1.     The Federal Clean Water Act authorizes the Environmental Protection Agency (EPA) to set
        numerical limits on the amount of pollution that an industry can dump into the nation's lakes,
        rivers and streams. Those numerical limits are set on an industry-by-industry basis and apply
        nationwide.

        EPA is developing a regulation that will limit the amount of toxic chemical "x" that paper mills
        can dump into the nation's lakes, rivers and streams to 1 pound for every hundred gallons of
        water that the mill dumps into the lakes, rivers and streams. Paper mills can reduce the amount
        of toxic chemical "x" that they dump into the water to that level by installing expensive filters.
        Similarly, if a paper mill does not bleach the paper that it produces, it can reduce the amount
        of toxic chemical "x" that it dumps in the water to that level.

        Many paper mills cannot afford the new filters and will have to shut down if they are forced to
        meet the 1 pound limit. Similarly, most paper mills claim that they must continue bleaching the
        paper that they produce, because no one wants to buy paper unless it is bleached.

        The paper mills have asked EPA to set the pollution limits for toxic chemical "x" at 5 pounds of
        the chemical for every 100 gallons of water. Paper mills can meet that standard by installing filters
        that cost 1/10 of the cost of the filters that are necessary to meet the 1 pound standard.

Questions to think about: Assuming that the proposed regulation will have an impact on the
economy of more than $100 million per year, does Executive Order 12,866 prevent EPA from
promulgating a regulation that requires the paper mills to reduce the amount of toxic chemical "x" that
they dump in the nation's lakes, rivers and streams to 1 pound for every hundred gallons? Does
EO 12866 impose any obligation on EPA to weigh the cost of the regulation against its benefits? Does
it require EPA to consult with any other agency before promulgating the regulation?

2.    Assume, for purposes of this hypothetical, that the Clean Water Act specifically provides that
        "EPA shall set pollution limits for toxic chemicals at a level that protects human health." Assume
        also that scientific studies indicate that discharges of more than 1 pound of toxic chemical "x"
        per 100 gallons of water create a significant cancer risk.

Question to think about: Does EO 12866 require EPA to balance the cost of setting the discharge
limit for toxic chemical "x" at 1 pound against the benefits of that limit?