Political stakes high for Monday showdown over EPA climate crackdown

Source: Jeremy P. Jacobs, E&E reporter • Posted: Monday, February 24, 2014

President Obama’s use of executive power to tackle global warming goes on trial Monday when the Supreme Court hears arguments in a challenge from industry and a dozen states to a U.S. EPA effort to curb industrial emissions of greenhouse gases.

Returning from a month off, the justices have scheduled unusually long arguments in a case focused on whether EPA lawfully included greenhouse gases in the permitting process for power plants and other large pollution sources.

While the industry and state challengers are decrying what they see as an EPA power grab, industry lawyers concede that the program at issue in the case is a small slice of EPA’s climate change agenda.

“There are multiple different EPA programs that cover the same pollutant. Even if [carbon dioxide] isn’t covered in the permitting program, it could still be covered in other programs,” said Jeff Holmstead, who was EPA air chief in the George W. Bush administration and now represents industry clients at Bracewell & Giuliani. Holmstead is not involved in the case.

The program at the heart of the case — Prevention of Significant Deterioration, or PSD — requires facilities to obtain permits that mandate the use of “best available” control technology to limit emissions.

But EPA is also developing new source performance standards for greenhouse gases from major facilities. Those rules are not at issue in Monday’s arguments.

After determining that greenhouse gases endanger public health, EPA promulgated motor vehicle standards. Industry also challenged those, but lost in court and was unable to get a Supreme Court review.

EPA in 2010 said the tailpipe rules “trigger” the inclusion of greenhouse gases in the PSD program.

The states and groups such as the Chamber of Commerce and American Chemistry Council argue that greenhouse gases don’t fit into the PSD program.

EPA supporters say the agency has long said regulating new pollutants under other parts of the Clean Air Act requires inclusion in the PSD program.

“For 30 years, EPA has had a consistent approach to this program,” said Richard Revesz, director of the New York University School of Law’s Institute for Policy Integrity.

Despite the narrow question granted by the court, observers expect the challengers to argue for a broad rejection of EPA’s rule.

Industry arguments have shifted since the court in October granted review of the case. The various parties have presented widely divergent arguments on why EPA cannot include greenhouse gases in the PSD program.

Originally, electric utilities said greenhouse gases should never be included in the terms of a PSD permit. The American Chemistry Council said they could, but only if a facility had been already required to obtain a PSD permit because of emissions of another criteria pollutant, such as nitrogen oxides (Greenwire, Oct. 16, 2013).

The challengers appear to have abandoned the latter argument.

According to their court briefs, industry, whose attorney is Peter Keisler of Sidley Austin LLP, will urge the court to rule that greenhouse gases have no place in the PSD program.

In particular, he and Texas Solicitor General Jonathan Mitchell, who will represent the states, are expected to argue that greenhouse gases are fundamentally unlike the other pollutants in the PSD program because they do not cause immediate health problems like criteria pollutants do.

An environmental lawyer involved in the case called the strategy “going for broke.”

The conservative-leaning court could be more receptive to the earlier position advocated by the American Chemistry Council. That resolution was backed by influential conservative Judge Brett Kavanaugh when the case was at the U.S. Court of Appeals for the District of Columbia Circuit.

But if the challengers are successful with the new arguments, the court’s ruling could provide an important political talking point in industry’s fight against EPA climate change regulations.

“If the court accepts any of these invitations to broaden the scope of its review,” said Thomas Lorenzen, a former assistant chief of the Department of Justice’s environmental division who is now at Dorsey & Whitney, “EPA’s authority to proceed with its climate regulations could be cast into doubt.”