Bloomberg News

EPA’s Greenhouse Gas Rules Are Illegal, Opponents Tell Court

February 29, 2012

The U.S. Environmental Protection Agency’s limits on industrial emissions of greenhouse gases including carbon dioxide are illegal and must be thrown out, opponents told federal judges in Washington.

A three-judge panel of the U.S. Court of Appeals today considered challenges to the agency’s rules determining which polluters are covered and when states and industries must comply with regulations curtailing the use of greenhouse gases.

“The agency crossed the line from statutory interpretation to statutory revision,” Peter Keisler, a lawyer for the National Association of Manufacturers, told the judges. He said the EPA violated the law when the agency raised emissions thresholds far above what Congress called for.

Companies such as Massey Energy Co. (MEE), business groups including the U.S. Chamber of Commerce and states led by Texas and Virginia are seeking to stop the agency through more than 60 lawsuits. Some argue that the agency relied on biased data from outside scientists, including some affiliated with the so-called climategate scandal.

The arguments were split into three parts. The panel heard arguments yesterday on the agency’s finding that greenhouse gases are pollutants that endanger human health. They also heard arguments against a 2010 rule on motor vehicle emissions that opponents said improperly sets greenhouse-gas standards for stationary sources, such as steel mills and power plants.

‘Tailoring Rule’

Today, the court considered challenges to the EPA’s “tailoring rule,” which limits the businesses covered by carbon regulation and phases in controls.

The agency aims to phase in industrial polluters covered by the carbon rules through 2016. The EPA argued in court filings that the tailoring rule is acceptable under the Clean Air Act and necessary to avoid states being overrun with permit requests.

In 2007, the Supreme Court ruled that the EPA had authority to regulate greenhouse gases such as carbon dioxide and methane under the Clean Air Act if the agency declared them a public danger. The EPA issued a so-called endangerment finding in December 2009, clearing the way for regulation of emissions from power plants, factories and other sources linked to global climate change.

The regulations require only the biggest emitters, such as power plants and oil refiners, obtain state carbon permits before building or upgrading facilities. State officials will determine pollution controls case by case.

‘Uphill Battle’

“A lot of the focus has been on endangerment, but that is going to be an uphill battle” for industry, said Jeffrey Holmstead, a lawyer at Bracewell & Giuliani LLP (1222L) in Washington who isn’t involved in the case. “The biggest vulnerability for EPA is on the tailoring rule.”

If the EPA loses on that it would create such chaos that “it forces Congress to act,” said Holmstead, who was an EPA official during the George W. Bush administration.

The case is Coalition for Responsible Regulation Inc. v. Environmental Protection Agency, 09-1322, U.S. Court of Appeals, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at

To contact the editor responsible for this story: Michael Hytha at

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