Forgotten Document Sheds New Light on Legality of EPA Climate Rules

A little known document sheds new light on the now 17-year-long controversy over EPA’s Clean Air Act authority with respect to greenhouse gases. The document is a letter of January 26, 1990 from EPA Administrator William Reilly to U.S. Senators. Reilly sets forth the Bush I administration’s reasons for removing greenhouse gas (GHG) regulatory provisions from S. 1630, the Senate version of the Clean Air Act (CAA) Amendments of 1990. Judging by the fact that the Senate later agreed to drop those provisions from the 1990 CAA as enacted, Reilly’s letter would appear to be a key piece of evidence for assessing legislative intent.

Would consideration of the document have altered the Supreme Court’s landmark ruling in Massachusetts v. EPA (2007)? We will never know. What’s hard to fathom is why no party to the case cited the letter. Maybe it was already lost in the mists of time.

Reilly apprises Senators that the Bush I administration “strongly opposes” S. 1630’s “requirement for reductions in carbon dioxide (CO2) emissions from auto tailpipes” — the same basic policy petitioners in Massachusetts would later sue EPA to adopt. Noting that the S. 1630 CO2 emission standards translate into motor vehicle mileage standards, Reilly highlights three reasons for striking the provision, two of which are germane to issues debated in Massachusetts:

First, it is premature to mandate specific controls to address global warming. International studies are underway. International negotiations on a framework convention on global climate change are scheduled for this year and should be completed prior to unilateral U.S. action. 

Second, fuel-economy requirements raise important non-environmental questions that need to be carefully considered, such as feasibility, cost and competitiveness of the U.S. auto industry with foreign manufacturers.

In addition, Reilly contends, the CO2 standards and provisions to regulate ozone-depleting substances based on global warming potential do not “appear to be a particularly effective approach to such a geographically vast problem.”

In Massachusetts, States and environmental groups challenged Bush II EPA’s rejection of a petition to establish motor vehicle emission standards for CO2 and other GHGs. EPA air chief Jeff Holmstead based the agency’s decision on both statutory and policy grounds (68 FR 52922-52933). The Court dismissed the latter arguments as “policy concerns,”  “policy judgments,” and “reasoning divorced from the statutory text.” However, some of Holmstead’s policy reasons for not regulating GHGs under the CAA reprise Reilly’s reasons for keeping GHG regulatory provisions out of the CAA. Specifically, according to Holmstead:

• Double regulation of fuel economy under both the Energy Policy Conservation Act and CAA could adversely affect U.S. auto industry competitiveness.
• Scientific uncertainties and lack of cost-effective technologies make GHG emission standards “inappropriate at this time.”
• Setting GHG motor vehicle standards would “result in an inefficient, piecemeal approach to addressing the climate change issue.”

Far from being “divorced” from the statutory text, similar policy concerns shaped the text of the statute that the 101st Congress passed and President G.H.W. Bush signed.

Why is this old news important? The extent of EPA’s powers with respect to GHGs is the central issue in the controversy over EPA’s Clean Power Plan (CPP). Although the CPP would be unlawful on numerous grounds even if Massachusetts spoke the gospel truth, courts with a healthy skepticism about that decision are more likely to review the CPP without fear or favor.

Previous commentary on this blog and elsewhere (here, here, here, and here) examines the Massachusetts Court’s reasoning. The remainder of today’s post summarizes that commentary.

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In Massachusetts, the Supreme Court concluded that the 1970 Clean Air Act “speaks directly” to the issue of greenhouse gases. In American Electric Power v. Connecticut (2011), the Court, citing Massachusetts, asserted that the CAA is the statutory “scheme” Congress “enacted” to address global climate change.

The Court’s opinion that in 1970, some 18 years before the first congressional hearing on global warming, the 91st Congress delegated vast regulatory powers to EPA that the 101st-111th Congresses repeatedly declined to grant in the 1990s and 2000s, when climate change became the world’s preeminent environmental cause célèbre, is almost too ludicrous to entertain. Let us count the ways.

(1) Far from speaking directly to the issue, the 1970 CAA is silent about greenhouse gases and global climate change. Ditto the Act as amended in 1977.

(2) The CAA does not begin to address global climate change until the 1990 Amendments, and then only in an oblique, carefully-caveated manner. The 1990 CAA mentions “carbon dioxide” in §103(g) and “global warming potential” in §602(e) — non-regulatory provisions that respectively admonish EPA not to infer authority for “pollution control requirements” and “additional regulation.”

(3) As indicated above, in its deliberations on the 1990 CAA Amendments, Congress considered and rejected provisions to establish CO2 emission standards for new motor vehicles, regulate ozone-depleting substances based on “global warming potential,” and establish reduction of CO2 and methane emissions as a national goal.

(4) The Massachusetts Court opined that regulating GHG emissions from new motor vehicles would not lead to “extreme measures” or “counterintuitive” results. In fact, such regulation triggered New Source Review (NSR) permitting requirements potentially affecting millions of small, non-industrial facilities. How so? Even your neighborhood Dunkin Donuts shop emits enough CO2 (250 tons per year) to qualify as a “major” source for NSR purposes. To avoid what EPA called “absurd results,” the agency “tailored” (i.e. amended) the Act’s major source definitions to exempt all but very large GHG emitters from NSR regulation. Tailoring, however, was itself an extreme measure, because administrative agencies have no power to amend statutes. To nip this Massachusetts-spawned imbroglio in the bud, the Court in Utility Air Regulatory Group v. EPA (2014) engaged in some tailoring of its own. It overturned EPA’s longstanding, reasonable, and — until Massachusetts — uncontroversial interpretation of the NSR triggering provisions.

(5) The Massachusetts Court ignored legislative intent as embodied in Congress’s consistent practice. As Judge Janice Rogers Brown observed in Coalition for Responsible Regulation v. EPA (2012), when Congress wants to expand the CAA to address new hazards (e.g. acid rain, toxic air pollutants, stratospheric ozone depletion), it does not deputize EPA or courts to “force these distinct problems into existing, ill-suited regulatory schemes.” Rather, “Congress expands the CAA only through considered legislative acts” after obtaining “the necessary political support.” Lack of such support is of course precisely the reason why ‘progressives’ seek to bypass Congress and legislate climate policy via unelected jurists and bureaucrats.

(6) The Court opined that although motor vehicle GHG standards and fuel economy standards may “overlap,” “there is no reason to think” EPA and the Department of Transportation (DOT) “cannot both administer their obligations and yet avoid inconsistency.” That misses the point. Motor vehicle GHG standards are inconsistent with the statutory scheme Congress enacted. The CAA provides no statutory authority for fuel economy regulation, yet there is an almost one-to-one relationship between motor vehicle GHG standards and mileage standards. The 1975 Energy Policy Conservation Act authorizes DOT to regulate fuel economy, not EPA, and prohibits States from adopting laws or regulations “related to” fuel economy. Yet thanks to Massachusetts, EPA and the California Air Resources Board now effectively determine the stringency of federal fuel economy standards.

(7) According to the Court, EPA’s authority to regulate GHGs comes from the most abstract provision of the CAA — the two-sentence definition of “air pollutant” in §302(g). The Court concluded that greenhouse gases “fit well” within the provision’s “capacious definition” of “air pollutant.” To obtain that result, however, the Court had to ignore a key term in the first sentence of §302(g) and the entire second sentence. The details are explicated here. Attorney Eric Groten’s slide captures the silliness of it all.