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Carbon Sequestration Council & Southern Co. Service, Inc. v. Environmental Protection Agency

United States Court of Appeals, District of Columbia Circuit

June 2, 2015

CARBON SEQUESTRATION COUNCIL AND SOUTHERN COMPANY SERVICES, INC., PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY AND GINA MCCARTHY, ADMINISTRATOR, RESPONDENTS

Argued: March 26, 2015.

Page 1130

On Petitions for Review of Final Agency Action of the United States Environmental Protection Agency.

Thomas Sayre Llewellyn argued the cause for petitioners. With him on the briefs were Stacy R. Linden and Robert F. Van Voorhees. Alec W. Farr entered an appearance.

Michele L. Walter, Attorney, U.S. Department of Justice, argued the cause for respondents. With her on the brief was John C. Cruden, Assistant Attorney General.

Before: GARLAND, Chief Judge, BROWN, Circuit Judge, and EDWARDS, Senior Circuit Judge.

OPINION

Page 1131

Edwards, Senior Circuit Judge.

Under the Safe Drinking Water Act, the Environmental Protection Agency (" EPA" or " Agency" ) is authorized to regulate the injection of fluids into underground wells to ensure that injection does not endanger drinking water sources. Under the Resource Conservation and Recovery Act (" RCRA" ), EPA is authorized to regulate " solid waste," which is defined, in part, as " discarded material, including solid, liquid, semisolid, or contained gaseous material resulting fro industrial, commercial, mining, and agricultural operations." 42 U.S.C. § 6903(27). When fluid " solid waste" is injected into underground wells, that waste may be subject to regulation under both the Safe Drinking Water Act and RCRA.

Page 1132

In 2010, acting pursuant to its authority under the Safe Drinking Water Act, EPA promulgated a rule creating the new " Class VI" well, and prohibiting the injection of hazardous RCRA " solid waste" into such wells. See Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestration (GS) Wells, 75 Fed.Reg. 77,230 (Dec. 10, 2010). Class VI wells are designated to receive carbon dioxide streams generated as part of a climate change mitigation program known as " carbon capture and storage." This program involves the capture of carbon dioxide from industrial sources, the compression of that carbon dioxide into a " supercritical fluid" that is neither a liquid nor a gas but has properties of both, and the injection of that supercritical carbon dioxide into an underground well to ensure that it does not reenter the atmosphere. Because the final stage of carbon capture and storage -- geologic sequestration of the supercritical carbon dioxide -- involves the underground injection of fluid, it is subject to Safe Drinking Water Act regulation.

A question arose during the course of the Class VI rulemaking whether carbon dioxide streams injected into Class VI wells are also " solid waste" subject to regulation under RCRA. EPA initiated a separate rulemaking in part to address that question. Several commenters argued that the carbon dioxide streams do not fit within the statutory definition of solid waste. And a number of commenters were concerned that if EPA determined that supercritical fluids are solid waste, then generators and injectors of these streams would be obliged to comply with costly RCRA regulations.

On Jan. 3, 2014, EPA issued a final rule in which it determined that supercritical carbon dioxide injected into Class VI underground wells for purposes of geologic sequestration is " solid waste" within the meaning of RCRA. See Hazardous Waste Management System: Conditional Exclusion for Carbon Dioxide (CO2) Streams in Geologic Sequestration Activities, 79 Fed.Reg. 350 (Jan. 3, 2014). EPA interpreted the phrase " including solid, liquid, semisolid, or contained gaseous material" as illustrative, rather than exhaustive, and stated that supercritical fluids fall within the statutory definition because they are of the same kind as those expressly included in the definition. 79 Fed.Reg. at 355. EPA also determined that the geologically sequestered streams constitute " discarded material" within the meaning of the statute because they are injected underground with the express intention of isolating them from reentry into the atmosphere, even though they could, theoretically, be extracted and reused in the future. Id. Having so concluded, EPA determined that supercritical carbon dioxide streams injected into Class VI wells for the purpose of geologic sequestration constitute " solid waste" subject to RCRA.

The Carbon Sequestration Council, Southern Company Services, Inc. (which is a member of the Carbon Sequestration Council), and the American Petroleum Institute (together, " Petitioners" ) now seek review of EPA's solid waste determination, arguing that the supercritical carbon dioxide streams at issue in this rule are not RCRA solid waste. The Carbon Sequestration Council asserts representational standing on behalf of Southern; and the American Petroleum Institute asserts representational standing on behalf of Occidental Oil and Gas (" Occidental" ). Because we find that Petitioners have no standing to pursue this challenge, we dismiss for want of jurisdiction. As the parties invoking federal jurisdiction, Petitioners " bear[] the burden of establishing"

Page 1133

Article III standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). They " must support each element of [their] claim to standing by affidavit or other evidence. [Their] burden of proof is to show a substantial probability that [they have] been injured, that the defendant caused [their] injury, and that the court could redress that injury." Sierra Club v. EPA, 292 F.3d 895, 899, 352 U.S.App.D.C. 191 (D.C. Cir. 2002) (citation and internal quotation marks omitted). Petitioners have failed to meet this burden of proof.

Southern Company Services, Inc. (" Southern" ) has failed to allege that it uses or intends to use any Class VI wells. Rather, it captures and compresses carbon dioxide either for use in enhanced oil recovery or in Class V experimental wells. The disputed rule addresses only streams injected into Class VI wells for the purpose of geologic sequestration, which are not mentioned in Southern's affidavit supporting standing. American Petroleum Institute (" Institute" ), in turn, relies on one of its members, Occidental, in an effort to demonstrate representational standing. Occidental, however, acknowledges that it is not directly regulated by the disputed rule. Rather, Occidental claims that EPA's 2014 rule presages regulation of its enhanced oil recovery activities, and that this will cause it to change its business practices in anticipation of likely future regulation. This is not enough in this case to demonstrate injury sufficient to meet the standing requirements of Article III. There is nothing in EPA's disputed rule to suggest that EPA intends to extend the rule to cover the activities of concern to Occidental; indeed, EPA expressly distinguished Occidental's activities from those being regulated and suggested that they are unlikely to be regulated in the future. Therefore, the actions taken by Occidental in anticipation of unspecified regulations are not fairly traceable to EPA's 2014 rulemaking.

Neither Southern nor Occidental can show any injury sufficient to satisfy the requirements of Article III. They therefore lack standing. Carbon Sequestration Council lacks standing because Southern lacks standing. And American Petroleum Institute lacks standing because Occidental lacks standing. The petitions for review are hereby dismissed.

I. Background

Because Petitioners lack standing, we have no occasion to consider whether supercritical fluids injected into a Class VI well that is subject to regulation under the Safe Drinking Water Act constitute " solid waste" that must also be regulated under RCRA. Nevertheless, because the regulatory context is crucial to understanding the Article III standing issues in this case, we begin with a brief review of the relevant statutes and regulations.

A. The Safe Drinking Water Act's Regulation of Underground Injection of Fluids

The Safe Drinking Water Act, 42 U.S.C. § 300f et seq., empowers EPA to promulgate regulations protecting the quality of drinking water sources in the United States. One of the industrial activities regulated under the statute is the injection of fluids into underground wells, when that injection may endanger the safety of drinking water sources. Id. § 300h(b)(1). To prevent any danger from underground injection of fluids, EPA has promulgated regulations creating " classes" of underground injection control wells, each with different construction and use requirements, and each authorized to receive different kinds of fluids under different circumstances. See 40 C.F.R. § 144.6

Page 1134

(describing the classes of wells). For example, Class I wells are the most secure and can be used for the injection of hazardous and radioactive waste. Class II wells are used for natural gas storage operations or oil or natural gas production. See id. This case involves the recently created " Class VI" well, which EPA created for carbon capture and storage operations involving the geologic sequestration of carbon dioxide. Any well owner or operator who seeks to inject fluids underground must meet the permitting requirements for the kind of injection well they intend to operate.

B. The Resource Conservation and Recovery Act's Regulation of Solid Waste

EPA also administers RCRA, which establishes regulatory standards for " solid waste." Under RCRA, generators of solid waste must determine whether that waste is hazardous, and then treat hazardous solid waste according to various regulatory requirements. The Act defines " solid waste," in relevant part, as follows:

The term " solid waste" means any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations . . . .

42 U.S.C. § 6903(27) (emphasis added). Importantly, this definition makes clear that statutory " solid waste" is not limited only to waste that is solid. Rather, it includes " other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations." See id. Some waste that is not in a solid state -- for example, liquid waste -- can thus be considered " solid waste" within the meaning of the ...


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