## Facts

- A company proposed construction of a large petroleum refinery in Portsmouth, Virginia, located in an air quality region that had not attained the national standard for photochemical oxidants (hydrocarbons).
- Under the Clean Air Act framework, construction of new major sources in a nonattainment area required a state implementation plan (SIP) approach that would assure progress toward attainment.
- Virginia submitted a SIP revision adopting an emissions-offset program to permit the refinery despite nonattainment status.
- The offset program required the Virginia Highway Department to reduce use of a high-emitting “cutback” asphalt in three highway districts and substitute a lower-emitting asphalt.
- Virginia projected that hydrocarbon reductions from asphalt changes would exceed the refinery’s projected hydrocarbon emissions, producing a net regional emissions decrease.
- EPA’s Administrator issued a final approval of the SIP revision.
- Environmental groups petitioned for judicial review, asserting the approval violated the Clean Air Act and was arbitrary and capricious.

## Issues

1. Whether EPA could lawfully approve an offset-based SIP revision permitting a new major source in a nonattainment area under the Clean Air Act as amended.
2. Whether EPA acted arbitrarily or capriciously in accepting the geographic area used for calculating and applying offsets (the three highway-district area).
3. Whether the predicted emissions reductions were sufficiently certain, quantifiable, and enforceable to qualify as valid offsets incorporated into the SIP.

## Decision

- The Fourth Circuit denied the petition for review and upheld EPA’s approval of Virginia’s SIP revision.
- The court held EPA’s action was not arbitrary, capricious, or an abuse of discretion and was consistent with the Clean Air Act.
- The court concluded EPA reasonably determined that the asphalt-use reductions would more than offset the refinery’s projected hydrocarbon emissions and that the controls were enforceable through the SIP.

## Legal Principles

- EPA approval of SIP revisions is reviewed under the arbitrary-and-capricious standard; courts generally defer to the agency’s reasonable statutory interpretations and technical judgments.
- Emissions-offset programs may be used in nonattainment areas if the SIP revision provides enforceable measures that yield a net air quality benefit and remains consistent with attainment obligations.
- EPA may accept a state’s chosen geographic configuration for offsets when the Clean Air Act does not impose a rigid sub-state delineation and the agency reasonably concludes the configuration supports attainment and maintenance of ambient standards.
- Offset reductions relied upon to justify new-source emissions must be quantifiable and incorporated into the SIP so they are enforceable.

## Conclusion

The Fourth Circuit upheld EPA’s approval of Virginia’s SIP revision allowing a new refinery in a nonattainment area because EPA reasonably concluded that enforceable asphalt-use reductions would more than offset the refinery’s hydrocarbon emissions and that the plan satisfied Clean Air Act requirements under deferential arbitrary-and-capricious review.


Citizens Against the Refinery’s Effects, Inc. v. U.S. EPA, 643 F.2d 183 (4th Cir. 1981)