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Energy Edge

Supreme Court Upholds EPA Carbon Permitting - Energy Edge Brought to You by Fuels America

June 23, 2014

TOP ENERGY NEWS

By Ben Geman (@ben_geman), Clare Foran (@ckmarie), and Jason Plautz (@jason_plautz)

SUPREME COURT UPHOLDS EPA CARBON PERMITTING ... A high court ruling Monday handed a victory to the Environmental Protection Agency by largely upholding a greenhouse-gas permitting program that applies to big industrial polluters like power plants and factories.

That decision gave environmentalists and liberal Democrats reason to cheer.

 

"Today's ruling upholds the heart of EPA's program for regulating carbon pollution from large new industrial facilities under the 'prevention of significant deterioration' (PSD) provisions of the Clean Air Act," said Rep. Henry Waxman, the top Democrat on the House Energy and Commerce Committee.

"EPA's foundational authority under the Clean Air Act to protect Americans' health from the clear and present danger of climate pollution is rock solid," said Vicki Patton, general counsel for the Environmental Defense Fund, a party to the case.

The ruling on Clean Air Act permits does not address EPA's plan, launched with a draft rule in early June, to set carbon-emissions standards for the nation's power plants. We have more on the decision here.

... BUT WITH A REBUKE. A 5-4 portion of the complex ruling supported by the Court's conservative justices clipped EPA's wings a bit.

The ruling said that the agency could only require greenhouse-gas curbs through the contested permitting program if facilities already have to obtain permits for conventional pollutants, such as the stuff that causes smog.

But the law "neither compels nor permits" EPA to "adopt an interpretation of the [Clean Air] Act requiring a source to obtain a PSD or Title V permit on the sole basis of its potential greenhouse-gas emissions," Justice Antonin Scalia's ruling states.

The decision also tossed out an EPA policy that raised the amount of greenhouse-gas emissions that trigger regulation far above the levels that allow permitting requirements for conventional pollutants.

The ruling is nonetheless expected to have very little practical effect on the number of facilities that must address greenhouse cases through the contested Clean Air Act permitting program. And EPA has long said it only wants the permitting program, which addresses new and overhauled facilities, to go after really big sources of industrial carbon emissions.

But critics suspect that EPA will eventually get more aggressive with the permitting program. The American Chemistry Council, a chemical manufacturers group that challenged EPA's rules, says the Court has provided a check against that. "We are pleased the Court agrees that only facilities emitting above threshold amounts of a conventional pollutant trigger PSD permitting requirements," the group said, adding that the ruling would "prevent the Agency from sweeping thousands of small businesses and factories" into the permitting program.

Scalia used some strong phrasing in rebuking EPA and limiting the permitting program slightly, alleging that the agency's reading of the Clean Air Act would "bring about an enormous and transformative expansion in EPA's regulatory authority without clear congressional authorization."

Look for opponents of EPA's upcoming—and more sweeping—power-plant emissions standards to point to that phrasing during battles over those rules.

ONE LOSER FROM THE DECISION: CONGRESS. The justices did deliver a slight rebuke to Congress for how it wrote the Clean Air Act, noting that the legislation's vagaries have done little to help matters. "In this respect (as in countless others), the Act is far from a chef d'oeuvre of legislative draftmanship," said Justice Antonin Scalia.

OBAMA ALREADY EYEING PARIS CONFERENCE. In a meeting with New Zealand Prime Minister John Key, President Obama discussed the 2015 U.N. climate summit in Paris. "We had a good conversation about climate change, where New Zealand, I think, has been an excellent partner with us and other economies, recognizing that this is a threat that none of us can solve individually—that we're going to have to work on it together," Obama said after the meeting.

REPUBLICANS ARE SCREAMING FOR ACTION ON GLOBAL WARMING, BUT ONLY FROM THE STANDS. A cadre of Republican former officials is breaking with its Capitol Hill colleagues to push for action on climate change. Henry Paulson, who was President George W. Bush's Treasury secretary, is the latest, writing in a New York Times opinion piece Sunday of a looming "climate bubble" that poses "enormous risks." Paulson also argues that a carbon tax would be a conservative policy approach to dealing with climate change. But Republicans on Capitol Hill aren't buying it. (Ben Geman, National Journal)

RISING OIL PRICES COULD HURT EMERGING ECONOMIES. As oil prices continue to rise due to speculation over instability in Iraq, emerging economies like India's and Turkey's that rely heavily on foreign oil shipments are feeling the pinch. (Josie Cox and Cassie Werber, Wall Street Journal)

VITTER, McCARTHY TO SQUARE OFF IN HOUSE HEARING. EPA Administrator Gina McCarthy, Senate Environment and Public Works Committee ranking member David Vitter, and Sen. Sheldon Whitehouse of Rhode Island will all testify before the House Oversight Committee on Wednesday. The hearing will focus on obstruction of congressional investigations on issues like the Bristol Bay mining project, as well as attendance fraud and other employee misconduct exposed by the investigation into John Beale.

REID OFFERS VOTE ON EPA AMENDMENT ... WITH A CATCH. Majority Leader Harry Reid offered Minority Leader Mitch McConnell a simple majority vote on his amendment blocking the EPA's power-plant rules, but only in exchange for a 51-vote threshold on a myriad of other issues like the minimum wage, equal pay for women, and the Shaheen-Portman energy-efficiency bill. Reid also decried the amendment holding up the appropriations process, saying the government has "had enough sequestrations and shutdowns."

AUSTRALIA INCHES TOWARD CARBON TAX REPEAL. Australian Prime Minister Tony Abbott brought up a bill again to void the country's carbon tax. The last time Abbott introduced legislation to kill the policy mechanism to curb carbon emissions, it was blocked by a Senate majority. The fate of the measure this time around is uncertain. (Rod McGuirk, Associated Press)

AUTOMAKERS ON THEIR WAY TO MEETING TAILPIPE STANDARDS. An analysis by the Consumer Federation of America found that auto manufacturers are on their way to meeting the 2025 fuel-economy standards. Of the 29 new vehicles introduced in 2014, 13 would comply with the 2016 fuel-economy requirements, seven would meet requirements in 2018 and three—the Mitsubishi Mirage, Nissan Rogue, and Toyota Highlander—are compliant with the 2020 standards. CFA also found that average fuel economy has increased by 20 percent since 2008.

HOUSTON STARES DOWN LABOR SHORTAGE. Business leaders in the city are growing concerned that the workforce hasn't kept pace with the growing economy, which has been buoyed by the city's flourishing fossil-fuel industry. (Terry Wade, Reuters)

ON THE CAMPAIGN TRAIL

WARREN CAMPAIGNS FOR TENNANT. Democratic Sen. Elizabeth Warren is hitting the road in West Virginia next month in a bid to help boost Natalie Tennant's bid for the state's open Senate seat. Tennant will face a tough fight when she squares off against Republican Rep. Shelley Moore Capito in November. (Jonathan Mattise, Associated Press)

WHAT INSIDERS ARE SAYING

COULD THE CLIMATE RULE COME UNDONE? What are the immediate and long-term threats to the president's regulations to limit carbon emissions from power plants?

"[EPA] structured the rule so that if a court doesn't agree with certain assumptions EPA made, the other parts of the rule can stand. This bit of legal foresight should allow EPA to take more legal risks in its final rule (which could lead to larger greenhouse-gas reductions), without jeopardizing the plan's overall viability in court." Brian Potts, partner, Foley & Lardner

HAPPENING TOMORROW

SCIENCE COMMITTEE MARKS UP DISCLOSURE BILL. The House Science Committee marks up a bill that would require EPA to release the science backing its regulations.

WATER-AUTHORITY HEARING. The House Natural Resources Committee holds a hearing on the EPA's proposal to expand its Clean Water Act authority.

NATURAL GAS HEARING. The Joint Economic Committee holds a hearing on the economic impact of increased natural-gas production.

ENERGY JOBS HEARING. The House Natural Resources Committee continues its series on energy labor with a hearing focused on education opportunities.

GREENHOUSE-GAS DISCUSSION. The Woodrow Wilson Center hosts a discussion on alternative pathways to addressing greenhouse-gas pollution.

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