Energy Reality, Energy Scorecard - Coal Still Checks the Boxes
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Celebrating the American Coal Council’s 40th Anniversary in 2022!
Issue 1 2022
Energy Reality, Energy Scorecard
Coal Still Checks the Boxes
Carbon Forward: Today’s Global Journey to the U.S. Banks Against
Advanced Energy Supreme Court – Fossil Fuel
Markets for Value- Realities Regulating Power Financing:
Added Products Reinforce Plant Greenhouse States
from Coal Coal’s Role Gas Emissions Stand Up
© Erik Cox Photography / shutterstock.com
Journey to the U.S. Supreme Court –
Regulating Power Plant Greenhouse
Gas Emissions
Paul M. Seby and Chris L. Bell, Greenberg Traurig LLP
T
his article is an effort to existing fossil-fuel powered power the concern that the Supreme Court
hit the “reset” button on plants. First, the power generation might “dismantle the administrative
the frequently breathless sector beat the Obama-EPA’s Clean state” suggests a fundamental distrust
commentary on the Power Plan’s (“CPP”) GHG emission of American democracy: applying the
recently argued Supreme goals by 10 years without any federal “major question” doctrine would mean
Court case (West Virginia et al v. EPA) GHG emission regulations. Second, that major climate change policies
addressing the scope of the United the petitioners are not challenging would have to be set by elected
States Environmental Protection whether EPA has the authority to representatives rather than unelected
Agency’s (“EPA”) authority to regulate regulate GHG emissions, but rather administrators. That Congress may
greenhouse gas emissions from how it can be lawfully exercised. Third, be ineffective is hardly a rationale for
44 American Coal | Issue 1, 2022 | www.acclive.com
bypassing the democratic process: the whom electricity would be generated authority is not unbounded: when
unilateral exercise of central executive and transmitted. setting emission standards, the
authority, particularly in the face of EPA replaced the CPP with the states must apply EPA’s “guidelines”
existential challenges, does not have a ACE Rule in 2019, which was promptly describing a “best system of emission
pretty history. Fourth, this case is not challenged in the D.C. Circuit. North reduction” (“BSER”) that has been
a hypothetical exercise looking for an Dakota intervened on behalf of EPA, “adequately demonstrated”. EPA’s
“advisory opinion” from the Supreme arguing that the ACE Rule correctly “guidelines” are the boundaries
Court: North Dakota seeks the specific allocated the responsibility to regulate within which the states must work to
relief of reinstatement of the Affordable power plant emissions between EPA establish the performance standards
Clean Energy (“ACE”) rule vacated by and the states as directed by Congress. for specific existing sources. A second
the D.C. Circuit. The D.C. Circuit vacated the ACE Rule layer of federal oversight is EPA’s
Lastly, and this will be the focus in January 2021, largely adopting EPA’s authority to review and approve the
of this article, there is a little-noticed reasoning from the CPP Rule. state plans. The primary role of states
path forward that simply requires in setting emission standards for
confirmation of the relative roles of existing sources differs from setting
the states and EPA established by
Congress in the Clean Air Act. This case
This case is not standards for new sources, for which
EPA is the primary authority.
is not just about EPA: it is about EPA’s
and the states’ relative authority to
just about EPA: The CPP dismantled this
framework by transforming BSER
regulate GHG emissions. Specifically,
North Dakota has asked the Supreme
it is about EPA’s from “guidelines” into fixed national
emission standards that were not
Court to confirm that Congress gave and the states’ “adequately demonstrated” for coal-
the states a primary role in regulating fired plants, as the fixed standards
air emissions from existing power relative authority themselves were impossible for
plants and to tell EPA that it cannot coal plants to meet. Without any
unilaterally impose major national to regulate GHG authorization from Congress, EPA
requirements that cut states out of seized the authority to set standards of
the process. The Supreme Court has emissions. performance for existing sources and
described the Clean Air Act as “a model upended over 100 years of state and
of cooperative federalism” spelling On October 29, 2021, the U.S. local control over the electric power
out the respective roles of EPA and Supreme Court granted North Dakota’s grid, which was based on a dispatching
the states. In this case the D.C. Circuit petition for certiorari, along with those system prioritizing the lowest cost
dismantled Congress’ cooperative of three other petitioners (West Virginia power, and would have imposed a
federalism framework by ruling that et al., North American Coal Corporation national system based on dispatching
EPA can effectively deprive the states and Westmoreland Mining Company). power from sources with the lowest
of any meaningful role in regulating North Dakota filed its own briefs, GHG emissions. North Dakota was
greenhouse gas emissions from arguing that the D.C. Circuit incorrectly largely stripped of its authority to set
existing power plants. diminished North Dakota’s rights under source-specific performance standards
The U.S. Supreme Court in 2016 the Clean Air Act and that the ACE Rule in its state plan as set forth in Section
stayed implementation of the CPP, should be reinstated. Oral argument 111(d)(1) of the Clean Air Act, and was
which set national GHG emission occurred on February 28, 2022. reduced to planning how it would
standards that could not be met by North Dakota’s petition uniquely replace the power (based on GHG
existing coal-fired power plants, even presented the Supreme Court with a emissions, not cost) that would be lost
though the Clean Air Act required straightforward question of statutory by shuttering existing coal-fired power
that such standards be “achievable”. interpretation. Section 111(d)(1) plants.
The CPP deprived North Dakota of directs EPA to promulgate regulations The CPP never went into effect
any meaningful role in regulating governing the process whereby “each because it was stayed by the Supreme
GHG emissions from existing power State shall submit to the Administrator Court. Ironically, the power sector
plants other than choosing which a plan which (A) establishes standards achieved the CPP’s GHG emission
coal-fired power plants would be of performance for any existing source reduction goals about a decade faster
shuttered and finding (and paying for) for any air pollutant,” and that the state than what the CPP contemplated,
replacement sources of electricity. plans could consider, “among other demonstrating that the CPP was
The CPP transformed EPA from an factors, the useful remaining life of ultimately unnecessary. The CPP
environmental regulator directed by a particular source of air emissions.” was replaced by the ACE Rule, which
Congress to cooperate with the states Thus, Congress granted to the states returned the process back to its
as equals into a national regulator of the authority to set emission standards statutory roots: EPA sets guidelines
the electrical grid, dictating how and by for existing power plants. The states’ based on what has been adequately
www.americancoalcouncil.org | Issue 1, 2022 | American Coal 45
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46 American Coal | Issue 1, 2022 | www.acclive.com
demonstrated, and then the states
apply that guidance to set performance
standards in the state plans that
EPA reviews and approves. The ACE
Rule provided a framework for North
Dakota to regulate GHG emissions
from existing power plants in a manner
consistent with the cooperative
federalism mandate established by
Congress.
North Dakota’s argument to
the Supreme Court is a relatively
straightforward one of statutory
interpretation that is distinct from
the issues that have captured the
attention of most commentators. The
Supreme Court could adopt North
Dakota’s arguments and reinstate
the ACE Rule without addressing the
“major question” doctrine or opining
on the limits of the administrative
© Bill Perry / shutterstock.com
state. Interestingly, North Dakota’s
statutory arguments were not seriously
contested by EPA.
Supreme Court oral arguments are
often very difficult to read, and these
cases were no exception. While most
of questions challenged the petitioners’
positions, they were asked primarily by
the Court’s three “liberal” justices. The
five to six “conservative” justices were is highly unlikely to vote to reverse is to be done about climate change.
less active in questioning petitioners’ the D.C. Circuit). The discussions On the other hand, justices who are
counsel, but were more active in about justiciability and standing also proponents of the D.C. Circuit’s opinion
questioning EPA and its supporters. did not illuminate North Dakota’s may be concerned that a far-reaching
There were only a few exchanges that straightforward argument that the injury decision reversing the D.C. Circuit
touched on North Dakota’s arguments. was the vacatur of the ACE Rule and the could cause permanent harm to their
The Chief Justice and Justice remedy was to reinstate that rule. vision of the administrative state, in
Clarence Thomas questioned whether It may be tempting for some which great deference is granted to
the “major question” doctrine was justices to kick the can and avoid unelected technical administrators on
the only way to decide the case in tackling difficult issues such as the major policy decisions without the clear
Petitioners’ favor, leaving the door open contours of the “major question” endorsement of elected legislators
for North Dakota’s position. Justice doctrine, complex technical issues in Congress. In this context, North
Sonia Sotomayor observed that the about whether emissions standards Dakota’s straightforward statutory
states “have a lead role in how this are limited to “inside the fence line” argument to re-establish the proper
is supposed to work,” though she did applications or can include “outside the balance between federal and state
not take that observation very far (and fence line” requirements, and what authority, which does not require
addressing all these other issues, may
be attractive.
The Supreme Court could adopt North A decision is expected by June of
2022.
Dakota’s arguments and reinstate the Paul M. Seby is a special
assistant attorney general for the
ACE Rule without addressing the ‘major State of North Dakota. He and Chris
Bell are shareholders with the law
question’ doctrine or opining on the limits firm Greenberg Traurig LLP which
represents the State of North Dakota
of the administrative state. before the U.S. Supreme Court.
www.americancoalcouncil.org | Issue 1, 2022 | American Coal 47You can also read
