No ‘free rein’ for the EPA

The U.S. Supreme Court has overturned a centerpiece of the U.S. Environmental Protection Agency’s (EPA) strategy to regulate greenhouse gas emissions under the Clean Air Act, clearly reining in the agency from what has become a pattern of regulatory overreach.  This will prove to be a heavy blow to the EPA’s future plans to regulate carbon.

The Court overturned the EPA’s Tailoring Rule this past week, which was a truly breathtaking example of the EPA’s efforts to change the law to suit its agenda.  The Clean Air Act requires that facilities that release certain thresholds of pollutants obtain a permit, depending on the type of facility.  Congress established these levels so that only large industrial and manufacturing plants would need permits.

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But when the EPA began regulating carbon, it ran into a problem.  According to agency figures, more than 6 million buildings and facilities potentially would now need permits.  This included schools, churches, apartment buildings and everything in between, which even the EPA recognized would be absurd.

The best idea would have been not to regulate carbon at all, but the EPA had another solution:  “Tailor” the statute – or essentially rewrite it – to increase permitting levels to target major facilities like power plants, while reserving authority to tighten thresholds over time so that an increasing number of buildings and facilities ultimately would be required to obtain permits.  That way the EPA could avoid politically untenable regulatory chaos while pursuing its agenda.

The Supreme Court, however, saw the issue much differently.  The Court told the EPA that basic Separation of Powers principles do not permit Executive Branch agencies to rewrite duly enacted laws.  The Court therefore struck down the Tailoring Rule, holding that “it would be patently unreasonable – not to say outrageous – for the EPA to insist on seizing expansive power” to rewrite Congressional enactments. 

The Court spared millions of small businesses from becoming subject to carbon permitting by adopting an interpretation of the Clean Air Act under which the big industrial sources may be required to use modest measures to control carbon emissions when they undergo permitting.  But the Court also warned the EPA that it does not have “unbounded regulatory authority” nor “a free rein” to engage in “an unreasonable and unanticipated degree of regulation.” 

This decision is especially significant at a time when the EPA is attempting to seize control of the U.S. electric utility industry under its new proposal to regulate carbon emissions from power plants.  The EPA wants to pick and choose energy sources and tell Americans how much energy they can use, while pretending that electricity rates will not increase and the reliability of the electric grid will not deteriorate as a consequence.  The Court’s action is a redirect for the EPA’s carbon agenda. 

The Clean Air Act plainly requires that emissions-control standards must be based on demonstrated technology that facilities can install to cost-effectively reduce emissions.  The EPA doesn’t like this approach; it wants to be free to transform the electricity sector in line with its own progressive vision, no matter what Congress has said.

So through its latest proposed carbon “pollution” standards, the EPA has creatively interpreted its authority to require coal generators to shut down or severely curtail production, which will enable other generation resources to take coal’s place.  Even the EPA itself acknowledges this proposal is unprecedented in the more than 40-year history of this program.

The agency’s new creative approach to Clean Air Act performance standards is unlikely to be tolerated by the Supreme Court given its recent ruling.  In overturning the Tailoring Rule, the Court sent an important message: Agency officials must abide by the letter of the law.  The Court said the EPA cannot “bring about an enormous and transformative expansion in [its] regulatory authority without clear Congressional authorization.” 

All federal courts will understand the Supreme Court’s decision. None will tolerate the latest carbon proposal for existing plants or the earlier proposal for new power plants. The EPA’s vision for regulating carbon emissions from U.S. power plants just took a thumping hit. 

Glaser, who has practiced energy and environmental law in Washington D.C. for 30 years, was involved in this Supreme Court case.

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