Does the Schumer-Manchin Bill Undercut West Virginia v. EPA? No, But Not For Lack of Trying

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This Wednesday on Fox Business with Larry Kudlow and later on Fox News with Sean Hannity, Sen. Ted Cruz (R-TX) warned that buried in the 725-page Schumer-Manchin bill are provisions designed to “overturn” the Supreme Court’s decision in West Virginia v. Environmental Protection Agency. So, I decided to take a look. No provisions in the bill would literally overturn West Virginia. However, some provisions seem calculated to create specious talking points for progressive judges who already believe—or profess to believe—that West Virginia was wrongly decided.

Sen. Cruz observed that the Court’s ruling was a big win for the State of West Virginia, U.S. energy consumers generally, and the U.S. constitutional system of government by politically accountable representatives. That is undeniably correct.

By a vote of 6-3, the Court vacated, as exceeding the EPA’s authority, the Obama administration’s “Clean Power Plan” (CPP), which aimed to reduce power-sector carbon dioxide (CO2) emissions to 32 percent below 2005 levels by 2030 (80 FR 64665). By clear implication, West Virginia thwarts the Biden administration’s ambition to mandate far more draconian power sector emission reductions over the next eight years.

Moreover, by grounding its decision in the “major questions doctrine,” the Court put all agencies on notice that it will disfavor any rulemaking that purports to find in a long-extant statute an unheralded power to remake an entire industry or sector of the U.S. economy absent a clear statement of authorization from Congress. The Court found no such clear statement in Section 111 of the Clean Air Act (CAA), the purported authority for the CPP.

Sen. Cruz appealed to Sen. Joe Manchin (D-WVA) not to let the radical left undo West Virginia’s Supreme Court victory, which would be disastrous for the state’s coal industry.

Cruz did not identify which provisions in the misnamed “Inflation Reduction Act” would overturn West Virginia, but he likely refers to Sections 60105(g) and 60107, which are on pages 666-670 of the bill text. Let’s look at each in turn.

CAA Section 111 was the disputed provision in West Virginia, Section 115 has been alleged to impose reciprocal greenhouse gas (GHG) reduction obligations on the U.S. under the Paris Agreement, Section 165 is the stationary source preconstruction permitting program Justice Scalia unwisely ruled applicable to GHG emitters already regulated for conventional air pollutants, Section 177 authorizes states to ban sales of gasoline-powered cars (according to California and its allies), Section 202 authorizes the EPA to regulate GHG emissions from new motor vehicles (according to the Supreme Court’s 2007 Massachusetts v. EPA decision), and Section 211 authorizes the EPA to regulate emissions from motor fuels. Sections 213 and 231 authorize the EPA to regulate emissions from nonroad engines and aircraft, respectively. Section 612 authorizes the EPA to regulate emissions from refrigerants, solvents, fire retardants, and other manufactured substances.

The Schumer-Manchin bill would appropriate $45 million to “carry out” those sections “with respect to greenhouse gases.” Would that gut or significantly roll back West Virginia v. EPA?

Not technically, as a matter of law. The EPA already has authority under those provisions to regulate emissions. The Court in West Virginia did not say that the EPA may not regulate power plant CO2 emissions under CAA Section 111 or GHG emissions from other sources under other provisions of the Act. Rather, the Court denied that Section 111 gave the EPA authority to set emission performance standards so stringent that coal and, eventually natural gas power plants could comply only through cap-and-trade programs—policies Congress had repeatedly considered and rejected.

The mischievous language in the Manchin-Schumer bill could, however, preclude future litigation that builds upon West Virginia. Eight of the nine CAA authorities listed in Section 60105(g) of the bill do not mention “carbon,” “greenhouse gases,” “climate change,” or “global warming.” In other words, there is no “clear statement” in those statutes authorizing their use to decarbonize portions of the economy.

CAA Section 211 does mention “greenhouse gases” in connection with the renewable fuel standards program, but with this proviso:

Nothing in this subsection, or regulations issued pursuant to this subsection, shall affect or be construed to affect the regulatory status of carbon dioxide or any other greenhouse gas, or to expand or limit regulatory authority regarding carbon dioxide or any other greenhouse gas, for purposes of other provisions … of this chapter [i.e. the CAA].

In short, Section 60105(g) of the Schumer-Manchin bill would provide the first “clear statement” in U.S. statutory law that Congress intends for CAA Sections 111, 115, 165, 177, 202, 213, and 231 to regulate greenhouse gases.

Regulatory advocates could cite Schumer-Manchin Section 60105(g) as evidence Congress wants the EPA to put the squeeze on fossil fuels. That political opinion would in turn exert pressure on legal opinion—especially among judges who view climate change as a crisis demanding urgent action. In other words, enacting those provisions would make West Virginia seem less definitive or settled.

Unfortunately, that’s not the worst of it. Section 60107 of Schumer-Manchin would establish a “Low Emissions Electricity Program.” It appropriates $51 million to help three broad interest groups—consumers, industries, and State-Tribal-local governments—reduce GHG emissions “from electric generation and use” and $1 million to monitor the recipients’ progress in reducing emissions. Those provisions may seem innocuous; they are not.

The Low Emissions Electricity Program expressly “amends” the Clean Air Act, becoming a new section after what is currently CAA Section 134. And then the other shoe drops.

Section 60107 of Schumer-Manchin also provides $18 million “to ensure that reductions in greenhouse gas emissions from domestic electricity generation and use are achieved through use of the authorities of this Act, including through the establishment of requirements under this Act,” based on the $1 million monitoring program.

So, if Schumer-Manchin passes, Congress will have amended the Clean Air Act to create an electric-sector greenhouse gas reduction program, with an $18 million fund to “ensure” reductions are “achieved,” including by “the establishment of requirements.” I am unaware of any CAA emission-reduction programs with “requirements” that are not regulatory.

Creating a Low Electricity Emissions Program through a reconciliation bill, without benefit of a hearing, would not cut any ice with the six justices comprising the majority in West Virginia. It would in no way contradict their judgment that CAA Section 111 does not authorize the EPA to compel states or utilities to reallocate production and market share from coal to gas generation and from fossil generation to renewables.

However, enactment of the Low Electricity Emissions Program would be grist for the mill of progressive judges and climate litigation groups who already believe the CPP was well within the scope of EPA’s authority.

When Joe Manchin first ran for the Senate in West Virginia, he famously shot a rifle bullet through the Waxman-Markey cap-and-trade bill, promising to “take dead aim” against the bill “because it is bad for West Virginia.” He is now sponsoring legislation that would amend the Clean Air Act to expressly require CO2 emission reductions from fossil-fuel power plants, and that specifically appropriates tens of millions of dollars to promote the Clean Air Act’s use as a framework for making climate policy. Enacting those provisions can only embolden opponents of West Virginia’s Supreme Court victory.

The title of this post was updated on September 1, 2022.