On February 24, 2014, the Supreme Court heard argument on the "Tailoring Rule," a key Obama climate change rule which requires certain major sources of greenhouse gas (GHG) emissions to secure pre-construction and operating permits. The issue before the Court was narrow, focusing on whether EPA correctly interpreted its authority to regulate GHGs from stationary sources based on its regulation of GHG emissions from motor vehicles through tailpipe standards. Pursuant to such authority, EPA had, in effect, rewritten the Clean Air Act (CAA) to allow it to regulate only the most significant sources of GHG emissions, rather than use the lower regulatory thresholds established in the law for more conventional pollutants.
It is likely the Court's analysis will remain narrow; during argument, the Court appeared uninterested in re-assessing its prior rulings that EPA had authority to regulate GHGs under the CAA. Justices, however, appeared to split along ideological lines on whether EPA properly acted to modify the CAA thresholds or whether it could have concluded GHGs need not be regulated under the permit programs at all. Even justices who appeared to side with EPA expressed some concerns about the limits of EPA's discretion. Thus, it is possible that the Court might vacate the rule and send it back to EPA for a new interpretation. However, such a ruling would not likely impact EPA's ability to regulate GHGs under other CAA provisions, such as the new source performance standards (NSPS) program which is the basis for the EPA's controversial proposals to regulate GHGs from new and existing power plants. A ruling against EPA, rather, would no doubt fuel critics of the Obama Administration's climate program, who would claim it is a vindication of their arguments that the Administration is overreaching its authority.