Opinion ID: 621128
Heading Depth: 3
Heading Rank: 1

Heading: Stack Height Credits

Text: One of the most vigorously contested issues in this protracted dispute is whether the EPA's computation of stack height was irrational. Montana Sulphur has a 100-meter high flue stack which was constructed after the 1993 SIP Call. Under EPA regulations, the EPA concluded the appropriate credit for that stack should be only 65 meters, and that the State of Montana's modeling assumptions using a greater stack height were therefore invalid. 67 Fed.Reg. at 22,209-22,238. The basic concern with stack height is this: a pollution source can lower ground-level, measured concentrations of pollution by raising the height of its stack and dispersing the pollution further into the atmosphere. Concerned that such a dispersion technique does not actually reduce the amount of pollution but merely spreads it around, Congress adopted 42 U.S.C. § 7423 to regulate the use of tall stacks. See Sierra Club v. EPA, 719 F.2d 436, 441 (D.C.Cir.1983) (discussing legislative history). Rather than completely prohibiting the use of tall stacks, which do prevent some harmful downwash of pollutants near the source, the statute and regulations seek to strike a balance between elevating stack height to disperse pollution away from a source and preventing relocation of pollution from one site to others. The formulas thus restrict a source from receiving credit for stack height that is higher than a Good Engineering Practice (GEP) figure. The applicable federal statutory provisions provide that emission limitations under an implementation plan shall not be affected in any manner by. . . so much of the stack height of any source as exceeds good engineering practice (as determined under regulations to be promulgated by the [EPA.]). 42 U.S.C. § 7423(a)(1). GEP is the height necessary to ensure that emissions from the stack do not result in excessive concentrations of any air pollution in the immediate vicinity of the source as a result of atmospheric downwash, eddies, and wakes which may be created by the source itself, nearby structures or nearby terrain obstacles. 42 U.S.C. § 7423(c). The EPA regulations provide three possible options for calculating GEP stack height, and allow use of the greatest resulting number: (1) 65 meters (de minimis height); (2) the height calculated using one of two formulas (formula height), or (3) the height demonstrated using fluid modeling or field study (above-formula height). 40 C.F.R. § 51.100(ii). In the SIP, Montana had approved a modeling demonstration for Montana Sulphur's 100-meter stack under Option 3, and concluded the creditable stack height was 97.5 meters. However, the EPA rejected Montana's calculations and maintains that the de minimis 65 meters is the proper stack height figure. Montana Sulphur disagrees with several steps in the process which led the EPA to this conclusion. [4]
The EPA rejected Montana's fluid modeling calculation of GEP stack height because, even though it used NSPS for the modeling, the SIP did not actually require Montana Sulphur to meet the NSPS emission rate. 67 Fed.Reg. at 22,209. Montana Sulphur concedes that NSPS may be used for modeling purposes, but contends that NSPS cannot be used as a substantive emissions limit, noting that the EPA regulations themselves state that the allowable emission rate to be used in making demonstrations under this part shall be prescribed by the [NSPS] that is applicable to the source category. . . . 40 C.F.R. § 51.100(kk)(1) (emphasis added). The EPA's interpretation of its own regulation, however, is not unreasonable. The EPA explains that allowable emissions is a term of art it uses to denote an enforceable emission limit, not a mere assumed emission rate that may be disregarded later. The EPA claims it has always interpreted this language to require ongoing compliance with the NSPS, and notes that the term is used elsewhere in the stack height regulations as a substantive limit. 67 Fed.Reg. at 22,210. The EPA further points out that § 51.100(kk)(1) allows a source to demonstrate that the NSPS emission rate is infeasible, and that there would be no reason to include this provision if the NSPS rate were a mere assumption in fluid modeling that need never actually be met. 67 Fed.Reg. at 22,212. We must review the provision as a whole and, where possible, effectuate every word. See Boise Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir.1991). The EPA's interpretation is also consistent with the views expressed in the preamble to the EPA stack height regulations, which states that the applicable section has been revised . . . to specify that an emission rate equivalent to NSPS must be met before a source may conduct fluid modeling to justify stack height credit in excess of that permitted by the GEP formulae. 50 Fed.Reg. 27,892, 27,898 (July 8, 1985) (emphasis added); see Las Vegas v. FAA, 570 F.3d 1109, 1117 (9th Cir.2009) (if regulation is ambiguous, we consult the preamble of the final rule as evidence of context or intent of the agency promulgating the regulations). Our conclusion is also consistent with that of the D.C. Circuit, which addressed the issue of stack height and the use of NSPS and concluded that the EPA has the discretion to impose NSPS requirements in the above formula context. Natural Res. Def. Council, Inc. v. Thomas, 838 F.2d 1224, 1241 (D.C.Cir.1988). The court noted that above-formula credit should be granted with the utmost caution and that the selection of the NSPS baseline was consistent with this admonition. Id. (internal quotation marks omitted). In light of the foregoing, we conclude it was neither arbitrary nor capricious for the EPA to require the SIP to include NSPS limits consistent with the modeling demonstration. [5]
In calculating stack height credit, the regulations only permit a source to use stack height that is necessary to avoid an exceedance of an ambient air quality standard. 40 C.F.R. § 51.100(kk)(1). Therefore, lower exceedance standards can be used to justify a higher stack height credit. A source seeking to justify a higher stack will seek to establish that the downwash pollution effects of the stack are excessive. In such cases, a higher stackwhich redistributes pollution over a wider areais justified in order to prevent excessive local pollution effects. Thus, it matters whether NAAQS, versus more stringent state standards, control in calculating excessive local concentrations. Montana Sulphur argues that Montana's emission rates (MAAQS) properly could be used as benchmarks for ambient air quality under § 51.100(kk)(1), because the regulation refers only to  an ambient air quality standard whereas the regulations elsewhere describe primary, secondary, and national standards. 40 C.F.R. § 51.100(kk)(1) (emphasis added); 40 C.F.R. § 51.100(c), (d), (e). The EPA, however, insists that national standards, not Montana's state-only annual SO2 standard, should apply to the determination of what is an excessive concentration of SO2 that exceeds an ambient air quality standard under these regulations. The regulation is ambiguous because it does not specifically identify which ambient air quality standard exceedances may be used to support the stack height. The preamble to the regulation, however, frequently refers to the use of NAAQS in addressing above-formula stack height and supports the EPA's interpretation that national standards should provide the benchmark. 50 Fed.Reg. at 27,898-27,899; see Las Vegas, 570 F.3d at 1117-18. Again, the EPA's interpretation of its own regulation is reasonable. Using NAAQS versus the MAAQS as the applicable benchmarks for the exceedance analysis comports with the purposes of 42 U.S.C. § 7423: using NAAQS prevents states from setting standards that might enable local industry to justify above-formula stack height credits that do not meet national standards, and better assures that the EPA will fulfill its obligations. See Sierra Club, 719 F.2d at 450 (EPA must make certain the standard it derives in fact fairly approximates the stack height level needed to protect local health and welfare; in doing so, moreover, it should err on the side of reducing stack height, in keeping with Congress's command that credit for stack heights above [formula] height be granted with `utmost caution').
The applicable statutory provisions leave room for interpretation, and the applicable stack height regulations lend support to the EPA's determinations on these complex points. We defer to the agency's judgment in these technical matters, and conclude the EPA did not act arbitrarily or capriciously by rejecting Montana's stack height credit calculation.