EPA’s latest attempt to control planet-warming emissions from the nation’s sprawling power sector came under scrutiny last week from the nation’s second-highest bench.
During nearly three hours of oral argument, the U.S. Court of Appeals for the District of Columbia Circuit asked a number of highly technical questions about EPA’s rule, but seemed skeptical that the regulation ran afoul of the Supreme Court’s limits on the agency’s regulatory power.
Trump-appointed Judge Neomi Rao took the lead in challenging the feasibility of EPA’s focus on widespread implementation of carbon capture and storage, or CCS, technology for existing coal- and new gas-fired power plants in its 2024 rule.
She also pressed the agency to explain how requirements for plants that aim to shut down are in line with the Supreme Court’s restrictions on EPA’s regulatory authority, as expressed in the 2022 case West Virginia v. EPA.
Rao wasn’t the only one with hard questions for EPA. Chief Judge Sri Srinivasan and Judge Brad Garcia also dug into the rule’s requirements, with Srinivasan asking the agency to show that the regulation does not repeat the same mistakes that the Supreme Court found in West Virginia.
“What’s the difference between saying 40 percent of the plants have to be gas plants?” he said. “Because it seems to me that’s exactly what the Supreme Court said the agency can’t do.”
Eric Hostetler, an attorney representing EPA, said the Biden rule aims to force “each individual plant to operate more cleanly” — which he said the Supreme Court has authorized as a system of emissions reduction.
It’s unclear whether the court will actually issue a decision in the case. The hearing fell just weeks before President-elect Donald Trump is set to take office with a pledge to repeal much of the Biden administration’s efforts to tackle climate change.
Both sides of the case claimed victory following Friday’s hearing.
“We are confident with our argument that this rule strips the states of important discretion while using technologies that don’t work in the real world,” said West Virginia Attorney General Patrick Morrisey, a Republican. He led the legal challenge to the rule, joined by other red states and industry groups.
“This green new deal agenda the Biden administration continues to force onto the people is setting up the plants to fail and therefore shutter, altering the nation’s already stretched grid,” Morrisey continued. “We need the plants to stay open.”
Vickie Patton, general counsel of the Environmental Defense Fund, which backed the Biden rule with a “friend of the court” brief, predicted a win for EPA.
“At least a majority of the judges recognized the essential merits of EPA’s carbon pollution standards for power plants and the extensive and careful analyses undergirding them,” she said in a statement.
Here are five things to know about Friday’s battle over the Biden administration’s effort to rein in power plant emissions:
1. It may be too soon for CCS
Much of the first half of last week’s argument centered on whether EPA had shown that CCS will be ready to be widely applied to the power sector.
The issue will likely be key to the success of the Biden rule. Challengers contend that EPA failed to prove that the industry would be able to continuously capture 90 percent of carbon emissions for new gas plants that provide baseload power to the grid, as well as existing coal plants that are set to keep operating past Jan. 1, 2039.
The judges zeroed in on whether the Clean Air Act requires the technology to be ready now, or only by the rule’s implementation deadline of Jan. 1, 2032.
Rao asked whether the timelines in the rule are achievable, given the amount of supporting infrastructure that plants would need to capture and store carbon.
“Am I correct there is no federal scheme for CO2 permitting?” she said, referring to authorizations for pipelines to transport captured carbon to storage vaults.
“These timelines for dealing with CO2 pipelines seem very optimistic,” she said. “There are a number of states that say they don’t want to have these CO2 pipelines. There is going to be litigation in state courts and federal courts.”
2. EPA could score a partial win
If EPA prevails on its plans for carbon capture, the court may still end up nixing parts of the Biden rule.
Rao questioned whether the court could find sections of the rule unreasonable, and if those provisions could be severed.
Hostetler, arguing on behalf of EPA, suggested that would be possible. But Michael Williams, representing West Virginia, disagreed and said if parts of the rule fail, then the agency would have to go back and reconsider the whole thing.
One section of the rule that drew questions from the judges was EPA’s plan requiring coal plants operating in the medium term to co-fire with 40 percent natural gas. The judges asked about the potential burden for coal plants that do not already co-fire to some degree with gas to get access to the fuel.
Allison Wood, a partner at the firm McGuireWoods, representing Electric Generators for a Sensible Transition in its challenge to the Biden rule, said co-firing with natural gas presents logistical challenges.
“Most coal plants either don’t have access to any amount of natural gas or the amount of gas required to comply,” she said.
The court also questioned whether the co-firing section of the EPA rule violates the Supreme Court’s restrictions on how the agency can require the power sector to switch to lower-emitting fuels.
Srinivasan asked whether the requirement is “tantamount to generation-shifting,” which the Supreme Court barred in West Virginia.
Hostetler replied that that the description was “inapt.” He said the agency does not require shifting operation from one plant to another, but instead mandates fuel-switching, or changing the fuel source used by the same operator.
3. ‘Major questions’ may not be a concern
The D.C. Circuit appeared unconvinced that the Biden rule violates the “major questions” doctrine, which holds that Congress must clearly delegate authority to agencies to handle matters of vast political and economic significance.
Williams, the attorney for West Virginia, argued that with the rule, EPA is claiming “transformative powers” that would allow it to shape the national energy grid.
“But EPA lacks any clear authorization from Congress to rejigger our nation’s power industry,” he said, adding that the Biden rule relegates states to “bit players.”
Rao questioned whether the judges needed to find a major questions violation if they rule that the challengers’ other arguments are valid.
“What extra work is the major questions doctrine doing here?” she asked.
She added that in West Virginia, in which the Supreme Court invoked the doctrine for the first time when it invalidated the 2015 Clean Power Plan, the justices suggested that technology-forcing requirements could fall under EPA authority.
“Here, there’s arguably technology-forcing requirements on particular sources,” she said. The high court, she added, “recognized that it was sort of a traditional heartland of Clean Air Act regulations.”
4. Another hearing is coming in 2025
Some of the claims about EPA’s authority over how states develop compliance plans are likely to come up again in another D.C. Circuit case scheduled for oral argument next month.
The Jan. 17 hearing will take place on the final Friday of the Biden administration. The case focuses on EPA’s implementing rules for the Biden power plant regulation.
In that suit, Republican-led states are asking the D.C. Circuit to determine whether EPA improperly limited the factors states can consider when developing plans for complying with its carbon rule.
The lawsuit also challenges the agency’s deadline for submitting plans.
New York Assistant Attorney General Michael Myers, who represented cities and blue states backing the EPA rule, said one issue the court could decide in the separate case is the claim that EPA prevented states from considering the remaining useful life of power plants that will continue to operate in the medium term.
5. Biden’s rule won’t survive Trump
There was no mention at Friday’s hearing of a looming hurdle to the Biden EPA’s regulatory plans: the incoming Trump administration.
Conservatives have targeted repeal of the power plant rule as a top priority. In a letter last week to the president-elect, the National Rural Electric Cooperative Association — one of the challengers in the case — urged Trump to scrap the regulation.
Repeal of “EPA’s unlawful power plant rule for greenhouse gas emissions” is one of the “highest priority actions” for the incoming administration, the association’s CEO, Jim Matheson, wrote.
Republican senators said that during meetings last week, Trump’s pick to lead EPA, former Republican Rep. Lee Zeldin, appeared receptive to rolling back Biden climate initiatives.
Sen. Pete Ricketts of Nebraska said he and Zeldin discussed the need for an EPA “that unleashes American energy, instead of attacking it.”
Ricketts added: “We need to end regulations like the Clean Power Plan that undermine our energy security and economic growth.”
Trump has pledged that Zeldin would “ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American businesses, while at the same time maintaining the highest environmental standards, including the cleanest air and water on the planet.”
Pam Bondi, Trump’s pick for U.S. attorney general — whose department would be in charge of legally defending the administration — was among nearly two dozen Republican state attorneys general who battled the Obama-era Clean Power Plan in court.
Bondi, then Florida’s attorney general, hailed a 2016 Supreme Court decision to stay the Obama power plant rule, saying the administration was “ignoring the limits of its authority in trying to impose harmful and heavy-handed regulations on Floridians and the rest of the country.”
This story also appears in Energywire.
