"Toto, I've Got a Feeling We're Not in Kansas Anymore"

The U.S. Supreme Court's April 2007 decision in Massachusetts v. EPA, holding that carbon dioxide is a pollutant that must be regulated by the U.S. Environmental Protection Agency under the Clean Air Act, appeared to mark a major milestone in the climate change debate. But, given the lack of concrete action by EPA since the decision, you may have been wondering when and how the decision might begin to have a more than academic effect. The wait is now over. On October 18, 2007, the Secretary of the Kansas Department of Health and Environment ("KDHE"), Roderick L. Bremby — with the support of Kansas Governor Kathleen Sebelius (D) — denied an application by Sunflower Electric Power Corporation for an air quality permit for a proposed 700-megawatt coal-fired electric generating plant in rural Kansas, citing greenhouse gas emissions as a threat to public health and the environment and relying, in part, on the Massachusetts v. EPA decision.

This permit denial is the first of its kind in the United States. Several factors make the decision remarkable from both legal and political perspectives: it occurred in Kansas rather than a state perceived as "liberal" or "activist," such as California or Massachusetts; it occurred in the absence of any specific federal or state statutory or regulatory provisions to support it; the project developer was a non-profit electrical cooperative; and the Massachusetts decision pertained to EPA's authority to regulate automobile exhaust, not power plant emissions. (Given the attenuated relationship between the actual issues in the Massachusetts case and the KDHE decision, perhaps Chief Justice Roberts was prescient in his dissent when he stated that Massachusetts' "true goal for this litigation may be more symbolic than anything else.") One can only speculate whether the politics of ethanol played a part in the denial, given that Kansas is a major corn-growing state and already a beneficiary of rising prices resulting from a federal ethanol program supposedly driven by concerns about climate change.

It is reasonable to foresee more actions of this kind in advance of carbon tax or "cap and trade" legislation. If for no other reason, permit applications may be denied simply to delay the construction of coal-fired (or other fossil fuel-fired) plants pending enactment of such legislation. Carbon tax or cap and trade legislation aside, delay may create opportunities for alternative energy technologies to develop and secure capital funding.

Politics aside, the standout fact that may have driven this action by the KDHE is that annual carbon dioxide emissions from the proposed coal-fired power plant (11 million tons per year) were projected to be roughly equal to the total reduction in annual carbon dioxide emissions (12 million tons per year) targeted by the Northeast's eight-state Regional Greenhouse Gas Initiative by 2020. Aware of this fact and the perspective it provides, Governor Sebelius cast the issue as a "moral" one.

By overriding his own staff's recommendation to issue the permit, and by resting his decision on broad policy considerations, Secretary Bremby has left his decision vulnerable on appeal by the project applicant. The first stage of the appeal process is administrative; Sunflower filed an appeal with the KDHE on November 1, 2007. As the appeal is to be decided by Secretary Bremby, Sunflower fully expects to lose at the administrative level. If that is the result, an appeal to the judiciary is sure to follow. Outside of the adjudicatory forum, loud, opposing political voices are already being heard.

Other industries should be taking note of this case. Cement manufacturers and other commonly targeted high greenhouse gas emitters may be at the top of the list of interested parties, but the issue goes well beyond traditional "smokestack" industries. For example, opposition to the planned development and expansion of resorts and golf courses in arid areas is likely to grow, at least if electric power for the projects (and, in some cases, for required desalination plants) is to be produced by fossil fuel-fired generating plants. Hotels, golf courses and associated restaurants and shops are hardly the first greenhouse gas sources to come to mind when one thinks about industry, notwithstanding the common use of the phrase "tourist industry." Yet these "luxury" projects will be perhaps the easiest targets of attack. As reflected by the KDHE decision in the Sunflower matter, the source of the attack will not necessarily be the one typically expected — a citizens group; it may well be the state.

For the full text of the KDHE press release relating to this permit denial, see:  http://www.kdheks.gov/news/web_archives/2007/10182007a.htm

For the full text of the opinion of the Kansas Attorney General issued in advance of, and to support, this permit denial, see:  http://www.kdheks.gov/download/KS_Atty_General_Opinion_10.17.07.pdf