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STATE OF NEW YORK
                                                OFFICE OF THE ATTORNEY GENERAL


  ANDREW M. CUOMO                                                                                    DIVISION OF PUBLIC ADVOCACY
ATTORNEY GENERAL                                                                              ENVIRONMENTAL PROTECTION BUREAU



                                                    MEMORANDUM


      TO: Assistant Attorney General
      FROM: Adam Sherwin
      DATE: July 30, 2009
      RE: EPA Proposed Rule on National Emission Standards for Hazardous Air Pollutants from the
      Portland Cement Manufacturing Industry

      Question Presented: Whether EPA is justified in not subcategorizing mercury emissions
      standards for the Portland Cement manufacturing industry.


      Short Answer: Yes. The statutory language of Section 112 of the Clean Air Act, which
      prohibits the consideration of costs in determining minimum emissions standards for hazardous
      air pollutants and gives EPA broad discretion to subcategorize, supports EPA’s proposed rule.
      The Clean Air Act’s legislative history also supports this decision.


      Facts: EPA is proposing a rule to regulate the mercury emissions of cement kilns from the
      Portland Cement manufacturing industry. National Emission Standards for Hazardous Air
      Pollutants From the Portland Cement Manufacturing Industry, 74 Fed. Reg. 21,136 (May 6,
      2009) (to be codified at 40 C.F.R. pt. 60, 63). Portland cement, a commonly used type of
      cement, is created by grinding and heating raw materials, such as limestone, clay, sand, and iron
      ore, in a rotary kiln. This process results in the emission of pollutants. One of these pollutants is


         The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
mercury, which is considered a hazardous air pollutant (“HAP”) under the Clean Air Act.
Section 112(d) of the Clean Air Act requires EPA to set emissions standards for sources of HAP.
42 U.S.C § 7412 (2009). This proposed rule sets emissions standards for the kilns that produce
Portland cement.
       Under the Clean Air Act, EPA has the option of subcategorizing emissions standards. Id.
§ 7412(d)(1). Rather than have a single emissions standard for a HAP source, subcategorization
allows EPA to create subcategories that distinguish among “classes, types, and sizes of sources.”
Id. The purpose of subcategorization is to allow EPA the flexibility to set different emissions
standards for different classes, types, and sizes of HAP sources. See S. REP. NO. 101-228, at 170
(1989) (“Sources for which the [emission] standard is not feasible would be organized in a
separate group and assigned an alternative emission limitation to be determined using the same
considerations.”). This prevents EPA from having to set a “one size fits all” standard, and allows
EPA to distinguish emissions standards based on differences in the sources. Id.
       In this proposed rule, EPA declined to adopt any subcategories for mercury emissions.
National Emission Standards for Hazardous Air Pollutants From the Portland Cement
Manufacturing Industry, 74 Fed. Reg. at 21,145. The subcategories considered by EPA were:
type of kiln, presence of an inline raw mill, practice of wasting cement kiln dust, mercury
concentration of limestone in the kiln’s proprietary quarry, geographic location, and total
mercury inputs. Id.
       EPA gave greatest consideration to a subcategory based on a facility’s proprietary
limestone quarry. Id. All cement plants have quarries located near their plants that supply them
with limestone, one of the main ingredients used in producing Portland cement. Id. The amount
of mercury varies in the limestone from these quarries, which affects the level of mercury
emissions produced by the kilns. Id. A subcategory based on a facility’s proprietary limestone
quarry would distinguish emissions levels based on the different levels of mercury in the
quarries. Id. This kind of subcategory would take into account the fact that some quarries have
more mercury in their limestone than others. EPA declined to adopt this subcategory because its
data showed that mercury emissions did not greatly vary among the quarries. Id. at 21,145–48.
Additionally, EPA also found that limestone mercury is not the dominant source of mercury in
many of the kiln’s emissions. Id. at 21,146–48.
       In the proposed rule, EPA acknowledged that a single standard without subcategories
could result in the closing of high mercury emitting kilns. Id. at 21,148. Given this possibility,
and the other potential impacts that this decision will have on the Portland Cement
manufacturing industry, EPA is soliciting comments of whether or not to subcategorize the
emissions standards. Id. at 21,149.


Analysis:
                     A. Statutory Language of Section 112 of the Clean Air Act


Process of Setting Emissions Standards under Section 112


        Section 112’s process of setting emissions standards supports EPA’s decision to not
subcategorize. EPA uses a two-step process for establishing emissions standards. The Clean Air
Act first requires EPA to determine the minimum emissions standards for HAP. 42 U.S.C. §
7412(d)(3). These minimum standards are established by the maximum achievable control
technology (“MACT”), which is determined by application of the best performance of similar
sources. Id. For new sources, the maximum degree of reduction in emissions that is deemed
achievable cannot be “less stringent than the emission control that is achieved in practice by the
best controlled similar source, as determined by the Administrator.” For existing sources, the
emissions shall not be less stringent than average emissions limitation achieved by best
performing 12% of existing sources (for which the administrator has emissions information) or
the best performing 5 sources for source categories with less than 30 sources. Id. This first step
of the process establishes the minimum emissions standards that EPA may set for HAP sources,
i.e., the “floor.”
        After determining the minimum standards, EPA then has the option of setting “beyond-
the-floor” standards.” Id. § 7412(d)(2). These are emissions standards that exceed the minimum
standards determined by the MACT. Section 112 requires EPA to determine these standards
based on what is “achievable” for new or existing sources. Id. This allows EPA to set higher
emissions standards for HAP sources than the minimum standards if EPA determines that it is
possible for these sources to meet higher emissions standards. In doing so, EPA is required to
consider the cost of achieving the emission reduction and any non-air quality health and
environmental impacts and energy requirements. Id. In this proposed rule, EPA did not propose
any “beyond-the-floor” standards for mercury. National Emission Standards for Hazardous Air
Pollutants From the Portland Cement Manufacturing Industry, 74 Fed. Reg. at 21,145.
       The consideration of costs is an important difference between these two steps of the
process. While Section 112 expressly requires EPA to consider costs in determining “beyond-
the-floor” standards, the statute does not allow EPA to consider costs in determining the
minimum standards. See Sierra Club v. EPA (Brick MACT), 479 F.3d 875 (D.C. Cir. 2007)
(“[S]ection 7412(d)(3) requires floors based on the emission level actually achieved by the best
performers (those with the lowest emission levels), not the emission level achievable by all
sources . . . .”); Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 861 (D.C. Cir. 2001)
(“EPA may not deviate from section 7412(d)(3)'s requirement that floors reflect what the best
performers actually achieve by claiming that floors must be achievable by all sources using
MACT technology . . . .”).
Process for Setting Emissions Standards for HAP Sources under Section 112



                                                     Step 1
                                  “Minimum Standards” for HAP emissions
                                            (a.k.a. “the floor”)
                                   Determined by Maximum Achievable
                                       Control Technology (MACT)




                                                                                Existing Sources
                New Sources                                         Emissions shall not be less stringent than
  Emissions cannot be “less stringent than                          average emissions limitation achieved by
  the emission control that is achieved in                          best performing 12% of existing sources
   practice by the best controlled similar                         (for which the administrator has emissions
       source, as determined by the                                   information) or the best performing 5
              Administrator.”                                      sources for source categories with less than
                                                                                   30 sources.




                                                     Step 2
                                        “Beyond-the-Floor” Standards

                                   Determined by what EPA considers to be
                                               “achievable”

                                              EPA must consider:




                                                                      Any non-air quality health and
                                                                    environmental impacts and energy
     Cost of achieving the emission reduction
                                                                             requirements




The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
Subcategorization under Section 112


        EPA’s broad authority to use subcategorization in setting emissions standards supports
EPA’s decision to not subcategorize emissions standards for mercury. Section 112(d)(1)
provides:


        The Administrator shall promulgate regulations establishing emission
        standards for each category or subcategory of major sources and area sources
        of hazardous air pollutants listed for regulation pursuant to subsection (c) in
        accordance with the schedules provided in subsections (c) and (e). The
        Administrator may distinguish among classes, types, and sizes of sources
        within a category or subcategory in establishing such standards . . . .

42 U.S.C § 7412(d)(1). EPA has broad discretion in deciding whether to subcategorize HAP
emissions standards. The statute provides that EPA “may distinguish among classes, types, and
sizes of sources within a category or subcategory . . . .” Id. (emphasis added). While EPA is not
permitted to avoid the requirements of the Clean Air Act through subcategorization, Section 112
gives EPA broad discretion in making this decision. NRDC v. EPA, 489 F.3d 1364, 1372 (D.C.
Cir. 2007).
        The text of Section 112 supports EPA’s decision not to subcategorize mercury emissions
standards. Because such a decision is within the discretion of the agency, EPA is permitted to
set emissions standards for the cement kilns without differentiating among classes, types, or
sizes. Nothing in Section 112 requires the creation of subcategories for these standards.
        Section 112’s requirement that costs not be considered in determining the minimum
standards for HAP emissions also supports EPA’s proposed rule. EPA may only set these
minimum standards based on MACT. 42 U.S.C § 7412(d)(3) (2009). If EPA were to create
subcategories for mercury emissions over concern that some cement kilns would be put out of
business, this would be a consideration of costs that the courts have held is impermissible.
Although EPA would need to consider this if it were proposing “beyond-the-floor” standards,
here EPA is only proposing minimum standards for mercury emissions. Because EPA may only
base the minimum standards on MACT, it is reasonable for EPA to not subcategorize the


  The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
mercury emissions standards for the Portland Cement manufacturing industry.
        A concurring opinion in a recent case over emissions standards for cement kilns suggests
a possible argument that opponents of this proposed rule could make against EPA’s decision to
not subcategorize. In Brick MACT, Judge Williams noted that in certain cases, it may be
prohibitively costly for particular plants to meet the minimum emissions standards under Section
112. Sierra Club v. EPA (Brick MACT), 479 F.3d 875, 884 (D.C. Cir. 2007) (Williams, J.,
concurring). In such a case, the “beyond-the-floor” standards, which allow for the consideration
of costs, would be less stringent than the minimum standards. Id. at 884–85. Judge Williams
argued that one purpose of subcategorization was to prevent such a scenario, and keep “the
relation between ‘achieved’ and ‘achievable’ in accord with common sense and the reasonable
meaning of the statute.” Id. at 885.
        However, as Judge Williams acknowledges in his opinion, the text of Section 112
supports minimum emissions standards that might force some plants out of business. Id. at 884–
85. Although Judge Williams may be correct that such an interpretation goes against the intent
of the drafters, the statutory language of Section 112 is unambiguously clear. Even when such a
conflict between the provisions of Section 112 occurs, the decision to subcategorize minimum
standards is entirely within the discretion of EPA.


                                B. Legislative History of the Clean Air Act


        The Clean Air Act’s legislative history also supports EPA’s position not to subcategorize
mercury emissions standards for the Portland Cement manufacturing industry. The Clean Air
Act Amendments of 1990 made significant revisions to the act. Section 112 was one part of the
act that underwent significant revision as a result of the amendments. Prior to 1990, Congress
used a health risk standard in regulating HAP, and directed EPA to set emission standards at a
level which “provides an ample margin of safety to protect public health.” S. REP. NO. 101-228,
at 128 (1989). Congress determined this standard worked poorly, with EPA only using it to
regulate a few sources of HAP. Id. It noted that “EPA has not been willing to write standards so
stringent because they would shutdown major segments of American industry.” Id. Congress


  The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
replaced the health risk standard with a technological approach which it believed would allow
EPA to adequately regulate toxics. Id. This approach, which is also used in other environmental
statutes, has been referred to as a “follow-the-leader” principle because it requires emissions
standards to be based on the performance of the best performing sources, regardless of cost.
David M. Driesen, Distributing the Costs of Environmental, Health, and Safety Protection: The
Feasibility Principle, Cost-Benefit Analysis, and Regulatory Reform, 32 B.C. ENVTL. AFF. L. REV.
1, 44–45 (2005).
        Most of the legislative history about Section 112 concerns the process of setting “beyond-
the-floor” standards. Here, Congress noted that “MACT is not intended . . . to drive sources to
the brink of shutdown.” H.R. REP. No. 101–490, pt. 1, at 328 (1990). In a scenario where the
emissions standards would drive some sources out of business, Congress intended EPA to have
the option of either lowering the emissions standards or subdividing the source category. S. REP.
NO. 101-228, at 170 (1989). This consideration of costs, discussed for the “beyond-the-floor”
standards, shows that Congress meant for EPA to only consider costs in this step of the process.
In determining the minimum emissions standards, Congress intended EPA to be limited to
technological considerations. See H.R. REP. No. 101–490, pt. 1, at 328 (1990) (“Consistent with
the MACT requirements in the first two sentences of paragraph (3), EPA is to take into account
energy, environmental impacts, economic impacts, and other costs . . . .“) (emphasis added).
        Here, a decision to subcategorize the emissions standards, over concern that some cement
plants would go out of business, would be a consideration of costs that Congress did not intend
the Clean Air Act to allow. Congress understood that Section 119’s minimum standards could
result in the closing of plants. See CON. REC. S667 (1990) (“EPA analysis assumes that plant
closure and impacts on employment will result from the Senate bill.”). While Congress intended
for costs to be an important consideration in setting “beyond-the-floor” standards, it did not
intend costs to be considered in setting the minimum standards.
        Further, Congress intended there to be limits in the creation of categories for HAP:


        Nothing in this language authorizes the establishment of a category based
        wholly on economic grounds nor is there any implication that individual



  The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
facilities may be granted categorical waivers (that is—separate categories will
        not be established for one or a few sources of a similar size, type or character
        based on assertions of extraordinary economic effects.

S. REP. NO. 101-228, at 166–67 (1989). While this language is in direct reference to the creation
of source categories, and not subcategories, it does show that Congress intended there to be
limits on EPA’s power to create categories under Section 112. While EPA has broad discretion
in creating categories, it is not permissible for categories to be based solely on economic
concerns. Here, the creation of subcategories for the sole purpose of preventing some cement
kilns from going out of business would conflict with Congress’s intended use of categories in
setting emissions standards.
        Consequently, the legislative history of the Clean Air Act support EPA’s decision to not
subcategorize mercury emissions standards for the Portland Cement manufacturing industry.


Conclusion: EPA is justified in not subcategorizing mercury emissions standards for the
Portland Cement manufacturing industry. EPA is not proposing any “beyond-the-floor”
emissions standards, but is instead proposing a regulation based on the minimum emissions
standards of Section 112. Because EPA is not permitted to consider costs in determining these
minimum standards, and has broad discretion in deciding to subcategorize, its decision is
permissible. The Clean Air Act’s legislative history also supports this regulation, which shows
Congress intended for these minimum standards to be determined by a technological standard,
without consideration of costs.




  The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us

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Writing Sample - Cement Kilns Memo

  • 1. STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL ANDREW M. CUOMO DIVISION OF PUBLIC ADVOCACY ATTORNEY GENERAL ENVIRONMENTAL PROTECTION BUREAU MEMORANDUM TO: Assistant Attorney General FROM: Adam Sherwin DATE: July 30, 2009 RE: EPA Proposed Rule on National Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry Question Presented: Whether EPA is justified in not subcategorizing mercury emissions standards for the Portland Cement manufacturing industry. Short Answer: Yes. The statutory language of Section 112 of the Clean Air Act, which prohibits the consideration of costs in determining minimum emissions standards for hazardous air pollutants and gives EPA broad discretion to subcategorize, supports EPA’s proposed rule. The Clean Air Act’s legislative history also supports this decision. Facts: EPA is proposing a rule to regulate the mercury emissions of cement kilns from the Portland Cement manufacturing industry. National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Industry, 74 Fed. Reg. 21,136 (May 6, 2009) (to be codified at 40 C.F.R. pt. 60, 63). Portland cement, a commonly used type of cement, is created by grinding and heating raw materials, such as limestone, clay, sand, and iron ore, in a rotary kiln. This process results in the emission of pollutants. One of these pollutants is The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
  • 2. mercury, which is considered a hazardous air pollutant (“HAP”) under the Clean Air Act. Section 112(d) of the Clean Air Act requires EPA to set emissions standards for sources of HAP. 42 U.S.C § 7412 (2009). This proposed rule sets emissions standards for the kilns that produce Portland cement. Under the Clean Air Act, EPA has the option of subcategorizing emissions standards. Id. § 7412(d)(1). Rather than have a single emissions standard for a HAP source, subcategorization allows EPA to create subcategories that distinguish among “classes, types, and sizes of sources.” Id. The purpose of subcategorization is to allow EPA the flexibility to set different emissions standards for different classes, types, and sizes of HAP sources. See S. REP. NO. 101-228, at 170 (1989) (“Sources for which the [emission] standard is not feasible would be organized in a separate group and assigned an alternative emission limitation to be determined using the same considerations.”). This prevents EPA from having to set a “one size fits all” standard, and allows EPA to distinguish emissions standards based on differences in the sources. Id. In this proposed rule, EPA declined to adopt any subcategories for mercury emissions. National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Industry, 74 Fed. Reg. at 21,145. The subcategories considered by EPA were: type of kiln, presence of an inline raw mill, practice of wasting cement kiln dust, mercury concentration of limestone in the kiln’s proprietary quarry, geographic location, and total mercury inputs. Id. EPA gave greatest consideration to a subcategory based on a facility’s proprietary limestone quarry. Id. All cement plants have quarries located near their plants that supply them with limestone, one of the main ingredients used in producing Portland cement. Id. The amount of mercury varies in the limestone from these quarries, which affects the level of mercury emissions produced by the kilns. Id. A subcategory based on a facility’s proprietary limestone quarry would distinguish emissions levels based on the different levels of mercury in the quarries. Id. This kind of subcategory would take into account the fact that some quarries have more mercury in their limestone than others. EPA declined to adopt this subcategory because its data showed that mercury emissions did not greatly vary among the quarries. Id. at 21,145–48. Additionally, EPA also found that limestone mercury is not the dominant source of mercury in many of the kiln’s emissions. Id. at 21,146–48. In the proposed rule, EPA acknowledged that a single standard without subcategories
  • 3. could result in the closing of high mercury emitting kilns. Id. at 21,148. Given this possibility, and the other potential impacts that this decision will have on the Portland Cement manufacturing industry, EPA is soliciting comments of whether or not to subcategorize the emissions standards. Id. at 21,149. Analysis: A. Statutory Language of Section 112 of the Clean Air Act Process of Setting Emissions Standards under Section 112 Section 112’s process of setting emissions standards supports EPA’s decision to not subcategorize. EPA uses a two-step process for establishing emissions standards. The Clean Air Act first requires EPA to determine the minimum emissions standards for HAP. 42 U.S.C. § 7412(d)(3). These minimum standards are established by the maximum achievable control technology (“MACT”), which is determined by application of the best performance of similar sources. Id. For new sources, the maximum degree of reduction in emissions that is deemed achievable cannot be “less stringent than the emission control that is achieved in practice by the best controlled similar source, as determined by the Administrator.” For existing sources, the emissions shall not be less stringent than average emissions limitation achieved by best performing 12% of existing sources (for which the administrator has emissions information) or the best performing 5 sources for source categories with less than 30 sources. Id. This first step of the process establishes the minimum emissions standards that EPA may set for HAP sources, i.e., the “floor.” After determining the minimum standards, EPA then has the option of setting “beyond- the-floor” standards.” Id. § 7412(d)(2). These are emissions standards that exceed the minimum standards determined by the MACT. Section 112 requires EPA to determine these standards based on what is “achievable” for new or existing sources. Id. This allows EPA to set higher emissions standards for HAP sources than the minimum standards if EPA determines that it is possible for these sources to meet higher emissions standards. In doing so, EPA is required to consider the cost of achieving the emission reduction and any non-air quality health and environmental impacts and energy requirements. Id. In this proposed rule, EPA did not propose
  • 4. any “beyond-the-floor” standards for mercury. National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Industry, 74 Fed. Reg. at 21,145. The consideration of costs is an important difference between these two steps of the process. While Section 112 expressly requires EPA to consider costs in determining “beyond- the-floor” standards, the statute does not allow EPA to consider costs in determining the minimum standards. See Sierra Club v. EPA (Brick MACT), 479 F.3d 875 (D.C. Cir. 2007) (“[S]ection 7412(d)(3) requires floors based on the emission level actually achieved by the best performers (those with the lowest emission levels), not the emission level achievable by all sources . . . .”); Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 861 (D.C. Cir. 2001) (“EPA may not deviate from section 7412(d)(3)'s requirement that floors reflect what the best performers actually achieve by claiming that floors must be achievable by all sources using MACT technology . . . .”).
  • 5. Process for Setting Emissions Standards for HAP Sources under Section 112 Step 1 “Minimum Standards” for HAP emissions (a.k.a. “the floor”) Determined by Maximum Achievable Control Technology (MACT) Existing Sources New Sources Emissions shall not be less stringent than Emissions cannot be “less stringent than average emissions limitation achieved by the emission control that is achieved in best performing 12% of existing sources practice by the best controlled similar (for which the administrator has emissions source, as determined by the information) or the best performing 5 Administrator.” sources for source categories with less than 30 sources. Step 2 “Beyond-the-Floor” Standards Determined by what EPA considers to be “achievable” EPA must consider: Any non-air quality health and environmental impacts and energy Cost of achieving the emission reduction requirements The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
  • 6. Subcategorization under Section 112 EPA’s broad authority to use subcategorization in setting emissions standards supports EPA’s decision to not subcategorize emissions standards for mercury. Section 112(d)(1) provides: The Administrator shall promulgate regulations establishing emission standards for each category or subcategory of major sources and area sources of hazardous air pollutants listed for regulation pursuant to subsection (c) in accordance with the schedules provided in subsections (c) and (e). The Administrator may distinguish among classes, types, and sizes of sources within a category or subcategory in establishing such standards . . . . 42 U.S.C § 7412(d)(1). EPA has broad discretion in deciding whether to subcategorize HAP emissions standards. The statute provides that EPA “may distinguish among classes, types, and sizes of sources within a category or subcategory . . . .” Id. (emphasis added). While EPA is not permitted to avoid the requirements of the Clean Air Act through subcategorization, Section 112 gives EPA broad discretion in making this decision. NRDC v. EPA, 489 F.3d 1364, 1372 (D.C. Cir. 2007). The text of Section 112 supports EPA’s decision not to subcategorize mercury emissions standards. Because such a decision is within the discretion of the agency, EPA is permitted to set emissions standards for the cement kilns without differentiating among classes, types, or sizes. Nothing in Section 112 requires the creation of subcategories for these standards. Section 112’s requirement that costs not be considered in determining the minimum standards for HAP emissions also supports EPA’s proposed rule. EPA may only set these minimum standards based on MACT. 42 U.S.C § 7412(d)(3) (2009). If EPA were to create subcategories for mercury emissions over concern that some cement kilns would be put out of business, this would be a consideration of costs that the courts have held is impermissible. Although EPA would need to consider this if it were proposing “beyond-the-floor” standards, here EPA is only proposing minimum standards for mercury emissions. Because EPA may only base the minimum standards on MACT, it is reasonable for EPA to not subcategorize the The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
  • 7. mercury emissions standards for the Portland Cement manufacturing industry. A concurring opinion in a recent case over emissions standards for cement kilns suggests a possible argument that opponents of this proposed rule could make against EPA’s decision to not subcategorize. In Brick MACT, Judge Williams noted that in certain cases, it may be prohibitively costly for particular plants to meet the minimum emissions standards under Section 112. Sierra Club v. EPA (Brick MACT), 479 F.3d 875, 884 (D.C. Cir. 2007) (Williams, J., concurring). In such a case, the “beyond-the-floor” standards, which allow for the consideration of costs, would be less stringent than the minimum standards. Id. at 884–85. Judge Williams argued that one purpose of subcategorization was to prevent such a scenario, and keep “the relation between ‘achieved’ and ‘achievable’ in accord with common sense and the reasonable meaning of the statute.” Id. at 885. However, as Judge Williams acknowledges in his opinion, the text of Section 112 supports minimum emissions standards that might force some plants out of business. Id. at 884– 85. Although Judge Williams may be correct that such an interpretation goes against the intent of the drafters, the statutory language of Section 112 is unambiguously clear. Even when such a conflict between the provisions of Section 112 occurs, the decision to subcategorize minimum standards is entirely within the discretion of EPA. B. Legislative History of the Clean Air Act The Clean Air Act’s legislative history also supports EPA’s position not to subcategorize mercury emissions standards for the Portland Cement manufacturing industry. The Clean Air Act Amendments of 1990 made significant revisions to the act. Section 112 was one part of the act that underwent significant revision as a result of the amendments. Prior to 1990, Congress used a health risk standard in regulating HAP, and directed EPA to set emission standards at a level which “provides an ample margin of safety to protect public health.” S. REP. NO. 101-228, at 128 (1989). Congress determined this standard worked poorly, with EPA only using it to regulate a few sources of HAP. Id. It noted that “EPA has not been willing to write standards so stringent because they would shutdown major segments of American industry.” Id. Congress The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
  • 8. replaced the health risk standard with a technological approach which it believed would allow EPA to adequately regulate toxics. Id. This approach, which is also used in other environmental statutes, has been referred to as a “follow-the-leader” principle because it requires emissions standards to be based on the performance of the best performing sources, regardless of cost. David M. Driesen, Distributing the Costs of Environmental, Health, and Safety Protection: The Feasibility Principle, Cost-Benefit Analysis, and Regulatory Reform, 32 B.C. ENVTL. AFF. L. REV. 1, 44–45 (2005). Most of the legislative history about Section 112 concerns the process of setting “beyond- the-floor” standards. Here, Congress noted that “MACT is not intended . . . to drive sources to the brink of shutdown.” H.R. REP. No. 101–490, pt. 1, at 328 (1990). In a scenario where the emissions standards would drive some sources out of business, Congress intended EPA to have the option of either lowering the emissions standards or subdividing the source category. S. REP. NO. 101-228, at 170 (1989). This consideration of costs, discussed for the “beyond-the-floor” standards, shows that Congress meant for EPA to only consider costs in this step of the process. In determining the minimum emissions standards, Congress intended EPA to be limited to technological considerations. See H.R. REP. No. 101–490, pt. 1, at 328 (1990) (“Consistent with the MACT requirements in the first two sentences of paragraph (3), EPA is to take into account energy, environmental impacts, economic impacts, and other costs . . . .“) (emphasis added). Here, a decision to subcategorize the emissions standards, over concern that some cement plants would go out of business, would be a consideration of costs that Congress did not intend the Clean Air Act to allow. Congress understood that Section 119’s minimum standards could result in the closing of plants. See CON. REC. S667 (1990) (“EPA analysis assumes that plant closure and impacts on employment will result from the Senate bill.”). While Congress intended for costs to be an important consideration in setting “beyond-the-floor” standards, it did not intend costs to be considered in setting the minimum standards. Further, Congress intended there to be limits in the creation of categories for HAP: Nothing in this language authorizes the establishment of a category based wholly on economic grounds nor is there any implication that individual The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
  • 9. facilities may be granted categorical waivers (that is—separate categories will not be established for one or a few sources of a similar size, type or character based on assertions of extraordinary economic effects. S. REP. NO. 101-228, at 166–67 (1989). While this language is in direct reference to the creation of source categories, and not subcategories, it does show that Congress intended there to be limits on EPA’s power to create categories under Section 112. While EPA has broad discretion in creating categories, it is not permissible for categories to be based solely on economic concerns. Here, the creation of subcategories for the sole purpose of preventing some cement kilns from going out of business would conflict with Congress’s intended use of categories in setting emissions standards. Consequently, the legislative history of the Clean Air Act support EPA’s decision to not subcategorize mercury emissions standards for the Portland Cement manufacturing industry. Conclusion: EPA is justified in not subcategorizing mercury emissions standards for the Portland Cement manufacturing industry. EPA is not proposing any “beyond-the-floor” emissions standards, but is instead proposing a regulation based on the minimum emissions standards of Section 112. Because EPA is not permitted to consider costs in determining these minimum standards, and has broad discretion in deciding to subcategorize, its decision is permissible. The Clean Air Act’s legislative history also supports this regulation, which shows Congress intended for these minimum standards to be determined by a technological standard, without consideration of costs. The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us
  • 10. The Capitol, Albany, NY 12224 • (518) 474-8096 • Fax (518) 473-2534 (Not for Service of Papers) • http://www.oag.state.ny.us