02/14/2020 - Legal Analysis

How Statutory Interpretation of the Clean Air Act Serves the Trump Administration’s Deregulatory Agenda

by Joe Goffman, Laura Bloomer

We worked with the Case Western Reserve Law Review to publish an article in which we analyze how the Trump administration is using Clean Air Act rulemakings to “deconstruct the administrative state.” Here we briefly outline our analyses. Click here to access the full article. You can listen to our podcast in which we discuss our findings here

EPA is attacking environmental rules and the agency’s capacity to act from many directions. The agency is undermining its own scientific expertise, making it more difficult for the public to hold the agency accountable, and decreasing the effectiveness of its compliance and enforcement policies. EPA is also rolling back many environmental regulations, which will directly affect public health, environmental quality, and our ability to transition to a low-carbon future. But the Clean Air Act (CAA) rollbacks also include the agency’s third deregulatory strategy. The Trump EPA is using the rollbacks to advance new interpretations of the Act that restrict EPA’s statutory authority to address climate change and other air pollution challenges. These new legal interpretations threaten EPA’s ability to deliver needed reductions in air pollution. They run counter to EPA and the CAA’s historic path, which for decades advanced along with technology and science, resulting in more effective environmental protection over time. Through these novel legal arguments, EPA is using the law as a tool to accomplish the Trump administration’s larger agenda of “deconstructing the administrative state.”

This deliberate transformation of EPA’s understanding of its legal mandate may be longer-lasting than the agency’s other deregulatory efforts. A new administration could rebuild a strong regulatory regime and could commit to re-investing in EPA’s scientific expertise. Both reconstruction efforts would be costly and time-consuming, but they are feasible. Certain changes to EPA’s interpretation of the law, however, could make efforts to revive stronger regulations more difficult and create permanent constraints on EPA’s authority to take the actions necessary to combat ongoing environmental threats. If upheld by the DC Circuit or Supreme Court, these new legal interpretations could hamstring future EPA administrators and impair the nation’s long-term progress towards cleaner air.

We noted four regulatory changes – two final and two proposed – that re-interpret long-standing CAA authorities to diminish EPA’s effectiveness as an agency. These actions are: (1) the repeal of the Clean Power Plan and its replacement with the Affordable Clean Energy Rule, (2) the revocation of California’s preemption waiver for its greenhouse gas tailpipe emissions standards and its Zero Emissions Vehicle program, (3) the proposed withdrawal and replacement of the “appropriate and necessary” finding that underpins the Mercury and Air Toxic Standards, and (4) the proposed rescission of methane regulations for the oil and natural gas sector.

These rulemakings are all based in different CAA provisions, and yet the Trump EPA is interpreting each provision to conclude that, as a matter of law, it cannot or should not act. As we write in our forthcoming article, “Each [rulemaking] replaces an interpretation that understood the CAA and the individual statutory provisions in exactly the opposite way. Each previous interpretation prioritized successfully addressing an air quality problem and discerning Congress’ meaning and intent. Each responded to the statutory language and construction of the relevant provision, incorporating their alignment with the Act’s overall structure and purpose. […] The agency approached the rulemakings that are now the target of the current reversals [by] adapting the CAA to current realities and finding within its language the tools to adequately meet the air quality challenge.”

The Trump EPA rejects this approach and interprets the CAA as static, rather than adaptive to modern challenges. These actions are in opposition to a mission-driven EPA, which would continue to understand the CAA as providing the means for achieving greater emissions reductions as science and technology progress.

Repeal of the Clean Power Plan and Promulgation of the Affordable Clean Energy Rule

The repeal of the Clean Power Plan and its replacement with the Affordable Clean Energy Rule (ACE) provide the clearest example of the administration’s strategy to curtail EPA’s CAA authority. The rules address carbon dioxide emissions from coal and natural gas-fired power plants. In ACE, EPA determines that the relevant provisions in the CAA limit EPA’s authority and do not authorize the agency to effectively curb carbon dioxide emissions. The CAA provisions in question require that EPA determine the “best system of emissions reduction” for power plants. In the past, EPA read the same CAA language as authorizing the agency to take a broad approach to identifying the best ways to reduce emissions. The George W. Bush administration proposed cap-and-trade programs between sources. Guided by stakeholder input regarding how the electricity grid operates, the 2015 Clean Power Plan included generation shifting from higher-emitting to lower-emitting sources as the best system of emission reduction.

Now, the Trump EPA interprets this same CAA provision as unambiguously prohibiting the agency from establishing generation shifting as the best system of emission reduction. Instead, EPA concludes that the CAA provisions in question only authorize the agency to require site-specific controls, or systems that can be operated at the power plant itself. Because this strategy ignores how the grid functions and how power plant operators commonly comply with environmental regulations, it prevents EPA from undertaking the most effective solution to reducing power plant carbon dioxide emissions.

The final rule acknowledges that ACE will achieve virtually no carbon dioxide emissions reductions. Why would an agency charged with reducing air pollution use its time and resources to make this change? The answer is found in the Trump EPA’s argument that the CAA is unambiguous. If the DC Circuit agrees that the statute is unambiguous, and if the Supreme Court upholds such a decision, a future administration will be prohibited from re-interpreting the statute in a more expansive way. It seems that this de facto revision of the law is the Trump administration’s real reason for advancing this legal interpretation.

Revocation of California’s Preemption Waiver

The Trump administration offers two alternative positions to justify its revocation of the 2013 preemption waiver EPA granted California for its greenhouse gas and Zero Emissions Vehicle programs. EPA’s preferred position partially deconstructs its CAA authority, yielding entirely to another agency’s decision. As in ACE, EPA’s alternative position relies on a fixed interpretation of the CAA that severely restricts one of the Act’s key components by blocking states’ authority to regulate greenhouse gas emissions from motor vehicles. Unlike in ACE, EPA frames its interpretation as “reasonable” and one that deserves deference from courts, rather than arguing solely that the statute is unambiguous.

California set the first tailpipe pollution standards in the 1960s, leading the nation in requiring automotive pollution control technology. The 1970 CAA established a national program for motor vehicle emissions standards, generally preempting the states’ right to set state-specific standards. Recognizing California’s technology-forcing role, Congress included provisions in the CAA that permit the state to request a waiver to set more stringent vehicle emissions standards and allow other states to adopt the approved standards. The statute also favors California’s role as technology leader by creating a presumption for granting a waiver, placing the burden on EPA to make at least one of three findings to deny a waiver.

The Trump EPA’s primary move in revoking California’s 2013 waiver is to hand off its rulemaking authority to the National Highway Traffic Safety Administration (NHTSA) – a regulatory body that oversees fuel economy standards and has no authority to implement the CAA. EPA incorporates NHTSA’s position that the statute granting NHTSA authority over fuel economy standards preempts California’s program. On this basis, EPA declares the 2013 waiver null and void from the beginning, before EPA even has the chance to undertake the required CAA analysis for denying a waiver. By adopting NHTSA’s position as its own, EPA abandons its CAA authority to grant California preemption waivers that address greenhouse gas emissions. This determination disrupts the role the CAA gave to states in advancing both air quality and automotive pollution control technology.

EPA’s alternative position leads to the same result through a static reading of the agency’s CAA authority. Rather than seeing the CAA as adaptive to modern pollution challenges, like climate change, EPA interprets the statute as prohibiting the agency from adequately responding to these problems. EPA now reads one of the statutory criteria for denying the waiver – that California “does not need such State standards to meet compelling and extraordinary conditions” – as excluding standards that are aimed at greenhouse gas emissions and combatting climate change. EPA concludes that the CAA compels the agency to revoke the waiver for greenhouse gas standards.

This interpretation is counter to the conclusion EPA reached in 2013. It’s a restrictive reading of the statutory text that essentially reverses the presumption for granting a waiver, and puts the burden of proof on California. It also ignores the impact the Zero Emission Vehicle program has on reducing overall emissions – not just climate pollutants. Further, the revocation impedes the technology-advancing purpose of the CAA, which is carried out through other states’ adoption of California’s standards and the incentives automakers have to conform with the state’s more stringent standards.

Proposed Withdrawal of the Appropriate and Necessary Finding for the Mercury and Air Toxic Standards

In its proposed withdrawal of the finding underpinning the Mercury and Air Toxic Standards (MATS), the Trump EPA reads a loophole into the CAA. The CAA requires EPA to set pollution control standards for toxic emissions from power plants if the agency determines the standards are “appropriate and necessary” after other CAA programs have been implemented. The statute instructs EPA to base this determination on whether the residual level of toxic emissions will likely cause public health hazards and on the availability of control technology. EPA made this determination and promulgated MATS in 2012. In the 2015 Michigan v. EPA decision, the Supreme Court invalidated that finding and held that the agency must consider costs when deciding whether it is “appropriate” to regulate. In 2016, EPA incorporated this holding in a supplemental appropriate and necessary finding by including costs as one factor in its decision making but not the overriding factor.

The Trump EPA’s proposed withdrawal of the 2016 supplemental finding advances a misreading of Michigan v. EPA and an improperly narrow cost-benefit calculation to conclude, in effect, that the agency need not act. EPA now reasons that the agency should base its decision to regulate on whether the costs outweigh the benefits, not on the level of toxic emissions and the threat they pose to human health. The agency then undertakes a cost-benefit analysis that minimizes important co-benefits, such as reductions in particulate matter and sulfur-dioxide. EPA concludes that it is not appropriate to further regulate toxic pollutant emissions from power plants. In doing this, EPA ignores Congress’ intent and the CAA’s text by determining that, despite its finding that toxic pollutants are emitted at levels harmful to public health, EPA cannot require further reductions because the costs outweigh the benefits. This reasoning distorts the Supreme Court’s decision in Michigan v. EPA, which found only that the agency needed to consider costs – not that EPA needed to perform a formal cost-benefit analysis or conclude that it was inappropriate to regulate on the sole basis of a cost-benefit comparison.

EPA notes that the withdrawal of the “appropriate and necessary” finding does not directly repeal MATS. As part of the rulemaking process, however, the agency is seeking comment on whether it would be authorized or compelled to repeal the standards if the withdrawal is finalized. Regardless, rescinding the initial finding makes the standards vulnerable to legal challenges. By taking this action and reinterpreting its methodology for considering costs, EPA is setting itself up to evade its statutory duty to protect communities from toxic emissions.

Proposed Rescission of Methane and Volatile Organic Compounds (VOCs) Standards for New and Modified Sources in the Oil and Natural Gas Sector

EPA’s proposed changes to the 2016 methane and VOCs standards for new and refurbished sources in the oil and natural gas sector take a previously integrated approach to methane regulations and break it apart. The proposal arbitrarily separates the sector into discrete parts and separates its emissions into discrete pollutants. This would make any future effort to comprehensively reduce methane emissions arduous and lengthy.

In 2016, EPA adopted standards for emissions of methane and VOCs from new sources in the oil and gas sector as part of an action to address the universe of equipment and pollution sources within the entire sector. The 2016 regulations affected new sources in the production, processing, transmission, and storage segments of the “crude oil and natural gas production” source category. By addressing methane emissions from new sources, EPA set the legal foundation for establishing standards to reduce methane emissions from older, existing sources within the sector.

The proposal lays the groundwork for justifying inaction by disaggregating the sector and its emissions. The proposal removes the 2016 pollution standards for sources in the transmission and storage segments, concluding that prior to regulating them, EPA must make a separate finding that emissions from those segments individually contribute significantly to the endangerment of public health or welfare. EPA’s argument relies on the irrelevant assertion that the composition of the gas changes as it moves through the segments. This ignores the fact that equipment in all four sectors emits the same harmful pollutants and that the segments operate in concert to produce marketable oil and gas.

The proposal also seeks comment on the unprecedented proposition that even though EPA has found that total pollution from the source category threatens harm to air quality, the agency would have to make entirely new findings about the threat posed by methane specifically before undertaking any action to curb methane pollution. Requiring separate pollutant- or segment-based findings would add significant and unnecessary hurdles to EPA’s ability to comprehensively address the sector’s emissions. It could also result in some segments remaining unregulated, as the impacts on air pollution of each segment may be too small to justify regulations, even though the cumulative impacts of the sector’s emissions would warrant action.

EPA also proposes to rescind all methane regulations, finding that they are redundant with the rules for VOCs. While this might be true given current technology and for new sources regulated under this program, the 2016 methane regulations are key to implementing a solution to the problem posed by methane emissions from the existing oil and gas sector sources. That is, regulating methane emissions from new sources is a prerequisite for regulating methane emissions from existing facilities – which typically emit greater amounts of methane. By removing these current standards, EPA forgoes its authority to regulate existing sources. The proposal downplays this result, which defeats the Act’s technology-advancing purpose and its comprehensive approach to addressing air pollution challenges.

Conclusion

The legal interpretations offered in these four rulemakings revise and restrict EPA’s CAA legal authority to protect human health and the environment. They defy Congress’ intent and the CAA’s language and design. The rulemakings push the CAA toward obsolescence in the face of evolving climate and air quality issues, a result the Supreme Court rejected in 2007. As we conclude in our article, “If each of these interpretations is confirmed, either as fixed precedent or strong presumption, then EPA’s course will be re-directed from that of the past several decades. At the very least, these interpretations reflect an agency that approaches its legal authorities as static rather than ‘progressive’ and that works to find limitations in its mandates rather than imperatives to continually respond to ongoing threats to air quality, public health and the environment.”

For a copy of the article, please click here.

Please cite the full article using the following format: Joseph Goffman & Laura Bloomer, Disempowering the EPA: How Statutory Interpretation of the Clean Air Act Serves the Trump Administration’s Deregulatory Agenda, 70 Case W. Res. L. Rev. (forthcoming 2020).

For more in-depth analysis of these important rules, please see:


This post was edited on October 23, 2020 to add in the final version of the article.