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June 04, 2019
EPA lawfully denied petition to expand OTR

The EPA’s broad discretion under the Clean Air Act (CAA) to select the measures to achieve and maintain air quality was affirmed by a panel of the U.S. Court of Appeals for the D.C. Circuit in a ruling addressing cross-state air pollution. The case goes back to December 2013 when 8 states in the 12-state Northeast Ozone Transport Region (OTR) petitioned the EPA to use a specific provision of the CAA under which the Agency would expand the OTR with 9 new states. In their petition, the OTR states included analyses to back up their claim that air pollution from the 9 upwind states made it difficult for the downwind OTR states to either achieve or maintain compliance with the CAA’s ozone standards. While the EPA did not deny that cross-state air pollution was affecting areas in the downwind states, the Agency said it was using other provisions of the CAA to address the problem. The panel said the EPA had the authority under the CAA to rely on those other provisions, and there is nothing in the Act that compels the Agency to expand the OTR, even if the approach it has selected has not yet remedied the problems cited by the petitioning states.

Mandatory measures

The 2013 petition was filed in the D.C. Circuit by Connecticut, Delaware, Maryland, Massachusetts, New York, Pennsylvania, Rhode Island, and Vermont. The states argued that air pollution transported from the upwind states of Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, and West Virginia, as well as the areas of Virginia not already in the OTR, was contributing substantially to the inability of the OTR states to either attain or maintain the 2008 National Ambient Air Quality Standards (NAAQS) for ozone. Inclusion of the upwind states in the OTR would compel them to undertake minimum actions to control emissions of nitrogen oxides (NOx) and volatile organic compounds (VOCs), the primary ozone precursors. These actions include vehicle-inspection and -maintenance programs in densely populated areas; reasonably available control technologies for emissions sources; vehicle-refueling control for vapor recovery; and heightened permitting and control requirements applicable to major stationary sources. 

Good-neighbor rules

The EPA proposed to deny the petition on January 19, 2017, which was the last day of the Obama administration. In its notice of final action, the Agency adhered to the rationale presented in the proposal and pointed to other, more effective measures the CAA provided to address interstate pollution. The EPA said it believed that continuation of the “longstanding and effective utilization of the existing and expected control programs under CAA’s mandatory good-neighbor provision embodied in Section 110(a)(2)(D)(i)(I) is a more effective means of addressing regional ozone pollution transport for the areas within the OTR that must attain the NAAQS than expanding the OTR as requested.” Actions the Agency has taken under Section 110(a)(2)(D)(i)(I) include four regional interstate transport rules focusing on the reduction of NOx emissions—the NOx SIP Call, Clean Air Interstate Rule (CAIR), Cross State Air Pollution Rule (CSAPR), and the CSAPR Update.

A congressional remedy

Under CAA Section 7506a(a), any state may petition the EPA to add any other state or portion of any other state to an “interstate transport region” if the petitioner has reason to believe the state “contributes significantly” to a violation of the NAAQS in one or more other states. Here, the petitioning states made several points to support their position that the EPA must add the upwind states to the OTR. Mainly, they argued that the other CAA tools the Agency seems to prefer to use are inadequate to address the problematic significant cross-state contributions; that the boundaries of the OTR are incorrect—a possibility Congress was aware of and addressed by empowering the EPA to remedy the error through Section 7506a(a); and that the EPA cannot selectively choose to not use a perfectly appropriate tool provided in the CAA to address a lingering public health issue by merely stating, without a valid and clearly articulated scientific basis, that the good-neighbor provisions are preferable and sufficient. 

According to the petitioners, the significant contribution of the upwind states to a violation of the NAAQS is “Congress’s selected trigger for expansion” of the OTR. This means, continue the petitioners, that as soon as it is determined that a significant contribution has occurred, the EPA must grant the petition to expand the OTR. Also, while the states did not deny that the EPA has discretion to deny a petition to expand the region, they contended that under Section 7506a(a), the EPA “may not decline an expansion based solely on a preference to rely on other provisions absent a reasonable basis to believe that these other provisions will effectively, on their own, redress interstate ozone pollution.” Therefore, the petitioners concluded, the EPA’s denial of the petition was arbitrary, capricious, and contrary to law.

Fundamental misunderstanding

The panel responded that the states’ arguments against the EPA are derived from a “fundamental misunderstanding of the scope of EPA’s discretion.” The panel wrote that the states identified nothing in the text of Section 7506a(a) to support their proposed limitation on the EPA’s discretion. While the CAA requires that petitioning states include a showing that a significant contribution to a violation has occurred, the Act also provides that after the showing has been made, the EPA “may” expand the region, not that it “shall” or “must” do so.

The petitioners also attempted to show in a variety of ways that the EPA’s other CAA tools will not on their own completely solve the interstate ozone transport problem. They argued that the EPA overlooked data indicating as much. The panel responded that even if this claim is true, it does not make enlargement of the OTR mandatory.

“Nowhere does the statute require EPA to add States to a region unless EPA’s other options will eliminate ozone pollution,” wrote the panel. “The States have given us no reason to question EPA’s judgment that its current approach to regulating ‘the interstate transport of ozone is a proven, efficient, and cost-effective means of addressing downwind air quality concerns that the agency has employed and refined over nearly two decades.’” (embedded quote from the EPA’s denial)

Adequate explanation

Regarding the states’ contention that the EPA abused its discretion, the panel responded that the Agency provided ample reasoning for its decision.

“Here, EPA adequately explained the facts and policy concerns it relied on,” wrote the panel. “EPA recounted its historical use of the good-neighbor provision and the ongoing downward trend in ozone pollution. In light of that undisputed trend, EPA had a sufficient basis in the record for predicting that improvement would continue under the current regulatory regime. Nothing more is required under the extremely deferential review we must apply here.”

The panel’s opinion in State of New York et al. v. EPA is here.

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