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October 15, 2013
Supreme Court to rule on GHG permitting trigger

The U.S. Supreme Court has sorted through a half-dozen petitions to overturn virtually all of the EPA’s GHG regulations and announced that it will render an opinion on only one element of the Agency’s program – “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

While that is the extent of the Supreme Court’s announcement, there is considerable importance in what the court did not say.  First the court did not agree to review the EPA’s 2009 finding that GHGs are air pollutants that endanger human health and the environment.  Second, the court would also not issue a decision on whether the endangerment finding authorized the EPA to issue its regulations to limit emissions of GHGs from motor vehicles (tailpipe standards).  In fact, in a majority decision in Massachusetts v. EPA, the Supreme Court had already ruled in the EPA’s favor on both those issues, and the latest announcement effectively rejected petitions from industry and some states that the High Court take a second look. 

Timing and tailoring rules

However, there is considerable import in the court’s willingness to review the stationary source permitting requirements the EPA issued following the promulgation of the GHG tailpipe standards. 

The first action – the Timing Rule – stated that stationary sources automatically became subject to CAA prevention of significant deterioration (PSD) and Title V permitting requirements for GHGs once the GHG tailpipe rule was issued. 

The second action – the Tailoring Rule – amended the emission thresholds applicable to stationary sources to ensure that only the largest sources of GHGs would initially be subject to permitting.

Both these rules, along with other elements of the EPA’s GHG regulatory program, were upheld in the lower courts, and have formed the basis for the Agency’s current proposal to set new source performance standards (NSPS) for GHG emissions from new power plants and an expected NSPS proposal for GHG emissions from existing power plants.

Stretching the CAA

In the six cases the Supreme Court is consolidating, many industry organizations and some states argued that the EPA’s GHG permitting rules are beyond the reach of the kinds of regulations Congress contemplated in writing the CAA. 

For example, in one case the U.S. Court of Appeals decided in the EPA’s favor, opponents of the rules pointed out the inappropriateness of using the CAA to limit GHG emissions from stationary sources because Congress never considered the need to change emission threshold triggers to account for vastly larger amounts of GHG emissions when compared to emissions of criteria air pollutants and hazardous air pollutants. But the EPA responded that the CAA requires the Agency to regulate emissions of “any air pollutant” from motor vehicles, and once that regulation becomes final, regulation of major sources emitting that same pollutant must follow.

In the end, the D.C. Circuit found that the EPA was simply adhering to its “34-year-old interpretation of the PSD permitting triggers” – that is, once the tailpipe rule for GHGs was issued, the CAA compelled the Agency to require PSD and Title V permitting for major emitters of GHGs.

The Supreme Court is expected to hear oral arguments in the consolidated cases in early 2014 and issue its opinion by June 2014. 

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