The Biden administration is making its last stand Friday to defend EPA’s power to slash planet-warming pollution from the electricity sector.
The U.S. Court of Appeals for the District of Columbia Circuit is holding a marathon hearing to weigh the agency’s 2024 rule to control greenhouse gas emissions from new gas and existing coal-fired power plants. The outcome of the case could set up future legal battles that will shape the electricity mix.
The D.C. Circuit agreed to expedited consideration of the case, but legal experts say an opinion is unlikely before President-elect Donald Trump returns to the White House. Trump’s nominee for EPA chief, former Republican Rep. Lee Zeldin, is widely expected to try and scrap the Biden-era power plant rule as part of the new administration’s deregulatory agenda.
Court observers say it’s possible there may never be a decision because the arguments are occurring less than two months before Inauguration Day. And Trump’s EPA is likely to ask that the case be held in abeyance before the court has the opportunity to deliver a verdict.
“I think everyone goes into it realizing that, ultimately, it’s highly unlikely we get a decision,” said Jeff Holmstead, a former EPA air chief under President George W. Bush. None of the judges, he said, “will be eager to rush into an opinion that they don’t need to write.”
Holmstead, who represents industry clients at Bracewell LLP, said the parties are eager to be heard nonetheless.
“The Biden administration has spent a lot of time and effort on the rule. … They want to defend it and make their arguments heard in court,” Holmstead said. The administration has said the regulation would slash heat-trapping emissions by 1.38 billion metric tons of carbon pollution through 2047 — the equivalent of taking 328 million gasoline-powered cars off the road.
The challengers in the case — a coalition of red states, industry and some power operators — plan to air their argument that EPA’s efforts to curb emissions through new technology “is essentially a mandate for the shutdown of coal plants,” Holmstead said.
Vickie Patton, general counsel at the Environmental Defense Fund, said in a memo Wednesday that the challengers’ main arguments go against the power industry’s assertions about the availability of carbon capture and storage. EDF has joined other environmental groups in a friend of the court brief in support of the rule.
“Many [in the power industry] supported Congress’ decision in the Inflation Reduction Act, to commit tens of billions of dollars to support the deployment of CCS throughout the country,” she wrote.
The three-judge panel will weigh whether the Biden administration’s 2024 rule is asking the power sector to widely adopt carbon capture and storage technology prematurely, and if it can require certain coal plants to also co-fire with gas as they continue to operate into the next decade.
EPA has maintained that these two emission-cutting strategies are “currently available technologies” the power sector can use widely and cost-effectively to limit greenhouse gas emissions.
The court will also address whether the rule is in line with limits on the agency’s regulatory power put in place by the Supreme Court in West Virginia v. EPA, which invalidated the Obama-era Clean Power Plan.
The landmark 2022 ruling found that the rule, which never went into effect, violated the newly articulated major questions doctrine, which holds that Congress must clearly delegate authority to an agency for issues of major political and economic significance.
Legal experts are bracing for a long hearing. The court has allotted 90 minutes of total argument time, although that could be extended as the judges ask questions.
90 percent carbon capture
Argument time: 25 minutes per side
The majority of argument time will be devoted to whether EPA can require the power sector to meet a target in the rule of 90 percent carbon capture and storage.
The agency is asking for that percentage of emissions capture for new gas plants that provide baseload power to the grid and existing coal plants that operate past Jan. 1, 2039.
The power sector will have to begin complying with the rule on Jan. 1, 2032.
The National Rural Electric Cooperative Association and other challengers are making the case that the agency’s emissions capture requirement is not an adequately demonstrated “best system of emissions reduction” under the Clean Air Act. They say the standard means a technology has already been shown to work.
But no facilities have achieved that level of carbon capture continuously, NRECA and the other challengers have said. Meeting the standard would require massive infrastructure development for the capture, transport and storage of CO2. The technology itself is also cost prohibitive and likely to drive the closure of critical power plants needed to maintain the reliability of the electric grid, they said in court filings.
EPA has claimed that the costs of carbon capture have declined in recent years, in part from improvements in the CCS process. Carbon is typically removed from a power plant’s exhaust using chemical solvents — the resulting mixture is heated and CO2 is isolated and compressed for storage.
In the U.S., there is one power plant using CCS at scale: the Petra Nova project in Texas. There are similar projects in Canada and China.
“Carbon capture really is the heart of the case,” Holmstead said. “There are other requirements, but the most controversial part relates to carbon capture. The whole rule really stands or falls on it.”
40 percent natural gas co-firing requirement
Argument time: 10 minutes per side
The second phase of oral argument will center on EPA’s requirements for existing coal plants.
Under the rule, those plants will stop operating before 2039. Those running past Jan. 1, 2032, are required to reduce emissions 16 percent by shifting to generating 40 percent of power from co-firing natural gas, instead of coal.
Electric Generators for a Sensible Transition and other challengers to the rule also claim that achieving that level of gas co-firing would be too expensive for many power plants and cannot be achieved by the electricity sector overall.
Not all plants have access to gas, and even those that do might not have consistent access, the challengers said. Also, power plants may not be able to obtain permits and construct needed pipelines by 2030, they said.
EPA has said fuel switching is a traditional regulatory method that the agency was allowed to consider.
The agency also said its analysis found that the costs of co-firing with gas were reasonable and power plants would be able to successfully implement the method by 2030.
Cooperative federalism and major questions doctrine
Argument time: 10 minutes per side
Finally, the court will close out the hearing with arguments about EPA’s authority to craft the rule at all.
One D.C. Circuit panel had already thrown cold water on claims under the major questions doctrine when the rule’s opponents asked the court to freeze the rule while litigation against it is ongoing. The doctrine holds that Congress has to clearly delegate agency authority to act on matters of major economic or political significance.
At the time, the panel, which included Trump-appointed Judge Neomi Rao, unanimously found that the EPA regulation “falls well within EPA’s bailiwick” and declined to freeze the rule.
Rao will again consider the question, along with Chief Judge Sri Srinivasan, an Obama pick, and Judge Brad Garcia, a Biden appointee, in Friday’s hearing.
West Virginia Attorney General Patrick Morrisey (R) and other challengers are alleging the rule is the latest example of EPA regulating in a way that Congress did not clearly give it authority to do.
They claim the agency is targeting coal-fired power plants in the same way it did under the Clean Power Plan that was struck down by the Supreme Court in West Virginia v. EPA. The challengers also said the rule undercut states’ power to create standards of performance for existing power sources.
EPA pointed to the Supreme Court’s ruling in West Virginia as lending support to the rule. In that ruling, the justices drew a clear distinction between rules that “may end up causing an incidental loss in coal’s market share” with ones that announce the market share of different energy sources and require power plants to reduce their coal use. The Biden-era rule is an example of the former type of approach, the agency has said.
The agency also said states’ core disagreement over who has power to craft implementation plans centered on EPA’s separate implementing regulations, which were not challenged in this case.
This story also appears in Climatewire.
