Bloomberg News

EPA Carbon-Limits Challenge Won’t Get Court Rehearing

December 20, 2012

A divided federal appeals court declined to reconsider a three-judge panel’s ruling that upheld U.S. Environmental Protection Agency limits on industrial and automotive emissions of greenhouse gases.

Voting 6-2, the U.S. Court of Appeals in Washington today rejected a request by business groups, energy companies and the state of Alaska that the full court consider its challenge to the EPA’s regulation of gases including carbon dioxide.

“The underlying policy questions and the outcome of this case are of exceptional importance,” U.S. Circuit Judge David Sentelle wrote in a four-page ruling. “The legal issues presented, however, are straightforward, requiring no more than the application of clear statutes and binding Supreme Court precedent.”

The three-judge panel in June ruled that the EPA properly concluded that greenhouse gases are pollutants which endanger human health and that opponents don’t have the legal right to challenge rules determining when states and industries must comply with regulations curtailing emissions of them.

Companies such as Peabody Energy Corp. (BTU:US), business groups including the U.S. Chamber of Commerce and states led by Texas and Virginia sought to stop the agency through more than 60 lawsuits. Some argued that the EPA relied on biased data from outside scientists.

Considering Review

“We will continue to fight against these regulations and are carefully considering Supreme Court review,” Jay Timmons, president of the National Association of Manufacturers, said in an e-mailed statement issued on behalf of two dozen business and industry trade groups.

Votes by two judges to rehear the case “send a clear signal that significant legal issues remain to be addressed,” Timmons said.

Automakers intervened in support of the new standards. Through the Alliance of Automobile Manufacturers, the carmakers supported a national program, saying they wanted to avoid conflicting standards from state and federal regulators.

In 2007, the U.S. 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 an endangerment finding in December 2009, clearing the way for regulation of emissions from power plants, factories and other sources linked to global climate change.

Power Plants

The EPA proposed the first-ever greenhouse-gas restrictions on new power plants, the largest emitter of those pollutants, last year, and is scheduled to complete those rules in the coming months.

The two appeals judges who voted in favor of reconsidering the case, Janice Rogers Brown and Brett Kavanaugh, argued that the EPA had overstepped its authority when determining that greenhouse gases are pollutants under the Clean Air Act.

“To find that CO2 may ultimately endanger public health and welfare because sea levels will rise tells us nothing about whether CO2 concentrations in ambient air directly harm public and welfare,” Brown, who was appointed to the court by President George W. Bush, said in her 23-page dissent.

The court also heard arguments against a 2010 rule on motor-vehicle emissions that opponents said improperly sets standards for stationary sources, such as steel mills and power plants.

Tailoring Rule

The court considered challenges to the EPA’s tailoring rule, which limits the businesses covered by carbon regulation and phases in controls. The agency plans 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 keep states from being overrun with permit requests.

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

The lead 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 tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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