CHIN, Circuit Judge:
When a ship takes on ballast water, it can inadvertently pick up organisms and their eggs and larvae, as well as sediment and pollutants. When the ship discharges ballast water, often in a new place, these organisms and pollutants are ejected into the surrounding waterbody, enabling these organisms to establish new, non-native populations. As a result, ships have become one of the primary ways that invasive species are spread from one waterbody to another. Id. at 1012-13 ("All told, more than 10,000 marine species each day hitch rides around the globe in the ballast water of cargo ships.") (quoting Nw. Envtl. Advocates v. EPA, No. C 03-05760 SI, 2006 WL 2669042, at *3 (N.D.Cal. Sept. 18, 2006)).
Invasive species cause severe economic and ecological harm, including by destroying native fish species and shellfish industries, creating algae blooms, and devastating tourism. Zebra mussels are a particularly destructive example. They were first introduced to Lake Erie in the 1980s by a freighter from Europe that discharged ballast water containing mussels.
Ballast water discharge is particularly problematic in the Great Lakes. Vessels that sail exclusively in the Great Lakes, known as "Lakers," account for over ninety-five percent of ballast water volumes transferred in the Great Lakes. Unfortunately, Lakers are more likely than oceangoing vessels to spread invasive species because the short duration of their voyages allows organisms to survive in their ballast.
In April 2013, EPA issued a Vessel General Permit (the "2013 VGP"), pursuant to section 402 of the CWA, 33 U.S.C. § 1342, to regulate the discharge of ballast water
On May 31, 2013, the Lake Carriers' Association and the Canadian Shipowners Association (the "CSA") filed a motion to intervene, which was granted on October 7, 2013. On January 1, 2014, the CSA filed a PFR in this case. EPA and the CSA jointly moved to sever the CSA PFR from this case and hold it in abeyance; the motion was granted on May 23, 2014.
We find that EPA acted arbitrarily and capriciously in issuing parts of the 2013 VGP, and therefore remand this matter to the EPA for further proceedings.
Congress created the CWA to limit pollution in the waters of the United States. See 33 U.S.C. § 1251(a) (objective of CWA is to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters"); S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95, 102, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004) (same); Waterkeeper All., Inc. v. EPA, 399 F.3d 486, 490-91 (2d Cir.2005) (same). The CWA thus prohibits the "discharge of any pollutant" from a "point source" to the "navigable waters" of the United States, except as permitted by the CWA. 33 U.S.C. §§ 1311(a), 1362 (emphasis added). The "discharge of a pollutant" includes "any addition of any pollutant to navigable waters from any point source." Id. § 1362(12)(A). A "pollutant" includes solid, industrial, agricultural, and biological waste. Id. § 1362(6). A "point source" is "any discernible, confined and discrete conveyance, including but not limited to any ... vessel or other floating craft, from which pollutants are or may be discharged." Id. § 1362(14). "Navigable waters" is defined as "the waters of the United States, including the territorial seas." Id. § 1362(7). The discharge of polluted water from a vessel ballast tank is a point source discharge covered by the CWA. See Nw. Envtl. Advocates, 537 F.3d at 1021.
A key component of the statute is the establishment of water quality standards. Water quality standards are set by states for waters within their boundaries and are then reviewed for approval by EPA. See 33 U.S.C. § 1313; 40 C.F.R. §§ 131.4, 131.10-.11; see also NRDC v. EPA, 279 F.3d 1180, 1183 (9th Cir.2002) ("Under the CWA, each state sets its own water quality standards, subject to review and approval by the EPA."). EPA must ensure that the standard proposed by the state will comply with the requirements of the CWA before approving it. See 33 U.S.C. §§ 1311(b)(1)(C), 1313(a) 1342(a)(1); 40 C.F.R. § 122.4(d).
An entity seeking to discharge a pollutant is required to obtain and comply with a permit that limits the amounts and kinds of pollutants being discharged. See NRDC v. EPA, 822 F.2d 104, 108 (D.C.Cir. 1987); see also Waterkeeper All., 399 F.3d at 498 (discharge allowed "where ... permits ensure that every discharge of pollutants will comply with all applicable effluent limitations and standards"). This permit, known as a National Pollutant Discharge Elimination System ("NPDES") permit, establishes enforceable effluent limitations, as well as monitoring and reporting requirements.
NPDES permits, which are issued either by EPA or a state in a federally approved permitting system, see 33 U.S.C. § 1342, may be individual (issued to a specific entity to discharge pollutants at a specific place) or general (issued to an entire class of dischargers in a geographic location), see 40 C.F.R. §§ 122.21, 122.28(a)(2), 124.1-.21, 124.51-.66. The permit here is a general permit.
Permits can impose two different types of standards on discharges: (1) technology-based standards and (2) water quality-based standards. See 33 U.S.C. §§ 1311(b)(1)(c) and (b)(2)(a), 1313, 1342(a). The 2013 VGP imposes both.
Technology-based effluent limits ("TBELs") set effluent limitations on a point source based on how effectively technology can reduce the pollutant being discharged. See 33 U.S.C. §§ 1311(b), (e), 1314(b); see also PUD No. 1 of Jefferson Cty. v. Wash. Dep't of Ecology, 511 U.S. 700, 704, 114 S.Ct. 1900, 128 L.Ed.2d 716 (1994) (holding that, to achieve goals of CWA, EPA is required to "establish and enforce technology-based limitations on individual discharges into the country's navigable waters from point sources"). Congress designed this standard to be technology-forcing, meaning it should force agencies and permit applicants to adopt technologies that achieve the greatest reductions in pollution. See NRDC, 822 F.2d at 124 (holding that CWA seeks "not only to stimulate but to press development of new, more efficient and effective technologies," which is "essential purpose of this series of progressively more demanding technology-based standards").
In determining the standard for TBELs, EPA considers the source of the pollution (existing or new) and the type of pollutant. For nonconventional pollutants from existing sources, EPA is required to set effluent limits based on the "best available technology economically achievable" or "BAT." 33 U.S.C. § 1311(b)(2)(A).
EPA considers a number of factors in assessing whether a technology is BAT, including:
See 33 U.S.C. § 1314(b)(1)(B).
EPA can mandate that BAT requires the use of a technology that is not currently available within a particular industry when (1) the technology is available in another industry, (2) EPA finds that the technology is transferrable from that other industry, and (3) EPA can reasonably predict that such technology will adequately treat the effluent. See Kennecott v. EPA, 780 F.2d 445, 453 (4th Cir.1986) (citing Tanners' Council of Am., Inc. v. Train, 540 F.2d 1188, 1192 (4th Cir.1976)).
If the TBELs are insufficient to attain or maintain water quality standards, the CWA requires NPDES permits to include additional water quality-based effluent limits ("WQBELs"). See 33 U.S.C. §§ 1311(b)(1)(C), 1312(a); NRDC, 822 F.2d at 110 ("Whenever a technology-based effluent limitation is insufficient to make a particular body of water fit for the uses for which it is needed, the EPA is to devise a water-quality based limitation that will be sufficient to the task."). WQBELs are designed to ensure that the discharges authorized by the permit do not violate water quality standards. See 33 U.S.C. §§ 1313, 1342(a)(2).
The WQBELs, which supplement the TBELs, are based on the amount and kind of pollutants in the water. See id. § 1312(a). WQBELs are set without regard to cost or technology availability. See NRDC v. EPA, 859 F.2d 156, 208 (D.C.Cir.1988) ("A technology-based standard discards its fundamental premise when it ignores the limits inherent in the technology. By contrast, a water quality-based permit limit begins with the premise that a certain level of water quality will be maintained, come what may, and places upon the permittee the responsibility for realizing that goal." (footnote omitted)). WQBELs may be narrative where the calculation of numeric limits is "infeasible." See 40 C.F.R. § 122.44(k)(3).
No permit may be issued when "the imposition of conditions cannot ensure compliance with the applicable water quality requirements of all affected States." Id. § 122.4(d). Thus, permits must establish limits on discharges that will lead to compliance with water quality standards. See Trs. for Alaska v. EPA, 749 F.2d 549, 556-57 (9th Cir.1984) (holding that permit must translate state water quality standards into end-of-pipe effluent limitations necessary to achieve those standards).
Because no states have established numeric water quality criteria for invasive species, EPA is required to establish WQBELs that ensure compliance with narrative criteria, designated uses, and anti-degradation
NPDES permits also require both monitoring and reporting of monitoring results of TBELs and WQBELs to assure compliance with permit limitations and facilitate enforcement. See 33 U.S.C. §§ 1314, 1318, 1342(a)(2); 40 C.F.R. § 122.44(i)(1)-(2).
When the CWA was first being implemented in the 1970s, EPA regulations exempted discharges that were "incidental" to the "normal operation" of vessels from NPDES permitting requirements. See National Pollutant Discharge Elimination System, 38 Fed.Reg. 13,528, 13,530 (May 22, 1973) (codified at 40 C.F.R. § 122.4); see also National Pollutant Discharge Elimination System; Revision of Regulations, 44 Fed.Reg. 32,854, 32,902 (June 7, 1979) (codified at 40 C.F.R. § 122.3(a)). This exemption included ballast water discharges.
In 1999, the NWEA and other environmental organizations submitted a rulemaking petition to EPA seeking to repeal this exemption, then codified at 40 C.F.R. § 122.3(a). See Final National Pollutant Discharge Elimination System (NPDES) General Permit for Discharges Incidental to the Normal Operation of a Vessel, 73 Fed.Reg. 79,473, 79,475 (Dec. 29, 2008). EPA denied the petition. See Nw. Envtl. Advocates, 537 F.3d at 1013. The environmental groups challenged the denial in the United States District Court for the Northern District of California, while simultaneously filing a PFR in the United States Court of Appeals for the Ninth Circuit, in case the district court lacked jurisdiction. The district court issued an order vacating the exemption, see Nw. Envtl. Advocates, 2006 WL 2669042, at *15, and the Ninth Circuit upheld the decision. See Nw. Envtl. Advocates, 537 F.3d at 1027. EPA finally repealed the exemption and issued a Vessel General Permit in 2008 (the "2008 VGP"). Draft National Pollutant Discharge Elimination System (NPDES) General Permits for Discharges Incidental to the Normal Operation of a Vessel, 73 Fed.Reg. 34,296 (June 17, 2008).
Environmental groups, industry groups, and the State of Michigan challenged the 2008 VGP in a PFR filed in the United States Court of Appeals for the D.C. Circuit, arguing primarily that the 2008 VGP was inadequate because it contained only narrative provisions, not specific numeric limitations on discharges. In March 2011, EPA settled this matter, agreeing to: (1) set "numeric concentration-based effluent limits for discharges of ballast water expressed as organisms per unit of ballast water volume"; (2) set numeric effluent limits that "represent the applicable levels of technology-based control"; and (3) "include more stringent water quality-based effluent limitations" if needed to satisfy applicable water quality standards. Settlement Agreement ¶¶ 9-13, NRDC v. EPA, No. 09-1089 (D.C. Cir. Mar. 8, 2011), ECF No. 1296922.
To create these new, more specific standards, EPA enlisted the help of its own Science Advisory Board (the "SAB") and the National Research Council/National Academy of Sciences Committee on Assessing Numeric Limits for Living Organisms in Ballast Water (the "NAS Committee").
In 2010, EPA asked the SAB to "provide advice on technologies and systems to minimize the impacts of invasive species in vessel ballast water discharge." App. at 599. Specifically, the SAB looked at four issues: (1) the performance of shipboard systems with available effluent testing data; (2) the potential performance of shipboard systems without reliable testing data; (3) system development for the shipboard systems identified in issues 1 and 2; and (4) the development of reliable information about the status of ballast water treatment technologies and system performance. In considering these questions, the SAB was to take into account The International Convention for the Control and Management of Ships' Ballast Water and Sediments (the "IMO Standard"), adopted by the International Maritime Organization in 2004, which set certain concentration-based ballast water effluent limits. Id. at 610.
In July 2011, the SAB issued its report Efficacy of Ballast Water Treatment Systems: A Report by the EPA Science Advisory Board (the "SAB Report"). The SAB identified fifty-one ballast-water treatment systems, with five categories of shipboard systems that could reliably achieve the IMO Standard. Id. at 601.
EPA created the NAS Committee to examine "the relationship between the concentration of living organisms in ballast water discharges and the probability of nonindigenous organisms successfully establishing populations in U.S. waters." Id. at 235.
In its June 2011 report, Assessing the Relationship Between Propagule Pressure and Invasion Risk in Ballast Water (the "NAS Report"), the NAS Committee concluded (1) there was "no significant relationship between ballast volume and invasions," and (2) "[t]he current state of science does not allow a quantitative evaluation of the relative merits of various discharge standards in terms of invasion probability." Id. at 363. Essentially, the Committee said that it was unable to establish a reliable numeric limit on discharges that would guarantee protection against invasive species, other than zero.
On March 28, 2013, EPA issued the 2013 VGP, the permit now before us, allowing vessels to discharge ballast water subject to certain limitations on the living organisms in the discharge. Final National Pollutant Discharge Elimination System (NPDES) General Permit for Discharges Incidental to the Normal Operation of a
As discussed above, TBELs impose effluent limitations on a point source based on how much technology is able to reduce the amount of a pollutant at issue. See 33 U.S.C. §§ 1311(b), (e), 1314(b). In this instance, EPA chose to set the TBELs at the IMO Standard, which requires:
Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels (VGP): Authorization to Discharge Under the National Pollutant Discharge Elimination System § 2.2.3.5, at 29 (Mar. 28, 2013), available at http://water.epa.gov/ polwaste/npdes/vessels/upload/vgp_permit 2013.pdf. The VGP did not set standards for other "small" organisms, such as bacteria or viruses.
The WQBELs in the 2013 VGP require: (1) oceangoing vessels entering the Great Lakes to continue to perform ballast water exchanges, and (2) all vessels to control discharges "as necessary to meet applicable water quality standards in the receiving water body or another water body impacted by [the] discharges." VGP § 2.2.3.7, at 43, § 2.3.1, at 59.
As noted above, NPDES permits must contain conditions that require both monitoring and reporting of monitoring results of TBELs and WQBELs to ensure compliance with water quality standards. See 33 U.S.C. § 1342(a)(2); 40 C.F.R. § 122.44(i)(1)-(2).
In the 2013 VGP, EPA established the following monitoring requirements for TBELs:
The first requirement is known as functionality monitoring. Under this requirement, a ballast water treatment program is considered to be in compliance if it is "operating according to the manufacturers' requirements." App. at 96.
The second requirement is known as effluent biological organism monitoring. Under this requirement, vessels must collect small-volume samples and analyze them for concentrations of two indicator pathogens. This is required between one and four times a year depending on the treatment system.
The only monitoring required for WQBELs is that ships report the "expected date, location, volume, and salinity of any ballast water to be discharged." VGP § 4.3, at 72 (emphasis added). Permittees are not required to report actual locations, volumes, or composition of ballast water to be discharged.
The 2013 VGP requires all Lakers to comply with non-numeric technology-based control measures, like ballast water exchange and other BMPs found in VGP § 2.2.3.3. App. at 85; see VGP § 2.2.3.3, at 27-28. Lakers are also subject to three ballast water management measures found in VGP § 2.2.3.4: (1) conducting an annual assessment of sediment accumulations; (2) minimizing the amount of water taken in nearshore environments; and (3) adequately maintaining sea chest screens, which keep larger organisms like fish out of ballast tanks. VGP § 2.2.3.4, at 28-29. In addition, all Lakers built on or after January 1, 2009, must comply with VGP § 2.2.3.5, which sets numeric ballast water discharge limits. VGP § 2.2.3.5.3.3, at 39.
We review a NPDES permit under the Administrative Procedure Act to determine whether EPA's actions were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). To determine whether the agency's actions were "arbitrary and capricious," we consider whether the agency
Islander E. Pipeline Co. v. McCarthy, 525 F.3d 141, 150-51 (2d Cir.2008) (quoting Motor Vehicle Mfrs. Ass'n. v. State Farm Mut. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). We must be "satisfied from the record that `the agency... examine[d] the relevant data and articulate[d] a satisfactory explanation for its action.'" Id. at 151 (quoting State Farm, 463 U.S. at 43, 103 S.Ct. 2856). An agency's action is lawful "only if it rests `on a consideration of the relevant factors.'" Michigan v. EPA, ___ U.S. ___, 135 S.Ct. 2699, 2706, 192 L.Ed.2d 674 (2015) (quoting State Farm, 463 U.S. at 43, 103 S.Ct. 2856).
In addition, judicial review of statutory interpretation by an agency is governed by Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under Chevron, we must first determine "whether Congress has directly spoken to the precise question at issue" in the CWA. Id. at 842, 104 S.Ct. 2778. If so, we must give effect to the unambiguously expressed intent of Congress. Id. at 842-43, 104 S.Ct. 2778. "[I]f the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. at 843, 104 S.Ct. 2778. As the Supreme Court held in Michigan v. EPA, "[e]ven under this deferential standard, however, `agencies must operate within the bounds of reasonable interpretation.'" 135 S.Ct. at 2707 (quoting Util. Air Regulatory Grp. v. EPA, ___ U.S. ___, 134 S.Ct. 2427, 2442, 189 L.Ed.2d 372 (2014)). We also grant deference to EPA's interpretation of its own regulations "unless that interpretation is `plainly erroneous or inconsistent with the regulation.'" Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 131 S.Ct. 871, 880, 178 L.Ed.2d 716 (2011) (quoting Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997)).
Here, petitioners challenge EPA's issuance of the 2013 VGP as arbitrary and capricious, and not in accordance with law, on a number of grounds.
First, petitioners argue that the TBELs are arbitrary and capricious. Specifically, petitioners assert that EPA acted arbitrarily and capriciously and not in accordance with the law when it: (1) selected the IMO standard as the standard for the TBELs; (2) failed to consider onshore treatment, limiting consideration to shipboard treatment; (3) failed to include numeric TBELs for viruses and protists; and (4) exempted Lakers built before 2009 ("pre-2009 Lakers") from the numeric TBELs of the 2013 VGP.
Second, petitioners argue that EPA acted arbitrarily and capriciously and not in accordance with the law in choosing narrative WQBELs, rather than numeric WQBELs, because, among other things, the narrative standard is too imprecise to guarantee compliance with water quality standards.
Finally, petitioners argue that EPA's monitoring and reporting requirements for TBELs and WQBELs are not in accordance with the law because they were inadequate to guarantee compliance.
Under the CWA, EPA must apply BAT in establishing pollution controls for ballast water discharge. BAT requires the "application of the best available technology economically achievable for such category or class, which will result in reasonable further progress toward the national goal of eliminating the discharge of all pollutants." 33 U.S.C. § 1311(b)(2)(A)(emphasis added). BAT also requires "a commitment of the maximum resources economically possible to the ultimate goal of eliminating all polluting discharges." EPA v. Nat'l Crushed Stone Ass'n, 449 U.S. 64, 74, 101 S.Ct. 295, 66 L.Ed.2d 268 (1980).
We hold that in failing to set TBELs that reflected BAT in the 2013 VGP, EPA
Petitioners argue that EPA failed to apply BAT when it chose the IMO Standard for TBELs in the 2013 VGP. They allege that EPA chose the IMO Standard first, and then worked "backwards" to determine which systems could achieve that standard. NWEA Br. at 36. In doing so, they contend, EPA improperly restricted the SAB's inquiry to whether certain technologies would meet what petitioners describe as "existing international consensus standards." Id. According to petitioners, EPA should have first considered what "available" technology was capable of achieving, and then created standards based on that capability. As a result, petitioners contend, EPA's standard did not achieve greater reductions in pollution discharges that were achievable with current technology.
We agree. EPA acted arbitrarily and capriciously when it chose the IMO Standard without adequately explaining why standards higher than the IMO Standard should not be used given available technology.
In choosing the IMO Standard, EPA overlooked crucial portions of the SAB Report. The SAB identified a number of technologies that can achieve standards higher than IMO for one or more organism sizes, including all five of the technologies identified as also meeting the IMO Standard.
EPA should not have adhered to the IMO Standard without explanation when technologies could have exceeded IMO. Indeed, seeking to find systems that are capable of doing better than the current standard is in keeping with the technology-forcing aspect of the CWA. See NRDC, 822 F.2d at 124. EPA should have first looked at the available ballast water technologies as identified by the SAB Report. Then, finding that those technologies could exceed the IMO Standard, EPA should have adjusted its standard accordingly, or explained why it would not. See Islander E. Pipeline, 525 F.3d at 151 (holding that agency must "examine[] the relevant data and articulate[] a satisfactory explanation for its action" (quoting State Farm, 463 U.S. at 43, 103 S.Ct. 2856)(alterations omitted)).
EPA's counterargument that no more was necessary because it did not limit the SAB to considering the IMO Standard is unavailing. EPA insists that it gave the SAB a list of potential regulatory limits, and then asked the SAB to identify the systems that could reliably meet those limits. In support, EPA points to its Charge Question 1 to the SAB, which asked the SAB to identify "discharge standards that the available data [about existing systems]
While it is true that EPA did not strictly limit the SAB's consideration to the IMO Standard, EPA is incorrect in suggesting that the SAB Report supports the conclusion that no system could meet standards stricter than the IMO Standard. Id.
Accordingly, by failing to consider adequately a standard more stringent than IMO, EPA failed to set permit limits that reflect BAT. See 33 U.S.C. § 1314(b)(2); Nat'l Crushed Stone, 449 U.S. at 74, 101 S.Ct. 295 (BAT requires "a commitment of the maximum resources economically possible to the ultimate goal of eliminating all pollution discharges"); FMC Corp. v. Train, 539 F.2d 973, 983-84 (4th Cir.1976) (upholding EPA's decision to set BAT based on data from a single pilot plant). In doing so, EPA acted arbitrarily and capriciously and not in accordance with law in choosing the IMO standard for the TBELs in the 2013 VGP.
Petitioners also argue that EPA arbitrarily and capriciously limited its consideration to shipboard treatments, failing to consider onshore treatment. Petitioners argue that onshore facilities used in other industries, such as sewage treatment plants and drinking water treatment plants, were reasonable alternatives to shipboard treatment that should have been considered. EPA concedes it directed the Board to "focus its limited time and resources on the status of shipboard treatment systems because such systems were either `in existence or in the development process.'" EPA Br. at 56-57 (quoting SAB Report). It argues that onshore treatment was not "available," primarily because no onshore system was yet in existence.
While it is true that no onshore systems existed then — unsurprising considering ballast water treatment was not required at all until the effective date of the 2008 VGP — the record suggests that such onshore systems were technologically possible at that time. Yet, EPA chose to curtail discussion about onshore systems and failed to develop information necessary to evaluate their availability. We conclude that by failing to consider onshore ballast water systems, EPA acted arbitrarily and capriciously.
What does "available" mean? As courts have interpreted the term in the CWA context, technologies that could be used for a particular discharge, even if
Kennecott, 780 F.2d at 453 (emphasis added) (citation omitted). This Court held similarly in Hooker Chemicals & Plastics Corp. v. Train,
537 F.2d 620, 636 (2d Cir.1976); see also Cal. & Hawaiian Sugar Co. v. EPA, 553 F.2d 280, 286 (2d Cir.1977) (technology used "`in other industries with similar raw waste characteristics'" was "available" (quoting Liquid and Crystalline Cane Sugar Refining Subcategory, 39 Fed.Reg. 10,522, 10,522 (1974))); Am. Petrol. Inst. v. EPA, 858 F.2d 261, 264-65 (5th Cir.1988) (holding that a process can be "deemed `available' even if it is not in use at all" because "[s]uch an outcome is consistent with Congress' intent to `push pollution control technology'" (quoting Ass'n of Pac. Fisheries v. EPA, 615 F.2d 794, 816 (9th Cir.1980); Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1061 (D.C.Cir.1978))).
For a technology in one industry to be "available" in a second industry: (1) the transfer technology must be available within the first industry; (2) the transfer technology must be transferable to the second industry; and (3) it must be reasonably predictable that the technology, if used in the second industry, will be capable of removing the increment required by the effluent standards. See Kennecott, 780 F.2d at 453 (citing Tanners' Council, 540 F.2d at 1192); CPC Int'l Inc. v. Train, 515 F.2d 1032, 1048 (8th Cir.1975); Hooker Chems., 537 F.2d at 636 ("But even if technology which is not presently in use can be treated as available and achievable, there must be some indication in the administrative record of the reasons for concluding that such technology is feasible and may reasonably be expected to yield the effluent reduction mandated when applied to the particular industry."). For example, in Kennecott, the Fourth Circuit upheld EPA's use of manufacturing technology from one industry as part of a BAT determination for treating wastewater in a different industry. 780 F.2d at 453-54.
Here, we cannot evaluate whether onshore technology should be considered "available" because the record does not contain a full discussion of onshore treatment. This lack of information about onshore facilities, however, is a problem of EPA's own making because EPA went to great lengths to foreclose discussion of onshore treatment both by expressly limiting the SAB's mandate to studying shipboard treatment technology and consistently opposing any attempt by the SAB to consider onshore treatment.
EPA's effort to curtail discussion of onshore treatment is well documented in the record. In a letter dated February 10, 2012, thirteen scientists, eight of whom
Id. at 744 (emphases added).
In light of these facts, we cannot well credit EPA's assertion that it lacked information to support a finding that onshore facilities were "available." While EPA states that it was "unaware of any onshore treatment facility currently available in the U.S. that is capable of meeting the VGP's § 2.2.3.5 ballast water discharge standards," and that it did not "receive information indicating they are or would become available over the term of the VGP," id. at 544, in fact EPA turned a blind eye to significant information about onshore treatment.
Indeed, the lack of information about the "availability" of onshore treatment is due in large part to EPA's arbitrary and capricious decision to oppose developing such information. As a result, the TBELs were based on an incomplete record — one lacking meaningful discussion of an "available" treatment, namely onshore treatment. See Humana of Aurora, Inc. v. Heckler, 753 F.2d 1579, 1583 (10th Cir. 1985) (agency action is arbitrary and capricious when based on a flawed study); Tex. Oil & Gas Ass'n v. EPA, 161 F.3d 923, 935 (5th Cir.1998) ("A regulation cannot stand if it is based on a flawed, inaccurate, or misapplied study."); Almay, Inc. v. Califano, 569 F.2d 674, 682 (D.C.Cir.1977) (rejecting regulation produced "on the basis of the flawed survey"). Put another way, EPA's refusal to consider onshore treatment "entirely fail[s] to consider an important aspect of the problem" and "offer[s] an explanation for its decision that runs counter to the evidence before the agency." Islander E. Pipeline, 525 F.3d at 150-51; see Tanners' Council, 540 F.2d at 1191 ("[T]he agency must fully explicate its course of inquiry, its analysis, and its reasoning."); see also State Farm, 463 U.S. at 43, 103 S.Ct. 2856; Hooker Chems., 537 F.2d at 636. Hence, it is arbitrary and capricious.
In fact, the SAB Report points out a number of reasonably predictable advantages
App. at 605; see also id. at 694. The SAB Report also notes that onshore treatment has a number of advantages over shipboard treatment because onshore facilities are not subject to problems such as limited space, small and overburdened crews, vibrations, weight allowances, limited power, ship instability, and greater corrosion rates. Id. at 678-80. Regarding ship crews in particular, studies have shown that "many of these crews are already overburdened," "[o]peration by trained, dedicated personnel in reception facilities would likely result in more reliable performance," and "[m]aintenance and repair work are more likely to be done reliably" as well. Id. at 681. Onshore treatment can also be more effective by using superior technologies that are not available for shipboard treatment, such as settling tanks, granular filtration, and membrane filtration. Id. at 680-81. Indeed, EPA cites a number of studies that conclude that onshore treatment facilities are a technically feasible option. Id. at 107. These studies date back to 1992, and proceed with some regularity thereafter — 1996, 1999, 2000, 2002, 2007, 2008.
Moreover, onshore treatment would not necessarily be slower than shipboard treatment to implement. The SAB estimated that onshore implementation would take up to thirty months, while EPA allowed eight years to phase-in shipboard implementation. See id. at 684. Nor would onshore treatment necessarily be more expensive than shipboard treatment. Regional economic studies suggest that "treating ballast water in reception facilities would be at least as economically feasible as shipboard treatment." Id. at 694. In addition, the cost of monitoring and enforcement is likely to be lower with a smaller number of reception facilities compared with a larger number of shipboard systems. Id. at 605, 694. The Coast Guard also found that onshore treatment was generally less expensive per metric ton of ballast water than shipboard treatment. Id. at 679.
Of course, onshore treatment has many costs, including the cost of retrofitting vessels for onshore facilities, particularly ships from outside the United States, and the cost of shipping delays created by the time it takes to discharge ballast onshore (though presumably shipboard treatment is not instantaneous). Costs alone, however, cannot determine BAT. See 33 U.S.C. § 1314(b)(2)(B). Furthermore, EPA failed to perform the economic analysis required to determine relative costs of the differing technologies in reaching its conclusion that onshore treatment was not economically achievable. See Waterkeeper All., 399 F.3d at 516 ("[T]he Administrator is obligated to `inquire into the initial and annual costs of applying the technology and make an affirmative determination that those costs can be reasonably borne by the industry.'" (quoting Riverkeeper, Inc. v. EPA, 358 F.3d 174, 195 (2d Cir.2004))); Nat'l Wildlife Fed'n v. EPA, 286 F.3d 554, 563 (D.C.Cir.2002) ("Although its analysis may be general, EPA `has the heaviest of obligations to explain and expose every step of its [cost-benefit] reasoning.' ... This duty to explain arises out of the need for reviewing courts to be able to discern the basis for EPA's decision." (internal citations omitted) (quoting Am. Lung Ass'n v. EPA, 134 F.3d 388, 392 (D.C.Cir. 1998))).
Thus, EPA could have well found that onshore treatment was "available." Indeed, EPA's failure to consider onshore treatment is inconsistent with the CWA's mandate that TBELs be technology-forcing. Congress designed the CWA to force agencies and permittees to adopt technologies that achieve the greatest reductions in pollutants. See NRDC, 822 F.2d at 124 (holding that CWA seeks "not only to stimulate but to press development of new, more efficient and effective technologies," which is the "essential purpose of this series of progressively more demanding technology-based standards"). As Judge Starr noted in NRDC, "the most salient characteristic of this statutory scheme, articulated time and again by its architects and embedded in the statutory language, is that it is technology-forcing." Id. at 123.
EPA's decision on this issue matters. As the SAB scientists pointed out, EPA's choice of system in this permit will have a long-term impact:
App. at 744-45 (emphasis added). We conclude that EPA failed to give fair and thorough consideration to both onshore and shipboard treatment systems in setting the standard in the 2013 VGP, and we remand to EPA to give full consideration to the issue now.
Petitioners also complain about the lack of numeric TBELs for viruses and protists (primarily single-celled organisms). EPA argues, however, that it could not set TBELs for viruses and protists in the 2013 VGP because EPA could not yet identify "suitable standardized test organisms and/or surrogate parameters to determine treatment system performance at removing or eliminating viruses and protists and which also can be used in establishing technology-based discharge limitations." App. at 486; see also App. at 495 ("EPA does not believe that there are sufficient data available to establish numeric limits for protists or other bacteria.")
We agree that it was not arbitrary and capricious for EPA to decline to set TBELs for organisms for which it is unable to test and for which it has insufficient
Petitioners allege that EPA's decision to exempt Lakers built before January 1, 2009 from numeric effluent limits of VGP § 2.2.3.5 was arbitrary and capricious. EPA based this decision on its finding that there was no treatment technology "available" for these vessels either onboard or onshore. App. at 11516. EPA expressed concern about the difficulty of finding effective onboard systems for pre-2009 Lakers due to their "unique operational and design constraints," such as the large volumes of fresh cold water they require, the short duration of their trips, their high pumping rates, and their uncoated ballast tanks. Id. at 116.
We agree with petitioners that exempting the pre-2009 Lakers was arbitrary and capricious. First, the lack of supply of updated shipboard systems is not a legitimate reason to exempt pre-2009 Lakers from the 2013 VGP, as, again, the purpose of BAT is to force technology to keep pace with need. See NRDC, 822 F.2d at 124.
Second, EPA's decision was based on a flawed record that failed to consider an important aspect of the problem, namely the possibility of onshore treatment. See Islander E. Pipeline, 525 F.3d at 150-51. EPA should have engaged in a cost-benefit analysis comparing onshore treatment with shipboard treatment, rather than dismissing onshore treatment. EPA disregarded the SAB's recommendation that onshore treatment would benefit pre-2009 Lakers that are "engaged solely in regional trade." Id. at 684. The SAB points out that the space and power constraints posed by pre-2009 Lakers are "largely absent in reception facilities." Id. at 680. EPA's foreclosure of considering onshore treatments for pre-2009 Lakers — and indeed, all Lakers — seems shortsighted. See supra at 164-69.
Third, EPA imposed the 2013 VGP on Lakers built after 2009, even though post-2009 Lakers face many of the same challenges and constraints as pre-2009 Lakers, such as their short voyages, high pumping rates, and freshwater environment.
The SAB Report supports our conclusion. Although the SAB Report acknowledged the limitations in treating ballast water from Lakers, it did not declare such treatment impossible. Instead, the SAB concluded that in light of these limitations, "[a] variety of environmental (e.g., temperature and salinity), operational (e.g., ballasting flow rates and holding times), and vessel design (e.g., ballast volume and unmanned barges) parameters" should be considered in determining the treatment standards. App. at 639.
EPA's exemption of the pre-2009 Lakers from the 2013 VGP was also arbitrary and capricious due to EPA's failure to conduct an appropriate and factually-supported cost-benefit analysis. Such an analysis might have shown that the cost of subjecting pre-2009 Lakers to the 2013 VGP was not unreasonably high, or, alternatively, that onshore treatment was economically feasible. For all these reasons, EPA's decision to exempt pre-2009 Lakers from the 2013 VGP was arbitrary and capricious.
Under the CWA, NPDES permits must include WQBELs where the TBELs are insufficient to maintain water quality standards. 33 U.S.C. § 1311(b)(1)(C); 40 C.F.R. § 122.44(d)(1)(vii)(A). Here, EPA concluded that "even at the IMO level of discharge, reasonable potential exists for such discharges to cause or contribute to violations of applicable water quality standards pursuant to 40 C.F.R. § 122.44(d)(1)(ii)." App. at 129. To address this concern, EPA established WQBELs to ensure compliance with water quality standards. EPA, however, chose to create narrative WQBELs because it believed numeric WQBELs were "infeasible" to calculate.
The WQBEL in the 2013 VGP states:
VGP § 2.3.1, at 59. In defending this standard, EPA relied in part on the NAS Report, which stated that "[t]he current state of science does not allow a quantitative evaluation of the relative merits of various discharge standards in terms of invasion probability." App. at 363.
Petitioners argue that this narrative WQBEL does not ensure compliance with water quality standards. We agree. This narrative standard is insufficient to give a shipowner guidance as to what is expected or to allow any permitting authority to determine whether a shipowner is violating water quality standards. By requiring shipowners to control discharges "as necessary to meet applicable water quality standards" without giving specific guidance on the discharge limits, EPA fails to fulfill its duty to "regulat[e] in fact, not only in principle." Waterkeeper All., 399 F.3d at 498. As this Circuit held in Waterkeeper Alliance, NPDES permits "may issue only where such permits ensure that every discharge of pollutants will comply
Even if determining the proper standard is difficult, EPA cannot simply give up and refuse to issue more specific guidelines. See Am. Paper Inst., Inc. v. EPA, 996 F.2d 346, 350 (D.C.Cir.1993) (articulating that, even if creating permit limits is difficult, permit writers cannot just "thr[o]w up their hands and, contrary to the Act, simply ignore[] water quality standards including narrative criteria altogether when deciding upon permit limitations"). Scientific uncertainty does not allow EPA to avoid responsibility for regulating discharges. See Massachusetts v. EPA, 549 U.S. 497, 534, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) ("EPA [cannot] avoid its statutory obligation by noting the uncertainty surrounding various features of climate change and concluding that it would therefore be better not to regulate at this time.").
Moreover, EPA's reliance on the NAS Report is misplaced. EPA concedes that the NAS Committee "did not conclude that it is infeasible to calculate water quality-based effluent limits for ballast water discharges." App. at 563. Rather, the NAS Committee found that it could not formulate a precise standard. In light of this uncertainty, it recommended further study of the issue. But EPA declined to engage in further study. See App. at 363-67. For all these reasons, EPA's WQBELs were arbitrary and capricious.
EPA's remaining counterarguments are unavailing. First, EPA asserts that petitioners fail to offer examples of "meaningful permit limits" for WQBELs. EPA Br. at 74. EPA, however, could articulate specific actions that vessels would be required to take to protect against site-specific threats. For example, if EPA or the shipowner became aware of an unusual risk posed by a specific port, EPA could require vessels to take action to avoid such risk at that port, including not uptaking ballast water or not discharging into other ports the contaminated ballast water that was taken up. Toward that end, EPA has included a set of specific best management practices in the 2013 VGP § 2.2.3.3, further demonstrating the viability of this approach.
Second, EPA argues that under 40 C.F.R. § 122.44(k)(3) it may employ BMPs instead of "[n]umeric effluent limitations" for WQBELs when deriving numeric limitations is "infeasible." 40 C.F.R. §§ 122.44(k)(3). BMPs include "schedules of activities, prohibitions of practices, maintenance procedures, and other management practices to prevent or reduce... pollution." Id. § 122.2. EPA argues that the narrative WQBEL is a BMP, and therefore it has discharged its duty under 40 C.F.R. § 122.2.
But EPA's narrative WQBEL does not qualify as a BMP, as it is neither a practice nor a procedure. BMPs typically involve requirements like operating procedures, treatment requirements, practices
Third, EPA claims that WQBEL standards will be sufficiently maintained because EPA can take "corrective actions" after the permittee becomes aware of a violation. App. at 160. This is not reassuring. The point of a permit is to prevent discharges that violate water quality standards before they happen. See 33 U.S.C. §§ 1311(b)(1)(C), 1342(a)(2); 40 C.F.R. §§ 122.4(d), 122.44(d)(1). "Corrective action" is not an effective remedy in an invasive species context — it is difficult to eradicate a colony of zebra mussels after they are established. See, e.g., Great Lakes Sci. Ctr., U.S. Geological Survey, Zebra Mussels Cause Economic and Ecological Problems in the Great Lakes 2 (rev.2011) ("Once zebra mussels become established in a water body, they are impossible to eradicate with the technology available today. Many chemicals kill zebra mussels, but these exotics are so tolerant and tough that everything in the water would have to be poisoned to destroy the mussel."); Robbins, A Western Showdown, at D6 (noting that officials in Western states have instituted elaborate and expensive inspection systems for boats because they "want desperately to keep the mussels out of blue-ribbon trout streams and pristine mountain lakes" as "once established [the mussels] are impossible to permanently eradicate"). This is all the more problematic because a vessel operator is not likely to know it has a discharge violation if, as discussed below, there are no monitoring requirements.
Accordingly, EPA acted arbitrarily and capriciously in issuing the WQBELs because they violate section 1342's requirement that NPDES permits ensure compliance with the CWA. Cf. Waterkeeper All., 399 F.3d at 498.
Under the CWA, NPDES permits must contain conditions that require both monitoring and reporting of monitoring results of TBELs and WQBELs to ensure compliance. See 33 U.S.C. § 1342(a)(2); 40 C.F.R. § 122.44(i)(1)-(2). The regulations provide, in pertinent part:
40 C.F.R. § 122.44(i)(1)-(2).
Enforcing compliance with a permit is the key to an effective NPDES program. See NRDC v. Cty. of L.A., 725 F.3d 1194, 1208 (9th Cir.2013) ("[T]he NPDES program fundamentally relies on self-monitoring," and "Congress' purpose in adopting this self-monitoring mechanism was to promote straightforward enforcement of the Act." (internal quotations omitted)). We now turn to the monitoring and reporting requirements in the 2013 VGP.
As previously discussed, the 2013 VGP requires vessels to monitor (1) the functionality of their ballast water treatment systems, if installed, and (2) the concentrations of the two "indicator" bacteria (E. coli and enterococci). VGP § 2.2.3.5.1.1.2, at 30, § 2.2.3.5.1.1.4, at 31-32.
The first requirement, known as "functionality monitoring," determines whether a ballast water treatment program is "operating according to the manufacturers' requirements." App. at 96. A shipowner is required to check a measurement that would "verify system functionality," such as how much chlorine the system is using each month. Id. at 1168. If the measurement is correct, it is assumed that the program is in compliance. If the equipment is not operating properly, the ship is not permitted to discharge ballast. The vessel owner is not required to take any measurement of pollutants or significant categories of living organisms in ballast water being discharged. Instead, the shipowner relies solely on the functioning of the treatment system to determine if the ship is complying with the permit. Treatment systems are inspected monthly. See VGP § 2.2.3.5.1.1.2, at 30 ("To assess the [system's] functionality, monitoring indicators of the [system's] functionality is required at least once per month for specific parameters that are applicable to your system.").
The second provision, effluent biological organism monitoring, requires vessels to collect small-volume samples from ballast discharge and analyze them for concentrations of two indicator pathogens, E. coli and enterococci. VGP § 2.2.3.5.1.1.4, at 31-32. The idea is that if there are significant levels of these two pathogens in the sample, then treatment has not been effective. Vessels are not required to monitor Vibrio cholera or medium or large organisms regulated in the 2013 VGP. Sampling is required between one and four times a year, depending on the type of system.
Petitioners present two arguments about why these requirements do not accord with the law. First, petitioners argue that the 2013 VGP violates CWA regulations by not requiring vessels to monitor the concentration of living organisms. The regulations require monitoring of mass, volume, or "other measurement specified in the permit." 40 C.F.R. § 122.44(i)(1)(i)-(ii). Petitioners contend the unit of measurement for living organisms in the 2013 VGP should be concentration. Neither functionality monitoring nor testing for two indicator microorganisms measures concentration. Thus, according to petitioners, the monitoring and reporting requirements for TBELs violate 40 C.F.R. § 122.44(i)(1).
Second, petitioners argue that these monitoring requirements violate the requirement in 40 C.F.R. § 122.44(i)(1) that monitoring "assure[s] compliance with permit limitations." Relying on functionality monitoring instead of requiring an actual measurement of concentrations of organisms means that neither EPA nor the public knows if the permittees are complying
We disagree with petitioners and conclude that EPA's monitoring requirements were not arbitrary and capricious. The CWA regulations expressly allow for monitoring quantities other than mass or volume, namely some "other measurement specified in the permit[] for each pollutant limited in the permit." 40 C.F.R. § 122.44(i)(1). Functionality monitoring and monitoring for the presence of indicator organisms qualify as such "other measurement."
And while there are potential alternatives, petitioners' urged alternative of direct monitoring is not required because "more sophisticated methods for enumerating living organisms in the larger size classes are not currently available for use by permittees." App. at 524. Current technology is not capable of adequately monitoring ballast water as it is being discharged because, EPA notes, such monitoring requires analyzing large volumes of water and is prohibitively expensive and impractical. According to EPA, testing medium and large organisms with shipboard systems can cost between $75,000 and $125,000 per vessel per sampling event. Moreover, the process would be impractical, involving sampling and analyzing large volumes of water in labs and requiring "dozens of hours to collect and analyze those samples." EPA Br. at 89.
Given the difficult circumstances, EPA's monitoring requirements for TBELs were not arbitrary and capricious. Cf. NRDC v. Costle, 568 F.2d 1369, 1380 (D.C.Cir.1977) ("[W]hen numerical effluent limitations are infeasible, EPA may issue permits with conditions designed to reduce the level of effluent discharges to acceptable levels."). In the face of the severe technological limitations on monitoring, it was reasonable for EPA to decline to require monitoring for parameters for which it is currently impractical to collect and analyze samples. Functionality monitoring and biological indirect monitoring are the only feasible options at present to assure compliance with the permit. We defer to EPA's decision that functionality monitoring and biological indicator monitoring, when used in combination, offer an acceptable "other measurement." See Auer, 519 U.S. at 461, 117 S.Ct. 905 (holding that courts should defer to agency's interpretation of its own regulations if not plainly erroneous or inconsistent with the regulation).
Petitioners also argue that EPA acted arbitrarily and capriciously in failing to require that permittees monitor ballast water discharges to ensure compliance with WQBELs. The only monitoring requirement for WQBELs is that ships report the "expected date, location, volume, and salinity of any ballast water to be discharged" into U.S. waters or at a reception facility. VGP § 4.3, at 72 (emphasis added). There is no requirement to report actual volumes, locations, or composition of ballast water discharges.
We agree that failure to include monitoring requirements for WQBELs was arbitrary and capricious. The regulations require monitoring to "assure compliance with permit limitations." 40 C.F.R. § 122.44. Generally, "an NPDES permit is unlawful if a permittee is not required to effectively monitor its permit compliance." NRDC, 725 F.3d at 1207. Here, the reporting requirement provided little information
Our conclusion is further supported by the simple, but overlooked, options that EPA has in structuring WQBEL monitoring requirements. One possible condition EPA could consider including in the WQBELs would be to require shipowners to monitor the actual time, place, and volume of ballast water discharge, rather than the expected time, place, and volume. Another possible condition would be to require shipowners to monitor for a particular pathogen or pollutant if it became known that such a pathogen or pollutant is a problem in a particular port. Each of these options would provide more significant monitoring.
EPA's contentions on this point are unpersuasive. EPA argues that if a vessel is in compliance with the TBELs, it should be "generally expected to already be controlling [its] vessel discharges to a degree that is protective of water quality," rendering additional monitoring to demonstrate compliance with narrative WQBELs unnecessary. App. at 530. In defense of this position, EPA also argues that 40 C.F.R. § 122.44(i) does not apply because of "practical constraints on the ability to collect and analyze the volumes of ballast water necessary to `directly' detect and quantify such organisms at the levels of concern." EPA Br. at 98. According to EPA, it is simply "unrealistic" to have stricter monitoring.
This, however, is not a valid excuse in the WQBEL context. See NRDC, 859 F.2d at 208 (stating legislative history of CWA "strongly supports [the] position that Congress did not intend to tie compliance with water quality-based limitations to the capabilities of any given level of technology," and "a water quality-based permit limit begins with the premise that a certain level of water quality will be maintained, come what may, and places upon the permittee the responsibility for realizing that goal"). It is inconsistent to say that WQBELs are necessary to ensure that water quality standards are met, while specific enforcement of such WQBELs is unnecessary. More importantly, this lack of enforcement violates the CWA regulations, which mandate that no permit may be issued "[w]hen the imposition of conditions cannot ensure compliance with the applicable water quality requirements of all affected States." 40 C.F.R. § 122.4(d).
Accordingly, EPA's failure to include monitoring for compliance with WQBELs was inconsistent with regulations and thus arbitrary and capricious.
Accordingly, we remand this matter to EPA for proceedings consistent with this opinion. The 2013 VGP is to remain in place until EPA issues a new VGP. See Idaho Farm Bureau Fed'n v. Babbitt, 58 F.3d 1392, 1405 (9th Cir.1995) (holding that "[o]rdinarily when a regulation is not promulgated in compliance with the APA, the regulation is invalid. However, when equity demands, the regulation can be left in place while the agency follows the necessary procedures." (citation omitted)); see
For the reasons set forth above, we GRANT the petition for review with respect to
and
We
The 2013 VGP shall remain in place until EPA issues a new VGP.
Id. at 610. While we agree that we must defer to EPA's conclusions regarding the technical feasibility of testing for standards 100 or 1000 times more stringent than the IMO Standard, there is nothing in the record to suggest that it would not be possible to test for twice or even ten times the IMO Standard.
