The U.S. Supreme Court said Friday it will consider challenges to EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act.
The court granted certiorari in challenges by coal mining companies and states led by West Virginia, Montana and Arizona that asked the court to examine Section 111 of the CAA, which was added in 1970 (42 U.S.C. Section 7411). The law directs EPA to regulate any new and existing stationary sources of air pollutants that contribute significantly to air pollution and endanger public health or welfare.
Section 111(d) empowers EPA to impose standards “for any existing source” based on limits “achievable through the application of the best system of emission reduction” that has been “adequately demonstrated.”
In January, the D.C. Circuit Court of Appeals rejected the Trump administration’s Affordable Clean Energy (ACE) rule for regulating power plants’ greenhouse gas emissions. The 2-1 ruling said EPA’s rulemaking under Trump and its repeal of the Obama administration’s Clean Power Plan (CPP) “hinged on a fundamental misconstruction” of the CAA. The court also said the ACE rule’s delayed enforcement deadlines were arbitrary and capricious, vacating the rule and remanding it to EPA for further action. (See DC Circuit Rejects Trump ACE Rule.)
The court consolidated four challenges and said it would hear one hour of oral arguments on the following questions:
- whether Congress gave EPA the power to issue rules “capable of reshaping the nation’s electricity grids and unilaterally decarbonizing virtually any sector of the economy — without any limits on what the agency can require so long as it considers cost, non-air impacts and energy requirements” (West Virginia, et al. v. EPA, et al., 20-1530);
- whether EPA has authority to develop industry-wide systems such as cap-and-trade programs or is limited to standards based on technology and methods that can be applied to individual sources (North American Coal Corp. v. EPA, 20-1531);
- whether EPA can issue “regulations for existing stationary sources that require states to apply binding nationwide ‘performance standards’ at a generation-sector-wide level, instead of at the individual source level, and whether those regulations deprive states of all implementation and decision-making power in creating their Section 111(d) plans” (North Dakota v. EPA, 20-1780); and
- whether 42 U.S.C. Section 7411(d) clearly authorizes EPA to decide such matters of vast economic and political significance as whether and how to restructure the nation’s energy system (Westmoreland Mining Holdings v. EPA, 20-1778).
The CPP sought to cut power sector carbon emissions by 32% by 2030, compared with 2005 levels, through “generation shifting”: substituting coal-fired generation with natural gas and renewables. The Supreme Court stayed the plan in 2016, and the Trump administration withdrew it and replaced it with the proposed ACE rule in 2019. EPA predicted that the ACE Rule would reduce CO2 emissions by less than 1% from baseline emission projections by 2035.
The petitioners in the West Virginia case said the D.C. Circuit “deviated from the text-based reading that the statute [and] purported to find grounds for EPA to dictate huge shifts in most sectors of the economy, even though nothing in the statute approaches the clear language Congress must use to assign such vast policymaking authority.”
If it is not reversed, the petitioners said, the ruling would allow EPA to “set standards on a regional or even national level, forcing dramatic changes in how and where electricity is produced, as well as transforming any other sector of the economy where stationary sources emit greenhouse gases.”
The D.C. Circuit said Section 111 acts as “a catch-all” to prevent gaps in regulations controlling stationary source emissions. Section 111(b)(1)(A) says the EPA administrator “shall” regulate any category of sources that, “in his judgment … causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.”
The D.C. Circuit heard arguments on challenges to the CPP in 2016 but never ruled on it after Trump’s EPA said it planned to withdraw it. (See Supreme Court Blocks Clean Power Plan.) The Trump administration said the rule violated the CAA because it endorsed generation shifting and emissions trading among permissible emission-control measures.
The Biden administration argued the court should reject the West Virginia challenge because the CPP “is no longer in effect and EPA does not intend to resurrect it.”
“EPA instead intends to issue a new Section 7411(d) rule after taking into account all relevant considerations, including changes to the electricity sector that have occurred during the last several years,” it said. “Petitioners urge this court to grant review now to help guide the upcoming rulemaking, but that is little more than a request for an impermissible advisory opinion. Any further judicial clarification of the scope of EPA’s authority under Section 7411(d) would more appropriately occur at the conclusion of the upcoming rulemaking, when the courts can review a concrete and considered EPA rule, rather than speculate as to the regulatory approaches the agency might take.”
Gabe Tabak, counsel for the American Clean Power Association, tweeted that the Supreme Court “would affect almost all of administrative law” if it answers no to the question raised in the Westmoreland Mining challenge: whether the CAA authorizes EPA to restructure the nation’s energy system.
ClearView Energy Partners said “the court’s eventual ruling will almost certainly shape any rule under” Section 111(d) because a proposed $150 billion Clean Electricity Performance Program — which would have offered incentives for utilities to reduce carbon emissions and penalize laggards — was stripped this month from legislation that Democrats hope to pass through the reconciliation process. (See related story, Biden, Democrats Unveil $1.75T Build Back Better Framework.)
West Virginia Attorney General Patrick Morrisey tweeted that he was “fired up” that the court took the case. “Biden’s policies would destroy America’s energy independence while giving China & Russia a big boost in their energy production efforts,” he said.
Before the court announced it would hear the challenges, EPA Administrator Michael Regan said that EPA “has ample … statutory authority [and] legal obligations to move forward as quickly as possible to tackle the climate crisis.
“EPA will move forward with a very aggressive agenda and complement to whatever Congress eventually passes,” he added, during an Oct. 28 interview with The Washington Post. “…I will push the envelope. I will move forward as quickly as possible, as aggressively as possible, using the authorities that Congress has given us.”
