UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

_______________________

No. 23-1094 _______________________

PORT HAMILTON REFINING AND TRANSPORTATION, LLLP, Petitioner v.

U.S. ENVIRONMENTAL PROTECTION AGENCY _______________________

On Petition for Review from a Decision of the Environmental Protection Agency __________________________

Argued May 24, 2023

Before: RESTREPO, McKEE, and SMITH, Circuit Judges

(Filed: July 25, 2023) Andrew C. Simpson [ARGUED] Andrew C. Simpson Law Offices 2191 Church Street, Suite 5 Christiansted, VI 00820 Counsel for Petitioner Port Hamilton Refining and Transportation LLLP Todd S. Kim Heather E. Gange [ARGUED] United States Department of Justice Environment & Natural Resources Division P.O. Box 7611 Ben Franklin Station Washington, DC 20044 Counsel for Respondent United States Environmental Protection Agency Michael R. Harris [ARGUED] Rajeev Venkat Vermont Law School 164 Chelsea Street South Royalton, VT 05068 Counsel for Amici-respondent Sierra Club, St Croix Environmental Association, Center for Biological Diversity __________________________

OPINION OF THE COURT __________________________ 2 SMITH, Circuit Judge.

Petitioner Port Hamilton Refining and Transportation, LLLP (Port Hamilton or the company) purchased an existing petroleum refinery located on St. Croix (Refinery) at a bankruptcy auction in December 2021. Port Hamilton hoped to resume operations at the Refinery, which had for decades served as the backbone of St. Croix’s local economy until it ceased operations in 2012. But in November 2022, the Environmental Protection Agency (EPA or the agency) notified Port Hamilton by letter that it would need a Prevention of Significant Deterioration (PSD) permit before the Refinery could resume operations.

The PSD permitting program is one tool among many provided in the Clean Air Act (CAA) that seeks to curb excessive air pollution. To obtain a PSD permit, a facility must not contribute to the violation of applicable air quality standards and must implement the “best available control technology” to limit air pollution. 42 U.S.C. §§ 7475(a), 7479(3). As is evident from the permit’s title, the PSD is a preventative measure. It applies to newly constructed stationary sources of air pollution and sources that undergo emissions-altering modifications. Id. §§ 7475(a), 7479(2)(C), 7411(a)(4).

Since the PSD program’s inception, EPA has developed its own understanding of what constitutes a newly constructed facility. Under EPA’s so-called “Reactivation Policy” (Policy), an existing facility is “new” if EPA concludes that it had previously been “shut down” and restarted. Matter of Monroe 3 Electric Generating Plant, Petition No. 6-99-2, at 7–8 (June 11, 1999). According to EPA, a shutdown facility must obtain a PSD permit upon restart. Id. But if the EPA determines that the facility had only been “idled,” then it need not obtain a permit. Id.

As relevant here, EPA issued two determinations as to the Refinery’s status under the Reactivation Policy. In 2018, EPA notified the Refinery’s prior owner that it need not obtain a PSD permit because the Refinery had been only “idled” since it last operated in 2012. Then in 2022, EPA reversed course and notified Port Hamilton that the agency considered the Refinery to have been “shut down” and accordingly would need to approve a PSD permit before operations could be resumed.

Port Hamilton petitions this Court for review of EPA’s 2022 decision. The company contends that the Reactivation Policy as applied to the Refinery exceeds EPA’s statutory authority and that even if the pol