Alaska Dept. of Environmental Conservation v. Environmental Protection Agency, et al.

Questions presented: Whether Sections 113(a)(5) and 167 of the Clean Air Act, 42 U.S.C. 7413(a)(5) and 7477, authorize the Environmental Protection Agency to issue administrative orders to prevent construction of a major emitting facility where a state permitting authority is prepared to grant the facility operator a "prevention-of-significant-deterioration" air quality permit based on an arbitrary and capricious application of the statutory requirement that such sources of air pollution be subject to the best available control technology?

BY KELLY HESSEDAL, MEDILL NEWS SERVICE

As the worlds largest source of zinc concentrate, the Red Dog Mine, located in northwest Alaska, sought to increase production by constructing a seventh electric generator, MG-17. The generators produce nitrogen oxides (NOx), a generic term for a group of highly reactive gases that contribute to several environmental concerns including ground-level ozone, global warming and acid rain. They also contribute to triggering respiratory problems in humans.

In June 1998, Teck Cominco Alaska, Inc. ("Cominco"), the owner of Red Dog Mine, submitted an application to the Alaska Department of Environmental Conservation (ADEC) for a permit that would allow them to increase nitrogen oxide amounts into the air.

Under the Clean Air Act, states must determine the best method to control air pollution in areas that have met national clean air standards by developing a state implementation plan. The act prohibits construction or modification on facilities that emit pollutants in "clean air" areas unless the facility uses the "best available control technology" to restrict the amount of pollutants. If the state does not carry out the act satisfactorily, the Environmental Protection Agency (EPA) steps in and evaluates the proposal.

The best technology is determined by considering energy, environmental and economic impacts by the "permitting authority," which under the act, is the states. In its application, Cominco proposed installing "Low NOx" to reduce amounts of NOx filtered into the air. Low NOx relies on high-combustion air temperatures to atomize toxic particles and reduce NOx emissions. They proposed installing Low NOx on all generators, including the proposed new generator.

In May 1999, the state granted Cominco a preliminary permit because it believed the proposal would reduce the total amount of NOx emissions to a level that was comparable or lower than installing the alternative, Selective Catalytic Reduction (SCR), exclusively on an existing generator, MG-5, and the new generator, MG-17. SCR is a more expensive process in which exhaust is injected with ammonia or urea and then combined with a catalyst.

In July 1999, the EPA disagreed with the state, concluding that SCR was the best technology for both generators even though SCR had never been determined to be optimal for the other existing generators. Though the EPA did not dispute that installing Low NOx on all seven generators would produce overall lower emissions, the agency argued that under Alaskas plan, Cominco must consider the best technology for each unit individually, rather than the facility as a whole.

Both sides agreed that installing SCR, rather than Low NOx on an individual generator did a better job of reducing emissions. The EPA asserted that if the company has the money to implement a more costly method, the economic efficiency of the best technology requirements is irrelevant. The state argued that SCRs excessive economic cost could affect the mines "world competitiveness" with rippling effects on Alaskas northwest economy.

In December 1999, the EPA issued a "Finding of Noncompliance Order," stating that Comincos construction of the new generator was not in compliance with the act or Alaskas plan. It ordered the state to withhold issuance of Comincos permit. Alaska issued the permit anyway, and even used the EPAs evaluative approach to determine that Low NOx was the best available technology.

In February 2000, the EPA ordered Cominco not to construct the MG-17 generator until Cominco could demonstrate to the EPAs satisfaction compliance with the act. The EPA later amended the order and allowed Cominco to perform certain construction activities during the short Alaska summer.

Alaska and Cominco filed petitions in the 9th Circuit Court of Appeals, challenging the EPAs authority to issue the Dec. 10, 1999 noncompliance order, as well as the February 2000 administrative order and the amended order. They contended that the EPA did not have the authority to interfere with its best technology determination.

In March 2001, the 9th Circuit sided with the EPA, asserting that the EPA has the ultimate authority to decide whether or not the state is complying with the best technology requirements. It further asserted that there was nothing stated in what defines the "best technology" that limits the EPAs authority.

"ADECs apparent motivation for the elimination of SCR appreciation for Comincos contribution to the local economy is not an accepted justification in the top-down approach. Worse still, it is uncomfortably reminiscent of one of the very reasons Congress granted EPA enforcement authority to protect states from industry pressure to issue ill-advised permits," the court said.

"The whole case is where the power lies between the feds and state," said Reed Hopper, attorney for the Pacific Legal Foundation, a nonprofit public interest law foundation. "[The states power] has no meaning if the EPA approves a state program and then can override it at any time. You undermine the state program if the EPA can go in and upset a decision it doesnt like."

On Feb. 24, 2003, the U.S. Supreme Court accepted review in the case.

Cameron Leonard, the assistant attorney general of Alaska, expressed concern that if the Supreme Court sides with the EPA, industries will be hesitant to work with state agencies without having concurrence with the EPA.

"The unpredictability of the permitting process may deter industries from working with the state," he said. "Nobody knows what the rules are and it makes it difficult for states to make meaningful negotiations."

On Jan. 21, 2004, the Court, split along ideological lines, held 5-4 that the EPA was empowered under the Clean Water Act to block construction of the pollutant emitting facility even though Alaska disagreed.

Calling it the "checking authority," Justice Ruth Bader Ginsburg wrote for the majority that Congress reason for enacting such programs -- to prevent significant deterioration of air quality in clean-air areas within a state and in neighboring states -- "is unlikely to be realized absent an EPA surveillance role that extends to ['best available control technology'] determinations."

In concluding that the EPA has supervisory authority over the reasonableness of a state's technology, the majority also found that the EPA did not act arbitrarily or capriciously in finding that Alaska's determination in the case lacked evidentiary support and was unreasonable.

In dissent, Justice Anthony Kennedy criticized the majority for misconstruing the express language of the Clean Air Act and undermining the "principles that preserve the integrity of states in our federal system" by allowing the EPA to act by administrative fiat "based on nothing more than its substantive disagreement with the states discretionary judgment.

"The majority creates a sort of Zenos paradox for state agencies. Because there can always be an additional procedure to ensure that the preceding process was followed, no matter how many steps states take toward the objective, they may never reach it. This is a most regrettable result," argued Kennedy.

"After todays decision...a state agency can no longer represent itself as the real governing body. No matter how much time was spent in consultation and negotiation, a single federal administrator can in the end set all aside by a unilateral order. This is a great step backward in Congress design to grant States a significant stake in developing and enforcing national environmental objectives."

Justices Antonin Scalia, Clarence Thomas, and Chief Justice William Rehnquist joined in dissent.