Before Rovner, Diane P. Wood, and Evans, Circuit
The opinion of the court was delivered by: Diane P. Wood, Circuit Judge
On Petition for Review of Final Rules of the Environmental Protection Agency.
The Clean Air Act (CAA), 42 U.S.C. § 7401, et seq., first enacted in 1970 and extensively revised in 1977 and 1990, establishes a complex and comprehensive regulatory system to reduce air pollution nationwide. The CAA requires the Environmental Protection Agency (EPA) to set national ambient air quality standards (NAAQS) specifying the maximum permissible air concentration of pollutants such as ozone, carbon monoxide, and sulfur dioxide. The 1990 Amendments created a classification system for areas that had not yet attained the permissible NAAQS for ozone based on how far out of compliance they were. It also specified measures each nonattainment area was required to take and limited the number of years each area had to achieve compliance. In 1991, the EPA designated the St. Louis area (consisting of the city of St. Louis, four Missouri counties, and three Illinois counties) as a "moderate" area. 56 Fed. Reg. 56,694, 56,751 (Nov. 6, 1991). This meant that it had until November 15, 1996, to achieve compliance. 42 U.S.C. § 7511(a)(1). As of the time the record in this case was compiled, St. Louis had not attained the ozone NAAQS.
Such a failure, according to the text of the CAA, should result in a "bump-up" to the next classification, "serious." Although the EPA agreed in a March 18, 1999, proposed rule that St. Louis was still out of compliance, see 64 Fed. Reg. 13,384, it noted that St. Louis had made such good progress that it was otherwise only in "marginal" noncompliance. Under the CAA, however, the fact that St. Louis was not in full compliance required that its classification be upgraded to "serious," rather than being downgraded to "marginal." The EPA, however, did not take the required action; instead, it proposed that it would redesignate St. Louis as a serious area, but defer final action on its reclassification while it investigated the possibility of a deferral of the formal "attainment date."
This maneuver prompted the Sierra Club to file a lawsuit against the EPA in the district court for the District of Columbia. In response to that suit, the EPA issued a rule which extended St. Louis's attainment deadline by eight years. The case now before us is a direct petition for review of the final EPA rule. Because we find that the EPA has no authority to create such an extension, we grant the petition for review and order the agency to redesignate St. Louis a serious nonattainment area.
Under the CAA, states that have not met the NAAQS for any pollutant are required to draft State Implementation Plans (SIPs) specifying emissions limitations applicable to pollution and taking additional steps to attain the relevant NAAQS. 42 U.S.C. § 7410(a). SIPs must be designed to bring a state into compliance and also must prohibit emissions that "contribute significantly to nonattainment in, or interfere with maintenance by, any other State." Id. § 7410(a)(2)(D)(i)(I).
In 1990, Congress responded to the problem of widespread nonattainment of the ozone NAAQS by adding "Subpart 2," 42 U.S.C. §§ 7511-7511f, which had the purpose of imposing "carefully designed restrictions on EPA discretion." Whitman v. American Trucking Ass'ns, Inc., 531 U.S. 457, 484 (2001). The EPA was to classify each ozone nonattainment area as either marginal, moderate, serious, severe, or extreme based upon its 1989 air quality. 42 U.S.C. § 7511(a)(1). Each area is then required to impose specific pollution controls and must achieve the ozone NAAQS by an assigned attainment date, ranging from 1993 to 2010, depending on the area's classification. Subpart 2 further provides that in some circumstances the EPA may grant "no more than 2 oneyear extensions" of an area's attainment date. Id. § 7511(a)(5); American Trucking, 531 U.S. at 493.
Within six months of an area's attainment date, the EPA must determine "whether the area attained the standard by that date." 42 U.S.C. § 7511(b)(2)(A). If the EPA determines that a marginal, moderate, or serious area did not attain the pertinent standard, it is required to reclassify the area to the next higher classification. Id. The area's attainment date is then extended, but it is at the same time subjected to the additional controls applicable to the higher classification. H.R. REP. NO. 101-490, at 232 (1990).
Although much air pollution is a local problem, wind currents and other environmental factors can cause emissions from "upwind" regions to contribute extensively to pollution in "downwind" areas. Congress recognized this problem in 1990 by strengthening several provisions of the CAA. First, it required for the first time that SIPs prohibit not just emissions that pollute the state where the source is located but also those that contribute to the nonattainment of any other state. Id. § 7410(a)(2)(D). Second, it reaffirmed that downwind states affected by transported pollution may petition the EPA to impose limits directly on upwind sources of pollution. Id. §§ 7426(b)-(c).
In 1995, the EPA acknowledged that many downwind states were having difficulty making progress toward attaining the ozone NAAQS through no fault of their own, but rather because of upwind pollution. It convened an Ozone Transport Assessment Group (OTAG) to study the problem. OTAG's work culminated in the "NOx SIP Call," which required various upwind states to revise their SIPs by implementing further environmental controls. 62 Fed. Reg. 60,318, 60,319 (Nov. 7, 1997). See generally Michigan v. EPA, 213 F.3d 663, 672 (D.C. Cir. 2000) (describing OTAG). The NOx SIP Call gives states until May 31, 2004, to implement specific NOx controls. Since it is accepted on this record that the St. Louis area is in part burdened by transported pollution from Kentucky, the NOx SIP Call is expected to benefit it.
The EPA first designated St. Louis a nonattainment area in 1978. 43 Fed. Reg. 8964 (Mar. 3, 1978). In 1991, as noted above, it classified St. Louis as a moderate ozone nonattainment area in accordance with the 1990 Amendments, with a statutory attainment deadline of November 15, 1996. 56 Fed. Reg. 56,694, 56,786 (Nov. 6, 1991). To this day, St. Louis has failed to attain the ozone NAAQS. In 1998, the Sierra Club filed a lawsuit in which it asked the district court to order the EPA to publish a notice reclassifying St. Louis as a serious area for failing to meet its attainment date. The EPA responded by publishing a proposed notice of reclassification. 64 Fed. Reg. 13,384 (Mar. 18, 1999). Upon closer inspection, however, it was apparent that the proposed notice was delivering less than it promised, insofar as the EPA also ...