Thursday, October 17, 2013

EPA GHG Effort to Get Supreme Court Review

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It’s not as sweeping a case as business and industry groups would perhaps prefer, though manufacturers must surely be pleased that a process that is adding to costs will be reviewed.

And environmental groups are touting the narrow scope of the question to be considered, though the vulnerability of a regulatory as opposed to a legislative approach to climate change is once again exposed.

The US Supreme Court on Tuesday agreed to review the Environmental Protection Agency’s (EPA) first set of rules designed to limit greenhouse gas emissions (GHG) from facilities such as factories, refineries and power plants.

In its Order granting certiorari on six of nine petitions submitted the Court specified that arguments in the consolidated case will be limited to the question, “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

Petitioners had sought review of a June 2012 decision of the US Court of Appeals for the District of Columbia Circuit upholding the EPA’s “endangerment finding” that GHG are a threat to human health and welfare.

The Supreme Court won’t consider–in fact it dismissed three petitions that raised the questions–challenges to the EPA’s basic finding that GHG are a threat to public welfare and to the EPA’s power to regulate such emissions from vehicles.

The Court will consider whether the EPA properly used its 2010 rule governing auto emissions as a basis to set permit standards for stationary sources as well, including a “tailoring rule” that shields smaller stationary sources from GHG permitting.

The EPA and the US Dept of Transportation have set joint carbon emissions and mileage standards for automobile model years 2012 through 2016 and are crafting rules for future years. This process will continue uninterrupted.

The EPA in 2011 began Clean Air Act (CAA) permitting for some large new and modified stationary emissions sources on a case-by-case basis. This permitting process is the source of the injury or damage petitioners argue underlies their standing to challenge the EPA’s rules.

The EPA permitting program has required facilities to improve their energy efficiency, which companies have been doing anyway. Approximately 100 facilities have been affected per year thus far, mostly electric power generators and natural gas processing plants. The process includes consideration of cost and is subject to judicial review.

Oral arguments early next year and a decision in July 2014 are actually two more steps in a process that’s been underway for more than five years.

More than 70 business groups and public policy organizations, plus 13 states, filed petitions asking the Supreme Court to review various aspects of the EPA’s new regulations. A range of environmental groups and 17 states filed briefs supporting the EPA action and urging the Supreme Court to decline to hear any of the appeals.

In 2007 the Supreme Court ruled in a 5-to-4 decision on the case of Massachusetts v. Environmental Protection Agency that the federal agency had the authority under the CAA to regulate GHG emissions from vehicles if it determined that GHGs endangered the public welfare. The Court “remanded”–or sent back for reconsideration–the issue to the EPA.

In 2009 the EPA under the Obama administration concluded that GHG “in the atmosphere may reasonably be anticipated both to endanger public health and to endanger public welfare.” This is the foundation for regulations to be issued in June 2014 that would impact existing power plants, the largest unregulated source of GHGs.

The June 26, 2012, DC Circuit decision dismissed the challenges to the EPA’s endangerment finding and the related GHG regulations. A three-judge panel unanimously upheld the EPA’s central finding that GHG such as carbon dioxide endanger public health and were likely responsible for the global warming experienced over the past half century.

Arguments and the Court’s decision will provide significant insight into a process that’s likely to play out in similar fashion once new EPA rules on carbon dioxide (CO2) emissions from power plants take effect.

Announced on Sept. 20, 2013, and due to be finalized after a comment period of 60 days following publication in the Federal Register, the EPA’s latest set of regulations would essentially require new coal-fired plants to capture and store a portion of the carbon dioxide CO2 they produce.

Regulations governing emissions from existing plants will be proposed in June 2014.

The EPA’s proposal for new plants would set a limit of 1,100 pounds of carbon dioxide per megawatt hour (MWh) for coal plants and 1,000 pounds for most natural gas plants.

The average US coal plant emits 1,768 pounds per MWh, so coal plants would have to capture and store 20 percent to 40 percent of the CO2 they produce. Natural gas plants wouldn’t be required to capture their emissions.

Standards for new power plants will give coal-fired producers an option to meet a “somewhat tighter limit” if they opt to average emissions over several years.

According to the EPA the new rules will ensure new plants are built with “available clean technology to limit carbon pollution,” a requirement in line with investment in “clean” energy technologies already taking place across the industry.

A broad interpretation of the Supreme Court’s Oct. 15 Order is that it the EPA’s authority to regulate climate-altering pollution from both stationary and mobile sources is intact, that the agency has both legal authority and the responsibility to address climate change and the GHG emissions that cause it.

Petitioners will likely argue that the EPA has taken extra-Constitutional steps, going beyond the letter of the CAA and Congress’ intent. The CAA only requires pre-construction permits for six specific emissions that impact national air quality.

The EPA’s broad interpretation of the “air pollutant” definition in the CAA gave it the scope to expand federal regulation to include GHG.

But Congress set thresholds for harmful pollutants that would require permits, 250 million tons per year for some facilities and 100 million tons for others. The limits were set for six specifically identified pollutants: particulate matter, carbon monoxide, lead, nitrogen dioxide, sulfur dioxide and ozone.

High concentrations of these pollutants in the air are considered capable of causing an immediate threat to human health. The purpose of the CAA is to cure that threat.

The threat from GHG–including CO2, methane, nitrous oxide, and hydrofluorocarbons–don’t themselves pose an immediate threat to human health. But the EPA is claiming broad regulatory power to address those wider threats to public welfare said to be posed by GHG and global warming.

That the Supreme Court declined to hear petitions challenging the EPA’s “endangerment finding”–that GHG pose a threat to public health and welfare–is significant because it’s the basis for the permitting process underway since 2011 and the CO2 regulations for new plants recently announced and those for existing plants to come next year.

In denying three petitions but granting six others, the high court signaled that it will focus on issues further down the regulatory process.

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