Monday, June 23, 2014

Supreme Court Slaps Down US EPA Power Grab

Subtitle: EPA Can Only Require BACT for Greenhouse Gases

In a ruling passed down today, the US Supreme Court handed the US Environmental Protection Agency, EPA, a stinging defeat.  The case is Utility Air Regulatory Group v EPA. 573 U.S. ___ (2014)  (page to be added later).   For the entire decision, see link.

The case is about "whether it was permissible for EPA to determine that its motor-vehicle greenhouse-gas regulations automatically triggered permitting requirements under the [Clean Air] Act for stationary sources that emit greenhouse gases."

The Court broke the question into two main issues, the first with three sub-issues and the second with only one issue.  Each is presented and discussed below.  

I-A: The Clean Air Act (Act) does not compel the EPA to adopt an interpretation of the Act requiring a source to obtain a PSD or Title V permit on the sole basis of its potential greenhouse-gas emissions.  

EPA had argued that the Act compelled just that result, ignoring that it (EPA) had "inferred from statutory context that a generic reference to air pollutants does not encompass every substance falling within the Act-wide definition on many other occasions." The Court then listed five separate instances of EPA interpreting "air pollutants" in a narrow, not a broad sense.  

Justice Scalia takes the EPA to task, comparing Carbon Dioxide to other harmless gases including steam and oxygen.  The Court opined: "It is plain as day that the Act does not envision an elaborate, burdensome permitting process for major emitters of steam, oxygen, or other harmless airborne substances. It takes some cheek for EPA to insist that it cannot possibly give “air pollutant” a reasonable, context-appropriate meaning in the PSD and Title V contexts when it has been doing precisely that for decades."

I-B: The Act also does not permit the EPA to adopt an interpretation of the Act requiring a source to obtain a PSD or Title V permit on the sole basis of its potential greenhouse-gas emissions. 

The Court chided EPA here, noting that EPA has "repeatedly acknowledged that applying the PSD and Title V permitting requirements to greenhouse gases would be inconsistent with—in fact, would overthrow—the Act’s structure and design. In the Tailoring Rule, EPA described the calamitous consequences of interpreting the Act in that way."  The Tailoring Rule from EPA described the millions (6.1 million) new sources that would fall under EPA permitting jurisdiction.  Presently, there are fewer than 15,000 such sources. 

The Court described EPA's own words as to the practical outcome of 6.1 million new sources under regulation: permitting delays would cause "construction projects to grind to a halt nationwide."  Also, statutory limits on permit issuance deadlines would be impossible to meet. 

Finally, the Court gave this reason for striking down EPA's interpretation: "EPA’s interpretation is also unreasonable because it would bring about an enormous and transformative expansion in EPA’s regulatory authority without clear congressional authorization."   Such expansion in regulatory authority is not in EPA's power.   As noted in other cases, an agency is to "fill in the details" of legislation passed by Congress and signed by the President.  An agency is not to expand the scope of that legislation as if it were Congress itself.  

I-C: EPA lacked authority to “tailor” the Act’s unambiguous numerical thresholds of 100 or 250 tons per year to accommodate its greenhouse-gas-inclusive interpretation of the permitting triggers.  

100,000 tons per year was EPA's tailored value. The EPA chose 100,000 tons per year in order to minimize the administrative burden - and public costs of administration - of literally millions of sources that emit carbon dioxide at threshold levels of 100 and 250 tons per year.  EPA's own documents suggested that it was too burdensome to require compliance at that level.  Therefore, EPA arbitrarily chose the 100,000 tons per year threshold for compliance.  The Court refused this as an acceptable act by EPA. 

The Court concluded that EPA cannot arbitrarily change the express limits in the Act on threshold quantities of emitted gases that will trigger regulation.  That is an unacceptable usurpation of Congressional powers.  Justice Scalia was rather scathing in his writing on that point, saying "An agency has no power to “tailor” legislation to bureaucratic policy goals by rewriting unambiguous statutory terms. Agencies exercise discretion only in the interstices created by statutory silence or ambiguity; they must always “‘give effect to the unambiguously expressed intent of Congress.’” "

The Court went on to say that EPA's position would create an unacceptable violation of the Separation of Powers expressed in the Constitution.  That is a strong slap, indeed. 

II: EPA reasonably interpreted the Act to require sources that would need permits based on their emission of conventional pollutants to comply with BACT for greenhouse gases.

The Court stated that regulating greenhouse gases via BACT could be either by increased energy efficiency, or adding reduction devices to a greenhouse gas source such as a power plant exhaust stack.  EPA stated that such devices would include carbon capture and storage. 

 The Court concluded that BACT was contemplated by Congress in writing the Act.   The Court stated that adding BACT is not disastrously unworkable, and does not impermissably increase EPA's authority.   

In summary, the Court wrote: "We hold that EPA exceeded its statutory authority when it interpreted the Clean Air Act to require PSD and Title V permitting for stationary sources based on their greenhouse-gas emissions. Specifically, the Agency may not treat greenhouse gases as a pollutant for purposes of defining a “major emitting facility” (or a “modification” thereof) in the PSD context or a “major source” in the Title V context. To the extent its regulations purport to do so, they are invalid. EPA may, however, continue to treat greenhouse gases as a “pollutant subject to regulation under this chapter” for purposes of requiring BACT for “anyway” sources [sources that would require a permit on the basis of other regulated air pollutants]."

All in all, not a bad day for America.  The EPA got slapped down rather severely, and it appears that Justice Scalia had a grand time in writing this opinion.  

Roger E. Sowell, Esq. 
Marina del Rey, California. 

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