Communities for a Better Environment v. United States Environmental Protection Agency ( 2015 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAR 16 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
COMMUNITIES FOR A BETTER No. 13-70167
ENVIRONMENT; CALIFORNIA
COMMUNITIES AGAINST TOXICS,
Petitioners, MEMORANDUM*
v.
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY; JARED
BLUMENFELD; GINA MCCARTHY,
Administrator, U.S. Environmental
Protection Agency,
Respondents,
THE SOUTH COAST AIR QUALITY
MANAGEMENT DISTRICT; CPV
SENTINEL, LLC,
Respondents - Intervenors.
On Petition for Review of an Order of the
United States Environmental Protection Agency
Argued and Submitted October 22, 2014
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
page 2
Before: THOMAS, Chief Judge, KOZINSKI and GOULD, Circuit Judges.
1. EPA reasonably determined that the District was not obligated to track
the credits transferred to the Sentinel project using Rule 1315 of Regulation XIII.
Rule 1315 is merely one way in which the District chooses to demonstrate
compliance with the Clean Air Act’s requirements that emission credits be
quantifiable and surplus. See 42 U.S.C. § 7503(c); 40 C.F.R.
§ 51.165(a)(3)(ii)(C)(1)(I). The District is free to use another method of showing
compliance with those requirements if that other method is written into an
amended State Implementation Plan (SIP), as was the case here. See Natural Res.
Def. Council, Inc. v. S. Coast Air Quality Mgmt. Dist., 651 F.3d 1066, 1073 (9th
Cir. 2011).
2. EPA was neither arbitrary nor capricious in determining that the credits
transferred to Sentinel were quantifiable and surplus.
First, contrary to petitioners’ assertion, EPA did not extrapolate emission
savings from shut down sources based on the emission limits those sources were
permitted to have, but instead relied on the amount they were actually emitting.
Nor was it arbitrary or capricious for EPA to accept credits from sources for which
page 3
only one year of data was available. EPA’s conservative estimates provided an
adequate margin of error to ensure statutory requirements were met.
Second, in determining whether the transferred credits were surplus, EPA
reasonably applied only the discounting effects of those regulations enacted
between the time of a source’s shutdown and the time of transfer, rather than
discounting by all the regulations that came into effect from the time of the
source’s initial permitting. Regulations that came into effect between the time of
permitting and the time of shutdown were already factored into each source’s
emission output at the time of shutdown, because a source is assumed to be in
compliance with applicable regulations when it closes. Requirements that
wouldn’t have affected a source had it not shut down do not need to be discounted.
See 42 U.S.C. § 7503(c)(2).
Finally, it was reasonable for EPA to assess the surplusage and
quantifiability of only those credits actually used on the Sentinel project. There is
no mechanism in the SIP for credits to be transferred from the AB1318 Tracking
System to a project other than Sentinel. Hence, even if any excess credits were not
technically “retired,” they cannot be used to warrant new emissions until the SIP is
amended to allow for that possibility. EPA need not validate those excess credits
until such a transfer is contemplated.
page 4
PETITION DENIED.