CLIMATE:

Judges skeptical of states challenging EPA regulatory authority

Federal judges wrestled today with whether U.S. EPA ran afoul of the law in directing states to implement regulations to address climate change.

At issue before a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit are two cases that challenge EPA's interactions with states after the agency finalized landmark greenhouse gas rules in 2010.

EPA had sought to make sure states that had Clean Air Act permitting authority for new major facilities were able to adequately take into account greenhouse gas emissions.

In December of that year, EPA called for those states to submit state implementation plans, or SIPs, for review, a process referred to as a SIP Call. It gave those states a short deadline to comply.

Texas, Wyoming and industry groups such as the National Mining Association and Utility Air Regulatory Group said EPA should have given states more time. David Rivkin, representing Texas, told the judges that EPA sought to coerce states into adopting the agency's policy.

EPA was "putting a gun to the head of the states," Rivkin said.

The cases are the latest challenge from Texas and industry to EPA's climate program. Last June, the D.C. Circuit upheld four rules at the heart of EPA's greenhouse gas efforts (Greenwire, June 26, 2012).

For most states with permitting authority, EPA signed off on greenhouse gas revisions to their prevention of significant deterioration, or PSD, permitting programs and let them move forward.

Texas, however, refused to submit a revised plan, contending that it was inappropriate to regulate greenhouse gas emissions. Instead, it pursued several lawsuits against the agency.

The Lone Star State contends that EPA -- acting outside its Clean Air Act authority -- threatened a ban on new construction. Rivkin also charged that EPA's action amounted to an incursion on Texas' constitutional rights as a sovereign state.

But Judges David Tatel and Judith Rogers, both appointed by President Clinton, took issue with Rivkin's arguments. Tatel noted that the court upheld EPA's greenhouse gas standards last June. Based on that precedent, he said, EPA appeared to be reading the construction-ban provision accurately in that it is self-executing -- meaning not left to EPA's discretion.

Precedent, Tatel said, has "this court saying the law is clear and unequivocal."

"Where is the ambiguity?" he asked.

Tatel also focused many of his questions on whether Texas and Wyoming had standing to bring the case -- that is, whether they were actually harmed by EPA's actions. EPA's regulations -- especially the tailoring rule, which gradually phased in greenhouse gas standards -- reduced the burden on states and industry for compliance.

At one point in arguments that lasted twice their allotted time, Henry Nickel, representing the Utility Air Regulatory Group, acknowledged that if the court finds EPA's reading of the statute is accurate, "then I would agree we don't have a case."

Rogers added that EPA was forced to act because Texas explicitly said in a letter to the agency that it did not intend to regulate greenhouse gases. After issuing the new rules, Rogers noted, EPA gave Texas options.

"Texas' response was it had no intention," she said.

Rogers did, however, seem open to Texas' constitutional argument, and the states also found some support in Judge Brett Kavanaugh's questioning.

Kavanaugh aggressively questioned EPA's lawyers about whether a provision in the Clean Air Act was triggered by the greenhouse gas regulations and, consequently, the states should have been provided three years.

He contended that the addition of new pollutants represented a significant change to the PSD program and, thus, the SIP process.

"They weren't there before," he said.

Revoking Texas' permitting power

In the second case, Texas challenged EPA's decision to revoke the state's PSD permitting authority that it was granted about 20 years ago.

The state claims EPA manipulated the law to accomplish its climate agenda.

At issue in the case is a Clean Air Act provision that grants EPA authority to revise an earlier agency action, including a SIP approval, when the agency determines there was an error.

EPA says that allowed it to pull the plug on Texas' SIP, while the state contends that the language was mainly meant for clerical mistakes.

Mark DeLaquil, representing Texas, contended that the provision meant there "has to be an error."

"It can't be that EPA changes its mind on its policy," he said.

Madeline Fleisher of the Department of Justice argued that Texas' SIP was always flawed because it didn't provide a mechanism for adding new pollutants. That became apparent, she said, when it refused to comply with greenhouse gas requirements.

Tatel again raised the standing question.

"If the state is not going to do a SIP," he said, "it isn't going to be injured by any of this."

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