Isramart : Obama's EPA Faces Legal Minefield Over CO2 Regulation

Isramart news:
-Environmental lawyers say the Obama Administration is walking through a legal minefield as it plans to regulate greenhouse gases.

But despite the possible explosion of court challenges, petitions and law suits, they say Obama's Environmental Protection Agency still has a chance of charting a regulatory course that prevents critics' worst fears of sustained economic damage.

Politically, however, the EPA's action may have put the president and his Democratic party in a very tight spot.

Under President Obama's climate czar, Carol Browner, the EPA has officially declared greenhouse gases a public danger through the Clean Air Act, a necessary precursor for regulating such emissions. The agency is expected to finalize a new emission rule for light-duty vehicles by the end of March.

Once that rule is approved and enforced, it automatically triggers regulations for emitters above a 100-ton to 250-ton-a-year threshold across the economy. Large bakeries, hospitals, dairy farms, churches, refiners, power stations, chemical plants, apartment buildings and any other facilities that emitted over those amounts would be subject to regulations under the Clean Air Act. The EPA said an estimated four million to six million facilities could become subject to regulation, permitting and cutting their emissions.

In an attempt to avoid the subsequent avalanche of permitting and the potential to harm the economy, the EPA proposed to "tailor" the threshold in the first few years to emitters of more than 25,000 tons a year, covering only around 13,400 of the largest emitters. - Political analysts say the EPA's endangerment decision was meant to pressure Congress into crafting and passing a legislative solution to cutting greenhouse gases, especially after the Administration said it preferred legislation over regulation under the Clean Air Act. Though the House passed such a bill, efforts in the Senate have all but died, postponed to March-April at the earliest. Exacerbated by a weak, non-binding international climate agreement and by vulnerable Democrats heading into an election year, political analysts say passage of a climate bill by Congress is increasingly unlikely.

Without congressional action, that leaves the onus on the EPA to regulate greenhouse gases under the Clean Air Act.

Groups across the political spectrum are already preparing to challenge the EPA's actions. The Chamber of Commerce has said the endangerment finding was based on faulty premises. Less main-stream environmental groups such as the Center for Biological Diversity have said they're prepared to press the Administration to regulate at lower thresholds, petitioning for a new, very stringent national air quality standard for greenhouse gases.

While legal experts say the courts are unlikely to block the endangerment finding during any legal challenge--calling it a heavy lift--the EPA's other actions are potentially more vulnerable to challenge.

"The EPA is on a tightwire without a net with this tailoring rule," said Patrick Traylor, a partner at the Washington office of Hogan & Hartson. "There's a very real risk a court could vacate the rule and a higher-than- normal risk they could stay it."

In particular, the EPA is using an obscure legal doctrine that ostensibly gives the agency flexibility to craft new rules under existing law. If the agency were to draft new greenhouse-gas rules at the much lower thresholds as stated in the law, the EPA says there would be "absurd" results in terms of the bureaucratic process and potential economic impact.

Under existing case law, particularly the Chevron vs Natural Resources Defense Council decision, federal agencies are subjected to a two-part test, however. The first step is determining whether the statutes are unambiguous.

"There's a real risk a court's going to say the law's unambiguous" and could disallow the tailoring rule, forcing regulation at the lower thresholds, Traylor said.

Jason Schwartz, a Legal Fellow at the Institute for Policy Integrity at New York University School, said "the EPA doesn't have a slam-dunk case."

"Neither the absurd-results canon nor the doctrine of administrative necessity will allow the EPA to create exemptions to those requirements," Schwartz and his Institute for Policy Integrity colleague, Inimai Chettiar, wrote in an April policy article.

One potentially saving argument, Schwartz says, is the EPA's plan to phase in different threshold-level emitters, allowing five years to study streamlining the permitting process for facilities under the 25,000 level. The courts may defer to the agency's action on that account.

Adding to the pressure on the EPA is the fact that many states already have the lower thresholds on their books. Because the tailoring rule doesn't preempt state laws, that could automatically expose any small emitters to regulation and potential lawsuits.

The Clean Air Act gives any citizen the right to charge potential polluters with violation of the Act's regulations. Not only environmentalists, but unions and business competitors could use the law to prevent new construction or modifications of emitting facilities.

State-level challenges are already shaping the regulatory process, with environmentalists' challenges seeking application of new source-review rules to consider greenhouse-gas emissions. Schwartz said challenges are a "definite" likelihood, especially once the vehicle-emissions regulations become effective.

Coincidentally, it's a local-level challenge that may end up temporarily saving the EPA from the dangerous political impact of regulating greenhouse gases through the Clean Air Act. As a result of a petition for a coal-fired power plant in Deseret, Utah, the EPA administrator under the George W. Bush Administration, Stephen Johnson, issued a memo that restricted permits from considering carbon-dioxide emissions.

Often called "shadow law," such memos give the Obama Administration the chance to outline what greenhouse-gas facilities and sectors should be regulated. Current Administrator Lisa Jackson--who has said the agency is reviewing the Johnson memo--could direct the agency to regulate greenhouse-gas emissions for stationary sources only if they are part of specially designated categories.

Although the EPA could choose to use this concept as a "Plan B" when finalizing the tailoring rule next year, Traylor says it would be seen as fundamentally inconsistent with EPA's primary legal theory and is unlikely to be included.

Instead, the EPA may wait to revisit that option, potentially buying a year's delay in greenhouse-gas regulations by declaring the vehicle-emissions law will become effective in 2011 instead of when the final bill is published in 2010.

"That gives the EPA time to litigate in courts, and if it loses, it can institute the alternate plan later," Traylor said.