In February, 2010, the NAM and other business groups filed a petition in federal appeals court challenging the U.S. Environmental Protection Agency’s (EPA) decision to regulate greenhouse gas (GHG) emissions from stationary sources through the Clean Air Act. Joining the NAM on the petition were the American Petroleum Institute, the National Petrochemical & Refiners Association, the National Association of Home Builders, the Corn Refiners Association, the Brick Industry Association, the Western States Petroleum Association and the National Oilseed Processors Association.
On March 18, 2010, a group of 21 industry associations and chambers of commerce filed a motion to intervene in the NAM suit in support of our position. This group represents a wide cross-section of sectors around the country that will be severely affected by EPA's effort to regulate stationary sources of greenhouse gases under the Clean Air Act.
A variety of other business groups and some states also challenged the endangerment finding. Some of these groups asked the EPA directly to reconsider its finding, but the agency turned down the request in July, 2010.
In the endangerment case, industry's opening brief was filed on May 20, 2011. Because the court required that all non-state petitioners and intervenors file only one brief, the views of 80 parties were consolidated, and the resulting brief includes disparate arguments from a variety of interests.
The brief explains that EPA does not say what constitutes a “safe climate,” acceptable global temperature ranges, or “safe” levels of GHGs in the atmosphere, nor will anyone be able to judge whether or when EPA has ever achieved a congressionally defined goal. EPA will not be able to say that its action will reduce global temperatures or that a temperature reduction will avoid an actual danger to public health and welfare.
The brief focused on, among other things, key EPA errors relating to (1) construing its authority to produce absurd results, (2) failing to provide a rational basis for determining whether GHG regulations will mitigate a defined public health or welfare risk, (3) lumping together six pollutants without making separate determinations about the effects of each, (4) failing to consider future mitigation and adaptation steps that impact whether health and welfare are endangered, and (5) failing to follow statutory procedures, including consultation with its own Science Advisory Board.
Congress did not intend for EPA’s endangerment finding to produce absurd results, yet that is the effect of EPA’s finding. The EPA should not have used the endangerment finding to cause PSD permitting requirements, since those requirements apply to emissions whose harm is concentrated in a particular geographic area. It should have adopted a more restricted reading of the statute, instead of a broad reading that would be narrowed by the absurd results doctrine.
We also argued that EPA has no rational basis for treating all six GHGs from motor vehicle emissions as a single air pollutant. Automobiles do not emit 2 of the six pollutants, and each of the pollutants that are emitted has radically different heat-trapping properties. In addition, EPA’s use of a “CO2 equivalent” as a proxy for regulation of each gas individually unlawfully avoids having to make endangerment findings for five of the six GHG air pollutants it seeks to regulate.
EPA also refused to consider “whether any harms from the regulated emissions will be independently averted or mitigated.” The agency also ignored emissions reductions that will occur from implementation of the Energy Independence and Security Act of 2007.
EPA's response was filed on Aug. 18, 2011. The agency argued that the administrative record was sufficient, that it reasonably classified six gases on one pollutant, and that it did not need to consider costs, administrative burdens, benefits or mitigation when making its endangerment finding. It also argued that it was not required to submit the proposed finding to the Science Advisory Board for review, and that complaints that it did not do so came too late in the process.
This litigation is one of many suits by the NAM and our coalition partners against EPA's attempt to regulate GHGs. In one, we challenged the agency’s interpretation of the so-called “Johnson Memo,” where EPA stated for the first time that it would apply controls on greenhouse gas emissions on a wide range of manufacturing and other stationary sources. See our summary in NAM v. EPA described as "Challenging EPA's STR interpretation". We subsequently filed additional suits challenging EPA's tailoring rule, tailpipe rule, and other rules being used to regulate stationary sources of greenhouse gases.
On September 26, 2011, the EPA's Inspector General issued a report in part finding that EPA did not make an independent assessment of key scientific evidence that it relied on in issuing its endangerment finding. We then asked the court to take judicial notice of the report. Public documents that are not already in the record of a case may be considered by a court, and we brought this development to the court's attention because it is directly relevant to EPA's claim in court that it exercised independent judgment when reviewing the scientific evidence.
Oral arguments were held on Feb. 28, 2012.
On June 26, 2012, the 3-judge panel upheld all of the primary greenhouse gas regulations. It upheld the EPA’s endangerment finding as within its discretionary power and procedurally sufficient, it upheld the tailpipe rule as being required by law once the endangerment finding is made, it found that the business community lacked standing to challenge the timing and tailoring rules because those rules helped rather than hurt, and, while it found our challenge to earlier rules in 1978, 1980 and 2002 to be timely, it rejected our legal arguments and found EPA’s interpretation compelled by the statute.