EPA Greenhouse Gas Rule Faces Court Challenges

The Environmental Protection Agency (EPA) published a Final Rule on May 9, 2024, to regulate greenhouse gas emissions from new, modified, and reconstructed fossil fuel-fired electric generating units. The rule also established emission guidelines for existing units and repealed the Affordable Clean Energy Rule.

Several parties, including state governments and industry groups, filed petitions challenging the rule in the United States Court of Appeals for the District of Columbia Circuit. The petitioners argue that the EPA exceeded its statutory authority and acted arbitrarily and capriciously in issuing the rule.

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One of the petitioners' main arguments is that the EPA's selection of a 90% carbon capture and sequestration/storage (CCS) system as the Best System of Emission Reduction (BSER) is unlawful because this technology has not been adequately demonstrated. The petitioners highlight that Section 7411 of the Clean Air Act, which governs the EPA's authority to set standards of performance for power plants, requires that the BSER "has been adequately demonstrated".

• The petitioners argue that the EPA's interpretation of "adequately demonstrated" to include technologies that are anticipated or projected to be viable in the future contradicts the plain language of the statute, which uses the present perfect tense "has been".
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• They further argue that the EPA's reliance on future projections for CCS technology contradicts the statutory requirement that emission limitations be "achievable" at the time the rule is promulgated.

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The petitioners also challenge the EPA's determination that the 90% CCS system is achievable, arguing that the EPA failed to adequately account for the significant technical and logistical challenges associated with implementing CCS on a wide scale, particularly within the rule's timeframe. They point out the lack of any existing power plant that has successfully demonstrated the continuous, annual, and facility-wide 90% CO2 capture rate mandated by the rule.

To support their argument, the petitioners cite examples of CCS projects that have fallen short of the EPA's expectations.

• For instance, they mention the Boundary Dam project in Canada, which the EPA initially claimed had achieved a 90% capture rate. However, the plant operator, SaskPower, clarified that Boundary Dam had never reached that level of CO2 capture.
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• Similarly, the petitioners point to other projects like Plant Barry and Petra Nova, which involve capturing a small fraction of CO2 emissions from a single facility, as inadequate evidence to support the EPA's claim that 90% CCS has been adequately demonstrated.

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The petitioners also raise concerns about the availability of infrastructure necessary for CCS deployment.

• They argue that the EPA failed to adequately consider the challenges of transporting and storing the massive amounts of CO2 that would need to be captured under the rule. They note the limited availability of CO2 pipelines and the lengthy permitting processes involved in establishing suitable storage sites.
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• The petitioners also criticize the EPA's reliance on a hypothetical construction timeline for a single CCS project, arguing that this does not realistically reflect the complexities and potential delays associated with deploying CCS infrastructure on a national scale.

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Furthermore, the petitioners argue that the EPA failed to adequately consider the cost of CCS technology and its potential impact on grid reliability. They contend that the EPA's reliance on tax credits to offset the high cost of CCS is an attempt to mask the true economic burden of the rule. They also express concern that the rule's ambitious timelines and stringent standards will lead to the premature retirement of coal-fired power plants, potentially jeopardizing the reliability of the electric grid, particularly given the challenges of replacing these baseload resources with renewable energy sources.

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Finally, the petitioners invoke the "major questions doctrine" to argue that the EPA exceeded its statutory authority by attempting to regulate a matter of vast political and economic significance without a clear statement from Congress. They contend that the EPA's attempt to reshape the nation's energy mix through the regulation of GHG emissions from power plants is a matter that Congress, not the EPA, should decide.

Court Document

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