Opinion ID: 187425
Heading Depth: 1
Heading Rank: 4

Heading: 15% VOC Reduction

Text: CAA section 182(b)(1) requires that, for a moderate nonattainment area, “no later than 3 years after November 15, 1990, the State shall submit a revision to the applicable implementation plan to provide for volatile organic compound emission reductions, within 6 years after November 15, 1990, of at least 15 percent from baseline emissions, accounting for any 24 growth in emissions after 1990.” 42 U.S.C. § 7511a(b)(1)(A)(i). CAA section 182(c), (d) and (e) incorporate the 15% VOC reduction requirement for, respectively, “serious,” “severe” and “extreme” nonattainment areas. Id. § 7511a(c)-(e). After the initial six-year period, CAA section 182(c), (d) and (e) impose on the same areas an additional RFP requirement that the SIP be revised so that it “will result in VOC emissions reductions from the baseline emissions . . . [of] at least 3 percent of baseline emissions each year,” “averaged over each consecutive 3-year period beginning 6 years after November 15, 1990, until the attainment date.” Id. § 7511a(c)(2)(B)(i) (imposing requirement on “serious” areas); see id. § 7511a(d), (e) (incorporating 3% reduction requirement for “severe” and “extreme” areas).4 As used in the cited provisions, “the term ‘baseline emissions’ means the total amount of actual VOC or NOx emissions from all anthropogenic sources in the area during the calendar year 1990.” CAA § 182(b)(1)(B), 42 U.S.C. § 7511a(b)(1)(B); see also CAA § 182(c)(2)(B), 42 U.S.C. § 7511a(c)(2)(B).5 In the Phase 2 Rule, the EPA determined that for all moderate and above areas “that had not met the 15 percent VOC emission reduction requirement for the 1-hour standard,” the RFP 15% reduction requirement “would apply” under the 8-hour 4 The statute permits a reduction in “an amount less than 3 percent of such baseline emissions each year, if the State demonstrates to the satisfaction of the Administrator that the plan reflecting such lesser amount includes all measures that can feasibly be implemented in the area, in light of technological achievability.” CAA § 182(c)(2)(B)(ii), 42 U.S.C. § 7511a(c)(2)(B)(ii). 5 Section 182 does not provide for a specific VOC reduction for a moderate area following the initial six-year 15% reduction period. Accordingly, thereafter a moderate area is subject to the general requirement in CAA section 172(c)(2) that “plan provisions shall require reasonable further progress,” 42 U.S.C. § 7502(c)(2). 25 standard. 70 Fed. Reg. at 71,632-33. Conversely, the EPA determined, 8-hour moderate and above areas that had already satisfied the 15% VOC emission reduction for the 1-hour standard will not be subjected a second time to the 15% requirement under the 8-hour standard. Id. at 71,633. Thus, “[a]reas classified under subpart 2 as moderate that had met the 15 percent VOC emission reduction requirement for the 1-hour standard are treated in the final rule like areas covered under subpart 1,” while “[a]reas classified under subpart 2 as serious and above that had met the 15 percent VOC emission reduction requirement for the 1-hour standard would be subject to the RFP requirement in section 172(e) [sic6] and the final rule would require them to obtain an average of 3 percent annual reductions of VOC and/or NOX emissions reductions for the first 6 years after the baseline year and every subsequent 3 years out to their attainment date.” Id. For both the 15% and the 3% reductions RFP requirements, the Phase 2 Rule provides that the RFP periods “would be equivalent to the periods Congress established in subpart 2,” id. at 71,633, running from a new baseline year, i.e., 2002 “for areas designated nonattainment for the 8-hour ozone NAAQS with an effective date of June 15, 2004,” id. at 71,637. First, the NRDC argues that the EPA “illegally waived” Subpart 2’s RFP requirement that each SIP be revised three years after the statute’s effective date to provide for a 15% VOC reduction within 6 years after enactment for all areas classified as “moderate” and above for ozone.7 6 The EPA apparently meant section 172(c), see supra note 5; section 172(e) is the anti-backsliding provision, see infra pp. 43-45. 7 “Ozone, an essential presence in the atmosphere’s stratospheric layer, is dangerous at ground level” and “is formed by the chemical reaction of nitrogen oxides (‘NOX’) with any of a number of volatile 26 As an initial matter, the EPA did not “waive” the 15% requirement but simply determined that, if a State had made the required revision for an area classified as moderate or greater when the one-hour NAAQS took effect, the State did not have to do so a second time after the 8-hour standard took effect. In so doing, the EPA reasonably resolved a statutory ambiguity under step 2 of the framework set out in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). See Natural Res. Def. Council v. EPA, 489 F.3d 1250, 1257 (D.C. Cir. 2007) (“Under Chevron: We first ask ‘whether Congress has directly spoken to the precise question at issue,’ in which case we ‘must give effect to the unambiguously expressed intent of Congress.’ If the ‘statute is silent or ambiguous with respect to the specific issue,’ however, we move to the second step and defer to the agency’s interpretation as long as it is ‘based on a permissible construction of the statute.’ ” (quoting Chevron, 467 U.S. at 842-43) (internal quotation marks omitted)). Accordingly, we reject the NRDC’s challenge to the VOC reduction provision. The NRDC contends that the EPA’s reading of the statute is “untenable” because the statute requires that the SIP provide for a 15% reduction from “baseline emissions”—which the “EPA itself defines . . . for purposes of the 8-hour ozone standard as emissions in 2002, not 1990”—and that the reduction be effected “ ‘within 6 years after’ the baseline year—that is, between 2002 and 2008 for the 8-hour standard.” NRDC Br. at 29. This argument, however, sidesteps the EPA’s rationale for its interpretation. The EPA identified a “gap in the statutory scheme” because “[t]he CAA is silent regarding whether a nonattainment area that implements the 15-percent VOC emission reduction of 42 U.S.C. § 7511a(b)(1)(A) must organic compounds (‘VOCs’), in the presence of sunlight.” S. Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882, 887 (D.C. Cir. 2006). 27 implement that provision a second time if the NAAQS is revised, or instead must implement other RFP provisions that expressly would have applied had there been no revision of the NAAQS.” EPA Br. at 29. The EPA filled this gap by selecting the latter resolution. As the EPA explained in the Phase 2 Rule, while it “believes that the CAA is quite clear that the SIP must provide for a 15 percent reduction in baseline VOC emissions for some period after 1990 in an area subject to section 182(b)(1)(A),” it “disagrees that the CAA plainly requires that the SIP for an area must require a second 15 percent reduction in VOC baseline emissions under a revised ozone standard.” 70 Fed. Reg. at 71,635-36 (first emphasis added); see also id. at 71,634 (“For those areas that have an approved 15 percent plan for their 1-hour ozone SIPs, an additional 15 percent VOC reduction is not necessary.”). Because the EPA ended its statutory analysis with the threshold inquiry whether section 182(b)(1)(A)(i) must be applied a second time under its revised standards (concluding it need not), the Agency did not need to decide how to interpret the term “baseline emissions” or to identify a baseline year for the purpose of so applying the provision. Further, because it had no need to reach these issues, it did not resolve them arbitrarily or capriciously, as the NRDC asserts, by “allowing a select group of nonattainment areas to rely on a different baseline from the distant past.” NRDC Br. at 30-31. Had the EPA required a nonattainment area to undertake a second 15% VOC reduction, it might have been arbitrary to use a different baseline or baseline year from that applicable to areas undertaking the first 15% VOC reduction under the 8-hour standard. But the Agency did not do so and we will not speculate whether it could lawfully have done so. The NRDC also argues that the EPA’s 15% approach is inconsistent with its treatment of section 182(c)(2)(B)(i)’s 3% reduction requirement for serious and above areas in that the “EPA does not read the Act as excusing such 3% continuing 28 emission cuts for serious and above 8-hour nonattainment areas merely because they may have had plans under the 1-hour standard to achieve continuing (i.e. post-1996) cuts of 3%/yr from a 1990 baseline.” NRDC Br. at 30 n.8. The 3% provision, however, is fundamentally different from the 15% provision in that the former does not (as does the latter) establish a one-time reduction requirement but instead imposes a continuing obligation that applies to “each consecutive 3-year period beginning 6 years after November 15, 1990, until the attainment date.” CAA § 182(c)(2)(B), 42 U.S.C. § 7511a(c)(2)(B). Finally, the NRDC asserts that the “EPA cannot override an express statutory command ‘simply by asserting that its preferred approach would be better policy,’ ” NRDC Br. at 30 (quoting Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1089 (D.C. Cir. 1996)), referring to the EPA’s observation that its approach “provides flexibility to States to use a mix of NOx and VOC reductions” under CAA section 172, 42 U.S.C. § 7502, rather than the required VOC-only reductions mandated by CAA section 182(b)(1)(A)(1), 42 U.S.C. § 7511a(b)(1)(A)(1). 70 Fed. Reg. at 71,634. As already explained, however, the EPA’s interpretation does not override an express command but rather resolves an ambiguity. Id. at 71,635-36. In commending the flexibility afforded, the EPA merely offered one more reason why its interpretation of the ambiguous statutory language is reasonable.