What Does West Virginia v. EPA Mean for the Agency’s New Proposed Clean Power Rule?
We don’t always hear what happens next after the Supreme Court hands down a big decision. In administrative overreach cases, often the agency tries to regulate again. One year after West Virginia v. EPA, that’s exactly what EPA is trying to do in its proposed rule under Section 111 of the Clean Air Act for coal and natural-gas power plants. It would be a mistake to let this second attempt fly under the radar.
Last year, the Court held that EPA cannot use Section 111 to reshape the nation’s electricity grids. West Virginia ended a seven-year litigation saga surrounding EPA’s 2015 “Clean Power Plan” rule. That rule had relied on Section 111(d)—a rarely used provision designed to make individual buildings and plants operate more efficiently—to set standards that required coal and natural-gas plants to significantly cut back operations or subsidize competitors (like wind and solar plants) that EPA preferred. This aggressive “generation shifting” model would have remade the electricity-generation market altogether. It would have forced fossil-fuel-fired power plants to close while increasing energy prices for millions of Americans and decreasing energy reliability nationwide. But West Virginia held that EPA cannot demand hugely transformative changes based on its belief that coal and natural gas should make up a much smaller share of the nation’s markets. Applying the major questions doctrine, the Court explained that decisions like that are big enough that Congress must speak plainly if it wants agencies to tackle them. And Section 111 contains no clear statement showing Congress made a call to shake up the power grids, much less tasked EPA with carrying it out.
With that mandate from the Court, the wait began to see what EPA would do next. Yet rather than taking West Virginia’s lessons to heart, EPA’s new proposal doubles down on the Clean Power Plan’s mistakes. It still targets coal and natural-gas plants for effective elimination. It just gets to this end by a different way.
The new proposed rule keys emission standards to carbon capture and sequestration/storage and hydrogen co-firing technologies. “CCS” involves rerouting a plant’s exhaust, isolating the carbon, and transporting it somewhere else for use or long-term storage. And hydrogen co-firing adds low-emitting hydrogen to a natural-gas turbine to reduce overall emissions. At first glance, these options appear to be closer to the sort of traditional systems EPA has looked to before as potential “best systems of emission reductions” under the statute—ways for individual power plants to reduce their own emissions. But a too-quick look can be deceiving.
In reality, EPA’s view of the technology’s capabilities is wishful thinking. Affected plants could not simply install these technologies to comply with the emission limits they would face if the rule goes into effect. Because the emissions targets are set so low, their only real option would be to stop producing altogether. And that result would get us right back to the problem that 19 states and others took to the Supreme Court last year. In other words, though the new proposal sets outright generation shifting aside, the agency is still trying to pick winners and losers—it wants to decide which fuel sources can and can’t be part of the nation’s energy sector.
To be clear, courts shouldn’t need the major questions doctrine to strike down a rule like this. As West Virginia recently explained in a comment on behalf of 21 states, the proposed rule fails almost every one of Section 111’s requirements. Under the statute, EPA must set a “best” system of emission reduction according to specific metrics Congress set: A best system must be “adequately demonstrated” to the point that standards based on it are “achievable.” And along with ordinary components of reasoned decisionmaking, EPA must account specifically for “cost,” “nonair quality health and environmental impact,” and the nation’s “energy requirements.” Congress allowed some room in this analysis for EPA to make projections about near-future technologies. But taken together, the statutory criteria leave no doubt that EPA must tie its rules to reality.
Here, though, CCS and co-firing are nowhere near ready for full-scale commercial use at the levels EPA wants. CCS shows promise, but it is still an emerging technology; there are no commercial-scale examples in America’s energy sector. Yet EPA bases its proposed emission guidelines on the idea that plants running at least at half capacity would operate CCS systems at 90% in the next 7 to 12 years. Hydrogen co-firing is even further behind CCS as a viable technology. Some plants currently co-fire at around 5% (though even then, not with the “ultra-low greenhouse gas hydrogen” EPA would require). But EPA wrote a proposed rule that assumes—without concrete evidence—that significant portions of the natural-gas industry can somehow transition to 96% co-firing by 2038. As our comment and many others explain, EPA is trafficking in policy pipedreams, not adequately demonstrated technologies that regulated power plants could actually put into place.
All of this means that the words Congress wrote into law in Section 111 should be enough on their own to hold EPA to task. Even so, we can’t ignore the words that aren’t there, either: The proposed rule is still in major-questions territory. It represents, once again, an agency taking on hugely important, expensive, and politically sensitive questions that affect the nationwide economy and Americans’ day-to-day lives. After all, if CCS and hydrogen co-firing technology doesn’t exist on the scale EPA envisions, but EPA requires power plants to limit emissions based on that impossible standard anyway, then what options does a regulated plant have? If it cannot operate at levels EPA deems acceptable, then it cannot operate at all. But Congress still hasn’t said—in clear statutory terms—that EPA can make that call. A rule’s results matter, and EPA doesn’t have authority to get to the Clean Power Plan’s ends by dressing up this new mandate another way.
And it seems EPA knows what it’s doing. CCS and hydrogen co-firing are not borderline regulatory matters, after all. Whatever options they might provide at an unknown point in the future, they are not viable on the extreme scales and limited timeframes EPA wants to set now. That reality makes it hard to judge this attempt as anything other than a backdoor way to push coal and natural-gas plants to close their doors—and save EPA the trouble. EPA has said as much, conceding that its plan will force “coal retirements,” and industry groups have confirmed that we will see industry-wide shutdowns if EPA charges ahead.
So as important as the Supreme Court’s decision last year was for the rule of law and holding agencies to the limits Congress sets, maintaining that line takes work. That’s why states like West Virginia and our coalition explained our (many) objections to EPA’s new plan and will be ready to hold EPA accountable in court if it doesn’t listen. Staying active matters for this specific rule: Who resolves issues of national energy policy and the ways those choices affect our people and businesses remain questions for Congress and the states, not EPA. It matters more generally, too. A key lesson from West Virginia v. EPA is that “who decides?” can be more important than the decision itself. What happens next in EPA’s Section 111 rulemaking may prove to be a test how strong that separation-of-powers victory really is.
Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at [email protected].