Opinion ID: 392800
Heading Depth: 1
Heading Rank: 3

Heading: the oxides of nitrogen waivers

Text: 96 The NRDC also challenges the EPA's granting of waivers of the standards for oxides of nitrogen (NOx) to various manufacturers. The NRDC argues that the EPA did not properly interpret or apply the statutory prerequisites that must be satisfied before such waivers may be granted. We uphold the EPA's decisions. 97 The NOx waivers at issue are temporary relaxations of the statutory NOx standard of 1.0 gpm for individual light-duty diesel vehicle models that are unable to achieve that standard. The EPA granted waivers permitting emissions up to 1.5 gpm for the 1981 and 1982 model years for certain GM, Daimler-Benz, Volvo, and Peugeot models, and waivers at levels varying from 1.3 to 1.5 gpm for certain Volkswagen diesels. 45 Fed.Reg. 5480 (1980); 45 Fed.Reg. 34,71 9 (1980). The EPA's basic rationale in granting the waivers was that looser NOx standards were necessary to permit compliance with the new particulate standards. 98 The waiver provisions of the Clean Air Act Amendments of 1977 reflect Congress' concern that pollution control standards tailored to the virtues and vices of the traditional gasoline engine might stifle the development of innovative alternative technologies. Newer systems that could eventually offer distinct advantages might require a period of indulgence before demonstrating their full potential. This concern focused particularly on oxides of nitrogen, which were known to present a serious challenge for the diesel engine. See, e. g., H.R.Rep.No. 294, 95th Cong., 1st Sess. 249-50 (1977); 123 Cong.Rec. 16,92 4 (1977) (remarks of Rep. Dingell); 123 Cong.Rec. 18,184 (1977) (remarks of Sen. Baker). 99 The present NOx waiver provision for diesels, section 202(b)(6)(B) of the Act, emerged in conference, splitting a separate diesel waiver off from the general waiver for an innovative power train technology or innovative emission control device or system. 36 The duration of the waiver was limited to a maximum of four years, and a list of prerequisites to granting the waiver was added: 100 Such waiver may be granted if the Administrator determines 101 (i) that such waiver will not endanger public health, 102 (ii) that such waiver will result in significant fuel savings at least equal to the fuel economy standard applicable in each year under the Energy Policy and Conservation Act, and 103 (iii) that the technology has a potential for long-term air quality benefit and has the potential to meet or exceed the average fuel economy standard applicable under the Energy Policy and Conservation Act at the expiration of the waiver. 104 Act § 202(b)(6)(B). The House bill had contained a similar public health requirement, 37 but the air quality benefit criterion was wholly new. 105 In its guidelines for waiver applications, the EPA set out its interpretation of these criteria, and listed in detail the information that manufacturers would have to submit in order to meet their burden of demonstrating that waivers should be granted. 43 Fed.Reg. 30341 (1978). The January 1980 announcement of waivers for GM, Daimler-Benz, and Volvo was accompanied by a rejection of Peugeot and Volkswagen applications due to insufficiency of information; 38 after more data were submitted, those waivers were granted in May 1980. 45 Fed.Reg. 5480 (1980); 45 Fed.Reg. 34,719 (1980). Although all manufacturers had requested four-year waivers, the EPA concluded that the data only justified waivers for 1981 and 1982. 106 The NRDC argues that these waivers should never have been granted because diesel technology cannot meet two of the statutory criteria for the waiver: the public health standard and the air quality benefit standard. The NRDC does not dispute the EPA's findings that waivers are necessary for certain vehicles. Before scrutinizing these claims, it is important to note our agreement with a position that the EPA has emphasized throughout these proceedings. The NO x waiver process was not intended as an opportunity to decide the ultimate fate of diesel technology. It was meant to offer temporary encouragement to further development of diesels, so long as the public interest would not be unduly endangered. There will be other opportunities to evaluate the costs and benefits of that technology as more becomes known about it. In announcing the NO x waivers, the EPA repeatedly stressed that this decision does not represent an open door to future production of light-duty diesels without great emphasis on developing methods to identify, characterize and control diesel-related emissions. And the agency cautioned manufacturers to proceed with the full realization that EPA has authority to act in the future under other provisions of the Act to prevent diesel emissions from posing an unacceptable risk to public health. 39 45 Fed.Reg. 5480, 5492-93 (1980). 107
108 The public health criterion for the NO x waivers does not require an evaluation of the long-term public health impact of diesel technology. It requires a finding that such waiver will not endanger public health. Act § 202(b)(6)(B)(i) (emphasis added). A major focus is thus on the character of emissions during the period of the waiver. Furthermore, the EPA found it likely that diesel vehicles could be marketed even if no NO x waivers were granted. Given the industry's commitment of resources to diesel production, the EPA believed that the original NO x standard might be met using exhaust gas recirculation, which reduces NO x but aggravates other polluting characteristics of diesel engines. 109 The EPA rejected the NRDC's claim that NO x waivers would endanger the public health because of increased NO x emissions. After analyzing the relevant data, the agency concluded that diesel NO x waivers would slow the expected decreases in ambient NO x levels over the next decade, but that this impact would not be significant. 45 Fed.Reg. 5480, 5488-89 (1980). We agree that Congress did not intend to preclude NO x waivers merely upon a showing that some impact on NO x levels would result. We cannot agree with the NRDC's contention that the EPA's determination that the effect was de minimis was clearly erroneous, Brief for Petitioner NRDC at 59 n.93 (hereinafter cited as NRDC Brief). 110 The EPA's public health evaluation also addressed the effect of the NO x waivers on emissions of other pollutants. This factor weighed in favor of granting the waivers because the technology used for NO x reduction increases emissions of several other harmful substances. 45 Fed.Reg. 5480, 5489 (1980). Particulates were an object of special concern, since greatly increased particulate emissions are a major distinguishing feature of diesel vehicles. 111 The EPA concluded that, given current technology, there was necessarily a trade-off between NO x emissions and particulate emissions. The NRDC opposed this view, but its arguments before the agency failed to take into account the fact that particulate standards under section 202(a) must be technology-based. It therefore insisted that the NO x waivers would increase particulate emissions by increasing sales of diesel vehicles. For any given particulate standard, relaxing the NO x standard would lower the cost of producing diesel-powered cars. NRDC Comments on NO x Waiver Applications at 7 (1979), J.A. 1067. This assertion overlooks the fact that no given particulate standard can be assumed until the NO x level has been determined, for as we have recognized above, the applicable standards for other pollutants help determine the particulate levels that available technology can achieve. In setting the 0.6 gpm particulate standard for 1982-1984, the EPA repeatedly observed that it was assuming a 1.5 gpm NO x standard. Regulatory Analysis at 33, J.A. 512; 45 Fed.Reg. 14,496, 14,497 (1980). 112 It was perfectly proper for the EPA to bear in mind this trade-off in evaluating the public health impact of the NO x waivers. The NRDC itself has stressed the respiratory and carcinogenic dangers of particulates, and we cannot say that the EPA was arbitrary in concluding that the benefits of reducing particulate levels outweighed the dangers of slightly increased NO x levels. 113 On appeal, the NRDC makes a somewhat different argument that even if the particulate level will be raised by denial of the NO x waiver, the total particulate emissions nationwide from the fleet of diesel vehicles would still be less than if waivers had been granted. NRDC estimates that the marginal cost of achieving the 1.0 gpm NO x standard would increase the price of diesels, and thereby lower the demand for them, to so great an extent that the total fleet emissions of particulate would be decreased by denial of the waiver, even though individual vehicle particulate emissions would be greater. NRDC Brief at 61. NRDC claims that if the EPA had properly calculated this effect of the waiver decision it would have concluded that the public health requires that the waiver be denied. But, as the EPA's brief observes, the NRDC has never offered factual support for this contention. Brief for Respondent EPA at 119 n.111. Certainly the record does not compel NRDC's conclusion. Data submitted by the manufacturers, though not adjusted for this marginal cost argument, indicated substantial increases in total particulate levels if the waivers were denied. 40 We cannot say that the cost of an exhaust gas recirculation system would necessarily dampen diesel demand enough to reverse this trend. 114
115 The meaning of the long-term air quality benefit criterion is less self-evident than that of the public health requirement. This prerequisite to the diesel waivers was contained in neither the House nor the Senate bill, but emerged in conference. The sole elaboration of its content is found in an explanation of the conference's efforts made to the Senate by the bill's sponsor, Senator Muskie: 116 And finally, in order to assure that the waiver will be targeted towards long term air quality benefits, the waivers may only be granted if there is a substantial likelihood that the engines will be able to comply at the end of the waiver period with the statutory emissions standards. Thus the waiver is not intended to provide a loophole in the statutory standards, but only to provide an opportunity for technology development which may lead to greatly improved emissions performance in the next decade. 117 123 Cong.Rec. 26,848 (1977). This provision represented a compromise between the Senate bill, which allowed only a two-year waiver of the 1.0 gpm NO x standard for innovative technologies, and the House bill, which provided indefinite waivers for four or more years as long as the public health would not be endangered. 41 118 Relying on this legislative history, the EPA interprets the air quality benefit criterion as requiring only that there be a substantial likelihood that the engines will be able to comply with the statutory standards applicable at the expiration of the waiver period. 45 Fed.Reg. 5480, 5493 (1980). As long as diesel vehicles have the potential for meeting those standards, no loophole has been opened and the statute is satisfied. 119 This is not the only possible interpretation of the air quality benefit provision, but it is not an implausible one. Where different interpretations of the statute are plausible, so long as EPA's construction of the statute is reasonable we may not substitute our own interpretation for the Agency's. Lead Industries Ass'n v. EPA, 647 F.2d 1130 at 1147-1148 (D.C.Cir.1980), cert. denied, --- U.S. ----, 101 S.Ct. 621, 66 L.Ed.2d 503 (1980). We decline the NRDC's invitation to hold that no waiver may be granted unless diesel emissions are found to be harmless. 120 The NRDC finds the EPA's interpretation illogical, asserting that its application to the particulate standards is totally circular. The NO x waivers are being justified by the ability of diesels to meet particulate standards that are themselves defined so that every diesel can meet those standards if given a NO x waiver. The NRDC regards it as absurd to see air quality benefit in compliance with standards so lacking in content. 121 It is true that there is a certain element of paradox in regarding achievement of technology-based standards as demonstrating a benefit. But this paradox is not an inevitable corollary of the EPA's interpretation of section 202(a)(6)(B) (iii). The effective circularity of this criterion as applied to particulates results specifically from the EPA's choice of the worst-performing diesel as the measure of particulate performance. As we have held, that choice is a permissible regulatory strategy but is in no way mandated by the statute. See Part II(C) supra. The air quality benefit criterion will be more substantial when applied to pollutants regulated under other schemes. 122 Finally, the NRDC complains that the EPA misconstrued Senator Muskie's reference to statutory emissions standards as implicating only the explicit numerical standards for hydrocarbons, carbon monoxide, and NO x, instead of including other emissions standards set by the EPA under its statutory authority. This claim is unfounded. The portion of the EPA's guidelines for waiver applications that relates to the air quality benefit criterion requires information concerning particulates and other unregulated pollutants, see 43 Fed.Reg. 30,341, 30,346-47 (1978), and the May 1980 waiver decisions explicitly recognized that the standards applicable at the end of the waiver period include the 0.6 gpm particulate standard, see 45 Fed.Reg. 34,719, 34,723-24 (1980). The first waiver decisions, in January 1980, did not mention this standard, but this was understandable, as it had not yet been promulgated. 123 In conclusion, we find no merit in the NRDC's allegations that the EPA granted NO x waivers unlawfully, at undue risk to the public health. The agency's actions were consistent with a reasonable interpretation of the statutory provisions.