Opinion ID: 362872
Heading Depth: 1
Heading Rank: 5

Heading: the agency's interpretation of the statute

Text: 39 Petitioners raise two major statutorily premised arguments in challenging these effluent regulations. First, they claim that the Act, as interpreted by the Supreme Court in DuPont, requires a greater degree of flexibility to vary the general effluent limitations in individual permits than the regulations allow. Second, it is contended that EPA has too severely narrowed the group of factors relevant in determining allowable effluent limitations and in so doing has contravened the will of Congress as expressed in section 304(b)(1)(B), Quoted in note 2 Supra. These two arguments merge to the extent that EPA refuses to allow variances based on the same factors that it also refuses to consider in setting the overall limitations. We find the Agency's statutory interpretation correct in both instances.
40 The Act explicitly includes a variance procedure for use by the permit-granting agencies in deciding how to reflect the EPA's overall 1983 limitations in the effluent permits of specific mills. Section 301(c). No similar variance clause with reference to the 1977 limitations is explicit in the Act. Nonetheless, the Agency consistently has included variance provisions in its regulations setting 1977 limits for the various industries, See United States Steel Corp. v. Train, 556 F.2d 822, 844-45 (7th Cir. 1977), and recently the Supreme Court held that under its understanding of the Act, such a variance provision is legally required: 41 We conclude that the statute authorizes the 1977 limitations as well as the 1983 limitations to be set by regulation, So long as some allowance is made for variations in individual plants, as EPA has done by including a variance clause in its 1977 limitations. 42 DuPont, supra, 430 U.S. at 128, 97 S.Ct. at 975 (emphasis added and footnote omitted). See United States Steel Corp., supra, 556 F.2d at 844-45. 43 Despite the Court's closing phrase, which seems to validate the Agency's actual variance practice, that question was left open in a footnote: 44 We agree with the Court of Appeals, (E. I. duPont de Nemours & Co. v. Train, 541 F.2d 1018, at 1028 (4th Cir. 1976)), that consideration of whether EPA's variance provision has proper scope would be premature. 45 DuPont, supra, 430 U.S. at 128 n. 19, 97 S.Ct. at 975. Thus, while DuPont clearly establishes the necessity of including Some provision for variances in the 1977 limitations, it raises a question as to the justiciability of the provision's specific validity in the context of review of the general set of limitations. 46 Our reading of DuPont and of the cited portion of the lower court opinion in that case leads us to conclude that, while final review of the variance provision must await individual permittees' attempts to utilize it, See note 29 Infra, a threshold review of the provision is a prerequisite to validation of the general limitations. 47 This conclusion is mandated by the narrowness of the rationale relied upon by the Fourth Circuit, and adopted by the Supreme Court, as a basis for avoiding the specifics of the variance question in DuPont : 48 The administration of these (variance) provisions in practice is a matter of speculation at the present. The question will arise when a claim for a variance is made in a permit application. 49 541 F.2d at 1028. Accord, Natural Resources Defense Council, Inc. v. EPA, 537 F.2d 642, 647 (2d Cir. 1976). In the three years that have now elapsed since DuPont was briefed and argued in the Fourth Circuit, however, enough indicia of the Agency's attitude toward the 1977 variance provision under the Act has accumulated so that its administration is anything but a matter of speculation. See especially In re Louisiana-Pacific Corp., 10 E.R.C. 1841 (1977) (Decision of the Administrator of EPA). 50 Petitioners have alleged that these recent indicia contradict the rebuttable presumption of administrative regularity that motivated the Supreme Court and Fourth Circuit in DuPont to allow the limitations to go into effect in advance of final proof that the variance provision was meaningful. In petitioner's view, the indicia point to the complete emasculation by the Agency of its 1977 variance provision. Accordingly, because the Supreme Court premised the Agency's power to set 1977 limitations by regulation on the availability of a meaningful variance provision, See pp. ---- - ---- of 191 U.S.App.D.C., pp. 1033-1034 of 590 F.2d Infra, and because the presumption that its variance will be applied meaningfully is no longer necessitated by a lack of concrete information, we cannot approve the regulations without finding that they include a sufficiently flexible variance provision. 28 Since its own decision in DuPont, the Fourth Circuit has reached a similar conclusion and has undertaken to review the variance clause in certain effluent limitations for electric generating plants. Appalachian Power Co. v. Train, 545 F.2d 1351, 1358-60 & n. 22, Modified, 545 F.2d 1380 (4th Cir. 1976). 51 We stress, however, that our view of the variance provision in the paper industry limitations before us, while indispensable in reviewing those limitations, is quite narrow. It seeks only to establish that the provision can be applied with enough flexibility to support the general rulemaking effort. We consequently take no position on its application in specific cases, or on its precise interpretation, beyond insisting that it meet this minimum-flexibility requirement. 29 52 The limited question before us, therefore, is whether the variance provision included in the 1977 paper industry limitations now under review has a capacity for the degree of flexibility that DuPont deemed crucial to the legality of any general set of industry-wide effluent limitations under the Act. Answering that question requires an examination of the Court's analysis in DuPont. 53 Prior to that case, the circuits had disagreed over whether the Act even permitted EPA to bind individual point sources with general regulations under section 301 or whether the binding limits were to be set in every case by the permit-issuing agencies with jurisdiction in each of the 50 states. Compare CPC Int'l, Inc. v. Train, 515 F.2d 1032, 1038 (8th Cir. 1975), With, e. g., American Frozen Food Inst., supra. The Supreme Court upheld the Agency's assertion of authority to issue binding, general limitations. It started with the observation that as to the 1983 limitations, section 301 of the Act leaves no doubt that these (general) limitations are to be set by regulation. DuPont, supra, 430 U.S. at 126, 97 S.Ct. at 974. 54 Noting, however, that (d)ifferent language is used in § 301 with respect to the 1977 limitations, Id. at 127, 97 S.Ct. at 9741, See id. at 133-34 n. 24, 97 S.Ct. 965, the Court nonetheless decided that two sets of limitations could be established by the same procedures, so long as some allowance is made for variations in individual plants in the 1977 limitations. Id. at 127-28, 97 S.Ct. 965. The Court apparently insisted upon reading a variance requirement into section 301's provisions with respect to the 1977 limitations in order to make those provisions coextensive with the section's 1983 provisions which do include a variance requirement, section 301(c) and to unambiguously invest the Agency with rulemaking authority. 430 U.S. at 127, 97 S.Ct. 965. 55 The importance that the Court assigned to a meaningful variance as a prerequisite to valid general limitations may be seen first in its use of the mandatory phrase so long as. Moreover, in the same case the Court unequivocally refused to read a variance requirement into the Act's provisions governing effluent regulations for Newly built plants. 430 U.S. at 137-39, 97 S.Ct. 965. Here the Court found that Congress intended these regulations to be absolute prohibitions, Id. at 138, 97 S.Ct. at 980 a finding it did not make with respect to the 1977 limitations despite the Act's failure explicitly to provide for variances therefrom. Finally, the Court emphasized the need for a meaningful variance when it argued that giving EPA the power to set general regulations would not undermine the Act's intent to give the states, through the permit-granting agencies, an important role in administering the Act. The Court subscribed to the view that, by leaving the granting of variances to the state agencies in the first instance, the significance of their role would be preserved. Id. at 134 n. 24, 97 S.Ct. 965, Citing American Meat Inst. v. EPA, 526 F.2d 442, 452 (7th Cir. 1975). Accord, American Paper Inst., supra, 177 U.S.App.D.C. at 190, 543 F.2d at 337. See generally Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 78-87, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975). Because the states can only grant variances that conform to EPA's interpretation of its variance provision, See In re Louisiana-Pacific Corp., supra, the states' role could still be severely undercut if the Agency were to interpret the variance allowance so narrowly as to remove its effect. 56 The motivating force in DuPont was the Court's desire to overcome the highly anomalous result that would attend a reading of section 301 to require a different pattern of promulgation for the 1977 limitations than the one so clearly laid out for the 1983 limitations. Hence, the Act was read, despite its nonparallel language, to establish the same promulgation procedures for both sets of limitations and, accordingly, to require a variance provision under both. At minimum, therefore, DuPont indicates that the Agency must give permittees the ability to secure variances from the 1977 limitations analogous to their statutorily provided ability to secure the same with respect to the 1983 standards. 30 57 Section 301(c) of the Act allows a modification of the general 1983 limitations in section 301(b)(2)(A) 58 upon a showing . . . that (a variance) (1) will represent the maximum use of technology within the economic capability of the owner or operator; and (2) will result in reasonable further progress toward the elimination of the discharge of pollutants. 31 59 The crucial language here appears to be technology within the Economic capability of the owner. This language clearly harks back to the best available technology Economically achievable for such category (of point sources) language in section 301(b)(2)(A) which provides for the establishment of general 1983 limitations. 32 In other words, section 301(c) (if properly invoked) authorizes the Agency to relieve a particular point source operator from any demands that the Act does not allow the Agency to make of the industry generally. That is to say, it may relieve him from the requirement of using more than the best available technology economically achievable (BATEA). Even the second qualification in section 301(c), that the variance may not halt progress toward eliminating pollution, tracks language in section 301(b)(2)(A) requiring that BATEA result in reasonable further progress toward the national goal of eliminating the discharge of all pollutants. See note 32 Supra. 60 Furthermore, the Act quite explicitly lays out the minimum factors that the Agency must consider in identifying BATEA. Those factors, referred to in section 301(b)(2)(A), are found in section 304(b)(2)(B). 33 As such, it seems clear that in deciding under section 301(c) whether the variance sought by a mill owner represent(s) the maximum use of technology within the economic capability of (that) owner, the permit-granting agency, and the EPA in supervising that agency, must consider the factors laid out in section 304(b)(2)(B). 61 Analogously, the 1977 variance provision must at minimum allow a petitioning mill operator to seek a dispensation from any limitation that, as a whole, demands more of him than section 301(b)(1)(A), the 1977 limitation provision, allows EPA to demand of the industry as a whole. Although this formulation ensures a meaningful variance, it should be noted that it is not a license for avoidance of the Act's strict pollution control requirements. It simply allows individual operators to argue, that, given the overall impact of an effluent limitation on their operations, they are faced with Stricter requirements than the Act authorizes EPA to place on the industry as a whole. 34 62 More specifically, section 301(b)(1)(A), as interpreted in DuPont, requires the application of the best practicable control technology currently available (BPCTCA) for each industrial subcategory. See note 1 Supra. Moreover, it, too, refers to a portion of section 304 that enumerates the factors relevant in setting BPCTCA. Section 304(b)(1)(B); See note 2 Supra. Under DuPont, therefore, a variance provision should allow the state agencies and EPA to excuse mill operators from making more than the maximum use of technology practicably available to them. Pursuant to section 304(b)(1)(B), the outlines of practicability in each case depend upon the total cost (to the operator) of application of technology in relation to the effluent reduction benefits to be achieved by that technology as well as upon the age of (the mill operator's) equipment . . . the process employed (by him), the engineering aspects of the application (at the mill) of various types of control techniques, process changes (and) non-water quality environmental impact (of the technology specified for his mill) (including energy requirements). The precise interrelationship of these factors in making variance decisions, moreover, basically should track the scope and interrelationship that we have assigned them in developing the general, industry-wide limitations. See pp. ---- - ---- of 191 U.S.App.D.C., pp. 1041-1053 of 590 F.2d Infra. 63 As will be explained more thoroughly Infra, this approach clearly rules out the necessity of considering local receiving water quality in making variance decisions. See In re Louisiana-Pacific, supra ; pp. ---- - ---- of 191 U.S.App.D.C., pp. 1041-1044 of 590 F.2d Infra. A more difficult question surrounds the relevance and importance of economic hardship. This issue is crucial, of course, because those mill operators who are most hard pressed economically will be the most likely to pursue vigorous variance demands. Moreover, when faced with the ultimate threat of economic hardship plant closure, with attendant unemployment and regional economic dislocation the local permit-granting agency will find it difficult to resist a plea for a variance. 64 We have explored this issue carefully, and we express our conclusion emphatically: Although the Total cost  of pollution control at the petitioning mill must be considered under a satisfactory variance provision, it is only relevant in relation to the effluent reduction benefits to be achieved at that mill, section 304(b)(1)(B); So long as those costs relative to the pollution reduction gains are not different from those that may be imposed on the industry as a whole, the difficulty, or in fact the inability, of the operator to absorb the costs need not control the variance decision. 35 65 We reach this conclusion under the statute only after satisfying ourselves that the legislative intent is as clear as the result is harsh. Most prominently, the Act's supporters in both Houses acknowledged and accepted the possibility that its 1977 requirements might cause individual plants to go out of business. E. g., Legislative History, at 231 (remarks of Rep. Jones); Id. at 1282 (remarks of Sen. Bentsen). They self-consciously made the legislative determination that the health and safety gains that achievement of the Act's aspirations would bring to future generations will in some cases outweigh the economic dislocation it causes to the present generation. See American Iron & Steel Inst., supra, 526 F.2d at 1052. They accordingly authorized EPA to impose effluent restrictions that they knew might shut down parts of regulated industries including, specifically, paper mills. See Legislative History, at 718-21 (statement of Rep. Meeds). The Agency, in turn, has projected that its limitations for the paper industry may shut down eight marginal mills, See p. ---- of 191 U.S.App.D.C., p. 1047 of 590 F.2d Infra, and the variance provision need not protect these or other individuals from impacts authorized for the industry as a whole. 66 Even more specifically, at least one legislator considered and rejected giving variances to pollution controls based on (such purely) economic grounds as 67 (w)hen the otherwise healthy small independent firm is forced to close, the tax base of the community is further weakened, and workers and families are forced back into already congested metropolitan areas . . .. 68 Legislative History, at 1355 (remarks of Sen. Nelson). Despite the appeal of economic hardship variances in circumstances such as those described, Senator Nelson argued, they could become a tool used by powerful political interests to obtain so many exemptions on the flimsiest of pretenses (that) tragic delay in stopping the destruction of our environment would result. Id. Hence, he opposed such variances and chose to rely on other means of protecting businesses from effluent-control-induced bankruptcy. See id., discussing section 8 of the Act, Amending Small Business Act, § 7, 15 U.S.C. § 636, Now codified in 15 U.S.C. § 636(g) (authorizing low interest loans to aid small businesses in meeting the Act's requirements). 36 69 We come, then, to the question of whether the actual variance provision included in the Phase II paper industry limitations, as interpreted, is capable of the minimum degree of flexibility just described.[[ 37 That provision notes that the EPA was at pains to account for all available data such as age and size of plant . . . energy requirements and Costs  relevant to effluent levels but acknowledges the inevitable possibility that data which would affect these limitations have not been considered (emphasis added). It accordingly allows a discharger to secure a permit containing less stringent limitations than those established by the EPA, if the discharger can show that factors related to the equipment or facilities involved, the process applied, or Other such factors related to such discharger are Fundamentally different from the factors considered in the establishment of the guidelines (emphasis added). 70 Not surprisingly, EPA's likely interpretation of these terms, and particularly the parts of it italicized above, have occasioned some dispute. The Agency itself at one point accepted public comments on this type of 1977 variance under the Act, looking toward a regulation definitively interpreting it. 39 Fed.Reg. 28926 (1974). No such regulation has been forthcoming, however. 71 Nonetheless, in 1974, the Agency's General Counsel instructed Agency personnel that the other such factors language in the typical 1977 variance provision quoted above did not envision the consideration of any Economic Factors. He accordingly limited the provision's application to cases involving fundamentally different factors of a Technical and Engineering nature. Memorandum to Regional Administrators of EPA, 39 Fed.Reg. 30073 (1974) (emphasis added). It was this interpretation that the Fourth Circuit disapproved of in Appalachian Power Co., supra, discussed in notes 30 & 35 Supra. Because the General Counsel's 1974 opinion relied exclusively on Congress's failure to include a variance procedure for the 1977 limitations we, too, would be inclined to find the opinion inconsistent with the Act, as now authoritatively interpreted in DuPont to include a meaningful variance requirement. See Currie, Congress, The Court, and Water Pollution, 1977 S.Ct.Rev. 39, 53-56. Nonetheless, we need not reach that question in light of the Agency's recent reinterpretation and expansion of the variance provision. 72 As of September 13, 1977, when EPA filed its brief in this case, the Agency still adhered to its 1974 interpretation of the variance provision to exclude consideration of economic factors. Brief for Respondent at 17-20. Moreover, that brief suggested that the provision's fundamental difference language required that the applicant demonstrate a Qualitatively different factor than any considered by the Agency in its rulemaking before a variance could be granted. Id. at 12-17. That is to say, if the Agency had considered data relevant, for example, to climate, or to energy needs for sludge disposal, the brief indicated that no variance based on those factors could subsequently issue, even if the climate or energy situation facing the applicant was Quantitatively different from the range of such situations considered by the Agency. 73 Nonetheless, two days after the brief was filed in this case, the Administrator of the EPA handed down a decision in In re Louisiana-Pacific, supra, which seems significantly to have liberalized the Agency's approach to the variance provision. 38 In essence, this decision tracked the analysis in DuPont and thereby expanded the range of factors recognized by EPA as relevant to the granting of a variance to include All of those factors listed in section 304(b)(1)(B): 74 My authority to provide for variances from (BPCTCA) flows from, and is inherent in, my authority to promulgate effluent limitations guidelines under Sections 301(b)(1)(A) and 304(b)(1) . . .. Variances can only be based on fundamental differences in factors which are appropriate to (the general) technology-based regulations and limitations derived through the variance process must still meet the congressional definition of best practicable control technology. 75 . . . . This does not mean that where a fundamental difference can be shown with respect to a factor other than (one not listed in section 304(b)(1)) a variance may not be appropriate. 76 Id. at 1851. See also id. at 1847 (describing section 304(b) of the Act as the source of factors which must be taken into account in developing (the general) industrial effluent limitations . . ..). 77 Consistent with his reliance on section 304(b), the Administrator clearly broke with the 1974 opinion of the General Counsel and cited such nontechnical factors relevant to the 1977 variances as energy requirements, Id. at 1851, raw materials, Id. at 1846 n. 9, non-water quality environmental impacts, such as land and air pollution from sludge disposal or burning, Id. at 1850-51 & n. 22, 1852-53 & n. 30, and even such economic factors as compliance costs, Id. at 1051-52 & n. 27. 39 As a matter of the potentially relevant factors, therefore, the Agency's interpretation has been brought into line with what we believe are the dictates of DuPont, and on that score we find the variance clause capable of the requisite minimum degree of flexibility. 78 The Louisiana-Pacific decision also clarifies the Agency's position with respect to the meaning of the fundamentally different language in the variance clause. First, it makes clear that, if an individual operator demonstrates a substantial( ) Id. at 1851, or fundamental difference in a section 304(b)(1)(B) factor vis-a-vis the Agency's regulatory findings about the factor on a national basis, a variance will be allowed. Id. at 1851 n. 25, 1852-53. Since EPA must, and claims that it did, consider all of the section 304(b)(1)(B) factors in setting the general limitations, the Administrator's decision indicates that factors already considered during rulemaking can, and in fact must, be considered during variance proceedings, so long as the requisite difference is shown. Here again, the degree of flexibility necessary to justify EPA in setting general 1977 limitations is achieved, and variances are not restricted to qualitatively different circumstances from those considered by EPA during rulemaking. 79 The remaining question, therefore, concerns the requirement that the difference between the individual and national situations (whether qualitative or quantitative) is fundamental. None of the petitioners in this case takes issue with the fundamental difference language so long as it is not used to preclude consideration of any of the section 304(b)(1)(B) factors. Petitioners realize that such a requirement, along with the allocation of the burden of proof to the variance applicant, assures that the pin-hole safety valve envisioned in the Act and DuPont does not become a yawning loophole. E. g., Joint Brief for Petitioners Addressing Common Issues, at 24. 80 We agree with the parties to these petitions that the fundamentality requirement does not deprive the variance provision before us of the minimum potential for flexibility required by DuPont. Although the variance must prevent the regulations from having a greater overall impact on an individual mill than the Act authorizes the general regulations to have on the industry, the one designed by EPA for use in its industry-wide limitations for 1977 accomplishes this goal. Because EPA, in devising the limitations, undertook a meticulous effort to obtain all relevant information from all available sources including the industry itself, and attempted to account for that information in all its diversity, the Agency has built a significant degree of flexibility into the regulations themselves. This flexibility is reflected in the 16 subcategories and 66 subdivisions thereof, as well as in the establishment of maximum single-day, and 30-day-average, limits that are much higher than the yearly-average limits that the Agency has found within the technological reach of the industry. 81 Thus, to a great degree, the Agency has accounted for cross-industry, and even cross-subcategory, differences in establishing the limits. Allowing for variances based on slight or moderate differentials at individual plants would accordingly ignore the liberality that is already built into the system. It would allow for variances, when the impact on an individual did not exceed the range of impacts considered by the Agency for the industry generally. 82 Moreover, without the fundamentality requirement the rulemaking process could be shortcircuited. As discussed earlier, Congress has placed EPA under the burden of almost instantaneously establishing comprehensive regulations aimed at achieving a monumental goal. That effort must proceed in advance of the availability of much relevant data. If the regulations could be ignored every time a mill owner who did not produce data from his operation during rulemaking suddenly develops the facts and finds them somewhat different from the ones available to the Agency, the achievement of the congressional goals would be pushed far beyond the time periods established in the Act. 83 Finally, the Agency, without destroying the necessary flexibility, may insist upon a fundamental difference as to one or even several individual factors, in order to account for the fact that each limit is the product of consideration of myriad factors, each of which may be expected to vary from plant to plant. As noted earlier, a variance only need be granted when the Overall situation facing an individual operator differs from the overall situation of the industry. See note 34 Supra and accompanying text. The Agency has properly adopted an approach that focuses on only one or a few of the relevant factors but sets a high differential standard therefor in order to relieve itself of having to analyze all of the relevant factors in every variance case to achieve the Overall differential picture. 84 In sum, the most recent delineation by the Agency of its 1977 variance policy under the Act convinces us that its policy is Capable of sufficient flexibility to buttress its claim of authority to limit 1977 effluent discharges by way of general regulations. We emphasize, once more, however, that this conclusion is inextricably linked to the Agency's current interpretation of its variance provision, and that, while crucial to our affirmance of the regulations as a whole, it implies no opinion on the specifics of individual variance applications.
85 EPA's consideration of the factors bearing on the best practicable technology currently available (BPCTCA) has inspired several challenges from petitioners. Some of these challenges concern the Agency's refusal to consider receiving water quality, while others concern EPA's manner of assessing the factors that all agree must be considered: cost and nonwater environmental impacts. We uphold the Agency's interpretation and application of the statute against both sets of challenges.
86 Some of the paper mills that must meet the effluent limitations under review discharge their effluents into the Pacific Ocean. Petitioners contend that the ocean can dilute or naturally treat effluent, and that EPA must take this capacity of the ocean (receiving water capacity) into account in a variety of ways. 40 They urge what they term common sense, I. e., that because the amounts of pollutant involved are small in comparison to bodies of water as vast as Puget Sound or the Pacific Ocean, they should not have to spend heavily on treatment equipment, or to increase their energy requirements and sludge levels, in order to treat wastes that the ocean could dilute or absorb. 41 87 EPA's secondary response to this claim was that pollution is far from harmless, even when disposed of in the largest bodies of water. As congressional testimony indicated, the Great Lakes, Puget Sound, and even areas of the Atlantic Ocean have been seriously injured by water pollution. 42 Even if the ocean can handle ordinary wastes, ocean life may be vulnerable to toxic compounds that typically accompany those wastes. 43 In the main, however, EPA simply asserted that the issue of receiving water capacity could not be raised in setting effluent limitations because Congress had ruled it out. We have examined the previous legislation in this area, and the 1972 Act's wording, legislative history, and policies, as underscored by its 1977 amendments. These sources, which were thoroughly analyzed in a recent opinion of the administrator of the Agency, fully support EPA's construction of the Act. 44 They make clear that based on long experience, and aware of the limits of technological knowledge and administrative flexibility, Congress made the deliberate decision to rule out arguments based on receiving water capacity. 88 The earliest version of the Federal Water Pollution Control Act was passed in 1948 and amended five times before 1972. Throughout that 24 year period, Congress attempted to use receiving water quality as a basis for setting pollution standards. W. Rodgers, Environmental Law 355-57 (1977). At the end of that period, Congress realized not only that its water pollution efforts until then had failed, but also that reliance on receiving water capacity as a crucial test for permissible pollution levels had contributed greatly to that failure. EPA v. State Water Resources Control Board, 426 U.S. 200, 202, 96 S.Ct. 2022, 48 L.Ed.2d 578 (1976). 45 89 Based on this experience, Congress adopted a new approach in 1972. Under the Act, a discharger's performance is . . . measured against strict technology-based effluent limitations specified levels of treatment to which it must conform, rather than against limitations derived from water quality standards to which it and other polluters must collectively conform. Id. at 204-05, 96 S.Ct. at 2024 (footnotes omitted). See Save the Bay, Inc. v. EPA, 556 F.2d 1282, 1284 (5th Cir. 1977); American Frozen Foods Inst., supra, 176 U.S.App.D.C. at 113, 539 F.2d at 115. 90 This new approach reflected developing views on practicality and rights. Congress concluded that water pollution seriously harmed the environment, and that although the cost of control would be heavy, the nation would benefit from controlling that pollution. Yet scientific uncertainties made it difficult to assess the benefits to particular bodies of receiving water. Even if the federal government eventually could succeed at the task at which had failed for 24 years and thus could determine benefits and devise water quality standards, Congress concluded that the requisite further delay was too long for the nation to wait. Note, The Federal Water Pollution Control Act Amendments of 1972: Ambiguity as A Control Device, 10 Harv.J.Legis. 565, 571-72 (1973). 91 Moreover, by eliminating the issue of the capacity of particular bodies of receiving water, Congress made nationwide uniformity in effluent regulation possible. Congress considered uniformity vital to free the states from the temptation of relaxing local limitations in order to woo or keep industrial facilities. 46 In addition, national uniformity made pollution clean-up possible without engaging in the divisive task of favoring some regions of the country over others. 92 More fundamentally, the new approach implemented changing views as to the relative rights of the public and of industrial polluters. Hitherto, the right of the polluter was pre-eminent, unless the damage caused by pollution could be proven. Henceforth, the right of the public to a clean environment would be pre-eminent, unless pollution treatment was impractical or unachievable. The Senate Committee declared that (t)he use of any river, lake, stream or ocean as a waste treatment system is unacceptable regardless of the measurable impact of the waste on the body of water in question. Legislative History at 1425 (Senate Report). The Conference Report stated that the Act specifically bans pollution dilution as an alternative to waste treatment. Id. at 284. This new view of relative rights was based in part on the hard-nosed assessment of our scientific ignorance: we know so little about the ultimate consequences of injection of new matter into water that (the Act requires) a presumption of pollution. . . . Id. at 1332 (remarks of Sen. Buckley). It also was based on the widely shared conviction that the nation's quality of life depended on its natural bounty, and that it was worth incurring heavy cost to preserve that bounty for future generations. 93 The Act reflects the new approach in a number of provisions. As noted, its goal was Zero discharge of pollutants by 1985, section 101(a)(1), 33 U.S.C. § 1251(a)(1), Not discharges at acceptable or tolerable levels for receiving water. The rest of the statute authorize(s) a series of steps to be taken to achieve (that) goal, DuPont, supra, 430 U.S. at 116, 97 S.Ct. at 969. It defines pollution, pollutant, discharge of a pollutant, and effluent limitation in terms of any addition to water that alters its chemical, physical, biological, (or) radiological integrity; it does not specify additions that diminish the quality of the receiving water. 47 In only one limited instance, thermal pollution, is receiving water capacity to be considered in relaxing standards, and the section allowing such consideration was drafted as a clear exception. Section 316(a) of the Act, 33 U.S.C. § 1326(a). Otherwise, receiving water quality was to be considered only in setting More stringent standards than effluent limitations otherwise would prescribe. Section 301(b)(1)(C) of the Act, 33 U.S.C. § 1311(b)(1)(C) (emphasis added). 94 The Act was passed with an expectation of mid-course corrections, Legislative History, at 175 (statement of Sen. Muskie), and in 1977 Congress amended the Act, although generally holding to the same tack set five years earlier. Pub.L. No. 95-217, 91 Stat. 1584. Notably, during those five years, representatives of the paper industry had appeared before Congress and urged it to Change the Act and to incorporate receiving water capacity as a consideration. See, e. g., Hearings before the Subcomm. on Environmental Pollution of the Senate Comm. on Environment and Public Works, 95th Cong., 1st Sess., pt. 3, at 193, 195, 540. Nonetheless, Congress was satisfied with this element of the statutory scheme. Except for a provision specifically aimed at discharges from publicly owned treatment plants, section 301(h) of the Act, 33 U.S.C. § 1311(h), 48 it resolved in the recent amendments to continue regulating discharges into all receiving waters alike. 49 95 Our experience with litigation under the Act, and particularly with this case, emphasizes the weight of Congress' policies. Even without receiving water capacity as an issue to delay it, EPA was late in promulgating these regulations. See pp. ---- - ---- of --- U.S.App.D.C., pp. 1020-1024 of 590 F.2d Supra. We have wrestled with the problems of weighing technological imponderables and can understand the greater difficulties that would have arisen if the receiving water issues involving even greater imponderables had also been involved. Historically, the paper industry itself, and particularly the sulfite process sector, avoided the impact of regulation because of the difficulty of proving that its discharges adversely affected receiving water. 50 96 Under the new statutory scheme, Congress clearly intended us to avoid such problems of proof so that a set of regulations with enforceable impact is possible. The dangers of ignoring this congressional mandate are clearly revealed by the one experiment in the Act with allowing consideration of receiving water capacity. As we have noted, thermal pollution regulation is the only area where the 1972 Act explicitly allowed receiving water capacity to continue as an issue. In reviewing the results of that experiment during consideration of the recent amendments to the Act, Congress found that the water capacity issue had led to a regulatory breakdown. Heat has thus become an unregulated pollutant, clearly not the intent of the Congress. . . . That limited exemption has been turned into a gaping loophole. S.Rep. No. 370, 95th Cong., 1st Sess. 8, Reprinted in (1977) U.S.Code Cong. & Admin.News, pp. 4326, 4334. Given the clarity of Congress' desire not to allow the receiving water capacity loophole to engulf its overall regulatory efforts in this area, we affirm the Agency's refusal to consider water quality in setting its limitations.
97 Petitioners also challenge EPA's manner of assessing two factors that all parties agree must be considered: cost and non-water quality environmental impacts. They contend that the Agency should have more carefully balanced costs versus the effluent reduction benefits of the regulations, and that it should have also balanced those benefits against the non-water quality environmental impacts to arrive at a net environmental benefit conclusion. Petitioners base their arguments on certain comments made by the Conferees for the Act, See notes 52 & 67 Infra, and on the fact that the Act lists non-water quality environmental impacts as a factor the Agency must take into account.In order to discuss petitioners' challenges, we must first identify the relevant statutory standard. Section 304(b)(1)(B) of the Act, 33 U.S.C. § 1314(b)(1)(B), identifies the factors bearing on BPCTCA in two groups. 51 First, the factors shall 98 include consideration of the total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application, 99 and second, they 100 shall also take into account the age of equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, non-water quality environmental impact (including energy requirements), and such other factors as the Administrator deems appropriate(.) 101 See note 2 Supra. 102 The first group consists of two factors that EPA must compare: total cost versus effluent reduction benefits. We shall call these the comparison factors. The other group is a list of many factors that EPA must take into account: age, process, engineering aspects, process changes, environmental impacts (including energy), and any others EPA deems appropriate. We shall call these the consideration factors. Notably, section 304(b)(2)(B) of the Act, 33 U.S.C. § 1314(b)(2)(B), which delineates the factors relevant to setting 1983 BATEA limitations, tracks the 1977 BPCTCA provision before us except in one regard: in the 1983 section, All factors, including costs and benefits, are consideration factors, and no factors are separated out for comparison. 103 Based on our examination of the statutory language and the legislative history, we conclude that Congress mandated a particular structure and weight for the 1977 comparison factors, that is to say, a limited balancing test. 52 In contrast, Congress did not mandate any particular structure or weight for the many consideration factors. Rather, it left EPA with discretion to decide how to account for the consideration factors, and how much weight to give each factor. In response to these divergent congressional approaches, we conclude that, on the one hand, we should examine EPA's treatment of cost and benefit under the 1977 standard to assure that the Agency complied with Congress' limited balancing directive. See note 52 Supra. On the other hand, our scrutiny of the Agency's treatment of the several consideration factors seeks to assure that the Agency informed itself as to their magnitude, and reached its own express and considered conclusion about their bearing. More particularly, we do not believe that EPA is required to use any specific structure such as a balancing test in assessing the consideration factors, nor do we believe that EPA is required to give each consideration factor any specific weight. 104 Our conclusions are based initially on the section's wording and apparent logic. By singling out two factors (the comparison factors) for separate treatment, and by requiring that they be considered in relation to each other, Congress elevated them to a level of greater attention and rigor. Moreover, the comparison factors are a closed set of two, making it possible to have a definite structure and weight in considering them and preventing extraneous factors from intruding on the balance. 105 By contrast, the statute directs the Agency only to take into account the consideration factors, without prescribing any structure for EPA's deliberations. As to this latter group of factors, the section cannot logically be interpreted to impose on EPA a specific structure of consideration or set of weights because it gave EPA authority to upset any such structure by exercising its discretion to add new factors to the mix. Instead, the listing of factors seems aimed at noting all of the matters that Congress considered worthy of study before making limitation decisions, without preventing EPA from identifying other factors that it considers worthy of study. So long as EPA pays some attention to the congressionally specified factors, the section on its face lets EPA relate the various factors as it deems necessary. 106 The legislative history reveals that clear congressional policies support the section's facial structure. The original House and Senate versions of the section differed significantly. A major point of contention between the two versions involved the House's stronger concern over the economic effects of imposing stringent effluent limitations. Ultimately a compromise was reached at Conference and accepted by both houses. It provided, first, that the Agency must use limited cost-benefit balancing in deriving 1977 standards, but not in arriving at the 1983 standards. Legislative History, at 170 (statement of Sen. Muskie). A mid-course evaluation was then to occur in the mid- to late-1970's, after the Act had been in effect for several years but before full implementation of the 1983 standards. Id. at 175. The latter step was designed to allow Congress to rewrite the 1983 standards in order to continue the cost-benefit balancing during that period as well, if Congress found after early experience that such a course was necessary. Section 315 of the Act, 33 U.S.C. § 1325 (establishing a National Study Commission to consider mid-course changes). 107 Thus the fact that Congress indicated its greater concern for cost-benefit calculation in the short run by making cost and benefit comparison factors for 1977, but only consideration factors for 1983, demonstrates the more relaxed view it took of EPA's treatment of consideration factors relevant to both the 1977 and 1983 standards. Indeed, after studying the need for mid-course correction, Congress decided to retain the 1972 arrangement, which, except for limited modifications not germane here, gives the Agency more complete discretion in considering the relevant factors in the future. 53 108 Judicial decisions have carefully observed that the cost and benefit factors require more rigorous EPA consideration of cost versus benefit in the 1977 standards than in the 1983 standards. American Paper Inst., supra, 177 U.S.App.D.C. at 191, 543 F.2d at 338 (cost-benefit balancing in 1977, not in 1983); Accord American Frozen Food Inst., supra, 176 U.S.App.D.C. at 117, 539 F.2d at 119; American Meat Inst., supra, 526 F.2d at 462-63; See W. Rodgers, Supra at 466. But see Appalachian Power Co., supra, 545 F.2d at 1361, Criticized in La Pierre, supra, 62 Iowa L.Rev. at 819-20. Since the consideration factors specified in the 1977 provision track the language of all of the factors including cost and benefit in the 1983 provision, these cases support a lower level of administrative rigor and judicial review with respect to the 1977 consideration factors than with respect to the costs and benefit factors relevant to that year's limitations. We are fortified in this view by its coincidence with the Agency's interpretation. As the Supreme Court held last year, the EPA's construction of this Act is entitled to some deference. DuPont, supra, 430 U.S. at 134-35, 97 S.Ct. 965. 109 Consequently, we must review the comparison factors to determine if EPA weighed them through the limited balancing test as intended by Congress. On the other hand, we may review the consideration factors only to determine if EPA was fully aware of them and reached its own express conclusions about them. Since the two types of factors are separate, we divide our discussion accordingly. 110
111 Petitioners do not challenge the cost-benefit analysis for the whole industry. They do, however, challenge the analysis for the sulfite sector, contending that EPA used an overall instead of an incremental method of balancing, and that its figures on the cost of BPCTCA for the dissolving sulfite subcategory were underestimates. We uphold EPA's determination against both contentions. 112 EPA's approach was similar to the one we upheld in American Paper Inst., supra, 177 U.S.App.D.C. at 191-92, 543 F.2d at 338-39. The Agency assessed the costs of internal and external effluent treatment measures, not only for the industry, but also for each subcategory. This included a separate cost assessment for the sulfite subcategories. App. 2380-83. An economic analysis was prepared to determine the impact of the costs on the industry. App. 1211-448. It found that the industry as a whole would readily absorb the cost of compliance with the 1977 standards, estimated at.$1.6 billion. Out of 270 mills employing 120,000 people, eight mills would likely be closed and 1800 people laid off. The Agency noted that the impact on the three heavily polluting sulfite subcategories would be the greatest. Of less than 30 sulfite mills, three would probably close, resulting in 550 people being laid off. 113 Against these costs, EPA balanced the main effluent reduction benefit: overall 5,000 fewer tons per day of BOD discharged into the nation's waters. 54 EPA refined this balance by calculating the cost per pound of BOD removed for each subcategory. App. 2478-79. Although sulfite mills must make large investments in waste treatment facilities, the cost-benefit balance is favorable for the limitations on these mills, because of the large volume of waste they produce and thus the greater treatment efficiency. See note 8 Supra. 114 Petitioners' first contention is that EPA not only should have calculated the overall cost-benefit balance, but also should have made an incremental calculation of that balance. More precisely, they contend that EPA must undertake to measure the costs and benefits of each additional increment of waste treatment control, from bare minimum up to complete pollution removal. In support of this contention, they point to Senator Muskie's description of cost-benefit balancing, which suggests a focus on the additional degree or marginal amount of effluent reduction. See note 52 Supra. Petitioners concede that we accepted EPA's calculation of the overall cost-benefit balance, without any further marginal or incremental analysis, in American Paper Inst., supra, 177 U.S.App.D.C. at 191, 543 F.2d at 338. Nonetheless, they suggest that the present case can be distinguished, because in these proceedings, unlike in American Paper Inst., industry representatives submitted an incremental breakdown of costs and benefits to the Agency. 55 115 The failure of American Paper Inst. to require EPA to perform its own incremental analysis is justified for a number of reasons beyond some oversight on the part of paper industry petitioners in that case. While EPA has no discretion to avoid cost-benefit balancing for its 1977 standards, it does have some discretion to decide how it will perform the cost-benefit balancing task. (E)ven with th(e) 1977 standard, the cost of compliance was not a factor to be given primary importance, American Iron & Steel Inst., supra, 526 F.2d at 1051, and, as such, cost need not be balanced against benefits with pinpoint precision. A requirement that EPA perform the elaborate task of calculating incremental balances would bog the Agency down in burdensome proceedings on a relatively subsidiary task. Hence, the Agency need not on its own undertake more than a net cost-benefit balancing to fulfill its obligation under section 304. 116 However, when an incremental analysis has been performed by industry and submitted to EPA, it is worthy of scrutiny by the Agency, for it may avoid the risk of hidden imbalances between cost and benefit. Id. at 1076 n. 19 (Adams, J., concurring). If such a hidden imbalance were revealed here, and if the Agency had ignored it, we might remand for further consideration. But in this case the incremental analysis proffered by industry showed that the last and most expensive increment of BOD treated in sulfite mills cost less than $.15 per pound of BOD removed, which is below the average cost of treatment in most of the industry's subcategories. App. 3545-51B. See note 8 Supra. We would be reluctant to find that EPA had ignored a hidden imbalance when the most unfavorable incremental cost-benefit balance that is challenged falls well within the range of averages for the industry as a whole. 56 117 Petitioners' next contention is that EPA underestimated the cost of BPCTCA for the dissolving sulfite subcategory, by misfiguring the cost of SSL recovery. 57 We have examined petitioners' contention, bearing in mind that we do not review EPA's cost figuring De novo, but accord EPA discretion to arrive at a cost figure within a broad zone of reasonable estimate. See Permian Basin Area Rate Cases, 390 U.S. 747, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968). Petitioners' complaint revolves around the Agency's refusal to include the capital cost of installing SSL recovery in some of its cost calculations. 58 As EPA notes, five out of six dissolving sulfite mills have already installed SSL recovery. Where, as here, most of a cost element has been incurred already, or will be incurred for a purpose other than meeting federal effluent limitations, EPA may exclude that element from the cost of BPCTCA. 59 Accordingly, we uphold EPA's estimate of the cost of BPCTCA. 118
119 (N)on-water quality environmental impact(s) (including energy requirements) are among the consideration factors listed in section 304, and are the sole factors of that kind on which petitioners premise a challenge to the limitations. We have already seen that the Act does not specify a particular structure for EPA's treatment of the consideration factors but instead leaves the Agency with discretion in deciding how they will be taken into account. In exercising that discretion, it is clear that EPA devoted considerable attention to assessing environmental impact and adequately set forth its conclusions with respect thereto. App. 2360-467 (Development Document). Most crucially, in view of the Act's emphasis in listing energy requirements as part of environmental impacts, EPA developed estimates of the new energy demands for the industry as a whole about 2.4% Of the industry's total energy use and for each industry subcategory. For the sulfite subcategories, with their higher waste loads requiring greater waste treatment, the figure was an 18% Increase in energy demand. 60 EPA also developed estimates of the sludge disposal problem, which is the reverse side of effluent reduction benefit, because the waste that is removed from effluent must be disposed of as sludge. 61 We are consequently convinced that EPA took adequately into account the environmental impacts of its regulations. 62 120 Petitioners assert, however, that we must impose on EPA a further and special requirement to engage in environmental balancing. They cite allegedly dramatic examples of negative environmental impacts from the air pollution and sludge disposal incident to waste treatment, and contend that EPA failed to give these enough weight in the balance. As we have discussed, we believe Congress entrusted the manner of deliberation about all of the consideration factors to EPA's discretion, and we are prepared to uphold EPA on that basis alone. Nonetheless, the special policies in the Act with respect to environmental protection warrant some additional comments. 121 Our consideration begins with the history of the Act, which shows that Congress developed a willingness to entrust EPA with more latitude than other agencies in carrying out programs that affect the environment. In the years immediately prior to the passage of the Act, the federal government had mounted a campaign to control water pollution by a permit program under the Rivers and Harbors Act of 1899, 33 U.S.C. § 407. During that period, Congress also had enacted the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321 Et seq., which was designed to force federal decisionmakers to consider the environmental effects of their decisions. Because the water pollution permit program under the Rivers and Harbors Act was aimed at enhancing the environment, some of NEPA's legislative history suggested that the permit program officials might be exempt from the duty under NEPA to prepare environmental impact statements (EIS's). Nevertheless, in December 1971, a court required EIS's for water permits under the Rivers and Harbors Act, Kalur v. Resor, 335 F.Supp. 1 (D.D.C.1971), and in so doing severely impeded the permit program's administrability. It is not surprising, therefore, that Congress became aware of this threat to the regulation of water pollution and that the legislators took it into account the following year in formulating the successor to that permit program the 1972 Act. See, e. g., Legislative History, at 260 (remarks of Rep. Dingell). 122 Accordingly, section 511(d) of the House version of the Act, H.R. 11896, 93d Cong., 1st Sess., excused EPA from complying with NEPA in issuance of water permits. Nonetheless, the House imposed environmental balancing duties on EPA in a different way. Section 101(g) of H.R. 11896 provided generally that (i) n the implementation of this Act, agencies responsible therefor shall consider all potential impacts relating to the water, land, and air to insure that other significant environmental degradations and damage to the health and welfare of man does not result. 63 The House also included environmental impact in the particular section listing the many factors to be tak(en) into account in setting effluent limitations. Id. § 304. The Senate version of the Act had No corresponding provisions. 123 After lengthy deliberations, 64 the Conference Committee knitted the two versions of the Act in a combination that minimized, without entirely omitting, EPA's obligation thereunder explicitly to consider the non-water environment. Like the House bill, the Conference version excused EPA from preparing EIS's. 65 Unlike the House bill, the Conference version completely deleted section 101(g), with its general duty to avoid all significantly adverse environmental impacts. Only section 304 was retained, in a modified and limited form, See note 68 Infra, which simply made non-water quality environmental impacts one of the many listed factors for EPA to take into account, along with such other factors as engineering aspects, age, and process changes. 124 Congress' intent in passing this legislation was obviously not to minimize the importance of protecting the environment. The late 1960's and early 1970's saw the passage of a number of statutes aimed at dramatically increasing the protection given the environment, and the Act involved herein is among the most important. Rather, Congress was resolved to rely on EPA's own internal structure and personnel attitudes to ensure that the net result of all of its programs would be a substantially enhanced natural environment. In essence, Congress was convinced that EPA's internal dynamics and procedures were the functional equivalent of the NEPA duties imposed on other agencies. 66 As Senator Muskie declared, (t)he whole concept of EPA is that environmental considerations are to be determined in one place by an agency whose sole mission is protection of the environment. 67 Based on this conviction about EPA's commitment to environmental goals, the legislators apparently felt that a judicially reviewable environmental balancing duty would serve no purpose except to establish a NEPA duty as a tactic of litigation and delay and thus make the EPA program unworkable. Portland Cement Ass'n v. Ruckelshaus, 158 U.S.App.D.C. 308, 317, 486 F.2d 375, 384 (1973), Cert. denied, 417 U.S. 921, 94 S.Ct. 2628, 41 L.Ed.2d 226 (1974). 125 That Section 304 requires EPA to take into account non-water quality environmental impacts, therefore, reflects several concerns apart from a fear that the Agency will have an inadequate commitment to protection of the air and land. Perhaps most important, if these factors were not listed, EPA arguably would have no authority to temper its effluent regulations when its own conclusion was that such tempering was needed to protect the land and air. 68 While committing the Agency to lead a comprehensive attack on water pollution, Congress did not intend that attack to prevent the Agency from realizing its other environmental goals. Furthermore, there are some environmental considerations, such as wildlife conservation, that are not within EPA's expertise, but that Congress wanted considered in EPA's deliberations on water pollution. See Legislative History, at 883-84 (letter from Reps. Reuss, Pelly, Et al.). Thus, it included a reference to All non-water quality environmental impacts to assure the proper broadening of EPA's environmental impact deliberations. Cf. Sun Enterprises, Ltd. v. Train, 532 F.2d 285, 289-90 (2d Cir. 1976) (EPA required under the Fish and Wildlife Coordination Act to consult with the Interior Department about relevant actions taken under the 1972 Act). 126 Finally, the requirement of some advertence on the Agency's part to non-water environmental impacts provided a mechanism for assuring that EPA's internal structure and procedures will evolve as expected. The Act's listing of environmental impacts as a factor encourages the Agency, if more incentive is necessary, to seek information from relevant sources outside the Agency and from personnel in sections of the Agency devoted to non-water matters. Once that communication is assured, the likelihood that the expected inter- and intra-agency sensitivity to environmental benefits and impacts will not occur is slight indeed. 69 127 Thus, since Congress intended EPA's internal structure to protect the non-water environment, the judicial function is completed when we have assured ourselves that EPA expressly considered the probable environmental impacts of its regulations. As we have noted, EPA fully investigated the environmental impacts, and thereby fulfilled this aspect of its statutorily mandated duty.