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EPA Seen as Prepared for Big Challenges Ahead of Carbon Rules

July 7, 2022, 7:12 PM

The EPA’s lawyers and rule writers face challenges as they work to finalize incoming carbon rules that avoid running afoul of the Supreme Court’s recent decision on power plant emissions, but the long runway up to the decision gave the agency adequate time to prepare, court watchers say.

The Supreme Court ruled last week that the Environmental Protection Agency didn’t have express permission from Congress to regulate on a broad, sector-wide basis under the Clean Air Act. The ruling didn’t rescind any authority to regulate greenhouse gases, but major, science-based moves to mitigate severe climate impacts got harder.

“EPA probably indicated that it recognized some things were going to be in the works with respect to the new power sector climate change regs when it informed the court that it was going to push things back to next spring, according to Morgan Lewis partner Rick Rothman. The agency updated its timeline to March 2023 to release carbon rules for existing power plants.

But the limits the court put on the agency will still prove to be an obstacle, Rothman said.

The agency is also likely to play it safe when it releases those rules given the court’s stance on “major questions,” which limits the scope of Clean Air Act authority to manage greenhouse gas emissions based on what is dictated by Congress, according to Michael Van Zandt, an environmental law practice leader at Hanson Bridgett LLP.

“Until we get clear direction from the congressional leaders as to how they think we should proceed, EPA is probably just going to basically lay low until they’ve tried to figure out another path to accomplish their goals,” he said.

Contingency Plans

Still, the EPA insists it is on track for the March 2023 deadlines on carbon rules, and some observers aren’t worried that most of the homework has already been done in anticipation of the decision in West Virginia v. EPA.

An EPA spokeswoman said the agency “will continue to conduct outreach in 2022 on greenhouse gas rules for new and existing power plants and propose further rulemaking under Clean Air Act section 111 in early 2023.”

Stan Meiburg, a former EPA acting deputy administrator and now director of Wake Forest University’s graduate sustainability program, said the EPA has been preparing for a range of different decisions for months.

“I don’t think this was a surprise,” Meiburg said. “Agency attorneys have been aware this is an issue for a long time. They’ve been anticipating it. So I don’t think it’s a case of, ‘Oh my God, EPA is going to grind to a halt because of this decision.’”

David Doniger, the EPA’s former director of climate change policy, agreed that the time frames are “doable,” if challenging.

“They have been doing analytical work and a lot of deep thought about how you structure something—what features you do or don’t include that you try to think through before you sit down and try to write it out in Federal Register text form,” said Doniger, now senior strategic director of the climate and clean energy program at the Natural Resources Defense Council.

EPA Administrator Michael Regan told a Senate committee in April that the agency would have a new standard to limit carbon emissions “ready to go as soon as the Supreme Court rules” on its authority to regulate in that space. He had earlier promised a set of tools to deal with emissions from power plants.

“We want to be sure that the rule that we design will fall within where the Supreme Court will land,” Regan told the lawmakers.

Joe Goffman, President Joe Biden’s nominee to lead the EPA’s Office of Air and Radiation, told the same panel in May that the EPA had “identified different options for responding” once the Supreme Court rules.

Potential Challenges

Among the challenges facing the EPA are staff shortages across the board, a ticking clock on the Biden administration’s first term, and a sometimes sclerotic bureaucracy that requires multiple checks and balances, according to Anne Idsal Austin, who led the air office under President Donald Trump.

“The lawyers are probably frustrated,” said Austin. “I would imagine that, under the current administration, they’ve been told, ‘Go big or go home, we need to regulate greenhouse gases,’ and now they have to deal with this significant set of parameters that have been placed around the EPA.”

Another potential snag is the fact that the Office of Air and Radiation still doesn’t have a confirmed political leader. Goffman is serving as acting head, but his confirmation is being held up in the Senate by holds from Republican lawmakers.

That matters because any decisions that come out of Goffman’s office are likely to draw more scrutiny from the administration’s opponents, including congressional lawmakers, said Austin, now a partner at Pillsbury Winthrop Shaw Pittman LLP.

To contact the reporters on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com; Jennifer Hijazi in Washington at jhijazi@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com