Charles S. Miller, Jr., Magistrate Judge.
Before the court are two motions. One is defendant's motion for summary judgment of dismissal, which is supported by amicus briefs from the State of North Dakota and the Lignite Energy Council ("LEC").
The court previously denied defendant's motion to dismiss for lack of jurisdiction, abstention, and failure to state claim.
Defendant is a coal mining company. At the time of the filing of this action, it had
Plaintiffs are ranchers. They own or lease some 5,637 acres in rural Mercer County, a significant portion of which either underlies or is in close proximity to defendant's mine. Plaintiffs' primary claim in this action is that defendant did not obtain the correct type of Clean Air Act permit for the construction of its mine, contending it needed a "major source" construction permit instead of the "minor source" permit it sought and received.
The relationship between plaintiffs and defendant has been a contentious one. Plaintiffs have contested other state and local permits that defendant needed either for construction or operation of its mine.
The Coyote Creek Mine is a surface mine that mines lignite, which is a low grade coal, i.e., it generates less BTU's on a per ton basis than higher grade coals. Because of its low grade, lignite is typically consumed near the mine because other coals (as well as other fuels) are more economical if they have to be transported any significant distance.
At this point, the only customer for defendant's mine is the Coyote Station, a coal-fired electric generating plant owned by a consortium of electrical utilities. The Coyote Station is a "mine mouth" plant, i.e., it is located in close proximity to the coal fields that are the source of its fuel, including defendant's coal reserves and mine. The Coyote Station as been in operation for more than three decades and previously had been supplied with lignite coal from another nearby mine.
The Coyote Creek Mine is not the only lignite mine in North Dakota. There are several other lignite mines that similarly supply other "mine-mouth" electric generating stations, and, in one instance, a commercial coal gasification plant.
In addition to removing the lignite coal from the ground and transporting to it to the Coyote Station, the Coyote Creek Mine crushes the mine-run coal down to a smaller size before it makes delivery to the Coyote Station. The mine facilities that "process" the coal in this fashion are the particular focus of this action because of the additional regulatory requirements that apply to coal processing facilities under the Clean Air Act.
Under the Clean Air Act ("Act" or "CAA") as amended, EPA has established national ambient air quality standards (NAAQS) for six pollutants: (1) particulate matter; (2) sulfur dioxide; (3) nitrogen oxides (with sulfur dioxide as the indicator); (4) carbon monoxide; (5) lead; and (6) ozone.
An important part of the CAA's scheme to achieve and maintain the NAAQS is its New Source Performance Standards (NSPS) program. The NSPS provisions require EPA to implement technology-based performance standards to limit emissions from new major sources of pollution, including newly constructed facilities and modifications of existing ones that increase emissions.
Congress later concluded that the NSPS program and the NAAQS were not enough because they did not prevent against the degradation of air quality in those areas of the country, like North Dakota, where the pollutant levels are lower than the NAAQS. For this reason, Congress amended the CAA to include provisions for the prevention of significant deterioration of air quality (the "PSD" provisions) that are set forth in Part C of Subchapter I of the Act, codified at 42 U.S.C. §§ 7470-7492.
Among the PSD provisions is a requirement that a "major emitting facility" may not be constructed until it obtains a permit to construct that complies with certain requirements of Part C, including the source's use of best available control technology ("BACT") for each regulated pollutant emitted from the facility. 42 U.S.C. §§ 7475(a) & 7479(1)-(3). The Act defines a major emitting facility as any stationary source with the potential to emit ("PTE") 250 tons per year ("tpy") of any air pollutant, except for certain listed sources for which the threshold limit is 100 tpy. 42 U.S.C. § 7479(1);
The CAA places primary responsibility upon the states for formulating detailed air pollution control strategies and carrying out the Act's provisions. To accomplish this, the CAA requires that each state adopt and submit to EPA for approval a "State Implementation Plan" ("SIP") to implement and carry out the policies and goals of the Act.
North Dakota has an approved SIP for much of the CAA's requirements, including administration of its PSD provisions.
The North Dakota Department of Health ("NDDOH") is the state agency charged with the administration and enforcement of the CAA and North Dakota's air quality laws. N.D.C.C. §§ 23-25-02 & 23-12-03. This includes the responsibility for reviewing construction permit applications and determining whether a major or minor source permit is required.
Defendant applied for and received a minor source construction permit from the NDDOH for the Coyote Creek Mine. Prior to issuing the permit, the NDDOH did not give public notice of the filing of defendant's application for the construction permit nor did it invite public participation in the permitting process. (Doc. No. 1-3).
Plaintiffs make two claims in their Amended Complaint. The primary one is that defendant needed a major source construction permit for its Coyote Creek Mine rather than the minor source permit it was granted. Plaintiffs argue this is because the mine's coal processing facilities (i.e., the part of defendant's coal mine that does the crushing) has a PTE for particulate matter ("PM") of 250 tpy or more, which is the requisite threshold in this instance for needing a major source construction permit. And, if a major source construction permit is required, this would subject not only the mine's coal processing facilities but also the entire mine to the CAA's and the NDDOH's more onerous requirements for major sources. Why the entire mine would be considered a major source and not just the coal processing facilities will be returned to later.
Plaintiffs contend for their second claim that defendant is in violation of the CAA's NSPS requirements by operating an open storage coal pile without a fugitive dust control plan as required by 40 C.F.R. § 60.254(c). As explained later, a § 60.254(c) dust control plan is only required if the open storage coal pile is deemed to be part of defendant's coal processing facilities.
Plaintiffs bring this action pursuant to the "citizen suit" provisions of 42 U.S.C. § 7604(a)(3) as well as 28 U.S.C. § 1331 (federal question jurisdiction). Plaintiffs seek:
Defendant denies that it needed a PSD major source construction permit. Defendant contends that the NDDOH correctly determined that the PTE for PM from the coal processing facilities embedded within its mine is negligible and, in any event, not anywhere close to 250 tpy. Consequently, according to the defendant, it needed only a minor source permit to satisfy the State's separate air pollution control requirements and not a PSD major source permit.
As for the NSPS claim, defendant contends that, while it does have a fugitive dust control plan for the entire mine to meet other regulatory requirements, it does not need one that meets NSPS performance requirements for the coal pile
There has been much hand-wringing in this case — both by defendant in its prior motion to dismiss and now by the LEC and the State — that this action is an unwarranted collateral attack on a state-issued minor source permit. The court rejected this argument in its earlier order denying defendant's motion to dismiss and rejects it again for the same reasons.
Nevertheless, it is worth emphasizing that this case would have come here in a much different posture had defendant requested the NDDOH follow a more formal process in the handling of its application for the construction permit, including providing notice to the public and inviting their participation. Had that process been followed, plaintiffs would have had the opportunity to make the arguments they are now making to the NDDOH; the NDDOH could have addressed them; and then, if either plaintiffs or defendant were disappointed in its decision, there would have been the right of an appeal (first to a state district court and then to the North Dakota Supreme Court) and that appeal could have been resolved based upon a formal administrative record.
Likewise, to the extent the NDDOH may be concerned about federal court second-guessing of its permit decision, it easily could have justified the use of more formal procedures. NDDOH's regulations not only provide for, but arguably require, use of its "public participation procedures" for "[s]ources for which a significant degree of public interest exists regarding air quality." N.D. Admin. Code § 33-15-14-02(6)(a)(6). For facility as large as defendant's coal mine, which over its life will impact several thousands of acres and generate substantial fugitive dust — particularly from its haul roads, it would hardly be a reach to conclude there may be significant public interest, which, arguably, is different from active opposition. The court remains puzzled why the NDDOH did not seek public input for an operation of the size and character of defendant's mine.
The law governing summary judgment is well known to the court and need not be repeated here.
To reset the table, the CAA's PSD provisions require that any new major emitting facility obtain a permit to construct. 42 U.S.C. § 7475(a). Under the PSD provisions, a major emitting facility includes certain listed types of industrial sources that have a PTE of 100 tpy for any air pollutant. 42 U.S.C. § 7479(1); 40 C.F.R. §§ 51.166(b)(1)(i)(a) & 52.21(b)(1)(i)(a). For example, the list includes fossil fuel fired steam electric generating plants, petroleum refineries, steel mills, and copper smelters. Surface coal mines are not on the list.
EPA concluded quite sometime ago, however, that it was bound by a court decision holding that the definition of a major emitting facility under 42 U.S.C. § 7479(1) is subject to the generic definitions of "major stationary source" and "major emitting facility" under § 7602(j), which, in turn, were construed to exclude "fugitive emissions" from the threshold calculation of whether a plant is a major source unless EPA has decided by rulemaking that fugitive emissions should be included for the particular source.
As recounted in
The point here, which will be returned to later, is that EPA made a policy choice — one based on weighing benefits versus costs — when it decided not to adopt a rule that would require consideration of fugitive emissions of PM from coal mines for the purpose of determining whether coal mines are major sources and the consequences
While fugitive emissions from coal mines generally do not have to be counted toward determining whether they are major sources, fugitive emissions must be counted for coal processing plants. This is because EPA has included within the list of categories of sources, for which fugitive emissions must be counted, "[a]ny other stationary source category which, as of August 7, 1980, is being regulated under section 111 or 112 of the Act." 40 C.F.R. §§ 51.166(b)(1)(iii)(aa) & 52.21(b)(1)(iii)(aa).
As noted earlier, Section 111 of the CAA established the NSPS program for new sources. And, while NSPS performance standards have not been established for coal mines, they have for coal processing plants that process more than 200 tons of coal per day. The governing regulations are set forth in 40 C.F.R. Part 60,
Coal preparation and processing plants (herein "coal processing plants") are not something unique to coal mines nor do all coal mines necessarily have them. A number of industrial facilities that use coal either for fuel or as a feedstock may have coal processing plants, including, for example, power plants, coke plants, Portland cement plants, synfuels plants, etc.
Also, some coal processing plants are more elaborate and physically larger than defendant's coal crushing facility. For example, unlike defendant's facility, some coal processing plants may include a number of different structures and processes between which might run conveyors or haul roads within the processing plants. Some also have elaborate facilities for loading the processed coal onto train cars, ships, etc.
As noted earlier, the consequence of defendant's mine having a facility for crushing coal is that, if the PTE for fugitive emissions of PM from the coal crushing facility meets or exceeds the 250 tpy threshold, then a major source permit is required not just for it but for the entire mine — even though one would not have been required if the mine did not have a coal processing facility and even though the mine in this case is clearly the primary
Defendant's minor source permit application and the permit that was issued pursuant to it appear to include only the equipment that actually does the crushing as part of the designated coal processing facilities subject to regulation under Subpart Y of the NSPS provisions. Further, neither the permit application nor the permit contain numerical estimates of PTE for PM for any of the equipment that are considered to be part of the coal processing facilities. Rather, the application and permit simply state that the PTE for fugitive emissions is negligible.
Plaintiffs contend that defendant failed to include as part of its designated coal processing facilities all of the facilities and
Defendant disagrees with plaintiffs' contention that it did not include all of the necessary facilities and equipment but proffers PTE estimates from it own experts for all of the facilities and equipment that plaintiffs claim should have been included except for its mine haul road, which it contends is clearly not subject to Subpart Y. These estimates in almost all cases are substantially less than those of plaintiffs' expert. Defendant also contends that, if the haul road and the coal pile are deemed not to be part of its coal processing facilities under Subpart Y, then the 250 tpy major source threshold is not reached even accepting the much higher PTE estimates of plaintiffs' expert for the remaining equipment and facilities that plaintiffs' claim are part of the coal processing facilities.
In the prior order denying defendant's motion to dismiss, the court expressed doubt about whether the mine haul road is part of defendant's coal processing facilities under Subpart Y. And, as discussed later, the court concludes that it is not after considering certain EPA guidance. Consequently, the overriding issue for purposes of summary judgment is whether defendant's open coal storage pile is part of defendant's coal processing facilities and subject to regulation under Subpart Y. This is because, as set forth in detail later, it would be the tipping point in terms of whether the 250 tpy threshold can be reached, even assuming plaintiffs' higher PTE estimates.
If plaintiffs cannot prove that 250 tpy threshold is reached (and they have the burden), that disposes of their primary claim that a major source permit was needed. Also, if the coal pile is not subject to Subpart Y regulation, that also disposes of their NSPS performance standard claim since defendant is only required to have a fugitive dust control plan that satisfies 40 C.F.R. § 60.254(c) if the coal pile is part of its coal processing facilities under Subpart Y, of which § 60.254(c) is a part.
Consequently, the primary focus of what follows will be upon whether the coal pile is part of defendant's coal processing facilities and subject to Subpart Y or not. In addressing this issue, the court will consider the governing Subpart Y regulations and discuss why, in this court's view, they do not provide a clear answer. The court will also address various EPA guidance and discuss why that guidance also does not provide a clear answer with respect to the coal pile but does with respect to the haul road.
However, before proceeding down this pathway, it is necessary first to provide more context by summarizing what defendant presented to the NDDOH in its application for its minor source permit and then consider what the record reflects about defendant's open coal storage pile.
Defendant's application for its minor source construction permit described the
The application then recited that the mined coal would be transported from the mine face over a haul road several miles to an open storage pile that would be located just outside of and physically adjacent to where defendant would construct a coal crushing facility, which, in turn, would be located next to the site of the Coyote Station. The open storage pile would store approximately 180,000 tons of coal, have a base area of roughly 700 feet by 500 feet, and cover a surface area of approximately 350,000 square feet, or approximately eight acres. (
According to the application, the stockpiled coal would be pushed into a "receiving pocket and apron feeder" by dozers operating on top of the pile "where it enters the coal processing facility." From there, the coal would be conveyed by the apron feeder a short distance to where it would then undergo both primary and secondary crushing. After the coal is crushed, it would fall onto a "conveyer belt" owned and operated by the Coyote Station "at which point it is no longer considered part of the CCMC permit." (
The application stated that specially designed enclosures surrounding its coal processing and conveying equipment would control the fugitive dust, with fogging if necessary. In air pollution control parlance, the enclosures are referred to as PECS ("passive enclosure containment system"). The application stated that no measurable emissions of PM to the atmosphere were expected with the use of these control systems. Hence, the estimate of PTE for PM from its coal processing facilities was that it would be "negligible." (
According to the application, defendant expected to produce approximately 2.5 million tons of coal annually with the capability of being able to produce up to 3.2 million tons per year — the highest amount that it stated it would process without seeking additional approval from the NDDOH. (
In its prior order, the court incorporated the following diagram taken from one of the defendant's briefs. (Doc. No. 38-6). While obviously not-to-scale, it does illustrate the flow of the coal and layout of the mine facilities relative to each other as well as the point where defendant initially contended the coal processing plant begins (labeled as the "Beginning of NSPS Applicability"). Hence, the diagram is set forth again for the same purpose.
Defendant's application provided an explanation for why the coal mine would not be a major source and, for that reason, only a minor source permit to construct was required to satisfy North Dakota's separate air pollution control requirements. Generally speaking, the application worked its way through the applicable federal statutes and regulations previously described, noting in particular that: (1) the only pollutant that would be emitted from the coal mine is PM; (2) the only emissions that would need to be counted for purposes of determining whether the mine is a major source would be those from the mine's coal crushing facilities; (3) the only emissions of PM from defendant's coal processing facilities would be fugitive emissions because no emissions would be mechanically vented; and (4) the fugitive emissions from defendant's coal crushers and conveying equipment were expected to be negligible based on the control imposed by the PECS. (Doc. No. 1-1, pp. 7-10).
As for the PTE for fugitive emissions of PM from the coal pile and the unloading of coal onto it, the application stated that these were not counted because the coal pile and the unloading of coal to it were considered not to be part of the coal crushing facilities subject to regulation under Subpart Y. In support of this conclusion, the application referenced the definition of "coal processing and conveying equipment" in 40 C.F.R. § 60.251(g) as well as what defendant contended is the applicable guidance from EPA. According to the application, EPA had taken the position that the beginning of a coal processing plant is the point where coal is first loaded into an apparatus that receives coal for processing ("first hopper"). The application stated that, in this instance, this would be the point where coal enters a "receiving pocket" after being pushed into it by a dozer from the coal pile where it is conveyed a short distance to the crushers and that this point is downstream from the coal storage pile. (
Depending upon how one interprets the relevant parts of Subpart Y and EPA's various guidance, the location, size, and functions of the coal pile may be relevant
The coal pile and the adjacent facilities that crush the coal are located immediately adjacent to the Coyote Station plant site, some three to four miles from the active mining area. Connecting the active mining area to the coal pile and the adjacent crushing facilities is a mine haul road that is located within a narrow ribbon of mine permit area. Set forth below is a mine facilities location map (Doc. No. 85-5, p. 27) that visually depicts the location of the coal processing facilities relative to the active mining area and the Coyote Station.
As noted by the earlier schematic showing the flow of the mined coal, the coal pile abuts up to a concrete retaining wall that separates the coal pile from the crushing equipment and the conveyor that conveys the coal after it is crushed to the Coyote Station. The apron feeder that conveys the coal to the crushing equipment extends out from the concrete wall into the coal pile. Set forth below is a photograph of the retaining wall and the structure surrounding the apron feeder (Doc. No. 94-2) taken prior to the coal pile being established.
The next photograph (Doc. No. 85-18, p. 2) is an aerial shot taken after the coal pile was established and the mine operating.
Two points are particularly notable about this photograph. One is the size of the coal pile relative to the point where coal is pushed from the pile into the apron feeder, as depicted by the location of the apron feeder in the first photograph as well as in succeeding photographs. The other is the line drawn on the photograph that encircles the area of the coal pile, the retaining wall, the crushing equipment, parts of the haul road, and a portion of the conveyor leading to the Coyote Station. Plaintiffs' position is that most, if not all, of the encircled area is part of defendant's coal processing facilities. This includes the haul road (particularly after it reaches the general area of the coal processing facilities), the coal pile, the retaining wall, the crushing
As noted by the diagram set forth earlier, once coal is removed from the earth at the mine face, it is hauled directly to the coal pile over the mine haul road and is deposited onto the coal pile by belly-dump trucks that have a capacity of carrying 240 tons of coal. (Doc. No. 90-8, p. 22).
The record reflects that, once the coal pile was established, quite frequently the coal from the mine is dumped in the immediate area of the apron feeder and bulldozed into or on top of the apron feeder for fairly immediate conveyance for crushing. Less often coal will be pushed from the rest pile to the apron feeder during periods when coal is not being hauled from the pit. Also, coal may occasionally be pushed from the other areas of the pile to the immediate area of loading into the apron feeder if necessary to even out the quality of the coal being delivered. (Doc. Nos. 83-2, pp. 2-3; 90-1, pp. 14-18, 111-12; 90-4, pp. 19, 58-59; 90-8, p. 8).
Set forth below is a screen shot (Doc. No. 117-2) from a video taken of a belly-dump truck unloading coal.
The next photograph (Doc. No. 94-3) is one of defendant's two dozers bulldozing coal over the top of the area of the buried apron feeder.
The primary dozer has within it equipment that allows the operator to control the operation of the apron feeder, including its speed, which, in turn, controls the rate defendant's equipment processes the coal and dumps it onto the conveyor for delivery. Further, the operator of the dozer has the ability to communicate with the Coyote Station to coordinate the operation of the conveyor belt, which it controls. In short, under normal operations, one person — the dozer operator — is able to control the operation of the coal processing equipment from on top of the coal pile. (Doc. No. 90-1, pp. 29-35, 49-79).
The next photograph (Doc. No. 90, p. 35) is taken from the coal pile with the structure surrounding the apron feeder and the apron feeder exposed. The wheel-like piece of equipment at the end of the short run of the conveyor part of the apron feeder is the primary crusher. As discussed later, the apron feeder is actually a "feeder breaker." Also, as discussed later, defendant contends that most of the time (but not necessarily all) the apron feeder and breaker are completely covered by the coal pile as coal is being loaded into it.
As noted earlier, defendant's permit application states that the open storage pile may store upwards of 180,000 tons of coal and have a base area of roughly 700 feet by 500 feet (i.e., 350,000 square feet), which is approximately eight acres. The record developed in this case reflects that, within the first few month of mining, the coal pile was built up to the point where it stored more than 100,000 tons of coal and has been consistently maintained above that level since that time. According to mine officials: (1) from mid-2016 when the mine began commercial operation to August 2017 (just prior to the filing of the motions in this case), the coal pile never fell below 101,000 tons and it reached that level only once following a long holiday coupled with a snowstorm: (2) the more or less steady delivery of coal as it is being mined replenishes the storage pile as coal is removed for crushing and delivery with some fluctuation for short periods when mining is not taking place or the power plant is down or running at reduced load; and (3) the desired inventory during normal operations is between 130,000 to 145,000 tons, which represents about a three week supply; and (4) the purpose for that inventory is to provide a source of supply in the event of an emergency or other unexpected halt of mining in the pit for an extended period. (Doc. No. 83-2).
These points have not reasonably been controverted by plaintiffs. While one of their experts contends that the coal pile is nothing more than a "surge pile" that exists to even out short-term fluctuations in delivery, the evidence set forth above does not bear this out. In fact, the graph showing the fluctuations in inventory level of the coal pile that plaintiffs themselves submitted as part of their brief demonstrates that roughly 2/3's of the inventory (at least in terms of quantities of coal) during the time frame considered was unaffected by daily operations. (Doc. No. 90, p. 18).
Hence, to the extent it is material, the bulk of the coal is in the pile is for longer than "temporary storage" — a term that EPA has used in at least one of its guidance, as discussed later.
The same plaintiffs' expert also expresses the opinion that defendant's coal pile is needed for the loading of the coal into the receiving structure for processing. While it is true that the coal pile does facilitate loading, it is readily apparent that most of
Finally, two other things may be relevant to whether defendant's coal pile should be considered a part of its coal processing facilities or simply another part of the mine. One is that defendant's coal pile is compromised only of mine-run, unprocessed coal. The Coyote Station has its own enclosed storage of processed coal that is of much smaller capacity and provides for about a three day supply. (Doc. Nos. 70-1, p. 19; 83-2, pp. 2-3; 90-2, pp. 53-54 90-4, pp. 63-64). The other is that, if defendant delivered only mine-run coal and the Coyote Station did its own processing, defendant would have needed a storage pile of the same size to maintain its contractual commitments for delivery during periods when active mining is not taking place or there is an unexpected mine outage.
In addressing the question of whether the coal pile is part of defendant's coal processing facilities, the court starts first with EPA's formally promulgated regulations governing coal processing plants. In this case, neither party contends that EPA's regulations are contrary to the CAA. Rather, the primary question is one of interpretation of the regulatory language and its application to the particular circumstances of this case.
Subpart Y of 40 C.F.R. Pt. 60 (§§ 60.250 through 60.256) contains most of the regulations governing coal processing plants, including setting performance standards for purposes of the CAA's NSPS program. Subpart Y includes the following definition of coal processing plants:
40 C.F.R. § 60.251(e). In addition, Subpart Y also refers to "affected facilities" that are specifically listed as being the following:
40 C.F.R. § 60.250(d) (italics added).
The reason for the separate definition of "affected facilities" is that Subpart Y only
In addition to the definition of a coal processing plant and the list of affected facilities, several additional Subpart Y definitions are relevant. They are:
40 C.F.R. § 60.251(f),(h), (m).
Finally, there is the following provision that leads off Subpart Y:
40 C.F.R. § 60.250(a) (italics added).
Plaintiffs contend this court need look no further than the language of Subpart Y in determining whether the coal pile is part of defendant's coal processing facilities given:
Plaintiffs also contend that not only do the PTE for PM emissions from the coal pile need to be considered for purposes of the 250 tpy major-source threshold but also the PTE for the unloading of the coal onto the pile, including the emissions from the truck traffic on the haul road at least after it crosses the boundary of what is the geographic scope of the coal processing facility if not all the way back to the "mine face." Plaintiff argues this is because all of this activity takes place "in" the coal processing plant as they have defined it and also because the definition of "open storage pile" in § 60.251(m) includes "equipment used in the loading, unloading, and conveying operations of the facility."
Defendant's argument for why the coal pile in this case is not part of its coal processing facilities that are subject to Subpart Y is based more upon EPA guidance as well as the overall context of EPA's regulatory scheme of which Subpart Y is a part than it does the actual text of Subpart Y. The court will address EPA guidance separately. In terms of the text of Subpart Y and the need to put it in context, defendant makes the following arguments:
Relying upon these points, defendant contends that the upstream boundary of its coal processing facilities is the point where the coal physically comes into contact with apron feeder, which it contends is the "first hopper" where coal is unloaded onto equipment that directly conveys the coal for processing. For reasons discussed later, this may be somewhat of a change from what defendant claimed at the time its permit application was being processed. But, even if so, its current position still excludes the coal pile.
After careful consideration of the generality of Subpart Y's provisions in light of the arguments of the parties and EPA's past decision not to subject to NSPS regulation fugitive emissions from surface coal mines, it appears the Subpart Y regulations do not themselves provide a clear answer as to whether the coal pile in this case is in or out. As discussed next, there is some EPA guidance that provides more direction, but, even that, is subject to interpretation and is equivocal with respect to the coal pile in this case.
The EPA guidance that defendant made specific reference to in its permit application for why the coal pile is not part if its coal handling facilities (and what the NDDOH appears to have relied upon when it agreed) is a selected portion of EPA's response to comments it received about coal unloading when Subpart Y was most recently amended in 2009. That response quotes, in part, earlier guidance that EPA gave in 1998 about coal unloading at coal processing facilities.
Plaintiffs claim that defendant and the NDDOH have "cherry picked" the portion of the 2009 response to comments that supports their conclusions and have ignored more broadly what EPA said about coal unloading. They contend that what EPA said generally about coal unloading together with the specific reference to open coal storage piles in the 2009 amendments to Subpart Y make clear EPA would consider the coal pile in this case to be a facility subject to Subpart Y.
Given the contentions of the parties, it is necessary for purposes of context to start with the the guidance that EPA offered in 1998 with respect to coal unloading and then what else EPA had to say as part of the 2009 rulemaking.
In an attachment to a letter to Congresswoman Barbara Cubin dated October 3, 1997, the EPA Office of Enforcement and Compliance Assurance addressed two questions bearing upon the issue of whether coal unloading at coal processing plants is regulated under Subpart Y.
The first question addressed in the
While the focus of the question was whether coal unloading was part of the "affected facility" of "coal processing and conveying equipment," so that the performance standards imposed by Subpart Y would apply to coal unloading, necessarily encompassed in EPA's answer is the conclusion that coal unloading is considered to be a part of the coal processing plant based on the definitions of "coal processing plant" and "coal processing and conveying equipment." The possible exception according to what EPA stated is when coal is unloaded for storage.
In the second question addressed by the
63 Fed. Reg. at 53290 (italics added). In the italicized language, however, EPA continued to distinguish coal unloading for storage, but stated here that coal unloading for "temporary storage" should be treated no differently than coal unloading more directly into the equipment that does the coal processing.
In the briefing here, both parties address the significance of the
Defendant in its briefing points primarily to the italicized language in EPA's consideration of the first question, particularly EPA's statement that: "The coal must be directly unloaded into receiving equipment,
While this beginning point appears to be a slight shift upstream from what it suggested to the NDDOH during permitting and what the NDDOH appears to have adopted as discussed later, what is clear is that both defendant and the NDDOH have ignored the general thrust of what EPA had to say about coal unloading since their beginning point — whether the most recent or an earlier one — does not take into account any equipment or activity associated with coal unloading. But, whether that necessarily means the coal pile needs to be included as a Subpart Y facility is a subject that will be returned to after the remainder of the guidance is considered.
In 2008, EPA began the formal process of amending Subpart Y by publishing in the Federal Register proposed amendments. EPA,
As part of this rule-making process, EPA provided detailed responses to the comments it received as a result of the April 2008 and May 2009 proposals. Some of the responses are in the preamble of the publication of the final amendments. Others are set forth in a separate summary that EPA prepared and made a part of the docket for the rulemaking for the 2009 Subpart Y amendments. EPA,
The coal industry and other commenters urged EPA during the 2009 rule-making to formally abandon its position that coal unloading at a coal processing facility should be deemed a part of the facilities subject to regulation under Subpart Y as set forth in the
As EPA's response makes clear, it rejected the suggestion by the coal industry and others that it abandon its
As the foregoing reflects, EPA's statements about the coal processing plant beginning at the point where coal is unloaded into a "hopper" date back to the
Defendant contends that EPA intends "first hopper" to refer to a physical piece of equipment that is capable of receiving coal and is involved in conveying the coal directly for processing. In support, defendant relies upon that portion of the above 2009 response by EPA to comments about coal unloading (which is a quote from the
While there is substantial force to defendant's reading, "hopper" is not a term used by Subpart Y and EPA has also referred to "hopper" or "first hopper" parenthetically as being a "drop point" in several of its responses to comments, including those set forth below as well as in its preamble to the final amendments.
Given the references to "drop point" along with the 2009 Amendments to Subpart Y, a equally plausible reading of EPA's guidance is that a coal pile could be a "first hopper" or "drop point." Also, there is plaintiffs' other argument that the coal pile is physically a part of the "hopper," given (1) the fact that it is connected (both physically and operationally) to the structure containing the apron feeder as it extends into the coal pile and (2) provides the platform for the unloading of coal into it. This also is plausible application of EPA's "first hopper (drop point)" guidance to the particular circumstances of this case.
Also, possibly lending support to plaintiffs' arguments is EPA's response to commenters who contended that EPA did not have the authority to regulate coal storage piles under 40 C.F.R. Pt. 60 because a coal pile is not a building, structure, facility, installation, or apparatus within the meaning of what they contended are applicable statutory and regulatory provisions because coal piles have no walls, floor surfaces, or dedicated equipment. In rejecting this contention, EPA stated, in relevant, part:
As noted earlier, Subpart Y specifically states in § 60.251(f) that "[e]quipment located at the mine face is not considered to be part of the coal preparation and processing plant." In at least two responses to comments during the 2009 rulemaking, EPA made reference to either the "mine face," "active mining area," or both, in the context of drawing a line between a coal processing plant and the rest of a mine.
One was EPA's response to comments that it should adopt subcategories for its Subpart Y requirements that would differentiate between coal "producers" (i.e., coal mines) from industrial "users" (e.g., power plants, cement manufacturers, and coke ovens).
Defendant, however, points to another response that EPA made to comments seeking clarification with respect to haul roads in which EPA made reference to "mine face" and in parentheses to "active mining area." The concern of the commenters was that haul roads located outside of the coal processing plant should not be subject to Subpart Y regulation. In addition, the commenters believed that EPA needed to more clearly define the beginning of the coal processing plant to make clear which haul roads would be subject to Subpart Y and which would not. The following is the full text of EPA's summary of the comments and its response:
Defendant contends that the above response is significant in several respects. First, there is again the reference to the beginning of the coal preparation plant being the first hopper, albeit also the parenthetical of "drop point." Second, EPA appears to distinguish between haul roads that lead up to but are outside of the coal processing plant, which would not be subject to Subpart Y, and those within a coal processing plant (i.e., located after the coal "enters the `coal preparation plant'"), which would be subject to Subpart Y. Defendant argues that the same concept applies to coal piles. That is, a coal pile for mine run, unprocessed coal within a surface coal mine that is located outside of the mine coal processing facilities (even if just outside) would not be subject to Subpart Y but a coal pile located after the coal enters the coal processing plant would be.
But, again, this begs the question of what comprises defendant's coal processing facilities in the first instance. If the coal pile is deemed to be an integral part, then the first entry of coal would be when it is unloaded onto the coal pile. Also, there is the separate issue of EPA's guidance stating that coal unloading of all types into a coal processing plant is subject to regulation under Subpart Y and whether, in this instance, that would be unloading onto the coal pile given EPA's comment about unloading for storage not being counted unless possibly the storage is only temporary.
Under what is generally referred to as
Plaintiffs claim that the PTE for PM from the mine haul road, as well as the activity of hauling coal over it from the active mining area to the coal pile, is subject to Subpart Y. Essentially, their argument is that the transportation of the coal by truck ("equipment") over the haul road and away from the "mine face" is part of
Given the literal language of Subpart Y, including § 60.251(f), plaintiffs' argument that the haul road and the hauling of coal over it are part of defendant's coal processing facilities is a plausible one. Further, there is support from a factual standpoint, given the physical layout of defendant's facilities, i.e., the mine face being located some three to four miles from the coal handling facilities and tethered to them by the narrow corridor containing the haul road.
Nevertheless, it is clear enough from the foregoing guidance that EPA does not consider a haul road from the mine face to the first drop point to be a part of a coal processing facility subject to Subpart Y. For this reason, the court concludes the haul road in this case is not included.
In the 1998 guidance addressing coal unloading at a coal processing plant, which was reaffirmed in 2009, EPA made clear (1) that coal unloading is subject to Subpart Y regulation, and (2) that, as a consequence, the PTE for PM emissions from coal unloading must be counted in making the required PTE calculation for determining whether the coal processing plant is a major source.
But, whether the failure to take into account coal unloading makes a difference in terms of the coal pile being in or out may depend upon: (1) whether there is any other logical point to draw a line between it and the rest of the coal processing facilities which includes coal unloading that is other than the unloading of coal onto the coal pile; and/or (2) whether the unloading is for longer than temporary storage. Further, apart from that, there is the question of whether the coal pile itself is "in" defendant's coal processing facilities for reasons articulated by plaintiffs, so the first point of entry (first "drop point") would be the unloading of coal onto the coal pile. Or, to put it another way, truck dumps for unloading coal would normally be considered part of the coal processing facilities and subject to Subpart Y regulation
As to these points, the court concludes that EPA's guidance does not provide a clear answer. Plaintiffs' reading of EPA guidance is plausible, but so also is defendant's — at least up to the point where it turns a blind eye to EPA's coal unloading guidance.
In its amicus brief, the State argues that Eighth Circuit precedent requires this
(Doc. No. 92, pp. 10-11). Not surprisingly, defendant agrees with the State's "considerable deference" formulation.
The court believes, however, that the State and defendant paint with too broad a brush and the precedent they cite is not on point. The issue in
Unfortunately, there is not a lot of case law addressing what deference, if any, should be accorded to determinations made by a state permitting agency that lead up to a conclusion that a source is not a major one in a citizen's suit under the CAA. Perhaps, the only case to have squarely addressed the issue is
A more recent case addressing what deference should be accorded the determinations of a state agency in a CAA citizen's suit — albeit not involving the issue of major source — is
Then, in working through the issues in the case, the court in
The court refused, however, to grant deference to the state agency's determination that another cell at the plant was subject to Subpart W. The court concluded that the state agency's determination on that point directly contradicted the plain language of Subpart W. The court added this was "a legal issue for the court to resolve, especially where it does not require the expertise of the agency as do some of the other issues presented in this action."
Still more recently, the federal district court in the Western District of Virginia addressed the question of whether it should give deference to the state permitting agency's determination that reclaimed fills and associated "underdrains" in a coal mine were not "point sources" for which a permit is required under the Clean Water Act ("CWA").
In contending the reclaimed fills were point sources requiring a permit, the environmental groups in
After considering these and other points, the court in
Prior to concluding it was premature to resolve the question of deference, the court discussed at some length the appropriateness of giving deference to a state agency determination in a citizen's suit under the CWA. This included quoting from a Ninth Circuit decision discussing the tension in a CWA citizen's suit between enforcing the requirements of the CWA if EPA has failed to do so and affording agency deference to what EPA decided and citing to two cases in which courts had refused to give deference to either the state permitting agency or EPA when to do so would be contrary to the requirements of the CWA.
The court concludes that the courts in
In other words, it is not enough in this case that the NDDOH has been delegated the authority to make the major source determination and that its decision standing alone appears to be rational. What the NDDOH decided must also be consistent with the CAA's requirements and any governing EPA regulations before deference can be afforded to this very important threshold determination.
Relevant to this case, the NDDOH had to do two things in reviewing defendant's minor source permit application for the Coyote Creek mine. One was to determine which of the mine facilities are part of defendant's coal processing facilities and subject to regulation under Subpart Y for the purposes of insuring that the NSPS performance standards are met as well as for identifying what emissions points need to be considered in determining whether the source is a major one for purposes of the PSD program. The other was to determine whether the PTE for PM from all of the emission points within the coal processing facilities collectively reached the 250 tpy major source threshold or not.
In terms of the latter, it necessary to keep in mind that PTE is a theoretical, regulatory construct that EPA uses to provide a benchmark for distinguishing between major and minor sources.
40 C.F.R. §§ 51.166(b)(4) & 52.21(b)(4). "At its core, potential to emit relates to a source's inherent capacity to emit air pollutants. That is, PTE reflects the maximum capacity of a source to emit any given air pollutant, based on the source's physical design and operational limitations."
PTE is not to be confused with actual emissions, which may be significantly lower.
While it does appear the critical issue upon summary judgment is whether the coal pile in this instance is part of defendant's coal processing facilities, some discussion of what the NDDOH determined or failed to determine with respect to other matters is necessary to address plaintiffs' argument that the NDDOH's alleged failures to properly address other issues is symptomatic of it not having conducted a meaningful review of defendant's minor source permit application. As discussed later, this is one of plaintiffs' arguments for why nothing of what the NDDOH decided is entitled to deference.
When this litigation commenced, there was no formal administrative record reflecting what the NDDOH decided in reaching its ultimate conclusion that defendant needed only a minor source permit for the Coyote Creek Mine. After the court denied defendant's motion to dismiss, the defendant went about assembling contemporaneous evidence of what the NDDOH considered. Through an open records request, defendant secured a handful of paper documents. Principally, these are:
The AQEA is a four and one-half page document that contains a short description of the mine facilities, a listing of the potentially applicable NDDOH Rules, a summary of the potential emissions, a summary of what the defendant proposed in terms of meeting the applicable rules, and a recommendation that the permit should be granted. In short, it appears to be the working document for the analysis of defendant's permit application.
In addition to obtaining the few agency documents that existed, the defendant deposed: the NDDOH's environmental engineer who had primary responsibility for evaluating the permit application, including preparation of the AQEA; the Director of the NDDOH's Air Quality Division who signed defendant's minor source permit; and the Chief of Environmental Section of the NDDOH.
The court will start first with what it appears the NDDOH decided was included in defendant's coal processing facilities and subject to Subpart Y. Then, the coal pile will be addressed specifically.
If appears from what follows that the NDDOH substantially relied upon what defendant contended was its coal handling facilities subject to Subpart Y. For that reason, the court starts with that first.
What was presented in defendant's permit application has been set forth in some detail above. In terms of defining precisely what equipment and facilities were deemed to be part of the coal processing facilities, the application was somewhat vague. While clearly the primary crusher, the secondary crusher, and the transition from the secondary crusher to the conveyor that transports the coal to the Coyote Station were included, there appears to be some uncertainty whether anything else was. Also, the
In terms of the upstream boundary of the coal handling facilities, the application stated:
(Doc. No. 1-1, p. 12) (footnote to EPA's guidance omitted). Also, in another part, the application stated: "From the pile the coal is pushed via dozer into a receiving pocket and apron feeder where it enters the coal processing facility." (
In response to three questions posed by the NDDOH engineer who did the primary analysis of defendant's permit application, the defendant stated:
(Doc No. 85-8, pp.2-3) (italics added).
As indicated by that portion of the responses set forth in italics, defendant more precisely stated that the apron feeder, like the coal pile, is not part of the coal processing facilities and is excluded from Subpart Y regulation. Based on this, it appears defendant's position at the time of permitting was that the upstream boundary of the coal processing facilities was the retaining wall or the backside of it. This is consistent with defendant's claim in its application that emissions from its coal processing equipment were controlled by the PECS, since there are no PECS-type enclosures that come close to totally surrounding the conveying portion of the apron feeder as it extends out into the coal pile. Also, this is consistent with what defendant stated in an internal Preliminary Feasibility Evaluation for the coal processing facilities: "The coal haulers will dump the coal and build an open stockpile on the mine side of the concrete retaining wall around the feed end of the feeder breaker." (Doc. No. 90-5, p. 4) (italics added). Further, it is consistent with the diagram that defendant submitted to the court in connection with the motion to dismiss as set forth earlier, which shows the backside of the retaining wall as being the beginning of Subpart Y regulation. (Doc. No. 38-6).
Also, complicating what was presented is the fact that the "apron feeder" and "primary crusher" as installed are one piece of equipment, known as a "feeder breaker." (Doc. No. 90-5, pp. 4-5). As the photograph set forth earlier indicates, the conveying portion of the "feeder breaker" conveys the coal a short distance to the "breaker," which is the primary crusher.
In its most recent briefing in this case, defendant makes no effort to claim that the apron feeder, as it extends out into the coal pile, is not part of its coal processing equipment. Rather, defendant now claims that the upstream boundary of the coal processing facilities is the point where the coal comes in physical contact with apron feeder after the coal has been unloaded from the coal pile. Most probably, this switch came about because the contention that the apron feeder is not part of the coal processing equipment subject to Subpart Y is untenable given that it and the primary crusher are one piece of equipment, i.e., a "feeder breaker." Also, under the more mechanical-oriented language that defendant selects from EPA's guidance for its argument that the upstream boundary of its coal processing facilities excludes the coal pile, the feeder part of the feeder breaker directly and immediately conveys the coal to the crushing equipment (i.e., the breaker) within the meaning of that guidance. Further, the feeder breaker is located downstream of the structure surrounding it, which clearly is "hopper-like" in appearance within defendant's literal construction of EPA's guidance.
In terms of the downstream or exit point of the coal handling facilities, defendant's application stated that the Subpart Y regulated facilities end at the point where the coal is transferred to the belt of the conveyor that conveys the coal to the Coyote
In addition to the problem of what defendant represented as being part of its coal handling facilities, it also appears that defendant's statements about the crushing equipment being more or less enclosed within the PECS is somewhat misleading — at least from the undersigned's reading of the application — as it applies to the primary crusher or breaker. The photograph set forth earlier showing the exposed feeder breaker makes it clear that the breaker would be exposed to air as coal is fed into it unless at all times the feeder breaker is either buried by the coal pile or the structure surrounding it is completely full of coal when the coal is being crushed.
There may also be a similar issue at the back end. If some portion of the conveyor should be included as part of defendant's Subpart Y facilities, only 3/4's of it is enclosed. Defendant's application was silent on that point.
Finally, even putting aside the ambiguity of the foregoing, what is clear is that defendant's application did not include any equipment or activity for the unloading of coal into the facilities, despite EPA's guidance with respect to coal unloading.
While not entirely clear, it appears the NDDOH accepted defendant's arguably too narrow representation of what constituted the beginning or upstream boundary of the coal processing facilities subject to Subpart Y that excluded not only any equipment or activity for the unloading of coal but also the apron feeder as it extends out into the coal pile, which now even defendant does not attempt to justify. This is because both the NDDOH's AQEA and the minor source permit it issued list only one emission unit ("FUG-1") as being subject to Subpart Y regulation that is described as being:
(Doc. Nos. 1-2, p. 2; 85-6, p. 8). And, while the above description references "conveying," most likely this was intended at the time to include only the conveying between the two crushers and the drop point onto the conveyor that conveys the coal to the Coyote Station.
After the NDDOH issued its minor source permit, this litigation commenced and the court issued its prior order denying the motion to dismiss. Since that time, NDDOH personnel have made various statements about where the upstream boundary of the coal processing plant begins. For example, a label placed on one of several pictures taken at an inspection of defendant's coal processing facility after it commenced operation describes the coal processing facilities that are part of emission unit "FUG-1." The description mentions only the equipment that does the primary and secondary crushing and the transition from the secondary crusher down to the point where the coal is loaded onto the conveyor that conveys the coal to the Coyote Station. (Doc. No. 83-10, p. 35). On another picture, however, there is a
The court suspects that what happened is that the NDDOH adopted what defendant represented to be the facilities and equipment it considered to be part of its coal processing facilities subject to Subpart Y, which apparently excluded the apron feeder as it extends out into the coal pile, and that any expression of opinion now about precisely where the upstream boundary is located is after-the-fact and a consequence of the focus now being placed upon the issue.
The same sorts of issues may exist with respect to the back end or downstream boundary of defendant's coal processing facilities. As noted earlier, defendant in its permit application represented that the downstream boundary was the point where the coal was dumped onto the conveyor belt owned by the Coyote Station. What was not specifically mentioned was that the defendant would still own and control the remainder of the conveyor for the first 750 feet before it crosses onto the Coyote Station plant site. After the commencement of this case, the NDDOH's reviewing engineer testified in his deposition that he guessed that the conveyor as it is on defendant's property would be an emission unit under "FUG-1." (Doc. No. 85-4, pp. 75, 86-87). In addition, the person who signed defendant's permit application said the same thing. (Doc. No. 90-4, p. 34-35).
The court again suspects the NDDOH accepted what defendant represented at the time of permitting the downstream boundary to be, which is the point where the coal is unloaded onto the belt of the conveyor, particularly since that is the point where any control of emissions by the PECS would appear to end.
Finally, what is clear is that NDDOH's determination of what constitutes the coal handling facilities subject to Subpart Y excluded any equipment and activity associated with coal unloading into the facilities. And, the reason for that appears to be the lack of any consideration of EPA's guidance on that point. Nowhere in the contemporaneous record is there any specific discussion about coal unloading at defendant's facilities having to be included. Further, it is apparent from the NDDOH's reviewing engineer's deposition testimony that he was not familiar with EPA's guidance on that point. (Doc. No. 85-4, pp. 101-105).
When defendant represented that the PTE for its coal processing facilities would be negligible because of the PECS, this representation appears likely not to have extended to the PTE for emissions from the apron feeder as it extends into the coal pile. And, there is no evidence that the NDDOH made its own PTE calculation for this emissions point. Also, there is a question (particularly now after the facilities have been constructed) whether the PTE for emissions from the breaker (i.e, the primary crusher) could properly have been assumed to be negligible based on the representation that the primary crushing would take place within the PECS.
First, the mine employees who were deposed or who have given affidavit testimony have not claimed that the feeder breaker is always completely covered by the coal pile, even during normal operation. For example, defendant's production manager attested in an affidavit that during normal operations the apron feeder is "rarely" visible and "typically" is covered by the coal pile. (Doc. No. 94-1, p. 2). Also, one of defendant's dozer operators testified:
(Doc. No. 90-1, p. 97). A permissible inference from this evidence is that there are times when the feeder, as well as the breaker, may be exposed or partially exposed as coal is being processed.
Second, in terms of the required PTE calculation, there is nothing in the permit that was issued which states that the feeder breaker will only be operated when the coal pile completely covers this equipment or even that the equipment will be covered a certain percentage of the time. Consequently, for purposes of the PTE calculation (and keeping in mind EPA's requirements for making the calculation, the fact that PTE differs from actual emissions, and the restrictions upon when operational controls can be used to limit the calculated PTE), the correct PTE estimate may have required an estimate for the operation of the feeder breaker as being only partially enclosed by the surrounding structures and without considering any coal coverage.
Some of the same issues may exist with respect to the back end of defendant's coal processing facilities, whatever that might be. If part or all of the conveyor is part of defendant's coal processing facilities for purposes of Subpart Y regulation, it is clear that neither defendant nor the NDDOH made any estimate of PTE from the partially enclosed conveyor contemporaneous with the issuance of the minor source permit.
Because of the questions that exist with respect to the feeder breaker, the back end of defendant's coal processing facilities, and the lack of consideration of any coal unloading, what appears to have been the NDDOH's too narrow determination of what is included in defendant's coal processing facilities subject to Subpart Y regulation is not entitled to deference in this case. Likewise, the same is true for the NDDOH's conclusion that the PTE from defendant's coal processing facilities is negligible. While it may be that properly made estimates of PTE from the emissions points not considered would not materially change that, the point is the determinations appears never to have been made.
While there are substantial questions about what exactly the NDDOH concluded with respect to both the upstream and downstream boundaries of defendant's coal processing facilities, it did consider whether the coal pile should be included and determined it need not be. Both the NDDOH's AQEA and the minor source permit specifically list defendant's "open coal storage pile" as part of the general mine facilities that, for purposes of regulated emissions, was classified as part of "FUG-2" and not part of the coal processing facilities under "FUG-1" and subject to Subpart Y. (Doc. Nos. 1-2, p. 2; 85-6, p. 8). And, while the NDDOH appears not to have contemporaneously expressed in the AQEA, the minor source permit, or any other record why it reached that conclusion, a fair assumption is it relied upon the
In fact, with respect to the latter, the NDDOH reviewing engineer testified during his deposition that he initially assumed in posing the third question in the email exchange set forth above that a fugitive dust emission control plan for the coal pile was required by 40 C.F.R. § 60.254(c), which is a part of Subpart Y. Then, when he received defendant's response stating that the coal storage pile fell outside of what would be considered the coal processing plant under Subpart Y according to EPA guidance, he reviewed the guidance referenced and concluded the coal storage pile was not subject to Subpart Y and, for that reason, no § 60.254(c) fugitive dust emission control plan for the coal pile was required. (Doc. No. 85-4, pp. 20-22).
Later, after the NDDOH issued its minor source permit to construct, plaintiffs' counsel wrote a letter to officials at EPA's Region VIII offices in Denver in which it was argued that defendant's coal pile should have been considered a part of its coal processing facilities under Subpart Y and the PTE for emissions from the coal pile counted in determining whether the mine was a major source. (Doc. No. 35-1, pp. 3-7). Following this letter, several Region VIII officials had a conference call with the NDDOH. During the call, the NDDOH discussed why it had reached the conclusions it did with the Region VIII officials not expressing any opinions or conclusions one way or the other according to the NDDOH personnel who participated in the call. (Doc. Nos. 85-4, pp. 64-44, 116-17; 85-11, pp. 55-61). After the phone conference, the NDDOH sent Region VIII a followup letter, enclosing a copy of
(Doc. No. 35-1, pp. 2-8).
Finally, the NDDOH engineer who did the primary work on defendant's application testified during his deposition that he still believed the coal pile is not subject to Subpart Y based upon the EPA guidance referenced in the letter to Region VIII. Also, the upper management of the NDDOH testified that they stood by staff's determination, although acknowledging they had not personally studied the issue. (Doc. No. 96-3, pp. 14, 20, 43-44; 83-8, pp. 8-13, 19, 31).
In short, the record reflects that the NDDOH considered the question of whether the coal pile is subject to Subpart Y at the time it issued defendant's minor source permit and, since that time, has stood by that determination.
Plaintiffs make several arguments for why the court should not give deference to the NDDOH's determination that the coal pile is not part of the coal processing plant under Subpart Y. One is that it is based upon an erroneous construction of both EPA's Subpart Y regulations as well as its controlling guidance. These issues have already been addressed, with the court concluding that plausible arguments can be made both ways under Subpart Y and EPA's guidance with respect to whether the coal pile is part of defendant's coal processing facilities or not.
Plaintiffs also contend that the NDDOH's determination that the coal pile
Finally, plaintiffs contend that the NDDOH's determination should be afforded no deference because it uncritically accepted what defendant represented were its coal processing facilities subject to Subpart Y based upon "cherry-picked" statements from EPA's 2009 guidance spoonfed by defendant. In other words, according to plaintiffs, the NDDOH likely would have looked at the issue of the coal pile differently had it reviewed EPA's guidance on coal unloading; considered the fact that the apron feeder as it extends physically into the coal pile is part of the facilities subject to Subpart Y (a point defendant now concedes); and considered other points, including the degree to which the coal pile is integrated physically and operationally with the coal processing equipment. In fact, according to plaintiffs, the initial inclination of defendant's reviewing engineer was that the coal pile was part of defendant's coal handling facilities and needed a fugitive dust control plan compliant with Subpart Y's requirements, and it was only after the defendant pointed him in the other direction with selected references from the 2009 EPA Guidance that he changed his mind.
While the NDDOH's apparent too narrow determination of what facilities are subject to Subpart Y and its lack of consideration of EPA's guidance on coal unloading are problematic, the court will, nevertheless, afford deference to the NDDOH's determination that the coal pile can be treated as simply another mine facility and not part of the coal processing facilities that are subject to Subpart Y regulation. The reasons why are the following:
Further, even for coal piles and haul roads that are undisputedly within a coal processing facility and clearly subject to Subpart Y, EPA has decided not to impose the numerical emission limitations of PM that Subpart Y imposes on certain types of coal processing equipment or even the opacity standards that it requires be met by most of the rest of the coal processing plant. Rather, for coal piles, it has limited the controls to imposing "work practice standards" for controlling fugitive dust that, for the most part, appear to be comparable to those already being imposed by SMCRA and the NDDOH
But to be clear, the court's decision that the coal pile is not subject to Subpart Y should not be viewed as anything more than the court having given deference to the NDDOH's determination as the tie-breaker based on the record before the court that potentially could be incomplete with respect to EPA's views on the matter. Further, to put a finer point on it, the court's decision is not required by the language of Subpart Y. Thus, it may be possible for EPA to avoid a similar result in the future for similarly situated coal piles by providing clarifying guidance.
Both parties have retained experts who have calculated PTE's for the emissions points at issue for purposes of the pending motions and in the event they are needed for trial. In addition, each side's experts dispute the calculations of the other side's experts. Further, the disputes are highly technical in nature and include such things as: (1) whether certain emission factors and protocols that have been developed and published by EPA's Office of Air Quality Planning and Standards, Emission Factor and Inventory Group in
What follows are the PTE estimates that have been made by the experts of the respective parties.
The following are the record estimates of PTE related to the haul road.
Mine activity Plaintiff Defendant PTE tpy PTE tpy Haul road from active mining area to coal PM 1,4905.5 No estimate storage pile — coal hauling PM10 424.8 made PM2.5 42.5 Haul road from active mining area to coal PM 66.8 No estimate storage pile — wind erosion PM10 31.4 made PM2.5 10.0
(Doc. No. 69-2, p. 12). As already discussed, the court concludes the PTE for the haul road need not be considered based on the EPA guidance set forth earlier. However, if the court is wrong, the defendant might very well have needed a major source construction permit, even assuming the criticisms leveled by defendant's experts to plaintiffs expert's calculation, or, at the very least, a "synthetic" minor source permit.
The following are the estimates of PTE for the coal pile and the unloading of coal to it:
Mine activity Plaintiff Defendant
PTE tpy PTE tpy
Coal unloading at storage pile PM 25.1 0.16-0.27
PM10 5.7 0.08-0.09
PM2.5 0.5 0.01-0.01
Coal storage pile wind erosion PM 209.0 16.7-18.45
PM10 104.5 8.4-9.22
PM2.5 15.7 1.3-3.69
Storage pile maintenance by bulldozer18 PM 42.9 21.01-45.0
PM10 10.2 5.0-10.7
PM2.5 0.9 0.46-1.3
Truck traffic through and around coal PM 49.8 No estimate
storage pile PM10 14.2 made
PM2.5 1.4
The court has concluded it will give deference to the NDDOH's determination the coal pile is not part of defendant's Subpart Y facilities. For that reason, the PTE for the coal pile and the unloading of coal onto the pile that is for storage and not for contemporaneous loading into the apron feeder need not be considered. Here, this would include not having to count plaintiffs expert's estimates for wind erosion and truck traffic through and around the coal storage pile.
If the court has erred in concluding that the coal pile and the unloading of coal to it for longer term storage need not be considered, there would have to be further proceedings to determine whether the PTE of PM reaches the 250 tpy threshold given the disputed estimates of the parties with respect to the foregoing as well as the other disputed emissions points discussed next.
The following are the record PTE estimates for the remaining emissions points whether disputed or undisputed in terms of whether they need be included.
Mine activity Plaintiff Defendant PTE tpy PTE tpy Coal unloading onto the apron feeder PM 25.1 0.00-0.25 from the coal pile by dozer PM10 5.7 0.00-0.08 PM2.5 0.6 0.01-0.01 Primary crushing PM 32.0 Negligible PM10 7.2 because of PM2.5 0.6 coal coverage Secondary crushing Negligible Negligible because of because of PECS PECS Loading from the secondary crusher onto PM 25.1 Negligible the conveyor PM10 5.7 because of PM2.5 0.5 PECS Wind erosion from the entire length of the PM 15.6?? 19 *** conveyor including Coyote Station PM10 7.3 PM2.5 2.3 Wind erosion from 750 ft of conveyor on PM *** 0.5 defendant's property PM10 0.03 PM2.5 0.00
(Doc. Nos. 69-2, p. 12; 70-1, p. 15; 70-2, pp. 26-30). What is clear from the foregoing is that, even if plaintiff experts' estimates are accepted with respect to the disputed emission points, plaintiff will be unable to prove that the 250 tpy threshold has been reached so long as the PTE for emissions from the coal pile and the haul road are not considered. Further, this is true even if all of the unloading of coal onto the coal pile is counted based upon a conclusion that, under normal operations, much of it is unloaded at the immediate location of the apron feeder and processed within a short time, i.e., any "storage" of such coal is only "temporary."
Plaintiffs contend that, if the court concludes they are not entitled to summary judgment that the coal pile is subject to Subpart Y based upon the facts they claim are undisputed, there needs to be a jury trial. In addition to the facts that plaintiffs claim are relevant that have already been discussed (i.e., the physical location of the coal pile, the facts demonstrating the physical and operational relationship between the coal pile and the equipment that does the crushing, etc.), they point to the opinion of one of their experts that the coal
The court disagrees based on its conclusion that, even construing the material and admissible facts most favorably for plaintiffs, there is a plausible basis under the language of Subpart Y and EPA's less than clear guidance for the coal pile not being considered a Subpart Y regulated facility. But, even if the court is wrong and if the question of whether the coal pile is part of defendant's coal processing facilities is one of disputed fact, the court likely would not allow the jury to consider the competing opinions of the experts since, in each instance, they do nothing more than parse the language of Subpart Y and the EPA guidance in arriving at their respective conclusions.
As noted earlier, plaintiffs' attorneys sent a letter to EPA's Region VIII in which they lodged complaints about the action taken by the NDDOH in granting the minor source permit to construct, including their argument that defendant needed a major source permit based on the PTE for emissions from the coal pile that they stated the NDDOH failed to consider. Following that letter, the Region VIII officials had a conference call with NDDOH personnel during which they discussed the issues raised by plaintiffs, including the reasons for why the coal pile was not considered to be subject to Subpart Y. According to the deposition testimony, the Region VIII officials mostly listened. After the call, the NDDOH wrote a followup letter to Region VIII providing a written explanation for its position. Finally, notice of this action was provided to the EPA Administrator as required by 42 U.S.C. § 7604(a)(3). (Doc. No. 37-1).
In reaching the decision set forth above, the court has not placed any reliance upon EPA's silence and inaction following the conference call, the letter sent by the NDDOH, and formal notice of this action. There are too many reasons for EPA' silence and lack of action that to allow the court to draw an inference with respect to its position or interpretation one way or the other, including higher priorities, lack of resources, the fact plaintiffs filed this action and EPA possibly deciding to see how it played out, etc.
The defendant has tendered evidence that, during an inspection of the mine prior to the NDDOH granting defendant its minor source operating permit, NDDOH personnel observed no visible emissions of PM from the coal pile, the operations being conducted on the coal pile, the crushing equipment, or the conveyor. The court has not taken this evidence into account. As explained earlier, what is relevant in terms of the major source issue is the PTE from the emissions points of defendant's facilities that are subject to Subpart Y, not actual emissions.
The same holds true for the opinion of one of plaintiffs' experts that there must be significant emissions from the area where coal is crushed as well as from the conveyor based on the amount of coal dust and fines he observed on the ground on the back side of the retaining wall, which he documented by photographs during an on-site inspection. (Doc. No. 70-3, pp. 18 & 26). While the photographs do show a significant amount of obviously black material, there is no evidence as to how it got there. For example, it could have been from an upset condition. But, even putting that aside, the issue is PTE and not actual emissions. If defendant has been operating its equipment in in a manner that violates its permit or other NDDOH minor source requirements, that is an enforcement issue.
Plaintiffs offered evidence that the Coyote Station and defendant did a fair amount of planning and structuring of their contractual arrangements to avoid any PSD consideration of the coal processing facilities under either the air permit defendant sought to obtain or the Coyote Station's existing air permit. This appears to have included the shifting of tentative locations of the coal handling facilities off the Coyote Station Plant site, the dividing up of ownership of the conveyor, and the
Plaintiffs have also offered evidence that defendant's consulting engineers had included the coal pile as a Subpart Y regulated facility in an initial draft of defendant's permit application that offered an explanation for why the coal pile was included that mirrors some of the arguments now being made by plaintiffs. More particularly, a draft application dated July 2013 included an open storage pile capable of storing 180,000 tons that provided the following explanation for why the coal pile would be subject to Subpart Y:
(Doc. No. 85-13, p. 5). Notably, there is no mention in this draft about processed coal potentially being returned to the coal pile. (
Another draft application dated August 2014 similarly included the coal pile as a Subpart Y regulated facility. (Doc. No. 85-14, pp. 6-27). In this application, there was a detailed explanation for why, if the open storage pile contained only unprocessed coal, it would not be subject to Subpart Y because the beginning point of the coal processing facility would be the "receiving pocket" downstream of the coal pile — the same explanation offered in the application that was finally submitted and discussed in detail earlier. But, with that being said, the August 2014 draft stated that some of the processed coal might be returned to the coal stockpile as additional storage, which, from all appearances, is the reason why the size of the proposed coal pile was increased in this draft to 260,000 tons. The draft then went to state that, because processed coal might be returned to the storage pile, it would be subject to Subpart Y because it would receiving coal after it had already passed through the upstream boundary of the coal processing facilities. (
Following this draft, a final draft was prepared in late August 2014 that excluded the possibility of returning processed coal to the coal pile, returned the proposed size of the coal pile to 180,000 tons, and removed the coal pile as a Subpart Y facility. (Doc. No. 85-21, pp. 4-30). This was after defendant stated in an email to its consulting engineer that it would not return processed coal to the coal pile and inquired whether that would change the emissions calculation. (Doc. No. 85-15, p. 2).
Defendant contends in its briefing that the reason for the inclusion of the coal pile
Plaintiffs further contend that another reason for the shifting views and the decision not to put processed coal back into the coal pile was because defendant and its consulting engineers were concerned about what might be deemed the correct PTE estimate for the coal pile. Plaintiffs point to a spreadsheet of estimated PTE's for the coal pile made by defendant's consulting engineer. Based on one methodology, the estimates were those set forth in the August 2014 draft application of: 23.02 tpy PM; 11.51 tpy PM10, and 11.51 tpy PM2.5. However, the other estimate using an EPA emission factor ("0.72u") from AP-42, Table 11.9.1 for Western Coal Mining resulted in an estimated PTE for PM of 259.4698 tpy. (Doc. No. 85-14, p. 38). Notably, this is the same emissions factor used by plaintiffs' expert when he arrived at a PTE estimate in excess of 200 tpy PM for the somewhat smaller coal pile of 180,000 tons. (Id.; Doc. No. 69-2, p. 19).
While the court has reviewed all of this evidence, what is relevant here in terms of whether defendant needed to obtain a major source permit is the final arrangement of facilities that defendant proposed and constructed as well as what EPA has said nor not said that is relevant to the coal pile in Subpart Y and its various guidance. The fact that defendant's consulting engineers may have changed their view on the issue may simply be the result of their having taken more time to fully study the matter. That being said, if the court is wrong in granting summary judgment and if the issue of whether the coal pile is in or out needs to be tried, then the foregoing is likely grist-for-the mill in the cross-examination of defendant's principals and consulting engineers as well as possibly direct evidence in support of plaintiffs' case.
Before proceeding with its application for a minor source permit, defendant had one or more meetings with NDDOH officials, the subject of which was whether the Coyote Station and the Coyote Creek mine had to be treated as a "single source" for purposes of permitting and compliance with CAA requirements. During one of the meetings, the NDDOH officials apparently expressed concern that EPA would deem the Coyote Station and the mine to be a single source, particularly given the proximity of the mine and that the Coyote Station being its only foreseeable customer. Because of this, the NDDOH urged the defendant to do a full PSD review. (Doc. No. 85-17).
Instead, defendant sought a separate source determination from the NDDOH by letter dated February 13, 2013. (Doc. No. 85-9, pp. 6-19). The NDDOH approved the separate source determination two months later in a letter to defendant dated April 11, 2013. (Doc. No. 85-9, pp. 3-5). Then, in defendant's application for its minor source permit, defendant relied upon that determination as one of the reasons why its proposed facilities did not constitute a major source (i.e., its emissions did not have to be aggregated with those of the Coyote Station) and only a minor source permit was required. (Doc. No. 1-1, p. 9).
While plaintiffs concede that whether or not the NDDOH made the right decision
Without getting into all of the complexities of a "single source" determination, one of the criteria is whether the sources are on adjacent property. In its letter to the NDDOH, the defendant represented its mine would not be located on property adjacent to the Coyote Station, but rather would be some three to four miles away, except for the possibility of the facilities being connected by a haul road or conveyor for the transportation of the mined coal, and depicted the physical separation by a map. (Doc. No. 85-9, pp. 14-17).
As the mine was permitted and constructed, however, there is no physical separation if the coal pile and the coal handling facilities are deemed to be part of the mine, as defendant contends. While the mine face is located some three to four miles from the Coyote Station, the eight-acre coal pile capable of holding up 180,000 tons and the crushing equipment, which defendant claims in this case are embedded within and part of its coal mine, are located on property that is immediately adjacent to the Coyote Station. And, while this is only one of the three criteria that have to be met for a source to be considered a "single source," there do appear to be questions with respect to the other criteria, despite defendant's protestations to the contrary. Further, it is clear from the NDDOH's separate source determination that it placed significant reliance upon the fact that the sources would not be adjacent to each other when it stated in the conclusion of its separate source determination:
(Doc. No. 85-9, p.5).
Plaintiffs also contend that defendant failed to disclose information about the amount of direction and control that the Coyote Station exerts over the mine. While defendant did allude to some of the Coyote Station's financial controls in its letter, which it stated were a function of the cost-plus nature of the coal supply agreement between the parties, plaintiffs claim that
Defendant's response to plaintiffs' proffer of this evidence is that it is not material to the issues in this case and that it would prevail on the "common control" and SIC code issues. Further, with respect to the adjacent property issue, it states that the NDDOH was always aware there would be conveying equipment or a haul road on adjacent property, ignoring the coal pile and the coal processing facilities.
While not entirely clear, plaintiffs appear to contend that this evidence is material in two respects. First, the representation that the mine facilities would be some three or four miles away is consistent with defendant having initially considered the coal pile and the coal processing facilities as being associated with each other and distinct from the mine face, as suggested in the July 2013 draft permit application, with all of this being evidence that the coal pile is part of defendant's coal processing facilities. Second, plaintiffs contend that defendant's representation about the fact its facilities would not be on adjacent property was materially false when made and is relevant for purposes of defendant's credibility. Plaintiffs contends the same is true for the lack of full disclosure with respect to facts bearing upon common control.
While the court agrees the "single source" issue is collateral to what has to be decided in this case given the scope of the complaint, the representation that there would be no mine facilities on adjacent property is troubling — at least on its face. If the court has erred in granting summary judgment and there needs to be a trial, what also might be fodder for cross-examination is how defendant can claim that the coal pile is a mine facility when it previously represented to the NDDOH there would be no mine facilities on adjacent property. Also, to the extent credibility is an issue, it might be admissible for that purpose. In either case, defendant would have the opportunity to provide whatever explanation it has for the representation that was made.
One of the employees of defendant's consulting engineering firm who was involved in putting together defendant's minor source permit application, including having input on whether the coal pile was a Subpart Y regulated facility or not, went to work for the NDDOH shortly after it issued the minor source permit. Plaintiffs contend that the court should give no deference
The court need not wade into the thicket of the propriety of the involvement by the former employee of defendant's consulting engineer as it bears upon the issue of deference. The NDDOH decisions to which the court gives deference were made prior to his becoming an NDDOH employee.
The suggestion has been made by defendant and the State that the NDDOH reached the right conclusion because all of the other surface mines in the State, most of which are larger, have been determined to be minor sources. For one thing, it is not clear that all of the coal mines do coal processing. Second, even for those that do, it appears from the evidence that at least two of the mines utilize some form of truck dump (Doc. No. 90-8, p. 29), which likely is deemed to be a Subpart Y facility. And, as already observed, one argument here is that defendant's open coal storage pile is simply a de facto substitute. Also, there is evidence that at least one of the mines that is much larger and processes approximately 16 million tpy obtained a "synthetic" minor source permit. (Doc. No. 85-11, pp. 42-48). And, what that may suggest is that the estimated PTE for that mine exceeded the major source permit threshold, but the mine agreed to operational or emission limits that reduced the calculated PTE below the threshold, thereby allowing it to obtain the "synthetic" minor source permit. In this case, defendant and the State agree that defendant's permit is not a "synthetic" minor source permit but rather is a "true" minor source permit.
In short, without knowing a lot more, it is not possible to draw any conclusions from the other mines about how they compare in terms of making the required PTE calculations for the major source determination. That being said, it does bear upon the observations that the court makes next.
If a more formal process had been followed here (such that plaintiffs would have arguably needed to participate) and if plaintiffs had been able to persuade the NDDOH that the PTE for the 250 tpy threshold had been exceeded or was very close with the PTE from the coal pile being counted, it appears likely defendant would have been able to agree to additional operational controls capable of enforcement on some objective basis or emission limits based on periodic testing that likely would have allowed it to receive a "synthetic" minor source permit, similar to apparently what one or more of the larger surface mines in the State were able to obtain. And, if that had happened, there would have been no PSD review, no need to revise the existing fugitive dust control already mandated by SMCRA and state
For the reasons set forth above, the court concludes that defendant's haul road and coal pile are not part of its coal processing facilities under 40 C.F.R. Pt. 60, Subpart Y. Given this determination, plaintiffs have not met their burden of demonstrating an ability of being able to prove that the 250 tpy major source threshold can be reached even if the court was to accept the PTE estimates of their expert and resolve the other disputed issues with respect to what emission points need to be included in their favor. Further, the determination that the coal pile is not a Subpart Y regulated facility in this instance disposes of plaintiffs NSPS performance claim for the reasons already articulated.
Therefore, the court
Most likely, the alternative estimates were made to address a potential objection that the 3.2 million tpy permit limitation should not be relied upon for purposes of calculating the required PTE, at least at the outset, because it is a legal limitation and not one based on the physical or mechanical operation of the equipment.
This is not to say that agreed upon production limits cannot be used. If the cumulative PTE for all emissions points exceeds 250 tpy afer using the maximum capacity of the coal processing equipment when appropriate, the permit applicant can agree to a federally enforceable permit limit on production, which likely would be coupled with production reporting requirement. Then, if the cumulative PTE with that adjustment is less than 250 tpy, the permit applicant would be entitled to what in CAA parlance is as "synthetic" minor source permit.
Quite frankly, conducting a jury trial on the issue of liability would be a challenge, particularly if the issue of whether the coal pile is in or out must tried. Does the court read just the relevant parts of Subpart Y to the jury and let it decide based on that alone? What about EPA's not entirely clear guidance? What about deference to any subsidiary matter decided by the NDDOH or, if we get to a jury trial, has the time for giving deference passed?
The same holds true for looking to the jury to resolve what the PTE from the various facilities may be. For example, one of the issues is whether certain published EPA emissions factors are appropriate, including what EPA stated in what may be an ambiguous footnotes to a certain section of AP-42, which might have significant consequences. Another example, is the question of whether the total moisture content of the coal can be considered or only "sorbed" moisture, including cautionary statements made by EPA about that subject. Further, how much discretion does the person making the estimation have to consider an average or mean number for an input to a formula over a worst case numbers? Does the court try and instruct on some of these matters, not allow certain opinions if the court concludes that they conflict with EPA guidance, or simply throw up its hands and let the jury fill in numbers after listening to the conflicting testimony of the experts on all of the issues, including how they might apply EPA guidance. A review of the expert reports in this case reveals that the complexity of the PTE issues is on par with those that the courts had to deal with in
The real answer to the court's concern about having to conduct a jury trial with respect to these issues may be that, for this action where the threshold question is whether defendant's mine is a major source (which is quasi-jurisdictional in nature), there is an argument for distinguishing
