EPA Rule: Legal Backing for Climate Plan — or ‘Lipstick on a Pig’

Coal outside Price, Utah.

Photograph by George Frey/Bloomberg

Coal outside Price, Utah.

Buried in the Environmental Protection Agency’s plan to cut carbon-dioxide emissions, which was published in the Federal Register today, is a second rule that may provide a crucial legal backstop to the plan.

The EPA’s proposed rule to cut the carbon from existing power plants was accompanied by a second, little-noticed rule that sets standards for power plants that are modified or reconstructed. While the standards for those plants can be met with little effort at coal or natural-gas units, the rule may provide a secondary legal girding for the more wide-reaching existing-plant plan.

“It gives another legal justification for” the second rule, said Nathan Richardson, a lawyer and resident scholar at Resources for the Future in Washington.

Understanding what’s at stake requires a bit of legal background. The EPA is using a provision of the Clean Air Act, known as section 111, to set the first carbon standards for power plants. Under that section, which is used for pollutants not specifically spelled out in the act, EPA must first use section 111(b) to set a standard for new plants, which applies nationwide. Once the rule is in place for the new plants, it triggers the requirement from 111(d) that states issue a plan to cover existing sources of pollution. The EPA issues guidelines for those state plans, and must approve them.

The agency’s 111(d) plan’s publication in the Federal Register today sets up a 120-day comment period.

In the case of carbon dioxide, the biggest climate gains are forecast to come from the rules for existing sources; however, legal analysts say the EPA’s proposal for new sources is legally vulnerable because the agency proposed a requirement that new coal plants install carbon-capture technology. No U.S. power plant is using it at commercial scale today, and so industry critics say it’s not a justified standard.

As a result, that could be overturned by a court, and if it’s gone, so goes the legal justification for the existing sources proposal.

“I think there are significant vulnerabilities to” the new-source plan, Thomas Lorenzen, a lawyer at Dorsey & Whitney in Washington and former government environment litigator, said in an interview. “It could jeopardize their existing-source plan if it got thrown out.”

And that’s where EPA’s proposed rule for modified sources comes in. It’s also a 111(b) rule, and it doesn’t require carbon-capture technology, which means its legal vulnerability is limited.

“Either of those section 111(b) rulemakings will provide the requisite predicate for this rulemaking,” the agency said in a legal memorandum for the existing-sources plan, which was released June 2.

Not every outside expert believes this statement from agency lawyers will be enough to bolster the EPA’s legal justification.

“It’s an attempt to put lipstick on a pig,” said Scott Segal, a lawyer at Bracewell & Giuliani in Washington who represents utilities dependent on coal that are critical of the rule. “This is very thin ice.”

Still, Richardson said that if EPA sticks to its guns and requires carbon-capture, and if a court tosses that rule out, the federal government could rely on the second 111(b) rule while reissues the standard for new plants.

“We are only talking about the time it takes to replace the new 111(b) rule, which shouldn’t be too long,” Richardson said.

And there’s always another possibility: Before the EPA finalizes its rule for new plants, it could scale back that requirement and not require carbon-capture equipment for coal plants. That would be a “conservative game,” but one that wouldn’t come with as much of a legal risk, Lorenzen said.

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