## Facts

- Teck Cominco Alaska, Inc. operated the Red Dog Mine in northwest Alaska, located in an attainment area for nitrogen dioxide.
- The mine was a major emitting facility for nitrogen oxides (NOx) and therefore subject to the Clean Air Act’s Prevention of Significant Deterioration (PSD) permitting program for new or modified major sources.
- PSD permits may not issue unless the source will use “best available control technology” (BACT) for each regulated pollutant.
- Cominco sought to add a new diesel generator and significantly increase output of an existing generator, triggering PSD review.
- Alaska Department of Environmental Conservation (ADEC), the state PSD permitting authority, identified “Low NOx” combustion controls as BACT while acknowledging that selective catalytic reduction (SCR) was technically feasible and would achieve greater NOx reductions.
- ADEC declined to select SCR and did not provide an adequate, evidence-based explanation (including cost support) for rejecting SCR.
- The Environmental Protection Agency (EPA) objected and issued orders under Clean Air Act §§ 113(a)(5) and 167 prohibiting construction unless Alaska either required SCR or supplied a reasoned record justification for rejecting it.

## Issues

1. Whether Clean Air Act §§ 113(a)(5) and 167 authorize EPA to prohibit construction under a state-issued PSD permit when EPA finds the state’s BACT determination unreasonable due to inadequate record support.
2. Whether EPA’s orders were arbitrary or capricious under the Administrative Procedure Act.

## Decision

- The Supreme Court affirmed the Ninth Circuit in a 5–4 decision (Justice Ginsburg).
- The Court held that EPA may issue orders under §§ 113(a)(5) and 167 to prevent construction of a major emitting facility that does not conform to PSD requirements, including the BACT requirement.
- The Court rejected the view that EPA’s role is limited to policing procedural compliance; EPA may act when the state’s BACT determination is unreasonable because it lacks evidentiary support or is plainly inconsistent with statutory criteria.
- The Court applied Chevron deference to EPA’s interpretation of its corrective authority under the Clean Air Act.
- The Court held EPA did not act arbitrarily or capriciously in concluding that ADEC’s rejection of SCR lacked adequate record support, particularly regarding economic justification.

## Legal Principles

- BACT is a substantive “requirement” of the PSD program; state BACT determinations must reflect a reasoned, record-supported application of statutory factors (including energy, environmental, and economic impacts and other costs).
- Under Clean Air Act §§ 113(a)(5) and 167, EPA may issue orders prohibiting construction or modification when a state is not acting in compliance with PSD requirements.
- EPA’s PSD oversight is not confined to procedural defects; EPA may intervene when a state’s BACT determination is unreasonable due to missing or inadequate support in the administrative record.
- Courts defer to reasonable EPA interpretations of ambiguous Clean Air Act enforcement provisions under Chevron.
- EPA enforcement orders under these provisions are reviewed under the APA’s arbitrary-and-capricious standard, focusing on whether the agency reasonably evaluated the state record and explained its action.

## Conclusion

The Court held that the Clean Air Act authorizes EPA to block construction authorized by a state PSD permit when the state’s BACT determination is unreasoned or unsupported by the record, and it upheld EPA’s orders as a lawful and non-arbitrary exercise of federal oversight within the PSD program.


Alaska Dep't of Env't Conservation v. EPA, 540 U.S. 461 (2004)