In one of the most anticipated environmental cases in years, the U.S. Court of Appeals for the District of Columbia recently upheld EPA's suite of greenhouse gas (GHG) rules, including the GHG standards for automobiles and the "tailoring rule" governing the permitting of new and modified industrial sources of GHGs. In Coalition for Responsible Regulation, Inc v. EPA (D.C. Cir., No. 09-1322, June 26, 2012), a coalition of states and industry had attacked the rule on numerous grounds, arguing that EPA's technical conclusions were scientifically indefensible and its rules arbitrary and capricious and contrary to the terms of the Clean Air Act. The court unanimously rejected all of these arguments, concluding that not only was EPA justified in pursuing regulation of GHGs under the Clean Air Act, but that the Agency was also compelled to do so in many respects.

The ruling effectively concludes the multi-year legal challenge to EPA's authority to regulate GHG emissions from autos and industrial sources. However, EPA still faces some challenges as it continues to implement this authority. Congress is threatening to revisit the issue, although the likelihood of any legislative change in this election year is low. Moreover, the state of Texas and industry are challenging EPA's takeover of the GHG permitting program in Texas. And, most importantly, the details of what EPA may require to control GHGs are just emerging. Thus for most companies the focus turns to EPA's nascent GHG permitting program for new and modified sources. EPA and the states have already issued several "Prevention of Significant Deterioration" pre-construction permits imposing "Best Available Control Technology" for GHG emissions, and these efforts are being watched carefully to ascertain what sort of requirements are likely to be imposed. Like all new regulatory programs, there are likely to be some hiccups as the effect of these precedents on future determinations becomes better understood.