ORAL ARGUMENT HELD FEBRUARY 28 AND 29, 2012 PANEL DECISION ISSUED JUNE 26, 2012

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 1 of 22 ORAL ARGUMENT HELD FEBRUARY 28 AND 29, 2012 PANEL DECISION ISSUED JUNE 26, 2012 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT COALITION FOR RESPONSIBLE REGULATION, INC., ET AL., Petitioners, v. Nos. 09-1322; 10-1073; 10-1092; 10-1167 ENVIRONMENTAL PROTECTION (and consolidated cases). AGENCY, Respondent. RESPONSE OF THE ENERGY-INTENSIVE MANUFACTURERS WORKING GROUP ON GREENHOUSE GAS REGULATION TO MOTIONS TO GOVERN FURTHER PROCEEDINGS FILED BY EPA AND ENVIRONMENTAL ORGANIZATION RESPONDENT- INTERVENORS

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 2 of 22 INTRODUCTION EPA concedes that the challenged rulemakings must be vacated to the extent they require a stationary source to obtain a PSD or Title V permit based on emissions of greenhouse gases ( GHGs ) alone. EPA Motion to Govern Future Proceedings at 19-20 ( EPA Motion ). Under the order it proposes, in addition, EPA would consider whether any further revisions to its regulations are appropriate in light of Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014) [( UARG )] and if so, it shall undertake to make such revisions. Id. at 20. We cannot know what EPA has in mind with respect to the obligation to determine what is appropriate under UARG, but we know what it does not have in mind giving relief from the existing greenhouse gas BACT requirements for anyway sources. With respect to this, EPA boldly says the above-quoted commitments which involve only continuation of the existing BACT regime fairly and completely implement the substance of the Supreme Court s holding regarding... the continuation of BACT requirements for greenhouse gas emissions in PSD permits required for construction and modification of anyway sources. Id. at 11 (emphasis added). Relief from the existing greenhouse gas BACT requirements for anyway sources is not consistent with the Clean Air Act or otherwise justified on the basis of the Supreme Court decision. Id. at 12 (footnote omitted). -1-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 3 of 22 The sides are thus well drawn. Petitioners, by contrast with the above, contend that fundamental reconsideration, revision, and possible elimination of these BACT requirements for anyway sources is required both to conform with the Act and UARG, and that the deliberations involved in that must embrace facts and consequences that EPA heretofore thought legally irrelevant. As important as vacatur is for this case considered in isolation, the underlying dispute as to the import of UARG is more so. By its attempt, in its Motion, to revive its conception of automatic triggering, EPA would undo the revolution worked by UARG with respect to the approach to statutory interpretation required for greenhouse gas regulation under the Clean Air Act. UARG requires an approach that is substantive, contextual, and holistic. It takes into account the effect of the unique GHG context on affected provisions of the Act. It requires that these provisions be included in the analysis of what the statute requires or permits that it not stop, that is, at terms that have jurisdictional importance or, as in this case, would connect one provision of the Act to others. Automatic triggering as conceived by EPA is the opposite a kind of isolatedterm literalism, blind to substantive effects, affected provisions and common sense. In terms of the underlying metaphor, EPA s conception of the trigger is that it is automatic as a doomsday device is: the creators of the triggered device would not care what is destroyed in this case, the statutory components of the PSD -2-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 4 of 22 program and the coherent scheme of standard-guided regulation they embody. ARGUMENT EPA contends that it may continue to enforce its current GHG BACT program, regardless of the consequences, under its automatic triggering interpretation of the BACT provision. See EPA Mot. at 13-15. But the mode of statutory interpretation upon which this is based, focusing on individual statutory terms isolated both from other essential statutory components of PSD regulation and the substantive effects of applying them in the unique GHG context, repeats the same interpretive errors corrected in UARG. Moreover, ironically, the way EPA reads UARG itself has the same flaw it is isolated-term literalism that decontextualizes the key term. As explained below, UARG far from upholding EPA s current program establishes that whether GHG BACT regulation is even permissible remains an open question, and contemplates that, if EPA wishes to adopt a GHG BACT program, it must attempt to devise new regulations in accord with the Supreme Court s opinion and the statute. I. EPA S READING OF UARG TAKES CONTINUE OUT OF CONTEXT AND IGNORES ALL THE ASPECTS OF THE COURT S OPINION THAT PATENLY CONTRADICT ITS READING. EPA s position is based upon using the word continue in a way that is different than the Court used it and ignoring the parts of UARG that are flatly inconsistent with the EPA reading. Continue appears once in the opinion, and the -3-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 5 of 22 object of this verb in the Court s sentence is fundamentally different than the objects EPA gives it in its various rewrites. The Court said that EPA may... continue to treat greenhouse gases as a pollutant subject to regulation under this chapter for purposes of requiring BACT for anyway sources. Id. at 2449. As we will discuss further in the next section, permissive inclusion in that phrase is but step one a necessary but not sufficient condition of statute- and UARGconforming inclusion of GHGs in a PSD BACT requirement. By contrast with the Court s usage, EPA says the following things may continue: EPA may continue to apply its existing regulations implementing the PSD permit BACT requirement to [ anyway ] sources greenhouse gas emissions. EPA Motion at 3-4. The Court affirmed that EPA may continue to require PSD permits for anyway sources Id. at 8. [T]he Supreme Court h[eld] that the application of BACT requirements for anyway sources may continue. Id. at 10.... to continue to require BACT... Id. at 15.... continue to require [GHG] emissions from anyway sources to be subject to the BACT requirement. Id. at 17. The agency never asks itself how something that may be impossible to devise (see below) may also continue. The Energy Intensive Manufacturing Group s Motion (EIM Motion at 2-3) quoted the half dozen or so UARG passages that are most starkly at odds with continuation of GHG BACT as is, and that, instead, map out a multi-faceted task -4-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 6 of 22 for the agency that may be impossible (UARG at 2429 n.9) to devise (id.) i.e. a statutory-component honoring version of PSD GHG BACT regulation. If the task is possible, it will likely result in a radically altered scheme, such that it ceases to be essentially a scheme of energy regulation and becomes one where that plays no role at all (id. at 2447-48) or, similarly, one that focuses on the at present very limited options for traditional pollution-control-type technology. Id. Of the ignored passages that contradict a reading that would permit EPA to continue PSD BACT regulation as is without re-examination and reform that attempt to address the many challenges it presents the most important are contained in the Court s footnote 9. Id. at 2449 n. 9. There the Court is responding to Justice Alito (joined by Justice Thomas) who has joined that part of the Court s opinion that contains most of the rebukes to the status quo at issue. In particular, the Court is responding to Justice Alito s argument that BACT is fundamentally incompatible with greenhouse gases. The footnote merits quotation in full: Justice Alito argues that BACT is fundamentally incompatible with greenhouse gases for two reasons. Post, at [2456] (opinion concurring in part and dissenting in part). First, BACT requires consideration of ambient air quality at the proposed site and in areas which may be affected by emissions from [the proposed] facility for each pollutant subject to regulation under this chapter, 7475(e)(1): see also 7475(e)(3)(B); and it is not obvious how that requirement should apply, or even whether it can apply, to greenhouse gases. Post, at [2456-2457]. But the possibility that that requirement may be inoperative as to greenhouse gases does not convince us that they must be categorically excluded from BACT even though they are indisputably a pollutant subject to regulation. Second, Justice Alito argues that EPA s guidance on how to implement greenhouse-gas BACT is a recipe -5-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 7 of 22 for arbitrary and inconsistent decisionmaking. Post at [2458]. But we are not reviewing EPA s guidance in these cases, and we cannot say that it is impossible for EPA and state permitting authorities to devise rational ways of complying with the statute s directive to determine BACT for greenhouse gases on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs. 7479(3). On the last point, as our motion indicated, we believe that, given the damage to each of the concepts of energy, environmental and economic impacts caused by the nature of GHGs and by explicit provisions of the Tailoring Rule, the task will prove not just difficult, but impossible. See EIM Motion at 15-17. However, UARG footnote 9 is particularly important in evaluating the argument of the EPA Motion in other respects. As the footnote indicates, and as Justice Alito details, in the Tailoring Rule EPA declared the local impacts requirement of the PSD statutory components to be ignorable even though it is triggered by the exact language air pollutant subject to regulation under this chapter that the agency claims automatically subjects anyway sources to the BACT requirement for GHGs. Hence, that phrase triggers both an automatic and inexorable obligation for GHGs (BACT) and an avoidable and inoperative obligation for GHGs (local impacts analysis), depending, evidently, on which power EPA ascribes to it. The automatic trigger, on the evidence supplied by its treatment by EPA, is not automatic, it is fact- and context-dependent, and it has been inconsistently pulled by human agency. Moreover, the Court flatly states that GHGs are indisputably a pollutant subject to regulation, yet concludes that a -6-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 8 of 22 BACT GHG obligation is but a permissible interpretation and, still further, that it may be impossible to devise a scheme of GHG inclusion that rationally comports with the statute. With respect to the phrase any air pollutant in the triggering language tied to numerical thresholds, which the agency had interpreted as any air pollutant subject to regulation, the Court found that there was a long history of EPA itself excluding even conventional pollutants. UARG at 2440-2442. For the BACT and local-impact triggers, however, prior treatment of conventional pollutants is not itself a basis for finding an interpretation of regulated pollutant that admits of no exemption to be inconsistent with the provision s history the permissibility of GHG inclusion therein will rise or fall on the consequences for rest of the statutory program and whether the statutory components can be satisfied in the GHG/global-warming context. Clearly, EPA s Motion contains an erroneous conception of automatic triggering and the subject to regulation phrase to which we turn more directly in the next section. For present purposes, it can be said that while the Court held that EPA may... continue to treat greenhouse gases as a pollutant subject to regulation under this chapter for purposes of requiring BACT for anyway sources (Id. at 2449), this statement, to be consistent with the rest of the opinion, can mean no more than that EPA is not precluded from attempting to devise a GHG BACT program that complies with the statute -7-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 9 of 22 provided that the agency can successfully navigate the obstacles to such regulation identified elsewhere in the Court s opinion. II. THE SUPREME COURT REJECTED EPA S AND THIS COURT S AUTOMATIC TRIGGERING INTERPRETATION. Continuation of the existing PSD GHG BACT regime and its fundamental, perhaps fatal, substantive deficiencies explicated by the Supreme Court is inconsistent with even boldy dismissive of explicit passages of UARG. Even absent this, vacatur of EPA s PSD GHG regulations, including those pertaining to BACT, and the rulemaking that produced them, would be required because they were based upon an interpretation of the statute and, more generally, an approach to interpretation of the Act in greenhouse-gas cases, that were rejected and replaced by the Court. The agency seeks to revive both of these things in its Motion as if UARG was but a transient inconvenience. The rejected statutory interpretation held that the BACT requirement applies to GHG emissions automatically by operation of the Clean Air Act. The rejected approach to statutory interpretation was the isolated-term de-contextualization that underlies this automatic triggering conception. EPA s motion advises this Court, inter alia, that the Supreme Court is a court of final review, not of first view (EPA Motion at 14-15) (citation omitted), and, [o]n the BACT issue, all the Supreme Court had before it was a reading of the Clean Air Act this Court upheld, and on this issue, the Supreme Court -8-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 10 of 22 affirmed that part of this Court s decision. Id. at 15. Accordingly, EPA s motion further asserts, the Supreme Court s decision simply cannot be read as anything other than an affirmation of this Court s determinations that the BACT requirement applies to greenhouse gases automatically by operation of the Clean Air Act and that EPA regulations implementing that requirement should continue in effect... EPA Motion at 14 (emphasis added). The essence of EPA s misuse of automatic in this case has been to give it powers of override to take it to mean the PSD program applies to greenhouse gases automatically, regardless of the various kinds of incoherence that creates for the statutory components of the program. EPA has used automatic to mean both without normal processes of statutory construction and nothing more required. For instance, in its briefing to this Court EPA said:...[t]he regulation of greenhouse gases from vehicles under Title II of the CAA meant these gases became a pollutant regulated under the Act, thereby making the provisions of PSD and Title V automatically applicable to stationary sources of that pollutant. No further action was required nor was any action taken by EPA... Final Brief for Respondents, at 22-23 (emphasis in original). Now, EPA again uses automatic as a talisman protecting it from further, basic obligations this time it purports to excuse further action in response to a Supreme Court opinion. The agency s conception of automatic triggering is fundamentally at odds with UARG. Footnote 9, as discussed above, indicates this. But, even more -9-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 11 of 22 fundamentally, each section and the structure of the Court s legal analysis in chief evidences it, for the agency s conception of automatic triggering is inconsistent with UARG s most fundamental teachings on the approach to statutory interpretation required in greenhouse-gas Clean Air Act cases. Section II of the Court s opinion is its Analysis. Section II(A)(1) of this analysis rejected EPA s mistaken conception that the Act compelled a greenhouse-gas inclusive interpretation of the PSD and title V triggers. Id. at 2442 (emphasis in original). In this section, the Court corrected the inference, likely related to the Court s use of the term unambiguous in Massachusetts, that the Court had there held that air pollutant in the CAA must everywhere be read to include greenhouse gases. See Massachusetts v. EPA, 549 U.S. 497, 529 (2009). In the course of its analysis the Court said the following: EPA thought its conclusion that a source s greenhouse-gas emissions may necessitate a PSD or Title V permit followed from the Act s unambiguous language. The Court of Appeals agreed and held that the statute compelled EPA s interpretation. 684 F.3d, at 134. We disagree... [Massachusetts] did not hold that EPA must always regulate greenhouse gases as an air pollutant everywhere that term appears in the statute, but only that EPA must ground its reasons for action or inaction in the statute... UARG at 2440-2441. Massachusetts does not strip EPA of authority to exclude greenhouse gases from the class of regulable air pollutants under other parts of the Act where their inclusion would be inconsistent with the statutory scheme Id. at 2441. -10-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 12 of 22 Massachusetts does not foreclose the Agency s use of statutory context to infer that certain of the Act s provisions use air pollutant to denote not every conceivable airborne substance, but only those that may be sensibly encompassed within the particular regulatory program. As certain amici felicitously put it, while Massachusetts rejected EPA s categorical contention that greenhouse gases could not be air pollutants for any purposes of the Act, it did not embrace EPA s current, equally categorical position that greenhouse gases must be air pollutants for all purposes regardless of statutory context. Id. (citation omitted). Section II(A)(2), which address the permissibility of a construction that would apply the PSD and Title V programs to sources based only on their GHG emissions, establishes the interpretive approach that is to be followed in applying the Clean Air Act to the distinct context (Id. at 2449) of greenhouse gases. This approach is the opposite of the isolated-term literalism that is the essence of the agency s conception of automatic triggering, and, instead elaborates on Section II(A)(I) s insistence on the relevance of context and consideration of whether GHGs can be sensibly encompassed within a given statutory program given its substantive effect(s). For instance: And reasonable statutory interpretation must account for both the specific context in which... language is used and the broader context of the statute as a whole.... A statutory provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme... because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.... Id. at 2442 (citations omitted). [The requirements of permits for GHG only sources ] would be incompatible with the substance of Congress regulatory scheme. Id. at 2443 (citation omitted). -11-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 13 of 22 EPA s interpretation is also unreasonable because it would bring about an enormous and transformative expansion in EPA s regulatory authority without clear congressional authorization. Id. 2443. Section II(B), which addresses BACT for anyway sources, builds on Section A. Though the agency and this Court had treated the regulation of anyway sources as a self-evident proposition compelled by plain language and Massachusetts, the Supreme Court does not even address the Chevron step-one question for anyway sources, proceeding directly to whether the regulation of anyway sources is, as a general matter, a permissible interpretation of the statute under Chevron. Id. at 2448. Why? Because the Court had already disposed of isolated-term, non-ghg-contextualized Chevron step-one mandates for CAA GHG purposes in Section II(A)(1). And, it assumed readers of its opinion would understand that the interpretive approach set out in parts II(A)(1) and (2) would carry over to part II(B). Indeed, II(B) represents a deeply substantive, whole-text application of the interpretive principles of II(A), and under that approach the Court finds the existing scheme deeply defective, but perhaps remediable. To be sure, this case evolved after it left this Court. Just as the Supreme Court related, Some petitioners urge[d] us to hold that EPA may never require BACT for greenhouse gases... because BACT is fundamentally unsuited to greenhouse-gas regulation. UARG at 2447. These petitioners did so by analyzing the myriad substantive statutory components of GHG PSD regulation that were -12-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 14 of 22 nullified, contradicted, rendered unworkable or otherwise contravened by an attempt to apply them to GHGs. See EIM Motion at 15 (and citations there). Moreover, some petitioners to the Court squarely presented the underlying issue as a matter of approach to statutory interpretation in CAA GHG cases, challenging this Court s and EPA s approach. See Petition for Certiorari of the Energy Intensive Manufacturers Working Group on Greenhouse Gas Regulation, et al. in No. 12-1254 at 3-7, 31-37 ( Our principal argument is that the Agency and the court below used a mistaken approach to statutory construction... Id. at 3); and Brief of Petitioners in No. 12-1254, The Energy Intensive Manufacturers Working Group on Greenhouse Gas Regulation et al., at 6-17 [ The Agency and lower court relied on plain and isolated language, making it impossible for them to see the effect that the GHG application had on the relevant statutory provisions. Id. at 13 (footnote omitted)]. If EPA believed these arguments were not fairly encompassed within the Question Presented or was not presented below, it could have so argued. In any case, the Supreme Court decided what it decided on the terms it decided it. This Court s view, as opposed to EPA s, is that an opinion of the Supreme Court must be given full force and effect, and cannot be interpreted or applied in a manner that ignores the implications of its rationale and the import of [its] analysis. See United States v. Oakar, 111 F.3d 146, 153 (D.C. Cir. 1997). The reading EPA would give UARG would both refuse to see that the teachings of parts -13-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 15 of 22 II(A) are to carry over to II(B) but also to declare to be mere dicta those parts of II(B) that represent the Supreme Court s conclusions about PSD GHG BACT that were based on the holistic, substantive, context-reflecting interpretive standards set out in the earlier parts of the opinion. See EPA Motion at 16-17. The challenges to the PSD GHG BACT status quo identified by the Court in II(B) are not mere dicta; they are essential components of its holding. But, even if the Court s discussion of the deficiencies of the GHG BACT program could be deemed dicta, it certainly qualifies as the sort of [c]arefully considered language of the Supreme Court, even if technically dictum, [that] generally must be treated as authoritative. Oakar, 111 F.3d at 153. Whatever the language is called, it quite clearly reflects an understanding and expectation of its authors that EPA will address it. The Court s findings in part II(B) were based upon the Court s application of the interpretive approach required in CAA GHG cases henceforth, beginning with these motions to govern. Moreover, An agency decision cannot be sustained... where it is based not on the agency s own judgment, but on an erroneous view of the law. Prill v. NLRB, 755 F.2d 941, 947 (D.C. Cir. 1985). Further, per Prill: [A]n agency regulation must be declared invalid, even though the agency might be able to adopt the regulation in the exercise of its discretion, if it was not based on the [agency s] own judgment but rather on the unjustified assumption that it was Congress judgment that such [a regulation is] desirable. FCC v. RCA Communications, Inc. 346 U.S. 86, 96 (1953) (parallel citation omitted). If a regulation is based on an incorrect -14-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 16 of 22 view of applicable law, the regulation cannot stand as promulgated, unless the mistake of the administrative body is one that clearly had no bearing on the procedure used or the substance of the decision reached. Massachusetts Trustees v. United States, 377 U.S. 235, 248 (parallel citations omitted) (1964). Prill 755 F.2d at 948 [quoting Planned Parenthood Federation of America, Inc. v. Heckler, 712 F.2d 650 (D.C. Cir. 1983) (separate opinion of Judge Bork)]. The Supreme Court s opinion in UARG must be read as allowing the agency to treat GHGs as subject to regulation but not permitting to stand the agency s profoundly mistaken understanding of the nature and requirements of that choice or the expansive, intrusive and incoherent scheme of regulation that emerged from the agency s misunderstanding. EPA may treat GHGs as subject to regulation for purposes of a BACT requirement for anyway sources, but only if it expressly chooses to do so, and only if it is able to meet the statutory requirements identified in UARG, applying the interpretive approach required by UARG. That interpretive approach will not interfere unduly with efforts to regulate GHGs under the Act, properly understood. In fact, it will provide EPA with a framework to exercise its discretion reasonably and responsibly. For instance, before UARG, EPA had argued in another case that it had authority to defer regulation of so-called biogenic carbon dioxide until it studied the matter because these sources have unique characteristics that were unquestionably unforeseen when Congress enacted [the] PSD program. Center for Biological -15-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 17 of 22 Diversity v. EPA, 722 F3d. 401, 409 (D.C. Cir. 2013). There the Court before UARG sided on various grounds with petitioners who argued that deferring inclusion of these emissions violates the Clean Air Act s plain language Id. at 408. Judge Kavanaugh, in an expressly reluctant concurrence, said that in light of this Court s precedent in Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir 2012) there is zero basis in the text of the Clean Air Act for EPA to distinguish biogenic carbon dioxide from other sources of carbon dioxide that EPA is required (under our precedent) to regulate Id. at 412 (Kavanaugh, J., concurring). III. EPA S PROPOSED COURSE WILL CAUSE UNCERTAINTY, CONFLICT AND UNNECESSARY LITIGATION. EPA s Motion states that the plan it proposes, in addition to faithfully reflect[ing] the Supreme Court s guidance on the discrete issues it decided, will provide a clear, functional, and common sense regulatory framework for EPA, states and other stakeholders to implement. EPA Motion at 1-2. Further, EPA says that failure to continue to require PSD permits for GHG emissions from anyway sources would create unwarranted uncertainty as to PSD permitting requirements for GHGs. Id. at 8. To the contrary it is the inaction in absence of vacatur proposed by EPA that will result in uncertainty, dysfunction, confusion, conflicting guidance and virtually boundless litigation. -16-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 18 of 22 This Court s decision on these opposing motions will produce one of two outcomes. If the Court vacates in compliance with UARG, EPA will understand that the initiative lies with it to decide whether or not to attempt to revive GHG BACT through an appropriately structured rulemaking. EPA will further understand that it is up to it, in the first instance, to decide how to define such regulation, constrain it, and answer the Supreme Court s concerns with it. Alternatively, under EPA s proposal, no vacatur of the present GHG BACT regulations would occur, and a hodge-podge of legitimate regulations, invalidated regulations, Tailoring Rule declarations of inoperability, and an almost entirely invalidated set of EPA guidance documents would be left in place to collectively define the agency s program. Permitting officials, applicants, and citizen groups would face a scheme of unprecedented conflict and uncertainty. If these permitting participants were writing on a blank slate, the situation would be chaotic virtually unlimited issues, without guidance. The actual situation is worse. Rather than a blank slate, there is a slate scribbled with mandates, guidance, indications and rationales most of which have apparently been invalidated by the Supreme Court. Each permitting body would have to determine for itself the implications of UARG and to determine for itself how much of the PSD and Title V Permitting Guidance for Greenhouse Gases (EIM Motion, Ex. A) of which the Memorandum says not a word is still operative. Each -17-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 19 of 22 would have to explore whether it can devise a scheme that answers Justice Alito s concerns validated by the Court and all of the others singled out by it. What is PSD GHG BACT post-uarg and how are the PSD statutory components to govern it? Is the country to litigate that, one permit, device, process or operational practice at a time under an announced regulatory scheme that has destroyed the coherence of the statutory factors that render it sensible? See EIM Motion at 15-18. Even with respect to conventional pollutants, EPA in the Tailoring Rule called the BACT determination a complicated, resource-intensive, time consuming and sometimes contentious process. 74 Fed. Reg. 55,321-22. The Court can get a good picture of what GHG BACT litigation in the absence of vacatur would look like from the summaries of scores of pre-ghg Environmental Appeals Board cases in the Permitting Guidance, many of them in footnotes. For instance, footnote 49 (id. at 20 n. 49) describes a case remanding BACT limitation where permit issuer failed to provide adequate explanation for why limits deviated from those of other facilities, and footnote 84 (id. at 30 n. 84) describes a facility s failure to sufficiently consider the possibility of applying an alternative process. As Justice Alito s opinion indicates, a PSD BACT determination is a top down multi-stage process that begins with step one under which [t]he applicant must identify all available control options that are potentially applicable by consulting EPA s BACT clearinghouse along with other -18-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 20 of 22 reliable sources. Id. at 2457 n. 1. See Craig Oren, Prevention of Significant Deterioration: Control Compelling Versus Site-Shifting, 74 IOWA L.REV. 1, 7 (1988) ( EPA has recently attempted to ensure tight control determinations by advising that BACT should be set at the most stringent level achieved by a similar source, unless the applicant can show that level to be unachievable. This topdown approach replaces the previous procedure of allowing the applicant to formulate the BACT alternatives and placing on the permitting authority the burden of showing more stringent options. ) Options for achieving greater energy efficiency number in the hundreds or more. EIM Motion at 10. A small-scale precursor of the litigation mess involved in suing over virtually all aspects of industrial operations under the guise of GHG/energy-consumption BACT can also be found in the history of litigation over PSD s routine maintenance exception. 1 A facility could decide that, rather than attempt to comply with a potentially invalid scheme of industrial energy-efficiency regulation, and rather than not building or expanding capacity in the United States until a GHG BACT regime is established one permit at a time, it will, instead, defy and litigate the biggest post- UARG questions. What kind of record would be presented for the question of 1 See Graham Zorn, Note, Prevention of Significant Deterioration and Its Routine Maintenance Exception: The Definition of Routine, Past, Present and Future, 33 VT. L. REV. 783 (2009) [ Born of a lawsuit, PSD was destined for frequent and contentious litigation from its inception. Id. at 785. PSD and the routine maintenance exception have been in a constant state of disarray since their inception. As evidenced by long periods of relative PSD quiet followed by spates of litigation and administrative rulemakings, the program does not lend itself well to compliance or enforcement. As result, PSD struggles to carry out the dual goals of the CAA: to protect air quality while protecting productive capacity. Id. at 803 (citation omitted)]. -19-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 21 of 22 whether PSD BACT may or should include energy efficiency, for instance? It would be inadequate. This is quintessentially a rulemaking matter that should address: whether energy-intensive trade-exposed industries as a class can meet reasonable goals without regulation; whether other pathways of regulation under the Act are preferable; or, if energy efficiency is to be regulated under PSD how can it stay within legal bounds and how can it avoid systematic, not just transactional or case-by-case, emissions leakage. See (re the latter point) Comments of the Energy Intensive Manufacturers Working Group on Greenhouse Gas Regulation, EPA-HQ-OAR-2009-0517 (Dec. 26, 2009) (EIM Motion, Ex. D) at 40-41. These issues must be decided by the agency on a rulemaking record, and an EPA decision, whatever it is, must be reviewed on such a record as well. CONCLUSION For the foregoing reasons, those presented in petitioners motions to govern, and the Joint Response of State, Industry, and Public Interest Parties, this Court should enter an order vacating the challenged rulemakings and making explicit that as a result of that order no PSD GHG BACT requirement exists for anyway sources unless and until EPA properly conducts a rulemaking implementing it. /s/ John J. McMackin, Jr. November 21, 2014 Williams & Jensen, PLLC 701 8 th St., NW, Suite 500 Washington, DC 20001 (202) 659-8201 -20-

USCA Case #10-1073 Document #1523807 Filed: 11/21/2014 Page 22 of 22 CERTIFICATE OF SERVICE I hereby certify that on this 21 st day of November, 2014, I caused the foregoing Response to be filed with the Clerk of the Court for the United States Court of Appeals for the District of Columbia Circuit using the CM/ECF system. Service was accomplished on all parties via the Court s CM/ECF system. /s/ John J. McMackin, Jr. -21-