On the first day of oral arguments for Coalition for Responsible Regulation v. EPA before a three-judge panel yesterday, the weather was a balmy 52 degrees Fahrenheit in February.

Although it cannot be held as a sign of climate change by itself, the unusually warm winter is an appropriate setting for the arguments in the District of Columbia's Circuit Court of Appeals. Petitioners in the case -- a coalition of oil and gas, manufacturing, construction and other industry groups and states -- are challenging U.S. EPA's authority under the Clean Air Act to regulate greenhouse gas emissions to slow the onset of global warming, extreme weather events and other consequences of climate change.

The anti-regulatory group is challenging four rules passed by the Obama administration in the past three years.

The endangerment finding established that greenhouse gases contribute to climate change, imperiling the health and welfare of Americans. The tailoring rule established that only the heaviest-emitting industries are required to obtain greenhouse gas permits, but smaller facilities are exempt. The tailpipe rule allows EPA to create carbon standards for light-duty vehicles, in addition to the National Highway Traffic Safety Administration's fuel efficiency standards. The timing rule requires that new controls of greenhouse gas emissions from stationary sources take effect at the same time as the motor standards.

The group called these regulations "absurd," unreasonable and against the intention of the original law, given the economic burden they could place on industry. EPA didn't separate risk assessment from political consequences, argued lawyers at the hearing today. The judges were Chief Judge David Sentelle, David Tatel and Judith Rogers (Greenwire, Feb. 28).

Hard road to travel

The first call for the recognition of greenhouse gases as pollutants came in 1998, when EPA's legal counsel, Jonathan Cannon, issued a formal opinion stating that the agency had ample authority to address climate pollution.

The issue reached an apex in 2007 with the Supreme Court decision in Massachusetts v. EPA. The justices, in a 5-4 split decision, found that greenhouse gases did meet the definition of a pollutant under the Clean Air Act, and ordered EPA to fulfill its obligation under the act to control emissions.

The Supreme Court decision was not met warmly by the agency at the time.

"The Bush EPA was a laundry list of reasons not to regulate," said Vickie Patton, general counsel for the Environmental Defense Fund.

"The Bush administration did nothing," agreed Holly Doremus, a professor of environmental law at the University of California, Berkeley, School of Law. "The Obama administration EPA started exploring what they must and could do under the Clean Air Act."

In December 2009, more than two years after the Supreme Court decision, EPA published its endangerment finding: Greenhouse gases were, officially, a danger to public health.

The 2007 administration leaders were cautious to implement Massachusetts v. EPA because they knew of the enormous problems that lay before them, said Jeff Holmstead, former EPA administrator for air and radiation and current head of the Environmental Strategies Group (ESG) at Bracewell && Giuliani, who left the agency two years before the Supreme Court decision.

EPA was justified by the Clean Air Act's Section 202, which requires the EPA administrator to issue standards for pollutants from motor vehicles that "cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare." This was followed with the tailpipe rule to create carbon standards for cars.

But questions on how to issue permits remained. Placed under the New Source Review/Prevention of Significant Deterioration (PSD) strategy, it was decided that emitters could obtain permits as long as they could demonstrate that new plants would not increase emissions above a certain threshold and best available control technology (BACT) requirements.

"The Massachusetts v. EPA case really surprised a lot of people, including President Obama and the environmentalists," said Holmstead. "It [EPA] was not designed to deal with CO2."

Indeed, power plants, vehicles and other industrial sources emit carbon dioxide at a much greater concentrations than they do pollutants like particulate matter or volatile organic compounds -- the fumes from paints and glues. Power plants release amounts of CO2 many times greater than amounts of any other EPA-regulated pollutant.

Tailoring troubles

The PSD rules are written much more broadly, said Doremus, making it easier to apply to an unfamiliar pollutant like greenhouse gases.

But another regulation was needed to sort out the confusion regarding this new pollutant. The tailoring rule, which only requires the heaviest carbon emitters to be subject to standards, did just that.

"Concentrating on the big sources makes it not an administrative nightmare," said Doremus. "They don't want Congress to come down on them like a ton of bricks."

The tailoring rule, to be argued today, stands to be the rule most susceptible to the challenge. EPA announced Monday that it would not change the threshold for permitting under the rule, meaning only new facilities with greenhouse gas emissions of at least 100,000 tons per year, and existing facilities that emit 100,000 tons per year and make changes that raise their emissions level by at least 75,000 tons.

"The biggest question is what's going to happen to this threshold after these cases," said Lexi Shultz, legislative director for climate and energy at the Union of Concerned Scientists.

The tailoring rule challenges are most interesting, said Doremus, because the text in the Clean Air Act is "flatly inconsistent" with EPA's rule.

Holmstead, who believes that Congress never intended to regulate carbon dioxide when it passed the Clean Air Act and its amendments, also thinks the tailoring rule is problematic.

"I do think that the tailoring rule was EPA's efforts to try to satisfy the environmental constituency," he said. But with three judges whose records have been sympathetic to EPA over industry, chances are the industry's complaints will not be heeded.

"They will fall on deaf ears," he said.