EPA Aims to Tie Democrats’ Hands for Good on Power Plant Carbon

The Trump administration’s legal strategy for overturning Obama-era power plant carbon dioxide controls goes beyond simply arguing it has the right to regulate differently, to contend that its way is the only way.

If successful, the Environmental Protection Agency could close the door on any future Democratic administration using that section of the Clean Air Act to expansively regulate climate-warming emissions from power plants. The power sector was the second-largest emitter of greenhouse gases in the U.S. in 2017, according to EPA data.

But the legal tactic is also risky, critics and supporters both say. If the argument fails, it could fail big—sending the EPA’s repeal and replacement of the Obama-era rule, known as the Clean Power Plan, back to the agency for a redo.

The EPA’s rewrite was published in the Federal Register on July 8, starting a 60-day clock to sue. Several state attorneys general, including those in California, New York, and Massachusetts, have said they will challenge the rule.

“They’re playing a purist’s game,” Joseph Goffman, former senior counsel in the EPA’s air office during the Obama administration, said in an interview. “The authors of this strategy are very, very skeptical of any kind of climate policy and dead set against the EPA using the Clean Air Act as an authority for such a policy.”

Goffman is now executive director of Harvard University’s Environmental and Energy Law Program.

“The current EPA leadership is trying to shrink the EPA’s Clean Air Act authority over greenhouse gases so it’s small enough that they can ‘drown it in a bathtub,’ ” he added, likening the agency’s tactics to Americans for Tax Reform President Grover Norquist‘s famous quote about cutting the size of the federal government.

Chevron Doctrine

At issue is the legal doctrine known as Chevron deference. That doctrine—tied to the 1984 Chevron U.S.A., Inc. v. Natural Resources Defense Council case—tees up a two-step test for whether the courts should defer to agencies’ interpretations of federal statute.

Under step two of the Chevron doctrine, if an agency determines that a federal statute is ambiguous, it can get deference—or leeway—from the courts to interpret the language, provided its interpretation is reasonable. The Obama EPA used such an argument to support the Clean Power Plan, which set first-time limits on carbon dioxide emissions from existing power plants.

Agencies typically have an easier time winning deference under that approach, legal observers say, but it leaves room for a future administration to reverse course.

To get rid of the Clean Power Plan, the EPA under President Donald Trump is using a Chevron step one justification.

Under that step, instead of explaining why its interpretation of the statute is reasonable, a federal agency must argue that its version is the only way to read the law.

It is a much higher legal bar, but a court win could have a much more permanent result, according to observers. It could tie the hands of any future administration that wanted to deviate from that interpretation.

‘Congress Spoke Directly’

The EPA’s replacement—unveiled June 19 and known as the Affordable Clean Energy, or ACE, rule—sets narrow requirements that are based solely on what individual power plants are able to achieve through efficiency improvements.

The Clean Power Plan included efficiency upgrades, but also encouraged utilities to switch to cleaner burning natural gas and renewable energy.

Trump EPA officials, however, said that approach was unlawful and far exceeded the agency’s authority. The EPA can set requirements based only on what an individual facility can achieve, and that is the sole way to read the Clean Air Act language, the agency argued.

“Congress spoke directly in Chevron step one terms” to that question, the rule reads.

Question for the Court

Because of that, the EPA’s rule tees up the possibility that the courts could decide fairly definitively on the scope of the agency’s authority.

Many legal observers say the court would have two choices: agree with Trump’s EPA that the statute can be read only one way, or send the entire Affordable Clean Energy rule back to the agency to rewrite.

The latter outcome would drag the EPA back from the regulatory finish line that has taken the Trump administration two and half years to cross. Retooling the legal underpinning for the Affordable Clean Energy rule could take the agency at least several months.

The closer it gets to the 2020 election, the higher the risk a new Democratic administration could trash the Trump EPA rule in favor of doubling down on the Obama-era approach.

With little room for middle ground in the courts, even backers of the Trump EPA’s rule acknowledge the Chevron step one path is a more challenging one.

“If the EPA had simply wanted to have the ACE rule upheld, they would have said, ‘We think this is the best way to read the statute,’” taking a Chevron step two approach, Jeff Holmstead, a partner at Bracewell LLP and former EPA air chief in the George W. Bush administration, said during a June 27 event hosted by the nonpartisan research group Resources for the Future.

‘Very Steep Hill’

Critics of the EPA’s rule are already poking holes in the agency’s argument.

Central to the EPA’s justification is its narrow read of the “best system of emission reduction” as laid out by Clean Air Act Section 111(d).

Under the Affordable Clean Energy rule, the “system” is confined only to what individual power plants can do. That is in contrast to the Clean Power Plan, which considered the power grid as the “system.”

It could be difficult for the EPA to defend its narrow reading as the only one, critics say, especially given just two years earlier the agency argued a much broader view before the U.S. Court of Appeals for the District of Columbia Circuit, the court that will hear any lawsuit over the new rule.

Legal challenges to the Clean Power Plan were fully briefed and argued before the full D.C. Circuit before the 2016 election.

“The word ‘system’ is very broad, and Congress knows how to use restrictive language when it wants to,” Megan Ceronsky, executive director of the Center for Applied Environmental Law & Policy, said in an interview.

“To argue before a court that the phrase ‘best system of emission reduction’ can only be interpreted in an extremely constrained and rigid way is hard,” added Ceronsky, who served as a climate and energy adviser in the Obama White House. “They are trying to push a very big rock up a very steep hill.”

The High Court

But even agency critics acknowledge that the Supreme Court’s makeup could tip the legal scales in the EPA’s favor.

Conservative-leaning justices like Neil Gorsuch and Brett Kavanaugh, for example, have raised questions about the court’s use of Chevron deference. During his time on the D.C. Circuit, Kavanaugh expressed strong skepticism of Obama-era greenhouse gas rules.

And three of the sitting justices dissented in Massachusetts v. EPA, the landmark 2007 case that found the agency has authority to regulate greenhouse gas emissions.

Were the Supreme Court to ultimately agree with the Trump administration, “then you can’t have anything that looks like a Clean Power Plan,” Ann Carlson, an environmental law professor at the University of California Los Angeles, said in an interview.

“You really cabin the flexibility to come up with a rule that would result in greater greenhouse gas emissions reductions,” she added.