Supreme Court Agrees to Hear Challenges to Greenhouse Gas Permitting Requirements

By Andrew Childers  

Oct. 15 -- The U.S. Supreme court will review whether the Environmental Protection Agency's decision to regulate greenhouse gas emissions from vehicles necessarily triggers similar Clean Air Act requirements to regulate stationary sources (Utility Air Regulatory Grp. v. EPA, U.S., No. 12-1146, cert. granted 10/15/13).

The Supreme Court granted certiorari Oct. 15 in six lawsuits challenging the EPA's various greenhouse gas regulations, but it only agreed to hear argument on the issue of whether regulating vehicles mandates that stationary sources also obtain permits for their greenhouse gas emissions. That decision leaves the EPA's fundamental authority to regulate greenhouse gas emissions under the Clean Air Act untouched, attorneys said Oct. 15.

The court rejected other challenges to the EPA's greenhouse gas rules, including its finding that greenhouse gas emissions present a public danger and should be regulated under the Clean Air Act and its subsequent vehicle emissions standards.

The Supreme Court had previously ruled that the EPA has the authority to regulate greenhouse gas emissions, but reviewing these lawsuits will give the court an opportunity to clarify how that authority should be applied.

Regulation of Power Plants

This case is not expected to affect the EPA's authority to regulate greenhouse gas emissions from power plants, several attorneys said.

Jennifer Smokelin, counsel at Reed Smith LLP, told Bloomberg BNA Oct. 15 that none of the petitioners challenging the EPA's permitting requirements had specifically raised the issue of whether the vehicle rule necessarily triggered the stationary source requirements.

“I don't think this issue was squarely addressed in the lower courts, which is interesting,” she said.

The court has allotted an hour for oral arguments.

A ruling against the EPA could eliminate the need for stationary industrial sources such as power plants and petroleum refineries to obtain prevention of significant deterioration and Title V operating permits for their greenhouse gas emissions.

Industry groups challenging the regulations have argued that the EPA should have interpreted the permitting requirements to apply only to the six criteria pollutants subject to national ambient air quality standards. That would have eliminated the need for the agency to issue its tailoring rule, which limited greenhouse gas permitting to the largest stationary sources (75 Fed. Reg. 31,514).

Permits for Stationary Sources

Clean Air Act Section 169(1) requires stationary sources with emissions greater than 250 tons per year to obtain prevention of significant deterioration permits. Sources with emissions greater than 100 tons per year are required to obtain Title V operating permits. That would require millions of smaller sources to obtain greenhouse gas permits, according to the EPA.

Instead, the tailoring rule limits permitting to new sources that emit more than 100,000 tons per year of carbon dioxide-equivalent and modified sources that increase their emissions by more than 75,000 tons per year.

“What this is really about is a basic rule of statutory construction,” Jeffrey Holmstead, a partner at Bracewell & Giuliani LLP who previously served as the EPA's assistant administrator for air and radiation, told Bloomberg BNA Oct. 15. “When there are two possible interpretations of the statute, EPA can't choose the one that it acknowledges will lead to an absurd result.”

Tailoring Rule Not Directly Addressed

While a defeat for the EPA would eliminate the permitting requirements and therefore the tailoring rule, Sean Donahue, an attorney representing the Environmental Defense Fund, said the Supreme Court did not seem to be soliciting arguments on the EPA's authority to modify the statutory permitting requirements as part of the tailoring rule.

“It could have but notably did not grant on questions relating to EPA's authority to issue the tailoring rule,” he told reporters Oct. 15.

The Supreme Court's grounds for taking the greenhouse gas cases does seem to conflict with a decision by the U.S. Court of Appeals for the District of Columbia Circuit, which had dismissed challenges to the tailoring rule on standing grounds, Jacob Hollinger, a partner at McDermott Will & Emery LLP who recently served as acting air branch chief for the EPA's Region 2 Office of Regional Counsel, told Bloomberg BNA Oct. 15.

“The court goes right to the substance of the question,” Hollinger said.

Permits May Still Be Required

Although the Supreme Court may find that greenhouse gas emissions by themselves do not trigger requirements to obtain Clean Air Act permits, many of the same industrial sources could be required to obtain permits for their greenhouse gases once they exceed the thresholds for other pollutants.

Judge Brett Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit acknowledged that when he dissented in that court's decision not to rehear challenges to the greenhouse gas regulations. In his dissent, Kavanaugh argued that only pollutants subject to a national ambient air quality standard could trigger the permitting requirements. But once industrial sources have reached that emissions threshold, they are required to obtain permits for all of their emissions, which would also include greenhouse gases.

“Congress designed the statute's permitting requirement based on facilities' NAAQS emissions, but, once those facilities are subject to the permitting requirement, they must also meet a range of other minimum environmental standards,” Kavanaugh said in his dissent.

That interpretation would still require most industrial sources to obtain permits for their greenhouse gas emissions, environmental advocates said.

“Even Judge Kavanaugh in his dissent notes that the question is really how this works, not whether it works,” Clean Air Task Force attorney Ann Weeks told Bloomberg BNA Oct. 15.

The D.C. Circuit unanimously upheld the rules in their entirety in 2012 (Coal. for Responsible Regulation. v. EPA, 684 F.3d 102, 74 ERC 2161, 2012 BL 159061 (D.C. Cir. 2012)).

The court rejected requests to rehear the cases in December 2012 .

Power Plants Not at Issue

Several attorneys said the Supreme Court's ruling is unlikely to affect the EPA's authority to issue carbon dioxide performance standards for fossil fuel-fired power plants. The EPA proposed new source performance standards for new power plants on Sept. 20, and President Barack Obama has ordered the agency to propose similar standards for existing units by June 2014 .

“Nothing that happened today raised any question about EPA's authority to do any of that,” Richard Revesz, director of the Institute for Policy Integrity at the New York University School of Law, told reporters Oct. 15.

The Supreme Court's decision not to address the endangerment finding reinforces the EPA's legal authority to pursue various climate change regulations, Revesz said.

Supreme Court Ruled on Climate Change

The Supreme Court has issued two previous decisions on climate change, both times finding the EPA has the Clean Air Act authority to regulate greenhouse gases.

In 2007, the Supreme Court held that EPA could regulate greenhouse gases as air pollutants (Massachusetts v. EPA , 549 U.S. 497, 63 ERC 2057 (2007)).

In Am. Electric Power Co. v. Conn., the Supreme Court decided 8-0 that the EPA's ability to regulate greenhouse gas emissions under the Clean Air Act displaced federal common law climate change claims (Am. Electric Power Co. v. Conn., 131 S.Ct 2527, 72 ERC 1609, 2011 BL 161239 (2011)).

Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School, told Bloomberg BNA Oct. 15 that the court is unlikely to revisit its past decisions. However, the most recent cases could present an opportunity to define the limits of the EPA's authority under the Clean Air Act.

Smokelin said the Supreme Court could also might signal its desire for Congress to act to provide the EPA with regulatory tools more appropriate for addressing climate change, rather than the agency forcing greenhouse gases into the existing Clean Air Act.

“It could be a call from the Supreme Court to tell everyone this has to go through Congress,” she said.


Six Cases Granted Cert

The Supreme Court agreed to hear the challenges in:


• Utility Air Regulatory Group v. EPA, U.S., No. 12-1146, cert granted 10/15/13;

• Am Chemistry Council v. EPA, U.S., No. 12-1248, cert granted 10/15/13;

• Energy Intensive Manufacturers v. EPA, U.S., No. 12-1254, cert granted 10/15/13;

• Southeastern Legal Found. v. EPA, U.S., No. 12-1268, cert granted 10/15/13;

• Tex. v. EPA, U.S., No. 12-1269, cert granted 10/15/13; and

• Chamber of Commerce v. EPA, U.S., No. 12-1272, cert granted 10/15/13.


The court denied cert in:


• Va. v. EPA, U.S., No. 12-1152, cert denied 10/15/13;

• Pacific Legal Found. v. EPA, U.S., No. 12-1153, cert denied 10/15/13; and

• Coal. for Responsible Regulation v. EPA, U.S., No. 12-1253, cert denied 10/15/13.


Both Virginia and the Pacific Legal Foundation had petitioned the Supreme Court to review the EPA's decision that greenhouse gases pose a threat to public health and the environment and should therefore be regulated under the Clean Air Act.

The Coalition for Responsible Regulation had argued that the EPA's regulations should be struck down because they would not have “any appreciable effect” on global climate change.


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To contact the editor responsible for this story: John Sullivan at