Alaska Wilderness League v. EPA, No. 12-71506 (9th Cir. 2013)
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Plaintiff challenged the EPA's permit allowing Shell to construct, operate, and conduct "pollutant emitting activities" associated with a drill vessel (the "Kulluk") in the Beaufort Sea off Alaska's North Slope. The court rejected Plaintiff's argument that the Environmental Appeals Board's (EAB) Decision was not entitled to Chevron deference; Section 7661c(e) of the Clean Air Act, 42 U.S.C. 7661c(e), was ambiguous, and the EPA's interpretation was reasonable under the applicable statutes' plain language; the court owed Chevron deference to the EAB Decision not to require a preconstruction increment analysis for the "Kulluk;" and the EPA permissibly granted a 500-meter exemption to the "Kulluk" from "ambient air" standards.
Court Description: Environmental Law. The panel denied a petition for review of a decision of the United States Environmental Protection Agency denying a challenge to a Clean Air Act permit that allowed Shell Offshore Inc. to conduct “pollutant emitting activities” associated with the drill vessel Kulluk in the Beaufort Sea off Alaska’s North Slope, and granted Shell a requested exemption of 500 meters surrounding the Kulluk from “ambient air” regulations. As a threshold matter, the panel held that the EPA’s decision, which included its interpretation of the Clean Air Act’s 42 U.S.C. § 7661c(e), was entitled to Chevron deference. The panel held that the EPA reasonably concluded that Shell need not analyze the Kulluk’s potential impact on the Clean Air Act’s “increment” requirements before obtaining an oil exploration permit. The panel also upheld the EPA’s exemption of a 500-meter radius surrounding the Kulluk from “ambient air” quality standards because the decision was a permissible application of the EPA’s regulations.
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FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ALASKA WILDERNESS LEAGUE; CENTER FOR BIOLOGICAL DIVERSITY; NATURAL RESOURCES DEFENSE COUNCIL; NORTHERN ALASKA ENVIRONMENTAL CENTER; PACIFIC ENVIRONMENT; RESISTING ENVIRONMENTAL DESTRUCTION ON INDIGENOUS LANDS; SIERRA CLUB; THE WILDERNESS SOCIETY, Petitioners, No. 12-71506 OPINION v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, SHELL OFFSHORE INC., Respondent-Intervenor. On Petition for Review of an Order of the Environmental Protection Agency Environmental Appeals Board Argued and Submitted May 21, 2013 Anchorage, Alaska Filed August 15, 2013 2 ALASKA WILDERNESS LEAGUE V. EPA Before: A. Wallace Tashima, Richard C. Tallman, and N. Randy Smith, Circuit Judges. Opinion by Judge N.R. Smith SUMMARY* Environmental Law The panel denied a petition for review of a decision of the United States Environmental Protection Agency denying a challenge to a Clean Air Act permit that allowed Shell Offshore Inc. to conduct pollutant emitting activities associated with the drill vessel Kulluk in the Beaufort Sea off Alaska s North Slope, and granted Shell a requested exemption of 500 meters surrounding the Kulluk from ambient air regulations. As a threshold matter, the panel held that the EPA s decision, which included its interpretation of the Clean Air Act s 42 U.S.C. § 7661c(e), was entitled to Chevron deference. The panel held that the EPA reasonably concluded that Shell need not analyze the Kulluk s potential impact on the Clean Air Act s increment requirements before obtaining an oil exploration permit. The panel also upheld the EPA s exemption of a 500-meter radius surrounding the Kulluk from ambient air quality standards because the decision was a permissible application of the EPA s regulations. * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. ALASKA WILDERNESS LEAGUE V. EPA 3 COUNSEL Colin C. O Brien (briefed and argued), Earthjustice, Anchorage, Alaska; Eric P. Jorgensen, Earthjustice, Juneau, Alaska, for Petitioners. Ignacia S. Moreno and Angeline Purdy (briefed and argued), Assistant Attorneys General, United States Department of Justice, Environment and Natural Resources Division; Alexander Fidis, Office of Regional Counsel, Region 10, United States Environmental Protection Agency; David Coursen, Office of General Counsel, United States Environmental Protection Agency, for Respondent. Duane A. Siler, Sarah C. Bordelon, and Tony G. Mendoza, Crowell & Moring LLP, Washington, D.C.; Kathleen M. Sullivan (briefed and argued), William B. Adams, and David S. Mader, Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York, for Respondent-Intervenor. Samuel B. Boxerman, Jim Wedeking, and Lisa E. Jones, Sidley Austin, LLP, Washington D.C.; Mara E. Zimmerman, American Petroleum Institute, Washington, D.C., for Amicus Curiae American Petroleum Institute. Cameron M. Leonard, Senior Assistant Attorney General, Office of the Attorney General of Alaska, Fairbanks, Alaska, for Amicus Curiae State of Alaska. 4 ALASKA WILDERNESS LEAGUE V. EPA OPINION N.R. SMITH, Circuit Judge: 42 U.S.C. § 7661c(e) is ambiguous as to whether increment requirements are applicable to a temporary source like Shell Offshore, Inc. s ( Shell ) drill vessel Kulluk. Accordingly, we defer to the EPA Environmental Appeals Board s ( EAB ) reasonable interpretation of § 7661c(e). See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). The EAB reasonably concluded that Shell need not analyze the Kulluk s potential impact on increment before obtaining an oil exploration permit. We also deny the petition for review of the Environmental Protection Agency s ( EPA ) exemption of a 500-meter radius surrounding the Kulluk from ambient air quality standards, because the decision was a permissible application of the EPA s regulations. See Resisting Envtl. Destruction on Indigenous Lands, REDOIL v. EPA, 716 F.3d 1155, 1158, 1160 61 (9th Cir. 2013). FACTS AND PROCEDURAL HISTORY A. Statutory and Regulatory Background The Clean Air Act (the Act ) imposes responsibility on both federal and state regulators to control and improve the nation s air quality. Alaska, Dep t of Envtl. Conservation v. EPA, 298 F.3d 814, 816 (9th Cir. 2002) (citing 42 U.S.C. §§ 7401 7671q). The Act requires states to submit for the EPA s approval a state implementation plan [ SIP ] that provides for attainment and maintenance of the national ambient air quality standards ( NAAQS ) promulgated by the EPA. Id. Title V of the Act, 42 U.S.C. §§ 7661 7661f, ALASKA WILDERNESS LEAGUE V. EPA 5 requires certain sources, including sources operating only temporarily in a given location, to obtain permits to assure compliance with the Act. See 42 U.S.C. § 7661c. In clean air areas, the Act imposes additional preconstruction permitting requirements under the Prevention of Significant Deterioration program (the PSD ). Alaska Dep t, 298 F.3d at 816 (citing 42 U.S.C. §§ 7470 7492). The PSD imposes increment standards to maintain air quality in clean air areas by preventing the total pollution from exceeding a certain level over an established baseline for the given region. See Great Basin Mine Watch v. EPA, 401 F.3d 1094, 1096 (9th Cir. 2005). Temporary sources may be subject to increment standards under 42 U.S.C. § 7661c(e), which reads, in pertinent part: The permitting authority may issue a single permit authorizing emissions from similar operations at multiple temporary locations. No such permit shall be issued unless it includes conditions that will assure compliance with all the requirements of this chapter at all authorized locations, including, but not limited to, ambient standards and compliance with any applicable increment or visibility requirements under part C of subchapter I of this chapter. At issue here is whether there are increment requirements applicable to the Kulluk under § 7661c(e) and the PSD. Also relevant to this appeal, the Act requires the EPA to regulate, through national quality standards, ambient air, which is the statute s term for the outdoor air used by the 6 ALASKA WILDERNESS LEAGUE V. EPA general public. Train v. Natural Res. Def. Council, Inc., 421 U.S. 60, 65 (1975). EPA-promulgated regulations define ambient air as that portion of the atmosphere, external to buildings, to which the general public has access. 40 C.F.R. § 50.1(e). Interpreting these statutes and regulations, the EPA has long exempted from the definition of ambient air the atmosphere over land owned or controlled by the source and to which public access is precluded by a fence or other physical barriers. Letter from Douglass M. Costle, EPA Administrator, to Senator Jennings Randolph, Chairman of the Environment and Public Works Committee (Dec. 19, 1980) (the Costle Letter ). B. EPA s Grant of Shell s Wilderness s Challenge Permit and Alaska To comply with Title V, Shell sought and obtained three related permits in 2011. At Shell s request, the EPA subsequently consolidated the permits into one permitting document (the Permit ). The Permit allows Shell to construct, operate, and conduct pollutant emitting activities associated with the Kulluk in the Beaufort Sea off Alaska s North Slope. Before issuing the Permit, the EPA released a Statement of Basis. The Statement of Basis provided that the EPA would not require Shell to analyze the effect its emissions would have on the increment for the Kulluk s area of operation. During the public comment period on the Permit, commenters took issue with this decision and the EPA s rationale in the Statement of Basis. The EPA s Response to Comments, issued contemporaneously with the Permit, addressed these concerns. The EPA concluded that increment analysis was unnecessary, because, under § 7661c(e) and the other relevant statutes, no increment requirements were applicable to the Kulluk. ALASKA WILDERNESS LEAGUE V. EPA 7 The Permit and Response to Comments also announced the EPA s decision to grant Shell s requested exemption of 500 meters surrounding the Kulluk from ambient air regulations. The Permit conditioned the exemption on the establishment of a U.S. Coast Guard safety zone and a public access control program to restrict public access to the waters within 500 meters of the Kulluk. Alaska Wilderness raised the increment and ambient air issues, among others, in its challenge of the Permit before the EAB. Alaska Wilderness contended that the EPA misinterpreted applicable increment under § 7661c(e). Alaska Wilderness argued that EPA s source-based interpretation erred by applying increment standards to temporary sources only if the PSD would impose increment standards on a similar stationary source. Alaska Wilderness maintained a geography based interpretation that increment requirements are applicable to all sources any time they are established for the geographic area. Alaska Wilderness also argued that the ambient air exemption was inconsistent with the Costle Letter, because Shell did not own and could not, by physical barrier, exclude the public from accessing the space. In a 100-page decision (the EAB Decision ), the EAB rejected both challenges. With respect to the increment issue, the EAB held: Increments . . . are not directly imposed by [§ 7661c(e)]. Instead, they must be implemented (i.e., applied to a source) through either of two means: (1) a state implementation plan, per [§ 7471] and 40 C.F.R. § 51.166(a)(1); or (2) the PSD major source permitting program, per [§ 7475(a)(3)(A)] and 40 C.F.R. § 52.21. 8 ALASKA WILDERNESS LEAGUE V. EPA Thus, while [§ 7661c(e)] can serve as the direct source of NAAQS compliance requirements and other [Clean Air Act] requirements for temporary sources, it only imposes PSD increment requirements to the extent such requirements are applicable to the source. Alaska Wilderness s timely petition (the Petition ) for review of the EAB Decision followed. STANDARD OF REVIEW As a threshold matter, we reject Alaska Wilderness s argument that the EAB Decision is not entitled to Chevron deference. [Chevron] generally sets forth the framework by which we review an agency s interpretation of a statute. Sierra Club v. EPA, 671 F.3d 955, 961 (9th Cir. 2012). Chevron deference is appropriate where the agency can demonstrate that it has the general power to make rules carrying the force of law and that the challenged action was taken in exercise of that authority. Id. at 962 (internal quotation marks omitted). Here, Congress explicitly granted to the EPA the authority to promulgate regulations and grant air permits for the Kulluk s operating region. REDOIL, 716 F.3d at 1161. The EPA exercised its authority through a formal process that included . . . public notice and comment . . . and [a] reasoned EAB decision[ ] upholding the air permits at issue. Id. As we have already held in REDOIL, the EAB proceeding was a formal adjudication that warrants Chevron deference. Id. ALASKA WILDERNESS LEAGUE V. EPA 9 Under [Chevron s two-step] framework at the first step we determine whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court as well as the agency, must give effect to the unambiguously expressed intent of Congress. Sierra Club, 671 F.3d at 961 62 (quoting Chevron, 467 U.S. at 842 43). [I]f the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency s answer is based on a permissible construction of the statute. Id. at 962. DISCUSSION A. Increment The parties do not dispute that the Kulluk is a major source under Title V and, thus, subject to that title s permitting requirements. Further, the parties agree that our analysis of § 7661c(e) must focus on the EPA s interpretation of applicable increment . . . requirements. It is also undisputed that the Kulluk is not a major emitting facility under the PSD. See 42 U.S.C. § 7479(1). If it were, then the parties agree that 42 U.S.C. § 7475(a)(3)(A) would require a preconstruction increment analysis under the EPA s interpretation set forth in the EAB Decision. Although the Kulluk is not a major emitting facility, Alaska Wilderness argues that § 7661c(e) (and the other relevant statutes) unambiguously support its position. Alaska Wilderness argues that § 7661c(e) mandated a preconstruction increment analysis for the Kulluk, because increments have been established for the Kulluk s operating region. The EPA maintains that § 7661c(e) did not require an increment analysis for the Kulluk. The EPA argues that 10 ALASKA WILDERNESS LEAGUE V. EPA whether increment requirements are applicable under § 7661c(e) (which incorporates the PSD by reference) is a function not only of geography, but also a function of whether the PSD would require an increment analysis for the specific source if it were stationary. Thus, EPA argues, the Kulluk does not trigger the analysis requirement, which the PSD imposes only if required by the state SIP or if the source is a major emitting facility under 42 U.S.C. § 7475. 1. Chevron Step One A statute is ambiguous if it is susceptible to more than one reasonable interpretation. See Ariz. Health Care Cost Containment Sys. v. McClellan, 508 F.3d 1243, 1253 (9th Cir. 2007); A-Z Int l v. Phillips, 179 F.3d 1187, 1192 (9th Cir. 1999); see also Putnam Family P ship v. City of Yucaipa, 673 F.3d 920, 928 (9th Cir. 2012) ( A statute is ambiguous if Congress has not directly spoken to the precise question at issue. (internal quotation marks omitted)). The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole. Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997). Accordingly, we begin with the plain language of the statute. Ariz. Health, 508 F.3d at 1249. Section 7661c(e) is ambiguous in its use of the term applicable. To give content to this term, Section 7661c(e) expressly incorporates and relies on Part C of subchapter I of [Chapter 85]. 42 U.S.C. § 7661c(e). One Part C provision, 42 U.S.C. § 7473, sets forth increment standards generally and makes clear that permissible increment levels are established by geographic area. However, § 7473 does not specify how increments apply to minor, temporary ALASKA WILDERNESS LEAGUE V. EPA 11 sources like the Kulluk. Section 7473 is also silent as to preconstruction increment analysis and imposes no preconstruction requirements on any source. As such, Alaska Wilderness cannot rely on § 7473 to support its argument that § 7661c(e) unambiguously compels a geography-based reading of the term applicable. Two other Part C provisions impose increment requirements based on source rather than geography. First, 42 U.S.C. § 7471 incorporates any increment requirements set forth in the governing SIP, making clear that they apply to the sources covered under those state plans. Second, 42 U.S.C. § 7475(a)(3)(A) imposes increment analysis requirements on major emitting facilities. Under these sections, and Alaska s SIP, no increment requirement would apply to a minor PSD source like the Kulluk if it were stationary. Accordingly, because Part C provisions support a source-based reading of applicable, but allowable increment levels are determined by geographic area, § 7661c(e) is ambiguous.1 We reject Alaska Wilderness s argument that the EPA s interpretation renders the different permitting provision of 1 Section 7661c(e) s express reliance on Part C demonstrates that we cannot, as Alaska Wilderness urges, read § 7661c(e) to unambiguously impose increment requirements over and above those created by Part C. By contrast, the parties do not dispute that § 7661c(e) imposes substantive NAAQS requirements on temporary sources. However, this does not support Alaska Wilderness s increment argument; it only demonstrates the section s ambiguity. The NAAQS that § 7661c(e) references do not incorporate another provision like Part C to determine which requirements are applicable. Thus, Part C s failure to clarify the interplay between geography and source brings ambiguity to § 7661c(e) s reference to increment, but has no bearing on the NAAQS. 12 ALASKA WILDERNESS LEAGUE V. EPA § 7661c(a) absurd or superfluous by redundantly applying state SIP requirements. Section 7661c(a), with a broad brush, states that any permit must include conditions to assure compliance with the requirements of the chapter, including SIP requirements. Section 7661c(e) performs a more specific function setting forth which requirements apply to temporary sources. As such, § 7661c(e) does not duplicate § 7661c(a), even under the EPA s reading. In fact, using Alaska Wilderness s logic, § 7661c(e) s incorporation of any portion of Part C would be redundant, because Part C is already part of the chapter covered by § 7661c(a). Clearly this is not the case. Thus, § 7661c(a) s reference to SIPs does not foreclose the EPA s interpretation, and Alaska Wilderness cannot resort to § 7661c(a) to clarify § 7661c(e) s ambiguity. 2. Chevron Step Two If an agency interprets an ambiguous statute and fills a gap or defines a term in a way that is reasonable in light of the legislature s revealed design, we give [that] judgment controlling weight. Ariz. Health, 508 F.3d at 1249 (alteration in original) (internal quotation marks omitted). Here, the EPA s interpretation is consistent with Congress s revealed design as evidenced by § 7661c(e) s plain language.2 In fact, the EPA arguably proffers the more reasonable reading of § 7661c(e) and Part C, given § 7471 s 2 Alaska Wilderness cannot rely on § 7661c(e) s legislative history to support its argument that § 7661c(e) unambiguously compels its geography-based interpretation. Any attempt to invoke § 7661c(e) s legislative history is inconsistent with Alaska Wilderness s claim that the statute is unambiguous. If the statutory language were truly as clear as Alaska Wilderness argues, reference to the legislative history would be both unnecessary and inappropriate to illuminate unambiguous text. REDOIL, 716 F.3d at 1162 63. ALASKA WILDERNESS LEAGUE V. EPA 13 and § 7475(a)(3)(A) s imposition of increment analysis requirements by source, and given the absence of any such requirement imposed by area under § 7473. Thus, we defer to the EPA s reasonable interpretation. B. Ambient Air Since briefing was completed in this case, we decided REDOIL. We then invited the parties to submit supplemental briefs as to the effect of REDOIL on the ambient air issue in this case. After briefing, we agree with the parties that REDOIL directly controls this issue. Thus, as in REDOIL, we conclude that the EPA s exemption of a 500-meter radius surrounding the Kulluk from ambient air quality standards was a permissible interpretation of its ambient air regulation and earlier letter ruling. REDOIL, 716 F.3d at 1165. CONCLUSION Section 7661c(e) is ambiguous, and the EPA s interpretation is reasonable under the applicable statutes plain language. Thus, we owe Chevron deference to the EAB Decision not to require a preconstruction increment analysis for the Kulluk. Similarly, as we held in REDOIL, the EPA permissibly granted a 500-meter exemption to the Kulluk from ambient air standards. PETITION DENIED.
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