Mills: Supreme Court Issues Far-Reaching Decision On Air Emissions

Alex Mills

Last week was an important week for energy producers and consumers.

The U.S. Supreme Court issued its opinion in “Utility Air Regulatory Group v. EPA” that left virtually everyone scratching their heads and wondering what it means.  The decision reinforces EPA’s authority to regulate greenhouse gases as long as:

1. they already need permits to emit conventional pollutants;
2. the facilities are newly constructed;
3. they meet the definition of a large emitter of greenhouse gas; and
4. they must be stationary sources.

Electric generation plants, refineries, manufacturers and gas processing plants could very easily fit this description.

The court, however, denied EPA the authority to regulate smaller sources that emit greenhouse gases, such as shopping centers, schools, apartments, etc.  The court said that Congress did not intend for facilities that emit small quantities of GHGs to be covered.  As a matter of fact, the term greenhouse gas was not even in the original Clean Air Act, but the court held that EPA’s interpretation of greenhouse gas is valid because it comes from the phrase “regulated pollutants.”

Producers and consumers most certainly will see the price of electricity and gasoline increase as EPA puts more restrictions and regulations on industry.  Large users of electricity, such as manufacturers, will be hit hard as they struggle to compete in an international market.

Meanwhile, the U.S. House Science Committee passed the Secret Science Reform Act, H.R. 4012, which would prohibit EPA from proposing regulations based on science that is not transparent or reproducible.

“The EPA’s regulatory process today is a closed loop,” wrote Congressman Lamar Smith (R-Tx.), chairman of the Science Committee, in the June 24 edition of The Wall Street Journal.  “The agency funds the scientific research it uses to support its regulations, and it picks supposedly independent (but usually agency-funded) scientists to review it.  When the regulations are challenged, the courts defer to the agency on scientific issues.  But the agency refuses to make public the scientific research it uses.”

Chairman Smith says that EPA’s regulations should be based on “legitimate science and data that are open to the public.”

“Monday’s (June 23) Supreme Court decision…underscores the need for scrutiny of agency claims,” Smith wrote.  “The court called EPA’s rewriting of the Clean Air Act ‘outrageous,’ and said that ‘When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy,’ we typically greet its announcement with a measure of skepticism.”

Smith said that EPA’s outlandish claims about rising seas, catastrophic events and lives saved are based on data that has not been made public.

While the energy industry struggles to determine how it will comply with these complicated laws and regulations, consumers will wonder why gasoline prices are so high.  They need look no farther than the regulations adopted by EPA and upheld by the Supreme Court.

Alex Mills is President of the Texas Alliance of Energy Producers.  The opinions expressed are solely of the author.