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U.S. Supreme Court To Hear Argument Over EPA’s Greenhouse Gas Regulations for Stationary Sources

By: Dan Mach

On Monday, the U.S. Supreme Court will hear argument in six consolidated challenges to the Environmental Protection Agency’s (“EPA’s”) decision to regulate emissions of greenhouse gases (“GHGs”) from stationary sources under certain provisions of the Clean Air Act (the “CAA”). The cases come from the D.C. Circuit Court of Appeals, which dismissed the challenges in 2012 on the ground that the petitioners lacked standing.

Monday’s argument presents a narrow question: whether EPA’s existing regulation of GHG emissions from motor vehicles triggered statutory permitting requirements that would apply to stationary sources. The CAA’s Prevention of Significant Deterioration (“PSD”) provisions require any facility that annually emits more than either 100 or 250 tons (depending on the type of facility) of “any air pollutant” to obtain an emissions permit. In its “Timing Rule,” EPA determined that its existing GHGs emissions standards for motor vehicles render such emissions “air pollutants” within the meaning of the statute, thereby triggering the PSD permit requirement. However, in its “Tailoring Rule,” EPA announced that it would initially require PSD permits only for very large sources of GHGs, rather than apply the statute’s low 100/250 ton threshold.

EPA’s interpretation raises two questions. The first is whether, as Judge Kavanaugh of the D.C. Circuit has argued in a dissenting opinion, the CAA requires PSD permits only for facilities that emit those “air pollutants” for which EPA has issued ambient air quality standards—a category that does not include GHGs. The second is whether EPA’s decision to raise the threshold of GHG emissions above which PSD permits are required was a permissible application of the statute.

This is the third time in seven years that the Court has considered the scope of EPA’s authority to regulate GHGs under the Clean Air Act. In its 2007 decision in Massachusetts v. EPA, the Court held that GHGs are unambiguously “air pollutants” potentially subject to regulation under Title II of the Act, which governs emissions standards for mobile sources. Following Massachusetts, EPA issued formal findings that motor vehicle emissions “cause or contribute” to GHG pollution that “endangers” public health and welfare—leading to its promulgation, under Title II, of fleet-wide average fuel efficiency standards for cars and trucks.  EPA’s endangerment finding was upheld by the D.C. Circuit, and the Supreme Court declined to grant petitions seeking review of that part of the appellate court’s decision.

In its 2011 decision in American Electric Power Company v. Connecticut, the Court acknowledged EPA’s authority to regulate GHGs from stationary sources as well. There, the Court held that the claim that GHG emissions from fossil-fuel fired power plants constituted a public nuisance under federal common law was “displaced”—that is, rendered legally obsolete—by “the Clean Air Act and the EPA actions it authorizes,” specifically noting, as an example, that EPA was then engaged in “rulemaking to set standards for greenhouse gas emissions from fossil-fuel fired power plants” under the CAA’s New Source Performance Standards provisions.

Given the narrow issue on which the Court granted review, it is unlikely that the outcome of the cases to be argued Monday will disturb EPA’s now well-established authority to regulate GHG emissions in general. It may, however, alter the specific ways in which EPA may exercise that authority with respect to stationary sources.

For more information on the Supreme Court proceedings or greenhouse gas regulation, contact Jeffrey Gracer.

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