Opinion ID: 768833
Heading Depth: 2
Heading Rank: 2

Heading: Inclusion of Specific States

Text: 61 Wisconsin industry petitioners separately challenge Wisconsin's inclusion in the SIP call. The Wisconsin petitioners argue that the emissions from the state do not contribute significantly to nonattainment in any other state. Section 110(a)(2)(D)(i)(I) requires that a state contribute significantly to nonattainment in ... any other State in order to be included in the challenged SIP call. 42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added). As explained below, EPA erroneously included Wisconsin in the SIP call because EPA failed to explain how Wisconsin contributes to nonattainment in any other state. 62 EPA contends that Wisconsin contributes significantly to other states' nonattainment because the state significantly contributes ozone over the Lake Michigan region. Despite EPA's Lake Michigan concerns, the agency does not show on the record that Wisconsin's ozone contribution affects any 63 onshore state nonattainment. At oral argument, counsel for EPA conceded that [t]he part that's missing [from the record] is a thorough explanation to support our modeling data and things of that nature between the Lake Michigan receptor area and the onshore states. Oral Arg. Tr. at 107.When asked for more, counsel could only respond that the best evidence ... is simply the narrative statements in the [final rule's] preambles.... There's nothing else there. Id. Because EPA conceded at oral argument that it has no record evidence directly linking Wisconsin's ozone contribution over Lake Michigan to nonattainment in any state and because EPA must demonstrate[ ] a reasonable connection between the facts on the record and its decision made pursuant to its statutory authority, Ethyl Corp. v. EPA, 51 F.3d 1053, 1064 (D.C. Cir. 1995), we hold that EPA acted unlawfully by including Wisconsin in a SIP call limited by statute to states contributing significantly to nonattainment in any other state and therefore set aside Wisconsin's inclusion in the SIP call. See 5 U.S.C. S 706(2)(A), (C) (1994) (The reviewing court shall ... hold unlawful and set aside agency action ... found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not accordance with law [or] in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.).
64 Missouri and Georgia were on the geographical perimeter of EPA's SIP call. No state west of Missouri was included, nor were the two states directly to its north (Iowa and Minnesota) and south (Arkansas). Georgia was a bit more in the thick of things, surrounded on three sides by included states--Alabama, Tennessee, North Carolina, and South Carolina; but the southern portion of Georgia borders the excluded state of Florida. Industrial petitioners within Missouri and Georgia challenge EPA's decision to calculate NOx budgets for these two states based on the entirety of NOx emissions in each state. Petitioners argue that there is record support only for the proposition that emissions from, roughly speaking, the eastern half of Missouri and the northern two-thirds of Georgia contribute to downwind concentrations; accordingly, they say, the NOx budgets for Missouri and Georgia should be based solely on those emissions. 65 We must here explain how EPA calculated NOx budgets. It projected the total amount of NOx emissions that sources in astate would emit in the year 2007, in light of expected growth and other controls required by the CAA. EPA then projected total NOx emissions if highly cost-effective controls were implemented. The resulting calculation became the state's NOx budget, with the difference between the base case and the controlled case being the significant contribution discussed above. Obviously a state's NOx budget will vary depending on whether EPA considers all of the NOx emissions in the state, or instead considers only emissions located in a smaller portion of the state (assuming emissions are dispersed throughout the state, which is the case here and without which the issue would be immaterial, as nonexistent emissions need not be controlled). For Missouri and Georgia, as for all other included states, NOx budgets were calculated using all NOx emissions in the state. 66 The challenge basically stems from the character of OTAG's modeling, and its resulting recommendations to EPA. OTAG's ozone transport model used grids drawn across most of the eastern half of the United States. The first grid was the most precise, with grid cells of 12 kilometers squared (244 square kilometers)--the fine grid. A second grid extended beyond the perimeter of the fine grid and had cells of 36 kilometers squared resolution--the coarse grid. For a variety of reasons to be discussed shortly, the fine grid did not track state boundaries, and Missouri and Georgia were among several states that were split between the fine and coarse grids. OTAG then ran modeling for both grids, but in the final analysis did not find emissions from the coarse grid worthy of special concern. OTAG's executive summary stated: [T]he focus on ozone air quality impacts in the fine grid raised questions about the need for controls in the coarse grid. The recommendations adopted by the Policy Group recognize that the OTAG analyses demonstrated that transport impacts of the coarse grid areas on the fine grid are minimal and therefore, do not include the coarse grid areas for recommended control measures other than those that would be applied nationally. Petitioners argue that EPA should base NOx budgets for Missouri and Georgia only on portions of these states within the fine grid. 67 EPA offers three reasons for including the entire states of Missouri and Georgia: 68 (1) The division of individual States by OTAG was based, in part, on computational limitations in OTAG's modeling analyses; (2) the additional upwind emissions from full, as opposed to partial, States would provide additional benefit to downwind nonattainment areas; and, (3) State-wide emissions budgets create fewer administrative difficulties than a partial-State budget. 69 Final Rule, 63 Fed. Reg. at 57,424. We review deferentially, searching for the reasonableness of EPA's action, Appalachian Power, 135 F.3d at 802, whether that be EPA's interpretation of the statute, see Chevron, 467 U.S. at 842-43, or EPA's explanation for its policy choice, see Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983). The two inquiries can and do overlap. See Animal Legal Defense Fund v. Glickman, 204 F.3d 229, 234 (D.C. Cir. Feb. 1, 2000). 70 On its face the statute neither mandates nor prohibits an all-or-nothing statewide perspective. It directs EPA to make sure that SIPs (which of course are state plans) adequately prohibit any source or other type of emissions activity within the State from emitting in excess of the substantive limit. The critical issue is whether the targeted source or emissions activity contribute[s] significantly to non-attainment in another state. 71 EPA's first argument is that the fine grid split Missouri and Georgia in part because of computer limitations--every extension of the fine grid modeling was costlyin terms of both computer memory and data collection. Document No. II-A-14, Draft OTAG Final Report Regional and Urban Scale Modeling--Chapter 2, 2-7 (undated). But the OTAG modelers allocated their scarce resources purposefully, by reference to known air quality data, explicitly taking into consideration the locale of various problem areas (as represented by urban-area modeling domains), and emissions density. Id. Thus it was no mere techno-fortuity that the fine grid included enough of Missouri to include the city of St. Louis and enough of Georgia to include Atlanta: both cities are designated nonattainment areas for ozone under the 1-hour NAAQS. See Final Rule, 63 Fed. Reg. at 57,359. Moreover, the fine grid portions of both states are the closest to other nonattainment areas, such as Chicago and Birmingham, and generally higher ozone density. 72 Of course the fine grid modeling of parts of Missouri and Georgia showed emissions in the aggregate meeting the EPA's threshold contribution criteria. Thus fine grid modeling of each in its entirety would presumably also have done so. But that is a simple arithmetic necessity (a state is necessarily composed of its parts) and provides no reason for EPA to ignore the very air quality factors that influenced the design of the modeling that did occur. OTAG itself clearly did not think those factors magically lost their force, for it recommended against controlling the rump areas. And EPA itself acknowledged part of the reason this should be so when it observed, Sources that are closer to the nonattainment area tend to have much larger effects on air quality than sources that are far away. 63 Fed. Reg. at 25,919. Indeed, even if the line between areas for which there was evidence and ones for which there was none were explained solely by fortuity, EPA would still be required to act upon the evidence that was generated. See Chemical Manufacturers Ass'n v. EPA, 859 F.2d 977, 989 (D.C. Cir. 1988) (holding that EPA must consider all the evidence--including the industry evidence). 73 This leads us to EPA defenses other than modeling design.The first is that the larger the geographic area that is controlled, the greater the downwind benefits. Final Rule, 63 Fed. Reg. at 57,424. This reason can only stand if the emissions at issue contribute significantly to nonattainment in another state. OTAG concluded they did not. Id. EPA claims that its state-specific modeling, which supplemented OTAG's more regional modeling, supports including the coarse grid areas. See id. Yet EPA's explanation and technique make clear that emissions from the fine grid areas may have been the sole source of the finding. Indeed, EPA says as much: [I]f emissions from part of a State contribute significantly to downwind nonattainment or maintenance problems, emissions from the entire State contribute significantly to downwind nonattainment or maintenance problems. Id. This of course is also true as a matter of logic (a state is the sum of its parts). But it is completely consistent with the rump portion being innocent of downwind effect, and thus is scarcely a reason for ruling that significant contributions from a border city should rope in the entire state. 74 Aware of this problem, EPA simply throws the burden of persuasion onto the states. [T]here is no peculiar meteorological phenomenon that would indicate that emissions from some portion of [each of the affected states] would not impact downwind nonattainment or maintenance problems. Id. In addition, the atmosphere is constantly in motion and has no limitations at geo-political boundaries. Id. If this is evidence of contribution, it proves too much. If the simple proposition that the prevailing westerlies carry pollutants eastward were enough, EPA could, on the basis of a plant in Pennsylvania, use S 110(a)(2)(D)(i)(I) to control all NOx emissions east of the Rocky Mountains. While we uphold EPA's determination that a significant contribution is acost effectively controllable contribution, EPA must first establish that there is a measurable contribution. Interstate contributions cannot be assumed out of thin air. 75 In the end administrative convenience is EPA's only real defense for basing NOx budgets on the entirety of a state's emissions. There seem to be two species of this argument. First, EPA seems to claim that it is just easier to calculate a NOx budget based on all the emissions in the state instead of only a portion of such emissions. EPA provides no explanation of why this is so, and it seems dubious. Within a state are counties, air quality control regions, and for some unfortunate states, nonattainment areas. EPA also has emissions data on specific sources, some of which may be susceptible of highly cost-effective controls, and others of which may not be. See, e.g., Emissions Data For Power Plants, <www.epa.gov/acidrain/emissions> (visited January 26, 2000). Without data from such state subdivisions and specific sources, EPA could never have performed modeling or even set a statewide budget. EPA has not explained how calculation of a budget for sources in only half of the state would be any more onerous than for all sources in the state. Unless it is relying on data that exist only for the state as a whole, calculation seems on its face easier for a half than for a whole. 76 EPA offers a second administrative problem. If the concern for not allowing S 110(a)(2)(D)(i)(I) to encompass unproven areas compels an insistence on proof of contribution from ever smaller geographic subdivisions, any area's specific contribution may appear insubstantial, even though collectively there are significant contributions. In other words, unlike bologna, which remains bologna no matter how thin you slice it, significant contribution may disappear if emissions activity is sliced too thinly. 77 While this argument was stressed on appeal, it is nowhere to be found in the proposed or final rule, except insofar as it may have lurked behind the vague invocation of administrative difficulties. See Final Rule, 63 Fed. Reg. at 57,424;Proposed Rule, 62 Fed. Reg. at 60,342. As a result it is quite undeveloped. But it appears to be based on a distortion of the claims of Missouri and Georgia. They are not asserting a right to bologna tactics, to slice down the unit of measurement to a point of insignificance. All they are claiming is that where the data--calculated under EPA's supervision--inculpate part of a state and not another, EPA should honor the resulting findings. 78 Such a proposition would of course leave EPA free to select states as the unit of measurement. In turn, states (or the areas of states that believed themselves innocent of material contributions, or sources located therein), might respond by offering finer-grained computations. Such a process seems more like a healthy search for truth than the collapse into infinite regress that EPA claims to fear. 79 EPA also points to state flexibility: Since each State has the flexibility to determine which sources to control in order to meet the budget, a State can structure its control strategy to require fewer reductions in certain portions of the State and greater controls in other areas. Final Rule, 63 Fed. Reg. at 57,424. This theory presents at least two difficulties. First, it overlooks the fact that state budgets not only encompass the whole state but are calculated on the basis of hypothesized cutbacks from areas that have not been shown to have made significant contributions. Thus the flexibility comes at the cost of a burden that is heavier in the aggregate, where the added weight accomplishes no purpose relevant to S 110(a)(2)(D)(i)(I). Second, a state's use of flexibility to pursue a purely in-state set of tradeoffs between cost and benefit (and thus unrelated to the goals of S 110(a)(2)(D)(i)(I)) may actually diminish the cutbacks in areas that are making acontribution to other states' nonattainment. 80 Thus nowhere has EPA reasonably explained why NOx budgets based on every state source are the best stopping point with respect to states on the perimeter of the ozone problem. 81 Therefore we vacate EPA's final rule with respect to Missouri and Georgia and remand to the agency for reconsideration in light of this opinion.
82 Petitioner Santee Cooper challenges South Carolina's inclusion in the SIP call by alleging that the state's downwind ozone nonattainment impact is minuscule and therefore not significant. We will hold unlawful EPA's decision to include South Carolina in the SIP call if we find EPA's decision arbitrary, capricious, an abuse of discretion, or otherwise not accordance with law. 5 U.S.C. S 706(2)(A). In order for EPA's decision to include South Carolina in the SIP call to survive review, the agency must demonstrate[ ] a reasonable connection between the facts on the record and its decision, Ethyl Corp., 51 F.3d at 1064. We conclude that the record supports EPA's decision to include the state as a significant contributor to downwind nonattainment. See Proposed Rule, 62 Fed. Reg. at 60,337-339. EPA considered the analyses submitted by the objecting petitioner but disagreed with the petitioner's conclusions as drawn from the relevant information. Specifically, EPA conducted additional modeling and interpreted the data in context and found that South Carolina significantly contributed to ozone nonattainment. See id.;Final Rule, 63 Fed. Reg. at 57,394-396. 83 For example, under the 1-hour standard, the UAM-V zeroout modeling results indicated that South Carolina had a high maximum contribution (16 ppb) and a high frequency of contribution (at least 2 ppb to 15% of the exceedences and at least 10 ppb to 5% of the exceedences) to Atlanta. See Office of Air and Radiation, U.S. Environmental Protection Agency, Doc. No. VI-B-11, Air Quality Modeling Technical Support Document for the NOx SIP Call C-5, H-2 (1998).The CAMx modeling results were comparable (25 ppb maximum contribution and a frequency of at least 2 ppb to 30% of the exceedences). See id. at C-5, G-6. Among the upwind states, only Alabama had a higher maximum contribution. See id. at Apps. G & H. Moreover, South Carolina's contribution to 1-hour nonattainment in Atlanta was no more insignificant than many of the other linkages that were found to be significant (e.g., Indiana's contribution to New York City).See id. at C-13, H-16. 84 In contrast, the petitioner seeks to show that the data, when viewed in isolation, makes South Carolina's contribution appear insignificant. In the end, we reject the challenge made on behalf of South Carolina because the petitioner attacks, not so much the accuracy of EPA's data, but rather EPA's reasonable analysis and application of the data. 85