A 10-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit for seven hours Tuesday grilled attorneys on both sides of the massive legal challenge against the Environmental Protection Agency’s Clean Power Plan.
The oral arguments were scheduled for just over three-and-a-half hours, but lengthy, and at times intense, questioning from the judges extended the timeline significantly.
The case against the Clean Power Plan, carbon emissions standards for existing coal-fired power plants, was launched in October 2015 when the final rule was published in the Federal Register, the legal starting gun for such a challenge. A coalition of 27 states and numerous energy producers, utilities, and trade organizations quickly filed suit against the EPA. An additional 18 states, the District of Columbia, and several municipalities, power companies, technology companies, and business associations backed the EPA as intervenors in the lawsuit.
The arguments covered five topic areas in which the petitioners have challenged EPA’s rule, which requires states to develop action plans to meet federally set emissions reduction goals: the use of outside the fence line measures; the legality of drafting a rule for coal-fired power plants under section 111(d) of the Clean Air Act; constitutional issues; claims that the regulation was changed too much between proposal and final; and issues relating to the EPA’s inability to ensure that states will be able to comply even in “the most adverse circumstances.”
The first topic broached in the courtroom pertained to the EPA’s inclusion of “outside the fence-line” measures in its “Best System of Emissions Reduction.” Under Section 111(d) of the Clean Air Act, the statute under which the CPP was drafted, the EPA is tasked with determining the beset proven system for reducing the emission of the pollutant in question from the source in question; in the CPP that is carbon from coal-fired power plants.
The EPA developed a “building block” system, which includes three means for reducing emissions: efficiency improvements at the plant; using natural gas; and using more renewable power. The first building block is permissible, petitioners said Tuesday, but the second two, which require generation shifting, require coal-fired power plant owners to invest in competing technologies, and that is not acceptable.
Elbert Lin, solicitor general of West Virginia, argued to the court that the rule would force the transformation of states’ energy sectors by making power producers subsidize other forms of generation.
“What you’re looking at here is that this is actually forcing the owners and the operators to cross subsidize, and if they can’t meet the specific standards, they’re going to have to potentially go 300 miles to build a windmill. That’s never envisioned under this section of the Clean Air Act,” West Virginia Attorney General Patrick Morrisey told reporters after the arguments ended.
The argument that owners would have to “subsidize” another industry did not seem to convince Judge Nina Pillard, an Obama appointee, who noted that in a technology-based BSER owners are still investing in a different industry, in that case, producers of scrubbers.
Judge Thomas Griffith, who was appointed by President George W. Bush, did not seem certain he bought the argument that the rule is transformational. Griffith noted that the percentage of the nation’s energy generated by coal is already on the decline. “How is that transformative? … That hardly sounds transformative to me,” he said,
Judge David Tatel, a Clinton appointee echoes this sentiment later, stating: “The only thing that seems transformative here is that it’s regulating CO2.” Tatel went on to note that EPA’s authority to regulate carbon had already been decided by the Supreme Court.
The Department of Justice, representing the EPA, countered Lin’s claim by stating that generation shifting is a common occurrence in the energy sector and that, in fact, energy producers told the agency while the rule was being drafted that they would use this method to meet their emissions reduction goals under the Clean Power Plan.
Of the EPA, the judges wanted to know why carbon was being regulated by the EPA in the first place. “Why isn’t this debate going on right now on the floor of the Senate,” Griffith asked.
Judge Brett Kavanaugh, a George W. Bush appointee, noted that while climate change is a certain threat, the job of the panel is to make sure laws are based on the call of Congress.
The fence-line issue was expected to be the headliner during the arguments, and that proved true. “I wasn’t surprised to see [that], everybody expected that that would be most lively part and that was what both sides kind of agreed should go first, that was the longest part,” Sean Donahue, an attorney representing the EPA’s environmental intervenors, told reporters after the arguments. “I think the first part was the hardest and the most aggressive questioning from the court, those statutory construction questions. I think the argument went really well.”
Of course, the petitioners also said they believed their arguments in the first section were well received. “We’ve always felt that that’s a very compelling argument, and while we feel that all of our arguments are very strong, that argument did appear to resonate with a number of people,” Morrisey said. “We don’t know which particular piece, but all it takes is winning in one of these arguments, and then the rule comes tumbling down.”
The second section, which dealt with statutory issues related to the EPA’s authority to regulate coal-fired power plants under Section 111(d) of the Clean Air Act, was also subject to lengthy debate. Petitioners argue that the EPA is precluded from regulating carbon from coal-fired power plants under that segment of the Clean Air Act because it has regulated coal-fired power plants under Section 112.
At issue is a confusing section of the 1990 Clean Air Act amendments. One amendment would, if read with the petitioners’ interpretation, indeed preclude the EPA from regulated coal-fired plants under Section 111(d). However, that amendment was sent to the Senate where it was again amended. The Senate amendment would not preclude the EPA from regulating under Section 111(d), the EPA says. Both amendments were ultimately approved in the conference report and signed by the president. It is unclear how the judges will decide this issue.
Trying to wade through the record to determine which amendment is the correct amendment was compared to a “hall of mirrors” by Kavanaugh and throughout the arguments, the judges noted specifically noted that the wording House version is extremely confusing.
Pillard seemed confused by what Congress’s logic would have been in drafting an amendment that would stop the EPA from regulating two different pollutants from one source. That is not double regulation she said, comparing it to road laws. “I’m going to make you go on the right side o the road, and I’m going to make you go the speed limit,” she said.
Constitutional issues relating to the 10th Amendment and claims of commandeering and coercion related to the EPA’s alleged takeover of state energy markets were covered in the third section of debate but did not get the attention petitioners had hoped they would, according to Donahue, “I think a lot of the issues that have been really at the front of a lot of the publicity campaigning against the rule, like the claims that it’s unconstitutional, that it commandeers states, didn’t seem to get much traction. We think those are more for show. They’re not really well founded in law, and I didn’t see those issues … creating a lot of excitement on the panel,” he said.
The final two sections did not get as much attention as the others. These sections dealt with the petitioners’ claims that the EPA changed the rule too much between its proposed and finalized versions and thus should have republished it and arguments that under the emissions trading scheme possible under the rule states with a significant amount of renewable energy could effectively block out fossil-reliant states leading to the latter being unable to comply.
No matter which way the court rules, its decision almost certain to be appealed to the Supreme Court. The high court issued a stay of the rule in February after a three-judge panel of the D.C. Circuit court refused to do so. The hold will remain in place until the legal case against the Clean Power Plan is resolved.
Just days after the Supreme Court’s 5-4 decision on the stay, Justice Antonin Scalia died. Republicans in Congress have refused to fill his seat until after President Barack Obama leaves office. Should the court’s consideration of the Clean Power Plan result in a tie vote, the case would revert to the ruling of the appeals court, making the current step in the legal process potentially very crucial.
