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Carbon Pollution Standards and Permits: What's the Difference? Let Me Explain...

David Doniger

Posted October 16, 2013 in Curbing Pollution, Solving Global Warming, U.S. Law and Policy

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A lot of people were confused yesterday by the Supreme Court’s decision to review one narrow aspect of EPA’s carbon pollution regulations.  Some reporters got it right, but others got mixed up by the spin and swirl of certain Washington lawyers on the losing side.

The key is to understand the difference between the Clean Air Act’s standard-setting requirements and the Act’s permitting requirements.  I wrote about these requirements yesterday; I’ll spell them out in a bit more detail today.

Here’s the bottom line:  The big loss yesterday was for the industries and states that wanted to derail President Obama’s Climate Action Plan and stop EPA from setting carbon pollution standards for power plants.

The Supreme Court refused all pleas to reconsider EPA’s Clean Air Act authority to set standards for carbon pollution from vehicles, power plants, and other industries. That authority is now beyond doubt.  What the Court agreed to consider is only the scope of certain Clean Air Act permitting requirements.

The industry groups’ lawyers, who should know better, spent their time yesterday trying to confuse reporters on this central point – trying to convey the impression that EPA’s standard-setting authority is still in doubt.

Don’t be confused.  No matter how the Court resolves these permitting questions, EPA’s authority to set standards is settled – for both vehicles and industrial sources.  The way is clear for EPA to set standards for new and existing power plants under President Obama’s Climate Action Plan. 

So here’s the scoop on standard-setting versus permitting.

Standard-setting 

A standard is a limit on carbon emissions that applies to a whole category of similar polluters.  Typical categories are cars, trucks, power plants, oil and gas wells, oil refineries, and so forth.  For example, standards limit the amount of carbon pollution allowed from a car (grams per mile driven) or a power plant (pounds per megawatt-hour of electricity).  

These standards are binding and enforceable all by themselves.  Under the standards, companies have to monitor and report their pollution to EPA, to states, and to the public.  A car company that makes vehicles that pollute above these levels faces heavy fines and other punishments.  So does a power plant operator that violates its standards. 

The Supreme Court has already determined – twice – that EPA has the authority and responsibility, under the Clean Air Act, to set these emission standards.  In 2007, in Massachusetts v. EPA, the Court held that Section 202 of the Clean Air Act requires EPA to set carbon pollution standards for new motor vehicles if the agency determined that this pollution endangers public health or welfare.  In 2011, in American Electric Power v. Connecticut, the Court held that Section 111 of the Act provides the same authority to set carbon pollution standards for power plants.

EPA set its landmark carbon pollution standards for motor vehicles in 2010, after making its scientific endangerment determination in 2009.  And EPA is now developing carbon pollution standards for new and existing power plants under the President’s Climate Action Plan.

Yesterday, the Court flatly rebuffed all petitions to scrutinize EPA’s assessment of climate science, or to look under the hood of the car standards.  The Court also rejected all pleas to reconsider and reverse Massachusetts and American Electric Power

So with two Supreme Court decisions under our belt, and all of the challengers’ legal options exhausted, it is now 100 percent settled that EPA has the authority to set enforceable carbon pollution standards for cars, power plants, and other big industries. 

Permitting requirements

So what did the Supreme Court agree to review?  The Court asked for briefs on only this question:  “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

There are two relevant permitting requirements under the Clean Air Act.

The first is called “new source review,” and it is found in Section 165 of the Act.  Basically, it requires each new and modified major industrial source to get a construction permit before starting to build, showing that it will use the “best available control technology” (BACT) for “each pollutant subject to regulation” under the Act. 

The second is called the “operating permit program,” and it is found in Title V of the Act.  It requires each existing major industrial source to have an operating permit collecting in one place all of the emission limits, monitoring obligations, etc., that apply to the source. 

What is the relationship between permits and standards?  

  • As I noted above, standards are fully enforceable on their own even if there are no permits.  Plant operators have to report their emissions and show that they meet their standards, and violations bring fines and penalties. 
  • Construction permits are important first because they limit the pollution of new or expanded sources in situations where there is no standard.  And when a standard is a bit old and out of date, the plant-specific determination of BACT makes sure that big new plants are built with modern pollution controls.
  • Operating permits are important because they collect all applicable standards and requirements in one document, simplifying compliance and enforcement.  But those standards are legally binding and enforceable even if there is no operating permit.

These permitting requirements apply to “major” sources – those that emit amounts of pollution above certain threshold amounts set forth in the law.  The idea was that big polluters should be scrutinized more carefully than small ones, and that they can afford it. 

The question the Supreme Court will consider is whether an industrial source can become “major” – and thus subject to these permitting requirements – because of its carbon pollution.

According to EPA and the Court of Appeals in Washington, the Clean Air Act makes no distinction between carbon pollution and other kinds of pollution.  When EPA set the carbon pollution standards for vehicles, carbon dioxide (CO2) became a “regulated pollutant” just like sulfur dioxide, nitrogen oxides, or any other substance the Clean Air Act has controlled for decades.  From then on, that meant major sources of CO2 had to obtain construction and operating permits.

The industry and state petitioners claim otherwise.  They claim that CO2 is totally different from the pollutants Congress meant the permit requirements to cover, and that CO2 never triggers those requirements.  In other words, a plant’s CO2 emissions, no matter how large, can never make that plant a “major” source and can never require it to get either construction or operating permits.

Hold your breath for a moment; we have to dive a bit deeper.  While all the petitioners argue that a plant’s CO2 emissions can’t trigger the permitting requirements, they disagree with each other on what happens if permitting is triggered by the plant’s emissions of another pollutant (like sulfur dioxide or nitrogen oxides). 

  • One group, led by the American Chemistry Council (ACC), concedes that if a new plant needs a construction permit because it emits large amounts of another pollutant, then it has to demonstrate use of the best available control technology (BACT) for all of its pollutants, even CO2.  The dissenting judge below, Judge Kavanaugh, agreed with them.
  • The other group of petitioners, led by the Utility Air Regulatory Group (UARG), takes the more extreme view that not even the BACT requirement applies to CO2.  In their view, the carbon pollution from new power plants is totally exempt from all permitting requirements.

So what’s it all mean?

The Supreme Court will decide whether EPA and the Court of Appeals got the carbon pollution permitting requirements right (we think they did).  If not, the Court will decide whether to go with the ACC’s version, UARG’s version, or something else.  But it will not revisit EPA’s authority to set carbon pollution standards.  Three strikes and you’re out.

So don’t be confused.  EPA’s authority to set carbon pollution standards is settled – for both vehicles and power plants.  The permitting questions are the only ones the Supreme Court has agreed to consider.  How they come out is important, of course.  But the core of the Clean Air Act – EPA’s authority and responsibility to set carbon pollution standards to protect us and our children and grandchildren from the dangers of climate change – rests on a stronger footing today than ever before.

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Comments

Michael BerndtsonOct 16 2013 10:07 PM

Nicely explained. Couldn't the future presidential candidate Cheney (the daughter) run on reversing Obama's executive decision? If natural gas prices were to climb, which they may in a couple years, emissions standards could be an easy campaign platform.

Just one more question (said like Lt. Columbo). Is oil and gas production exempt from this? For instance, does shale gas drilling and production infrastructure get a work around from the Clean Air Act? Why wouldn't hybrid Oil and Gas / electric utilities just plop a brand new gas turbine cogeneration plant right in the middle of a well field and call it "production?" Avoid midstream and distribution middlemen. Ignore compliance monitoring for things like mercury in addition to CO2, CH4 and other GHGs.

Full disclosure if it isn't obvious: I'm highly suspicious of the current administration and its advisors using environmental protection as the premise for promoting the natural gas economy. This kind of enlightened, yet practical environmentalism always backfires due to unintended consequences. Like contaminating groundwater to fight climate change. At the end of the well production curve, we'll have less clean water supply and possibly more carbon in the atmosphere (and mercury).

David DonigerOct 16 2013 10:27 PM

Michael, we have to stop meeting like this... I'm not concerned about a Cheney dynasty, or sharply higher gas prices; both seem equally unlikely. Oil and gas sources are also covered by Section 111 of the Clean Air Act. President Obama's Climate Action Plan calls for EPA and other agencies to curb methane leakage, and we're working to make that happen too. So stay tuned.

Joseph O'SullivanOct 17 2013 04:57 PM

David Doniger: "So don’t be confused."

I'm not anymore, thanks. This post explained what was really at issue in this case.

When I first learned about this case, I went to the Supreme Court's page and saw the question that the court would hear. I knew that the question was a narrow one, but I was unsure about the details.

If I recall correctly from the administrative law class I took 10+ years ago, wouldn't the Chevron v NRDC decision be controlling? If the courts should defer to agencies as the Supreme Court said to in that case, isn't this case relatively easy to predict?

David DonigerOct 17 2013 05:18 PM

EPA's position, and the Court of Appeals decision, is that the law is unambiguous in requiring major greenhouse gas sources to get permits. If it's unambiguous, you do not even get to the Chevron case.

Joseph O'SullivanOct 17 2013 09:25 PM

Thanks David, I partially forgot the first step, looking directly at the statute.

Am I correct in assuming that at least some of the Supreme Court Justices believe that the law is ambiguous? Is that the reason they are hearing the case?

That is why I brought up Chevron. I assumed that the Clean Air Act might be unclear about the permitting issue. Even though the courts are to give deference to the agencies, they still might rule on the agency actions if the statute is ambiguous.

David DonigerOct 18 2013 12:03 AM

You are right that even if the Justices find the permitting provisions ambiguous, they may still find EPA's position a permissible interpretation.

Comments are closed for this post.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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