It took a little over five years but USEPA's greenhouse gas regulation program is now firmly established - for the moment anyway. The D.C. Circuit today rejected every challenge by numerous petitioners and intervenors to the whole raft of USEPA rules that followed from the critical Supreme Court decision, Massachusetts v. EPA, in 2007. In Coalition for Responsible Regulation, Inc. v. Environmental Protection Agency (attached), the D.C. Circuit considered arguments against the validity of
The Endangerment Rule, Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(s) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009),
The Tailpipe Rule, Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010)
The Tailoring Rule, Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31, 514 (June 3, 2010), and
The Timing Rule, Reconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed. Reg. 17,004 (Apr. 2, 2010),
as well as a general challenge to the USEPA's implementation of the Clean Air Act. Each argument was rejected. The Endangerment and Tailpipe Rules are not arbitrary and capricious, no petitioner (whether from industry or a state) had standing to attack the Timing and Tailoring Rules, and the USEPA's interpretation of the relevant Clean Air Act provisions "is unambiguously correct."
The blogosphere is overwhelmed with commentary and analysis. Rather than repeat what others have already said, we want to focus on just one small segment (pages 45-50) of the 82 page opinion: standing for the National Association of Home Builders (NAHB) and the National Oilseed Processors Association (NOPA). The court singled out the NAHB and the NOPA because they were the only industry petitioners that had standing to challenge the "result of the Tailpipe Rule, which had the effect of expanding the [Prevention of Significant Deterioration] PSD program to never-regulated sources."
A little background is in order. Massachusetts v. EPA established that greenhouse gases could be regulated as air pollutants (within the meaning of the Clean Air Act) by USEPA. The Endangerment Finding concluded that six "well-mixed" greenhouse gases emitted from motor vehicles contributed to the "climate change problem" and thus were "reasonably anticipated to endanger public health and welfare." As a result, USEPA issued the Tailpipe Rule, which set GHG emission standards for cars and light trucks.
Two sections of the Clean Air Act, the PSD program and the state permitting requirements under Title V, are triggered by the emission of "any air pollutant" (which USEPA has interpreted to mean: any regulated air pollutant). Accordingly, once GHGs were regulated anywhere under the Clean Air Act (such as from tailpipes of motor vehicles), GHGs constituted an "air pollutant" within the meaning of the Act and stationary sources that emitted GHGs became subject to PSD and Title V permitting requirements. The proverbial camel's nose was in the tent, and the camel followed post-haste. This approach to regulation was long-standing and had been relevant to rules promulgated in 1978, 1980 and 2002. Since the Act provided for a basis for review only within 60 days of the promulgation of national regulations, challenges to USEPA's approach were very much time-barred, but with one very significant exception: "if such petition is based solely on grounds arising after such sixtieth day, ..." 42 U.S.C. 7607(b)(1).
What this means is that an entity whose claim has recently ripened has standing to challenge the USEPA's approach. Stated differently, entities that did not have standing in 1978, 1980 or 2002 because "their alleged injuries were only speculative" (such as NAHB and NOPA), may subsequently find they do have standing because their facilities are now regulated. NOPA asserted that "[prior] to promulgation of the Tailpipe Rule, no member's facility had triggered PSD review by virtue of emissions of a non-criteria pollutant. Now that greenhouse gases are a regulated non-criteria pollutant, many NOPA members will have to obtain PSD permits as [a] result of their facilities' emissions ..." NAHB members who likewise were not subject to PSD requirements, were now certain to have to obtain PSD permits sometime in the future. Accordingly, unlike other industry petitioners, NOPA and NAHB were found to have standing to challenge USEPA's "interpretation of the PSD permitting triggers ..."
This result is important. Absent regulations like the Tailoring Rule, GHG regulation will be far-reaching and will bring in entities not previously subject to regulation. Those entities will be entitled to challenge the regulation, as well as the methods USEPA uses to implement the regulations, even if those methods have been around for decades. Thus, even though USEPA's GHG program sailed through this set of challenges, the door certainly is not closed to other challenges as GHG regulation expands.