United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 26, 2002 Decided May 3, 2002
No. 01-1052
National Petrochemical & Refiners Association,
Petitioner
v.
Environmental Protection Agency,
Respondent
International Truck and Engine Corporation, et al.,
Intervenors
Consolidated with
01-1092, 01-1093, 01-1094, 01-1130, 01-1132,
01-1134, 01-1404, 01-1414
On Petitions for Review of Orders of the
Environmental Protection Agency
Theodore L. Garrett argued the cause for petitioner Cum-
mins Inc. With him on the briefs was Andrew J. Heimert.
Julie R. Domike argued the cause and filed the briefs for
petitioner Volvo Truck Corporation.
Michael F. McBride argued the cause for petitioner Na-
tional Petrochemical & Refiners Association, et al. With him
on the brief were Maurice H. McBride, Bruce W. Neely,
John W. Lawrence, John S. Hahn, Julie Anna Potts, Janice
K. Raburn, David T. Deal, Thomas Sayre Llewellyn and Chet
M. Thompson.
William A. Anderson, II, argued the cause for petitioners
Alliance of Automobile Manufacturers and Association of
International Automobile Manufacturers, Inc. With him on
the briefs were Julie C. Becker, Ellen L. Shapiro, Charles H.
Lockwood and Susan A. MacIntyre.
Jed R. Mandel and Timothy A. French were on the briefs
for Engine Manufacturer petitioners.
Eric G. Hostetler, Kent E. Hanson and Norman L. Rave,
Jr., Attorneys, U.S. Department of Justice, argued the causes
for respondents. With them on the briefs were Kenneth C.
Amaditz, Attorney, U.S. Department of Justice, John T.
Hannon, Michael J. Horowitz and Steven E. Silverman,
Attorneys, U.S. Environmental Protection Agency.
Howard I. Fox and John D. Walke were on the brief for
intervenors American Lung Association, et al.
Janice K. Raburn, David T. Deal, Thomas Sayre Llewel-
lyn, Michael F. McBride, Bruce W. Neely, John W. Lawrence
and Maurice H. McBride were on the brief for intervenor
American Petroleum Institute, et al.
Hope M. Babcock, Richard Blumenthal, Attorney General,
State of Connecticut, Kimberly Massicotte, Assistant Attor-
ney General, M. Jane Brady, Attorney General, State of
Delaware, Kevin Maloney, Assistant Attorney General, J.
Joseph Curran, Jr., Attorney General, State of Maryland,
Kathy M. Kinsey, Assistant Attorney General, Thomas F.
Reilly, Attorney General, Commonwealth of Massachusetts,
Kirsten H. Engel, Assistant Attorney General, Philip T.
McLaughlin, Attorney General, State of New Hampshire,
Maureen D. Smith, Assistant Attorney General, Eliot Spit-
zer, Attorney General, State of New York, Peter H. Lehner,
Assistant Attorney General, Robert A. Reiley, M. Dukes
Pepper, Jr., Sheldon Whitehouse, Attorney General, State of
Rhode Island, Tricia K. Jedele, Assistant Attorney General,
Barbara Beth Baird and Jeri G. Voge were on the brief for
intervenors State and Territorial Air Pollution Program Ad-
ministrators, et al. and amicus curiae South Coast Air Quality
Management District. Jennifer L. Wazenski, Assistant At-
torney General, State of Maryland, entered an appearance.
Laurence H. Levine, Robert M. Sussman, Julia A. Hatch-
er, William A. Anderson, II, Susan A. MacIntyre, Julie C.
Becker and Ellen L. Shapiro were on the brief for intervenors
International Truck and Engine Corporation, et al.
Before: Sentelle and Tatel, Circuit Judges, and
Williams, Senior Circuit Judge.
Opinion for the Court filed PER CURIAM.
PER CURIAM:1 We have here a set of challenges to an
EPA rule affecting diesel fuel and engines. The rule requires
drastic reductions in exhaust emissions starting in 2007 (for
some emissions 95% lower than current standards). To aid in
the achievement of the new emission standards, the rule also
requires a 97% reduction in the sulfur level in diesel fuel.
Numerous parties, including engine manufacturers (including
Cummins Inc.), automobile makers, and fuel refiners, chal-
lenged the rule on various grounds, while others, including
environmental groups and states, defended it. We deny the
petitions.
I. The Regulations
Diesel engines emit nitrous oxides ("NOx"), non-methane
hydrocarbons, and particulate matter ("PM"), all of which are
__________
1 Parts I and II of the opinion are by Senior Judge Williams;
part III is by Judge Sentelle; and parts IV and V are by Judge
Tatel.
harmful to the environment and human health (as no party
disputes). Fulfilling its duty under the Clean Air Act to set
emission standards that "reflect the greatest degree of emis-
sion reduction achievable" through cost-effective technology,
42 U.S.C. s 7521(a)(3), the EPA decided on dramatic reduc-
tions of diesel engine emission standards, issuing a final rule
on January 18, 2001: Control of Air Pollution from New
Motor Vehicles: Heavy-Duty Engine and Vehicle Standards
and Highway Diesel Fuel Sulfur Control Requirements, 66
Fed. Reg. 5002 (2001) (hereinafter "2007 Rule").
The 2007 Rule sets the following standards for diesel
engines: 0.01 grams per brake-horsepower-hour (g/bhp-hr)
for PM, 0.20 g/bhp-hr for NOx, and 0.14 g/bhp-hr for non-
methane hydrocarbons. 66 Fed. Reg. at 5005; 40 C.F.R.
s 86.007-11(a)(1), (3). For PM and NOx, the new standards
are "90 percent and 95 percent below current standard levels,
respectively." 66 Fed. Reg. at 5002. Engine emissions are
to be measured by the Federal Test Procedure, see 40 C.F.R.
s 86.1301-90 et seq., as well as two other test procedures that
are not at issue in this case.
The standard for PM takes full effect in 2007. 66 Fed.
Reg. at 5005. The standards for NOx and non-methane
hydrocarbons, however, will be phased in as follows: 50% of a
manufacturer's sales for 2007, 2008 and 2009 engines and
100% of sales for 2010 and following. Id.; 40 C.F.R.
s 86.007-11(g). During the phase-in period, manufacturers
will be allowed to participate in an averaging, banking, and
trading ("ABT") program. This program allows the genera-
tion of credits from engines that beat the standards; the
credits can then be applied to engines that may not be able to
meet the 2007 standards right away. 66 Fed. Reg. at 5109-
11; 40 C.F.R. s 86.007-15. A crucial distinction is made
here: Averaging across service classes (e.g., between light
heavy-duty engines and heavy heavy-duty engines) is allowed,
but not banking or trading. 66 Fed. Reg. at 5110.
The 2007 Rule also eliminates a preexisting exception--
available only for turbocharged heavy-duty diesel engines--
for emissions from engine crankcases. 66 Fed. Reg. at 5040;
40 C.F.R. s 86.007-11(c). As a result, any crankcase emis-
sions not eliminated count against a vehicle's emission limit.
High pollutant levels in fuel make it impossible or at least
far more difficult to achieve low emissions. Thus, under its
authority to regulate any fuel components that significantly
impair "the performance of any emission control device or
system," 42 U.S.C. s 7545(c)(1)(B), the EPA also decided to
require "a 97 percent reduction in the sulfur content of diesel
fuel." 66 Fed. Reg. at 5002. As of 2006, the maximum sulfur
content of diesel fuel will be reduced from 500 ppm to 15
ppm. (Under a 15 ppm cap, the EPA predicts that the
average sulfur level in diesel will actually be 7 ppm. Re-
sponse to Comments at 3-50.) Under its "Temporary Com-
pliance Option," the EPA actually requires that only 80% of
fuel from any given refinery meet the 15 ppm cap in years
2006-08. Any overachieving refiner will generate credits,
which it can then use to average with another refinery owned
by that refiner, bank for future years, or sell to another
refiner. 66 Fed. Reg. at 5065.
II. The Emissions Standards
We review the 2007 Rule under the arbitrary and capri-
cious standard of 42 U.S.C. s 7607(d), which is indistinguish-
able from the Administrative Procedure Act equivalent. See
Ethyl Corp. v. EPA, 51 F.3d 1053, 1064 (D.C. Cir. 1995);
Small Refiner Lead Phase-Down Task Force v. EPA, 705
F.2d 506, 519 (D.C. Cir. 1983). Deference is particularly
great where EPA's decision is based on complex scientific or
technical analysis. Appalachian Power Co. v. EPA, 251 F.3d
1026, 1035 (D.C. Cir. 2001).
A. Background on Emissions Control Technology
Diesel exhaust emissions can be controlled through the use
of catalytic emission control devices in the vehicle's exhaust
system. 66 Fed. Reg. at 5007. These resemble the familiar
catalytic converters found on ordinary automobiles. Id.
Current control devices for diesel engines work less well than
they do for gasoline engines, because of diesels' "oxygen-rich
and relatively cool ... exhaust environment." Id. at 5009.
PM emissions are also more difficult to control in diesel
engines because of the soot formed during diesel combustion.
Id. Compounding the difficulties is the fact that "historical
diesel NOx control approaches tend to increase PM and vice
versa, but both are harmful pollutants that need to be con-
trolled." Id.
Thus, in order to achieve drastic--and simultaneous--re-
ductions in PM, NOx, and non-methane hydrocarbons, engine
manufacturers will need technical innovations in emission
controls. The EPA predicts that two relatively new technolo-
gies will aid in achieving the 2007 reductions: the catalyzed
diesel particulate filter ("particulate filter") and the NOx
adsorber. 66 Fed. Reg. at 5036. In the following para-
graphs, we explain briefly--and to the best of our under-
standing--how each technology works on the targeted emis-
sions.
Particulate matter is made up of three things: Unburned
carbon particles (or soot), unburned hydrocarbons (also called
the "soluble organic fraction"), and sulfates (resulting from
the oxidation of sulfur in the engine's exhaust). 66 Fed. Reg.
at 5047. The majority of diesel PM is soot. Catalyzed
particulate filters work by passing the exhaust through a
ceramic or metallic filter that captures soot and other PM.
Particulate filters eventually become plugged up with par-
ticulate matter, at which point the collected particles (mostly
carbon) have to be burned off (or oxidized). Id. The
burning-off process is called "regeneration," and the result
(from oxidizing carbon) is of course carbon dioxide. Id. The
EPA was convinced that precious metal catalysts would make
regeneration possible at the low temperatures typical of
diesel engines, and that such catalysts could thus be used on a
continuous basis throughout the life of the trap. Id.; see also
Regulatory Impact Analysis ("RIA") III-6.
NOx adsorbers do their work by storing NOx during the
normal oxygen-rich conditions of diesel engine operation.
RIA III-18. Over time, the adsorber becomes full of the
stored NOx, thus requiring regeneration. During regenera-
tion, the excess NOx is burned off; technically, it is reduced
to N2 by an interaction with carbon monoxide across a
catalyst system that typically contains platinum and rhodium;
the less-harmful gases that result are N2 and CO2. Id. Like
NOx, sulfur from the fuel accumulates over time by bonding
to the NOx adsorber's catalysts, and must be burned off
during a "desulfation" process (more on that below). The
EPA suggests the use of dual-bed NOx adsorbers (for a
diagram, see RIA III-23), which involve splitting of the
exhaust stream into two pipes, each of which has an adsorber
bed. The benefit of such an arrangement is that regenera-
tion and/or desulfation can be conducted in one bed while
nearly all the exhaust stream is directed to the bed that is
still in adsorbtion mode, thus maintaining a consistent level of
performance. RIA III-22 to III-25.
Crankcase emissions are emitted from the vehicle's crank-
case, having gotten there by leaking from the combustion
chamber through the piston rings. 66 Fed. Reg. at 5040.
The EPA's elimination of the previous exception for such
emissions is a "performance requirement," leaving the solu-
tion entirely up to manufacturers. Id. The EPA predicts
that manufacturers will either filter crankcase gases and
route them back into the engine intake, or route the gases
into the exhaust stream (upstream of any emissions control
devices). RIA III-78-79. Another option would be to vent
crankcase gases directly to the atmosphere; this is an unlike-
ly choice, because the combined emissions from exhaust and
crankcase together would have to fall within the exhaust
emissions standards. 66 Fed. Reg. at 5040.
B. Cummins's Challenges
1. Feasibility of NOx and PM Standards
Cummins argues that the EPA acted arbitrarily and capri-
ciously in concluding that engine manufacturers will be able
to develop emissions-control systems satisfying the new rule.
According to Cummins, the EPA failed to make "reasonable
extrapolations," Cummins's Opening Brief at 5 (quoting Nat-
ural Resources Defense Council v. Thomas, 805 F.2d 410, 432
(D.C. Cir. 1986)), or to "provide a reasoned explanation for
believing that its projection is reliable," id. (quoting National
Resources Defense Council, Inc. v. EPA, 655 F.2d 318, 328
(D.C. Cir. 1981)).
In reviewing these issues, we note that EPA was "not
obliged to provide detailed solutions to every engineering
problem," but had only to "identify the major steps" for
improvement and "give plausible reasons for its belief that
the industry will be able to solve those problems in the time
remaining." Husqvarna AB v. EPA, 254 F.3d 195, 201 (D.C.
Cir. 2001) (quoting NRDC, 655 F.2d at 333). Since the EPA
is authorized to adopt "technology-forcing" regulations, see
NRDC, 655 F.2d at 333; Sierra Club v. Costle, 657 F.2d 298,
364 (D.C. Cir. 1981), a petitioner's evidence that current
technology is inadequate is not enough to show that the EPA
was arbitrary in predicting future success.
a. Availability of Adequate NOx Adsorbers
In support of its assessment that manufacturers can feasi-
bly meet the 2007 standards using NOx adsorbers, the EPA
pointed to the successful results achieved already in various
test programs. For example, the National Vehicle and Fuel
Emission Laboratory ("NVFEL") program reached the fol-
lowing conclusion: "This test program has shown that NOx
adsorbers and [particulate filters] are capable of greater than
90% emission reductions ... after running approximately 200
hours on 5 ppm sulfur equivalent fuel, without a desulfation
event. With reasonably expected desulfation, the expected
NOx reduction efficiency would be higher." EPA, 2007 Diesel
Emission Test Program, Initial Test Report at 31, IV-A-29
(Dec. 11, 2000) (hereinafter "NVFEL Study"); see also RIA
III-35 to III-48 (discussing the NVFEL test program). The
Department of Energy's Diesel Emission Control Sulfur Ef-
fects ("DECSE") program produced several reports finding
"NOx conversion efficiencies exceeding 90 percent...." RIA
III-35. And ironically, Cummins's own researchers (cited by
the EPA's Regulatory Impact Analysis) reported using a NOx
adsorber that cut NOx emissions by 98% on the Federal Test
Procedure, to a level of 0.055 g/bhp-hr (slightly more than a
quarter of the 0.20 g/bhp-hr standard adopted for 2007).
Byron Bunker, Memo to File II-E-25, Handout 6 (Sept. 18,
2000) (Joint Appendix "J.A." III 1947); see also RIA III-34.
Other industry commenters agreed that NOx adsorber
technology could be developed and available by 2007. See,
e.g., Letter of Manufacturers of Emission Controls Associa-
tion (April 5, 2000), II-G-60; Testimony of Johnson Matthey
(June 22, 2000), IV-F-100; Testimony of the Engelhard
Corp. (June 27, 2000), IV-F-188; Letter of Apyron Technolo-
gies, Inc. (Aug. 10, 2000), IV-D-227; Letter of the Engelhard
Corp. (Oct. 3, 2000), IV-G-38; Letter of Johnson Matthey
(Oct. 19, 2000), IV-G-55. Of course it is no surprise that NOx
adsorber manufacturers would support a regulation creating
a potential for sales of their products. See, e.g., George J.
Stigler, The Economic Theory of Regulation, 2 Bell J. Econ.
& Management Sci. 3 (1971). But such a manufacturer would
risk a considerable loss of reputation if its technology could
not fulfill a mandate that it had persuaded EPA to adopt. So
the submissions add something to the more direct experimen-
tal evidence.
Cummins, however, asserts that no NOx control system will
be capable of meeting the EPA's 2007 standards. It presents
three reasons to support this conclusion; ultimately, we are
convinced by none.
* * *
First, Cummins argues that though the EPA standards in
effect require NOx adsorbers to operate at 90% efficiency,
rapid degeneration will prevent them from lasting for any-
where near the useful life of a heavy heavy-duty diesel
engine. According to Cummins, the EPA's tests showing the
requisite 90% efficiency were short-term rather than for
extended periods.
Cummins fails, however, to give a full picture of the EPA's
research. Whereas Cummins claims that a certain EPA test
was only short-term, it actually involved a NOx adsorber
system that had already accumulated "190 hours of opera-
tion," the equivalent of "more than 13,000 miles of driving."
RIA III-48. Moreover, the test did not include any desulfa-
tion events (see below), which likely reduced performance;
even so, the NOx adsorber was almost able to meet the 2007
standard. Id. (Table III.A-4). Cummins also cites a test
mentioned at 66 Fed. Reg. 5049 as showing that degradation
happens after 600 miles. But that test used 150 ppm diesel
fuel--10 times the maximum level allowed by the 2007 Rule
(and 20 times what EPA believes the 15 ppm cap will yield in
practice). Cummins also complains that the DECSE study
cited by the EPA showed that 90% efficiency declined to 75%
after only 40 hours--and that was using 3 ppm sulfur fuel to
boot. Cummins's Opening Brief at 8 (citing RIA III-66 &
Fig. III.A-15). Overall, NOx adsorber performance degraded
by 2% per hour of operation, with higher degradation when
higher sulfur fuel was used. Id. (citing RIA III-67). But the
EPA never denied that degradation is currently something of
a challenge; what matters is whether (as discussed below in
regard to desulfation) the EPA was arbitrary or capricious in
predicting that degradation could eventually be controlled.
* * *
In a closely-related argument, Cummins urges that the
desulfation process is an intractable obstacle to long-lasting
NOx adsorbers. As we've said, the NOx adsorber works
primarily by adsorbing NOx on catalysts. 66 Fed. Reg. at
5059. Sulfur, however, bonds to the catalysts as well, clog-
ging up the catalyst sites and degrading performance. Id.
To prevent degradation, NOx adsorbers must periodically be
subject to "desulfation," a process that removes sulfur. De-
sulfation, however, requires that exhaust temperatures be
increased--and this in turn poses a risk of so-called "sinter-
ing," in which the catalysts are melted. Id. at 5060. Sinter-
ing, unsurprisingly, degrades the device's future NOx adsor-
bance. Id.
The result, according to Cummins, is a technical "catch-22"
that pulls manufacturers in "conflicting directions." On one
hand, desulfation should happen often and at high tempera-
tures to prevent clogging by sulfur; on the other hand,
frequent, high-temperature desulfation itself degrades NOx
adsorbance. As Cummins sees it, the EPA presents no
reason to think that this technical obstacle will be overcome,
other than "unsupported predictions of government and
private-sector observers, who assert in conclusory fashion
that technology that overcomes these inherent problems will
develop in due time." Cummins's argument turns on its
heavy discounting of the studies relied on by EPA.
Cummins says that the Ford Study (Mark A. Dearth et al.,
Sulfur Interaction with Lean NOx Traps (Oct. 1998) J.A. III
2187)) is not strictly relevant because it was performed using
a "pulsator," a device that burns synthetic gases and injects
pollutants to test catalyst performance. Cummins seems to
regard it as self-evident that the use of a pulsator leads to
inaccurate or inapplicable results. In making this assumption
it overestimates our technical sophistication. The EPA ar-
gues in response that the pulsator experiment does shed light
on the ability of NOx adsorbers to withstand desulfation. As
Cummins gives no articulable reason to doubt this conclusion,
we cannot fault the EPA for having relied on the study.
As for Cummins's objection that further Ford experiments
found significant degradation, the EPA observes that these
further experiments were conducted at temperatures of 900
to 1000 degrees Celsius (see Ford Study, J.A. III 2192-93),
whereas a "heavy-duty diesel engine in contrast rarely has
exhaust gas temperatures in excess of 500