Opinion ID: 327524
Heading Depth: 1
Heading Rank: 2

Heading: the national standards of performance for new sources.

Text: 99 Our review of the Administrator's action in promulgating the national standards of performance for new sources 20 is limited to a determination of whether the Administrator's decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2) (A); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). Cf. Union Electric Co. v. Environmental Protection Agency, 515 F.2d 206, at 214 (8th Cir. 1975). As the Supreme Court noted in Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 416, 91 S.Ct. at 823, the scope of this review is a limited one: 100    (T)he court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.    Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency. 101 The new source standards for the corn wet milling subcategory set maximum allowable discharge levels or loads for three pollutant measurements: five-day biochemical oxygen demand (BOD 5), 21 total suspended solids (TSS), 22 and pH. 23 The BOD 5 and TSS load levels are expressed in terms of pounds per thousand standard bushels (MSBu) of corn processed. 24 For BOD 5, the new source standards permit a maximum average of daily values for thirty consecutive calendar days of 20 pounds per MSBu. For TSS, the standards permit a thirty-day average of 10 pounds per MSBu. The maximum allowable discharge level on any single day is three times the thirty-day average, or 60 pounds of BOD 5 and 30 pounds of TSS per MSBu. See 40 C.F.R. § 406.15. 102 The petitioners assert that the new source standards are arbitrary and capricious and are not in accordance with law, because there is no adequate basis in the record for the EPA's conclusion that the standards can be met by utilization of 103    the best available demonstrated control technology, processes, operating methods, or other alternatives   . 104 § 306(a)(1). 105 Specifically, the petitioners contend that the new source standards are predicated on the existence and efficacy of technology which is neither available nor demonstrated within the meaning of the Act. 106 Initially, we must examine the EPA's justification for the new source standards. Those standards are identical to the 1983 guidelines for existing plants. 40 C.F.R. § 406.13. The 1983 guidelines assume the technology available to meet the 1977 guidelines will be supplemented by additional technology in 1983. 25 107 The 1977 guidelines are predicated on a technology consisting essentially of recirculated cooling water, aerated equalization, activated sludge, and good housekeeping practices. 26 The EPA concluded that this technology would be sufficient to permit compliance with the 1977 guidelines, which consist of 50 pounds each of BOD 5 and TSS per MSBu on a thirty-day average, with three times that amount permitted on any single day. See 40 C.F.R. § 406.12. 108 The 1983 guidelines/new source standards are predicated on the availability of the 1977 technology plus the addition of deep bed filtration. 27 The EPA concluded that deep bed filtration will result in the removal of approximately 30 more pounds of BOD 5 and 40 more pounds of TSS per MSBu. 28 109 The correctness of the EPA's conclusion that the new source standards can be met thus hinges on the validity of four intermediate conclusions: (1) that the 1977 technology is demonstrated and available for new plants; (2) that the 1977 technology will be sufficient to remove all but 50 pounds each of BOD 5 and TSS per MSBu; (3) that the incremental deep bed filter technology is demonstrated and available for new plants; and (4) that the incremental technology will be sufficient to remove an additional 30 pounds of BOD 5 and 40 pounds of TSS per MSBu. 110 The petitioners concede that the 1977 technology is available for implementation in new plants. 29 They contend, however, that it will not perform up to EPA expectations and that its use will not bring compliance with the 1977 guidelines. They rest their case on the premise that the CPC Plant at Pekin, Illinois, has not been able to meet the 1977 guidelines, despite its implementation of most of the 1977 technology. Their reliance is misplaced, for the record indicates that the Pekin Plant discharges 6,000 pounds of BOD 5 daily in once-through barometric cooling water without treatment a practice which does not square with the 1977 technology's requirement that cooling water be recirculated and treated. If the Pekin Plant recirculated this cooling water, treated it in accordance with approved technology, and maintained effective in-plant controls, it would, on the basis of the record, be able to meet 1977 discharge guidelines. 111 The EPA, on the other hand, based its conclusions as to the performance capabilities of the 1977 technology on the following reasoning: 112 (1) Data from existing plant operations indicates that the best existing plants have made substantial progress in reducing BOD 5 and TSS by using an activated sludge process plus some in-plant controls; 113 (2) The best existing plants fail to treat large quantities of BOD 5 and TSS because they use barometric condensers and discharge the waste from these condensers directly into receiving waters; 114 (3) By using surface condensers a demonstrated technology the raw effluent could be concentrated and subjected to activated sludge treatment thereby achieving significantly greater BOD 5 and TSS reductions; 115 (4) None of the best known in-plant controls are being used in combination in any one plant; 116 (5) By combining the best known in-plant controls in one plant, greater reductions of BOD 5 and TSS would be achievable; 117 (6) There are no practical reasons which would preclude the implementation of the complete 1977 technology in a new plant. 118 We conclude that the data was sufficient, the projected results were reasonable, and the petitioners have not demonstrated that the EPA made a clear error of judgment in determining that the 1977 technology, when employed in a new plant, would enable it to comply with the 1977 guidelines. 30 119 The remaining question, therefore, is whether the record supports the Administrator's conclusion that the technology necessary to achieve the incremental removal of 30 pounds of BOD 5 and 40 pounds of TSS per MSBu is available for use in new plants. We conclude that it does not. 120 The EPA's supporting documents concede that the deep bed filtration technology has not been demonstrated within the corn wet milling industry. 31 See Development Document at 87, 121. This does not end the inquiry, for new source standards may properly be based on a technology which has been demonstrated outside the industry, if that technology is transferable to it. 32 The EPA contends that deep bed filtration has been proven effective elsewhere and that it is readily transferable to corn wet milling. 121 To base its standards on transfer technology, the EPA must: (1) determine that the transfer technology in this case, deep bed filtration is available outside the industry; (2) determine that the technology is transferable to the industry; and (3) make a reasonable prediction that the technology, if used in the industry, will be capable of removing the increment required by the new source standards. Cf. Portland Cement Association v. Ruckelshaus, 158 U.S.App.D.C. 308, 486 F.2d 375, 391-392 (1973); International Harvester Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 478 F.2d 615, 628-629 (1973). 122 The petitioners concede that deep bed filtration has been successfully used in other industries and in municipal treatment works. They deny, however, that deep bed filtration is adaptable to the corn wet milling industry and deny that the use of such filters in the industry will result in the removal of the incremental 30 pounds of BOD 5 and 40 pounds of TSS per MSBu. The basis for their contention is the fact that corn wet milling industry effluent is subject to shockloads, 33 and contains such high concentrations of suspended solids that clogging of the filtration system is to be expected. 34 123 Given the unique nature of the corn wet milling effluent, and the apparent relevance of its uniqueness to the efficacy of deep bed filtration, 35 the EPA cannot rely on a presumption of transferability of that technology. 36 Its conclusion that the technology is transferable, and its prediction that the use of the technology within the industry will result in removal of the 30 and 40 pound increments must be supported by evidence in the record. 37 The District of Columbia Circuit, in examining new source standards under the Clean Air Act, has stated the matter well: 124    The Administrator may make a projection based on existing technology, though that projection is subject to the restraints of reasonableness and cannot be based on crystal ball inquiry.    (T)he question of availability is partially dependent on lead time, the time in which the technology will have to be available. Since the standards here put into effect will control new plants immediately, as opposed to one or two years in the future, the latitude of projection is correspondingly narrowed. If actual tests are not relied on, but instead a prediction is made, its validity as applied to this case rests on the reliability of (the) prediction and the nature of (the) assumptions. International Harvester, at 45 (155 U.S.App.D.C. at 438, 478 F.2d at 642). 125 Portland Cement Ass'n v. Ruckelshaus, supra, at 391-392. 126 We conclude that the prediction as to the efficacy of deep bed filtration in the corn wet milling industry is not a reasonable one, because there is no support in the record for that prediction. The sum total of the evidence in the record as to the efficacy of deep bed filtration in or outside of the corn wet milling industry consists of the following: 38 127 (1) A statement that deep bed filtration has been used outside the industry for several years, and produces a high quality effluent. Development Document at 121. 128 This statement is not supported in the record and the degree of BOD 5 and TSS reduction obtained by other industries and municipalities is nowhere quantified. 129 (2) Statements that: 130 It is anticipated that the technology of removing biological solids by filtration will improve rapidly   . Id. at 120 (Emphasis supplied.). 131 Deep bed filtration will remove most of the remaining suspended solids   . Id. at 121. 132 (I)t is    felt that the new performance standards can be met with the technology. Id. at 126 (Emphasis supplied.). 133 The technology should significantly reduce the raw waste loads and the new source standards should be achievable. Id. at 127 (Emphasis supplied.). 134 The Clinton Plant should demonstrate the transferability of the technology to the industry. 39 Id. at 121 (Emphasis supplied.). 135 These statements are likewise not supported in the record. We can find no concrete data, test results, literature, or expert opinion tending to support the EPA's feelings, anticipations and prophecies. 136 To the contrary, the EPA originally proposed a 1977 guideline of 35 pounds per MSBu of TSS, only to raise it to 50 pounds in the final regulations, with the following comment: 137    EPA believes that while the 30 lb limit might be attainable, the technology is not yet available to achieve this effluent level on a routine basis.    39 Fed.Reg. 10512 (1974). 40 138 Further doubt is cast on the achievability of the new source standards in a letter sent by the Department of Agriculture to the EPA on July 25, 1973: 139 If the Level II (July 1, 1983) standards are to be applied immediately to any new construction, this would appear to delay any new construction by several years because of recognized lack of proven control and treatment technologies for economically achieving the proposed levels. Is such delay acceptable? 140 It follows that, on the basis of this record, we have no alternative but to reject the new source standards. There remains the question of remedy. The Act directs that the standards should have been promulgated more than one year ago. See § 306(b)(1). We believe that this mandate to proceed expeditiously would not be furthered if we simply held that the new source standards are unacceptable. Accordingly, we remand to the EPA with directions set forth below, and retain jurisdiction pending the remand. See South Terminal Corp. v. Environmental Protection Agency, 504 F.2d 646, 665-667 (1st Cir. 1974); International Harvester Co. v. Ruckelshaus, supra, at 649; Kennecott Copper Corp. v. Environmental Protection Agency, 149 U.S.App.D.C. 231, 462 F.2d 846, 850-851 (1972). Cf. 28 U.S.C. § 2106. 141 The proceedings in the EPA on remand shall be conducted in accordance with the procedural requirements of the Act, except that the time periods shall be shortened so as to permit the EPA to enter its final order in the matter within 120 days. Within that time, the EPA shall either furnish support for the new source standards previously published, or establish new ones which can be achieved with the best available demonstrated control technology. 41 If the petitioners are dissatisfied with the Administrator's final action, they shall have ten days to file with this Court any objections to his final order. In that event, an accelerated briefing schedule shall be arranged with the clerk of this Court to review the Administrator's action. 142 On remand, we instruct the EPA to deal with one other matter which is not adequately covered in the record. Section 306(b)(1)(B) directs the Administrator to consider the issue of costs in adopting new source standards. This consideration is particularly important here, since the record indicates that capital and operating costs may be of more significance in this industry than in some others, due to low profit margins, the highly volatile nature of raw material prices, and competitive substitutes which make it difficult to pass on increased costs to consumers. 42 Compare Portland Cement Ass'n v. Ruckelshaus, supra at 387-388, 390. 143 The current record concerning costs for new sources is unsatisfactory in two major respects. First, the EPA has not projected separate operating and capital cost figures for new plants, but has relied on those prepared with respect to modifying existing plants to comply with the 1983 guidelines. It must correct this defect on remand. It may well be that these costs will be less for new plants than for modified ones, but we cannot assume this to be the case. Second, the EPA based its cost figures on 1971 prices, even though the Development Document and the regulations were published in March of 1974. More current figures than this are available, and should be used by the EPA in setting forth projected capital and operating costs for new plants. 144