Massachusetts v. EPA

Post image for CO2 Litigation: Court and EPA Can’t Both Be Right — and Both May Be Wrong

Is the Clean Air Act so badly flawed that it will cripple environmental enforcement and economic development alike unless the EPA and its state counterparts defy clear statutory provisions or, alternatively, spend $21 billion annually to employ an additional 320,000 bureaucrats?

That is a central issue in a recent lawsuit by Southeastern Legal Foundation (SLF), the Competitive Enterprise Institute (CEI), a host of lawmakers and several companies, who are petitioning the Supreme Court to review an appellate court decision upholding the EPA’s global warming regulations.

I discuss some of the legal issues today in a column on Forbes.com. My conclusion: The Court’s reading of the Clean Air Act in Massachusetts v. EPA (2007) and the EPA’s reading of the Act in regulating greenhouse gas emissions from “major” stationary sources cannot both be right — and both may be wrong!

Unless the Court is prepared to take ownership of the bizarre notion that the the Clean Air Act was wired from the start to self-destruct four decades later, it should either overturn the EPA’s regulation of stationary sources, revise its decision in Mass. v. EPA, or both.

Post image for Will the Supreme Court Review EPA’s Greenhouse Gas Regulations?

Powerful dissenting opinions can sometimes persuade a higher court to review a lower court’s ruling. Massachusetts v. EPA (2007), the Supreme Court decision empowering the EPA to act as a super legislature and ‘enact’ climate policy, is a prime example.

In 2005, the D.C. Circuit Court of Appeals held that the Bush administration EPA properly exercised its discretion when it denied a petition by eco-litigation groups to regulate greenhouse gas (GHG) emissions from new motor vehicles under §202 of the Clean Air Act (CAA). I remember feeling relieved but disappointed. The 2-1 majority ducked the central issue, namely, whether the CAA authorizes the EPA to regulate GHGs as climate change agents. In contrast, Judge David Tatel’s dissent made a strong argument that the EPA does have the power to regulate GHGs and, consequently, has a duty to determine whether GHG emissions endanger public health or welfare. Tatel’s opinion was a key factor persuading the Supreme Court to hear the case.

The Court in Massachusetts ruled in favor of petitioners, setting the stage for the EPA’s ongoing, ever-expanding regulation of GHG emissions from both mobile and stationary sources.

The EPA’s greenhouse regulatory surge, however, is not yet ‘settled law.’ Recent strong dissenting opinions by two D.C. Circuit Court of Appeals judges may persuade the Supreme Court to review one or more of the agency’s GHG rules — or even reassess its ruling in Mass. v. EPA. [click to continue…]

Post image for Why Courts Should Repeal EPA’s ‘Carbon Pollution’ Standard (and why you should care)

Note: A nearly identical version of this column appeared last week in Forbes Online. I am reposting it here with many additional hyperlinks so that readers may more easily access the evidence supporting my conclusions.

The November 2012 elections ensure that President Obama’s war on coal will continue for at least two more years. The administration’s preferred M.O. has been for the EPA to ‘enact’ anti-coal policies that Congress would reject if such measures were introduced as legislation and put to a vote. Had Gov. Romney won the presidential race and the GOP gained control of the Senate, affordable energy advocates could now go on offense and pursue a legislative strategy to roll back various EPA global warming regulations, air pollution regulations, and restrictions on mountaintop mining. But Romney lost and Democrats gained two Senate seats.

Consequently, defenders of free-market energy are stuck playing defense and their main weapon now is litigation. This is a hard slog because courts usually defer to agency interpretations of the statutes they administer. But sometimes petitioners win. In August, the U.S. Court of Appeals struck down the EPA’s Cross State Air Pollution Rule (CSAPR), a regulation chiefly targeting coal-fired power plants. The Court found that the CSAPR exceeded the agency’s statutory authority. Similarly, in March, the Court ruled that the EPA exceeded its authority when it revoked a Clean Water Act permit for Arch Coal’s Spruce Mine No. 1 in Logan County, West Virginia.

A key litigation target in 2013 is EPA’s proposal to establish greenhouse gas (GHG) “new source performance standards” (NSPS) for power plants. This so-called carbon pollution standard is not based on policy-neutral health or scientific criteria. Rather, the EPA contrived the standard so that commercially-viable coal plants cannot meet it. The rule effectively bans investment in new coal generation.

We Can Win This One

Prospects for overturning the rule are good for three main reasons. [click to continue…]

Post image for More on the Carbon Tax Cabal

Concerning the “Price Carbon Campaign/Lame Duck Initiative” meeting of center-right and ‘progressive’ pols, wonks, and activists yesterday at the American Enterprise Institute (AEI), herewith a few additional thoughts.

Today’s Greenwire quotes AEI economic policy director Kevin Hassett saying that AEI was just playing host and the meeting was just information sharing. Well, okay, let’s assume he experienced it that way, but what about the ‘progressives’ who set the agenda? They must really be into sharing, because this was their fifth meeting. Whatever the AEI folks thought the event was about, the agenda clearly outlines a strategy meeting to develop the PR/legislative campaign to promote and enact carbon taxes.

During the cap-and-trade debate in the last Congress, there was something of a consensus among economists that EPA regulation of greenhouse gases (GHGs) is the worst option, a ‘comprehensive legislative solution’ (i.e. cap-and-trade) has less economic risk, and a carbon tax is the most efficient option. But the ‘progressives’ in the “Price Carbon Campaign” are pushing for carbon taxes on top of EPA regulation.

Because the meeting was non-public and hush-hush, we may never know who said what. Here are some points the ‘conservative’ economists  should have made: [click to continue…]

Post image for Attorney Peter Glaser’s “Morning After” Reflections on the D.C. Circuit Court GHG Decision

Despite the disappointing decision yesterday, it would be well to remember that the real damage was done in the Supreme Court’s 5-4 Massachusetts decision, where EPA was found to have authority to regulate GHGs under the CAA so long as it determined that GHGs endanger the public health and welfare. 

. . .the Massachusetts decision was a real travesty.  It is impossible to review the history of the public debate on GHG regulation in this country beginning in the 1980s, when potential climate change first came to prominence, and conclude that authority to regulate GHGs was always available, hiding in plain sight in the CAA as first enacted in 1970. The Supreme Court said in the 2001 American Trucking Associations decision, in language that is often cited, that Congress does not “hide elephants in mouseholes.”  Evidently, in the case of EPA GHG regulation, Congress did.

In the end, the most rational thing for the country to do on GHGs is for Congress to enact legislation that gets EPA out of the GHG regulatory business entirely.  — Peter Glaser

In Massachustts v. EPA, the 5-4 majority argued: (1) The Clean Air Act (CAA) defines “air pollutant” as any airborne substance whatsoever; (2) the EPA has a mandatory duty to regulate air pollutants emitted by automobiles if the associated “air pollution” “may reasonably be anticipated to endanger public health and welfare”; and (3) “welfare” effects include changes in “weather and climate.” Given these premises, the Court basically left the EPA one way to avoid regulating GHGs: Cancel its membership in the self-anointed “scientific consensus” — the climate alarm movement – that the agency had spent years promoting and leading. No chance of that happening.

For reasons discussed here and here, the lynchpin of the Massachusetts Court’s argument, premise (1), was a misreading of the CAA definition of “air pollutant.” At a minimum, respondent EPA’s opinion that carbon dioxide (CO2) is not an air pollutant was a “permissible construction” of the statute and thus should have been accorded deference under the Court’s Chevron Step 2 test. If the GHG regime EPA is building were proposed in legislation and put to a vote, Congress would reject it. Congress would surely have rejected the EPA’s GHG agenda in 1970, when it enacted the CAA and defined “air pollutant.” The terms “greenhouse gas” and “greenhouse effect” do not even occur in the CAA. Only as amended in 1990 does the CAA even obliquely address the issue of global climate change. Congress considered and rejected regulatory climate policies in the debates on the 1990 CAA Amendments. The very provisions tacitly addressing climate change – CAA Secs. 103(g) and 602(e) – admonish the EPA not to adopt “pollution control requirements” for CO2, and not to regulate substances based on their “global warming potential.”

With the case law on GHG regulation hopelessly botched by the Supreme Court, only Congress can rein in the EPA — and only if there is a change of management in the White House and the Senate in November.

Peter Glaser’s full commentary on the D.C. Circuit Court decision follows. [click to continue…]

Post image for EPA’s Carbon Pollution Standard — One Step Closer to Policy Disaster

Today (June 25th) is the deadline for submitting comments on the EPA’s proposed Carbon Pollution Standard Rule, which will establish first-ever New Source Performance Standards (NSPS) for carbon dioxide (CO2) emissions from fossil-fuel electric generating units.

The proposed standard is 1,000 lbs of CO2 per megawatt hour (MWh). The EPA claims that 95% of all new natural gas combined cycle power plants can meet the standard — maybe, maybe not. One thing is clear — no conventional coal power plant can meet the standard. Even today’s most efficient coal power plants emit 1,800 lbs CO2/MWh on average.

A coal power plant equipped with carbon capture and storage (CCS) technology could meet the standard, but the EPA acknowledges that  CCS is prohibitive, raising the cost of generating electricity by as much as 80%.

So what the proposal is really telling the electric utility industry is this: If you want to build a new coal-fired power plant, you’ll have to build a natural gas combined cycle plant instead. Not surprising given President Obama’s longstanding ambition to “bankrupt” anyone who builds a new coal power plant.

In a comment letter submitted today on behalf of the Competitive Enterprise Institute, I recommend that the EPA withdraw the proposed regulation for the following reasons: [click to continue…]

Post image for Update on Legality of Obama’s 54.5 MPG Standard

On Monday, I noted that Team Obama plans to set new-car fuel-economy standards for model years (MYs) 2017-2025, a nine-year period, despite the fact that the authorizing statute, the Energy Policy Conservation Act, 49 U.S.C. 32902(b)(3)(B), restricts the setting of fuel-economy standards to “not more than 5 model years.” No matter how hard or long government lawyers squint at the text, 5 does not mean 9. In the words of House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), the standards proposed for MYs 2022-2025, which reach 54.5 mpg in 2025, are “outside the scope of law.”

Since writing that post, I have learned that Team Obama will try to finesse the legal problem by basing the MYs 2022-2025 fuel economy standards solely on EPA’s authority to set emission standards under CAA Sec. 202. This is Bizarro World jurisprudence.

EPA will be setting de-facto fuel-economy standards, pretending that GHG standards are not fuel-economy standards, but specifying CO2 reduction percentages that the agency avows, and everybody knows, convert directly into percentage increases in fuel economy.

Nobody but the judicial activists who gave us Massachusetts v. EPA can say with a straight face that when Congress enacted CAA Sec. 202, it meant to transfer the power of setting fuel-economy standards from the National Highway Traffic Safety Administration (NHTSA) to EPA. Nor would any non-Bizarro lawyer contend that CAA Sec. 202 authorizes EPA to set fuel economy standards as many years into the future as the agency sees fit, despite EPCA’s explicit limit of “not more than 5 model years.”

Okay, maybe I was wrong. Just because the Supreme Court in Massachusetts v. EPA legislated from the bench in order to empower EPA to legislate from the bureau does not necessarily mean that lower courts will tolerate similar breaches of the separation of powers.

Yesterday (May 26, 2011), in Avenal Power Center v. EPA, District of Columbia Judge Richard Leon mockingly rejected EPA’s arguments for attempting to amend the Clean Air Act to suit the agency’s administrative convenience. Although not mentioned by him, Judge Leon’s reasoning may strengthen legal challenges to EPA’s greenhouse gas Tailoring Rule.

[click to continue…]

Tomorrow, the Senate is scheduled to vote on the Inhofe-Upton Energy Tax Prevention Act (S. 482) to overturn EPA’s Endangerment Rule and most of the agency’s other greenhouse gas (GHG) regulations. The bill is based on the constitutional premise that Congress, not an administrative agency with no political accountability to the people, should make the big decisions regarding national policy.

The fact that Congress remains deadlocked on climate and energy policy is a reason for EPA not to act — not an excuse for the agency to substitute its will for that of the people’s representatives.

I am a huge fan of the Inhofe-Upton bill. But even a good thing can be improved. S. 482 should be amended to preempt public nuisance litigation against GHG emitters under federal common law. Indeed, in its current form, S. 482 could actually increase the risk that the Supreme Court will empower trial lawyers and activist judges to ‘legislate’ climate policy.  [click to continue…]