Justia Federal District Court Opinions

Under the aegis of the Federal Water Pollution Control Act Amendments of 1972 (the Act), Pub.L. No. 92-500, 86 Stat. 816, 33 U.S.C. §§ 1251-1376, as amended, clean water act of 1977, pub.l. no. 95-217, 91 stat. 1566, the Environmental Protection Agency has embarked upon a step-by-step process of issuing effluent limitations for each industry that discharges pollutants into the waters of the United States. By these consolidated petitions, members of one such industry, American pulp and paper makers, challenge the validity of EPA regulations limiting the 1977-83 effluent discharges of many pulp, paper, and paperboard mills. See42 Fed.Reg. 1398-426 (1977). We are satisfied that EPA properly construed and rationally exercised the authority delegated to it by Congress and that, with one exception, it did so according to the appropriate procedures. Accordingly, we uphold the resulting effluent limitations in all but one instance.

After several years of judicial experience with the Federal Water Pollution Control Act Amendments of 1972, and, in particular, with industry-wide challenges to effluent limitations promulgated thereunder, little further explanation of the statutory framework is necessary. See, e. g., E. I. duPont de Nemours & Co. v. Train (duPont), 430 U.S. 112, 116-21, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977); American Paper Inst. v. Train, 177 U.S.App.D.C. 181, 186-89, 543 F.2d 328, 333-36, Cert. dismissed, 429 U.S. 967, 97 S.Ct. 398, 50 L.Ed.2d 335 (1976); American Frozen Food Inst. v. Train, 176 U.S.App.D.C. 105, 113-122, 539 F.2d 107, 115-24 (1976). As now authoritatively interpreted by the Supreme Court in DuPont, supra, 430 U.S. at 126-36, 97 S.Ct. 965, section 301(b) of the Act, 33 U.S.C. § 1311(b),¹ authorizes the Environmental Protection Agency (EPA or the Agency), after orchestrating a process of study, proposal, notice, and comment, to issue two sets of progressively more stringent regulations precisely limiting the effluent discharges of every "category (or) class of (existing) point sources," I. e., generally, every industry that pollutes the Nation's waters. According to section 301(b), the first set of regulations must limit discharges between July 2, 1977 and July 1, 1983, inclusive, to levels characteristic of point sources utilizing "BPCTCA," I. e., the "best practicable control technology currently available." Section 301(b)(1)(A). The second set applies thereafter and is defined in terms of the more restricted levels of discharges from point sources using "BATEA," I. e., the "best available technology economically achievable." Section 301(b)(2)(A).

Section 304 of the Act, 33 U.S.C. § 1314,² establishes the minimum cross-industry criteria that EPA must use in developing each of the two sets of industry-specific limitations, and requires EPA to identify other factors as well as the model technology (BPCTCA for 1977, BATEA for 1983) relevant to each affected industry. Jurisdiction to review both the 1977 and 1983 sets of industry-wide regulations is conferred upon the United States Courts of Appeals by section 509(b)(1) of the Act, 33 U.S.C. § 1369(b)(1).

Meanwhile, the permit-issuing system established by section 402 of the Act, 33 U.S.C. § 1342, provides a procedure whereby the general effluent limitations for each class of point sources are transformed by EPA, or some EPA-approved state agency, into an authorization for a specific plant or mill to discharge effluents up to specified limits. The statute contemplates a very close correlation between the general effluent limitations promulgated by EPA and the specific discharge authorizations allowed each mill by the permit-issuing agency. The only exception to this rule is the Act's provision of a "modification" or variance procedure under which EPA may relax the general standards somewhat in individual permits under certain limited circumstances. Section 301(c), 33 U.S.C. § 1311(c). See duPont, supra, 430 U.S. at 128, 97 S.Ct. 965. These permit-related proceedings are also judicially reviewable under the Act. Section 309(b)(1)(F), 33 U.S.C. § 1369(b)(1)(F).

Finally, the regulatory circle is closed by stringent criminal and civil penalties the latter of which are enforceable both by the government and by private citizens for any effluents discharged in excess of those provided for in the permit. Sections 301(a), 309 of the Act, 33 U.S.C. §§ 1311(a), 1319.

The regulations at issue in this case are the result of a rulemaking process developed by the Agency over the past six years for promulgating industry-wide effluent limitations under sections 301(b) and 304(b) of the Act. See notes 1 and 2 Supra. See generally, La Pierre, Technology-Forcing and Federal Environmental Protection Statutes, 62 Iowa L.Rev. 771, 810-13 (1977). The procedures for these regulations began in early 1973 when EPA divided the American pulp and paper industry into two segments for purposes of establishing 1977 and 1983 effluent limitations. In "Phase I" of its rulemaking effort for the industry, it proposed, received several tiers of comments on, and promulgated 1977 and 1983 limitations for the "unbleached" segment of the industry, which produces unbleached pulp and paper. 39 Fed.Reg. 18742 (1974). This Court reviewed and upheld those regulations in full in 1976, and they are not in issue here. See American Paper Inst., supra.

Promulgation of "Phase II" regulations for the apparently larger, "bleached" segment of the paper industry did not proceed with the same dispatch as in Phase I.³ Accordingly, along with many of EPA's responsibilities under the Act, its rulemaking for Phase II of the paper industry became the subject of law suits and settlement agreements between environmental action groups and the Agency, resulting in the establishment of court-enforced time-tables for the promulgation of each industry's limitations. See Natural Resources Defense Council (NRDC) v. Train, 6 E.R.C. 1033 (D.D.C.1973), Rev'd in part & remanded, 166 U.S.App.D.C. 312, 510 F.2d 692 (1975), Timetable extended on remand, see NRDC v. Costle, 183 U.S.App.D.C. 11, 17, 561 F.2d 904, 910 n.32 (1977). These efforts apparently put EPA under a judicially enforceable obligation to issue the 1977 limitations by January 30, 1976 which it chose to accomplish by promulgating those limitations separately and more quickly than their 1983 counterparts. Consequently, it is only the 1977-related regulations that are before us.

The actual promulgation procedures used in devising the challenged regulations were not unlike those used in Phase I and delineated in American Paper Inst., supra, 543 F.2d at 334-36. EPA commenced the 1977 part of the Phase II rulemaking process by commissioning two consulting firms in July 1973 to prepare a draft study suggesting possible industrial subcategories, as well as BPCTCA and achievable effluent reduction levels for each. About a year later, in August 1974, EPA made the draft study public and some 22 organizations, including many of the petitioners now before us, made it the target of comment and criticism.⁴ Another year passed as the Agency responded to this new wave of solicited information by revising the draft report and by appending it, described as a "draft Development Document," to an advance notice of proposed regulations. That notice was issued in the fall of 1975, and comments were again solicited. 40 Fed.Reg. 41300 (1975). It was followed a few months later by the issuance of a third contractor's study of the economic impact of the proposed regulations ("Economic Analysis").

Comments on this complete package of proposals and supporting analyses were processed and reflected in "Interim Final" regulations published on February 19, 1976 and accompanied by revised drafts of the Development Document and Economic Analysis. The Agency's obligation to comply with the January 30, 1976 deadline accounted for this quasi-final format as well as for the relatively quick turn-around time between this and the preceding public notices. See NRDC v. Train, supra, 510 F.2d at 711. This procedure also allowed petitioners in these consolidated cases to set the judicial review mechanism in motion even as they were provided and utilized one final opportunity to urge the Agency on its own to revise the limitations before their final issuance.

The Agency's efforts during these intermediate stages attracted thousands of pages of public comment. The industry, moreover, was offered the opportunity to introduce further testimony at a formal hearing, but it declined. The "Final Limitations" issued on January 6, 1977, with final Development Document and Economic Analysis attached. These regulations, like each of the Agency's intermediate proposals during the rulemaking process, reflected significant changes generally favorable to industry in response to comments received.

The present litigation commenced in early 1976 with a petition for review filed in the United States Court of Appeals for the Third Circuit by petitioners in No. 76-1675. Subsequently, other review petitions were also filed in the Ninth Circuit but were transferred by that court to the Third Circuit under 28 U.S.C. § 2112(a). EPA then convinced the Third Circuit to transfer all of the cases to this Circuit in light of its experience with the related issues raised in the Phase I litigation, American Paper Inst., supra. This court consolidated the petitions and established briefing and oral argument schedules providing for a single presentation of the issues raised in common by all of the petitioners, as well as for supplemental presentations by individual petitioners, or groups thereof, on specialized issues.

Although for ease of discourse we will generally refer collectively to the challengers before us as "petitioners", it is important to note that the limitations have somewhat different impacts on, and accordingly have elicited some separate challenges from, different segments of the industry. In order to understand the challenges as they reflect both the common concerns of all members, and the separate concerns of individual subcategories, of the American paper industry, we turn next to a brief discussion of the manufacturing and pollution control processes typical of the industry.

To make paper from trees is an old art; to do it without water pollution is a new science. In papermaking, logs or wooden chips must be ground up or "cooked" in one of several processes until only cellulose pulp is left. The pulp is bleached and made into various types and grades of paper. The cooking solutions and wash water that are left contain a variety of chemicals produced during "cooking" and other processes, including acids and large quantities of dissolved cellulose-breakdown products. Indeed, in some pulping processes, more of the wood is discarded in the waste water than is used to make paper. Appendix (App.) 2116. EPA has selected three parameters for measuring the pollutant content of the industry's effluent, all of which have been used extensively in this and other industries' measurements: total suspended solids (TSS), biochemical oxygen demand (BOD), and pH.⁵ TSS reflects the total amount of solids in solution, while BOD reflects the amount of biodegradable material in solution, and pH measures the acidity of the solution.⁶

EPA has divided this segment of the industry into 16 subcategories, and further subdivided it into 66 subdivisions, for the purposes of its rulemaking effort. As noted, some of petitioners' challenges concern all of the regulations for the whole industry, while other challenges are directed to regulations for particular industry subcategories. Actually, of the 16 subcategories in the whole industry, only three the three that use some form of the "sulfite process" have evoked particularized challenges.⁷ The reaction of sulfite mill operators stems from the limitations' greater economic impact on them.⁸ That impact in turn results from the fact that the sulfite process creates one of the highest pollution loads of any industrial process, and certainly the highest within the pulping industry.⁹ In fact, the Act's legislative history focused in particular on injury to shellfish in rivers and bays caused by sulfite wastes. A Legislative History of the Water Pollution Control Act Amendments of 1972 718-21 (1973) (hereinafter referred to as Legislative History ). Because the sulfite process is central in this case, we describe it in greater detail.

In the sulfite process, wooden chips are "cooked" in hot solutions of sulphurous acid and other chemicals. The cooking dissolves the binding agent in the wood (lignin) and also a good deal of the cellulose. The end product is cellulose pulp and an acid solution called spent sulfite liquor (SSL). There are two types of sulfite processes. In the papergrade sulfite process, which produces cellulose pulp for paper, the cellulose does not need to be very pure, and moderate steps suffice for cooking and separating pulp from SSL. In the dissolving sulfite process, aimed at making the raw cellulose base for materials such as cellophane and rayon, the cellulose must be pure, so the cooking and separation of the SSL are more complete and extra bleaching of the pulp is performed.

The sulfite process results in SSL and other potential pollution solutions containing acids, dissolved cellulose break-down products, and many types of organic compounds. These solutions receive various kinds of waste treatment. SSL is evaporated and burned in "SSL recovery," eliminating the water pollution potential and producing usable heat and sometimes reusable chemicals.¹⁰ The non-SSL waste solutions are pumped into sedimentation tanks where some of the suspended solids settle out of solution. The solutions are then pumped into other tanks and lagoons for secondary or "biological" treatment, in which bacteria are grown in the solutions to feed on and break down the waste. Eventually, the water is drained from the bacteria-laden solutions by a variety of methods. After draining, the caked solid or "sludge" that is left is incinerated or used for landfill.

Before turning to the merits of petitioners' challenges to the 1977 effluent limitations, some mention must be made of the appropriate scope of review under the circumstances of this case. Generally, informal rulemaking such as produced the regulations involved herein is reviewed under section 10(e)(2) of the Administrative Procedure Act (APA), 5 U.S.C. § 706(2). Pursuant to this provision, we must "set aside" any portion of the 1977 effluent limitations that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," is "in excess of statutory . . . authority . . . or short of statutory right," or is "without observance of procedure required by law." See American Paper Inst., supra, 543 F.2d at 338; American Frozen Food Inst., supra, 176 U.S.App.D.C. at 130-31, 539 F.2d at 132-33. See generally Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-17, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971).

In form, section 10(e)(2) embodies a list of various adjectives or adjectival phrases any one of which, if found applicable, requires our disapproval of the administrative action in question. These formulations are far from being entirely discrete as a matter of the ordinary meaning of language, and, indeed, are in some respects cumulative rather than differential in their applicability. This is especially true of the words "arbitrary," " capricious," and "abuse of discretion." In its totality, at all events, section 10(e)(2) is indicative of a multifaceted review function committed to the courts. In the present context, for example, that function is divisible into three categories statutory, procedural, and substantive.

In the case before us, we first must determine whether the EPA regulations involved herein are "not in accordance with law," or, more particularly, whether they are "in excess of statutory . . . authority." APA §§ 10(e)(2) (A), (C), 5 U.S.C. § 706(2)(A), (C). We must also consider whether the process used in arriving at those regulations afforded those affected in their procedural due. More specifically, in the informal rulemaking context involved herein, this inquiry asks whether the agency gave "interested persons an opportunity to participate in the rule making through submission of written (or other) data" and whether it "incorporate(d) in the rule adopted a concise general statement of their basis and purpose."¹¹ 5 U.S.C. § 553. See Vermont Yankee Nuclear Power Corp. v. National Resources Defense Council, 435 U.S. 519, 98 S.Ct. 1197, 1202, 55 L.Ed.2d 460 (1978). Finally, we are charged by section 10(e)(2) of the APA to consider whether the agency "abuse(d its) discretion" (or was "arbitrary" or "capricious") in exercising the quasi-legislative authority delegated to it by Congress, or, on the other hand, whether its "decision was based on a consideration of the relevant factors and (was not the product of) a clear error of judgment." Citizens to Preserve Overton Park, Inc., supra, 401 U.S. at 416, 91 S.Ct. at 824. See also Vermont Yankee, supra, at 1214.

Due concern both for the intent of Congress in drafting the particular statute at issue, and, more generally, for the "boundaries between the legislative and the judicial function," Industrial Union Dep't v. Hodgson,162 U.S.App.D.C. 331, 339, 499 F.2d 467, 475 (1974), often demands that we exercise certain aspects of our review function with more circumspection than is appropriate to others. Turning to the case at hand, therefore, we are initially confronted with a "complicated and lengthy statute," American Frozen Food Inst., supra, 176 U.S.App.D.C. at 111, 539 F.2d at 113, aimed at achieving the monumental "national goal" of Eliminating "the discharge of pollutants into the (nation's) navigable waters" within the short span of 13 years. Section 101(a)(1) of the Act, 33 U.S.C. § 1251. The immensity of the planning task thrust upon the Agency by Congress was heightened by the drafters' insistence upon industry-by-industry uniformity of effluent limitations and control techniques. E. g., Legislative History, at 170 (statement of Sen. Muskie). Not only would the Agency's regulations have to work almost immediately, but they also would have to achieve cross-industry applicability despite the geographical, technological, and economic diversity that characterizes almost every discrete sector of manufacturing and agriculture in this country.

Yet, ambitious as was their goal, the drafters of the Act labored under no illusions about the uncertain state of current knowledge concerning the creation, effects, and control of water pollution. E. g., Legislative History, at 1332 (remarks of Sen. Buckley). Their intent, therefore, was to rely on EPA's ingenuity, See, e. g., C & H Sugar Co. v. EPA, supra note 6,553 F.2d at 286-87 backed up by the Act's comprehensive system of administrative rulemaking and stiff penalties to force each industry on its own to develop the technology necessary to achieve the Act's aspiring goal. See generally La Pierre, Supra. Congress's commitment to that goal, as well as the severe impact its achievement may have on those immediately affected, is further illustrated by the drafters' realization that enforcement of the Act would probably shut down some plants around the nation. E. g., Legislative History, at 231 (remarks of Rep. Jones). See American Iron & Steel Inst. v. Train, 526 F.2d 1027, 1052 (3d Cir. 1976).

In light of the structure and aims of the Act, and the breadth of authority delegated by it to the EPA to identify highly sophisticated control technology in an area fraught with scientific uncertainty, our review function encounters significant limitations in the substantive aspect where the given statutory standards are "arbitrary," "capricious," or "abuse of discretion." First, it is elementary that our function is not to weigh De novo the available evidence and to substitute our judgment for that of the Agency. Second, an expansive concept and exercise of the review power in the eleven Courts of Appeals charged with that function could easily impede accomplishment of the Act's ambitious pollution-ending aspiration as well as its goal of industry-by-industry uniformity. See generally, Currie, Judicial Review Under Federal Pollution Laws, 62 Iowa L.Rev. 1221, 1261-71 (1977). This problem looms larger in the substantive area of review than it does in those areas involving statutory interpretation and procedural integrity because of the technological and scientific uncertainty that EPA must overcome as best it can in making the discretionary judgments delegated to it by Congress. There are also obvious limitations upon the capacity of courts to deal meaningfully with arcane areas of knowledge of this kind.

EPA has taken its responsibility quite seriously, employing no less than three highly qualified private consulting firms to augment its own technological expertise. Accordingly, we must not be too quick to draw conclusions, differing from those of the Agency, in this necessarily imprecise area of knowledge. E. g., Industrial Union Dep't, supra, 162 U.S.App.D.C. at 338-39, 499 F.2d at 474-75 n. 18 ("Where existing methodology or research in a new area of regulation is deficient, the agency necessarily enjoys (a) broad discretion to attempt to formulate a solution to the best of its ability on the basis of available information"). See Permian Basin Area Rate Cases, 390 U.S. 747, 811, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968); Ethyl Corp. v. EPA, 176 U.S.App.D.C. 373, 396, 399, 541 F.2d 1, 24, 27 (En banc ), Cert. denied, 426 U.S. 941, 96 S.Ct. 2663, 49 L.Ed.2d 394 (1976); Id. 176 U.S.App.D.C. at 438-439, 541 F.2d at 66-67 (Bazelon, C. J., concurring); Society of the Plastics Indus., Inc. v. OSHA, 509 F.2d 1301, 1308 (2d Cir.), Cert. denied, 421 U.S. 992, 95 S.Ct. 1998, 44 L.Ed.2d 482 (1975). Indeed, the mere fact that the counsel on both sides in this suit could draw upon the opinions of diverse experts sitting virtually at their elbows during preparation of their briefs,¹² while we are forced to decide between their resulting arguments on the basis of our "generalist" judicial backgrounds, argues for restraint on our part.¹³ In sum, unless we are quite certain of our basis for doing so, we must be slow to overturn the Agency's judgment, whichever way it may incline, when Congress has required it to act quickly and decisively despite the lack of exact data.

The likelihood of that degree of certainty on our part, we might add, almost inevitably decreases when our review is based on the record of informal rulemaking before the Agency. Because of the nature of such rulemaking, again exaggerated in this case by the complexity of the subject matter, the record's portrayal of facts is essentially unsystematic (I. e., unaffected by any rules of evidence, or by face-to-face adversarial presentation). See Vermont Yankee, supra, 98 S.Ct. at 1217. Moreover, the greater part of the record will often transcend even an eclectic collection of facts and will instead be oriented towards aiding the Agency in making "pure(ly) legislative judgments." Industrial Union Dep't, supra, 162 U.S.App.D.C. at 338, 499 F.2d at 474. As such, it is relatively unhelpful to judges who have no way of testing the veracity of its "extensive and often conflicting" contents, or of analyzing it in the light of the neutral principles in which judicial decisionmaking is grounded. Id. 162 U.S.App.D.C. at 338-340, 499 F.2d at 474-76; Accord FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 813-814, 98 S.Ct. 2096, 2121-2122, 56 L.Ed.2d 697 (1978); See Ethyl Corp. v. EPA, supra, 176 U.S.App.D.C. at 392, 541 F.2d at 20; Society of Plastics Indus., Inc., supra, 509 F.2d at 1304; Automotive Parts & Accessories Ass'n v. Boyd, 132 U.S.App.D.C. 200, 208, 407 F.2d 330, 338 (1968).

In these circumstances, therefore, we will be content in carrying out our substantive review (that is, assuming the statute and the requisite procedures have been followed) first, to insist upon an explanation of the facts and policy concerns relied on by the Agency in making its decision; second, to see if those facts have some basis in the record; and finally, to decide whether those facts and those legislative considerations by themselves could lead a reasonable person to make the judgment that the Agency has made. See Citizens to Preserve Overton Park, Inc., supra, 401 U.S. at 416, 91 S.Ct. 814; Amoco Oil Co. v. EPA, 163 U.S.App.D.C. 162, 180-81, 501 F.2d 722, 740-41 (1974); Industrial Union Dep't, supra, 162 U.S.App.D.C. at 339-40, 499 F.2d at 475-76.

On the other hand, the Act its history, intent, and the nature of the duties it delegates to the Agency and the judiciary does not imply any derogation of the courts' traditional primacy in interpreting statutory directives and enforcing procedural rectitude. Although calling upon the Agency to make technical judgments, the provisions of the Act that are controlling in this case use common-sense terms that are thoroughly treated in the legislative history, so that their meaning is not inherently more accessible to the Agency than to ourselves. See Texas Gas Transmission Corp. v. Shell Oil Co., 363 U.S. 263, 270, 80 S.Ct. 1122, 4 L.Ed.2d 1208 (1960); Lubrizol Corp. v. EPA, 562 F.2d 807, 816-17 & n.23 (1977). Accordingly, in this statutory area of review, and particularly in the absence of some special indication that the Agency interpretation may coincide with that of Congress, Cf. Udall v. Tallman, 380 U.S. 1, 16-18, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965), we are less hesitant to reject the decision of the Agency, if the latter does not comport with the conclusion dictated by established principles of statutory construction. See Adamo Wrecking Co. v. United States, 434 U.S. 275, 98 S.Ct. 566, 570 n.5, 54 L.Ed.2d 538 (1978); ASARCO, Inc. v. EPA, 188 U.S.App.D.C. 77, 83, 578 F.2d 319, 325 (1978), Discussing Train v. Natural Resources Defense Council, 421 U.S. 60, 75, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975).

Even more so than our review of EPA's statutory interpretations, our review of its procedural integrity in promulgating the regulations before us is the product of our independent judgment, and our main reliance in ensuring that, despite its broad discretion, the Agency has not acted unfairly or in disregard of the statutorily prescribed procedures. E. g., National Asphalt Pavement Ass'n v. Train, 176 U.S.App.D.C. 296, 304-5, 539 F.2d 775, 783-84 (1976). Our assertion of judicial independence in carrying out the procedural aspect of the review function derives from this country's historical reliance on the courts as the exponents of procedural fairness.¹⁴ E. g., Hurtado v. California, 110 U.S. 516, 4 S.Ct. 111, 28 L.Ed. 232 (1884); Palko v. Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288 (1937); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); Goss v. Lopez, 419 U.S. 565, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975). Recently, this reliance has transcended cases arising under either of the due process clauses and has infused modern notions of administrative law, in particular in the area of informal rulemaking. E. g., Rodway v. Department of Agriculture, 168 U.S.App.D.C. 387, 391-95, 514 F.2d 809, 813-18 (1975); Portland Cement Ass'n v. Ruckelshaus, 158 U.S.App.D.C. 308, 326, 486 F.2d 375, 393 (1973), Cert. denied, 417 U.S. 921, 94 S.Ct. 2628, 41 L.Ed.2d 226 (1974); See Independent Broker-Dealers' Trade Ass'n v. SEC, 142 U.S.App.D.C. 338, 350, 442 F.2d 132, 144, Cert. denied, 404 U.S. 828, 92 S.Ct. 63, 30 L.Ed.2d 57 (1971).

Our reliance on careful procedural review, moreover, derives from an expectation that if the Agency, in carrying out its "essentially legislative task," has infused the administrative process with the degree of openness, explanation, and participatory democracy required by the APA, it will thereby have "negate(d) the dangers of arbitrariness and irrationality in the formulation of rules . . .," Automotive Parts & Accessories Ass'n, supra, 132 U.S.App.D.C. at 208, 407 F.2d at 338, Quoted in National Asphalt Pavement Ass'n, supra, 176 U.S.App.D.C. at 304-05, 539 F.2d at 783-84. See Ethyl Corp. v. EPA, supra, 176 U.S.App.D.C. at 438, 541 F.2d at 66 (Bazelon, C. J., concurring), Quoting International Harvester Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 448, 478 F.2d 615, 652 (1973) (Bazelon, C. J., concurring). Furthermore, such procedures will maximize the susceptibility of the record to judicial review. Dry Colors Mfrs. Ass'n v. Department of Labor, 486 F.2d 98, 105-07 (3d Cir. 1973). In short, we are willing to entrust the Agency with wide-ranging regulatory discretion, and even, to a lesser extent, with an interpretive discretion vis-a-vis its statutory mandate, so long as we are assured that its promulgation process as a whole and in each of its major aspects provides a degree of public awareness, understanding, and participation commensurate with the complexity and intrusiveness of the resulting regulations.¹⁵ See American Frozen Food Inst., supra, 176 U.S.App.D.C. at 133, 539 F.2d at 135; note 11 Supra. Even here, however, beyond the notice, comment, and explanation requirements of section 553 of the APA, it is generally up to the Agency to select among the myriad available techniques to accomplish the goal of public understanding and participation. Vermont Yankee, supra, 98 S.Ct. at 1211-17. Cf. duPont, supra, 430 U.S. at 131-32 nn.22-23, 97 S.Ct. 965; Texaco Inc. v. FEA, 531 F.2d 1071, 1082 (Em.App.), Cert. denied, 426 U.S. 941, 96 S.Ct. 2662, 49 L.Ed.2d 394 (1976).¹⁶

Turning first, then, to our procedurally oriented review task, we note that in general the Agency appears to have bent over backwards to accommodate public participation in, and understanding of, the promulgation of the effluent limitations before us. No less than four opportunities for public comment on parts or all of the proposed regulations and supporting data were provided by the Agency and liberally utilized by the industry. That EPA made the hoped-for use of these procedures is evidenced by its willingness at each stage to reflect the comments in revisions of its conclusion,¹⁷ and by the fact that members of the industry apparently exhausted most of their comments and criticisms before the Agency exhausted its procedures. Hence, the industry's trade association rejected EPA's offer to hold a formal hearing.

The one procedural inadequacy attributed to EPA in this case is of very limited scope. It concerns EPA's derivation of one effluent limitation (out of three in all) for one subdivision of the industry (out of 66 in all): the BOD limitation for acetate grade dissolving sulfite mills. The genesis of this challenge is complicated and somewhat obscure. It revolves around EPA's computation of the "secondary waste load"¹⁸ that must be treated by typical acetate grade dissolving sulfite mills using BPC-TCA. To derive a typical secondary waste load, the Agency was forced to adjust the limited data available to it, See note 70 Infra, to make it representative of the appropriate mills. The dispute has arisen out of the Agency's identification and computation of the appropriate adjustments. Petitioners contend that, properly adjusted, the figures would show that these mills produce large amounts of waste that are costly to treat. Consequently, they urge that a high cost figure must be utilized in the Agency's cost-benefit balancing. EPA responds that there is not so much waste to treat at a typical mill, and thus that it justifiably used a lower cost estimate than the one argued for by petitioner.

EPA originally computed the secondary waste load for these mills at 487 pounds of waste to be treated per ton of product (lbs/ton), App. 1514, a figure to which the industry did not object.¹⁹ Between the publication of the Interim Final Limitations and the Final Limitations, however, the Agency apparently secured new data and recalculated the waste load as lower, I. e., 404 lbs/ton.²⁰ EPA purportedly arrived at the latter figure after it (1) studied two other factors that it realized would require adjusting the figure upwards and downwards respectively, but then (2) decided to disregard the two factors on the assumption that they cancelled each other out.²¹ We say "purportedly" because the record includes no mention of the two factors, much less of their mode of being considered. Finally, in making its cost calculations, EPA took the 404 lbs/ton figure and reduced it to 314 lbs/ton on a further assumption that it now admits is erroneous.²²

Because the industry had no opportunity to comment on either the 314 or 404 lbs/ton figures after the Final Limitations were issued, it made its objection to them in its brief on appeal.²³ It concluded these objections by recalculating secondary waste load and arriving at a figure close to the Agency's original 487 lbs/ton calculation. Brief for Petitioners in Nos. 76-1688 and 76-1690, at Appendix F. Included in its recomputations were some new data that had not been placed in the record. Although counsel for EPA conceded in response that petitioners' objections to the secondary waste load figures were partly correct, they also noted that petitioners' new data were favorable to EPA's conclusions.²⁴ Counsel asserted that if EPA recalculated secondary waste load based on both the new data, and on the two factors previously disregarded because they were assumed to cancel out, See note 21 Supra and accompanying text, it would arrive at secondary waste load figure of 292 lbs/ton even below its earlier computations. In sum, EPA conceded some errors and deletions but urged that by remaking its computations from scratch, it could justify the figures used in the Final Limitations.²⁵

The labyrinthine trail that must be followed merely to Set forth this dispute without even venturing a guess as to how to resolve it amply illustrates the inadequacy of the procedures followed by the Agency. Most obviously, the defect stems from the inadequacy of the Agency's final published explanation. That explanation includes, and we presume the Agency relied upon, computations now admitted to be erroneous. See note 22 Supra and accompanying text. Further, it deletes mention of a phantom set of not-quite-offsetting adjustments that Agency attorneys now deem crucial to the viability of the EPA's cost determination. See note 21 Supra and accompanying text.

Absent a coherent discussion in the record of the factual "basis" and legislative "purpose" underlying EPA's conclusion, See 5 U.S.C. § 553, we are unable to rely on our usual assumption that the Agency, when relying on supportable facts and permissible policy concerns and when obligated to explain itself, will rationally exercise the duties delegated to it by Congress. It is for this reason that we take no solace in the fact that the Agency's Counsel, after the fact, may be able convincingly to rationalize the Agency's decision. E. g., Dry Color Mfrs. Ass'n, supra, 486 F.2d at 106. See Vermont Yankee, supra, 98 S.Ct. at 1214, Quoting Camp. v. Pitts, 411 U.S. 138, 143, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973).

Moreover, the Agency's procedures in this limited instance improperly denied petitioners the opportunity to comment on a significant part of the Agency's decisionmaking process as required by section 553. See American Frozen Food Inst., supra, 539 F.2d at 135, 176 U.S.App.D.C. at 133. Thus, the 404 and 314 lbs/ton figures variously relied upon by the Agency must be validated, if at all, by reference (1) to certain data on two mills obtained by the Agency after the opportunity for public comment had lapsed; (2) other data from one mill that is not reflected in the record at all but was included by petitioners in their brief;²⁶ and (3) calculations, also not reflected in the record, based on information scattered throughout the record. This denial of an opportunity for comment on these facts further undermines our usual assumption that notice and comment rulemaking, by virtue of its accessibility to public scrutiny, will achieve rational results.

Our conclusion does not imply any dissatisfaction with the rule that the Agency need not subject every incremental change in its conclusions after each round of notice and comment to further public scrutiny before final action. E. g., International Harvester Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 424, 478 F.2d 615, 632 n.51 (1973); South Terminal Corp. v. EPA, 504 F.2d 646, 659 (1st Cir. 1974). But in this case, the Agency's final conclusions are far from the "logical outgrowth" of the preceding notice and comment process, Id., and instead are the result of a complex mix of controversial and uncommented upon data and calculations. Given the lengths that the Agency must travel to justify its revisions between the interim and final stages, we cannot be sure that further and ultimately convincing public criticism of those changes would not have been forthcoming had it been invited by the Agency.²⁷ See Marathon Oil Co. v. EPA, 564 F.2d 1253, 1271-72 n.54 (9th Cir. 1977).

For all of the foregoing reasons, therefore, we must remand the regulation setting forth the BOD limitation for acetate grade dissolving sulfite mills. On remand, the Agency should conduct notice and comment proceedings aimed at reassessing and more fully explaining its conclusions concerning that limitation's validity in light of the cost of complying therewith. See id. at 1271-72.

V. THE AGENCY'S INTERPRETATION OF THE STATUTE

Petitioners raise two major statutorily premised arguments in challenging these effluent regulations. First, they claim that the Act, as interpreted by the Supreme Court in DuPont, requires a greater degree of flexibility to vary the general effluent limitations in individual permits than the regulations allow. Second, it is contended that EPA has too severely narrowed the group of factors relevant in determining allowable effluent limitations and in so doing has contravened the will of Congress as expressed in section 304(b)(1)(B), Quoted in note 2 Supra. These two arguments merge to the extent that EPA refuses to allow variances based on the same factors that it also refuses to consider in setting the overall limitations. We find the Agency's statutory interpretation correct in both instances.

The Act explicitly includes a variance procedure for use by the permit-granting agencies in deciding how to reflect the EPA's overall 1983 limitations in the effluent permits of specific mills. Section 301(c). No similar variance clause with reference to the 1977 limitations is explicit in the Act. Nonetheless, the Agency consistently has included variance provisions in its regulations setting 1977 limits for the various industries, See United States Steel Corp. v. Train, 556 F.2d 822, 844-45 (7th Cir. 1977), and recently the Supreme Court held that under its understanding of the Act, such a variance provision is legally required:

We conclude that the statute authorizes the 1977 limitations as well as the 1983 limitations to be set by regulation, So long as some allowance is made for variations in individual plants, as EPA has done by including a variance clause in its 1977 limitations.

DuPont, supra, 430 U.S. at 128, 97 S.Ct. at 975 (emphasis added and footnote omitted). See United States Steel Corp., supra, 556 F.2d at 844-45.

Despite the Court's closing phrase, which seems to validate the Agency's actual variance practice, that question was left open in a footnote:

We agree with the Court of Appeals, (E. I. duPont de Nemours & Co. v. Train, 541 F.2d 1018, at 1028 (4th Cir. 1976)), that consideration of whether EPA's variance provision has proper scope would be premature.

DuPont, supra, 430 U.S. at 128 n. 19, 97 S.Ct. at 975. Thus, while DuPont clearly establishes the necessity of including Some provision for variances in the 1977 limitations, it raises a question as to the justiciability of the provision's specific validity in the context of review of the general set of limitations.

Our reading of DuPont and of the cited portion of the lower court opinion in that case leads us to conclude that, while final review of the variance provision must await individual permittees' attempts to utilize it, See note 29 Infra, a threshold review of the provision is a prerequisite to validation of the general limitations.

This conclusion is mandated by the narrowness of the rationale relied upon by the Fourth Circuit, and adopted by the Supreme Court, as a basis for avoiding the specifics of the variance question in DuPont :

The administration of these (variance) provisions in practice is a matter of speculation at the present. The question will arise when a claim for a variance is made in a permit application.

541 F.2d at 1028. Accord, Natural Resources Defense Council, Inc. v. EPA, 537 F.2d 642, 647 (2d Cir. 1976). In the three years that have now elapsed since DuPont was briefed and argued in the Fourth Circuit, however, enough indicia of the Agency's attitude toward the 1977 variance provision under the Act has accumulated so that its administration is anything but "a matter of speculation." See especially In re Louisiana-Pacific Corp., 10 E.R.C. 1841 (1977) (Decision of the Administrator of EPA).

Petitioners have alleged that these recent indicia contradict the rebuttable presumption of administrative regularity that motivated the Supreme Court and Fourth Circuit in DuPont to allow the limitations to go into effect in advance of final proof that the variance provision was meaningful. In petitioner's view, the indicia point to the complete emasculation by the Agency of its 1977 variance provision. Accordingly, because the Supreme Court premised the Agency's power to set 1977 limitations by regulation on the availability of a meaningful variance provision, See pp. ---- - ---- of 191 U.S.App.D.C., pp. 1033-1034 of 590 F.2d Infra, and because the presumption that its variance will be applied meaningfully is no longer necessitated by a lack of concrete information, we cannot approve the regulations without finding that they include a sufficiently flexible variance provision.²⁸ Since its own decision in DuPont, the Fourth Circuit has reached a similar conclusion and has undertaken to review the variance clause in certain effluent limitations for electric generating plants. Appalachian Power Co. v. Train, 545 F.2d 1351, 1358-60 & n. 22, Modified, 545 F.2d 1380 (4th Cir. 1976).

We stress, however, that our view of the variance provision in the paper industry limitations before us, while indispensable in reviewing those limitations, is quite narrow. It seeks only to establish that the provision can be applied with enough flexibility to support the general rulemaking effort. We consequently take no position on its application in specific cases, or on its precise interpretation, beyond insisting that it meet this minimum-flexibility requirement.²⁹

The limited question before us, therefore, is whether the variance provision included in the 1977 paper industry limitations now under review has a capacity for the degree of flexibility that DuPont deemed crucial to the legality of any general set of industry-wide effluent limitations under the Act. Answering that question requires an examination of the Court's analysis in DuPont.

Prior to that case, the circuits had disagreed over whether the Act even permitted EPA to bind individual point sources with general regulations under section 301 or whether the binding limits were to be set in every case by the permit-issuing agencies with jurisdiction in each of the 50 states. Compare CPC Int'l, Inc. v. Train, 515 F.2d 1032, 1038 (8th Cir. 1975), With, e. g., American Frozen Food Inst., supra. The Supreme Court upheld the Agency's assertion of authority to issue binding, general limitations. It started with the observation that as to the 1983 limitations, section 301 of the Act "leaves no doubt that these (general) limitations are to be set by regulation." DuPont, supra, 430 U.S. at 126, 97 S.Ct. at 974.

Noting, however, that "(d)ifferent language is used in § 301 with respect to the 1977 limitations," Id. at 127, 97 S.Ct. at 9741, See id. at 133-34 n. 24, 97 S.Ct. 965, the Court nonetheless decided that two sets of limitations could be established by the same procedures, "so long as some allowance is made for variations in individual plants" in the 1977 limitations. Id. at 127-28, 97 S.Ct. 965. The Court apparently insisted upon reading a variance requirement into section 301's provisions with respect to the 1977 limitations in order to make those provisions coextensive with the section's 1983 provisions which do include a variance requirement, section 301(c) and to "unambiguously" invest the Agency with rulemaking authority. 430 U.S. at 127, 97 S.Ct. 965.

The importance that the Court assigned to a meaningful variance as a prerequisite to valid general limitations may be seen first in its use of the mandatory phrase "so long as." Moreover, in the same case the Court unequivocally refused to read a variance requirement into the Act's provisions governing effluent regulations for Newly built plants. 430 U.S. at 137-39, 97 S.Ct. 965. Here the Court found "that Congress intended these regulations to be absolute prohibitions," Id. at 138, 97 S.Ct. at 980 a finding it did not make with respect to the 1977 limitations despite the Act's failure explicitly to provide for variances therefrom. Finally, the Court emphasized the need for a meaningful variance when it argued that giving EPA the power to set general regulations would not undermine the Act's intent to give the states, through the permit-granting agencies, an important role in administering the Act. The Court subscribed to the view that, by leaving the granting of variances to the state agencies in the first instance, the significance of their role would be preserved. Id. at 134 n. 24, 97 S.Ct. 965, Citing American Meat Inst. v. EPA, 526 F.2d 442, 452 (7th Cir. 1975). Accord, American Paper Inst., supra, 177 U.S.App.D.C. at 190, 543 F.2d at 337. See generally Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 78-87, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975). Because the states can only grant variances that conform to EPA's interpretation of its variance provision, See In re Louisiana-Pacific Corp., supra, the states' role could still be severely undercut if the Agency were to interpret the variance allowance so narrowly as to remove its effect.

The motivating force in DuPont was the Court's desire to overcome the "highly anomalous" result that would attend a reading of section 301 to require a different pattern of promulgation for the 1977 limitations than the one so clearly laid out for the 1983 limitations. Hence, the Act was read, despite its nonparallel language, to establish the same promulgation procedures for both sets of limitations and, accordingly, to require a variance provision under both. At minimum, therefore, DuPont indicates that the Agency must give permittees the ability to secure variances from the 1977 limitations analogous to their statutorily provided ability to secure the same with respect to the 1983 standards.³⁰

Section 301(c) of the Act allows a modification of the general 1983 limitations in section 301(b)(2)(A)

upon a showing . . . that (a variance) (1) will represent the maximum use of technology within the economic capability of the owner or operator; and (2) will result in reasonable further progress toward the elimination of the discharge of pollutants.³¹

The crucial language here appears to be "technology within the Economic capability of the owner." This language clearly harks back to the "best available technology Economically achievable for such category (of point sources)" language in section 301(b)(2)(A) which provides for the establishment of general 1983 limitations.³² In other words, section 301(c) (if properly invoked) authorizes the Agency to relieve a particular point source operator from any demands that the Act does not allow the Agency to make of the industry generally. That is to say, it may relieve him from the requirement of using more than the best available technology economically achievable (BATEA). Even the second qualification in section 301(c), that the variance may not halt progress toward eliminating pollution, tracks language in section 301(b)(2)(A) requiring that BATEA "result in reasonable further progress toward the national goal of eliminating the discharge of all pollutants." See note 32 Supra.

Furthermore, the Act quite explicitly lays out the minimum factors that the Agency must consider in identifying BATEA. Those factors, referred to in section 301(b)(2)(A), are found in section 304(b)(2)(B).³³ As such, it seems clear that in deciding under section 301(c) whether the variance sought by a mill owner "represent(s) the maximum use of technology within the economic capability of (that) owner," the permit-granting agency, and the EPA in supervising that agency, must consider the factors laid out in section 304(b)(2)(B).

Analogously, the 1977 variance provision must at minimum allow a petitioning mill operator to seek a dispensation from any limitation that, as a whole, demands more of him than section 301(b)(1)(A), the 1977 limitation provision, allows EPA to demand of the industry as a whole. Although this formulation ensures a meaningful variance, it should be noted that it is not a license for avoidance of the Act's strict pollution control requirements. It simply allows individual operators to argue, that, given the overall impact of an effluent limitation on their operations, they are faced with Stricter requirements than the Act authorizes EPA to place on the industry as a whole.³⁴

More specifically, section 301(b)(1)(A), as interpreted in DuPont, requires "the application of the best practicable control technology currently available" (BPCTCA) for each industrial subcategory. See note 1 Supra. Moreover, it, too, refers to a portion of section 304 that enumerates the factors relevant in setting BPCTCA. Section 304(b)(1)(B); See note 2 Supra. Under DuPont, therefore, a variance provision should allow the state agencies and EPA to excuse mill operators from making more than the maximum use of technology practicably available to them. Pursuant to section 304(b)(1)(B), the outlines of practicability in each case depend upon "the total cost (to the operator) of application of technology in relation to the effluent reduction benefits to be achieved" by that technology as well as upon "the age of (the mill operator's) equipment . . . the process employed (by him), the engineering aspects of the application (at the mill) of various types of control techniques, process changes (and) non-water quality environmental impact (of the technology specified for his mill) (including energy requirements)." The precise interrelationship of these factors in making variance decisions, moreover, basically should track the scope and interrelationship that we have assigned them in developing the general, industry-wide limitations. See pp. ---- - ---- of 191 U.S.App.D.C., pp. 1041-1053 of 590 F.2d Infra.

As will be explained more thoroughly Infra, this approach clearly rules out the necessity of considering local receiving water quality in making variance decisions. See In re Louisiana-Pacific, supra ; pp. ---- - ---- of 191 U.S.App.D.C., pp. 1041-1044 of 590 F.2d Infra. A more difficult question surrounds the relevance and importance of economic hardship. This issue is crucial, of course, because those mill operators who are most hard pressed economically will be the most likely to pursue vigorous variance demands. Moreover, when faced with the ultimate threat of economic hardship plant closure, with attendant unemployment and regional economic dislocation the local permit-granting agency will find it difficult to resist a plea for a variance.

We have explored this issue carefully, and we express our conclusion emphatically: Although the "Total cost " of pollution control at the petitioning mill must be considered under a satisfactory variance provision, it is only relevant "in relation to the effluent reduction benefits to be achieved" at that mill, section 304(b)(1)(B); So long as those costs relative to the pollution reduction gains are not different from those that may be imposed on the industry as a whole, the difficulty, or in fact the inability, of the operator to absorb the costs need not control the variance decision.³⁵

We reach this conclusion under the statute only after satisfying ourselves that the legislative intent is as clear as the result is harsh. Most prominently, the Act's supporters in both Houses acknowledged and accepted the possibility that its 1977 requirements might cause individual plants to go out of business. E. g., Legislative History, at 231 (remarks of Rep. Jones); Id. at 1282 (remarks of Sen. Bentsen). They self-consciously made the legislative determination that the health and safety gains that achievement of the Act's aspirations would bring to future generations will in some cases outweigh the economic dislocation it causes to the present generation. See American Iron & Steel Inst., supra, 526 F.2d at 1052. They accordingly authorized EPA to impose effluent restrictions that they knew might shut down parts of regulated industries including, specifically, paper mills. See Legislative History, at 718-21 (statement of Rep. Meeds). The Agency, in turn, has projected that its limitations for the paper industry may shut down eight marginal mills, See p. ---- of 191 U.S.App.D.C., p. 1047 of 590 F.2d Infra, and the variance provision need not protect these or other individuals from impacts authorized for the industry as a whole.

Even more specifically, at least one legislator considered and rejected "giving variances to pollution controls based on (such purely) economic grounds" as

(w)hen the otherwise healthy small independent firm is forced to close, the tax base of the community is further weakened, and workers and families are forced back into already congested metropolitan areas . . ..

Legislative History, at 1355 (remarks of Sen. Nelson). Despite the appeal of economic hardship variances in circumstances such as those described, Senator Nelson argued, they could become "a tool used by powerful political interests to obtain so many exemptions on the flimsiest of pretenses (that) tragic delay in stopping the destruction of our environment" would result. Id. Hence, he opposed such variances and chose to rely on other means of protecting businesses from effluent-control-induced bankruptcy. See id., discussing section 8 of the Act, Amending Small Business Act, § 7, 15 U.S.C. § 636, Now codified in 15 U.S.C. § 636(g) (authorizing low interest loans to aid small businesses in meeting the Act's requirements).³⁶

We come, then, to the question of whether the actual variance provision included in the Phase II paper industry limitations, as interpreted, is capable of the minimum degree of flexibility just described.[[³⁷ That provision notes that the EPA was at pains to account for all available data "such as age and size of plant . . . energy requirements and Costs " relevant to effluent levels but acknowledges the inevitable possibility "that data which would affect these limitations" have not been considered (emphasis added). It accordingly allows a discharger to secure a permit containing less stringent limitations than those established by the EPA, if the discharger can show "that factors related to the equipment or facilities involved, the process applied, or Other such factors related to such discharger are Fundamentally different from the factors considered in the establishment of the guidelines" (emphasis added).

Not surprisingly, EPA's likely interpretation of these terms, and particularly the parts of it italicized above, have occasioned some dispute. The Agency itself at one point accepted public comments on this type of 1977 variance under the Act, looking toward a regulation definitively interpreting it. 39 Fed.Reg. 28926 (1974). No such regulation has been forthcoming, however.

Nonetheless, in 1974, the Agency's General Counsel instructed Agency personnel that the "other such factors" language in the typical 1977 variance provision quoted above did not envision the consideration of any Economic Factors. He accordingly limited the provision's application to cases involving fundamentally different "factors of a Technical and Engineering nature." Memorandum to Regional Administrators of EPA, 39 Fed.Reg. 30073 (1974) (emphasis added). It was this interpretation that the Fourth Circuit disapproved of in Appalachian Power Co., supra, discussed in notes 30 & 35 Supra. Because the General Counsel's 1974 opinion relied exclusively on Congress's failure to include a variance procedure for the 1977 limitations we, too, would be inclined to find the opinion inconsistent with the Act, as now authoritatively interpreted in DuPont to include a meaningful variance requirement. See Currie, Congress, The Court, and Water Pollution, 1977 S.Ct.Rev. 39, 53-56. Nonetheless, we need not reach that question in light of the Agency's recent reinterpretation and expansion of the variance provision.

As of September 13, 1977, when EPA filed its brief in this case, the Agency still adhered to its 1974 interpretation of the variance provision to exclude consideration of economic factors. Brief for Respondent at 17-20. Moreover, that brief suggested that the provision's "fundamental difference" language required that the applicant demonstrate a Qualitatively different factor than any considered by the Agency in its rulemaking before a variance could be granted. Id. at 12-17. That is to say, if the Agency had considered data relevant, for example, to climate, or to energy needs for sludge disposal, the brief indicated that no variance based on those factors could subsequently issue, even if the climate or energy situation facing the applicant was Quantitatively different from the range of such situations considered by the Agency.

Nonetheless, two days after the brief was filed in this case, the Administrator of the EPA handed down a decision in In re Louisiana-Pacific, supra, which seems significantly to have liberalized the Agency's approach to the variance provision.³⁸ In essence, this decision tracked the analysis in DuPont and thereby expanded the range of factors recognized by EPA as relevant to the granting of a variance to include All of those factors listed in section 304(b)(1)(B):

My authority to provide for variances from (BPCTCA) flows from, and is inherent in, my authority to promulgate effluent limitations guidelines under Sections 301(b)(1)(A) and 304(b)(1) . . .. Variances can only be based on fundamental differences in factors which are appropriate to (the general) technology-based regulations and limitations derived through the variance process must still meet the congressional definition of best practicable control technology.

. . . . This does not mean that where a fundamental difference can be shown with respect to a factor other than (one not listed in section 304(b)(1)) a variance may not be appropriate.

Id. at 1851. See also id. at 1847 (describing section 304(b) of the Act as the source of "factors which must be taken into account in developing (the general) industrial effluent limitations . . ..").

Consistent with his reliance on section 304(b), the Administrator clearly broke with the 1974 opinion of the General Counsel and cited such nontechnical factors relevant to the 1977 variances as energy requirements, Id. at 1851, raw materials, Id. at 1846 n. 9, non-water quality environmental impacts, such as land and air pollution from sludge disposal or burning, Id. at 1850-51 & n. 22, 1852-53 & n. 30, and even such economic factors as compliance costs, Id. at 1051-52 & n. 27.³⁹ As a matter of the potentially relevant factors, therefore, the Agency's interpretation has been brought into line with what we believe are the dictates of DuPont, and on that score we find the variance clause capable of the requisite minimum degree of flexibility.

The Louisiana-Pacific decision also clarifies the Agency's position with respect to the meaning of the "fundamentally different" language in the variance clause. First, it makes clear that, if an individual operator demonstrates a "substantial( )" Id. at 1851, or "fundamental" difference in a section 304(b)(1)(B) factor vis-a-vis the Agency's regulatory findings about the factor "on a national basis," a variance will be allowed. Id. at 1851 n. 25, 1852-53. Since EPA must, and claims that it did, consider all of the section 304(b)(1)(B) factors in setting the general limitations, the Administrator's decision indicates that factors already considered during rulemaking can, and in fact must, be considered during variance proceedings, so long as the requisite difference is shown. Here again, the degree of flexibility necessary to justify EPA in setting general 1977 limitations is achieved, and variances are not restricted to qualitatively different circumstances from those considered by EPA during rulemaking.

The remaining question, therefore, concerns the requirement that the difference between the individual and national situations (whether qualitative or quantitative) is fundamental. None of the petitioners in this case takes issue with the "fundamental difference" language so long as it is not used to preclude consideration of any of the section 304(b)(1)(B) factors. Petitioners realize that such a requirement, along with the allocation of the burden of proof to the variance applicant, assures that the pin-hole safety valve envisioned in the Act and DuPont does not become a yawning loophole. E. g., Joint Brief for Petitioners Addressing Common Issues, at 24.

We agree with the parties to these petitions that the fundamentality requirement does not deprive the variance provision before us of the minimum potential for flexibility required by DuPont. Although the variance must prevent the regulations from having a greater overall impact on an individual mill than the Act authorizes the general regulations to have on the industry, the one designed by EPA for use in its industry-wide limitations for 1977 accomplishes this goal. Because EPA, in devising the limitations, undertook a meticulous effort to obtain all relevant information from all available sources including the industry itself, and attempted to account for that information in all its diversity, the Agency has built a significant degree of flexibility into the regulations themselves. This flexibility is reflected in the 16 subcategories and 66 subdivisions thereof, as well as in the establishment of maximum single-day, and 30-day-average, limits that are much higher than the yearly-average limits that the Agency has found within the technological reach of the industry.

Thus, to a great degree, the Agency has accounted for cross-industry, and even "cross-subcategory," differences in establishing the limits. Allowing for variances based on slight or moderate differentials at individual plants would accordingly ignore the liberality that is already built into the system. It would allow for variances, when the impact on an individual did not exceed the range of impacts considered by the Agency for the industry generally.

Moreover, without the fundamentality requirement the rulemaking process could be shortcircuited. As discussed earlier, Congress has placed EPA under the burden of almost instantaneously establishing comprehensive regulations aimed at achieving a monumental goal. That effort must proceed in advance of the availability of much relevant data. If the regulations could be ignored every time a mill owner who did not produce data from his operation during rulemaking suddenly develops the facts and finds them somewhat different from the ones available to the Agency, the achievement of the congressional goals would be pushed far beyond the time periods established in the Act.

Finally, the Agency, without destroying the necessary flexibility, may insist upon a fundamental difference as to one or even several individual factors, in order to account for the fact that each limit is the product of consideration of myriad factors, each of which may be expected to vary from plant to plant. As noted earlier, a variance only need be granted when the Overall situation facing an individual operator differs from the overall situation of the industry. See note 34 Supra and accompanying text. The Agency has properly adopted an approach that focuses on only one or a few of the relevant factors but sets a high differential standard therefor in order to relieve itself of having to analyze all of the relevant factors in every variance case to achieve the Overall differential picture.

In sum, the most recent delineation by the Agency of its 1977 variance policy under the Act convinces us that its policy is Capable of sufficient flexibility to buttress its claim of authority to limit 1977 effluent discharges by way of general regulations. We emphasize, once more, however, that this conclusion is inextricably linked to the Agency's current interpretation of its variance provision, and that, while crucial to our affirmance of the regulations as a whole, it implies no opinion on the specifics of individual variance applications.

EPA's consideration of the factors bearing on "the best practicable technology currently available" (BPCTCA) has inspired several challenges from petitioners. Some of these challenges concern the Agency's refusal to consider receiving water quality, while others concern EPA's manner of assessing the factors that all agree must be considered: cost and nonwater environmental impacts. We uphold the Agency's interpretation and application of the statute against both sets of challenges.

Some of the paper mills that must meet the effluent limitations under review discharge their effluents into the Pacific Ocean. Petitioners contend that the ocean can dilute or naturally treat effluent, and that EPA must take this capacity of the ocean ("receiving water capacity") into account in a variety of ways.⁴⁰ They urge what they term "common sense," I. e., that because the amounts of pollutant involved are small in comparison to bodies of water as vast as Puget Sound or the Pacific Ocean, they should not have to spend heavily on treatment equipment, or to increase their energy requirements and sludge levels, in order to treat wastes that the ocean could dilute or absorb.⁴¹

EPA's secondary response to this claim was that pollution is far from harmless, even when disposed of in the largest bodies of water. As congressional testimony indicated, the Great Lakes, Puget Sound, and even areas of the Atlantic Ocean have been seriously injured by water pollution.⁴² Even if the ocean can handle ordinary wastes, ocean life may be vulnerable to toxic compounds that typically accompany those wastes.⁴³ In the main, however, EPA simply asserted that the issue of receiving water capacity could not be raised in setting effluent limitations because Congress had ruled it out. We have examined the previous legislation in this area, and the 1972 Act's wording, legislative history, and policies, as underscored by its 1977 amendments. These sources, which were thoroughly analyzed in a recent opinion of the administrator of the Agency, fully support EPA's construction of the Act.⁴⁴ They make clear that based on long experience, and aware of the limits of technological knowledge and administrative flexibility, Congress made the deliberate decision to rule out arguments based on receiving water capacity.

The earliest version of the Federal Water Pollution Control Act was passed in 1948 and amended five times before 1972. Throughout that 24 year period, Congress attempted to use receiving water quality as a basis for setting pollution standards. W. Rodgers, Environmental Law 355-57 (1977). At the end of that period, Congress realized not only that its water pollution efforts until then had failed, but also that reliance on receiving water capacity as a crucial test for permissible pollution levels had contributed greatly to that failure. EPA v. State Water Resources Control Board, 426 U.S. 200, 202, 96 S.Ct. 2022, 48 L.Ed.2d 578 (1976).⁴⁵

Based on this experience, Congress adopted a new approach in 1972. Under the Act, "a discharger's performance is . . . measured against strict technology-based effluent limitations specified levels of treatment to which it must conform, rather than against limitations derived from water quality standards to which it and other polluters must collectively conform." Id. at 204-05, 96 S.Ct. at 2024 (footnotes omitted). See Save the Bay, Inc. v. EPA, 556 F.2d 1282, 1284 (5th Cir. 1977); American Frozen Foods Inst., supra, 176 U.S.App.D.C. at 113, 539 F.2d at 115.

This new approach reflected developing views on practicality and rights. Congress concluded that water pollution seriously harmed the environment, and that although the cost of control would be heavy, the nation would benefit from controlling that pollution. Yet scientific uncertainties made it difficult to assess the benefits to particular bodies of receiving water. Even if the federal government eventually could succeed at the task at which had failed for 24 years and thus could determine benefits and devise water quality standards, Congress concluded that the requisite further delay was too long for the nation to wait. Note, The Federal Water Pollution Control Act Amendments of 1972: Ambiguity as A Control Device, 10 Harv.J.Legis. 565, 571-72 (1973).

Moreover, by eliminating the issue of the capacity of particular bodies of receiving water, Congress made nationwide uniformity in effluent regulation possible. Congress considered uniformity vital to free the states from the temptation of relaxing local limitations in order to woo or keep industrial facilities.⁴⁶ In addition, national uniformity made pollution clean-up possible without engaging in the divisive task of favoring some regions of the country over others.

More fundamentally, the new approach implemented changing views as to the relative rights of the public and of industrial polluters. Hitherto, the right of the polluter was pre-eminent, unless the damage caused by pollution could be proven. Henceforth, the right of the public to a clean environment would be pre-eminent, unless pollution treatment was impractical or unachievable. The Senate Committee declared that "(t)he use of any river, lake, stream or ocean as a waste treatment system is unacceptable" regardless of the measurable impact of the waste on the body of water in question. Legislative History at 1425 (Senate Report). The Conference Report stated that the Act "specifically bans pollution dilution as an alternative to waste treatment." Id. at 284. This new view of relative rights was based in part on the hard-nosed assessment of our scientific ignorance: "we know so little about the ultimate consequences of injection of new matter into water that (the Act requires) a presumption of pollution. . . ." Id. at 1332 (remarks of Sen. Buckley). It also was based on the widely shared conviction that the nation's quality of life depended on its natural bounty, and that it was worth incurring heavy cost to preserve that bounty for future generations.

The Act reflects the new approach in a number of provisions. As noted, its goal was Zero discharge of pollutants by 1985, section 101(a)(1), 33 U.S.C. § 1251(a)(1), Not discharges at acceptable or tolerable levels for receiving water. The rest of the statute "authorize(s) a series of steps to be taken to achieve (that) goal," DuPont, supra, 430 U.S. at 116, 97 S.Ct. at 969. It defines "pollution," "pollutant," "discharge of a pollutant," and "effluent limitation" in terms of any addition to water that alters its "chemical, physical, biological, (or) radiological integrity;" it does not specify additions that diminish the quality of the receiving water.⁴⁷ In only one limited instance, thermal pollution, is receiving water capacity to be considered in relaxing standards, and the section allowing such consideration was drafted as a clear exception. Section 316(a) of the Act, 33 U.S.C. § 1326(a). Otherwise, receiving water quality was to be considered only in setting "More stringent" standards than effluent limitations otherwise would prescribe. Section 301(b)(1)(C) of the Act, 33 U.S.C. § 1311(b)(1)(C) (emphasis added).

The Act was passed with an expectation of "mid-course corrections," Legislative History, at 175 (statement of Sen. Muskie), and in 1977 Congress amended the Act, although generally holding to the same tack set five years earlier. Pub.L. No. 95-217, 91 Stat. 1584. Notably, during those five years, representatives of the paper industry had appeared before Congress and urged it to Change the Act and to incorporate receiving water capacity as a consideration. See, e. g., Hearings before the Subcomm. on Environmental Pollution of the Senate Comm. on Environment and Public Works, 95th Cong., 1st Sess., pt. 3, at 193, 195, 540. Nonetheless, Congress was satisfied with this element of the statutory scheme. Except for a provision specifically aimed at discharges from "publicly owned treatment plants," section 301(h) of the Act, 33 U.S.C. § 1311(h),⁴⁸ it resolved in the recent amendments to continue regulating discharges into all receiving waters alike.⁴⁹

Our experience with litigation under the Act, and particularly with this case, emphasizes the weight of Congress