Texas Loses Challenge to Greenhouse Gas Rules

     (CN) – The D.C. Circuit declined to stop enforcement of new rules that compel states to regulate greenhouse gases as air pollutants under the Clean Air Act.
     After the U.S. Supreme Court held in 2007 with Massachusetts v. EPA that greenhouse gases qualify as an air pollutant under the Clean Air Act, the Environmental Protection Agency ordered states to set up a permitting process for greenhouse gas emitters.
     By 2010, the EPA found the permitting plans of 13 states to be inadequate since they lacked a provision to include carbon dioxide as a pollutant.
     Of the 13 states that lacked an adequate state implementation plan, or SIP, Texas alone refused to identify when it planned to comply with the new regulations. In fact, in 2010 the Texas Attorney General Greg Abbot sent a letter to the EPA stating that Texas had “neither the authority nor the intention of interpreting, ignoring or amending its laws in order to compel the permitting of greenhouse gas emissions.”
     In response, the agency ordered Texas to comply by Dec. 1, 2011, and advised the state that it could take legal action to ensure “that greenhouse gas sources in Texas, as in every other state in the country, have available a permitting authority to process their permit applications.”
     Texas and Wyoming, another of the 13 that had been faulted for an inadequate plan, sued the EPA in 2012. They claimed that the Clean Air Act gives states the primary role in adopting and revising implementation plans, but that the EPA has imposed regulations as part of its “greenhouse gas regulatory agenda.”
     Additionally, Texas argued that the EPA failed to give the state the required three years to comply with the greenhouse gas regulations. It said the EPA had threatened to take over part of the state’s air permitting program immediately or impose a construction moratorium on the Texas businesses if the state did not agree to comply immediately with the regulations.
     Abbot blasted the “unelected, unaccountable bureaucrats at the EPA” for “flouting the law by denying Texas the opportunity to manage its own air permitting program.”
     “The EPA’s unlawful scheme threatens Texas jobs and businesses by imposing costly and unnecessary greenhouse gas regulations immediately and improperly,” the Texas prosecutor said at the time. “These expensive mandates do little to make our air safer or to control the global warming the EPA insists is threatening our country, while doing great damage to our energy independence and economic recovery.”
     A divided three-judge panel of the D.C. Circuit concluded last week, however, that the Clean Air Act “unambiguously requires a PSD [prevention of significant deterioration of air quality] permit setting forth emission limitations for each pollutant subject to regulation under the act before a major emitting facility may be constructed, even when the applicable SIP has not been updated to include requirements for newly regulated pollutants.”
     Three times the court has interpreted the act as prohibiting the unpermitted construction of stationary pollution sources, according to the ruling.
     Once the EPA’s “Tailpipe Rule” added greenhouse gases to the air pollutants list, the PSD program automatically applied to those facilities, the appellate judges added.
     “This understanding of congressional intent is reinforced by the different text for Part D permits and precedent of the Supreme Court and this court,” Judge Judith Rogers wrote for the majority. “‘If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.'”
     Rogers included the latter remark as a reference to the 1984 decision Chevron USA Inc. v. Natural Resources Defense Council.
     Texas and Wyoming also failed to persuade the court that they could continue issuing permits until they added greenhouse gases to their SIPs, under the Clean Air Act’s “cooperative federalism” doctrine.
     Congress gave the EPA power to act in states where federal air quality standards are not maintained, according to the ruling.
     “Congress had determined federal PSD oversight was necessary to prevent states from improperly competing for industry by adopting more permissive pollution controls,” Rogers wrote. “One of Congress’s stated goals for the PSD program was to ensure that economic growth occurred ‘in a manner consistent with the preservation of existing clean air resources.’ The same rationale explains why Congress made CAA section 165(a) self-executing for newly regulated pollutants: otherwise, states would have a perverse incentive to delay incorporating new pollutants into revised SIPs in order to compete for industry in the interim.”
     Rogers added: “Neither Texas nor Wyoming has suggested that revising their SIPs to incorporate PSD permitting for greenhouse gases would require independent balancing of local conditions and needs. As EPA observed, a corrective SIP revision could constitute a simple addition of greenhouse gases to the list of pollutants subject to PSD permitting. Indeed, most States’ PSD programs automatically update to include newly regulated pollutants like greenhouse gases. Others subject to the SIP Call Rule, including respondent-intervenor Connecticut, worked cooperatively with EPA to revise their SIPs and to ensure permitting continuity promptly and as needed. Texas alone did not, informing EPA that it had ‘no intention’ of revising its SIP because of its disagreement with EPA’s regulation of greenhouse gases under the Act. Invoking ‘cooperative federalism’ in these circumstances has a hollow ring.”
     The panel also rejected arguments that the Tenth Amendment prohibits the EPA from forcing states to give up their rights in order to carry out federal policy. The court noted that the Supreme Court has “repeatedly affirmed the constitutionality of federal statutes that allow states to administer federal programs but provide for direct federal administration if a state chooses not to administer it.”
     “State petitioners concede that direct federal regulation of greenhouse gas emissions is within Congress’s authority under the Commerce Clause,” Rogers added.
     This marks the second time that the federal appeals court sided with the EPA in a challenge to its new greenhouse gas rules. Last summer, the D.C. Circuit upheld the Tailpipe Rule on greenhouse gases emitted by cars and light trucks.
     In the latest case, Judge Brett Kavanaugh wrote in dissent that states should still be allowed to issue PSD construction permits while revising their implementation plans.
     Kavanaugh also took issue with the EPA’s decision to revoke Texas’s SIP and its imposition of its own final implementation plan instead.
     “EPA relied on an alternative ground in imposing a FIP on Texas before Texas’s 12-month deadline for revisions had even passed,” Kavanaugh wrote. “EPA retroactively disapproved Texas’s preexisting SIP because, according to EPA, the SIP was flawed when EPA approved it 18 years earlier. EPA claims that Texas’s SIP was flawed because the SIP neither (i) updates automatically to incorporate new federal regulations, such as the greenhouse gas regulations, nor (ii) provides express assurances that the state will update its plan as necessary whenever a new EPA regulation issues. But neither the Act nor EPA regulations require either an automatically updating SIP or assurances that the state will reflexively update its plan. So Texas’s SIP was not flawed when EPA approved it 18 years earlier, and it cannot be retroactively disapproved on that basis.”

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