Supreme Court poised to decide fate of mercury emission limits

The fate of a contentious U.S. Environmental Protection Agency rule limiting mercury emissions from electric power plants will be decided by the nation’s highest court sometime in the next few days in a case that could force EPA to factor in regulatory compliance costs when deciding if an air pollutant is harmful to human health.

The case turns on the question when EPA must consider industry’s compliance costs in the process of imposing emission limits on the category of air pollutants that are considered hazardous to human health and the environment.

Section 112 of the Clean Air Act imposes the requirement of a so-called “air toxics determination” before the agency can set limits on the discharge of those toxic pollutants to the atmosphere.

The statute provides that EPA must “list” all sources of air pollutants that  “present[] a threat of adverse effects to human health or the environment” that “warrant[] regulation under this section.” Once EPA lists a source of such a hazardous air pollutant, the agency is required to set standards that achieve the “maximum degree of reduction in emissions,” considering factors including compliance costs, energy requirements, and non-emission related health and environmental impacts.

The administration of former President Bill Clinton decided in Dec. 2000 that regulation of mercury, particulates, and toxic gases from electric  power plants is necessary to protect public health and the environment. The subsequent administration sought to alter that determination, but its effort to do so was rejected by a federal appeals court in 2008.

The Obama administration proceeded with development of a so-called Mercury Air Toxics rule and finalized it in Feb. 2012.

According to a fact sheet prepared by EPA, the rule would likely save up to 11,000 lives per year. About 1,400 coal-and oil-fired power plants would be affected.

During the process of finalizing the MACT rule, EPA evaluated the costs that electric utilities may incur in order to comply with the 2012 emission limits. The agency determined that the total annual costs of compliance would be about $9.6 billion. That compares to yearly public health benefits that range from $37 billion to $90 billion.

Lawyers for industry and some state governments challenged the rule in court, arguing that EPA must consider industry’s costs of compliance with emission limits before deciding that regulation of those emissions is necessary.

They lost before the U.S. Court of Appeals for the District of Columbia Circuit, which ruled in 2014 that EPA had properly considered costs at the stage of the process at which the emission limits were set.

Only one member of the three-judge panel that heard the case at the appeals court level, an appointee of former President George W. Bush, agreed with the industry lawyers’ argument.

“It’s just kind of inconceivable that Congress meant for EPA to do a cost-benefit analysis at the decision-to-regulate stage,” Karl S. Coplan, a professor of law at Pace University Law School, said. “It’s a technology-based limitation, not a health-based limit. EPA must consider costs at the stage of what the limit must be. There’s no point in making EPA consider costs at the should-we-regulate stage and then again at the what-the-limit-should-be stage.”

The Supreme Court has generally required federal courts to defer to agency interpretations of the statutes they administer if the language at issue is ambiguous and the agency’s reading is reasonable. This approach to deciding cases involving challenges to agency action, known as the Chevron doctrine, is a cornerstone of administrative law.

Coplan does not think that the MACT case before is likely to induce a majority of the justices to abandon the doctrine altogether.

“I think there are some justices that are uncomfortable with it,” he said. “But their discomfort seems to depend on which side it comes up. It’s fair to say that Justice Scalia is one of those who has expressed skepticism about it in the past.”

If the Court does not turn away from the Chevron doctrine, then the only rationale it would have to reject the MACT rule would be would be that the text of the Clean Air Act that appear to foreclose consideration of costs at the stage of deciding whether a pollutant is dangerous to human health and the environment actually does require the agency to consider such costs then.

“The finding by EPA that regulation of electrical utility industry emissions is appropriate was made many years ago and the practical effect of this decision, depending on how it comes out, could be a real setback for EPA’s regulation of coal-fired power plants and for cleaning them up,” Coplan said.

The Supreme Court heard oral arguments in the case on March 25.

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