     Case: 10-60459       Document: 00511887879       Page: 1     Date Filed: 06/15/2012




             IN THE UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                      Fifth Circuit

                                                                            FILED
                                                                           June 15, 2012

                                       No. 10-60459                        Lyle W. Cayce
                                                                                Clerk

BCCA APPEAL GROUP; STATE OF TEXAS; TEXAS ASSOCIATION OF
MANUFACTURERS; TEXAS OIL & GAS ASSOCIATION,

                                                  PETITIONERS
v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

                                                  RESPONDENT



                         Petitions for Review of an Order of the
                           Environmental Protection Agency


Before SMITH, SOUTHWICK, and GRAVES, Circuit Judges.
PER CURIAM:*
        BCCA Appeal Group, the State of Texas, the Texas Association of
Manufacturers, and the Texas Oil & Gas Association (collectively “BCCA”)
petition this Court for review of the Environmental Protection Agency’s (EPA)
final order disapproving a state implementation plan revision submitted by the
State of Texas pursuant to the Clean Air Act.1 At issue is whether the EPA
abused its discretion, acted arbitrarily and capriciously, and exceeded its

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
        1
            42 U.S.C. §§ 7401-7671q.
   Case: 10-60459      Document: 00511887879         Page: 2    Date Filed: 06/15/2012



                                      No. 10-60459

statutory authority in denying the plan revision. We conclude that it did not and
deny the petitions for review.
                    FACTS AND PROCEDURAL HISTORY
       This case involves state implementation plan (SIP) revisions to the
Qualified Facilities Program (QFP) enacted by Texas in 1995 and submitted for
EPA approval in 1996. The plan was resubmitted for EPA approval in 1998.2
In 2008, industry groups (BCCA) filed suit against the EPA for failing to timely
make a decision on approval of the plan under the eighteen-month time period
set out in the Clean Air Act (CAA). See 42 U.S.C. §§ 7410(k)(1)(B), (k)(2). The
lawsuit was prompted by EPA enforcement letters that facilities should comply
with existing rules prior to the proposed revisions. BCCA asked the district
court to order a schedule establishing deadlines by which the EPA would have
to take action on pending Texas air permit revisions. The parties agreed to a
settlement and a consent decree was entered on Jan. 21, 2010, obligating EPA
to “approve or disapprove, in whole or in part,” the relevant revisions within the
time period established by the court. See BCCA Appeal Group v. EPA, No. 3:08-
cv-01491-G (N.D. Tex. Jan. 21, 2010).
       On April 14, 2010, EPA issued its final rule disapproving the program. 75
Fed. Reg. 19,468-93 (Apr. 14, 2010). EPA disapproved the program because it
did not meet the Minor New Source Review (NSR) SIP nor did it meet the NSR
SIP requirement for a substitute Major NSR SIP revision. Thereafter, BCCA
Appeal Group, Texas Oil & Gas Association, and Texas Association of
Manufacturers (collectively “BCCA”), and the State of Texas filed petitions for




       2
         Texas has since submitted proposed revisions to the program under State law to
address the reasons for the disapproval of the program. The EPA has not completed its review
of this submission, which it says “fully re-writes the Qualified Facilities Program.” Those
rules are not before this court.

                                             2
   Case: 10-60459      Document: 00511887879    Page: 3    Date Filed: 06/15/2012



                                  No. 10-60459

review of the final EPA action with this court, which has jurisdiction under 42
U.S.C. § 7607(b)(1).
                           STANDARD OF REVIEW
      In considering the EPA’s interpretation of the CAA, a statute it
administers, this Court applies the two-step analysis set forth in Chevron
U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81
L.Ed.2d 694 (1984). If Congress has spoken directly on the question at issue, the
“court, as well as the agency, must give effect to the unambiguously expressed
intent of Congress.” Id. at 842-43. However, if “Congress has not directly
addressed the precise question at issue, the court does not simply impose its own
construction on the statute.” Id. at 843. “Rather, if the statute is silent or
ambiguous with respect to the specific issue, the question for the court is
whether the agency’s answer is based on a permissible construction of the
statute.” Chevron, 467 U.S. at 843.
      Otherwise, this Court reviews final action by the EPA on SIP revisions
under the Administrative Procedure Act, which requires that this court shall:
“hold unlawful and set aside agency action, findings, and conclusions found to
be – (A) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law. . . .” 5 U.S.C. § 706(2)(A). Under this standard, this court
must be assured that the agency considered the relevant factors in making the
decision, that the action bears a rational relationship to the purpose of the
statute, and that there is substantial evidence in the record to support it. Public
Citizens, Inc. v. EPA, 343 F. 3d 449, 455 (5th Cir. 2003). “[B]ut, we cannot
substitute our judgment for that of the agency.” Id. This court will uphold the
agency’s actions if the minimum standards of rationality are satisfied by its
reasons and policy choices. Id. “Moreover, the EPA’s interpretations of its
regulations are entitled to substantial deference and are given ‘controlling
weight’ unless ‘plainly erroneous or inconsistent with the regulation.’” Id. at 455-

                                         3
   Case: 10-60459      Document: 00511887879        Page: 4    Date Filed: 06/15/2012



                                     No. 10-60459

56 (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct.
2381, 129 L.Ed.2d 405 (1994).
                                    DISCUSSION
      The petitioners assert that the EPA’s disapproval of the QFP is arbitrary,
capricious, an abuse of discretion and otherwise not in accordance with the law.
In doing so, BCCA asserts that the EPA acted “more than a decade too late.”
With regard to this timeliness issue, there are provisions in the CAA setting out
a time period of some eighteen months. 42 U.S.C. §§ 7410(k)(1)(B), (k)(2).
However, the CAA also says: “The plan revision shall not be treated as meeting
the requirements of this chapter until the Administrator approves the entire
plan revision as complying with the applicable requirements of this chapter.”
42 U.S.C. § 7410(k)(3). Further, the remedy for an Administrator’s failure to
perform an act or duty under this chapter is a civil action in district court to
compel agency action. 42 U.S.C. § 7604(2).
      BCCA filed such a suit and obtained a consent decree obligating the EPA
to “approve or disapprove, in whole or in part,” the relevant revisions within the
time period established by the court. See BCCA Appeal Group v. EPA, No. 3:08-
cv-01491-G (N.D. Tex. Jan. 21, 2010). BCCA admits in its complaint filed in that
district court action that it did not file the suit, which was more than a decade
after the revisions were submitted, until the EPA sent enforcement letters to
facilities demanding that they operate under existing rules rather than the
proposed revisions that had not yet been approved. Id. Nevertheless, BCCA
properly pursued a civil action and obtained the appropriate relief through the
consent decree, which also provided payment of attorneys’ fees by the EPA.
      With regard to the revisions, the EPA found that the program did not meet
the Minor NSR3 SIP requirements nor did it meet the Major NSR4 SIP

      3
          The CAA requires that Minor NSR programs provide for the enforcement and
“regulation of the modification and construction of any stationary source within the areas

                                            4
   Case: 10-60459       Document: 00511887879         Page: 5     Date Filed: 06/15/2012



                                       No. 10-60459

requirements for a substitute Major NSR SIP revision. In other words, as stated
in the EPA’s brief:
       EPA disapproved the program because it determined, among other
       things, (i) that because the Program is not explicitly limited to
       smaller sources of pollutants as Texas claims, a major source may
       circumvent applicable requirements, (ii) that the Program allows
       facilities to make changes that potentially increase emissions of
       pollutants without ensuring that there will be no interference with
       clean air standards or control strategies, and (iii) that Texas did not
       provide EPA with sufficient information to demonstrate that the
       Program meets certain statutory and regulatory requirements
       necessary to approve the Program under 42 U.S.C. § 7410(l).

       The petitioners assert that the EPA improperly or mistakenly injected
requirements found in Major NSR provisions. However, the EPA found that the
program was not clearly limited to Minor NSR. The petitioners conceded at oral
argument that the plan does not explicitly state that it is limited to Minor NSR.
Therefore, the issue of whether the program was clearly limited to Minor NSR
is dispositive of many of the petitioners’ assertions and they are not all discussed
individually herein.
       The proposed revisions at issue were enacted by Texas in Senate Bill No.
1126. These revisions amend the State’s definition of “modification of existing
facility” to exclude certain facility changes and exempts facilities from the
obligation to obtain certain authorizations before engaging in modification.
Specifically, under the revisions enacted in Senate Bill 1126, “modification of
existing facility” does not include:


covered by the plan as necessary to assure that national ambient air quality standards are
achieved. . . .” 42 U.S.C. § 7410(a)(2)(c).
       4
        Major NSR means any new or modified source that is subject to nonattainment new
source review (NNSR) or prevention of significant deterioration (PSD) of air quality under the
CAA. 75 Fed. Reg. 19468. Generally, a source is deemed major if it has a potential to emit in
excess of 10 tons per year of any single hazardous air pollutant or 25 tons per year of any
combination of hazardous air pollutants. 42 U.S.C. § 7412(a)(1).

                                              5
   Case: 10-60459   Document: 00511887879       Page: 6   Date Filed: 06/15/2012



                                  No. 10-60459

      (E) a physical change in, or change in the method of operation of, a
      facility that does not result in a net increase in allowable emissions
      of any air contaminant and that does not result in the emission of
      any air contaminant not previously emitted, provided that the
      facility:
             (i) has received a preconstruction permit or permit
      amendment or has been exempted pursuant to Section 382.057 from
      preconstruction permit requirements no earlier than 120 months
      before the change will occur; or
             (ii) uses, regardless of whether the facility has received a
      permit, an air pollution control method that is at least as effective
      as the best available control technology, considering technical
      practicability and economic reasonableness, that the board required
      or would have required for a facility of the same class or type as a
      condition of issuing a permit or permit amendment 120 months
      before the change will occur. . . .

Act of May 9, 1995. 74th Leg., R.S., ch. 150, § 1, § 382.003, 1995 Tex. Gen. Laws
997, 997-98.
      The revisions further provide, in relevant part:
      (b) In determining whether a proposed change at an existing facility
      that meets the criteria of Section 382.003(9)(E) results in a net
      increase in allowable emissions, the board shall consider the effect
      on emissions of:
             (1) any air pollution control method applied to a facility;
             (2) any decreases in allowable emissions from other facilities
      that have received a preconstruction permit or permit amendment
      no earlier than 120 months before the change will occur; and
             (3) any decreases in actual emissions from other facilities that
      meet the criteria of Section 382.003(9)(E)(i) or (ii).

Act of May 9, 1995. 74th Leg., R.S., ch. 150, § 2, § 382.0512, 1995 Tex. Gen. Laws
997, 998.
      These revisions were later adopted by the Texas Natural Resource
Conservation Commission (TNRCC), the predecessor of the Texas Commission
on Environmental Quality (TCEQ). The Guidance Document regarding the
Modification of Existing Facilities Under Senate Bill 1126 provides in the


                                        6
   Case: 10-60459   Document: 00511887879      Page: 7   Date Filed: 06/15/2012



                                   No. 10-60459

Purpose and Scope that the “legislative intent of SB 1126 was to provide
additional flexibility to certain facilities to make physical and operational
changes without a requirement to obtain a permit or other approval from
TNRCC.” The Guidance Document further provides the following: “SB 1126
revised the TCAA statutory definition of ‘modification of existing facility’ by
adding three types of physical and operational changes that are not considered
to be modifications, even if the change results in an increase in emissions.” This
document also maintains that “SB 1126 only revised the Texas ‘minor new
source review’ program to allow some changes to be made without a requirement
to obtain a permit or other ‘approval’ from the TNRCC.”
      BCCA cites Florida Power & Light Company v. Costle, 650 F.2d 579, 588
(5th Cir. Unit B 1981), for the proposition that the EPA “should defer to the
state’s interpretation of the terms of its air pollution control plan when said
interpretation is consistent with the Clean Air Act.” Id. However, in Florida
Power & Light, the EPA was attempting to require Florida to incorporate a
state-imposed two-year limitation on relief into an EPA-approved proposed
revision of a SIP. Here the EPA has not approved the proposed revisions and
was not attempting to require Texas to incorporate any state-imposed limitation.
      BCCA states in its brief that, “[p]urporting to conduct a ‘legal
interpretation,’ EPA disagreed that the Program is exclusively a Minor NSR
program. 75 Fed. Reg. 19,476.” Further, “EPA is not vested with expertise in
‘legal interpretation’ of state law, however, and it had no basis upon which to
disregard Texas statutes, rules, and the TCEQ’s position regarding the limited
scope of the Program.” BCCA is referring to the EPA’s response to comments
generally opposing the EPA proposal and the quoted portions are taken out of
context. The full response said:
           EPA understands TCEQ’s explanation of the origination of the
      Program in SB 1126. Nonetheless, the Qualified Facilities Program


                                        7
   Case: 10-60459   Document: 00511887879      Page: 8   Date Filed: 06/15/2012



                                  No. 10-60459

      must meet all Federal requirements under the CAA in order to be
      approvable. The fact that EPA failed to act on the Qualified
      Facilities Program SIP revision within the statutory timeframe does
      not dictate the action EPA must take on the Program at this time.
      We cannot approve a program that fails to meet the requirements
      of the CAA. As discussed throughout our proposal and this final
      notice, the current Qualified Facilities Program fails to meet all
      requirements. We disagree with commenters that the Qualified
      Facilities Program is exclusively a Minor NSR program, based upon
      the ambiguities in the Program’s rules. Furthermore, EPA need not
      prove that the Program is actually used for major modifications.
      EPA is required to review a SIP revision submission for its
      compliance with the Act and EPA regulations. [Citations omitted].
      This includes an analysis of the submitted regulations for their legal
      interpretation. The Program’s rules are ambiguous and therefore
      do not adequately prohibit use under Major NSR. We recognize that
      TCEQ considers the Program to be a Minor NSR Program; however,
      the State admits that its rules are insufficient to limit the Program
      to Minor NSR. See 74 FR 48450, at 48456-48457; Section V.F.
      below for further information.

75 Fed. Reg. 19468, 19476 (EPA Apr. 14, 2010) (final rule) (to be codified at 40
C.F.R. pt. 52).
      BCCA and Texas both point out that in a 1995 comment, the EPA said
that Texas had adequately addressed the issue of preventing circumvention of
Major NSR. However, the EPA said that after it sent that 1995 comment letter,
State legislators significantly revised the Texas Clean Air Act.
      Texas asserts that any attempt to circumvent Major NSR would constitute
violations of Texas’ Major NSR rules and its QFP. However, petitioners also
state that the EPA is without authority to interpret Texas law. Notwithstanding
Texas rules, the EPA ultimately found that Texas did not provide it with
sufficient information to demonstrate that the program meets the statutory and
regulatory requirements necessary for approval under 42 U.S.C. § 7410(l) of the
federal CAA.



                                        8
   Case: 10-60459       Document: 00511887879          Page: 9     Date Filed: 06/15/2012



                                       No. 10-60459

       Texas asserts that States have great flexibility in creating their minor new
source review programs and quotes 75 Fed. Reg. at 19,485 as follows: “We [EPA]
agree that states have great flexibility to create their own Minor NSR SIP
programs.” Again, the context of this quote is very telling. The sentences
immediately following say, “[h]owever, at a minimum, those Minor NSR SIP
programs must meet all of the Federal requirements. Likewise, the Qualified
Facilities Program must meet all Federal requirements under the CAA in order
to be approvable.” While Texas has flexibility, the QFP must meet all Federal
requirements under the CAA.
       The petitioners also assert that the EPA improperly imposes Major NSR
netting5 requirements. Texas takes issue with the EPA’s use of Major NSR
netting requirements to analyze the program’s Minor NSR netting approvability
“because these principles are designed to ensure that there is no interference
with the NAAQS [national ambient air quality standards] and control
strategies.” 75 Fed. Reg. at 19,473. Texas then asserts that the “proper test for
netting under minor new source review is whether the netting interferes with
the national ambient air quality standards [NAAQS] and control strategies.”
While this is exactly what the Major NSR netting requirements are designed to
ensure, again, the EPA found that the plan was not limited to Minor NSR.
Further, as stated previously, petitioners conceded at oral argument that the
plan does not state that it is explicitly limited to Minor NSR.
       The petitioners rely heavily on Train v. Natural Res. Def. Council, 421
U.S. 60, 79, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975), for the following:
       The Act gives the Agency no authority to question the wisdom of a
       State’s choices of emission limitations if they are part of a plan
       which satisfies the standards of § 110(a)(2) . . . . Thus, so long as the
       ultimate effect of a State’s choice of emission limitations is

       5
        Netting basically refers to the offsetting of emissions increases at one facility with a
greater or equal reduction of emissions at another facility.

                                               9
  Case: 10-60459        Document: 00511887879          Page: 10     Date Filed: 06/15/2012



                                        No. 10-60459

       compliance with the national standards for ambient air, the State
       is at liberty to adopt whatever mix of emission limitations it deems
       best suited to its particular situation.

Id. (Emphasis added). Here, the EPA found that the plan was not in compliance
with the national standards.
       BCCA asserts that the failure to cite an example of anyone attempting to
use the plan to circumvent Major NSR thus far should prevent the EPA from
suggesting that it could be used for such. The flaw in that argument is that the
plan has not yet been approved by the EPA, a fact that in no way indicates that
an improper attempt to circumvent Major NSR would somehow be prevented
upon approval.
       The EPA’s factual findings are entitled to substantial deference and should
be upheld if they are supported by the administrative record, even if there are
alternative findings supported by the record. See Arkansas v. Oklahoma, 503
U.S. 91, 113, 112 S.Ct. 1046, 117 L.Ed.2d 239 (1992).6 The record in this matter


       6
         In his concurring opinion, Judge Southwick takes issue with any deference to the
EPA, yet offers no applicable authority for his assertion that the EPA is not entitled to
deference. Instead, he cites dictum in a footnote quoting a portion of a law journal article in
United States v. Mead Corp., 533 U.S. 218, 230, n. 11 (2001), a tariff classification case from
The Court of International Trade. In Mead, the Supreme Court found Chevron deference
inapplicable for reasons not existing in the EPA case before us. ( “There are, nonetheless,
ample reasons to deny Chevron deference here. The authorization for classification rulings,
and Customs’s practice in making them, present a case far removed not only from notice-and-
comment process, but from any other circumstances reasonably suggesting that Congress ever
thought of classification rulings as deserving the deference claimed for them here.” Id. at 231.)
Judge Southwick also cites Mayo Found. for Med. Educ. & Research v. United States, 131 S.Ct.
704, 714 (2011). However, in Mayo, the Supreme Court found that the agency rule at issue
merited Chevron deference, saying: “In the Long Island Care case, we found that Chevron
provided the appropriate standard of review where an agency rule sets forth important
individual rights and duties, where the agency focuses fully and directly upon the issue, where
the agency uses full notice-and-comment procedures to promulgate a rule, and where the
resulting rule falls within the statutory grant of authority. These same considerations point
to the same result here. This case falls squarely within the bounds of, and is properly
analyzed under, Chevron and Mead.” Mayo, 131 S.Ct. at 714 (internal marks and citations
omitted). As in Mayo, the instant case falls squarely within the bounds of Chevron and
deference applies.

                                               10
  Case: 10-60459    Document: 00511887879     Page: 11   Date Filed: 06/15/2012



                                 No. 10-60459

establishes that the EPA considered the relevant factors in disapproving the
program, that the action bears a rational relationship to the purpose of the
statute, and that there is substantial evidence in the record to support it.
Despite any interpretations to the contrary, the relevant portions of Senate Bill
1126 quoted previously herein support the EPA’s finding that the revisions are
not clearly limited to Minor NSR.
                                CONCLUSION
      For the foregoing reasons, we deny the petitions for review and uphold the
EPA’s action disapproving the plan revisions.


      DENIED.




                                       11
     Case: 10-60459   Document: 00511887879     Page: 12    Date Filed: 06/15/2012



                                     No. 10-60459

LESLIE H. SOUTHWICK, Circuit Judge, concurring in the judgment:
        I agree we should deny the petition for review. Respectfully, my reasoning
differs from that of the majority.
        After notice and comment, EPA offered four reasons for disapproving the
Qualified Facilities Program (QFP) as a Minor New Source Review (NSR)
revision to Texas’s state implementation plan (SIP): (1) the regulatory text
permits evasion of Major NSR requirements; (2) its “netting” features jeopardize
attainment and maintenance of national ambient air quality standards
(NAAQS); (3) Texas did not furnish the necessary data and modeling to predict
whether the QFP’s impact on future air quality would truly be de minimis; and
(4) the definition of “facility” in the program was overly broad. See 75 Fed. Reg.
19,468, 19,473-19,474 (Apr. 14, 2010) (to be codified at 40 C.F.R. pt. 52). I do not
join the majority in ratifying the first of these. Also, like the majority, I express
no position on the final two. I conclude the problems identified by EPA with
netting are sufficiently supported by the record and justify denial of the petition.
I.      EPA’s Legal Interpretation
        My concern with the majority’s approach is that, central to its reasoning,
we are taking sides in a dispute over drafting styles. Invoking Chevron, EPA
argues that the court should defer to its “legal interpretation” that without
explicit text warning that major sources may not use this program, the QFP
cannot be understood solely to pertain to minor sources of pollution. 75 Fed.
Reg. at 19,476, 19,469.
        Texas rightly observes that express negative language is not the only way
to convey a limitation. I see no reason to credit EPA for any expertise on
whether Texas should express the purposes of this program in a negative or
affirmative manner, so long as it is clear. For example, EPA has not pointed to
evidence from its regulatory experiences that affirmative descriptions of plan
coverage are less effective than negative statements. Experience might be a

                                          12
  Case: 10-60459       Document: 00511887879         Page: 13     Date Filed: 06/15/2012



                                       No. 10-60459

foundation for expertise here, or at least be a basis for arguing it. On this
record, I see nothing beyond a quibble. Without any historical pattern or other
basis to support the preference, insisting on one expression compared to the
other is arbitrary and, perhaps more accurately, capricious.
       Texas still must have given an adequate affirmative explanation. It
identified an applicant’s affirmative obligation to comply with Major NSR
requirements. See Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 526
(5th Cir. 2008). It argues that the QFP requires persons modifying a qualified
facility to keep documentation and information sufficient “to show that the
project will comply with § 116.150 and § 116.151 of this title (relating to
Nonattainment Review) and §§ 116.160-116.163 of this title (relating to
Prevention of Significant Deterioration Review).” 30 Tex. Admin. Code § 116.117
(1998). These Nonattainment and so-called PSD programs only regulate major
sources, leading EPA to refer to them “together as the major NSR program.” 74
Fed. Reg. 51,418, 51,421 (Oct. 6, 2009) (to be codified at 40 C.F.R. pts. 70-71).
The Texas Commission on Environmental Quality has always considered QFP
to be exclusively a Minor NSR program. EPA acknowledges that fact. 75 Fed.
Reg. at 19,476.
       Confronted with a dispute between Texas and EPA about the meaning of
the submitted SIP, the majority, implicitly as a matter of administrative
deference, privileges EPA’s construction. E.g., Chevron, USA, Inc. v. NRDC, 467
U.S. 837, 842-43 (1984). I would not. It is of some significance that the SIP is
purely state law until approved; the Texas Legislature enacted it with Senate
Bill 1126 – an amendment to the Texas Clean Air Act.                      This fact is not
conclusive, since in a given situation EPA’s environmental expertise might
improve its understanding of a proposed SIP, warranting some deference.1 As

       1
         Under the APA, “our deference to the agency’s expertise is significant,” meaning that
“a court reviewing an agency action may not substitute its own judgment for that of the

                                             13
      Case: 10-60459   Document: 00511887879       Page: 14     Date Filed: 06/15/2012



                                     No. 10-60459

to whether the Texas Administrative Code codifies the prohibition that the
Texas Commission on Environmental Quality claims it does, I do not believe
EPA has special policy insight. There is no plausible account that Congress
would have wished for EPA to “enjoy primary interpretational authority” as to
how Texas law should express itself. United States v. Mead Corp., 533 U.S. 218,
230 n.11 (2001) (quotation marks and citation omitted); see also Mayo Found. for
Med. Educ. & Research v. United States, 131 S. Ct. 704, 714 (2011). The
majority makes reasonable efforts to distinguish these authorities factually, as
they are distinguishable, but does not support its own position that a federal
agency would be owed Chevron deference in a situation such as this.
         Though I do not agree that Chevron has any relevance here, I would prefer
neither reaching that issue nor deciding which party has the more persuasive
interpretation of the QFP. Even stipulating that the program is limited to
Minor NSR, EPA’s disapproval may stand under the APA.
         I turn now, briefly, to why I believe that is so.
II.      Netting
         As an experiment in deregulation, the premise behind the QFP proposal
is that physical changes that do “not result in a net increase in allowable
emission[s]” are no longer defined as facility modifications. 30 Tex. Admin. Code
§ 116.10(11)(E) (2002). As a consequence, they avoid the need to secure a Minor
NSR permit under one of the mechanisms provided for in the already approved
SIP. Credible netting is thus the glue that holds the program together.
         EPA “disapprove[d] netting under the Qualified Facilities Program as a
Minor NSR program, in part because the Program fail[ed] to ensure that
ambient air is protected in consideration of all changes in the netting.” 75 Fed.




agency.” La. Envtl. Action Network v. EPA, 382 F.3d 575, 582 (5th Cir. 2004).

                                            14
  Case: 10-60459       Document: 00511887879          Page: 15      Date Filed: 06/15/2012



                                       No. 10-60459

Reg. at 19,477. At least two particular faults in QFP netting identified in the
final rule stand out as valid, justifying agency disapproval.
       First, the program “fails to define a contemporaneous period or require
that emission reductions occur within a specified period.” 75 Fed. Reg. at 19,478.
In other words, the program does not specify the time frame for when a pollution
increase must be offset. Unlike as to Major NSR evasion, this is not a matter of
interpretation, but rather of complete statutory and regulatory silence.2
       Second, EPA found a weakness in the pollutant interchange methodology,
a technical subject at the heart of its environmental expertise. QFP permits
“[e]missions of different compounds within the same air contaminant category”
to be interchanged. 30 Tex. Admin. Code § 116.116(e)(3)(B) (2000). An “air
contaminant category” is defined as “a group of related compounds, such as
volatile organic compounds, particulate matter, nitrogen oxides, and sulfur
compounds.” § 116.116(e)(3)(F). Because the term “sulfur compounds” embraces
both hydrogen sulfide and sulfur dioxide, EPA reasonably concluded that this
definition would jeopardize the NAAQS for sulfur dioxide. By the same token,
the general category “particulate matter” would permit increases of smaller
particulate (PM-2.5) to be offset by reductions in larger ones (PM-10). Different
NAAQS govern PM-2.5 and PM-10, because generally the more fine a
particulate, the more deleterious to human health.
       Establishing, monitoring, and enforcing the nation’s air quality standards
is EPA’s central charge under the Clean Air Act. State SIPs are the means to

       2
           As this court recently recognized, “extensive and complex” requirements govern
Major NSR, while “[i]n stark contrast, the CAA [Clean Air Act] prescribes only the barest of
requirements for ‘minor’ NSR.” Luminant Generation Co. v. EPA, 675 F.3d 917, 922 (5th Cir.
2012). Thus, Texas is correct that EPA may not condition Minor NSR approval on features
imported from Major NSR, as this would upset the statutory scheme. While references to
“contemporaneous” reductions are indeed found in the Major NSR rules, 40 C.F.R. §
51.165(a)(1)(vi)(A)(2), offsets without some time-equivalence cannot in any logical sense be
said to be net-neutral. As such, EPA is justified in insisting on this bedrock feature, dictated
by common sense.

                                              15
  Case: 10-60459    Document: 00511887879      Page: 16   Date Filed: 06/15/2012



                                  No. 10-60459

these ends, and EPA “shall not approve a revision” to a SIP if it “would interfere”
with NAAQS. See 42 U.S.C. § 7410(a)(l). In accord with this statutory mandate,
in terms of timing and how pollutants are defined, EPA found that the QFP
would undermine specific NAAQS. Because these conclusions are rooted in
agency expertise, adequately explained, and based on the congressionally
prescribed factors, our duty is to uphold EPA’s final action to disapprove. See
Luminant, 675 F.3d at 925 (discussing the court’s purview under the APA, 5
U.S.C. § 706).
      I therefore concur in the judgment.




                                        16
