United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 20, 2007 Decided June 19, 2007

No. 05-1446

ENVIRONMENTAL DEFENSE,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

On Petition for Review of a Final Rule of the

Environmental Protection Agency

David S. Baron argued the cause for the petitioner.

Michael C. Augustini, Attorney, United States Department

of Justice, argued the cause for the respondent. John C. Cruden,

Deputy Assistant Attorney General, and Brian L. Doster,

Counsel, Unites States Environmental Protection Agency, were

on brief.

Before: HENDERSON, ROGERS and GRIFFITH, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

Concurring opinion filed by Circuit Judge ROGERS.

KAREN LECRAFT HENDERSON, Circuit Judge: As part of the

Clean Air Act (CAA), the Congress created a program entitled

“Prevention of Significant Deterioration of Air Quality” (PSD),

which is designed to protect air quality in national parks and
2

similar scenic and recreational areas. 42 U.S.C. ch. 85, subch. I,

pt. C (CAA §§ 160-169b, 42 U.S.C. §§ 7470-92). In 1988 the

Environmental Protection Agency (EPA) promulgated

regulations to implement the PSD program for nitrogen oxides

(NOx). Prevention of Significant Deterioration for Nitrogen

Oxides, 53 Fed. Reg. 40,656 (October 17, 1988) (1988 Rule).

In 1990, the court reviewed the 1988 Rule and remanded the

regulations to EPA. Envtl. Def. Fund, Inc. v. EPA, 898 F.2d

183 (D.C. Cir. 1990). EPA issued a new final rule in 2005.

Prevention of Significant Deterioration for Nitrogen Oxides, 70

Fed. Reg. 59,582 (Oct. 12, 2005) (codified at 40 C.F.R.

§§ 51.166, 52.21) (2005 Rule). Petitioner Environmental

Defense seeks review of the 2005 Rule. Because EPA followed

our directives in Environmental Defense Fund and its

regulations reflect a reasonable interpretation of the applicable

CAA PSD provisions, we deny the petition for review.

I.

The CAA requires that EPA promulgate a primary and a

secondary National Ambient Air Quality Standard (NAAQS) for

each air pollutant for which EPA has issued “air quality criteria”

pursuant to CAA section 108, 42 U.S.C. § 7408. 42 U.S.C.

§ 7409(a); see generally Whitman v. Am. Trucking Ass’ns, 531

U.S. 457, 462 (2001). After the NAAQS is established for a

particular pollutant, each state must submit to EPA a list of all

areas in the state, designating each area as “attainment” (i.e., it

meets the NAAQS); “nonattainment” (i.e., it does not meet the

NAAQS) or “unclassifiable” (i.e., it “cannot be classified on the

basis of available information as meeting or not meeting the

[NAAQS]”). 42 U.S.C. § 7407. The state must then develop

and submit to EPA a “State Implementation Plan” (SIP) which

“provides for implementation, maintenance, and enforcement of

[the NAAQs].” Id. § 7410(a)(1).

In 1977, the Congress amended the CAA to add the PSD

provisions in order to “protect the air quality in national parks
3

and similar areas of special scenic or recreational value, and in

areas where pollution was within the national ambient standards,

while assuring economic growth consistent with such

protection.” Envtl. Def. Fund, 898 F.2d at 184 (citing CAA

§ 160, 42 U.S.C. § 7470). The PSD provisions require that each

applicable 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 each region (or portion thereof) designated

pursuant to section 7407 of [title 42] as attainment or

unclassifiable.” 42 U.S.C. § 7471. The PSD establishes three

classes of subject attainment or unclassifiable areas:

Class I—comprising mainly large national parks and

national wilderness areas; Class II—regions where the

ambient air quality levels more than meet the national

standards; and Class III—regions meeting the definition of

Class I or Class II areas but redesignated at the behest of a

state for higher levels of industrial development.

Envtl. Def. Fund, 898 F.2d at 185 (citing CAA §§ 162, 164, 42

U.S.C. §§ 7472, 7474). For each of the three Classes, the

Congress required that EPA establish numerical emission limits

for specific pollutants. 

For “Set I” pollutants—i.e., sulfur oxide and particulate

matter—CAA § 163 establishes for each Class “maximum

allowable increases”—called “increments” and expressed in

micrograms per cubic meter (μg/m3)—“over baseline

concentrations.” 42 U.S.C. § 7473. The “baseline

concentration” is defined as “the ambient concentration levels

which exist at the time of the first application for a permit” by

a major emitting facility. Id. § 7479(4). 

For “Set II” pollutants—namely, hydrocarbons, carbon

monoxide, photochemical oxidants and, at issue here, NOx —the

Congress declined to set specific incremental or other limits,
4

1

The House version of the bill set identical percentage increments

for Set I and Set II pollutants. H.R. 6161, 95th Cong., § 108(a), at

294-95 (April 6, 1977). The Senate version prescribed the same

increments as the House bill for Set I pollutants but, for Set II

pollutants, directed EPA to conduct a study and report back to the

Congress with proposed increments. S. 252, 95th Cong., § 6, at 20-21

(May 10, 1977). The final bill retained the prescribed increments for

Set I pollutants but, for Set II pollutants, directed EPA, after

conducting a study, to establish the limits. 

2

EPA had aborted an earlier rulemaking. See Envtl. Def. Fund,

898 F.2d at 184 n.3.

leaving the task to EPA. Subsection 166(a) directs that for these

pollutants EPA “shall conduct a study and not later than two

years after August 7, 1977, promulgate regulations to prevent

the significant deterioration of air quality which would result

from the emissions of such pollutants.” Id. § 7476(a).

Subsection 166(c) further directs that the regulations “shall

provide specific numerical measures against which permit

applications may be evaluated, a framework for stimulating

improved control technology, protection of air quality values,

and fulfill the goals and purposes set forth in section 7401 and

section 7470 of [title 42].” Id. § 7476(c). More specifically,

subsection 166(d) instructs that the regulations “shall provide

specific measures at least as effective as the increments

established in section 7473 of [title 42] to fulfill such goals and

purposes, and may contain air quality increments, emission

density requirements, or other measures.” Id. § 7476(d).1

A. 1988 PSD Rule 

EPA issued a proposed rule for PSD of NOx on February 8,

1988.2

 Prevention of Significant Deterioration for Nitrogen

Oxides, 53 Fed. Reg. 3698 (Feb. 8, 1988). On October 17,

1988, EPA issued the final rule, in which it decided to adopt an

increment limitation system for NOx similar to the increment
5

scheme the Congress had prescribed for Set I pollutants—and

had contemplated that EPA might adopt for Set II pollutants, see

42 U.S.C. § 7476(d) (Set II regulations “may contain air quality

increments”). Accordingly, EPA established increment limits

“by reference to”—that is, as a percentage of—the NAAQS it

had promulgated for NOx pursuant to 42 U.S.C. § 7409 because

the “Congress used the NAAQS for [Set I] pollutants as the

benchmark for determining what constitutes ‘significant

deterioration’ ” and “because the NAAQS constitute the basic

measure of air quality under the Act.” 53 Fed. Reg. at 3700.

EPA also chose the same percentages for Set II that the

Congress had for Set I: 2.5% for Class I areas, 25% for Class II

areas and 50% for Class III areas. Id. at 3704-05. In addition,

EPA promulgated NOx increments for only one nitrogen oxide

compound, nitrogen dioxide (NO2), based on the NO2

NAAQS—notwithstanding the statute calls for regulating

“nitrogen oxides” generally—because NO2 was “the pollutant on

which the national ambient air quality standards (NAAQS) for

nitrogen oxides were based,” 53 Fed. Reg. at 40,656, and thus

was “the only compound for which it had established an ambient

standard” on which to base an increment, Envtl. Def. Fund, 898

F.2d at 185.

B. Environmental Defense Fund, Inc. v. EPA

In Environmental Defense Fund, the court reviewed the 1988

Rule and found it failed to comply with the Congress’s

directives in two respects.

First, the court concluded that EPA’s incremental approach

was incomplete. The court approved as reasonable EPA’s

construction of subsection 166(d)’s mandate that EPA “provide

specific measures at least as effective as the increments

established in section 7473,” 42 U.S.C. § 74726(d), “as

requiring that the Set II rules be at least as stringent as those for

Set I, i.e., that increments be set no lower, as percentages of a

pollutant’s ambient standards, than the Set I increments were as
6

percentages of their respective ambient standards.” Envtl. Def.

Fund, 898 F.2d at 187 (emphasis original); see id. at 188

(approving “stringency” interpretation as “both workable and

completely faithful to a broad vision of the relevant goals and

purposes” (emphasis original)). Nonetheless, the court

concluded EPA’s interpretation “overlook[ed]” two indicators

of the Congress’s intent in enacting section 166: (1) “the

language of subsection (c)” that mandates the Set II regulations

“fulfill the goals and purposes set forth in section 7401 and

section 7470 of [title 42],’ ” 42 U.S.C. § 7476(c); and (2) “the

vector of forces represented by the Senate bill,” which

“originally wanted more study conducted on the Set II

pollutants, with Congress to make the final choice,” see supra

note 1, and, in its final form, still “appears to manifest much of

this intention, merely substituting the EPA for Congress as

decisionmaker.” 898 F.2d at 188. Given EPA’s lapse, the court

concluded section 166 does not afford EPA an absolute safe

harbor to establish Set II increments that mimic the Set I

increments because “a failure to assess a pollutant in terms of

the PSD goals breaches the agency’s duty to consider all the

relevant statutory factors” and EPA “candidly admit[ted] it did

not make that inquiry.” Id. 188-89 (citing Motor Vehicle Mfrs.

Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29

(1983); Specialty Equip. Mkt. Ass’n v. Ruckelshaus, 720 F.2d

124, 132 (D.C. Cir. 1983)). 

While rejecting an absolute safe harbor, the court did

endorse a contingent safe harbor approach (among three

hypothesized interpretations). The court explained that EPA’s

selected increment methodology would provide a safe harbor “if

but only if the Administrator determines (without being arbitrary

and capricious) that the criteria under subsection (c) do not call

for a more, or a less, stringent standard.” Id. at 189 (footnote

omitted). The court then concluded it could not uphold EPA’s

regulations based on the contingent safe harbor theory: “The

reading that we have hypothesized of § 166(d) as a contingent
7

3

The court gave the following reason for not ordering vacatur: “No

party to this litigation asks that the court vacate the EPA’s regulations,

and to do so would at least temporarily defeat petitioner’s purpose, the

enhanced protection of the environmental values covered by the PSD

provisions.” 898 F.2d at 190.

safe harbor requires the agency first to adopt that view, then to

determine that the inquiry under subsection (c) does not require

a more stringent standard. It has done neither.” Id. at 189.

Second, the court found fault with EPA’s promulgating an

increment based solely on the NAAQS, which “resulted in

EPA’s defining increments for only one compound of nitrogen

oxides (NO2), and defining them only in terms of annual

averages.” Id. at 190. The court concluded EPA’s decision

ignored the different natures of the NAAQS and the PSD

measures, noting that the NAAQS provisions “seem to

encompass everything imaginable,” id. (citing 42 U.S.C.

§ 7409(b)(2), which requires NAAQS “requisite to protect the

public welfare”), while the PSD program “emphasizes special

considerations, such as national wilderness areas and their

‘natural, recreational, scenic, or historic value[s],’ ” id. (quoting

42 U.S.C. §7470(2) (alteration in original)). “Thus a pollutant

that has only mild public health effects but severe effects on

wilderness areas might demand a lower increment (measured as

a percentage of its ambient standards) than one with severe

health effects but only mild effects on wilderness areas.” Id. 

Based on these two shortcomings, the court remanded the

1988 Rule to EPA “to develop an interpretation of § 166 that

considers both subsections (c) and (d), and if necessary to take

new evidence and modify the regulations.” Id. It did not vacate

the regulations, which have therefore remained in effect.3
8

4

On these additional measures, see infra pp. 13-14. 

C. 2005 PSD Rule

On February 23, 2005, EPA issued a proposed rule,

Prevention of Significant Deterioration for Nitrogen Oxides, 70

Fed. Reg. 8880 (Feb. 23, 2005), in which it “responded to the

court’s opinion” in Environmental Defense Fund and proposed

to adopt the contingent safe harbor interpretation of subsections

166(c) and (d) endorsed by the court and, based thereon, NOx

increments as in the 1988 Rule. Final Rule, 70 Fed. Reg. at

59,586. On October 12, 2005, EPA issued its final rule, which

followed the same path. EPA there set out “five central

elements” as the basis for its regulations. Id.

First, EPA “read section 166 of the Act to direct EPA to

conduct a holistic analysis that considers how a complete system

of regulations will collectively satisfy the applicable criteria,

rather than evaluating one individual part of a regulatory scheme

in isolation.” Id. Accordingly, it “did not look at increments in

isolation, but also considered how these increments work in

conjunction with other measures”—namely, “[Air Quality

Related Values] review in Class I areas, additional impacts

analysis, and [Best Available Control Technology]

requirements”—“to satisfy the statutory criteria.” Id.

4

Second, EPA determined that the contingent safe harbor

approach reflects a reasonable interpretation of subsection 166,

which, it concluded, can be read to require that EPA first,

pursuant to subsection (d), “identify a minimum level of

effectiveness, or safe harbor, for the body of pollutant-specific

PSD regulations adopted under section 166” and then “conduct

further review to determine whether, based on the criteria in

subsection (c), EPA’s pollutant-specific PSD regulations under

section 166 should contain measures that deviate from the

minimum ‘safe harbor’ identified under subsection (d),” which
9

subsection requires measures that are “ ‘at least as stringent’ as

the statutory increments set forth in section 163.” Id. at 59,587.

Third, EPA identified “eight statutory factors that EPA must

apply when promulgating pollutant-specific regulations to

prevent significant deterioration of air quality.” Id. at 59,586.

The first three are based on the “three stand-alone criteria in

section 166(c),” which “indicate that PSD regulations for

specific pollutants should provide (1) specific numerical

measures for evaluating permit applications; (2) a framework for

stimulating improved control technology; and (3) protection of

air quality values.” Id. at 59,587 (citing 42 U.S.C. § 7476(c)).

The remaining five factors were “incorporated into the analysis

by virtue of the fourth criterion in section 166(c), which directs

that EPA’s pollutant-specific PSD regulations ‘fulfill the goals

and purposes’ set forth in sections 160 and 101 of the Act.” Id.

(quoting 42 U.S.C. 7476(c)). They are the five “goals and

purposes listed in section 160 as factors applicable to

pollutant-specific PSD regulations established under section

166,” id.:

 (1) to protect public health and welfare from any actual

or potential adverse effect which in the Administrator's

judgment may reasonably be anticipate [sic] to occur

from air pollution or from exposures to pollutants in

other media, which pollutants originate as emissions to

the ambient air) [sic], notwithstanding attainment and

maintenance of all national ambient air quality

standards;

 (2) to preserve, protect, and enhance the air quality in

national parks, national wilderness areas, national

monuments, national seashores, and other areas of

special national or regional natural, recreational, scenic,

or historic value;
10

5

EPA took the view that “PSD measures that satisfy the specific

goals and purposes of section 160 also satisfy the more general

purposes and goals identified in section 101 of the Act,” noting that

“[t]he overall goals and purposes of the CAA listed in sections 101(b)

and 101(c) are general goals regarding protecting and enhancing the

nation's air resources and controlling and preventing pollution.” 70

Fed. Reg. at 59,587 n.1. 

 (3) to insure that economic growth will occur in a

manner consistent with the preservation of existing clean

air resources;

 (4) to assure that emissions from any source in any

State will not interfere with any portion of the applicable

implementation plan to prevent significant deterioration

of air quality for any other State; and

 (5) to assure that any decision to permit increased air

pollution in any area to which this section applies is

made only after careful evaluation of all the

consequences of such a decision and after adequate

procedural opportunities for informed public

participation in the decisionmaking process.

42 U.S.C. § 7470.5

Fourth, EPA interpreted the requirement that it

“simultaneously satisfy each of these factors to establish a

balancing test in cases where certain objectives may be at odds

with each other.” 70 Fed. Reg. at 59,586. Specifically, EPA

noted the need to strike a balance between the potentially

conflicting goals set out in section 160(3): “to simultaneously

protect air quality and maximize opportunities for economic

growth,” id. at 59,588.

Fifth, EPA recognized that “the requirements of section 166

may be satisfied by adopting other measures besides an

increment and that EPA may allow States to demonstrate that
11

alternatives to increment [sic] contained in a SIP meet the

requirements of sections 166(c) and 166(d).” Id. at 59,586. 

Based on these five elements, EPA announced it was

“retaining the existing NO2 increments without change” and

“amending the text of [its] PSD regulations at 40 CFR 51.166 to

clarify that any State may employ an alternative approach to the

NO2 increments if the State’s approach meets certain

requirements.” Id. at 59,595-96 (footnote omitted). See 40

C.F.R. § 51.166(c)(2) (new subsection allowing State to

“demonstrate that it has alternative measures in its plan other

than maximum allowable increases that satisfy the requirements

in sections 166(c) and 166(d) of the Clean Air Act for nitrogen

oxides”). EPA then set out in detail the balancing analysis it had

conducted, explaining how six components of its NOx PSD

regulations advance the eight statutory factors it had identified.

See 70 Fed. Reg. at 59,596-99. 

1. Increment System: First, EPA determined that using an

increment system fulfills “[t]wo of the factors applicable under

section 166(c)”: (1) the “obligation . . . to provide ‘specific

numerical measures against which permit applications may be

evaluated’ ” because each increment is “a quantitative value that

establishes the ‘maximum allowable increase’ for a particular

pollutant” and “functions, therefore, as a specific numerical

measure that can be used to evaluate whether an applicant’s

proposed project will cause or contribute to air pollution in

excess of allowable levels,” id. at 59,596; and (2) the

requirement of “providing ‘a framework for stimulating

improved control technology’ ” because increments “establish

an incentive to apply more stringent control technologies in

order to avoid violating the increment,” id. 

2. Area Classifications: Second, EPA determined that

setting increments “at different levels for each class of PSD

area” also fulfills two of the applicable factors: (1) “Establishing

the most stringent increments in Class I areas helps fulfill
12

EPA’s obligation to establish regulations for NOX that ‘preserve,

protect, and enhance the air quality’ in parks and special areas”

because “Class I areas are primarily the kinds of parks and

special areas covered by section 160(2),” id. at 59,597 (quoting

42 U.S.C. § 7470(2)); and (2) setting less stringent increments

for Class II (“an intermediate level”) and Class III (“a higher

level”) “help[s] satisfy the goal in section 160(3) that EPA

‘insure that economic growth will occur in a manner consistent

with preservation of clean air resources,’ ” id. (quoting 42

U.S.C. § 7470(3)), because “[i]n those areas where clean air

resources may not require as much protection, more growth is

allowed” and thus “this classification scheme helps ensure that

growth can occur where it is needed (Class III areas) without

putting as much pressure on existing clean air resources in other

areas where some growth is still desired (Class II areas).” Id.

Further, “[b]y redesignating an existing Class II area to Class

III,” EPA observed, “States may accommodate economic

growth and air quality in areas where the Class II increment is

too stringent to allow the siting of new or modified sources.” Id.

EPA noted that the redesignation procedures require “a

commitment of the State government to the creation of such an

area, extensive public review, participation in the SIP area

redesignation process, and a finding that the redesignation will

not result in the applicable increment being exceeded in a nearby

Class I or Class II area.” Id. (citing 42 U.S.C. § 7474(a)-(b)). 

3. Permitting Procedures: Third, EPA determined that its

pre-construction “permitting procedures” for new major sources

and major modifications of existing sources fulfill the goals set

out in CAA section 160(4) and 160(5), which “require that PSD

programs in one State not interfere with the PSD programs in

other States and that PSD programs assure that any decision to

permit increased air pollution is made after careful evaluation

and public participation in the decisionmaking process.” 70

Fed. Reg. at 59,597.
13

6

Under section 165(d), the FLM and the State permitting authority

must review the impacts on AQRVs of any proposed new or modified

source’s emissions. If the emissions satisfy the Class I increment

limit, the FLM may object to or concur in a PSD permit based on

identified AQRV impacts and make a recommendation to the

permitting authority (either the State or EPA). The permit may still

issue unless the FLM “demonstrat[es] to the satisfaction of the

permitting authority that the source or modification will have an

adverse impact on AQRVs.” 70 Fed. Reg. at 59,597. If the emissions

will violate a Class I increment, the permit may not issue unless the

permitting authority “demonstrates to the satisfaction of the FLM that

there will be no adverse impact on AQRVs.” Id. at 59,597-98. EPA

observed that “[t]he CAA does not define AQRV, except to note that

it includes visibility, id at 59,598 (citing 42 U.S.C. § 7475(d)(1)(B)).

EPA added, however:

Some additional insight can be gained from the following

description in legislative history:

The term “air quality related values” of Federal lands

designated as class I includes the fundamental

purposes for which such lands have been established

and preserved by the Congress and the responsible

Federal agency. For example, under the 1916

4. Air Quality Related Values Review by Federal Land

Manager and Permitting Authority: Fourth, EPA determined

that its regulatory scheme for review of Air Quality Related

Values (AQRVs) in Class I areas—to be conducted by the

Federal Land Manager (FLM) and State permitting

authority—required under CAA section 165(d), 42 U.S.C.

§ 7475(d), “helps to satisfy the factors in sections 166(c) and

160(2), which require that EPA’s PSD regulations for NOX

protect air quality values, and parks and other special areas,

respectively”—because the AQRV scheme “helps to provide

protection for parks and special areas (which are generally the

Class I areas subject to this review) and air quality values

(which are factors considered in the review).” Id. at 59,597-98.6
14

Organic Act to establish the National Park Service

(16 U.S.C. 1), the purpose of such national park lands

“is to conserve the scenery and the natural and

historic objects and the wildlife therein and to

provide for the enjoyment of the same in such

manner and by such means as will leave them

unimpaired for the enjoyment of future generations.”

Id. (quoting S. Rep. No. 95-127 at 36 (1977)).

5. Additional Impacts Analysis: Fifth, EPA determined

that its regulatory requirement that an owner or operator conduct

an “additional impacts analysis,” i.e., “an analysis of the

impairment to visibility, soils and vegetation” resulting from a

new or modified source under 40 C.F.R. §§ 51.166(o)(1) and

52.21(o)(1), “helps fulfill the criteria and goals and purposes in

sections 166(c) and 160.” Id. at 59,599. EPA noted this

requirement “is especially helpful for satisfying the

requirements of section 166(c) in Class II and Class III areas,”

which are not subject to the AQRV review applicable to Class

I areas. Id.

6. Installation of Best Available Control Technology:

Sixth, EPA determined that requiring new and modified sources

to use the Best Available Control Technology (BACT) also

helps “satisfy the factors in sections 166(c) and 160(2)” because

the BACT standard “is rigorous and in practice has required

significant reductions in the pollutant emissions from new and

modified sources” and “helps to protect air quality values, public

health and welfare, and parks and other special areas.” Id. at

59,599. 

Finally, EPA justified its decision to prescribe increments

for NO2 only and based on the NAAQS on the ground that the

NO2 increment, in conjunction with EPA’s impending fine

particulate matter increment rule, will limit emissions of other

nitrogen oxide compounds as well. 
15

The petitioner filed its petition for review on December 12,

2005.

II.

Because “we read the ambiguities and perplexities of the

statute as delegating to the agency a broad interpretive authority,

as we must under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837,

843-44 (1984),” Envtl. Def. Fund, 898 F.2d at 189 (parallel

citation omitted), we defer to EPA’s “permissible construction

of the statute,” Chevron, 467 U.S. at 843. Where, as here, the

Congress “has explicitly left a gap for the agency to fill, there is

an express delegation of authority to the agency to elucidate a

specific provision of the statute by regulation” and “[s]uch

legislative regulations are given controlling weight unless they

are arbitrary, capricious, or manifestly contrary to the statute.”

Id. at 843-44. Applying this deferential standard, we uphold

EPA’s 2005 PSD Rule as reflecting a reasonable statutory

interpretation.

As our summary of EPA’s 2005 PSD Rule demonstrates, on

remand EPA scrupulously followed the court’s instructions in

Environmental Defense Fund. EPA expressly adopted the

court’s contingent safe harbor approach (in lieu of EPA’s earlier

absolute safe harbor), explaining in detail how the NAAQSbased increments, along with other measures, fulfill the PSD’s

statutory goals (expressed as eight “factors”), as section 166(c)

requires. EPA also explained why it did not promulgate

standards, incremental or otherwise, for nitrogen oxide

compounds other than NO2. Nonetheless, the petitioner

challenges the 2005 PSD Rule on several grounds.

A. Duty to Preserve, Protect and Enhance Air Quality 

The petitioner’s primary objection is that EPA violated its

duty under section 160(2), as incorporated into section 166, to

make a finding that the NOx PSD regulations fulfill the statutory

goal to “preserve, protect and enhance” the air quality in parks
16

and other natural areas. See 42 U.S.C. § 7470(2); see also id.

§ 7401. Additionally, the petitioner argues, EPA could not

reasonably have made such a finding because the increments as

promulgated do not fulfill this goal. We find this doublebarreled challenge unpersuasive.

First, EPA did expressly find that the PSD regulations fulfill

the statutory goal to preserve, protect, and enhance air

quality—among the several goals EPA is called upon to balance.

See Envtl. Def. Fund, 898 F.2d at 189 (“subsection (c)

commands a broad weighing of factors”). In particular EPA

must, as it recognized in the 2005 Rule, see 70 Fed. Reg. at

59,588, balance the potentially conflicting goals in subsections

160(2) and 160(3) to protect air quality and to promote

economic growth. See 898 F.2d at 184 (“The stated purpose of

these ‘PSD’ provisions was (roughly) to protect the air quality

in national parks and similar areas of special scenic or

recreational value, and in areas where pollution was within the

national ambient standards, while assuring economic growth

consistent with such protection.” (citing 42 U.S.C. § 7470)); id

at 187-88 (“ ‘protectiveness’ reading of subsection (d) escapes

the extreme intractability of the optimality reading, but it

accomplishes this only by slighting the ‘economic growth’ goal

of § 160”); see also NRDC v. EPA, 937 F.2d 641, 645-46 (D.C.

Cir. 1991) (“Nothing in the legislative history undermines the

inference that Congress believed that its PSD provisions should

balance the values of clean air, on the one hand, and economic

development and productivity, on the other, and much confirms

it.”). And this is precisely what EPA did. The 2005 Rule

includes an extensive explanation of how EPA balanced the

eight statutory factors and how the repromulgated regulations

satisfy various of them. See 70 Fed. Reg. at 59,596-99. Of

particular importance here, EPA expressly found that the

statutory goal to preserve, protect and enhance air quality is

fulfilled through the area classifications system, id. at 59,597,

the AQRV review, id. at 59,597-98, the Additional Impacts
17

Analysis, id. at 59,599, and the use of the BACT standard, id. at

59,599; see supra pp. 8, 13-14.

For the second part of its argument, the petitioner relies

largely on the historical evidence that in the fifteen years since

the Set II increments were first promulgated in 1988, air quality

in parks and natural areas has deteriorated. We see two flaws in

the petitioner’s reasoning.

First, it overlooks the Congress’s apparent intent when it

expressly adopted an increment program for Set I pollutants in

section 163 and authorized EPA to do so for Set II pollutants in

section 166. By its nature, such an increment limitation system

does not reduce existing concentration levels but rather limits

increases. Thus, EPA reasonably viewed the statutory PSD

program as “designed to be a growth management program that

limits the deterioration of air quality beyond baseline levels that

may be caused by the construction of major new and modified

sources.” Id. at 59,589. The petitioner’s real beef is with EPA’s

determination that this goal is met by using the same increment

methodology for Set II pollutants (and NOX in particular) that

the Congress used for Set I and thereby setting the significant

deterioration bar at the same level as the Congress did for Set I.

Given EPA’s adherence to the statute’s requirements, as the

court delineated them in Environmental Defense Fund, we do

not believe that in doing so EPA abused the considerable

discretion that section 166 grants it to establish Set II PSD

measures. 

Second, in the 2005 Rule, EPA noted that the deterioration

that has occurred has not been nationwide but is limited to

specific areas, “primarily in the West,” id. at 59,603, a problem

EPA did not believe could be directly alleviated through the

PSD program because the Congress intended EPA to establish

nationally uniform PSD measures (as the Congress itself

established for Set II pollutants). EPA explained:
18

We continue to believe that the PSD program is intended

to allow the air quality in each area of the country

attaining the NAAQS, and with the same area

classification, to “deteriorate” by the same amount for

each subject pollutant, regardless of the existing air

quality when the increment is initially triggered in a

particular area, as long as such growth allowed within

the constraints of the increment does not cause adverse

impacts on site-specific AQRVs or other important

values. In this way, the PSD increments avoid having a

disproportionate impact on growth that might

disadvantage some communities, recognizing that the

increments in themselves would not address existing

negative impacts but cannot allow significant new

adverse impacts. Congress established the foundation for

uniform national increments when it created increments

for SO2 and PM under section 165 of the Act.

Id. at 59,601 (footnote omitted); see also id. at 59,602 (“[W]e do

not believe it is permissible or appropriate for us to establish

uniform increments at levels so stringent that they prevent any

adverse impact on the most sensitive receptors in any part of the

U.S.”). EPA’s construction of the statute is consistent with the

path the Congress chose in mandating specific uniform national

increments for Set I pollutants in section 163. It is also

supported by the legislative history of section 163, which

indicates that the Congress deliberately selected uniform

increments because it deemed locally individualized increments

to be inequitable. See H.R. Rep. No. 95-294, at 153 (1977)

(expressing belief that “the adoption of increments based on

percentage of the national standards means equity for all areas

of a similar class” and rejecting “suggestions . . . that the

pollution increments should be calculated as a function of

existing levels of pollution in each area” because “the inequities

inherent in such an approach are readily evident”); S. Rep. No.
19

7

In 1990, the Congress amended the PSD to add section 166(f),

which authorizes EPA “to substitute, for the maximum allowable

increases in particulate matter specified in section 7473(b)” a separate

increment limitation for fine particulate matter (“particulate matter

with an aerodynamic diameter smaller than or equal to 10

micrometers”), which “shall be of equal stringency in effect as those

specified in the provision[]for which they are substituted.” 42 U.S.C.

§ 7476(f). 

95-127, at 30 (1977) (“These increments are the same for all

nondeterioration areas, thus providing equity for all areas.”).

B. PSD Regulations for Ozone and Particulate Matter

 Next, the petitioner contends EPA unlawfully “ignored the

contribution of NOX to formation of ozone and fine particulate

matter,” Pet’r Br. at 31, which are secondary pollutants “formed

in part by reactions of NOX emissions with other pollutants in

the atmosphere,” 70 Fed. Reg. at 59,590. We believe that EPA

reasonably justified its decision not to address either fine

particulate matter or ozone in the NOX PSD regulations on the

ground that the statutory PSD provisions require EPA to

establish regulations specific to both fine particulate matter, 42

U.S.C. §§ 7473, 7476(f), and ozone (“photochemical oxidants”),

id. § 7476(a), and EPA intends to do just that in separate

rulemakings.7 The petitioner asserts that EPA has abrogated its

responsibility to do so—having promulgated PSD regulations

for neither pollutant thus far—but, as EPA notes, the petitioner’s

appropriate avenue of relief is to seek by judicial mandate that

EPA conduct those rulemakings within a certain time frame,

which is precisely the procedure Environmental Defense Fund

followed when EPA was slow to repromulgate the regulations

at issue here. See In re Envtl. Def., No. 03-1220 (filed July 31,

2003) (mandamus petition seeking order directing EPA to

complete NOX PSD regulation remand by date certain). 
20

C. Promulgating Only NO2 Increment

Finally, the petitioner asserts EPA arbitrarily adopted

increments for NO2 only, based on the NO2 NAAQS, objecting

in particular to EPA’s decision not to consider other NOX

compounds. In Environmental Defense Fund, the court noted

EPA had “regulated only one nitrogen oxide compound,

nitrogen dioxide or NO2, as this is the only compound for which

it had established an ambient standard,” 898 F.2d at 185, and

concluded that EPA’s basis for choosing NO2 only was

inadequate because “the ‘goals and purposes’ of the PSD

program, set forth in § 160, are not identical to the criteria on

which the ambient standards are based, §§ 108(a) and 109(b), 42

U.S.C. §§ 7408(a), 7409(b),” and “[s]ubsection (c) . . .

commands the Administrator to inquire into a pollutant’s

relation to the goals and purposes of the statute.” Id. at 190.

The court further noted that it found “nothing in the language or

legislative history suggesting that this duty could be satisfied

simply by referencing the ambient standards.” Id. 

On remand, EPA “decided not to add any additional

increments based on other forms of NOX to the existing

increments for NO2.” 70 Fed. Reg. at 59,606. This time,

however, EPA did not rely on a rote conversion of the NO2

NAAQS to a corresponding increment. EPA concluded “it is

not feasible to develop broader-based increments for NO at this

time,” largely because “the available scientific and technical

evidence available for [its] consideration did not exist . . . to

adequately establish a quantifiable relationship between NOX

emissions (NO/NO2) and nitrogen deposition products, including

nitrates.” Id. at 59,606-07. In any event, EPA explained, it is

“not necessary to adopt individual increments for nitrate”

because: (1) “anthropogenic emissions of NOX predominantly

originate as NO and quickly oxidize into NO2,” id. at 59,606; (2)

“the existing NO2 increments, which limit the allowable increase

of NO2 in a given area, serve also to limit the amount of nitrate
21

8

EPA also noted that using the NO2 increment is “ ‘at least as

effective’ as the statutory increments in section 163 of the Act”

because “Congress established statutory increments in section 163 for

only those forms of PM and sulfur oxides for which [EPA] had

promulgated a NAAQS.” 70 Fed. Reg. at 59,606. 

in the atmosphere,” thereby placing “some limit” “on downwind

formations of nitrate compounds as well,” id.; see also Envtl.

Def. Fund, 898 F.2d at 185 n.5 (noting that “regulations of NO2

can also indirectly limit other nitrogen oxide compounds

because atmospheric processes convert NO2 into other nitrogen

oxide compounds” (citing EDF’s comments)); and (3) “ambient

nitrate often exists in the atmosphere in particulate form,”

which, EPA believed, “could be more effectively regulated

under our national [particulate matter] program,” 70 Fed. Reg.

at 59,606.8

 EPA has offered a reasonable scientific justification

for adopting only NO2 increments, and we may not second-guess

its judgment. See Am. Coke & Coal Chems. Inst. v. EPA, 452

F.3d 930, 941-42 (D.C. Cir. 2006) (“The court owes particular

deference to EPA when its rulemakings rest upon matters of

scientific and statistical judgment within the agency's sphere of

special competence and statutory jurisdiction.”) (citing West

Virginia v. EPA, 362 F.3d 861, 871 (D.C. Cir. 2004); Small

Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506,

535 (D.C. Cir. 1983); Kennecott v. EPA, 780 F.2d 445, 447-48

(4th Cir. 1985)). And EPA’s decision is consistent with the

court’s discussion in Environmental Defense Fund. The court

there recognized that, although the petitioner “m[ight] still . . .

make the argument on remand that under subsection (c)

short-term increments or increments for other nitrogen oxide

compounds are needed to ‘protect[ ] air quality values, and

fulfill the goals and purposes’ of the statute,” “[n]evertheless the

ambient standards are the ‘basic measure of air quality under the

[Clean Air Act],’ Proposed Rules, 53 Fed. Reg. at 3700/3, and

the controlling standards by no means exclude any value that is
22

the subject of focus under the PSD provisions.” Envtl. Def.

Fund, 898 F.2d at 190 (emphasis original) (first alteration

added).

In sum, the Congress expressly conferred on EPA broad

discretion to establish PSD limitation measures and EPA did so

in conformance with the statutory directives. Under our

deferential standard of review, we therefore uphold the 2005

Rule for Prevention of Significant Deterioration for Nitrogen

Oxides as a reasonable implementation of the Set II PSD

statutory provisions and, accordingly, deny the petition for

review.

So ordered.
ROGERS, Circuit Judge, concurring: I join the court in

denying the petition challenging the final rule implementing the

program for the Prevention of Significant Deterioration of Air

Quality (“PSD”) for Nitrogen Oxides. 70 Fed. Reg. 59,582

(Oct. 12, 2005) (codified at 40 C.F.R. §§ 51.66, 52.21) (“2005

Rule”). I write separately because the rule sits at the outer

boundary of reasonableness — the “holistic” approach adopted

by EPA in the 2005 Rule is at present less than the sum of its

parts.

In the fifteen years between this court’s remand in

Environmental Defense Fund, Inc. v. EPA, 898 F.2d 183 (D.C.

Cir. 1990), and promulgation of the 2005 Rule, air quality has

deteriorated seriously. See 70 Fed. Reg. at 59,593-95. One of

the express purposes of the PSD program adopted by Congress

in the Clean Air Act Amendments of 1977 was “to preserve,

protect, and enhance the air quality” in national parks,

wilderness areas, and similar scenic and recreational areas. 42

U.S.C. § 7470(2); see Envtl. Def. Fund, 898 F.2d at 184 (citing

42 U.S.C. § 7470); Op. at 1-2. Nonetheless, EPA has chosen “a

growth management” approach designed to “limit[] the

deterioration of air quality,” Op. at 17 (quoting 70 Fed. Reg. at

59,589); see 70 Fed. Reg. at 59,588-89, 59,600, which is not

quite the same as preserving, protecting, and enhancing.

In 1990, the court noted that if EPA had kept to the

statutory two-year deadline for issuing Set II PSD limits and

“piggybacked the PSD increments on the ambient [air quality]

standards . . . , the increments would have been at risk of being

rendered obsolete almost immediately after promulgation.”

Envtl. Def. Fund, 898 F.2d at 190. By waiting fifteen years,

EPA has promulgated a rule with no change in the increments

that may already be obsolete, especially because no other

programs, such as reviews by the Federal Land Manager and

State permitting authority, have prevented substantial

environmental deterioration in the interim, see 70 Fed. Reg. at
2

59,593-95; see also Petitioner’s Reply Br. at 8 & n.4.

EPA deflects petitioner’s individual criticisms of its

approach by responding that its holistic approach “satisf[ies]”

the statutory requirements. See 70 Fed. Reg. at 59,596, 59,605.

No doubt, a holistic approach is permissible. But the parts of a

holistic rule must still comport with the statutory requirements,

and EPA offers no opinion that its balancing approach will

ameliorate the decline in air quality experienced in the last

fifteen years much less enhance air quality, as the statute

contemplates, see 42 U.S.C. § 7470(2). See, e.g., 70 Fed. Reg.

at 59,587-89, 59,610. The court struggles to find such an

opinion. See Op. at 16-17. Despite the requirement to

accommodate both the interests of environmental protection and

economic growth, see 42 U.S.C. § 7470 (2)-(3), EPA has

focused on “maximiz[ing] opportunities for economic growth,”

70 Fed. Reg. at 59,588. Allowing the States to redesignate Class

II areas as Class III, see id. at 59,597; Op. at 12, does not

suggest an accommodation so much as a capitulation to

economic growth at the expense of environmental concerns.

Additionally, to demonstrate that it has met the statutory

requirements, EPA relies on regulatory controls for ozone and

fine particulate matter that it has yet to propose much less

promulgate, see 70 Fed. Reg. at 59,590; Op. at 19. 

To the extent EPA relies in the 2005 Rule on programs to

bring about improvements in the future, e.g., the Clean Air

Interstate Rule (“CAIR”), 70 Fed. Reg. at 59,600, its

interpretation of the statutory goal of enhancement of air quality

as extending only to improving visibility in national parks,

wilderness areas, and other Class I areas and to remedying

violations of PSD increments, id. at 59,589, and its

interpretation of regional increments as inconsistent with

congressional intent, id. at 59,601, means that its chosen holistic

approach bears a heavy burden to fulfill Congress’s mandates,
3

even acknowledging that some of those mandates may require

EPA to balance goals, see Op. at 16; 42 U.S.C. §§ 7470,

7476(c). Although the court may defer to EPA’s judgment that

it is more reasonable to promulgate rules in a separate

proceeding to address the contribution of nitrogen oxides and

other pollutants to the formation of particulate matter and ozone,

to deny the petition for review the court must treat EPA’s

representations as a promise that it will promulgate additional

regulatory controls as a further step in an incremental approach

to fulfill its statutory obligations. See Advocates for Highway &

Auto Safety v. Fed. Motor Carrier Safety Admin., 429 F.3d 1136,

1147 (D.C. Cir. 2005). As a practical matter, the involvement

of interested parties may be necessary to ensure that EPA does

so, much as occurred here when Environmental Defense filed a

petition for a writ of mandamus to compel EPA to respond to the

1990 remand of its rule. See Op. at 19. After fifteen years in

which EPA did not give priority to the PSD program for

nitrogen oxides, its current approach in the 2005 Rule suggests

a less than rigorous enforcement regime to protect, much less

enhance, air quality. 

Nonetheless, as the court observes, EPA has adhered to the

interpretation deemed permissible by the court in 1990, see Op.

at 2, 15, 17, 21; Envtl. Def. Fund, 898 F.2d at 188-89, and

considered the relevant statutory factors, see Op. at 22; 70 Fed.

Reg. at 59,596-99. Additionally, there are expert judgments that

underlie the 2005 Rule, see Op. at 21, and EPA has offered a

minimally cogent explanation of its approach, see id. at 20-22.

Accordingly, the petition for review fails to show that EPA’s

interpretation is not permissible under Chevron U.S.A. Inc. v.

Natural Res. Def. Council, Inc., 467 U.S. 837, 842-44 (1984).