Arteva Specialties S. A.r.l., D/b/a K Osa v. Environmental Protection Agency

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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 13, 2003 Decided April 8, 2003
No. 96-1422
ARTEVA S PECIALTIES S. A.R.L., D/B/A K O SA,
PETITIONER
v.
E NVIRONMENTAL P ROTECTION AGENCY,
R ESPONDENT
No. 96-1423
EASTMAN C HEMICAL COMPANY,
PETITIONER
v.
E NVIRONMENTAL P ROTECTION AGENCY,
R ESPONDENT
–————
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.

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No. 01-1398
ARTEVA S PECIALTIES S. A.R.L., D/B/A K O SA,
PETITIONER
v.
E NVIRONMENTAL P ROTECTION AGENCY,
R ESPONDENT
On Petitions for Review of Orders of the
Environmental Protection Agency
Alan H. McConnell argued the cause for the petitioners.
William F. Lane was on brief. Kurt E. Blase and Victoria
A. Cochran entered appearances.
Laurel A. Bedig, Attorney, United States Department of
Justice, argued the cause for the respondent. Steven Silver-
man, Attorney, United States Environmental Protection
Agency, was on brief. John C. Cruden, Assistant Attorney
General, Christopher S. Vaden, Eric G. Hostetler and Mary
F. Edgar, Attorneys, United States Department of Justice,
and Patricia A. Embrey, Attorney, United States Environ-
mental Protection Agency, entered appearances.
Before: E DWARDS, H ENDERSON and R OGERS, Circuit Judges.
Opinion for the court filed by Circuit Judge H ENDERSON.
K AREN L ECRAFT H ENDERSON, Circuit Judge: In 1996 the
Environmental Protection Agency (EPA) promulgated nation-
al standards to reduce emissions of hazardous air pollutants
from plants that manufacture a group of polymers and resins,
including polyethylene terephthalate resin (PET). National
Emissions Standards for Hazardous Air Pollutant Emissions:
Group IV, Polymers and Resins: Final Rule, 61 Fed. Reg.
48,208 (Sept. 12, 1996) (Group IV NESHAP), pursuant to

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section 112 of the Clean Air Act, 42 U.S.C. § 7412. Arteva
Specialties S.a.r.l. d/b/a KoSa (KoSa)1 and Eastman Chemical
Company (Eastman), which operate PET manufacturing
plants, seek review of the equipment leak standard of Group
IV NESHAP on the ground the required emission controls
are not cost effective as required by section 112(d)(2), 42
U.S.C. § 7412(d)(2). Specifically, the petitioners contend it
was arbitrary for EPA to aggregate costs and effectiveness
facility-wide, rather than disaggregating the costs and effec-
tiveness of the individual control technologies proposed. For
the reasons set forth below, we grant the petitions for review
and remand to the agency to clarify its decision to aggregate
costs and effectiveness.
I.
Section 112 of the Clean Air Act directs EPA to set
national emission standards to reduce emission of various
‘‘hazardous air pollutants.’’ See 42 U.S.C. § 7412.2 Subsec-
tion (d)(2) provides:
Emission standards promulgated under this subsection
and applicable to new or existing sources of hazardous
air pollutants shall require the maximum degree of re-
duction in emissions of the hazardous air pollutants
1 KoSa replaced then-petitioner Hoechst Celanese Corporation on
February 5, 2002 after purchasing its PET manufacturing facilities.
2 Section 112(b)(2) defines ‘‘hazardous air pollutants’’ as
pollutants which present, or may present, through inhalation or
other routes of exposure, a threat of adverse human health
effects (including, but not limited to, substances which are
known to be, or may reasonably be anticipated to be, carcino-
genic, mutagenic, teratogenic, neurotoxic, which cause repro-
ductive dysfunction, or which are acutely or chronically toxic)
or adverse environmental effects whether through ambient
concentrations, bioaccumulation, deposition, or otherwise, but
not including releases subject to regulation under subsection (r)
of this section as a result of emissions to the airTTTT
42 U.S.C. § 7412(b)(2).

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subject to this section (including a prohibition on such
emissions, where achievable) that the Administrator, tak-
ing into consideration the cost of achieving such emission
reduction, and any non-air quality health and environ-
mental impacts and energy requirements, determines is
achievable for new or existing sources in the category or
subcategory to which such emission standard applies,
through application of measures, processes, methods,
systems or techniquesTTTT
42 U.S.C. § 7412(d)(2). Subsection (d)(3) requires that EPA
set a minimum standard for a category which, for existing
sources such as those here, must be at least as stringent as
the average emission level achieved by the ‘‘best performing’’
existing sources. 42 U.S.C. § 7112(d)(3)(A)-(B). Pursuant to
these provisions, EPA promulgates standards in a two step
process. First, EPA identifies a ‘‘maximum achievable con-
trol technology’’ (MACT) for each pollutant and source cate-
gory which serves as a ‘‘floor’’ for its control standards; then
the agency selects as its standard either the MACT floor or,
if achievable in light of the factors and methods listed in
subsection (d)(2), ‘‘beyond the floor’’ technology that is more
stringent than the MACT. See generally Cement Kiln Recy-
cling Coalition, 255 F.3d 855, 858 (D.C. Cir. 2001). In the
Group IV NESHAP rulemaking EPA selected as the MACT
floor for PET manufacturing facilities sensory leak detection
and repair (LDAR), which relies solely on the human senses
to detect leaks. See EPA’s Opp’n to Pet’r’s Motion for Stay
Pending Review, at 3 (filed December 10, 2001). Neverthe-
less, for most of the equipment categories addressed in the
leak provisions, EPA prescribed, in lieu of or as an alternative
to sensory LDAR, one or both of two beyond-the-floor tech-
nologies: ‘‘one time’’ equipment modification or ‘‘Method 21’’
LDAR, which uses portable organic vapor analyzers to moni-
tor emissions.
Pursuant to subsection (d)(2)’s directive to ‘‘tak[e] into
consideration the cost of achieving such emission reduction,’’
EPA conducted a cost effectiveness analysis of the proposed
standard, using the following methodology. First, EPA cal-
culated the aggregate effectiveness of the proposed controls

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at each PET producing facility by subtracting the aggregate
estimated post-control leak rates from the aggregate estimat-
ed pre-control leak rates to ascertain the amount of emission
reduction. EPA then calculated the aggregate estimated
costs to implement the leak reduction technologies selected at
each facility. Third, EPA calculated the cost effectiveness by
dividing the aggregate estimated costs of all of the technolo-
gies for each facility by the aggregate estimated reductions
for the facility. Finally, EPA reported the combined cost-
effectiveness of the improvements at the facilities in each of
four subcategories of PET production plants—identified by
the feedstock used (dimethyl terephthalmate (DMT) or tere-
phthalic acid (TPA)) and by the manufacturing process ap-
plied (batch or continuous)—as the annual cost per ton of
HAP reduction: $620/ton (DMT-batch), $320/ton (DMT-
continuous), $1500/ton (TPA-continuous) and $730/ton (TPA-
batch). See 66 Fed. Reg. at 40,905. 3 EPA concluded that
these aggregate figures demonstrate that implementation of
the standard for each subcategory is cost effective. 4
In November 1996 KoSa and Eastman filed separate peti-
tions for review with this court and a joint petition for
reconsideration with EPA. With the petition for reconsidera-
tion they submitted new cost and emissions data that they
contended should be used to determine cost effectiveness. In
response, in October 1998 EPA conducted a new analysis
using the petitioners’ data which produced new, less cost
effectivene figures: $2100/ton (DMT-batch), $1300/ton (DMT-
continuous), $1600/ton (TPA-continuous) and $1600/ton (TPA-
batch). See 66 Fed. Reg. at 40,905. Based on these results,
3 Initially, EPA reported the cost effectiveness in $/megagram,
see EPA, Re-valuation of Equipment Leak Analysis for PET
Facilities Subject to the Group IV Polymers and Resins NESHAP,
at 7 (October 26, 1998), but converted the results to $/ton in its final
denial of the petition for reconsideration.
4 EPA identified a single facility type within the TPA-continuous
subcategory (the type using a ‘‘continuous TPA high viscosity
multiple end finisher process,’’ 61 Fed. Reg. at 48,225), for which it
found the standard would not be cost effective.

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EPA again concluded the standard is cost effective and issued
a proposed denial of the petitions for reconsideration on June
8, 1999. National Emission Standards for Hazardous Air
Pollutants: Group IV Polymers and Resins: Proposed Denial
of Petition for Reconsideration and Notice of Public Hearing,
64 Fed. Reg. 30,456 (June 8, 1999).
The petitioners submitted comments on the proposed deni-
al, asserting EPA had underestimated the costs of the control
and overestimated the emission reductions and that EPA
should not have aggregated the cost effectiveness of the
controls. EPA conducted another analysis in December 2000
and calculated the following costs/ton: $3300/ton (DMT-
batch), $2700/ton (DMT-continuous), $1700/ton (TPA-
continuous) and $1600/ton (TPA-batch). On June 8, 2001
EPA published its final denial of the petition for reconsidera-
tion, concluding once again that the standards are cost effec-
tive. National Emission Standards for Hazardous Air Pollu-
tant Emissions: Group IV: Polymers and Resins: Final rule;
Amendments and Denial of Petitions, 66 Fed. Reg. 40,903
(August 6, 2001). KoSa filed a petition for review of the
denial on November 12, 2001.
II.
The petitioners do not here challenge EPA’s basic cost
effectiveness methodology but fault only the agency’s decision
to aggregate the cost effectiveness of the proposed controls—
facility-wide and by facility subcategory—which, they con-
tend, misrepresents the cost effectiveness of the leak provi-
sions, at least for some types of equipment, because it aver-
ages the cost effectiveness of using Method 21 with the cost
effectiveness of the other two controls—one time modification
and sensory LDAR.5 Because of the high cost of Method 21,
the petitioners maintain, only a separate analysis of this
control will accurately reflect the cost effectiveness of the
equipment leak standard. We conclude that, although aggre-
5 The petitioners also challenge EPA’s conclusion that sensory
LDAR is cost effective. Because we are remanding to EPA to
clarify its cost effectiveness analysis, we need not reach this issue.

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gating cost effectiveness may be a permissible approach to
assessing the standard’s cost effectiveness, the present record
does not demonstrate that EPA’s use of aggregation was
reasonable.
In its denial of reconsideration, EPA set forth the following
justification for aggregating its cost effectiveness results:
We did not perform cost analyses which separate por-
tions of the equipment leak programs that require one-
time equipment modifications from the portions that are
based on EPA Method 21 monitoring. We consider the
LDAR program to be a whole program designed to
reduce HAP emissions from equipment leaks across the
total facility. The leaks from individual equipment com-
ponents are considered together due to the similarity of
the cause of the emissions and the control techniques.
We do not believe it is appropriate nor necessary to
disaggregate equipment leak programs by individual
component types
66 Fed. Reg. at 40,905. EPA now offers a different defense
of aggregation. Pointing out that ‘‘most of the leak detection
and repair provisions provide specific alternative ways of
achieving the standard,’’ the agency asserts that ‘‘this inter-
changeability of compliance methods’’ makes the standard
sufficiently ‘‘flexible’’ that aggregation does not distort the
results. Resp’t’s Br. at 20–21. The petitioners correctly
counter, however, that for two sources—‘‘[v]alves in gas/vapor
service and in light liquid service’’ and ‘‘[c]onnectors in
gas/vapor service and in light liquid service’’—the standard
authorizes only Method 21 LDAR so that, for those two
sources at least, aggregation appears to distort the cost
effectiveness. See 40 C.F.R. §§ 63.168 (valves), § 63.174
(connectors).
To shore its defense here, EPA has cited a fallback provi-
sion in the standards which permits a facility owner or
operator to use an ‘‘alternative means of emission limitation’’
if EPA determines, pursuant to the procedure set out in 40
C.F.R. § 63.177, that it is ‘‘a permissible alternative.’’ Thus,
EPA reasons, ‘‘[i]n all instances a facility may utilize a leak

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detection and repair method of its own choosing.’’ Resp’t’s
Br. at 20 (citing 40 C.F.R. §§ 63.162(b)(1)). At oral argument
EPA identified specific measures it contends may be used as
alternatives to Method 21 for § 63.168 valves and § 63.174
connectors. For § 63.168 valves the agency points to a
portion of a technical document it prepared in June 1993
which identified ‘‘two primary alternatives for controlling
equipment leaks from pressure relief devices: use of a rup-
ture disc (RD) in conjunction with the [pressure relief valve],
or use of a closed vent system,’’ EPA, Protocol for Equipment
Leak Emission Estimates, at 5–4 (June 1993); for § 63.174
connectors the agency points to the language of the regula-
tion itself, which provides ‘‘an optional credit for removed
connectors’’ that are satisfactorily welded to prevent leaks, 40
C.F.R. § 63.174(j).
EPA may well be correct that the availability of the
alternatives it cites adequately answers the petitioners’ con-
cern over the cost-effectiveness of the cited provisions. We
are unable, however, to discern this from the administrative
record because EPA did not take into account these particu-
lar alternatives in conducting its cost effectiveness analysis.
We therefore have no evidence of their cost or of their
effectiveness. They may be relatively inexpensive and effec-
tive measures or they may be less cost effective than Method
21 LDAR. Because the agency failed to consider in its
analysis below the alternatives it now offers, we cannot accept
its assertion here that their availability makes EPA’s pro-
posed standard cost effective notwithstanding the aggregation
problem. Cf. Sierra Club v. EPA, 167 F.3d 658, 665 (D.C.
Cir. 1999) (remanding emission standard for medical waste
incinerators because ‘‘[a]lthough th[e] potential rationale for
EPA’s method was made clear in the briefs for the agency
and the parties intervening on its behalf, it does not appear in
the rulemaking record with enough clarity for us to say that
the agency’s ‘path may reasonably be discerned’ ’’) (quoting
Bowman Transp., Inc. v. Arkansas–Best Freight Sys, Inc.,
419 U.S. 281, 286 (1974)). We emphasize that aggregating
cost effectiveness is not prohibited under the Clean Air Act’s

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cost effectiveness provisions and EPA’s decision to do so on
remand will therefore be upheld as long as it is reasonable.
See Husqvarna AB v. EPA, 254 F.3d 195 (D.C. Cir. 2001)
(upholding chosen methodology as ‘‘reasonable’’ because stat-
ute ‘‘d[id] not mandate a specific method of cost analysis’’). If
EPA demonstrates on remand that a cost effective and
practicable alternative to Method 21 exists for each leak
source, and expressly provides for the alternatives in the
standard, we do not see how the petitioners can then assail
aggregation as unreasonable.
For the foregoing reasons, we remand to EPA to clarify
the PET equipment leak standard after reconsidering its cost
effectiveness in accord with this opinion. On remand, the
stay of the standard issued by the court on January 7, 2002
will remain in effect pending final termination of the proceed-
ing.
So ordered.

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