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POLITICS: PennAve

The winner of Supreme Court's latest EPA ruling? Everyone and no one

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Supreme Court,Climate Change,EPA,PennAve,Energy and Environment,Coal,Zack Colman,Law,Antonin Scalia,Greenhouse Gases

The jury's still out on whether Monday's Supreme Court ruling will have any effect on the Environmental Protection Agency's proposed rule to limit carbon emissions from power plants.

Both opponents and defenders of the EPA push claimed victory in the 5-4 and 7-2 decisions on a pair of EPA permitting programs for large industrial emissions sources, a reflection of the nuanced case before the high court.

The Supreme Court, in a majority opinion written by Justice Antonin Scalia, ruled the EPA could not require companies wishing to expand or modify existing facilities to get a pre-construction permit under the programs in question simply because they emit greenhouse gases.

The ruling also said that the EPA had improperly interpreted the Clean Air Act to mean it must regulate greenhouse gas emissions. It noted the agency cannot rewrite the Clean Air Act to work within the framework of directly regulating those emissions from major stationary sources, as it had attempted to do to avoid regulating entities such as schools and churches.

But, in a key point for the EPA, it maintained that facilities needing a permit for other pollutants such as sulfur dioxide and nitrogen oxide must use the best available technology to control greenhouse gas emissions -- meaning the EPA can still control pollution coming from those facilities, but not smaller entities that don't produce large amounts of pollution, which the agency didn't want to regulate.

"Scalia split the baby, allowing EPA to regulate big operations but preventing a great expansion in EPA authority that nobody truly wanted," said Tim Profeta, director of the Nicholas Institute for Environmental Policy Solutions at Duke University. "I think he did all a favor -- even the agency, which did not want to regulate ma and pa -- but just found a different legal route than the agency had found."

For businesses, the majority opinion's citation of a 2000 Supreme Court case has prompted optimism that future litigation might restrain EPA's reach on the power plant rule, which aims to cut power-sector emissions 30 percent below 2005 levels by 2030.

Scalia referred to Food and Drug Administration v. Brown & Williamson in the majority opinion. The high court, then led by the late Chief Justice William Rehnquist, noted an agency cannot step outside its administrative statute to regulate.

Some experts took that to mean the court might be skeptical of the potential for the EPA power plant rules to regulate energy markets.

"Some may view that as being a shot across EPA's bow that it might be going a little too far," said Charles Haake, of counsel at Gibson Dunn & Crutcher LLP. "I don't think it will change EPA's path, though."

That's because the agency and its environmental supporters found plenty to like as well, as they called the ruling a victory for the proposed power plant rules.

The opinion kept intact the "endangerment finding" -- an element from an earlier Supreme Court case that greenhouse gas emissions pose a risk to the public, giving the EPA authority to regulate them. It also upheld an earlier court decision that allowed the EPA to regulate emissions from vehicles.

Kyle Aarons, a senior fellow with the Center for Energy and Environment Solutions, said the votes from some justices hint that the EPA's argument has traction when it comes to regulating greenhouse gases.

"[I]t's probably a good sign for EPA that [Justices Anthony] Kennedy, Scalia and [Chief Justice John] Roberts all agreed that [greenhouse gases] belong in [the permitting program] - they're just saying that [greenhouse gases] alone can't trigger [the permits]," he said in an email, calling it a "good sign that Roberts and Scalia weren't swayed by the [Justice Clarence] Thomas/[Samuel] Alito argument that the Clean Air Act isn't designed for [greenhouse gas] regulation."

In terms of real-world effect, the case might merely eat at the margins of the EPA's authority.

When combined with the requirement to use the best available technology to control greenhouse gas emissions, the EPA said its regulatory program would now capture 83 percent of emissions from stationary sources, compared with 86 percent previously.

"The upshot is there's no practical difference," said William Yeatman, a senior fellow with the conservative Competitive Enterprise Institute.

The opinion, chock full of "flowery language," as Yeatman put it, will likely re-emerge in public comments both for and against the power plant proposal, which was announced at the beginning of the month.

"That will certainly provide grist for the gristmill for any challenge of EPA regulation into perpetuity," he said.

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