Summary
The United States Court of Appeals for the Fifth Circuit reviewed consolidated challenges to the Environmental Protection Agency’s Phase III rule regulating cooling water intake structures under § 316(b) of the Clean Water Act. The court granted a joint motion by the EPA and environmental petitioners to remand the rule’s existing-facilities provisions for reconsideration in light of Entergy Corp. v. Riverkeeper, while affirming the provisions governing new offshore oil and gas facilities.
Topics
Practice areas
Questions Presented
- Whether the EPA and environmental petitioners' joint motion to remand the Phase III Rule as applied to existing cooling water intake structures should be granted.
- Whether the EPA violated the APA's notice requirements by relying on an economic-achievability rationale on appeal that allegedly differed from the cost-benefit rationale disclosed during rulemaking.
- Whether § 316(b) of the Clean Water Act requires the EPA to consider the location of the offshore facility, rather than only the location of the cooling water intake structure, when establishing national standards.
- Whether the EPA's decision to promulgate national standards for new offshore facilities without a facility-specific cost-benefit analysis, and its reliance on SEAMAP and other qualitative environmental data, was arbitrary and capricious.
Holdings
- The court granted the EPA and Riverkeeper's joint motion to remand the Phase III Rule as applied to existing cooling water intake structures.
- The EPA did not violate the APA's notice requirements by defending the Rule on economic-achievability grounds; that rationale was not a post hoc litigation position materially different from the rationale disclosed during rulemaking.
- Section 316(b) permits, but does not require, the EPA to use cost-benefit analysis in determining the best technology available for minimizing adverse environmental impact.
- The plain language of § 316(b) requires the EPA to consider the location of the cooling water intake structure, not necessarily the physical location of the facility served by that structure.
- The EPA's Final Phase III Rule for new offshore facilities was not arbitrary or capricious; the Rule was substantially supported by the record and rationally related to § 316(b)'s statutory purpose.
Key quotations
“We hold that the plain language of the statute requires the EPA to consider the location of the CWIS when establishing rules under § 316(b), irrespective of whether the location of the CWIS is the same as that of the facility served or is located in or contiguous to the water but distant from the facility.” (opinion at 31)
“Given the admitted information shortage, the EPA must make use of the information it has, recognizing the limits of the information; EPA cannot refuse to carry out its mandate, waiting for the day when it might possess perfect information.” (opinion at 33)
“Under the highly deferential standard of review here applicable, we hold that the Final Phase III Rule for new facilities is substantially supported by the record and is rationally related to the statutory purpose of § 316(b).” (opinion at 38)
Factual background
Cooling water intake structures withdraw and recirculate large volumes of water at industrial facilities, causing impingement and entrainment of aquatic organisms. The EPA's Phase III Rule regulated existing facilities through case-by-case permitting and imposed national categorical standards on certain new offshore oil and gas facilities. For new facilities, the EPA relied on industry and economic information, environmental studies including SEAMAP data from the Gulf of Mexico, and the expected costs and impacts of available intake technologies.
Procedural history
Challenges to the Final Phase III Rule were filed in several courts of appeals, consolidated by an MDL panel, and assigned to the Fifth Circuit. The case was stayed pending the Supreme Court's decision in Entergy Corp. v. Riverkeeper. After that decision, the EPA and Riverkeeper jointly moved to remand the existing-facilities portion of the Rule, while ConocoPhillips continued its challenges to the new-facilities portion.
Remand instructions
The Phase III Rule was remanded only insofar as it regulates existing cooling water intake structures, for EPA reconsideration in light of Entergy Corp. v. Riverkeeper. The portion regulating new offshore facilities was affirmed.