5th Cir. Denies Petition over EPA’s Review Of ExxonMobil Refinery Permit

The Fifth Circuit on Friday agreed with the Environmental Protection Agency’s (EPA) decision to not object to ExxonMobil’s air pollution permit application to expand a large petrochemical plant located in Baytown, Texas.  The Environmental Integrity Project and the Sierra Club argued the EPA should object to the permit, and use a more scrutinized review process.

The court considered EPA’s administration of the Title V permitting program under the Clean Air Act, 42 U.S.C. § 7401.  Here, ExxonMobil was seeking a revised Title V permit for the plant expansion, and the petitioners argued the “underlying Title I preconstruction permit allowing the expansion was invalid.”  Title V was “[a]dded to the Act in 1990, Title V is designed to consolidate in a single operating permit all substantive requirements a pollution source must comply with, including preconstruction permits previously issued under Title I of the Act.”  Title V has been called a “source specific bible for Clean Air Act compliance.”

The dispute centered on the EPA’s interpretation of Title V under 40 C.F.R. § 70.2.  The EPA’s current position is to follow the Hunter Order, which states “the intent of title V is not to second-guess the results of any State’s NSR program.”  Under Title I, a state’s New Source Review (NSR) program requires operators, such as ExxonMobil, to obtain preconstruction permits before any new additions or modifications to existing facilities are made.  The EPA began to shift from this view in the mid-1990s and until 2017 more broadly interpreted § 70.2.  For example, in one case, the EPA was permitted to use Title V to object to an “improper preconstruction determination.”  However, in 2017 the EPA returned to its original view when reviewing a Title V permit application that “neither EPA nor state permitting authorities must determine whether the source received the right kind of preconstruction permit.”

The court accorded the EPA’s view under the Hunter order Skidmore deference, and in applying Skidmore held “[a]s we read it, the Hunter Order defends the agency’s interpretation based principally on Title V’s text, Title V’s structure and purpose, and the structure of the Act as a whole.”  Furthermore, the court stated the petitioners’ argument was “fatally undermined principally not by what Title V includes but by what it omits.”  Specifically, nowhere under Title V permitting requires the “EPA to double-check whether preconstruction permits “properly derived” from the preconstruction rules.”  Additionally, the court agreed with the EPA that “Title V lacks a specific textual mandate requiring the agency to revisit the Title I adequacy of preconstruction permits.”  The court stated they rejected petitioners’ position because accepting it would be going beyond gap-filling an area left by Congress’ silence, and rather a rewriting of the rules that Congress has enacted. 

At the end of the opinion, the court emphasized that nothing in its opinion would prevent petitioners from continuing to challenge this specific ExxonMobil refinery’s compliance with the Clean Air Act in other contexts.  The focus here was to address the EPA’s view that Title V permitting is not the proper vehicle for reexamining the validity of Title I preconstruction permits, which the judges here agreed with.

The petition for review was before Circuit Judges Hayes, Graves, and Duncan.  Judge Duncan authored the opinion.