A large coal company's petition against the Environmental Protection Agency's proposed emissions rule for power plants is a legal swing for the fences, but a decades-old discrepancy in a technical amendment to the Clean Air Act might give it a chance, according to experts.
Separate House and Senate versions of the act, which was last amended in 1990, were never reconciled and therefore lead to different interpretations. Murray Energy Corp., which filed the petition June 18 in the D.C. Circuit Court, is hewing to the House version in claiming the EPA has overstepped its authority.
Murray Energy and its backers argue that the House language outlaws regulating the source of emissions — in this case, power plants — using both section 111d, the part of the act used for the proposed limits on existing power plants, and section 112, under which the EPA has ordered power plant controls on mercury and air toxics that go into effect in 2016.
"That's actually not a bad argument," said Craig Moyer, a partner with Manatt, Phelps & Phillips LLP, who is chairman of the firm's environmental division.
The court is likely to reject the initial petition because the rule, which aims to curb the sector's emissions 30 percent below 2005 levels by 2030, is in draft stage, Moyer and other experts said. But it could resurface when the EPA submits a final rule next year.
Still, the EPA is likely on solid footing because the Senate version places the emphasis on the regulated pollutant rather than source.
That would give the EPA grounds to regulate through section 111d, the agency says, since there's no current limits of any sort on carbon emissions. And when there's ambiguity in a statute, case law -- specifically, Chevron v. Natural Resources Defense Council in 1984 -- has determined that the interpretation rests with the agency.
"If you've got two versions of a statute, that's about the clearest evidence you could probably have that the statute is ambiguous," said Nathan Richardson, a lawyer with think tank Resources for the Future.
Only the House version appears in U.S. code. The key difference between that and the Senate version is the House language bars the EPA from regulating pollutants "emitted from a source category which is regulated under section 112." The upper chamber puts it this way: The EPA can "establish standards of performance for any existing source for any air pollutant ... not included on a list published" under certain section 112 provisions.
But Ann Weeks, senior counsel with the Clean Air Task Force, said that doesn't tell the whole story, and added Murray Energy didn't present the full accounting of the drafting error in its petition.
"[T]he prohibition is on regulating air pollutants that are [National Ambient Air Quality Standards] or listed [hazardous air pollutants] under 111(d). [Carbon dioxide] is neither. That’s the status quo ante the conforming amendments and clearly what Congress intended to preserve," Weeks said in an email.
Generally, the deference toward the agency in interpreting statutes has benefited the Obama administration's EPA, especially when it comes to air quality.
In a legal memo attached to the proposed power plant rule, the EPA said using section 112 to regulate hazardous pollutants "does not deprive" it of using 111d to manage carbon emissions.
"History has shown us that EPA writes solid rules and they stand up in court — courts have reaffirmed our science and reasoning time and time again," EPA spokeswoman Liz Purchia said in an email.
While the challenge might not stand up to the test of the courts, it is already beginning to color some opposition to the proposed rule by Capitol Hill Republicans. With the petition coming a year out from when the rule is finalized — which is typically when states or companies establish standing to file a legitimate lawsuit — it is laying the groundwork for additional attacks against the proposal.
"There's an explicit prohibition in some of the language," Rep. Ed Whitfield, R-Ky., chairman of the Energy and Power subcommittee of the Energy and Commerce Committee, told reporters last week. "Basically, because they're regulating under 112 already, 111d explicitly prohibits them from doing it again under 111d."
Rep. Morgan Griffith, R-Va., peppered EPA air pollution chief Janet McCabe with questions about the agency's authority to regulate power plants, asking her whether the agency believes the warring versions "creates ambiguity in what is the law or about what the law is."
"This is not a new interpretation," McCabe responded to Griffith's inquiry during a June 19 Energy and Power subcommittee hearing.
Still, the sort of ambiguity being considered in the Murray Energy petition is different than others, Richardson said. He said the stark contrast between the two chambers' versions makes the case intriguing, but that it's still a "home run swing" that will likely result in the courts allowing EPA to interpret the Clean Air Act.
"This is different because they're two different words in the statutes," Richardson said. "But my intuition is that it breaks down along the same lines."
CORRECTION: Nine states have joined Murray Energy in its petition. An earlier version of this story misstated the number of states.