Long-delayed action on the health risks of mercury produced by U.S. coal power plants will have to wait even longer, as the Supreme Court decided today that federal authorities failed to properly weigh the benefits of regulation against the costs.
Justice Antonin Scalia, writing the opinion for a 5-4 majority, said that the U.S. Environmental Protection Agency (EPA) acted unreasonably when it deemed cost "irrelevant" to the question of whether or not to regulate hazardous power plant pollution.
The decision blocks enforcement of rules that just went into effect this past April after decades of study, lawsuits, and political wrangling through four administrations.
“EPA is disappointed that the Court did not uphold the rule,” the agency said in a statement. But it noted that, since the rule was issued 3 years ago, “investments have been made and most plants are already well on their way to making emissions reductions.”
The 2011 Mercury and Air Toxics Standards, with an estimated price tag of $9.6 billion, was one of the most expensive regulations EPA ever issued, according to the Congressional Research Service. EPA, however, concluded that the rule’s health benefits outweighed the costs. Agency analysts concluded cutting emissions of the toxin would result in 130,000 fewer asthma attacks, 4700 fewer heart attacks, and 11,000 fewer premature deaths each year, adding up to at least $37 billion to $90 billion annually.
The majority of those calculated benefits were due to the side effect of regulating particulate pollution, however, and EPA did not use that analysis in making its initial legal determination that regulation of mercury was "necessary and appropriate." EPA said the full cost-benefit analysis was only needed at the end of the regulatory process, to determine the exact toughness of regulation needed.
Today, Scalia said that approach made no sense. "By EPA’s logic, someone could decide whether it is 'appropriate' to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system," Scalia wrote. "It is unreasonable to read an instruction to an administrative agency to determine whether 'regulation is appropriate and necessary' as an invitation to ignore cost."
In a withering dissent, Justice Elena Kagan criticized the "peculiarly blinkered way" the court approached the case. "I agree with the majority—let there be no doubt about this—that EPA’s power plant regulation would be unreasonable if '[t]he Agency gave cost no thought at all.' But that is just not what happened here." She said that EPA took costs into account in multiple stages over more than a decade, and knew it would analyze the costs again when it decided exactly what level of mercury limits were needed.
"The Agency acted well within its authority in declining to consider costs at the opening bell of the regulatory process given that it would do so in every round thereafter—and given that the emissions limits finally issued would depend crucially on those accountings," she wrote.
The rule's opponents, led by Michigan, had joined 21 other states, utilities, and coal mining interests in arguing that the only relevant figures EPA could consider were the $4 million to $6 million in annual forgone future earnings for those who suffer IQ loss from mercury poisoning as children. Using those benefit figures meant $2400 in costs for the utilities for every $1 in benefits for the public. That ratio "is not reasonable, imposes great expenses on consumers, and threatens to put covered electric utilities out of business," the petitioners concluded in their argument against the rule.
Today’s decision means that EPA will now have to either produce a new cost-benefit analysis, or write an entirely new mercury plan at the same time that the agency already has a full agenda because of its efforts to take action on climate change. Many of the same states, utilities, and coal mining interests that fought the mercury pollution rules are also lined up to battle EPA's pending regulations to limit carbon dioxide emissions from existing power plants, due out in the coming weeks.
(The Supreme Court's decision, in fact, appears to topple one of their arguments—at least for the time being. West Virginia and several other states argued that EPA couldn't regulate carbon dioxide emissions because the agency already regulates mercury emissions.)
In some sense, EPA's effort on greenhouse gases, called the Clean Power Plan, could render the mercury issue moot. Some utilities argue they will be forced to shut coal plants down under the Clean Power Plan, eliminating both carbon dioxide and mercury emissions. In theory, power plants also may be able to address their mercury problem with installation of advanced carbon emissions controls; in its regulatory impact analysis EPA lists reduction of mercury as a potential side benefit of proposed carbon dioxide rules. But the greenhouse gas battle is just beginning and, because it involves the same interests, could rage as long as the fight over mercury, which began in the mid-1990s.
In the meantime, however, mercury emissions likely will continue unabated at some 170 power plants, accounting for about 40% of the U.S. coal fleet. On the one hand, there's good news in that statistic. It means about 60% of U.S. coal plants already have equipment that allows them to meet the tighter mercury standards called for by the now blocked rule. Those plants were able to comply because they already had equipment to control acid rain emissions—flue gas desulfurization units—that could be adjusted to capture mercury as a side benefit, the U.S. Energy Information Administration (EIA) said in an analysis last year.
Of the remaining coal plants with uncontrolled mercury and air toxics emissions, EIA said operators have already slated about 10% for retirement. That would continue a trend that has been well underway; according to the Sierra Club, which has been campaigning for shutdown of U.S. coal plants, 187 have been closed since 2011, when the Obama administration first proposed the mercury regulations. Most analysts agree that the shuttering of coal plants has been caused by not only the mercury rules and other regulatory actions, but because of competition from cheaper natural gas fuel. Because natural gas doesn't produce mercury emissions when burned, the market's shift to that fuel also has helped curb air toxics.
What today’s decision won’t resolve are the technical complexities of removing mercury waste from coal plant emissions. The type of coal that a plant burns and the design of the facility can make a difference in how easily the mercury can be removed. A sorbent, like activated carbon, can remove mercury, but dried sorbent injection systems are more cost-effective in plants that burn low-sulfur coal. For plants that burn high-sulfur coal, the scrubber that removes sulfur dioxide to meet acid rain rules is effective at removing a large amount of mercury, but not enough to meet the proposed EPA standard of 90% or higher removal. Plant operators have to add an activated carbon injection system or other technology to boost the scrubber's effectiveness.
"There's no silver bullet—even for the same utility," said Corey Tyree, director of energy and environment at the Southern Research Institute in Birmingham, Alabama, a nonprofit organization that works both for the utility industry and the U.S. government. "What utilities struggle with is they look at their coal plant, and it already removes 80% of the mercury, but they have to get it to 90%, and there's all this additional cost for a small uptick," Tyree says.
Many of the problems plants face are due to the fact that elemental mercury is insoluble. Plant operators typically will turn to technology to oxidize the mercury or they will use a halogen, like bromine, to combine with the mercury so that it can be dissolved. But they have to guard against mercury returning to elemental form and being re-emitted through the smokestack. Also, the mercury compounds and sorbents add to the costs of the plant handling its solid or liquid waste.
Tony Facchiano, senior program manager of the environmental controls program area of the Electric Power Research Institute (EPRI), an industry-funded nonprofit organization in Washington, D.C., said that it has devoted much effort to researching how to address mercury in a "holistic" way, taking into account all of the other environmental considerations at a plant. For example, some solutions for mercury may require energy—in essence, making electricity production less efficient, and generating additional carbon dioxide—moving coal power plants in precisely the opposite direction that EPA will seek in the pending greenhouse gas regulations.
Ramsay Chang, an EPRI senior technical executive who has focused on mercury, said there have been no real game-changing technologies introduced in the 25 years since Congress directed EPA to address power plant toxic air pollution. "Activated carbon has been used for ages, and there's been a little bit better carbon, slightly cheaper, and more effective, but nothing revolutionary," he said.
For the power plant operators, he said, "The bottom line is cost. Because if you do everything under the sun, you'll take care of mercury. But what is the actual cost and is it cost-effective to stay open?"
The Supreme Court decision now sends that question back to EPA, where it may be overshadowed by the battle over greenhouse gas regulations. EPA has estimated that the Clean Power Plan will cost $7.3 billion to $8.8 billion annually in 2030, but would lead to climate and health benefits worth an estimated $55 billion to $93 billion per year. That analysis that also depended heavily on the cobenefits of reducing particulate pollution.