The U.S. Court of Appeals for the D.C. Circuit last week handed the Environmental Protection Agency (EPA) two legal victories over challenges from states and industry, affirming the agency’s revisions to the National Ambient Air Quality Standard (NAAQS) for nitrogen oxides (NOx) and upholding its revised final sulfur dioxide (SO2) standard.

The NOx NAAQS Case

In the case decided by the court on July 17, American Petroleum Institute v. EPA, the American Petroleum Institute, the Utility Air Regulatory Group, and the Interstate Natural Gas Association of America challenged the EPA’s February 2010 adoption of a final rule requiring "the three-year average of the annual 98th percentile of the daily maximum 1-hour average concentration [be] less than or equal to 100 ppb.”

The groups claimed the EPA was "arbitrary and capricious" in how it dealt with evidence that showed, as the EPA suggests, short-term NO2 exposure could cause an array of adverse respiratory health effects. They also argued that the agency was "arbitrary and capricious" when it allegedly decided to require applicants for new or modified sources of pollution to demonstrate compliance of the NAAQS within one year of filing, even though an adequate technique to model compliance did not yet exist.

Until methods for modeling compliance with the new 1-hour NAAQS have been developed and approved by the agency, the EPA should allow applicants to demonstrate compliance with the pre-existing annual NAAQS, as they previously had to do, the groups argued. The NAAQS was unlawful, they also contended, because it is more stringent than "requisite to protect the public health" with an "adequate margin of safety," as is delineated in the Clean Air Act.

But the court ruled that the EPA’s staff conducted the review of the proposed NAAQS sufficiently, and the "API has presented no reason for us to disturb that judgment," wrote Senior Circuit Judge Douglas Ginsburg, who filed the opinion for the court.

Regarding the claim that the agency did not consider whether sources complying with the NAAQS would be able meet the compliance deadline, or the rule’s effect on economic growth, the court upheld the EPA’s contention that the final rule did not constitute a final decision concerning the permitting of new or modified sources under the new NAAQS, and it was therefore not subject to judicial review.

"To be sure, one could reasonably read as mandatory the isolated statement that permit applicants ‘will initially be required’ to meet the new NAAQS," the court ruled. “At the same time, the statement could reasonably be read to mean the EPA intends in the future to establish such a requirement, in which case the statement falls short of being the consummation of the agency’s decision-making process."

The SO2 NAAQS Case

In the case decided on July 20, National Environmental Development Association’s Clean Air Project v. EPA, several companies, industrial associations, and states—North Dakota, South Dakota, Nevada, Louisiana, Texas (and supported by Oklahoma)—petitioned the court to review the EPA’s June 2010-promulgated "Primary NAAQS for SO2" and lower court denial of petitions for reconsideration of that standard.

The petitioners argued that the EPA not only failed to follow notice-and-comment rulemaking procedures when it set the standard but that it also arbitrarily set the maximum SO2 concentration at a level lower than statutorily authorized.

The Clean Air Act requires the EPA to promulgate a primary and secondary NAAQS for each pollutant listed in the act and revise them every five years. After the EPA promulgates a new final standard, the Clean Air Act allows each state to recommend whether areas within their boundaries should be designated as "nonattainment," "attainment," or "unclassifiable," but the EPA makes the final designation. States must then submit state implementation plans (SIPs), which must receive EPA approval, to impose federally enforceable controls on air pollution sources so states can attain the NAAQS.

The EPA reviewed, but did not revise the first primary NAAQS for SO2 promulgated in April 1971 until June 22, 2010. In 1988, it proposed to add a new 1-hour primary standard of 400 ppb to protect against 5- to 10-minute bursts of SO2 concentrations, the pollutant that is released primarily by fossil fuel combustion, and in 1994, it proposed to add a 5-minute standard of 600 ppb. However in 1996, the agency said it would not revise the NAAQS, saying that adverse effects did "not pose a broad public health problem when viewed from a national perspective." The American Lung Association sued the EPA’s decision not to implement the 5-minute standard, and the D.C. Circuit ruled in 1998 that the agency had not "adequately" explained how it reached its decision.

In response to that court decision, the EPA initiated review of the SO2 NAAQS and proposed a rule in 2006 to revise the primary SO2 standard. That proposal essentially revoked the existing 24-hour and annual standard and established a standard to target short-term bursts of SO2 exposure (a 99th percentile 1-hour daily maximum standard level of between 100 ppb and 50 ppb). The rule also proposed to amend ambient air monitoring, reporting, and network design requirements.

After receiving comments on the rule, the EPA issued the final rule in June 2010 mandating that states meet the new 1-hour SO2 standard using a 99th percentile form set at 75 ppb maximum SO2 concentration. The action, which the EPA said would benefit public health and "provide an adequate margin of safety," prompted legal challenges from industry and several states.

The petitioners argued that the EPA failed to follow the notice-and-comment rulemaking provisions because statements in the preamble of the final rule suggest a mandatory hybrid modeling-monitoring implementation approach rather than a monitoring-only approach described in the proposal. The court threw out that claim, however, saying the challenge to the rulemaking procedure is not within its jurisdiction "because the challenged statements [in the preamble] do not constitute a final agency action," as Chief Judge David Sentelle wrote in the court’s opinion.

The non-state petitioners brought the second challenge, contending that the EPA’s decision to adopt a 75 ppb standard was "arbitrary and capricious" because the EPA had not shown that 5-minute exposures to SO2 levels below 400 ppb could cause adverse effects in individuals and that the EPA "cherry-pick[ed]" studies that supported its preferred result, while ignoring studies that support a higher standard.

"EPA offers a reasonable explanation of why it relied most heavily on three particular epidemiologic studies," the court ruled on Friday. "EPA explains that it relied on those three studies, out of the more than fifty peer reviewed studies available, precisely because these three were conducted in the United States and included multi-pollutant models to help address the ‘major methodical issue,’ that Petitioners contend EPA ignored."

"We further conclude that EPA did not act arbitrarily in setting the level of SO2 emissions and therefore deny that portion of the petitions for review," the court ruled.

Sources: POWERnews, U.S. Court of Appeals, D.C. Circuit

—Sonal Patel, Senior Writer (@POWERmagazine)