EMERGENCY DOCKET

Supreme Court allows EPA emissions rule to stand while litigation continues

The Supreme Court on Wednesday left in place a rule issued by the Environmental Protection Agency in May to reduce emissions of carbon dioxide by power plants. In a brief order, the justices turned down a request from states, energy companies, and other industry groups to put the rule on hold while their challenge in a federal appeals court moves forward.

Defending the rule, the EPA says that it would lead to significant reductions in carbon pollution over the next two decades – “equivalent to preventing the annual emissions of 328 million gasoline cars.” And that in turn, the EPA argues, could provide nearly $400 billion in benefits to the climate and public health.

Justice Clarence Thomas would have temporarily blocked the EPA from enforcing the rule.

Justices Brett Kavanaugh and Neil Gorsuch expressed sympathy for the challengers’ arguments, but they noted that because the litigation is moving quickly in the lower court, they are unlikely to be affected by the rule for now.

Justice Samuel Alito did not participate in the case, presumably (although he did not say so explicitly) because he owns stock in one of the companies involved in the challenge.

The Supreme Court’s order came just under four months after a divided court granted a request to block a different rule issued by the EPA while a challenge moved forward in the U.S. Court of Appeals for the District of Columbia Circuit. The rule there, stemming from the agency’s interpretation of a law known as the “good neighbor” provision of the Clean Air Act, was intended to reduce air pollution from power plants and other industrial facilities that affects downwind states.

That case, Ohio v. EPA, also came to the court on its so-called “shadow” docket – that is, as an emergency appeal asking the justices to put the rule on hold while proceedings in the D.C. Circuit continued. The states, companies, and industry groups seeking to block the “good neighbor” rule came to the Supreme Court in Oct. 2023, asking the justices to intervene. The justices agreed in December to hear argument in the case and fast-tracked the case for consideration in February; the court issued its opinion in late June.

Earlier this month the court turned down two other sets of requests on its shadow docket to put other EPA rules on hold while litigation moves forward. One set of requests sought to block an EPA rule regulating the release of mercury and other hazardous air pollutants from coal-fired power plants; another request dealt with a challenge to a portion of an EPA rule intended to regulate methane emissions from oil and gas facilities. In those cases, the justices did not provide any explanations for their decisions, and there were no recorded dissents.

At the center of the dispute over the rule that the justices left in place on Wednesday is the rule’s focus on reducing carbon dioxide emissions by requiring some power plants to meet emissions standards similar to what they would achieve using “90% carbon capture” – a technology that relies on chemical solvents to remove 90% of the carbon dioxide from a plant’s exhaust stream and then permanently store it underground.

A group of states, energy companies and other industry groups challenged the rule in the D.C. Circuit. In a unanimous order in July, three judges – two Obama appointees and one Trump appointee – rejected a request to put the rule on hold while the challenge moves forward there. But the court of appeals agreed to fast-track the case, with briefing now scheduled to finish by Nov. 1.

The challengers came to the Supreme Court in late July, asking the justices to step in and put the rule on hold as they did in the Ohio case in June. They contended that the Supreme Court is likely to strike down the rule – one of the main criteria in deciding whether to grant temporary relief – because it is inconsistent with the text of the Clean Air Act, which requires the EPA to determine the “best system of emission reduction” that is “adequately demonstrated.” While acknowledging that 90% carbon capture is an “important emerging technology,” the challengers insisted that it is not currently achievable on a large commercial scale. “At best,” Ohio suggested in its brief, “this is like an 1840 law regulating widespread use of incandescent light bulbs. “At worst, this is the Betamax.”

Moreover, the challengers argued, the rule also violates the “major questions doctrine” – the idea that if Congress wants to give an agency the power to make decisions of vast economic and political significance, it must say so clearly. The challengers pointed to the court’s 2022 decision in West Virginia v. EPA striking down the Clean Power Plan, a set of regulations adopted during the Obama administration to combat climate change by making industry-wide changes. In an opinion by Chief Justice John Roberts, a divided court concluded that the Clean Air Act did not give the EPA that kind of “unprecedented power over American industry.”

The same is true here, the challengers wrote, because the rule is really intended to force coal-fired power plants to close by setting impossibly stringent emissions standards. But Congress, West Virginia contended in its request for relief, “kept the question of how much coal-based generation should exist for itself.”

The challengers also warned the justices of permanent harm if the rule is not put on hold while litigation continues. Without a stay, power companies will have to make “irreversible decisions about plant closures, replacement generation, and the like that involve enormous irretrievable costs and risk electric reliability,” private industry groups told the court. And the states predicted that allowing the rule to remain in place could lead to “major rate hikes” and leave residents “unnecessarily vulnerable to brownouts and blackouts.”

Representing the EPA, U.S. Solicitor General Elizabeth Prelogar pushed back against the challengers’ suggestion that standards based on 90% carbon capture were not achievable. Carbon capture was patented almost a century ago, she observed, and extensive pipeline systems have been operated in this country “for decades.” The real dispute is not over the use of the technology, she countered, but instead over “whether the capture rate should be 90% or some other percentage, and how long it takes to install” facilities for carbon capture. But those are precisely the kinds of “technical and scientific issues that Congress entrusted to the expert agency,” the EPA. And the EPA has reasonably concluded, she wrote, “based on hundreds of pages of scientific and technical analysis, that the carbon-capture system has been adequately demonstrated and that standards of performance based on that system are achievable.”

Prelogar also rejected the challengers’ contention that the rule violates the “major questions doctrine,” insisting that this is not a case in which the EPA is making a “novel” claim of “extravagant” power. Rather, she wrote, the EPA for a half-century has set “performance standards based on measures that would reduce pollution by causing plants to operate more cleanly” – just as it did here. The fact that the rule may impose significant costs does not, standing alone, “trigger major-questions analysis,” Prelogar maintained. The Supreme Court, she noted, “often resolves multi-billion-dollar cases without invoking the major-questions doctrine,” and the projected costs associated with the rule are not “unusually large within the specific context of power-plant regulation.”

A group of power companies, led by Pacific Gas & Electric Co., echoed the EPA’s plea to leave the rule in place for now. The companies argued that if the challengers were correct that the rule would lead to the kind of generation shifting that the court struck down in West Virginia v. EPA “simply because it will reduce the operation of coal-fired power plants, then any rule requiring coal plants to control their emissions would implicate the major questions doctrine.”

The EPA also countered that power companies will not be permanently harmed if the rule remains in place for now. Power plants don’t actually need to comply with the emissions standards for six to eight years, Prelogar emphasized, and even the “feasibility work” that states would need to do before the June 2026 deadline to submit state plans would not need to begin before June 2025.

Nearly two months after the briefing was completed, the justices issued a one-sentence order denying the challengers’ request to block the rule while litigation in the D.C. Circuit moves forward.

Kavanaugh, joined by Gorsuch, explained that in his view the challengers had shown a “strong likelihood of success on the merits as to at least some of their challenges” to the rule. But because – as Prelogar had stressed – the challengers do not need to begin their work to comply with the rule until next June, they are unlikely to be permanently injured by the rule before the D.C. Circuit issues its decision.

Kavanaugh left open the possibility that the challengers could return to the Supreme Court to again seek temporary relief if necessary after the D.C. Circuit’s ruling.

This article was originally published at Howe on the Court.