One of President Barack Obama’s major climate initiatives has survived its first major legal test. But the fighting is far from over.
A federal appeals court yesterday dismissed a lawsuit seeking to prevent the Obama administration from issuing landmark regulations on greenhouse gas emissions from existing power plants, saying the challenge was premature because the rules are not yet final. The challengers—an alliance of energy and fossil fuel companies and coal-producing states—wanted the court “to do something that they candidly acknowledge we have never done before: review the legality of a proposed rule,” wrote Judge Brett Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit in an opinion unanimously backed by a three-judge panel.
Officials at the Environmental Protection Agency (EPA), which last year unveiled the so-called Clean Power Plan, welcomed the news. “E.P.A. is pleased that the court has denied the challenges to our proposed Clean Power Plan and confirmed our assessment that they are premature,” wrote EPA spokeswoman Liz Purchia in a statement.
The agency is now free to fine-tune and release the final rule, which is expected later this summer. It has received more than 2 million public comments on the draft, which officials have said they plan to tweak. But the outline is clear. Sometimes drawing on some creative application of rarely used provisions of the federal Clean Air Act, EPA has set a separate carbon-cutting goal for each state, based on its energy mix and ability to achieve reductions. States will have a year to submit plans for achieving the goals, and another 4 years to begin hitting interim targets.
Opponents have promised an epic fight and are summoning both mind-numbing technical arguments and lofty appeals to the Constitution. “The breadth of this rule is mind-boggling—it is a roving mandate to do good that the agency has taken upon itself,” says attorney Scott Segal of Bracewell & Giuliani, a law and lobbying firm in Washington, D.C., who is advising big energy producers and users on what he argues are EPA's many vulnerabilities. “Once you take on something that broad,” he argues, “you also expand all the legal infirmities."
EPA's defenders argue the plan is sound, and a full-court press is simply to be expected against rules that would curb the source of one-third of the nation's greenhouse gas emissions. “There are going to be winners and losers,” predicts Richard Revesz, director of the Institute for Policy Integrity at New York University School of Law in New York City, which filed court briefs in defense of EPA. "Obviously, it's not good for the coal industry. It's not surprising that to protect their market share they're going to invest a lot of money" trying to block the rule.
Still, even President Obama predicted that “this will be tough” during his 20 May commencement address at the U.S. Coast Guard Academy. But he stressed that the United States has to “move ahead with standards to cut the amount of carbon pollution.”
Just how tough? Here are seven arguments and tactics opponents are expected to use to try to bring down the clean power rule.
1. Back to court to show immediate harm
As soon as EPA does publish its final rules, the race will be on to block them before they take effect. The plaintiffs that lost today’s case—including 14 states—have said they will go back to court, likely with more allies. A lot will depend on the federal judges, drawn at random, who hear the case. (Seven of the 11 judges on the D.C. circuit were appointed by presidents Obama or Clinton.) Two of the judges who issued yesterday’s opinion, for example, ruled in 2011 to block another big EPA clean air regulation—the Cross-State Air Pollution Rule to cut power plant ozone and fine particulate emissions that blow across state borders. But EPA ultimately won that fight in a 6 to 2 ruling by the U.S. Supreme Court.
That high court decision bodes well for EPA in the long run, but it's a victory that took nearly 3 years. Similar delays on the Clean Power Plan would rob Obama of his chance to put his stamp on a climate action legacy. And it could have international implications, because the United States faces important climate negotiations in Paris in December, which will be harder if their domestic plan is in legal limbo. And it would make it far easier for President Obama's successor to withdraw the plan entirely.
To win a stay of the clean power rule, energy companies or states will have to show both that they face “immediate, irreparable harm,” and have a good chance of winning the case on its merits. Because no emissions cuts would be required until 2020, it may be hard to show an "immediate" threat; states and power companies will argue the industry has to plan capital investments well in advance.
2. Pick apart the language of the law
Challengers see an opening because of the messy way Congress wrote and revised the Clean Air Act. When first passed in 1970, Congress created Section 111 giving the government authority to regulate pollutants not already specifically addressed in other sections of the law. (The idea was to give flexibility to address newly emerging problems.) But when the law was amended in 1990, the language was changed so that it could be interpreted to cover only facilities (a “source category,” the law now says) that aren't addressed in another provision, Section 112. Adding more confusion: the House of Representatives and Senate had passed different versions of the bill that were never formally reconciled.
Now, in an argument only a Washington lawyer could love, challengers to the clean power rule will argue that EPA can't regulate power plants using Section 111, which is a major foundation of the new rule, because they already are regulated under Section 112.
In its brief for the case settled yesterday, EPA described the text of the law as “a grammatical mess” and “convoluted.” But it wrote that if the challengers are right, then then “EPA would have to pick one set of health and environmental issues to address, while ignoring another.”
Revesz, for one, calls this argument “literally preposterous,” while David Doniger, director of the Natural Resources Defense Council's climate program, dismisses it as “a dishonest fiction.” Power plants are, in fact, regulated under several sections of the Clean Air Act, other observers note. And courts have a long tradition of giving deference to federal agency interpretations of the laws for which they are responsible, making this attack likely to be a long shot.
3. Argue the Constitution is at stake
One of the nation's leading constitutional scholars contends that the Clean Power Plan would usurp the role of the states in violation of the 10th Amendment. The argument is all the more bitter for EPA supporters because its proponent is Harvard Law School Professor Laurence Tribe: a liberal hero for his court victories against big tobacco and other businesses accused of wrongdoing, the man who represented Al Gore in his ill-fated Florida recount battle, and a personal mentor to Obama when he was a student at Harvard. “Burning the Constitution should not become part of our national energy policy,” Tribe said in congressional testimony in March.
It's not the first time Tribe has shown skepticism of EPA's powers; he argued on behalf of General Electric that the agency's Superfund toxic waste cleanup law was unconstitutional. Notably, Tribe lost that case in 2010. This time, Tribe’s client is the world's largest coal company, Peabody Energy. But environmental law experts, including some of Tribe's own Harvard colleagues, believe that he will fare no better.
That’s because federal environmental programs have long been based on EPA setting standards and the states implementing them—“cooperative federalism,” as EPA's supporters call it. Some of Tribe's arguments “if taken seriously, would lead to a dismantling of the New Deal” programs established by President Franklin Roosevelt, Revesz says. But in Washington, even a losing constitutional argument can still win points. Senate Majority Leader Mitch McConnell (R–KY) invoked Tribe's arguments in March when he made an extraordinary call for states simply to refuse to submit plans to implement the Clean Power Plan.
4. Just say no
So far, Oklahoma is the only state to take up McConnell's call for inaction. On 28 April, Governor Mary Fallin (R) signed an executive order barring state environmental officials from working on any state plans to implement the new rules. And she directed Oklahoma's attorney general to undertake his own legal analysis of the rules immediately after they are finalized. But EPA will step in if a state doesn’t write its own plan and take over implementation of the new rule. The potential for such bigfooting and loss of control may be enough to dissuade other states from just saying no.
5. Warn that the lights will go out
EPA critics argue that the plan will force big, steady-running coal power plants that generate “baseload” electricity to close or scale back, making the power supply less reliable. That view is backed in a report by the North American Electric Reliability Corp. (NERC), an industry-funded nonprofit to which Congress has delegated responsibility for ensuring the reliability of the electric delivery system. But a competing analysis commissioned by renewable energy, smart grid, and energy technology companies said that NERC had failed to take into account clean power measures that actually could make the system more reliable. And other NERC critics say its past predictions of electricity reliability troubles due to environmental regulations have proven to be “overblown.”
“Such warnings are common whenever there is major change in the industry,” wrote energy policy expert Susan Tierney on the World Resources Institute's blog on 14 May. “[T]he reliability concerns currently being raised … presume inflexible implementation, are based on worst-case scenarios, and assume that policy makers, regulators and market participants will stand on the sidelines until it is too late to act.” In 40 years of Clean Air Act regulation, she noted, regulators have never been flatfooted enough to allow environmental rules to dim the nation's lights.
Still, the reliability issue has resonance on Capitol Hill, where few politicians are steeped in the nitty-gritty of electric systems issues and no one wants to be responsible for power outages. It's no surprise that the key bill introduced in Congress to stop EPA is called the “Affordable Reliable Energy Now Act.” It would put EPA's Clean Power Plan on hold until the legal issues are resolved, and give states an opt-out if their governor determines it would “negatively impact” either economic growth or electric reliability. It will not be easy, however, for the current bill to garner the 67 votes needed to override a presidential veto—which would be all but certain if it actually made it to the president’s desk. Narrower legislation that would give states greater flexibility in implementing the rule, however, could draw wider bipartisan support.
6. Save the manatees
In an unusually creative strategy, rule opponents are trying to enlist another federal agency—the U.S. Fish and Wildlife Service (FWS)—in slowing down greenhouse gas regulation, arguing fossil fuel cuts could hurt an endangered marine mammal, the Florida manatee. About 60% of Florida's manatees rely on warm-water refuges created by outflows from 10 coal and nuclear power plants. Representative Rob Bishop (R–UT), chair of the House Natural Resources Committee, earlier this spring floated the idea that EPA should be required to engage in formal consultations with FWS over the impact of the power plant regulations, which could force some of these coal plants to close.
7. Flexibility jujitsu
As in the martial art of jujitsu, Clean Power Plan opponents will try to turn a touted strength into a weakness.
EPA's supporters argue the plan is innovative because it gives states the power to look for needed greenhouse gas cuts anywhere—even “beyond the fence line” of any particular fossil fuel power plant. States could start conservation programs, for instance, or even work out pollution trades with other states that have an easier time meeting their goals. Such flexibility means states won’t necessarily have to move quickly to close power plants.
But the plan's opponents argue that EPA doesn’t have the authority to go beyond the fence line—that the agency has authority only to spell out standards for the polluting power plants themselves. At issue is a phrase in the law that says EPA can set rules to encourage “the best system of emission reduction.” The agency argues a “system” includes a full range of options, including energy conservation or replacing fossil fuels with renewable sources.
Opponents disagree. “EPA is trying to change the statute,” says Jeff Holmstead, an energy industry lawyer at Bracewell & Giuliani. “But what the statute has meant, and the way EPA has interpreted it for 40 years is as the best system for controlling emissions from an individual power plant.”
This argument is especially galling to EPA's supporters, because under President George W. Bush's administration, when Holmstead himself was an EPA official in charge of air pollution programs, the agency tried to regulate mercury pollution using a similarly flexible system of pollution allowance trading. The Supreme Court struck down the mercury program for other reasons, and Holmstead argues it was far more limited than what EPA is now trying to do. “We knew that our approach … might be pushing up against the boundary of our legal authority,” he says. But the new rule “really raises legal issues that have never been raised before.”
EPA acknowledges it is trying to do something different. But Doniger, who like Holmstead has both been an EPA official and an outside opponent, believes EPA is on firm legal ground.