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Clean Power Plan Oral Argument: Will Limited Government Survive the Age of Global Warming?

It’s now 10 days since the D.C. Court of Appeals heard oral argument on the Environmental Protection Agency’s carbon dioxide (CO2) emission performance standards for existing fossil-fuel power plants—the agency’s so-called Clean Power Plan. Rumor has it a transcript will be released next week—long after the news cycle is over. That is unacceptable.

Using inexpensive voice recognition software, the Court could post an unofficial transcript on the day of the hearing. At present, if you want to find out who said what, your only recourse is to wade through seven and a half hours of the oral argument recording. A recording is a poor substitute for a transcript. You can’t easily compare later statements to earlier statements, pause over particular exchanges, or keep track of the myriad detail. The Court’s antiquated protocol limits open government and discourages public engagement.

Fed up, I spent hours transcribing certain portions of the proceeding. The audio was often poor, and I didn’t try to capture the stammers and false starts. But I learned enough to confirm the report of eye witnesses that Sidley Austin attorney Peter Keisler, representing industry and labor petitioners, more than held his own against a barrage of unfriendly questions from Judges Tatel, Millett, and Pillard. The back and forth comes to nearly 5,000 words, and I won’t try to summarize it. Instead, I will highlight two exchanges that underscore the challenge of preserving limited government in the Age of Global Warming.

First, a quick recap of the basic statutory argument against the Power Plan. EPA’s authority under the relevant provision, section 111(d) of the Clean Air Act (CAA), is limited to setting emission performance standards for existing (already-built) stationary sources, and such standards must be “achievable” by the “source,” defined as a “building, structure, facility, or installation” that emits air pollutants. What EPA does instead is set CO2 standards that are not achievable by any existing fossil-fuel power plant—or even any new unit with state-of-the-art control technology.

To comply with standards no source can achieve, owners have the “choice” to invest in new renewable generation, reduce output from their coal or gas power plants, or simply shut those facilities down. But section 111(d) gives EPA no authority to regulate the economic activities of source owners in the wider marketplace outside the source. Moreover, “produce less power,” “shut down the plant,” and “subsidize your competitor’s wind farm” are not bona fide CAA performance standards. Such options do nothing to improve the “environmental performance” (lower the emissions rate) of an existing coal or gas power plant.

The first exchange I want to highlight is between Keisler and Judge David Tatel. Referring to Keisler’s argument that EPA has no authority to compel coal power plant owners to buy emission credits to comply with an emission standard unachievable by the source, Judge Tatel asks: “What is it exactly in the statute that prohibits that? It’s a Chevron 1 question. What part of the statute speaks directly to that? What is it that prohibits EPA from requiring the owners to set an emission standard that might require owners to purchase emission credits? What in the statute exactly prohibits that?”

Keisler responds: “I will cite a couple of statutory provisions on this but I need to begin with the fact that it is the absence in the statute of any authority to compel the owner to invest. This has to be found somewhere affirmatively in the statute.” Spot on. It is a cornerstone of our constitutional system that Congress only has such powers as the people, through the Constitution, have delegated to it, either by express provision or clear implication, and, similarly that federal agencies have only such powers as Congress has delegated to them, either by express statutory provision or clear implication.

The burden of proof is thus on EPA to show that 111(d), a provision only three sentences long, contains the expansive authority the agency somehow never discovered in more than four prior decades of administering it. Tatel, however, suggests the burden is on petitioners, as if agencies may do whatever Congress has not expressly prohibited. That view is convenient for those who seek power over others in the name of solving the “climate crisis,” but it stands the principle of administrative law on its head.

The second notable exchange is between Keisler and Judge Millet. She tries to argue that Keisler’s literalism—that a source is a “building, structure, facility, or installation” and not its owner—is not literal enough. The text does not refer to the “technology inside” the facility. So why can’t EPA set an emission standard for a structure that happens to be a coal power plant, which the source can meet only by “altering the balance of how it creates that electricity within that building”—for example by incorporating solar technology. The implication being that if the “structure” can comply by generating some of its power from renewable technology, why can’t the owner comply by investing in someone else’s solar installation a hundred miles away?

Keisler responds: “Well, I would go back to the fact that EPA has never said we can tell a coal plant you have to emit at zero, you have turn yourself into a solar plant. They have always accepted the nature of the source, and that’s how the statute functions. EPA identifies a source category. And a category can be fossil fuel plants, and then it regulates the sources within that category. This would be essentially regulating the sources—if I understand your Honor’s question—to turn them into a different category. Which is not something we think either the statute or EPA thinks is permissible.”

Indeed, as clearly spelled out in the statute, section 111 performance standards are standards for source categories. Categories are defined by their technological characteristics. The technological differences distinguishing one category from another impose objective constraints on how stringent emission performance standards can be and still be “achievable.”

It is astonishing that a Judge on the Court of original jurisdiction in Clean Air Act cases, in what is arguably the most important CAA case of our time, either does not know or does not care that the statute’s organizing principle—regulation by source category—limits what EPA may permissibly do in the name of solving the “climate crisis.”