ON PETITION FOR REHEARING

The EPA has petitioned for a rehearing on or clarification of the issue of application of the Emission Offset Ruling referred to in the last part of our original opinion. The petition must be granted to the following extent.

The Offset Ruling applies fairly stringent limitations on the construction of any new emissions source that would cause an NAAQS violation or exacerbate an existing one. As the EPA points out, application of the Ruling is on a case by case basis and does not depend entirely upon whether the proposed source is within a designated § 7407(d) nonattainment area. Some sources within such areas may be approved 1 and some sources not within such areas may be disapproved. 2 It appears evident to us that the existence of a nonattainment designation may have substantial impact on application of the Ruling in the areas in question in this case. As EPA acknowledges, a designation creates a “working presumption.” EPA is not precluded from using the Offset Ruling in these areas, if such application is warranted in a particular case. Rather, in its application of the Ruling EPA may not rely upon the designations invalidated by us. Any reliance upon nonattainment designations as relevant to application of the Ruling must await new designations. We express no views on the procedures to be followed in such a case.

To the extent herein indicated, the petition for rehearing or clarification is GRANTED.