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Good morning.

[00:00:15] Speaker 08:
Seth Johnson for Health and Environmental Petitioners.

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We're challenging three ways EPA failed to protect public health and welfare in the 2015 Ozone Standards Rule.

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I'd first like to talk about the primary standard, the health standard, and how EPA illegally and arbitrarily set it to allow ozone levels that are harmful to human health.

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Then I plan to talk about how EPA set an illegally and arbitrarily weak secondary standard rather than protecting public welfare.

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And finally, I'll talk about EPA's creation of a grandfathering waiver that allows certain new sources of air pollution to violate the new standards.

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The health standard.

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A fundamental pillar of EPA's rationale for the health standard is that it's purportedly below the lowest level of ozone that EPA agrees causes adverse effects when people are exposed to it over eight hours.

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But to reach this conclusion, EPA arbitrarily got rid of KSAC's advice as well as evidence from controlled human experiments that showed that eight-hour levels of ozone cause adverse effects.

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Then, EPA unlawfully and arbitrarily wrote off the undisputed fact that its weak standard allows adverse health effects anyhow because of the combination of form and level that EPA selected.

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I'll start with how the standard allows adverse effects to occur under even EPA's own calculations.

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EPA found that an eight-hour level of 72 parts per billion of ozone causes healthy young adults to suffer adverse health effects.

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In fact, EPA agrees that the majority of healthy young adults exposed in the lab to 72 parts per billion actually experienced adverse health effects.

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But EPA defines the standard so that areas can satisfy it, yet repeatedly have ozone levels at or above the 72 part per billion level.

[00:02:06] Speaker 04:
Are you saying that the statute requires them to set the standards such that an area

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To be in compliance to area can never exceed that standard on any given day?

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What the act requires, and under this court's case law, is a standard that ensures the absence of adverse effects on sensitive subpopulations.

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And that's from this court's case law in coalition of battery recyclers from 2010, American Lung Association in 1998, and Lead Industries Association.

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EPA hasn't done that here.

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EPA has set a standard that it knows allows adverse health effects.

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It's set a standard that areas that comply with the standard have tens of days at or above the 72 part per billion level.

[00:03:00] Speaker 04:
Okay, well, what about my question?

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The standard can't allow for one day?

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Is that what you're saying?

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The standard has to ensure an absence of adverse effects on sensitive subpopulations.

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And so once EPA identifies a level.

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EPA has to set a number.

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So I'm asking you how they set that number.

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Do they set that number by saying there can't be one day?

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The problem here is the combination of form and level.

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They could set a level.

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They could set a form where the level they set could be exceeded sometimes, but it can't

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It can't exceed a level that causes adverse health effects.

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They could set the level lower and change the form.

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They have options.

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The problem here is that EPA set a standard that it knows allows multiple days with harmful levels of ozone, including levels above 80, 90, or 100 parts per billion, all of which are levels that EPA agrees cause a range of adverse health effects, including breathing problems so severe that they send people to the hospital.

[00:04:08] Speaker 08:
And EPA agrees with all of this.

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EPA acknowledges that 72 parts per billion ozone causes adverse health effects.

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EPA agrees that the standard allows these dangerous exposures.

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And EPA's own calculations show that hundreds of thousands of children will experience dangerous exposures in dangerous ways in any given year, with tens of thousands of them experiencing it multiple times in a year.

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EPA hasn't rationally concluded here that the standard prevents, that the standard meets its obligations of preventing adverse health effects.

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Mr. Johnson, on the secondary standard, could you explain a little bit more how the two different aspects of the standard interact?

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You argued that EPA impermissible use a three-year average.

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without lowering the average to account for some of the annual spikes.

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And you also argued that it should have used the W126 cumulative average instead of the exceedances during individual days standard that's part of the primary standard.

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How would,

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Do they both have to be dealt with together?

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If the EPA had used the cumulative one-year, or the one-year approach, could it have then used the same, not used the W126 standard?

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I don't think so.

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KSAC gave advice about both of those points, and it gave advice about those points separately, so I'll try to address them separately.

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I'll start with the cumulative form.

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KSAC advised and EPA agrees that the cumulative form is the appropriate metric.

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for the secondary standard.

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This is because ozone harms plants and people differently.

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It harms plants over the span of the growing season.

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It harms people, EPA says, over an eight-hour period.

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And CASAC advised that the strategies to meet an eight-hour standard aren't the same strategies that will lead to compliance with accumulative form.

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And so there's just a mismatch, and this is confirmed by the air quality data, which shows there's actually a mismatch.

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And it's, they're just different processes of harm.

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It's not that humans are also cumulatively harmed.

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I mean, I guess one way of looking at it is if humans are the more sensitive of the two, then isn't the standard that we apply the primary standard protective also of the harms to public welfare?

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Or is it different?

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People bounce back and trees, don't they cumulatively suffer?

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Trees take in the ozone all throughout.

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Trees are outside all day.

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Outdoors.

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And over the span of the growing season, they take in ozone.

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And that harms their growth over the span of a growing season.

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And I guess my question is, are humans not?

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I mean, if you are outdoors and you have some lung decrement, and then you go back in for a while, does that go away?

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Or is the next time you go outside, it's going to be getting worse and worse, just more intermittently?

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Do we know that from this record?

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I'm not sure I saw anything on that.

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The human health harm EPA focused on here was the eight-hour peaks, so that's what it focused on.

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But your argument about the trees, to me, seems a little contrary to your argument about how EPA shouldn't have looked at exposure assessment data

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because you're arguing that there should be a different standard for trees because trees are exposed more, but when EPA looked to see how people are actually exposed to the air and how they act and when they're outside, et cetera, you say that they can't look at that because they're just supposed to set a level that says that the air can't get above a certain amount of ozone.

[00:08:26] Speaker 04:
How do you square what I think is attention in your two positions?

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Well, I don't, we didn't rely on the same exposure assessment for welfare risks that, or for welfare that, sorry, let me start that again.

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When EPA concluded that eight hours of ozone harms human health, that 72 parts per billion of ozone over a 6.6 hour exposure harms human health, that was based on controlled human experiments.

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When it finds that ozone harms growing plants, that was also based on controlled experiments at facilities in various parts of the country.

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It was also based on various studies.

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So both of them are based, the question of how they're harmed

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That's both based on, both of those are based on actual data.

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But the EPA said, let's look at whether and how many people are actually outside and exposed to the air on a given day.

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I mean, it's one thing to say, okay, if we do a controlled experiment where we have people breathe air with a specific amount of ozone and we know what harm that will cause, that's fine, but EPA sought to try to figure out does that really happen and how much does it happen and to whom does it happen and under what circumstances does it happen.

[00:09:59] Speaker 04:
What's wrong with that?

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It's not how Congress directed the standards to be set.

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Congress provided guidance about how standards have to be set.

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It said that there has to be an absence of adverse effect demonstrated through ordinary statistical means.

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And the EPA didn't make that finding here.

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The EPA couldn't make that finding here.

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The EPA found that there's adverse effect in these lab studies.

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on the majority of healthy young adults.

[00:10:31] Speaker 04:
And the lab studies... But if there's a high level of ozone in the mechanical room of this courthouse, it's dangerous and it would have adverse effects.

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But it only affects people who are entering into that mechanical room.

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It's not having adverse effects to you and I and everybody else who never goes in there.

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I mean, isn't it relevant to, you can't just look at this, you know, that.

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that specification in the vacuum, right?

[00:11:07] Speaker 08:
The lab studies that EPA relied on here are simulating moderate exercise over the course of a day.

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They're simulating what an outdoor worker would do over the course of a day.

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They're simulating what an active child would do over the course of the day.

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They're simulating what a recreationalist would do over the course of the day.

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These are ordinary activities.

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And EPA is relying on a simulation that's on top of a simulation that's on top of assumptions in order to try to write that off.

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And that's not consistent with what the Clean Air Act says.

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It's not consistent with this court's holdings.

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It's not consistent with the guidance that

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Congress provided to EPA in the 1970 Senate report about how standards have to be set.

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That's where Congress said there's got to be an absence of adverse effect on the health of a statistically related sample of persons in sensitive groups from exposure to the ambient air.

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EPA here found that there are adverse health effects

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to a statistically related group of healthy people, from exposure to low levels of ozone pollution that occur in the ambient air when people are doing ordinary activities.

[00:12:23] Speaker 04:
And I'm sorry, I got you off track of Judge Pillard's questions about the secondary standard.

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Well, eventually I'm going to want to pivot back to the primary standard anyway, but thank you, thank you.

[00:12:35] Speaker 02:
So I was just asking about the relationship between the different features of the secondary standard and one having to do with the

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periodicity and the other having to do with the way it's measured.

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I'd given at least the start of an answer on the form and I think my conclusion to that was just EPA found

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EPA's own data shows there is a mismatch between the form.

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There are national parks that meet the primary standard while violating the weak cumulative form with the three-year averaging that EPA set itself.

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And these are parks like Grand Canyon National Park and Petrified Forest National Park.

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And EPA just said, well, we're just going to ignore those.

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And that's not reasoned judgment.

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That's just massaging a rationale to fit a desired conclusion.

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But let me just put it more simply.

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If we were to say the EPA didn't justify using the three-year average because that allows unacceptably high annual levels of exposure, would that be a holding that we could arrive at separate from

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the W126 argument.

[00:13:47] Speaker 08:
Yes.

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Yes.

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And so for the averaging, the point is that CASAC said all of these studies are about single-year exposures to ozone.

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That's all the science is based on.

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And single-year exposures to ozone harm growing trees.

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And so the standard should be set at one year.

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And CASAC acknowledged that if EPA wanted to set it at a three-year average, it would need to reduce the level.

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And it suggested ways to reduce the level.

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It said you could figure out the ratio between a single-year high and the three-year average and figure out that average ratio and adjust the three-year standard by that, or adjust the level by that.

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And EPA never responded to that.

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EPA just said, well, we'll just set it somewhat below what the single year average was.

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And that's not a reasoned response to KSAC's recommendation.

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So that's arbitrary.

[00:14:52] Speaker 04:
Didn't they do more than that?

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I mean, didn't they also

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look at the Cottonwood data and say that it should really be excluded and then based on that they made the adjustment?

[00:15:07] Speaker 08:
Well, that's separate from making the adjustment between a one year and a three year.

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That's how EPA massaged the number that it arrived at so that it could be equal to

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That's how they massaged the numbers so that it wouldn't be 15 part per million hours, but rather 17 part per million hours.

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And EPA's exclusion of the Cottonwood data was also irrational.

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It said, well, KSAC said, this data, you're putting too much emphasis on it.

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KSAC also relied on the table that included the Cottonwood data.

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It relied on that and discussed it at length.

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And EPA's response was just to say, well, we're just going to throw it out entirely.

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And that's just not consistent with KSAC's advice either.

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It's not plausible to

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It's not plausible to conclude that Case Act said, well, you're putting too much emphasis on it.

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We're going to rely on the data.

[00:16:02] Speaker 07:
I'm assuming that you want some time in rebuttal, although you didn't ask for any.

[00:16:07] Speaker 07:
But before you get to the end of your argument as for rebuttal time, would you deal with the grandfathering rule issue?

[00:16:14] Speaker 07:
I'm interested in

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I mean, doesn't EPA – hasn't EPA for a long time effective – set effective dates, and what's wrong with them doing so here?

[00:16:25] Speaker 08:
Well, EPA didn't set an effective date here.

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That's just not at issue whether EPA could change the effective date.

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If that were at issue, we would still say it's illegal and arbitrary because it would be adjusting the effective date of a health protective standard on non-health basis.

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Here, what EPA did is rely on what it calls implicit authority to create this waiver.

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It acknowledges that Section 7475A3 requires it to show – requires a

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somebody trying to build a highly polluting factory or power plant to show that its emissions won't cause or contribute to air pollution in excess of any national ambient air quality standard.

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EPA agrees that this encompasses the new standards.

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Any national ambient air quality standards covers the new standards.

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And this court's repeatedly held that any unambiguously means any under the Clean Air Act.

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It's true here, too.

[00:17:30] Speaker 02:
I'm curious about the practical effect.

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So there are going to be some facilities sources that would be get a final permitting decision before the new NACs come into effect.

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How are they then treated?

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Presumably they were functioning at a level that was acceptable previously, but if the

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if it changes the area's PSD, then basically the contribution that the one facility is making to the overall ozone levels would then have to be accounted for by the area as a whole.

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What I'm asking is it seems like there's some distributional burden effect here.

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And so every time you have a

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of source, a major source that's permitted and then there's some further regulatory stringency, is it the case that all the emitters within that area then have to, you know, special measures to reduce their ozone or would there be something focused on that one?

[00:18:47] Speaker 02:
Do you see my question?

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Because then if you're grandfathering, you're basically accepting that the area is accepting a burden that then is going to have to be borne by the entire area.

[00:18:59] Speaker 08:
I think I understand your question.

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So if I understand it, it's

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If a facility gets a permit before the new standard goes into effect, it's going to have this distributional effect, distributional issue.

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And if it doesn't, then it's going to have to make sure that it's not going to cause or contribute to air pollution.

[00:19:20] Speaker 02:
Right.

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Whereas Ms.

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Grandfather, effectively knowing, anticipating that it is sure to have some effect that would not be acceptable under the new standards or isn't

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isn't being required to establish its eligibility under the new standards, basically giving a pass to one source that is then going to have to cause everybody to tighten their belts.

[00:19:45] Speaker 08:
Yeah, that's the problem.

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Congress drew the line.

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It said once there's a new standard in effect, all sources of a certain size have to demonstrate they won't cause or contribute to violations of the standard.

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And that, in part, was motivated by concerns about this distributional effect.

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Congress recognized that it would be more efficient and fairer to prevent pollution before it occurs.

[00:20:18] Speaker 08:
I see I'm out of time.

[00:20:19] Speaker 08:
We'll give you back some time, Robert.

[00:20:21] Speaker 08:
We'll hear from Mr. Hemmington.

[00:20:23] Speaker 07:
Thank you.

[00:20:44] Speaker 09:
Good morning, Your Honor, and may it please the Court, Justin Heminger for Respondent EPA.

[00:20:50] Speaker 09:
My colleagues Simi Bhat and I are joined at council table by David Orlan and Melina Williams from EPA's Office of General Counsel.

[00:20:59] Speaker 09:
The revised ozone standards here represent notable forward progress in protecting the health of all Americans across this country.

[00:21:06] Speaker 09:
I'd like to remind the court of what EPA did in this rule.

[00:21:09] Speaker 09:
In the revised standards, EPA lowered the level from 75 parts per billion to 70 parts per billion.

[00:21:16] Speaker 09:
And it did so, the administrator did so, to protect the health and welfare

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of at-risk populations, particularly children and asthmatics, across this country.

[00:21:26] Speaker 07:
How do you respond to your friend's argument that the study showed that under these new standards there will be hundreds of thousands of people adversely affected?

[00:21:33] Speaker 09:
Well, Judge Griffith, I think that's what I would point to what Judge Wilkins was asking about.

[00:21:37] Speaker 09:
And the administrator's explanation for that is on JA 355 in the record.

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What the administrator did was look at what real world exposure to ozone does to humans.

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And certainly the clinical studies are one piece of evidence that the administrator was looking at.

[00:21:52] Speaker 09:
Those studies showed that some individuals at 72 parts per billion ozone exposure while exercising or engaged in moderate physical activity would experience an adverse health effect.

[00:22:04] Speaker 09:
some individuals.

[00:22:05] Speaker 09:
But the administrator then had to turn that into standards that protect the public health.

[00:22:10] Speaker 09:
Women says the public health is the health of the public.

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It's the health of people that are engaged in real lives and real activities on a day-to-day basis.

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And so what the administrator did was develop an exposure assessment that analyzed how real people spend their time outdoors

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what they do, what sort of activities they engage in, and when they would be likely to have an elevated breathing rate.

[00:22:33] Speaker 09:
And Judge Wilkins, I did want to make sure that it's not just that the air itself needs to be at a certain level, it's also that people have to be physically active.

[00:22:44] Speaker 09:
So to your analogy of the boiler room,

[00:22:47] Speaker 09:
even an unhealthy level or at these low levels of ozone, if you're sitting in the room, it actually has to be about 500 parts per billion before you would experience an adverse effect.

[00:22:59] Speaker 09:
If you're just sitting in the room.

[00:23:01] Speaker 09:
So you actually have to be physically engaged, physically active to experience an adverse or a health effect at these low levels of ozone.

[00:23:11] Speaker 09:
What the administrator was really doing here was not just protecting against 72 parts per billion,

[00:23:16] Speaker 09:
or setting a standard that's protective at 70 parts per billion.

[00:23:20] Speaker 09:
When the administrator set a level of 70 parts per billion, she found that that actually was very effective at protecting against a whole range of ozone exposures, from 80 parts per billion all the way down to 60 parts per billion.

[00:23:33] Speaker 09:
So she's really looking at this in a holistic way as a way to protect the public health, or as Whitman said, what is requisite, sufficient, but not more than necessary.

[00:23:44] Speaker 07:
I'll ask you a couple of questions about the secondary NAICS.

[00:23:48] Speaker 07:
Sure.

[00:23:49] Speaker 07:
There are two things that concern me.

[00:23:50] Speaker 07:
Maybe you can clarify them.

[00:23:51] Speaker 07:
One is on the tree growth loss.

[00:23:54] Speaker 07:
I mean, CASIC was very specific in saying that if you're going to go to the three-year average, you're going to have to drop the parts.

[00:24:05] Speaker 07:
You're going to have to lower the parts per million.

[00:24:07] Speaker 07:
And EPA didn't do that.

[00:24:09] Speaker 07:
went to the three-year average and didn't drop it.

[00:24:14] Speaker 07:
So what is the justification for going against the KSEC recommendation?

[00:24:18] Speaker 07:
Because whenever that happens, there's a special burden on the administrator to explain what she's doing.

[00:24:24] Speaker 09:
There is, Judge Griffith, but I would push back a little bit on whether EPA actually responded to that advice, so that the administrator clearly considered that advice, and this was in response

[00:24:37] Speaker 09:
to Judge Pillard's question earlier about how the Administrator responded, I would point the court to Joint Appendix JA403, column two.

[00:24:47] Speaker 09:
And there the Administrator attempted to wrestle with all of these issues, so the Administrator recognized that CASAC had said, adopt W126 Cumulative Seasonal Exposure Index as the form of the standard.

[00:25:04] Speaker 09:
CASAC also said,

[00:25:05] Speaker 09:
do a one-year average, not a three-year average.

[00:25:08] Speaker 09:
And then KSAC said, if you choose to do a three-year average, then you have to set a standard that's lower than what you would set as a one-year standard.

[00:25:15] Speaker 09:
And I think that's the question.

[00:25:17] Speaker 09:
And that wasn't done.

[00:25:18] Speaker 09:
That part of the recommendation wasn't followed.

[00:25:21] Speaker 09:
Why?

[00:25:22] Speaker 09:
Well, how the administrator

[00:25:27] Speaker 09:
I disagree that the administrator didn't respond to that advice, but how she responded was... She rejected that advice.

[00:25:34] Speaker 09:
Why?

[00:25:35] Speaker 09:
She took it by lowering the standard from protecting against 6% tree growth loss down to 5.3% tree growth loss.

[00:25:46] Speaker 09:
And there is actually a delta there.

[00:25:47] Speaker 09:
So it's 6% tree growth loss.

[00:25:50] Speaker 09:
The W126 parts per million hours is 19.

[00:25:57] Speaker 09:
If you look at the tree growth chart, then the next level down is 5.7% tree growth loss, and that corresponds to 18 parts per million hours.

[00:26:07] Speaker 09:
And what the administrator did, and this is really where the administrator was exercising her judgment, she said, I'm gonna go a little bit lower than that, down to 5.3% tree growth loss, and that was equivalent to 17 parts per million hours.

[00:26:25] Speaker 09:
I can.

[00:26:27] Speaker 07:
Wasn't KSAC's recommendation to use 2% as a benchmark?

[00:26:31] Speaker 09:
Your Honor, KSAC said look at 2% as a relevant benchmark, but it also said look at a range of

[00:26:42] Speaker 09:
W126 exposures between seven and 15 parts per million.

[00:26:46] Speaker 09:
If you look at that range, the only number that would protect against 2% tree growth loss is actually seven parts per million hours, W126.

[00:26:54] Speaker 09:
So even CASAC's own recommendation for range wasn't just consider numbers that would protect at 2% and lower.

[00:27:03] Speaker 09:
CASAC had a number of levels that they recommended that were within a range much higher than the seven parts per million.

[00:27:10] Speaker 02:
KSAC's data all included the cottonwood trees, and the table that they produced included them.

[00:27:18] Speaker 02:
And I know there was some back and forth about the weighting of the cottonwood data.

[00:27:24] Speaker 02:
But EPA, as I understand it, just excluded it.

[00:27:27] Speaker 02:
And how is that rational and adequately accounting for that data?

[00:27:35] Speaker 09:
Sure, Your Honor.

[00:27:37] Speaker 09:
There's a small amount of comedy of errors here because, of course, the accusation is that CASAC provided the advice.

[00:27:47] Speaker 09:
It wasn't really telling EPA to leave the cottonwood data out.

[00:27:50] Speaker 09:
And then EPA just sort of said that's what CASAC was doing.

[00:27:54] Speaker 09:
But I think CASAC's advice was take the cottonwood data out.

[00:27:56] Speaker 09:
And CASAC pointed to several scientific reasons for doing that.

[00:28:00] Speaker 09:
But the EPA itself actually looked at the CASAC

[00:28:03] Speaker 09:
recommendation and then made its own independent judgment that the cottonwood data should be eliminated for scientific reasons.

[00:28:09] Speaker 09:
And just find the citation for the court here.

[00:28:14] Speaker 09:
Well, in any event, the reasons were, and this is in the rule, that the data for the 11 tree species that EPA ended up using actually

[00:28:30] Speaker 09:
was comprised of about 51 different studies, and those studies were controlled for climate and other factors.

[00:28:37] Speaker 09:
With the cottonwood data, I believe it was one study, a single study, and it wasn't controlled for climate or environmental factors.

[00:28:44] Speaker 09:
So the data that EPA got from the cottonwood study was actually much less reliable EPA found than... And the other studies didn't include cottonwood?

[00:28:54] Speaker 09:
No, Your Honor, it was 51 studies that covered the other 11 species, and then there was a single study – it may have been two studies that covered cottonwood, but the cottonwood studies did not control for climate, for environmental conditions.

[00:29:06] Speaker 02:
So just – you're saying that the 51 studies did not include cottonwood?

[00:29:10] Speaker 09:
That's correct, Your Honor.

[00:29:11] Speaker 09:
Yeah, so I think the total studies were – there were 52 studies, but only one of those was for cottonwood, and EPA – the administrator

[00:29:20] Speaker 09:
listened to KSAC's advice on that unquestionably, but the Administrator also made her own independent judgment that the science that supported the cottonwood numbers was not as reliable as the data that supported the other 11 tree species that she ended up using for her tree growth analysis.

[00:29:37] Speaker 07:
The other concern I have is about the leaf injury, the decision not to measure for that.

[00:29:45] Speaker 07:
Explain that.

[00:29:46] Speaker 09:
Well, Your Honor, on leaf injury,

[00:29:49] Speaker 09:
The administrator acknowledged that ozone, there was sufficient evidence that ozone causes leaf damage and that that had the potential to be adverse.

[00:30:00] Speaker 09:
But where the administrator paused was that the exposure response data, the criteria, the science to show what levels of ozone would actually correspond to a certain amount of leaf

[00:30:15] Speaker 09:
injury is just not as developed as she felt she needed in order to reach a certain level of certainty to make a judgment about what level of... It was certain enough for Kasich, right?

[00:30:27] Speaker 07:
Kasich made a recommendation regarding this.

[00:30:29] Speaker 07:
It was certain enough for them.

[00:30:30] Speaker 04:
They did.

[00:30:31] Speaker 07:
And uncertainty only gets you so far, right?

[00:30:34] Speaker 04:
That's not a totem that you can... Didn't Kasich find, I'm sorry, didn't Kasich find 10 parts per million hours was, may use the word, required to protect against foliar injury?

[00:30:48] Speaker 09:
Yes, Your Honor.

[00:30:49] Speaker 09:
But to Judge Griffith's question, EPA actually disagreed with Kasich's conclusion

[00:30:56] Speaker 07:
Was it based on certainty or lack thereof?

[00:30:58] Speaker 07:
What was the basis for the disagreement?

[00:31:01] Speaker 07:
I thought you were making the point that the data was uncertain, so the administrator tread gently and decided not to impose standards on that.

[00:31:11] Speaker 07:
My point is, well, it was certain enough for CASIC to make the recommendation that Judge Wilkins referred to.

[00:31:18] Speaker 09:
It was, but then to, but EPA actually

[00:31:23] Speaker 09:
disagreed with Kasich's... So it's not uncertainty.

[00:31:26] Speaker 09:
I thought... The uncertainty is, Judge Griffith, the Minister is looking at the whole record of evidence that she has before, and she judged that the evidence was uncertain enough that she couldn't determine what level of welfare protection would be... So I'm getting it.

[00:31:42] Speaker 07:
So was that the basis, one of the bases of her disagreement with Kasich?

[00:31:46] Speaker 07:
Kasich looks at it and says,

[00:31:48] Speaker 07:
there's enough here, we're certain enough that we can make a recommendation, and she looks at it and she says, I'm looking at the same data and I don't think it's certain enough.

[00:31:57] Speaker 07:
Is that the dynamic here?

[00:31:59] Speaker 09:
Yes, Your Honor, plus EPA actually went out and did a separate analysis of the air quality data that she thought would have sort of illuminated KSAC's advice about the 10 parts per million hours.

[00:32:14] Speaker 09:
That's the Smith and

[00:32:18] Speaker 09:
the Smith and Murphy memo, JA 394 to 395.

[00:32:24] Speaker 09:
And what EPA found from that memo is that, in fact, that tree growth loss did continue to correspond to, in some way, to ozone exposures above 10 parts per million.

[00:32:42] Speaker 09:
She didn't feel like that evidence was

[00:32:45] Speaker 09:
accurate enough to actually correspond the specific level of ozone exposure to a specific amount of leaf damage, but it was enough for her to know that KSAC's sort of assumption, their presumption that 10 parts per million was what was necessary, a requisite, was faulty.

[00:33:02] Speaker 09:
And so on that basis, she decided to disagree with KSAC's advice.

[00:33:07] Speaker 09:
But her overall judgment was simply that this evidence was not

[00:33:11] Speaker 09:
strong enough for her to make a clear judgment of adversity, whereas in contrast... You just said in connection to tree growth loss, right?

[00:33:19] Speaker 09:
Oh, I'm sorry, Your Honor.

[00:33:21] Speaker 09:
Leaf damage.

[00:33:22] Speaker 07:
But actually... Because there is an issue here about whether she looked at leaf damage as an adverse effect in itself, or whether it was a surrogate for something else, right?

[00:33:32] Speaker 09:
Well, that's actually the... I misspoke, but the tree growth loss was what the administrator found was the surrogate.

[00:33:40] Speaker 09:
She found that was a good surrogate for a broader range.

[00:33:44] Speaker 07:
But what I'm getting at is, how about leaf damage in itself, as an end in itself, something to be avoided?

[00:33:50] Speaker 09:
So the administrator considered that.

[00:33:53] Speaker 09:
She in fact looked at three different types of vegetation effects.

[00:33:55] Speaker 09:
It was the tree growth loss, it was the leaf damage, and then crop yield.

[00:34:01] Speaker 09:
crop yields.

[00:34:01] Speaker 09:
So she looked at three different types of effects and she looked at each of them and she found that leaf damage was one where she had a lot of really good data that she could draw a judgment on what was requisite to protect the public welfare.

[00:34:15] Speaker 09:
And in fact for leaf damage she found that that was a good surrogate or proxy for a broader range of effects.

[00:34:24] Speaker 09:
But for both leaf damage

[00:34:26] Speaker 09:
and crop yield law, she found that neither of those gave her enough certainty in the evidence to make a judgment.

[00:34:33] Speaker 04:
Help me make sure that I'm understanding the statute correctly and how the administrator is supposed to do this.

[00:34:41] Speaker 04:
So the finding that's required is a finding about what's requisite to protect the public welfare, right?

[00:34:50] Speaker 04:
That's correct.

[00:34:51] Speaker 04:
And if there are different levels that would be required to protect tree growth loss versus crop yield loss versus leaf injury, is the administrator required to just pick the lowest, the most protective?

[00:35:13] Speaker 04:
Let's say it's 20 parts per million hours for one and 10 for another and five

[00:35:22] Speaker 04:
for the third to protect the public welfare?

[00:35:25] Speaker 04:
Is the administrator required to pick five because that's the most protective?

[00:35:31] Speaker 04:
Or how does the administrator weigh the fact that different levels are required to protect those different indicators of the public welfare?

[00:35:42] Speaker 04:
Well, it's a very good question.

[00:35:43] Speaker 09:
I think it's

[00:35:45] Speaker 09:
It's a tricky question because on the one hand, the administrator has to look at all the effects that are occurring that may be potentially adverse, and then she has to make judgments about which effects would be adverse to the public welfare, and then she has to set a standard.

[00:36:02] Speaker 09:
Congress has given the administrator a certain amount of judgment, and some of that's scientific judgment, and some of that's policy judgment.

[00:36:09] Speaker 09:
So I think it's difficult to say that the administrator would have to pick a certain level if one effect was at the lowest level, but certainly the administrator would have to account for that in her decision.

[00:36:25] Speaker 02:
question that maybe we all share.

[00:36:27] Speaker 02:
It's known and demonstrated scientifically that there's leaf damage from ozone exposure.

[00:36:34] Speaker 02:
And CASAC made a particular recommendation, 10 parts per million hours.

[00:36:41] Speaker 02:
It said that it was a bright line, but that was its recommendation.

[00:36:45] Speaker 02:
And it seemed like EPA just said, well, you know, there's some uncertainty here.

[00:36:51] Speaker 02:
Let's treat tree growth as a surrogate for leaf injury.

[00:36:57] Speaker 02:
I'm not aware of scientific evidence explaining the relationship between the tree growth problem

[00:37:04] Speaker 02:
and the leaf injury problem that supports the surrogate determination.

[00:37:08] Speaker 02:
It feels like maybe a response to the quite difficult question that Judge Wilkins raised, which is you have various data that show different levels of tolerance and how should the administrator come up with a public welfare standard, but I just don't see where UK has grappled with that.

[00:37:30] Speaker 02:
Given the damage, given the determination that this is an important element of the public welfare, it reads as if it's dropped off the table.

[00:37:42] Speaker 09:
Well, Your Honor, I would like to clarify that the Administrator did not find that tree growth loss was a good surrogate for leaf damage.

[00:37:55] Speaker 09:
I think the record reflects that the Ministry found that tree growth loss

[00:38:01] Speaker 09:
was a really good surrogate or proxy for a broad array of vegetation effects.

[00:38:06] Speaker 09:
But the administrator didn't find that tree growth loss was a direct surrogate or somehow directly accounted for for leaf damage.

[00:38:16] Speaker 09:
So she didn't find that.

[00:38:17] Speaker 09:
What she did find was that she had really good information, scientific criteria, to use tree growth loss as a basis for protecting against

[00:38:27] Speaker 09:
a number of vegetation effects.

[00:38:30] Speaker 09:
Now, of course, leaves are part of trees, but again, the science isn't there for her to correlate the tree growth loss to the leaf damage.

[00:38:39] Speaker 09:
The science also isn't there, the administrator found, to quantify leaf damage as a separate vegetation effect.

[00:38:49] Speaker 09:
And that's where she made the judgment that she couldn't set a standard that way.

[00:38:53] Speaker 02:
Why not?

[00:38:53] Speaker 02:
I mean, there's science on that, and there's some uncertainty in every

[00:38:57] Speaker 02:
standard setting, as we've seen on all the issues in this case.

[00:39:03] Speaker 02:
Isn't it incumbent on the – on the administrator to figure out some standard?

[00:39:10] Speaker 09:
Well, the administrator did set a standard that she judged... Relating to leaf damage.

[00:39:16] Speaker 09:
I don't think 7409B2, the standard setting provision here, requires the administrator set separate standards for each vegetation effect, as long as she has found and judged that she's providing requisite protection for the public welfare.

[00:39:33] Speaker 02:
Well, like in American Farm Bureau, we said,

[00:39:35] Speaker 02:
that UK's assertion that it need not determine what level of visibility protection is requisite to protect the public health fails under the plain language of the statute.

[00:39:43] Speaker 02:
It seems like similarly, there needs to be some level set that's requisite to protect the public welfare, some level of leave damage.

[00:39:53] Speaker 09:
No?

[00:39:54] Speaker 09:
I disagree that if the science doesn't allow the administrator to make that judgment, I think that's where you enter a realm of uncertainty.

[00:40:02] Speaker 09:
At the same time, the administrator did judge that

[00:40:05] Speaker 09:
that lowering the standard here, the secondary standard, would provide some level of protection for leaf damage.

[00:40:14] Speaker 09:
But she wasn't certain how much because the studies, and they're referred to as exposure response studies, that's what she had for the tree growth loss.

[00:40:24] Speaker 09:
She didn't have that sort of data for leaf damage.

[00:40:28] Speaker 09:
So she couldn't correlate those.

[00:40:31] Speaker 09:
those studies.

[00:40:32] Speaker 09:
I guess, you know, the secondary standard, neither standard is easy, but to understand the administrator's rationale, I guess I wouldn't recommend that the court read the entire rule, but the JA 402 to 409, that lays out the administrator's reasoning for how she got from Case X advice and considered the

[00:40:55] Speaker 09:
each of these vegetation effects, tree growth loss, leaf damage, crop yield loss, and then ultimately judge that a standard based on tree growth loss would be requisite to protect the public welfare.

[00:41:07] Speaker 07:
What is the source of EPA's grandfathering authority?

[00:41:11] Speaker 07:
Where does that come from?

[00:41:12] Speaker 09:
Well, Judge Griffith, we would say that the source of authority is in the prevention of significant deterioration provision that's at issue.

[00:41:21] Speaker 09:
We would say that the tension between

[00:41:25] Speaker 09:
the two requirements that the permitting applicant submit a permit, and then in 7475C, that the permitting authority grant or deny a completed permit within one year, that the tension there creates an ambiguity.

[00:41:44] Speaker 07:
Why is there tension?

[00:41:45] Speaker 07:
You didn't make it?

[00:41:47] Speaker 07:
You have to resubmit.

[00:41:48] Speaker 07:
You fail.

[00:41:48] Speaker 07:
I mean, the statute talks about the application is made, and it's either accepted or denied.

[00:41:57] Speaker 07:
So you deny the application because you're not compliant with the new standards.

[00:42:03] Speaker 09:
So I think that there's a tiny... What's the tension about that?

[00:42:06] Speaker 09:
Well, Judge Griffin, there's a tiny thing here, because there are actually three steps.

[00:42:09] Speaker 09:
The administrator, excuse me, the permitting authority

[00:42:14] Speaker 09:
Let me back up.

[00:42:14] Speaker 09:
The permitting applicant submits the application.

[00:42:18] Speaker 09:
Then, under 7475C, the permitting authority, and that's either EPA or the state, actually has to make a decision that the permitting application is complete.

[00:42:29] Speaker 09:
Or in some instances, some states will simply publish the proposed permit, which is the equivalent of finding it to be complete.

[00:42:36] Speaker 09:
Then that, under 7475C, triggers

[00:42:40] Speaker 09:
the permitting authority's obligation to grant or deny within one year.

[00:42:44] Speaker 09:
So it's a three-step process, and what we're talking about is permits that fall in that third, that third bucket.

[00:42:50] Speaker 07:
And so... Does grant or deny within one year?

[00:42:55] Speaker 07:
Right, so, but... You deny.

[00:42:56] Speaker 07:
You haven't met the NACs, you haven't demonstrated capacity to meet the NACs, and so it's denied.

[00:43:02] Speaker 07:
What's wrong with that?

[00:43:02] Speaker 09:
Well, Judge Griffin, think about two permit applicants.

[00:43:05] Speaker 09:
One is, you know, sort of submits their application and is found to be complete, and

[00:43:10] Speaker 09:
within a few days the permitting authority grants the permit.

[00:43:13] Speaker 09:
Another applicant, their permit application is pending and then for a few more days and then the new NACS comes out.

[00:43:19] Speaker 09:
And then under the environmental petitioner's reading, the difference there is that now the permitting authority has to simply deny.

[00:43:29] Speaker 09:
EPA took a middle ground here by saying,

[00:43:31] Speaker 09:
that a permanent authority could find that that permit.

[00:43:34] Speaker 07:
I understand it took a middle ground.

[00:43:35] Speaker 07:
The question is on what authority did they take a middle ground.

[00:43:40] Speaker 07:
Let me ask you this.

[00:43:41] Speaker 07:
What are the limits to the EPA's grandfathering rule?

[00:43:45] Speaker 07:
Could they say three years after the NUNACs become taken into effect, we'll give you three years until it's the effective date?

[00:43:54] Speaker 07:
I don't know.

[00:43:55] Speaker 07:
No.

[00:43:55] Speaker 07:
What is the limiting principle?

[00:43:56] Speaker 07:
7475C says within one year.

[00:44:00] Speaker 07:
So the most you can give them is an extra year to comply?

[00:44:05] Speaker 09:
Yes.

[00:44:05] Speaker 02:
But the one year is just when the agency has to act on it.

[00:44:08] Speaker 02:
That's correct.

[00:44:08] Speaker 02:
I don't understand how that supports grandfathering.

[00:44:11] Speaker 02:
Because, I mean, you could have done something that seems more consistent with the requirement that a source meet any NACs, including

[00:44:23] Speaker 02:
the current ones, which might be to treat a, I don't know, the various ways you could help with resubmission or with tweaking of the proposal or without grant funding.

[00:44:38] Speaker 02:
The concern is, the same concern that my questions to environmental petitioners expressed, which is, wouldn't it be the case if a source is permitted that, and it either

[00:44:54] Speaker 02:
under the new standard, the area may stay in attainment but exceed a PSD increment that the downstream administrative burdens and compliance burdens of the new increment are going to be imposed on all sources in the area?

[00:45:12] Speaker 02:
The state is going to have to scramble in a way that when we know the change is coming into effect, why would we invite that

[00:45:22] Speaker 02:
you know, that challenge, that emitter into an area, when it's gonna have that kind of effect.

[00:45:30] Speaker 09:
So I agree that there has been a process through which the state will have to figure out how to account for the new source and whether, and if it's applying the 2008 NACs rather than the 2015 NACs, then there may be some difference there.

[00:45:45] Speaker 09:
And that does put a burden on the state then to account for those sources.

[00:45:49] Speaker 02:
And on other sources.

[00:45:51] Speaker 09:
That's correct.

[00:45:53] Speaker 09:
And that's certainly part of the problem here that EPA had to wrestle with.

[00:45:58] Speaker 09:
To Judge Griffith's point about authority, we also did point out that, I believe under Citizens to Save Spencer County, that this court had noted that EPA has authority under 7601, sort of general rulemaking authority.

[00:46:10] Speaker 09:
Now, EPA in this role has primarily invoked its authority to interpret the tension that it saw between

[00:46:16] Speaker 09:
Sub-Provision A and Sub-Provision C, but it also did invoke insight to its general authorities and necessary regulations.

[00:46:25] Speaker 07:
We'll hear from industry-responsive interviewers now.

[00:46:27] Speaker 07:
Thank you, Mr. Henry.

[00:46:34] Speaker 07:
Good morning.

[00:46:36] Speaker 01:
To court please, my name is James Beeke.

[00:46:38] Speaker 01:
I represent the industry intervene.

[00:46:41] Speaker 01:
Mr. Johnson's main argument on the primary standard is that EPA found

[00:46:45] Speaker 01:
that at 72 parts per million ozone causes adverse effects, but it set a standard which would allow numerous individuals to experience exposures at 72 parts per million or above that could cause adverse effects, and that's unlawful.

[00:47:00] Speaker 01:
But that's too simplistic.

[00:47:02] Speaker 01:
As both the legislative history and the Scots prior opinions have held, there is no requirement to set a standard that prevents all occurrences

[00:47:15] Speaker 01:
of levels that could cause effects that are considered by the American Thoracic Society to meet a definition of adverse or a need to prevent all such effects themselves.

[00:47:29] Speaker 01:
The administrator's task was to decide

[00:47:34] Speaker 01:
whether overall ozone effects have an adverse effect on the overall public health and to set a standard that is requisite to protect the public health with an adequate margin of safety.

[00:47:46] Speaker 01:
And that means consider, it has to consider the nature and severity of the effect, the frequency of exposures that could produce effects, the frequency of effects, the uncertainties in the evidence, and make a judgment.

[00:48:02] Speaker 02:
But Mr. Beeke, where it is established by the evidence that a body of exposures will most likely occur, it's reasonable to anticipate they will occur, and that they will cause harm, that does seem to be... Well, you have to consider, I think, the nature and severity of the effects.

[00:48:25] Speaker 01:
In this case,

[00:48:26] Speaker 01:
You had earlier asked, do people experience effects like trees or their accumulative effect?

[00:48:31] Speaker 01:
It's not.

[00:48:32] Speaker 01:
The effects that are shown at 72 parts per million are transient effects that are reversible.

[00:48:38] Speaker 01:
There are a small percentage of subjects that were greater than 10% decrement in lung function.

[00:48:44] Speaker 01:
Some of those subjects had symptoms.

[00:48:47] Speaker 01:
only after exposures during exercise, after six hour exposures to exercise.

[00:48:52] Speaker 01:
Given that nature and severity of effects, it was reasonable to consider the frequency.

[00:48:57] Speaker 01:
EPA stated that the judgment as to the adversity of effects to the public welfare, I mean to the public health, the overall public health, depends and is influenced by the frequency at which these effects would occur.

[00:49:15] Speaker 01:
And so it was reasonable for EPA to consider frequency of the effects, frequency of the exposures, and make a policy judgment as to the level at which ozone effects are adverse to the overall public health.

[00:49:29] Speaker 01:
And that was the policy judgment.

[00:49:30] Speaker 01:
It was explained and should be upheld.

[00:49:34] Speaker 01:
Now, to court, please, just one second.

[00:49:36] Speaker 01:
This court's recently required

[00:49:39] Speaker 01:
trade associations, which are my clients, to identify seeking – who are claiming representational standing to identify individual members with individual standing.

[00:49:49] Speaker 01:
I just want to note that Murray Energy, who is also a petitioner but has individual standing, is a member of my client National Association of Manufacturers, so that's a individual with – and we can submit a document to that effect or that will – but that doesn't.

[00:50:22] Speaker 08:
Thanks for the additional time.

[00:50:24] Speaker 08:
This court's case law says standards, primary standards, must ensure the absence of adverse effects on sensitive populations.

[00:50:31] Speaker 08:
We're not talking about risks here.

[00:50:32] Speaker 08:
We're talking about acknowledged adverse effects that 66 percent of healthy young adults exposed in the lab experience.

[00:50:42] Speaker 08:
Even if not everyone is going to experience them, a senior with asthma who experiences lung function decrement and respiratory symptoms could go to the hospital and could suffer very, very severe adverse effects.

[00:50:56] Speaker 08:
What EPA is doing here is saying that when areas have ozone levels at or above 72 parts per billion, the air is unhealthy for sensitive groups.

[00:51:07] Speaker 08:
Sensitive groups should stay inside.

[00:51:09] Speaker 08:
but EPA is allowing these areas to have these harmful levels of ozone repeatedly and not have to clean up the air.

[00:51:18] Speaker 02:
Isn't that not quite fair?

[00:51:19] Speaker 02:
I mean, the exposure studies look at ordinary activity, not a cautionary, you must stay inside activity.

[00:51:29] Speaker 08:
I mean, it's an ordinary activity for

[00:51:31] Speaker 08:
an outdoor worker who may have no option but to go outside on a day like that where that's the person's job.

[00:51:40] Speaker 08:
It's a simulation of what an active child will do on a summer day.

[00:51:47] Speaker 08:
and allowing those harmful exposures to continue without areas having to clean up the air isn't consistent with the Clean Air Act.

[00:51:55] Speaker 08:
That's why EPA itself made clear that it can't rely on the intersection of people with harmful air to write off the harmful levels of ozone.

[00:52:05] Speaker 08:
That's at JAA 2132.

[00:52:06] Speaker 08:
And at the very least, EPA hasn't shown or explained why the exposures that it does allow aren't

[00:52:16] Speaker 08:
harmful to public health, just like it failed to do in the American Lung Dissociation case.

[00:52:21] Speaker 08:
If anything, this case is more irrational than American Lung Dissociation because there, EPA disputed whether the pollution at issue caused adverse effects.

[00:52:32] Speaker 08:
Here, EPA agrees that the pollution at issue causes adverse effects.

[00:52:42] Speaker 08:
I didn't get a chance to talk about leaf damage before.

[00:52:47] Speaker 08:
Just – Mr. Heminger said that KSAC referred to 10 as a threshold, 10 part per million hours.

[00:52:56] Speaker 08:
KSAC at J515 didn't say – said it wasn't a threshold, said it was a place where the rate of change in the number of sites with leaf damage changed.

[00:53:06] Speaker 08:
And it's not just KSAC who gave EPA advice about what level

[00:53:11] Speaker 08:
what levels would be requisite.

[00:53:13] Speaker 08:
It was also the National Park Service.

[00:53:15] Speaker 08:
EPA has just pointed to uncertainty here, and Farm Bureau makes clear that just wrote, incantation of uncertainty doesn't carry its burden.

[00:53:26] Speaker 08:
If I can just say one very quick note about grandfathering, this case isn't at all like Spencer County.

[00:53:33] Speaker 08:
In Spencer County, there was an insuperable conflict between two statutory provisions.

[00:53:39] Speaker 08:
There is no actual conflict.

[00:53:41] Speaker 08:
There's just a reference to attention.

[00:53:43] Speaker 08:
EPA doesn't like the policy that Congress established.

[00:53:46] Speaker 08:
EPA has no authority, implicit or anywhere else, to override that policy.

[00:53:52] Speaker 02:
What was the citation you gave on the leaf damage?

[00:53:55] Speaker 08:
JA 515.

[00:53:56] Speaker 08:
515?

[00:53:56] Speaker 08:
Yeah.

[00:53:57] Speaker 02:
Thank you.

[00:53:58] Speaker 02:
Thanks.

[00:54:00] Speaker 07:
Thank you very much.

[00:54:04] Speaker 07:
So we'll now hear from Mr. Dre.

[00:54:06] Speaker 07:
Is that right?

[00:54:08] Speaker 07:
You want to do background ozone?

[00:54:10] Speaker 07:
Do you all need to switch places now?

[00:54:13] Speaker 06:
Okay, we'll give you a minute to switch places.

[00:54:58] Speaker 03:
Good morning.

[00:54:58] Speaker 03:
Good morning.

[00:54:59] Speaker 03:
May it please the court.

[00:55:00] Speaker 03:
I'm Dominic Dre and I represent the state petitioners.

[00:55:03] Speaker 03:
I will endeavor to reserve four minutes of time for rebuttal.

[00:55:08] Speaker 03:
Our case is about the requirement of a reasoned rulemaking process and here that process was deficient in four ways.

[00:55:16] Speaker 03:
First, EPA's focus on mean or average contributions of background ozone rather than peak contributions.

[00:55:24] Speaker 03:
Second,

[00:55:25] Speaker 03:
their distinction between interstate and international contributions to a state's uncontrollable ozone.

[00:55:32] Speaker 03:
Third, the consideration of background ozone when selecting a value from within a range, but not when selecting that range itself.

[00:55:42] Speaker 03:
And finally, their insistence that background ozone alone must constitute an exceedance in order for there to be a cognizable problem.

[00:55:52] Speaker 03:
To walk through those, first the peak versus mean question.

[00:55:55] Speaker 03:
We would call the peak-peak issue in our briefing.

[00:55:59] Speaker 03:
EPA discusses seasonal averages for background ozone in its models.

[00:56:05] Speaker 03:
It says that the seasonal means contribute 25 to 50 parts per billion.

[00:56:10] Speaker 03:
The problem, of course, and why this is arbitrary, is that your seasonal mean isn't what triggers non-attainment.

[00:56:16] Speaker 03:
It's your fourth worst eight-hour reading.

[00:56:18] Speaker 03:
In the same way, when EPA pivots to talking about high ozone days, ozone days with 70 parts per billion or more, they average over the entire U.S.

[00:56:28] Speaker 03:
And in so doing, they conclude that 35% of background ozone on those days

[00:56:33] Speaker 03:
is, excuse me, 35% of the total observed ozone on those days is background.

[00:56:38] Speaker 03:
But once again, nonattainment doesn't depend on the average over the entire country.

[00:56:43] Speaker 03:
It depends on the site-specific data.

[00:56:45] Speaker 03:
They do in the policy assessment actually give a glimpse into what it might look like if they had done this rationally.

[00:56:51] Speaker 03:
Figure 40, it's at 786 of the Joint Appendix, shows location-specific modeling.

[00:56:58] Speaker 03:
for background on high background days.

[00:57:01] Speaker 03:
And there you have many locations, especially in the Intermountain West and the Upper Midwest, which largely tracks the composition of our petitioner coalition, where background ozone contributes 70 or 80%.

[00:57:14] Speaker 03:
And that, again, is still deficient in some ways because it is still a seasonal average in those locations.

[00:57:21] Speaker 03:
But nevertheless, it is at least location specific on high ozone days.

[00:57:28] Speaker 03:
Secondly, we discussed the contribution of interstate versus international ozone.

[00:57:35] Speaker 03:
As Justice Ginsburg explains sort of humorously in the EME Homer city case, air pollution is heedless of state lines.

[00:57:43] Speaker 03:
We know that and EPA knows it too.

[00:57:46] Speaker 03:
We know that EPA concedes that point when it talks about international ozone as being something that they should consider but not interstate.

[00:57:53] Speaker 03:
EPA actually has a definition for the kind of background ozone that we're talking about.

[00:57:59] Speaker 03:
They call it the generic definition, and they discuss it a couple times.

[00:58:03] Speaker 03:
JA 651 in the policy assessment, they describe ozone that cannot be influenced by the actions within the jurisdiction of concern.

[00:58:11] Speaker 03:
The same thing, note 84 in the final rule.

[00:58:13] Speaker 03:
They talk about ozone that comes from outside the jurisdiction of an area.

[00:58:17] Speaker 03:
But then in the very same footnote, they, quote, assumed, not my word, theirs, that when commenters spoke about background ozone, they were talking about U.S.

[00:58:27] Speaker 03:
background, which is to say background ozone that's not generated in the United States.

[00:58:32] Speaker 03:
But that's an arbitrary distinction.

[00:58:33] Speaker 03:
And in fact, if anything, it makes very little sense, and it underscores the arbitrariness of this, for EPA to seize upon international ozone as being uncontrollable, but not in your state.

[00:58:44] Speaker 03:
Because after all, at least international ozone has one of these enforcement stages.

[00:58:48] Speaker 03:
Mr. Drake, can we start with the statute here?

[00:58:50] Speaker 03:
Certainly.

[00:58:51] Speaker 07:
What in the statute requires EPA to take into account background ozone when establishing the NAICS?

[00:59:00] Speaker 03:
Is there anything in the statute that requires that?

[00:59:03] Speaker 03:
Yes, your honor.

[00:59:04] Speaker 03:
And it starts in section 109, exactly the section that EPA reads nearly in total isolation.

[00:59:11] Speaker 03:
That section refers to public health, it talks about what's requisite, and it discusses the judgment of the administrator.

[00:59:18] Speaker 07:
All of these... But as you probably know where I'm headed with this, there are at least three provisions in the statute that talk about EPA taking into account background ozone in the implementation of the NACs, which suggests that that's where you pay attention to background ozone.

[00:59:37] Speaker 07:
that it's not necessary to do so when you're establishing an axe in the first instance?

[00:59:42] Speaker 03:
So a couple of responses, Judge Griffith.

[00:59:44] Speaker 03:
First, I actually read those enforcement stage measures the opposite.

[00:59:49] Speaker 03:
I think there are evidence that states are not supposed to be on the hook for ozone that they can't control.

[00:59:55] Speaker 03:
That's why it's carved out.

[00:59:57] Speaker 03:
The second response is the requirement of a reasoned exercise of judgment.

[01:00:03] Speaker 03:
I mean, judgment appears

[01:00:04] Speaker 03:
all over the statute, including in 1 and I. That goes to how you arbitrarily distinguish between kinds of background and measurement metrics like we're talking about in this petition.

[01:00:16] Speaker 03:
There's also, of course, the requirement in 107A that states achieve and maintain the standard, which assumes that it's achievable and maintainable.

[01:00:26] Speaker 03:
The same thing appears in 110, the SIP provision that requires them to submit SIPs that will accomplish this.

[01:00:33] Speaker 03:
Running through all of this is the assumption that they will be achievable standards.

[01:00:40] Speaker 03:
And actually, the reliance, we pointed out in the 28-J flurry of 28-Js over the weekend that this court has already said that you can't rely on later stage relief, safety valves was the court's term, in order to solve a rulemaking that was arbitrary.

[01:00:57] Speaker 03:
which gets back to these process errors that are really the thrust of the state's petition in this case.

[01:01:04] Speaker 03:
To continue marching through them, the range versus value choice, EPA says that it could not consider

[01:01:12] Speaker 03:
Proximity to background ozone, this is a quote I should note at 638, J-638, BPA did not consider proximity to background ozone concentrations when identifying the range of policy options.

[01:01:25] Speaker 03:
Then at 65-328, the big background page of the rulemaking, the agency says it may consider them only when selecting from within this range.

[01:01:38] Speaker 03:
The thing is that this range value distinction is nowhere in the statute at all.

[01:01:42] Speaker 03:
That's totally a creation of agency practice.

[01:01:46] Speaker 02:
Well, I think the logic is that anywhere within the range is requisite.

[01:01:51] Speaker 02:
And so we're not, you know, the agency is saying it's not considering background ozone as an excuse not to come up with a level requisite for the public health.

[01:02:05] Speaker 02:
but when it has some leeway in determining against the background of the science, what's requisite for the public health, it may take into account the background.

[01:02:17] Speaker 03:
That's an accurate, I agree that that's a summary of EPA's position in this case, and it has a sort of superficial appeal, except that the question is then why are they allowed to consider it when choosing within that range?

[01:02:28] Speaker 02:
Well, the idea is that the dominant goal of the statute, the requirement of the statute,

[01:02:34] Speaker 02:
is to set levels that protect the public health.

[01:02:38] Speaker 02:
And if it's really impractical, the agency is not allowed to say, well, okay, let's harm a bunch of people because it would be really hard to move forward without allowing a lot more ozone.

[01:02:53] Speaker 02:
And Congress seems to have said, no, actually, we're not going to do that.

[01:02:58] Speaker 02:
It may be a scramble.

[01:03:00] Speaker 02:
It may mean no development here.

[01:03:03] Speaker 02:
It may be very difficult.

[01:03:06] Speaker 02:
Public health, I mean, if you can't live in the air, that's the bottom line.

[01:03:11] Speaker 02:
And so if that's the objective, and there are multiple ways to meet it, it does seem like it would be consistent with the statute to say at the implementation stage, well, if there were some ways to meet this that are fairer, you're going to take that into account.

[01:03:27] Speaker 03:
So I think there are a couple of responses there, but let me begin by disputing the premise that EPA certainly advances, that the Cleaner Act has a sort of singular focus on declaring a standard, come hell or high water, that is as protective as possible.

[01:03:48] Speaker 03:
We know that that's not true.

[01:03:49] Speaker 02:
That's not what I said either, though.

[01:03:51] Speaker 02:
I said requisite to protect the public health.

[01:03:53] Speaker 02:
And obviously, if it were as protective as possible, there would be no range.

[01:03:59] Speaker 02:
Unless there was some plateau of health effects between the two poles of the range.

[01:04:06] Speaker 02:
But where there is a discernible, real, scientifically supported health effect, the idea is that whether it's caused by background ozone impart

[01:04:20] Speaker 02:
not going to be the basis for a discount.

[01:04:23] Speaker 02:
I mean, if you flip it, that wouldn't really make sense, would it?

[01:04:25] Speaker 02:
If there's a lot of background ozone, we'll just act as if that's not there because it wouldn't really be fair to permit applicants.

[01:04:32] Speaker 02:
Let's imagine it's a level ozone field and allow permits up to some further increment.

[01:04:41] Speaker 02:
It wouldn't make sense.

[01:04:43] Speaker 03:
Your Honor indicates, correctly, that there is obviously something doing some work to put the brakes on.

[01:04:49] Speaker 03:
Because as this Court and the Supreme Court have recognized, ozone is a zero threshold pollutant.

[01:04:54] Speaker 03:
At some level, it will have some effect on some person under some circumstance.

[01:04:59] Speaker 03:
So there's some degree, somewhere in the equation, that they're applying the brakes.

[01:05:05] Speaker 03:
And that has to be gleaned from the remainder of the statute.

[01:05:09] Speaker 03:
What are those limiting principles?

[01:05:11] Speaker 03:
That's actually exactly what the government just argued a couple months ago to the Supreme Court in the Gandhi case, the non-delegation case on which the court just granted cert this last term.

[01:05:23] Speaker 03:
And the answer is you look around in the statute and see what the limiting principles are.

[01:05:29] Speaker 03:
So maybe it's requisite that's doing the work.

[01:05:31] Speaker 03:
That was the answer in Whitman.

[01:05:32] Speaker 03:
Maybe it's a technical understanding of the term public health, which we identify in our briefing using the contemporary public health dictionaries that that includes some concern for.

[01:05:44] Speaker 03:
for other things like your ability to make a living, which is the gist of Justice Breyer's concurrence in the Whitman case, that the industrialized society is not a very healthy society.

[01:05:54] Speaker 03:
But whatever it is, the agency is applying some principle, or at least we assume that they are applying some principle, to try and apply the brakes on the zero threshold pollutant.

[01:06:05] Speaker 03:
And our complaint, the reason that we're here with this petition, is to ask that that standard be applied in a rational way.

[01:06:13] Speaker 03:
Hasn't your argument already been rejected in API?

[01:06:16] Speaker 03:
No, your honor.

[01:06:18] Speaker 03:
API is one of a series of cases, beginning with lead industries, in which this court and the Supreme Court have said that cost, economic cost, can't be considered.

[01:06:26] Speaker 03:
And so in API, that was exactly API's argument, the Petroleum Institute's argument.

[01:06:32] Speaker 03:
The city of Houston also showed up and used language that sort of sounds similar to what we're talking about.

[01:06:38] Speaker 03:
Yeah, it sure does.

[01:06:38] Speaker 03:
They used the word attainability.

[01:06:39] Speaker 03:
Attainability, yeah.

[01:06:41] Speaker 03:
Sounds very similar.

[01:06:42] Speaker 03:
We use the statutory achievable, but they are using a similar term.

[01:06:46] Speaker 03:
And we know that that's not the same thing, though, because if you look into their briefing, what they're talking about is that it would be hard to do.

[01:06:54] Speaker 03:
And we're not arguing that it would be hard to do.

[01:06:56] Speaker 03:
We're arguing that this is a misconstruction of the statute.

[01:06:59] Speaker 03:
Furthermore, Houston was complaining... And what did we say to their argument that it would be hard to do?

[01:07:05] Speaker 03:
You said that that was not an acceptable consideration.

[01:07:08] Speaker 03:
So how is your argument different?

[01:07:09] Speaker 03:
So our argument is different because in API, Houston was not... Well, first of all, Houston's not a state, so it doesn't have...

[01:07:15] Speaker 03:
even the standing, I think, to assert what we're asserting now.

[01:07:18] Speaker 03:
But secondarily, at a more practical level, the background in that case was about 60 parts per billion in Houston.

[01:07:25] Speaker 03:
And they were complaining about a standard set at 120 parts per billion.

[01:07:30] Speaker 03:
So a standard, in other words, that left a full 60 parts per billion for human activity.

[01:07:35] Speaker 03:
That's in their briefing.

[01:07:36] Speaker 03:
They granted all that.

[01:07:38] Speaker 03:
That is essentially a concession that they were not close to background.

[01:07:41] Speaker 03:
They were not getting into the area that we're talking about preserving some margin for human activity.

[01:07:46] Speaker 03:
It's a factual distinction, but it has incredible legal consequences.

[01:07:50] Speaker 02:
And our case is... Hasn't one of the 28-J letters said, you know, you anticipated that there would be many, many, many areas that would be at maximum?

[01:08:00] Speaker 02:
And they've said, now we know that it's not.

[01:08:05] Speaker 02:
I mean, how big of a problem, how close to crisis is the record at this point?

[01:08:11] Speaker 03:
Yes, so we will wander outside the record here.

[01:08:16] Speaker 03:
We know that in Arizona, for example, we have another area, we went from having Maricopa County, now Yuma is also designated, and this is hot off the presses, Pima County just tripped it as well.

[01:08:28] Speaker 03:
So we've tripled our number of non-attainment areas in the state of Arizona.

[01:08:31] Speaker 03:
I don't know from my coalition partners what it looks like in their states, but I can... And what happens at non-attainment?

[01:08:38] Speaker 02:
I mean, this is also relevant to the...

[01:08:41] Speaker 03:
Right, so the first project, once an area becomes marginal non-attainment, obviously we're working on the SIPs now.

[01:08:48] Speaker 03:
The permitting process takes effect immediately for new sources that requires, in the first bin, marginal non-attainment at 10% offset for certain emissions.

[01:09:01] Speaker 03:
And then, of course, these ramp up from there.

[01:09:04] Speaker 03:
And with the anti-backsliding provisions and everything with which the court is familiar, it takes 20 years of compliance to get back out of these circumstances.

[01:09:12] Speaker 03:
And so you have places like Yuma, for example, which is not a very developed, not a heavy industrial part of our country,

[01:09:19] Speaker 03:
It's a poorer area.

[01:09:21] Speaker 03:
It has an overwhelmingly minority population.

[01:09:24] Speaker 03:
And that area is now facing these limitations because among other things, so they have a design value of 71.

[01:09:32] Speaker 03:
16 parts per billion blow in from California.

[01:09:36] Speaker 03:
That's at JA 2021.

[01:09:40] Speaker 03:
So you have real costs for people in a poor area that could benefit from some growth.

[01:09:46] Speaker 03:
that are being imposed because they have the misfortune of living downwind from outside of the jurisdiction that we can't control.

[01:09:53] Speaker 03:
To your question as a legal matter judge, EPA itself grants that, quote, a non-de minimis number of locations where background exceeds 75, that's HA 120, and then in the final rulemaking they talk about many instances, their term,

[01:10:10] Speaker 03:
I don't know how many is many, but frankly, even if it's one, it's a problem.

[01:10:15] Speaker 03:
Many instances of background over 70 parts per billion due to out-of-state contributions, and they specifically discussed California.

[01:10:21] Speaker 03:
That's at note 230 in the final rulemaking.

[01:10:25] Speaker 03:
Which gets to the final and fourth way in which this process was arbitrary and capricious.

[01:10:31] Speaker 03:
That is insistence on background alone as the cause of an exceedance.

[01:10:36] Speaker 03:
This court has explained in American Trucking 3

[01:10:39] Speaker 03:
It used the language too close to peak background levels.

[01:10:44] Speaker 03:
And we know from the policy assessment, JA773, EPA recognizes that zero man-made emissions is an unrealizable scenario.

[01:10:55] Speaker 03:
All of this recognizes what we know to be true, which is that there's supposed to be some margin for human activity.

[01:11:03] Speaker 03:
That was also, again, Justice Breyer and Whitman.

[01:11:06] Speaker 03:
So the claim from EPA oft repeated that there will only be 22 exceedances under their model, 22 exceedances of 70 parts per billion.

[01:11:16] Speaker 03:
That's looking at exceedances with background ozone alone.

[01:11:19] Speaker 03:
And again, it's their sort of tailored definition of background ozone.

[01:11:22] Speaker 03:
And it involves a model with averages.

[01:11:24] Speaker 03:
So these things kind of compound each other.

[01:11:26] Speaker 03:
But even taking that at its face value, that's 22 exceedences of 70 based on background alone that allows no room for human activity, which this court and the Supreme Court have indicated is a misreading of the statute.

[01:11:38] Speaker 02:
Isn't it no room for human activity without a lot of compensating measures?

[01:11:43] Speaker 03:
No.

[01:11:44] Speaker 02:
Isn't that what they're saying?

[01:11:46] Speaker 03:
I do not think that is what they're saying.

[01:11:48] Speaker 03:
As I understand this model, the prediction here is 22 exceedances of 70 parts per billion based on USB alone.

[01:11:57] Speaker 02:
Right.

[01:11:58] Speaker 02:
But I'm saying, and you say, and therefore no activity, no new permits in that.

[01:12:03] Speaker 02:
And I was just saying, yes, new permits, but under more onerous conditions.

[01:12:06] Speaker 03:
Oh, no.

[01:12:08] Speaker 03:
So these exceedances that exceed 70 based on USB alone would involve zero human emissions.

[01:12:17] Speaker 03:
So it's true that if you were to have emissions there, it would be heavily burdened.

[01:12:22] Speaker 03:
Is that your honest question?

[01:12:24] Speaker 02:
I guess we're talking past each other.

[01:12:25] Speaker 02:
I guess if you wanted to, then you can't bring any new development in any terms whatsoever.

[01:12:30] Speaker 02:
Correct.

[01:12:30] Speaker 02:
Correct.

[01:12:30] Speaker 02:
Oh, no, no.

[01:12:30] Speaker 03:
Well, you'd be in whatever non-attainment that area is in.

[01:12:33] Speaker 03:
So that would depend on the particular area we're talking about.

[01:12:35] Speaker 02:
It would be more costly.

[01:12:37] Speaker 03:
But that's exactly right.

[01:12:39] Speaker 03:
But more to the point, that area would have been arbitrarily classified as being a nonattainment area when we know that the Clean Air Act is supposed to allow some margin for human activity.

[01:12:51] Speaker 03:
So with that, I will reserve the balance and thank the court.

[01:12:54] Speaker 03:
Thank you.

[01:13:01] Speaker 01:
Go ahead, please.

[01:13:03] Speaker 01:
General Dre has argued that the act requires EPA to consider background.

[01:13:10] Speaker 01:
EPA will argue that you don't have to reach the question whether the act requires or allows EPA to consider background, because in this case, EPA found as a factual matter that background levels didn't provide attainment.

[01:13:24] Speaker 01:
I want to offer a couple of other possible approaches you could think about.

[01:13:28] Speaker 01:
One is, based on the following three factors.

[01:13:33] Speaker 01:
One, I think it's clear that reading the act to allow consideration, regardless of whether it requires consideration, to allow consideration of background would be a permissible reading of the act.

[01:13:44] Speaker 01:
That's what the court held in American Trekking 3, that that would be – that you could consider it.

[01:13:50] Speaker 01:
Second, we've shown that EPA has recently recognized in one of the 28 J-letters that some recent events have shown that they recognize that it's an important aspect of the problem.

[01:14:02] Speaker 01:
The impact of background levels on attainability of the standards is an important aspect of the problem.

[01:14:08] Speaker 01:
EPA tried to address that by saying that background levels won't prevent attainment, but that was

[01:14:16] Speaker 01:
based on the assumption, as General J said, that you're talking about background levels alone.

[01:14:21] Speaker 01:
So they never really grappled with the fact as to there must be some allowance for human-caused activities.

[01:14:30] Speaker 01:
How big it is is not a matter that EPA didn't have to address because they didn't address that issue.

[01:14:36] Speaker 01:
So I think all those things together show

[01:14:39] Speaker 01:
that EPA did not take into account the important aspect of the problem, which is a hallmark under the APA of arbitrary decision making, and could be, case could be remanded on that ground.

[01:14:50] Speaker 01:
I have one other one, that possibility, that is, since EPA didn't really come to grips with the question of whether background levels would prevent attainment, once you take into account the sum allowance for

[01:15:10] Speaker 01:
anthropogenic activities.

[01:15:12] Speaker 01:
They also then didn't have to really come to grips with the problems to whether the act allows them to do that.

[01:15:20] Speaker 01:
And I'm suggesting that another possible approach is that this court could remand the case to EPA to consider these things in the first instance before the, give the EPA a shot at addressing, if they fix those things, they can address whether consideration of background is permissible when you take into account

[01:15:39] Speaker 01:
that there has to be some allowance for human activities.

[01:15:42] Speaker 01:
And if EPA should consider that first, and then before the court has the rule.

[01:15:47] Speaker 01:
So those are some suggestions as to possible activities I'd like to reserve.

[01:15:51] Speaker 01:
However, a few seconds I have.

[01:15:54] Speaker 01:
Thanks.

[01:15:54] Speaker 07:
Thank you.

[01:16:07] Speaker 07:
Good morning.

[01:16:08] Speaker 00:
Good morning, Your Honors, and may it please the court send me a thought for the United States EPA.

[01:16:13] Speaker 00:
Your Honors, the Clean Air Act does not require EPA to raise an ax because of background pollution.

[01:16:19] Speaker 00:
What the Clean Air Act requires is that EPA set an ax that is a requisite to protect public health and welfare.

[01:16:25] Speaker 00:
And the nation's public health and welfare is at issue in this case.

[01:16:29] Speaker 00:
State and industry petitioners' argument would deny necessary protection to millions of Americans across the country.

[01:16:36] Speaker 00:
when the record shows that only a few areas may experience high background ozone events.

[01:16:43] Speaker 02:
If background ozone blowing in from overseas caused exceedances in all or most of the Western United States, would the Clean Air Act require those states to somehow suck the ozone out of the air?

[01:17:01] Speaker 00:
Your Honor, EPA has never said that, and that is far from the situation here.

[01:17:05] Speaker 00:
Of course, under the international transport provision, states, yes, their areas will be designated nonattainment, but the data from that international pollution can be excluded.

[01:17:17] Speaker 00:
And so states will not need to demonstrate that they actually attain the NACs.

[01:17:22] Speaker 00:
They'll need to demonstrate that the international pollution is the but for cause of their nonattainment.

[01:17:28] Speaker 00:
So no, under the international.

[01:17:30] Speaker 02:
And then what implications for industry?

[01:17:33] Speaker 00:
And then what implications for industry?

[01:17:35] Speaker 00:
Well, the areas would maintain their non-attainment designations.

[01:17:40] Speaker 00:
So industry would still need to abide by the non-attainment resource review rules, et cetera.

[01:17:46] Speaker 00:
But the states would not be sanctioned.

[01:17:48] Speaker 00:
There's no implication of that here.

[01:17:51] Speaker 00:
In terms of the number of areas that are at issue, EPA studied

[01:17:57] Speaker 00:
locations across the country throughout the ozone season.

[01:18:01] Speaker 00:
There are more than 275,000 data points accounted for in EPA's models.

[01:18:08] Speaker 00:
And what EPA found was that only 2 or 22, depending on the model, points would exceed 70 ppb.

[01:18:16] Speaker 00:
And in terms of 60 PPB, only 35 or 135, again, depending on the model, would exclude 60 PPB.

[01:18:26] Speaker 00:
So we're talking about very few areas.

[01:18:29] Speaker 00:
Keep in mind there are over 3,000 counties in the country.

[01:18:31] Speaker 00:
And state petitioners have discussed three.

[01:18:37] Speaker 02:
And what are your responses to Mr. Dray's general days and Mr. Beeke's arguments about the averaging and how the data that you're relying on is just not realistic about how areas go into non-attainment?

[01:18:51] Speaker 00:
Your Honor, the points that I just discussed, the 2 and 22, 35, 135, those are days, those are specific days and specific locations.

[01:18:59] Speaker 00:
Those are not averages.

[01:19:00] Speaker 00:
Yes, EPA also studied the averages, but EPA studied these points as well.

[01:19:05] Speaker 00:
So it is incorrect to say,

[01:19:06] Speaker 00:
but EPA only studied the averages.

[01:19:08] Speaker 00:
As to Judge Griffith's question about API, the facts are different here, but the analysis still holds.

[01:19:18] Speaker 00:
We're talking about, again, limited areas, mostly in the Intermountain West, which is the area between the Rockies and the Sierras.

[01:19:25] Speaker 00:
And just like in that case, these regional implementation concerns do not need to change to that level of the next.

[01:19:35] Speaker 02:
And you point to, mainly in support of that, the various authorities, exceptional events, there's an international transport and the rural transport provisions.

[01:19:46] Speaker 02:
What about exceedances that might be caused or substantially prompted by background ozone that don't fit into those categories?

[01:19:55] Speaker 02:
What recourse?

[01:19:56] Speaker 00:
Your Honor, what EPA found on this record is that the levels of background ozone over 60 ppb, those that would approach or exceed the next, those are associated with stratospheric intrusions and wildfires.

[01:20:09] Speaker 00:
And those events do fall within the exceptional events provision.

[01:20:12] Speaker 00:
So we're not talking about some standard biogenic emissions that push background ozone

[01:20:19] Speaker 00:
way into those outlier categories.

[01:20:23] Speaker 00:
Those more typical background emissions are accounted for in the seasonal mean, obviously with some variation.

[01:20:28] Speaker 07:
Could I ask you to respond to Mr. Dre's statutory argument, which I said that doesn't the statute read as if these exceptions in implementation suggest that there is no requirement to consider background ozone in the setting of the NACs?

[01:20:47] Speaker 07:
You heard his

[01:20:47] Speaker 07:
argument response.

[01:20:48] Speaker 07:
Could you reply to that?

[01:20:51] Speaker 00:
Yes.

[01:20:51] Speaker 00:
Mr. Dre is pointing to some provisions that reference state implementation plans.

[01:20:57] Speaker 00:
And the conclusion that he's drawing from that is that under those provisions states are required to attain the NACs.

[01:21:04] Speaker 00:
That is not true.

[01:21:04] Speaker 00:
State implementation plans are submitted after exceptional events demonstrations.

[01:21:09] Speaker 00:
So the states will not need to demonstrate attainment

[01:21:14] Speaker 00:
you know, in terms of extracting background ozone because that background ozone data will have already been eliminated from the levels that the states will need to address.

[01:21:28] Speaker 00:
Also, Your Honor, in terms of the statutory argument, those provisions show that Congress was aware of background pollution, and as you said, Your Honor, rightly so, did not require EPA to account for background pollution in the setting of the next.

[01:21:41] Speaker 02:
Does EPA have a position on whether it's permitted to consider background ozone in setting the NACs?

[01:21:50] Speaker 00:
Your Honor, we believe that that question was not squarely addressed by this record.

[01:21:55] Speaker 00:
State and industry petitioners argued that EPA must raise the NACs, not that EPA could do so.

[01:22:01] Speaker 00:
And so we would say that that question is prudentially unripe before this court.

[01:22:08] Speaker 00:
EPA will be undertaking another NAICS review, is currently undertaking another NAICS review, and will be looking at that question.

[01:22:15] Speaker 00:
And at that time, we believe it would be the appropriate time if EPA does make a decision on that to review that question.

[01:22:22] Speaker 00:
And for support for our prudential ripeness proposition, I would direct you to the case API VEPA.

[01:22:30] Speaker 00:
It's actually one of Judge Griffith's cases.

[01:22:33] Speaker 00:
It's at 683 F3rd 382.

[01:22:41] Speaker 00:
Your honor, on the interstate emissions point, EPA rightly excluded interstate emissions from the definition of U.S.

[01:22:51] Speaker 00:
background, which is what EPA studied.

[01:22:53] Speaker 00:
because interstate emissions are controlled for under the Clean Air Act.

[01:22:57] Speaker 00:
Through the Good Neighbor provision, yes, but also through the petition process in section 7426A, as well as the transport region process in section 7506A, parenthesis A. Why the distinction between US background and international background?

[01:23:21] Speaker 00:
Well, U.S.

[01:23:21] Speaker 00:
background excludes international background and also it excludes natural background.

[01:23:28] Speaker 00:
So there are those two components that are excluded from U.S.

[01:23:32] Speaker 00:
background.

[01:23:33] Speaker 02:
I was just saying why?

[01:23:34] Speaker 02:
Does that make sense if you're looking at it from either from a health perspective or from the industry challenges and state challenges perspective?

[01:23:43] Speaker 00:
It makes sense from a modeling perspective.

[01:23:46] Speaker 00:
There are different modeling inputs or boundary conditions that you use.

[01:23:51] Speaker 00:
And so the source apportionment model, which is one of the two types of models, allows you to trace back to natural or international.

[01:24:06] Speaker 00:
Your Honor, in the flurry of 28-day letters, one of the letters, I believe it was the state petitioner's letter, cited a FERC case and I just wanted to make the point that this case is not like the FERC case because in that case the agency had created an exception

[01:24:24] Speaker 00:
when the statute charged it with creating a general methodology.

[01:24:29] Speaker 00:
Here, EPA has not created these exceptions.

[01:24:31] Speaker 00:
Congress has created these exceptions.

[01:24:34] Speaker 00:
Moreover, in the Fert case, the exceptions were so numerous the court was concerned that they might swallow the rule itself.

[01:24:42] Speaker 00:
And here again, as we said, the outliers are extremely rare.

[01:24:52] Speaker 00:
If there are no further questions, we ask the court to deny the petitions and to reserve the question of whether EPA may ever consider background pollution in a future next.

[01:25:03] Speaker 07:
Thank you.

[01:25:11] Speaker 08:
Good morning again.

[01:25:12] Speaker 08:
Seth Johnson for Health and Environmental Interveners.

[01:25:16] Speaker 08:
The question of whether EPA can consider background ozone at all is a straightforward legal question that has already been answered.

[01:25:23] Speaker 08:
It's a Chevron step one question.

[01:25:25] Speaker 08:
This court should reach it.

[01:25:26] Speaker 08:
And under this court's precedent and the Supreme Court precedent, it's already been rejected.

[01:25:31] Speaker 08:
EPA has no authority whatsoever to consider background ozone and setting standards.

[01:25:35] Speaker 08:
The base petitioners here are claiming that Congress surreptitiously made attainability a relevant consideration in standard setting by requiring plans to create – excuse me – by requiring states to create plans to achieve standards.

[01:25:49] Speaker 08:
That's an ancillary provision to the standard setting provision.

[01:25:53] Speaker 08:
The Supreme Court has already explained that for Congress to change what the fundamental basis for setting standards is in some provision – for Congress to change that fundamental basis for setting standards – That's not an issue we need to reach in this case, though.

[01:26:08] Speaker 07:
You'd like us to.

[01:26:09] Speaker 07:
It would be efficient.

[01:26:11] Speaker 07:
Efficient.

[01:26:12] Speaker 08:
And it would be proper.

[01:26:17] Speaker 08:
Whitman already held that the only thing that's relevant is the health and welfare effects of the pollutant in the ambient air.

[01:26:24] Speaker 08:
This court has already held that repeatedly and as a result

[01:26:29] Speaker 08:
Petitioners' arguments about background ozone and attainability, whether style does attainability or achievability, fail.

[01:26:36] Speaker 08:
API v. Costal is directly on point.

[01:26:40] Speaker 08:
In that case, this court reviewed challenges to ozone standards.

[01:26:44] Speaker 08:
Industry and governmental entities, some of which are parties today, argued that background ozone and the attainability of standards were important considerations in standard setting.

[01:26:54] Speaker 08:
And in that case, the court easily rejected the argument.

[01:26:56] Speaker 08:
API controls here.

[01:26:58] Speaker 08:
They try to evade it.

[01:27:00] Speaker 08:
They say API didn't address a situation where purportedly broad swaths of the country wouldn't be able to attain the standards, or would find it really hard to attain the standards, and that's simply wrong.

[01:27:11] Speaker 08:
At page 1190 of that case, the court agreed that information about, quote, the issue of whether attainment of the proposed standards would be precluded in most areas of the nation by natural background levels of ozone was irrelevant to standard setting.

[01:27:28] Speaker 08:
State petitioners ignore this point entirely, though it's controlling case law, and industry petitioners make the irrelevant point that the court simply referred to its earlier conclusion on attainability.

[01:27:40] Speaker 08:
The fact that API repeatedly held that attainability was irrelevant hardly weakens the force of its holding that attainability is irrelevant even when someone claims that a standard's attainability is broadly questionable.

[01:27:51] Speaker 08:
They also rely on ATA III.

[01:27:54] Speaker 08:
ATA III never wants

[01:27:57] Speaker 08:
cited API, the discussion of background ozone is at most a subsidiary issue there.

[01:28:03] Speaker 08:
And even industry petitioners agree in their reply at page 10 that the question of whether EPA could consider background ozone wasn't squarely at issue in that case.

[01:28:11] Speaker 08:
So it's dictum.

[01:28:14] Speaker 08:
And even if there were some conflict between ATA III and API, API would control because it's the older case.

[01:28:38] Speaker 05:
Good morning, Your Honors.

[01:28:39] Speaker 05:
Jonathan Weiner for State Interveners.

[01:28:42] Speaker 05:
I'd like to make two points.

[01:28:44] Speaker 05:
First, as Judge Griffith was alluding to with your initial question, Congress has already spoken to the question of how to handle background – the effects background emissions might have on attainment.

[01:28:57] Speaker 05:
You mentioned three provisions.

[01:28:58] Speaker 05:
I count at least five scenarios covered by multiple provisions in the Clean Air Act.

[01:29:06] Speaker 07:
Math is not my forte, I guess.

[01:29:09] Speaker 05:
Well, I'm not giving you an exact number.

[01:29:12] Speaker 05:
I'm saying it's more than five.

[01:29:13] Speaker 05:
But it covers interstate transport, international transport,

[01:29:18] Speaker 05:
rural transport, exceptional events.

[01:29:21] Speaker 05:
And I'd like to point out one other example that was not cited in the briefs that I think gets to Judge Pillard's question about what doesn't fit.

[01:29:29] Speaker 05:
And that is section 7513E and F, which addresses biogenic emissions of particulate matter and provides for waivers and extensions of certain non-attainment requirements.

[01:29:43] Speaker 05:
It's for particulate matter, not ozone, but taken together with all the other provisions

[01:29:48] Speaker 05:
It shows that Congress thought about all of the concerns that petitioners are raising, and it articulated the specificity how and when each of them should be addressed.

[01:29:57] Speaker 05:
And there would have been no need to have done this if EPA could instead respond to background emissions by simply weakening national standards below the level requisite to protect public health.

[01:30:09] Speaker 05:
Judge Griffith, you asked if the court needs to reach this question.

[01:30:13] Speaker 05:
I think you may need to reach this question if

[01:30:17] Speaker 05:
I think depending on what you think of the petitioner's argument that EPA has already concluded, has wrongly concluded that it cannot consider background ozone.

[01:30:29] Speaker 05:
The second point is about the point of the NAICS program.

[01:30:32] Speaker 05:
And that is to identify areas with unhealthy air quality and help them improve it.

[01:30:37] Speaker 05:
Non-attainment designations are a feature of that program.

[01:30:40] Speaker 05:
They're not a bug.

[01:30:41] Speaker 05:
And in the experience of our coalition of states and state air agencies and the District of Columbia,

[01:30:47] Speaker 05:
their non-attainment designations are very helpful to us in improving our air quality.

[01:30:53] Speaker 05:
Just a number of ways in which they do that, they unlock federal tools.

[01:30:57] Speaker 05:
Most importantly for what we're talking about today, I think the provisions that give downwind states recourse against emissions from upwind sources.

[01:31:07] Speaker 05:
They amup federal grant funding.

[01:31:09] Speaker 05:
They trigger planning processes.

[01:31:11] Speaker 05:
In some cases, they allow greater action under state law.

[01:31:13] Speaker 05:
And they inform state and local decisions about resource allocation and where it's safe to site industrial facilities.

[01:31:20] Speaker 05:
If EPA did not have to call a spade a spade but could instead pretend unhealthy air protects public health, we would lose all of these benefits.

[01:31:27] Speaker 05:
And just to respond to a state petitioner's argument about the effects of California emissions on Yuma, what they're really arguing is

[01:31:37] Speaker 05:
that the NACs should be weaker nationwide, which would result in California no longer being responsible for emissions that it might be sending into Yuma.

[01:31:50] Speaker 05:
It would also result in states in the Northeast losing the benefits of non-attainment destinations that have nothing to do with emissions that might be traveling back and forth between California and Yuma, or as I imagine you would say, in just one direction.

[01:32:07] Speaker 05:
That's where petitioners' interpretation leads.

[01:32:11] Speaker 05:
It's wholly irrational.

[01:32:13] Speaker 05:
It's not what the statute allows.

[01:32:15] Speaker 05:
And as the co-counsel just said, it's already been decided by women in API.

[01:32:21] Speaker 05:
We ask this court to reject it.

[01:32:24] Speaker 05:
Thank you.

[01:32:26] Speaker 07:
How much time does Mr. Dre have?

[01:32:31] Speaker 07:
Is that enough?

[01:32:32] Speaker 07:
You want three?

[01:32:33] Speaker 03:
Oh, how much time do you have?

[01:32:36] Speaker 03:
I actually got about a minute, but we'll give you three.

[01:32:40] Speaker 03:
It's been a long morning, so I'll try to be efficient about this.

[01:32:44] Speaker 03:
A couple of points in response to my various friends on the other sides.

[01:32:51] Speaker 03:
First of all, EPA points out that we've discussed only three counties.

[01:32:54] Speaker 03:
There are only 15 counties in Arizona.

[01:32:55] Speaker 03:
Out West, they're pretty big, and it covers huge swaths of land.

[01:33:00] Speaker 03:
They also said that the reason for distinguishing between international and interstate was modeling.

[01:33:05] Speaker 03:
That is not a sufficient rational explanation for that distinction.

[01:33:11] Speaker 03:
I'll also take the opportunity to discuss briefly the claim that the consideration only as to the range might not be right.

[01:33:20] Speaker 03:
Only isn't my word, it's in the rulemaking at 65-328.

[01:33:23] Speaker 03:
They just graphed that word onto American Trucking 3, which says that you can consider it.

[01:33:30] Speaker 03:
On the subject of American Trucking 3, Mr. Johnson pointed out

[01:33:35] Speaker 03:
that under his reading, that's somehow at odds with API and Whitman.

[01:33:41] Speaker 03:
I suggest that that's actually a flaw in his reading of that precedent rather than a flaw in this court's work there.

[01:33:47] Speaker 03:
That not only allowed ATA III, that is, not only allowed consideration of background ozone, but in fact, in a circumstance not so different from this one, the court blessed EPA's

[01:33:57] Speaker 03:
They're more creative than here solution as to background ozone concerning particulate matter.

[01:34:02] Speaker 03:
In that case, I mean, the geography was inverted.

[01:34:04] Speaker 03:
It was hard for the east to achieve the PM standard and easy for the west.

[01:34:11] Speaker 03:
But what EPA did in that case was it set a standard that was achievable everywhere and then turned to regional haze and used a different tool from its toolkit to help solve the problems that persisted on the East Coast.

[01:34:23] Speaker 03:
We have the sort of rhetorical argument, it's a straw man of course, but from the briefing and again just now that we'd require the standard to be set at the worst level in the country or something like that.

[01:34:35] Speaker 03:
What we're asking for is just process improvements and EPA could frankly do something like it did in ATA 3 or it could set a standard that's defined as background plus 20 parts per billion or whatever.

[01:34:47] Speaker 03:
The point is that this lack of creativity is a function of sloppy and hasty rulemaking.

[01:34:53] Speaker 03:
One final point, on the subject of the good neighbor provision, the good neighbor provision is very, very cold comfort for states like Nevada, Utah, and Arizona that live next door to California, because they're already in the most extreme form of non-attainment, as they mentioned in their brief.

[01:35:12] Speaker 03:
we can't foist any more restrictions on them.

[01:35:15] Speaker 03:
They don't get more extreme.

[01:35:16] Speaker 03:
The good neighbor provision does nothing for the good neighbor.

[01:35:19] Speaker 03:
It's actually something of a misnomer.

[01:35:20] Speaker 03:
It should be called the bad neighbor provision, because it just allows the good neighbor to complain about what's going on next door.

[01:35:26] Speaker 03:
And although sort of satisfying, that doesn't do anything to help us realize attainment.

[01:35:33] Speaker 03:
With that, the court has three competing approaches to background ozone before today.

[01:35:38] Speaker 03:
The environmentalist petitioners say that it can never be considered.

[01:35:40] Speaker 03:
The states say that it should be remanded for a rational and consistent approach, along the four lines I explained.

[01:35:49] Speaker 03:
And EPA says that it can sometimes consider it, but not all the time, like range versus value, and it can consider some, like international, but not all, like interstate.

[01:35:58] Speaker 03:
That's not wise or moderate.

[01:36:00] Speaker 03:
It's arbitrary and capricious, and this Court should vacate and remand the rule for a more thoughtful rulemaking.

[01:36:07] Speaker 03:
Thank you very much.

[01:36:11] Speaker 01:
Just one, Jim Beeke for the Institute of Petitioners.

[01:36:17] Speaker 01:
Just one quick point.

[01:36:19] Speaker 01:
Ms.

[01:36:19] Speaker 01:
Bott says you don't need to reach the question of whether EPA may consider background ozone levels in setting the standard.

[01:36:27] Speaker 01:
Environmental interveners say yes, you should, and you can't do it.

[01:36:31] Speaker 01:
But I'd suggest it one way.

[01:36:34] Speaker 01:
Give the EPA a shot at whether it never really considered that question, never considered it in the context of,

[01:36:40] Speaker 01:
looking at if background levels will prevent attainment, when you consider there must be some allowance for manmade emissions, then can EPA consider background?

[01:36:55] Speaker 01:
They should look at that first, and then the case can come back.

[01:37:00] Speaker 01:
The case can be remanded for that.

[01:37:02] Speaker 01:
Just one other thing on the quote that

[01:37:05] Speaker 01:
that the Vimal petitioners or Vimal interveners made about most areas of the country.

[01:37:11] Speaker 01:
That's not what the court held in the API case.

[01:37:15] Speaker 01:
In that case, in that part of the case, the court was ruling on a decision to reject some documents submitted late by the American Petroleum Institute.

[01:37:27] Speaker 01:
And it was American Petroleum Institute that said these documents would affect the attainability of ozone in many parts of the country.

[01:37:35] Speaker 01:
And the court said that EPA was okay to not let that in.

[01:37:39] Speaker 01:
So it's a little miscitation of that.

[01:37:42] Speaker 01:
That's it.

[01:37:42] Speaker 01:
Anything else?

[01:37:43] Speaker 07:
Thank you very much.

[01:37:44] Speaker 07:
The case is submitted.