Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

In early November, the EPA sent to OMB the next significant regulation governing greenhouse gas emissions.  Under the latest rule, EPA would establish CO2 emission standards for new and modified coal-fired power plants. 

The new rule is titled the Greenhouse Gas New Source Performance Standard (NSPS) for Electric Utility Steam Generating Units.  The NSPS standards are based on the best demonstrated technology (BDT) that has been demonstrated to work in a given industry, considering economic costs and other factors. The standard can vary from source to source. It could be a numerical emission limit, a design standard, an equipment standard, or a work practice standard.

The proposal will clearly be the next in an ongoing debate regarding EPA regulations and jobs. 

EPA States:

“EPA will work with OMB throughout the interagency review process and will issue the proposal when this review is complete,” said EPA spokeswoman Betsaida Alcantara. “EPA has engaged in an extensive and open public process to gather the latest and best information.”

In a story in the LA Times, the Heritage Foundation attacked the latest EPA proposal:

"We don’t believe that unelected bureaucrats should be doing what Congress was elected to do," said Nicolas Loris, policy analyst at the Heritage Foundation, which has battled the EPA regulation of carbon from the outset. “The economic costs of regulation by the EPA or by a cap-and-trade system far outweighs any environmental benefit we would get from these measures."

Asked how the Heritage Foundation would like to see this problem addressed, he added: "First we need to step back and look at what the real problem is: CO2 isn’t black smoke that is emitted from factories; it’s a colorless, odorless gas. Does it contribute to global warming and climate change? Sure. But it’s the role of Congress to figure out the best way to address those effects in a way that protects our economy."

Inability of Congress to Act Leave Void EPA Has Authority to Fill

In Congress, there appears to be no pragmatists anymore, especially when it comes to EPA regulatory authority.  The approach from either side tends to be all or nothing..

With Congress deadlocked the policy vacuum will be filled.  In this case, EPA has the authority under the Clean Air Act to regulate greenhouse gases (GHGs).  The Supreme Court in Massachusetts v. EPA already declared CO2 and the other GHGs a "pollutant" under the Clean Air Act that can be regulated.

In fact, EPA has been sued multiple times to exercise this authority.  As long as the Clean Air Act remains unchanged, the Court cases are generally going to support EPA's authority.  While the Heritage Foundation is correct that CO2 is much different than the other "pollutants" regulated under the Clean Air Act, unless Congress acts to change the law to treat it differently EPA will and is legally obligated to implement new regulations. 

D.C. Circuit Panel Selected to Hear Challenges to EPA's Existing GHG Rules

While EPA is poised to issue its NSPS to control CO2 from power plants, its earlier GHG regulations have been challenged.  There are two main GHGs rules being challenged:

1. EPA's "endangerment finding"- a prerequisite to regulating GHGs from motor vehicles.  In making the finding, EPA was required to review the latest science and determine whether GHGs endanger human health and the environment. 
2. EPA's "Tailoring Rule"- EPA recognizes that CO2 is emitted in orders of magnitude greater quantities compared to other Clean Air Act pollutants.  In an effort to make the existing structure of the Clean Air Act fit GHGs, EPA issued the tailoring rule which raised the trigger thresholds for certain federal permitting requirements (i.e. New Source Review) even though the triggers appear in the Clean Air Act itself.

The panel in the D.C. Circuit that will be hearing these challenges was recently announced.  An excellent article on Greenwire discusses the three judges on the D.C. Circuit panel.  The judges are Chief Judge David Sentelle, a conservative appointed by President Reagan, and two Clinton appointees: Judge Judith Rogers and Judge David Tatel. From the article:

All three had some involvement when the court tackled Massachusetts v. EPA, the case that -- once it went up to the Supreme Court -- ultimately gave EPA the authority to regulate carbon emissions.

Lawyers familiar with the litigation over the rules say the panel probably favors EPA based on each judge's record in environmental cases and regulatory cases in general.

Overall, the panel "will examine the arguments fairly but rigorously," said Jonathan Adler, who heads the Center for Business Law and Regulation at Case Western Reserve University School of Law.

"This may appear to be a panel predisposed to support the EPA, but it is also a panel that is not likely to let the EPA get away with slipshod arguments," he added.

The "tailoring" rule, which interprets the Clean Air Act in such a way that only major polluters are required to obtain permits for greenhouse gas emissions, is the one that is viewed to be most vulnerable. Critics say it essentially rewrites the Clean Air Act.

Given the scientific foundation that supports the conclusions climate change is real and humans are contributing to the problem, it is unlikely that the Court will overturn EPA's Endangerment Finding.  However, as discussed in the article and in prior posts, EPA "Tailoring Rule" is based on a house of cards.  A fundamental axiom of the law is you cannot rewrite a statute through rulemaking.

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Today, the U.S. Supreme Court released their opinion in AEP v. Connecticut  in which the Court held that the Clean Air Act ("CAA") and the EPA actions on regulating greenhouse gas emissions displaced any federal common-law right to seek greenhouse gas emission reductions.  The suit was filed by Eastern States and non-profit land groups against coal-fired power plants in an attempt to have court order emission reductions. Businesses were deeply concerned that if the Court allowed the nuisance case to proceed, the courts would be flooded with climate change litigation.

Legal Ruling

The States had argued their nuisance claims were not displaced because EPA had not yet established final emission standards.  The Court stated the displacement test is simply "whether the statute speaks directly to the question at issue." In other words, if the statute give authority to act that is enough to displace federal common law.

The Court noted that in  Massachusetts v. EPA it had previously held:

• Emissions of carbon dioxide qualify as air pollution subject to the CAA. 
• CAA Section 111 gives authority to EPA to list categories of stationary sources that cause or contribute significantly to air pollution that "endangers public health and welfare"  (categories would include coal-fired power plants)
• Once a category is listed under Section 111, EPA must establish performance standards for new or modified sources within that category
• CAA also will require regulation of existing sources in the category
• If EPA fails to act in setting standards, States and private parties may petition for a rulemaking on the matter, and EPA’s response will be reviewable in federal court.

For these reasons, the Court held it was clear the CAA "speaks directly" to the emission of carbon dioxide from the defendant's coal-fired power plants.

Implications of Today's Ruling

1. Prevents "Flood" of Federal Nuisance Claims- Obviously today's ruling is very good news for those who feared the courts could be flooded with climate change litigation under federal common law. 
2. Possible State Nuisance Claims-  The Court notes that the issue before them was limited to actions under federal nuisance, it does not address nuisance claims based upon state law.  The Supreme Court sent the case back to the Second Circuit to determine if state nuisance claims are pre-empted by the CAA.  This leaves open a huge issue that could likely result in yet another Supreme Court ruling.
3. EPA v. Courts-  In its opinion the Supreme Court stated its preference for EPA to decide appropriate emission reductions, not the courts.   The Court said EPA, with all its expertise, is in a better position to balance competing interests and establish standards. 
4. Tacit Endorsement of EPA Regulatory Authority- The key battle right now are EPA's regulatory actions to move forward with emission standards for greenhouse gases.  Some have asserted EPA's actions demonstrate the Agency is "out of control."  The Supreme Court's decision makes clear, once again, EPA has the authority to regulate greenhouse gases.  Also, the Court notes repeatedly, if EPA fails to act in establishing those standards it can be compelled to act by private parties. 

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A coalition of business groups, including the National Association of Manufacturers, have filed a request to block the effectiveness of EPA's climate change rulemaking.  The business groups have filed a motion seeking a stay of the effectiveness of EPA regulations that will soon require stationary sources (factories, utilities and boilers) to reduce greenhouse gas (GHGs) emissions from those sources beginning in 2011.

There are two interesting strategic decisions that emerge from the brief filed seeking a stay of EPA's GHG rules:

• Business groups are not trying to block the mandatory GHG rules pertaining to motor vehicles; and
• The stay would not be of EPA's Tailoring Rule, but would seek to block any legal ability to begin regulating GHGs from stationary sources

The Clean Air Act requires all sources emitting above 100/250 tons per year of a regulated pollutant to go through federal permitting- EPA's New Source Review Program.  EPA adopted the Tailoring Rule to raise those thresholds that EPA asserts would otherwise apply once it finalized its regulation of GHGs from vehicles.

It is the premise that the vehicle rules trigger regulation of stationary sources that the business groups are challenging in this motion.  This from the brief filed seeking a stay:

Movants offer a distinct request for a partial stay that would enable EPA to
realize its goal of imposing GHG emission limits on cars while preserving the status quo for stationary sources. Specifically, Movants request the Court stay the effects of the Tailpipe Rule, Tailoring Rule, and PSD Interpretive Rule on stationary sources, such that GHG emissions are not subject to PSD and Title V pending this appeal.  Movants do not request a stay of the Tailpipe Rule as applied to cars.

Business groups challenge EPA assertion on two separate grounds:

Emissions of a pollutant triggers PSD permitting if, and only if, the pollutant is subject to a NAAQS and the source is located in an attainment area for that pollutant. GHGs are not such a pollutant, so GHG emissions alone cannot trigger PSD permitting.

The very impetus for the Tailoring Rule’s revision of statutory thresholds was EPA’s recognition that requiring sources to obtain PSD permits solely based on GHG emissions is “absurd” and inconsistent with Congress’s vision for the PSD program. Congress did not enact the CAA to bring any part of the American economy to a dead stop, and EPA’s interpretation of the CAA threatening that result is unreasonable, arbitrary, and capricious. In addition, EPA’s view that GHGs are subject to regulation under the PSD program—which is plainly focused on local air quality—is unreasonable. Congress never intended the PSD program to regulate pollutants like GHGs.

Business groups had no alternative but to seek a stay given the ramifications of EPA embarking on this regulatory path.  Typically, you would ask to stay the effectiveness of a specific rule.    However, delaying the legal effectiveness of the Tailoring Rule would arguably subject all businesses to the ridiculously low permitting thresholds 100/250 tons in the Clean Air Act. 

As result, business group are challenge the very premise the EPA had to enact the Tailoring Rule because otherwise the 100/250 ton thresholds would take effect after enactment of the vehicle tailpipe rule.

The only concern is if the Court agrees, in part, with the business group's arguments.  First, the Court may say a stay can only be granted of a specific rule.  Second, the Court may agree EPA went too far but provide a different result.

Let's remember no one was asking the Court to throw out the Clean Air Interstate Rule (CAIR).  What happens if the Court agrees EPA has no authority to change the statutory thresholds in the Clean Air Act (100/250 tons per year), but agrees the vehicle rule automatically triggers PSD regulation of GHGs?

While litigation is necessary with so much at stake, it is also very unpredictable.  Let's hope the Court gets this one right by looking at the real world implications of its decision.

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In a very close vote 53-47, the U.S. Senate defeated a resolution designed to block U.S. EPA's regulation of greenhouse gases utilizing its existing authority under the Clean Air Act.  Six Democrats supported the Republican effort to block EPA.  Republicans needed 51 votes to effectively block or delay EPA's efforts. Now everyone is offering their opinions as to what the vote truly means.

Background on Resolution

Last year, EPA issued its scientific based finding that greenhouse gases endanger public health.  The EPA determined that man made greenhouse gases (GHGs) significantly contribute to rising global temperatures and climate change ("endangerment finding").

Following the Supreme Court's ruling in Massachusetts v. EPA, the so called "endangerment finding" was a required precursor to regulation of GHGs from motor vehicles.  EPA finalized emission standards for trucks and cars earlier this year. 

By establishing mandatory GHG emission limits for motor vehicles, regulations of GHG emissions from factories and power plants was automatically triggered.  Regulations of both vehicles and stationary sources is set to commence next year.  Businesses have warned that higher costs and job losses will result from EPA's regulations.

Test Run for Climate Change Resolution

There had been speculation in the weeks preceding yesterday's vote, that it would serve as a test of the Senate's determination to pass comprehensive climate change legislation.  Some argue a close vote signified a lack of support for taking action this year. 

Senator Kerry took the opportunity to immediately challenge Republicans who during the debate on the resolution stated they supported addressing climate change, but feared EPA regulation was the wrong method. Sen. John Kerry, a co-author of the American Power Act (APA), the cap-and-trade bill introduced in the Senate in May, challenged his Republican colleagues: 

"This is going to be the 'Great Hypocrisy Test' resolution," Kerry said. "We're going to see how many of these folks who are here on the floor saying we need to leave it to Congress ... are actually going to show up and vote ... to restrain greenhouse gases."  (from Solve Climate)

Despite Senator Kerry's comments, the close vote means that Senators are reluctant to adopt comprehensive climate change legislation.

Senator Rockefeller Alternative- Temporary Delay of EPA

Some argue that the close vote signifies support for a water downed version of the resolution.  Senator Rockefeller has proposed a resolution that would simply delay the effectiveness of EPA's regulations for two years. 

In reading the tea leaves of the Senate votes and speeches, some are suggesting that there are enough votes to support the Rockefeller proposal.  There Democrat Senators (Sens. Dorgan, Webb and Conrad) have already indicated support for the Rockefeller proposal.  This from the Wall Street Journal on prospects of the Rockefeller resolution:

Mr. Webb signaled the intensity of his position on the Senate floor, announcing that he would "regretfully" oppose the Murkowski resolution.

It wasn't clear whether Senate Majority Leader Harry Reid (D., Nev.) has agreed to bring such an alternative up for a vote. "I don't know if Harry has made any promises along those lines," Sen. Dick Durbin (D., Ill.), the No. 2 Democrat in the Senate, told a reporter Thursday.
 

"Uncertainty" Will Persist Going Forward

What the close vote really means is that nobody really knows what this means for the prospects of comprehensive climate change legislation.   Some argue the close vote means no bill.  Some argue that defeat of the resolution puts a ticking clock on impending EPA regulation set to commence in 2011.  EPA regulation could put pressure on Congress to act.

Here is my take-  Congress doesn't have the will to push forward Legislation before the mid-term elections.  In addition, EPA regulations will be phased in gradually over time which removes the pressure to act prior to 2011.  By default, we will operate under EPA regulations for the foreseeable future.   

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Today, a day that will likely live in environmental law infamy....the EPA Administrator Lisa Jackson finalized the "endangerment finding" in response to the U.S. Supreme Court's ruling in EPA v. Massachusetts which was issued way back in April 2, 2007.  While the Supreme Court found that greenhouse gases were air pollutants covered by the Clean Air Act, it did not say the Act mandated regulation.  Rather, the Court said EPA was required to make additional findings regarding the danger presented by greenhouse gases before regulations would kick in. 

The magic language for emission standards from motor vehicles appears in Section 202(a) of the Clean Air Act.  Under Section 202(a), EPA is required to determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare (so called "endangerment finding").   If EPA makes a positive finding- meaning emissions endanger public health and welfare- it then promulgate greenhouse gas emission standards for motor vehicles.  Today, the Administrator made an positive determination.

Today's major announcement is the necessary precursor to mandatory emission standards for vehicles.  More importantly, it sets in motion regulation of greenhouse gases from all sources, not just motor vehicles.   Here are the steps that lead to that result:

1. Positive "endangerment finding"
2. Finalize regulations setting emission standards from motor vehicles- March 2010?
3. Greenhouse gases (GHGs) become a "regulated pollutant" under the Clean Air Act- once a "regulated pollutant" other regulations in the Clean Air Act are automatically triggered.
4. Most notably, on the same day vehicle standards are finalized, New Source Review (NSR) standards would include review of emissions of GHGs from new or expanding sources.  No new regulatory action is required for NSR to apply to GHGs, it will automatically happen.

EPA realizes the process that has been set in motion for much broader regulations which is why it proposed the Greenhouse Gas Tailoring Rule in the Fall. (see prior post, EPA Risky Climate Change Regulatory Approach) The Tailoring Rule attempts to temporarily reduce the scope of the NSR program to only larger emission sources of GHGs. 

Now that a positive endangerment finding has been finalized, broad GHG regulation is absolutely inevitable.  Short of Congressional action, the existing Clean Air Act will be used to regulate GHG emissions.  An outcome, even the EPA itself has said it does not prefer.  Note the press release from EPA:

President Obama and Administrator Jackson have publicly stated that they support a legislative solution to the problem of climate change and Congress’ efforts to pass comprehensive climate legislation. However, climate change is threatening public health and welfare, and it is critical that EPA fulfill its obligation to respond to the 2007 U.S. Supreme Court ruling that determined that greenhouse gases fit within the Clean Air Act definition of air pollutants. 
 

Congressional refusal to act swiftly on climate change legislation is putting us dangerously close to a chaotic regulatory scheme under existing Clean Air Act authority.  In fact, as noted above, Congress has to act to take us off the path.  Refusing to act, in order to blame President Obama is too large a price to pay to score a few political points. 

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More rumblings that EPA may move forward with regulation of greenhouse gases under its existing authority under the Clean Air Act.  It appears EPA has started to rattle its saber in an effort to re-energize the cap-and-trade proposal currently in the Senate.

The San Francisco Chronicle reported that Administrator Lisa Jackson said the "endangerment finding" would be issued in the next few  months.  Here are a few of her key comments:

"Legislation is so important, because it will combine the most efficient, most economy-wide, least costly (and) least disruptive way to deal with carbon dioxide pollution," Jackson said. "We get further faster without top-down regulation."

But Jackson insisted the EPA would continue on a path that began when the Supreme Court ruled in 2007 that greenhouse gases qualified as pollutants and could be regulated if the government determined they threatened the public.

"Two years is a long time for this country to wait for us to respond to the Supreme Court's ruling," Jackson said.

An "Endangerment Finding" is a prerequisite to regulation of greenhouse gases under the Clean Air Act.  In Massachusetts v. EPA, the Supreme Court held that the Administrator must determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision.

On April 17, 2009, the EPA issued its proposed positive "Endangerment Finding" and now the public comment period has closed.  This means the EPA could move forward with a final rulemaking at any time.

As Administrator Jackson's comments make clear, the Obama Administration's preferred course of action is passage of cap-and-trade legislation- the American Clean Energy and Security Act of 2009 (ACES).  However, it appears momentum behind the legislation has waned in the Senate. 

Some business groups and politicians may see EPA's comments as only bluffing.  That would be a grave mistake.  There is no doubt from the comments made by the Obama Administration the Agency will proceed with regulation under the Clean Air Act very soon if the prospects on legislation dim.  Key members of the Obama Administration not only believe action must be taken regarding climate change, they also believe the Supreme Court made it legally required. 

Furthermore, those who believe EPA regulations pertaining to climate change can simply be overturned, should read the Supreme Court's decision in Massachusetts v. EPA.  The highest court in the land has left little room for a legal determination that climate change is a hoax or not worthy of regulation.

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Greenwire obtained a leaked copy of a U.S. EPA powerpoint presentation that discussed the likely elements of the "endangerment finding" and a timeline for action.  The presentation includes a slide showing a timeline for action.  According to the slide, the Agency will miss the April 2nd anniversary of the Massachusetts v. EPA Supreme Court decision, but is projected to sign the rule on April 16.   

In Massachusetts v. EPA decided in April of 2007, the Supreme Court held that greenhouse gases (GHGs) are pollutants that may be regulated under the Clean Air Act. But the Court did not go far enough to say EPA must regulate GHGs. At issue in this case was Section 202 of the Clean Air Act which covers regulation of greenhouse gases from motor vehicles. For a pollutant to be regulated under Section 202 it must be “reasonably be anticipated” to “endanger public health or welfare.” Therefore, EPA must conclude GHGs from motor vehicles endanger public health before regulation commences The Court remanded the Section 202 determination to EPA to make the necessary "endangerment finding."

As expected and detailed in the EPA powerpoint, the Agency is poised to make a positive endangerment finding.  The presentation also contains additional insights as to what to expect in the April 16the finding:

• EPA will expand the definition of "pollutants" to include the six GHGs traditionally regulated (CO2, CH4, N2O, HFCs, PFCs, SF6).  It will leave out other possible pollutants such as black carbon
• EPA will make a positive finding that GHGs impact both "public welfare" and "public health."  An earlier proposed finding did not make a finding that "public health" was impacted.  EPA will cite to rising temperatures, worse air quality and extreme storm events as impacts on public health
• EPA notes that the Administrator has discretion to determine some sources of GHGs are de minimis or insignificant.  I assume this is meant to address the concern expressed by the U.S. Chamber that everything down to churches and retail stores will be regulated as source of GHG emissions
• EPA will propose two options for listing GHGs as "air pollutants."  Option 1: group the six GHGs together as CO2e (C02 equivalents).  Option 2:  list each GHG individually.  EPA prefers the first option as CO2e have developed into the common currency in other regulatory and trading mechanisms
• EPA discusses the impact of the two options discussed above on different regulatory sections of the Clean Air Act.  Notably, PSD and NSPS are included on the list.  This seems to recognize that the endangerment finding could have an immediate effect of requiring permits for new sources of GHGs.

The "endangerment finding" is the first major domino to fall leading to comprehensive regulation of GHGs.  While President Obama's Cap and Trade proposal is drawing more scrutiny, it presents a much better option than regulation under the Clean Air Act.  Let's hope that legislation can pass before too many of the dominoes fall.

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Lets get everyone up to speed with events on regulation of greenhouse gases (GHGs) including CO2:

1.  Supreme Court says CO2 is a pollutant under the Clean Air Act.  In Massachusetts v. EPA decided in April of 2007, the Supreme Court held that GHGs are pollutants that may be regulated under the Clean Air Act.  But the Court did not go far enough to say EPA must regulate GHGs. At issue in this case was Section 202 of the Clean Air Act which covers regulation of greenhouse gases from motor vehicles. For a pollutant to be regulated under Section 202 it must be “reasonably be anticipated” to “endanger public health or welfare.”   Therefore, EPA must conclude GHGs from motor vehicles endager public health before regulation commences The Court remanded the Section 202 determination to EPA to make the necessary "endangerment finding." 

2.  U.S. EPA says Clean Air Act is "ill suited" to regulated GHGs-  in July 2008, the EPA released its Advance Notice of Proposed Rulemaking on GHG regulation.  Along with its release, EPA Administrator Johnson made statements that the Clean Air Act is an ill-suited vehicle for regulation of GHGs. The ANPR represents EPA's response to both the Supreme Court's decision in Massachusetts v. EPA and a number of pending petitions to regulate greenhouse gas emissions from most mobile and stationary air pollution sources. The ANPR includes extensive analysis of the science related to climate change, technologies available for reducing greenhouse gas emissions, and the various statutory provisions that may be implicated by an endangerment finding under section 202 of the Clean Air Act. It solicits public comment on a variety of important issues.

3.  Environmental Groups Argue Regulation of GHGs is Not Discretionary by EPA-   Many environmental groups have argued that the finding that GHGs are a "pollutant" under the Clean Air Act is enough to trigger immediate regulation under permitting provisions of the Act.  They argue the endangerment finding necessary for regulation under Section 202 is not necessary to begin regulating GHGs under other provisions of the Act.

4.  Litigation Ensues Over Whether Regulation of GHGs is Discretionary-  As discussed in previous posts, a number of legal challenges have been filed to the issuance of permits for construction of new coal fired power plants.  Environmental and Citizen Groups have challenged the permits on the basis the failed to control CO2 as a pollutant.  U.S. EPA and State EPA's have argued that C02 and the other GHGs are not "regulated" pollutants under the Act.  They distinguish the Massachusetts decision by saying the Court only found GHGs to be a pollutant.  Therefore, U.S. EPA must complete its rulemaking process before GHGs are regulated.  At least one State Court has already disagreed with EPA's interpretation.  A Georgia Court has already ruled the GHG are a regulated pollutant that must be considered as part of EPA's New Source Review (NSR) permitting program.

And now the latest....

While U.S. EPA methodically proceeds down its rulemaking path, it is more than likely the Courts will not wait for EPA before deciding whether CO2 is a regulated pollutant.  In fact, I believe the landmark case to decide whether regulation of GHGs must occur immediately is about to be decided.  In the case, the Sierra Club is challenging EPA’s issuance of a permit for a waste-coal-fired generating unit at a power plant in Utah that did not establish Best Available Control Technology (BACT) emissions limits for CO2

On September 12, 2008, reply briefs were filed in the case of in the Deseret Power Electric Cooperative (Bonanza) case which is before U.S. EPA's Environmental Appeals Board.   A decision in the case could be expected in the next couple of months.  To give you an idea of the level of attention this case is attracting, the following business groups filed briefs in the litigation:  U.S. Chamber of Commerce, National Association of Manufacturers, American Petroleum Institute, American Chemistry Council, etc.   

Sierra Club argues that because the Supreme Court has already determined that CO2 is an “air pollutant” under the Clean Air Act (CAA), that finding triggers EPA's obligation to establish BACT for CO2 emissions in the permit.  EPA and the business groups counter that the Supreme Court only EPA found CO2 to be a “pollutant” under the CAA, it is not yet a pollutant “subject to regulation” for which BACT is required until EPA concludes is rulemaking process. 

The Sierra Club together with New York, California and other Northeast States have put forward a novel argument that may tip the scales in their favor based upon comments I have heard from EPA officials.  The Sierra Club cites to Section 821 of the Clean Air Act which establishes monitoring requirements for CO2.  The following excerpt is from a Sierra Club brief filed in the litigation:

In § 821 Congress ordered EPA “to promulgate regulations” requiring that hundreds of facilities covered by Title IV monitor and report their CO2 emissions, and in §165, Congress required a BACT limit for “any pollutant subject to regulation” under the Act. The only possible reading of these two statutory mandates is that Congress intended that EPA apply BACT limits to CO2 pursuant to §165.

The ultimate issue boils down to whether monitoring requirements rise to the level of "regulation" of CO2 or does EPA have to establish actual air quality standards or emission limits for CO2 and other GHGs.    

The decision in this case will have massive repercussions.  If EAB decides in EPA's favor, regulation of GHG will likely be delayed for at least a couple of years.  If the EAB agrees with the Sierra Club, EPA will need to immediately begin regulating GHG in permitting actions.  As I will discuss in an upcoming post, such a decision could overwhelm EPA and the States in new permits for hundreds of thousands of new sources. 

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For the first time a court has revoked a permit due to concerns over C02 emissions and climate change.  While there have been previous instances where states have denied permits due to concerns with C02 emissions, this is the first time a court has revoked a previously issued permit.  Notably, the Court did not base its decision on state law, rather it ruled the Clean Air Act (CAA) requires analysis and control of C02 emissions. 

Other courts are currently hearing similar challenges.  If this decision is a trend it will have major implications for any new facilities seeking an air permit.  In a future blog post I will discuss the implications of using the Clean Air Act, specifically the New Source Review provisions, to regulate CO2.  Much speculation has been made as to whether CO2 will be regulated even without action by Congress on comprehensive climate change legislation.

The CO2 decision was issued on June 20, 2008 in Georgia's Fulton County Superior Court.  The Georgia Environmental Protection Division had approved a permit for the construction of a proposed 1200-megawatt coal-fired power plant.   Environmental groups, including the Sierra Club, challenged the permit saying the plant's emission of 8-9 million tons of CO2 had to be considered. Siding with the Sierra Club, the Court overturned the State's issuance and sent the permit back to perform the analysis it said was required under the CAA. 

Note: According to Sourcewatch, between 2007 and 2008, plans for 69 coal plants have been canceled.

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