Argued March 18, 2013
On Petition for Review of Final Agency Action of the United States Environmental Protection Agency (EPA-HQ-OAR-2011-0081)
William M. Bumpers, Esq. [ARGUED] Brook Detterman, Esq. Debra J. Jezouit, Esq. BAKER BOTTS L.L.P., Walter Stone, Esq. GenOn Energy Inc., Counsel for Petitioner, GenOn REMA, LLC
George P. Sibley, III, Esq. [ARGUED] HUNTON & WILLIAMS LLP Andrea B. Field, Esq. Elizabeth L. Horner, Esq. HUNTON & WILLIAMS LLP Counsel for Petitioner-Intervenor, Utility Air Regulatory Group
Thomas A. Lorenzen, Esq. U.S. Department of Justice Environmental Enforcement Section T. Monique Peoples, Esq. [ARGUED] U.S. Department of Justice Environmental Defense Section Suite Stephanie L. Hogan, Esq. Office of General Counsel (2344A) United States Environmental Protection Agency Counsel for Respondent, United States Environmental Protection Agency
Jon C. Martin, Esq. Ruth E. Musetto, Esq. [ARGUED] Lisa J. Morelli, Esq. Office of Attorney General of New Jersey Division of Law Richard J. Hughes Justice Counsel for Respondent-Intervenor, State of New Jersey
Joseph O. Minott, Esq. Clean Air Council Zachary M. Fabish, Esq. [ARGUED] The Sierra Club Counsel for Respondent-Intervenors, Greenpeace, Clean Air Council and The Sierra Club.
Before: FUENTES, CHAGARES, and BARRY, Circuit Judges.
FUENTES, Circuit Judge.
Portland Generating Station (" Portland ") is a 427-megawatt, coal-fired, electricity generating plant located in Upper Mount Bethel Township in Northampton County, Pennsylvania. Portland is directly across the Delaware River within 500 feet of Knowlton Township in Warren County, New Jersey. The EPA has found that Portland emits sulfur dioxide in amounts that significantly interfere with the control of air pollution across state borders. Sulfur dioxide is a toxic air pollutant that endangers life and health, causing burning of the nose and throat, difficulty breathing, and obstruction of the lungs and airways. Because of its location, Portland's sulfur dioxide emissions travel directly across the river into areas of New Jersey. In response to a petition under the Clean Air Act, the EPA issued a rule imposing direct limits on Portland's emissions and a schedule of restrictions to reduce its contribution to air pollution within three years. GenOn REMA, LLC (" GenOn "), the owner and operator of Portland, challenges the EPA's rule as inconsistent with the agency's authority under the Clean Air Act and as arbitrary and capricious. We will uphold the rule and deny GenOn's petition for review.
A. Statutory Background
The Clean Air Act authorizes the Environmental Protection Agency (the “EPA ") to establish air quality standards and empowers the states to achieve those standards. Concerned Citizens of Bridesburg v. EPA, 836 F.2d 777, 779 (3d Cir. 1987) (internal citations omitted). This “cooperative federalism" structure is a defining feature of the statute. Appalachian Power Co. v. EPA, 249 F.3d 1032, 1046 (D.C. Cir. 2001). The Clean Air Act gives the EPA authority to establish national ambient air quality standards (" NAAQS ") for certain pervasive air pollutants to protect public health and welfare. 42 U.S.C. §§ 7408, 7409. Under Section 110 of the Clean Air Act, states are required to implement NAAQS through state implementation plans (" SIPs ") that specify how NAAQS will be achieved and maintained in the state. Id §§ 7407, 7410. States must adopt and submit SIPs to the EPA that provide for the “implementation, maintenance, and enforcement” of NAAQS within their borders no later than three years after the EPA promulgates a particular NAAQS. Id § 7410(a)(1).
If the EPA approves the SIPs, they become enforceable as federal law. Id § 7413. If the EPA finds that a SIP is inadequate to attain or maintain a NAAQS or otherwise does not comply with the Clean Air Act, the EPA issues a “SIP call” requiring the state to submit a revised SIP to correct the inadequacies. Id § 7410(k)(5). The EPA may also promulgate a Federal Implementation Plan (" FIP ") to establish direct federal controls on sources of air pollution if the EPA disapproves a SIP in whole or in part, or finds that a state has failed to submit either a SIP or SIP revision. Id. § 7410(c).
Section 126(b) of the Clean Air Act allows downwind states to petition the EPA for a finding that a source in an upwind state affects the petitioning state's attainment or maintenance of NAAQS due to air pollution emanating from the source in the upwind state. See id. § 7426(b). Section 126(b) of the Clean Air Act provides:
Any State or political subdivision may petition the [EPA] for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of section 7410(a)(2)(D)(ii) of this title or this section. Within 60 days after receipt of any petition under this subsection and after public hearing, the [EPA] shall make such a finding or deny the petition.
In turn, Section 7410(a)(2)(D)(i), also known as the “good neighbor provision, ” prohibits sources or emissions activity within a state from emitting air pollutants in amounts that will:
(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard, or
(II)interfere with measures required to be included in the applicable implementation plan for any other State . . . to prevent significant deterioration of air quality or to protect visibility.
Id. § 7410(a)(2)(D)(i).
If the EPA finds, pursuant to a Section 126(b) petition, that the upwind state is violating the good neighbor provision of the Clean Air Act, the polluting source must cease operations within three months of the EPA's finding. Id. § 7426(c). The EPA may, however, allow the source to continue operations beyond three months if the source “complies with such emission limitations and compliance schedules ...