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Obama’s EPA 2, Agency Opponents 0 at Supreme Court

By Greg Stohr and Mark Drajem
June 23, 2014 3:20 PM EDT 125 Comments

The Environmental Protection Agency retained the legal right to curb greenhouse gases from large power plants, refineries and chemical factories, adding to a string of environmental court wins for the Obama administration.

The U.S. Supreme Court today largely upheld the EPA’s requirement for emitters of gases tied to climate change -- backing the rules for large facilities, while barring them for smaller polluters such as apartment buildings, schools or restaurants. After the decision, facilities responsible for 83 percent of emissions still need a permit.

“EPA is getting almost everything it wanted in this case,” Justice Antonin Scalia, who wrote for the majority, said in announcing the decision today.

The high court’s ruling follows its rejection last year of a plea to reconsider whether the agency can regulate greenhouse gases, and a decision in April upholding the EPA’s rule cutting pollution from power plants tied to soot and smog that crosses state lines. A lower court upheld its far-reaching mercury rule.

In each of the earlier cases the court deferred to the agency in figuring out how to apply complex statutory language, something Scalia, a frequent critic of the EPA, did in part today.

“The Supreme Court largely upheld EPA’s approach to focusing Clean Air Act permits on only the largest stationary sources of greenhouse gases such as power plants, refineries and other types of industrial facilities,” Liz Purchia, an EPA spokeswoman, said in a statement.

Power Plants

The decision doesn’t touch President Barack Obama’s more comprehensive climate-change proposal released June 2 to cut carbon emissions from existing power plants. No precedent was set that could alter that plan, said Ricky Revesz, director of the Institute for Policy Integrity at New York University.

The court’s refusal in October to consider arguments over the EPA rules left business groups fighting the permit requirement, which they said could have ultimately affected millions of facilities.

“The real concern was the bringing in of much smaller manufacturing entities,” said Leslie Hulse, a lawyer at the American Chemistry Council, which advocated the divided approach the court adopted.

Today’s ruling heads off that possibility, limiting the rules to a few hundred facilities that already have to get permits for other pollutants. The justices said greenhouse-gas emissions by themselves can’t serve as the trigger for a permit requirement.

Splintered Court

The case splintered the court. Chief Justice John Roberts and Justice Anthony Kennedy joined Scalia’s opinion. The four Democratic appointees -- Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan -- said they would have gone further to back the EPA.

Justices Samuel Alito and Clarence Thomas said they would have barred the EPA from regulating greenhouse gas emissions even from the largest sources. They said the court was wrong in 2007 when it said the agency could regulate climate change under the Clean Air Act.

Scalia blasted what he termed the overreach by the agency in requiring a facility to get a permit solely because of greenhouse-gas emissions, which he said would expand the program to include many smaller facilities that lawmakers did not intend to include in the lengthy, expensive process.

That approach “would bring about an enormous and transformative expansion in EPA’s regulatory authority without clear congressional authorization,” Scalia wrote.

‘Rhetorical Ammunition’

That language will give rhetorical ammunition, though not a controlling legal precedent, to groups that may challenge the administration’s power plant plan, said Roger Martella, a Washington lawyer who represented the American Chemistry Council in the high court case.

The permitting requirements are part of the EPA’s Prevention of Significant Deterioration program under the Clean Air Act. Under that program, facilities must install the best available technology to control emissions from new or modified major sources of air pollution. That permitting process can take a year or more.

The industries primarily affected by the requirements are power plants, chemical facilities, oil and gas projects and cement plants, according to the EPA. Companies that have applied for permits include Calpine Corp. (CPN), ExxonMobil Corp. (XOM) and Occidental Petroleum Corp. (OXY) Since 2011, 172 greenhouse-gas permits have been issued, according to the EPA.

Mercury, Carbon

The heart of the decision focused on requirements in the Clean Air Act that facilities get a review if they emit any air pollutant at 100 tons or 250 tons, depending on the type of source. While that is a large amount for traditional pollutants such as mercury or sulfur dioxide, it could cover many thousands more facilities if carbon dioxide emissions were counted at that level.

“Like EPA, we think it beyond reasonable debate that requiring permits for sources based solely on their emission of greenhouse gases at the 100- and 250-tons-per-year levels set forth in the statute would be ‘incompatible’ with ‘the substance of Congress’s regulatory scheme,’” Scalia wrote in the majority opinion.

Before today’s decision, the EPA had instituted a provision to “tailor” the applicability of the permits to larger facilities as a way to get around the tonnage requirement. EPA said it would eventually move to apply the rules to polluters of all levels, but that approach was tossed by the court today.

To contact the reporters on this story: Greg Stohr in Washington at gstohr@bloomberg.net; Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editors responsible for this story: Patrick Oster at poster@bloomberg.net Steve Geimann, Laurie Asseo

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