The combined legal arguments of the state of Oklahoma and the Oklahoma Industrial Energy Consumers (petitioners) failed to convince the U.S. Court of Appeals for the 10th Circuit that it should review EPA’s disapproval of Oklahoma’s state implementation plan (SIP) to impose regional haze regulations on four units at two power plants. 

The petitioners contended the Agency’s disapproval, as well as its decision to promulgate a federal implementation plan (FIP) that required costly pollution controls at the power plants in place of the actions contained in Oklahoma’s SIP, were arbitrary and capricious.  One member of the three-judge panel concurred in part and dissented in part with the majority opinion that the EPA correctly applied its authority under the Clean Air Act to set best available control technology (BART) requirements for the power plant units, which differed from BART contained in Oklahoma’s SIP.

Oklahoma’s BART

The case originates in EPA’s 2005 regional haze rule.  Under the rule, states were required to develop SIPs that contain emissions limits, schedules of compliance, and other measures to ensure the states made reasonable progress toward remedying any existing impairment of visibility in Class I federal areas that is caused by man-made pollution. 

Thirty-one states failed to meet EPA’s December 2007 deadline for submitting their SIPs.  This triggered EPA’s duty to promulgate FIPs for these states within 2 years.  Before the EPA completed its FIP for Oklahoma, the state submitted its SIP in February 2010.  The Oklahoma SIP set a sulfur dioxide (SO2) emissions limit of 0.65 lb/mmBtu (30-day average) and 0.55 lb/mmBtu (annual average) for each of the four units.  BART for each of these units was based on the continued use of low-sulfur coal.  The SIP considered, but rejected, an emissions limit that would require the installation of scrubbers to remove SO2.

Cost differences

In March 2011, the EPA issued a proposal that partially approved and partially disapproved Oklahoma’s SIP.  Regarding the disapproval, the EPA said Oklahoma overestimated the costs of dry and wet scrubbing, leading to the conclusion that these controls were not cost effective.  Specifically, Oklahoma estimated the cost of scrubbers to be $7,147 per ton of SO2 removed at one of the units. 

The EPA projected scrubbers at that same unit would cost $1,291 per ton of SO2 removed.  Based on the use of scrubbers, EPA’s proposal would set an SO2 emissions limit of 0.06 lb/mmBtu (39-day average). 

The petitioners argued that their estimates were based on costs associated with site-specific issues as allowed by EPA’s Air Pollution Cost Control Manual.  But the EPA contended that the cost manual specifies that any costs that differ from generic costs indicated in the manual must be accompanied by documentation for any additional information used for the cost calculations, including any information supplied by vendors.  The EPA claimed that Oklahoma did not provide this specific information, and the majority agreed that Oklahoma did not.

States’ rights

The petitioners also contended that EPA’s action interfered with the preference Congress afforded to the states in determining BART.  The 10th Circuit agreed that states do have the first right to determine BART, but added that the CAA  also gives the EPA the authority to reject that determination if the state fails to follow the federal guidelines and then to impose a FIP pending the state’s correction of its SIP.

Also, according to the petitioners, the EPA assumed too long a life for the scrubbers (thus decreasing their cost over the long term); that use of scrubbers would not have a significant impact on visibility; and that the EPA unlawfully promulgated a FIP in the same action that disapproved the SIP.  The majority rejected each of these arguments.

Dissent

In his separate opinion, Circuit Judge Kelly wrote that he agreed with much of the analysis offered by the majority.  But Kelly dissented on the majority’s endorsement of the method the EPA used to determine control costs.  “[The EPA’s] options arbitrarily and capriciously (1) assumed [the units] would burn coal they are not burning and have no plans to burn and (2) used scrubbers that do not fit and are not technically feasible. 

“Although the EPA has at least some authority to review BART determinations within a state’s SIP, it has no authority to condition approval of a SIP based simply on a preference for a particular control measure,” added Kelly, who said the petition for review should have been granted. 

Oklahoma v. EPA