June 24, 2019

Tenth Circuit: EPA Had Authority to Review and Reject Oklahoma’s BART Determination Under Clean Air Act

The Tenth Circuit Court of Appeals published its opinion in State of Oklahoma v. United States Environmental Protection Agency on Friday, July 19, 2013.

Under the Clean Air Act (CAA), the Environmental Protection Agency (EPA) must create and review national ambient air quality standards for certain pollutants. States then have the responsibility to adopt state implementation plans (SIPs), which provide for implementation, maintenance, and enforcement of those primary and secondary air quality standards.

States, however, exercise this authority with federal oversight. The EPA reviews all SIPs to ensure that the plans comply with the statute. The EPA may not approve any plan that would interfere with any  requirement of the Clean Air Act.

At issue in this case were the portions of the CAA that seek to protect visibility at certain national parks and wildlife areas. A state—or the EPA, when promulgating a FIP—must: 1) determine which eligible sources in their state contribute to visibility impairment; and then 2) determine the “best available retrofit technology” (BART) for controlling the emissions causing that impairment at that source.

In 2005, the EPA issued an updated version of its Regional Haze Rule that required states to submit SIP revisions by December 17, 2007. On January 15, 2009, the EPA took final action in finding that Oklahoma failed to submit a SIP that addressed any of the Regional Haze elements by this deadline. This triggered the EPA’s duty to promulgate a federal implementation plan within two years. Before the EPA promulgated a FIP, however, Oklahoma submitted its SIP. After notice and comment, the EPA published the final rule enacting emissions limits. On February 24, 2012, the State of Oklahoma and the Oklahoma Industrial Energy Consumers filed in this court a petition seeking review of the EPA’s final rule.

In these consolidated petitions for review, petitioners challenged the final rule promulgated by the EPA. The petitioners argued that the EPA impermissibly rejected Oklahoma’s plan to limit the emissions of sulfur dioxide at Oklahoma Gas and Electric Company power plants and replaced it with its own more stringent regulations, which petitioners contended usurped the state’s authority and required sizable expenditures on unnecessary technology.

The Tenth Circuit agreed with the EPA that the statute provided the agency with the power to review Oklahoma’s BART determinations. The EPA rejected Oklahoma’s SIP because the BART determinations failed to comply with the required guidelines. The statute and the legislative history supported the Court’s conclusion that the EPA could reject BART determinations that do not comply with the guidelines. States have the ability to create SIPs, but they are subject to EPA review.  The Tenth Circuit therefore held that the EPA had authority to review the state’s BART plan.

The Tenth Circuit then had to determine whether the EPA lawfully exercised that authority when it rejected Oklahoma’s SIP. Petitioners argued that the EPA took arbitrary and capricious action in rejecting two sets of cost estimates they used in determining BART. In following the standards of the Administrative Procedure Act (APA) in reviewing the EPA’s actions under the CAA, the Tenth Circuit held that the EPA lawfully exercised its authority in rejecting Oklahoma’s SIP and promulgating its own. The EPA considered the relevant data and rationally explained its decision. The Court found petitioners’ arguments to be without merit.

Petitioners further challenged many decisions made by the EPA in promulgating the FIP. The Court reviewed these challenges under the same arbitrary and capricious standard it used to evaluate the EPA’s rejection of the SIP and rejected all of the petitioners’ arguments.

In addition to these arguments concerning the EPA’s substantive analysis, the petitioners raised a number of challenges to the procedures the EPA used in promulgating the rule. The CAA creates a high bar for any petitioner challenging an EPA action on procedural grounds. The petitioner must prove: 1) that the failure to observe the procedure was arbitrary and capricious; 2) that the objection was raised with reasonable specificity during the period for public comment; and 3) that the errors were so serious and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if such errors had not been made. The Tenth Circuit did not agree that the EPA’s actions violated the procedural requirements of the Clean Air Act.

In summary, the Tenth Circuit held that the EPA had the authority to review Oklahoma’s BART determinations. Moreover, it exercised that authority properly. Accordingly, the Court denied the petition for review of the EPA’s final rule.  The stay pending hearing by the merits panel was lifted.