The Supreme Court struck down the Environmental Protection Agency’s carbon dioxide permitting scheme for power plants and other large facilities, saying the agency exceeded its authority under the Clean Air Act.
The EPA has been requiring facilities emitting more than 100,000 tons of carbon dioxide per year to get permits. The agency, however, had to “tailor” the rule to accommodate regulating carbon dioxide emitting facilities under the Clean Air Act.
“We hold that EPA exceeded its statutory authority when it interpreted the Clean Air Act to require… permitting for stationary sources based on their greenhouse-gas emissions,” Justice Antonin Scalia wrote in the majority opinion.
“Specifically, the agency may not treat greenhouse gases as a pollutant for purposes of defining a ‘major emitting facility’ … in the [permitting] context or a ‘major source’” Scalia wrote. “To the extent its regulations purport to do so, they are invalid.”
The decision was welcomed by power companies, as well as the oil and gas industry, because the rules also extended to refineries and other large manufacturing facilities.
“Today’s decision will help to ensure that permitting requirements fall within the authority granted by Congress,” said Harry Ng, vice president and general counsel at the American Petroleum Institute.
“It is a stark reminder that the EPA’s power is not unlimited. Any new rules should be designed to complement – not strangle – the manufacturing renaissance America is experiencing thanks to new energy production,” Ng said in a statement.
The Supreme Court’s decision, however, does not affect upcoming regulations limiting carbon dioxide emissions on new and existing power plants. EPA regulations on existing power plants aim to cut carbon emissions 30 percent by 2030.
Emissions limits on new and existing power plants would force the retirement of 19 percent of the U.S. coal plant fleet and cut coal production by up to 28 percent, according to the EPA’s own analysis.
“Under the provisions of this rule, EPA projects that approximately 46 to 49 GW of additional coal-fired generation (about 19 percent of all coal-fired capacity and 4.6 percent of total generation capacity in 2020) may be removed from operation by 2020,” the EPA said in its regulatory impact analysis.
The EPA’s power plant rule, coupled with other power plant rules, is projected to raise electricity prices 10 percent by 2020, according to an analysis by the American Action Forum. Consumers could pay $150 more each year for electricity due to Obama administration regulations.
The Supreme Court’s ruling also does not strike down the EPA’s ability to require industrial facilities and power plants to get permits for emitting traditional pollutants already being regulated by the agency.
“EPA is getting almost everything it wanted in this case,” wrote Scalia, adding that the EPA will be able to regulate 83 percent of carbon dioxide emissions under the court’s ruling — close to the EPA’s goal of regulating 86 percent of carbon emissions.
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