Legal Analysis of/Early Comments on
EPA’s
Proposed Carbon Pollution Standard
1
By William Yeatman, Competitive Enterprise Institute, wyeatman@cei.org
Introduction: Standard of Review for Clean Air Act §111 NSPS
The United States Court of Appeals, District of Columbia Circuit is the court of exclusive review for New Source Performance Standards (NSPS) and has examined Clean Air Act §111 on several prior occasions.
2
The
court’s decisions
, in turn,
have “established
a rigorous standard of
review under § 111.”
3
Broadly, the court has described its Clean Air Act §111 review
as being “a test of reasonableness.”
4
In order to survive review,
the administrator’s
NSPS determination
“
must consider all of the relevant factors and demonstrate a reasonable connection between the facts in
the record and the resulting policy scheme.”
5
While the court must be mindful of the high degree
1
On Friday, September 20, 2013, EPA released the prepublication version of the proposed Carbon Pollution Standard. The prepublication version has been signed by Administrator Gina McCarthy, and currently awaits publication in the Federal Register. All references in these comments refer to the prepublication version, available http://www2.epa.gov/sites/production/files/2013-09/documents/20130920proposal.pdf . When the Federal Register version is published, I will update the citations.
2
Portland Cement Association v. Ruckelshaus,
486 F.2d 375 (D.C.Cir.1973);
Essex Chemical Corp. v. Ruckelshaus,
486 F.2d 427 (D.C.Cir.1973);
National Asphalt Paving Association v. Train,
539 F.2d 775 (D.C.Cir.1976);
National Lime Association v. Environmental Protection Agency
627 F. 2d 416 (D.C. Cir. 1980);
Lignite Energy Council, et al. v. Environmental Protection Agency
198 F.3d 930 (D.C. Cir. 1999);
Sierra Club v. Costle
, 657 F.2d 298 (D.C. Cir. 1981)
3
National Lime Association v. Environmental Protection Agency
627 F. 2d 416 at 429
4
Essex Chemical Corp. v. Ruckelshaus,
486 F.2d 427 at 434
5
Sierra Club v. Costle
, 657 F.2d 298 at 323
of deference it
must show the agency’s scientific judgment,
6
“the necessity to review agency
decisions, if it is to be more than a meaningless exercise, requires enough steeping in technical
matters to determine whether the agency has exercised a reasoned discretion.”
7
Regarding its review of
Clean Air Act §111, the court has explained that, “ultimately…the cause of a clean
environment is best served by reasoned decision-
making.”
8
The statutory
“focal point” of the court’s review of a
n NSPS is the
administrator’s determination
of a
“standard of
performance,
”
9
which reflects the degree of emission limitation
achievable
through the application of the
best system of emission reduction
which (taking into account the
cost
of achieving such reduction and any
nonair quality health
and
environmental impact
and
energy requirements
) the Administrator determines has been
adequately demonstrated
.
10
(formatting added to stress statutory terms) In
Sierra Club v. Costle
, the court “parsed” this difficult statutory phrasing of “standard of performance”:
[Clean Air Act] § 111 most reasonably seems to require that EPA identify the emission
levels that are “
achievable
” with “
adequately demonstrated technology
.” After EPA
makes this determination, it must exercise its discretion to choose an achievable emission level which represents the
best balance
of
economic
,
environmental
, and
energy considerations
.
11
(formatting added) As is explained in the sections below, the
court’s prior decisions
have further interpreted many of these terms in order to guide the NSPS process. For example, the administrator must ensure that
a technology is commercially viable before it can be determined to be “adequately demonstrated.” And when she considers whether an emission standard is “achievable,” the
administrator must take into account the representativeness of the data that she used to justify her decision. After the administrator makes those two determinations
(”
adequately demonstrated technology
” and “achievable
standard
”)
, she then must balance economic, environmental, and energy impacts
6
See, e.g.,
Appalachian Power Co. v. EPA
135 F.3d 791, 801-802 (D.C. Cir. 1998)
7
Portland Cement Association v. Ruckelshaus,
486 F.2d 375 at 402 citations, quotations omitted; The court stated eloquently stated this aspect of review in
Essex Chemical Corp. v. Ruckelshaus
:
“
While we must bow to the acknowledged expertise of the administrator on matters technical, we should not automatically succumb thereto, over
whelmed as it were by the utter “scientificity” of the expedition” at 434
8
Portland Cement Association v. Ruckelshaus,
486 F.2d 375 at 402
9
Essex Chemical Corp. v. Ruckelshaus,
486 F.2d 427 at 433
10
Clean Air Act §111(b)(1)(B) requires the administrator to “publish proposed regulations, establishing Federal
standards of performance for new sources [within a source category that has been determined to contribute significantly to air pollution that end
angers public health or welfare].” The term “standard of performance” is
defined in Clean Air Act §111(a)(1).
11
Sierra Club v. Costle
, 657 F.2d 298 at 330
to choose the best system of emission reduction. Although the court has recognized that the administrator has
“a great degree
of discretion” in weighing these
factors,
12
her choice is not unrestrained. Prior decisions have established the parameters of reasonable decision-making, as a
safeguard against “crystal ball” inquiry.
13
Notably, judicial
review of the agency’
s balancing of the relevant factors is conditioned on the newness of the technology on which the sta
ndard is based. As the “imprint
of the new technology
”
on the
rule increases, the court’s review becomes “more demanding.”
14
This is important in the context of the EPA’s proposed rule, which is based on the “newest”
possible technology (carbon capture and sequestration), one that hasn
’t yet been demonstrated commercially. It follows that EPA’s balancing of the statutory considerations in formulating the
proposed NSPS is held to the most demanding standards of review.
Summary of Comments
on EPA’s Proposed Carbon Pollution Standard
1.
The administrator failed to perform a determination that partial CC
S is “adequately determined,”
as is required by the statute. Instead, the agency contrived a new
determination (”technical feasibility”) unrelated to the court’s guidance on Clean Air Act
§111 interpretation. The record, in fact, does not support an
“adequately demonstrated”
determination for partial CCS, because the technology has not been demonstrated commercially. It is incumbent upon the administrator to dispel such doubts by performing a reasonable analysis. 2.
The administrator failed to perform a determination that an emissions standard based on
partial CCS is “achievable,” as is required by the statute. Instead, the agency contrived a new determination (“technical feasibility”) unrelated to
the court’s guidance on Clean Air
Act §111 interpretation. The record, in fact,
does not support an “achievability”
determination for an emissions standard based on partial CCS, due to limited availability of the technology. It is incumbent upon the administrator to dispel such doubts. 3.
The administrator expects new coal plants that comply with NSPS will sell captured CO2 to oil companies, which will use the gas to enhance oil recovery. Yet the administrator impermissibly failed to take into account the CO2 attributable to the oil that is recovered using gas captured at the coal plant. Evidence indicates that the CO2 from oil derivative
12
Lignite Energy Council, et al. v. Environmental Protection Agency
198 F.3d 930 at 933, “Because section 111 does
not set forth the weight that should be assigned to each of these factors, we have granted the agency a great degree of discretion in balancing them.
13
Portland Cement Association v. Ruckelshaus,
486 F.2d 37
5 at 391, “The administrator may make a projection
based on extisting technology, though that projection is subject to the restraints of reasonableness and cannot be
based on “crystal ball” inquiry. (citations omitted)
14
Sierra Club v. Costle
657 F.2d 298
at 348, “the greater the imprint of the new technology on the final rule, the more demanding our review of the evidence about the potential benefits and capabilities of the new technology.”