ELR Citation: ELR 20200
No(s). 06-60662 (5th Cir. Jul 23, 2010)

The Fifth Circuit remanded the existing-facilities portion of EPA's rule for regulating the use of cooling water intake structures (CWIS) for both existing and new offshore oil and gas extraction facilities, but affirmed the portion of the rule that regulates new offshore facilities. EPA established three phases for the CWIS regulation: Phase I applies to all new CWIS facilities above a particular intake threshold size, except new offshore oil rigs; Phase II applies to existing large power plants that take in more than 50 millions gallons of water a day; and Phase III applies to existing facilities, new oil rigs, new offshore liquefied natural gas facilities, and new seafood processing vessels. EPA and an environmental group filed a motion to remand Phase III of the rule in light of the U.S. Supreme Court's decision in Entergy Co. v. Riverkeeper, 129 S. Ct. 1498, 39 ELR 20067 (2009), in which the Court remanded Phase II. Because it is imminently reasonable to address together the substantial similarities of fact between that aspect of the Phase II Rule and the instant Phase III Rule in light of Entergy Corp., the court granted their motion for remand. Pending a new rule, EPA's CWA §316(b) case-by-case permitting procedure, which was in place before the Phase III Rule was promulgated, will remain in effect. But the court affirmed the portion of the rule that regulates new offshore facilities, denying industry's petition for review. The Final Phase III Rule for new facilities is substantially supported by the record and is rationally related to the statutory purpose of §316(b). EPA gave sufficient notice that it could but was not bound to engage in cost-benefit analyses when promulgating the final rule for new facilities, and the Agency's decision to regulate on the basis of economic achievability was borne out by the existence of cost information but not benefit information.