CLIMATE:

Justices struggle for common ground on EPA emission rules

A divided Supreme Court appeared to search today for a middle ground in the challenge from industry and a dozen states to a U.S. EPA crackdown on heat-trapping greenhouse gas emissions.

A dozen states and industry groups including the U.S. Chamber of Commerce and American Chemistry Council want the court to overturn EPA's inclusion of greenhouse gases in an air permitting programs for emissions from power plants and other industrial sites.

During unusually long arguments, the justices frequently fractured along ideological lines, with the liberal wing asking pointed questions of the challengers and conservatives taking issue with EPA.

But two of the court's swing votes, Chief Justice John Roberts and Justice Anthony Kennedy, were troubled by EPA's decision to revise the statutory mandate that industrial sources must obtain a permit if their emissions exceed 100 tons per year of a pollutant.

EPA raised the minimum to between 75,000 and 100,000 tons per year for greenhouse gases because thousands of small emission sources -- such as hospitals and apartment buildings -- would need permits under the 100-ton standard. That, in turn, would overwhelm EPA's permitting ability.

Kennedy told Solicitor General Donald Verrilli that he "couldn't find a single precedent that seems to support your position."

The Prevention of Significant Deterioration, or PSD, program requires facilities to obtain permits before construction or modification. The permits require them to use the "best available" technology to control emissions of harmful pollutants.

After concluding greenhouse gases pose a threat to human health, EPA issued standards limiting emissions from motor vehicles. It then claimed, in 2010, that the tailpipe rules triggered regulation of greenhouse gases from other sectors through the Clean Air Act, including the PSD program. The agency then issued regulations.

Most of the arguments today centered on the definition of "any air pollutant" and whether it applied to greenhouse gases after the tailpipe rule.

Industry attorney Peter Keisler of Sidley Austin LLP argued "any air pollutant" can mean different things for different Clean Air Act programs. For the PSD program, he said, it should be defined as a pollutant that has an "area specific air quality impact."

But the court's liberal wing maintained the agency deserves deference.

"This is the apex of Chevron deference," said Justice Elena Kagan, referring to the Supreme Court's 1984 decision in Chevron v. Natural Resources Defense Council, which held courts must defer to agency interpretations when the law is ambiguous.

The justices also appeared perplexed by what was at stake in the case. Keisler noted that it would be more appropriate for EPA to set national standards for greenhouse gases from stationary sources, which the agency is currently drafting through the Clean Air Act's New Source Performance Standards.

"Then I don't know what this case is about," Justice Stephen Breyer said.

Verrilli emphasized that the PSD and NSPS programs are designed to work in tandem, with PSD taking the lead while the NSPS rules are drafted.

"PSD is supposed to fill the breach," Verrilli said.

Still, the justices appeared to be looking for a compromise.

Kennedy and Roberts indicated they felt bound by the court's precedent in 2007's Massachusetts v. EPA, which held that EPA must regulate greenhouse gases as a pollutant under the Clean Air Act if the emissions are deemed threats to public health or welfare.

But Roberts appeared reluctant to back everything EPA has done. He and other justices repeatedly referred to a solution offered by conservative appellate Judge Brett Kavanaugh that would allow EPA to include greenhouse gases in PSD permits for facilities that have to obtain the permits because of their emissions of other pollutants.

Roberts noted that according to briefs filed to the court -- including the American Chemistry Council's opening brief -- that interpretation would still cover 83 percent of the national greenhouse gas emissions. EPA's interpretation would cover 86 percent of those emissions -- a 3-point difference (Greenwire, Oct. 16, 2013).

The liberal Breyer seemed to largely support EPA's interpretation, but he also told Verrilli that "even if you lose you can still regulate 83 percent."

Roberts also appeared receptive to Keisler's argument that greenhouse gases are different from the other pollutants covered by the PSD program.

Greenhouse gas controls, he said, relate "to energy consumption as opposed to particulate emissions."

Verrilli emphasized, though, that there are "many other pollutants that EPA has regulated for years and used as a trigger" for the PSD program.

All of the regulations represent the Obama administration's stated desire to use executive action to address climate change in the absence of action by Congress. Industry and Republican-leaning states have challenged all of the rules in court.

The challengers have lost on those challenges so far, and the Supreme Court declined to review the endangerment finding and the tailpipe rules, choosing to focus only on the narrow question of whether the auto rules triggered inclusion of greenhouse gases in the PSD program.

EPA contends the Clean Air Act clearly states that they do and points to regulations put on the books in 1978, 1980 and 2002 that show the agency adding pollutants to the PSD program after EPA regulated them under different sections of the law.

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