Before EPA can crack down on the nation’s second-largest source of climate pollution, the agency must survive the scrutiny of one of its most powerful critics — the conservative-dominated Supreme Court.
Republicans are already declaring that EPA’s rule to limit power plant pollution — issued Thursday — fails to conform to the high court’s West Virginia v. EPA ruling. That 2022 decision invalidated the Obama administration’s attempt to shift the electric grid to renewable sources and restricted the federal government’s power to write expensive and politically divisive regulations.
West Virginia Attorney General Patrick Morrisey has already vowed to challenge the Biden rule in court and predicted he’d score a repeat victory against what he called an “out-of-control agency.”
Morrisey — a Republican who convinced the Supreme Court in West Virginia to scrap the Obama-era Clean Power Plan — said the new rule is designed to put coal plants out of business by setting standards facilities can’t meet.
“This tactic by the EPA is unacceptable, and this rule flies in the face of the rule of law,” Morrisey said. “We are confident this new rule is not going to be upheld.”
EPA’s announcement of its carbon rule for existing coal-fired plants and new natural gas turbines came as part of a suite of regulatory actions focused on the power sector. The agency also announced Thursday long-awaited updated standards for controlling mercury emissions, water pollution and coal ash contamination from power plants.
The Obama administration’s 2015 Clean Power Plan took a systemwide approach to reducing carbon pollution. But the Biden rule tackles emissions from individual plants — an approach that EPA and environmental lawyers hope will be more palatable to the Supreme Court.
The new rule advances carbon capture and storage (CCS) as the best system of emission reduction (BSER) to curb 1.38 billion metric tons of carbon dioxide over the next 23 years, the equivalent of taking 328 million gasoline-powered cars off the road for a year.
Facilities have until 2032 to slash or capture 90 percent of their carbon emissions. If they can’t comply, they must exit the grid by 2039.
Critics of the rule rebuked EPA’s new approach as a more covert way to shift the power sector away from fossil fuels.
“It looks like a subterfuge to accomplish the same thing,” said Jeff Holmstead, a partner at Bracewell who served as EPA air chief during the George W. Bush administration. “If you require a technology that is outrageously expensive and unproven, you’re going to shut down a lot of coal plants, and you’re going to shift generation.”
EPA Administrator Michael Regan said Thursday that he’s confident the agency’s new regulations will withstand legal scrutiny.
“We have spent time ensuring that each path taken is durable,” Regan told reporters before the rules were released. “We are measuring twice and cutting once and learning from past actions and past results.”
Jennifer Rushlow, dean of the Maverick Lloyd School for the Environment at Vermont Law and Graduate School, said she views the Biden rule as a strong effort to adhere to both EPA’s obligation to curb planet-warming emissions and the Supreme Court’s West Virginia ruling.
In addition to invalidating the Clean Power Plan, the Supreme Court ruling also reshaped the “major questions doctrine,” blocking EPA and other federal agencies from regulating matters of vast political and economic significance — such as climate change — without express permission from Congress.
“It would be reaching pretty far to claim that this more classic approach to reducing pollution from individual power plants isn’t what Congress intended in the Clean Air Act,” she said.
‘Plain vanilla’ rule
Court battles over the Biden power plant rule are likely to center on whether EPA overstepped the limits the Supreme Court set on the agency in West Virginia.
But legal observers say the new rule’s focus on facility-level carbon emissions may save the regulation from the pitfalls the Clean Power Plan encountered in the 2022 case.
The Clean Air Act requires EPA to use the “best system of emission reduction” when setting pollution standards. The Obama rule interpreted the BSER for coal plants to include producing less power, building a new natural gas or renewable project or investing in an existing facility burning cleaner fuels.
The Clean Power Plan never went into effect after the Supreme Court stayed the rule in 2016 and the Trump administration replaced the regulation with narrower requirements in 2019. But the power sector achieved the rule’s goals — to slash emissions 32 percent from 2005 levels by 2030 — a decade ahead of the deadline.
Chief Justice John Roberts, writing for the six-member conservative majority in West Virginia in 2022, found that the Clean Power Plan handed EPA power that far exceeded its authority in a “previously little-used backwater” of the Clean Air Act.
“At bottom, the Clean Power Plan essentially adopted a cap-and-trade scheme, or set of state cap-and-trade schemes, for carbon,” Roberts wrote. “Congress, however, has consistently rejected proposals to amend the Clean Air Act to create such a program.”
The Biden rule, however, takes an entirely different approach, said Dena Adler, a senior attorney at the Institute for Policy Integrity at the New York University School of Law.
“EPA’s new rule sticks to its plain vanilla, long-standing approach to reduce emissions through systems that help a source operate more cleanly,” she said.
Adler said the traditional approach will help the agency head off challenges that rely on the major questions doctrine because the legal theory applies to “extraordinary” cases involving agency authority.
She noted that EPA also provided hundreds of pages of legal, technical and economic analysis to explain its decisions in the new rule. Courts, she said, have long recognized that EPA has discretion to balance technical considerations under the Clean Air Act, as long as it can show that its choices were reasonable.
“EPA read the writing on the wall — and in the Supreme Court’s decision,” Adler said.
Frank Sturges, an attorney at the Clean Air Task Force, which helped defend EPA’s climate authority in West Virginia, said he believes the Biden rule is based on a “strong legal foundation” and that the organization is once again prepared to go to court.
“The Supreme Court told EPA to look at traditional, at-the-source pollution control measures for carbon emissions,” he said, “and that’s exactly what the agency did.”
New congressional authority
Supporters of EPA’s plan say the agency’s legal standing was boosted months after the Supreme Court decision when Biden signed the Inflation Reduction Act into law, enacting generous tax credits for green energy and carbon capture technology.
They note the law — for the first time ever — defines greenhouse gases such as CO2 and methane as air pollutants, bolstering EPA’s control over the emissions.
The law revises the Clean Air Act by adding Section 135, which provides for a low-emissions electricity program. And it directs EPA to address greenhouse gas emissions, reinforcing the agency’s “duty, its responsibility to protect public health and protect people from this harmful pollution,” said Vickie Patton, general counsel at the Environmental Defense Fund.
The Inflation Reduction Act also changed the cost structure for clean solutions, Patton said, including providing tax credits for green energy that will run through at least 2032.
Still, there has been debate over how the climate law affects the breadth of EPA authority.
From the perspective of the states — the parties responsible for submitting plans to EPA to demonstrate compliance with the power plant rule — the new legislation doesn’t do much to help them conform with the regulation, said Doug Benevento, who served as EPA associate deputy administrator under former President Donald Trump and is now a partner at the law firm Holland & Hart.
Benevento said Western states like Colorado, where he resides, will need broader regulatory reform from the Interior Department and other agencies to help them get carbon pipelines across federal lands and will require legal protection from the liability risks posed by all that new infrastructure.
The climate law’s federal tax incentives and bolstered EPA climate authority, he said, “really won’t help.”
Grid reliability
Critics of the Biden rule said court fights over the regulation may also focus on risks to the reliability of the electric grid.
The Edison Electric Institute, which represents investor-owned electric companies, criticized the Biden plan’s reliance on CCS, saying it is “not yet ready for full-scale, economy-wide deployment.” Nor, the group said, is there time to permit, finance and build the infrastructure needed for compliance by 2032.
But Regan noted Thursday that some of the group’s members have argued that CCS is viable, and they are investing billions of dollars in it.
The EPA administrator said he was not surprised that some sectors of the energy industry raised questions about reliability, suggesting they are seeking as much flexibility as possible.
“The reality is that we know the potential of this industry, we’ve been talking to this industry,” he said. “We believe that we have those interests baked in.”
Legal analysts say the rules are written to thwart any legal arguments aimed at reliability and the use of CCS.
“EPA has a history of regulating power plant pollution and coordinating with the entities that have the tools to ensure reliability,” said NYU’s Adler. “It’s a false dilemma to say we have to choose between grid reliability and pollution reduction.”
Andres Restrepo, a senior attorney at the Sierra Club, said the Biden rule gives power plants compliance flexibility in the event that there is a true emergency.
He said opposition to the EPA rule may be more driven by politics than the law.
EPA’s power plant is “completely in line with what the Supreme Court held in West Virginia,” he said.
“From the time that these rules were proposed, you heard opponents calling it Clean Power Plan 2.0,” he continued. “It just couldn’t be further from the truth.”
Reporters Carlos Anchondo and Jean Chemnick contributed.
This story also appears in Energywire.
