Court Opinion

ID: 1038003
Source: CourtListenerOpinion
Date Created: 2013-08-21 00:01:42.529954+00
Date Added: 2024-06-11T12:46:57.873754
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 3, 2013                 Decided August 20, 2013

                       No. 11-1131

   NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES,
                    PETITIONER

                            v.

     ENVIRONMENTAL PROTECTION AGENCY AND GINA
          MCCARTHY, ADMINISTRATOR, EPA,
                   RESPONDENTS

     MAXWEST ENVIRONMENTAL SYSTEMS, INC., ET AL.,
                   INTERVENORS

   Consolidated with 11-1167, 11-1185, 12-1236, 12-1237

       On Petitions for Review of a Final Rule of the
      United States Environmental Protection Agency

        Jeffrey A. Knight argued the cause for
petitioners/respondents-intervenors National Association of
Clean Water Agencies, et al. With him on the briefs were
Peter H. Wyckoff and Steven A. Hann.
                             2

      James S. Pew argued the cause for petitioner Sierra
Club. With him on the briefs was Jonathan A. Wiener.

       Lisa Sharp argued the cause for intervenor MaxWest
Environmental Systems Inc. With her on the briefs was D.
Cameron Prell.

        Michele L. Walter and Martha C. Mann, Attorneys,
U.S. Department of Justice, argued the causes and filed the
brief for respondents.

       Jonathan A. Wiener argued the cause for respondent-
intervenor Sierra Club. With him on the brief was James S.
Pew.

       Steven A. Hann, Jeffery A. Knight, and Peter H.
Wyckoff were on the brief for respondents-intervenors
National Association of Clean Water Agencies, et al.

       Before: GARLAND, Chief Judge, BROWN, Circuit
Judge, and SENTELLE, Senior Circuit Judge.

      Opinion for the Court filed by Senior Circuit Judge
SENTELLE.

     SENTELLE, Senior Circuit Judge: In March 2011, the
Environmental Protection Agency (“EPA”) issued a final rule
establishing emission standards for sewage sludge
incinerators under § 129 of the Clean Air Act, 42 U.S.C. §
7429. See Standards of Performance for New Stationary
Sources and Emission Guidelines for Existing Sources:
Sewage Sludge Incineration Units, 76 Fed. Reg. 15,372 (Mar.
21, 2011). Determining that sewage sludge incinerators were
“solid waste incineration unit[s]” as defined in § 129(g)(1),
                              3
the EPA promulgated “maximum achievable control
technology” (“MACT”) standards for two subcategories of
sewage sludge incinerators.

     The Clean Air Act cabins EPA’s discretion in setting
MACT standards, requiring EPA to base the standards on the
emissions achieved by the best-performing existing
incinerators. See 42 U.S.C. § 7429(a)(2). But acting under
pressure of a court order to establish the MACT standards by
a set deadline, EPA took a targeted approach to collecting
emissions data and used several different methods to estimate
the emissions levels achieved by existing incinerators. See 76
Fed. Reg. at 15,386.

     The petitioners challenge several different aspects of the
rulemaking. Petitioners National Association of Clean Water
Agencies and Hatfield Township Municipal Authority
(collectively, “NACWA”) challenge EPA’s authority to
regulate sewage sludge incinerators under § 129, asserting
that sewage sludge incinerators do not fall within the scope of
§ 129(g)(1)’s definition of “solid waste incineration unit.”
Petitioners NACWA and Sierra Club seek review of the
sewage sludge incinerator emission standards, challenging
several aspects of EPA’s methodology for estimating the
emission levels achieved by the best performing units. In
addition to these petitioners, MaxWest Environmental
Systems, developer of a proprietary biosolids management
process, intervenes to challenge EPA’s treatment of its
technology in the sewage sludge incinerator rule.

     For the reasons stated below, we deny NACWA’s
petition for review as to EPA’s authority to regulate sewage
sludge incinerators under § 129. As to the petitioners’
challenges to EPA’s methodology in setting emission
standards, we agree that in some respects EPA has not
                                 4
adequately established that its estimations are reasonable, and
so remand parts of the sewage sludge incinerator rule to EPA
for further proceedings without vacating the current standards.
We otherwise deny the petitions for review, and will not
consider intervenor MaxWest’s arguments as they are not
within the scope of issues raised by the petitioners.

I.      BACKGROUND

A. Statutory Background

     The Clean Air Act requires EPA to set emission
standards for polluting sources “to protect and enhance the
quality of the Nation’s air resources.”          42 U.S.C. §
7401(b)(1). Section 112 of the Clean Air Act, 42 U.S.C. §
7412, requires EPA to set emission standards for a list of
hazardous air pollutants emitted by major sources and area
sources. Id. § 7412(d). Section 129 is more specific,
directing EPA to establish emission standards for a list of nine
pollutants emitted by solid waste incineration units. Id. §
7429(a). Subject to certain exceptions not relevant to this
case, § 129 defines a “solid waste incineration unit” as “a
distinct operating unit of any facility which combusts any
solid waste material from commercial or industrial
establishments or the general public (including single and
multiple residences, hotels, and motels).” Id. § 7429(g)(1).

     Under § 129, the standards established by EPA must
reflect “the maximum degree of reduction” in the emissions
of a list of pollutants1 that EPA, “taking into consideration the
1
  Specifically, § 129 requires EPA to set numerical emission
limitations for: “particulate matter (total and fine), opacity (as
appropriate), sulfur dioxide, hydrogen chloride, oxides of nitrogen,
carbon monoxide, lead, cadmium, mercury, and dioxins and
dibenzofurans.” § 129(a)(4).
                              5
cost of achieving such emission reduction, and any non-air
quality health and environmental impacts and energy
requirements, determines is achievable for new or existing
units” in each category of sources. Id. § 7429(a)(2). EPA
refers to these standards as the “maximum achievable control
technology” standards, abbreviated as the MACT standards.
Northeast Maryland Waste Disposal Authority v. EPA, 358
F.3d 936, 939–40 (D.C. Cir. 2004).

     Congress set parameters governing EPA’s establishing of
the MACT standards, which EPA has implemented through a
two-step process. First, EPA sets a baseline level of
stringency for emissions controls known as the MACT floor.
For new units, the MACT floor is the level of emissions
control “that is achieved in practice by the best controlled
similar unit,” as determined by EPA. 42 U.S.C. § 7429(a)(2).
For existing units, the MACT floor is “the average emissions
limitation achieved by the best performing 12 percent of
units” in each category. Id. Second, EPA determines whether
more stringent “beyond-the-floor” MACT standards are
achievable, taking into consideration the factors listed in §
129(a)(2).

     The Clean Air Act makes promulgating MACT standards
under § 112 and § 129 mutually exclusive. Id. § 7429(h)(2).
Although the statutory directive on setting MACT standards is
virtually identical under § 112 and § 129, EPA’s decision to
regulate a source under one section rather than the other has
practical consequences. For example, the list of pollutants for
which EPA must set MACT standards differs between the two
sections. Compare id. § 7412(b) (list of hazardous air
pollutants), with id. § 7429(a)(4) (list of nine pollutants for
which EPA must set MACT standards for solid waste
incinerators). The stringency of regulation for sources
covered under these sections can also differ, depending on the
                              6
type of source. Under § 129, all solid waste incinerators
within § 129(g)(1)’s definition of “solid waste incineration
unit” are subject to the MACT standards that EPA establishes
for that category of incinerator. See id. § 7429(a). In
contrast, the MACT standards established under § 112 are
mandated only for “major sources,” defined as sources that
have the potential to emit ten tons per year or more of any
hazardous air pollutants, or twenty-five tons per year or more
of any combination of hazardous air pollutants. See id. §
7412(a)(1), (d)(5).

     For sources that are not “major sources”—defined in §
112(a)(1) as “area sources”—EPA is given the discretion to
establish standards providing “for the use of generally
available control technologies or management practices . . . to
reduce emissions of hazardous air pollutants.”           Id. §
7412(d)(5). The generally available control technology
standard is not governed by the same statutory requirements
as the MACT standard, giving EPA more flexibility in
regulating area sources. Because EPA determined in 2002
that no sewage sludge incinerator emitted hazardous air
pollutants at such a level as to qualify as a major source, the
generally available control technology standard would apply
to sewage sludge incinerators if EPA regulated them under §
112. See National Emission Standards for Hazardous Air
Pollutants: Revision of Source Category List Under Section
112 of the Clean Air Act, 67 Fed. Reg. 6,521, 6,523. (Feb.
12, 2002). Sewage sludge incinerators also would not be
subject to monitoring and siting review requirements, which
are mandated by § 129 but not by § 112. See 42 U.S.C. §
7429(a)(3), (c).
                                7
B. Regulatory Background

     Publicly-owned      treatment    works,   owned     by
municipalities or regional authorities, are responsible for
managing all sewage that enters into the sanitary sewer
system. Publicly-owned treatment works first treat the
wastewater, creating sewage sludge in the process, then use
various methods to dispose of the sewage sludge. Many
publicly-owned treatment works use sewage sludge
incinerators to dispose of sewage sludge. EPA’s inventory of
sewage sludge incinerators stood at 204 at the time of the
rulemaking. 76 Fed. Reg. at 15,387.

     EPA proposed emission standards for sewage sludge
incinerators in October 2010, asserting its authority under §
129 to regulate “other categories of solid waste incineration
units.” See 75 Fed Reg. at 63,263; 42 U.S.C. § 7429(a)(1)(E).
EPA began to develop these standards after the District Court
for the District of Columbia determined that EPA was failing
to discharge its non-discretionary duty under provisions of §
112, and ordered EPA to do so. See 75 Fed. Reg. at 63,264.
Although the specific § 112 obligations with which EPA had
failed to comply are not relevant to this petition, the district
court determined that § 112 required EPA to set emission
standards for sewage sludge incinerators.2 See Sierra Club v.
Jackson, 1:01-CV-1537, EFC No. 84 at 23 (D.D.C. filed Aug.
2, 2006); Sierra Club v. Jackson, 1:01-CV-1537, ECF No.
150 at 6–8 (D.D.C. filed Jan. 20, 2011). After granting EPA
multiple motions to extend the deadline for issuing sewage
2
  The § 112 obligations were to identify and regulate certain area
sources that account for 90 percent or more of aggregate air
emissions of 30 hazardous air pollutants identified by EPA under §
112(k)(3)(B)(i)–(ii). See Sierra Club v. Jackson, No. 1:01-CV-
1537, ECF No. 80 (D.D.C. filed Mar. 31, 2006); see also 42 U.S.C.
§ 7412(c)(3), (k)(3)(B).
                              8
sludge regulations, the district court ultimately required EPA
to promulgate the final rule by February 21, 2011. Id., ECF
No. 150, at 25.

1. Proposed Rule

     On October 14, 2010, EPA issued a proposed rule
proposing emission standards for sewage sludge incinerators.
See Standards of Performance for New Stationary Sources &
Emission Guidelines for Existing Sources: Sewage Sludge
Incineration Units, 75 Fed. Reg. 63,260. In the preamble,
EPA explained that although it had stated in other rules its
intent to regulate sewage sludge incinerators under § 112, it
was proposing to regulate sewage sludge incinerators under §
129 in light of our ruling in Natural Resources Defense
Council v. EPA, 489 F.3d 1250 (D.C. Cir. 2007). See id. at
63,263 (citing Standards of Performance for New Stationary
Sources and Emission Guidelines for Existing Source: Other
Solid Waste Incineration Units, 70 Fed. Reg. 74,870 (Dec. 16,
2005)).

     In the proposed rule, EPA established two subcategories
of sewage sludge incinerators: multiple hearth incinerators
and fluidized bed incinerators. Id. at 63,268. EPA found that
these were the only two types of incinerators used to combust
sewage sludge, and determined subcategorization was
warranted because the combustion design for these two types
of incinerators varied significantly. Id.

     In proposing the MACT standards for the subcategories
of incinerators, EPA extensively discussed the methodology it
used to derive the MACT floors. See id. at 63,269–75. To
select which units to survey for emissions data, EPA
identified units equipped with the control technology that it
believed would achieve the lowest emissions possible for the
                              9
§ 129 pollutants. Id. at 63,270. EPA stated that using control
technologies to select best-performing units was sufficient
because municipalities were already required to limit the
concentration of pollutants in sewage sludge under Clean
Water Act regulations. Id. (citing 40 C.F.R. pt. 503). These
preexisting regulations, EPA explained, caused incinerators to
“burn a relatively homogeneous waste,” thus rendering
control technologies a suitable proxy for targeting the best-
performing units from which to collect emissions data. Id.

     For its dataset, EPA surveyed 9 municipalities, and
supplemented the results of that study with data from State
environmental agencies’ public databases, yielding emissions
information from 5 fluidized bed incinerators and 20 multiple
hearth incinerators, although EPA acknowledged that not
every test contained information on all nine § 129 pollutants.
Id. Because 12 percent of the existing incinerator population
based on EPA’s then-current count of incinerators was 7
fluidized bed incinerators and 20 multiple hearth incinerators,
EPA acknowledged that it did “not have actual emissions test
data for the population of units that represent the best-
performing 12 percent,” for every pollutant. Because EPA
interpreted § 129 to require a MACT floor dataset
representative of the best-performing 12 percent of
incinerators, EPA concluded it needed to determine whether
its data from fewer than 12 percent of incinerators could
represent the best-performing 12 percent. Id.

     EPA addressed this issue by explaining that it could use
“statistical techniques to determine the minimum number of
observations needed to accurately characterize the distribution
of the best performing 12 percent of units in each
subcategory.” Id.; see Memorandum from Eastern Research
Group, Inc. to Amy Hambrick, U.S. EPA, at 7–9 (Jan. 2011)
(“Revised MACT Floor Memo”). Based on this statistical
                               10
analysis, EPA concluded that it had collected enough
observations to conclude that the dataset it used met “the
minimum size needed to characterize the population of 12
percent of the best-performing units for all pollutants, when
late-arriving data are included.” 75 Fed. Reg. at 63,271.
Nevertheless, EPA requested “that commenters provide
additional emissions stack test data and supporting
documentation, as that may enable us to establish a final
MACT floor based on a more complete data set.” Id. at
63,270.

     The proposed rule also discussed EPA’s methods for
addressing variability in the emissions data it collected. EPA
bases its MACT standards on short-term emissions test data,
which are not always “representative of the range of operating
conditions that the best-performing facilities face on a day-to-
day basis.” Id. at 63,269. Therefore, EPA believed it needed
to account for variability in emissions performance. Id. EPA
explained that for two or more tests at a single incinerator
under what appear to be the same operating conditions,
“[v]ariations in emissions may be caused by different settings
for emissions testing equipment, different field teams
conducting the testing, differences in sample handling or
different laboratories analyzing the results.” Id. And
emissions may even vary within a single test, as each test
comprises at least three separate test runs, and each test run
captures only a snapshot of an incinerator’s performance. Id.

     To address this variability, EPA proposed using a
statistical tool it terms the “upper prediction limit.” For future
observations of emissions from an incinerator, the upper
prediction limit “is the upper end of a range of values that
will, with a specified degree of confidence, contain the next
(or some other pre-specified) randomly selected observation
from a population.” Id. Thus, a 99 percent confidence-level
                               11
upper prediction limit “represents the value which one can
expect the mean of future 3-run performance tests from the
best-performing 12 percent of sources to fall below, with 99
percent confidence, based upon the results of the independent
sample of observations from the same best-performing
sources.” Id. at 63,271.

     EPA’s proposed MACT floor methodology also
addressed “non-detect data,” which are emission testing data
too low for the testing equipment to accurately detect. Id. at
63,272. Rather than estimate that non-detect data was at the
“method detection level,” i.e., “the minimum concentration of
a pollutant that can be measured with confidence that the level
is greater than zero,” EPA Br. at 61 n.20, EPA used a
different test to determine the MACT floor. Id. at 63,273.
Under the test, EPA multiplied what it termed the
“representative method detection level” by three, and
compared that value to the MACT floor that EPA calculated
using all data, including non-detect data. Id. If three times the
representative method detection level was less than the
calculated MACT floor, EPA would conclude that the MACT
floor calculation adequately addressed measurement
variability; if not, EPA would use the three-times value “to
ensure that the MACT floor emission limit accounts for
measurement variability and imprecision.” Id.

     For new source MACT floors, EPA explained that it
would base the floors “on the best-performing single source
for each regulated pollutant, with an appropriate accounting
for emissions variability.” Id. at 63,274. Thus, EPA
identified the lowest emitting incinerator with at least three
test runs, and applied the 99 percent upper prediction limit.
Id. While EPA proposed a new source MACT floor for
fluidized bed incinerators, it did not propose a new source
MACT floor for multiple hearth incinerators. Id. at 63,272.
                               12
Instead, it proposed that all new incinerators—including
multiple hearth incinerators—meet the emission limits for the
best-performing fluidized bed incinerator, explaining that
industry information suggested that future units constructed
would likely be fluidized bed incinerators and that industry
information demonstrated that new fluidized bed incinerators
“have more efficient combustion characteristics resulting in
lower emissions.” Id. at 63,272, 63,274.

     In discussing whether to set “beyond-the-floor” MACT
standards for existing sources, EPA determined that for most
of the § 129 pollutants, no additional control technologies
were available that would cost-effectively reduce emissions.
Id. at 63,275, 63,277. For mercury, EPA concluded that using
activated carbon injection with some form of particulate
matter control for multiple hearth incinerators would be a
cost-effective option for achieving beyond-the-floor emission
reductions, noting that these combined control technologies
would also control for dioxins and dibenzofurans. Id. at
63,276–77. For fluidized bed incinerators, EPA concluded
that “[i]n light of the technical feasibility, costs, energy, and
nonair quality health and environmental impacts” discussed in
the rule, it was not reasonable to establish beyond-the-floor
MACT standards for new and existing fluidized bed
incinerators. Id. at 63,277.

     EPA also proposed monitoring requirements for all new
and existing sewage sludge incinerators. Id. at 63,277–82. In
relevant part, EPA proposed initial and annual emissions
performance tests for most pollutants, with continuous
monitoring as an alternative, and control device parameter
monitoring for certain control technologies. Id. at 63,277.
EPA specifically required continuous emissions monitoring
for carbon monoxide on new sewage sludge incinerators,
although continuous emissions monitoring for carbon
                              13
monoxide remained optional for existing incinerators, and
optional for all other pollutants. Id. at 63,278, 63,281.

2. Final Rule

     EPA promulgated the final rule setting emission limits
for sewage sludge incinerators on March 21, 2011. 76 Fed.
Reg. 15,372. The final rule remained substantially similar to
the proposed rule, regulating sewage sludge incinerators
under § 129 and generally adopting the methodology for
setting the MACT floors stated in the proposed rule. Id. at
15,382–92.

     The final rule did contain a few substantive changes.
While EPA had proposed setting all new incinerator MACT
floors on the best-performing fluidized bed incinerator, in the
final rule it decided to set a separate MACT floor for new
multiple hearth incinerators. Id. at 15,384. EPA explained
that it had been persuaded by comments pointing out that
under the proposed regulations, any source that exceeded a
threshold in modification costs would be considered a new
unit. See 40 C.F.R. § 60.4775 (defining a new sewage sludge
incinerator as a unit that “[c]ommenced modification after
September 21, 2011”); 40 C.F.R. § 60.4930 (defining
modification as “a change to an existing [sewage sludge
incinerator] later than September 21, 2011 and that meets one
of two criteria”). Because it did not want to discourage
municipalities from modifying multiple hearth incinerators,
and because there was otherwise no technical reason why
municipalities could not build new multiple hearth
incinerators, EPA explained it decided to establish separate
new incinerator MACT floors. 76 Fed Reg. at 15,384.

     In setting the new multiple hearth incinerator MACT
floors, EPA’s upper prediction limit analysis on what it
                              14
deemed the best-performing multiple hearth incinerators
yielded MACT floors for two pollutants that were less
stringent (i.e., a higher emission limit) than what it had
calculated for existing multiple hearth incinerators. EPA set
the new multiple hearth incinerator floors for these two
pollutants—hydrogen chloride and sulfur dioxide—at the
same level as existing multiple hearth incinerator floors,
reasoning that new incinerator MACT floors could not be less
stringent than existing incinerator MACT floors. Id. at
15,388–89.

     EPA also deviated from the proposed rule by deciding
not to set beyond-the-floor standards for any pollutants. Id. at
15,380. In the final rule, EPA explained that the cost of
requiring the additional contemplated control technology to
reduce mercury was $80,000 to $100,000 per pound removed,
and that, based on this cost and other factors, it determined
that beyond-the-floor standards were no longer appropriate.
Id. at 15,394.

     EPA also made minor changes to its MACT floor dataset,
such as reducing its inventory of incinerators to 204, and
consequently, reducing the numbers of incinerators needed to
represent 12 percent to 18 multiple hearth incinerators and 8
fluidized bed incinerators. Id. at 15,387. Although the
reduction in inventory decreased the number of incinerators
necessary to represent 12 percent, EPA still did not have
emissions data from 12 percent of incinerators for certain
pollutants. While commenters attempted to supplement that
dataset by submitting emissions stack test data that EPA
requested in the proposed rule, EPA rejected that data because
commenters had not substantiated it with emission test
reports. Id.
                              15
     In the final rule, EPA candidly noted that its MACT floor
methodology—including the emissions testing dataset from
less than 12 percent of incinerators—was motivated in part by
the impending court-ordered deadline to establish emission
standards. EPA explained that “given the court-ordered
deadline for EPA to issue the final [sewage sludge
incinerator] rule, it was not possible to undertake the time-
consuming process of sending an [information collection
request] to all the affected [sewage sludge incinerators]
consistent with the requirements of the [Paperwork Reduction
Act].” Id. at 15,386.

     EPA also responded to comments criticizing EPA for not
using data available to it to set MACT floors, including data
about variability in sewage sludge metal concentrations
collected from the Clean Water Act regulations. EPA
responded that the upper prediction limit and its survey of
units from nine different states adequately accounted for
variability. Id. at 15,391. EPA further stated that it “did not
have sufficient information at proposal to consider if it were
appropriate to incorporate variability based on sludge
content,” explaining that the data commenters submitted was
not adequately supported and therefore insufficient to clarify
the effect of sewage sludge variability on emissions. Id.

     Sierra Club and NACWA filed petitions for
reconsideration of EPA’s final rule. EPA denied both
petitions. See 77 Fed Reg. 25,087 (Apr. 27, 2012). Sierra
Club filed a petition for review in this court. NACWA, joined
by the Hatfield Township Municipal Authority, also filed a
petition for review. We have consolidated all petitions for
review.
                             16
II.    NACWA’S AND SIERRA CLUB’S PETITIONS
       FOR REVIEW

A. EPA’S AUTHORITY TO REGULATE SEWAGE SLUDGE
   INCINERATORS

     We first address NACWA’s contention that EPA violated
the Clean Air Act by setting emission standards for sewage
sludge incinerators under § 129 rather than § 112.
Specifically, NACWA asserts that § 129(g)(1)’s definition of
“solid waste incineration unit” excludes sewage sludge
incinerators.

     Section 129(g)(1) defines a solid waste incineration unit
as “a distinct operating unit of any facility which combusts
any solid waste material from commercial or industrial
establishments or the general public (including single and
multiple residences, hotels, and motels).” 42 U.S.C. §
7429(g)(1). In interpreting the phrase “solid waste material
from commercial or industrial establishments or the general
public,” EPA explained in its final rule that “[s]ewage sludge
clearly originates from the general public, including
residential and commercial facilities. Simply because the
waste is treated at a [publicly-owned treatment work] prior to
combustion does not change the original source of the sewage
sludge.” 76 Fed. Reg. at 15,383.

    In contrast to EPA’s interpretation, NACWA argues that
the words “from . . . the general public” “refer only to the
proximate source of the solid waste material in question,”
covering, for example, trash a municipality collects from a
house and transports to a municipal incinerator, but not a
waste product that the municipality itself creates. NACWA
Br. at 21–22. Because the sewage sludge incinerated by a
publicly-owned treatment work is the product of the treatment
                              17
of domestic sewage, NACWA asserts that sewage sludge
comes from the publicly-owned treatment work, and not
“from . . . the general public” that produces the domestic
sewage. Id. at 19

     Because NACWA asks us to review EPA’s construction
of § 129 as authorizing EPA to regulate sewage sludge
incinerators under the category of “other . . . solid waste
incineration units,” see 76 Fed. Reg. at 15,383 (citing 42
U.S.C. § 7429), we apply Chevron v. NRDC to determine
whether EPA is entitled to deference in its interpretation. See
467 U.S. 837, 842 (1984). Under Chevron, we first determine
whether the statute unambiguously forbids EPA’s
interpretation. Id. at 842–43. If the statute is silent or
ambiguous, we then question whether EPA’s interpretation is
based on a permissible construction of the statute. Id. at 843.

     At first glance, the definition of solid waste incineration
units in § 129(g)(1) appears ambiguous, a reality even
NACWA acknowledges. See NACWA Br. at 21 (“Read
alone, the word ‘from’ does not reveal whether it refers to the
proximate source of the material or whether it refers instead to
a distant ‘original’ source of the material.”); see also Oral
Arg. Tr. at 5:19–23, 7:4–10, 10:5–19 (conceding that, without
any other context, § 129 “would carry the meaning that EPA
has ascribed to it”). Among the dictionary definitions of
“from” is “a function word to indicate the source or original
or moving force of something: as . . . the place of origin,
source, or derivation of a material or immaterial thing.”
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 913
(1981). Thus, W.B. Yeats may proclaim, “All creation is
[from] conflict,” and not necessarily mean that creation
springs directly from conflict rather than through intermediate
consequences of conflict, while one who states that a man
“took a dime [from] his pocket” could only be understood to
                              18
mean that the dime originated from a specific location on a
specific person. Id. Because the word “from” in § 129(g)(1)
may be susceptible to either sense of the word, we agree with
both parties that the phrase “from . . . the general public,”
standing alone, is textually ambiguous. Cf. Environmental
Defense Fund v. EPA, 167 F.3d 641, 652 (D.C. Cir. 1999)
(Williams, J., dissenting) (explaining that the phrase “comes
from” is ambiguous—for example, “A layabout who says he
‘comes from a hardworking family’ can be telling the truth
even if all his relatives are dead.”).

     But textual ambiguity is not the end of the matter, as we
have held that “a statute may foreclose an agency’s preferred
interpretation despite such textual ambiguities,” an analysis
we undertake by “exhaust[ing] the traditional tools of
statutory construction to determine whether a congressional
act admits of plain meaning.” Catawba County v. EPA, 571
F.3d 20, 35 (D.C. Cir. 2009); Arizona Public Service Co. v.
EPA, 211 F.3d 1280, 1287 (D.C. Cir. 2000). Thus, although
both NACWA and EPA acknowledge § 129(g)(1)’s apparent
textual ambiguity, both parties also argue that the statute
unambiguously resolves in their favor. EPA relies on our
opinion in NRDC v. EPA, 489 F.3d 1250 (D.C. Cir. 2007), in
which we interpreted the definition of “solid waste
incineration unit” to be very broad, while NACWA relies
primarily on the words surrounding “from” and on the overall
structure of the Clean Air Act and the Clean Water Act.

     We begin with NACWA’s argument that “from . . . the
general public” requires a proximate cause interpretation, lest
the words “general public” become superfluous. NACWA
asserts that because all waste has its origin in the general
public at some point, Congress could have simply defined a
solid waste incinerator as “a unit . . . which combusts any
solid waste material” without having to add “from
                               19
commercial or industrial establishments or the general
public.” See 42 U.S.C. § 7429(g)(1). But even if we take as
true NACWA’s assertion that all solid waste “originates”
from the general public, and NACWA’s assertion that EPA’s
interpretation of § 129(g)(1) would therefore cover all units
that incinerate solid waste (except those specifically excluded
in § 129(g)(1)), the “‘preference for avoiding surplusage
constructions is not absolute.’” Amoco Products Co. v.
Watson, 410 F.3d 722, 734 (D.C. Cir. 2005) (quoting Lamie v.
U.S. Trustee, 540 U.S. 526, 536 (2004)). In some cases,
redundancy may reflect the broad purpose of a congressional
statute. See Babbitt v. Sweet Home Chapter of Communities
for a Greater Oregon, 515 U.S. 687, 698 n.11 (1995).

     Although defining a covered incinerator as one that
combusts solid waste “from commercial or industrial
establishments or the general public” suggests some limitation
on the coverage of § 129(g)(1) based on the source of the
waste, the extent of that limitation is unclear. Congress may
have intended to define solid waste incinerators to exclude
specific categories of incinerators beyond the express
exceptions listed in § 129(g)(1); for example, incinerators
combusting waste directly produced by state or local
government sources. But it also may have intended to give
the definition of § 129(g)(1) a broad scope, with “the general
public” functioning as something akin to a catchall. Thus, the
fact that the three broad categories of sources of solid waste
listed in § 129(g)(1)—commercial and industrial
establishments, and the general public—may be surplusage
under EPA’s original source interpretation does not
unambiguously mean that Congress intended for the word
“from” to have NACWA’s proximate source interpretation.
In any event, if Congress indeed unambiguously intended to
exclude municipal sewage sludge incinerators from the
definition of § 129(g)(1), it chose a strange way to go about it.
                              20

     NACWA also asserts as factually incorrect EPA’s
statement that “[s]ewage sludge clearly originates from the
general public, including residential and commercial
facilities,” arguing that sewage sludge does not “originate”
until a publicly-owned treatment work treats raw sewage.
NACWA Br. at 22–24. In support of this argument, NACWA
cites EPA regulations in which EPA recognized that sewage
sludge results from wastewater treatment and is distinct from
domestic sewage, and to a Clean Water Act provision from
which one may infer that the production of sewage sludge is,
by statutory definition, part of a publicly-owned treatment
work. See 33 U.S.C. § 1292(2)(A); 40 C.F.R. §§ 60.4930,
60.5250; Joint Appendix 986–87.

     NACWA’s argument, however, fails to address how
EPA’s original source interpretation of “from”—i.e., that the
general public is a “but-for” cause of sewage sludge—renders
the treatment facility that creates sewage sludge relevant. For
example, one could say “bread comes from fields of wheat,”
and be understood, or say “bread comes from the baker,” and
also be understood. The fact that several intermediate
processes had to occur to produce the bread—transporting
wheat from the field, adding different ingredients to produce
dough, or heating the dough in an oven—does not negate the
validity of a sentence that uses “from” to link the bread to the
source of an important ingredient. As we noted above,
WEBSTER’S, supra 17, at 913, at least one dictionary defines
“from” as a function word used to indicate, among other
meanings, “the place of origin, source or derivation of a
material or immaterial thing.” (emphasis added). Thus, the
fact that the sewage sludge may not exist in that form until
treated at a publicly-owned treatment work does not
unambiguously       invalidate     EPA’s     original    source
interpretation that sewage sludge is from the general public,
                              21
even if EPA’s interpretation is some steps removed. While it
is also true that other EPA regulations recognize that sewage
sludge is distinct from domestic sewage, these regulations are
not dispositive of EPA’s interpretation of § 129(g)(1). Put
differently, the fact that EPA determined in other regulations
that sewage sludge and domestic sewage are distinct does not
preclude EPA from recognizing that sewage sludge would not
exist but for domestic sewage, and does not prevent EPA
from interpreting “from . . . the general public” as meaning
the original, but-for source of sewage sludge.

     In addition to its textual arguments, NACWA asserts that
EPA’s interpretation of § 129(g)(1) conflicts with § 112(e)(5),
which states that EPA “shall promulgate standards pursuant to
subsection (d) of this section applicable to publicly owned
treatment works (as defined in title II of the Federal Water
Pollution Control Act) not later than 5 years after November
15, 1990.” NACWA argues that when § 112(e)(5) is read in
conjunction with the Clean Water Act, which NACWA
claims defines publicly-owned treatment works to include
sewage sludge incinerators, EPA must establish emission
standards for the entirety of a publicly-owned treatment work
pursuant to § 112(d). Because EPA may only establish
emission standards for a source exclusively under either §
112(d) or § 129(a), see 42 U.S.C. § 7429(h)(2), NACWA
maintains that § 112(e)(5) supports its interpretation that
Congress did not intend for EPA to regulate sewage sludge
incinerators under §129(g)(1).

     We agree with EPA, however, that § 112(e)(5) is simply
a timing provision, and does not prevent EPA from regulating
aspects of a publicly-owned treatment work to which more
specific provisions apply. See FTC. v. Manager, Retail Credit
Co., Miami Branch Office, 515 F.2d 988, 993 (D.C. Cir.
1975) (“The principle that a specific statutory provision
                               22
prevails over a more general provision is established beyond
question.”). If we accept EPA’s interpretation of “from . . .
the general public,” § 129 would govern sewage sludge
incinerators, and the exclusivity provision of § 129(h)(2)
would render § 112 not “applicable to” sewage sludge
incinerators, leaving no conflict between the texts. Thus, the
overall structure of the Clean Air Act does not unambiguously
require NACWA’s interpretation of the word “from.”

     In fact, when EPA issued its rule proposing emission
standards for publicly-owned treatment works as required by
§ 112(e)(5), it established standards for certain processes at
publicly-owned treatment works while deciding to regulate
sewage sludge incinerators under § 129, a decision that went
unchallenged at the time. See National Emission Standards
for Hazardous Air Pollutants: Publicly Owned Treatment
Works, 63 Fed. Reg. 66,084, 66087 (Dec. 1, 1998) (Proposed
Rule); 64 Fed. Reg. 57,572 (Oct. 26, 1999) (Final Rule).
Though EPA’s decision in 1998 to regulate sewage sludge
incinerators under § 129 does not prove that its interpretation
is correct in the present, the fact that it established standards
for other processes within publicly-owned treatment works
under its § 112 authority demonstrates that sewage sludge
incinerators are not the only aspect of a publicly-owned
treatment work to which § 112 may be “applicable.” See 40
C.F.R. Part 63, Subpart VVV.

     We therefore conclude that the traditional tools of
statutory construction do not demonstrate that § 129(g)(1)
unambiguously excludes sewage sludge incinerators. But we
also disagree with EPA that our opinion in NRDC v. EPA, 489
F.3d 1250 (D.C. Cir. 2007), unambiguously resolves §
129(g)(1) in EPA’s favor.
                              23
     In NRDC, we heard challenges to an EPA rule that
defined “commercial or industrial waste” to include solid
waste combusted at incinerators that did not provide for
energy recovery or operated without energy recovery. Id. at
1258 (citing 70 Fed. Reg. at 55,572). Defining “commercial
or industrial waste” in this way effectively created exceptions
to the definition of “solid waste incineration unit” beyond
those written in the statute. Id. We vacated and remanded
EPA’s rule, rejecting its argument that it was resolving an
ambiguity created by Congress’s failure to define
“commercial or industrial waste.” Id. As we explained,
Congress’s use of the word “any” in the definitional phrase
“any facility which combusts any solid waste from
commercial or industrial establishments” rendered the phrase
clear and unambiguous, and EPA had no authority to create
exceptions not explicitly listed in the statute through its
definition of “commercial or industrial waste.” See id. at
1259–60.

     Because the resolution of the present issue depends on
the role of the word “from” in this statute, however, our
discussion about the broad scope of § 129(g)(1)’s definition
of “solid waste incineration unit” based on the word “any” is
largely irrelevant. As we noted in NRDC, “The word ‘any’ is
usually understood to be all inclusive,” 489 F.3d at 1257
(internal citation omitted), and EPA presented no compelling
reason “why ‘any’ should not mean ‘any.’” Id. at 1260
(internal citation omitted). In contrast, “from” is susceptible
to different meanings and renders § 129(g)(1) ambiguous—
even when viewed in light of the traditional tools of statutory
construction—such that either NACWA’s or EPA’s
interpretation of § 129(g)(1) is plausible.

    Having determined that the phrase “from . . . the general
public” is ambiguous under Chevron step one, we now apply
                               24
Chevron step two to determine whether EPA’s interpretation
“is based on a permissible construction of the statute.”
Chevron, 467 U.S. at 843. If EPA’s “choice represents a
reasonable accommodation of conflicting policies that were
committed to [EPA]’s care by the statute, we should not
disturb it unless it appears from the statute or its legislative
history that the accommodation is not one Congress would
have sanctioned.” Id. at 845 (internal quotation marks
omitted).

     NACWA first asserts that EPA’s interpretation of §
129(g)(1) is unreasonable under Chevron step two because
EPA advanced a new rationale for its interpretation of §
129(g)(1) for the first time in its denial of reconsideration to
NACWA. Specifically, NACWA cites EPA’s reasoning that
its conclusion on the coverage of § 129(g)(1) “is based on a
reasonable interpretation of two provisions of the [Clean Air
Act], so as to give both meaning,” and that “it is reasonable
for the EPA to consider both provisions and to conclude that
. . . section 129(g)’s all-encompassing definition of solid
waste incineration unit requires regulation” under § 129.
Joint Appendix 1092 (EPA’s letter denying NACWA’s
petition for reconsideration). NACWA argues that EPA’s
explanation is irrational not only because EPA allegedly
raised it for the first time in the denial of reconsideration, but
also because it amounts to a conclusory statement and
because it fails to consider the importance of other
environmental statutes.           We find these arguments
unconvincing. EPA explained in its final rule that it viewed §
112(e)(5) as merely a timing provision, and further stated that
to interpret § 112(e)(5) more broadly “would conflict with
section 129(g) and with the DC Circuit’s [sic] interpretation
of section 129(g).” 76 Fed. Reg. at 15,383. EPA’s reasoning
in denying NACWA’s petition for reconsideration is not only
consistent with its reasoning in the final rule, but also a
                              25
reasonable interpretation of the statute for the reasons we
have just explained.

     Second, NACWA argues EPA’s construction of §
129(g)(1) is unreasonable because it ignores legislative
history and the policies underlying the Clean Water Act’s
provisions on sewage sludge incineration. NACWA contends
that the discussion of wastewater treatment facilities in the
legislative history of § 112, and the absence of any reference
to sewage sludge or sewage sludge incinerators in § 129,
demonstrate that Congress intended EPA to regulate all
aspects of publicly-owned treatment works only under § 112.
But though the legislative history on § 112 mentions
wastewater treatment plants—an unsurprising fact in the
context of a section stating the date by when EPA must issue
§ 112(d) emission standards applicable to publicly-owned
treatment works—NACWA has cited no language in the
legislative history pertaining to sewage sludge incinerators.
We need not determine whether legislative history can
generally suffice to render an agency’s interpretation invalid
at Chevron step two. Nothing in the legislative history cited
by NACWA suggests that Congress would not have
sanctioned EPA’s interpretation of § 129(g)(1) as including
sewage sludge incinerators or EPA’s interpretation of §
112(e)(5) as being a timing provision.

     NACWA also contends that one of the congressional
objectives of the Clean Water Act is to “maintain[] local
flexibility and control over the means for managing sewage
sludge,” and that adopting EPA’s interpretation of § 129
would usurp local control. NACWA Br. at 27–28; see 33
U.S.C. § 1345(e) (“The determination of the manner of
disposal or use of sludge is a local determination . . . .”). We
agree with EPA, however, that this argument is largely
irrelevant to whether it reasonably interpreted § 129.
                               26
Establishing MACT standards for sewage sludge incinerators
does not, as a purely legal matter, remove local control over
which method of sewage sludge disposal to use. Even if the
presumably increased costs associated with emission
standards would affect a municipality’s decision on how to
dispose of sewage sludge, 33 U.S.C. § 1345(e) is not so
strongly worded as to completely insulate a municipality’s
decision-making process from EPA rulemaking.

     To sum, we conclude that the phrase “from . . . the
general public” is ambiguous. Because EPA’s original source
interpretation of that phrase is permissible, we give deference
to its interpretation of the definition of “solid waste
incineration unit,” and uphold its authority to establish
emission standards for sewage sludge incinerators under §
129.

B. CHALLENGES TO THE MACT FLOOR METHODOLOGY

     Petitioners NACWA and Sierra Club both challenge the
adequacy of EPA’s methodology in determining the MACT
floors for existing units. Both challenge EPA’s decision to set
MACT floors on emissions data from less than 12 percent of
sewage sludge incinerators, albeit on different legal theories.
See NACWA Br. at 32–37 (asserting that EPA’s failure to
base MACT floors on less than 12 percent of incinerators
violates § 129); Sierra Club Br. at 28–30 (asserting that
EPA’s failure to base MACT floors on less than 12 percent of
incinerators is arbitrary and capricious).

     Both petitioners also criticize distinct but related aspects
of EPA’s rulemaking. Sierra Club contends that EPA’s
method of selecting the best performers based on control
technology is unlawful and arbitrary, pointing to other factors
that may influence emission levels. See Sierra Club Br. at
                              27
18–23. NACWA argues that EPA failed to demonstrate that
the data it used to set MACT floors represented the
performance of the best-performing sewage sludge
incinerators, contending that EPA failed to consider
variability in sewage sludge contents and its effect on
emission levels and that the upper prediction limit does not
account for that variability. See NACWA Br. at 38–42.
Sierra Club also challenges EPA’s use of the upper prediction
limit, arguing that EPA does not demonstrate that the upper
prediction limit represented the “average emissions limitation
achieved” and was therefore unlawful and arbitrary. Beyond
these related arguments, Sierra Club argues that EPA’s
method for accounting for non-detect data is flawed.

     In promulgating the MACT standards for sewage sludge
incinerators, EPA took a different approach than it has in
other MACT standard regulations that have come before us
on petitions for review. First, EPA collected its MACT floor
dataset—i.e., the emission levels of “the best performing 12
percent of units” for the existing incinerator MACT floors—
by targeting the sewage sludge incinerators it believed to
employ the best air pollution control technology for emissions
testing. See 75 Fed. Reg. at 63,269–70. Second, after it had
collected emissions data for the MACT floor dataset, EPA
applied a statistical analysis, which it termed the “upper
prediction limit,” to account for variability. See 75 Fed. Reg.
at 63,269, 63,271 (explaining that EPA “must exercise its
judgment, based on an evaluation of the relevant factors and
available data, to determine the level of emissions control that
has been achieved by the best performing [sewage sludge
incinerators] under variable conditions.”).

     Both steps in this approach involved several different
estimations and assumptions. For example, because EPA
chose to limit its information collection requests to nine
                               28
municipalities, it had to estimate which sewage sludge
incinerators would have the lowest emissions, which it chose
to do based on the air pollution control technology the
incinerators used. See 75 Fed. Reg. at 63,270. And because
EPA’s limited emission testing did not yield data for 12
percent of incinerators for every pollutant, it used a statistical
technique to estimate whether a dataset of fewer than 12
percent of incinerators could estimate the best-performing 12
percent of incinerators. Id. Because every test did not
produce usable data, EPA used an approximation to account
for emissions test data too low to be accurately measured by
monitoring equipment. Id. at 63,272. EPA also estimated the
variability of the sewage sludge incinerators—what they
would achieve under a range of operating conditions—by
applying the upper prediction limit. Id. at 63,271.

     We have accorded Chevron deference to EPA’s
interpretation of § 129 as allowing it to estimate MACT
floors, noting that the requirement that the existing unit floors
“not be less stringent than the average emissions limitation
achieved by the best performing 12 percent of units” does not,
on its own, dictate “how the performance of the best units is
to be calculated.” Sierra Club v. EPA, 167 F.3d 658, 661–62
(D.C. Cir. 1999). Although EPA would ideally set MACT
floors by surveying all existing incinerators and identifying
the best-performing 12 percent of units with hard data, we
have not required EPA to go that far, recognizing that “EPA
typically has wide latitude in determining the extent of data-
gathering necessary to solve a problem.” Id. at 662; see also
id. at 661 (noting that Sierra Club, in arguing that case, had
“disavowed any interpretation that would require measuring
the performance of every last unit”); Oral Arg. Tr. at 53:25–
54:9 (statement from EPA’s attorney stating, “EPA in a
perfect world would have data from all 204 units”). Instead,
we explained that the plain meaning of § 129(a)(2) does not
                               29
“exclude estimation, either by sampling or by some other
reliable means.” Sierra Club, 167 F.3d at 662. But we have
not given EPA free rein in its estimation techniques. EPA
“must demonstrate with substantial evidence — not mere
assertions” that its estimation “allows a reasonable inference
as to the performance of the top 12 percent of units.” Id. at
663; Northeast Maryland Waste Disposal Authority, 358 F.3d
at 954 (internal quotation marks omitted).

     Relying on Sierra Club’s holding that EPA may estimate
“the average emissions limitation achieved by the best
performing 12 percent” without violating the Clean Air Act,
we have often held EPA’s attempts to estimate the
performance of the top 12 percent units to be lawful in theory.
But we have often held that, in practice, EPA could not
support the assumptions underlying its estimations with
substantial evidence. For example, in Sierra Club, EPA based
existing medical waste incinerator MACT floors on emission
limits established by state regulations, assuming that “all
[medical waste incinerators] are . . . achieving their
[regulatory] limits.” Id. at 663 (second alteration in original).
Although we held that EPA could, in theory, use regulatory
data as a proxy, EPA’s use of the data in that case to estimate
the performance of the top 12 percent was arbitrary and
capricious because the state emission limits were substantially
higher than emissions from an uncontrolled incinerator,
rendering the regulatory data a meaningless proxy for
emission levels from medical waste incinerators. See id. at
663–64 (explaining that while the average emission level
from uncontrolled incinerators was 2,770 parts per million
volume, the average of the state emission limits appeared to
be 5,227 parts per million volume); see also Northeast
Maryland Waste Disposal Authority, 358 F.3d at 953–54
(rejecting EPA’s use of state emission levels for the same
reason as in Sierra Club).
                              30

     In Sierra Club, we also discussed a method EPA used to
set new incinerator MACT floors, which are required to be
“no less stringent than the emissions control that is achieved
in practice by the best controlled similar unit.” See 167 F.3d
at 664–65; 42 U.S.C. § 7429(a)(2). In setting new incinerator
MACT floors, EPA had chosen what it believed to be the
most effective control technology used by an incinerator in
each category, identified the highest level of emissions (i.e.,
worst) recorded by any incinerator using that technology, and
then increased that value by 10 percent. Sierra Club, 167
F.3d at 665. Selecting the control technology used by sources
with the lowest emission levels and then setting MACT floors
at the levels achieved by the worst performing source, which
we termed the “MACT approach” in later cases, was
supposed to account for the fact that the best-controlled
similar unit will not consistently achieve the same emission
level. See Cement Kiln Recycling Coaliation v. EPA, 255
F.3d 855, 861 (D.C. Cir. 2001). In other words, as we
explained in Sierra Club, it is reasonable to expect that the
incinerator on which the MACT floors are based should be
able to “achieve” the MACT floor “in practice,” which it
could not do unless “achieved in practice” meant “achieved
under the worst foreseeable circumstances.” 167 F.3d at 665.
But though EPA may account for variability and set MACT
floors at the emission levels achieved by the best-controlled
source under the worst foreseeable circumstances, we
concluded in Sierra Club that EPA had not adequately
explained why adopting the MACT approach would achieve
that goal, and remanded the medical waste incinerator MACT
standards to EPA for further clarification. Id.

    In later cases, we addressed EPA’s attempts to expand its
MACT approach to developing existing source MACT floors.
See National Lime Ass’n v. EPA, 233 F.3d 625, 632 (D.C. Cir.
                              31
2000); Cement Kiln, 255 F.3d at 859; Sierra Club v. EPA, 479
F.3d 875, 879–880, 882–83 (D.C. Cir. 2007) (“Brick
MACT”). For example, in Cement Kiln, EPA identified the
best-performing 12 percent of sources by emission levels,
identified the control technology used by sources with
emission levels equivalent to or lower than the median of that
12 percent, and then set the MACT floor at the worst emission
level achieved by any source using that control technology.
255 F.3d at 859. As in Sierra Club, EPA’s rationale in setting
the MACT floors on the worst performer using MACT
technology was to account for variability in the emission
levels “achieved” by the best-performing 12 percent. See id.
at 862, 865–66. While we explained this approach could be
lawful in theory if, for example, control technology was
completely or significantly determinative of a source’s
emission levels, we nevertheless concluded that EPA had not
adequately demonstrated with substantial evidence that its
estimation was reasonable. Id. at 863–66. Because factors
apart from air pollution control technology could affect
emission levels, we concluded that EPA’s assumption that the
worst-performing unit could represent the best-performing
units was flawed. Id. at 866; see also Brick MACT, 479 F.3d
at 882 (“Given Cement Kiln’s holding that EPA may not use
emission levels of the worst performers . . . without a
demonstrated relationship between the two, we conclude that
the emission floors . . . violate the [Clean Air Act].”); id. at
883 (“EPA’s decision to base floors exclusively on
technology even though non-technology factors affect
emission levels violates the [Clean Air Act].”).

     As these cases demonstrate, establishing MACT floors is
no simple task. Determining the best performing sources is
not even as straightforward as simply collecting emission test
data from all incinerators and ranking them, as incinerators
that have low emission levels one day may have very high
                              32
emission levels under the worst foreseeable conditions (for
example, if an incinerator experiences a spike in sludge
pollutant concentrations during certain times of the year).
Recognizing that variability in the performance of sources can
make identifying the best-performing sources based on short-
term emissions data a nearly impossible task, we have upheld
EPA’s estimation of MACT floors in at least one case. In
Mossville Environmental Action Now v. EPA, 370 F.3d 1232
(D.C. Cir. 2004), EPA explained that great variability in
emissions among sources it sought to regulate made
comparing sources and selecting the best-performing units
virtually impossible, and so set the MACT standards for the
pollutant at issue at the level of preexisting EPA emission
standards. See id. at 1240 (“With comparisons between plants
impossible, and emission variations not related to
technological performance, the EPA claims it was unable to
select the best [performing] sources.”). Because EPA pointed
out that the source with the overall lowest long-term emission
of the pollutant at issue barely satisfied the preexisting
emission standards, we upheld EPA’s estimation that its
preexisting emission standards for that pollutant reasonably
represented the average emission levels of that pollutant for
the best-performing units. Id. at 1242.

     With this background in mind, we turn to the petitioners’
challenges to the MACT floor methodology EPA used in
setting emission standards for sewage sludge incinerators. As
we explained, EPA’s approach to setting MACT floors had
essentially two steps: (a) determining the best-performing
sewage sludge incinerators and gathering data; and (b)
applying the upper prediction limit to the collected dataset to
account for variability.

   To determine the best-performing incinerators, EPA,
mindful of our holding in past MACT floor cases, has devised
                              33
a different approach than it has in other rulemaking we have
reviewed. First, EPA identified the incinerators it believed
would have the lowest emissions based on the type of unit and
installed air pollution controls. 75 Fed. Reg. at 63,270. EPA
then conducted emission tests from these incinerators to
develop its MACT floor dataset, which it supplemented with
data from state environmental agency public databases. Id.
Because some test runs yielded emissions data at a level that
EPA’s testing equipment could not accurately measure, EPA
developed a method for incorporating this non-detect data.
Id. at 63,273.

     This method of using technology to set MACT floors
differs from the “MACT approach” discussed in Cement Kiln
and Brick MACT. In those cases, EPA had first identified the
sources with the lowest emissions, then identified the primary
emission control technology used by those sources, and then
set the MACT floors based on sources that used that
technology. See Cement Kiln, 255 F.3d at 859; Brick MACT,
479 F.3d at 879. In contrast, EPA has, in this rulemaking,
selected which sewage sludge incinerators to survey based on
their control technology, without first determining their
emission levels relative to other sources. See Revised MACT
Floor Memo at 6 (“To select the surveyed owners, EPA
reviewed the inventory of [sewage sludge incinerators] for the
control devices being operated, and identified a subset of units
expected to have the lowest emissions based on the type of
unit and the installed air pollution controls.” (emphasis
added)).

     Even after selectively identifying and collecting data
from incinerators, EPA did not collect data on every § 129
pollutant from 12 percent of sources. For example, while EPA
estimated in the final rule that it would need data on eighteen
multiple hearth incinerators to meet the 12 percent
                               34
requirement, the number of multiple hearth incinerators for
which it had data (including supplemental reports from state
environmental agency databases) ranged from nineteen to five
incinerators depending on the pollutant. See Revised MACT
Floor Memo at 7. Believing that § 129(a)(2) required it to
have data representative of at least 12 percent of incinerators,
EPA devised a method of estimating whether a limited dataset
could be representative of the best-performing 12 percent of
units. Specifically, EPA applied a statistical analysis on the
underrepresented pollutant datasets to estimate whether it had
enough observations from testing incinerators to represent the
best-performing 12 percent of incinerators. See 75 Fed. Reg.
63,270; Revised MACT Floor Memo at 7–8. Applying this
statistical analysis to its MACT floor dataset yielded an
estimate of an estimate; in other words, the limited dataset to
which EPA was applying this statistical analysis was itself
already the result of EPA’s estimating the best performers
based on control technology.

     After it had collected its dataset, EPA applied the upper
prediction limit to estimate variability in sewage sludge
incinerator emissions, stating its belief that the MACT floors
had to be set at such a level that the best-performing
incinerators “can expect to meet ‘every day and under all
operating conditions.’” 75 Fed. Reg. at 63,269 (quoting
Mossville Environmental Action Now, 370 F.3d at 1241–42).
We will address challenges to EPA’s estimations in the
following order: (1) whether EPA may use control technology
as a proxy for best-performing incinerators; (2) whether EPA
did not adequately account for variability in the characteristics
of sewage sludge fed into the sewage sludge incinerators, and
whether it may account for variability with the upper
prediction limit; (3) whether EPA may apply a statistical
equation to determine whether EPA had a sufficient dataset to
be representative of the best-performing 12 percent; and (4)
                             35
whether EPA may incorporate non-detect data by comparing
calculated MACT floors to a value that is three times the
representative detection level.

1. Identifying the best-performing incinerators based on
   control technology

     We first address Sierra Club’s challenge to EPA’s
selection of the best-performing units based on the type of
unit and installed air pollution control technology. In
addressing Sierra Club’s argument that EPA did not establish
that non-technology factors do not affect emissions, we admit
some confusion over whether NACWA is also arguing that
EPA acted arbitrarily in its selection of best performers by
failing to account for variability, or whether its argument is
that EPA failed to account for the variability experienced by
the best-performing units it selected. See NACWA Br. at 39
(“Commenters argued that EPA’s targeted selection of nine
[publicly-owned treatment works] based solely on type of
pollution control makes it impossible for EPA to assume that
the data are representative of the best-performing [sewage
sludge incinerators] across the entire category.”) (citing
NACWA Comments, Joint Appendix 24–25). But see
NACWA Br. at 41 (“Because these data show the great
variability of these pollutants, commenters urged EPA to
determine the emission rates achieved by the best-performing
sources under the full range of operating conditions.”). The
closeness of these two arguments is hardly surprising given
that variability in incinerator operating conditions may make
the “best performing 12 percent of units” a moving target,
particularly when EPA uses emission levels as the metric for
“best performing.” But while both NACWA’s and Sierra
Club’s arguments on this point share a similar element—
EPA’s alleged failure to account for sewage sludge variability
makes its MACT floor methodology arbitrary and
                              36
capricious—Sierra Club focuses on EPA’s assumption about
control technology installed on the incinerator, while
NACWA focuses on EPA’s assumptions about the effect of
sewage sludge characteristics on emission levels. Because
these contentions are different in kind, we will address them
separately.

     We begin with Sierra Club’s allegation that EPA’s
estimate of the best-performing 12 percent of units is
unlawful and arbitrary. In arguing that this estimate is
unlawful, Sierra Club relies on Cement Kiln, asserting that
EPA’s estimation technique can be upheld only if air
pollution control technologies are “the only factor
determining emission levels.” Id. (quoting 255 F.3d at 863).
Because EPA conceded that some non-technology factors
affected emission levels, even accounting for Clean Water
Act Part 503 regulations, see 75 Fed. Reg. at 63,270, Sierra
Club argues that EPA’s method of estimating is per se
unlawful.

     Sierra Club reads our holding in Cement Kiln too strictly.
Later in our opinion in Cement Kiln, we explained that “if
[EPA] can demonstrate with substantial evidence – not mere
assertions – that MACT technology significantly controls
emissions, or that factors other than the control have a
negligible effect, the MACT approach could be a reasonable
means of satisfying the statute’s requirements.” 255 F.3d at
866 (emphases added).        Unsurprisingly, EPA cited this
portion of our opinion when responding to Sierra Club’s
challenge to using control technology as a proxy for the best-
performing incinerators. EPA Br. at 55. Sierra Club asserts
that EPA cannot justify its approach under this softer
standard, arguing that the significant/negligible standard is
dicta. See Sierra Club Reply Br. at 3–4.
                              37
     While Sierra Club may be correct that this statement is
dicta, we now elevate it to holding. First, our statement in
Cement Kiln that the MACT approach would satisfy the
statute “if pollution control technology were the only factor
determining emission levels” was a direct quote from our
opinion in National Lime, where the statement was itself
dicta. 255 F.3d at 863 (quoting National Lime, 233 F.3d at
633); see National Lime, 233 F.3d at 633 (summarizing an
argument made by Sierra Club that we could not consider
because it was not properly raised). Moreover, in Cement
Kiln, we did not rely on the presence of any other factor
influencing emission levels to hold that EPA’s MACT
approach failed to satisfy the statutory requirements for
setting MACT floors, instead resting our holding on the bases
that several non-control factors could influence emission
levels, and that EPA’s difficulty in quantifying these factors
was no excuse for failing to demonstrate its estimate was
reasonable. Cement Kiln, 255 F.3d at 863–65.

     Second, if we are to give any substance to EPA’s ability
to estimate the best performing units based on control
technology, we must allow EPA to use air pollution control
technology as a proxy for emission levels even if the
correlation between control technology and emission levels is
imperfect because non-control factors have a negligible effect
on emissions. This is so because an estimate, by definition,
will not accurately account for every variable that may affect
emissions. WEBSTER’S, supra 17, at 778 (defining “estimate”
as meaning “to judge the value, worth, or significance of: esp:
to arrive at (a value judgment that is often valid but
incomplete, approximate, or tentative)”) (emphasis added).
Were we to adopt the strict standard Sierra Club argues
applies, we would effectively be prohibiting EPA from using
this estimation technique, as we find it impossible to imagine
any situation where there is a perfect correlation between
                             38
control technology and emissions. See Cement Kiln, 255 F.3d
at 871 (“[W]e do not expect the impossible of the [EPA].
Floors need not be perfect mirrors of the best performers’
emissions.”). Thus, the fact that air pollution control
technology is not the only factor affecting emission levels
does not render EPA’s use of control technologies to identify
best performers per se unlawful.

     EPA, however, must still demonstrate that its estimate is
reasonable.    In justifying its approach of “specifically
[seeking] emissions data from those municipalities that have
installed and operate more than one of the controls that EPA
identified as achieving the most reductions possible for the
Section 129 pollutants,” EPA Br. at 56, EPA points to Clean
Water Act regulations on sewage sludge disposal as
accounting for non-control technology factors. See 40 C.F.R.
Part 503, Subpart E. These regulations include a requirement
that incinerators comply with Clean Air Act emission
standards for beryllium and mercury, see 40 C.F.R. §
503.43(a)–(b), and set limits for the average daily
concentrations of lead, cadmium, and other metals in the
sewage sludge that is fed into an incinerator. See 40 C.F.R. §
503.43(c)–(d). EPA explained in the rulemaking, and now
before us, that sewage sludge incinerators “receive a more
homogenous type of waste to burn,” and that because of the
Part 503 standards sewage sludge incinerators “are already
incorporating management practices and measures to reduce
waste and limit the concentration of pollutants in [sewage
sludge].” See Revised MACT Floor Memo at 6–7; 75 Fed.
Reg. at 63,270.

     It is true that EPA has pointed to some evidence of
reduced variability among sewage sludge incinerators, a
showing EPA failed to make in other MACT floor cases. See,
e.g., Sierra Club, 167 F.3d at 662–64 (concluding that
                               39
assumption that States would set emission limits at a level
near what incinerators achieved in practice to be unsupported
and contradicted by the record); Cement Kiln, 255 F.3d at 865
(determining that EPA did not attempt to support its
assumption that emission levels were solely dependent on
control technologies, instead explaining that for some
pollutants, the “factors other than technology that affect
emissions . . . are difficult to quantify for the definition of
MACT”) (internal quotation marks omitted). Nevertheless,
EPA concedes “that there is some variation of Section 129
pollutants present in the waste that is burned at individual
sewage sludge incinerators.” EPA Br. at 58. The question
thus remains: can EPA demonstrate with substantial evidence
that some variation in pollutants has a negligible effect on
sewage sludge incinerators, or that non-technology factors
aside from sewage sludge content have a negligible effect on
emissions?

     Sierra Club argues that EPA has not made that
demonstration, pointing out that EPA’s assumption does not
account for the fact that incinerator emissions are “affected by
the fuels they use, the age and design of the individual unit,
the specific quality and age of control devices at individual
units, the training and skill of the operators, and the care with
which they run individual units.” Sierra Club Br. at 18–19
(internal quotation marks omitted). We found this argument
persuasive in Cement Kiln, see 255 F.3d at 862–65, and again
agree with Sierra Club here. The fact that publicly-owned
treatment works are already required to limit pollutant
concentrations in sewage sludge before incineration does not
establish that other variations in the operation of sewage
sludge incinerators and the air pollution control technology
they use will have only a negligible effect in emissions.
Without evidence that air pollution control technology will
achieve substantially the same performance across
                              40
incinerators without regard to the particular incinerator on
which it is installed, EPA has made only a “mere assertion”
that its regulations account for non-technology factors and
that the type of air pollution control technology used by an
incinerator is significantly determinative of emissions. See 76
Fed. Reg. at 15,392; Cement Kiln, 255 F.3d at 866.

     Sierra Club also argues that variations in sewage sludge
pollutant content are a factor affecting emission levels apart
from the air control technology in use by a sewage sludge
incinerator. Responding to EPA’s arguments that the Part 503
regulations already require publicly-owned treatment works to
“apply[] non-technology measures to reduce emissions” and
therefore produce a more homogenous waste, Sierra Club
argues that “[e]ven if correct, these arguments merely show
that the units EPA selected as best performers have varying
sludge inputs and that these inputs affect sewage sludge
incinerators’ emissions less than they affect emissions from
other categories of incinerators.” Sierra Club Br. at 19.
Although this is a fair point, it is more relevant to NACWA’s
argument that EPA failed to account for variability in sewage
sludge pollutants when collecting its dataset, a point we
address more comprehensively in the following section.

     Suffice it to say, unless EPA can demonstrate that the
relatively reduced variations in sewage sludge characteristics
have a negligible effect on emissions, Sierra Club’s argument
that non-technology factors affect emissions seems even more
meritorious. See Cement Kiln, 255 F.3d at 864 (citing, in
support of its holding, an EPA technical memorandum in
which EPA observed that the variability in emissions among
sources using MACT technology “indicate[d] that the air
pollution control device system type . . . may not be the only
important consideration affecting [dioxin/furan] control; other
factors such as combustion quality and waste composition . . .
                               41
may also be of importance.”) (emphasis added) (second
alteration in original). As we will discuss in the next section,
EPA has alluded to evidence that may demonstrate a low
correlation between sewage sludge characteristics and
emissions.      See Joint Appendix 1095 (Letter Denying
NACWA’s Petition for Reconsideration) (citing data gathered
during EPA’s information collection request that showed that
“the contents of . . . pollutants in the sludge itself has little
relationship to the emissions of the pollutants, because these
pollutants are removed by the control devices.”). But as we
will also discuss in the following section, citing this evidence
for the first time in denying a petition for reconsideration may
be an insufficient basis upon which to defend EPA’s position
that its Part 503 regulations account for non-technology
factors.

     To bolster its argument that non-technology factors have
a non-negligible effect on emission levels, Sierra Club points
out that some incinerators EPA did not survey for data
collection reported superior performance to those EPA did
survey, undercutting EPA’s assumption that control
technology is the only factor controlling emission levels. For
example, Sierra Club cites comments submitted by Palo Alto,
which reported that its program of reducing mercury inputs
was effective in reducing mercury emissions to a level far
below the existing unit MACT floor, and which was not
included in the best-performing 12 percent. See Joint
Appendix 628–29.         Sierra Club also notes that the
supplemental data EPA took from state environmental agency
public databases showed emission levels lower than those
EPA decided to survey—a fact EPA candidly acknowledges.
See 76 Fed. Reg. 15,387 (“For some pollutants, the emissions
from these supplemental test reports were lower than those
from the nine [surveyed] sources.”). This is evidence, Sierra
                              42
Club argues, that EPA’s estimate of the best performers based
on control technology is arbitrary and capricious.

     EPA responds that it did not have to consider the Palo
Alto incinerator’s reported emission level, because Palo Alto
failed to comply with EPA’s instruction in the proposed rule
to provide “supporting documentation” when submitting
additional emissions stack test data in its comments. See 75
Fed. Reg. at 63,270. Because EPA could not verify the
accuracy of Palo Alto’s asserted emission levels, EPA
explains that it was unable to draw any correlation between
Palo Alto’s sewage sludge management practices and a
reduction in mercury emissions. In the past, we have upheld
EPA’s rejection of data it determined deficient, explaining
that we give substantial deference to an agency’s expert
scientific judgment. Similarly, when EPA requests that
commenters substantiate their reported emission test data, and
they do not comply, EPA “[is] not obligated under its policy”
to compare its collected results with the unsubstantiated data
that commenters submit. See Edison Electric Institute v. EPA,
2 F.3d 438, 448 (D.C. Cir. 1993) Id. at 449. Thus, we agree
with EPA that it deserves deference for its decision not to
draw any correlations between Palo Alto’s change in
management practice and a reduction in mercury emissions
based on the data submitted.

     EPA, however, does not respond to Sierra Club’s
argument that the fact that randomly selected incinerators
from state environmental agency databases had emission
levels lower than those from the incinerators EPA chose to
survey based on technology demonstrates that EPA’s use of
control technology is unreasonable. Instead, it explains that
the supplemental information from state environmental
agency databases “included emissions test data from
facilities/units that met the same criteria EPA used in issuing
                              43
information collection requests, i.e., units with more than one
of the controls that EPA identified as achieving the most
reductions possible for the Section 129 pollutants.” EPA Br.
at 56–57; compare Joint Appendix 979 (listing incinerators
from which EPA collected emissions test data and the control
technologies they used), with Joint Appendix 1012–1040
(listing incinerator emission test data collected from state
environmental agency databases along with control
technologies used). But EPA did not state this rationale in the
rulemaking, and we cannot “accept appellate counsel’s post
hoc rationalizations for agency action.” Motor Vehicles
Manufacturer’s Ass’n v. State Farm Mutual Auto Insurance
Co., 463 U.S. 29, 50 (1983). And before this court, EPA does
not claim that it specifically searched state environmental
agency databases for data from sewage sludge incinerators
that use what it considered the best-performing technology,
explaining only that the supplemental data “included”
emissions data from facilities that had one or more of the
controls identified. Even taking as true that the incinerators
for which EPA had data in supplemental testing used similar
air pollution controls as the incinerators it selected, the fact
that similarly-controlled incinerators achieve lower emission
levels suggests that non-technology factors have a non-
negligible effect on emission levels.

     Therefore, we agree with Sierra Club that EPA has not
demonstrated with substantial evidence that non-control
technology factors apart from sewage sludge content, like
variations in age, design, or operation of the incinerators
themselves, would have a negligible effect on incinerator
emissions. That EPA’s supplemental test reports show
superior performance to the incinerators EPA chose for
information collection requests is strong evidence that the
type of air pollution control technology used itself is not
significantly determinative of emissions.      Nevertheless,
                                44
because EPA may be able to explain why non-control
technology factors have a negligible effect on emissions and
why the data it used from supplemental test reports
outperform the units it identified as best, we remand this
portion of the rulemaking to EPA for further explanation
without vacating the MACT floor regulations.

2. Accounting for variability

     We now address NACWA’s and Sierra Club’s challenges
to EPA’s method of accounting for variability. In the
proposed rule, EPA explained that it was accounting for intra-
unit variability using a statistical tool it termed the upper
prediction limit, and was relying on the Part 503 regulations
to account for variability in sewage sludge pollutant
concentration between incinerators. See 75 Fed. Reg. at
63,270–71. Because the upper prediction limit is not a
straightforward method of accounting for variability, we first
review and elaborate on this concept. The 99 percent upper
prediction limit “represents the value which one can expect
the mean of future 3-run performance tests from the best-
performing 12 percent of sources to fall below, with 99
percent confidence, based upon the results of the independent
sample of observations from the best-performing sources.”
75 Fed. Reg. at 63,271. EPA calculated the upper prediction
limit using the following formula:

          	               	
                                                    1    1
                    	 ̅       0.99,   1

In this formula, n represents the number of test runs (i.e., the
sample size), m represents the number of test runs in a
compliance average, ̅ represents the mean, s represents the
                              45
standard deviation (i.e., a value representing how much
variation exists from the mean within a dataset), and t(0.99,
n–1) represents a value called the t-statistic, which is a
number based on the number of test runs and EPA’s desired
99 percent significance. Id. Because of the role of the
standard deviation in this formula, greater variation within a
dataset will produce a higher upper prediction limit. And
because EPA incorporated the upper prediction limit into its
analysis by setting the MACT floor at the level of the upper
prediction limit (unless its methodology for addressing non-
detect data, which we will discuss below, yielded a higher
result), a higher upper prediction limit means a higher MACT
floor.

     For existing incinerators, EPA did not apply the upper
prediction limit to each 3-run test for each incinerator, but
instead applied it to the entire dataset it collected for a
pollutant. See id.; see, e.g., Revised MACT Floor Memo
Attachment B-8. For example, when setting the MACT floor
for sulfur dioxide, for which EPA had 63 test runs, EPA
calculated the upper prediction limit using a sample size of
63, a mean and standard deviation based on all 63 test runs, a
desired 3-run compliance average, and a desired confidence
level of 99 percent. See 75 Fed. Reg. at 63,271; Revised
MACT Floor Memo Attachment B-8. The resulting value
calculated by the upper prediction limit appears to represent,
with 99 percent confidence, the value EPA predicts a 3-run
average from an imaginary incinerator—representative of the
mean and variation among the best-performing 12 percent
incinerators—could achieve. Predicting the value that a “3-
run average” will fall below appears confusing at first
glance—but we note that the focus of the upper prediction
limit is on the average, and not the values of the three runs
used to derive that future average. Thus if the upper
prediction limit (i.e., MACT floor) were 5, it would not matter
                              46
whether the 3-run test was 5-5-5, or 1-5-9, as both 3-run tests
average to 5. Designing the upper prediction limit this way
appears to give incinerators testing for compliance with the
MACT standards some leeway in variations among emissions
between test runs. See 75 Fed. Reg. at 63,269.

     During the comment period Sierra Club, but not
NACWA, challenged EPA’s use of the upper prediction limit.
See Joint Appendix 608. Although NACWA did not criticize
the upper prediction limit as a method for addressing
variability in its comments, it did assert that EPA failed to
account for variability in sewage sludge characteristics
resulting from regional and seasonal variability. See id. 670–
72. NACWA also challenged EPA’s use of the Clean Water
Act Part 503 regulatory data in its rulemaking, asserting that
EPA’s assumption that sewage sludge was homogenous was
demonstrably false based on that data.           For example,
NACWA pointed out that the monthly average lead
concentration in sewage sludge in January 2009 was 62.23
mg/dry kg for southerly incinerators and 97.00 mg/dry kg for
westerly incinerators, while the monthly average lead
concentration in July 2009 was 123.14 mg/dry kg for
southerly incinerators and 218.55 mg/dry kg for westerly
incinerators. Id. 671. NACWA argued that because EPA
regulations required publicly-owned treatment works to report
this data to EPA, see 40 C.F.R. § 503.48, EPA had access to
the data and should have used it during rulemaking to account
for variability. Id. 671–72. Moreover, NACWA noted that
the Part 503 regulations did not even address all § 129
pollutants. See id. 672.

    In the final rule, EPA defended its use of the upper
prediction limit against Sierra Club’s criticisms. See 76 Fed.
Reg. at 15,389. In response to NACWA’s comments, EPA
explained that it collected emissions data from nine different
                                47
facilities in nine different states, claiming that these facilities
were “located in a mix of northern, southern, eastern, and
western states,” each with its “own unique sludge
characteristics from different residential and commercial
populations.” Id. at 15,391. EPA stated that it felt the dataset
had “sufficient variation in regions, climates and populations”
to “adequately incorporate[] variability in wastewater
treatment systems across the U.S.,” and that it had “also
incorporated variability using the [upper prediction limit].”
Id.

     Both petitioners now challenge EPA’s use of the upper
prediction limit to account for variability among sewage
sludge incinerators. Sierra Club contends that the upper
prediction limit is unlawful as applied to existing incinerator
datasets because it does not represent the “average” emissions
limitation achieved by the best-performing 12 percent of
incinerators, a fact inconsistent with EPA’s statements that
the upper prediction limit is “based on” an average. Sierra
Club asserts that the upper prediction limit is unlawful as
applied to new sources as well, stating that “the upper
prediction limit is not an estimate of what the best unit
actually ‘achieved in practice.’” Sierra Club Br. at 25.

     Sierra Club also argues that EPA’s use of the upper
prediction limit is arbitrary and capricious because EPA does
not provide an explanation of how the upper prediction limit
represents the emissions level achieved by the best
performing units under the worst reasonably foreseeable
conditions. To support its arbitrary and capricious argument,
Sierra Club points to the fact that, by applying the upper
prediction limit, EPA calculated a MACT floor for the best-
controlled unit that was higher than the floor based on the
average emissions limitations achieved by the top 12 percent
of units. See 76 Fed. Reg. at 15,388–89. Sierra Club also
                               48
alleges that EPA has been inconsistent with its use of the
upper prediction limit, using the upper prediction limit to set
the MACT floors but not using it to identify incinerators in
the first place.

    NACWA does not challenge EPA’s use of the upper
prediction limit as broadly as Sierra Club, explaining that
“using the 99 [percent] [upper prediction limit] method to
account for variability in emission performance is not
prohibited by statute, nor is it unreasonable, provided EPA
uses representative data from the congressionally required 12
[percent] of units.” NACWA Intervenor Br. at 7. Instead,
NACWA challenges EPA’s justification that the upper
prediction limit adequately accounts for variability in a
dataset that itself is not reflective of the variety of conditions
in which sewage sludge incinerators operate, asserting that
“the [upper prediction limit] cannot account for variability
among [sewage sludge incinerators] unless the underlying
data are representative of the category as a whole.” In other
words, NACWA argues that because EPA failed to take into
account regional and seasonal variability in sewage sludge
pollutant concentrations and failed to use the Part 503 data
showing variability in sewage sludge characteristics in its
analysis, EPA produced a limited dataset that was not
representative of the “emission rates achieved by the best-
performing sources under the full range of operating
conditions.” NACWA Br. at 41.

     EPA’s responses to both Sierra Club’s and NACWA’s
arguments are somewhat conclusory, relying primarily on its
explanation in the Revised MACT Floor Memo rather than
addressing the petitioners’ legal arguments. Responding to
Sierra Club, EPA asserts that it did not “simply ‘pick a
number’” in setting the upper prediction limit, and explains
that the reason why some new incinerator MACT floors were
                              49
higher than existing incinerator MACT floors was because of
the smaller datasets with greater variation. EPA Br. at 52.
EPA argues that NACWA’s criticism of the upper prediction
limit is “overly simplistic,” explaining that “EPA’s use of the
[upper prediction limit] to account for variability also
addressed any emissions variability due to differences in
sludge content,” and that if NACWA’s approach were
accepted, “it would account for variability in sludge content
on top of the variability in emission levels that are already
accounted for through the [upper prediction limit].” EPA Br.
at 50–51.

     Before stepping into the morass of arguments on the
upper prediction limit, we take a moment to revisit the
statutory source of EPA’s obligation to set MACT floors.
Section 129(a)(2) requires existing MACT floors to be no less
stringent than “the average emissions limitation achieved by
the best performing 12 percent of units.” As we noted in
Sierra Club, “this phrase on its own says nothing about how
the performance of the best units is to be calculated.” 167
F.3d at 661. In the past, we have primarily relied on Sierra
Club when reviewing MACT standards to state that EPA can
reasonably estimate the performance of the best units. But
underlying Sierra Club’s holding is also the proposition that,
because EPA can interpret ambiguous statutes under Chevron,
EPA can decide what value the MACT floors are supposed to
represent, as long as that decision is a reasonable
interpretation of the statute. See id. at 661–62.

     In this case, EPA has explained that its “long-standing
interpretation [of section 129] is that the combination of
section 129(a)(4), requiring numerical standards for each
enumerated pollutant, and section 129(a)(2), requiring that
each such standard be at least as stringent as the MACT floor,
supports that floors be derived for each pollutant based on the
                              50
emissions levels achieved for each pollutant.” 75 Fed. Reg. at
63,269. And in the final rule, EPA clarified that it was “using
lowest emissions limitation as the measure of best
performance.” 76 Fed. Reg. at 15,389.

     But even with these explicit interpretations of § 129(a)(2)
as guidelines, the phrase “average emissions limitation
achieved by the best performing 12 percent of units” could be
interpreted several different ways, with several different
variations of what the MACT floor is supposed to represent.
For example, and without prejudging the legality of these
different interpretations, EPA could interpret the “average
emissions limitation achieved by the best performing 12
percent of units” to mean the average of the emission levels
achieved by the best-performing units based on EPA’s short-
term emission test data, without regard to the range of
conditions under which the incinerators operate. In that case,
the MACT floors would simply be an average of the
emissions data EPA collected from the best-performing units.

     The phrase could also mean the average of the emission
levels that each best-performing unit achieved under the worst
foreseeable circumstances. If EPA were to take this
interpretation, it would seem sensible to determine the
population of the best-performing units based on which units
achieve the lowest emission levels under the worst
foreseeable conditions, and then average those emission
levels.

     Based on EPA’s method of determining MACT floors in
this case and its response to Sierra Club’s comments,
however, it seems EPA has adopted yet another interpretation
of the phrase “average emissions limitation achieved by the
best performing 12 percent of units.” In the final rule, EPA
cited Sierra Club’s comments that § 129(a)(2)
                              51
“unambiguously requires EPA to set floors reflecting the
‘average’ emission level achieved by the best sources” and
that “although EPA may consider variability in estimating an
individual source’s actual performance over time, nothing in
the [Clean Air Act] or the case law even suggests that EPA
may account for differences in performance between sources
except as § 129 provides, by averaging the emission levels
achieved by the sources in the top 12 percent.” 76 Fed. Reg.
at 15,389. EPA responded that “[b]ecause the [upper
prediction limit] represents the value which we can expect the
mean (i.e., average) of three future observations (3-run
average) to fall below, based upon the results of the
independent sample size from the same population, the [upper
prediction limit] reflects average emissions.” Id.

     It is not clear to us, however, that the “average emissions
limitation achieved by the best performing 12 percent” would
refer to the future average of a 3-run test that EPA predicts a
source in the best-performing 12 percent will fall below with
99 percent confidence. Instead, the word “average” as
referred to in the standard for existing unit MACT floors
seems to mean the average emissions limitation that the
existing population of the best-performing 12 percent of
incinerators has achieved, not the average of a future 3-run
test conducted for compliance purposes.

     This is not to say that the upper prediction limit, which
EPA applied to the average of the emission levels recorded
while testing the best-performing 12 percent, would violate
the statutory standard established in § 129. Under its method,
EPA seems to have effectively modeled an imaginary
incinerator based on the short-term emissions test data from
incinerators in what EPA considers the best-performing 12
percent of units. Using the average, the standard deviation of
the dataset, and the number of data points, EPA claims its
                               52
statistical formula models, with 99 percent confidence, the
upper limit of what that imaginary incinerator would achieve
based on the distribution of the dataset. Given that EPA
believes that it must set MACT floors “that the best
performing sources can meet ‘every day and under all
operating conditions,’” it seems plausible to state that this
predicted emission level represents the “average emissions
limitation achieved by the best performing 12 percent of
units.” See 75 Fed. Reg. at 63,269 (quoting Mossville
Environmental Action Now, 370 F.3d at 1241–42).

     EPA has not interpreted “average emissions limitation
achieved” this way, however, and because we “may not
supply a reasoned basis for the agency’s action that the
agency itself has not given,” we can only adjudge EPA’s
interpretation based on essentially one sentence from the
Federal Register. Bowman Transportation, Inc. v. Arkansas-
Best Freight System, Inc., 419 U.S. 281, 285–86 (1974); see
76 Fed. Reg. at 15,389. The need for further explanation is
especially acute when EPA’s approach of using the upper
prediction limit and its interpretation of “average emissions
limitation achieved” are both departures from the approaches
EPA has taken in setting MACT floors in earlier cases. As to
the interpretation of “average” specifically, EPA has not
previously interpreted the phrase “average emissions
limitation achieved” to refer to the average of a future 3-run
test, but instead the average emissions levels of the best-
performing 12 percent of sources for which EPA had data (or
the average of the proxies EPA used to estimate those
emission levels). See Sierra Club, 167 F.3d at 661 (“[EPA]
selected the 12 percent of the incinerator population subject to
the strictest controls and set the floor level for the subcategory
by averaging the emissions limitations governing those
incinerators.”); National Lime, 233 F.3d at 630 (“To set
existing source emission floors, EPA . . . . identified the
                              53
technology used by the median plant out of the best twelve
percent of plants for which it had information and set the
existing source emission floor at the emission level of the
worst performing plant in its database using that
technology.”); Cement Kiln, 255 F.3d at 859 (explaining that
for existing sources, EPA identified the best-performing 12
percent of sources, then identified the emission control
technology used by sources with emission levels equivalent to
or lower than the median of the best-performing 12 percent,
and then set the MACT floor at the worst emission level
achieved by any source using that technology); Northeast
Maryland Waste Disposal Authority, 358 F.3d at 953 (“For
each pollutant, EPA calculated the MACT floor by averaging
the most stringent 12% of state permit limits in each class.”).

     Although EPA may be able to justify its novel
interpretation that “average” means the average of a future 3-
run compliance test, one sentence in the Federal Register is
not enough of a basis to uphold EPA’s new approach to
incorporating variability against arbitrary and capricious
review. Accordingly, on remand, we expect EPA to clarify
how the upper prediction limit represents the “average
emissions limitation achieved by the best performing 12
percent.” See Sierra Club, 167 F.3d at 664 (remanding EPA’s
MACT floor determination, because “[i]t is possible that EPA
may be able to explain it”).

     We now turn to Sierra Club’s related challenge to the
upper prediction limit as arbitrary because “EPA provides no
support for the notion that the upper prediction limit for the
single best-performing unit reflects that unit’s actual
performance, even under the ‘worst reasonably foreseeable’
circumstances.’” Sierra Club Br. at 26. While it is true that
EPA did not even use the phrase “worse foreseeable
circumstances” in its rulemaking, it did explain its belief that
                               54
it must set MACT floors that the “best performing sources can
expect to meet ‘every day and under all operating
conditions.’” 75 Fed. Reg. at 63,269 (quoting Mossville
Environmental Action Now, 370 F.3d at 1241–42). Not only
are these standards approximately equivalent, EPA is not
wedded to our “worse foreseeable circumstances”
interpretation of “achieved in practice.” See Sierra Club, 167
F.3d at 665 (explaining that “EPA would be justified in
setting the floors at a level that is a reasonable estimate of the
performance of the ‘best controlled similar unit’ under the
worst reasonably foreseeable circumstances,” adding “we use
the subjunctive because it is not clear from the record that the
agency was doing this”). More substantively, EPA’s citation
to Mossville Environmental Action Now in the same section as
EPA’s description of the upper prediction limit may be
enough to reasonably discern EPA’s justification for the upper
prediction limit, even if EPA has not directly stated how it
justifies the upper prediction limit as a method for accounting
for variability in light of the Clean Air Act and our case law.
See Bowman Transportation, 419 U.S. at 286.

     Although it may be sufficiently clear that EPA’s
prediction of the best-performing incinerators’ upper limit
represents standards these incinerators can “meet every day
and under all operating conditions,” EPA has not clearly
explained how the upper prediction limit itself operates to
predict this value with sufficient accuracy. In the Brick
MACT case, we held that EPA’s use of the MACT approach
violated the Clean Air Act because “it . . . failed to show that
the emission levels achieved by the worst performers using a
given pollution control device actually predict the range of
emission levels achieved by the best performers using that
device.” 479 F.3d at 882. Similarly, EPA provides little
explanation on how the upper prediction limit can actually
predict the upper limit EPA expects the best-performing unit
                               55
or units to achieve. As Sierra Club pointed out, the upper
prediction limit’s predictive ability does appear somewhat
doubtful when it produces a higher MACT floor for an
incinerator with raw test data ranging from 0.31 to 2.26 than
for a group of incinerators with raw test data ranging from
0.31 to 40.32 and a mean of 9.38. See Revised MACT Floor
Memo Attachment B-8 (Sulfur dioxide emissions test data for
existing multiple hearth incinerator floor); id. Attachment D-8
(Sulfur dioxide emissions test data for new multiple hearth
incinerator floor).      As EPA stated in explaining this
apparently illogical result, a smaller dataset may have greater
variability, and thus a higher upper prediction limit. But if the
upper prediction limit can vary so much depending on the size
of the dataset, EPA should explain on remand why the upper
prediction limit is a reasonable estimate of what an incinerator
would achieve under the worst foreseeable conditions for
incinerators with smaller datasets.         Put differently, if
collecting more data has such a significant effect on the upper
prediction limit, presumably producing a more accurate
estimate of what that incinerator would “achieve in practice,”
EPA should explain why the upper prediction limit could still
be considered accurate given a small dataset.

     While it is true that we “owe particular deference to EPA
when its rulemakings rest upon matters of scientific and
statistical judgment within the agency’s sphere of special
competence and statutory jurisdiction,” American Coke &
Chemicals Institute v. EPA, 452 F.3d 930, 941 (D.C. Cir.
2006), EPA must still articulate a “rational connection
between the facts found and the choice made.” Burlington
Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962).
Because we are already remanding the upper prediction limit,
we encourage EPA to elaborate how the statistical formula it
uses can predict the upper limit of incinerator emissions. We
are hesitant to rubber-stamp EPA’s invocation of statistics
                              56
without some explanation of the underlying principles or
reasons why its formulas would produce an accurate result,
particularly when the “facts found”—the MACT floor
datasets—demonstrate flaws in the formula.

     We now turn to NACWA’s arguments that EPA failed to
account for variability in sewage sludge characteristics,
beginning with NACWA’s argument that the upper prediction
limit cannot account for this sort of variability. See NACWA
Br. at 39; EPA Br. at 51 (“EPA’s use of the [upper prediction
limit] to account for variability also addressed any emissions
variability due to differences in sludge content.”). Before
discussing NACWA’s challenges to EPA’s method of
accounting for variability, however, we take a moment to note
a distinction NACWA appears to draw in its brief, in which it
argues that its analyses on the Part 503 data “demonstrate that
there is significant variability in metals concentrations among
[publicly-owned treatment works] and within a [publicly
owned treatment work].” NACWA Br. at 42. As we will
explain below, we agree with NACWA that under the
rationale EPA expressed during rulemaking regarding
variability, EPA should have accounted for variability in
sewage sludge characteristics within a publicly-owned
treatment work or better explained why that variability was
irrelevant. It is unclear, however, whether EPA needed to
account for variability among publicly-owned treatment
works.

     First, we agree with NACWA that EPA has not
adequately explained how the upper prediction limit can
address variability in sewage sludge characteristics,
particularly given the context in which it described the upper
prediction limit in the proposed rule and the Revised MACT
Floor Memo. EPA explained in the proposed rule and in its
Revised MACT Floor Memo that “[t]he types of variability
                               57
that EPA attempts to account for include operational
distinctions between and within tests at the same unit.” 75
Fed. Reg. at 63,269; Revised MACT Floor Memo at 4–5. As
to existing incinerator MACT floors, EPA stated that “[b]y
including multiple emissions tests from units with a test
average in the top 12 percent, EPA can evaluate intra-unit
variability of emissions tests over time, considering variability
in control device performance, unit operations, and fuels fired
during the test. . . . [T]he [upper prediction limit] was used for
the [sewage sludge incinerator] MACT floor variability
analysis.” 75 Fed. Reg. at 63,271; Revised MACT Floor
Memo at 11–12. These statements appear to contradict EPA’s
implied position in the final rule (and express position on
petition for review) that the upper prediction limit can account
for more than intra-unit variability. See 76 Fed. Reg. at
15,391 (explaining, in response to NACWA’s comments that
EPA failed to account for variability in sewage sludge
characteristics, that in addition to collecting emissions
information from facilities in nine different states, “[w]e have
also incorporated variability using the [upper prediction
limit].”); EPA Br. at 51.

     Not only is EPA contradictory on whether the upper
prediction limit accounts for more than intra-unit variability,
NACWA’s argument that the underlying dataset must already
be representative of variability in sewage sludge
characteristics before applying the upper prediction limit is
persuasive, at least as applied to variability within a publicly-
owned treatment work. Assuming that NACWA’s summary
of monthly average sewage sludge pollutant concentrations in
its comments is accurate, short-term emissions testing done in
January when the monthly average lead concentration is
lowest may not be representative of incinerators’ performance
in July, when the monthly average lead concentration is
almost double.        See Joint Appendix 671 (NACWA
                              58
Comments). If sewage sludge incinerator emissions increase
based on sewage sludge pollutant concentrations, then it
would seem to follow that the average emission levels of
sewage sludge incinerators in July would be higher than the
average in January. Cf. Sierra Club, 167 F.3d at 666 (“The
EPA does not deny that the waste stream reductions the Sierra
Club calls for would reduce pollution. The less mercury in,
the less mercury out, and the less chlorinated plastic in, the
less HCl out.”). And assuming that the standard deviation
does not change from month-to-month, it would also follow
that the upper prediction limit, and thus the MACT floor,
would be higher for a dataset based on July emission testing.

     As with the other aspects of the upper prediction limit,
however, EPA may be able to explain and clarify on remand
its position on whether the upper prediction limit can account
for variability in sewage sludge content. EPA may also be
able to explain why NACWA is incorrect in asserting that
EPA needs to base its upper prediction limit on a
representative dataset. Alternatively, EPA could adopt an
interpretation of “average emissions limitation achieved by
the best performing 12 percent of units” that does not require
EPA to determine what the best-performing units achieve
under the worst foreseeable conditions.

     Having determined that EPA did not make clear whether
the upper prediction limit accounts only for intra-unit
variability, we now turn to NACWA’s remaining and related
arguments on EPA’s variability analysis. We start first with
NACWA’s argument that EPA failed to demonstrate that its
MACT floor dataset represented the best-performing 12
percent of incinerators because it failed to adequately account
for variability in sewage sludge characteristics. NACWA
maintains that sewage sludge characteristics can vary not only
by geographic region, but also by seasons, differences in
                             59
wastewater treatment technologies, and the sanitary wastes
received from the communities served by publicly-owned
treatment works. See Joint Appendix 671 (summarizing
month-to-month variability in sewage sludge pollutant
concentrations based on Part 503 data); id. at 1075
(summarizing the minimum, maximum, median, and 25th and
75th percentile sewage sludge pollutant concentration for
several different publicly-owned treatment works operating
sewage sludge incinerators). Moreover, NACWA criticizes
EPA for not factoring sewage sludge variability into its
MACT floor methodology, noting that EPA has had twenty
years of data on sewage sludge from the Part 503 regulations,
which require regulated entities to report information about
pollutant concentrations to EPA. See 40 C.F.R. § 503.48.

     NACWA argues that this limited testing is problematic,
implying that if EPA used a limited dataset that is not
representative of the full range of conditions experienced by
sewage sludge incinerators, and set MACT floors on that
dataset without accounting for the significant variation in
sewage sludge, it could underestimate the emissions limitation
achieved by the best-performing incinerators. For example, if
the concentration of a pollutant in sewage sludge is lower in
the winter but higher in the summer, basing MACT floors
only on a dataset of emission tests taken during the winter
would underestimate the emissions limitation achieved under
the worst foreseeable conditions. Relatedly, if sewage sludge
pollutant concentrations are naturally higher at a sewage
sludge incinerator in one region versus another incinerator in
a different region, NACWA appears to assert that EPA must
account for these variations in its dataset.

     EPA, in addition to responding that the upper prediction
limit accounts for variability, asserts that NACWA “fails to
explain how the alleged variations in the metals content in
                               60
sludge affects the emissions performance of the best
performing units.” Instead, EPA contends, “NACWA simply
points to data submitted under the [Clean Water Act] Part 503
regulations without demonstrating whether and how the
pollutant content of sludge affects emissions.” EPA Br. at 51.
EPA further explains that “air pollution control devices
generally used by the best performing sewage sludge
incinerators result in significant pollutant reductions between
the incoming sludge feed and outgoing emissions,” and thus
that “any differences in pollutant concentrations in the sludge
feed should have minimal impact on emissions because the
pollutants contained in the sludge feed itself are removed by
air pollution control devices.” Id.

     EPA did not cite to the record in its brief for these factual
assertions. Nor are these assertions in the final rule’s section
responding to NACWA’s comments on this point, in which
EPA responded not that there was a low correlation between
emissions and sewage sludge pollutant concentrations, but
instead that “[w]e requested additional information in the
[notice of proposed rulemaking], but did not receive adequate
sampling data from the best-performing sources.” 76 Fed.
Reg. at 15,391. Upon review of the record, the only place we
could find support for EPA’s factual assertion was in its letter
denying NACWA’s petition for reconsideration. There, EPA
explained that it had collected sludge content data at the same
time as the emissions tests, and that because it found a “high
reduction in pollutant levels between incoming sludge and
emissions due to add-on controls, the variation in the lead
content in the sludge . . . did not affect the emissions
performance of those sources.” Joint Appendix 1095 (Letter
Denying NACWA’s Petition for Reconsideration).

    But even assuming that EPA intended to rely on this
assertion in defending its rulemaking on the current petition
                               61
for review, it is not clear to us that a rationale offered for the
first time in a petition for reconsideration is sufficient to be a
ground upon which we can judge the propriety of EPA’s
action. We could find no case discussing the propriety of
judging an agency’s action based on a statement made for the
first time in a denial of a petition for reconsideration, but it
seems to be a weak basis for upholding agency action. This is
particularly true when a petitioner has raised an objection
during the comment period that gave an agency the
opportunity to respond to the objection before the denial of
reconsideration. See 76 Fed. Reg. at 15,391 (summarizing
several statements from commenters, including that
“emissions from [sewage sludge incinerators] are affected not
just by control technology but also by other factors including
the contents of the sludge that a unit is burning,” and that “the
proposed standards does [sic] not take into account that
[mercury, cadmium, lead, hydrogen chloride and sulfur
dioxide] emissions are a function of the sludge content of
[mercury, cadmium, lead], chlorine, and sulfur”). A purpose
of notice-and-comment provisions under the APA (and
presumably of the more elaborate procedural safeguards in §
307 of the Clean Air Act) is “to ensure that affected parties
have an opportunity to participate in and influence agency
decision making at an early stage, when the agency is likely to
give real consideration to alternative ideas.” New Jersey,
Department of Environmental Protection v. EPA, 626 F.2d
1038, 1049 (D.C. Cir. 1980). By waiting until the petition for
reconsideration to respond to a comment that had been raised
during the comment period, EPA deprives the affected party
of the opportunity to respond to EPA’s rationale and influence
agency action at an earlier stage. Thus, just as we will not
entertain an argument raised for the first time in a reply brief
to prevent sandbagging of appellees and respondents, we are
reluctant to affirm based on a factual assertion raised for the
first time in an agency’s denial of a petition for
                             62
reconsideration when the agency had an opportunity to raise
that point at an earlier point in the rulemaking process. See
Mohamad v. Rajoub, 634 F.3d 604, 608 (D.C. Cir. 2011). On
remand, however, EPA may elaborate upon and explain the
data that led it to conclude a low correlation between sewage
sludge concentrations and emissions, using that conclusion to
support the reasonableness of its estimate if it finds that
approach appropriate.

     Because EPA did not provide evidence during
rulemaking that there was a low correlation between sewage
sludge pollutants and actual emissions, we address EPA’s
argument that NACWA did not establish a correlation
between sewage sludge pollutant contents and emissions.
EPA is mistaken in putting the burden of establishing this
correlation on NACWA. While EPA could arguably have
interpreted § 129(a)(2) in a way that does not require it to
account for variability, in which case NACWA would need to
argue why EPA’s interpretation is not “based on a permissible
construction of the statute,” Chevron, 467 U.S. at 843,
having decided to account for variability, and having decided
to estimate that variability, EPA bears the burden of
demonstrating with substantial evidence that its estimate is
reasonable.     See Northeast Maryland Waste Disposal
Authority, 358 F.3d at 954. If EPA is arguing its estimated
MACT floors are reasonable based on the assumption that its
limited dataset allows it to account for the worst foreseeable
conditions because sewage sludge variability will have a
negligible effect on emissions, EPA, and not NACWA, bears
the burden of demonstrating that this assumption is correct.

    EPA’s related argument that NACWA “failed to
demonstrate why data from more units across more states
during different times of the year would have led to a better
determination of the best performers, why the representative
                              63
data that EPA did collect prevented EPA from reasonably
determining the best performers, or how consideration of
[Clean Water Act] Part 503 data or stack test data would have
changed the results” suffers from similar flaws. EPA Br. at
52. Although EPA did not have to consider emissions stack
test data that commenters submitted without appropriate
documentation, see supra at 42, we disagree with EPA that
NACWA has the burden of showing why more data would
better determine best performers. It seems self-evident that
more data from a broader span of time would have helped
support (or defeat) EPA’s assumptions about the extent to
which sewage sludge variability affects emission levels, and if
EPA wanted to justify a limited dataset from a smaller
timespan as being representative, it, and not NACWA, bears
the burden of making that demonstration. Moreover, EPA’s
argument that NACWA did not demonstrate how more data
would have prevented EPA from reasonably determining the
best performers is unavailing. The representative data EPA
collected did not prevent or assist it from determining the best
performers, as EPA had already determined the best-
performing incinerators based on control technology with no
additional input from NACWA required. In fact, calling the
data “representative” implies that EPA believes it targeted the
best performers even regardless of what the data actually
showed.

     While we agree with NACWA that EPA may have been
unduly dismissive of the fact that there is significant sewage
sludge variability within a publicly-owned treatment work,
NACWA’s claim that EPA must account for variability
among publicly-owned treatment works raises statutory issues
beyond the scope of the issues NACWA raised in its petition
for review. Specifically, by asserting that EPA must account
for variability among publicly-owned treatment works
because the publicly-owned treatment works have limited
                               64
control over the pollutant concentration in their sewage
sludge, NACWA appears to be urging a different
interpretation of the “average emissions limitation achieved
by the best performing 12 percent of units” than the one EPA
has adopted.

     In this rulemaking EPA explained that it “is using lowest
emissions limitation as the measure of best performance.” 76
Fed. Reg. at 15,389. Thus, by arguing that EPA must account
for variability in sewage sludge content over which a
publicly-owned treatment work has no control, NACWA is
essentially requesting that EPA adopt a different
interpretation of the phrase “average emissions limitation
achieved by the best performing 12 percent of units.” For
example, if an incinerator, through bad luck, receives 100
units of pollutants in its sewage sludge, and manages to emit
only 50 units of pollutants, it could be said to be a better
performer than an incinerator that receives, through good
luck, only 30 units but emits 25 units of pollutants. But under
EPA’s interpretation of “best performing,” the reduction in
emissions from uncontrolled conditions to controlled
conditions is irrelevant—the best-performing incinerators are
those that emit the lowest levels of pollutants, and so the
incinerator with an emission level of 25 would be the better
performer. Where EPA explains that a best performer is
determined by its emission level, apparently in absolute terms,
the logical consequence of NACWA’s argument is that the
“best performing” incinerators must be those that are the most
effective at removing pollutants from incinerated waste before
emitting pollutants from the stack. In fact, NACWA
expressly states its desire for a different interpretation in its
comments on the proposed rule, explaining that “[w]ithout the
use of long-term data to support the level of emission
standards, this variability makes numeric technology-based
limits impractical and infeasible and should provide EPA
                               65
strong motivation to look to other regulatory options.” Joint
Appendix 671. Relatedly, NACWA’s comments also urged
EPA to apply a “variability factor,” based on the variability in
sewage sludge characteristics, to the stack test data.

     While it may be true that a publicly-owned treatment
work’s obligation to manage all sewage that enters into the
sanitary sewer system distinguishes it from commercial or
industrial incinerators that have more control over what waste
they combust, this fact does not present a unique scenario in
setting MACT floors. As a concurring opinion noted in the
Brick MACT case, there seems to be a paradox in § 112’s
directions on setting MACT standards (which is almost
identically worded to § 129). See 479 F.3d at 884–85
(Williams, J., concurring). Specifically, the statute “calls for
emissions standards that are the most stringent that EPA finds
to be ‘achievable,’ taking into account a variety of factors
including cost,” while also requiring that “the standards ‘shall
not be less stringent’ than the emission control that have been
‘achieved in practice.’” Id. at 884 (internal citations omitted).
Thus, implicit in the statute’s requirements is that the standard
for what is achievable will be more stringent than the floors
that are based on past achievement. Id. But if meeting the
floors is prohibitively costly for an incinerator “because of
conditions specific to those plants,” for example, because “the
required technology cannot, given local inputs whose use is
essential, achieve the floor,” then it would seem that what
some plants have achieved is not achievable for other plants.
As applied here, where incinerators have limited control over
sewage sludge that can vary significantly in its pollutant
concentrations, this criticism of the MACT standards seems
especially pointed.

     Even if this were true, however, NACWA has not argued
that § 129 requires EPA to account for variability in sewage
                              66
sludge inputs among publicly-owned treatment works, or that
EPA’s interpretation of the statute as basing “best performers”
on the “lowest emission levels” is impermissible. Nor has
NACWA argued that EPA acted arbitrarily or capriciously by
not basing MACT floors on a more “sewage sludge-diverse”
dataset or by not applying a variability factor to account for
variations in sewage sludge characteristics.         Moreover,
NACWA’s urging that EPA adopt a variability factor may put
EPA in conflict with its own interpretation of what “best
performing” means. If EPA applies a variability factor, based
on the heaviest sewage sludge pollutant concentrations
experienced by publicly-owned treatment works, to an
incinerator for which it has already estimated emission levels
under the worst foreseeable circumstances, the MACT floor
could no longer be said to reflect what that incinerator
“achieved.” Instead, applying a variability factor would be
akin to EPA’s approach in other cases to set MACT floors
based on the emissions of the worst performer using MACT
technology, which EPA attempted to justify “by claiming that
floors must be achievable by all sources using MACT
technology.” Cement Kiln, 255 F.3d at 861. While we have
recognized the paradox in requiring all incinerators to comply
with a floor based on what some incinerators achieved in the
past but which may be unachievable to other incinerators, we
have roundly rejected an interpretation of § 129 that would
require EPA to set the MACT floors at levels achievable by
all sources. See Brick MACT, 479 F.3d at 880 (“‘EPA may
not deviate from section 7412(d)(3)’s requirement that floors
reflect what the best performers actually achieve by claiming
that floors must be achievable by all sources using MACT
technology.’”) (quoting Cement Kiln, 255 F.3d at 861).

    But while we conclude that NACWA has not argued a
legal basis for why EPA should account for variability in
sewage sludge characteristics among publicly-owned
                                67
treatment works, we are somewhat confused by EPA’s
defense of its variability analysis in the final rule, particularly
given its statement that it is using the “lowest emissions
limitation as the measure of best performance.” 76 Fed. Reg.
at 15,389. In the proposed rule, EPA made no mention of
deriving a dataset representative of variability among
publicly-owned treatment works. See 75 Fed. Reg. at 63,269–
72. But in the final rule, EPA responded to comments that
EPA did not adequately account for variability by explaining
that it had “gathered [emissions information] from nine
different facilities located in nine different states” and that the
facilities surveyed, when “combined together,” “represent
sufficient variations in regions, climates and populations that
adequately incorporates variability in wastewater treatment
systems across the U.S.”            76 Fed. Reg. at 15,389.
“[V]ariations in regions, climates and populations,” however,
seem irrelevant in the hunt for the lowest emitting
incinerators. See id. If EPA did consider sewage sludge
incinerators to be a unique type of incinerator and did seek to
develop a dataset that was geographically and
demographically diverse, then it should reconcile that goal
with its statement that the best-performing units are the lowest
emitting. And if EPA does seek to develop a dataset
representative of variability among sewage sludge
incinerators, it needs to address NACWA’s contentions that
some of its MACT floors are not actually geographically
representative. See NACWA Br. at 33–34 (demonstrating
that fluidized bed incinerator MACT floors were based only
on publicly-owned treatment works in Michigan, Minnesota,
Pennsylvania, and North Carolina).

     To sum, while we determine that EPA’s use of the upper
prediction limit may be lawful, we are remanding this portion
of its rulemaking for further explanation on the issues of how
the upper prediction limit represents the “average emissions
                               68
limitation achieved,” how the upper prediction limit is a
reasonable method of predicting the upper limit of the best-
performing incinerators, and how the upper prediction limit
accounts for variability in incinerator performance when it is
not based on a dataset representative of the best-performing
incinerators under the worst-performing conditions.         We
further conclude that NACWA’s arguments that EPA must
consider variability in sewage sludge characteristics among
publicly-owned treatment works are meritless because
NACWA has not argued any legal basis invoking either the
statutory language or arbitrary-and-capricious review why
EPA is compelled to account for that sort of variability. But
because EPA’s discussion of its efforts to create a
representative dataset seems in conflict with its assertion that
the best-performing incinerators are those with the lowest
emission levels, we also remand for EPA to reconcile this
point.

3. Adequacy of the MACT floor dataset

     We now address Sierra Club’s and NACWA’s argument
that EPA unlawfully and arbitrarily set certain MACT floors
on datasets comprising less than 12 percent of the population
of sewage sludge incinerators. In its rulemaking, EPA
candidly admitted its data collection efforts yielded a dataset
that comprised less than 12 percent of existing incinerators for
certain pollutants. See 75 Fed. Reg. at 63,270 (“EPA does not
have actual emissions test data for the population of units that
represent the best-performing 12 percent . . . .”). EPA
nevertheless concluded that the lack of data for at least 12
percent of incinerators did not prevent it from setting MACT
floors, as it had “conducted a statistical analysis to verify the
minimum number of observations needed to accurately
characterize the distribution of the 12 percent of units in each
category,” and had determined that the data it used “m[et] or
                              69
exceed[ed] the number of observations necessary to provide
an accurate representation of that data.” 76 Fed. Reg. at
15,387. EPA’s only explanation for why its use of this
technique was appropriate was that “emission data are
normally distributed [i.e., on a bell curve], or can be
transformed to be normally distributed.” Revised MACT
Floor Memo at 8.

     On petition for review, NACWA argues that EPA’s
failure to collect sufficient data violates § 129, which, unlike
§ 112, requires EPA to set the MACT floor on the top 12
percent of performing units without the qualifier “for which
the Administrator has emissions information.” Compare 42
U.S.C. § 7429(a)(2), with id. § 7412(d). Thus, NACWA
asserts, EPA may not extrapolate information about the “best
performing units” from less than 12 percent of such units in
light of Congress’s unqualified directive on setting solid
waste incinerator MACT floors.

     NACWA is incorrect that EPA’s decision to set MACT
floors on less than 12 percent of data is per se unlawful. In
concluding that the law allows EPA to estimate the “average
emissions limitation achieved by the best performing 12
percent of units,” we have not determined any requirement
that EPA have at least a representative sample of 12 percent
of the population of incinerators. Instead, we have explained
that the existing incinerator MACT floor standard “does not
by its plain meaning exclude estimation either by sampling or
by some other reliable means.” Sierra Club, 167 F.3d at 662
(emphasis added). Thus, the fact that EPA does not possess
data directly collected from 12 percent of incinerators does
not make its estimate inherently unlawful. Cf. Mossville
Environmental Action Now, 370 F.3d at 1241 (allowing EPA
to use one data point—EPA’s preexisting emission
standard—to establish an existing source MACT floor,
                             70
because the preexisting standard was “just barely satisfied by
the plant with the lowest overall long term [emission of the
pollutant at issue]”).

     While NACWA simply asserts EPA cannot lawfully set
existing incinerator MACT floors on fewer than 12 percent of
incinerators, Sierra Club goes further and argues that EPA
acted arbitrarily and capriciously in setting MACT floors
representative of the best performing 12 percent on less than
12 percent of data. Sierra Club contends that EPA fails to
demonstrate or even claim that “emissions from the units for
which it has data are representative of emissions from the
ones for which it lacks data,” repeating its argument that
incinerators for which EPA lacks data may be achieving
lower emission levels than those for which it has data. Sierra
Club. Br. at 29. This appears to be the equivalent of arguing
that EPA cannot compound its error in estimating the best
performing 12 percent by assuming that an imperfect dataset
can represent other potentially superior incinerators that
should be included in the top 12 percent.

    The point that errors in one estimate will be further
compounded by another estimate is a fair one. If the MACT
technology approach to selecting best performing incinerators
was 75 percent accurate, and EPA’s statistical equation
represented a larger sample size with 80 percent accuracy,
each estimate, alone, may be sufficiently reasonable. But if
EPA combined the two and applied an 80 percent accurate
formula to a 75 percent accurate estimate of best performers
based on technology, the underlying result may be too
imprecise to be considered reasonable. And this does not even
account for the fact that EPA’s MACT floor methodology
layers another estimate—the upper prediction limit—to
account for variability.
                              71
     Sierra Club is also correct that EPA has “base[d]
estimates of the performance of one group of units on the
performance of a different group without demonstrating that
this approach yields accurate estimates.” Sierra Club Br. at
29. EPA did so in this case by using a statistical formula for
determining the minimum number of observations necessary
to adequately characterize the population of the best
performing 12 percent of units, which is as follows:

                                 1

Revised MACT Floor Memo at 8. In this formula, n
represents the minimum number of observations required, N
represents the population size, Z represents a value associated
with a specific confidence level, E represents the level of
precision or error tolerance, p represents the degree of
variability in observations, and q represents one minus p. We
note that none of the variables in this formula are fixed or
based on the dataset, aside from N, the population size,
leaving EPA to select the value for most variables; in this
case, a 90% confidence level, a precision level of 20%, and a
degree of variability of 0.5. Revised Mact Floor Memo at 8–
9.

     The flexibility in defining variables in this formula is of
some concern, as the reasonableness of EPA’s statistical
extrapolation depends on variables for which EPA sets values.
Our confidence in this statistical methodology is hardly
heartened by the fact that the minimum number of
observations EPA calculated (11 for fluidized bed incinerators
and 14 for multiple hearth incinerators), were both just one
shy of the number of observations EPA actually collected for
the pollutant with the least amount of test data (12 for
fluidized bed incinerators and 15 for multiple hearth
                                72
incinerators). Revised MACT Floor Memo at 9. To illustrate
how much the result can vary, had EPA chosen a precision
level of 15% instead of 20%, the minimum number of
observations required for fluidized bed incinerators would
have increased from 11 to 14. Changing the specific
confidence level from 90% to 95%3 increases the minimum
number of observations from 11 to 13.4 To EPA’s credit, it
chose a value for variability that would maximize the number
of observations required, and explained it chose that value to
overestimate the number of minimum observations needed.
Revised MACT Floor Memo at 8–9. But for the rest of the
variables, EPA selected values which could have been
determinative of the validity of its dataset without explaining
why it selected those numbers. That EPA could have
determined the statutory sufficiency of its dataset by choosing
values does not mean that EPA did so, but at a minimum EPA
must explain why it chose the values it did. “[A]n agency
may not pluck a number out of thin air when it promulgates
rules in which percentage terms play a critical role.” WJG
Telephone Co. v. FCC, 675 F.2d 386, 388–89 (D.C. Cir.
1982).

3
  In entering values into EPA’s statistical equation, we assumed a
Z-score for a 95% confidence level as 1.960.                    See
http://people.richland.edu/james/lecture/m170/ch08-int.html
(noting the 90% confidence level Z-score is 1.645, the same used
by EPA to calculate the minimum number of observations required
in its MACT floor analysis); see Revised MACT Floor Memo at 8.
4
  As in Sierra Club, we note that “[o]ur observations are based on
our own analysis of EPA’s data, and we may have omitted some
crucial step in the process.” 167 F.3d at 664. But as we also noted
in Sierra Club, and will explain in more detail, this “exercise
highlights the need for additional explanation even if our
calculation is wrong.” Id.
                               73
      In addition to not explaining why it chose the values it
did for its statistical equation, EPA has not clarified how this
statistical method can allow a limited dataset to approximate a
larger portion of the population. In laying out the equation,
EPA cited a study titled “Sample Size Requirements for
Studying Small Populations in Gerontology Research” from
the journal “Health Services Outcomes Research
Methodologies.” See Revised MACT Floor Memo at 8, 18.
But EPA provided no justification for how this equation could
allow it to extrapolate the best performing 12 percent from an
insufficient dataset, other than to state, “Because the emission
data are normally distributed, or can be transformed to
normally distributed . . . a statistical technique can be
employed to determine the minimum number of observations
needed to accurately characterize the distribution of the best
performing 12 percent of units.” Revised MACT Floor Memo
at 8. As we explained with the upper prediction limit, while it
is true that we “owe particular deference to EPA when its
rulemakings rest upon matters of scientific and statistical
judgment within the agency’s sphere of special competence
and statutory jurisdiction,” EPA must still articulate a
“rational connection between the facts found and the choice
made.” Burlington Truck Lines, 371 U.S. at 168; American
Coke & Chemicals Institute, 452 F.3d at 941. If EPA chooses
to use statistics as a shortcut for meeting the Congressional
mandate to set MACT floors, it must justify its statistical
analysis with greater detail than “a statistical technique can be
employed” when “data [are] normally distributed.” Although
EPA does not need to fill the Federal Register with treatises
on statistics, it must specify in greater detail why the equation
it is using can accomplish the purpose for which EPA is using
the equation. This is not only required as part of EPA’s
obligation to demonstrate the reasonableness of its estimates
with substantial evidence, but also to prevent an agency from
                              74
using opaque statistical justification to cover a deficiency in
its dataset.

     As with the upper prediction limit, EPA’s use of this
statistical technique is not unlawful as long as EPA can
demonstrate with substantial evidence why it reasonably
estimates the performance of incinerators for which it has no
data. Because this demonstration requires more detail than
EPA gave here, we remand this portion of the rulemaking for
further explanation on why EPA can use this formula to
estimate gaps in its data and an explanation of why EPA
chose the variables it did.

4. Incorporating non-detect data

     Sierra Club challenges EPA’s method of accounting for
certain emissions data that was not quality-assured. When
collecting data on certain pollutants from sewage sludge
incinerators, EPA encountered “non-detect data”—i.e.,
emission levels too low to register in an emissions test. See
Revised MACT Floor Memo at 14–15. In the rulemaking,
EPA explained that it would use a two-part test based on the
method detection level, which is the “minimum concentration
of a pollutant that can be measured with confidence that the
level is greater than zero.” EPA Br. at 61 n.20; Revised
MACT Floor Memo at 14–15.

    Because the method detection level varies depending on
several factors, EPA first established a value it termed the
“representative method detection level,” which it defined as
“the highest test-specific method detection level reported in a
data set that is also equal to or less than the average emission
calculated for the data set.” Revised MACT Floor Memo at
14–15. In other words, if a specific emissions test registered a
non-detect at a value higher than the average emission level,
                             75
EPA excluded it as a candidate for the representative method
detection level to “minimiz[e] the effect of a test[] with an
inordinately high method detection level.” Id.

     The second step in incorporating non-detect data was to
multiply the representative method detection level by three
and compare it to the calculated floor emission limit for that
pollutant. Id. EPA’s rationale for choosing to multiply the
representative method detection level by three, rather than
using the method detection level itself, was to reduce the
effect of measurement imprecision. EPA explained that at
values around the method detection level, measurement
imprecision is around 40 to 50 percent. Id. at 14. As values
increase above the method detection level, the testing
becomes more accurate, with around 10 to 15 percent
measurement imprecision at three times the method detection
level. Id.

     If the calculated emission limit was greater than the
representative method detection level times three, EPA
concluded that its calculation adequately addressed
measurement variability, and thus would set the calculated
emission limit as the MACT floor. Id. If the calculated
emission level was less than the representative method
detection level, EPA concluded that its calculation did not
adequately account for measurement variability, and the
representative method detection level would become the
MACT floor. Id. EPA used this method to set the four out of
the forty MACT floors it established for sewage sludge
incinerators. See Revised MACT Floor Memo at 19.

    Sierra Club argues that EPA’s method of incorporating
non-detect data is unlawful because it does not reflect what
the best performers actually achieve, as required by §
129(a)(2). See Brick MACT, 479 F.3d at 880 (interpreting §
                              76
112). Sierra Club also contends that the three times
representative method detection level value is not a
reasonable estimate of the emission levels achieved by an
incinerator when a test produces non-detect data.

     We agree with EPA that its method of incorporating non-
detect data is reasonable, and not arbitrary or capricious. We
do not expect EPA to perform the impossible, see Cement
Kiln, 255 F.3d at 871, and that includes recording emission
levels that are not accurately detectable with its current
emissions testing technology. As EPA explains the issue,
emission levels from zero up to some value above the method
detection level cannot be stated with accuracy. Because any
emission level EPA selects at that point will necessarily be an
estimate, EPA adopted a method to account for measurement
imprecision that has a rational basis in the correlation between
increased emission values and increased testing precision.

     Although Sierra Club argued in its comments that EPA
should have at the very least assumed that non-detect data was
at the detection limit, it did not offer any evidence that EPA
was incorrect in explaining why, given the measurement
imprecision at the method detection level, a non-detect test
run would always yield emissions data below the method
detection level. Because we owe significant deference to
EPA in areas of its technical expertise, we reject Sierra Club’s
challenge to EPA’s method of addressing non-detect data.
                                77
C. SETTING   CERTAIN  NEW   MULTIPLE HEARTH
   INCINERATOR MACT FLOORS AT EXISTING MULTIPLE
   HEARTH INCINERATOR MACT FLOOR EMISSION
   LEVELS

     Although EPA had explained in its proposed rule that it
was proposing new incinerator MACT floors for all sewage
sludge incinerators based only on fluidized bed incinerator
emission data, in the final rule it set separate new incinerator
MACT floors for both subcategories in response to industry
commenters. See 76 Fed. Reg. at 15,384. When EPA applied
the upper prediction limit to the best performing multiple
hearth incinerator for each pollutant, however, it yielded new
multiple hearth incinerator MACT floors for hydrogen
chloride and sulfur dioxide that were higher than than the
existing multiple hearth incinerator MACT floors. See 76
Fed. Reg. at 15,388–89. Reasoning that new incinerator
MACT floors could not be less stringent than existing
incinerator MACT floors, EPA set the new multiple hearth
incinerator MACT floors for hydrogen chloride and sulfur
dioxide at the existing multiple hearth incinerator MACT
floors. See id.

     Sierra Club challenges this decision, arguing, among
other things, that this decision does not at all attempt to satisfy
§ 129(a)(2)’s requirement that the new incinerator MACT
floor be set at the level the best-controlled units actually
achieved. But because we are remanding the portions of
EPA’s rulemaking establishing the upper prediction limit, in
part to further explain why the upper prediction limit is a
reasonable estimate given that it can fluctuate so much
depending on variability, we decline to consider Sierra Club’s
challenge at this time.
                              78
D. BEYOND-THE-FLOOR STANDARDS

     In the final rule, EPA explained that it chose not to adopt
beyond-the-floor standards for existing incinerators, primarily
based on its determination that additional control technologies
would not be cost-effective, and mentioned nothing about
setting beyond-the-floor standards for new incinerators. 76
Fed. Reg. at 15,394.         Sierra Club challenges EPA’s
determination not to set beyond-the-floor standards for
existing units based on cost-effectiveness considerations.
Sierra Club also challenges EPA’s decision not to set beyond-
the-floor standards for new multiple hearth incinerators even
though it provided no comment on this issue, explaining that
because EPA did not adopt new multiple hearth incinerators
MACT floors until the final rule it was impracticable to do so.
See 75 Fed. Reg. at 63,272 (deciding to set all new sewage
sludge incinerator MACT floors at the level of the best-
performing fluidized bed incinerators); 42 U.S.C. §
7607(d)(7)(B).

1. Deciding not to set beyond-the-floor standards for
   existing units

     In challenging EPA’s decision not to set beyond-the-floor
standards for existing units, Sierra Club argues that §
129(a)(2) “unambiguously requires the ‘maximum’ degree of
reduction that can be achieved considering cost and other
statutory factors.” Sierra Club Br. at 36. Allowing EPA to
determine whether a cost-per-ton reduction is appropriate,
Sierra Club asserts, would give EPA greater discretion than §
129 allows, as Congress requires more from EPA in § 129
than to undertake a cost-benefit analysis. But in arguing that
EPA abused its discretion in determining the maximum
degree of reduction in emissions that is achievable for sewage
sludge incinerators, “taking into consideration the cost of
                               79
achieving such emission reduction,” Sierra Club must clear a
high bar, as we are at our most deferential when an agency is
“making predictions, within its area of special expertise, at the
frontiers of science.” See Husqvarna AB v. EPA, 254 F.3d
195, 199 (D.C. Cir. 2001) (quoting Baltimore Gas & Electric
Co. v. NRDC, 462 U.S. 87, 103 (1983)).

    EPA argues that § 129(a)(2) does not require it to
establish a beyond-the-floor standard regardless of costs,
explaining that we have upheld a similar cost-effectiveness
analysis in the past based on a similarly-worded statute. See
Husqvarna, 254 F.3d at 200 (requiring EPA to promulgate
standards that “shall achieve the greatest degree of emission
reduction achievable through the application of technology
which [EPA] determines will be available for the engines or
vehicles to which such standards apply, giving appropriate
consideration to the cost of applying such technology within
the period of time available to manufacturers and to noise,
energy, and safety factors associated with the application of
such technology”) (quoting 42 U.S.C. § 7547(a)(3)). We
agree. In Husqvarna, we explained that because the similarly
worded statute did not “mandate a specific method of cost
analysis, we find reasonable the EPA’s choice to consider
costs on the per ton of emissions removed basis.” Id. (citing
65 Fed. Reg. 24,300). This applies equally here to EPA’s
decision to consider costs on the per pound of mercury
emissions removed basis.

     Sierra Club also asserts that EPA’s cost-effectiveness
analysis is arbitrary and capricious because EPA only
considered the cost of proposed beyond-the-floor technology
options in reductions of mercury, without also considering the
benefit that these proposed technology options would have in
reducing other pollutants. But in the proposed rule, EPA
estimated the emission reductions to both dioxins and
                              80
mercury from different control technology options, attributing
the cost solely to mercury because “99.9 percent of the
emissions reduction [from applying beyond-the-floor
technologies] is associated with [mercury].” 75 Fed. Reg. at
63,277. In the final rule, EPA evaluated adding a fabric filter
in combination with the beyond-the-floor technologies it
discussed in its proposed rule, and again attributed reductions
solely to mercury. 76 Fed. Reg. at 15,393–94. Although EPA
did not explain in the final rule why it did not consider the
cost in terms of pounds removed of other pollutants, its failure
to do so was not arbitrary and capricious, particularly given
that Congress gave EPA broad discretion in considering
whether to go beyond-the-floor. See 42 U.S.C. § 7429(a)(2).

     Finally, Sierra Club argues that EPA violated § 129
because it did not consider “methods and technologies for
removal or destruction of pollutants before . . . combustion”
as required by § 129(a)(3). As evidence that pre-combustion
methods can significantly reduce emission levels, Sierra Club
again cites Palo Alto’s comments in which the city described
its source control program.          This program involved
“assist[ing] in authoring California legislation that eliminated
mercury in thermometers, certain switches, and novelty
items”; “requir[ing] amalgam separators at dental facilities”;
and operating “an ongoing drop-off program for all types of
mercury-containing equipment.” Joint Appendix 628–29
(Palo Alto Comments).

    EPA responds that § 129 “does not authorize EPA to
regulate the sources of sewage sludge under the [Clean Air
Act], and no commenter cited any authority to the contrary,”
which was the same position it explained to commenters.
EPA Br. at 73; see Joint Appendix 1011. Because § 129(a)(3)
is ambiguous as to the extent of pre-combustion emission
reduction methods EPA should consider, and because Palo
                              81
Alto’s program goes far beyond the scope of activities that
occur at publicly-owned treatment works and their sewage
sludge incinerators, we uphold EPA’s decision not to consider
source control in its beyond-the-floor analysis as a reasonable
interpretation of § 129.

2. Deciding not to set beyond-the-floor standards for new
   multiple hearth incinerators

     EPA asserts that Sierra Club has waived the issue of
beyond-the-floor standards for new multiple hearth
incinerators by failing to comment on this issue. We agree.
The Clean Air Act’s judicial review provision limits judicial
review to objections “raised with reasonable specificity
during the period for public comment.” 42 U.S.C. §
7607(d)(7)(B). If it was “impracticable to raise such
objection within such time” and the “objection is of central
relevance to the outcome of the rule,” an objecting party may
petition for reconsideration and we may review a denial of
that petition. 42 U.S.C. § 7607(d)(7)(B). If a petitioner has
not satisfied 42 U.S.C. § 7607(d)(7)(B)’s exhaustion
requirements in raising its objections before EPA, we do not
have jurisdiction to hear that objection on a petition for
review. Portland Cement Ass’n v. EPA, 665 F.3d 177, 185
(D.C. Cir. 2011).

     In promulgating the sewage sludge incinerator rule, EPA
explained in the proposed rulemaking that while it was
proposing that all new incinerator MACT floors be based on
data from the best-performing fluidized bed incinerator, it was
“aware that owners and operators with modified [multiple
hearth] units may have concerns regarding meeting the new
source limits.” 75 Fed. Reg. at 63,272. In light of that, EPA
“request[ed] comment on th[e] proposed approach,” even
providing a proposal of potential MACT floor emission limits
                              82
“[t]o assist commenters with their evaluation of the proposal.”
Id.

     EPA’s request for comment and proposed new multiple
hearth incinerator MACT floors put Sierra Club on notice that
EPA was seriously considering deviating from its proposed
new incinerator MACT floors for new multiple hearth
incinerators. Although the potential MACT standards for new
multiple hearth incinerators were more stringent than the
MACT standards EPA ultimately adopted, Sierra Club had
EPA’s MACT floor dataset, which included raw data from
emissions test and a list of the control devices used by the
units EPA considered the best performing. Compare 75 Fed.
Reg. at 63,272 (tabulating proposed new multiple hearth
incinerator MACT standards), with 76 Fed. Reg. at 15,388–89
(tabulating final new multiple hearth incinerator MACT
standards); see Joint Appendix 607 (Sierra Club comments
citing EPA’s MACT floor analysis and commenting on EPA’s
dataset).

     While it is true that “we do not require telepathy,” and
are reluctant to require advocates for affected groups to
anticipate every contingency lest we encourage strategic
vagueness by agencies, we nevertheless “require some degree
of foresight on the part of commenters.” Portland Cement
Ass’n, 665 F.3d at 186. Because Sierra Club was on notice
that EPA was considering setting new multiple hearth
incinerator MACT floors and because it had access to the
dataset EPA would use in setting new multiple hearth
incinerator floors, we conclude that it was practicable for
Sierra Club to comment on beyond-the-floor standards for
new multiple hearth incinerator MACT floors. Accordingly,
we will not consider Sierra Club’s argument regarding new
multiple hearth incinerator beyond-the-floor standards. See
42 U.S.C. § 7607(d)(7)(B).
                              83

E. SUBCATEGORIZING SEWAGE SLUDGE INCINERATORS

     NACWA challenges EPA’s decision to create only two
subcategories for sewage sludge incinerators. In its
rulemaking, EPA proposed subcategorizing sewage sludge
incinerators into multiple hearth and fluidized bed
incinerators, and proposed no other categories or
subdivisions. See 75 Fed. Reg. at 63,268. EPA invited
comment on whether other combustor designs were used at
sewage sludge incinerators, requesting emissions information
from stack tests conducted on those designs. Id.

     Commenters responded and requested that EPA further
subcategorize “based on size of the [sewage sludge
incinerator], type of sewage sludge incinerated, limited use
units, and distance over which the [incinerator] would need to
transport its sludge for disposal.” 76 Fed. Reg. at 15,384. But
EPA adopted only the two subcategories it proposed,
explaining that it did “not have data to support distinguishing
units based on class, type, or size,” and that “[w]ithout such
information,” it did “not have a basis for concluding that these
types of units should be based in a different subcategory.” Id.

     NACWA challenges EPA’s decision not to subcategorize
further, asserting that it had identified “back-up and
emergency” sewage sludge incinerators, and other unique
categories, that would have a difficult time meeting the
sewage sludge incinerator rule’s testing obligations. As its
legal basis, NACWA asserts that EPA failed to respond
adequately to its substantive comment, as required under 42
U.S.C. § 7607(d)(6)(B), and that EPA’s claim that it did not
have data is arbitrary because commenters had submitted
information about these special-use sewage sludge
incinerators.
                             84

     We agree with EPA that its decision to create
subcategories only for multiple hearth and fluidized bed
incinerators was not arbitrary or capricious. We have held
that EPA has authority to subcategorize within
Congressionally mandated categories under § 129(a)(2). See
Northeast Maryland Waste Disposal Authority, 358 F.3d at
946–47. We have also held that EPA’s subcategorization
authority under § 112 involves an expert determination,
placing a heavy burden on a challenger to overcome
deference to EPA’s “articulated rational connection between
the facts found and the choice made.” NRDC v. EPA, 489
F.3d 1364, 1375 (D.C. Cir. 2007).

     EPA’s decision here appears well within its expert
determination. Perhaps recognizing the deference we owe
EPA in its decision to subcategorize, NACWA does not
challenge EPA’s authority to do so, but instead asserts
procedural challenges. We do not find these challenges
meritorious. EPA rationally stated its policy to require
emission information from stack tests on the combustion
designs that commenters wanted EPA to accommodate into a
separate subcategory. Although NACWA identified different
classes of incinerators and discussed differences in sewage
sludge variability that it felt justified further
subcategorization, it does not cite any emissions information
from stack tests it submitted for the special-circumstance
sewage sludge incinerators for which it desired
subcategorization. EPA “was not obligated under its policy”
to create new subcategories or to offer a further response on
NACWA’s request for further subcategorization, and we will
uphold its decision not to create additional subcategories
beyond the multiple hearth and fluidized bed incinerators.
See Edison Electric Institute, 2 F.3d at 449.
                               85
F. MONITORING

     Section 129(c) requires incinerator operators “to monitor
emissions from the unit at the point at which such emissions
are emitted into the ambient air . . . and at such other points as
necessary to protect public health and the environment,” and
“to monitor such other parameters relating to the operation of
the unit and its pollution control technology” as EPA deems
appropriate. In the final rule, EPA required all new and
existing sewage sludge incinerators to “demonstrate initial
and annual compliance with the emission limits using EPA-
approved emission test methods.” 76 Fed. Reg. at 15,377.
EPA gave existing incinerators the option of continuous
emissions monitoring in lieu of initial and annual tests, and
required continuous parameter monitoring. Id. For new
incinerators, EPA made continuous emissions monitoring
mandatory for carbon monoxide, and optional for other
pollutants in lieu of initial and annual emissions testing, and
required continuous parameter monitoring. Id.

     Sierra Club argues that EPA violates the statute by only
requiring parameter monitoring and not mandating continuous
emissions monitoring for all pollutants on all incinerators.
EPA responds that Congress gave it the discretion to require
parameter monitoring as appropriate, and that its combination
of initial and annual emissions testing combined with
parameter monitoring serves to meet § 129’s monitoring
requirement. We agree with EPA that § 129(c)(1) does not
require continuous emissions monitoring and that its
monitoring requirements in the sewage sludge incinerator rule
satisfy § 129’s statutory requirement.

    Under 42 U.S.C. § 7661c, EPA “may by rule prescribe
procedures and methods for determining compliance and for
monitoring and analysis of pollutants regulated under this
                              86
Act, but continuous emissions monitoring need not be
required if alternative methods are available that provide
sufficiently reliable and timely information for determining
compliance.” 42 U.S.C. § 7661c(b). Although this section
appears to clarify the Clean Air Act’s mandate that EPA’s
permit programs include monitoring and reporting
requirements, it is evidence supporting EPA’s interpretation
of § 129’s monitoring requirement as requiring assurance of
compliance with emission standards, but not continuous
emissions monitoring. Sierra Club provides no legal authority
to the contrary. Determining whether specified testing and
monitoring requirements assure compliance with EPA’s
emission standards “requires a high level of technical
expertise,” and because Sierra Club has not given us any
reason to doubt that EPA’s requirements will effectively
assure compliance, “we must defer to the informed
discretion” of EPA. National Lime, 233 F.3d at 635 (quoting
Marsh v. Oregon Natural Resources Council, 490 U.S. 360,
377 (1989)).

III.   MAXWEST’S INTERVENTION

     MaxWest Environmental Systems, the developer of a
“proprietary biosolids management process that converts
biosolids into syngas,” used in units MaxWest terms as
“gasifiers,” challenges EPA’s treatment (or lack thereof) of
gasifiers in the final rule. See Intervenor MaxWest Br. at 1–2,
9–21. EPA asserts several grounds why we need not reach
MaxWest’s arguments, including that MaxWest lacks
standing and that the issues it raises are outside the scope of
those raised by the petitioners.

     “[B]ecause Article III standing is a prerequisite to a
federal court’s exercise of jurisdiction,” we “cannot proceed
at all in any cause” unless we first determine that a party
                              87
seeking to be heard has satisfied the three-part test of Lujan.
Sinochem International Co. v. Malay International Shipping
Corp., 549 U.S. 422, 430 (2007); New England Power
Generators Ass’n v. FERC, 707 F.3d 364, 368 (D.C. Cir.
2013). But while we cannot assume hypothetical jurisdiction
to decide the merits of a case, we have leeway “to choose
among threshold grounds for denying audience to a case on
the merits” because “jurisdiction is vital only if the court
proposes to issue a judgment on the merits.” Sinochem, 549
U.S. at 431 (internal alteration omitted) (quoting Intec USA,
L.L.C. v. Engle, 467 F.3d 1038, 1041 (7th Cir. 2006)). Thus,
we need not resolve MaxWest’s standing to intervene if we
can dispose of its intervention on another threshold ground
that does not require us to reach the merits of MaxWest’s
arguments. See id. (explaining that a federal court need not
determine whether it has jurisdiction when deciding, for
example, not to exercise supplemental jurisdiction over state
law claims on discretionary grounds or to abstain under
Younger v. Harris).

     The alternative threshold ground for rejecting MaxWest’s
intervention is that MaxWest’s issues are outside the scope of
those raised by NACWA. None of the six petitioners’ briefs
filed in this case mention MaxWest’s gasification process.
When we allowed MaxWest to intervene out of time, we
warned it that “an intervening party may join issue only on a
matter that has been brought before the court by another
party.” NACWA v. EPA, No. 11-1131, Doc. 1344244 at 2
(D.C. Cir. filed Nov. 28, 2011) (citing Beethoven.com LLC v.
Librarian of Congress, 394 F.3d 939, 946 (D.C. Cir. 2005)).
MaxWest has not heeded our warning. Its bare assertion that
it modeled its statement of issues after NACWA’s does not
change the fact that its substantive arguments are unrelated to
the issues raised by NACWA and Sierra Club. See MaxWest
                               88
Reply Br. at 8–10.         Therefore, we will not consider
MaxWest’s arguments.

IV.    CONCLUSION

     For the foregoing reasons, we remand to EPA portions of
its rule for further explanation without vacating the current
MACT standards. Specifically, we direct EPA to clarify why
its Clean Water Act Part 503 regulations control for other
non-technology factors. We also direct EPA to clarify issues
related to its upper prediction limit and variability analysis.
In particular, EPA should explain why the upper prediction
limit represents the “average emissions limitation achieved by
the best performing 12 percent of” incinerators; why the
upper prediction limit reasonably estimates the worst
foreseeable operating conditions; and why the upper
prediction limit can account for more than intra-unit
variability, as EPA claimed it could on petition for review.
Finally, we direct EPA to elaborate on how it can use a
statistical method to determine whether a limited dataset is
representative of incinerators for which it has no data, and to
explain why it chose the variables it did for that statistical
analysis.5

     In all other respects, we uphold EPA’s rule against the
petitioners’ challenges. Because the issues MaxWest raised in
its intervenor brief are outside the scope raised by the
petitioners, we do not consider its arguments.

                                                     So ordered.

5
  We do not, of course, mean to suggest that EPA is bound to reach
the same conclusion upon reexamination of the record for purposes
of explanation. Should EPA find itself unable to support its
conclusions, it is, of course, free to reach different ones.