[00:00:02] Speaker 00: Case number 08-1065, State of New Jersey Petitioner versus Environmental Protection Agency. [00:00:09] Speaker 00: Ms. [00:00:09] Speaker 00: Morelli for the petitioner, Ms. [00:00:11] Speaker 00: Brown for the respondent, Ms. [00:00:13] Speaker 00: Broom for the intervener. [00:00:16] Speaker 04: I'm just gonna switch my light real quick to see if I can fix this, hold on. [00:00:27] Speaker 04: Apologies for that. [00:00:29] Speaker 04: Lisa Morelle for Petitioner State of New Jersey. [00:00:32] Speaker 04: I'd like to reserve three minutes of time for rebuttal. [00:00:35] Speaker 04: May it please the court? [00:00:37] Speaker 04: EPA's revised reasonable possibility record keeping rule remains defective and should be set aside. [00:00:43] Speaker 04: It is arbitrary and capricious because EPA did not do enough to address the enforceability issues identified by this court in New York versus EPA by not requiring sources to retain [00:00:58] Speaker 04: and report pre-change admission calculations. [00:01:02] Speaker 04: In rejecting the original rule, this court took issue with the fact that sources had no obligation to retain records, let alone report those records to or projections to permitting authorities. [00:01:18] Speaker 04: The revised rule with its trust us applicability scheme does not correct this defect. [00:01:24] Speaker 04: EPA's rule forces authorities to police NSR using post-construction monitoring data. [00:01:32] Speaker 04: This is not pre-construction review. [00:01:35] Speaker 04: In contrast to a straightforward show us your work rule, the reasonable possibility rule gives sources unfettered discretion. [00:01:44] Speaker 04: Ms. [00:01:44] Speaker 02: Morelli, with apologies for the interruption, I want to start with standing if I could. [00:01:55] Speaker 02: I also will apologize in advance. [00:01:56] Speaker 02: This is going to be something of a long question, but standing wasn't briefed as extensively as some of the merits questions. [00:02:03] Speaker 02: And so I'm going to share where I think the case is on standing. [00:02:07] Speaker 02: And then I want you to have every opportunity to tell me where I've gone off track if you think I have. [00:02:16] Speaker 02: Clapper says that the standard for standing is that the injury has to be certainly impending in a footnote [00:02:24] Speaker 02: it says that the substantial risk standard may survive. [00:02:31] Speaker 02: Possibly that substantial risk standard is lower than certainly impending and Susan B. Anthony case uses the substantial risk standard. [00:02:38] Speaker 02: Maybe that's confined to the pre-enforcement cases, maybe not. [00:02:45] Speaker 02: If it's not and if it survives and if it were to apply here, [00:02:50] Speaker 02: You still can't rely on an attenuated chain of inferences necessary to find harm. [00:02:55] Speaker 02: That's from Clapper. [00:02:57] Speaker 02: You can't rely on speculation about the unfettered choices made by independent actors, not before the court. [00:03:03] Speaker 02: That's from Clapper. [00:03:05] Speaker 02: You instead have to plead and prove concrete facts showing your actual harm, sorry, showing the actual action by the defendant has caused a substantial risk of harm to you. [00:03:18] Speaker 02: Now in Mass V EPA, Massachusetts was able to point to specific cars. [00:03:24] Speaker 02: It was easy. [00:03:25] Speaker 02: It was all cars, but they could point to specific cars and say these cars are emitting a pollutant, and that pollutant is making a specific part of our land, our coastline, recede. [00:03:38] Speaker 02: So the specific cars were causing our specific coastline to recede. [00:03:44] Speaker 02: And the science said that that was happening at the moment. [00:03:47] Speaker 02: And the science said that that was also going to continue happening. [00:03:51] Speaker 02: Here by contrast, EPA has already banned the pollution that you think should be banned. [00:03:59] Speaker 02: You say you're injured because EPA has not made it hard enough for a source to evade the EPA's standard. [00:04:09] Speaker 02: But you don't point to any source [00:04:13] Speaker 02: that will certainly, to use Clapper's words, evade the ban, or that is even likely to evade the ban. [00:04:21] Speaker 02: I didn't see any specific sources in all the briefing in this case that you say this source is going to cheat and evade the ban. [00:04:30] Speaker 02: So I don't think any source's evasion is certainly impending, and I don't think there's a substantial risk that any source will evade the ban. [00:04:37] Speaker 02: And your theory of standing, if I understand it, instead goes something like this. [00:04:42] Speaker 02: It involves, I think, up to seven assumptions. [00:04:45] Speaker 02: You assume that some unspecified source will say there's no reasonable possibility of a significant emission. [00:04:53] Speaker 02: You assume the EPA will not catch them when they cheat. [00:04:57] Speaker 02: You assume that no other authorities will catch them. [00:05:01] Speaker 02: You assume the EPA would not have granted them a permit for the significant emission. [00:05:06] Speaker 02: You assume that the extra pollution will reach New Jersey. [00:05:09] Speaker 02: You assume that someone in New Jersey [00:05:11] Speaker 02: will be exposed to the extra pollution, and you assume that that person will be injured by the exposure. [00:05:18] Speaker 02: I think that's a lot of assumptions. [00:05:20] Speaker 02: It seems like an attenuated chain of inferences necessary to find harm to, again, use Clapper's words, which you can't do. [00:05:26] Speaker 02: And it also seems like, in Clapper's words, speculation about the unfettered choices made by independent actors not before the court, which, again, Clapper says you can't do. [00:05:37] Speaker 02: I know you disagree with that, and I want you to be able to pick it apart piece by piece and tell me everything you think I got wrong. [00:05:47] Speaker 04: So I'll try to address the questions that you raised, your concerns. [00:05:54] Speaker 04: With any type of rule or statute that requires an entity to take certain actions, [00:06:02] Speaker 04: you're never going to be able to predict in advance for sure whether that source is going to comply or not. [00:06:07] Speaker 04: So there's always going to be some element of what the source is going to do. [00:06:13] Speaker 04: You try to ensure they will comply by enabling one, as we say here, permitting authorities to be able to check what the source is doing. [00:06:25] Speaker 04: So there is some assurance of compliance. [00:06:28] Speaker 04: As far as attenuated circumstances, [00:06:31] Speaker 04: And this is in one of the declarations we submitted. [00:06:35] Speaker 04: There's no question that most of New Jersey's air pollution comes from upwind out of state sources, something on the order of 70%. [00:06:44] Speaker 04: So without question, we are impacted by what facilities upwind and out of state of New Jersey are doing. [00:06:53] Speaker 04: And there are a lot of those facilities that are upwind of us. [00:06:57] Speaker 04: So, you know, the, [00:07:01] Speaker 04: For all these facilities, if the enforcement ability of their own permitting officials are hampered to the extent that they can't even find out if the source has undertaken a modification in the first instance, then yes, that will have a direct impact on New Jersey because those sources that are undertaking these changes are not submitting [00:07:30] Speaker 04: information to permitting authorities that they need to evaluate NSR compliance and they're not able to ensure that NSR requirements are met, which includes installing pollution controls if required. [00:07:46] Speaker 02: Thank you for being patient with my question and for the thorough answer. [00:07:50] Speaker 02: I'm grateful for it. [00:07:51] Speaker 02: Along the lines of standing and injury and redressability, let's assume that there is a source in Pennsylvania, a specific plant, and that plant is cheating and polluting, and New Jersey is injured by it. [00:08:08] Speaker 02: What can New Jersey do if they find out that the EPA is, if they find out that cheating is going on? [00:08:16] Speaker 02: What can New Jersey do to that plant that's not in New Jersey? [00:08:21] Speaker 04: So New Jersey has the ability to bring a citizen suit action under the Clean Air Act. [00:08:27] Speaker 04: And they can sue the plant. [00:08:28] Speaker 04: In fact, we have done that. [00:08:30] Speaker 04: We have done that with multiple power plants, in fact, located in Pennsylvania, as well as other upwind states in the Midwest. [00:08:39] Speaker 04: So they have that option. [00:08:41] Speaker 04: they could petition EPA under 126 if they believed that, or I shouldn't say believe, they would need evidence to show that emissions from that plant were resulting in a max exceedance, an exceedance of the national ambient air quality standards for a pollutant that was affecting New Jersey's air quality. [00:09:05] Speaker 04: So those are the avenues that are generally available for out-of-state sources. [00:09:09] Speaker 02: I want to turn and just brief a little bit to the merits now. [00:09:13] Speaker 02: I'm concerned that almost everything you asked the EPA to do in your comments after they proposed the 2007 rule, I'm concerned that EPA may have done either everything or at least almost everything that you asked them to do. [00:09:35] Speaker 02: So I looked at, I've got your comments here. [00:09:39] Speaker 02: And with regards to the percentage increase trigger approach, I'm at JA50. [00:09:46] Speaker 02: It has, that's the approach that's at issue on this case now. [00:09:52] Speaker 02: It talks about demand growth in almost every paragraph. [00:09:56] Speaker 02: The first paragraph just summarizes what EPA did. [00:09:59] Speaker 02: And then the second paragraph begins to criticize it. [00:10:01] Speaker 02: I'm at JA51 now. [00:10:03] Speaker 02: It says that the EPA's approach is bad because it won't address demand growth. [00:10:09] Speaker 02: And then the third paragraph there says, it's bad because sources can exclude product demand growth. [00:10:14] Speaker 02: And it will be often difficult to separate demand growth from other emissions. [00:10:20] Speaker 02: And then it continues to talk about increasing demand growth. [00:10:24] Speaker 02: It talks about the New York case. [00:10:26] Speaker 02: And it says that EPA quotes the New York case. [00:10:29] Speaker 02: Now I'm on JA 53. [00:10:30] Speaker 02: It quotes the New York case, but it didn't address the New York case because it does not address this problem. [00:10:38] Speaker 02: And the problem there [00:10:39] Speaker 02: is referring to again the inclusion of demand growth or the exclusion rather of demand growth and the next paragraph says a source wouldn't trigger record keeping by excluding demand growth and it's often difficult to find demand growth and the next paragraph [00:10:55] Speaker 02: says EPA concedes no records will be kept with regard to, next paragraph, this deficiency, says no records will be kept and that could be solved by one of two ways. [00:11:10] Speaker 02: And the next paragraph, final paragraph, gives the two ways that the problem, according to you, could be fixed. [00:11:15] Speaker 02: Now the first option you give, EPA didn't choose, but the second option you give [00:11:20] Speaker 02: says EPA could fix this problem, the problem that I've been talking about this whole time and that is mentioned in all of your comments, if EPA subjected facilities that choose to exclude demand growth emissions to record-keeping monitoring and reporting requirements to ensure that, and now I'm on JA55, to ensure that permitting agencies and enforcement authorities have sufficient information to hold facilities accountable. [00:11:42] Speaker 02: Now, EPA did not, [00:11:45] Speaker 02: do exactly that. [00:11:47] Speaker 02: But what EPA did do is it said that if you're a source and you want to qualify for reasonable possibility, then you still have to keep records. [00:12:02] Speaker 02: You still have to at least keep your pre-modification records. [00:12:06] Speaker 02: If you're over the 50% threshold, not just when you exclude demand growth, [00:12:13] Speaker 02: but even when you include demand growth. [00:12:16] Speaker 02: So a company say they're at 40% without including the demand growth emissions, but once they include the demand growth emissions, they're at 60% of the significant emissions threshold. [00:12:29] Speaker 02: In that case, they still have to keep the pre-modification records. [00:12:33] Speaker 02: So I guess it seems like you got almost everything you wanted. [00:12:39] Speaker 02: Why are the things that you didn't get [00:12:43] Speaker 02: Why are they as important as you're making out? [00:12:46] Speaker 02: And along those lines, there were a lot of states in the original round of litigation. [00:12:52] Speaker 02: There were a lot of states on your comments. [00:12:54] Speaker 02: You're the only state left. [00:12:56] Speaker 02: Is it that the other states were satisfied that EPA did almost everything you wanted EPA to do? [00:13:03] Speaker 04: So let me address your first question first. [00:13:11] Speaker 04: the really the most critical thing that we did want, which was reporting a pre pre project and mission calculations. [00:13:21] Speaker 04: And the reason why that's so critical is that information just is not available from any, any other source. [00:13:30] Speaker 04: And it brings transparency as well as accountability to the process. [00:13:36] Speaker 04: The problem that we found throughout NSR litigation and [00:13:41] Speaker 04: I personally, on behalf of New Jersey, have been involved in five or six of these NSR enforcement cases. [00:13:48] Speaker 04: The problem is that permitting authorities don't know that a modification has occurred that might have NSR implications. [00:13:59] Speaker 04: And they have no way to check that. [00:14:02] Speaker 04: And in the litigation, when you finally get to that point, which is a very long, drawn-out process and entails, you know, requires a lot of resources, [00:14:11] Speaker 04: You find that the admission calculations that were done were very sketchy if they were done at all. [00:14:18] Speaker 04: And and so the importance of requiring reporting is that You know the the source knows that a permitting official is going to review the calculations and so [00:14:32] Speaker 04: It really, I think, brings, as I said, some accountability to the process. [00:14:36] Speaker 04: And I think also in a lot of states, or at least in New Jersey, when you submit information to the permitting authorities, you have to do so under oath, or you have to certify that the information is true and correct to the best of your knowledge. [00:14:53] Speaker 04: So that's the key piece. [00:14:56] Speaker 04: That, we believe, is more important than anything, more important than [00:15:00] Speaker 04: post-construction records, post-construction monitoring, admission records, because all of that, we can come back and ask the source to provide the additional information. [00:15:13] Speaker 04: What we can't get upfront are the pre-construction admission calculations, and we can't get those records pre-construction. [00:15:21] Speaker 04: Again, the whole point of the NSR program is to allow permitting authorities to evaluate [00:15:29] Speaker 04: before construction, whether pollution controls are required. [00:15:33] Speaker 04: And they can't do that if they don't have the calculations in hand. [00:15:39] Speaker 02: Ms. [00:15:39] Speaker 02: Morelli, I've taken up all of your time. [00:15:40] Speaker 02: I'm finished asking your questions. [00:15:42] Speaker 02: I thank you for your patience. [00:15:44] Speaker 02: And I especially thank my colleagues for their patience. [00:15:48] Speaker 01: Of course. [00:15:49] Speaker 02: I promise not to ask anymore. [00:15:50] Speaker 01: No, no. [00:15:50] Speaker 01: Never need for that promise. [00:15:52] Speaker 01: I want to make sure my colleagues will give you time for rebuttal, Ms. [00:15:55] Speaker 01: Morelli, but I want to make sure my colleagues don't have further questions for you. [00:16:00] Speaker 01: If not, we'll hear from the government. [00:16:04] Speaker 01: Thank you. [00:16:05] Speaker 01: Ms. [00:16:05] Speaker 01: Morelle, Ms. [00:16:06] Speaker 01: Brown. [00:16:09] Speaker 03: Good morning. [00:16:09] Speaker 03: May it please the court? [00:16:10] Speaker 03: Laura Brown on behalf of the Environmental Protection Agency. [00:16:13] Speaker 03: The challenged rule is the product of reasoned decision making, and it should be upheld for three reasons. [00:16:18] Speaker 03: First, the Clean Air Act does not require sources to keep records, monitor emissions, and report to reviewing authorities when they determine that a modification does not require a new source review permit. [00:16:29] Speaker 03: But in recognizing the potential value of this information for enforcement, EPA balanced administrative concerns and set an objective bright line test that requires record keeping, reporting, and monitoring for those projects that EPA determines will have a higher probability of actually causing a significant injury. [00:16:49] Speaker 01: So before we go too deep into the merits, can I just start you off where Judge Walker started off, which is withstanding. [00:16:54] Speaker 01: The government didn't make standing objection here. [00:16:58] Speaker 01: And at least my experience with the government has been where the government believes there's any standing argument to be made, it usually makes it. [00:17:04] Speaker 01: And I'm just wondering, can we infer from that that you think that there is standing here? [00:17:10] Speaker 03: Well, Your Honor, I will note that we did, in our brief, assert a concern about standing with respect to any injury that is caused by sources within New Jersey, because New Jersey has... Well, actually, I didn't read you to be... That's only sources within New Jersey, so it doesn't deal with upwind sources, but I didn't even read that to be a standing objection. [00:17:30] Speaker 01: I thought that was in the context of your merits argument, but maybe I missed something. [00:17:34] Speaker 01: Maybe you... [00:17:34] Speaker 03: No, no, you didn't miss it. [00:17:36] Speaker 03: You're right. [00:17:37] Speaker 03: I just thought I would at least point that out that we do think there is concern with their injury within the state of New Jersey. [00:17:43] Speaker 02: Do you think New Jersey has standing? [00:17:45] Speaker 03: Obviously, it's petitioners burden to establish that they have standing and I'm certainly not going to argue with your hypothetical Judge Walker that you laid out certain very detailed causes of events that would have to occur. [00:17:56] Speaker 03: I think Ms. [00:17:57] Speaker 03: Broom will probably address standing in a much more educated fashion since it was actually raised in her brief. [00:18:03] Speaker 03: We did determine our initial assessment was that New Jersey did outstanding with respect to out of state sources. [00:18:11] Speaker 03: Okay. [00:18:12] Speaker 03: And second for those modifications that do not trigger the record keeping monitoring reporting requirements EPA explained how other records routinely kept by sources relate it and other reviewing authorities and enforcing new source review. [00:18:25] Speaker 03: And given EPA's vast experience and expertise in enforcing new source review using these type of records, the explanation should be given deference. [00:18:34] Speaker 06: Let's assume that as you argue that the court must defer. [00:18:38] Speaker 06: This is an area of [00:18:40] Speaker 06: EPA expertise, what is the expertise that responds to petitioners' argument that as to pre-construction, there are no substitute records. [00:19:04] Speaker 06: And if those records are not available pre-construction, [00:19:10] Speaker 06: You heard all the things she said. [00:19:12] Speaker 06: Why is that a matter to which the court should defer because of the agency's expertise? [00:19:22] Speaker 03: Well, I would note in the first instance that we do not concede that this information. [00:19:26] Speaker 06: Would you agree that whether there are pre-construction records required or not is just a fact question? [00:19:41] Speaker 03: So what EPA has determined, given its expertise and experience in administering the new source review program, is that actually minor new source review permits, which must be applied for prior to construction, could provide states such as New Jersey with the information that it seeks about a proposed modification that does not meet the major new source review record keeping requirements. [00:20:07] Speaker 06: Minor sources. [00:20:08] Speaker 06: What about major sources? [00:20:10] Speaker 03: Well, so the minor new source review program applies to major sources when they make determinations that a modification is not a major modification under the Clean Air Act, under the new source review program. [00:20:23] Speaker 03: So major sources can submit minor source new source review applications for those modifications that do not meet the major. [00:20:31] Speaker 06: I'm thinking somebody's going to spend $500 million building a new plant. [00:20:38] Speaker 06: How are minor source records [00:20:40] Speaker 06: going to provide the information? [00:20:44] Speaker 03: Well, in that instance, if the source determines that there is not a major modification, it sounds like your hypothetical if someone is going to build a new plant, then that would automatically fall within the major new source review program and would also require a new source review permit as a new source. [00:21:04] Speaker 03: So you're telling me that council is just wrong? [00:21:11] Speaker 03: I think council has overstated her concern or New Jersey, excuse me, has overstated their concern about the lack of available records pre construction. [00:21:21] Speaker 03: Actually, New Jersey's brief on this point actually New Jersey's reply brief strengthens EPA's [00:21:27] Speaker 03: For instance, New Jersey has adopted regulations that require sources, major sources, that have determined that a modification does not trigger major new source review to submit to the reviewing authorities either a notice or a permit application describing the proposed modification and any change in emission as a result. [00:21:48] Speaker 03: So even in New Jersey, when a major source makes the determination that a change or physical project is not a modification that falls within the major new source of view program, New Jersey is still getting the information it needs to make a determination of whether there could be a major new source of view implication. [00:22:05] Speaker 01: Does that definitely help out of state? [00:22:08] Speaker 06: We're all going to ask you the same question. [00:22:10] Speaker 03: What about out-of-state sources? [00:22:17] Speaker 03: So out of state sources are under the new source of view regulations required to provide notice to states within the air quality region of minor new source of view applications and provide the states an opportunity and the public too to comment on those minor new source of view applications, which are pre-construction. [00:22:40] Speaker 03: And so New Jersey will have notice of minor new source review permit applications from sources within, for instance, the state of Pennsylvania or other states within the regional air quality district. [00:22:54] Speaker 01: Is there no gap? [00:22:55] Speaker 01: Is there no delta there in between where there's a modification that doesn't arise to the level that requires reporting, but that also wouldn't [00:23:09] Speaker 01: come under minor source so that New Jersey is actually not going to know about the modification. [00:23:17] Speaker 03: I don't think I can say there's no gap. [00:23:18] Speaker 03: So states have the authority to determine if there are categorized insignificant activities that it determines are exempt from the minor new source review program. [00:23:29] Speaker 03: And so those are specific activities that states have made a specific determination of our types of projects that really could have no or exempt would have no influence or impact on the state's [00:23:42] Speaker 03: air quality and do not require actual pre-construction permit. [00:23:46] Speaker 03: That is allowed under the statute. [00:23:47] Speaker 03: But it's going to be, in my understanding, it's pretty rare. [00:23:51] Speaker 03: So either a source is going to seek a major new source review permit. [00:23:55] Speaker 03: And if it doesn't, then it sort of falls into the minor new source review bucket. [00:23:59] Speaker 03: And there will be notification to the reviewing authorities about the type of project that that source is proposing. [00:24:06] Speaker 01: And I'm just talking about out of state, upwind sources, right? [00:24:08] Speaker 01: I'm not talking about within New Jersey sources. [00:24:11] Speaker 01: And you're talking about the same thing you're talking about. [00:24:13] Speaker 03: No, I am talking about out of state. [00:24:15] Speaker 03: So there might be a gap. [00:24:16] Speaker 03: There could be a gap of insignificant projects that a state, for instance, Pennsylvania, determines exempt from minor new source review. [00:24:24] Speaker 03: And so that's small. [00:24:25] Speaker 01: But that's even south of minor. [00:24:26] Speaker 01: It's insignificant. [00:24:28] Speaker 01: So that's even, according to whatever jurisdictions are reviewing it, even more trivial than minor. [00:24:34] Speaker 03: Correct. [00:24:34] Speaker 03: That's correct. [00:24:35] Speaker 01: You're saying there's no gap between minor and major, such that [00:24:38] Speaker 03: I am not aware of any, and based on my discussions with my client, that it is either the permanent application will be either a major modification or a minor modification. [00:24:52] Speaker 02: Or insignificant activity. [00:24:54] Speaker 02: So I'm not sure that that's consistent with your brief, but maybe I'm just misunderstanding. [00:24:59] Speaker 02: The smallest would be completely insignificant. [00:25:03] Speaker 02: They would have to get a minor permit. [00:25:07] Speaker 02: No? [00:25:08] Speaker 03: No. [00:25:09] Speaker 03: So, so there's major new source review, which is for major modifications and then there if a modification is not a major modification, then most likely it is a minor modification. [00:25:20] Speaker 03: However, there are some projects that a state can exempt from the minor new source review program that are so insignificant. [00:25:27] Speaker 02: So there's completely insignificant, and then there's the minor modifications. [00:25:33] Speaker 02: And when that happens, there's some reporting that goes on to the state through the SIPs. [00:25:37] Speaker 02: Is that correct? [00:25:38] Speaker 02: Correct. [00:25:40] Speaker 02: OK. [00:25:40] Speaker 02: And then there's also a modification that has a reasonable possibility of being major. [00:25:49] Speaker 02: That's next. [00:25:50] Speaker 02: And then there's a modification that is major. [00:25:53] Speaker 02: Right. [00:25:53] Speaker 02: Now, I'm wondering. [00:25:56] Speaker 02: Because I'm still not sure is there a gap ever between a minor modification that is that triggers SIP reporting. [00:26:07] Speaker 02: And a reasonable possibility of a major modification. [00:26:11] Speaker 03: Yes. [00:26:12] Speaker 02: So, and I think how, how rare is that [00:26:15] Speaker 03: So if I'm understanding your question correctly, there a determination that a modification is not a major modification, but has a higher probability of potentially being a major modification, that falls within the reasonable possibility. [00:26:31] Speaker 02: What if it's below the reasonable possibility standard, but above the minor modification SIPP standard? [00:26:38] Speaker 03: So if it's below the reasonable possibility standard, then in most cases it needs a minor new source of your permit. [00:26:44] Speaker 02: So I get that and I'm just trying to figure out what does most cases mean. [00:26:48] Speaker 01: What's the most? [00:26:50] Speaker 01: Why do you say most? [00:26:51] Speaker 02: 99% of cases, 60% of cases? [00:26:55] Speaker 03: Well, because of the category that could be exempt. [00:26:59] Speaker 03: Insignificant. [00:27:00] Speaker 03: Insignificant, correct. [00:27:02] Speaker 03: So it either is major new source review project, or minor new source review project that may or may not be subject to reasonable possibility record keeping. [00:27:12] Speaker 03: And then there's the third category, this insignificant. [00:27:16] Speaker 03: So the regional possibilities, Kindred, covers the minor new source review program, but only those that are more likely or potentially likely to trigger a major new source review. [00:27:28] Speaker 02: Again, significant is the smallest of those in terms of admissions. [00:27:31] Speaker 03: That is the smallest, which states have just exempted as a- I'm sorry, Chief Judge. [00:27:35] Speaker 01: No, no, not at all. [00:27:36] Speaker 01: Not at all. [00:27:37] Speaker 01: I think we're asking the same questions and going in the same place. [00:27:40] Speaker 01: Can I just ask? [00:27:41] Speaker 01: But I don't want to cut you off, Judge Walker, if you have a- [00:27:43] Speaker 01: Can I just ask the question in this following way just to make sure I understand the typology? [00:27:47] Speaker 01: So let's just assume away the insignificant ones. [00:27:49] Speaker 01: So you don't need to caveat your answer, at least for these purposes with respect to the insignificant ones. [00:27:54] Speaker 01: Put those to one side. [00:27:56] Speaker 01: Then if, as I understand New Jersey's argument, they're saying that for some, if it's not major so that we're in reasonable possibility land, there's going to be some projects as to which they receive no notice that it's even happening because the reporting [00:28:11] Speaker 01: Part of it is not there. [00:28:12] Speaker 01: Record keeping might be there, but reporting is not there. [00:28:14] Speaker 01: And as I understand your response, you're saying, no, that category doesn't really exist. [00:28:19] Speaker 01: Again, putting aside insignificant because there will be awareness of it by virtue of minor. [00:28:25] Speaker 03: So that is generally, yes, I think that is generally correct. [00:28:29] Speaker 03: I am afraid to say a hundred percent that there could not be one specific type of project that I'm just not thinking of sitting right here, but generally, yes, that, that, that a state will receive notification of a project that does not major, a major modification through its minor new source review program. [00:28:48] Speaker 02: Now, New Jersey, let me say, if one of us wants to say that in an opinion, [00:28:53] Speaker 02: Where in the JA should we look to find support for that? [00:28:58] Speaker 02: And you don't have to know the number off the top of your head, but if you could give us a hint. [00:29:02] Speaker 03: Yeah, so I think it's actually within the regulations, so 40 CFR, 51, 160. [00:29:11] Speaker 03: That describes what EPA requires of minor new source review programs, as well as within the federal register associated with the promulgation of this rule, EPA discussed the sufficiency of minor new source review programs as supporting a gap filler. [00:29:31] Speaker 03: I just would like to clarify, though, that New Jersey might not itself [00:29:35] Speaker 03: receive notification for every minor new source of the permit occurring outside of its jurisdiction. [00:29:40] Speaker 03: For those jurisdictions that are not within the air quality region, sources are not required, excuse me, the states are not required to provide notice to other states about sources that are making a minor source modification. [00:29:58] Speaker 01: What if it's a downwind state though? [00:29:59] Speaker 01: I can understand if it's a state that's not even within [00:30:03] Speaker 01: the, you know, the wind column at all. [00:30:05] Speaker 01: But if it's if it's a downwind state within the way we usually think about downwind states under Homer and all the statutes and regulations that apply to that dynamic, would New Jersey get noticed as a downwind state or no? [00:30:18] Speaker 03: So under the regulation, New Jersey is only required to get notice from those states that are within its air quality region. [00:30:25] Speaker 03: From a practical perspective, I do not know if there are downwind states that are not included within that district. [00:30:33] Speaker 03: But if it were outside of that region, then it would probably not receive that. [00:30:41] Speaker 03: I see my time is up. [00:30:43] Speaker 03: I could just make one final point. [00:30:46] Speaker 03: You know, what New Jersey seems to seek here is reporting for all modifications or virtually all modifications, no matter how insignificant. [00:30:58] Speaker 03: And that reporting [00:31:01] Speaker 03: could actually also impose not only a burden on the regulated community, but also a burden on administrative, excuse me, reviewing authorities, especially those with small staff or that lack resources to review all proposed modifications and ultimately distract them from those modifications that have a higher probability of potentially causing a significant [00:31:26] Speaker 03: mission increase and what EPA was doing as part of this rule is assisting reviewing authorities and focusing their attention on those types of projects. [00:31:37] Speaker 02: Can I ask one more question? [00:31:40] Speaker 02: Between 2009 and 2019, EPA was, I guess, reconsidering the 2007 rule and then after 10 years of reconsidering it, it decided not to reconsider it. [00:31:50] Speaker 02: What was that all about? [00:31:56] Speaker 03: I think that there was perhaps a change in priorities. [00:31:59] Speaker 03: I don't know that I can speak directly to the decision-making that was made on why not to reconsider. [00:32:05] Speaker 03: That wasn't actually part of this challenge. [00:32:10] Speaker 01: OK. [00:32:10] Speaker 01: Thank you, Ms. [00:32:11] Speaker 01: Brown. [00:32:13] Speaker 01: If my colleagues have further questions, we'll hear from Intervener Council. [00:32:19] Speaker 01: Ms. [00:32:19] Speaker 01: Broom. [00:32:20] Speaker 05: OK, thank you. [00:32:21] Speaker 05: I think I'm just unmuted now. [00:32:23] Speaker 05: May I please the court? [00:32:25] Speaker 05: I had a presentation, but I guess what I'd like to start with is the fact that in the New York case that gave birth to this rulemaking, the court stated less burdensome requirements may well be appropriate for changes [00:32:42] Speaker 05: or sources with little likelihood of triggering NSR. [00:32:46] Speaker 05: And as Judge Williams said in his concurring opinion, EPA need not show that the system chosen will achieve perfect NSR compliance. [00:32:55] Speaker 05: Perfection is often too costly to be sensible. [00:32:59] Speaker 05: And I lay that out as a predicate, and I would like to explain [00:33:05] Speaker 05: I do a lot of compliance work with big facilities and small facilities. [00:33:09] Speaker 05: So the way that the program works and Judge Rogers, to your question earlier, you have major news source review and minor news source review aren't addressed to major and minor sources. [00:33:25] Speaker 05: they're addressed to projects and so you get this misnomer because it's called new source review when it's really maybe should be better called new project review and this rule is solely concerning existing sources and modifications at existing sources and so if you have a refinery or an automobile manufacturing plant [00:33:50] Speaker 05: There are some projects that will trigger major new source review because they exceed the significance levels. [00:33:57] Speaker 05: And those go to major NSR. [00:34:00] Speaker 05: But most projects out of facility trigger minor new source review and get these minor source permits. [00:34:08] Speaker 05: And that's what the states deal with. [00:34:10] Speaker 05: And so someone asked earlier if there is a gap there between major and minor. [00:34:17] Speaker 05: No, there's no gap. [00:34:18] Speaker 05: Minor goes up to the major source trigger level. [00:34:22] Speaker 05: And then below minor, there's this de minimis insignificant stuff. [00:34:27] Speaker 05: And so an example of that is there are a list of exemptions in New Jersey schools. [00:34:33] Speaker 05: New Jersey Administrative Code 72726.4 contains a list of exemptions for [00:34:40] Speaker 05: Things like adhesives and sealants that contain less than 20 grams per liter of volatile organic compounds. [00:34:47] Speaker 05: Very specific things that the state has determined and EPA has approved after a public notice and comment process that those things are insignificant. [00:34:58] Speaker 05: So I would go back to the state implementation plan, even though one individual exemption in the use of that might not be [00:35:08] Speaker 02: Reviewed that the fact that there would be an exemption at that level and there there aren't a lot of this burn the state implementation plans for minor modifications Do they all require? [00:35:23] Speaker 02: Reporting of pre-modification record-keeping No, and they know that that's that's the whole problem according to New Jersey [00:35:36] Speaker 05: So that takes me back to my point on perfection. [00:35:41] Speaker 05: I mean, the fundamental question is, and EPA made this point in their brief, that if you require reporting of absolutely everything, you're going to lose the wheat for the chaff. [00:35:54] Speaker 05: And you're going to miss the projects that you really should be paying attention to. [00:36:00] Speaker 05: and that if you have to report, things happen at a major plant every day, they're doing maintenance, they're- I'm not talking, I'm sorry, I'm not talking about the insignificant modifications, the routine maintenance, those kinds, but the modifications that are greater than- That are minor new source review. [00:36:20] Speaker 02: That are minor new source review. [00:36:23] Speaker 02: In those instances- You have to get a permit. [00:36:25] Speaker 02: It is the case that, so you [00:36:28] Speaker 02: do or don't have to report your pre-modification record keeping? [00:36:33] Speaker 05: You would end up on the application form, and this is not in the record, but this is just from my experience. [00:36:40] Speaker 05: So on the application form that you fill out for a minor NSR permit, you have to tell them what your emissions are and what you're doing. [00:36:49] Speaker 02: So then there is reporting of pre-modification records. [00:36:53] Speaker 05: Right. [00:36:54] Speaker 05: It's just not pursuant to this rule. [00:36:57] Speaker 01: So can I ask a follow-up question about that? [00:37:00] Speaker 01: So if the application has that information, the application is submitted to whom? [00:37:09] Speaker 05: The New Jersey DEP or the New York Department of Environmental Conservation. [00:37:13] Speaker 01: If it's an in-state source, right? [00:37:16] Speaker 01: Yes. [00:37:16] Speaker 01: Then if it's an out-of-state source, if you're downwind from an out-of-state source, how does the downwind jurisdiction [00:37:24] Speaker 05: So there's a public notice and comment process under minor NSR. [00:37:27] Speaker 05: So they would have to look at the New York DC's public notices, which are on its website or, you know, everything's changed between print paper. [00:37:40] Speaker 05: newspaper but there is a public notice process it's on the DEC's website Pennsylvania the same thing and and I will say that that the states that blow towards um New Jersey have some of the most extensive minor NSR programs in the country and I know they cited you know something in Kansas but Kansas doesn't blow to them and and and I could quibble with how they describe that but [00:38:09] Speaker 05: the states that they're dealing with, to the extent you ask the standing question, it just makes their claim entirely speculative. [00:38:18] Speaker 01: Yeah. [00:38:18] Speaker 01: Well, even if Kansas is not a significant source, Kansas is a significant state. [00:38:22] Speaker 01: I'll just say that as somebody from Kansas, but... It's not always... If my colleagues don't have any further questions for you, we will hear from Ms. [00:38:36] Speaker 01: Morelli on her rebuttal. [00:38:38] Speaker 01: Thank you, Ms. [00:38:39] Speaker 01: Morelle. [00:38:41] Speaker 01: Ms. [00:38:41] Speaker 01: Morelle, we gave you three minutes of your rebuttal, but Judge Walker. [00:38:45] Speaker 02: Could you start with the argument that both of your opposing counsels made that you will be easily distracted by too much information? [00:38:54] Speaker 04: Not at all. [00:38:57] Speaker 04: Because, you know, the permitting authorities, they know what they're doing. [00:39:00] Speaker 04: They process lots of applications. [00:39:03] Speaker 04: They can look at an application and the emission calculations that are done and evaluate for themselves, do we think this is going to be problematic or not? [00:39:13] Speaker 04: And that's their job. [00:39:14] Speaker 04: But they need that information to be able to do that analysis. [00:39:18] Speaker 04: But in terms of overburdening them, no, they would like to have the information so they can at least [00:39:24] Speaker 04: have some sort of check and, you know, and it may be that post project emissions raise a concern and then they can go back and look at what was submitted beforehand and determine, wow, is this really off base or, you know, what's going on here. [00:39:39] Speaker 04: But a couple things I wanted to address really quickly on the burden. [00:39:42] Speaker 04: Yeah, perfection may not be required, but the ability to enforce certainly is required. [00:39:50] Speaker 04: And as far as the burden, EPA itself, when they promulgated the final rule, acknowledged that requiring sources to keep records, the emission calculation records, they're already required to perform. [00:40:05] Speaker 04: And I want to make that point because that's important. [00:40:07] Speaker 04: They're already required to do the calculation. [00:40:10] Speaker 04: So EPA itself said requiring them to keep those records is a minimal additional burden. [00:40:17] Speaker 04: Our position is likewise, you know, requiring sources to report those emission calculations is a nominal burden. [00:40:25] Speaker 04: They have to email it to the permitting authorities. [00:40:28] Speaker 04: So not a great burden. [00:40:29] Speaker 04: The second thing I wanted to address was this issue of minor new source review, which I think is really a red herring. [00:40:36] Speaker 04: So minor new source review, major NSR applies to major sources, which there's a defined list for sources who emit or have the potential to emit 100 tons or more [00:40:48] Speaker 04: of NSR pollutant, or there's a catch-all category for sources that emit or have the potential to emit 250 tons per year of a pollutant, a regulated pollutant. [00:41:01] Speaker 04: So if those major sources do not think that they're going to, a project they are proposing, which will increase emissions, but they don't believe it will increase emissions enough to trigger NSR, [00:41:16] Speaker 04: then yes, they apply for a minor NSR permit or permit modification. [00:41:23] Speaker 04: But unless they are projecting that the project will lead to increased emissions that could result in exceedance of a NAICS, a National Ambient Air Quality Standard, or that will result in a significant emissions increase, [00:41:45] Speaker 04: For most of these programs, it's not a case by case review. [00:41:50] Speaker 04: It's done on a programmatic basis. [00:41:53] Speaker 04: You have permits by rules. [00:41:54] Speaker 04: You have general permits. [00:41:56] Speaker 04: I mean, the authorities don't have time to review each and every minor new source permit application in depth. [00:42:02] Speaker 04: They are not required to submit the pre [00:42:05] Speaker 04: project emission calculations that they are under major NSR and sources and states, excuse me, that only adopt the federal rules are clearly not required to submit the pre-emission calculations. [00:42:20] Speaker 02: Ms. [00:42:20] Speaker 02: Morelli, I'm confused between two things you just said. [00:42:24] Speaker 02: Maybe you meant them both, but one thing you seem to say is for a minor modification [00:42:30] Speaker 02: the state authorities that would grant a permit for that minor modification don't have time to thoroughly review the reporting that is done by the facility. [00:42:43] Speaker 02: And then I also heard you just say the reporting that's done by this facility is not really much reporting at all. [00:42:54] Speaker 02: Did you mean just the first thing or did you mean both of them? [00:42:57] Speaker 04: Sorry, I didn't mean to say it's not that they don't have the time. [00:43:00] Speaker 04: It's that there's a lot of minor applications as opposed to major applications. [00:43:06] Speaker 04: But the thing is, and that's one of the reasons why for minor applications, they require less information, generally speaking. [00:43:16] Speaker 04: They don't require the in-depth information that you would submit with a major modification application. [00:43:22] Speaker 04: So it's a much less rigorous process [00:43:26] Speaker 04: less information is provided. [00:43:28] Speaker 04: It's not that the permitting authorities don't review the information that is provided. [00:43:33] Speaker 02: I guess that if a unit makes a minor modification, does the unit report the, just the facility report the pre-modification emissions? [00:43:48] Speaker 04: I believe they do. [00:43:50] Speaker 02: Yeah. [00:43:50] Speaker 02: So that seems to me, that seems like the ball game, but [00:43:57] Speaker 04: Well, I would disagree because what they're required to do is not just report their, again, what they're emitting now. [00:44:05] Speaker 04: They have to, under major NSR, report what they project future emissions will be, which can entail, you know, they can consider a lot of factors. [00:44:18] Speaker 02: But Ms. [00:44:19] Speaker 02: Morelle, you were telling us earlier that the thing that you really need [00:44:24] Speaker 02: is you need reporting of pre-modification emissions, the post-modification stuff. [00:44:30] Speaker 02: You can get that when you need it. [00:44:31] Speaker 04: If I say to that, sorry, I didn't, let me clarify. [00:44:36] Speaker 04: What we need are the pre-project emission calculations that project future emissions following the project. [00:44:46] Speaker 04: Those are the critical things, you know, the critical information that we need [00:44:51] Speaker 04: permitting authorities need to evaluate NSR compliance. [00:44:57] Speaker 01: Thank you. [00:44:57] Speaker 01: Does my colleagues have further questions? [00:45:01] Speaker 01: Thank you, counsel. [00:45:02] Speaker 01: Thank you to all counsel for your arguments this morning. [00:45:04] Speaker 01: We'll take this case under submission.