The Supreme Court Is Living Rent-Free in the EPA’s Head

If nothing else, give the Environmental Protection Agency credit for this: They seem to understand the assignment.

Last year, the Supreme Court struck down the Clean Power Plan, President Barack Obama’s ambitious attempt to restrict carbon pollution from power plants. That proposal never carried the force of law, and it had been held in suspended animation by the Court — and later the Trump administration — since 2016. But after President Joe Biden took office, Chief Justice John Roberts and the Court’s conservative majority revived it seemingly entirely for the sake of deeming it illegal.

The proposal went far beyond what was allowed by Congress, Roberts ruled. Normally, an EPA standard would require that power plants or factories install some kind of equipment on their smoke stacks to meet a pollution cap. “By contrast, and by design,” the Obama proposal could only be satisfied by burning less coal, the chief justice wrote. It required “generation shifting,” forcing states to get more of their power from renewable, nuclear, or natural-gas plants.

That overreached the EPA’s authority under the Clean Air Act, Roberts declared. If the EPA wanted to regulate greenhouse gases, then it needed to treat them like a normal air pollutant — and it needed to act like a normal technocratic agency. Above all, it had to keep its regulations to those that could be accomplished “inside the fenceline” of each power plant.

So last week, when the Biden administration finally unveiled its own draft attempt at regulating carbon pollution from power plants, it knew it was playing on the Court’s, well, court. And it behaved accordingly. The best thing you can say about the EPA’s new power-plant proposal — which will be one of the Biden era’s most important climate regulations — is that it was meticulously, painstakingly tailored to the Court’s demands. If Chief Justice Roberts asked for a normal rule, then the EPA has delivered one so awkwardly, self-consciously normal that it seems a little like a narc. The worst thing about the new rule is that this desire to please the Court may have rendered the rule a little too ineffectual.

If America wants to fight climate change, it must clean up its power plants. Generating abundant, cheap, zero-carbon electricity is the key to the country’s decarbonization strategy.

“If you clean up the power sector, it enables you to clean up other sectors of the economy too, through electrification,” Leah Stokes, an environmental-science professor at the University of California, Santa Barbara, told me. “Electric cars, heat pumps, induction stoves — all these machines can be fueled with clean power.”

Biden’s climate law, the Inflation Reduction Act, will slash emissions from the sector over the next decade, according to federal and independent modeling efforts. But it won’t get the sector all the way there. That’s where the new proposal is supposed to step in.

As per the Supreme Court’s request, the proposal details how every kind of power plant — even those that burn coal or natural gas — can meet their climate requirements for decades to come. It mandates a buildout of carbon capture and storage infrastructure, or CCS, for most coal and some natural-gas plants that plan to stay open long-term.

“The EPA rule makes sure everyone is on the same level-playing field. If the Inflation Reduction Act is enough to incentivize CCS in some places, the EPA is gonna make sure everyone is gonna do it,” Nick Bryner, a law professor at Louisiana State University, told me. “I think it’s designed very, very well to work in tandem with the IRA tax credits.”

If the IRA is the regulatory-friendly angel on its shoulder, then the Supreme Court’s decision last year — called West Virginia v. EPA — is the devil. The EPA’s desire to stay on the Court’s good side is even visible in the proposal’s name. Previous administrations have tried to give their power-plant rules a memorable name — Obama had the Clean Power Plan, of course, and the Trump administration christened its effort the “Affordable Clean Energy Rule,” or ACE. The Biden administration, by comparison, named the new proposal:

New Source Performance Standards for Greenhouse Gas Emissions from New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule

That’s the NSPSGHGNMRFFFEGU; EGGGEEFFFGU; RACE Rule for short.

I would say that the agency couldn’t have given it a more technocratic name if it tried, except that it obviously tried very hard. “Traditional approach, traditional name,” the EPA’s press office chirped when the Politico reporter Alex Guillén first noted the name. Just what the Supreme Court asked for!, they all but added. The agency is so desperate to look obedient and demure that even its social-media team has been briefed on current federal doctrine.

At the same time, the rule does “a tremendous amount to make the rule as flexible as possible given the constraints they’re working with in West Virginia v. EPA,” Bryner said. Under the proposal, some natural-gas plants can choose between installing carbon-capture equipment or burning low-carbon hydrogen.

But the rules may have erred on the side of too much flexibility, says Charles Harper, a policy analyst at Evergreen, a climate advocacy group and think tank. Evergreen and other environmental groups are worried that the rules might be too generous to fossil fuel companies. They’re focusing their criticism on two elements of the draft: its handling of natural-gas plants and coal retirements.

First, the EPA rule as proposed would not apply to an overwhelming majority of the country’s natural-gas plants.

A large share of carbon emissions from natural-gas plants come from so-called “baseload” plants that generate many hundreds of megawatts of electricity at all hours of the day. The rule focuses on these facilities, and it requires them either to install CCS equipment or to burn hydrogen fuel.

But the rule is not nearly so strict about small or medium-sized natural-gas plants. Natural-gas plants that generate less than 300 megawatts of electricity — or that run less than half the time — are essentially exempt from the rule. This excludes 77% of the country’s natural-gas plants from the new EPA proposal, requiring them to make no changes through 2040.

It is unclear what share of carbon emissions these natural-gas plants represent. The EPA did not provide an estimate of their carbon emissions before the deadline for this story.

As a whole, natural-gas power plants emit 43% of the U.S. electricity sector’s carbon pollution, despite producing nearly twice as much power as coal.

Environmental groups say the proposal’s coal problem is simpler to fix. In the draft, the EPA puts coal-fired power plants in different categories depending on when they’re slated to retire. Plants that have no retirement date — or that will remain open after 2040 — must install equipment to capture 90% of their emissions by the year 2030. Plants shutting down after 2035 must make a cheaper set of changes. And plants due to close by 2032 don’t have to make any changes at all, so long as they don’t increase their emissions over the next decade.

Those deadlines are too long from now, and the EPA should bring them forward in time when it issues a final version of the rule, Harper said. “2040 is pretty far out and would entail a lot of unabated emissions hitting the climate and human health,” he told me.

The EPA still has time to edit this proposal; it will hear public comment over the next few months and probably issue a final version of the rule next year. With the procedural issues resolved, the Supreme Court’s ability to object to that rule is limited to whether carbon capture is feasible and affordable enough to be used under the Clean Air Act.

If there is a bright spot for climate advocates in the new rule, it’s that the Biden administration — and last year’s Democratic majority in Congress — seem to have anticipated that move.

As the House was voting on the IRA last year, Representative Frank Pallone, the chair of the House Energy and Commerce Committee, put a statement in the congressional record saying that the EPA should take the IRA’s generous tax credits into account when proposing power-plant rules. The subsidies should be considered when the agency is deciding whether CCS is feasible and affordable, he said. The EPA cites Pallone’s statement in its new draft.

But ultimately it is Chief Justice John Roberts who will get to decide. Almost a decade ago, a set of conservative states sued the EPA to block it from requiring CCS. That issue has since been held in its own state of suspended animation. It may soon breathe again.