INSIGHT: Court leaves Congress to remedy EPA greenhouse rules

28 June 2012 16:08  [Source: ICIS news]

By Joe Kamalick

Only Congress can now rein-in EPA GHG rulesWASHINGTON (ICIS)--A landmark court ruling this week essentially shut the door on hopes among US industry that judicial remedies could reverse ever-expanding federal rules limiting greenhouse gases, leaving only a precarious possibility that Congress might act someday to rein-in runaway regulators.

A US appellate court on Tuesday dismissed the legal challenge to federal regulation of greenhouse gases (GHG) filed by a broad coalition of industries and several states, saying the Environmental Protection Agency (EPA) may rightly impose limits on such emissions.

Manufacturing interests quickly termed the ruling a major and costly setback for US industry, agriculture and other businesses.

Various state governments joined an industrial and manufacturing coalition in challenging the December 2009 “endangerment finding” by EPA that carbon dioxide (CO2) and other greenhouse gases are “pollutants” and that the agency had authority to regulate and limit such emissions.

EPA has based its broad swipe against GHG emissions on the 2007 Supreme Court ruling in Massachusetts v. EPA, in which the high court held that carbon dioxide, other greenhouse gases, and anything else in the atmosphere, come within the purview of the 1970 Clean Air Act.

The high court said that if EPA determined that GHGs posed a health risk, the agency could and should regulate those substances. In its endangerment finding of 2009, EPA did just that, citing UN-sourced global warming research – widely criticised – as its scientific basis.

The state and industry petitioners also challenged the EPA’s later “tailoring rule” – in which the agency limited its initial GHG emissions restrictions only to major facilities, such as power plants, chemicals factories, refineries and other production – charging that it was discriminatory and beyond the EPA’s authority under the Clean Air Act.

By its own admission, EPA said that its regulation of all emissions sources as defined by the Clean Air Act would have an “absurd result”, requiring millions of entities, including farms, hospitals, universities, schools and even many private homes to obtain emissions permits from the agency.

In this week’s sharp and even hostile 82-page ruling, the US Court of Appeals for the DC Circuit held that EPA’s “endangerment finding” was neither arbitrary or capricious, and that the agency’s interpretation of the Clean Air Act as it applies to greenhouse gas “is unambiguously correct”.

The court did not rule directly on the challenge to EPA’s “tailoring rule”, saying that none of the petitioners in the case had standing, meaning they were not legally entitled to contest that EPA action.

The National Association of Manufacturers (NAM) was quick to condemn the court’s ruling, saying that it “is a setback for businesses facing damaging regulations from the EPA”.

Speaking on behalf of Coalition for Responsible Regulation (CRR), NAM president Jay Timmons said the many plaintiffs within the coalition “will be considering all of our legal options” in the wake of the court ruling.

The coalition includes the American Chemistry Council (ACC) and the American Fuel & Petrochemical Manufacturers (AFPM) and the American Petroleum Institute (API) along with a variety of foods, agriculture and other manufacturing or energy interests.

Timmons indicated that NAM and the coalition would press the case, either in the courts or through Congress or both.

Calling the EPA regulation of greenhouse gases “one of the most costly complex and burdensome regulations facing manufacturers”, Timmons said the rules will inhibit companies’ “ability to hire, invest and grow”.

“The debate to address climate change should take place in the US Congress,” he added.

Congress considered a cap-and-trade greenhouse gases bill in 2009 but failed to approve it.

Congress is not going to take up the issue during this election year, that is certain.

Whether it does so in 2013 or beyond is also a long shot, even if there is a Republican in the White House and Republicans win a majority in the Senate and retain their majority in the House.

Senator James Inhofe of Oklahoma, ranking Republican on the Senate Environment Committee, said the court finding constituted “a huge loss for every American, especially those in the heartland states which rely on fossil fuel development and the affordable energy that comes with it”.

“And what will Americans get in return for this regulatory nightmare?” he asked. “Even EPA administrator Lisa Jackson has said that these rules will have no effect on the climate, so it will be all pain for no environmental gain.”

“Last year 64 senators went on record as wanting to stop these devastating greenhouse gas regulations from taking effect,” Inhofe said, adding: “It’s time they actually do so.”

On the House side, Republican Congressman Fred Upton, chairman of the Energy and Commerce Committee, said the court decision enshrining EPA’s greenhouse gases authority “delivers a devastating blow to the US economy and American consumers”.

He charged that EPA’s regulations are “slowing economic growth and threatening to entangle millions of small businesses” and “represent an unprecedented expansion of EPA authority that has the potential to affect virtually every sector of the economy and touch every household”.

Jeff Holmstead, an attorney with the Washington, DC, office of Bracewell & Giuliani and former EPA administrator for air policy, said the EPA greenhouse gas rules are already impeding US industrial development.

“According to the estimates that EPA made when it issued the [greenhouse gas] rules,” he said, “we should have seen about 2,000 greenhouse permits issued by now for new and expanded facilities.”

“But in the 18 months since EPA’s new permitting requirements were put in place, fewer than 15 permits have been issued nationwide,” he said, adding: “The new permitting requirements that the Obama EPA has imposed have basically brought US industrial development to a standstill.”

In April this year the House passed Upton’s bill, HR-910, that would roll-back the bulk of EPA’s greenhouse gases initiatives.

That bill would essentially revoke EPA’s authority to regulate GHG, rescind those GHG-related actions already taken, and bar the agency from regulating carbon-dioxide in the future.

The measure passed in the House in April 255 to 172 – largely in a party-line vote but with help from 19 Democrats – and is now pending in the Senate. But it doesn’t stand a chance of passing in that chamber, least of all in an election year.

And even if Republicans – most of whom are openly sceptical of anthropogenic global warming and hostile to EPA’s greenhouse rules – should win the White House and Senate in November’s elections, getting Congress to essentially reverse the EPA endangerment finding and the rules that are flowing from it will be a major challenge.

Marlo Lewis, senior fellow at the Competitive Enterprise Institute (CEI) on energy and environmental policy, said that “Some push-back [against EPA] may come if Republicans are in the White House and the majority in Congress, but based on what it takes to do anything in Congress that requires real political courage, that might not be enough”.

Eventually, Lewis said, the ongoing expansion of EPA greenhouse gas regulations and their multiplying impact on industry, business and the overall economy will become so painfully apparent to the general public that Congress may finally act.

In the meantime, he said, “a regulatory cascade is coming”.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles