[US] The Supreme Court of the United States upholds majority of EPA’s authority to regulate greenhouse gas emissions.

The Supreme Court of the United States (SCOTUS) has upheld EPA’s authority to regulate greenhouse gas (GHG) emissions, but set limits on that power.  In its ruling in Utility Air Regulatory Group v. EPA, SCOTUS held that EPA cannot use GHG emissions as a trigger to require construction and operation permits, but where a facility is subject to permitting by virtue of emissions of other conventional pollutants, EPA may regulate GHG emissions from that facility.

In what the EPA is calling a victory, the Supreme Court of the United States (SCOTUS) has largely upheld the agency’s authority to regulate greenhouse gas (GHG) emissions.  The split decision, drafted by conservative Justice Antonin Scalia, holds that while EPA may not impose permitting requirements on facilities based solely on their GHG emissions, it may regulate GHG emissions from a facility that is otherwise subject to permitting due to emissions of other air pollutants.  The ruling will allow the agency to regulate polluters responsible for 83% of GHG emissions from stationary sources such as power plants and industrial facilities.

The Clean Air Act (CAA) imposes permitting requirements on stationary sources such as factories and power plants.  The CAA’s “Prevention of Significant Deterioration” (PSD) provisions require a “major emitting facility” to obtain a permit prior to construction or modification.  A “major emitting facility” is a stationary source with the potential to emit 250 tons per year (tpy) of certain air pollutants (some pollutants have a threshold of 100 tpy).  In order to obtain the PSD permit, the facility must comply with emissions limitations that reflect the “best available control technology” (BACT) for each pollutant regulated under the CAA.  While the PSD permit is required to construct a facility, EPA also administers the Title V operating permit program that requires major sources (emissions of certain pollutants over 100 tpy) to obtain a Title V permit.

As such, emissions of certain air pollutants over 100 tpy or 250 tpy are a trigger for PSD and Title V permitting requirements.  EPA took the position that GHGs, such as carbon dioxide, are an air pollutant triggering the PSD and Title V permitting requirements.  A major issue with EPA’s position was that a huge number of small sources, such as apartment buildings, office buildings, and schools, emit GHGs above the triggering threshold, thus subjecting these small sources to complicated PSD and Title V permitting requirements.  As a solution, EPA introduced the “Tailoring Rule” that said that the GHGs rules would be phased in and only apply to sources with emission levels over 100,000 tpy or 250,000 tpy.

The Court disagreed with EPA on this point and ruled that the EPA could not redefine the CAA’s definition of the triggering threshold levels.  In addition, the Court held that GHGs were not an “air pollutant” that would trigger PSD and Title V permitting; however, where a facility emits criteria pollutants (ozone, PM, NOx, SOx, or lead) over the threshold triggering amounts, EPA can require that facility to use BACT for other regulated pollutants, including GHGs.

The result is largely a victory for EPA and the Obama administration.  According to Justice Scalia, EPA’s plan sought to target 86% of emissions from stationary sources; however, by removing GHGs as a “trigger” for PSD and Title V, the agency will still be able to regulate 83% of emissions from stationary sources due to the fact that the vast majority are subject to PSD and Title V from emissions of other pollutants.

The decision gives EPA confidence that its power plant rules limiting GHGs under the New Source Performance Standards (emission limits targeting specific categories of emitters), will be upheld in the inevitable upcoming legal fight, while opponents are claiming that the decision highlights weaknesses in the EPA’s authority.  In a joint statement from Representatives Fred Upton (R-Mich.) chairman of the House Energy and Commerce Committee, and Ed Whitfield (R-Ky.), who leads the panel’s Energy and Power Subcommittee, the congressman said: “The court recognized the EPA does not, in fact, have unlimited authority, despite the agency’s best effort to control every sector of the U.S. economy.”

 Philip Pulitzer, EHS Legal Counsel, Red-on-line.

Source:

Utility Air Regulatory Group v. EPA, S. Ct., No. 12-1146 (decided June 23, 2014) (http://www.supremecourt.gov/opinions/13pdf/12-1146_4g18.pdf)

Benjamin Goad and Timothy Cama, Supreme Court largely upholds EPA’s greenhouse gas powers, The Hill, June 23, 2014 (http://thehill.com/policy/energy-environment/210233-supreme-court-upholds-epas-greenhouse-gas-powers-with-limits)