Thursday, June 26, 2014

The EPA, Supreme Court and Carbon Dioxide

On Monday, June 23, 2014 the Supreme Court issued its opinion in the case Utility Air Regulatory Group v. EPA finding that regulators are not fee to “revise clear statutory terms that turn out not to work in practice.” The practical impact of this decision on current EPA regulations is limited, but the precedent is important.

Back in April 2007 in a decision in Massachusetts v EPA (2007), the Supreme Court had ruled that the Clean Air Act did authorize federal regulations on greenhouse gas emissions, and that the agency was required to issue them for automobiles unless it had a scientific basis for its refusal. That case was brought by several states to force the EPA to determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which endangers public health or welfare, or whether the science is too uncertain to make a reasoned decision.

This decision was followed in December 2009 by EPA finding that “the current and projected concentrations of the six key well-mixed greenhouse gases in the atmosphere threaten the public health and welfare of current and future generations.” These greenhouse gases including carbon dioxide (CO2) were thus pollutants under section 202(a) of the Clean Air Act which deals entirely with mobile sources of pollution.

The EPA then took the next step and went on to address greenhouse gases, specifically CO2, from stationary sources. The problem in regulating CO2 from stationary sources is that the Clean Air Act imposes very specific permitting requirements on stationary sources, that are a “major emitting facility”. The Clean Air Act specifically defines a “major emitting facility” as a stationary source with the potential to emit 250 tons per year of “any air pollutant” (or 100 tons per year for certain types of sources). Facilities seeking to qualify for a permit must, demonstrate that they comply with emissions limitations that reflect the “best available control technology” for “each pollutant subject to regulation under” the Act. In addition, Title V of the Clean Air Act makes it unlawful to operate any “major source,” wherever located, without a permit. A “major source” is a stationary source with the potential to emit 100 tons per year of “any air pollutant.”

The obvious problem is that these thresholds would require virtually any commercial building, school, churches, farm, landfill and some residences to obtain a permit to operate under the Clean Air Act a process that according to the EPA could cost $20,000-$50,000 for each entity. So the EPA attempted to side step this issue by raising the permit triggering limits to 100,000 tons to qualify as a major emitting facility for greenhouse gases and 75,000 tons for a stationary source to require a permit under the law.

The Supreme Court found that the EPA lacked authority to “tailor” the Act’s unambiguous numerical thresholds of 100 or 250 tons per year to accommodate its greenhouse-gas-inclusive interpretation of the permitting triggers. This according to the decision would have been an enormous and transformative expansion in EPA’s authority, the ability determine carbon dioxide standards and enforcement without congressional authority. Stating that “Agencies must always give effect to the unambiguously expressed intent of Congress.”

The decision states that “the Clean Air Act neither compels nor permits EPA" to require a stationary source to obtain a “Prevention of Significant Deterioration” (PSD) or Title V permit only on the basis of its potential greenhouse-gas emissions. However, EPA can reasonably interpreted the Clean Air Act to require sources that would need permits based on their emission of conventional pollutants to comply with a “best available control technology” requirement for greenhouse gases.

So, EPA gets to require already regulated stationary sources of pollution to use the “best available control technology” to reduce greenhouse gases and determine the limits. This would cover according to the EPA 83% of the greenhouse gas emission from stationary sources. This decision does not address the recently proposed regulations to create national CO2 emissions standards for new and existing power plants with the goal of reducing CO2 emissions.

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