On the first day of its new term, the U.S. Supreme Court announced that it will hear the challenge to a June 2012 U.S. Court of Appeals for the District of Columbia Circuit ruling that upheld EPA's greenhouse gas program.
The justices accepted six petitions for review, but said they would consider only a single question for all of them. The granted issue is "whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases." This question is one that the court hasn't grappled with before. (They never touched this in Massachusetts v. EPA.)
The six petitions were consolidated for one hour of oral argument, which is not likely to occur until 2014. The Court denied review of three other petitions challenging EPA on greenhouse gas rules.
This narrow review granted allows the Environmental Protection Agency authority to regulate greenhouse gas emissions as a pollutant to stand, even as it agreed to examine how the agency could demand greater pollution controls through the permitting process.
The interpretation of the acceptance by the Court from the National Association of Manufacturers was, "Manufacturers are pleased with the Supreme Court's decision to review the EPA's greenhouse gas regulations from stationary sources -- one of the most costly, complex and harmful regulatory issues facing manufacturers and threatening our global competitiveness."
Gina McCarthy, the EPA Administrator, said in a statement that the court was taking up a "very narrow legal question" that would not substantially weaken the Obama administration's climate-change agenda.
In June 2013, as part of his Climate Action Plan, President Obama directed EPA to issue a new proposal by Sept. 20, 2013 to reduce CO2 emissions from new power plants. The president also directed EPA to propose federal guidelines by June 1, 2014 to be used in conjunction with state programs to reduce CO2 emissions from existing power plants.
In keeping with that directive, the EPA issued their New Source Performance Standard rule-making in late September outlining maximum emissions for new power plants. The basis for their issuance of the rule-making was the earlier Supreme Court ruling in 2007 in Massachusetts v. EPA, which held that EPA must regulate greenhouse gases as a pollutant under the Clean Air Act.
When you look, not only at the power generation to which the first set of CO2 regulation applies, but also at who else are the top emitters of greenhouse gas emissions, next in line is the oil and gas industry because of methane emissions, the manufacturing sector leading off with iron and steel, the concrete industry, as well as the agriculture sectors. Very few folks get left out except renewable electricity producers like wind. So everyone has skin in this game.
So where does that leave industry and the EPA? The Supreme Court had the opportunity here to revisit Massachusetts v. EPA. Many of the petitioners asked the court explicitly to revisit that case in light of how far they had seen EPA push PSD and Title V permitting and questioned again whether EPA really has this authority. The court declined that invitation.
But, industry does get to have the court revisit at least part of the greenhouse gas authority that the EPA is exercising. This could slow down the EPA in some areas if they provide additional guidance here. Right now EPA will forge ahead, now that the government is funded again, with its listening tours and outreach to the states and industry. Some leaders in Congress will try to slow them down as well. The timelines announced in the president's directives are tight and would conclude most of the rule-makings before the end of his term.