On June 23, 2014, the U.S. Supreme Court struck down elements of the U.S. Environmental Protection Agency’s (EPA) regulations of greenhouse gas (GHG) emissions from stationary sources or facilities. The decision comes while EPA is accepting comments on proposed rules to restrict GHG emissions from power plants.
It is important to keep in mind that the Supreme Court limited its review only to whether EPA’s regulation of GHGs from mobile sources (vehicles and trucks) triggered the control of stationary sources of emissions through the Clean Air Act’s (CAA) Prevention of Significant Deterioration (PSD) pre-construction permitting program and the Title V operating permits program. These permits relate to the construction, major upgrades, and operations of facilities that emit “conventional” pollutants (e.g., ozone, particulate matter, carbon monoxide, etc.). The Court did not review the validity of EPA’s Endangerment Finding for GHG emissions, nor did they specifically address EPA’s proposed power plant rules.
The Court found that the emissions of GHGs alone do not trigger the facility permitting programs and associated controls; however, if a facility already qualifies for those CAA permitting programs to reduce emissions of conventional pollutants, then EPA also can require controls for GHG emissions. In other words, EPA does not have authority to regulate GHG emissions from facilities not otherwise subject to PSD review or the Title V program. But EPA may impose “best available control technology” (BACT) limits to control GHGs from major sources that need CAA PSD and Title V permits for other pollutants regulated under the CAA. This outcome is welcomed by builders and developers who were concerned that they would eventually need a predevelopment permit for carbon dioxide emissions from, for example, the natural gas-heated buildings they construct each year.
In addition, the Supreme Court looked at the validity of the “Tailoring Rule;” EPA promulgated that rule to “ease” the pain of GHG regulation for the smaller, non-major sources. Congress set the qualifying thresholds in the CAA very low intentionally, as they dealt with limiting criteria pollutants. EPA temporarily raised those thresholds with its “Tailoring Rule,” to keep small sources of GHG emissions (schools, churches, apartments, etc.) from immediately having to comply with the requirements of the stationary source permitting programs. In doing so, EPA delayed the regulation of those small sources to a future date. However, the Court stated that EPA was wrong to change the qualifying thresholds in the CAA for stationary source permitting programs. The Tailoring Rule thus was invalidated as unlawful.
As smaller stationary sources are currently not required to participate in the permitting programs for GHGs, the Supreme Court decision will not make any drastic changes to the way EPA’s current program currently works related to these sources. However, it does protect against future regulation of those sources. In effect, the Court took away the short-term protections for small sources that the Tailoring Rule provided; and then gave those protections back by limiting GHG controls only to facilities that qualify for those permits anyway. The vast majority of small sources of GHGs do not currently qualify for PSD or Title V permits for other pollutants.
The Supreme Court decision is available here: http://www.supremecourt.gov/opinions/13pdf/12-1146_4g18.pdf.
The legal community is still evaluating whether the Supreme Court’s decision will affect EPA’s proposed “power plant” rules. The proposed rules fall under a separate section of the CAA, so possible impacts are not immediately obvious. Some organizations are heartened that the Supreme Court set limitations on EPA’s authority to regulate GHG emissions.
EPA Proposes Major Reductions in Greenhouse Gas Emissions for Power Plants
EPA is also establishing GHG performance standards for new, modified, and existing power plants. EPA rolled out the proposed rules separately beginning with new power plants in 2013 (published in January 2014) and the modified and existing power plant each proposed in early June 2014. Final rules, guidelines and associated state plans for all three segments should be completed during 2016. All emission reduction measures are to be fully implemented in 2030. Through these programs, EPA would set individual goals for each state (included in proposal), which states can meet by--
- Making fossil fuel-fired power plants more efficient (i.e., upgrades);
- Using lower-emitting power sources more (i.e., renewable energy and natural gas);
- Building more zero/low-emitting energy sources (i.e., nuclear power); and/or
- Using electricity more efficiently (i.e., demand side improvements).