(Updates with excerpts from argument starting in fourth paragraph.)
Feb. 24 (Bloomberg) -- U.S. Supreme Court justices questioned whether the Environmental Protection Agency had authority to impose permit requirements on power plants and factories in a test of President Barack Obama’s climate-change agenda.
In a 90-minute session sprinkled with references to football games and Dunkin’ Donuts, the court today heard arguments from industry groups and Republican-led states over one aspect of the agency’s effort under the Clean Air Act.
The justices hinted they might rule narrowly, perhaps by allowing greenhouse-gas limits on facilities that already must get a permit for other types of emissions. The justice likely to provide the swing vote, Anthony Kennedy, asked just a handful of questions. Early on, he suggested he wasn’t interested in revisiting the court’s 2007 decision letting the EPA regulate carbon emissions.
Later Kennedy told an Obama administration lawyer defending the EPA policy, “I couldn’t find a single precedent that strongly supports your position.”
The industries primarily affected by the requirements are power plants, chemical facilities, oil and gas projects and cement plants, according to the EPA. Companies that have applied for permits include Calpine Corp., Exxon Mobil Corp. and Occidental Petroleum Corp.
States and business groups say the permit rules ultimately may affect millions of facilities, including bakeries and apartment complexes.
The EPA says it is avoiding that outcome, at least for now, by relaxing the threshold that normally triggers a permit requirement. The Clean Air Act generally requires a permit for sources that exceed either 100 tons or 250 tons per year of a particular pollutant.
Peter Keisler, the lawyer representing the challengers, told the justices that the permit program was designed to address local pollution, not the worldwide effects of greenhouse gases.
Justice Elena Kagan said Keisler’s interpretation of the Clean Air Act -- excluding greenhouse gases from the permit requirement altogether -- was equally hard to square with the law.
“The conundrum that this case raises is that everybody is violating a statutory term,” Kagan said. When that happens, the agency’s interpretation should get deference, she said.
The effect of the permit program so far has been limited. Since 2011, 141 greenhouse-gas permits have been issued, about half for new facilities and half for the expansion of existing ones, according to the EPA.
The EPA’s biggest greenhouse-gas initiative, its proposed rules directly limiting emissions from power plants, isn’t at issue in the Supreme Court case. The Obama administration’s top Supreme Court lawyer, U.S. Solicitor General Donald Verrilli, today told the justices that the permitting rules are an important complement to the nationwide caps.
Unlike the caps, the permit rules are already in effect, and they apply to refineries and cement makers as well as power plants.
“This is an urgent problem,” Verrilli said. “Every year that passes, the problem gets worse and the threat to future generations gets worse. And I think, faced with the obligations that EPA had, it made the most reasonable choice available to it.”
Several justices asked whether Verrilli’s approach would mean EPA regulation of events such as football games and large family gatherings. Verrilli said that wouldn’t happen. “The goal of the transition is not to gradually expand the permitting requirement until they’ve got all the Dunkin’ Donuts in America under it,” he said.
Chief Justice John Roberts pointed to court documents indicating that the EPA could accomplish the vast majority of its objectives by regulating greenhouse gases only from facilities that already must get permits for other emissions.
Under questioning from Justice Sonia Sotomayor, Verrilli later suggested that an approach along those lines might offer a narrow way to resolve the case.
“That’s the rifle-shot solution, to the extent that the court thinks it’s a problem,” he said.
The EPA concluded after Obama took office in 2009 that greenhouse gases pose a danger to public health and the planet. The agency followed up by placing new emissions standards on cars and trucks.
The high court case centers on the EPA’s next step, when it used the vehicle-emission rule as a basis to also set permit standards for factories and other stationary sources. The EPA says those requirements were automatically triggered once the agency found that greenhouse gases were enough of a threat to warrant vehicle regulations.
The agency’s interpretation drew skepticism from Justices Antonin Scalia and Samuel Alito.
“In the entire history of federal regulation, what is the best example you can give us of an agency’s doing something like this, where it has taken a statute with numbers and has crossed them out and written in the numbers it likes?” Alito asked.
The court gave the EPA a preliminary victory in the case in October, refusing to consider arguments that would have barred the agency from addressing climate change at all. That left states and business groups fighting the permit rules.
The court will rule by July.
The cases are Utility Air Regulatory Group v. EPA, 12-1146; American Chemistry Council v. EPA, 12-1248; Energy-Intensive Manufacturers v. EPA, 12-1254; Southeastern Legal Foundation v. EPA, 12-1268; Texas v. EPA, 12-1269; and Chamber of Commerce v. EPA, 12-1272.
--Editors: Laurie Asseo, Mark McQuillan