throbber
USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 1 of 33
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`ORAL ARGUMENT NOT YET SCHEDULED
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE DISTRICT OF COLUMBIA CIRCUIT
`
`No. 23-1157 (consolidated with Nos. 23-1181, 23-1183, 23-1190, 23-1191, 23-
`1193, 23-1195, 23-1199, 23-1200, 23-1201, 23-1202, 23-1203, 23-1205 23-1206,
`23-1207, 23-1208, 23-1209, 23-1211, 23-1306, 23-1307, 23-1314 23-1315, 23-
`1316, 23-1317)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`STATE OF UTAH, et al.,
`
`
`
`Petitioners,
`
`v.
`
`UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et
`al.,
`
`Respondents.
`
`
`
`
`
`On Petitions for Judicial Review of Final Agency Action of
`the United States Environmental Protection Agency
`88 Fed. Reg. 36,654 (June 5, 2023)
`
`
`JOINT SUPPLEMENTAL BRIEF OF INDUSTRY PETITIONERS
`
`
`
`Catherine E. Stetson
`Hogan Lovells US LLP
`555 Thirteenth Street, NW
`Washington, DC 20004
`(202) 637-5600
`
`
`Ana M. Gutiérrez
`Michael D. Miller
`Womble Bond Dickinson (US) LLP
`1601 19th Street
`Denver, CO 80202
`Ana.Gutierrez@wbd-us.com
`
`Counsel for Kinder Morgan, Inc.
`Additional Counsel Listed on Inside Front Cover and Following Pages
`
`
`Dated: February 3, 2025
`
`
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 2 of 33
`
`Michael B. Schon
`LEHOTSKY KELLER COHN LLP
`200 Massachusetts Ave. N.W.
`Washington, DC 20001
`(512) 693-8350
`
`Mithun Mansinghani
`LEHOTSKY KELLER COHN LLP
`629 W. Main St.
`Oklahoma City, OK 73102
`(512) 693-8350
`
`Counsel for National Mining
`Association
`
`Allison D. Wood
`Makram B. Jaber
`Aaron M. Flynn
`MCGUIRE WOODS LLP
`888 16th Street N.W., Suite 500
`Black Lives Matter Plaza
`Washington, DC 20006
`
`Counsel for Associated Electric
`Cooperative, Inc., Deseret
`Generation & Transmission Co-
`Operative d/b/a Deseret Power
`Electric Cooperative, Ohio Valley
`Electric corporation, Wabash
`Valley Power Association, Inc.
`d/b/a Wabash Valley Power
`Alliance, America’s Power,
`National Rural Electric
`
`Samuel B. Boxerman
`Kathleen Mueller
`Jeremy Rozansky
`SIDLEY AUSTIN LLP
`1501 K Street N.W.
`Washington, DC 20005
`
`Counsel for Interstate Natural
`Gas Association of America and
`American Petroleum Institute
`
`David M. Flannery
`Kathy G. Beckett
`Keeleigh S. Huffman
`STEPTOE & JOHNSON, PLLC
`707 Virginia St. East
`Post Office Box 1588
`Charleston, WV 25326
`(304) 353-8000
`
`Edward L. Kropp
`STEPTOE & JOHNSON, PLLC
`Post Office Box 36425
`Indianapolis, Indiana 46236
`(317) 946-9882
`
`
`
`Counsel for Petitioners American Forest &
`Paper Association, American Iron and
`Steel Institute, and Midwest Ozone Group
`
`
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 3 of 33
`
`Cooperative Association and
`Portland Cement Association
`
`
`Aaron M. Streett
`Matthew L. Kuryla
`Beau Carter
`BAKER BOTTS L.L.P.
`910 Louisiana St.
`Houston, Texas 77002
`(713) 229-1855
`
`Counsel for Energy Transfer LP
`
`John D. Lazzaretti
`SQUIRE PATTON BOGGS (US) LLP
`1000 Key Tower
`127 Public Square
`Cleveland, OH 44114
`(216) 479-8500
`
`Counsel for Petitioner United
`States Steel Corporation
`
`Kelly M. McQueen
`THE MCQUEEN FIRM, PLLC
`12 Woodsong Drive
`Roland, AR 72135
`(501) 580-3291
`
`Counsel for Petitioner
`Arkansas League of Good
`Neighbors
`
`
`
`Brittany M. Pemberton
`BRACEWELL LLP
`2001 M Street N.W., Suite 900
`Washington, D.C. 20036
`(202) 828-1708
`
`Counsel for TransCanada PipeLine USA
`Ltd.
`
`
`Elliott Zenick
`AMERICAN CHEMISTRY COUNCIL
`700 2nd St. N.E.
`Washington, DC 20002
`(202) 249-6744
`
`Counsel for Petitioner
`American Chemistry Council
`
`
`Michael E. Born (49961)
`Cheri A. Budzynski (51761)
`SHUMAKER, LOOP & KENDRICK, LLP
`Huntington Center
`41 South High Street, Suite 2400
`Columbus, OH 43215
`(614) 463-9441
`
`Counsel for Petitioners Buckeye Power,
`
`
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 4 of 33
`
`
`
`Elbert Lin
`Kevin S. Elliker
`David N. Goldman
`HUNTON ANDREWS KURTH LLP
`951 East Byrd Street, East Tower
`Richmond, VA 23219
`(804) 788-8200
`
`F. William Brownell
`E. Carter Chandler Clements
`HUNTON ANDREWS KURTH LLP
`2200 Pennsylvania Avenue
`N.W.
`Washington, DC 20037
`(202) 955-1500
`
`Counsel for Petitioners
`Union Electric Company, d/b/a
`Ameren Missouri, and Arkansas
`League of Good Neighbors
`
`
`
`
`
`
`
`
`
`
`
`
`
`Inc. and the Ohio Valley Electric
`Corporation
`
`Mark W. DeLaquil
`BAKER & HOSTETLER LLP
`Washington Square, Suite 1100
`1050 Connecticut Avenue N.W.
`Washington, D.C. 20036
`(202) 861-1500
`
`Martin T. Booher
`Joshua T. Wilson
`BAKER & HOSTETLER LLP
`2000 Key Tower
`127 Public Square
`Cleveland, Ohio 44114
`
`Counsel for Hybar LLC
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 5 of 33
`
`Laura K. McAfee
`(D.C. Cir. Bar No. 62386)
`BEVERIDGE & DIAMOND, PC
`201 North Charles Street, Suite 2200
`Baltimore, MD 21201
`
`Counsel for Enbridge (U.S.) Inc.
`
`Richard S. Moskowitz
`Tyler Kubik
`AMERICAN FUEL &
`PETROCHEMICAL
`MANUFACTURERS
`1800 M Street, NW
`Suite 900 North
`Washington, DC 20036
`(202) 844-5474
`
`Counsel for Petitioner American
`Fuel & Petrochemical
`Manufacturers
`
`
`
`
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 6 of 33
`
`TABLE OF CONTENTS
`
`
`Page
`
`TABLE OF AUTHORITIES ................................................................................... ii
`
`GLOSSARY ............................................................................................................ iv
`
`INTRODUCTION ................................................................................................... 1
`
`ARGUMENT ............................................................................................................ 2
`
`I.
`
`The Supplement Is Not Reasonable Or Reasonably
`Explained ............................................................................................. 2
`
`A.
`
`B.
`
`The Supplement Fails To Demonstrate That The
`Rule Will Result In A “Meaningful” Improvement
`In Air Quality ............................................................................ 2
`
`The Rule’s Screening Assessment for Non-EGUs
`Depends On The Number Of Covered States ................... 10
`
`C.
`
`EPA Premised The Rule On Multi-State Trading ............. 15
`
`II.
`
`The Supplement Exceeds The Scope Of The Partial
`Remand Order .................................................................................. 16
`
`III. EPA Unlawfully Denied Public Comment ................................... 17
`
`CONCLUSION ...................................................................................................... 18
`
`
`
`i
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 7 of 33
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases:
`
`Am. Radio Relay League v. FCC,
`524 F.3d 227 (D.C. Cir. 2008) ............................................................... 17-18
`
`Clean Wisconsin v. EPA,
`964 F.3d 1145 (D.C. Cir. 2020) ................................................................... 17
`
`Conn. Light & Power Co. v. NRC,
`673 F.2d 525 (D.C. Cir. 1982) ..................................................................... 18
`
`EME Homer City Generation, L.P. v. EPA,
`572 U.S. 489 (2014) .............................................................................. 8, 9, 13
`
`EME Homer City Generation, L.P. v. EPA,
`696 F.3d 7 (D.C. Cir. 2012) ..................................................................... 9, 13
`
`In re MCP no. 185,
`124 F.4th 993 (6th Cir. 2025) ........................................................................ 8
`
`Kentucky v. EPA,
`123 F.4th 447 (6th Cir. 2024) ........................................................................ 3
`
`Loper Bright Enterprises v. Raimondo,
`603 U.S. 369 (2024) ........................................................................................ 8
`
`Michigan v. EPA,
`576 U.S. 743 (2015) ...................................................................................... 13
`
`Nevada Cement Co. LLC v. EPA,
`No. 23-682, Dkt. 65.1 (9th Cir. Dec. 17, 2024) ............................................ 4
`
`Ohio v. EPA,
`603 U.S. 279 (2024) .................................................................. 1, 2, 4, 8, 9, 18
`
`Tex Tin Corp. v. EPA,
`992 F.3d 353 (D.C. Cir. 1993) ..................................................................... 14
`
`
`
`ii
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 8 of 33
`
`Statutes & Other Authorities:
`
`42 U.S.C. § 7410(a)(2)(D)(i) ........................................................................... 2, 9, 13
`
`42 U.S.C. § 7410(c) ................................................................................................... 9
`
`42 U.S.C. § 7607(d)(9)(A) ...................................................................................... 13
`
`86 FR 23,054 (Apr. 30, 2021) ................................................................................... 9
`
`87 FR 20,036 (Apr. 6, 2022) ............................................................................. 10-11
`
`88 FR 36,654 (June 5, 2023) ..................................................................................... 3
`
`89 FR 99,105 (Dec. 10, 2024) .................. 4, 5, 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17
`
`iii
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 9 of 33
`
`Act
`
`EGUs
`
`EPA
`
`FIP
`
`JA
`
`GLOSSARY
`
`Clean Air Act
`
`electric generating units
`
`United States Environmental Protection Agency
`
`Federal Implementation Plan
`
`Joint Appendix
`
`Non-EGUs
`
`non-electric generating units
`
`NOx
`
`ppb
`
`RTC
`
`SIP
`
`TSD
`
`nitrogen oxides
`
`parts per billion
`
`Response to Comments
`
`State Implementation Plan
`
`Technical Support Document
`
`
`
`
`iv
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 10 of 33
`
`INTRODUCTION
`
`The Supreme Court held that EPA likely failed to reasonably explain
`
`“why the number and identity of participating States does not affect what
`
`measures maximize cost-effective downwind air-quality improvements.”
`
`Ohio v. EPA, 603 U.S. 279, 293-294 (2024). EPA also likely failed to justify its
`
`conclusion that the federal Good Neighbor Plan (“Rule”) was “severable”
`
`and could nevertheless stand even after half the states it intended to cover
`
`were legally removed. Id. And the Court made clear that the Act prevented
`
`it—“and courts that may in the future assess the FIP’s merits…from
`
`consulting explanations and
`
`information offered after the [R]ule’s
`
`promulgation.” Id. at 295 n.11.1
`
`Despite the Supreme Court’s instruction, EPA sought partial remand
`
`to offer additional explanations and information, ECF 2074472, and issued a
`
`
`1 The Supreme Court had no occasion to address Petitioners’ other
`arguments that are now fully briefed before this Court and include that EPA
`violated its statutory duty to avoid over-control, unlawfully regulated Non-
`EGUs, and failed to consider the Rule’s impact on energy reliability, among
`other issues.
`
` 1
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 11 of 33
`
`28,000-word document that
`
`it called a “supplemental response to
`
`comments,” 89 FR 99,105 (Dec. 10, 2024) (“Supplement”). That post-
`
`promulgation explanation and information—which was not subject to
`
`notice-and-comment—should not be considered by this Court. Regardless,
`
`the Supplement fails to cure the fatal flaws identified by the Supreme Court.
`
`ARGUMENT
`
`Industry Petitioners adopt the arguments of the State Petitioners’
`
`(except Wisconsin) and write separately to address the following additional
`
`issues.
`
`I.
`
`The Supplement Is Not Reasonable Or Reasonably Explained.
`
`In the Supplement, EPA says that it would have promulgated the same
`
`Rule, regardless of the number and identity of the states subject to it. 89 FR
`
`99,105. The narrow question for this Court is whether EPA’s Supplement is
`
`“reasonable and reasonably explained.” Ohio, 603 U.S. at 292. It is not.
`
`A.
`
`The Supplement Fails To Demonstrate That The Rule Will
`Result In A “Meaningful” Improvement In Air Quality.
`
`EPA tethers its “significant contribution” framework under 42 U.S.C.
`
`§ 7410(a)(2)(D)(i), to analyses of “cost-effective” controls and “meaningful
`
` 2
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 12 of 33
`
`downwind air quality improvement.” 88 FR 36,654, 36,728 (June 5, 2023).
`
`“[T]o inform the air quality effects of the [R]ule,” EPA modeled the
`
`“combined impact” of the measures for all EGUs and Non-EGUs across all
`
`covered states. Id. at 36,748. EPA concluded that “[w]hen the effects of these
`
`emissions reductions are assessed collectively across the hundreds of EGU
`
`and non-EGU industrial sources that are subject to this rule, the cumulative
`
`improvements in ozone levels at downwind receptors, while they may vary
`
`to some extent, are both measurable and meaningful.…” Id. at 36,741
`
`(emphasis added). EPA did not prepare any other analysis (e.g., limited to
`
`11 states, or state-by-state, or otherwise) that demonstrates meaningful
`
`impacts. The most EPA offers is an attempt to blur the record on the
`
`aggregate impacts of the entire Rule.
`
`Only 11 of the original 23 states included in the Rule have state plan
`
`disapprovals that Courts have not stayed or vacated. Industry Br. 14 & nn.5-
`
`6; Kentucky v. EPA, 123 F.4th 447, 452 (6th Cir. 2024) (vacating state plan
`
`disapproval on the merits). The removed 12 states account for “over 70
`
` 3
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 13 of 33
`
`percent of the emissions EPA had planned to address.” Ohio, 603 U.S. at 290.2
`
`EPA thus needs to “conduct a new assessment and modeling of
`
`contribution.” Air Stewardship Comment 14, JA438. After all, and as EPA
`
`makes clear, “[n]ot every upwind state has the same mix of non-EGU
`
`industries, and…costs…will vary from facility to facility.” 88 FR 36,683; see
`
`also id. (same for EGUs).
`
`The Supplement does not conduct this necessary re-analysis, and it
`
`does not (because it cannot) cure the Rule’s failures.
`
`First, the Supplement claims that the Rule’s Step-3 “air quality analysis
`
`did not rely on a 23-state scope of coverage.” 89 FR 99,120. The Rule and
`
`record contradict this.
`
`In EPA’s words, at Step 3, it matters “how many emissions reductions
`
`may be obtained and how air quality is ultimately impacted.” 88 FR 36,683.
`
`
`2 The Ninth Circuit stayed Nevada’s plan disapproval but recently lifted that
`stay after the parties settled the case. Nevada Cement Co. LLC v. EPA, No. 23-
`682, Dkt. 65.1 (9th Cir. Dec. 17, 2024). Because the emissions reductions EPA
`expected from Nevada were de minimis—approximately four tons—and
`much lower than other states’ reductions, Petitioners’ broader points remain
`accurate. See 88 FR 36,738-39.
`
` 4
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 14 of 33
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`And when EPA presented state-specific estimated reductions to support the
`
`purported finding of “meaningful” downwind air-quality improvements,
`
`EPA relied on the combined effect of reductions across 23 states. See id. at
`
`36,738-39 tbls. V.C.1-2 & V.C.2-2 (only showing reductions for the 23 states);
`
`id. at 36,745 (describing precise reductions expected from application of the
`
`Rule to all 23 states); id. at 36,748 (concluding the “collective application” of
`
`the Rule
`
`should
`
`“deliver meaningful downwind
`
`air quality
`
`improvements”).
`
`Regardless of what “meaningful” air quality improvements the Rule
`
`would allegedly generate from 23 states, the deficiencies identified by the
`
`Supreme Court remain unresolved. EPA entirely failed to assess what would
`
`happen to air quality improvements and the attendant costs (and cost-
`
`effectiveness) if one or more states dropped out of the Rule. This failure
`
`dooms the Rule, and the Supplement is no cure.
`
`Second, the Supplement argues that it does not matter whether a state
`
`is subject to the Rule or not. See 89 FR 99,117, 99,120. As EPA now sees it, the
`
` 5
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 15 of 33
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`assumed emissions reductions in the Rule for each state apply regardless of
`
`whether that state is formally covered by the Rule. See id. at 99,119-20
`
`That is news. It is also wrong. Eleven SIP disapprovals have either been
`
`overturned or stayed. EPA’s assertion that those states must still comply
`
`with this Rule is legally and factually invalid.
`
`And, the specific set of states subject to the Rule is fundamental. The
`
`Rule established emissions limits based on installation of controls selected at
`
`Step 3, where EPA evaluated costs against emissions reductions and air
`
`quality impacts. See 88 FR 36,678 (“The EPA applies a multifactor assessment
`
`using cost thresholds, total emissions reduction potential, and downwind air
`
`quality effects as key factors…”). The total emissions reductions and
`
`resulting air quality impacts (as well as cost thresholds) depend on the
`
`number and identity of states and sources that are regulated under that plan.
`
`It’s that simple.
`
`EPA responds that “all states must ultimately discharge their good
`
`neighbor obligations whether through an approved SIP or a FIP.” 89 FR
`
`99,119. That is true, but not relevant here. The question is not whether states
`
` 6
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 16 of 33
`
`must discharge their obligations. It is whether the Rule is an appropriate way
`
`to measure and discharge the obligation of each state whose SIP was
`
`disapproved. It is not.
`
`Third, the Supplement now dismisses any obligation to determine if
`
`the Rule produces “meaningful” air-quality improvements. EPA now says it
`
`found “widespread reductions in ozone” collectively across the 23 states,
`
`and that evaluation served a “confirmatory” role at Step 3. Id. at 99,110.
`
`Consider the astounding nature of EPA’s new position: EPA now believes
`
`its Clean Air Act Rule need not depend on or evaluate the actual impact on
`
`clean air. This stands in stark contrast to the Rule, where EPA declares
`
`meaningful air quality improvements “a central component.” 88 FR 36,741.
`
`And tellingly, EPA never refers to the air quality improvement analysis as a
`
`“confirmatory” exercise in the Rule. Even if actually improving air quality
`
`no longer matters, even in the Supplement, EPA only claims “widespread
`
`reductions” when considered “on average and in the aggregate.” 89 FR
`
`99,110. A single result assumed only with aggregated reductions is not
`
` 7
`
`
`
`“‘modular’ by nature.” Id. at 99,112.
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 17 of 33
`
`All that aside, EPA provides no support for its assertion that the Step
`
`3 results are in fact “confirmatory” of “widespread reductions” given the
`
`greatly reduced geographical scope of the Rule. Bottom line, EPA cannot
`
`backup whether the Rule would produce meaningful reductions at all, let
`
`alone whether the costs of those reductions would be justified.
`
`Fourth, the Supplement attempts to support its aggregate-only
`
`analysis by citing previous rulemakings and EPA v. EME Homer City
`
`Generation, L.P., 572 U.S. 489 (2014). See, e.g., 89 FR 99,118. To begin with,
`
`EPA’s reliance on Homer is misplaced after Loper Bright Enterprises v.
`
`Raimondo, 603 U.S. 369, 412 (2024). See In re MCP no. 185, 124 F.4th 993, 1002-
`
`03 (6th Cir. 2025) (applying Loper); Industry Petitioner Reply Br. 3, 22 n.6
`
`(deference to EPA unwarranted because of Loper). But in any event, neither
`
`past rules nor Homer addressed the issue here: whether EPA would need to
`
`re-do its analysis if states were to drop out of the 23-State plan. Indeed,
`
`Homer itself emphasized “the combined effect the upwind reductions
`
` 8
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 18 of 33
`
`projected at each cost threshold would have on air quality in downwind
`
`States.” 572 U.S. at 501 (emphasis added).3
`
`Fifth, EPA has previously declined to include certain sectors in
`
`transport FIPs because potential reductions would not have resulted in “a
`
`sufficiently meaningful and timely air quality improvement.”88 FR 36,678
`
`(citing 86 FR 23,054, 23,110 (Apr. 30, 2021)). For example, in the 2021
`
`revisions to the previous ozone transport FIP, after modeling, EPA rejected
`
`requirements for Non-EGUs, concluding they would not “have a
`
`meaningful effect” on the relevant downwind area. 86 FR 23,110.
`
`This highlights EPA’s ability to analyze variable scenarios and the
`
`obvious failure here to “explain why [EPA] believed its rule would continue
`
`to offer cost-effective improvements in downwind air quality with only a
`
`subset of the States it originally intended to cover.” Ohio, 603 U.S. at 295 n.11.
`
`
`3 Further, Sections §7410(a)(2)(D)(i) and (c) both refer to individual state
`obligations and EPA’s authority to issue FIPs for individual states. Neither
`expressly authorize EPA to issue one sweeping and singular plan to cover
`numerous states, and Homer never addressed that issue. See EME Homer City
`Generation, L.P. v. EPA, 696 F.3d 7, 28 (D.C. Cir. 2012), rev’d, 572 U.S. at 496.
`
` 9
`
`
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 19 of 33
`
`Here, EPA has provided no basis for why a rule with greatly diminished
`
`emissions reductions does not result in a lack of meaningful downwind air-
`
`quality improvements, as it did in 2021 for Non-EGUs.
`
`Finally, EPA falls back to declaring the Rule “sufficient” and blaming
`
`commenters for not providing an alternative, more cost-effective approach.
`
`89 FR 99,119. Many commenters did offer such approaches, e.g., Kinder
`
`Morgan Comment 37, JA354, but that is beside the point. It is EPA’s
`
`obligation, not Petitioners’, to consider all important aspects of the problem,
`
`provide reasoned explanation, and otherwise avoid arbitrary and capricious
`
`action.
`
`B.
`
`The Rule’s Screening Assessment for Non-EGUs Depends On
`The Number Of Covered States.
`
`Having never before regulated Non-EGUs through direct emissions
`
`controls in prior transport FIPs, EPA had to determine which, if any,
`
`industries to include. At proposal, EPA relied on a “Screening Assessment”
`
`“[t]o identify appropriate control strategies for non-EGU sources to achieve
`
`NOx emissions reductions that would result in meaningful air quality
`
`improvements…from non-EGU sources linked in the upwind states.” 87 FR
`
`
`10
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 20 of 33
`
`20,036, 20,043 (Apr. 6, 2022). The proposed rule’s inclusion of certain
`
`industries—but not others—was “based on the results of this assessment.”
`
`Id.
`
`The Screening Assessment selected only nine Non-EGU industries
`
`from among 41 industries located within the “23 linked states” that met
`
`certain modeled downwind air-quality criteria. See Screening Assessment 2-
`
`3, 7, 22, JA47-48, JA52-53. Within and among the 23 linked states EPA only
`
`looked for industries with either a maximum contribution to a downwind
`
`receptor greater than or equal to 0.1 ppb, or a maximum contribution of
`
`greater than or equal to 0.01 ppb to at least 10 receptors. Id. It is undisputed
`
`that the result of applying those criteria depends on the group of “linked”
`
`or “upwind” states analyzed. See id. at 15 fig.2, JA2232 (showing
`
`heterogenous geographic distribution of selected Non-EGU industries); 89
`
`FR 99,121-22.
`
`Adopting
`
`the Screening Assessment’s conclusions,
`
`the Rule
`
`“affirm[ed]”
`
`its “proposed determinations of which
`
`industries…are
`
`potentially impactful and…[would] make meaningful improvements at the
`
`
`11
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 21 of 33
`
`identified downwind receptors.” 88 FR 36,661. EPA further explained that
`
`the Rule “focused on the most impactful industries and emissions units as
`
`determined by…the non-EGU screening assessment prepared for the
`
`proposal.” Id. at 36,682. Neither the Rule nor the Supplement analyzed,
`
`however, what the screening results would have been if the covered sources
`
`or receptors changed due to states being removed from the Rule’s reach. This
`
`is yet another reason that the Rule is not severable.
`
`As with the assessment of “meaningful improvement” of downwind
`
`air quality, EPA now dismisses the importance of the Screening Assessment.
`
`Its arguments lack merit.
`
`Citing the Response to Comments (“RTC”) document (at p.104), EPA
`
`argues that the Screening Assessment “did not need to be redone on the basis
`
`of changes in the scope of coverage of the [R]ule.” 89 FR 99,121-22. But that
`
`citation is irrelevant, speaking only to the technical reliability of the Non-
`
`EGU screening criteria. RTC 104, JA1364. And EPA’s conclusive claim that
`
`the Screening Assessment’s thresholds for inclusion still apply just the same
`
`
`12
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 22 of 33
`
`after half the intended states are no longer subject to the Rule is otherwise
`
`unsupported by the record.
`
`Similarly, the Supplement contends that the Screening Assessment
`
`only served a “limited purpose: to screen for industries and emissions-unit
`
`types” for further analysis. 89 FR 99,122. That purpose was not “limited”; it
`
`was the whole point. The Screening Assessment was fundamental to the
`
`Rule because it determined how EPA would exercise a “broad and unusual
`
`authority” to regulate entire industries across 23 states. Homer, 696 F.3d at 28
`
`(D.C. Cir. 2012), rev’d, 572 U.S. at 496.
`
`The Supplement is also wrong that “EPA could have chosen to forgo
`
`[the Screening Assessment’s] analysis.” 89 FR 99,122. On that view, EPA
`
`could select “any source” or “emissions activity” simply at random. See id.
`
`(quoting 42 U.S.C. §7410(a)(2)(D)(i)). This argument both proves too much
`
`and again fails to acknowledge that EPA must still act reasonably. See 42
`
`U.S.C. §7607(d)(9)(A); Michigan v. EPA, 576 U.S. 743, 750 (2015) (“[A]gencies
`
`are required to engage in ‘reasoned decisionmaking.’”). Here, the Screening
`
`Assessment represented EPA’s only effort to explain which Non-EGUs it
`
`
`13
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 23 of 33
`
`included (and why), belying the Supplement’s conclusion that EPA could
`
`have simply discarded this pivotal step.
`
`It is no answer to baldly claim that the Screening Assessment was
`
`unimportant because “the control of any
`
`large sources of NOx
`
`emissions…will generally beneficially affect downwind ozone levels.” 89 FR
`
`99,122. Such hand-waving is not a sufficient basis to target certain industries
`
`from among the 41 EPA evaluated. See Tex Tin Corp. v. EPA, 992 F.3d 353,
`
`355 (D.C. Cir. 1993) (holding “unsupported assumptions” insufficient to
`
`support EPA’s conclusion). That argument is also at odds with what EPA
`
`claims to have done—a “technically rigorous method for narrowing the
`
`industries in a manner that treated each industry similarly,” 89 FR 99,122,
`
`and an alleged laborious analysis of costs and cost-effectiveness, id. at 99,116-
`
`17.
`
`The remainder of EPA’s attempt to rehabilitate the Screening
`
`Assessment fails to address the issue, and is improper. EPA focuses on
`
`arguments concerning whether industries should be analyzed for inclusion
`
`at the industry level rather than the source level. See id. at 99,122. That
`
`
`14
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 24 of 33
`
`explanation does not address the severability issue—the sole issue on
`
`remand—at all.
`
`C.
`
`EPA Premised The Rule On Multi-State Trading.
`
`The Rule repeatedly touts the reasonableness of requirements for
`
`powerplants by pointing to trading between the 23 states. EPA opined that
`
`the “interstate trading program…delivers substantial benefits” related to
`
`“compliance
`
`flexibility,”
`
`“certainty,”
`
`“transparency,”
`
`and
`
`“cost-
`
`effective[ness].” 88 FR 36,684; see also id. at 36,729 (interstate trading “make[s]
`
`the use of a single representative cost all the more appropriate”). In the Rule,
`
`EPA explained that “[b]roader marketplaces generally provide greater
`
`market liquidity and therefore make trading programs better at providing
`
`these advantages.” Id. at 36,766 n.295.
`
`The Supplement downplays trading as an afterthought. EPA says the
`
`Rule’s stringency is not based on trading but is instead “premised on at-the-
`
`source” controls. 89 FR 99,124. But these arguments ignore that EPA justified
`
`higher costs to many powerplants by pointing to trading as a guardrail
`
`against unjustifiable costs. 88 FR 36,754. EPA’s choice of at-the-source
`
`
`15
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 25 of 33
`
`stringency is therefore necessarily influenced by the assumed availability of
`
`interstate trading.
`
`EPA’s argument—made for the first time in the Supplement—that
`
`trading programs can theoretically function even within one state, id. at
`
`99,125, should also be rejected. There is no support in the record for a one-
`
`State trading program. This Rule’s 23-state trading program was premised
`
`on the liquidity of “broader marketplaces,” 88 FR 36,766 n.295. Further, the
`
`Supplement made no effort to distinguish between which states are in or out.
`
`Here, the states with stayed or vacated SIP disapprovals collectively
`
`represent approximately 90% of anticipated powerplant emissions
`
`reductions in the Rule. See id. at 36,738. EPA has completely failed to address
`
`the impact on the trading market of losing 90% of the reductions that would
`
`generate allowances—i.e., the guardrail to the Rule’s cost-effectiveness.
`
`II. The Supplement Exceeds The Scope Of The Partial Remand Order.
`
`EPA requested remand to address “whether or why the same
`
`emissions-control measures…would continue to further the [Rule’s] stated
`
`purpose of maximizing cost-effective air-quality improvement if fewer states
`
`
`16
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 26 of 33
`
`remained in the plan.” EPA Mot. 6 (ECF 2068299). The Remand Order
`
`correspondingly permitted EPA to address comments “related to the
`
`severability of the [Rule].” Remand Order 1 (ECF 2074472).
`
`EPA did not stay within those confines at all, instead offering
`
`additional (and new) arguments about other aspects of the Rule. See, e.g., 89
`
`FR 99,116-17 (buttressing control-cost methodology), 99,123 (introducing—
`
`for the first time—EPA’s cost-control estimates for each type of control it
`
`identified for pipeline engines), 99,126 n.59 (arguing why the Rule regulates
`
`sources within Tribal jurisdiction).
`
`Setting aside that these arguments are impermissible because they
`
`exceed the scope of this court’s partial remand order, Industry Petitioners
`
`underscore that this Court “may not…accept…post hoc rationalizations for
`
`EPA’s decisions.” Clean Wisconsin v. EPA, 964 F.3d 1145, 1161 (D.C. Cir. 2020)
`
`(quotations omitted).
`
`III. EPA Unlawfully Denied Public Comment.
`
`“Public notice and comment regarding relied-upon technical analysis”
`
`is “the safety valve in the use of sophisticated methodology.” Am. Radio Relay
`
`
`17
`
`

`

`USCA Case #23-1157 Document #2098255 Filed: 02/03/2025 Page 27 of 33
`
`League v. FCC, 524 F.3d 227, 236 (D.C. Cir. 2008) (quotation and alteration
`
`omitted). Industry Petitioners nevertheless were denied the opportunity to
`
`“communicate information, concerns, and criticisms to [EPA] during the
`
`rule-making process.” Conn. Light & Power Co. v. NRC, 673 F.2d 525, 530 (D.C.
`
`Cir. 1982). The failure to subject EPA’s remand process to comment
`
`significantly prejudiced Industry Petitioners—they were denied the
`
`opportunity to present information, data, and evidence to persuade EPA
`
`(and build a record for judicial review) that the Rule cannot be applied in
`
`any state absent additional air-quality modeling and re-analysis of
`
`important scope- and state-dependent analyses.
`
`CONCLUSION
`
`EPA has put a lot of words on paper, but it still has not reasonably
`
`explained “why the number and identity of participating States does not
`
`affect what measures maximize cost-effective downwind air-quality
`
`improvements.” Ohio, 6

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