‘Increase’ doesn’t require a net-increase.

James Wright 78, judge of the United States Court of Appeals for the District of Columbia Circuit, 1/27/1928, “ASARCO, Inc. v. EPA,” 578 F.2d 319, NSPS = New Source Performance Standards

The basic controversy in the cases before us concerns the determination of the units to which the NSPSs apply. Under the Act the NSPSs apply to "new sources." A "new source" is defined as " any stationary source, the construction or modification of which" begins after the NSPS covering that type of source is published. Section 111(a)(2), 42 U.S.C. § 1857c-6(a)(2) (1970) (emphasis added). Further statutory definitions explain the terms used in this one. A "`stationary source' means any building, structure, facility, or installation which emits or may emit any air pollutant." Section 111(a)(3), 42 U.S.C. § 1857c-6(a)(3) (1970). A ‘modification' means any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted." Section 111(a)(4), 42 U.S.C. § 1857c-6(a)(4) (1970). The statute thus directs that the NSPSs are to apply to any building, structure, facility, or installation which emits or may emit any air pollutant and which is either (1) newly constructed or (2) physically or operationally changed in such a way that its emission of any air pollutant increases.

[Footnote 7 omitted]

The "bubble concept" is based on defining a stationary source as a combination of facilities, such as an entire plant, and applying the NSPSs only when a new plant is constructed or when an existing plant is physically or operationally changed in such a way that net emissions of any pollutant from the entire plant increase. If applied consistently, the bubble concept would allow the operator of an existing plant to avoid application of the strict NSPSs by offsetting any increase in pollution caused by a change in the plant ( e.g., modification or replacement of an existing facility, or even addition of a new facility) against a decrease in pollution from other units within the plant as a whole.

B. History of the EPA Regulations

EPA's original regulations interpreting Section 111, promulgated in 1971, repeated the statutory definitions of "stationary source" and "modification" almost word for word and did not contain any version of the "bubble concept." See 36 Fed.Reg. 24877 (1971), codified at 40 C.F.R. §§ 60.2(d) (h) (1975). EPA acknowledges in its brief that it originally "defined the term new source as `an affected facility' which in turn was defined as any apparatus to which a standard of performance is specifically applicable." Brief for EPA at 10 (emphasis added). Affected facilities, and thus new sources, were clearly not synonymous with entire plants. For example, the regulations setting the NSPSs for sources in portland cement plants identify the following "affected facilities" in such plants: "kiln, clinker cooler, raw mill system, finish mill system, raw mill dryer, raw material storage, clinker storage, finished product storage, conveyor transfer points, bagging and bulk loading and unloading systems." 40 C.F.R. § 60.60 (1975).

[Footnotes 8 + 9 omitted]

The "bubble concept" appeared first in proposals from the nonferrous smelting industry and the Department of Commerce (DOC) beginning in December 1972. The industry and DOC urged that a stationary source be defined as an entire plant so that no "modifications" of the source would occur unless the total emissions of some pollutant from the plant increased.

[Footnote 10 omitted]

In response to industry proposals and demands from DOC, EPA prepared draft regulations in May and July 1974 "clarifying" the previous regulations. EPA made some concessions to the industry in these drafts, but did not accept the industry's position that an entire plant should be defined as a single source. EPA continued to resist the bubble concept in meetings with industry representatives, DOC, and the Office of Management and Budget through August 1974. See JA 8-9, 30-34.

[Footnotes 11-13 omitted]

Then, in September 1974, the agency again revised its position, making further concessions and proposing new regulations incorporating a limited version of the bubble concept. After an additional concession further extending the bubble concept in response to a submission by DOC, the proposed regulations were adopted by EPA.

[Footnotes 14-16 omitted]

The new regulations would classify an entire plant as a single stationary source by embellishing the statutory definition of a stationary source as follows:

"Stationary source" means any building, structure, facility, or installation which emits or may emit any air pollutant and which contains any one or combination of the following:

(1) Affected facilities. (2) Existing facilities.

(3) Facilities of the type for which no standards have been promulgated in this part.

40 C.F.R. § 60.2(d) (1976) (emphasis added). The italicized language is not included in the statutory definition of "stationary source" ("any building, structure, facility, or installation which emits or may emit any air pollutant"), nor was it included in the prior regulations. See 40 C.F.R. § 60.2(d) (1975). Thus the present regulations, instead of limiting the definition of "stationary source" to one "facility" as the statute does, make it cover "any one or combination of" facilities. The preamble to the new regulations makes it clear that the purpose of this change is to define a statutory source as an entire plant.

[Footnotes 17 + 18 omitted]

Relying on this new definition of a statutory source, EPA applies the bubble concept to allow a plant operator who alters an existing facility in a way that increases its emissions to avoid application of the NSPSs by decreasing emissions from other facilities within the plant. The regulations provide that "[a] modification shall not be deemed to occur" unless the change in an existing facility results in a net increase in the emission of a pollutant from the whole "source."

[Footnote 19 omitted]

In spite of strong comments from the nonferrous smelting industry, represented here by ASARCO, the new regulations do not consistently apply the bubble concept to treat an entire plant as a single stationary source. EPA continues to apply NSPSs to all newly constructed facilities, even when the emission increases from the new facilities are offset by emission decreases from other facilities in the same plant. Newly constructed facilities are thus treated as independent stationary sources. In order to draw a line defining when the bubble concept will be applied, the regulations classify any changes in existing facilities that cost more than a fixed percentage of the value of the changed facility as "reconstruction." 40 C.F.R. § 60.15 (1976). "Reconstructed" facilities, like new facilities, are subject to NSPSs regardless of whether emissions from the plant of which they are a part increase.