McConnell has new argument for EPA climate rule

Opponents of the Obama administration’s climate rule for power plants have unearthed what they believe to be a significant new legal argument against the regulation.

They say that the Clean Air Act restricts states from entering into multi-state agreements to comply with the Environmental Protection Agency’s (EPA) rule, unless Congress approves each agreement.

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Sen. Mitch McConnellMitch McConnellBusiness groups ramp up pressure to fill Ex-Im board Senate Dems: No August break without Zika deal Never Trump plots its last stand MORE (R-Ky.) brought up the argument at a Wednesday congressional hearing with EPA head Gina McCarthyGina McCarthyOvernight Energy: Volkswagen reaches .7B settlement over emissions Volkswagen reaches .7B settlement for emissions cheating Dozens of senators push EPA for higher ethanol mandate MORE, saying Section 102(c) of the Clean Air Act will hamper the EPA’s ability to encourage states to enter into multi-state agreements.

EPA officials, including McCarthy, have said that multi-state agreements will allow states to comply with the rule at a lower cost while achieving better emissions cuts than they could alone. They’ve called it a “significant” part of their strategy to reduce emissions.

But McConnell argues that the multi-state agreements would require congressional consent — and that’s not coming.

“I can assure you that as long as I’m majority leader of the Senate, this body’s not going to be signing off on any backdoor energy tax,” he said.

McCarthy didn’t directly answer McConnell’s objection, saying only that she believes “we’re acting under the authority that Congress gave us under the Clean Air Act,” and that the rule will stand up in court.

The energy sector thinks McConnell’s argument could be a hurdle for the Obama administration, but supporters of the EPA argue it won’t go anywhere.

McConnell’s legal argument is his latest strategy aimed at undermining the rule through means other than legislation. Earlier this year, he encouraged states to ignore the rule and not submit compliance plans at all, forcing the EPA to write its own plans for the states. 

The strategy regarding multi-state agreements is the brainchild of Neil Chatterjee, a top adviser to McConnell for energy and environmental policy.

Jeff Holmstead, a former EPA assistant administration for air pollution, said he had not heard an argument regarding the multi-state provision of the law.

“It looks like they’re kind of blindsided by this,” he said of the EPA. “And I do think it creates some big problems for EPA.”

Holmstead, who now represents energy companies as a partner at Bracewell and Giuliani, said the EPA “didn’t seem to have given any thought to this provision,” since it wasn’t mentioned in the proposed rule.

While McConnell’s argument had not received high-profile attention before, it is not new. The Texas Commission on Environmental Quality brought it up in comments it sent to the EPA last year, and the Clean Air Task Force refuted it in its own arguments.

Jamie Van Nostrand, an environmental law professor at the West Virginia University College of Law, said McConnell’s point has no merit.

He cited the Regional Greenhouse Gas Initiative (RGGI), an existing agreement among Northeastern states to cut their carbon pollution.

Those states work together voluntarily on individual states plans, which is allowed under the Clean Air Act, not a federally binding compact.

“I don’t think states voluntarily proceeding under a multi-state compliance strategy by collectively adopting model statutes/regulations, as the RGGI states did, would run afoul of Section 120(c),” he said.

David Doniger, director of the Natural Resources Defense Council, cited the same group of states to refute McConnell.

“They did not make a compact and thus would not need any congressional approval when they submit plans to EPA,” he said.

But Holmstead said that would be problematic, because the EPA’s climate rule — as it was proposed last year — would require that states’ compliance plans be binding and enforceable by the federal government.

“EPA might try to come up with some way to get around 102(c), but I think that just creates more legal problems, because they said all along that it has to be federally enforceable,” Holmstead said.

EPA spokeswoman Liz Purchia said that the agency is working to figure out in its final rule this summer how it can enable and encourage multi-state agreements.

“Thanks in part to comments we received on the proposal, we are considering a variety of ways that states and utilities can realize flexibility through multi-state compliance strategies,” she said.