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Sierra Club v. U.S. Environmental Protection Agency

United States Court of Appeals, Ninth Circuit

August 12, 2014

SIERRA CLUB; CENTER FOR BIOLOGICAL DIVERSITY; GREENACTION FOR HEALTH AND ENVIRONMENTAL JUSTICE, Petitioners,
v.
U.S. ENVIRONMENTAL PROTECTION AGENCY; LISA P. JACKSON, in her official capacity as Administrator, U.S. Environmental Protection Agency; GINA MCCARTHY, in her official capacity as Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency, Respondents, AVENAL POWER CENTER, Respondent-Intervenor. EL PUEBLO PARA EL AIRE Y AGUA LIMPIO, Petitioner,
v.
U.S. ENVIRONMENTAL PROTECTION AGENCY; LISA P. JACKSON, in her official capacity as Administrator of the USEPA; JARED BLUMENFELD, in his official capacity as Regional Administrator for Region IX of the USEPS, Respondents, AVENAL POWER CENTER, Respondent-Intervenor

Argued and Submitted, San Francisco, California October 8, 2013

On Petition for Review of an Order of the United States Environmental Protection Agency.

SUMMARY [**]

Environmental Law

The panel granted a petition for review brought by environmental groups, and vacated the Environmental Protection Agency's decision to issue a Prevention of Significant Deterioration Permit, allowing Avenal Power Center LLC to build and operate the Avenal Energy Project, a 600 megawatt natural gas-fired power plant, under the old air quality standards.

The panel held that petitioners had standing because a number of the petitioners had associational standing to challenge EPA's action. Turning to the merits, the panel held that the EPA exceeded its authority under the Clean Air Act. The panel applied Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), analysis, and held that the Clean Air Act unambiguously required Avenal Power to demonstrate that the Avenal Energy Project complied with the regulations in effect at the time the Permit was issued. The panel further held that because Congress had directly spoken on the issue, the EPA could not waive this requirement. The panel remanded for further proceedings.

Paul R. Cort (argued) and George Torgun, Earth justice, Oakland, California, for Petitioners Sierra Club, Center for Biological Diversity, and Greenaction for Health and Environmental Justice.

Ingrid Brostrom and Brent Newell, Center on Race, Poverty & the Environment, San Francisco, California, for Petitioner El Pueblo Para El Aire y Agua Limpio.

Ignacia S. Moreno, Assistant Attorney General, and Stephanie J. Talbert (argued), United States Department of Justice, Environment & Natural Resources Division, Washington, D.C.; Brian Doster, David Coursen, Melina Williams, and Julia Walters, United States Environmental Protection Agency, for Respondents.

William R. Warne (argued), Jane E. Luckhardt, Elizabeth B. Stallard, Gregory T. Broderick, and Nicholas Rabinowitch, Downey Brand LLP, Sacramento, California, for Respondent-Intervenor.

John J. Davis, Jr. and Andrew J. Kahn, Davis, Cowell & Bowe, LLP, San Francisco, California, for Amici Curiae Avenal-Area Unions.

Before: N. Randy Smith and Jacqueline H. Nguyen, Circuit Judges, and Gordon J. Quist, Senior District Judge.[*] Opinion by Judge Nguyen.

OPINION

NGUYEN, Circuit Judge:

Avenal Power Center LLC (" Avenal Power" ) applied to the United States Environmental Protection Agency (" EPA" ) for a Prevention of Significant Deterioration Permit (" Permit" ), to build and operate the Avenal Energy Project, a 600 megawatt natural gas-fired power plant in the city of Avenal, California. Although EPA had a statutory duty under the Clean Air Act to either grant or deny the Permit application within one year, 42 U.S.C. § 7475(c), it failed to do so. After the deadline passed but before taking any final action, EPA tightened the applicable air quality standards. Avenal Power filed suit and sought to compel EPA to issue the Permit under the old standards that would have applied had EPA acted within the statutory deadline. Initially, EPA responded that it could not legally do so, because the Clean Air Act explicitly requires any newly constructed facility to employ the best available control technology (" BACT" ) for regulated pollutants and meet air quality standards in effect at the time a permit is issued. See 42 U.S.C. § 7475(a)(3)-(4). Months later, however, EPA reversed course and granted Avenal Power the Permit without regard to the new regulations, which by then had gone into effect. EPA contends that, under narrow circumstances, it has the authority to grandfather certain permit applications like Avenal Power's, and that its decision is entitled to deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Sierra Club, Greenaction for Health and Environmental Justice, Center for Biological Diversity, and El Pueblo para el Aire y Agua Limpio (collectively " Petitioners" ), challenge EPA's action.

Applying Chevron, we hold that the Clean Air Act unambiguously requires Avenal Power to demonstrate that the Avenal Energy Project complies with the regulations in effect at the time the Permit is issued. Because " Congress has directly spoken to the precise question at issue," Chevron, 467 U.S. at 842, EPA cannot waive this requirement. We therefore GRANT the Petition for review, VACATE the decision to issue the Permit, and REMAND for proceedings consistent with this opinion.

BACKGROUND

Avenal Power proposes to build and operate a power plant, the Avenal Energy Project, near the agricultural communities of Avenal, Huron, and Kettleman City, within California's San Joaquin Valley Pollution Control District. The facility would generate electricity from two 180-megawatt natural gas combustion turbine generators, and a 300-megawatt steam turbine generator that utilizes heat from the combustion turbines. According to EPA, the facility " will be equipped with state-of-the-art control technology and will be one of the lowest emitting power plants of its kind." It is undisputed, however, that its expected emissions of several pollutants, including nitrogen dioxide (" NO2" ), carbon dioxide (" CO2" ), and sulfur dioxide (" SO2" ), are sufficient to subject it to regulation under the Clean Air Act.

On February 15, 2008, Avenal Power submitted an application to EPA for a Permit. The Regional Administrator determined the application to be administratively complete on March 19, 2008. As of that date, EPA had not yet promulgated national ambient air quality standards (" NAAQS" ) for NO2 or SO2 emissions, or BACT requirements for greenhouse gases, including CO2. NAAQS, which are regularly reviewed and revised by the EPA Administrator, set hourly limits on the emission of designated pollutants. See 42 U.S.C. § § 7409, 7409(d)(1); 40 C.F.R. § 52.21(b)(50). The BACT requirement consists of " an emission limitation based on the maximum degree of reduction of each [regulated] pollutant" that EPA determines is achievable " through application of production processes and available methods, systems, and techniques" in view of " energy, environmental, and economic impacts and other costs." 42 U.S.C. § 7479(3).

On June 16, 2009, after the one-year decision making period had elapsed, see 42 U.S.C. § 7475(c), the Regional Administrator finally issued a Statement of Basis describing the reasons for the proposed approval of the Permit. The Statement of Basis is subject to notice and comment procedures that afford the public an opportunity to participate in the review process by submitting written comments and appearing at a hearing to voice support or concern. See 42 U.S.C. § 7475(a)(2); 40 C.F.R. § § 124.10-12. During the comment period in this case, EPA held an informational meeting and two hearings. Concerned that the Avenal Energy Project would adversely impact the environment and health and quality of life of local residents, Petitioners filed comments opposing issuance of the Permit.

While Avenal Power's Permit application was still under consideration, EPA adopted more stringent NAAQS and revised the BACT requirement. Specifically, EPA tightened NAAQS for NO2, capping hourly emissions at 100 parts per billion (" ppb" ), with the new regulations to take effect on April 12, 2010. See Primary National Ambient Air Quality Standards for Nitrogen Dioxide, 75 Fed. Reg. 6,474, 6,475 (Feb. 9, 2010). EPA further subjected greenhouse gases such as CO2 to BACT requirements, effective January 2, 2011. See Reconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed. Reg. 17,004 (Apr. 2, 2010). Finally, EPA published a final rule establishing a new hourly SO2 NAAQS of 75 ppb, to become effective August 23, 2010. See Primary National Ambient Air Quality Standards for Sulfur Dixoide, 75 Fed. Reg. 35,520 (June 22, 2010).

Facing a slew of new regulations, and frustrated by the delay, Avenal Power filed suit on March 9, 2010, in the United States District Court for the District of Columbia, to compel EPA to issue the Permit. Two months later, EPA requested that Avenal Power complete a cumulative air impact assessment of the Avenal Energy Project's hourly NO2 emissions to address its compliance with the revised ...


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