, 40 C.F.R. S 60.100(a) states:

The provisions of this subpart are applicable to the following affected facilities in petroleum

refineries: fluid catalytic cracking unit catalyst regenerators, fuel gas combustion devices, and all

Claus sulfur recovery plants except Claus plants of 20 long tons per day (LTD) or less. The Claus

sulfur recovery plant need not be physically located within the boundaries of a petroleum

refinery to be an affected facility, provided it processes gases produced within a petroleum

refinery.

40 C.F.R. S 60.100(a) (1999) (emphasis added). For the last sentence of S 60.100(a) to make any sense,

the ultimate question to be answered when determining whether certain facilities are "in petroleum

refineries" must be: Where are the facilities physically located?

Although the EPA argues strenuously that the term "petroleum refinery" must be interpreted broadly to

include not only Motiva's petroleum refinery but also an adjacent, free

‐ standing, independent electric

power plant complex that produces steam and electricity for use by the refinery (as well as other

commercial customers including the local power company), the stationary gas turbines in this free

‐ standing, independent facility are simply not "in" a "petroleum refinery" because neither the

Repowering Project nor the electric power plant complex in which the Repowering Project is located

engages in the production of "gasoline, kerosene, distillate fuel oils, residual fuel oils, lubricants, or

other products through distillation of petroleum or through redistillation, cracking or reforming of

unfinished petroleum derivatives." 40 C.F .R. S 60.101(a) (1999). Moreover, the explicit inclusion in S

60.100(a) of Claus recovery plants "not

. . . physically located within the boundaries of a petroleum

refinery," and the corresponding absence of a similar inclusion with respect to "fuel gas combustion

devices" "not

. . . physically located within the boundaries of a petroleum refinery," further undermines

the EPA's determination.

C. Chemical Composition of Synthesis Gas Burned in the Stationary Gas Turbines

Although our determination that Subpart J does not apply here frees us from having to determine

whether the synthesis gas to be burned by the stationary gas turbines is a "fuel gas" regulated under

Subpart J, we do note that the chemical composition of the synthesis gas is markedly different from the

chemical composition of other fuel gases, the burning of which is subject to regulation under Subpart J.

As the petitioners highlight in their brief, and as the regulatory history of Subpart J suggests, the

exclusive focus and purpose of Subpart J is the reduction of sulfur emissions (specifically sulfur dioxide

(SO2) emissions) by limiting the amount of hydrogen sulfide (H 2S) in combustible fuel gases combustedin petroleum refineries. According to Motiva, a not insignificant amount of the sulfur/SO2, emitted

when the synthesis gas at issue is combusted in these turbines, comes not from H 2S in the synthesis gas

but from COS in the synthesis gas.

Regardless of the exact source of the sulfur/SO2 emissions, it appears from the record that at least some

of the sulfur/SO2 emitted when the synthesis gas at issue is combusted comes not from H2S in the gas

but rather from COS in the gas. As mentioned above, compliance with Subpart J can be established

either by measuring and monitoring the H2S level in the fuel gas prior to combustion or by measuring

and monitoring the SO2 level in the emissions after combustion. See supra, note 4. If subject to

regulation under Subpart J, Motiva is without a legally acceptable method for measuring the combined

concentration of COS and H2S in the pre

‐ combustion synthesis burned at the Repowering Project.

Therefore, Motiva will be forced either to monitor and r educe the emission of SO2, or to monitor and

control the level of H2S in the pre

‐ combustion synthesis gas being combusted at the Repowering Project

(rather than the level of H2S and COS in the pre

‐ combustion synthesis gas), even though by itself, the

level of H2S in the synthesis gas being combusted is an arguably poor and clearly inferior measure of

Motiva's compliance with Subpart J. As the EPA points out, the unique chemical composition of the

synthesis gas, in and of itself, does not and would not exempt the stationary gas turbines at issue here

from regulation under Subpart J. This composition may suggest, however, that another regulation, for

example, Subpart GG, 15 regulating stationary gas turbines, rather than Subpart J, may be the

appropriate regulation under which to regulate emissions from these gas turbines. The discontinuity

between the chemical composition of synthesis gas to be combusted at the Repowering Project and the

chemical composition of other fuel gases, the combustion of which is subject to regulation under

Subpart J, also suggests that the EPA's determination is "inconsistent with the regulation" at issue and

should be set aside 16

.

D. EPA's Prior Determination Under Subpart OOO

In arguing that its determination in this case is neither plainly erroneous nor inconsistent with Subpart J,

the EPA relies in part on what it characterizes as a prior, analogous determination under Subpart OOO

‐‐

Standards of Performance for Nonmetallic Mineral Processing Plants 17

. The EPA's reliance on this

determination is misplaced for two reasons.

First, while the factual background of the EP A's earlier determination under Subpart OOO is not entirely

clear (the record is incomplete), it is clear that the facts of this earlier determination are distinguishable,

in at least one key respect, from the facts in this case. Unlike the stationary gas turbines at issue here,

15 40 C.F.R. S 60.330, entitled "Applicability and Designation of Affected Facility," is the first section of Title 40, Subpart GG, and states in

relevant part:

(a) The provisions of this subpart are applicable to the following affected facilities: All stationary gas turbines with a heat input at

peak load equal to or greater than 10.7 gigajoules per hour, based on the lower heating value of the fuel fired.

(b) Any facility under paragraph (a) of this section which commences construction, modification, or reconstruction after October 3,

1977, is subject to the requirements of this part...

40 C.F.R. S 60.330 (1999). It is undisputed by the parties that Subpart GG applies to the stationary gas turbines at issue in this case. The parties

dispute only the applicability of Subpart J, which imposes much more stringent requirements than does Subpart GG on emissions from these

stationary gas turbines.

16 We further note that Motiva's inability to monitor and control the level of H2S and COS (prior to combustion) in the gas being combusted at

the Repowering Project would take on heightened significance if it could be shown that monitoring the post

‐ combustion SO2 emissions was

more costly than monitoring the pre

‐ combustion level of H2S in the synthesis gas at issue.

17 See Standards of Performance for Nonmetallic Mineral Processing Plants, 40 C.F.R. SS 60.670

‐ 60.676 (1999).the Cement Treated Base plants located at nonmetallic mineral processing plants were portable. This

fact alone distinguishes the EP A's prior determination under Subpart OOO because, as discussed above,

physical location is the touchstone for deter mining which facilities are "affected facilities" as the term is

defined in Subpart J. Because the Cement Treated Base plants at issue in this prior determination were

portable, had the EPA concluded that these Cement Treated Base plants were subject to regulation

under Subpart OOO based on their physical location, the regulatory framework established by Subpart

OOO could have been easily circumvented simply by moving the Cement Treated Base plants. Phrased

differently, when portable facilities are at issue, physical location cannot possibly be the touchstone for

deter mining if, and/or when, regulation is appropriate. This obvious consequence of portability is, of

course, irrelevant in the present case because the gas turbines here are stationary.

Second, and more importantly, even assuming, arguendo, that the facts surrounding the prior

determination under Subpart OOO and the present determination under Subpart J are sufficiently

analogous, this in no way implies that the EPA's prior determination under Subpart OOO was either

correct or consistent with Subpart OOO. Neither this Court nor any other court of which we are aware

has addressed the propriety and/or legality of this prior determination upon which the EPA relies in

part. As such, even assuming that the facts surrounding this prior determination under Subpart OOO

and the present determination under Subpart J are sufficiently analogous, we can only conclude from

this that the EP A has addressed the issues consistently, not correctly 18

.

V. CONCLUSION

It well

‐ established, as a general proposition, that the EPA's interpretation of its own regulations is

entitled to "great deference." As the Supreme Court stated in Udall v. Tallman:

When faced with a problem of statutory construction, this Court shows great deference to the

interpretation given the statute by the officers or agency charged with its

administration...[Moreover, w]hen the construction of an administrative regulation rather than

a statute is in issue, deference is even more clearly in order.

Udall v. Tallman, 380 U.S. 1, 16 (1965). Such deference, however, is not without limitations. The EP A

determination at issue in this case seemingly ignores the requirement, set forth at 40 C.F.R. S 60.100(a)

(1999), that "affected facilities" regulated under Subpart J be located "in [a] petroleum refinery." In light

of this, we conclude that the EPA's determination is both "plainly erroneous," and inconsistent with

Subpart J. We will therefore grant Motiva's petition for review and vacate the EPA's Determination.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

18 The parties argue extensively as to whether subjecting the stationary gas turbines at issue in this case to regulation under Subpart J would

"yield..any environmental benefits." As discussed supra, we hold today that Subpart J is inapplicable to these stationary gas turbines because

the turbines are not located "in" a "petroleum refinery." We therefore need not reach the question of whether subjecting the turbines at issue

in this case to regulation under Subpart J would "yield...any environmental benefits."