213 F.3d 663 (D.C. Cir. 2000)
State of Michigan, Michigan Department of Environmental Quality and State of West Virginia, Division of Environmental Protection, Petitionersv.U.S. Environmental Protection Agency, RespondentNew England Council, Inc., et al., Intervenors
Nos. 98-1497, 98-1499, 98-1500, 98-1501, 98-1502, 98-1504, 98-1518,98-1556, 98-1567, 98-1573, 98-1585, 98-1588, 98-1590,98-1596, 98-1598, 98-1601, 98-1602, 98-1608, 98-1609,98-1611, 98-1615, 98-1616, 98-1617, 98-1618, 98-1619,98-1621, 99-1070, 99-1093
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 9, 1999Decided March 3, 2000

[Copyrighted Material Omitted][Copyrighted Material Omitted][Copyrighted Material Omitted]
On Petitions for Review of an Order of the Environmental Protection Agency
Susan E. Ashbrook, Assistant Attorney General, State of  Ohio, James C. Gulick, Special Deputy Attorney, State of  North Carolina, Andrea B. Field, Theodore L. Garrett, Todd  Palmer, Jonathan S. Martel, William F. Pedersen and Scott  H. Segal argued the causes for petitioners. With them on the  briefs were Betty D. Montgomery, Attorney General, State of  Ohio, Andrew S. Bergman, Assistant Attorney General, Michael F. Easley, Attorney General, State of North Carolina,  J. AllenJernigan, Special Deputy Attorney General, James  P. Longest, Jr., and Amy R. Gillespie, Assistant Attorneys  General, Bill Pryor, Attorney General, State of Alabama,  Tommy E. Bryan, Assitant Attorney General, Jeffrey Modisett, Attorney General, State of Indiana, Daniel B. Dovenbarger, Chief Counsel, Jennifer M. Granholm, Attorney General,  State of Michigan, Thomas Casey, Solicitor General, Alan F.  Hoffman, Assistant Attorney General, Charles M. Condon,  Attorney General, State of South Carolina, Mark E. Earley,  Attorney General, State of Virginia, Roger L. Chaffe, Senior  Assistant Attorney General, Stewart T. Leeth, Assistant Attorney General, Thomas H. Zerbe, Senior Counsel, State of  West Virginia, Samuel L. Finklea, III, Grant Crandall,  Eugene M. Trisko, Norman W. Fichthorn, Mel S. Schulze,  David M. Flannery, Kathy Beckett, Harold P. Quinn, Jr.,  Michael D. Hockley, J. Lister Hubbard, R. Brooke Lawson,  III, Robert E. Lannan, II, Terry J. Satterlee, Alok Ahuja, Mark E. Shere, Bryan G. Tabler, Jeffrey L. Landsman,  Jennifer S. McGinnity, Howard E. Shapiro, Margaret Claiborne Campbell, Thomas E. Knauer, David R. Straus, Deborah E. Jennings, Julie R. Domike, Patricia T. Barmeyer,  Lisa G. Dowden, Brian J. Renaud, Rhonda L. Ross, Jeffrey  F. Cherry, Katherine L. Rhyne, John M. Koeppl, Henry J.  Handzel, Jeffrey A. Knight, Joan Dreskin, Kevin B. Belford,  Pamela A. Lacey, Gene E. Godley, Michael H. Levin and  Edmund B. Frost. Earle D. Getchell, Jr., Neal J. Cabral,  Christopher D. Man, Jacqueline H. Fine, Jon S. Faletto and  John P. Proctor entered appearances.
James E. Doyle, Attorney General, State of Wisconsin, and  Philip Peterson and Thomas L. Dosch, Assistant Attorneys  General, were on the brief for intervenor State of Wisconsin.
Louis E. Tosi and William L. Patberg were on the brief for  amicus curiae Toledo Metropolitan Area Council of Governments.
Charles S. Carter and Deborah Ann Hottel were on the  brief of amici curiae South Carolina Chamber of Commerce,  Environmental Management Association of South Carolina,  South Carolina Manufacturers Alliance, and South Carolina  Farm Bureau Federation.
Jon M. Lipshultz and Patricia R. McCubbin, Attorneys,  U.S. Department of Justice, argued the causes for respondent. With them on the brief were Lois J. Schiffer, Assistant  Attorney General, and Jan Tierney, Howard Hoffman, Amey  W. Marrella and Dwight C. Alpern, Attorneys, U.S. Environmental Protection Agency.
J. Jared Snyder, Assistant Attorney General, State of New  York, argued the cause for state intervenors. With him on the  brief were Elliot Spitzer, Attorney General, Peter H. Schiff,  Deputy Attorney General, Thomas F. Reilly, Attorney General, State of Massachusetts, William L. Pardee, Assistant  Attorney General, M. Dukes Pepper, Jr., Assistant Counsel,  State of Pennsylvania, Sheldon Whitehouse, Attorney General, State of Rhode Island, Michael Rubin, Environmental  Advocate, William H. Sorrell, Attorney General, State of Vermont, Ronald A. Shems, Assistant Attorney General,  Jennifer L. Wurzbacher, Assistant Attorney General, State of  Maryland, Richard Blumenthal, Attorney General, State of  Connecticut, Richard F. Webb, Assistant Attorney General,  Andrew Ketterer, Attorney General, State of Maine, Paul  Stern, Deputy Attorney General, Philip McLaughlin, Attorney General, State of New Hampshire, and Maureen D.  Smith, Assistant Attorney General.
Kathleen L. Millian argued the cause for intervenor Her  Majesty the Queen in Right of Ontario (Province of Ontario,  Canada).  With her on the brief was Bruce J. Terris.
David Hawkins and Raissa Griffin were on the brief for  intervenor Natural Resources Defense Council, et al.  Andrew P. Caputo entered an appearance.
Patrick M. Raher, John G. Roberts, Jr., Catherine E.  Stetson, Michael R. Barr, Michael A. Conley, Theresa Fenelon Falk, John H. Sharp, Paul G. Wallach and Kenneth R.  Meade were on the brief for industry intervenors.
Richard A. Wegman was on the brief for intervenor the  Government of Canada.
Before:  Williams, Sentelle and Rogers, Circuit Judges.
Opinion Per Curiam.*


1
Dissenting opinion filed by Circuit Judge Sentelle.

Introduction

2
Under the Clean Air Act the Environmental Protection  Agency promulgates national ambient air quality standards  ("NAAQS") for air pollutants, and states must then adopt  state implementation plans ("SIPs") providing for the implementation, maintenance, and enforcement of the NAAQS;such plans are then submitted to EPA for approval.  See  Clean Air Act ("CAA") S 110(a)(1), 42 U.S.C. S 7410(a)(1)  (1994).  Even after a SIP is approved, EPA may at a later  time call for SIP revisions if the Administrator finds a SIP inadequate to attain or maintain the NAAQS, to meet the  dictates of pollutant transport commissions, or "to otherwise  comply with any requirement of this chapter."  CAA  S 110(k)(5), 42 U.S.C. S 7410(k)(5).


3
In October 1998 EPA issued a final rule mandating that 22  states and the District of Columbia revise their SIPs to  mitigate the interstate transport of ozone.1  See Finding of  Significant Contribution and Rulemaking for Certain States  in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone ("Final  Rule"), 63 Fed. Reg. 57,356 (1998).  The statutory hook for  EPA's action was a 1990 amendment to the Clean Air Act  which requires that SIPs contain "adequate provisions" prohibiting


4
any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to non attainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary am-bient air quality standard.


5
CAA S 110(a)(2)(D)(i)(I), 42 U.S.C. S 7410(a)(2)(D)(i)(I)  (1994).  EPA uniformly required that each state reduce nitrogen oxides (NOx--an ozone precursor) by the amount accomplishable by what EPA dubbed "highly cost-effective controls," namely, those controls EPA found capable of removing  NOX at a cost of $2000 or less per ton.  Numerous petitions  for review challenge various aspects of EPA's decision.


6
In Part I we reject the following claims:  that EPA could  not call for the SIP revisions without convening a transport  commission;  that EPA failed to undertake a sufficiently  state-specific determination of ozone contribution;  that EPA  unlawfully overrode past precedent regarding "significant"  contribution;  that EPA's consideration of the cost of NOx reduction violated the statute;  that EPA's scheme of uniform  controls is arbitrary and capricious;  that CAA  S 110(a)(2)(D)(i)(I) as construed by EPA violates the nondelegation doctrine.


7
In Part II we hold that the record does not support  including Wisconsin in the SIP call, nor does it support  creating NOx budgets based on the entire emissions of Missouri or Georgia.  We reject the claim thatSouth Carolina  was improperly included in the SIP call.


8
In Part III we reject the claim that EPA impermissibly  intruded on the statutory rights of states to fashion their  SIPs.  We also reject the claim that EPA violated the Regulatory Flexibility Act.


9
In Part IV we reject the claim that EPA arbitrarily revised  the definition of a "NOx budget unit."  We reject all of the  claims raised by the Council of Industrial Boilers save one: we hold that EPA failed to provide adequate notice of a  change in the definition of an electric generating unit.  We  also hold that EPA did not provide adequate notice of a  change in the control level assumed for large, stationary  internal combustion engines, but we reject the claim that  EPA failed to follow its own standards in defining such  engines.  Finally, we uphold EPA's limits on early reduction  credits, and EPA's use of a 15% multiplier for calculating  emissions from low mass emission units.


10
We note at the outset that one challenge has been stayed. In 1979, EPA set the acceptable level for ozone in the  ambient air at 0.12 parts per million ("ppm"), averaged over  intervals of one hour.  This standard is commonly known as  the "1-hour standard."  By 1997, EPA had concluded that the  1-hour standard no longer adequately protected public  health.  See National Ambient Air Quality Standards for  Ozone, 62 Fed. Reg. 38,856 (1997).  Pursuant to the agency's  statutory mandate to review and revise NAAQS as appropriate, 42 U.S.C. S 7409(d)(1), EPA promulgated a new, more  stringent "8-hour standard" which limits ozone levels to 0.08  ppm, averaged over an 8-hour period.  See 62 Fed. Reg.  38,856 (codified at 40 C.F.R. § 50.10).


11
EPA has undertaken the phasing out of the 1-hour standard on an area-by-area basis, mandating that the standard  would no longer apply to an area once it is "determine[d] that  the area has air quality meeting the 1-hour standard."  40  C.F.R. S 50.9(b).  The call for SIP revisions in question here  requires the covered upwind states to submit SIP revisions  pursuant to the 8-hour standard even though EPA was not  designating any 8-hour nonattainment areas prior to July  1999.  See 63 Fed. Reg. at 57,370;  Transportation Equity Act  for the 21st Century, Pub. L. No. 105-178, § 6103, 112 Stat.  107, 465 (1998) (providing that states submit suggested designations no later than July 1999 and EPA finalize those  designations no later than July 2000).  EPA maintains that it  has the authority to include the 8-hour standard in the  current S 110(a)(2)(D)-specific SIP call pursuant to its authority under S 110(a)(1).  Section 110(a)(1) provides that


12
[e]ach State shall ... adopt and submit to [EPA], within3 years (or such shorter period as [EPA] may prescribe)after the promulgation of a national primary ambient air quality standard (or any revision thereof) ..., a plan which provides for implementation, maintenance, and enforcement of such primary standard in each air quality control region (or portion thereof) within such State.


13
42 U.S.C. S 7410(a)(1).


14
State and Industry/Labor petitioners initially attacked the  challenged SIP call on the basis that EPA exceeded its  statutory authority and acted arbitrarily in basing the SIP  call on the 8-hour standard when the agency had not yet  designated any areas as being in nonattainment under the  new standard.  After petitioners' final briefs were submitted,  we held in American Trucking Ass'ns, Inc. v. EPA, 175 F.3d  1027, reh'g granted in part, den'd in part 195 F.3d 4 (D.C.  Cir. 1999), that the new NAAQS based on the 8-hour standard was derived from a construction of the Clean Air Act  that rendered the relevant provision an unconstitutional delegation of legislative power and remanded the case to the  agency.  See id. at 1033-40.  Seizing on this holding, petitioners added in their reply briefs that if this court does not accept the contention in their original briefs as to why EPA impermissibly reliedon the 8-hour standard, then we should  hold that American Trucking means that EPA cannot rely on  the 8-hour standard because it was promulgated in violation  of the non-delegation doctrine.


15
Regardless, EPA moved to stay consideration of the issues  involving the 8-hour standard because the agency has stayed  the 8-hour findings contained in the challenged SIP call.  We  granted the motion.  Because EPA's stay removes the 8-hour  findings as a basis for the SIP call, we will resolve only the  issues involving the 1-hour standard.

I. General Claims
A. Transport Commission

16
States have the primary responsibility to attain and maintain NAAQS within their borders.  See CAA S 107(a), 42  U.S.C. S 7407(a).  When EPA concludes that an "implementation plan for any area is substantially inadequate to attain  or maintain the relevant [NAAQS], to mitigate adequately the  interstate pollutant transport described in section [176A] or  [184], or to otherwise comply with any requirement of this  chapter," the CAA requires EPA to order a state to revise  and correct its SIP "as necessary" ("SIP call").  CAA  S 110(k)(5), 42 U.S.C. S 7410(k)(5).  One such "requirement  of this chapter," is the "good neighbor provision" of section  110(a)(2)(D).  As amended, section 110(a)(2)(D) requires that  a SIP "contain adequate provisions"


17
(i) prohibiting, consistent with the provisions of this sub-chapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard ... [and]


18
(ii) insuring compliance with the applicable requirements of sections [126] and [115] ... (relating to interstate and international pollution abatement).


19
42 U.S.C. S 7410(a)(2)(D) (emphasis added).  Section 126(b)  enables an individual state or a political subdivision of a state  to petition EPA to make a "finding that any major source or  group of stationary sources emits or would emit any air  pollutant in violation of the prohibition of [§ 110(a)(2)(D)(ii)]."  42 U.S.C. S 7426(b).  EPA may make or deny such a finding. See id.  Section 115 pertains to petitions made by foreign  countries.  See 42 U.S.C. S 7415.


20
Title I, the subchapter referenced in section 110(a)(2)(D),  also includes sections 176A and 184, the provisions referenced  in section 110(k)(5).  In 1990, Congress added a provision to  section 176A stating that EPA "may" establish an interstate  air pollution transport region whenever EPA "has reason to  believe that the interstate transport of air pollutants from one  or more States contributes significantly to a violation of a  national ambient air quality standard in one or more other  States."  42 U.S.C. S 7506a(a).  The section also provides  that whenever EPA "establishes a transport region ...  [EPA] shall establish a transport commission."  42 U.S.C.  S 7506a(b)(1).  Among other things, a section 176A commission is to assess the interstate transport situation in the  relevant transport region, assess interstate pollution mitigation strategies, and recommend to EPA measures necessary  "to ensure that the plans for the relevant States meet the  requirements of [section 110(a)(2)(D)]." 42 U.S.C.  S 7506a(b)(2).  In addition, section 176A permits a transport  commission to request that EPA "issue a finding under  [section 110(k)(5)] ... that the implementation plan for one or  more of the States in the transport region is substantially  inadequate to meet [section 110(a)(2)(D) requirements]."  42  U.S.C. S 7506a(c).  After public comment, EPA has the authority to approve, approve in part, or disapprove such a  request.  See id.


21
In part, section 184, an ozone-specific provision, establishes  an ozone transport region in the northeast ("NOTR") and sets  the deadline for convening the transport commission required  as a result of NOTR's establishment.  See 42 U.S.C.  S 7511c(a).  The section also requires that "[i]n accordance  with [section 110] ... each State included [or subsequently included] within a transport region established for ozone shall  submit a State implementation plan or revision" regarding  vehicle inspection programs and volatile organic compounds  control technology.  42 U.S.C. S 7511c(b). In addition, section  184 contains provisions giving states within an established  transport region the opportunity to use their section  176A-established transport commission to help develop additional ozone control measures.  See 42 U.S.C. S 7511c(c).


22
Efforts to control states' upwind contributions to ozone  pollution continued to fall short during the early 1990s.  In  1995, upon the recommendation of the Environmental Council  of the States, thirty-seven states and representatives from  EPA, industry, and environmental groups formed a national  work-group called the Ozone Transport Assessment Group  ("OTAG") to study and devise solutions to the interstate  ozone transport problem.  See 62 Fed. Reg. 60,318, at 60,319;EPA, Ozone Transport Assessment Group Executive Report,  EPA Document No. A 95-56, Doc. No. II-G-05 ("Executive  Report") at ii.  More specifically, OTAG's purpose was to  "identify and recommend a strategy to reduce transported  ozone and its precursors, which, in combination with other  measures, will enable attainment and maintenance of the  ozone standard in the OTAG region."  Executive Report at ii.OTAG concluded that upwind states needed to reduce NOx  emissions in order to address the transport problem.  However, the OTAG members could not agree on specific control  measure recommendations.  See 62 Fed. Reg. at 60,320.  In  response to OTAG's efforts, EPA engaged in further analysis  and devised the SIP call challenged here.


23
Industry/Labor petitioners argue that the CAA required  EPA to convene a transport commission pursuant to sections  176A/184 prior to issuing the challenged SIP call.  EPA  concedes that OTAG was not a statutorily-mandated 176A/184  transport commission as defined in the CAA.  If a transport  commission is required, EPA would be bound by statute to  follow certain procedures in establishing and executing its  commission obligation.  However, we hold that the CAA does  not require EPA to establish such a commission.


24
Industry/Labor petitioners contend that the reference to  the transport commission provisions in section 110(k)(5) and  the mandate of section 110(a)(2)(D) that SIP requirements be  consistent with Title I provisions obligated EPA, prior to  issuing the SIP call, to create a transport commission guided  by the terms in sections 176A and 184 of the statute.  Industry/Labor petitioners also note that sections 176A and  184 reference both sections 110(a)(2)(D) and 110(k)(5).  See 42  U.S.C. SS 7506a(b)(2), (c), 7511c(c)(5).  From this hodgepodge  of largely unrelated cross-references, Industry/Labor petitioners argue that EPA can only issue a section 110(k)(5) SIP  call to enforce section 110(a)(2)(D)'s requirement after forming a 176A/184 transport commission.  We disagree.


25
As a threshold matter, subsections 176A(a) and (b)(1) make  clear that EPA must establish a transport commission if the  agency exercises its discretion to create a transport region  pursuant to section 176A(a).  See 42 U.S.C. §§ 7506a(a),  (b)(1).  However, EPA can address interstate transport apart  from convening a 176A/184 transport commission as subsection (a) provides that EPA "may" establish a transport region  and subsection (b)(1) only requires a transport commission  upon the establishment of a transport region because  "[w]henever the Administrator establishes a transport region  under subsection (a) ..., the Administrator shall establish a  transport commission."  Moreover,the relevant section 184  requirements apply to states within established transport  regions.  See 42 U.S.C. S 7511c(a)-(c).  Thus, Industry/Labor  petitioners cannot reason around the determinative statutory  language contained in section 176A.  Statutory construction is  not an exercise in picking apart a complex statute and piecing  the parts back together in a manner to effect a particular end. Ideally, a statute's directive concerning a certain issue will be  plain and clear.  Just so here.

B. State-Specific Analysis

26
Section 110(a)(2)(D)(I)(i) requires that the relevant offending emissions be "emissions activity within the State."  Several petitioners charge that EPA did not sufficiently analyze each particular state in determining which states contributed  unduly to ozone downwind.


27
In issuing its Notice of Proposed Rulemaking ("NPRM"),  EPA relied on data collected from OTAG.  The data were  multi-state and regional in nature and were framed as a  model of how ozone was transported downwind from 12  different regions that covered the eastern half of the United  States.  See Final Rule, 63 Fed. Reg. at 57,382.  The OTAG  regions do not track state boundaries, so several states are  split between regions.  EPA also relied upon the NOx emissions of the individual states.  See id. at 57,383-84.  A  potential shortcoming of the NPRM's approach was that it  was too multi-state in nature.  EPA knew how much NOx  each state was emitting, but a state's emissions as a share of  total emissions do not necessarily correspond proportionately  to its share in the creation of ozone in downwind states.OTAG's multi-state modeling of such downwind transportation painted with a rather broad brush.


28
We need not pass judgment on whether the evidence and  approach of the NPRM would have supported the final rule. After receiving comments regarding the insufficiently state specific analysis of the NPRM, EPA performed state-specific  modeling.  Id. at 57,384.  According to EPA, this confirmed  the results of the regional modeling.  Id.


29
The two types of state-specific modeling go by the names  UAM-V and CAMx.  In the UAM-V approach, the researchers model an affected downwind area to establish a base case,  and then "zero-out" a particular source state.  Thus with  UAM-V it can be estimated what ozone concentrations would  be like if a particular state contributed no ozone or ozone  precursors.  The CAMx modeling, on the other hand, is a  source apportionment analysis which tracks modeled ozone  from its precursors (NOx and volatile organic compounds  (VOCs)) through the formation of ozone and subsequent  migration.  Whereas UAM-V tells modelers how much ozone  is missing when one state is zeroed out, CAMx models an  ozone concentration and provides apportionment, i.e., who  sent what.  An advantage of the CAMx model used by EPA was that, unlike the UAM-V modeling, with CAMx EPA  could isolate man-made emissions, or ozone creation based on  reactions between man-made and biogenic emissions.  UAM-V modeling was less discriminating.


30
Petitioners really do nothing more than quibble with the  state-specific modeling.  For example, Industry/Labor petitioners argue that zero-out modeling is inappropriate because  it models an impossible scenario--the elimination of all manmade NOx emissions;  but they do not suggest how much this  characteristic is likely to distort the results.  State petitioners  charge that sometimes the results of the two models were  inconsistent, with, for example, the CAMx showing a larger  migration of ozone from a state than the UAM-V showed for  all man-made NOx in that state.  EPA itself noted this  infrequent inconsistency.  See id. at 57,385.  Neither criticism  affords ground for non-expert judges to find a material  likelihood of serious error.  See Appalachian Power Co. v.  EPA, 135 F.3d 791, 802 (D.C. Cir. 1998).


31
Petitioners complain that EPA did not provide the data  sooner.  EPA made the new modeling available on the Internet six weeks prior to the final rule, published its availability  in the Federal Register a month before the final rule, and  during that time received and responded to questions and  comments regarding the modeling.  Other than what we have  already mentioned, petitioners have evidently not been able to  identify further flaws in the modeling used, and thus have  failed to show any prejudice from EPA's timetable.  Personal  Watercraft Indus. Ass'n v. Department of Commerce, 48 F.3d  540, 544 (D.C. Cir. 1995).

C. Determining "Significant" Contribution

32
Section 110(a)(2)(D)(i)(I) applies only to states that "contribute significantly" to nonattainment in a downwind state. Petitioners make essentially four arguments challenging  EPA's determination of "significance":  (1) EPA acted contrary to precedent;  (2) EPA considered forbidden factors,  namely, costs of reduction;  (3) EPA irrationally imposed  uniform NOx controls on the states;  (4) EPA's determination was so devoid of intelligible principles as to violate the  nondelegation doctrine.

1.Past Precedent

33
Before the 1990 amendments to the Clean Air Act,  S 110(a)(2)(E)(I) directed the EPA to insist on SIP provisions  adequate to prevent sources within a state from emitting air  pollution that would "prevent attainment or maintenance [of  primary or secondary standards] by any other State."  42  U.S.C. S 7410(a)(2)(E) (1982) (emphasis added).  In a number  of decisions EPA found, with approval of the courts, that  various emissions of a particular state, having a proportionate  impact on some downwind state greater than the impacts  involved here, did not meet that standard.  See New York v.  EPA, 852 F.2d 574 (D.C. Cir. 1988);  Air Pollution Control  Dist. of Jefferson County v. EPA, 739 F.2d 1071 (6th Cir.  1984);  New York v. EPA, 716 F.2d 440 (7th Cir. 1983);  New  York v. EPA, 710 F.2d 1200 (6th Cir. 1983);  Connecticut v.  EPA, 696 F.2d 147 (2d Cir. 1982).  According to the states,  these decisions, and what they claim to be Congress's implicit  endorsement in the 1990 amendments, bar EPA from regarding the ozone emissions here as "significant" within the  meaning of S 110(a)(2)(D)(i)(I).  Thus the states would equate  the old standard--"prevent attainment"--with the new standard:  "contribute significantly to non-attainment."


34
Nothing in the text of the new section or any other  provision of the statute spells out a criterion for classifying  "emissions activity" as "significant."  Nor did EPA, under the  then-existing provision, bind itself to any criterion.  Further,  given EPA's finding as to the cumulative effects of the  pollutants that generate ozone, EPA might well be able to  distinguish this case from the sulfur dioxide cases that the  states have cited.  See 63 Fed. Reg. at 57,359 ("The chemical  reactions that create ozone take place while the pollutants are  being blown through the air by the wind, which means that  ozone can be more severe many miles away from the source  of emissions than it is at the source.").  But the states point  to nothing suggesting any prior adoption by EPA of any binding concept of how much was too much, so the claim falls  short at the threshold.

2.Consideration of costs

35
Petitioners claim S 110(a)(2)(D)(i)(I) does not permit EPA  to take into consideration the cost of reducing ozone.  The  full section provides that SIPs must contain provisions adequately prohibiting  any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ...  contribute significantly to non-attainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard.42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added).


36
Before reviewing the petitioners' attacks we must first  describe how EPA went about the business at hand.  It first  determined that 23 jurisdictions are "significant" contributors  to downwind nonattainment.  63 Fed. Reg. 57,398.  In making this listing EPA drew lines based on the magnitude,  frequency, and relative amount of each state's ozone contribution to a nonattainment area.  For example, in one calculation  it looked at the number of NOx parts per billion ("ppb") that a  candidate state's emissions made to exceedances in specific  downwind locations (examined as a proportion of those exceedances).  Indiana was found to contribute at least 2 ppb to  4% of the 1-hour ozone exceedances in New York City, and  was deemed a "significant contributor" to nonattainment  there.  On the other hand, Alabama, Georgia, Massachusetts,  Missouri, South Carolina, Tennessee, and Wisconsin were not  deemed "significant contributors" to New York City nonattainment because none of these states ever contributed more  than 2 ppb to a 1-hour exceedance in that area.  Although  EPA looked at other measures, e.g., the percentage contribution of a state's emissions to total concentrations in a specified  area, no one quarrels either with its use of multiple measures,  or with the way it drew the line at this stage.


37
Although the dividing line was a very low threshold of  contribution, in the end EPA's rule called for termination of  only a subset of each state's contribution.  EPA decided that  the 23 "significant contributors" need only reduce their ozone  by the amount achievable with "highly cost-effective controls."  63 Fed. Reg. at 57,403.  Thus, once a state had been  nominally marked a "significant contributor," it could satisfy  the statute, i.e., reduce its contribution to a point where it  would not be "significant" within the meaning of  S 110(a)(2)(D)(i)(I), by cutting back the amount that could be  eliminated with "highly cost-effective controls."  EPA's design was to have a lot of states make what it considered  modest NOx reductions, uniformly limited to ones that could  be achieved (in EPA's estimate) for less than $2000 a ton.  As  a result, naturally, the ultimate line of "significance," whether  measured in volume of NOx emitted or arriving in nonattainment areas, would vary from state to state depending on  variations in cutback costs.


38
State and Industry/Labor petitioners argue that this approach runs afoul of S 110(a)(2)(D), which they read as prohibiting any consideration of costs or cost-effectiveness in  determining what contributions are "significant."  So far as  appears, none of the states proposes that EPA, if reversed,  must require complete extirpation of their NOx emissions. Rather, the gamble--at least of the small contributors--is  evidently that if EPA were barred from considering costs, it  would never have included such states.  Because the attacks  from the states and Industry/Labor are somewhat dissimilar  and have shifted back-and-forth between the opening briefs,  reply briefs, and oral argument, a summary of the relevant  differences and vacillations is in order.  We note that no  party makes any claim that EPA was either confined to  adopting rules whose benefits exceeded their costs, or permitted to use that criterion in selecting its final rule.2  Nor has it been argued thatthe term "significant" required consideration of costs.


39
State petitioners initially argued that it was "arbitrary and  unlawful" for EPA to make cost effectiveness a "controlling  factor" or "linchpin" in the determination of significant contribution under § 110(a)(2)(D).  Thus EPA's error, as the states  would have it, was in considering costs too much:  "Petitioning  States do not claim that there is no role for cost considerations;  Petitioning States simply stress that EPA must establish a definition of significance that is dominated by air  quality factors, as air quality is the sole factor mentioned in  the statute."  Reply Br. of Petitioning States at 4.  In  support of this position, State petitioners cited our en banc  decision in Natural Resources Defense Council v. EPA, 824  F.2d 1146, 1163 (D.C. Cir. 1987) (en banc), where we held that  a statutory mandate for EPA to set a standard with an  "ample margin of safety to protect the public health" did not  preclude the consideration of costs and technological feasibility, but that these concerns could not be the "primary consideration."


40
At oral argument, counsel for the states abandoned this  position and decided that the statute flatly prohibits EPA  from considering costs at all.  Transcript of Oral Argument at  14-17.  Indeed, counsel eventually went so far as to claim  that if faced with two states, one of which could eliminate all  relevant emissions at a trivial cost, while the other could  eliminate none at a cost of less than $5000 a ton, EPA must  mandate the same cutback for each.  Id. at 16-17.


41
We should note here that the consequence of this position  is not so extreme as it sounds.  EPA's rule allows ton-for-ton  emissions trading between firms based on allowances determined by each state.  See 63 Fed. Reg. 57,456.  Obviously the  firms with the highest emission reduction costs will, if permitted by their states, buy up pollution allowances from firms  that are granted allowances because they have over controlled for NOx--firms, obviously, with low reduction  costs.  If transaction costs were zero, the only effect of the  initial assignment of cutbacks would be distributional:  firms  would make only the cheaper cutbacks, but firms with high  emission-reduction costs would buy allowances from those  with low costs and thereby transfer wealth to them.  See  Ronald H. Coase, The Problem of Social Cost, 3 J. L. & Econ.  1 (1960).  But transaction costs notoriously are not zero;3  so  the likely effect of the proposed statutory interpretation  would be that any aggregate cutback would be achieved at  considerably higher cost than under EPA's reading of  S 110(a)(2)(D)(i)(I), with absolutely no offsetting environmental benefit to the public.  Of course we are able to assume the  existence of EPA's allowance trading program only because  no one has challenged its adoption.  As the program seems to  have no rationale other than cost reduction, see 63 Fed. Reg.  at 57,457, it would presumably be invalid under petitioners'  proposed reading of S 110(a)(2)(D)(i)(I), in which case the  states' position really is as extreme as it sounds.


42
Returning to the positions of the parties, we find Industry/Labor engaging in a migration comparable to that of the  states, though in the opposite direction.  In its opening and  reply brief Industry/Labor argued that "S 110(a)(2)(D) requires consideration of only air quality impacts in determining the significance of any contribution."  However, at oral  argument Industry/Labor offered a construction of the statute that seemed to restore to EPA via § 110(k)(5) what it  would take away via S 110(a)(2)(D).  Industry/Labor claimed  that costs could be considered when EPAdetermines if a SIP  is "adequate" under § 110(k)(5).  Transcript of Oral Argument at 28.  The states actually offered this same reading of  S 110(k)(5) in their reply brief (back when they thought EPA  could consider costs) but appeared to abandon it at oral  argument in favor of a flat prohibition on EPA cost considerations.  The argument that costs may be considered under  § 110(k)(5) seems to concede that the structure of the statutory scheme manifests no intention to bar the consideration of  costs.


43
And so we are indeed presented with the question whether  S 110(a)(2)(D) bars consideration of costs, but it is presented  to us with the caveat that costs can be considered later on in  the process, and accompanied by a false start by the states,  who initially said that EPA could consider costs, just not too  much.  Against this backdrop, it would be at the very least  ironic for us to say there is "clear congressional intent to  preclude consideration of cost" under S 110(a)(2)(D).  See  Natural Resources Defense Council v. EPA, 824 F.2d 1146,  1163 (D.C. Cir. 1987) (en banc).


44
For convenience we repeat the statutory language.  Section  110(a)(2)(D)(i)(I) provides that SIPs must contain provisions  adequately prohibiting


45
any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard.


46
42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added).  By its  terms the statute is focused on "amounts" of "emissions  activity" that "contribute significantly to nonattainment."  The fundamental dispute is over the clarity of the phrase  "contribute significantly."  Must EPA simply pick some flat  "amount" of contribution, based exclusively on health concerns, such that any excess would put a state in the forbidden zone of "significance"?4  Or was it permissible for EPA to  consider differences in cutback costs, so that, after reduction  of all that could be cost-effectively eliminated, any remaining  "contribution" would not be considered "significant"?  In  deciding on the permissible ceiling, EPA used "significant" in  the second way.


47
The term "significant" does not in itself convey a thought  that significance should be measured in only one dimension-here, in the petitioners' view, health alone.  Indeed, "significant" is a very odd choice to express unidimensionality; consider the phrase "significant other."  In some contexts,  "significant" begs a consideration of costs.  In finding a  threshold requirement of "significant risk" in S 3(8) of the  Occupational Health and Safety Act, 29 U.S.C. S 652(8), a  plurality of the Supreme Court understood a "significant" risk  as something more than a "mathematical straitjacket," and  held that "[s]ome risks are plainly acceptable and others are  plainly unacceptable."  Industrial Union Dept., AFL-CIO v.  American Petroleum Institute ("Benzene"), 448 U.S. 607, 655  (1980) (plurality opinion).  The plurality withheld judgment  on whether the Act required a "reasonable correlation between costs and benefits," id. at 615, but the upshot of  inserting the adjective "significant" was a consideration of  which risks are worth the cost of elimination.  OSHA has  since interpreted S 3(8) and regulation of "significant risk" to  require "cost-effective protective measures" and set standards with an eye toward "the costs of safety standards  [being] reasonably related to their benefits."  See International Union v. OSHA (Lockout/Tag out II), 37 F.3d 665, 66869 (D.C. Cir. 1994) (quoting OSHA's final rule).  OSHA's  reaction to the term "significant" seems to confirm what some  commentators have asked rhetorically:  "[C]an an agency sensiblydecide whether a risk is 'significant' without also  examining the cost of eliminating it?"  Stephen G. Breyer, Richard B. Stewart, Cass R. Sunstein & Matthew L. Spitzer, Administrative Law and Regulatory Policy 65 (4th ed. 1999).


48
Petitioners conspicuously fail to describe the intellectual  process by which EPA would determine "significance" if it  may consider only health.  EPA has determined that ozone  has some adverse health effects--however slight--at every  level.  See National Ambient Air Quality Standards for  Ozone, 62 Fed. Reg. 38,856 (1997).  Without consideration of  cost it is hard to see why any ozone-creating emissions should  not be regarded as fatally "significant" under  § 110(a)(2)(D)(i)(I).  Perhaps EPA might (under such a rule)  let the upwind states off at the stringency level of the  programs imposed on non-attainment areas, but petitioners  do not explain how "significance" can exclude cost but admit  equity.


49
Although the ambiguity of the word "significant" and the  implications of a health-only reading are potentially fatal  flaws in petitioners' theory (aside from their own inability to  discern the "plain language" consistently), the most formidable obstacle is the settled law of this circuit.  It is only where  there is "clear congressional intent to preclude consideration  of cost" that we find agencies barred from considering costs. NRDC, 824 F.2d at 1163;  see also George E. Warren Corp. v.  EPA, 159 F.3d 616, 622-24 (D.C. Cir. 1998), reh'g granted,  164 F.3d 676 (D.C. Cir. 1999);  Grand Canyon Air Tour  Coalition v. FAA, 154 F.3d 455, 475 (D.C. Cir. 1998), cert.  denied, 119 S. Ct. 2046 (1999);  NRDC v. EPA, 937 F.2d 641,  643-46 (D.C. Cir. 1991);  cf. International Bhd. of Teamsters  v. United States, 735 F.2d 1525, 1528-29 (D.C. Cir. 1984)  (construing mandate to adopt "reasonable requirements" for  safety as allowing consideration of cost).


50
In NRDC we considered S 112 of the Clean Air Act,  requiring EPA to set an air quality standard for hazardous  pollutants with an "ample margin of safety" to protect the  public health.  We held that this phrase did not preclude a  consideration of costs.  824 F.2d at 1155, 1163.  In George E.  Warren Corp. we acknowledged that the statutory scheme for  the reformulated gasoline program had the "overall goal" of  improving air quality and "reducing air pollution."  159 F.3d  at 622.  But because there was nothing "in the text or  structure of the statute to indicate that the Congress intended to preclude the EPA from considering the effects a  proposed rule might have upon the price and supply of  gasoline," id. at 623, we found no such preclusion even though  the provision at issue contained no allusion whatever to such  effects.  Similarly, in Grand Canyon Air Tour the statute  required the FAA to devise a plan for "substantial restoration  of the natural quiet" in the Grand Canyon area, but we found  nothing impermissible in the FAA's consideration of costs to  the air tourism industry in deciding how "substantial" that  restoration must be.  154 F.3d at 475.  In NRDC v. EPA we  considered whether EPA permissibly used cost-benefit analysis in refusing to classify a particular polluting source as  "major."  The petitioners argued that cost considerations  were precluded, and we stated:  "[W]hile the statutory language and legislative history do not bar petitioners' construction, they provide little support and no necessity for it."  937  F.2d at 645.  We affirmed EPA's use of cost-benefit analysis.


51
These cases are unexceptional in their general view that  preclusion of cost consideration requires a rather express  congressional direction.  See Edward W. Warren & Gary E.  Marchant, "More Good Than Harm":  A First Principle for  Environmental Agencies and Reviewing Courts, 20 Ecology  L.Q. 379, 421 (1993) ("The need to compare benefits and costs  has long played a role in judicial review of agency actions  regulating health and safety risks.");  Cass R. Sunstein, InterpretingStatutes in the Regulatory State, 103 Harv. L. Rev.  405, 487 (1989) (suggesting an "interpretive principle" drawn  from case law, including NRDC v. EPA, 824 F.2d 1146, that  reviewing courts will read statutes as authorizing regulations  with benefits at least "roughly commensurate with their costs,  unless there is a clear legislative statement to the contrary").Three of the cases, moreover--the two NRDC cases and  Grand Canyon--, involve statutory language with just the  same structure as here.  A mandate directed to some environmental benefit is phrased in general quantitative terms  ("ample margin of safety," "substantial restoration," and "major"), and contains not a word alluding to non-health tradeoffs;  in each case we found that in making its judgments of  degree the agency was free to consider the costs of demanding higher levels of environmental benefit.  So too here.


52
Petitioners point to no evidence of the requisite "clear  congressional intent to preclude consideration of cost."NRDC, 824 F.2d at 1163.  The text, we have already seen,  works no such preclusion.  As for the statutory structure,  petitioners willingly concede that costs may be considered  under S 110(k)(5) in determining the adequacy of a state plan. Why would a Congress intent on precluding cost considerations allow such an escape hatch?  The petitioners cite no  legislative history suggesting that cost considerations should  be barred.


53
In sum, there is nothing in the text, structure, or history of S 110(a)(2)(D) that bars EPA from considering cost in its  application.

3.Uniform Controls

54
As we have seen, EPA required that all of the covered  jurisdictions, regardless of amount of contribution, reduce  their NOx by an amount achievable with "highly cost-effective  controls."  Petitioners claim that EPA's uniform control  strategy is irrational in two distinct ways.  First, they observe that where two states differ considerably in the amount  of their respective NOx contributions to downwind nonattainment, under the EPA rule even the small contributors must  make reductions equivalent to those achievable by highly  cost-effective measures.  This of course flows ineluctably  from the EPA's decision to draw the "significant contribution" line on a basis of cost differentials.  Our upholding of  that decision logically entails upholding this consequence.


55
The second objection is that because of distance and the  vagaries of pollutant migration and ozone formation, a molecule of NOx emitted in Indiana (for example) may cause far  less adverse health impact than a molecule emitted in eastern  Pennsylvania.  EPA acknowledges that "[s]ources that are  closer to the nonattainment area tend to have much larger effects on air quality than sources that are far away."  63  Fed. Reg. at 25,919.  While EPA's cost-effectiveness standard  and emissions trading seem to mean that EPA will secure the  resulting aggregate NOx reduction at roughly the lowest  possible cost, they do not necessarily mean that it will have  secured the resulting aggregate health benefits at the lowest  cost.  Petitioners ask, in effect, why EPA did not, by one  means or another (e.g., in the emissions trading system),  make reductions from sources near the nonattainment areas  (or otherwise more damaging, molecule for molecule) more  valuable than ones from distant sources?


56
EPA considered this approach, modeling the efficacy of  regional alternatives compared to its uniform strategy.  See  Final Rule, 63 Fed. Reg. at 57,423.  Its researchers found  that non-uniform regional approaches by comparison did not  "provide either a significant improvement in air quality or a  substantial reduction in cost."  Id.  The complaining states  offer no material critique of EPA's methodology in reaching  this answer, which in fact some independent investigators  have confirmed.  See Krupnick & Anderson, A DilemmaDownwind, 137 Resources for the Future 5, 6 (1999) ("[Even  with] spatial differences, when viewed across the entire study  region, RFF concluded that there was no clear benefit to an  exposure-based trading system, compared with simple ton-for-ton NOx trading.  Public health benefits would be approximately the same, and there would be no significant difference  in costs to the utilities.").  We have no basis to upset EPA's  judgment.

4.Nondelegation

57
In their opening brief and more prominently in their reply brief, state petitioners argue that EPA has not determined  "significant contribution" based on any intelligible principles.  Petitioners rely heavily on our decision in American Trucking Ass'ns, Inc. v. EPA, 175 F.3d 1027, reh'g granted in part,  den'd in part 195 F.3d 4 (D.C. Cir. 1999), essentially arguing  that nothing about EPA's analysis explains how much of a  NOx contribution was too much (i.e., worthy of a SIP call).


58
We must recognize here that EPA's cost-effectiveness criterion is a radically incomplete line-drawing device.  EPA has  effectively ruled that each affected state must get down to the  NOx emissions levels that would prevail if it removed all NOx  emissions costing $2000/ton or less to remove.  This satisfies  its "cost-effectiveness" criterion because (if states also seek to  minimize costs subject to the EPA's constraint) only these  relatively low-cost tons will be removed.  But while EPA  indicates that it rested the $2000/ton figure on "NOx emissions controls that are available and of comparable cost to  other recently undertaken or planned NOx measures," Final  Rule, 63 Fed. Reg. at 57,400, it neither rests that benchmark  on anything in the language or function of S 110(a)(2)(D)(i)(I),  nor otherwise explains why the resulting cut-off point represents the right degree of "cost-effectiveness" (i.e., why "highly cost-effective" should be at that "height").  Accordingly, we  must read EPA as having understood that its selection of the  cut-off point was essentially unbounded.


59
But petitioners have ignored a limit to the nondelegation  doctrine that we relied on in American Trucking and even  more emphatically in its immediate precursor, International  Union, UAW v. OSHA ("Lockout/Tagout I"), 938 F.2d 1310  (D.C. Cir. 1991).  There we noted that the scope of the  agency's "claimed power to roam" was "immense, encompassing all American enterprise."  Id. at 1317.  Quoting verbatim  from Synar v. United States, 626 F. Supp. 1374, 1383 (D.D.C.  1986) (three-judge panel), aff'd sub nom. Bowsher v. Synar,  478 U.S. 714 (1986), we said, "When the scope increases to  immense proportions, as in [A.L.A. Schecter Poultry Corp. v.  United States, 295 U.S. 495 (1935)], the standards must be  correspondingly more precise."  Lockout/Tagout I, 938 F.2d  at 1317.  We noted that a mass of cases in courts had upheld  delegations of effectively standardless discretion, and distinguished them precisely on the ground of the narrower scope  within which the agencies could deploy that discretion.  Id. American Trucking, perhaps too succinctly for petitioners to  notice, incorporated the Lockout/Tagout I discussion of the  point.  American Trucking, 175 F.3d at 1037.


60
Nominally, of course, S 110(a)(2)(D)(i)(I) encompasses "all  American enterprise."  But as a practical matter EPA must  make a number of threshold determinations that in practice  appear to have confined the statute to a modest role.  Before  assessing "significance," EPA must find (1) emissions activity  within a state;  (2) show with modeling or other evidence that  such emissions are migrating into other states;  and (3) show  that the emissions are contributing to nonattainment.  We do  not mean to minimize the scope of EPA's action in the  present case.  Nearly half of the nation is affected and  control costs will be substantial.  And it may ultimately prove  that the dam constituted by these criteria willburst, subjecting "all American industry" to EPA's S 110(a)(2)(D)(i)(I) discretion.  But in practice, so far, these threshold criteria  appear to have so limited EPA's activity under the section as  to make the rule in question here the sole example of  S 110(a)(2)(D)(i)(I) rulemaking.  Accordingly, the grounds on  which we remanded in Lockout-Tagout I and American  Trucking for confining agency constructions are absent here.

II. Inclusion of Specific States
A.Wisconsin

61
Wisconsin industry petitioners separately challenge Wisconsin's inclusion in the SIP call.  The Wisconsin petitioners  argue that the emissions from the state do not contribute  significantly to nonattainment in any other state.  Section  110(a)(2)(D)(i)(I) requires that a state "contribute significantly  to nonattainment in ... any other State" in order to be  included in the challenged SIP call.  42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added).  As explained below,  EPA erroneously included Wisconsin in the SIP call because  EPA failed to explain how Wisconsin contributes to nonattainment in any other state.


62
EPA contends that Wisconsin contributes significantly to  other states' nonattainment because the state significantly  contributes ozone over the Lake Michigan region.  Despite  EPA's Lake Michigan concerns, the agency does not show on  the record that Wisconsin's ozone contribution affects any


63
onshore state nonattainment.  At oral argument, counsel for  EPA conceded that "[t]he part that's missing [from the  record] is a thorough explanation to support our modeling  data and things of that nature between the Lake Michigan  receptor area and the onshore states."  Oral Arg. Tr. at 107.When asked for more, counsel could only respond that "the  best evidence ... is simply the narrative statements in the  [final rule's] preambles....  There's nothing else there."  Id. Because EPA conceded at oral argument that it has no record  evidence directly linking Wisconsin's ozone contribution over  Lake Michigan to nonattainment in any state and because  EPA must "demonstrate[ ] a reasonable connection between  the facts on the record and its decision" made pursuant to its  statutory authority, Ethyl Corp. v. EPA, 51 F.3d 1053, 1064  (D.C. Cir. 1995), we hold that EPA acted unlawfully by  including Wisconsin in a SIP call limited by statute to states  contributing significantly to nonattainment in any other state  and therefore set aside Wisconsin's inclusion in the SIP call. See 5 U.S.C. S 706(2)(A), (C) (1994) ("The reviewing court  shall ... hold unlawful and set aside agency action ... found  to be ... arbitrary, capricious, an abuse of discretion, or  otherwise not accordance with law [or] in excess of statutory  jurisdiction, authority, or limitations, or short of statutory  right.").

B. Missouri and Georgia

64
Missouri and Georgia were on the geographical perimeter  of EPA's SIP call.  No state west of Missouri was included,  nor were the two states directly to its north (Iowa and  Minnesota) and south (Arkansas).  Georgia was a bit more in  the thick of things, surrounded on three sides by included  states--Alabama, Tennessee, North Carolina, and South Carolina;  but the southern portion of Georgia borders the excluded state of Florida.  Industrial petitioners within Missouri and Georgia challenge EPA's decision to calculate NOx  budgets for these two states based on the entirety of NOx  emissions in each state.  Petitioners argue that there is  record support only for the proposition that emissions from,  roughly speaking, the eastern half of Missouri and the northern two-thirds of Georgia "contribute" to downwind concentrations;  accordingly, they say, the NOx budgets for Missouri  and Georgia should be based solely on those emissions.


65
We must here explain how EPA calculated NOx budgets. It projected the total amount of NOx emissions that sources in astate would emit in the year 2007, in light of expected  growth and other controls required by the CAA.  EPA then  projected total NOx emissions if "highly cost-effective controls" were implemented.  The resulting calculation became  the state's NOx budget, with the difference between the base  case and the controlled case being the "significant" contribution discussed above.  Obviously a state's NOx budget will  vary depending on whether EPA considers all of the NOx  emissions in the state, or instead considers only emissions  located in a smaller portion of the state (assuming emissions  are dispersed throughout the state, which is the case here  and without which the issue would be immaterial, as nonexistent emissions need not be controlled).  For Missouri and  Georgia, as for all other included states, NOx budgets were  calculated using all NOx emissions in the state.


66
The challenge basically stems from the character of  OTAG's modeling, and its resulting recommendations to EPA.  OTAG's ozone transport model used grids drawn across most  of the eastern half of the United States.  The first grid was  the most precise, with grid cells of 12 kilometers squared (244  square kilometers)--the "fine grid."  A second grid extended  beyond the perimeter of the fine grid and had cells of 36  kilometers squared resolution--the "coarse grid."  For a  variety of reasons to be discussed shortly, the fine grid did  not track state boundaries, and Missouri and Georgia were  among several states that were split between the fine and  coarse grids.  OTAG then ran modeling for both grids, but in  the final analysis did not find emissions from the coarse grid  worthy of special concern.  OTAG's executive summary stated:  "[T]he focus on ozone air quality impacts in the fine grid  raised questions about the need for controls in the coarse  grid.  The recommendations adopted by the Policy Group  recognize that the OTAG analyses demonstrated that transport impacts of the coarse grid areas on the fine grid are  minimal and therefore, do not include the coarse grid areas for recommended control measures other than those that  would be applied nationally."  Petitioners argue that EPA  should base NOx budgets for Missouri and Georgia only on  portions of these states within the fine grid.


67
EPA offers three reasons for including the entire states of  Missouri and Georgia:


68
(1) The division of individual States by OTAG was based, in part, on computational limitations in OTAG's modeling analyses;  (2) the additional upwind emissions from full, as opposed to partial, States would provide additional benefit to downwind nonattainment areas;  and, (3) State-wide emissions budgets create fewer administrative difficulties than a partial-State budget.


69
Final Rule, 63 Fed. Reg. at 57,424.  We review deferentially,  searching for the reasonableness of EPA's action, Appalachian Power, 135 F.3d at 802, whether that be EPA's interpretation of the statute, see Chevron, 467 U.S. at 842-43, or  EPA's explanation for its policy choice, see Motor Vehicle  Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S.  29, 43 (1983).  The two inquiries can and do overlap.  See  Animal Legal Defense Fund v. Glickman, 204 F.3d 229, 234 (D.C. Cir. Feb. 1, 2000).


70
On its face the statute neither mandates nor prohibits an  all-or-nothing statewide perspective.  It directs EPA to make  sure that SIPs (which of course are state plans) adequately  prohibit "any source or other type of emissions activity within  the State from emitting" in excess of the substantive limit. The critical issue is whether the targeted "source" or "emissions activity" "contribute[s] significantly to non-attainment"  in another state.


71
EPA's first argument is that the fine grid split Missouri  and Georgia in part because of computer limitations--every  extension of the fine grid modeling was costlyin terms of  both computer memory and data collection.  Document No.  II-A-14, Draft OTAG Final Report Regional and Urban  Scale Modeling--Chapter 2, 2-7 (undated).  But the OTAG  modelers allocated their scarce resources purposefully, by  reference to known air quality data, explicitly taking into  consideration the "locale of various problem areas (as represented by urban-area modeling domains), and emissions density."  Id.  Thus it was no mere techno-fortuity that the fine  grid included enough of Missouri to include the city of St.  Louis and enough of Georgia to include Atlanta:  both cities  are designated nonattainment areas for ozone under the  1-hour NAAQS.  See Final Rule, 63 Fed. Reg. at 57,359.  Moreover, the fine grid portions of both states are the closest  to other nonattainment areas, such as Chicago and Birmingham, and generally higher ozone density.


72
Of course the fine grid modeling of parts of Missouri and  Georgia showed emissions in the aggregate meeting the  EPA's threshold "contribution" criteria.  Thus fine grid modeling of each in its entirety would presumably also have done  so.  But that is a simple arithmetic necessity (a state is  necessarily composed of its parts) and provides no reason for  EPA to ignore the very air quality factors that influenced the  design of the modeling that did occur.  OTAG itself clearly  did not think those factors magically lost their force, for it  recommended against controlling the rump areas.  And EPA  itself acknowledged part of the reason this should be so when  it observed, "Sources that are closer to the nonattainment  area tend to have much larger effects on air quality than  sources that are far away."  63 Fed. Reg. at 25,919.  Indeed,  even if the line between areas for which there was evidence  and ones for which there was none were explained solely by  fortuity, EPA would still be required to act upon the evidence  that was generated.  See Chemical Manufacturers Ass'n v.  EPA, 859 F.2d 977, 989 (D.C. Cir. 1988) (holding that EPA  must consider "all the evidence--including the industry evidence").


73
This leads us to EPA defenses other than modeling design.The first is that "the larger the geographic area that is  controlled, the greater the downwind benefits."  Final Rule,  63 Fed. Reg. at 57,424.  This reason can only stand if the  emissions at issue contribute significantly to nonattainment in  another state.  OTAG concluded they did not.  Id.  EPA claims that its state-specific modeling, which supplemented  OTAG's more regional modeling, supports including the  coarse grid areas.  See id.  Yet EPA's explanation and  technique make clear that emissions from the fine grid areas  may have been the sole source of the finding.  Indeed, EPA  says as much:  "[I]f emissions from part of a State contribute  significantly to downwind nonattainment or maintenance  problems, emissions from the entire State contribute significantly to downwind nonattainment or maintenance problems."  Id.  This of course is also true as a matter of logic (a state is  the sum of its parts).  But it is completely consistent with the  rump portion being innocent of downwind effect, and thus is  scarcely a reason for ruling that significant contributions  from a border city should rope in the entire state.


74
Aware of this problem, EPA simply throws the burden of  persuasion onto the states.  "[T]here is no peculiar meteorological phenomenon that would indicate that emissions from  some portion of [each of the affected states] would not impact  downwind nonattainment or maintenance problems."  Id.  In  addition, "the atmosphere is constantly in motion and has no  limitations at geo-political boundaries."  Id.  If this is "evidence" of contribution, it proves too much.  If the simple  proposition that the prevailing westerlies carry pollutants  eastward were enough, EPA could, on the basis of a plant in  Pennsylvania, use S 110(a)(2)(D)(i)(I) to control all NOx emissions east of the Rocky Mountains.  While we uphold EPA's  determination that a "significant" contribution is acost effectively controllable contribution, EPA must first establish  that there is a measurable contribution.  Interstate contributions cannot be assumed out of thin air.


75
In the end administrative convenience is EPA's only real  defense for basing NOx budgets on the entirety of a state's  emissions.  There seem to be two species of this argument.  First, EPA seems to claim that it is just easier to calculate a  NOx budget based on all the emissions in the state instead of  only a portion of such emissions.  EPA provides no explanation of why this is so, and it seems dubious.  Within a state  are counties, air quality control regions, and for some unfortunate states, nonattainment areas.  EPA also has emissions data on specific sources, some of which may be susceptible of  "highly cost-effective controls," and others of which may not  be.  See, e.g., Emissions Data For Power Plants,  <www.epa.gov/acidrain/emissions> (visited January 26,  2000).  Without data from such state subdivisions and specific  sources, EPA could never have performed modeling or even  set a statewide budget.  EPA has not explained how calculation of a budget for sources in only half of the state would be  any more onerous than for all sources in the state.  Unless it  is relying on data that exist only for the state as a whole,  calculation seems on its face easier for a half than for a whole.


76
EPA offers a second administrative problem.  If the concern for not allowing S 110(a)(2)(D)(i)(I) to encompass unproven areas compels an insistence on proof of contribution  from ever smaller geographic subdivisions, any area's specific  contribution may appear insubstantial, even though collectively there are significant contributions.  In other words, unlike  bologna, which remains bologna no matter how thin you slice  it, significant contribution may disappear if emissions activity  is sliced too thinly.


77
While this argument was stressed on appeal, it is nowhere  to be found in the proposed or final rule, except insofar as it  may have lurked behind the vague invocation of "administrative difficulties."  See Final Rule, 63 Fed. Reg. at 57,424;Proposed Rule, 62 Fed. Reg. at 60,342.  As a result it is quite  undeveloped.  But it appears to be based on a distortion of  the claims of Missouri and Georgia.  They are not asserting a  right to bologna tactics, to slice down the unit of measurement to a point of insignificance.  All they are claiming is that  where the data--calculated under EPA's supervision--inculpate part of a state and not another, EPA should honor the  resulting findings.


78
Such a proposition would of course leave EPA free to select  states as the unit of measurement.  In turn, states (or the  areas of states that believed themselves innocent of material  contributions, or sources located therein), might respond by  offering finer-grained computations.  Such a process seems more like a healthy search for truth than the collapse into  infinite regress that EPA claims to fear.


79
EPA also points to state flexibility:  "Since each State has  the flexibility to determine which sources to control in order  to meet the budget, a State can structure its control strategy  to require fewer reductions in certain portions of the State  and greater controls in other areas."  Final Rule, 63 Fed.  Reg. at 57,424.  This theory presents at least two difficulties. First, it overlooks the fact that state budgets not only encompass the whole state but are calculated on the basis of  hypothesized cutbacks from areas that have not been shown  to have made significant contributions.  Thus the "flexibility"  comes at the cost of a burden that is heavier in the aggregate,  where the added weight accomplishes no purpose relevant to  S 110(a)(2)(D)(i)(I).  Second, a state's use of flexibility to  pursue a purely in-state set of tradeoffs between cost and  benefit (and thus unrelated to the goals of S 110(a)(2)(D)(i)(I))  may actually diminish the cutbacks in areas that are making acontribution to other states' nonattainment.


80
Thus nowhere has EPA reasonably explained why NOx  budgets based on every state source are the best stopping  point with respect to states on the perimeter of the ozone  problem.


81
Therefore we vacate EPA's final rule with respect to  Missouri and Georgia and remand to the agency for reconsideration in light of this opinion.

C. South Carolina

82
Petitioner Santee Cooper challenges South Carolina's inclusion in the SIP call by alleging that the state's downwind  ozone nonattainment impact is "minuscule" and therefore not  significant.  We will hold unlawful EPA's decision to include  South Carolina in the SIP call if we find EPA's decision  "arbitrary, capricious, an abuse of discretion, or otherwise not  accordance with law."  5 U.S.C. S 706(2)(A).  In order for  EPA's decision to include South Carolina in the SIP call to  survive review, the agency must "demonstrate[ ] a reasonable  connection between the facts on the record and its decision," Ethyl Corp., 51 F.3d at 1064.  We conclude that the record  supports EPA's decision to include the state as a significant  contributor to downwind nonattainment.  See Proposed Rule,  62 Fed. Reg. at 60,337-339.  EPA considered the analyses  submitted by the objecting petitioner but disagreed with the  petitioner's conclusions as drawn from the relevant information.  Specifically, EPA conducted additional modeling and  interpreted the data in context and found that South Carolina  significantly contributed to ozone nonattainment.  See id.;Final Rule, 63 Fed. Reg. at 57,394-396.


83
For example, under the 1-hour standard, the UAM-V zeroout modeling results indicated that South Carolina had a high  maximum contribution (16 ppb) and a high frequency of  contribution (at least 2 ppb to 15% of the exceedences and at  least 10 ppb to 5% of the exceedences) to Atlanta.  See  Office of Air and Radiation, U.S. Environmental Protection  Agency, Doc. No. VI-B-11, Air Quality Modeling Technical  Support Document for the NOx SIP Call C-5, H-2 (1998).The CAMx modeling results were comparable (25 ppb maximum contribution and a frequency of at least 2 ppb to 30% of  the exceedences).  See id. at C-5, G-6.  Among the upwind  states, only Alabama had a higher maximum contribution. See id. at Apps. G & H. Moreover, South Carolina's contribution to 1-hour nonattainment in Atlanta was no more "insignificant" than many of the other linkages that were found to  be significant (e.g., Indiana's contribution to New York City).See id. at C-13, H-16.


84
In contrast, the petitioner seeks to show that the data,  when viewed in isolation, makes South Carolina's contribution  appear insignificant.  In the end, we reject the challenge  made on behalf of South Carolina because the petitioner  attacks, not so much the accuracy of EPA's data, but rather  EPA's reasonable analysis and application of the data.


85
III. Federalism and Regulatory Flexibility Act

A. NOx Budgets

86
Building on OTAG's work, EPA ordered the challenged  SIP call under the authority of section 110(k)(5) in order to address significant contribution to 1-hour ozone nonattainment as described under section 110(a)(2)(D).5  In fashioning  the SIP call, EPA focused on OTAG's determination that  "[r]egional  NOx emissions reductions are effective in producing ozone benefits."  Proposed Rule, 62 Fed. Reg. 60,318, at  60,320.  EPA also took into consideration OTAG's conclusion  that while NOx controls are effective in addressing regional  ozone problems, VOC controls are most effective locally and  are most advantageous to urban nonattainment areas.  See  id. Because OTAG concluded that NOx reductions providethe key to addressing regional ozone problems, EPA's SIP call  addresses regional ozone nonattainment through NOx emissions "budgets" established by the agency for each covered  state.  The budgets represent the amount of allowable NOx  emissions remaining after a covered state prohibits the NOx  amount contributing significantly to down wind nonattainment. See Final Rule, 63 Fed. Reg. 57,356, at 57,368.  While EPA  calculated the budgets using highly cost-effective emission  controls, the agency allows the states to choose the control  measures necessary to bring their emissions within the budget requirements.  See id. at 57,377;  id. at 57,400.  Under  EPA's budget plan, a state "may choose from a broader menu  of cost-effective, reasonable alternatives" including alternatives that "may even be more advantageous in light of local  concerns."  Id. at 57,369-370.  In fact, EPA has stated that  the states have "full discretion in selecting the controls, so  that [the states] may choose any set of controls that would  assure achievement of the budget."  Id. at 57,378.  In addition, each state has the option of adopting an interstate  trading program that allows it to purchase NOx "allowances"  from sources that have elected to over-control.  Id. at 57,430.The SIP call also gives the states the option in some circumstances to use "banked" allowances (i.e. allowances from prior  years) to comply with emissions limits.  See id.


87
Petitioners assert that EPA's NOx budget program impermissibly intrudes on the statutory right of the states to fashion their SIP submissions in the first instance.  In support of this position, the petitioners primarily rely on our  decision in Virginia v. EPA, 108 F.3d 1397 (D.C. Cir.),  modified on other grounds, 116 F.3d 499 (D.C. Cir. 1997),  where we held that EPA may not use a section 110(k)(5) SIP  call to order states to adopt a particular approach to achieving the SIP requirements listed in section 110.  Under the  rule at issue in Virginia, EPA required states to adopt  California's vehicle emission program and in effect set the  numerical emissions limitations and mandated the means for  the states to achieve the necessary emissions reductions. That case involved an EPA rule that required several states  to reduce ozone precursors by a particular program and only  allowed states to implement a more stringent program as an  alternative or substitute.  We held that EPA's approach  exceeded its authority under section 110 because each state  retains the authority to determine in the first instance the  necessary and appropriate control measures needed to satisfy  section 110's standards.  See id. at 1407-09 (citing Train v.  NRDC, 421 U.S. 60, 78-79 (1975)).


88
Our holding in Virginia was mandated by the Supreme  Court's decision in Train v. NRDC, 421 U.S. 60 (1975).Train involved a challenge to Georgia's procedures for revising source-specific emission limits adopted in a SIP.  See id.  at 68-71.  The Train Court held that states have the authority under the CAA to initially propose specific emission  limitations.  See id. at 79.  The Court defined "emission limitations" as "regulations of the composition of substances  emitted into the ambient air from such sources as power  plants, service stations, and the like.  They are the specific  rules to which operators of pollution sources are subject,  and which if enforced should result in ambient air which  meets the national standards."  Id. at 78 (emphasis added).The Court further held that EPA has only "a secondary role  in the process of determining and enforcing the specific,  source-by-source emission limitations."  Id. at 79 (emphasis  added).  The Train decision and subsequent precedent make  clear that section 110 left to the states "the power to [initially] determine which sources would be burdened by regulation and to what extent."  Union Elec. Co. v. EPA, 427 U.S.  246, 269 (1976) (emphasis added);  cf. Virginia, 108 F.3d at  1399, 1401, 1408 (involving asource-specific program);  Riverside Cement Co. v. Thomas, 843 F.2d 1246, 1247-48 (9th  Cir. 1988) (citing Train and noting EPA's secondary role in  enforcing source-by-source emissions limitations).  As we  elaborated in Virginia, "the Supreme Court decided ... that  [section 110] did not confer upon EPA the authority to  condition approval of [a state's] implementation plan ... on  the state's adoption of a specific control measure."  Virginia, 108 F.3d at 1408.  For the reasons set forth below, we  conclude that the NOx budgets do not fall within the realm  of impermissible SIP call regulation as defined in Virginia  and Train.


89
Given the Train and Virginia precedent, the validity of the  NOx budget program underlying the SIP call depends in part  on whether the program in effect constitutes an EPA-imposed  control measure or emission limitation triggering the Train Virginia federalism bar:  in other words, on whether the  program constitutes an impermissible source-specific means  rather than a permissible end goal.  However, the program's  validity also depends on whether EPA's budgets allow the  covered states real choice with regard to the control measure  options available to them to meet the budget requirements.


90
Section 110(a)(2)(D) requires SIPs to contain adequate  provisions prohibiting emissions from "any source or other  type of emissions activity within the State" that "contribute  significantly" to NAAQS nonattainment in another state. Here, EPA mandates that 22 states and the District of  Columbia implement section 110(a)(2)(D) using its NOx budget system.  In essence, the NOx budget in question is an  EPA mandate prohibiting NOx emissions in the 23 jurisdictions from exceeding a tonnage specific to that jurisdiction. See 63 Fed. Reg. 57,356 at 57,491-493 (1998).  Of concern to  petitioners, the budget rule prohibits states from seeking  compliance, in whole or part, by controlling VOC emissions  even though VOCs as well as NOx emissions contribute to  ozone problems.  See, e.g., id. at 57,359;  see also 40 C.F.R.  § 52.31(b)(7) (1998) (defining ozone precursors).


91
Yet, the budget plan's defining aspects do not necessarily  cause the program to conflict with the limiting principles  contained in Train and Virginia.  Analyzing the budget rule  together with the relevant precedent, we hold that based on  section 110's silence, EPA reasonably interpreted section 110  as providing it with the authority to determine a state's NOx  significant contribution level and agree with EPA that the  NOx budget plan does no more than project whether states  have reduced emissions sufficiently to mitigate interstate  transport.  See 63 Fed. Reg. at 57,368.


92
Under section 110, EPA must "approve a [SIP] submittal  as a whole if it meets all of the applicable requirements of  [the Act]."  42 U.S.C. S 7410(k)(3).  While the states have  considerable latitude in fashioning SIPs, the CAA "nonetheless subject[s] the States to strict minimum compliance requirements" and gives EPA the authority to determine a  state's compliance with the requirements.  Union Elec. Co.,  427 U.S. at 256-57 (referring to the requirements contained  in the statute).  Given EPA's authority to ensure that submitted SIPs adequately prohibit significantly contributing emissions, EPA permissibly relied on its general rulemaking  authority to prospectively inform the states of EPA's significance determinations.


93
Moreover, EPA does not tell the states how to achieve SIP  compliance.  Rather, EPA looks to section 110(a)(2)(D) and  merely provides the levels to be achieved by state-determined  compliance mechanisms.  Specifically, EPA set NOx reduction  levels based, in part, on assumptions about reductions obtainable through highly cost-effective controls.  See Final Rule,  63 Fed. Reg. at 57,426.  However, EPA made clear that  states do not have to adopt the control scheme that EPA  assumed for budget-setting purposes.  See id. at 57,369-370.States can choose from a myriad ofreasonably cost-effective  options to achieve the assigned reduction levels.  See, e.g., id.  at 57,438 (noting possibilities with regard to mobile sources);id. at 57, 378 (noting possibilities with regard to stationary  sources);  id. at 57,416.  While EPA bases the budgets here  on "highly cost-effective" control measures, the states remain  free to implement other "cost-effective" or "reasonably cost effective" measures in place of the ones identified by EPA. See id. at 57,378;  63 Fed. Reg. 60,318 at 60,328 (1997) (noting  that "one State may choose to primarily achieve emissions  reductions from stationary sources while another State may  focus on emissions reductions from the mobile source sector").  More importantly, EPA went so far as to give the  states "full discretion in selecting ... controls," 63 Fed. Reg.  at 57,378, thereby allowing states to attain their budgets by  imposing even quite unreasonable, very cost-ineffective controls.  In Virginia, we did not bar EPA from permitting  more costly alternatives but rather alternatives states would  consider "unreasonable or impracticable."  Here, EPA accommodates Virginia's mandate by allowing reasonable control alternatives and allowing states to focus reduction efforts  based on local needs or preferences.  See 63 Fed. Reg. at  57,369;  id. at 57,399-405;  62 Fed. Reg. at 60,328.  Thus, real  choice exists for the covered states.


94
Regarding EPA's decision not to rely on VOC reductions,  EPA reasonably concluded that long-range ozone transport  can only be addressed adequately through NOx  reductions. Petitioners' reliance and emphasis on VOC reductions in lieu  of NOx reductions ignores the scientific basis for EPA's rule.  OTAG and EPA concluded that VOC controls would not  effectively address interstate ozone transport.  Furthermore,  states can cure any NOx reduction "disbenefits" with corresponding optional VOC controls.  See 62 Fed Reg. at 60,344345;  63 Fed. Reg. at 57,425.  Thus, the SIP call cannot be  invalidated merely because EPA reasonably chose not to  regulate VOCs.


95
In sum, we conclude that EPA's NOx budget program  reasonably establishes reduction levels and leaves the control  measure selection decision to the states.  In addition, unlike  the rule invalidated in Virginia, states implementing alternative control measures will not be penalized with more stringent emissions targets.  Since the challenged budget program does not mandate a "specific, source-by-source emission  limitation[ ]," the NOx budget plan does not run afoul of  Train or Virginia.

B. Regulatory Flexibility Act

96
The Regulatory Flexibility Act ("RFA"), 5 U.S.C. SS 601612, as amended in 1996 by the Small Business Regulatory  Enforcement Fairness Act ("SBREFA"), Pub. L. No.  114-121, Title II, 110 Stat. 847, 857-74, SS 201-253 (codified  at 5 U.S.C. SS 601-612 (1994 & Supp. II 1996)), requires an  agency, when proposing a rule for notice and comment, to  "prepare and make available for public comment an initial  regulatory flexibility analysis.... [that] describe[s] the impact of the proposed rule on small entities," 5 U.S.C. S 603(a),  including small businesses, small organizations, and small  governmental jurisdictions.  See id. S 601(6).  In addition,  when promulgating a final rule, an agency must "prepare a  final regulatory flexibility analysis" that describes, among  other things, "a summary of the significant issues raised by  the public comments in response to the initial regulatory  flexibility analysis, a summary of the assessment of the  agency of such issues," and "the steps the agency has taken  to minimize the significant economic impact on small entities."  Id. S 604(a).


97
However, these analyses are not required if the agency  "certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities."  Id. S 605(b).  In the instant case, EPA certified that the proposedand final rule will not have a significant economic impact on a substantial number of small entities and,  accordingly, did not perform any regulatory flexibility analysis.  See Final Rule, 63 Fed. Reg. at 57,478;  Proposed Rule,  62 Fed. Reg. at 60,375.  RFA petitioners contend that EPA's  certification was improper and in violation of the RFA.  We  disagree.


98
The court has consistently held that the RFA imposes "no  obligation to conduct a small entity impact analysis of effects  on entities which it does not regulate."  Motor & Equip.  Mfrs. Ass'n. v. Nichols, 142 F.3d 449, 467 (D.C. Cir. 1998)  (quoting United Distribution Cos. v. FERC, 88 F.3d 1105,  1170 (D.C. Cir. 1996));  see also American Trucking, 175 F.3d  at 1044.  Therefore, the key issue in evaluating EPA's S 605(b) certification is whether the NOx SIP call "regulates"  small entities.


99
EPA based its certification on its view that the NOx SIP  call "would not establish requirements applicable to small  entities" because "it would require States to develop, adopt,  and submit SIP revisions that would achieve the necessary  NOx reductions and would leave to the States the task of  determining how to obtain those reductions, including which  entities to regulate."  Final Rule, 63 Fed. Reg. at 57,478.  We  agree with EPA's statement that the SIP call does not  directly regulate individual sources of emissions.  The instant  case is thus analogous to American Trucking, which upheld  EPA's certification under § 605(b) because the revised  NAAQS at issue "regulate small entities only indirectly--that  is, insofar as they affect the planning decision of the States."American Trucking, 175 F.3d at 1044.  Therefore, we conclude that EPA's certification under § 605(b) is justified.

IV. Remaining Claims

100
A. Definition of "NOx Budget Unit"


101
RFA petitioners also contend that EPA arbitrarily revised  the definition of a "NOx budget unit" to bring certain small  sources within the scope of the core group of emission producing sources to which the NOx Budget Trading Rule  ("model trading rule") applies.6  This contention is meritless.


102
In the proposed rule, a "NOx budget unit" was defined as a  boiler that either serves electricity generators with a capacity  greater than 25 megawatts ("MW") or does not serve generators but has a design heat capacity of greater than 250 million  Btu/hr ("mmBTu/hr").  See Supplemental Notice for the  Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region  for Purposes of Reducing Regional Transport of Ozone ("Supplemental Notice of Proposed Rule"), 63 Fed. Reg. 25,902,  25,978 (1998).  EPA sought comment on "the appropriateness  of including [such] categories ..., whether the size cut-offs  should be higher or lower for these source categories, and the  appropriateness of including other source categories in the  core group."  Id. at 25,923.  In the final rule, EPA discussed  and revised the definition to expand the core group by  including large boilers--those with design heat capacity of  greater than 250 mmBtu/hr--even if they served generators  with a capacity less than 25 MW.  See Final Rule, 63 Fed.  Reg. at 57,518.  EPA explained that it was making this  change in order to address the concernraised in the comments about excluding large boilers with high levels of emission just because they happen to serve small generators.  See  id. at 57,461.


103
EPA's revision is reasonable.  The only argument that  RFA petitioners seem to have against the change is that it  contradicts EPA's statement elsewhere that "small electrical  generators less than 25 MW ... will be exempt under the  final model rule."  Id. at 57,463.  It is unclear why this  statement renders EPA's final action arbitrary.  EPA's definition of a NOx budget unit and the reasons for its change are  set forth in the preamble to the final rule, and the most that  the RFA petitioners have demonstrated is that EPA made at  least one statement that was, as EPA concedes in its brief,  "incomplete in that it did not address the case of large boilers  with small generators."  Such a minor oversight in the drafting of the preamble to the final rule does not render the  substantive decision by EPA arbitrary.

B. Council of Industrial Boiler Owners
1.Introduction

104
In the rulemaking, EPA distinguished between electricity  generating units ("EGUs") and non-electricity generating  units ("non-EGUs").  Council of Industrial Boiler Owners  ("CIBO"), a trade association whose membership consists of  companies and universities operating industrial boilers and  turbines ("industrial boilers"), which constitute one category  of non-EGUs, challenges the NOx SIP call for being based on  the following arbitrary and capricious actions by EPA:  EPA's  failure to determine whether non-EGUs are significant contributors, EPA's flawed cost assumptions in its determination  of cost-effective control measures for non-EGUs, EPA's erroneous calculation of non-EGU budgets, and EPA's arbitrary  redefinition of the term "EGU."  We agree only that EPA's  redefinition of EGUs was arbitrary and capricious.


105
2.Significant Contribution of Industrial Boilers


106
CIBO challenges EPA's decision to include non-EGU boilers in the rule without having isolated non-EGU emissions to  determine whether they "significantly contribute" to the interstate ozone transport problem and whether implementing  highly cost-effective emissions reduction measures on industrial boilers would ameliorate nonattainment in downwind  states.  CIBO maintains that non-EGU boilers typically have  significantly shorter stacks than EGUs and that their emissions, as a result, fall below the "mixing layer" that promotes  long-range NOx transport.  Therefore, CIBO contends, industrial boilers as a group can have no impact on long-range  ozone transport.  However, this factual claim fails in view of  contrary evidence in the record.  OTAG's Executive Report  states as one of its major conclusions that "[b]oth elevated  (from tall stacks) and low-level NOx reductions are effective."  Executive Report at 4.  EPA reiterated this finding by OTAG  in the NPRM, see Proposed Rule, 62 Fed. Reg. at 60,332, it  relied on the finding, and it appears that members of CIBO  never challenged it during the comment period.  Therefore,  we cannot say EPA's inclusion of non-EGUs in the group of  significantly contributing sources was arbitrary.


107
3.Cost-Effectiveness Calculation for Industrial Boilers' Control Measures


108
CIBO also challenges EPA's conclusion that industrial boilers could achieve a 60% emissions reduction using highly  cost-effective control measures, see Final Rule, 63 Fed. Reg.  at 57,418, as based on flawed cost calculations.  More specifically, CIBO lists the following alleged problems in EPA's cost  assumptions:


109
EPA's assumption of 10 years as the lifetime of all  control measures for industrial boilers, except for selective  catalytic reduction and selective non-catalytic reduction controls, for which 20 years was assumed.


110
EPA's use of a 10% discount rate, not 7%, in its costeffectiveness analysis.


111
EPA's failure to take into account the fact that control  effectiveness can vary by as much as 10% to 20%.


112
EPA's failure to take into account cost and feasibility  implications of load variability and firing of multiple fuels.


113
EPA's assumption of NOx emission allowance costs of  $2,000 per ton, when emission allowances trade for $5,500 to  $6,300 per ton.


114
The general problem of these criticisms is that CIBO  merely lists several items as problems and labels all of them  "irrational" without explaining why its claims should concern  the court.  Given that almost all of CIBO's challenges involve  technical details on which the court generally defers to the  agency's expertise, CIBO's failure to explain why the socalled problems it identifies amount to an arbitrary and  capricious decisionmaking is fatal to its claims.7  Therefore, we reject CIBO's claims regarding EPA's underlying cost  assumptions about industrial boilers.


115
4.Determination of Non-EGU Component of State NoxBudgets


116
CIBO contends that EPA's calculation of the non-EGU  component for the State NOx budget lacks adequate support  in the record and lists the following as problems:


117
Non-EGU inventories had errors.


118
EPA's use of Bureau of Economic Analysis growth factor  to project 2007 emission levels have "inherent error."


119
EPA employed "crude extrapolations" to identify large  non-EGU boilers.


120
The "default boiler capacity file" is not in the record and  the record does not reveal how EPA manipulated the data.


121
The source of Bureau of Economic Analysis growth  factors is not identified in the record, and the record does not  show how EPA manipulated the data.


122
It is unknown whether EPA credited NOx reductions  from fluidized-bed combustion technology.


123
Again, CIBO merely presents a list of problems without  explaining why these alleged errors render EPA's rulemaking  arbitrary or capricious.  In addition, CIBO members had  repeated opportunities to provide correct information for  some of these items during the rulemaking process.  CIBO's  poorly articulated, blanket accusations at this late stage contribute little to improve the quality of agency rulemaking; therefore, we reject CIBO's challenges regarding EPA's calculation of NOx budgets for non-EGUs.

5.Definition of EGU

124
More persuasively, CIBO contends that EPA revised the  definition of "EGU" without adequate notice.  Throughout  the rulemaking, EPA defined an EGU as it did under the acid  rain program, which excludes from the category of "utility  units" those cogeneration units that sell less than one-third of  their potential electrical output capacity or less than 25 MW  per year.  See 42 U.S.C. S 7651a(17)(C).  However, two  months after the promulgation of the rule, EPAredefined an  EGU as a unit that serves a "large" generator (greater than  25MW) that sells electricity.  CIBO contends that EPA did  not provide sufficient notice and opportunity to comment on  this revision, especially considering that the industrial boilers  have relied on the previous definition for a number of years. We agree.


125
EPA maintains that it provided adequate notice in the May  1998 supplemental notice, stating that "deregulation of electric utilities" means that "it is not clear how ownership of the  electricity generating facilities will evolve."  Supplemental  Notice of Proposed Rule, 63 Fed. Reg. at 25,923.  Given that  "there is no relevant physical or technological difference  between utilities and other power generators," EPA proposed, "all large electricity generating sources, regardless of  ownership," should be treated the same.  Id. There are  several problems with EPA's response.  First, it is undisputed that EPA was departing from the definition of EGUs as  used in prior regulatory contexts, and EPA was not explicit  about the departure from the prior practice until two months  after the rule was promulgated.  Neither the proposed rulemaking in November 1997 nor the final rule in October 1998  introduced the new definition.  EPA waited until the December 1998 correction notice to announce that it will "classify as  an EGU any boiler ... that is connected to a generator  greater than 25 M We from which any electricity is sold."Correction and Clarification to the Finding of Significant  Contribution and Rulemaking for Purposes of Reducing Regional Transport of Ozone ("Correction Notice to Final  Rule"), 63 Fed. Reg. 71,220, 71,223 (1998).  After the December correction notice, EPA reopened the comment period for sixty days for comments on this and other issues.  In EPA's  May 1999 response to the comments, EPA, for the first time,  discussed why the change was necessary and offered a justification largely based on recent changes in the electric power  industry.  See Responses to the 2007 Baseline Sub-Inventory  Information and Significant Comments for the Final NOx SIP  Call 10-12 (May 1999) ("Responses to Final Comments").


126
As to the statement in the May 1998 supplemental notice  that EPA claims constitutes notice, this statement was given  in EPA's discussion of how the core group of sources for the  model trading rule should be defined, and not in the context  of a discussion about the general distinction between EGUs  and non-EGUs for the purposes of calculating state budgets. Cf. Small Refiner Lead Phase-Down Task Force v. EPA, 705  F.2d 506, 550 (D.C. Cir. 1983).  Moreover, EPA also explicitly  observed in the same May notice discussion about the model  trading rule that "[m]any of the definitions ... are the same  as those used in ... the Acid Rain Program regulations, in  order to maintain consistency among programs."  Supplemental Notice of Proposed Rule, 63 Fed. Reg. at 25,923.Given the vague and conflicting signals that EPA was sending, it is an exaggeration to state that some general "theme"  of the regulatory consequences of deregulation of the utility  industry throughout rulemaking meant that EPA's lastminute revision of the definition of EGU should have been  anticipated by industrial boilers as a "logical outgrowth" of  EPA's earlier statements.  See American Water Works  Ass'n. v. EPA, 40 F.3d 1266, 1274-75 (D.C. Cir. 1994).


127
EPA contends that even assuming that CIBO did not have  adequate notice and opportunity to comment on the EGU  definition, the error has been cured because it reopened the  comment period on this issue after its announcement of the  revision.  See Correction Notice to Final Rule, 63 Fed. Reg.  at 71,221-23.  This response is to no avail.  During the new  comment period, some commenters complained that there had  not been sufficient notice and opportunity to comment on the  EGU redefinition.  See Responses to Final Comment, at 12.  EPA's response to this charge primarily relied on the claim that there had beenadequate notice prior to the redefinition,  see id., and we have already rejected that argument.


128
Therefore, we conclude EPA did not provide sufficient  notice and opportunity to comment for its redefinition of  EGUs and remand the rulemaking to EPA for further consideration in light of this opinion.

C. INGAA

129
Interstate Natural Gas Association of America ("INGAA"),  a trade association that represents major interstate natural  gas transmission companies in the United States, contends  that EPA did not provide adequate notice and opportunity to  comment on the control level assumed for "large" stationary  internal combustion ("IC") engines in its determination of  state NOx budgets.  We agree.


130
EPA's NPRM in November 1997 assumed a 70% control  level for large IC engines, see Proposed Rule, 62 Fed. Reg. at  60,354, after considering and rejecting an 80% control level. See id. at 60,348.  Then, in the supplemental notice in May  1998, EPA continued to assume the 70% control level.  See  Supplemental Notice of Proposed Rule, 63 Fed. Reg. at  25,908.  EPA stated in the same notice that it "intends to  further analyze" control approaches for IC engines and said  that "[a]s the above analyses are completed, EPA intends to  place them in the docket."  Id. at 25,909.  EPA did not  present a new analysis until September 4, 1998, when it  concluded that a 90% control level was more appropriate for  large IC engines.  See Technical Support Document for Stationary International Combustion Engines 2 (September 4,  1998).  When the rule was finally promulgated in October  1998, EPA stated that it was assuming a 90% control level. See Final Rule, 63 Fed. Reg. at 57,418.


131
INGAA contends that EPA's switch from 70% to 90% for  large IC engines was unanticipated and that EPA should  have allowed comments on the issue.  Considering EPA's  repeated affirmation of the 70% assumption throughout rulemaking and rejection of a higher, 80% assumption earlier, a


132
revision in its assumption less than one month before the final  rule was promulgated hardly provided adequate notice, especially given the magnitude of the consequences of the proposed change on the regulated bodies.  Therefore, we remand  for further consideration on this issue.8


133
In addition, INGAA challenges EPA's definition of large IC  engines.  EPA, in the final rule, distinguished between large  and small sources by defining a "cutoff level."  63 Fed. Reg.  at 57,414.  EPA assumed no control for sources below the  cutoff level and defined small sources as units with a capacity  less than or equal to 250 mmBtu/hr and with emissions less  than or equal to one ton per day.  See id. at 57,415.  EPA  added that "EPA is relying on a capacity approach first and a  tons per day approach second (where a capacity data is not  available or appropriate)" to define small sources.  Id. at  57,416.  Then, in the December correction notice, EPA largely repeated the same methodology for determining the cutoff  level, but added that "[a] stationary internal combustion  engine and a cement plant were determined to be 'large' if its  1995 average daily ozone season emissions were greater than  one ton."  Correction Notice to Final Rule, 63 Fed. Reg. at  71,224.


134
INGAA contends that EPA did not follow its own standard  in the correction notice and singled out IC engines and  cement plants without explanation.  Although EPA's various  statements on this issue throughout rulemaking have not  always been very clear or entirely consistent, EPA went  through an extensive commentperiod on this issue, see Final  Rule, 63 Fed. Reg. at 57,415-17, and we agree with EPA that  the change that INGAA criticizes for being arbitrary is  merely a minor clarification that satisfies the reasonableness  standard.

D. PP&L

135
1.EPA's Restrictions on Early Reduction Credits


136
PP&L, an electric utility that owns several generating  stations in Pennsylvania, contends that EPA arbitrarily limited the number of "early reduction credits" ("ERCs").  We  disagree.


137
Under the SIP call, a source can generate ERCs if it  reduces its NOx emissions before May 2003 to a level below  that is required by any regulatory scheme.  ERCs can then  be used to compensate for emitting emissions above required  levels in a later time period.  See Final Rule, 63 Fed. Reg. at  57,430.  EPA limited the amount of available ERCs for each  state to the size of each state's compliance supplement pool  ("CSP").  See id. at 57,474.  The CSP is an additional allowance of emissions that allows states to emit 200,000 tons of  NOx in the 2003-2004 ozone seasons over the state emissions  budgets.  Id. at 57,428.  EPA created the CSP in response to  the comments that if all utilities had to install pollution  control equipment by May 1, 2003, there might be disruptions  in electricity supply.  See id.  If a state chooses to use the  CSP, it can either provide ERCs or distribute the allowances  to sources that demonstrate a need for the compliance supplement.  See id. at 57,429-30.


138
PP&L contends that imposing this limit on the number of  ERCs is arbitrary and capricious because placing any limit on  ERCs is environmentally counterproductive.  We do not find  this contention persuasive.  EPA noted during the comment  period that ERCs, although generally beneficial, can be costly  in that they allow states to exceed their budgets.  See Responses to Significant Comments on the Proposed Finding of  Significant Contribution and Rulemaking for Certain States  in the Ozone Transport Assessment Group (OTAG) Region  for Purposes of Reducing Regional Transport of Ozone 346  (September 1998) ("Responses to Comments").  EPA noted  further that the CSP, by establishing a cap on the number of  allowances to be distributed, limited such potential costs.  Id.EPA's decision is thus reasonable.


139
PP&L also contends that EPA has not demonstrated why  the "flow control mechanism" is not sufficient to address its  concern.  Under the flow control mechanism, the use of  banked allowances exceeding 10% of the emissions budget for  sources in the trading program is either flatly prohibited or  discouraged by discounting the value of ERCs used as such,  and states can choose between either method.  See Final  Rule, 63 Fed. Reg. at 57,431-32.  This complaint by PP&L  overlooks the fact that EPA included the flow control mechanism in the regulatory scheme "[a]s a final safeguard limiting  the impact of additional allowances eligible for banking in the  system."  Responses to Comments, at 346.  Therefore, it was  a safeguard created in addition to the CSP limitation.  It was  within EPA's discretion to devise multiple limitations to contain the environmental cost of ERCs.


140
PP&L further contends that, even if it is rational for EPA  to place a limit on the amount of ERCs, EPA's choice of  setting the limit at the same amount as the CSP is arbitrary  and capricious.  This contention fails as well.  The record  shows that EPA allowed ERCs merely as a mechanism for  managing the CSP, not as an independent program with a  purpose separate from that of the CSP.  See Final Rule, 63  Fed. Reg. at 57,428-33.  Therefore, EPA's decision to limit  the amount of ERCs to the size of the CSP was reasonable.


141
2.Emissions Multiplier for Low Mass Emission Units


142
PP&L also contends that EPA arbitrarily required "low  mass emission units"("LMEUs") to use a 15% multiplier to  calculate their emissions.  We disagree.


143
EPA allows LMEUs either to use a generic default NOx or  to determine a unit-specific NOx emission rate by conducting  a stack test once every five years.  Because EPA found that  the stack test results can vary by 15% or more depending on  atmospheric conditions, EPA requires an LMEU to calculate  its emissions rate by adding 15% to the stack test result.  See  Final Rule, 63 Fed. Reg. at 57,490.


144
PP&L contends that this is unreasonable because EPA has  stated that the testing would likely underestimate emissions during cooler less humid conditions.  See id.  PP&L reasons  that because the SIP call applies only during summer seasons  (when ozone forms), that the stack test underestimates emissions during the winter cannot justify the 15% multiplier. This contention is to no avail.  Because the record contains  evidence that NOx rates determined by the stack test can  vary widely even during the ozone season, EPA's decision was  reasonable.  See Docket A-97-35, Item IV-A-1 at 43-54  (August 26, 1998).

Conclusion

145
We vacate EPA's final rule with respect to Wisconsin,  Missouri, and Georgia (see Part II.A-B).  These cases are  remanded for further consideration in light of this opinion. We hold that EPA failed to provide adequate notice of a  change in the definition of an electric generating unit (see  Part IV.B.5), and that EPA did not provide adequate notice of  a change in the control level assumed for large stationary  internal combustion engines (see Part IV.C).  These cases are  also remanded.


146
In all other respects, the petitions for review are denied.


147
So ordered.



Notes:


*
 Judge Williams wrote Parts I.B-C and II.B;  Judge Sentelle  wrote Parts I.A, II.A, II.C, and III.A;  Judge Rogers wrote Parts  III.B and IV.


1
 The states are Alabama, Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, North Carolina, New Jersey, New York, Ohio, Pennsylvania,  Rhode Island, South Carolina, Tennessee, Virginia, West Virginia,  and Wisconsin.


2
 Indeed, accepting EPA's belief that ozone cannot be held responsible for mortality effects, see Proposed Rule, 62 Fed. Reg. at  60,321 (not listing death as a health effect of groundlevel ozone);compare Final Rule, 63 Fed. Reg. at 57,359 (listing "[p]ossible long-term damage to the lungs or even premature death" as health  effects), and mainly using EPA data, some outside observers have  calculated the benefit per ton of NOx reduction as ranging from a  high of $750 per ton (for mobile sources in certain areas) to a low of  negative $6 per ton (for other mobile sources).  Alan Krupnick &  Virginia McConnell, "Cost-Effective NOx control in the Eastern  U.S." (Draft July 1999) (Table 4);  see Krupnick & Anderson, A  Dilemma Downwind, 137 Resources for the Future 5, 7 (1999) ("If  one assumes that ozone does not cause deaths, the EPA's proposal  is much too restrictive, incurring costs far out of proportion with  the benefits it would bring.").


3
 A glance at EPA's regulations for allowance trading will convince any doubter that transaction costs can safely be expected to  be substantial.  See 63 Fed. Reg. at 57,457-75.


4
 We deal below with a related question:  Did EPA act irrationally  in setting the level of significance without regard for varying levels  of downwind impact?  See part I.C.3 below.


5
 As noted above, we will not address the 8-hour portion of the  SIP call.


6
 To assist states in meeting their budgets and to facilitate the  most cost-effective reductions, the SIP call established a model rule  for interstate trading of NOx "allowances."  Each state can choose  whether to adopt the model rule, which will be administered by  EPA, to adopt its own trading program, or to have no trading  program at all.  See Final Rule, 63 Fed. Reg. at 57,456-58.
The core group definition is used to set the minimum requirements that a State would have to include in its trading rule in order  to participate in the EPA-managed multi-state trading program. See id. at 57,461.  EPA viewed that setting such requirements was  necessary for controlling the administrative costs of managing the  trading program.  See id.


7
 For instance, the last item on the list, that it is arbitrary and  capricious for EPA to assume NOx emission allowance costs of  $2,000 per ton when emission allowances now trade for $5,500 to  $6,300 per ton, is insufficiently explained.  Of course, if the firms in  the market generating entitlement prices of $5,500 to $6,300 per ton  were regulated at the same degree of stringency as EPA contemplates for firms expected to be burdened under the present rule, the market price would be strong evidence that compliance would cost far more than the $2,000 per ton figure that EPA has used.  No one would pay $6,000 for an entitlement to emit a ton that he could remove at a cost of $2,000;  the price of an entitlement could not exceed the marginal removal cost.  But if the prices to which CIBO points arose among firms more stringently regulated, there would be no such contradiction.  CIBO has not even endeavored to show equivalent stringency.


8
 INGAA further contends that, even putting aside the notice  issue, the documents that EPA relies on do not support EPA's  assumption of 90% control level.  Because we are remanding on the  basis of the conclusion that there was inadequate notice, we do not  reach the merits of the issue.


Sentelle, Circuit Judge, dissenting:

148
Unlike the majority's  journey through this regulatory scheme, mine is neither  lengthy nor complex, because I get off at the first stop.  In  promulgating the regulations at issue, EPA purported to  exercise the authority Congress conferred upon it to enforce  the requirements of 42 U.S.C. S 7410(a)(2)(D)(i)(I) which  empowers the Administrator to police the contents of State  Implementation Plans ("SIPs"), specifically to ensure that  such plans contain


149
adequate provisions ...  prohibiting ...  any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ...contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard....


150
42 U.S.C. S 7410(a)(2)(D)(i)(I) (1994) (emphasis added).  EPA  is a federal agency--a creature of statute.  It has no constitutional or common law existence or authority, but only those  authorities conferred upon it by Congress.  If there is no  statute conferring authority, a federal agency has none.  The  only statute upon which EPA purports to rely in the current  controversy is S 7410(a)(2)(D)(i)(I).  That section provides  authority for EPA to require States to act in a certain fashion  based upon the presence of sources or activities which emit  "pollutants in amounts which will ... contribute significantly  to nonattainment."  It would appear to me that Congress  clearly empowered EPA to base its actions on amounts of  pollutants, those amounts to be measured in terms of significance of contribution to downwind nonattainment.  Instead,  EPA has chosen, doubtless in the pursuit of beneficent ends,  to assert authority to require the SIPs to contain provisions  based not on the amounts of pollutants, nor even on the  relative significance of the contributions of such pollutants to  downwind nonattainment, but on the relative cost effectiveness of alleviation.  I agree with the State petitioners that it  is undeniable that EPA has exceeded its statutory authority.


151
We have before had occasion to remind EPA that its  mission is not a roving commission to achieve pure air or any  other laudable goal.  In American Petroleum Institute v.  United States EPA, 52 F.3d 1113 (D.C. Cir. 1995), we reviewed an EPA rule requiring that thirty percent of the  oxygen in reformulated gasoline be derived from renewable  sources, such as ethanol.  The statutory authority under  which EPA operated, 42 U.S.C. S 7545(k)(1) empowered EPA  to promulgate regulations achieving "the greatest reduction  in emissions of ozone forming volatile organic compounds...."  42 U.S.C. S 7545(k)(1).  Although EPA advanced commendable goals of economic benefit for its inclusion of the additional goal of ethanol market protection, we  struck down the overreaching and reminded EPA that "it is  axiomatic that an administrative agency's power to promulgate legislative regulations is limited to the authority delegated by Congress."  API, 52 F.3d at 1119 (quoting Bowen v.  Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988)).


152
Similarly, in Ethyl Corp. v. EPA, 51 F.3d 1053 (D.C. Cir.  1995), we considered EPA's denial of a Clean Air Act waiver  application based on health considerations.  We did not suggest that EPA acted in bad faith or that health considerations  were not important, but we repaired to the statutory grant of  authority in 42 U.S.C. S 7545(f)(4), which based the Administrator's authority to deny waiver solely on the property of an  additive to "cause or contribute to a failure of any emission  control device or system...."  42 U.S.C. S 7545(f)(4).  We  again granted the petition for review of the Administration's  action, reminding EPA that where "the plain language of a  provision makes it clear that ... decisions are to be based on  one criterion, the EPA cannot base its decision on other  criteria," even on a criterion as laudable as the health of the  public.  Ethyl Corp., 51 F.3d at 1058.


153
For all the majority's discussion of inconsistent arguments  by States and the possibility of taking costs into account  elsewhere raised by the Administration and adopted by the  majority, I do not see why the present controversy does not  fall squarely within the four corners of API and Ethyl Corp. Congress set forth one criterion:  the emission of an amount  of pollutant sufficient to contribute significantly to downwind  nonattainment.  EPA adopted a different criterion:  the cost  effectiveness of alleviation.  I would remind the agency once  more of the lessons of API and Ethyl Corp., allow the  petitions for review, and end the case.


154
The majority makes a fundamental mistake by divorcing  the adverb "significantly" from the verb it modifies, "contribute."  The majority compounds its error by divorcing significantly from the rest of the statutory provision in issue.  Maj.  Op. at 19-23.  By focusing on "significance" or what it means  to be "significant," the majority ignores the fact that the  statute permits EPA to address that which is "contribut[ed]  significantly."  42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added).  And what should EPA look for as being contributed  significantly?  Congress clearly answered that question for  the agency as being an "amount" of an "air pollutant."  Id.  Considering that Congress expressly gave EPA authority  with regard to "any air pollutant in amounts which will ...contribute significantly to nonattainment ...," id. (emphasis  added), I marvel at an interpretation that permits cost effectiveness to find a place in a statutory provision addressing  amounts of air pollutant contribution.  While the contribution  must affect nonattainment significantly, no reasonable reading of the statutory provision in its entirety allows the term  significantly to springboard costs of alleviation into EPA's  statutorily-defined authority.  Given S 7410(a)(2)(D)(i)(I)'s  mandate as a whole, it becomes clear that EPA and the  majority have to contort the statute's language by isolating  the term significantly and ignoring the terms air pollutant,  amounts, and contribute in order to work cost considerations  into the statute.  I just cannotagree with such an unusual  exercise in statutory construction.


155
I see nothing in Chevron U.S.A. Inc. v. NRDC, Inc., 467  U.S. 837 (1984), that either compels or counsels the majority's  result.  EPA argues that Congress did not define significant  contribution.  True, it did not.  Neither did it define amount. But neither EPA nor the majority have offered any reasonable interpretation of those words which makes them depend upon or even relate to the cost effectiveness of alleviation.1EPA comes close to arguing:  Congress has not expressly  forbidden us to use this criterion, therefore we may use it.As we said in Ethyl Corp.:


156
To suggest, as the [EPA] effectively does, that Chevronstep two is implicated any time a statute does notexpressly negate the existence of a claimed administra-tive power ..., is both flatly unfaithful to the principlesof administrative law ... and refuted by precedent.


157
51 F.3d at 1060.  Because the majority's deference to EPA's  unreasonable statutory interpretation as couched in the agency's scurrilous "second-step" cost effectiveness analysis ventures off track, as I said, I am getting off at the first stop.


158
Because I would invalidate the regulatory scheme before us  at its inception, I will not address the subsidiary issues  pursued by my colleagues.



Notes:


1
 Contrary to the suggestion of the majority, neither of the cases  cited by the majority bear any implication that the cost of alleviating or otherwise dealing with risk expressed as a noun or a verb has  any effect upon the definition of "significant" or "significantly" used  as an adjective or adverb modifying that noun or verb.  The portion  of Industrial Union Department v. American Petroleum Institute,  448 U.S. 607, 655 (1980) (plurality opinion) quoted by the majority  to the effect "that a 'significant' risk ...  is not a mathematical  straitjacket," (Maj. Op. at 20) does not deal in any fashion with the  cost of alleviation.  Rather, Justice Stevens in that opinion was  contrasting the significance of a one-in-a-billion chance of cancer  from drinking chlorinated water against the one-in-a-thousand risk  that regular inhalation of certain benzene-containing vapors would  be fatal.  Obviously, the "significance" of the risk deals with its  importance, not the cost of its alleviation.  Equally off point is  International Union, United Auto Workers v. OSHA, 37 F.3d 665,  668-69 (D.C. Cir. 1994), which concerned the cost-effectiveness of  alleviating measures directed at risk theretofore determined to have  been significant, not with the use of cost-effectiveness in determining the significance of the risk vel non.


