Lignite Energy Council,petitioners v. U.S. Environmental Protection Agency, Natural Gas Supply Association, Intervenors

Citations: 198 F.3d 930; 339 U.S. App. D.C. 183; 30 Envtl. L. Rep. (Envtl. Law Inst.) 20279; 49 ERC (BNA) 1682; 1999 U.S. App. LEXIS 33131Docket: 98-1525, 98-1529, 98-1533, 98-1541 & 98-1543

Court: Court of Appeals for the D.C. Circuit; December 21, 1999; Federal Appellate Court

Combined Opinion SummaryCombined Opinion Original

EnglishEspañolSimplified EnglishEspañol Fácil

Petitioners, including the Lignite Energy Council, challenged the Environmental Protection Agency's (EPA) new source performance standards for nitrogen oxides (NOx) emissions from utility and industrial boilers. The U.S. Court of Appeals for the District of Columbia Circuit upheld the EPA's authority under Section 111 of the Clean Air Act to establish these standards, concluding that the agency did not exceed its discretion in this matter. The standards set NOx emissions limits at 0.15 lb/MMBtu for utility boilers and 0.20 lb/MMBtu for industrial boilers, reflecting what the EPA considers the "best demonstrated system" for emissions reduction, specifically the use of selective catalytic reduction (SCR) combined with combustion control technologies.

Petitioners argued that the EPA failed to appropriately balance the factors required by Section 111 when selecting SCR for the standards. However, the court emphasized that Section 111 does not prescribe how to weigh these factors, granting the agency significant discretion. The court noted that the EPA's decision would only be overturned if the costs associated with the chosen technology were deemed exorbitant.

Petitioners contend that selective catalytic reduction (SCR) does not qualify as the 'best demonstrated system' under section 111 due to its higher incremental costs for reducing NOx emissions compared to combustion controls. They argue that advancements in combustion technologies could allow many boilers to meet EPA's standards more economically. However, EPA's findings indicate that the new standards will only modestly raise electricity production costs for newly constructed boilers, justifying its discretion under section 111. 

Petitioners claim that the environmental benefits of advanced combustion controls undermine EPA's standards, but the agency's new source performance standards are not technology-forcing, and ongoing improvements in combustion controls will lessen reliance on SCR technology. 

EPA's decision to implement uniform standards for all utility boilers, rather than varied standards based on boiler type, is also defended as appropriate given the performance characteristics of SCR, which is less dependent on boiler design or fuel type. While petitioners argue that SCR may underperform with high-sulfur coal, EPA's monitoring data indicates the .15 lb/MMBtu standard is achievable, and concerns about catalyst poisoning in coal-fired boilers were found to be minor.

Additionally, petitioners challenge the .20 lb/MMBtu standard for industrial boilers, asserting that SCR is not adequately demonstrated for coal-fired applications. Although EPA lacked emissions data for SCR in these contexts, this absence does not invalidate the standard, as section 111 focuses on future technological projections rather than current capabilities. EPA can address data shortages through qualitative methods, including extrapolating from other industries' performance, without relying on speculation.

EPA has determined that selective catalytic reduction (SCR) technology is 'adequately demonstrated' and that a NOx emissions standard of .20 lb/MMBtu is achievable for coal-fired industrial boilers, paralleling findings for utility boilers due to their similar designs and emission reduction capabilities. Despite petitioners' concerns regarding SCR's efficacy under fluctuating load cycles typical of industrial boilers, EPA has provided evidence of SCR's successful application across various operating conditions. 

Furthermore, EPA's application of the .20 lb/MMBtu standard to combination boilers, which burn multiple fuel types, is justified by advancements in NOx emissions technology since previous standards were set in 1986. The new standard aligns with the performance capabilities of wood-fired boilers, which can achieve even lower emissions levels.

Additionally, petitioners challenge EPA's valuation of steam energy from cogeneration facilities, arguing that the agency's assignment of a 50% credit for steam energy is an arbitrary discount. However, EPA's rationale for this credit is to promote cogeneration efficiency, given that only a fraction of steam energy is utilized effectively in industrial processes. The agency's approach to calculating the output of cogeneration units is deemed acceptable, considering the complexities involved in assessing the useful energy of steam heat on a case-by-case basis.

Petitions for review have been denied, affirming the Environmental Protection Agency's (EPA) emission standards for utility boilers. The output-based standard is set at 1.6 pounds of NOx per megawatt hour, which the EPA correlates with a .15 lb/MMBtu input-based standard for simplicity. The petitioners' claim that this shift unfairly disadvantages low-energy coals like lignite is rejected; it can equally be argued that an input-based standard disadvantages high-energy fuels. The document notes that Selective Catalytic Reduction (SCR) technology, which reduces NOx emissions post-combustion by using ammonia and a catalyst, is acceptable for EPA’s standards despite its past focus on combustion control technologies. Furthermore, the absence of specific data on SCR applications for lignite-burning boilers does not render the standards unlawful, as the EPA can reasonably extrapolate from existing successful SCR applications on other types of coal-fired boilers.