Where There's a Will: Must EPA Consider the Technologic and Economic Feasibility of State Air Implementation Plans?

Within a week of each other, two circuit courts of appeals recently handed down contradictory rulings on the question of whether the EPA Administrator must consider the technological feasibility and economic impact of state air quality implementation plans in the process of approving or disapproving them under § 110 of the Clean Air Act. The Seventh Circuit, on January 23, 1975, held that the Administrator is not required to consider such factors in making approval decisions under § 110, but that technological infeasibility and economic hardship may be taken into account by the agency and the federal district courts in fashioning compliance schedules in enforcement proceedings under § 113 of the Act.¹ On January 29, 1975, the Third Circuit, apparently unaware of the Seventh Circuit's ruling, held that the Act implicitly requires the Administrator to determine the technological feasibility and economic impact of a state implementation plan in proceedings under § 110, and to disapprove a particular plan if he finds it to be technologically infeasible.²

The focus of this controversy is the exact nature of the Administrator's powers and duties under § 110³. The statutory scheme requires each state to submit to EPA a plan providing for the implemention, maintenance and enforcement of the primary and secondary air quality standards promulgated by the Administrator on April 30, 1971 pursuant to § 109. The Administrator, in turn, "shall approve" a state's plan if he determines that it contains certain features specified in § 110(a)(2), was adopted after reasonable notice and a hearing, that it provides for the attainment of primary standards "as expeditiously as practicable," but in no case later than three years from the date of approval, and assures the attainment of secondary standards within a "reasonable time." The specific features which the plan must contain, as set forth in § 110(a)(2), are: schedules and timetables for compliance; procedures for monitoring and analyzing ambient air quality data; procedures for reviewing the proposed location of new sources; adequate provisions for intergovernmental cooperation; assurances of adequate personnel, funding and authority for enforcement; and provisions for modification of the plan to account for revisions in the national standards or the development of improved, more expeditious methods of achieving compliance.

In Indiana & Michigan Electric Co. v. EPA,⁴ the Seventh Circuit affirmed the Administrator's approval of portions of the Illinois and Indiana implementation plans governing emissions from coal-fired steam generating plants in the face of a challenge by various electric utilities. The petitioners argued that the statutory phrase "as expeditiously as practicable" imposes an [5 ELR 10057] implicit duty on the Administrator to consider the technological feasibility and economic impact of the plans before approving them. The court quickly rejected this contention, however, noting that the three-year deadline for compliance which immediately follows that phrase in the statutory language reflects a limit beyond which excuses of impracticability will not be allowed. The court found highly significant the omission of any mention of economic or technological factors among the specific criteria listed in § 110(a)(2) which the Administrator must consider prior to the approval of a state plan. According to Mr. Justice Clark, sitting by designation and writing for the court, the statute imposes a mandatory obligation upon the Administrator: he "shall approve" a state plan if it meets the explicit minimum requirements set forth in § 110(a)(2).

The court took great pains to point out that its ruling did not mean technological and economic considerations were wholly irrelevant under the Clean Air Act. Such factors, it suggested, may quite properly be considered by the agency or the federal district courts in enforcement proceedings uner § 113 of the Act.⁵ Any compliance order issued by the Administrator must specify a reasonable compliance schedule, "taking into account the seriousness of the violation and any good faith efforts to comply with applicable requirements." To the Seventh Circuit this wording indicated a congressional intent that in instances where compliance may be technologically or economically impossible, good faith efforts of the party subject to regulation should be considered in fashioning a compliance schedule as well as in imposing penalties. The court noted that § 307(b)(2),⁶ which precludes review in enforcement proceedings of any aspect of the Administrator's approval decision under § 110, does not prevent the petitioners from presenting technological feasibility and economic impact argument in enforcement proceedings since the Administrator need not consider such factors in approving state plans. In so deciding, the court partially followed the Sixth Circuit's ruling in Buckeye Power⁷ and expressly declined to follow the Third Circuit's decision in Getty Oil.⁸

Within a week, however, the Third Circuit handed down a contrary interpretation of the Administrator's duties under § 110 in St. Joe Minerals Corp. v. EPA.⁹ In St. Joe, the operator of a zinc-smelting plant field a petition challenging the Administrator's approval of the portion of the Pennsylvania implementation plan governing sulfur oxide emissions. The plan contained only one standard for all existing sulfur oxide emissions sources within the state, despite the fact that EPA's regulations for the formulation of implementation plans included an example specifically for zinc smelters of emission-limitations attainable with reasonably available technology. In 1973, the court ruled that the petitioners had not been afforded a meaningful hearing regarding the plan's technological and economic feasibility, and remanded the case to the agency which proceeded to conduct an administrative hearing on the feasibility question.¹⁰ In March 1974, the Administrator concluded that the plan's sulfur oxide emissions standard, as applied to St. Joe's smelter, was technologically infeasible, but voiced his belief that the Clean Air Act precluded his disapproving the plan on that basis. He proposed instead to request that the state revise the plan, and to stay federal enforcement pending state administrative and judicial review. St. Joe then petitioned the court to review the Administrator's approval of the plan, claiming that is was based on an erroneous construction of the law.

The Third Circuit, finding that the phrase "as expeditiously as practicable" (emphasis the court's) suggests the Administrator should evaluate the workability of the proposed plan, agreed with this contention. Referring to its earlier ruling in Duquesne Light,¹¹ the court pointed out that there would have been no reason to remand the case to EPA for an expanded hearing on technological and economic feasibility if the Administrator did not have the power to disapprove the plan on such bases. The court then went on to consider Getty Oil, in which petitioners were held barred from obtaining judicial review of their claims of technological and economic feasibility in an enforcement proceeding since these matters could have been reviewed at the time EPA approved the implementation plan. If, as Getty Oil implies, a court of appeals is empowered to review and reverse the Administrator's approval on technological and economic grounds, the court reasoned, then the Administrator surely has the authority to review the plan on these same grounds and disapprove unreasonable portions of it. Admitting that the Act does not explicitly authorize the Administrator to disapprove a plan which is not practicable, the court nonetheless stated that if Congress had intended to require the Administrator to approve a plan even though compliance with it is technologically infeasible, the statutory language would have been more explicit.

The court found additional support for its interpretation of § 110 in Buckeye Power and the Fourth Circuit's ruling in Appalachian Power Co. v. EPA.¹² In Buckeye, [5 ELR 10058] the Sixth Circuit ruled that the Administrator must consider feasibility claims in making implementation plan approvals. The case is not, however, wholly supportive of the Third Circuit's position because the court also concluded that these same claims could be litigated again in an enforcement proceeding, a conclusion upon which the Seventh Circuit relied in Indiana & Michigan Electric. And in Appalachian Power, the Fourth Circuit pointed to the interagency review process to which proposed implementation plans are subjected in order to determine their aggregate impact and the availability of fuels and investment capital as evidence that technological and economic aspects of the plans are in fact administratively reviewed prior to approval.

With or without these additional authorities, however, the Third Circuit's view of § 110 clearly rests on shaky legal ground. The interpretation put forth in St. Joe Minerals requires that a substantial loophole be read into the statute, an exercise in statutory construction courts usually frown upon. The Third Circuit refused to believe that Congress intended, without specifically saying so in the statute, to preclude the Administrator from reviewing the feasibility of state plans before approving them and to require him to approve plans which are technologically infeasible. But it is even harder to believe, as that court apparently did in St. Joe, that Congress would specify in some detail the features of a state plan which the Administrator must consider before approving it, a list which does not include technological and economic feasibility, impose upon him with the mandatory "shall" the duty to approve the plan if those specific features are present and certain procedural and structural requirements are met, and yet all the while intend that the Administrator not only examine the plan for technological and economic workability, but also disapprove it if he finds it unreasonable in these areas.

Moreover, the Third Circuit's interpretation is at variance with the general philosophical approach of the Clean Air Act, which is to set high standards for pollution control performance and force regulated industries to develop the technological means to meet them. This approacl is perhaps most vividly illustrated by the requirement that auto emissions be reduced by 90 percent within five years, a goal certainly beyond the range of technology available in 1970. In the event that the task of meeting these high standards proves impossible in particular cases, the statute provides a mechanism by which compliance deadlines can be extended, but only upon a finding by the Administrator that the necessary technology does not exist despite good faith efforts by the regulated industry to develop it, and that there are no alternative routes to timely compliance.

The essential technology-forcing nature of the Act is also clearly evidenced by the legislative history. The Senate Report on the bill stated that

[t]he Committee does not intend that the recommended control techniques documents should lock in existing technology …. Air pollution control requires a new and unique technology….

The Committee intends that the information provided pursuant to this section should serve as guidance to States, not as limitations on control technology innovation.¹³

Senator Cooper (R-Ky.) explained the reasons behind adopting the new technology-forcing approach to air pollution control embodied in the bill:

[the pre-1970 approach] has made technology and economic feasibility factors, which are under the control of industry, dictate public policy rather than respond to public policy.… Through [the new] mechanism the committee expects to develop maximum incentive to stimulate new technical and economic means of reducing … emissions. Without such incentive such innovation is not likely to be forthcoming.¹⁴

Given these facts, the Seventh Circuit's opinion in Indiana & Michigan Electric seems by far the sounder interpretation of § 110. The statute's technology-forcing nature is reaffirmed, while a showing of technological or economic infeasibility, coupled with a good faith compliance effort, may be considered by EPA or the court as mitigating factors in the process of drafting compliance schedules or imposing fines in enforcement proceedings. No loopholes are cut in the statute, and the resulting regulatory scheme is both reasonable and workable.

This is not to minimize the problems inherent in forcing the development of pollution control technology, however.One recent example is EPA Administrator Russell Train's announcement that the catalytic converter, a new device developed by the automakers to meet the stringent emissions reduction standards imposed by the statute, releases sulfuric acid droplets into the atmosphere.¹⁵ The technology developed by the industry in response to high, technology-forcing standards in this instance created environmental harms of its own, and by the time this was discovered, the industry was almost wholly committed to that particular technology and there was insufficient time and corporate flexibility to develop an alternative means of compliance before the statutory deadline.

But the track record of the technology-forcing approach so far is a good one, with its latest product, stack gas desulfurization scrubbers, coming of age within the last year.¹⁶ The Third Circuit's misinterpretation of [5 ELR 10059] § 110, if it prevails, would in effect prohibit the inclusion of technology-forcing provisions in state implementation plans, and take federal air pollution control policy back to the discredited pre-1970 approach of weak standards and lax enforcement. The Seventh Circuit's view of the statutory scheme, on the other hand, affirms a vigorous federal role in air pollution control and upholds the technology-forcing approach which has thus far served us well. Its ruling is supported both by a reading of the statute and considerations of logic and policy, and would, it seems, be in a strong position vis-a-vis the Third Circuit's view should the Supreme Court ultimately rule on this split of authority between the two circuits.

1. Indiana & Michigan Electric Company v. Environmental Protection Agency, 5 ELR 20191 (7th Cir. Jan. 23, 1975).

2. St. Joe Minerals Corporation v. Environmental Protection Agency, 5 ELR 20188 (3d Cir. Jan. 29, 1975).

3. 42 U.S.C. § 1857c-5, ELR 41206.

4. 5 ELR 20191 (7th Cir. Jan. 23, 1975).

5. 42 U.S.C. § 1857c-8, ELR 41209-41210.

6. 42 U.S.C. § 1857h-5(b)(2), ELR 41226.

7. 3 ELR 20634 (6th Cir. 1973).

8. 2 ELR 20683 (3d Cir. 1972).

9. 5 ELR 20188 (3d Cir. Jan. 29, 1975).

10. Duquesne Light Co. v. Environmental Protection Agency, 3 ELR 20483 (3d Cir. 1973).

11. Id.

12. 3 ELR 20310 (4th Cir. 1973).

13. S. Rep. No. 91-1196, 91st Cong., 2d Sess. 9 (1970).

14. 116 Cong. Rec. 33317 (Sept. 22, 1970).

15. See Environmental Protection Agency — Recent Developments, 5 ELR 20160 (Apr. 1975).

16. See Comment, Tall Stacks Versus Scrubbers: $3.5 Million Publicity Campaign Fails to Discredit Emission Reduction Technology, 5 ELR 10009 (Jan. 1975).