Score One For Rational Regulation: The 2nd Circuit Rejects Environmental and Industry Challenges to EPA’s Cooling Water Intake Structure Rule

On Monday, the 2nd Circuit Court of Appeals rejected all challenges to EPA’s cooling water intake structure rule.  Notwithstanding the Court’s rejection of the industry challenges, it’s a big win for industry.  As I noted when the rule was promulgated, industry dodged a major bullet when EPA decided not to require closed-cycle cooling at existing facilities.

The decision is really all about Chevron deference and is another bit of evidence in support of my ongoing effort to demonstrate that conservatives might want to be careful what they wish for when they discuss overruling Chevron.

The most significant element of the decision was the holding that EPA’s use of cost-benefit analysis in the rule was consistent with the CWA.  While at some level this was merely an extension of the Supreme Court’s holding in Entergy v. Riverkeeper, it’s nonetheless an important decision in its support for EPA’s approach to cost-benefit analysis in the rule.

Overall, I think the case represents a rare breath of good news on the environmental front.  EPA’s rule was, on balance, a model of good rulemaking.  EPA spent a lot of time taking comment from and listening to the regulated community.  It ultimately issued a rule that imposed stringent standards on the facilities that – literally – use 99.8% of all water withdrawn for industrial purposes in the United States, while giving those facilities substantial flexibility in how to meet the standards.  The Court applied Chevron deference to EPA’s statutory interpretation and traditional APA deference to EPA’s conclusions from the record, and affirmed EPA across the board.

Might I suggest that this is how rulemaking and judicial review are supposed to work?

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