DC Circuit finds fatal flaws in EPA unfair emissions regulations

Jeff McNelly [Executive Director, ARIPPA]: "For several years ARIPPA has been involved in an effort to educate EPA and Congressional leaders that the proposed CAIR regulations were flawed and unfair to our industry. This effort has involved hundreds of thousands of volunteer hours as well as professional staff and counsel guidance. Our positions were supported by the PA Department of Environmental Protection and the Governor of Pennsylvania. Unfortunately our efforts to cure this unfair situation with the regulatory source (EPA) and the legislative body that drafted the original law/language were unsuccessful and our only recourse to find help and fairness was through the time consuming and legal/judicial system. We are gratified that an unbiased body finally recognized the "fatal flaws" involved in both the drafting of this proposed regulation and the intent behind such activity.

Indeed the DC Circuit Court of Appeals issued its opinion in the CAIR litigation at the end of last week. Among other arguments raised by petitioners challenging the regulation, the Court agreed with us (and other petitioners challenging the SO2 portion of the rule) that EPA had no legal authority to use the Title IV acid rain program to implement CAIR. Because the Court agreed with the first argument that we raised in our briefing papers (i.e., that EPA had no legal authority to rely on Title IV at all), it did not need to get to our secondary argument, which we also addressed in oral argument (i.e., if EPA did have authority to use the Acid Rain program to implement CAIR, it must preserve the exemptions inherent in the acid rain program).

Interestingly, the Court did not agree with all of the challenges raised by the different petitioners. Nonetheless, because EPA had consistently characterized the CAIR regulation as a complex, integrated program, the Court concluded that the entire regulation must be vacated because some petitioners (including us) had correctly raised "fatal flaws" in portions of the regulation. EPA now must effectively start over in developing a CAIR-equivalent regulation. It is possible that Congress will act before EPA does, since several bills are under consideration that would address the vacated CAMR requirements, the vacated CAIR requirements and greenhouse gases from electric generating units.

Procedurally, EPA has the right to seek reconsideration by the Court, seek reconsideration by the entire panel of judges within the DC Circuit Court, or appeal to the United States Supreme Court. Given the implications of the rule, it is certainly possible that EPA may seek reconsideration of the ruling. If so, we will file responsive pleadings and need to participate in the process."

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