Opinion ID: 2804923
Heading Depth: 2
Heading Rank: 1

Heading: Southern Company Services, Inc.

Text: Southern provides regulatory and engineering services for its corporate family, which delivers energy-related services, including electric power, in the states of Alabama, Georgia, Florida, and Mississippi. Southern submitted the declaration of Richard A. Esposito, its Principal Research Geologist, in support of its claim to standing and in support of Carbon Sequestration Council’s claim to representational standing. Esposito’s affidavit describes Southern’s involvement in carbon capture, including testing carbon capture technologies and installing carbon capture equipment on a variety of the electricity generating plants in its corporate family. Among 15 other things, Southern’s corporate family provides supercritical carbon dioxide from several of its plants for geologic sequestration demonstration projects being conducted by the United States Department of Energy. Much of the captured carbon dioxide from the plants is injected into Class V wells, which are authorized for testing experimental technologies such as those involved in geologic sequestration. Decl. of Richard A. Esposito ¶¶ 7–8, 10. Beyond its involvement in testing carbon sequestration technologies using experimental Class V wells, Southern’s corporate family also plans to capture carbon dioxide for use by other companies in enhanced oil recovery and for “other commercial uses.” Id. ¶¶ 13–14. Esposito’s affidavit contends that EPA’s solid waste determination injures Southern by requiring it to incur costs to determine whether its carbon dioxide streams are hazardous. Southern lacks standing because Esposito’s affidavit fails to point to any activity covered by the regulation at issue in this case – namely, the injection of “a supercritical [carbon dioxide] stream . . . into a permitted . . . Class VI well for purposes of [geologic sequestration].” 79 Fed. Reg. at 354. As a result, there is no evidence in the record to support Southern’s claim that the disputed rule injures Southern by requiring it to incur costs related to determining whether its carbon dioxide streams are hazardous waste. Stated simply, the record is devoid of evidence showing that Southern is regulated or otherwise injured by EPA’s solid waste determination. As noted above, Southern has averred that it engages or plans to engage in two assertedly relevant activities: (1) capturing carbon dioxide for use in enhanced oil recovery and “other commercial uses,” and (2) capturing carbon dioxide for injection into Class V experimental wells in connection with 16 geologic sequestration demonstration projects. Neither of these activities is covered by EPA’s solid waste determination. EPA has strictly and clearly limited its solid waste determination to carbon dioxide streams injected into Class VI wells for purposes of geologic sequestration, meaning that any requirement that Southern might have to determine whether its carbon dioxide streams are hazardous is speculative rather than actual or imminent. There is no evidence that Southern operates or plans to operate Class VI wells, or that any of Southern’s business activities are covered by this rule. Petitioners attempt to escape this conclusion by stating that “Southern is harmed by EPA’s decision to include captured supercritical carbon dioxide streams in the definition of ‘solid waste’ because Southern will incur costs to determine if any carbon dioxide stream it captures is a RCRA hazardous waste.” Opening Br. of Petitioners 16. In support of this theory of standing, Southern points to Esposito’s declaration in which he states that “[u]nder the final rule, it will be necessary for anyone who captures carbon dioxide streams from an emission source to determine whether the captured carbon dioxide stream is a ‘hazardous waste’ subject to RCRA.” Decl. of Richard A. Esposito ¶ 18 (emphasis added). This claim finds no support in the record. EPA has made it very clear in its rule, in its brief, and during oral argument before the court that its solid waste determination is limited to supercritical carbon dioxide streams injected into Class VI wells for the purpose of geologic sequestration. The rule does not classify carbon dioxide used in enhanced oil recovery or for experimentation in Class V wells as “solid waste,” and so Esposito’s statement that “anyone who captures carbon dioxide streams from an emission source [must] determine whether the captured 17 carbon dioxide stream is a ‘hazardous waste’” is simply wrong. In a vain attempt to support their position, Esposito and Petitioners selectively quote part of EPA’s proposed rule as saying that “all generators that capture [carbon dioxide] . . . would incur costs to determine if the [carbon dioxide] stream is a RCRA hazardous waste.” See, e.g., Opening Br. of Petitioners 16–17 (quoting 76 Fed. Reg. at 48,089). But Esposito and Petitioners leave out that this quotation comes from the proposed rule’s economic assessment of the possible impact of the rule, in which EPA “assume[d]” that all existing generators capturing carbon would incur costs. 76 Fed. Reg. at 48,089. In the context of the cost-benefit analysis that assumption made sense, because EPA also “assume[d] . . . all generators that capture [carbon dioxide] will . . . send their [carbon dioxide] streams to Class VI wells.” Id. at 48,090. These assumptions do not define the scope of the disputed rule. To the contrary, EPA has stated that it “considers [supercritical carbon dioxide streams] to be a solid waste” only “[o]nce the decision is made that the supercritical [carbon dioxide] stream will be sent to a . . . Class VI well for discard.” 76 Fed. Reg. at 48,078. Since Southern has not stated that it currently or in the future intends to send its carbon dioxide streams to Class VI wells, the rule, by its own terms, does not apply, and Southern will not incur the injuries it claims as a result of EPA’s solid waste determination in this case. With respect to the use of carbon dioxide in commercial activities such as enhanced oil recovery, EPA expressly distinguished such commercial uses of carbon dioxide from the specific, narrow use at issue in this case. EPA made it clear that carbon dioxide used in oil recovery raises issues that “are beyond the scope of this final rule.” 79 Fed. Reg. at 355. 18 The rule concerns only carbon dioxide “streams when they are to be injected into . . . Class VI wells for the purpose of [geologic sequestration].” Id. (emphasis in original). It is no less clear that EPA’s rule does not embrace any determination regarding Class V experimental wells, because EPA explicitly stated in its solid waste determination that the “rule is not intended to affect the status of [carbon dioxide] that is injected into wells other than . . . Class VI wells.” 76 Fed. Reg. at 48,078 & n.16. Counsel for EPA also confirmed at oral argument that the agency’s solid waste determination in this rule did not reach experimental injection into Class V wells. Oral Arg. 24:35. Finally, Petitioners argue that Southern is injured by EPA’s solid waste determination because the company may not always be able to rely on the conditional exclusion included in EPA’s final rule. And, according to Petitioners, this may cause Southern to incur the costs associated with the requirement to make hazardous waste determinations. For example, “Southern may decide to contract for geologic sequestration of some of [its] carbon dioxide . . . through a commingled pipeline system” that will deliver carbon dioxide streams both to Class VI wells and to other uses such as enhanced oil recovery operations. Reply Br. of Petitioners 11. “In that circumstance, Southern will have no way of knowing whether its carbon dioxide stream is actually sequestered in a Class VI well . . . .” Id. EPA contests Southern’s description of the requirements of the conditional exclusion, arguing that Southern would have no difficulty abiding by the exclusion. We need not address this matter, however, because Southern’s claim fails on its own terms. The Esposito affidavit does not say, or even suggest, that Southern is considering entering into such an arrangement. In order to establish standing, a petitioner’s evidentiary submissions “must be more than an 19 ingenious academic exercise in the conceivable.” Alaska Legislative Council v. Babbitt, 181 F.3d 1333, 1339 (D.C. Cir. 1999) (internal quotation marks omitted). Counsel’s unsupported assertions in a Reply Brief are inadequate to meet the burden of proof to demonstrate standing. B. The American Petroleum Institute and Occidental Oil and Gas American Petroleum Institute, a party in this case, attempts to rely on its member Occidental Oil and Gas in support of representational standing. See Public Citizen, Inc. v. Nat’l Highway Traffic Safety Admin., 489 F.3d 1279, 1289 (D.C. Cir. 2007) (“An organization has standing to sue on behalf of its members when, among other things, its members would otherwise have standing to sue in their own right.” (internal quotation marks omitted)). Occidental produces oil and gas in the United States and around the world, occasionally using enhanced oil recovery processes involving the injection of carbon dioxide into underground wells. In support of standing, Occidental submitted the affidavit of Greg Hardin, its Director of Regulatory Affairs. Hardin’s affidavit explains Occidental’s use of carbon dioxide streams in its oil exploration efforts, which involve injecting these streams underground to release trapped oil from porous rock and make the oil flow more easily to the wellhead. The affidavit states that over time virtually all of the injected carbon dioxide becomes permanently trapped underground, occupying the pore space remaining after the oil and gas have been produced. While Hardin acknowledges that the rule under review does not directly cover Occidental’s use of carbon dioxide streams, and further acknowledges that the rule explicitly indicates that EPA’s position is that use of carbon dioxide streams in enhanced oil recovery “would not 20 generally be a waste management activity,” Hardin nevertheless claims that the rule injures Occidental. Decl. of Greg Hardin ¶ 8 (quoting 79 Fed. Reg. at 355). Hardin contends that EPA’s “broad assertion” of authority resulting from the agency’s solid waste determination may presage further regulatory action touching on Occidental’s drilling operations. See id. ¶¶ 8–9. For this reason, Hardin claims that “EPA’s assertion of authority, if left undisturbed, will influence Occidental’s business decisions concerning the expansion of [carbon dioxide enhanced oil recovery] going forward.” Id. ¶ 8. This is insufficient to demonstrate standing. Occidental has not averred that it is engaged in any activity regulated by the narrow rule at issue in this case. Any injury it could claim as a direct result of the regulation would be speculative, because, as demonstrated above, EPA carefully cabined its rule to encompass only the injection of carbon dioxide streams into Class VI wells for purposes of geologic sequestration. Occidental has not claimed any interest in pursuing these regulated activities. Perhaps sensing this problem, Petitioners do not claim that Occidental will incur costs as a direct consequence of EPA’s solid waste determination. Rather, they claim that EPA’s determination “will influence Occidental’s business decisions,” forcing it to incur costs and alter its behavior in anticipation of incremental regulatory action. See Opening Br. of Petitioners 17–18. In support of their position, Petitioners cite Sabre, Inc. v. Department of Transportation, 429 F.3d 1113 (D.C. Cir. 2005). In Sabre, the Department of Transportation (“Department”) issued a rule “unambiguously claim[ing] jurisdiction over” Sabre, the petitioner in that case. Id. at 21 1117. Although that contested claim of jurisdiction did not itself impose any immediate regulatory injuries, this court found that Sabre had standing to challenge the jurisdictional determination because the Department’s statements “indicate[d] a very high probability that it [would] act against a practice that” Sabre had shown, through detailed evidence, it was interested in pursuing. Id. Specifically, the Department “strongly condemn[ed]” Sabre’s desired activity and made clear that it viewed it as “categorically anti-competitive and unfair,” “reject[ing] arguments that [it] may have social benefits.” Id. Because the Department had authority to impose penalties on Sabre without any further action, the court found that, under these circumstances, the Department’s assertion of jurisdiction had “immediate, unavoidable implications for Sabre’s business choices and investments, which constitutes a sufficiently distinct and palpable injury.” Id. at 1118. Because Sabre had “proffered evidence in a sealed supplemental declaration that confirm[ed] the present existence” of business plans that would be interrupted as a result of the Department’s assertion of jurisdiction, the court concluded that the company had met its burden of showing that its “injury [was] actual, not conjectural or hypothetical.” Id. Sabre is clearly inapposite, and gives no support to Occidental’s standing claim here. Unlike that case, in which the agency had unambiguously established jurisdiction over a party, in this case EPA has – as Hardin admits in his affidavit – explicitly declined to assert jurisdiction over the enhanced oil recovery activities engaged in by Occidental. Additionally, the agency’s statements in Sabre explicitly condemned the regulated party’s desired activity and indicated a high likelihood of agency enforcement action. Occidental has faced no such statements from EPA in this case. In fact, EPA has stated its “expectation that [injection of carbon dioxide streams as part of enhanced oil recovery] would not generally 22 be a waste management activity” subject to RCRA. 79 Fed. Reg. at 355. In sum, the record in this case stands in stark contrast to the situation encountered by the regulated party in Sabre. The disputed rule here is indisputably narrow and it does not capture any of Occidental’s business activities. Therefore, Occidental cannot show that EPA’s solid waste determination has “immediate, unavoidable implications” for its business that create a “distinct and palpable injury.” Occidental speculates that its enhanced oil recovery activities may at some ill-defined time in the future be subject to the disputed rule. But there is nothing in the record to support this claim. Standing cannot be “inferred argumentatively,” based on a party’s “(mis)characterization” and “exaggeration of [an agency’s’] findings.” See Advanced Mgmt. Tech., Inc. v. FAA, 211 F.3d 633, 636 (D.C. Cir. 2000) (citation omitted). Occidental surely cannot claim injury sufficient to satisfy the requirements of Article III standing based purely on a speculative concern that EPA may choose to regulate its business at some point in the indefinite future. And any business decisions prompted by its misreading of the solid waste determination cannot reasonably be attributed to EPA. Because Occidental lacks standing, the Institute cannot claim representational standing on its behalf.