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Less than a week after the U.S. Environmental Protection Agency (EPA) reversed its position on the applicability of the Clean Air Act’s New Source Review requirements to greenhouse gas emissions at stationary sources, a coalition of industry groups has filed a petition with the D.C. Circuit Court of Appeals challenging the move.  The March 31, 2010 policy formally reverses EPA’s position from the stance articulated in December 2008 by then-EPA Administrator Stephen Johnson. There, EPA had interpreted the definition of a “regulated NSR pollutant” in 40 C.F.R. 8 52.21(b)(50) to exclude pollutants for which EPA regulations only require monitoring or reporting. This exclusion meant that greenhouse gas emissions were not subject to the Clean Air Act’s Prevention of Significant Deterioration program, which requires facilities to meet certain technical requirements and obtain a permit before constructing or modifying major emission sources.  The Obama Administration signaled its intent to revisit this interpretation in September 2009, when it issued a proposed rule to permit large stationary sources of greenhouse gases, and the Administration further demonstrated its resolve in December 2009 when it issued a final endangerment finding under the Clean Air Act’s mobile source program, setting the stage for regulation of auto and truck emissions.

The industry petition, filed April 2, 2010, was co-signed by the Coalition for Responsible Regulation Inc., the Industrial Minerals Association-North America, the National Cattlemen’s Beef Association, Great Northern Project Development LP, Rosebud Mining Co., and Alpha Natural Resources Inc.  The April 2 Petition is just one of several recent efforts by the Coalition to challenge EPA’s efforts to regulate greenhouse gases under its Clean Air Act Authority. A similar petition, filed with the D.C. Circuit December 23, 2009,  asked for review of EPA’s mobile source endangerment finding.  In February 2010, the coalition provided a preview of some of its likely arguments when it petitioned EPA directly to reconsider its mobile source endangerment finding, arguing that EPA had relied upon flawed climate data in making its finding, that the climate science peer review process had been compromised, that EPA’s reliance on IPCC data constituted an unlawful delegation of its statutory responsibilities, and that EPA’s decision making process violated the Administrative Procedure Act. 

Parties have 60 days from the publication of the new policy in the Federal Register to file their own petitions for review. 

UPDATE: In their conference of February 23rd, the Supreme Court declined to hear Utility Air Regulatory Group v. New Jersey, clearing the way for the EPA to enact new, stricter regulations regarding mercury emissions from power plants.

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As noted on SCOTUSblog earlier, the Obama administration moved earlier this month to dismiss a case that the Bush administration’s Environmental Protection Agency (EPA) had appealed to the Supreme Court. The case dealt with the Clean Air Mercury Rule—specifically provisions in the rule which allowed the EPA to de-list emissions sources without making specific health and environmental determinations. While this move by the Obama EPA will likely lead to the dismissal of the case in question—EPA v. State of New Jersey—another parallel case, Utility Air Regulatory Group v. New Jersey, remains before the Court.

The EPA’s motion dismiss likely puts that case in jeopardy as well; however, a coalition of electric utilities and trade organizations has asked the Court to continue Utility Air Regulatory Group v. New Jersey, arguing that the case has separate issues which are not made irrelevant by the dismissal of the EPA’s case.

Read their letter to the Court in full at SCOTUSblog.

While the Obama administration’s legislative agenda in regards to climate change is still in its infancy, the administration has already moved to reconcile the differences between its views and the current position of government in important environmental litigation. The first of those moves came today, when Solicitor General Elena Kagan moved to dismiss the Environmental Protection Agency (EPA) ’s position in EPA v. State of New Jersey. The Solicitor General’s move in this case, which will affect the implementation of the Clean Air Mercury Rule, represents a fairly dramatic change in policy for the EPA, and likely means that the case will not be granted certiorari and recieve Supreme Court review.

Read a more complete discussion of this issue at SCOTUSblog.com.

 Two days before Christmas, the DC Circuit Court of Appeals reversed course and issued a new ruling in the Clean Air Interstate Rule (CAIR) case–North Carolina v. EPA, No. 05-1244. 

In July 2008, a three-judge panel struck down the CAIR program after determining that it violated EPA’s statutory mandate.  The panel held that EPA was required to evaluate and address air pollution contributions on a state-by-state basis, whereas CAIR uses a regional approach.  In addition, they held that the EPA lacked authority to terminate or limit emissions allowances originally issued under the Acid Rain Program (ARP); many of CAIR’s environmental benefits are based on mandating accelerated retirement of ARP allowances, so that pollution is quickly reduced across the region. 

The panel then held that the rule would be vacated in its entirety and remanded to EPA to promulgate a new rule consistent with the court’s opinion.  The federal government filed a petition for rehearing and rehearing en banc on September 24, 2008.  A month later, the court issued an order directing the other parties to the case to file a response to the government’s petition. 

On December 23, 2008 the same three-judge panel granted the petition for rehearing in part and significantly modified its prior remedial order.  The Court withdrew its vacatur order and reinstated the rule — held that the rule should stay in place — pending the EPA’s reconsideration of the rule on remand.  The Court noted that, “notwithstanding the relative flaws of CAIR, allowing CAIR to remain in effect until it is replaced by a rule consistent with our opinion would at least temporarily preserve the environmental values covered by CAIR.”  The Court underscored, however, that EPA must still fix “CAIR’s fundamental flaws” in a timely manner, or face being hauled before the Court yet again.  “[W]e do not intend to grant an indefinite stay of the effectiveness of this court’s decision,” the Court cautioned.

This decision is the result of a rather uncommon process within the D.C. Circuit. At the outset, it is unusual for the DC Circuit to grant a petition for rehearing, particularly one that so substantially modifies the court’s initial ruling.  Patricia Millett, co-head of Akin Gump’s Supreme Court and Appellate practice, noted that the judges had already considered and addressed the ramifications of their vacatur decision in July, so it is “particularly unusual for the Court to reevaluate and reverse course on an issue of such consequence that had already been debated and decided.  After all, these type of administrative law issues are the DC Circuit Court’s bailiwick.”  None of the issues presented in the rehearing were strikingly new or novel - the effects of eliminating CAIR were outlined for the Court at the time.  Because the government also sought rehearing en banc by the full D.C. Circuit — something that it is relatively rare for the Solicitor General to authorize the federal government to do in that court — there is speculation that the panel’s change of heart may have been motivated by pressure or concerns from other members of the Court.

In the end, the Court determined that having an illegal program in effect is better than not having any program at all, given the environmental benefits that CAIR is expected to deliver.  EPA estimates that CAIR “will result in $85 to $100 billion in health benefits and nearly $2 billion in visibility benefits per year by 2015 and will substantially reduce premature mortality in the eastern United States.”

There is little question that the federal government believed that the environmental and public health benefits of CAIR were critically important issues, given that the Solicitor General authorized the EPA to seek rehearing en banc and the EPA included with its petition signed declarations from high-ranking air pollution officials offering support for CAIR.  Brian J. McLean, the Director of EPA’s Office of Air and Radiation, argued that vacating CAIR “would remove the primary incentive for power companies to install and operate emission controls” in many areas.  He also noted the effect that vacating CAIR would have on the markets for emission allowances under the Clean Air Act: in a four month period the price for sulfur dioxide allowances dropped by roughly 80 percent, reducing by over $3 billion the value of banked allowances being held by firms. 

Thus, in addition to achieving significant environmental benefits, the DC Circuit’s reversal is likely to send a positive message about the future of emissions markets in the US, an important issue as President-elect Obama readies his climate change agenda, and Congress returns to work with hopes of passing comprehensive carbon legislation. 

Last week, the National Highway Traffic Safety Administration (NHTSA) issued a Notice of Intent to Prepare an Environmental Impact Statement (EIS) for the Corporate Average Fuel Economy Standards (CAFE) for model years 2011 to 2015.

The new notice “initiates the NEPA scoping process to identify the environmental issues and reasonable alternatives to be examined in the EIS, and requests comments regarding those and others matters related to the scope of NHTSA’s NEPA analysis for the new standards.”

Specifically, “[t]he scoping process initiated by this notice seeks to determine ‘the range of actions, alternatives, and impacts to be considered’ in the EIS and to identify the most important issues for analysis involving the potential environmental impacts of NHTSA’s CAFE standards.”

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This post is the third installment in our ongoing coverage of Center for Biological Diversity v. National Highway Traffic Safety Administration.

Earlier this month, the Center for Biological Diversity (CBD) filed its response to National Highway Traffic Safety Administration (NHTSA’s) Petition for Rehearing en banc. NHTSA’s Petition for Rehearing focused on the 9th Circuit’s order that the agency prepare a complete Environmental Impact Statement (EIS) that accounts for the role that auto emissions play in global climate change; NHTSA argued that the circuit court lacks authority to order an EIS. CBD’s response argues that the 9th Circuit was well within its rights to order NHTSA to produce an EIS.

CBD argues that the courts have the authority to “both ‘set aside’ an unlawful finding of no significant impact and ‘compel’ an unlawfully withheld EIS.” So long as “substantial questions are raised as to whether a project” may have a significant impact on the environment, an agency must prepare an EIS. CBD argues that once this threshold is reached, the courts may compel the agency to produce the required EIS. CBD’s filing cites six cases within the 9th Circuit alone that have ordered a full or supplemental EIS, countering NHTSA’s argument that courts do not have this authority.

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We reported in January that three environmental groups had notified the Fish and Wildlife Service (FWS) of their intent to sue over the Service’s failure to act on a petition to list the polar bear as a threatened or endangered species. The original petition was filed in February 2005.

Under 16 U.S.C. § 1540(g)(2)(C), written notice must be given to the Secretary of the Interior at least 60 days before a citizen suit can be filed in federal district court. The 60 day period elapsed yesterday and the three groups — the Center for Biological Diversity, Greenpeace, and the Natural Resources Defense Council — filed suit to force FWS to act on the petition.

The Department of the Interior has indicated that it will respond to the suit “in a timely manner.”

The Center for Biological Diversity also recently sued the FWS to have ten species of penguins listed as a result of the effects of climate change. For many penguin species, including the emperor penguin, loss of habitat, caused by declines in Antarctic sea ice, poses a significant threat to survival.

In our previous coverage of Center for Biological Diversity v. National Highway Traffic Safety Administration, Perry Rosen noted that one likely course of action was for NHTSA to petition for a rehearing en banc - before the full Ninth Circuit, rather than just the typical panel of three judges. NHTSA recently filed just such a petition before the Ninth Circuit.

In the original ruling, the judges found that the new CAFE (fuel economy) standards were arbitrary and capricious. In addition, the court held that the Environmental Assessment (EA) was inadequate, and ordered NHTSA to produce a full Environmental Impact Statement (EIS) that accounts for the effect of emissions on climate change. An EIS is required when an agency find that its proposed action will have a significant impact on the environment.

NHTSA’s petition focuses on the second aspect of the decision, and argues that the 9th Circuit does not have the authority to order a full EIS. Instead, NHTSA argues that it should be allowed, on remand, to address any deficiencies in the EA and potentially avoid the preparation of a full EIS.

NHTSA argues that administrative law “only allows a reviewing court to ‘hold unlawful and set aside’ agency action that if finds arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Citing a long string of Supreme Court cases, the agency writes that “when a reviewing court finds that an administrative agency has erred, the appropriate remedy is to remand the matter back to the agency for ‘further consideration.’” The court does not substitute its own judgment for that of the agency, but merely reviews the agency’s determinations.

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A ruling this morning invalidating the U.S. mercury emissions cap and trade program should not impact the Environmental Protection Agency’s authority to establish trading programs for other emissions, including carbon dioxide.

The United States Court of Appeals for the District of Columbia Circuit today struck down two rules promulgated by the U.S. Environmental Protection Agency (EPA) addressing mercury emissions from coal-fired power plants. State of New Jersey v. EPA, No. 05-1097 (D.C. Cir. Feb. 8, 2008). The court ruled that EPA deleted power plants from the list of emission sources subject to hazardous air pollutants requirements of the Clean Air Act (CAA) without following the statutory requirements for delisting. This conclusion, the court reasoned, required it also to invalidate EPA’s Clean Air Mercury Rule (CAMR) that had established numerical limitations for the emission of mercury from power plants and a cap and trade system for compliance with those limits.

The Bush Administration developed and promulgated CAMR in an effort to back away from an 11^th hour finding issued by EPA Administrator Browner in December 2000 that regulation of mercury emissions from coal-fired power plants under the hazardous air pollutant program was “appropriate and necessary.” This finding by the Clinton Administration was not subject to judicial review, but served as the linchpin for the court’s invalidation of CAMR. Once EPA made that finding and included power lists on the “list” of emission sources subject to regulation, the court ruled EPA could change course only by following the procedures set forth in the CAA.

To promulgate the CAMR, and its cap and trade system, EPA tried to short-circuit the statutory procedures. The court ruled that EPA did not have the discretion to proceed in that manner. While this decision prevents EPA from proceeding with a cap and trade system for mercury emissions, it does not provide opponents of cap and trade systems comfort. The court expressly declined to consider arguments concerning EPA’s authority to establish a cap and trade system for pollutants and sources outside the hazardous air pollutant regime.

Today, three environmental groups informed the Fish and Wildlife Service (FWS) of their intent to sue the agency regarding the listing of the polar bear as an endangered or threatened species.

The Center for Biological Diversity, Greenpeace and the Natural Resources Defense Council had petitioned the government in February 2005 to give polar bears protection under the Endangered Species Act (ESA). After not receiving a response, the petitioners sued in federal court in December 2005. Center for Biological Diversity v. Norton (N.D. Cal).

On July 5, 2006, the parties agreed to a negotiated settlement under which FWS would publish a finding by December 27, 2006. On January 9, 2007, after missing the initial deadline, FWS issued a proposed rule to extend “threatened” status to polar bears, which would mark the first time a mammal was found to be at risk because of global warming. FWS had one year from that date to make a final determination. (more…)