Court Opinion

ID: 767054
Source: CourtListenerOpinion
Date Created: 2012-04-18 08:21:41+00
Date Added: 2024-06-11T17:55:25.702384
License: Public Domain

198 F.3d 930 (D.C. Cir. 1999)
Lignite Energy Council, et al.,Petitionersv.U.S. Environmental Protection Agency, RespondentNatural Gas Supply Association, et al., Intervenors
No. 98-1525 Consolidated with98-1529, 98-1533, 98-1541, 98-1543
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 16, 1999December 21, 1999

[Copyrighted Material Omitted]
On Petitions for Review of an Order of the Environmental Protection Agency
F. Willam Brownell and William F. Pedersen argued the  cause for petitioners.  With them on the briefs were Craig S. Harrison, Jeffrey A. Knight, Harold P. Quinn, Jr., Gene E.  Godley, Scott H. Segal, Brian R. Bjella, and Charles S.  Miller, Jr.
Heidi Heitkamp, Attorney General, State of North Dakota,  and Carmen Miller, Assistant Attorney General, were on the  brief for amicus curiae the State of North Dakota.
Wendy L. Blake, Attorney, U.S. Department of Justice,  argued the cause for respondent.  With her on the brief was  Lois J. Schiffer, Assistant Attorney General.
Armond M. Cohen was on the brief for amicus curiae  Conservation Law Foundation, et al.
John H. Sharp, Michael R. Barr and Michael A. Conley  were on the brief for intervenors.
Before:  Edwards, Chief Judge, Silberman and Henderson,  Circuit Judges.
Opinion for the Court filed Per Curiam.

Per Curiam:

1
Petitioners challenge EPA's new source performance standards for nitrogen oxides emissions from utility  and industrial boilers.  We conclude that EPA did not exceed  its discretion under section 111 of the Clean Air Act in  promulgating these standards, and therefore deny the petitions.

2
* * * *

3
Fossil-fuel fired steam generating units ("boilers") emit  nitrogen oxides (NOx), air pollutants that can cause deleterious health effects and contribute to the formation of acid rain. Section 111 of the Clean Air Act requires EPA to establish  performance standards for the emission of NOx from newly  constructed boilers;  these "new source performance standards" are to be set at a level that

4
reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any non air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.

5
42 U.S.C. § 7411(a)(1).  In its 1990 Clean Air Act Amendments Congress specifically directed EPA to exercise its  section 111 authority and establish new NOx standards that  incorporate "improvements in methods for the reduction of  emissions of oxides of nitrogen."  42 U.S.C. § 7651f(c)(1).

6
In response to these statutory mandates, EPA promulgated  a rule lowering its NOx new source performance standards to  .15 lb/MMBtu (pounds of NOx emitted per million BTU  burned) for utility boilers1 and .20 lb/MMBtu for industrial  boilers.  See 63 Fed. Reg. 49,442, 49,443 (1998) (to be codified  at 40 C.F.R. pt. 60).  These standards reflect the level of NOx  emissions achievable by what EPA considers to be the "best  demonstrated system" of emissions reduction:  the use of  selective catalytic reduction (SCR) in combination with combustion control technologies.2 Petitioners' central claim is  that EPA selected SCR as the basis for its NOx standards  without properly balancing the factors that section 111 requires it to "take into account."  Because section 111 does not set forth the weight that be should assigned to each of these  factors, we have granted the agency a great degree of discretion in balancing them, see, e.g., New York v. Reilly, 969 F.2d  1147, 1150 (D.C. Cir. 1992);  EPA's choice will be sustained  unless the environmental or economic costs of using the  technology are exorbitant.  See National Asphalt Pavement  Ass'n v. Train, 539 F.2d 775, 786 (D.C. Cir. 1976).

7
Petitioners argue that SCR is not the "best demonstrated  system" under section 111 because the incremental cost of  reducing NOx emissions is considerably higher with SCR than  with combustion controls.  Recent improvements in combustion controls will enable many boilers to attain emissions  levels close to EPA's SCR-based standards;  accordingly,  petitioners assert that EPA should have based its standards  on these less expensive technologies.  However, in light of  EPA's unchallenged findings showing that the new standards  will only modestly increase the cost of producing electricity in  newly constructed boilers, see 62 Fed. Reg. 36,948, 36,958  (1997) (proposed NOx revisions), we do not think that EPA  exceeded its considerable discretion under section 111.Moreover, petitioners' argument stressing the comparable  environmental merits of advanced combustion controls is to a  certain extent self-defeating, since the new source performance standards set by EPA are not technology-forcing, and  continuing advances in combustion control technologies will  reduce the amount of NOx reduction that must be captured by  the more expensive SCR technology.

8
It was also within EPA's discretion to issue uniform standards for all utility boilers, rather than adhering to its past  practice of setting a range of standards based on boiler and  fuel type.  See, e.g., 44 Fed. Reg. 33,580 (1979) (establishing  varying NOx emissions standards for utility boilers).  Petitioners recognize that EPA is not required by law to subcategorize--section 111 merely states that "the Administrator  may distinguish among classes, types, and sizes within categories of new sources," 42 U.S.C. § 7411(b)(2) (emphasis  added)--but argue that it was arbitrary and capricious for  EPA to decline to do so.  EPA explains that its change to  uniform standards is justified by SCR's performance characteristics:  Unlike the technologies on which past new source  performance standards were based, flue gas treatment technologies like SCR limit NOx emissions after combustion, and  the effectiveness of SCR is thus far less dependent upon  boiler design or fuel type.  Petitioners respond that there are  reasons to expect SCR to perform less adequately on boilers  burning high-sulfur coals, but EPA collected continuous emissions monitoring data on two high-sulfur coal-fired utility  boilers that showed that the .15 lb/MMBtu standard was  achievable, and supplemented this study with similar evidence  from foreign utility boilers.  EPA also considered petitioners'  concerns about the impact of alkaline metals on the performance of the catalyst used in the SCR process, and concluded  that such "catalyst poisoning" is not a significant problem in  coal-fired boilers.  See 63 Fed. Reg. at 49,445.  Mindful of the  high degree of deference we must show to EPA's scientific  judgment, see, e.g., Appalachian Power Co. v. EPA, 135 F.3d  791, 801-02 (D.C. Cir. 1998), we accept these determinations  and sustain EPA's uniform standard for utility boilers.

9
Petitioners offer a broader challenge to EPA's .20 lb/ MMBtu standard for industrial boilers, claiming that SCR is  not "adequately demonstrated" for any coal-fired industrial  boilers.  EPA was unable to collect emissions data for the  application of SCR to these boilers, but this absence of data is  not surprising for a new technology like SCR, nor does it in  and of itself defeat EPA's standard.  Because it applies only  to new sources, we have recognized that section 111 "looks  toward what may fairly be projected for the regulated future,  rather than the state of the art at present."  Portland  Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir.  1973).  Of course, where data are unavailable, EPA may not  base its determination that a technology is adequately demonstrated or that a standard is achievable on mere speculation  or conjecture, see, e.g., National Asphalt Pavement Ass'n,  539 F.2d at 787, but EPA may compensate for a shortage of  data through the use of other qualitative methods, including  the reasonable extrapolation of a technology's performance in  other industries.  See, e.g., Weyerhaeuser Co. v. Costle, 590  F.2d 1011, 1054 n.70 (D.C. Cir. 1978).

10
EPA has done precisely that here, concluding from its  study of utility boilers that SCR is "adequately demonstrated" and the .20 lb/MMBtu standard is "achievable" for coal fired industrial boilers as well.  Utility and industrial boilers  are similar in design and both categories of boilers can attain  similar levels of NOx emissions reduction through combustion  controls, which means that SCR will be required to capture  comparable quantities of NOx for both boiler types.  While  petitioners argue that SCR is less likely to be effective on  industrial boilers because they have widely fluctuating load  cycles, EPA has shown that SCR can be successfully applied  to coal-fired utility boilers under a "wide range of operating  conditions" including those analogous to the load cycles of  industrial boilers.  63 Fed. Reg. at 49,444.  We think that it  was reasonable for EPA to extrapolate from its studies of  utility boilers in setting an SCR-based new source performance standard for coal-fired industrial boilers.3

11
We also sustain EPA's application of the .20 lb/MMBtu  standard to combination boilers, which simultaneously combust a mixture of fuels.  The preexisting NOx emissions  standards established a range of values for combustion boilers that varied by fuel type:  while combination boilers burning natural gas with non-coal solid fuels (e.g., wood) were  subject to a .30 lb/MMBtu standard, the performance standards for combination boilers combusting coal with oil or  natural gas were determined based upon the proportion of  the boiler's total heat input provided by each fuel.  See 51  Fed. Reg. 42,768, 42,790 (1986).  It is difficult to understand  petitioners' objection to the application of the industrial boiler  standard to boilers burning natural gas and wood.  A reduction of that standard from .30 to .20 lb/MMBtu is perfectly reasonable in light of the significant advances in NOx emissions technology since 1986;  indeed, EPA studies show that  wood-fired boilers can reach emissions levels far lower than  .20 lb/MMBtu through the application of flue gas treatment  technologies.  And our conclusion that the .20 lb/MMBtu  standard is achievable for boilers burning only coal necessarily defeats petitioners' objection that the industrial boiler  standard is unreasonable as applied to combination boilers  burning coal simultaneously with other fuels with lower NOx  emissions characteristics.

12
Petitioners' final objection is to EPA's valuation of steam  energy produced by "cogeneration facilities."  EPA's adoption of an output-based standard for utility boilers raised the  question of how to calculate the energy produced by these  units, which generate thermal steam energy in addition to  electrical energy.  Steam energy produced by cogeneration  facilities is exported for several different industrial uses; however, because of inefficiencies in transporting and converting steam, only a fraction of steam energy produced by  cogeneration facilities is actually used in the industrial process.  EPA resolved this problem by assigning a 50% credit  for steam energy when determining a cogeneration unit's  output.  See 63 Fed. Reg. at 49,447.  Petitioners describe this  credit as an arbitrary and capricious "discounting" of steam  energy's value, but it just as easily could be called a subsidy: The maximum efficiency for the conversion of steam to electrical energy is only 38%, and EPA's final rule justifies the  50% credit on the ground that it will encourage cogeneration. Id.  In light of the difficulties that would attend calculating  the useful energy of steam heat produced by cogeneration  facilities on a unit-by-unit basis, we conclude that EPA's  resolution of this issue was acceptable.

13
The petitions for review are denied.

14
So ordered.

Notes:

1
 To be precise, the emission standard for utility boilers is an  output-based standard of 1.6 pounds of NOx emitted per megawatt hour of electricity generated.  However, as this output-based standard was intended by EPA to correlate with a .15 lb/MMBtu input based standard, we refer to its input-based equivalent for simplicity's sake throughout this opinion.  We reject petitioners' argument  that EPA's decision to shift to an output-based standard for utility  boilers unfairly "penalizes" the use of low-energy coals, like lignite; it would seem just as easy to argue that an input-based standard  "penalizes" high-energy fuels.

2
 SCR is a "flue gas treatment technology";  it reduces NOx  after combustion by injecting ammonia into the flue gas in the  presence of a catalyst, breaking down NOx and producing nitrogen  and water.  In setting past standards, EPA had focused solely on  combustion control technologies, which instead reduce NOx by  suppressing its formation during the combustion process.  See 62  Fed. Reg. 36,948, 36,949-50 (1997).

3
 For similar reasons, we do not think that EPA's lack of data  on domestic SCR applications to boilers burning lignite renders its  standards unlawful.  In assessing a new technology like SCR, EPA  is not required to provide evidence of its application to boilers  burning every type of coal from every geographical location.  It is  acceptable for EPA to extrapolate from the successful applications  of SCR to domestic high-sulfur coal-fired boilers and to foreign  boilers burning lignite.