Opinion ID: 501652
Heading Depth: 2
Heading Rank: 1

Heading: The Control-First Dispute

Text: 32 The 1982 Regulations allowed sources to build stacks to formula height and to increase existing stacks to formula height at will. But a source seeking credit for above-formula stacks was required to demonstrate (by fluid modeling or field studies) that the extra height was necessary within the meaning of Sec. 123's definition of GEP (height necessary to insure that emissions ... do not result in excessive [downwash-induced] concentrations of any air pollutant....). 47 Fed.Reg. 5865/2 (1982). The agency defined excessive concentrations in terms of a relativist test: downwash-induced pollutant concentrations were excessive if they exceeded maximum non-downwash concentrations by 40 percent or more. Id. at 5869/1. 33 Though the 40 percent figure is not in itself at issue, a word of explanation is in order. In preparing the 1982 regulations EPA found that downwash increased ground-level pollution concentration levels by about 40 percent where a source's stack was at formula height (i.e., 2.5H). Sierra Club, 719 F.2d at 446. As Congress had recognized the 2.5H formula as indicative of traditional engineering practice and therefore presumptively sound, the agency reasoned that any downwash-induced pollution increase exceeding what a formula-height stack would normally produce should be regarded as excessive. Id. 34 In Sierra Club, environmental petitioners attacked the relativist test and prevailed. They argued that Congress was content to give credit to stacks only to the extent that their height was necessary to protect human health, so that a downwash-induced concentration could be excessive only if it were health-threatening. 719 F.2d at 447. The 40 percent relativist test of course had no direct connection with any health threat. 35 The relativist-absolute dispute appeared to the court in Sierra Club to dissolve into the question whether Congress meant in Sec. 123 to codify a traditional engineering formula or to create a health-and-welfare-based stack height standard. The court found that the statute and its legislative history disclose[d] sharply conflicting signals, and concluded, after reviewing the question in detail, that Congress [probably] thought traditional engineering practice and protection of health were the same thing. Id. at 448. But the court also found evidence in the legislative history that Congress recognized that a choice between the two standards would be necessary if traditional engineering practice dictated a height greater than that necessary to protect human health. Id. The court concluded that meeting air quality standards was primary in [Congress's] mind and that good engineering practice was merely a way to do so. Id. Finding it unlikely that the 40 percent standard would identify an absolute pollutant concentration that is dangerous to health, the court remanded to the agency with instructions to develop a standard directly responsive to the concern for health and welfare that motivated Congress to establish the downwash exception. Id. at 450. 36 The mandate to develop an absolute test revealed an issue that did not exist under the relativist one. Ground-level concentrations are obviously a function not only of stack height and other elements mentioned in Sec. 123's GEP definition, but also of the emissions emerging at the top of the stack. Once excessive concentrations are defined in absolute terms, the stack height necessary  to avoid those concentrations on the ground will obviously vary with a source's actual emissions. Thus Sierra Club opened a gap in Sec. 123's GEP definition, the gap expressed in the bracketed and emphasized clause below: height necessary [given a specified emissions level ] to insure that emissions from the stack do not result in excessive concentrations.... 37 Although the parties disagree as to how much the assumed emissions rate affects any computation of credit-worthy stack height, they agree on the direction of the impact: high assumed emissions rates entail relatively generous stack credits (and thus relatively high permissible emissions rates), low assumptions the opposite. 38 EPA's choice of a baseline emissions rate in the 1985 regulations has varied with the particular contexts presented by the rulemaking. The critical decisions have related to the demonstrations (consisting of field studies or fluid modeling demonstrations) that the regulations require of sources in some circumstances. First, sources seeking credit for any stack height increase after original construction must (unless the stack is grandfathered) demonstrate compliance with Sec. 123's GEP definition, even though the height for which credit is sought in within EPA's formula. 10 40 C.F.R. Sec. 51.1(kk)(2). Here, EPA has specified that the baseline must be the emission rate specified by any applicable State implementation plan (or, in the absence of such a limit, the actual emissions rate). Id. NRDC argues that instead the baseline must be that emissions rate which would result from the source's using all available methods. NRDC Brief at 22 (emphasis added). The parties have dubbed NRDC's contention the control-first approach. 39 EPA also requires a demonstration for any stack height above that resulting from its formula (unless the stack is grandfathered). 40 C.F.R. Sec. 51.1(kk)(1). Here it uses as the baseline the rate provided in the new source performance standards (NSPS) promulgated for new power plants under Sec. 111 of the Act, 42 U.S.C. Sec. 7411, unless the source can show that the NSPS rate is unfeasible. This conditional NSPS standard is, of course, a variant of control-first; it is vigorously attacked by industry. 11 40 Finally, the baseline emissions rate is relevant to EPA's validation of its formula, a matter that is indirectly at issue here. That validation was based in part on studies from various power plants, the cleanest having an emissions rate of 4.65 pounds of sulphur dioxide per million British thermal units (Btu). J.A. 834. This compares with an NSPS emissions limit of 1.2 pounds per million Btu for plants built between 1971 and 1978, 40 C.F.R. Sec. 60.43(a)(2), and thus obviously does not fit the control-first model. 41 In this part we address the general question whether Sec. 123 requires use of control-first and conclude that it does not. Later sections face the baseline emissions rate problem in the specific contexts already mentioned. 42 We first address EPA's contention that NRDC's control-first claims are barred by res judicata, as it failed to raise the argument in Sierra Club. Of course where res judicata (claim preclusion) applies, it bars relitigation not only as to all matters which were determined in the previous litigation, but also as to all matters that might have been determined. Tutt v. Doby, 459 F.2d 1195, 1197 (D.C.Cir.1972). Moreover, enforcement of the 60-day time limits imposed by the statute providing for review, 42 U.S.C. Sec. 7607(b)(1), requires that issues raised by an initial set of rules be raised within that time limit, not saved for use against the rules that may emerge from a remand. 43 Neither of these barriers applies here. The issue of the proper baseline emissions rate became ripe only after the Sierra Club court remanded for application of an absolute test. While the environmentalists' briefs in Sierra Club might have mentioned the issue, they could hardly have induced this court to pass on it before EPA had a chance to do so. They are not, therefore, precluded from raising the matter in the present litigation. 44 On the merits, we start by noting the scope of our review. If, using traditional tools of statutory construction, we can discern Congress's intentions in regard to baseline emissions rates, obviously we must give effect to Congress's will. NLRB v. United Food & Commercial Workers Union, Local 23, --- U.S. ----, ----, 108 S.Ct. 413, 421, 98 L.Ed.2d 429 (1987) (citations omitted); Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). If we find that the statute is silent or ambiguous on the issue, however, we must defer to the EPA's interpretation if it is based upon a permissible statutory construction. NLRB, --- U.S. at ----, 108 S.Ct. at 421, quoting Chevron, 467 U.S. at 843, 844, 104 S.Ct. at 2782, 2783. 45 Before evaluating the various appeals to the dictionary and to legislative history, we think it suitable to note that the view which NRDC says Congress adopted carries drastic implications. Control-first would require each source to assume, for purposes of its stack height credit demonstration, the lowest achievable emissions rate, determined on either a generic or an individualized basis. Although the record does not allow us to infer exactly the impact of the baseline emissions rate on the emissions rate that would emerge (after the stack height credit were calculated and then used to determine the permissible emissions), all parties agree that that impact is substantial. Indeed, that is what the fight is all about. If Congress in Sec. 123 prescribed the use of such a baseline emissions rate, with all its implications for ultimate emissions ceilings, it did so in a remarkably cryptic way. 46 In the Clean Air Act Congress has formulated standards for development of emissions limits in a variety of contexts. For example, it provided for generic emissions limits for new sources in Sec. 111, 42 U.S.C. Sec. 7411 (1982), spelling out at length the criteria for calculation of the limits. In a variety of other contexts, it has provided--at length--for determination of the lowest feasible emissions level on a source-by-source basis. See, e.g., 42 U.S.C. Secs. 7475(a)(4), 7479(3) (mandating use of the best available control technology (BACT) for new sources in attainment areas, and defining the parameters of the standard); 42 U.S.C. Secs. 7502(b)(2), 7501(3) (requiring lowest achievable emissions rate (LAER) for new sources in nonattainment areas, and defining LAER); 42 U.S.C. Sec. 7502(b)(3) (requiring reasonably available control technology (RACT) for existing sources in nonattainment areas); 42 U.S.C. Sec. 7491(g) (requiring best available retrofit technology (BART) for pre-1971 sources impairing visibility in national parks and certain other clean areas). NRDC in essence contends that in Sec. 123 Congress mandated agency pursuit of a similar strategy, but without providing a word of guidance. All NRDC's arguments must be assessed in light of one's estimate of the plausibility of any such scenario. We think it quite unlikely. 47 NRDC argues that its control-first interpretation is consistent with the plain meaning of the statutory language and is clearly supported by relevant legislative history. It argues further that even if the statute were ambiguous, EPA's interpretation is internally inconsistent and therefore invalid. 48 NRDC contends that the control-first approach follows inexorably from the plain meaning of the word necessary. Webster's Third New World Dictionary defines necessary to mean essential or indispensable. Id. at 1511. It argues that this definition compels a finding that stack height cannot be necessary to control ground level pollution unless the source has employed all feasible emission-control alternatives for reaching the desired levels under downwash conditions. NRDC Brief at 22. 49 But courts have frequently interpreted the word necessary to mean less than absolutely essential, FTC v. Rockefeller, 591 F.2d 182, 188 (2d Cir.1979); 9 to 5 Organization for Women Office Workers v. Board of Governors, 721 F.2d 1, 10 (1st Cir.1983), and have explicitly found that a measure may be necessary even though acceptable alternatives have not been exhausted. In FTC v. Rockefeller, supra, for example, the court said that the word 'necessary' is not always used in its most rigid sense. 591 F.2d at 188. Specifically, it found that a subpoena could be necessary to an FTC investigation even though the Commission had not pursued reasonably available alternatives. Id.; cf. Chrisner v. Complete Auto Transit, Inc., 645 F.2d 1251, 1261-62 (6th Cir.1981) (statutory term reasonably necessary is not absolute and does not require complete absence of alternatives). As these courts have recognized, meaning varies with context; Webster's definition by no means tells us that Congress intended that the baseline emissions rate--an issue that surfaced only after this court's Sierra Club decision--must be premised on the source's having employed all available emissions controls. 50 NRDC asserts that the legislative history clearly demonstrates Congress's intent to adopt a control-first posture. The House Committee which drafted Sec. 123 stated that it was intended to ratify the general thrust, if not the specific holdings, of the three U.S. courts of appeals which have considered the issue of the permissibility of use of intermittent controls, tall stacks, and other dispersion enhancement techniques. House Report at 91-92. The cases cited by the House Report are, of course, the familiar ones of the NRDC trilogy, and each found that other measures for complying with the NAAQS are necessary, for purposes of Sec. 110(a)(2)(B) review, only when further limits on emissions were infeasible. 51 We do not believe, however, that legislative history endorsing the general thrust of the NRDC trilogy demonstrates that Congress in Sec. 123 itself clearly resolved the exact degree of hierarchy appropriate in ranking control above dispersion. 52 Just as the Sierra Club court did not anticipate the present issue, we see no evidence that the courts involved in the NRDC trilogy anticipated it. Once one recognizes--as Congress indisputably recognized in Sec. 123--that dispersion through stacks can play a quite legitimate role in protecting health and welfare from downwash, it is not by any means obvious that in calculating the appropriate role of stacks one must assume that reduction efforts have been pushed to the point of infeasibility. 53 Section 123's concept of GEP stack height not only acknowledges a legitimate role for stacks, but endorses engineering practices developed at a time when emissions were largely unregulated. In fact, Congress gave those practices a specific endorsement in authorizing the EPA to rely on the 2.5H formula in granting credit. See Sec. 123(c) (Administrator is only obligated to conduct demonstrations for above-formula stacks). It is true that this court decided in Sierra Club that in any potential clash between defining GEP as that height necessary to avoid downwash-induced effects on human health and welfare, and defining it as 2.5H, the former must prevail. 719 F.2d at 448. But that decision did not undermine the statutory assumption that sources might legitimately rely on stacks aimed at protecting health and welfare from emisssions rates such as have prevailed on plants built before Congress's vigorous 1970 intervention into clean air regulation. 54 Thus it appears to us that the cases of the NRDC trilogy simply do not speak to the issue of calculating GEP height, because those courts never even considered the possibility that sources could rely on stacks except when driven to do so by the infeasibility of all alternatives. Legislative history endorsing their general thrust therefore cannot answer new questions posed by Sec. 123 itself: Necessary as used in the GEP definition of Sec. 123 cannot be answered by reference to the trilogy's construction of the word in Sec. 110(a)(2)(B). 55 NRDC further points to legislative history that in its view suggests that Congress believed credit should be given only for stack heights needed by well controlled sources. In discussing its reasons for granting sources credit for GEP stack height, the House Committee explained that 56 for many years, good air quality management has meant building a stack sufficiently tall to offset aerodynamic downwash created by structures in the immediate vicinity of the stack. Without some provision for stack height, a plume released downwind of such structure might become engulfed by turbulent eddys [sic ] within the wake of the structure. When this occurs even the plume from a well-controlled source may cause air quality standards (or other requirements) to be violated. 57 House Report at 93, U.S.Code Cong. & Admin.News 1977, p. 1171 (emphasis added). 58 We find NRDC's reading strained. It seems clear to us that the Committee was merely justifying its decision to grant credit up to GEP stack height with the observation that even well controlled sources may need to rely on the dispersion engendered by a GEP height stack to avoid excessive local ground-level pollution concentration. 59 Finally, NRDC points to a number of references expressing disapproval of the use of the dispersion effects of tall stacks to meet the NAAQS. See, e.g., House Report at 93 (the courts have determined that the 1970 act prohibited tall stacks as a final compliance method); Conference Report, H.R.Rep. No. 564, 95th Cong., 1st Sess. 144 (1977), U.S.Code Cong. & Admin.News 1977, pp. 1077, 1171, 1524 (Tall stacks are not a means of emission limitation under the Clean Air Act of 1970.). But we noted in Alabama Power v. Costle that tall stack is a term that really covers a too-tall stack. 636 F.2d 323, 389 (D.C.Cir.1979) (emphasis added). Thus the references merely reiterate the Congress's intent to deny stack height credit beyond the height dictated by GEP; they do not reflect any legislative decisions on how to calculate GEP. 60 Far from finding a clear Congressional intent to adopt NRDC's control-first strategy, we find the statute's use of the term necessary to be completely ambiguous. We find no evidence in the statute or the legislative history that Congress ever thought through the question of how to determine GEP or formulated any view on the control-first approach. In view of Congress's endorsement of the historic practice of using stacks to protect health from downwash-induced pollution, we think the agency, in adopting existing or SIP-required emissions rates as the baseline for demonstrations to support within-formula height increases, gave the statute a quite reasonable interpretation. 61 NRDC asserts that even if we find the statute to be silent as to the appropriate emission level assumption, we should reject the agency's approach as internally inconsistent and therefore arbitrary and capricious. See 5 U.S.C. Sec. 706(2)(A). As noted above, while EPA authorizes use of existing or SIP-required emissions as the baseline for justifying within-formula increases, 40 C.F.R. Sec. 51.1(kk)(2), it requires an assumption of NSPS emissions for demonstrations needed to justify above-formula stack heights, 40 C.F.R. Sec. 51.1(kk)(1). NRDC claims that as NSPS is defined in terms of technological and economic feasibility, the latter provision reflects the agency's partial acceptance of the control-first approach. The agency's treatment of within-formula increases, it says, is hopelessly inconsistent with its view of above-formula stacks. NRDC Brief at 28-29. 62 The EPA explained in the rulemaking that it rejected use of existing emissions in the above-formula context for fear of impermissible circularity--to the extent that [a source's preexisting emissions] limit relied on greater than formula height, it would amount to using a tall stack to justify itself. See 50 Fed.Reg. 27,898/2. But we think that Sec. 123 left the agency free to regard this circularity as permissible in the within-formula context, impermissible in the above-formula context. EPA explained that its use of NSPS (the stringent standard applicable to new sources) for above-formula stacks conformed to Congress's expectation that the credit for stacks above formula height ... be granted only in rare cases. 50 Fed.Reg. 27,898/1. 63 NRDC is certainly correct when it notes that the circularity problem that attends the use of existing emissions levels for above-formula demonstration purposes also applies to within-formula demonstrations. Where the formula has overstated the stack height necessary to avoid excessive ground level concentrations, the SIP or existing emissions levels may reflect the benefit of the erroneous assumption, so that its use in a within-formula stack height demonstration will inflate the necessary stack height. The problem, however, is plainly less severe than in the above-formula height context. The initial stack height credit was by definition within-formula, thus limiting the source's existing emissions rate, and thus the extent to which the laxity of the process may inflict potential damage. The reliance on the formula in the initial computation establishes an outer bound on the degree of error. This is quite different from the risks entailed by use of existing rates in the above-formula context, precisely where both this court and Congress itself have warned the agency to extend credit only with utmost caution, Sierra Club, 719 F.2d at 450. 64 Accordingly, we reject NRDC's contentions that Sec. 123 prohibits use of existing emissions rates in within-formula demonstrations and that the discrepancy between the baseline assumptions for above- and within-formula demonstrations renders the latter arbitrary and capricious. 65