House Panel wades into legality of EPA rule this week as publication looms

Source: Jean Chemnick, E&E reporter • Posted: Monday, October 19, 2015

A key subcommittee of the House Energy and Commerce Committee will review the legal arguments against U.S. EPA’s Clean Power Plan this week as stakeholders wait for the imminent publication of the landmark climate rule.

When the Energy and Power Subcommittee holds its hearing Thursday, the rules for new, modified and existing power plants may have already been published in the Federal Register. And that will set off a chain of events in the courts and on Capitol Hill that will consume much of the rest of the Obama administration and determine the fate of the central platform of the president’s Climate Action Plan.

But while Republicans in the House and Senate are expected to devote some time this fall to knocking down the landmark climate rule, the question of whether the Clean Power Plan survives Obama’s presidency will likely be resolved in the courts.

Partisans on both sides of the issue say they are confident they will prevail. Environmentalists who have long sought carbon curbs for power plants say these are amply supported by the Clean Air Act and previous Supreme Court decisions that confirmed that EPA could use the statute to tackle greenhouse gases.

Republicans and industry, meanwhile, say the agency has pushed the Clean Air Act to the breaking point with this rule and have already previewed arguments ranging from concerns about the rule’s structure to claims that EPA is barred from introducing new carbon power plant regulations at all.

Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said at an Oct. 7 hearing on the final EPA rule that there were “many reasons to question the legality of this unprecedented set of regulations.”

“Few if any of the concerns about the proposed existing source rule were addressed in the final version,” he said, touting his bill that would allow states to opt out of compliance.

While only a handful of states have said they will pursue a “just say no” approach and refuse to comply with the rule, many more are poised to sue.

Fifteen states filed a lawsuit to block the draft, and when the final version was unveiled on Aug. 3, they immediately petitioned for an emergency stay. When the rule is published, their challenges will no longer be premature, and opponents will have 60 days to file petitions for review with the courts signaling they intend to sue.

Stay motions will follow, likely in the first quarter of next year. To secure a stay, litigants must prove that they face irreparable harm if the regulation remains in effect until the courts issue a decision and that they are likely to win. That’s the standard a group of states met when the Cincinnati-based 6th U.S. Circuit Court of Appeals stayed a controversial Clean Water Act rule nationwide earlier this month (Greenwire, Oct. 9).

But some experts who track the marquee climate change rule say the final version makes it tricky to show irreparable harm. States don’t even have to submit final plans until 2018, they note, and implementation doesn’t begin until 2022. Meanwhile, opponents and the Obama administration both wish to expedite judicial review, hoping the U.S. Court of Appeals for the District of Columbia Circuit will have ruled by the end of next year — before states must submit plans and before the Obama EPA and Department of Justice hand the rule off to a possibly hostile new administration in 2017. A Supreme Court decision could take an additional year or longer — likely arriving after Obama’s successor is in office.

Many of the potential arguments that opponents will use are well known, thanks in part to all the premature challenges. Opponents have raised issues of constitutional law, questioning whether the rule seeks to commandeer the states by giving them the choice to either regulate their utilities themselves or leave it to the federal government to do it. They also contend that a discrepancy in the 1990 Clean Air Act amendments bars EPA from using Section 111(d) to curb power plant carbon because the agency is already regulating power plants under Section 112 — albeit for different pollutants.

David Doniger, director of the Natural Resources Defense Council’s clean air and climate program, said at a D.C. Bar Association event last week that these challenges were “in the nature of throwing spaghetti at the wall to see what sticks.”

Lisa Heinzerling, a Georgetown Law professor and former EPA climate official, said the constitutional law questions, including those often raised by Harvard Law professor Laurence Tribe, are “casual” and “not deeply argued.” If Tribe — who has gained particular notoriety among Republicans for being a one-time mentor of President Obama — wanted to upset past precedent that gives deference to the agency, he needs to make a stronger case, she argued.

Jeff Holmstead, an EPA air chief under George W. Bush who is now a partner at Bracewell & Giuliani, told a Koch Industries Inc. questioner at the same event that he thought the Supreme Court had established that EPA could use the Clean Air Act to regulate greenhouse gas emissions. And he called the final version of the rule “less illegal” than the draft version. But he nonetheless expressed confidence that it would not pass legal muster because of its “beyond the fence line” structure.

The rule would cut power sector emissions by 32 percent below 2005 levels by 2030 — a much steeper cut than power plants could achieve simply by improving their heat rates individually. In fact, as Holmstead pointed out, many states have little ability to comply unless they engage in interstate emissions trading.

“What EPA has done is completely contrary to the language of the statute,” he said. EPA has departed from past practice by demanding that utilities do more than they can do at their own facilities while still continuing to operate them. The agency is not entitled to deference in this case, he said, because if Congress had intended to grant such broad control over an economic sector, it would have been very explicit.

Doniger, meanwhile, noted that the Clean Power Plan plays an important role in what U.S. negotiators will take to Paris for this year’s high-stakes round of U.N. negotiations.

“It has established the bona fides of the United States,” he said, persuading other countries to also put forward commitments.

“If our opponents would be successful in knocking the Clean Power Plan down, it would be a blow not only to domestic action but to international action,” he said.

The subcommittee had not yet released its witness list Friday.

Schedule: The hearing is Thursday, Oct. 22, at 2 p.m. in 2123 Rayburn.

Witnesses: TBA.