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Bethlehem Steel Corp. v. United States Environmental Protection Agency

decided: June 8, 1981.



Before Adams and Sloviter, Circuit Judges and Knox, District Judge.*fn*

Author: Sloviter


The Pennsylvania Department of Environmental Resources issued a Delayed Compliance Order (DCO) extending the time for Bethlehem Steel Corporation (Bethlehem) to bring the fugitive particulate emissions from certain of its blast furnace cast houses into compliance with the requirements of the Clean Air Act, Pub.L.No. 91-604, 84 Stat. 1676 (1970), as amended, 42 U.S.C. §§ 7401-7508 (1976 & Supp. I 1977). The Administrator of the United States Environmental Protection Agency (EPA) disapproved that order in a final action authorized by section 113(d)(2) of that Act, 42 U.S.C. § 7413(d)(2) (Supp. I 1977). Bethlehem petitions this court to review the EPA's action. This entails an analysis of whether the EPA erred in finding that the Pennsylvania DCO failed to comply with the requirements of section 113(d)(4) of the Act, 42 U.S.C. § 7413(d)(4).


Bethlehem operates integrated iron and steel facilities, including four blast furnaces, at its facility in Bethlehem, Northampton County, Pennsylvania. Each of these furnaces has an attached cast house, within which the products of the furnace are drawn off, separated into molten iron and slag, and moved out of the area in cars running on tracks. While the iron and slag are being drawn, separated and moved, they are exposed to the air and emit particulate pollution into it. Since these particulates are not channeled into smoke stacks or chimneys, they are described as "fugitive." Fugitive particulate emissions during casting represent about 0.4% of the total particulate emissions associated with blast furnace operation. Fifty to eighty percent of these fugitive emissions are in turn associated with the drawing off and initial separation phases of the cast house operations, which take place within the areas of the cast house closest to the furnace. A more detailed description of the process is set forth in the margin.*fn1

Section 109(a) of the Clean Air Act, 42 U.S.C. § 7409(a), requires the federal government to establish nationwide air quality standards, including standards for particulate emissions. Under section 110(a)(1) of the Act, 42 U.S.C. § 7410(a)(1), each state was required to establish a plan for "implementation, maintenance, and enforcement" of these air quality standards for all areas of the state. These State Implementation Plans were to be submitted to the Environmental Protection Agency for review under statutory criteria set out in section 110(a)(2), 42 U.S.C. § 7410(a)(2).

Under the State Implementation Plan (SIP) originally established by the Pennsylvania Department of Environmental Resources ("Pennsylvania"), no fugitive air contaminant shall be emitted "into the outdoor atmosphere ... from any source other than ... sources determined by the Department (of Environmental Resources) to be of minor significance with respect to the achievement and maintenance of ambient air quality standards or with respect to causing air pollution." 25 Pa.Code § 123.1(a), (a)(9) (1972). Further, under the SIP fugitive emissions from Bethlehem's cast houses had to be brought into compliance with air quality standards by 1972. However, in 1973 Bethlehem received a variance from Pennsylvania which extended the time for compliance until July 31, 1975. The extension was approved by the EPA and was meant to give Bethlehem time to investigate and develop appropriate control technology. Bethlehem did not meet the 1975 deadline for compliance, and Pennsylvania commenced an enforcement action against it.

That enforcement action was eventually resolved by a negotiated consent order. Bethlehem agreed, inter alia, to install a partial roof monitor enclosure system and bag houses on its blast furnace cast houses by July 31, 1980, at an estimated cost of $12.5 million. Such a system would pull air from the cast house through a filtering system, and would thereby remove particulates emitted during the drawing and separating phases of the casting process. These particulates would otherwise escape through the open sides of the cast house structure. Bethlehem projected that operating the system would cost about $500,000 annually. Based on prototypes and models tested by Bethlehem, Bethlehem concluded that this control system was more efficient than the alternative technology, which used complete enclosure of the cast houses to achieve total capture of particulates from all phases of the casting process.

By the time the consent order was negotiated between Pennsylvania and Bethlehem, Congress had enacted the Clean Air Act Amendments of 1977 which required that Pennsylvania submit the consent order to the EPA for approval. These amendments reflected congressional concern that the goals of the Clean Air Act were not being met, in part because the states and the EPA had developed a practice of negotiating consent orders that permitted compliance timetables more extended than those originally contemplated by the Act or that omitted deadlines altogether. Section 113(d), 42 U.S.C. § 7413(d), added in 1977, set uniform national standards for the use of delayed compliance orders. Clean Air Act Amendments of 1977, Pub.L.No. 95-95, § 112(a), 91 Stat. 705. Under section 113(d)(1), a state may issue a DCO if it determines that a stationary source, such as Bethlehem, is unable to comply with the applicable State Implementation Plan by the time specified therein and if the order meets certain criteria. Among other requirements, the DCO must contain a schedule and timetable for compliance, § 113(d)(1)(B); must require compliance with applicable interim requirements, § 113(d)(1)(C); and must require final compliance no later than July 1, 1979 or three years after the date for final compliance under the State Implementation Plan, whichever is later, § 113(d)(1) (D).

A longer extension, up to five years after the date on which the source would otherwise be required to be in final compliance with the applicable SIP, is available under section 113(d)(4) for sources proposing to use a "new means of emission limitation." To be entitled to this longer extension, the source must meet the requirements of section 113(d)(1) and the following additional conditions: (1) the EPA must determine that the new means is likely to be "adequately demonstrated" upon expiration of the order, § 113(d)(4)(A); (2) the new means must not be likely to be used unless an order is granted under this subsection, § 113(d)(4)(B); (3) the EPA must find there is a substantial likelihood the new means will achieve either greater continuous emission reduction than the means that would otherwise be used, § 113(d)(4)(C)(i), or equivalent emission reduction at lower cost "in terms of energy, economic, or nonair quality environmental impact ...," § 113(d)(4)(C)(ii); and (4) compliance with the requirement of the State Implementation Plan prior to or during the installation of such new means must be impracticable, § 113(d)(4) (D).

Before a DCO becomes effective for a major stationary source like Bethlehem, with or without new means, the EPA must review it and determine that a proposed DCO "has been issued in accordance with the requirements of this Act." § 113(d)(2). Thereafter, while a DCO is in effect and the source complies with it, no federal or citizens' enforcement action may be pursued for noncompliance with the requirements covered by the DCO. § 113(d)(10).

Pursuant to section 113(d), Pennsylvania issued the consent order negotiated with Bethlehem as a proposed DCO and submitted it to the EPA in June 1979. On July 30, 1979 the EPA published notice of a "Proposed Rule" disapproving the order. 44 Fed.Reg. 44572. In connection with this Proposed Rule, the EPA furnished to Bethlehem a Rationale Document setting forth the EPA's reasoning for its disapproval. In the Proposed Rule and the Rationale Document, the EPA gave four grounds for its conclusion that the proposed DCO was not in accord with section 113(d). First, the order did not impose the interim requirements as required by section 113(d)(1)(C) and (d)(7). Second, the proposed DCO did not satisfy section 113(d)(1)(D), because it did not call for complete elimination of fugitive emissions, for EPA approval of a determination that all emissions except those of "minor significance" had been eliminated, or for final compliance with the SIP by July 31, 1980. Third, the technology did not in fact qualify as a "new means" entitled to the five year extension under section 113(d)(4). Fourth, the technique to be used by Bethlehem would not achieve continuous emission reduction equivalent to existing technology at lower cost or greater reduction at same cost as required by section 113(d)(4) (C).

In response to the Proposed Rule and Rationale Document, Bethlehem filed written comments arguing for approval of the DCO. The EPA discussed and rejected Bethlehem's arguments and published a Final Rule on October 2, 1979, reiterating the four grounds for its disapproval. 44 Fed.Reg. 56696. On October 26, 1979 Bethlehem filed its Petition for Review in this court.*fn2


Our standard of review of a final order of the EPA is that established by section 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706 (1976). United States Steel Corp. v. EPA, 633 F.2d 671, 673 (3d Cir. 1980); Delaware Citizens for Clean Air, Inc. v. EPA, 480 F.2d 972 (3d Cir. 1973). That section states that a reviewing court "shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action." Further, the reviewing court shall hold unlawful and set aside agency action, findings, and conclusions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," or "in excess of statutory ... authority, or limitations ...." 5 U.S.C. § 706(2). This is also the standard set out in the Clean Air Act, 42 U.S.C. § 7607(d)(9)(A), (C) (Supp. I 1977).

Under this standard this court has primary responsibility for determining whether the EPA has correctly interpreted the statutory provision upon which it has based its decision. See St. Joe Minerals Corp. v. EPA, 508 F.2d 743, 746 (3d Cir. 1975), vacated as moot, 425 U.S. 987, 96 S. Ct. 2196, 48 L. Ed. 2d 812 (1976). We must determine that the agency had statutory authority for the action it undertook. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S. Ct. 814, 823, 28 L. Ed. 2d 136 (1971). We must then consider whether the EPA has considered the relevant information brought to its attention, Delaware Citizens for Clean Air, Inc. v. EPA, 480 F.2d 972 (3d Cir. 1973), and made a reasonable choice from among the alternatives presented to it. Train v. Natural Resource Defense Council, Inc., 421 U.S. 60, 75, 95 S. Ct. 1470, 1480, 43 L. Ed. 2d 731 (1975); National Industrial Sand Ass'n v. Marshall, 601 F.2d 689, 699-700 (3d Cir. 1979).

While deference is due to the interpretation of a statutory term by the officers or agency charged with its administration, Udall v. Tallman, 380 U.S. 1, 16, 85 S. Ct. 792, 801, 13 L. Ed. 2d 616 (1965); National Industrial Sand Ass'n v. Marshall, supra, 601 F.2d at 698, not all administrative interpretations of regulatory statutes will be accepted. See Udall v. Tallman, supra, 380 U.S. at 16, 85 S. Ct. at 801. We are constrained by our obligation "to honor the clear meaning of a statute, as revealed by its language, purpose and history." International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 566 n.20, 99 S. Ct. 790, 800 n.20, 58 L. Ed. 2d 808 (1979).



The EPA's first ground for disapproving the DCO is that it does not meet the requirements of Section 113(d)(1)(C) and (d)(7) regarding interim emission reductions and standards. Section 113(d)(1)(C) provides that a state may issue a DCO if

the order requires compliance with applicable interim requirements as provided in ... paragraph (6) and (7) ....

Paragraph (6) states that a DCO shall set forth a compliance schedule "containing increments of progress which require compliance with the requirement postponed as expeditiously as practicable." Paragraph (7) provides:

A source (subject to a DCO) shall use the best practicable system or systems of emission reduction (as determined by the (EPA) taking into account the requirement with which the source must ultimately comply) for the period during which such order is in effect and shall comply with such interim requirements as the (EPA) ...

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