[US] SCOTUS hears EPA GHG arguments

The Supreme Court heard oral arguments on whether EPA’s rules regulating greenhouse gas (GHG) emissions from stationary sources are within the authority granted to the agency by the Clean Air Act (CAA).  The dispute focuses on the EPA’s permitting process for industrial sources such as coal-fired power plants, chemical facilities, and oil refineries, and EPA’s decision to phase in the GHG limits with the “Tailoring Rule.”  EPA claims it has authority to regulate GHG emissions from major sources following an endangerment finding that carbon dioxide threatens human health and the environment, while industry opponents claim EPA has exceeded its authority under the CAA.

The Supreme Court heard oral arguments in the much watched case Utility Air Regulatory Group v. EPA, with the court reviewing the 2010 decision by EPA to regulate GHGs under permits for new facilities.  EPA claimed that its GHG emission standards for passenger cars triggered a need to regulate GHGs under permits for new facilities.  In 2012, the U.S. Court of Appeals for the District of Columbia upheld the GHG regulatory program, including the endangerment finding, a finding by EPA that GHGs endanger the public health and environment.  The Supreme Court granted certiorari on the single issue of whether EPA “permissibly determined that its regulation of GHG emissions from new motor vehicles triggered permitting requirements under the CAA for stationary sources that emit GHGs.”

The hearing was limited to the EPA’s permitting program for large new and modified pollution sources that have been in effect since 2011.  Under the program subject to review, regulators require large new and modified industrial plants to limit GHG emissions.  The EPA issued what is known as the “Tailoring Rule,” which provided that EPA would begin by regulating only very large GHG emitters.  Without the Tailoring Rule, EPA’s permitting division would be overwhelmed as many small sources, such as apartment buildings and office complexes, emit GHGs that exceed thresholds of 100 or 250 tons per year (tpy) of air pollution set in the CAA.  The Tailoring Rule has been rolled out in two steps: first, the GHG limits applied only to existing large sources already subject to permit requirements; then, step two, to new facilities that have the potential to emit 100,000 tpy of carbon dioxide equivalent.

The justices seemed to seek a middle ground between striking down the rules in their entirety and upholding the contentious regulations.  The case, while important, sets the stage for more high-profile cases to come.  EPA is scheduled to issue a final rule on GHG limits for new power plants, with limits on existing power plants expected by mid-2015.   Both sets of regulation are almost certain to make it to the highest court.

Sources:

Madeline O, Fleisher, Supreme Court hears argument on EPA regulation of stationary source greenhouse gas emissions, Lexology, February 25, 2014 (http://www.lexology.com/library/detail.aspx?g=27b63f98-9b29-4b82-916c-160479677312)

Laura Barron-Lopez, Supreme Court weighs EPA authority to regulate greenhouse gases, The Hill, February 23, 2014 (http://thehill.com/blogs/e2-wire/e2-wire/198962-supreme-court-weighs-epa-authority-to-regulate-greenhouse-gases)

Philip Pulitzer, Supreme Court grants review of greenhouse gas case, Red-on-line USA, October 19, 2013

Red-on-line EHS Legal Counsel