LEXSEE 636 F.2D 323

Alabama Power Co. v. Costle

No. 78-1006

UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT

204 U.S. App. D.C. 51; 636 F.2d 323; 1979 U.S. App. LEXIS 9696; 13 ERC (BNA)

1993; 10 ELR 20001

April 20, 1979, Argued

December 14, 1979, Decided

SUBSEQUENT HISTORY: As Amended April 21,

1980.

[*364] States may permit consumption of the available

increments. They also seek to have EPA set aside some

portion of the available increments to ensure that current

development does not inadvertently cause a violation of

the maximum thresholds. EPA has evidenced an intention

to promulgate guidelines to help the states manage the

allocation of available increments. This is an appropriate

step. But this is not to say that the agency may prescribe

the manner in which states will manage their allowed

internal growth. In the allocation of responsibilities made

by Congress, maximum limitations have been set. These

must be observed by the states, but assuming such

compliance, growth-management decisions were left by

Congress for resolution by the states.

V. SOURCES LOCATED IN NON-ATTAINMENT

AREAS

Section 165(a) 104 provides that a PSD permit is

required before a major emitting facility "may be

constructed in any area to which this part applies."

Industry petitioners contend that this language limits the

application of the PSD review requirements to sources

constructed in certain locations, and that those locations

are the statutorily defined "clean air areas." 105 On this

premise, industry petitioners argue that section 165 does

not apply to sources located in the so-called

"non-attainment" areas. 106 EPA, on the other hand,

takes the position that the identification of "clean air" and

"non-attainment" areas in section 107(d) 107 of the Act

are only a starting point for the planning process that will

lead to revised state implementation plans, that these

identifications do not shape the "area" to which the PSD

review requirements apply, and that preconstruction

review must precede the construction anywhere of a

major emitting facility which will adversely affect the air

quality of an area to which this part applies. EPA's

regulations extend the permit requirements of section 165

to all sources, wherever located, if the emissions from the

source have an impact on any clean air area. 108 The

issue, then, is whether a source becomes subject to the

PSD review process because of its location within an area

to which this part applies, or because of its impact upon

the air quality of one.

104 42 U.S.C. § 7475(a) (1978).

105 In this context, the term "clean air area" refers

to those air quality control regions in which the

ambient air quality does not exceed the applicable

NAAQS, which there is insufficient data to make

such a determination. See C.A.A. at §§ 161,

163(b), 42 U.S.C. §§ 7471, 7473(b) (1978). The

clean air areas are identified pursuant to C.A.A. at

§ 107(d)(1)(D), (E), 42 U.S.C. § 7407(d)(1)(D),

(E) (1978).

106 "Non-attainment" areas are defined in section

171(2) as those air quality control regions

designated, under sections 107(d)(1)(A)-(C), as

regions that fail to meet the standards of an

applicable NAAQS.

107 42 U.S.C. § 7407(d) (1978).

108 40 C.F.R. §§ 51.24(i)(1), 52(i)(1) (1978).

EPA discovers in the purposes of the Clean Air Act

and the 1977 Amendments an authority sufficient to

justify its regulation applying section 165 according to

impact. It asserts that such a reading is necessary to

prevent the significant deterioration of air quality in fact.

Section 160(4) sets forth as a purpose of Part C (PSD) "to

Page 1
assure that emissions from any source in any State"

(regardless of whether the location of the source is

designated an attainment area) "will not interfere with"

any portion of the PSD plan for any other State. Clearly,

EPA argues, the concern is with the air quality in clean

air areas, not with the location of the source affecting that

air quality. Finally, the agency contends, Section 109 161

incorporates the purpose set out in Section 101(b)(1), 110

to protect and enhance the quality of the nation's air

resources which prompted this Court's holding in Sierra

Club v. Ruckelshaus. 111

109 42 U.S.C. § 7471 (1978).

110 42 U.S.C. § 7401(b)(1) (1978).

111 344 F. Supp. 253 (D.D.C. 1972), aff'd per

curiam, 4 ERC (D.C. Cir. 1972), aff'd by a

equally divided court sub nom. Fri v. Sierra

Club, 412 U.S. 541, 93 S. Ct. 2770, 37 L. Ed. 2d

140 (1973).

[*365] EPA is correct that portions of the

legislative history indicate that the purposes of the Act

would best be served by an extension of the PSD

provisions to any source, the emissions from which

adversely affect the non-degradation scheme. 112 But this

alone does not present the situation we faced in Sierra

Club, where Congress had clearly articulated a purpose

but had remained silent as to the means for effectuating

that purpose. Nor do we have here a case where two

provisions of the Act are in irreconcilable conflict, the

situation we faced in Citizens to Preserve Spencer County

v. EPA. 113 Rather, we have here an instance where the

Congress, presumably after due consideration, has

indicated by plain language a preference to pursue its

stated goals by what EPA asserts are less than optimal

means. In such a case, neither this court nor the agency is

free to ignore the plain meaning of the statute and to

substitute its policy judgment for that of Congress.

112 See, e. g., H.Rep.No.95-564, 95th Cong., 1st

Sess. 151 (1977); H.Rep.No.95-294, 95th Cong.,

1st Sess. 9, 145, 151-52 (1977).

113 195 U.S.App.D.C. 30, 600 F.2d 844 (1979).

After careful consideration of the statute and the

legislative history, we must accept the contention of the

industry petitioners that the phrase "constructed in any

area to which this part applies" limits the application of

Section 165 to major emitting facilities to be constructed

in certain locations. But, we reject the proposition that the

only statutory means available to fulfill the purposes of

Part C are the permit provisions of § 165.

The plain meaning of the inclusion in section 165 of

the words "any area to which this part applies" is that

Congress intended location to be the key determinant of

the applicability of the PSD review requirements. That

this is the correct interpretation is underscored by the

inclusion of the same words in section 165(a)(3)(A), and

by the precise language employed by Congress in those

provisions where its concern was more source (rather

than area) specific. 114

114 See, e. g., C.A.A. at § 169A(b)(2)(a), 42

U.S.C. § 7491(b)(2)(a) (1978); C.A.A. at §

165(a)(7), 42 U.S.C. § 7475(a)(7) (1978); C.A.A.

at § 165(e)(1), 42 U.S.C. § 7475(e)(1) (1978).

The legislative history supports our interpretation.

The language of the pertinent provision, section 165(a),

derives from the original bill reported to the Senate in

1976 by the Public Works Committee. That bill stated in

pertinent part that "no major emitting facility . . . may be

constructed in any area designated under this subsection."

115 That plainly means location in a designated (clear air)

area. In 1977, when Senator Muskie introduced the bill,

116 he said, with respect to its PSD provisions, that it was

"in every significant detail identical to last year's bill." 117

When the Senate provision limited the PSD permit

process to sources in areas "designated under this

subsection," it was expressly limiting that process to

sources located in the areas subject to PSD protection.

The Conference bill maintained the principle of the

Senate version in that regard, but substituted for the

Senate provisions the House provisions which designated

the areas subject to PSD protection. Because of this

combined approach, the conferees could not refer to areas

"designated under this subsection" (or even "section")

because, unlike the Senate bill, the PSD provisions of the

Conference bill comprised several sections (ss 160-169 of

Part C). Accordingly, in order to make the intended

reference, the language was changed to area "to which

this part applies." This change in language preserved

location as a determinant of the applicability of section

165. Therefore, we conclude, as noted above, 118 that the

phrase "constructed [*366] in any area to which this part

applies" limits the application of section 165 to major

emitting facilities to be constructed in certain locations.

115 Senate Bill, S.3219, 94th Cong., 2d Sess.

(1976).

116 Senate Bill, S.252, 95th Cong., 1st Sess.

Page 2

204 U.S. App. D.C. 51; 636 F.2d 323, *364;

1979 U.S. App. LEXIS 9696; 13 ERC (BNA) 1993
(1977).

117 123 Cong.Rec. S9162 (daily ed., June 8,

1977).

118 See also Remarks of Senator Hart, 122

Cong.Rec. S12470 (daily ed., July 26, 1976);

Remarks of Senator Muskie, 122 Cong.Rec.

S13316 (daily ed., August 4, 1978).

EPA sought to further extend the reach of the PSD

review provisions. But, to so extend EPA's authority is to

ignore the fact that section 165(a) defines those major

emitting facilities which become subject to its permit

requirements and does so by virtue of location in a

designated area.

EPA argued initially, and in its petition for

reconsideration, that limiting the application of the permit

requirements of section 165 solely to sources within clean

air areas may not provide an adequate solution to a

particular pollution problem associated with those areas

the problem of interstate pollution. In our per curiam

opinion, we indicated agreement with the position

advanced by EPA, noting that the problem of interstate

pollution was indeed a serious concern not dealt with

adequately by the permit requirement. It was our

apprehension that Congress did not intend such a major

pollution problem to go untreated, and this led us to

discover within the statute a basis for the exercise by

EPA of rulemaking authority to extend the permit

requirement of section 165 beyond its literal limitations.

Our review of the petitions for reconsideration

submitted by both the industry petitioners and EPA has

led us to conclude that sections other than section 165 are

available to fulfill that congressional objective of need to

cope with the problem of interstate pollution.

Section 110(a)(2)(E)(i) provides a vehicle for

implementing the congressional objective of abating

substantial interstate air pollution. That provision requires

that an SIP shall contain "adequate provisions . . .

prohibiting any stationary source within the State from

emitting any air pollutant in amounts which will . . .

interfere with measures required to be included in the

applicable implementation plan for any other state under

(the PSD part)." The phrase "measures required to be

included" in an SIP clearly incorporates at least (1) the

absolute emissions limitation for each pollutant for which

increment limitations have been set under section 163 or

166, (2) the monitoring and modeling requirements of

section 165(e), and (3) "such other measures as may be

necessary, as determined under regulations promulgated

under (part C)," as provided in section 161. EPA's

authority, under § 110(a)(2)(E) (i), to prevent interstate

inference with these measures to prevent, in other words,

the industry of one state from interfering with the PSD

program of another is clear. And, it does not depend upon

the permit process of section 165 for its effectiveness.

So also, section 126 of the Act is a vehicle for

abating substantial interstate air pollution independent of

permitting. That provision allows that, upon petition by a

state or political subdivision, the EPA may determine that

a source in a neighboring state "emits or would emit any

air pollutant in violation of the prohibition of section

110(a)(2)(E)(i)." If such a violation is found, the remedy

provided by section 126(c) which remedy is applicable

"notwithstanding any permit which may have been

granted by the State" is not denial or revocation of a

permit, but a prohibition against construction or operation

for a new source and a prohibition against continued

operation for an existing source, unless EPA authorizes

continued operation for up to three years while the source

is being brought into compliance with § 110(a)(2)(E)(i).

The industry petitioners acknowledged the obligation

imposed upon them by sections 110 and 126 in their

Response to EPA's Petition for Rehearing.

Even if § 126(a)(1)(A) does not mandate

SIPs to require notice from sources in

nonattainment areas, as we believe, that

does not relieve such sources from the

requirements of § 110(A)(2)(E)(i) that

SIPs contain "adequate provisions"

preventing any source from emitting

pollutants in amounts which will interfere

with the PSD measures required to be

included in the SIPs of other States. Nor

does it relieve them from the provisions

[*367] of § 126(b) for enforcement of §

110(a)(2)(E)(i). If notice similar to that

otherwise provided in § 126(a) should be

necessary to prevent violation of §

110(a)(2)(E)(i) by a source in a

nonattainment area which would adversely

affect air quality in a clean-air area of

another State, we do not perceive any

reason why such notice could not be

required pursuant to § 110(a)(2)(E)(i) even

though not required by § 126(a)(1) (A).

Page 3

204 U.S. App. D.C. 51; 636 F.2d 323, *366;

1979 U.S. App. LEXIS 9696; 13 ERC (BNA) 1993
119

119Response of Industry Petitioners to

Respondents' Petition for Rehearing at 12 (filed

August 2, 1979).

We hold that both section 110(a)(2)(E)(i) and section

126(c) give EPA the authority to require that SIP's

contain provisions sufficient to address the problem of

interstate air pollution. We find that section 126(a) gives

the agency the authority to require that SIP's include

notice provisions designed to trigger the mechanisms

required by section 110(a)(2)(E)(i) or section 126(c).

And we find that section 126(b) is an additional means to

activate those mechanisms by permitting any state or

political subdivision to petition the Administrator for a

finding that "any major source emits or would emit any

air pollutant in violation of the prohibition of section

110(a)(2)(E)(i)." 120

120 42 U.S.C. § 7426(b) (1978) (emphasis

added).

To the extent that there is any gap in those notice

provisions, section 114 is available. It provides that for

the purpose of carrying out the provisions of the Act "the

Administrator may require any person who owns or

operates any emission source . . . to (A) establish and

maintain such records, (B) make such reports, (C) install,

use, and maintain such monitoring equipment or

methods, (D) sample such emissions . . ., and (E) provide

such other information, as he may reasonably require . . ."

121 Thus, section 114 authorizes the Administrator to

require any facility to provide notice of an interstate

impact on air quality, be it or some other source the cause

of the impact.

121 42 U.S.C. § 7414 (1978) (emphasis added).

Section 161 122 provides still another vehicle for

implementing the congressional objective of abating

substantial interstate air pollution. We realize that, at oral

argument, EPA disclaimed invocation of section 161

rulemaking authority to address this problem. However,

that disclaimer came at a time when, in the agency's

view, section 165, by its own terms, applied PSD review

to sources of interstate air pollution impacting on clean

air areas. Given such a view of section 165, the agency's

disclaimer of authority under section 161 was reasonable.

We have now held that section 165 does not, by its own

terms, apply to sources located outside of clean air areas.

In this light, and in view of the legislative desire to

prevent interstate impacts, the authority granted to the

EPA by the plain language of section 161 "each (SIP)

shall contain emission limitations and such other

measures as may be necessary, as determined under

regulations promulgated under this part, to prevent

significant deterioration of air quality (in clean air areas)"

123 grants to the Administrator the power to promulgate

rules requiring that SIPs adequately address the problem.

We hold that the Administrator may promulgate rules to

require the inclusion of such provisions in the SIP of the

state whose clean air area is affected, of the state which is

the source of the adverse impact, or of both.

122 42 U.S.C. § 7471 (1978).

123 Id. (emphasis added).

This is not a case where Congress has crafted a

specified set of measures to solve a problem, so that

additional measures in agency-initiated rules can be

deemed not "necessary." On the contrary, this is a case

where the congressional objective to meet the problem of

substantial interstate pollution is clear, and the statutory

measures addressed to it are modest. Accordingly, a

determination that supplemental measures are

"necessary," 124 for the purpose of triggering [*368]

rulemaking authority under section 161, is within the

authority granted by Congress, even though generally the

statute relies on measures specified by Congress rather

than a contemplation of broad agency rulemaking

discretion.

124 Even giving that term an expansive reading,

see, e. g., Niagara Mohawk Power Corporation v.

FPC, 126 U.S.App.D.C. 376, 379 F.2d 153

(1967).

In sum, though it is clear from the legislative history

that Congress intended to address the problem of

interstate pollution, we are of the view that the

Administrator has authority to administer section

110(a)(2)(E)(i) and section 126(b) and (c) in conjunction

with section 114 and section 126(a) so as to require SIPs

to address the problem. We are also of the view that EPA

has additional authority, pursuant to rulemaking authority

granted in section 161, to promulgate regulations

requiring that SIPs include measures to abate interstate

adverse impacts on clear air areas.

Page 4

204 U.S. App. D.C. 51; 636 F.2d 323, *367;

1979 U.S. App. LEXIS 9696; 13 ERC (BNA) 1993
There are provisions in the Act, such as those of

section 165(d)(2), which evidence a solicitude for the

maintenance of air quality in federal lands but there are

none which justify the application of the permit

requirements of section 165 to sources not located in, but

impacting upon, such areas. Section 169A is available to

protect visibility in Class I areas where visibility is an

important characteristic, and the Administrator may

choose to invoke the rulemaking authority granted to him

by section 161 to address this problem. We find no basis

for reading into section 165 an application of the PSD

review provisions to sources in non-attainment areas that

impact upon the air quality of federal lands and Indian

reservations.

In conclusion, based upon our analysis of the Act, we

vacate EPA's regulations extending the permit

requirements of section 165 to all sources, wherever

located, if the emissions from the source have an impact

on any clean air area. 125 We do so because they were

promulgated pursuant to EPA's reading of Section 165, a

reading which we have rejected. 126

125 40 C.F.R. §§ 51.24(i)(1), 52.21(i)(1) (1978).

126 Should the Administrator determine that the

provisions of sections 110, 126, and 114 are

insufficient to address the problem of interstate

pollution that impacts upon clean air areas, he

may use his rulemaking authority under section

161 to promulgate new regulations. Those

regulations will, of course, be subject to review.

Based upon this analysis, we are no longer confident

that this statute provides a predicate for the court to put a

"gloss" on section 165 sufficient to support EPA

rulemaking authority to apply the permit requirements of

that section to major emitting facilities located in

non-attainment areas in one state that impact adversely

upon clean air areas within a neighboring state.

EPA, in a petition for reconsideration, correctly

points out that emissions from facilities located in a

non-attainment area within a state which impact

adversely on the air quality of federal lands and Indian

reservations raise similar problems of interjurisdictional

pollution as are presented in the context of interstate

pollution.

VI. REGULATION OF FUGITIVE EMISSIONS,

INCLUDING FUGITIVE DUST

In the general definitional section of the Act, section

302(j), 127 Congress employed the term "fugitive

emissions" to refer to one manner of emission of any air

pollutant. As commonly understood, emissions from an

"industrial point source" include emissions emanating

from a stack or from a chimney. By contrast, "fugitive

emissions," are emissions from a facility that escape other

than from a point source. Principal among the fugitive

emissions is "fugitive dust," a term referring to fugitive

emissions by particulate matter. 128 EPA's regulations

encompass sources of fugitive emissions (including

fugitive dust) as well as industrial point sources. A

subsequent [*369] section of this opinion 129 confirms

EPA's authority to regulate sources of fugitive emissions

and discusses the factors that de- limit the agency's

discretion to define a "source" or an "emitting facility" of

fugitive emissions.

127 42 U.S.C. § 7602(j) (1978).

128 Though we have discerned the general

parameters of these terms, EPA has latitude to

provide reasonable, though more specific,

definitions along similar lines, so long as they

comport with congressional intent.

129 See section III of Judge Wilkey's Part of this

opinion.

EPA's regulation of fugitive emissions has been of

special concern to the mining and forestry industries

which contend, without serious opposition, that they are

incapable of meeting the strict limitations on the emission

of particulate matter set by the PSD provisions. The terms

of section 165, which detail the preconstruction review

and permit requirements for each new or modified "major

emitting facility" apply with equal force to fugitive

emissions and emissions from industrial point sources.

130 EPA assumed that there is similarly no distinction to

be made between fugitive emissions and emissions from

industrial point sources when determining whether a

source is a major emitting facility within section 169(1)

131 and thus subject to section 165. This assumption led

the agency to conclude that sources of fugitive dust

satisfying the annual tonnage threshold specified in

section 169(1) are major emitting facilities. But,

solicitude for the plight of the extractive and silvaculture

industries motivated EPA to promulgate a partial

exemption for sources of fugitive dust, an exemption

which industry argues is inadequate and environmental

groups contend is beyond agency authority. 132

Page 5

204 U.S. App. D.C. 51; 636 F.2d 323, *368;

1979 U.S. App. LEXIS 9696; 13 ERC (BNA) 1993
130 42 U.S.C. § 7475 (1978).

131 42 U.S.C. § 7479(1) (1978).

132 40 C.F.R. §§ 51.24(k)(5), 52.21(k)(5) (1978).

The regulation maintains the requirement that

such sources apply best available control

technology (BACT) as defined by section 169(3),

42 U.S.C. § 7479(3) (1978), but exempts them

from the otherwise-required showing that

particulate emissions from the facility will not

exceed either the applicable national ambient air

quality standards (NAAQS) or the allowable

increments.

EPA is correct that a major emitting facility is

subject to the requirements of section 165 for each

pollutant it emits irrespective of the manner in which it is

emitted. However, a source emitting large quantities of

fugitive emissions may remain outside the definition of

major emitting facility and thus may not be subject to the

requirements of section 165.

The origin of this distinction lies in section 302(j) of

the Act, which provides:

Except as otherwise expressly provided,

the terms "major stationary source" and

"major emitting facility" mean any

stationary facility or source of air

pollutants which directly emits, or has the

potential to emit, one hundred tons per

year or more of any air pollutant

(including any major emitting facility or

source of fugitive emissions of any such

pollutant, as determined by rule by the

Administrator). 133

13342 U.S.C. § 7602(j) (1978).

EPA construes this provision as a general definition

of "major emitting facility" that is totally supplanted for

the PSD provisions by the definition of major emitting

facility contained in section 169(1). Such is not the case.

Section 302(j) is a definition of "major emitting facility"

in quantitative terms. That quantitative term is set at the

threshold of 100 tons per year. The calculation of the 100

ton figure includes "fugitive emissions of any such

pollutant, as determined by rule by the Administrator."

Thus, section 302(j) specifically attaches a rulemaking

requirement for the inclusion of fugitive emissions in the

threshold calculation. The legislative history of this

rulemaking provision is sparse, but it well may define a

legislative response to the policy considerations presented

by the regulation of sources where the predominant

emissions are fugitive in origin, particularly fugitive dust.

Whatever the motivation of the "rule" provision of 302(j),

its existence is unmistakable. Even if the origin of this

provision is fortuitous, the provision may be welcomed as

serendipitous, for it gives EPA flexibility to provide

industry-by-industry consideration and the appropriate

tailoring of coverage.

Page 6

204 U.S. App. D.C. 51; 636 F.2d 323, *369;

1979 U.S. App. LEXIS 9696; 13 ERC (BNA) 1993