Citizens Against Refinery's Effects, Inc. v. United States Environmental Protection Agency
643 F.2d 183 (1981)
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Rule of Law:
Under the Clean Air Act, the Environmental Protection Agency (EPA) has broad discretion to approve a state's plan to offset new pollution sources, and a court will uphold the agency's technical and administrative decisions—such as defining the geographic offset area and baseline emissions year—unless they are arbitrary, capricious, or not in accordance with the law.
Facts:
- Hampton Roads Energy Company (HREC) proposed to build a petroleum refinery in Portsmouth, Virginia.
- Portsmouth was in an area that had not attained the national air quality standard for photochemical oxidants, a pollutant created by hydrocarbon emissions.
- The Clean Air Act generally prohibits the construction of new major sources of pollutants like hydrocarbons in such 'nonattainment' areas.
- To permit the refinery, Virginia officials proposed an 'offset' plan where the Virginia Department of Highways would reduce hydrocarbon emissions by switching from 'cutback' asphalt to 'emulsified' asphalt for road paving.
- The proposed emissions reduction from the asphalt change would be greater than the new emissions from the HREC refinery.
- For several years prior, the Virginia Department of Highways had a voluntary, non-enforceable policy to reduce its use of cutback asphalt for cost-saving reasons.
- The state proposed using three highway districts as the geographic area for the offset and 1977, a year of unusually high asphalt consumption, as the baseline year for calculating the reduction.
Procedural Posture:
- The Virginia State Air Pollution Control Board (VSAPCB) submitted a proposed State Implementation Plan (SIP), including a construction permit for HREC's refinery, to the U.S. Environmental Protection Agency (EPA) for approval.
- The EPA published the proposed plan for public comment.
- Citizens Against the Refinery’s Effects (CARE) submitted comments opposing the plan.
- The Administrator of the EPA considered the comments and issued a final ruling approving the Virginia SIP.
- CARE, the petitioner, appealed the EPA Administrator's final ruling to the United States Court of Appeals for the Fourth Circuit.
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Issue:
Did the Environmental Protection Agency act in an arbitrary and capricious manner when it approved a State Implementation Plan that allows a new pollution source based on an offset plan with a broad geographic area, a recent high-pollution baseline year, and a legally enforceable commitment to a previously voluntary reduction?
Opinions:
Majority - K. K. Hall
No, the Environmental Protection Agency did not act in an arbitrary and capricious manner. The EPA's approval of the State Implementation Plan was a reasonable exercise of the discretion granted to it under the Clean Air Act. The court's reasoning is based on several points. First, regarding the geographic area, Congress intended for states and the EPA to have flexibility in designing implementation plans to encourage economic growth while improving air quality. Using highway department administrative districts was a practical and reasonable choice, and the broad area was acceptable given the wide dispersion of hydrocarbon pollutants. Second, the selection of 1977 as the base year was within the agency's discretion; since the EPA's offset ruling was issued in 1976 and HREC's permit was reissued in 1977, it was a logical choice despite the high pollution levels that year. Third, while Virginia had a prior voluntary policy to reduce cutback asphalt use, the state's plan made that reduction legally binding and enforceable, which satisfies the requirements of the offset rule. Finally, the court deferred to the EPA's technical expertise on the determination of the Lowest Achievable Emissions Rate (LAER) for the refinery, finding no evidence of arbitrary action.
Analysis:
This case solidifies the significant judicial deference granted to the EPA's technical judgments in approving State Implementation Plans under the Clean Air Act. It confirms that states have considerable flexibility in designing offset programs to balance economic development with air quality goals. The decision allows for the use of broad, administratively convenient geographic areas and favorable baseline years, provided the agency's choices are not arbitrary or capricious. This precedent empowers the EPA and states to pursue creative, practical solutions for permitting new industries in nonattainment areas, so long as a net air quality benefit is achieved and the plan is legally enforceable.
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