Megan Herzog has done a great job of explaining the background of the rules and summarizing the proposal in her blog posts. I just wanted to add a quick note about how EPA has structured its rules in light of possible legal challenges. The fundamental issue facing EPA is how to define the “best system” for reducing carbon emissions. Is it limited to technological upgrades at individual emitters? Or can it be broader, and if so, how broad? Industry is sure to argue that EPA can only set standards for individual plants that emit carbon, nothing more.
EPA responds to this argument in two ways. First, as Megan notes, states can use measures drawn from four “building blocks” — reductions at individual emitters, trading with other emitters, use of renewable energy, and energy efficiency. The first block corresponds to industry’s interpretation of the law. The second block is a bit broader, but the Supreme Court’s recent decision in EME Homer strongly supports its legality. So EPA asks for comment on the possibility of using only the first two blocks. It might decide to take this option, I suspect, if it loses really badly in a case currently pending before the Supreme Court, since that might be a signal of how the Court will approach these regulations. In any event, EPA is also making the building blocks legally severable, so that in the worst scenario it still has building block 1 in place even if it loses everything else.
Second, EPA has structured the emissions goals in a way that undercuts the distinction between “inside the fence” and “outside the fence” emissions reductions. The state goals are set as emission rates for fossil-fuel fired plants (on a statewide basis). The initial rate is set based on the first two blocks, but then the state gets to count avoided emissions through use of new renewables or energy efficiency as part of the plants’ output. Essentially, this counts emissions that are avoided through reduced plant utilization as part of a plant’s compliance. States are given the option of simply translating the emissions goals into a limit on the total mass of carbon emitted by its generators. In short, the goal is measured through the output and emissions of fossil-fuel plants, which they can essentially meet either by cutting back on carbon emissions per megawatt or by reducing their number of megawatts. The result is to deconstruct the significance of the “fence line” as a way of thinking about the program.
Overall, EPA seems to have done as good a job as possible of insulating the proposed rules from fundamental legal attack. That doesn’t guarantee success, of course. We’ll know more about the Supreme Court’s attitude when it decides the current case. It will be a bad sign if it strikes down all of the PSD rule that it is considering, whereas if it upholds even part of that rule it will be a helpful indication for EPA.
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Daniel Farber | June 2, 2014
Megan Herzog has done a great job of explaining the background of the rules and summarizing the proposal in her blog posts. I just wanted to add a quick note about how EPA has structured its rules in light of possible legal challenges. The fundamental issue facing EPA is how to define the “best system” for […]
Erin Kesler | June 2, 2014
Today, Center for Progressive Reform Member Scholar Robert Verchick published an op-ed in New Orleans’ Times-Picayune entitled, “Gov. Jindal, don’t sign away our legal claims against BP.” The piece notes: Governor Jindal will probably sign SB469, a bill designed to neutralize the Southeast Louisiana Flood Protection Authority – East’s lawsuit against oil and gas companies. But does […]
Joel Eisen | May 30, 2014
Last Friday (May 23), in Electric Power Supply Association v. FERC, a D.C. Circuit panel split 2-1 and vacated Order 745, a Federal Energy Regulatory Commission (FERC) rule designed to promote “demand response” (DR). DR is a rapidly growing and valuable means of reducing electricity demand, thereby benefiting consumers and the environment. It is also an important […]
Erin Kesler | May 29, 2014
Center for Progressive Reform Member Scholar and Professor of Law and Emory University School of Law William Buzbee will be testifying today at a House Committee on Small Business Administration Hearing entitled, “Will the EPA’s ‘Waters of the United States’ Rule Drown Small Businesses?” According to Buzbee’s testimony: The purpose and logic of the new “waters” proposed […]
Victor Flatt | May 28, 2014
On May 14, 2014, the EPA proposed new rules to control “residual risk” from hazardous air emissions (such as from benzene) at the nation’s petroleum refineries. The Clean Air Act requires the EPA to calculate whether or not residual risk to human health exists after the agency has put Maximum Achievable Control Technology (MACT) in […]
James Goodwin | May 27, 2014
Sometime last Friday—the Friday before the Memorial Day holiday weekend—the Obama Administration quietly issued the Spring 2014 Regulatory Agenda. It’s becoming something of a tradition for the Administration to release this semiannual document on classic “take out the trash” news days in this fashion. The Fall 2013 Regulatory Agenda was similarly released to whatever the […]
Rena Steinzor | May 22, 2014
The federal regulatory system is in crisis. For the past several decades, a damaging set of mandates has continued to pile up on the books—mandates that threaten to stifle critical progress and undermine the nation’s ability to compete in the world economy. Even today, out-of-touch policymakers are attempting to add still more of these mandates, […]
Alexandra Klass | May 22, 2014
Within the past month, two federal district courts—one in Colorado and one in Minnesota—have issued important decisions on the constitutionality of state clean energy policies. Both cases raised the same legal issue, namely, whether the state laws in question regulate extraterritorially in violation of the dormant Commerce Clause of the U.S. Constitution. But the courts […]
Amy Sinden | May 20, 2014
The EPA issued its long-awaited cooling water rule yesterday and the score appears to be: Industry – home run; Fish – zero. Which is to say, it’s bad news not just for the fish but also for all of us who depend on the health of our aquatic ecosystems – which is to say, everyone. […]