Opinion ID: 621128
Heading Depth: 2
Heading Rank: 3

Heading: The FIP

Text: Montana Sulphur argues that the EPA lost its authority to promulgate a FIP when it failed to act within two years, as set forth in 42 U.S.C. § 7410(c). [7] Section 7410(c)(1)(B) indicates that the EPA shall promulgate a Federal implementation plan at any time within 2 years after disapproval or partial disapproval of a SIP. While this is certainly an explicit deadline, as opposed to a more general requirement such as after reasonable notice and public hearings, see generally General Motors Corp. v. United States, 496 U.S. 530, 110 S.Ct. 2528, 110 L.Ed.2d 480 (1990), it does not follow that the agency loses authority to act if it fails to meet that deadline. Rather, the Supreme Court has declined to treat a statutory requirement that an agency `shall' act within a specified time, without more, as a jurisdictional limit precluding action later. Barnhart v. Peabody Coal Co., 537 U.S. 149, 158, 123 S.Ct. 748, 154 L.Ed.2d 653 (2003). When, as here, there are less drastic remedies available for failure to meet a statutory deadline, courts should not assume that Congress intended the agency to lose its power to act. Brock v. Pierce Cty., 476 U.S. 253, 260, 106 S.Ct. 1834, 90 L.Ed.2d 248 (1986). As the Court noted in General Motors Corp., the Clean Air Act provides remedies for EPA inaction, including a suit to compel agency action or a request for reduction or elimination of penalties during any period of unreasonable agency delay. 496 U.S. at 542 n. 4, 110 S.Ct. 2528 (citing 42 U.S.C. §§ 7604(a)(2) & 7413(b)). We hold that in the absence of any Congressional indication otherwise, the failure to act within two years does not utterly deprive the EPA of authority to promulgate the FIP. See Nat'l Petrochemical & Refiners Ass'n. v. EPA, 630 F.3d 145, 155-56 (D.C.Cir.2010).
Montana Sulphur contends that the EPA acted arbitrarily and capriciously by imposing numerical limits on flaring emissions during periods of unusual operations such as SSM. The FIP requires that emissions not exceed 150 lbs/3 hrs and also provides an affirmative defense to penalties for emissions that are beyond the company's control, such as during unusual events like SSM. See 73 Fed.Reg. at 21,431-21,437 (addressing comments to FIP); 73 Fed.Reg. at 21,459 (flare requirements); 73 Fed.Reg. at 21,464-21,465 (affirmative defense). Montana Sulphur argues that: a numerical limit on flaring emissions is infeasible and violations will assuredly occur, see Bunker Hill Co. v. EPA, 572 F.2d 1286 (9th Cir.1977); the EPA is acting inconsistently with its history of exempting flaring during SSM; the 150 lb./3-hour figure is based on unsupported state modeling; no deference should be given to the EPA's internal excess emissions policy (the EEP) [8] ; and enforcement discretion cannot compensate for infeasible requirements, see Marathon Oil Co. v. EPA, 564 F.2d 1253 (9th Cir.1977). In turn, the EPA responds that it must provide for attainment of NAAQS at all times so a total exemption for SSM during flaring is inadequate, see Sierra Club v. EPA, 551 F.3d 1019 (D.C.Cir.2008); it is reasonable to encourage minimizing flare emissions, whether they are routine or during SSM; the numerical requirements are generally consistent with longstanding internal policies such as the EEP, see Ariz. Public Serv. Co. v. EPA, 562 F.3d 1116, 1129 (10th Cir.2009); and the FIP provides relief for truly unavoidable emissions with an affirmative defense to penalties, 73 Fed.Reg. at 21,464-21,465. Although not always consistently employed, as early as 1983, the EPA adopted a policy requiring continuous compliance with the Clean Air Act requirements but acknowledging that some leeway might be necessary for unusual events such as SSM. [9] In 1999, the EPA's EEP identified several SIPs that did not comply with its policy and urged regions to review for compliance; this later memo also clarified that while outright exemptions for SSM were not acceptable, states could adopt an affirmative defense to penalties for unforeseeable and unavoidable exceedances, although noting that this may not be appropriate for SO2 emissions where attainment problems are caused by one or only a few sources. The FIP here contains such an affirmative defense, and the EPA indicates that other regulatory agencies, including the State of Colorado and Maricopa County, Arizona, have adopted similar criteria. 73 Fed.Reg. at 21,432. The EPA explains that although including the defense in the FIP is a slight deviation from the EEP (because in the Billings/Laurel area one or more sources may have the potential to cause an exceedance of the SO2 limits), [10] experience since the time the EEP was issued led the agency to conclude that the elements of the affirmative defense provide a very significant incentive for facilities to do all they can to comply with their emission limits and that this approachnumerical limits plus the affirmative defenseappropriately and reasonably addresses industry concerns regarding safety. 73 Fed.Reg. at 21,435. Other circuits have endorsed the EPA's position that the Clean Air Act requires continuous compliance, including during SSM. The Sixth Circuit rejected a challenge to the EPA's disapproval of a Michigan SIP which had provided an automatic exemption from emission limits during SSM. Mich. Dep't of Envtl. Quality v. Browner, 230 F.3d 181 (6th Cir.2000). The Sixth Circuit deferred to the EPA's interpretation of the Clean Air Act that broad exclusions from compliance with emissions limitations during SSM could jeopardize ambient air quality and upheld the SIP disapproval. Id. at 185; see also Ariz. Public Serv. Co., 562 F.3d at 1127, 1129 (rejecting challenge to EPA's refusal to exempt excess emissions caused by malfunctions, and concluding that the policy is a reasonable interpretation of the Clean Air Act because excess emissions resulting from malfunctions are violations of the Clean Air Act, for such emissions can interfere with attainment of the national air standards). In fact, when the EPA attempted to be more lax under another section of the Clean Air Act by permitting good work practices for emissions during SSM events rather than imposing numerical emission limits, the D.C. Circuit concluded that the SSM exemption violates the [Clean Air Act's] requirement that some section 112 standard apply continuously, and vacated the exemption. Sierra Club, 551 F.3d at 1028. Montana Sulphur also contends that the actual numerical limits imposed by the EPA are arbitrary, going beyond what is necessary to satisfy the NAAQS, claiming the EPA simply seized upon and accepted Montana's decision to impose a 150 lb/3-hour limitation on flares. However, in response to a similar comment, the EPA explained in its final rule: Emission inputs to the model were established using criteria contained in 40 CFR part 51, Appendix W, Section 8. The emission limits set by the modeling analysis are based on emission rates that would just meet the NAAQS. They are not based on arbitrary limits that go far beyond protecting the NAAQS. For example, with the limits we are establishing and the SIP limits we approved, our modeling resulted in a high value of 354 µg/m which would exactly meet the 24-hour SO2 NAAQS of 365 µg/m when background concentrations of 11 µg/m are considered. 73 Fed.Reg. at 21,439 (emphasis added). Finally, the EPA acknowledges that violations are likely inevitable, but relies on the provision of an affirmative defense to compensate for the infeasibility problem. Montana Sulphur claims that the possibility of enforcement discretion is insufficient to require compliance with an infeasible limitation. However, here the EPA does not rely on enforcement discretion alone, but specifically promulgates an affirmative defense in the FIP, which clearly defines the requirements to avoid penalties. Although Montana Sulphur argues that there is no rational basis to limit the affirmative defense to penalties and that the defense should extend to injunctive relief as well, the EPA persuasively explains that [t]here could be instances in which malfunctions are unavoidable based on current plant layout and operating parameters but in which some form of corrective action would still be appropriate and that it is reasonable to retain the authority to seek injunctive relief for all exceedances of emission limits so that we remain able to protect the NAAQS, regardless of source `culpability' for any specific exceedance. 73 Fed.Reg. at 21,435-21,437. In sum, we conclude that the EPA reasonably interpreted the Clean Air Act to require continuous limits on emissions and that the actual numerical limits imposed by the FIP are neither arbitrary nor capricious.
Montana Sulphur further argues that the EPA acted arbitrarily and capriciously by requiring implementation of flare monitoring technology that does not exist. It contends that it is technically infeasible to monitor low rates of flow to flares during routine operations, and that the required total sulfur monitors exist only in pilot testing. However, Montana Sulphur repeats its objections to the initially proposed FIP without addressing the modifications the EPA made in the final FIP to accommodate these concerns. With respect to the concern that flare flow monitors cannot monitor accurately at low flow velocities (under 1.0 fps), the EPA responded that: (1) it had based the requirement on what it saw was achievable in vendor literature and required in at least two other areas, 73 Fed.Reg. at 21,425; (2) it modified the accuracy requirement from +/-5% to +/- 20% when dealing with low flows between 0.1 and 1 fps, 73 Fed.Reg. at 21,426; and (3) it implemented a secondary means for companies to determine whether flow is reaching the flare when the flow monitor indicates low flow, 73 Fed.Reg. at 21,426. With respect to the total sulfur monitors, Montana Sulphur is correct that these monitors appear to have primarily been in pilot testing at the time of the FIP, though the EPA does identify two sources where analyzers are on lines leading to refinery flares, and did revise the FIP to give industry a full year to install the monitors. 73 Fed.Reg. at 21,427-21, 428. Moreover, the EPA also revised the final FIP to allow other methods to determine total sulfur concentration, including grab or integrated sampling. 73 Fed. Reg. at 21,429. Thus, the availability of total sulfur concentration monitoring is something of a red herring since the company can use an alternate means to measure sulfur. 40 C.F.R. § 52.1392(h)(3). Montana Sulphur does not point to any evidence in the record that grab sampling is technically infeasible.
Montana Sulphur contends that the EPA acted arbitrarily and capriciously when it granted variable emission limits to a nearby power plant and the ExxonMobil refinery, but imposed fixed emission limits on it instead. In Montana's SIP, the state used a variable emissions limit for all three sources, which involved a computer dispersion model that required Montana to run 1,320 modeling scenarios. 73 Fed.Reg. at 21,444. However, as discussed above, in that modeling, Montana had improperly calculated the stack height credit for Montana Sulphur's primary 100-meter stack ( see section II.A., supra ). Because the EPA disapproved the SIP's use of the stack height credit in the modeling calculation, it was left with no fixed or variable emissions limit for Montana Sulphur; thus, it needed to fill this gap with the FIP. 67 Fed.Reg. at 22,170, 22,206. The EPA explained that it considered fixed emissions limits to be easier to model, monitor and enforce, 71 Fed.Reg. at 39,268, and that this was the type of limit used at virtually every other source in the country (with the exception of the other two Montana sources). 73 Fed.Reg. at 21,444-21,445. The EPA also notes that based on past reporting data, it appeared Montana Sulphur would be able to attain the fixed limit without the need for any additional pollution controls. 71 Fed.Reg. at 39,268. Because the EPA would have primary enforcement responsibility regarding the FIP and the Montana Sulphur emissions, it chose what it perceived as a simpler method. Although the EPA approved Montana's use of the variable limits with respect to the other two sources, the emission limits at play there did not involve improper stack calculations, and, in addition, the State was primarily responsible for ensuring the other sources' compliance with the variable limits. Montana Sulphur does not point to any other source in which the EPA itself imposed variable limits in a FIP. Moreover, the EPA expressed reservations about the State's use of the variable limits as to the other sources; it indicated it would be monitoring the situation closely and might reconsider its approval of those conditions if doubts arose about the accuracy of the monitoring and/or reporting under that system. 67 Fed.Reg. at 22,207. Thus, contrary to Montana Sulphur's argument, this is not a case where the EPA depart[ed], sub silentio, from its usual rules of decision to reach a different, unexplained result in a single case. See Western States Petroleum Ass'n v. EPA, 87 F.3d 280, 284 (9th Cir.1996) (quotation marks omitted). Rather, it offered a reasonable explanation for why it selected a different type of emissions limit than the State had chosen, and, in fact, explained that fixed emissions limits are the norm and the preferred method. 73 Fed.Reg. at 21,444-21,445.
Montana Sulfur next argues that the EPA acted arbitrarily and capriciously by imposing emission limits and monitoring requirements regarding Montana Sulphur's auxiliary stacks and 30-meter stack. Montana Sulphur argues that the requirements are unnecessary to comply with the NAAQS because the emissions are extremely small and have no practical effect on NAAQS. [11] It also contends that the worst case scenario calculation by the EPA ignores reality because Montana Sulphur cannot vent all five boilers to the auxiliary stacks and still operate its plant. As discussed above, the EPA partially disapproved Montana's limitations on the auxiliary stacks and the 30-meter stack because there was no restriction on the sulfur content of the fuel when exhausting through these stacks and because the SIP lacked a monitoring method to make the mass emission limits practically enforceable. 67 Fed.Reg. at 22,170. The FIP adopted the same mass emission limits that the state had imposed in the SIP12 lbs/3 hoursand added monitoring requirements to ensure compliance with the limits. 73 Fed.Reg. at 21,451-21,452. As for the arbitrariness of the actual limits and monitoring requirements, it was reasonable for the EPA to use the state's original emission limitations for consistency because they were a piece of the state's overall control strategy supporting attainment. The EPA further points out that (1) the final FIP was revised to allow Montana Sulphur to use its existing length-of-stain detector tubes for monitoring rather than requiring the portable analyzers suggested in the initial proposal, 73 Fed.Reg. at 21,446 (noting that the final FIP was similar to the state operating permit requirements that already applied to Montana Sulphur); and (2) the final FIP increased the concentration limits on the fuel burned in the units from 100 ppm/3 hours to 160 ppm/3 hours to accommodate Montana Sulphur's concern that it was too restrictive, noting that modeling using 160 ppm for up to three hours would still meet attainment requirements (but not if emissions were at this level for the entire day) and that evidence indicated Montana Sulphur should already be within these limits in light of the SIP's requirement of burning only low sulfur gas and the fuel gas scrubbing technology it uses. 73 Fed.Reg. at 21,446-47. The EPA also explains that its modeling assumption that all units were venting to the stacks, whether this would ever happen, was a way of simplifying monitoring and compliance for Montana Sulphur. Under this model, Montana Sulphur needed only to measure H2S ppm concentration (using its existing monitoring device) to determine compliance, whereas direct compliance per boiler stack would either require additional monitoring equipment or methods or be unreliable due to potential variation in boiler use and venting practices. 73 Fed.Reg. at 21,446-21,447 & 21,452. The EPA sums up its decision in its final FIP: We believe additional monitoring equipment would need to be installed, or additional monitoring would need to be performed, at greater expense to [Montana Sulphur], to achieve adequate method to determine direct compliance with the mass emission limits. The concentration limits we are imposing are reasonable, can be monitored at reasonable cost, and will ensure protection of the NAAQS. 73 Fed.Reg. at 21,447. Thus, the specific emission limits and monitoring requirements imposed by the FIP, based on revised emission models and that allow Montana Sulphur to use existing technology, were not arbitrary or unreasonable.
This issue is addressed in Section II.A above, regarding the 2002 SIP disapproval. Because we previously concluded that the EPA properly rejected Montana's calculated stack height credit in the SIP and that it was proper to use the 65-meter de minimis figure instead, see 40 C.F.R. § 51.118, we likewise hold here that the EPA did not act arbitrarily in using that figure in the FIP. [12]
Montana Sulphur claims the EPA acted arbitrarily and capriciously because the FIP did not take into account the reduced emission limits resulting from certain consent decrees and Montana air quality permit changes entered into between sources such as ExxonMobil, CHS Refineries, and the State of Montana. Montana Sulphur contends it was irrational for the EPA to ignore the effects of these consent decrees, which were entered into after the 2002 SIP disapproval but before the 2006-2008 FIP. The EPA offered three justifications for declining to consider the emission reductions that resulted or will result from those consent decrees and permit changes. First, it noted that Montana did not actually make any revisions to the SIP to address the flaws in that document, and, having disapproved portions of the SIP, the EPA was required to fill those gaps. 73 Fed.Reg. at 21,421. Second, the EPA noted that even though federally enforceable, some of the state permits can be revised without EPA approval and the consent decrees have a limited lifespan; it opined that stationary source emission limits necessary to demonstrate attainment must be included in the FIP or approved SIP so that changes to those limits may only be made with its approval. Id. Finally, the EPA explained that the emission limits within the consent decrees and permit actions do not contain limits that are consistent with the averaging times of the NAAQS, specifically the 3-hour and calendar-day averaging periods. 73 Fed.Reg. at 21,422. For example, the CHS permit and decree impose ppm limits for 7-day and 365-day rolling averages instead of mass pound limits per 3-hour and calendar-day periods. Id. The EPA pointed out that [n]one of the commenters has suggested these limits be converted to FIP mass limits that would apply over a 3-hour averaging period, and the State has not submitted a SIP revision with such limits. Id. In light of the specific procedures in place for SIP approval or disapproval and the responsibility of the EPA to promulgate a FIP when the state plan is inadequate in some respect, we conclude the EPA's position is justified. The EPA correctly reads 42 U.S.C. § 7410(a)(2) as requiring states to include enforceable emission limits and other control measures in the plan itself. Whatever requirements may exist in the consent decrees and construction permits (which may or may not be equivalent to the requirements of the FIP, since they are measured by different means over a different time frame), they are not part of the underlying SIP and the EPA here has authority to fill the gaps in the portions of the SIP it had previously disapproved.
Finally, Montana Sulphur argues that the EPA acted arbitrarily and capriciously because it used outdated modeling in the FIP. In the FIP, the EPA used the Industrial Source Complex (ISC) model, which was the preferred model at the time Montana proposed its SIP. In 2005, the EPA revised its Guideline on Air Quality Models and recommended use of a new dispersion modelAERMOD. 70 Fed. Reg. 68,218 (Nov. 9, 2005). However, the rule grandfathered ISC models for one year (through Nov. 8, 2006), and indicated that during that time AERMOD could, but was not required to, be substituted for ISC for appropriate applications. [13] The EPA proposed the FIP in July 2006, within the one-year transition period. In issuing the final FIP in April 2008, the EPA further defended its choice to stick with the ISC dispersion model: The commenter is correct that a newer model is now available. For new SIPs, we would require states to use EPA's most recent model. However, this is a unique situation. The State developed the Billings/Laurel SO2 SIP using the ISC model, which was current at that time, and we approved various source-specific emission limits in the SIP based on the State's modeling effort. The purpose of this FIP is to fill gaps in the approved SIP. We are not intending or required to re-do the entire SIP. . . . We note that MDEQ tested the performance of the ISC model when the Billings/Laurel SO2 SIP was being developed, and the results showed that the model performance exceeded the performance criteria for models of this type. . . . We also note that ISC remained an accepted EPA model at the time we proposed our FIP, and it is reasonable to finalize the FIP based on the same model. Switching models after our proposal would have required us to re-propose the FIP and would have delayed the FIP further. 73 Fed.Reg. at 21,437-21,438. The EPA's continued use of the ISC model was not arbitrary or capricious. The model was properly employed at both the time of the state SIP and the proposed FIP. The FIP did not replace the entire SIP, but only the limited portions the EPA had disapproved; because use of a different model could have yielded results that did not comport with the remainder of the SIP, it was not arbitrary or capricious for the EPA to continue with the existing model despite some later technological improvements.