A federal appeals court has
thrown out rules issued by the Bush administration in 2005 that established a
cap-and-trade program for mercury emissions from coal- and oil-fired power
plants, saying the administration violated the Clean Air Act by removing the
plants from a list of hazardous air pollutant sources that Congress had
stipulated must be subject to far more stringent regulation.
The first of the invalidated
rules reversed a December 2000 determination by the EPA during the Clinton
administration that oil- and coal-fired power plants were subject to regulation
under Section 112 of the Clean Air Act, in which Congress mandated that
industrial emissions of mercury and other hazardous air pollutants (HAP) be
regulated using maximum achievable control technology (MACT).
The MACT standard requires new
power plants to adopt at a minimum the emission control that is in use at the
“best-controlled similar source” and requires existing plants to adopt controls
equal to the average emissions reduction achieved by the best-performing 12% of
the universe of similar plants. Under this standard, most affected power plants
would have had to reduce their emissions by 85% to 90% within three years.
Coal-dependent utilities
complained that meeting the MACT standard would be prohibitively expensive and
would adversely affect electric reliability. Those claims fell on receptive ears
in the Bush administration’s EPA.
In early 2004, the EPA proposed
two regulatory alternatives to control mercury emissions from power plants,
including one proposal very similar to the Clinton MACT requirement. In the
second alternative, however, the agency proposed to remove—or “delist”—coal- and
oil-fired power plants from the Section 112 list of HAP sources subject to MACT
and instead to regulate these sources under a different section of the federal
air statute that allows pollutant emissions trading.
The second proposal, broadly
supported by the utility industry, was roundly criticized by environmentalists
and public health officials. The critics said that—besides being in clear
contradiction of Congress’s intent in writing the Section 112 HAP provisions—the
trading plan would lead to multiple mercury “hot-spot” areas surrounding power
plants that chose to comply with the cap by buying emission allowances rather
than installing controls sufficient to capture large amounts of mercury.
Despite this criticism, the EPA
on March 29, 2005, issued a final rule delisting coal- and oil-fired power
plants from the list of sources subject to MACT under Section 112.
At the same time, the agency
issued a second final rule that established the Clean Air Mercury Rule, which
required coal- and oil-fired utilities to reduce their emissions by 70% below
current levels by 2018. The rule not only set a far weaker emissions cap than
the MACT standard but also gave generators 15 years more to comply than they
would have had under the tougher clean-up requirement.
The EPA’s Office of Inspector
General later discovered that the agency’s senior political management had
ordered agency staff to effectively write the mercury rule backwards: from a
control level of 70% by 2018 selected by political appointees “instead of basing
the standard on an unbiased determination of what the top-performing [power
plant] units were achieving in practice.”
Eighteen states, along with a
number of environmental and public health advocacy groups, filed suit
challenging the rules. Other states intervened in the case on industry’s
behalf.
In its 18-page ruling, the court
said Congress prohibited the EPA from removing power plants from the Section 112
MACT list unless the agency met specific criteria laid out in the Clean Air
Act.
The statute stipulates that the
EPA may delete any category of sources from the MACT list if the agency
determines that “emissions from no source in the category or subcategory
concerned . . . exceed a level which is adequate to protect public health with
an adequate margin of safety and no adverse environmental effect will result
from emissions from any source.”
Noting that the EPA conceded in
court that it had listed the power plants under Section 112, the court said the
only way the agency lawfully could have delisted the plants was by determining
that the power plants met the strict delisting criteria.
“Yet EPA concedes that it never
made the findings [the statute] would require in order to delist” the power
plants, the court said. “EPA’s purported removal of [power plants] from [the
statute] therefore violated the Clean Air Act’s plain text and must be
rejected.”
The court rebuffed the EPA’s
arguments to get around the congressional delisting criteria, saying the agency
“provides no persuasive rationale for why the comprehensive delisting process .
. . does not apply.”
The judges also didn’t buy the
EPA’s final argument that it was entitled to delist the power plants simply
because it had reversed the Clinton administration’s 2000 decision to list
them.
“This explanation deploys
the logic of the Queen of Hearts, substituting EPA’s desires for the plain text
of [the statute],” the court said.
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