Appealed from: United States Court of Appeals, Second Circuit (Jan. 25, 2007)
CLEAN WATER ACT, GAS PRICES, ENVIRONMENTAL PROTECTION AGENCY, ENVIRONMENTAL LAW
Cooling water intake structures divert billions of gallons of water into coolant systems for industrial equipment and power generation. These systems can injure or kill billions of aquatic organisms, resulting in severe environmental impacts. Congress sought to remedy this problem through 33 U.S.C. §1326(b). The statute requires that “cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.” The “best technology available” requirement is the heart of the dispute. In enforcing the statute, the Environmental Protection Agency (“EPA”) turned to a cost-benefit analysis. If the cost of a particular technology was not justified by a corresponding environmental benefit, the technology was not required. Environmental groups sued to require the EPA to employ a cost only analysis. This analysis requires the best technology a facility could afford, even if the environmental benefit generated was minimal. This case will affect the EPA’s method of regulating cooling water intake structures, potentially leading to greater costs for power plants and industry. Increased costs may disrupt the energy industry and potentially lead to greater costs for consumers.
Whether Section 316(b) of the Clean Water Act, 33 U.S.C. 1326(b), authorizes the Environmental Protection Agency (EPA) to compare costs with benefits in determining the “best technology available for minimizing adverse environmental impact” at cooling water intake structures. The cases are consolidated and a total of one hour is allotted for oral argument.
May the EPA perform a cost-benefit analysis to decide which technologies best minimize adverse environmental impacts on marine life stemming from cooling water intake structures?
Industry diverts billions of gallons of water a day into water-intake coolant systems in order to cool industrial equipment and also to generate power. See Riverkeeper, Inc. v. EPA, 358 F.3d 174, 181 (2d. Cir. 2004). Though this water is returned to the environment, this can result in the destruction of some or all of the fish species in that water, drastically altering the content of the earth’s bodies of water. See id. Congress sought to solve this problem in § 316(b) of the Clean Water Act (“CWA”). See CWA § 316(b),33 U.S.C. § 1326(b). The statute requires that “the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.” Id. The CWA requires the Environmental Protection Agency (“EPA”) to uphold § 316(b) by issuing regulations for these water-intake coolant systems to ensure that industry complies with its directives. See id.
In 1993, the environmental group Riverkeeper, Inc., along with other groups, sued the EPA for failing to issue regulations upholding § 316(b). See Riverkeeper, Inc., et al. v. EPA (“Riverkeeper II”), 475 F.3d 83, 90 (2007). The EPA responded with a three-phase rule governing new intake structures, existing intake structures, and smaller facilities; it promulgated a Phase II rule for existing intake structures in 2004. See id. at 92. The rule holds that the standard for following § 316(b) is a cost-benefit analysis when determining whether facilities are using the “best technology available” for their cooling structures in preventing environmental harm. See id. at 91–94. This standard compares the monetary costs of the most effective cooling structures (in terms of § 316(b)) with how much aquatic life is to be saved. See id.
Riverkeeper and a variety of other environmental groups (“Riverkeeper et al.”) again sued the EPA, this time with several coastal state petitioners: Rhode Island, Connecticut, Delaware, Massachusetts, New Jersey, and New York (“state petitioners”). See id. at 96. The environmental groups have an overarching concern for the protection of aquatic life, and are especially concerned with how the EPA upholds its duties under the Clean Water Act. The state petitioners have a more immediate concern in that coolant systems directly affect both their coastal waters and their bodies of water connecting to the coast. The environmental and state petitioners contended that the Phase II cost-benefit rule is deficient because the EPA exceeded its authority and engaged in improper cost considerations, creating a very lax standard and failing in its duty to uphold § 316(b). See Riverkeeper II, 475 F.3d at 96–97. A series of industry groups joined the EPA in defending the cost-benefit standard for § 316(b): Entergy Corporation (“Entergy”), the Utility Water Act Group (“UWAG”), and PSEG Fossil LLC and PSEG Nuclear LLC (“PSEG”). See id. These industry groups are particularly concerned because the standard the EPA promulgates directly affects them; though they are in compliance with the cost-benefit standard, a stricter rule would most likely require them to update existing or install new cooling structures, at a huge cost. See Brief of Amicus Curiae American Chemistry Council, et al. in Support of Petitioners, at 1; Brief for Petitioners Entergy Corp., PSEG Fossil LLC, & PSEG Nuclear LLCA (Entergy Corp. et al.) at 49–50.
The Second Circuit ruled in favor of the environmental and state petitioners, holding that the application of a “cost-benefit analysis” was improper, in that it is not in keeping with the language of § 316(b) and thwarts Congress’s intent in passing the statute. See Riverkeeper II, 475 F.3d at 101. Instead, after considering the statute itself and the Act as a whole, the Court held that the proper standard to apply is one that considers “feasibility” – whether the best technology available is in fact feasible to apply to the industry in question. See id. at 99. The Court determined that the EPA could consider cost only after it had determined what the most effective technology, in terms of § 316(b), is, and whether that technology could reasonably be borne by the industry as a whole. See id. at 99–100. Only after determining what technology meets the “most effective” benchmark can the EPA consider factors of cost-effectiveness, which might allow for a cheaper solution that has essentially the same effect on wildlife as the established benchmark. See id. at 100.
The industry groups and the EPA each appealed the Second Circuit ruling, arguing that it improperly interpreted § 316(b) of the CWA, and that the language of the section and the Act in fact grants the EPA authority to use a cost-benefit analysis. The Supreme Court granted certiorari in April 2008.
Petitioner’s (ENTERGY) Brief – HERE
Petitioner’s (Utility Water) Brief – HERE
Respondent’s (RiverKeepers) Brief – HERE
Respondent’s (The States) Brief – HERE
USDOJ’s Brief – HERE
FOR FURTHER ANALYSIS – READ ON HERE