[00:00:01] Speaker 01:
Case number 18, there's 1285 at L. State of Maryland Petitioner versus Environmental Protection Agency.

[00:00:25] Speaker 01:
Good morning, Your Honor.

[00:00:27] Speaker 01:
I'm William Kisau and I represent Petitioner State of Delaware.

[00:00:31] Speaker 01:
I will be addressing the out-of-state monitoring issue on behalf of the state of Delaware, as well as position our intervenors in this matter.

[00:00:39] Speaker 01:
Just briefly, Your Honors, my colleague, Mr. Joshua Segal, sorry, Mr. Joshua Berman, will be addressing the remaining step one issues.

[00:00:49] Speaker 01:
And my colleague, Mr. Michael Shranty, will be addressing the step three issues.

[00:00:54] Speaker 07:
May I have the floor?

[00:00:56] Speaker 07:
microphone microphone a little bit or get closer to the microphone.

[00:01:00] Speaker 01:
Oh sure Your Honor.

[00:01:01] Speaker 02:
You can't pick it up.

[00:01:02] Speaker 02:
We gotta move up the hole.

[00:01:10] Speaker 07:
Thanks a lot.

[00:01:11] Speaker 01:
Is this better Your Honor?

[00:01:14] Speaker 01:
May it please the court.

[00:01:16] Speaker 01:
Delaware petitioner intervener states are asking the court to find that section 126 permits any state in a multi-state non-attainment area

[00:01:25] Speaker 01:
to file a section 126 petition to address the missions that are contributing to the multi-state areas non-attainment.

[00:01:34] Speaker 01:
There are three points I would like to make to support the Delaware petitioner intervener's position.

[00:01:39] Speaker 01:
First, we believe the plain language of section 126 clearly authorizes any state within a multi-state area to file section 126 petition on behalf of the entire multi-state area.

[00:01:55] Speaker 01:
This court in Denver EPA, a case that Delaware sites in its reply brief, this court construed the language any state in the context of a request for an attainment date extension from a multi-state area.

[00:02:11] Speaker 05:
Do you need to be suing on behalf of the whole multi-state area?

[00:02:16] Speaker 05:
I thought the simplest ground you have, which to me is a pretty compelling one, which is that

[00:02:25] Speaker 05:
Even if the receptor is in Pennsylvania, once you get a hit, that triggers legal consequences for Delaware, and you're Delaware, and that's all you need.

[00:02:37] Speaker 01:
That, your honor, I don't know that I could have summarized our argument better than you just did.

[00:02:41] Speaker 01:
That's really our argument in a nutshell, that because every state in the multi-state area is equally affected by any one non-attaining monitor, any state in the multi-state area should be able to petition based on that non-attaining monitor.

[00:02:56] Speaker 01:
I see my time is about up.

[00:02:59] Speaker 01:
Just briefly, even if the court finds that the plain language or the statute is ambiguous, we still feel that EPA's interpretation is unreasonably narrow because the far states that are similarly situated in a multi-state non-attainment area are being able to avail themselves of a remedy simply because the non-attaining monitor is not located within the petitioning state.

[00:03:21] Speaker 01:
And we don't see any support for that narrow interpretation

[00:03:25] Speaker 01:
is section 126.

[00:03:31] Speaker 01:
And then briefly, Your Honor, the last point is we feel that if EPA looked at Delaware's petition the same way as it did Maryland, it would have found that Delaware's petition satisfied steps one and step two.

[00:03:44] Speaker 01:
EPA concluded Maryland satisfied steps one and two because under its CASPER update, they found that Maryland would have a maintenance receptor.

[00:03:52] Speaker 01:
But that same modeling showed that the Philadelphia non-attainment area would also have a maintenance receptor.

[00:03:58] Speaker 01:
So we feel that if Maryland was applying the same standard, or I'm sorry, that if EPA was applying the same standard to both states' petitions, it should have included that Delaware's petitions also satisfy Steps 1 and Step 2.

[00:04:11] Speaker 02:
All right.

[00:04:11] Speaker 02:
Thank you, Mr. Cassell.

[00:04:12] Speaker 01:
Thank you, Your Honors.

[00:04:17] Speaker 02:
Mr. Berman.

[00:04:27] Speaker 04:
May it please the court, Joshua Berman on behalf of citizen petitioners in the state of Delaware, I will address the remaining step one issues that would acknowledge that if the court agrees with the argument from Mr. Kassab, it is not necessary to reach the issues that I'm going to be addressing here.

[00:04:42] Speaker 04:
The operative remaining question at step one is whether Delaware itself has an air quality problem.

[00:04:48] Speaker 04:
On the record, it does.

[00:04:49] Speaker 02:
Don't you have to, does his argument actually

[00:04:54] Speaker 02:
go to the 2015 NACs unless you make an argument about what the appropriate analytic year is?

[00:05:00] Speaker 04:
Correct, Your Honor.

[00:05:02] Speaker 04:
This argument exclusively goes to the 2015 analytic year.

[00:05:05] Speaker 04:
The arguments that Mr. Kassab just made affect the EPA, the reasonableness of the EPA's interpretation under both 2008 and 2015.

[00:05:14] Speaker 04:
So you want to address what the correct analytic year is?

[00:05:19] Speaker 04:
Delaware, there's no dispute on the record here that Delaware submitted its petition pursuant to both

[00:05:24] Speaker 02:
I'm sorry, I don't mean that.

[00:05:26] Speaker 02:
I mean, whether 2023 is the correct year or not.

[00:05:32] Speaker 02:
I see.

[00:05:32] Speaker 02:
Yes, Your Honor.

[00:05:33] Speaker 04:
So, as this Court most recently reaffirmed in the Wisconsin and New York decisions that came out this fall, of which there are 20 HA letters regarding, the correct analytic year has to be the year that Delaware is required to attain an axe no later than.

[00:05:50] Speaker 04:
Here, Delaware is designated as a marginal non-attainment area for the 2015 standard.

[00:05:55] Speaker 04:
It's undisputed on the record that its attainment date is August 2021.

[00:05:58] Speaker 04:
EPA's decision to look exclusively at air quality projections beyond that date are foreclosed by this Court's decisions in Wisconsin and in New York, which say that states are required to attain by their attainment dates, and good neighbor obligations must be implemented on a timeframe that permits timely attainment.

[00:06:21] Speaker 04:
More fundamentally here, EPA unlawfully fails to give effect to the present tense, emits, in section 126.

[00:06:31] Speaker 04:
EPA acknowledges that emits refers to current emissions, but it insists that relief is only available for future non-attainment.

[00:06:39] Speaker 04:
EPA is unable to bridge this divide.

[00:06:42] Speaker 04:
Current emissions affect current non-attainment, not air quality, in 2023, which is what EPA exclusively considered.

[00:06:51] Speaker 04:
As this court already observed in North Carolina, Section 126 can provide relief for present-day violations of air quality standards.

[00:07:00] Speaker 04:
And the Third Circuit in Genon-Rima affirmed that Section 126 is a tool for immediate action.

[00:07:07] Speaker 04:
On this record, it is undisputed that Delaware monitors persist in non-attainment of the 2015 ozone standard.

[00:07:13] Speaker 04:
Delaware therefore satisfies step one for this standard.

[00:07:18] Speaker 04:
And moreover, even if the court were to disagree about the plain language of section 126, and some consideration of future air quality were permissible, as we just discussed, the schedule, EPA's analytic approach to step one conflicts with the attainment schedules in the act that were at issue in this course decision in Wisconsin and in New York.

[00:07:37] Speaker 05:
Just on the present versus future point, you don't disagree that,

[00:07:46] Speaker 05:
One essential element of a section 126 petition is a violation of the good neighbor provision, right?

[00:07:58] Speaker 05:
That is correct, your honor.

[00:08:00] Speaker 05:
And a thought in, I think it was North Carolina, we upheld a view of the good neighbor provision as future focused.

[00:08:13] Speaker 04:
That's correct, Your Honor, but the context is quite important.

[00:08:16] Speaker 04:
In the North Carolina case, this court was considering EPA's interpretation of the word will in section 110A2DI.

[00:08:22] Speaker 04:
And we said it connotes both certainties.

[00:08:24] Speaker 04:
That's right.

[00:08:25] Speaker 04:
It acknowledged there were two distinct meanings that the word connoted and said in the context of the Clean Air Interstate Rule, which was a federal implementation plan, it was not unreasonable for EPA to give it forward-looking effect.

[00:08:39] Speaker 04:
In that context, in the planning context, it made sense for that word to have future effect.

[00:08:44] Speaker 04:
Implementation plans are, by their nature, forward-looking.

[00:08:47] Speaker 04:
They are planning documents.

[00:08:48] Speaker 04:
By contrast, in the next sentence, the North Carolina court turned around and said, Section 126 is different.

[00:08:54] Speaker 04:
Section 126 provides relief for present-day violations of air quality standards.

[00:09:00] Speaker 04:
Again, we cannot see a way to read the word omits consistent with the exclusively forward-looking nonattainment consideration that EPA has given it.

[00:09:09] Speaker 05:
No, but I mean, there's the anti-chameleon canon, right?

[00:09:14] Speaker 05:
Once you impose a certain construction on a statute, that's what the statute means.

[00:09:21] Speaker 05:
It can't shift according to context.

[00:09:26] Speaker 04:
But as this court recognized, the context there did matter.

[00:09:29] Speaker 04:
The court expressly recognized that Section 126 presented a context.

[00:09:33] Speaker 05:
The context was a justification for upholding

[00:09:38] Speaker 05:
EPA's interpretation of 126 as forward-looking, but once we've done that, that's what Section 126 means, and that's what you're stuck with here.

[00:09:50] Speaker 04:
Your Honor, even if the Court finds that, again, as the discussion I had with Chief Judge Garland,

[00:09:56] Speaker 04:
It is still relevant here that the dates that EPA considered in rejecting Delaware's petition at step one were exclusively beyond Delaware's attainment date.

[00:10:06] Speaker 04:
And I believe, of course, decisions in Wisconsin and New York foreclosed consideration of air quality beyond attainment dates as a basis for disclaiming the existence of an air quality problem.

[00:10:16] Speaker 04:
And also it clearly held that good neighbor obligations must be implemented on a time frame that's consistent with and allows for a timely attainment of the air quality standards.

[00:10:25] Speaker 04:
I see my time is up.

[00:10:27] Speaker 04:
Thank you, Your Honors.

[00:10:51] Speaker 03:
Good morning, Your Honors, and may it please the Court.

[00:10:54] Speaker 03:
Michael Strandy, representing the state of Maryland, discussing the step three issues on behalf of the petitioners in this matter.

[00:11:01] Speaker 03:
With regard to the step three issues, I'd like to discuss three points.

[00:11:05] Speaker 03:
The first is that the update rules aggregate assumptions are inconsistent with the source specific data presented in the petition before you.

[00:11:15] Speaker 03:
Two, that the update rules cap and trade program fails

[00:11:20] Speaker 03:
to reasonably address the emissions from the named units in consideration of how ozone attainment is measured, and three, how the EPA's denial of non-catalytic controls was inconsistent with its past statements.

[00:11:36] Speaker 02:
Can I ask you to address number four and to address that first?

[00:11:40] Speaker 02:
It may incorporate all the others.

[00:11:42] Speaker 02:
which is how do our decisions in Wisconsin and New York affect the ability of the EPA to rely on the update rule at all.

[00:11:52] Speaker 03:
Absolutely, Your Honor.

[00:11:54] Speaker 03:
The update rule, this court's decision in Wisconsin absolutely addressed the issue of EPA's establishment of an aggregate emissions limit for purposes of the update rule, which was a regional rule meant to address hundreds of sources across 22 different states.

[00:12:21] Speaker 03:
And this court found in that decision that EPA's use of a fleet-wide average to generally approximate what optimization would be, a 0.10 pounds per million BTU emissions rate, was reasonable within the scope of that rule.

[00:12:43] Speaker 03:
But it's important to note a couple things here, Your Honor.

[00:12:47] Speaker 03:
That rule, in establishing that rule, the EPA noted that specific individual units would be able to, could have better rates than that 0.1 emissions rate.

[00:12:59] Speaker 03:
and that their use of a generally achievable rate was specifically noted, their use of a single uniform rate was only appropriate, quote unquote, due to the partial nature of the remedy.

[00:13:15] Speaker 03:
And this court, as Your Honors know, has said that partial remedy was inappropriate and has remanded to EPA the update rule in order to implement a complete remedy.

[00:13:28] Speaker 05:
We upheld the rule with one exception, right?

[00:13:33] Speaker 05:
And the one exception was the failure to harmonize the up stick, the upwind deadlines with the

[00:13:41] Speaker 05:
under good neighbor with the downwind attainment deadlines, right?

[00:13:44] Speaker 03:
Well, I think this court said the rule was reasonable but for it being a partial rule and that a complete remedy needed to be implemented by the deadline.

[00:13:59] Speaker 03:
It's because of the failure to harmonize those deadlines.

[00:14:03] Speaker 05:
That's correct.

[00:14:04] Speaker 05:
Which seems like a different problem from some of the ones

[00:14:11] Speaker 05:
at issue here, we declined to vacate the rule.

[00:14:16] Speaker 05:
The reason we gave for declining to vacate the rule was to preserve the structure and integrity of the cap and trade program.

[00:14:29] Speaker 05:
And we certainly didn't foreclose EPA from preserving that

[00:14:33] Speaker 03:
kind of program in whatever it did on remand.

[00:14:37] Speaker 03:
There are two different things here, and I definitely want to try to address both of them.

[00:14:42] Speaker 03:
You're absolutely right, Your Honor.

[00:14:43] Speaker 03:
I don't think EPA's use of these generalized assumptions in establishing its partial rule, which was meant to be broad and address generally what optimization was, was intended to be

[00:15:00] Speaker 03:
overturned, and it wasn't overturned, but that doesn't also mean that these particular units can't do better.

[00:15:07] Speaker 03:
And EPA has conceded that their step three analysis is to consider whether there are additional cost-effective emissions reductions available at these particular sites.

[00:15:19] Speaker 03:
I think this would be more akin to the way this Corps and the Supreme Court has treated EPA's establishment of

[00:15:28] Speaker 03:
Statewide emission budgets under the original Casper rule and the Casper update.

[00:15:33] Speaker 03:
In those cases, EPA put forth a general strategy for establishing emissions budgets and then allocating allowances to individual sources.

[00:15:46] Speaker 03:
This court and the Supreme Court upheld that general structure but said there can be as applied challenges.

[00:15:52] Speaker 03:
And this is like an as applied challenge here, Your Honor.

[00:15:55] Speaker 03:
Remember, we're talking about a rule that was promulgated under Section 110, and whether that rule under 110, which is a statewide federal implementation plan, can satisfy a 126 petition, which is a separate independent provision under the Clean Air Act meant to address specific sources.

[00:16:19] Speaker 05:
I mean, that goes back to a question I asked your colleague, which is,

[00:16:25] Speaker 05:
One essential element of a 110 finding is a 126 violation.

[00:16:31] Speaker 03:
That's correct, Your Honor.

[00:16:33] Speaker 03:
So EPA has already said here that we have a downwind non-attainment problem with regard to Maryland, and that at step two, the cap and trade program that they have has not pushed the states, the upwind states that are named in the petition below their threshold mark.

[00:16:54] Speaker 03:
And under EPA's own three-step analysis, the next step is then to determine whether there are any cost-effective emissions reductions available within the state.

[00:17:04] Speaker 03:
And this petition, based on fact-specific data about these specific sources, says there are more cost-effective emissions reductions.

[00:17:13] Speaker 02:
Maybe misunderstood.

[00:17:14] Speaker 02:
I have a more fundamental administrative law question issue here, which I thought was an argument that you had made in your 20HA letter, but maybe I'm wrong about that.

[00:17:24] Speaker 02:
And that is the government's answer to your 126 petition is that you haven't shown that a major source would emit any air pollutant in violation of the prohibition of the good neighbor provision.

[00:17:40] Speaker 02:
Because the update rule ensures that there is no violation of the good neighbor provision.

[00:17:49] Speaker 02:
That's their reason.

[00:17:50] Speaker 02:
We have found that the update rule does not satisfy the good neighbor provision.

[00:17:56] Speaker 02:
And that means that the justification they have provided under the Chenery rule no longer upholds the reason that they gave in rejecting your petition.

[00:18:10] Speaker 02:
I'm not saying this is correct analysis, but that strikes me as your best argument in all the 200 pages of briefs that you filed here.

[00:18:18] Speaker 02:
If you could focus on that, I would appreciate it.

[00:18:21] Speaker 02:
Sure, Your Honor.

[00:18:22] Speaker 03:
So we have a remand.

[00:18:25] Speaker 03:
You're absolutely right.

[00:18:26] Speaker 03:
We have a remand of a rule to provide a complete remedy.

[00:18:29] Speaker 03:
EPA has not to date told us where the proper line is to provide that complete remedy.

[00:18:37] Speaker 03:
And so it's unclear how EPA can rely upon a remanded rule as satisfying this source specific 126 petition.

[00:18:47] Speaker 03:
I would move on to cap and trade, but I'm not sure if that answer is satisfied.

[00:18:51] Speaker 02:
Well, they gave an answer in their 28-J letter.

[00:18:54] Speaker 02:
And if you could respond to that, that would be helpful.

[00:18:59] Speaker 02:
All right.

[00:19:01] Speaker 02:
I'm struggling to.

[00:19:02] Speaker 02:
All right.

[00:19:02] Speaker 02:
Well, we'll give you a chance, I guess.

[00:19:04] Speaker 02:
Are you the rebuttal speaker as well?

[00:19:05] Speaker 02:
You'll have a chance.

[00:19:06] Speaker 02:
I am.

[00:19:07] Speaker 02:
I am, but I don't.

[00:19:08] Speaker 02:
Now that I've presented the question, I'm sure that the EPA will answer it, and then you'll have a chance to rebuttal.

[00:19:13] Speaker 03:
Okay, that sounds fair, Your Honor.

[00:19:15] Speaker 03:
With regard to cap and trade, I know Judge Katz has asked a question about cap and trade, and I want to make clear

[00:19:23] Speaker 03:
That Maryland isn't, and the petitioners aren't, stating that a cap and trade program can't be used as satisfying the 126 petition.

[00:19:32] Speaker 03:
Of course, if EPA established a cap and trade program which prevented a state from contributing above the threshold amount at step two, that would satisfy the 126 petition.

[00:19:45] Speaker 03:
And it's possible that EPA could craft a trading program that would limit contributions from individual sources consistent with the way ozone attainment is demonstrated.

[00:19:57] Speaker 03:
But that's not the cap and trade program we have before us today.

[00:20:01] Speaker 03:
EPA is relying on emissions from outside sources not named in the 126 petition to establish a generalized optimization rate without looking at what the proper optimization rate is for these particular sources.

[00:20:18] Speaker 03:
And then the cap and trade program would allow a state to go up to 20% over its statewide budget, 120% of its emissions.

[00:20:28] Speaker 03:
can be allotted for with allowances.

[00:20:33] Speaker 03:
And EPA says so long as those named sources, even if they're emitting more, it's okay so long as sources outside of the petition scope are eliminating.

[00:20:47] Speaker 03:
the same amount of emissions.

[00:20:49] Speaker 03:
And that's a fundamental question about EPA's authority under Section 126.

[00:20:55] Speaker 02:
Section 126... If you're right about that, wouldn't that eliminate any kind of cap and trade program?

[00:21:01] Speaker 03:
No, I think a cap and trade program could be crafted such that it looks at

[00:21:06] Speaker 03:
the named sources in a 126 petition and allows for balancing and movement amongst those sources.

[00:21:14] Speaker 02:
But you can't have a cap and trade between states or within a state, is that correct?

[00:21:18] Speaker 03:
You absolutely could.

[00:21:19] Speaker 03:
I think the proper place for that would be at satisfaction of step two.

[00:21:25] Speaker 03:
You're getting below the threshold amount, and so you've satisfied the first part.

[00:21:29] Speaker 02:
And then... You're saying under, just to be clear, you're saying under step three,

[00:21:35] Speaker 02:
You can't have a cap and trade that doesn't address the specific sources that you raise in the 126, but instead addresses all the sources in such a way as to satisfy whatever

[00:21:51] Speaker 02:
cost-effective result the agency comes up with in terms of contribute substantially to downstate emissions.

[00:21:58] Speaker 02:
I think that's right, your honor.

[00:22:00] Speaker 03:
I want, maybe if I take a step back and do some table setting here for you, and maybe I should have done that at the beginning.

[00:22:07] Speaker 03:
We're talking about an update, the update rule was promulgated under section 110 as a federal implementation plan to resolve a state's statewide failure to do an adequate SIP, state implementation plan.

[00:22:25] Speaker 03:
In contrast, section 126 is an independent, Congress set an independent mechanism to address

[00:22:33] Speaker 03:
violations of the good neighbor provision from a source or group of sources.

[00:22:39] Speaker 03:
By the plain language of that section, the EPA must then make a finding based upon that petition, whether those named sources do or do not do what the petition says, and then if there is a finding,

[00:22:55] Speaker 03:
The EPA must regulate those sources.

[00:22:58] Speaker 03:
Those sources must either shut down or come into compliance with the Good Neighbor provision.

[00:23:03] Speaker 03:
And it's unclear how EPA can rely on emissions reductions from other states or other sources in order to satisfy those specific obligations under Section 126.

[00:23:18] Speaker 03:
I don't know if that answers your question.

[00:23:20] Speaker 03:
I see I'm out of time.

[00:23:21] Speaker 03:
I'd be happy to respond to more.

[00:23:24] Speaker 03:
Thank you.

[00:23:25] Speaker 03:
Thank you.

[00:23:48] Speaker 00:
Good morning, Your Honors.

[00:23:50] Speaker 00:
May it please the Court, my name is Samara Spence.

[00:23:52] Speaker 00:
I'm here on behalf of EPA.

[00:23:54] Speaker 00:
With me at council table, I have Abhi Vijayan and Stephanie Hogan from EPA's Office of General Counsel.

[00:24:02] Speaker 00:
I'll get into the step one and step three issues in a little bit more detail, but I'd like to start with the questions about the Wisconsin opinion and how it affects EPA's justification here.

[00:24:14] Speaker 00:
It's important to keep in mind, as I think you, Judge Katz, has pointed out, the Wisconsin opinion upheld most of the update rule.

[00:24:23] Speaker 00:
That was the modeling that EPA did, these fleet-wide assessments that EPA did, the cost threshold, the trading program remedy, all that was upheld.

[00:24:38] Speaker 00:
in Wisconsin had to do with the fact that that rule was partial, and EPA has always admitted that it was partial.

[00:24:46] Speaker 00:
There were things that EPA didn't assess in the update, and those things were controls at non-power plants, non-EGUs, and things like new catalytic controls and new non-catalytic controls.

[00:25:02] Speaker 00:
So there are sources out there that haven't installed those things.

[00:25:06] Speaker 00:
What the update focused on,

[00:25:08] Speaker 00:
was optimization and operation of existing catalytic controls and existing non-catalytic controls.

[00:25:18] Speaker 00:
Those are the same controls that petitioners have brought forward in this case.

[00:25:26] Speaker 00:
So when you ask Judge Garland about how does that impact EPA's conclusion as to those sources, it doesn't.

[00:25:35] Speaker 00:
because EPA's assessment of these sources in the update was complete and it is complete now.

[00:25:44] Speaker 00:
What's not complete is the rest of it.

[00:25:46] Speaker 00:
These petitions are not about the rest of it.

[00:25:49] Speaker 00:
They're not about non-power plants.

[00:25:52] Speaker 02:
I understand that argument and I expect the other side will, I'm expecting the other side to answer that question in a little while now that they understand the argument.

[00:26:03] Speaker 02:
But again, I'm thinking about a slightly more basic level.

[00:26:07] Speaker 02:
Your argument is that section 126 petition fails as long as it doesn't produce violations of the good neighbor provision, which is 110, right?

[00:26:23] Speaker 02:
That's your argument.

[00:26:24] Speaker 02:
Yes.

[00:26:25] Speaker 02:
But in Wisconsin, we held,

[00:26:29] Speaker 02:
And in order to establish that, you rely on the update rule, which determines that the upwind states will not contribute significantly to the downwind states' attainment.

[00:26:44] Speaker 02:
Contributes significantly, includes cost analysis, et cetera.

[00:26:47] Speaker 02:
Right?

[00:26:48] Speaker 02:
So I've got sort of the rationale here.

[00:26:49] Speaker 00:
Correctly?

[00:26:50] Speaker 00:
This is one part, which is that EPA didn't stop with what was in the update.

[00:26:55] Speaker 00:
EPA supplemented that analysis in this rule.

[00:26:57] Speaker 00:
So EPA said, here's what I did in the update.

[00:26:59] Speaker 00:
Here's what I looked at.

[00:27:00] Speaker 00:
Here's the remedy I imposed.

[00:27:01] Speaker 00:
And I'm also looking at these new things.

[00:27:03] Speaker 00:
So it did not just rest its laurels in the update.

[00:27:06] Speaker 02:
Well, but all of that rested on the wrong year.

[00:27:11] Speaker 02:
I want you to assume for the moment that all of that rested on the wrong future year.

[00:27:16] Speaker 02:
Assume that the correct future year is 2021, not 2023.

[00:27:19] Speaker 02:
I appreciate you have an argument to the contrary.

[00:27:23] Speaker 02:
But for the purposes of this discussion, assume that we think

[00:27:26] Speaker 02:
At least that I think that 2021, not 2023 is the right year.

[00:27:32] Speaker 02:
Under those circumstances, in Wisconsin we said the update rule we consider in this case fails to eliminate upwind state significant contributions to downwind pollution by the statutory deadline for downwind states to meet the next.

[00:27:46] Speaker 02:
So if in your justification you are relying in significant part

[00:27:55] Speaker 02:
on a rule that we have said actually fails to satisfy the good neighbor provision.

[00:28:01] Speaker 02:
How can we uphold your judgment in this case?

[00:28:05] Speaker 02:
Your judgment is based on a rule that we've already held is insufficient.

[00:28:12] Speaker 00:
I have two responses to that, Your Honor, and part will set aside because it's a longer discussion, and that has to do with what the court actually held in Wisconsin.

[00:28:22] Speaker 02:
I think I just read to you what the court held in Wisconsin.

[00:28:25] Speaker 02:
So I understand it holds generally the idea of cap and trade, all the other things that you began with your table setting.

[00:28:33] Speaker 02:
I'm not interested in that for right now.

[00:28:34] Speaker 02:
I'm looking at the bottom line, the reason we remanded, and I read you the sentence.

[00:28:40] Speaker 00:
Yes, so that sentence is one of the many ways the court states it.

[00:28:44] Speaker 00:
And that leads to the 2021 versus 2023 discussion, which I'll get into.

[00:28:50] Speaker 00:
The other part of the answer to your question is that as to these controls,

[00:28:55] Speaker 00:
there is a deadline in the update.

[00:28:57] Speaker 00:
The trading program had a deadline of 2017.

[00:29:02] Speaker 00:
And the court pointed that out in explaining the background.

[00:29:06] Speaker 00:
The reason why the court said it was not complete, where it repeatedly said, you didn't do it by any particular date, by any particular date, by any particular date.

[00:29:16] Speaker 00:
What it meant by that is that it was partial, because there is a deadline for

[00:29:21] Speaker 00:
these controls, for the remedy for these controls.

[00:29:24] Speaker 00:
That's what the update training program is.

[00:29:27] Speaker 00:
It's a remedy for these sources.

[00:29:30] Speaker 00:
So even if that is your formulation is what the court in Wisconsin held, which I want to be clear I disagree with, but these sources have a deadline.

[00:29:45] Speaker 02:
I'm not sure how that solves the problem.

[00:29:47] Speaker 02:
That is,

[00:29:50] Speaker 02:
These sources alone do not satisfy the requirement of the good neighbor policy that there be, that the upwind states that have to, that contribute significantly to downwind attainment stop doing that.

[00:30:08] Speaker 02:
And they have to do it by a certain date.

[00:30:10] Speaker 02:
It's not, why is it sufficient to say, well, we've picked x number of sources and they will be done by that date unless you can show that those sources

[00:30:20] Speaker 02:
together in a cap and trade program and the problem of significant contribution to downwind state's attainment by the date that is the appropriate date.

[00:30:32] Speaker 00:
So the reason is because this is the remedy that, sorry, these are the sources that were targeted by that remedy and this remedy is addressing those sources.

[00:30:44] Speaker 00:
Those sources are doing what Maryland is asking for.

[00:30:50] Speaker 00:
In the Wisconsin case, it was about have the upwind states as a whole fulfilled their duty to eliminate.

[00:31:02] Speaker 00:
And they haven't.

[00:31:03] Speaker 00:
That's what the court have held in Wisconsin.

[00:31:06] Speaker 00:
These are 126 petitions.

[00:31:07] Speaker 00:
We're looking at specific sources.

[00:31:09] Speaker 00:
The sources that we're looking at are sources that were already addressed.

[00:31:13] Speaker 00:
They're covered by the trading program.

[00:31:15] Speaker 00:
The trading program is requiring them

[00:31:18] Speaker 00:
to operate their controls, and it's working.

[00:31:21] Speaker 00:
Now, there's the technical question that Council for Maryland brought up, which is, well, could you get these reductions from somewhere else?

[00:31:28] Speaker 00:
Technically, yes.

[00:31:30] Speaker 00:
But EPA looked at that.

[00:31:32] Speaker 00:
On this record, what EPA found is that the sources are operating.

[00:31:38] Speaker 00:
And the reason we know that, there's a chart, I believe it's on page 74 of EPA's brief, and it shows the 2017

[00:31:47] Speaker 00:
emission rates of these facilities.

[00:31:49] Speaker 00:
All of them but one in 2017 were emitting at rates that showed that they were operating their controls.

[00:31:56] Speaker 02:
What about the non-catalytic ones?

[00:31:59] Speaker 02:
Do you have a suggestion about non-catalytic?

[00:32:02] Speaker 00:
Right.

[00:32:02] Speaker 00:
So the non-catalytic controls, it's a slightly different statutory question.

[00:32:06] Speaker 00:
It's the question under step three of EPA's analysis, which is, is it cost effective

[00:32:15] Speaker 00:
to operate these controls, and that's what gets you to do they significantly contribute and interfere with downwind maintenance, right?

[00:32:27] Speaker 00:
So in the update, EPA already looked at those controls and already said it's not cost effective to do this.

[00:32:34] Speaker 00:
It's really expensive, and it doesn't have enough downwind benefit based on our modeling, which is really complicated.

[00:32:44] Speaker 00:
to make it significant within the meaning of the good neighbor provision.

[00:32:49] Speaker 00:
EPA looked at them again here.

[00:32:50] Speaker 00:
So there's two facilities that petitioners raised with respect to non-catalytic controls.

[00:32:56] Speaker 00:
And EPA looked at those two facilities and said they're small, they're not emitting that much.

[00:33:01] Speaker 00:
And when I look at my modeling, it shows that the potential downwind improvements are pretty minimal.

[00:33:08] Speaker 00:
So we're sticking by that cost threshold that we used in the update.

[00:33:14] Speaker 05:
And there's something I want to... I mean, we still said that that rule didn't go far enough.

[00:33:23] Speaker 05:
So don't you have to... Let's just talk about the remand in Wisconsin.

[00:33:29] Speaker 05:
Don't you have to reopen the question whether non-catalytic are, you know, the next most cost-effective

[00:33:44] Speaker 05:
control to achieve a greater degree of enforcement of good neighbor provision?

[00:33:53] Speaker 00:
Not necessarily because EPA already addressed those controls.

[00:33:57] Speaker 00:
Remember the controls that were left on the table.

[00:34:00] Speaker 05:
You have to do more on remand, right?

[00:34:04] Speaker 05:
You couldn't just reinstate the rule and say DC Circuit never mind.

[00:34:10] Speaker 00:
Absolutely.

[00:34:11] Speaker 05:
Now you obviously have discretion to consider whether the something more is non-catalytic controls or non, what's the acronym, EGUs or something else.

[00:34:26] Speaker 00:
Well, what was clear in Wisconsin is EPA does have to look at whatever it needs to look at to say, we've looked at everything.

[00:34:37] Speaker 00:
That's what the court got EPA on.

[00:34:39] Speaker 00:
They didn't look at everything.

[00:34:41] Speaker 00:
EPA said they didn't look at everything.

[00:34:42] Speaker 00:
They looked at SCR.

[00:34:44] Speaker 00:
They didn't look at new SCR.

[00:34:46] Speaker 00:
They didn't look at new SNCR.

[00:34:48] Speaker 00:
And they didn't look at non-EGUs.

[00:34:51] Speaker 00:
So EPA has to go back and do that.

[00:34:53] Speaker 00:
Now, let's say there was new information.

[00:34:55] Speaker 05:
And make comparative judgments, right?

[00:34:58] Speaker 00:
Sure.

[00:34:58] Speaker 00:
And so let's say they want to revisit.

[00:35:00] Speaker 05:
And so it may be the case that the non-catalytic are

[00:35:06] Speaker 05:
the next most efficient set of regulations.

[00:35:10] Speaker 05:
It may not.

[00:35:10] Speaker 00:
So they can revisit that conclusion.

[00:35:12] Speaker 00:
Right.

[00:35:12] Speaker 00:
I think that's what you're saying.

[00:35:13] Speaker 05:
And if they can revisit, then Chief Judge Garland is right that it's not a sufficient answer in this case for EPA to say, oh, we addressed, we resolved those issues, resolved those issues in the update rule.

[00:35:32] Speaker 00:
So it is because in the denial, EPA didn't just say the update resolved those issues.

[00:35:38] Speaker 00:
EPA took another one.

[00:35:39] Speaker 05:
In this denial.

[00:35:39] Speaker 00:
In this denial.

[00:35:41] Speaker 00:
EPA said, okay, I already reached a cost threshold in the update.

[00:35:45] Speaker 00:
Now let's look at what new information you've given me.

[00:35:49] Speaker 00:
You've got two facilities.

[00:35:50] Speaker 00:
They're small.

[00:35:51] Speaker 00:
They're low emitters.

[00:35:52] Speaker 00:
And when I look at my modeling, there's not that much downwind air quality improvement available.

[00:35:59] Speaker 00:
So I'm making a finding

[00:36:01] Speaker 00:
under step three that it's not cost effective to operate these controls.

[00:36:08] Speaker 00:
So even if that was true that EPA had to revisit this on remand from Wisconsin, for these non-catalytic facilities, EPA has already done that here.

[00:36:21] Speaker 00:
So it doesn't change that legal landscape.

[00:36:24] Speaker 05:
Okay, so one possible justification is

[00:36:29] Speaker 05:
We did this in the, we resolved this in the update perl and let's assume for the sake of argument we don't think that's good enough.

[00:36:37] Speaker 05:
So you just gave me another one which is in the denial here you made a micro assessment of these two, these two plants.

[00:36:50] Speaker 05:
I had thought that there was a third rationale

[00:36:56] Speaker 05:
which was in the administrative record and therefore might solve the Chenery problem, which is simply that it's the petitioner's burden of proof.

[00:37:08] Speaker 05:
And regardless of what you say, they didn't satisfy that burden.

[00:37:14] Speaker 00:
Yes, Your Honor.

[00:37:14] Speaker 00:
I'm glad you bring it up because when it comes to these step three questions, there's really two, you know, key cases that really,

[00:37:23] Speaker 00:
should frame how the court should look at this.

[00:37:25] Speaker 00:
One is the 1998 New York case that says the technical burden is on the petitioners.

[00:37:32] Speaker 00:
EPA doesn't have to affirmatively prove or affirmatively disprove

[00:37:37] Speaker 00:
the allegations from petitioners.

[00:37:39] Speaker 00:
They have to present data.

[00:37:41] Speaker 00:
They have to show that a binding must be made.

[00:37:44] Speaker 00:
The other case that the court should really pay attention to is Appalachian power.

[00:37:49] Speaker 00:
Now, petitioners never really confront this case, but I really think it resolves a lot of the legal questions that petitioners have raised, which is that you can fly spec a trading program based on

[00:38:04] Speaker 00:
what we think a specific source that's already covered can do.

[00:38:09] Speaker 00:
In Appalachian Power, EPA used a regional analysis that was already on the books to make a 7426 finding, and it implemented a regional remedy to resolve the Section 7426 finding.

[00:38:27] Speaker 00:
So if EPA can use a regional remedy to resolve

[00:38:30] Speaker 00:
allegations about specific sources, then of course, if there's already a regional remedy addressing these same sources, then it makes sense for EPA to conclude that they've satisfied their good neighbor obligations by participating in that trading program.

[00:38:49] Speaker 00:
And so I encourage the court to pay attention to that case because it's really directly on point for a lot of these issues.

[00:38:59] Speaker 05:
You can use regional remedy to solve concerns about specific sources.

[00:39:09] Speaker 06:
That's correct.

[00:39:10] Speaker 05:
That's a general statement of law, which I'm willing to take your word is true.

[00:39:18] Speaker 05:
But that doesn't really answer the question whether EPA did that here.

[00:39:24] Speaker 05:
I mean, that just takes us back to,

[00:39:27] Speaker 05:
What you said earlier, which is to the extent there were things that needed cleaning up after Wisconsin, you did that in the update, in the denial.

[00:39:40] Speaker 00:
Right.

[00:39:40] Speaker 00:
So as a matter of, I think, clear precedent, Appalachian powers as a regional remedy under section 7426 of spine.

[00:39:49] Speaker 00:
As a matter of fact, as a matter of record fact, EPA looked at these sources.

[00:39:54] Speaker 00:
They said they're operating their controls.

[00:39:57] Speaker 00:
the goals of the trading program are being met.

[00:40:01] Speaker 00:
There were some specific allegations like, well, are they idling their controls during the ozone season?

[00:40:08] Speaker 00:
They're not.

[00:40:09] Speaker 00:
Not on this record.

[00:40:10] Speaker 00:
That's not what this record shows.

[00:40:12] Speaker 00:
So EPA sort of went through those things and said, we've already addressed this.

[00:40:18] Speaker 00:
So I'd like to also point out this sort of practical question, which is a little strange.

[00:40:24] Speaker 00:
Let's say you

[00:40:25] Speaker 00:
impose the source-specific limit on these sources.

[00:40:32] Speaker 00:
Well, you've still got the regional cap, so other sources then can go emit more, right?

[00:40:37] Speaker 00:
What matters for ozone is the upwind total NOx, right?

[00:40:44] Speaker 00:
This is a regional pollutant.

[00:40:45] Speaker 00:
You have upwind NOx, downwind ozone.

[00:40:48] Speaker 02:
But if you're looking at the wrong analytic year, which we've held you are, then maybe your cap has to be lower.

[00:40:56] Speaker 00:
So I'd like to get into that question, if we could, Your Honor, because I think that when you say that the court has held that EPA is looking at the wrong end... I want you to assume for purposes... I understand your argument.

[00:41:12] Speaker 02:
I don't think that I'll be advanced by oral argument on it.

[00:41:14] Speaker 02:
I want you to... The problem I'm working with is with the assumption that you're on the wrong year.

[00:41:22] Speaker 02:
Now, is your argument still the same, even if the year is not 2023, that you have to reach attainment by?

[00:41:30] Speaker 02:
That you have to solve the good neighbor problem by?

[00:41:34] Speaker 00:
So for both step one and step three, and I'm not clear on which one you're asking about, but for both, yes, what analytic year EPA is considering for future non-attainment doesn't matter on this record.

[00:41:45] Speaker 00:
And it doesn't matter under step one because Delaware didn't prove

[00:41:50] Speaker 00:
any future analytic year.

[00:41:52] Speaker 00:
Delaware didn't say or prove in any way that they will have an air quality problem by 2021.

[00:41:59] Speaker 05:
This just goes back to the burden of proof point.

[00:42:03] Speaker 00:
It goes back to the burden of proof point.

[00:42:04] Speaker 00:
Exactly.

[00:42:05] Speaker 00:
Delaware also didn't prove, by the way, that even if you could look at these out-of-state monitors, that the multi-state area will have a downwind air quality problem at any future year.

[00:42:20] Speaker 00:
EPA didn't have to prove any particular future year.

[00:42:23] Speaker 00:
What EPA had to do was look at the record that Delaware presented.

[00:42:27] Speaker 00:
EPA did that.

[00:42:29] Speaker 00:
And then EPA went above and beyond that step by doing its own gut check with this model that it already had on hand.

[00:42:35] Speaker 00:
So you don't have to even look at that question about what future analytic year matters.

[00:42:42] Speaker 00:
The court doesn't have to reach that.

[00:42:45] Speaker 00:
And I do want to point out, because this is important,

[00:42:48] Speaker 00:
EPA did say in the record that even if they looked at these out of state monitors, there's still no proof of a downwind air quality problem.

[00:43:00] Speaker 00:
Another thing I want to point out about this out of state monitor question is that there's this strange thing in the record.

[00:43:07] Speaker 00:
Delaware says, well, you have to look at monitors in Pennsylvania to prove downwind air quality problems.

[00:43:18] Speaker 00:
But three of the four facilities that Delaware petitions about are in Pennsylvania.

[00:43:24] Speaker 00:
You can't have interstate transport from Pennsylvania to Pennsylvania.

[00:43:29] Speaker 00:
So they can't have it both ways.

[00:43:30] Speaker 00:
If you get to look at these out of state monitors in Pennsylvania, then three of their petitions go away as a matter of the law immediately.

[00:43:38] Speaker 05:
Why?

[00:43:39] Speaker 05:
The interstate transport is from Pennsylvania to Delaware.

[00:43:46] Speaker 00:
The monitors in Delaware don't even have a current non-attainment problem, Your Honor.

[00:43:52] Speaker 00:
So if what you're looking at are air quality monitors in Delaware, there's no non-attainment problem.

[00:44:00] Speaker 00:
Delaware didn't prove it.

[00:44:01] Speaker 00:
EPA's own assessment showed that it's not there.

[00:44:05] Speaker 00:
Delaware is an upwind state to Philadelphia.

[00:44:09] Speaker 00:
That's why it's included in that non-attainment area.

[00:44:12] Speaker 00:
So if what Delaware wants to do is rely on these downwind monitors in Philadelphia, you can't then say that upwind sources in Pennsylvania are contributing to non-attainment problems in Pennsylvania.

[00:44:27] Speaker 00:
That's not interstate transport.

[00:44:29] Speaker 00:
So it's this house of cards that they've built up that doesn't really add up.

[00:44:35] Speaker 00:
All you really have to do to answer these questions is get to the first part, which is that Delaware didn't meet their burden under step one.

[00:44:44] Speaker 00:
Maryland didn't meet their burden under step three.

[00:44:47] Speaker 00:
And that's enough.

[00:44:48] Speaker 02:
Can I ask you about the step three burden that is with respect to cost?

[00:44:54] Speaker 02:
How is an individual state to be expected to make the kind of

[00:45:01] Speaker 02:
significant contribution based on the cost-effective analysis.

[00:45:07] Speaker 02:
You talked about practicality.

[00:45:09] Speaker 02:
How can a state ever prove that?

[00:45:11] Speaker 02:
They'd have to look at every single possible kind of control and every single possible kind of emitter.

[00:45:20] Speaker 02:
That's the job that EPA does in order to make the determination of what the amount per ton is cost-effective.

[00:45:28] Speaker 02:
How can an individual state asking for

[00:45:32] Speaker 02:
greater limit on emissions when they're reaching that attainment, and we do that.

[00:45:38] Speaker 00:
So I would be speculating about exactly what the technical analysis would have to show, but if, for example, they were to say, hey, here's some sources that haven't already been addressed, or here's a standard that hasn't already been addressed,

[00:45:55] Speaker 00:
You know, I'm going to show you the cost of controls.

[00:45:57] Speaker 00:
I think this is cost effective based on whatever.

[00:46:00] Speaker 00:
You know, there are instances where... Based on whatever.

[00:46:03] Speaker 02:
I mean, the EPA's analysis is not really a cost benefit analysis.

[00:46:08] Speaker 02:
It's a cost effectiveness analysis.

[00:46:11] Speaker 02:
That's right.

[00:46:11] Speaker 02:
And that requires more than just showing cost benefit.

[00:46:15] Speaker 02:
It requires evaluation of all the possible controls and all the possible plants.

[00:46:21] Speaker 02:
Not just in any one plant.

[00:46:23] Speaker 00:
No, I don't think that's necessarily true, Your Honor.

[00:46:25] Speaker 00:
I mean, in the update, EPA didn't do that.

[00:46:27] Speaker 00:
EPA looked at certain controls and assessed those controls for cost effectiveness.

[00:46:33] Speaker 00:
I think you could, for example, look at non-EGU sources and say, you know, here's this

[00:46:41] Speaker 00:
specific set of controls, and I think that they're cost-effective.

[00:46:46] Speaker 02:
I mean, EPA's... I don't think I think they're cost-effective is going to persuade anybody.

[00:46:51] Speaker 02:
So there has to be something... So they would have to make a case, right?

[00:46:53] Speaker 00:
It would have to be a technical... That's what the 1998 New York case says.

[00:46:57] Speaker 00:
They have to make a technical case.

[00:46:58] Speaker 00:
And so what EPA looks at is the quantity of emission reductions available

[00:47:10] Speaker 00:
what would be achieved upwind and what would be achieved downwind.

[00:47:14] Speaker 00:
I think an important thing to keep in mind is that ozone is just an unusual pollutant, right?

[00:47:20] Speaker 00:
You have upwind knocks, a whole bunch of other stuff, this complex process that happens in between, and then eventually you get downwind ozone.

[00:47:29] Speaker 00:
Other pollutants are a little bit more straightforward, like sulfur dioxide, for example.

[00:47:33] Speaker 00:
You can sort of measure the amount of

[00:47:36] Speaker 00:
sulfur dioxide coming out of a plant and have a pretty close correlation to what the air quality is going to be.

[00:47:41] Speaker 00:
So there could be situations with SO2 and there are examples of that.

[00:47:47] Speaker 00:
We also have examples of where EPA has made 7426 findings under an ozone program.

[00:47:53] Speaker 00:
That's what was at issue in the Appalachian Power case.

[00:47:58] Speaker 00:
That was an ozone 7426 finding and the petitioners in that case did

[00:48:04] Speaker 00:
make the case and a lot of that used information that EPA had already generated.

[00:48:09] Speaker 05:
And so I... Do they have to identify some category of reduction technology or whatever other than the ones you've already ordered?

[00:48:29] Speaker 05:
Even if they don't have to identify every possible one in the universe?

[00:48:33] Speaker 00:
So if I understand you correctly, it's a question of could you ever look at the same sources that EPA's or the same controls that EPA's already assessed under 7426 and make out a finding?

[00:48:45] Speaker 05:
Yeah.

[00:48:45] Speaker 05:
I mean, I'm just looking at one of your graphs, which has points for different possible technologies.

[00:48:59] Speaker 05:
And one point is optimizing the catalytic

[00:49:03] Speaker 05:
and the next point as you go up on pollution reduction on one axis and cost on the other is optimizing non-catalytic and then there are a few other points and then who knows what other possibilities there are in the world and it seems unrealistic to say that the burden is to identify every possible point and compare them.

[00:49:28] Speaker 05:
I think that's right, that the states wouldn't have to identify them.

[00:49:32] Speaker 05:
for them to say, all right, we know one point is optimizing catalytic and we know the next point on the graph is optimizing non-catalytic and that's the one that, now that we know the update rule didn't go far enough, I mean, here's EPA's graph and the next,

[00:50:01] Speaker 05:
Next most expensive option is non-catalytic, so you have to do that one, optimizing non-catalytic.

[00:50:09] Speaker 00:
It's a case they can try to make, right?

[00:50:10] Speaker 00:
And it's a case that they would have to make based on data, which they did here in EPA assessed.

[00:50:15] Speaker 00:
But I think the court has to keep in mind that whether or not a significant contribution exists

[00:50:20] Speaker 00:
is a matter of discretion to EPA.

[00:50:23] Speaker 00:
I mean, the court has said that repeatedly.

[00:50:25] Speaker 00:
And it's in Wisconsin.

[00:50:26] Speaker 00:
It says, you know, EPA still has significant latitude, for example, in finding whether it's significant.

[00:50:34] Speaker 00:
So yes, they could come in and say, hey, you already assessed this.

[00:50:37] Speaker 00:
I've got some new information.

[00:50:39] Speaker 00:
I think you should make this finding.

[00:50:41] Speaker 00:
EPA can look at that data and say, you know what?

[00:50:43] Speaker 00:
I don't agree.

[00:50:44] Speaker 05:
Why can't they?

[00:50:46] Speaker 05:
piggyback off your analysis in the update rule, which plots a bunch of points, and you draw a line between catalytic and non-catalytic, and you say, we're going to go so far but no farther.

[00:51:02] Speaker 05:
And they say, all right, you know, EPA's done all the relevant work.

[00:51:09] Speaker 05:
This is the next best possibility.

[00:51:13] Speaker 05:
So that's what EPA now has to do.

[00:51:16] Speaker 00:
I mean, that's where they tried to do that.

[00:51:20] Speaker 00:
EPA looked at it and said we disagree.

[00:51:22] Speaker 00:
And what was left on the table in Wisconsin, what EPA has to go back to do, isn't to revisit

[00:51:29] Speaker 00:
these SNCR controls, it's to look at other stuff.

[00:51:31] Speaker 00:
EPA can revisit SNCR controls, right?

[00:51:34] Speaker 00:
They have the discretion to do that, especially if there's new data that says that they should.

[00:51:39] Speaker 00:
But it's not required.

[00:51:42] Speaker 00:
And here, when that was presented to EPA, EPA said, I just disagree.

[00:51:46] Speaker 05:
And that's because there may be other options on this graph somewhere in between catalytic and non-catalytic.

[00:51:59] Speaker 05:
in terms of bang for the buck?

[00:52:03] Speaker 00:
That's certainly possible.

[00:52:05] Speaker 05:
That seems to come close to saying they need to prove the negative, consider every possible technology and negate everyone.

[00:52:15] Speaker 00:
No, Your Honor, I don't think EPA is asking them to prove the negative.

[00:52:19] Speaker 00:
You know, what's clear on EPA's decision is that EPA, first of all, it was before the Wisconsin decision came out, so I didn't have opportunity to talk about that, but I think the outcome probably would have been the same.

[00:52:30] Speaker 00:
EPA said, you're asking me to do something with controls that I've already assessed.

[00:52:38] Speaker 00:
There's a whole bunch of stuff I haven't assessed.

[00:52:40] Speaker 00:
But you're not asking me about that.

[00:52:41] Speaker 00:
You're asking me about the stuff I already addressed.

[00:52:44] Speaker 00:
I already imposed a remedy for catalytic controls.

[00:52:48] Speaker 00:
And I already said non-catalytic controls are not cost effective.

[00:52:52] Speaker 00:
I'm looking at it again.

[00:52:53] Speaker 00:
I'm looking at new data that you presented.

[00:52:55] Speaker 00:
I'm looking at new data that I have.

[00:52:58] Speaker 00:
And I think what I've done is enough.

[00:53:01] Speaker 00:
So that's really what permeates throughout EPA's denial is that they say, I've looked at this, I'm going to look again, but you're not asking me about things I didn't look at.

[00:53:14] Speaker 00:
Short exception of Brunner Island, which is a record issue.

[00:53:17] Speaker 00:
They didn't make the case.

[00:53:19] Speaker 02:
You introduced that by saying they didn't have Wisconsin in front of me, but they probably would have given the same answer.

[00:53:27] Speaker 02:
So this is the classic case that we require remand for.

[00:53:31] Speaker 02:
A lawyer saying this probably would have been the same answer.

[00:53:35] Speaker 02:
It's not good enough.

[00:53:36] Speaker 00:
I'd say probably because I don't know if the facts have changed since then.

[00:53:40] Speaker 00:
I know what data is in this record, and EPA can always make another finding.

[00:53:45] Speaker 00:
But what Wisconsin requires, I don't think actually touches on any of the things EPA actually did here.

[00:53:54] Speaker 00:
And I want to ask your honor, because I think this is important.

[00:53:58] Speaker 00:
There's a lot in this Wisconsin opinion

[00:54:00] Speaker 00:
There are various statements of what EPA was holding.

[00:54:04] Speaker 00:
For example, it says one formulation is that upwind eliminations have to happen by the statutory deadlines by which downwind states must demonstrate attainment.

[00:54:16] Speaker 00:
Marginal areas don't have to demonstrate attainment.

[00:54:19] Speaker 00:
Marginal areas don't have control obligations.

[00:54:23] Speaker 00:
I think what Wisconsin required was control parity.

[00:54:27] Speaker 00:
upwind controls installed at the same time as downwind controls.

[00:54:31] Speaker 00:
And that way you make sure that you're not over-controlling the upwind states and under-controlling the downwind states.

[00:54:37] Speaker 00:
That's what I think Wisconsin requires.

[00:54:40] Speaker 00:
But the court just didn't have the question in front of them of what do you do with marginal areas where there are no control obligations, where there is no attainment demonstration requirement.

[00:54:51] Speaker 00:
Yes, the statute says attain, but it doesn't specify steps to do that.

[00:54:57] Speaker 00:
All they have to do as a marginal state is collect data and report data.

[00:55:04] Speaker 00:
If you were to have parity between upwind and downwind states with data collection, you know, that's not the same thing as saying, I'm asking upwind states to install control.

[00:55:12] Speaker 02:
Where's the word parity in Wisconsin?

[00:55:14] Speaker 00:
That's my summary of what it gets at.

[00:55:16] Speaker 02:
I didn't read that word.

[00:55:18] Speaker 02:
And I appreciate you're asking us to look really closely at it, but I think you can assume that we've already done that.

[00:55:24] Speaker 02:
So if your twist on this is that this is a case about parity, that Wisconsin was about that rather than about the inability to satisfy the good neighbor responsibility by the date on which somebody is required to do something.

[00:55:39] Speaker 02:
If you want to point out a particular paragraph that says that, I'd be happy to look at it.

[00:55:44] Speaker 00:
I would like to point out the paragraph where I think it really encompasses this.

[00:55:48] Speaker 00:
What it says is... Just tell me the page.

[00:55:50] Speaker 00:
This is at page 314 of the Federal Register.

[00:55:54] Speaker 00:
It says the Casper Update Rule... At third?

[00:55:57] Speaker 00:
Yes.

[00:55:59] Speaker 00:
The Casper Update Rule fails to eliminate upwind state significant contributions to downwind pollution by the statutory deadline for downwind states to meet the NAICS for ozone.

[00:56:09] Speaker 00:
That in turn forces downwind areas to make greater reductions

[00:56:14] Speaker 00:
than the good neighbor provision requires.

[00:56:16] Speaker 00:
This is an equity statement about parity.

[00:56:19] Speaker 00:
And there's another place that I would like to point to, Your Honors.

[00:56:22] Speaker 02:
Where's the parity part?

[00:56:24] Speaker 02:
The point is that it forces downward areas to make greater reductions.

[00:56:29] Speaker 00:
Right.

[00:56:29] Speaker 00:
So if you were to force upwind states to install controls before downwind states install controls, then you have that same problem in the other direction, right?

[00:56:40] Speaker 00:
You have a deviation

[00:56:42] Speaker 00:
in a direction that requires upwind states to do more than their share.

[00:56:46] Speaker 00:
There's another paragraph I'd like to point to, Your Honor.

[00:56:55] Speaker 00:
This is at page 320.

[00:56:56] Speaker 00:
It says, we do not foreclose the possibility that the statutory command we can choose here

[00:57:07] Speaker 00:
might reasonably be read under particular circumstances and upon a sufficient showing of necessity to allow some deviation between upwind and downwind deadlines."

[00:57:16] Speaker 02:
Necessity?

[00:57:17] Speaker 02:
What's the necessity here?

[00:57:18] Speaker 00:
So I'm not sure what that means, but I can tell you that... But you think it means parity, apparently.

[00:57:23] Speaker 02:
Is that what you're reading into the word necessity?

[00:57:25] Speaker 02:
It's an odd word for parity.

[00:57:27] Speaker 00:
I'm not reading the word parity into necessity.

[00:57:29] Speaker 00:
I'm reading the word parity into the F314, the equitable concern.

[00:57:32] Speaker 00:
But I'd like to go to the next sentence, Your Honor.

[00:57:34] Speaker 00:
It says, any such deviation would need to be rooted in Title I's framework.

[00:57:39] Speaker 00:
Title I includes all of the substantive requirements for marginal areas, all of the substantive requirements for moderate areas.

[00:57:47] Speaker 00:
So what EPA is saying, well, you don't have to do anything but collect data as a marginal area.

[00:57:57] Speaker 00:
The moderate area is the correct date.

[00:58:00] Speaker 00:
I mentioned this, Your Honor, because it sounds like you're interested in making a finding based on a holding based on the 2021 versus 2023 issue based on what Wisconsin says.

[00:58:11] Speaker 00:
And if that's what the court is considering, I would ask for supplemental briefing on that question, because we had very little space in the 28-J letters to talk about that.

[00:58:22] Speaker 00:
But I would also like to emphasize that I just don't think the court needs to get to that issue because they didn't make their case for any future non-attainment date.

[00:58:33] Speaker 00:
Delaware didn't prove non-attainment by 2021 or any other future date.

[00:58:38] Speaker 00:
So whether you think it's 2021 or 2023 or 2025, it's not dispositive for this case.

[00:58:49] Speaker 02:
Okay, thank you very much.

[00:58:56] Speaker 02:
We'll let the other side go over by 11, so we'll divide that a little bit and give you five minutes.

[00:59:05] Speaker 04:
Thank you, Your Honor.

[00:59:06] Speaker 04:
I think these points should be relatively brief.

[00:59:09] Speaker 04:
First, on the discussion that the Council was just having with the Court, Congress knew how to make exceptions in the Clean Air Act.

[00:59:15] Speaker 04:
We wanted to make exceptions.

[00:59:17] Speaker 04:
there is no exception that good neighbor obligations do not apply to marginal non-attainment areas for ozone.

[00:59:24] Speaker 04:
That's simply nowhere in the act.

[00:59:26] Speaker 04:
Tellingly EPA Nowhere in this entire case has ever acknowledged the consequences that apply to non-attainment areas.

[00:59:33] Speaker 04:
There are economic consequences that exist even for marginal areas.

[00:59:37] Speaker 04:
Any new major source of pollution is required to obtain emission offsets.

[00:59:42] Speaker 04:
That is an economic burden on a downwind state that is subjected to marginal non-attainment area.

[00:59:47] Speaker 04:
marginal non-attainment.

[00:59:48] Speaker 04:
And there are public health consequences.

[00:59:50] Speaker 04:
The reason UPA established these standards in the first place, which they needed to establish exclusively based on health considerations, is because people who live in non-attainment areas breathe unsafe air.

[01:00:01] Speaker 04:
That is why the Act makes its central goal.

[01:00:03] Speaker 04:
And if you look at there's language in Wisconsin saying that the central purpose of the Act is to bring areas into attainment by attainment dates.

[01:00:09] Speaker 04:
So EPA completely ignores that.

[01:00:10] Speaker 04:
They are entirely focused on the control cost equity in a way that I think is also, if you look at the record, Delaware, if you look at its petitions, shows that based on EPA's own modeling, Delaware is responsible for less than 10 percent of its own ozone problem.

[01:00:26] Speaker 04:
Pennsylvania by itself is responsible for 20 percent of Delaware's ozone problem.

[01:00:30] Speaker 04:
There's nothing equitable about requiring Delaware to try to squeeze more blood from a stone than there is about requiring optimization of already installed controls on sources in Pennsylvania.

[01:00:41] Speaker 04:
A couple points on the record, the council for EPA just misstated the record with regard to the 2008

[01:00:47] Speaker 04:
standard as it applies to Delaware.

[01:00:51] Speaker 04:
The modeling that EPA relied on, the 2017 modeling that EPA relied on to conclude that there was a modeled non-attainment problem for Maryland, that same modeling, as Council for Delaware recognized, shows that there is also a modeled non-attainment problem in the Philadelphia non-attainment area.

[01:01:07] Speaker 04:
The fact that that monitor is located outside the boundaries

[01:01:11] Speaker 04:
of Delaware, as I believe the court was recognizing, is immaterial here.

[01:01:15] Speaker 04:
The consequences that flow from that nonattainment flow regardless of where that monitor is located.

[01:01:20] Speaker 04:
EPA's argument that the fact that some of these sources are located in Pennsylvania and this monitor happens to be in Pennsylvania is too cute.

[01:01:27] Speaker 04:
The Delaware's petitioning, because it is in nonattainment, it's irrelevant where that location of that monitor is.

[01:01:33] Speaker 04:
And so I think EPA's argument, EPA tries to do too much with the location of these sources.

[01:01:37] Speaker 04:
Delaware's petitioning not based on Pennsylvania's nonattainment,

[01:01:40] Speaker 04:
but based on its own non-attainment, which flows from this monitor.

[01:01:43] Speaker 04:
Finally, for the 2015 standard, EPA contends that there is no evidence in the record that Delaware will struggle to attain at a future date.

[01:01:52] Speaker 04:
That is also simply incorrect.

[01:01:54] Speaker 04:
The record, as EPA does not dispute Joint Appendix page 13 and 15, shows the most current monitor data for Delaware.

[01:02:01] Speaker 04:
Those data show that three of the four monitors in New Castle County are failing to attain the 2015 standard as of that year.

[01:02:10] Speaker 04:
Those data also show that the 2017 monitor values, which are monitor values that will be used to determine if they're going to affect attainment in future years, are also showing exceedances of the air quality standards.

[01:02:22] Speaker 04:
So Delaware is in fact going to struggle to, because of its failing air quality at the time it filed the petition and through the time that EPA denied the petition, EPA is going to continue to struggle to attain the standard based on those data are going to carry forward for three years based on the way ozone unattainment is calculated.

[01:02:38] Speaker 02:
Okay, thank you very much for the questions.

[01:02:43] Speaker 02:
How much time did he have?

[01:02:49] Speaker 02:
For the order.

[01:02:50] Speaker 03:
All right, we'll give you five minutes also.

[01:02:52] Speaker 03:
Thank you, Your Honor.

[01:02:54] Speaker 03:
I'd like to start by trying to address the question you had asked me earlier and that I obviously struggled to give a clear enough answer to you.

[01:03:03] Speaker 03:
At the end of the day, the EPA is relying on aggregate assumptions from the update rule to justify its single uniform level of optimization, which by its own recognition and by its own language in the update rule said was only appropriate due

[01:03:23] Speaker 03:
to the partial nature of that remedy.

[01:03:26] Speaker 03:
And this court has now remanded that decision, saying a partial remedy was not good enough.

[01:03:32] Speaker 02:
And so... Did you say a partial remedy wasn't good enough, or just that the date of the payment wasn't good enough?

[01:03:38] Speaker 03:
It's said to provide a complete remedy.

[01:03:41] Speaker 03:
By the date?

[01:03:42] Speaker 02:
The Wisconsin decision, I believe.

[01:03:44] Speaker 02:
Yes, but was the problem because of the partial nature, or because of the date?

[01:03:50] Speaker 02:
that it didn't attain by the attainment date of the downwind?

[01:03:55] Speaker 03:
Well, it wasn't just about attainment.

[01:03:59] Speaker 03:
It didn't provide for a complete remedy by the time that downwind states needed to provide for their own compliance.

[01:04:06] Speaker 03:
So the date does factor into that, but the rule itself was a partial remedy set to implement the partial remedy by the attainment deadline.

[01:04:17] Speaker 03:
And so downwind states were then

[01:04:19] Speaker 03:
necessarily required to make additional emissions reductions without the benefit of the reductions it is required to have.

[01:04:28] Speaker 03:
And so this court has remanded to EPA to provide a complete remedy in it, you know, consistent with the attainment deadlines to the extent EPA can even do that now.

[01:04:40] Speaker 03:
And opposing counsel said that

[01:04:44] Speaker 03:
The CASPER update is already providing what Maryland has asked for, and it is not.

[01:04:50] Speaker 03:
Maryland is using the own general assumptions that EPA stated that certain sources can do better than this generalized partial rate that EPA presented, and saying these are the sources that can do better.

[01:05:04] Speaker 03:
And moreover,

[01:05:06] Speaker 03:
All the sources that were petitioned aren't even meeting the rate that EPA says is a generalized rate.

[01:05:11] Speaker 03:
There are 13 sources that exceeded the 0.10 rate.

[01:05:15] Speaker 03:
When EPA says that it took a look at the data and saw that most of the sources that the sources are operating

[01:05:23] Speaker 03:
It says the sources are operating based on an emissions average of 0.20.

[01:05:28] Speaker 03:
That's double than the rate it said is supposed to be an optimized rate, even though Maryland disagrees that that's the optimized rate for these particular petition sources.

[01:05:41] Speaker 05:
And finally, on that narrow point, why isn't it perfectly rational to say here's the optimal rate

[01:05:51] Speaker 05:
on average across all plants and here's the optimal rate for the least efficient.

[01:05:58] Speaker 03:
I think that would be reasonable if EPA had... One is 0.1 and one is 0.2.

[01:06:03] Speaker 03:
I think that would be reasonable if EPA had looked at the particular sources named in the petition, evaluated the specific data from these sources, and made that determination.

[01:06:14] Speaker 03:
But the aggregate assumptions it used relied on high emissions from sources outside the petition sources.

[01:06:22] Speaker 03:
It threw out data on the basis that

[01:06:26] Speaker 03:
The lowest rates might have been from newly installed equipment when Maryland showed that its petition sources had installed their controls in the years 1999 to 2004, and that the best rates were sometimes a decade more than when their controls were installed.

[01:06:46] Speaker 03:
Just the underlying assumptions here don't line up with the facts presented in the petition.

[01:06:51] Speaker 03:
And in order to be granted deference, as this court knows, EPA needs to justify its decision based on the facts in the record.

[01:06:59] Speaker 03:
And it hasn't done that here.

[01:07:02] Speaker 03:
As far as burden, Your Honor, EPA has already

[01:07:07] Speaker 03:
conceded that Maryland's got an attainment problem, that the upwind states were linked, and that it presented a technically sufficient petition.

[01:07:18] Speaker 03:
I'm not sure what else Maryland was supposed to present here.

[01:07:22] Speaker 03:
We discussed the cost effectiveness of the remaining emissions reductions beyond what were implemented in the update rule in 2017 in the petition.

[01:07:33] Speaker 03:
Maryland used the same Sergeant 1D calculations to assess cost effectiveness for the sources controlled by catalytic controls and showed the remaining emissions reductions fell within a $500 to $1,400 per ton reduction, which EPA said is cost effective for those controls already.

[01:07:56] Speaker 03:
And so it's unclear what further burden Maryland needed to present in a petition.

[01:08:04] Speaker 03:
with regard to non-catalytic controls.

[01:08:08] Speaker 03:
I think EPA's

[01:08:11] Speaker 03:
position is a mischaracterization of what it said in the update rule.

[01:08:15] Speaker 03:
The update rule did not find that any controls above $1,400 per ton are not cost effective.

[01:08:23] Speaker 03:
What it focused on as part of its partial rule was the most cost effective.

[01:08:29] Speaker 03:
It looked at what got the biggest bang for the buck and explicitly stated that that determination, the $1,400 per ton, was not determinative

[01:08:39] Speaker 03:
determinative of future cost-effectiveness evaluations.

[01:08:45] Speaker 03:
This Court has remanded the Rule 2 EPA for a complete remedy.

[01:08:50] Speaker 03:
We don't know, as I think Your Honor was alluding to, where that line is, where the new cost-effectiveness line will be to provide a complete remedy, and we're not asking this Court to make that determination here.

[01:09:05] Speaker 03:
But to have

[01:09:07] Speaker 03:
But to be told that a source that has already spent the money to install a control doesn't need to even run those controls because the emissions are too small, doesn't line up with the way EPA treated small emissions in the Casper.

[01:09:22] Speaker 05:
You said you're not asking us to make the policy-laden judgments about where to draw those lines, but you really are.

[01:09:36] Speaker 05:
to the extent that if we accept your argument on burden is you don't have to prove the negative about any possible alternative technology.

[01:09:48] Speaker 05:
You've come in and made a presentation with regard to non-catalytic and we rule in your favor that will be a necessary part of the

[01:10:05] Speaker 05:
next update rule, even though there may be all sorts of other options on the table and even though those are actively under consideration, presumably on the Wisconsin remand.

[01:10:19] Speaker 03:
The score certainly can go that far.

[01:10:21] Speaker 03:
I think the point I was trying to make is

[01:10:26] Speaker 03:
EPA has said in the past that catalytic and non-catalytic controls are the most cost-effective controls for power plants.

[01:10:36] Speaker 03:
And it has upheld the use of non-catalytic controls as reasonably available control technology in consideration of economics

[01:10:45] Speaker 03:
in other parts of the Clean Air Act.

[01:10:48] Speaker 03:
And to now turn that on its head and say we don't think these are cost-effective based on our language in the Casper update, which only says we're focusing on the most cost-effective and this is not determinative of future cost-effective determinations, is just too far.

[01:11:07] Speaker 02:
What is your answer to opposing counsel's argument with respect to the catalytic controls that

[01:11:14] Speaker 02:
even if they impose some additional optimization requirement without a change in the cap, it won't make any difference.

[01:11:22] Speaker 02:
Because if they optimize more, then they'll be able to sell their allowances or buy allowances, et cetera.

[01:11:28] Speaker 03:
Number one, these might be the sources that are running more frequently, so that's not necessarily true, Your Honor.

[01:11:36] Speaker 03:
What's not necessarily true?

[01:11:37] Speaker 03:
That a different source will be able to necessarily emit more within the state of Maryland or another state affecting Maryland's... Well, it's not within the state of Maryland.

[01:11:52] Speaker 03:
These are upwind sources that we're talking about.

[01:11:56] Speaker 03:
There are limits on how much a source can buy, how much a state can buy from another source.

[01:12:03] Speaker 03:
There are assurance levels.

[01:12:05] Speaker 03:
125% or something like that.

[01:12:07] Speaker 02:
So what?

[01:12:08] Speaker 02:
So do we know whether this will go above that or not?

[01:12:11] Speaker 03:
Maryland didn't.

[01:12:13] Speaker 03:
It only performed an over control analysis to say if we look at what Casper update required and if we get this additional reduction, whether that would result in over control.

[01:12:25] Speaker 03:
And the answer was no.

[01:12:27] Speaker 03:
And EPA's analysis agrees with that.

[01:12:29] Speaker 03:
But other than, you know, that analysis, I can't point to you to anything in the record that says whether

[01:12:39] Speaker 03:
you know, this remedy that Marilyn's seeking at the end of the day will resolve the problem or not.

[01:12:44] Speaker 03:
I can't answer that, but Marilyn believes it's an important step forward and for EPA to say it's unnecessary because that'll just be absorbed by somebody else.

[01:12:55] Speaker 03:
We're not sure.

[01:12:56] Speaker 03:
We don't know what a complete remedy is going to look like.

[01:12:59] Speaker 03:
We just know that these sources are sources that are able

[01:13:04] Speaker 03:
From a historic perspective, to run a lot better than they are, EPA acknowledges certain sources can run a lot better than 0.1.

[01:13:13] Speaker 03:
EPA acknowledges that its uniform level that it applied in the CASPER update was only appropriate given the partial nature of its role in Maryland seeking to resolve its problem, the interference with its own maintenance from upwind sources.

[01:13:31] Speaker 03:
where, you know, up to 70% on certain days come from upland sources.

[01:13:38] Speaker 03:
That's a number Maryland has measured through high monitor, high altitude monitors and airplanes measuring ozone and a number consistent that this court found in the Wisconsin opinion per EPA's own record.

[01:13:54] Speaker 03:
Let me just ask if there are further questions.

[01:13:58] Speaker 02:
Thank you very much.

[01:13:58] Speaker 02:
We'll take them out on their seats.