President Barack Obama’s opponents won a Supreme Court skirmish in the “war on coal” Monday, but the ruling blocking his mercury pollution rule won’t do anything to reverse coal’s waning role in the nation’s power supply.
And on top of that, legal experts don’t expect the decision to hamper the administration’s plans for landmark climate regulations that are set to further cement the decline of the fuel that only a few years ago dominated the industry.
For utility giant American Electric Power and others in the power sector, the judgment on the mercury rule that started to take effect in April comes too late to save the dozens of plants that already closed, or are slated to in the next several months.
“We’re not bringing them back,” Nick Akins, AEP’s CEO, president and chairman told POLITICO. “Once that ball gets rolling, it’s not going to change.”
The ruling that clipped an administration regulation on mercury pollution stuck to a narrow path — whether EPA should have considered the costs of the rule in an early analysis rather than later in the rulemaking process — but didn’t reach into the issues expected in the courtroom battles to come over one of Obama’s priorities: battling climate change.
Obama has pushed climate change to the top of the White House agenda for his second term, calling on his EPA to propose the first-ever U.S. measures to curtail emissions of the greenhouse gases that scientists say are raising temperatures and lifting sea levels.
And though Republicans and coal-state politicians welcomed the 5-4 ruling that remanded the EPA rule back to a lower court for further review, little has changed for the prospects of the agency’s final climate change power plant rules due out later this summer, according to legal experts.
“I do think this was a body blow, but [it’s] a long way from a death blow when it comes to cleaning up coal power plants,” said Frank O’Donnell, president of the green group Clean Air Watch.
The opinion written by Justice Antonin Scalia rapped EPA for not properly taking the costs of its regulation into effect early enough, and it raised questions on whether “ancillary,” or additional benefits not directly related to the rule, should be counted.
But Scalia’s majority opinion in Michigan v. EPA doesn’t address whether EPA has the authority to interpret a contradiction in the 1990 Clean Air Act amendments to launch a regulation that will alter how the country’s energy companies’ produce electricity.
“I frankly don’t think this opinion has great implications for [Obama’s] Clean Power Plan based on what I anticipate to be the direct statutory challenges to the plan,” said Bill Bumpers, who heads the climate change practice for utility companies at the law firm Baker Botts.
And the White House insisted after the ruling that EPA’s final carbon dioxide rules would not be affected by the Supreme Court ruling on the mercury and air toxics rule.
“These are two separate rulemaking processes that we have pursued here and there is nothing contained in this ruling that should in any way impact our ability to successfully implement the Clean Power Plan,” White House spokesman Josh Earnest told reporters.
Not everyone agreed that the mercury ruling had little bearing on the carbon rules. Hal Quinn, president and CEO of the industry group National Mining Association, said the court’s opinion was a shot across EPA’s bow for exceeding its authority under the Clean Air Act.
“I think it should give EPA considerable pause about the current design and structure of both its carbon dioxide rules for power plants,” he said, referring to the pending mandates for both existing and future plants.
To be sure, the mercury and carbon regulations are inextricably linked because of language in the Clean Air Act. Early legal challenges to the carbon rules argued that the law says EPA cannot limit greenhouse gases from power plants if it also regulates power plants with the mercury rule, known as the Mercury and Air Toxics Standard.
EPA and other supporters of the carbon rules have countered that an unusual legislative glitch was created when the language in question was signed into law, allowing EPA to regulate both mercury and carbon dioxide.
Ultimately, a circuit court declined to weigh in on the matter because the rule is not yet finalized. But that only delays the clash over carbon, and EPA’s foes are not shying away from another lawsuit.
West Virginia Attorney General Patrick Morrisey, whose state was among those that challenged the mercury rule, warned that the Supreme Court’s ruling showed the justices will not tolerate federal overreach through EPA regulations.
“If the EPA ignores the Supreme Court’s clear warning today and continues to press forward with these illegal, costly rules, my office will challenge those rules in court, and we intend to win – again,” Morrisey said in a statement.
Still, Sen. Majority Leader Mitch McConnell (R-Ky.) noted that mercury regulation had already forced many plants into retirement, and reiterated his warning to governors around the country not to join the EPA’s climate change plan.
“Clearly, there is no reason to subject their states to such unnecessary pain before the courts have even had a chance to weigh in, especially if the Supreme Court simply ends up tossing the regulation out as we saw today,” he said in a statement.
AEP’s Akins hoped the EPA would become more transparent in its analysis — and that it would better plan for the effects on companies.
“You really need to have an adequate review before you have an impact on the industry,” he said. “That drives a large message for [the climate rule.]”
Now the matter falls back to the D.C. District Court of Appeals — whose ruling upholding the mercury rule was reversed by the Supreme Court on Monday — to decide how to move forward.
The circuit could keep the rule in place while EPA works out a new initial cost-benefit analysis and moves the rule forward. There is precedent for such a decision, according to Graham McCahan, an attorney with the Environmental Defense Fund. The circuit court previously struck down a George W. Bush-era rule governing air pollution that crosses state lines, but kept it in place while the Obama administration wrote a new version that ultimately won the backing of the high court.
Or the circuit court might instead vacate the mercury rule and force EPA to essentially start from scratch.
Brian Potts, an attorney who represents utilities and power providers at Foley & Lardner, said he believed the Supreme Court indicated the circuit court should vacate the rule.
Ironically, he added, that could actually benefit the carbon rules by making moot the argument raised by West Virginia, Murray Energy and other EPA critics.
“EPA is going to be facing a difficult decision: try to keep its mercury regulation in place for the next few years or forego mercury regulation so that the Clean Power Plan can move forward more easily,” Potts wrote in an email.
Bumpers agrees that vacating the mercury rule would at least “temporarily” make the challenges to the carbon rule moot.
He added that it is unclear right now whether EPA’s foes could bring the same legal challenge in the event that the carbon rules are finished before the mercury rules. There are significant and untested legal issues with such a maneuver.
Any conjecture about what will happen are “premature” because the mercury rule isn’t yet “out of the way,” according to McCahan.
“I think that will just get worked out in the context of that [carbon rule] litigation when that happens after the final rule comes out,” he said.
Eric Wolff and Matt Daily contributed to this report.
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