U.S. justices to hear challenge to Obama on climate change

By Valerie Volcovici and Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Tuesday dealt a blow to the Obama administration when it agreed to hear a challenge to part of the U.S. Environmental Protection Agency's first wave of regulations aimed at tackling climate change, thus setting up one of its biggest environmental cases in years.

But judges left intact the agency's clean-car standards and its authority to regulate carbon emissions in agreeing to consider a single question of the many presented by nine different petitioners - a move hailed as a win by green groups.

The question the court will consider concerns whether the EPA correctly determined that its own decision to regulate greenhouse gas (GHG) emissions from motor vehicles automatically gave it the authority to regulate emissions from stationary sources like power plants and oil refineries.

The EPA regulations are among President Barack Obama's most significant measures to address climate change.

A federal appeals court in Washington upheld the rules, issued by the EPA under the Clean Air Act, in 2012. The regulations allowed for GHG emissions from a wide range of sources to be regulated for the first time.

By agreeing to hear various legal claims raised by states and business groups, the court could be getting set to limit the reach of its important 2007 ruling, Massachusetts v. EPA, in which it held on a 5-4 vote that carbon was a pollutant that could potentially be regulated under the Clean Air Act.

The legal question, crafted from those raised in the six petitions, indicates the court does not plan to revisit the underlying reasoning behind Massachusetts v. EPA but will weigh whether EPA went further than allowed under the Act.

Jonathan Adler, a law professor at Case Western Reserve University in Ohio, said the court did not dispute the scientific basis underpinning the EPA'S greenhouse gas regulations or its industry-backed vehicle emissions standards, but focused on the most legally shaky challenges buried in the various petitions.

"The grant (of the petition) is appropriately limited," Adler said. "The question presented will force the court to confront the consequences of its handiwork."

Industry groups applauded the high court's consideration of placing a check on what they call regulatory overreach, but environmental lawyers argued that because the justices will assess only one aspect of the petitions, the EPA's broader goal of reducing harmful pollution, and Obama's climate plan, will be barely affected.

"Today's orders by the U.S. Supreme Court make it abundantly clear, once and for all, that EPA has both the legal authority and the responsibility to address climate change and the carbon pollution that causes it," said Vickie Patton, general counsel at the Environmental Defense Fund.

David Doniger, a policy director and senior attorney for the Natural Resources Defense Council, another environmental group, said limiting the focus of the petitions was "a total rejection of the core industry push, which was to overturn the endangerment finding and block power-plant standards."

Eric Groten, a partner at law firm Vinson and Elkins, which represents the industry-backed Coalition for Responsible Regulation, said the court's acceptance of the petition raises the key question of how easily the EPA can use its authority to regulate greenhouse gases.

"This bodes well for efforts to cauterize the damage, as the court will consider whether EPA needs to legally and factually justify each action taken to regulate GHG, or whether it can just wave Massachusetts v. EPA as a magic wand and conjure what it wishes," Groten said.

U.S. natural gas futures were little changed on Tuesday despite the news. Prices matched Monday's nearly four-month spot chart high of $3.855 per mmBtu in overnight trading before being hit by some profit-taking. The most current contract is up more than 9 percent in just over a week.

REGULATORY AGENDA

Oral arguments are likely to be heard early in the new year with a ruling issued by the end of June.

The same month, the EPA is due to propose a major rule that would limit the amount of greenhouse gases the country's existing fleet of more than 1,000 power plants can emit.

Tuesday's decision does not affect the agency's ability to require power plants to install the best available technology to reduce emissions. It could, though, impede the EPA's ability to require new or modified facilities, such as refineries or power plants, to obtain emissions permits.

The American Petroleum Institute, a lobbying group that along with manufacturing interests filed one of the petitions, said the fact that EPA regulations for cars automatically triggered the permitting requirement was an "overstep" of the agency's authority under the Clean Air Act.

"The EPA is seeking to regulate U.S. manufacturing in a way that Congress never planned and never intended," said Harry Ng, API vice president and general counsel.

But Tuesday's ruling means the court effectively upheld the EPA's ability to use the Clean Air Act to regulate emissions from power plants and other stationary sources.

Even if the court ruled for petitioners on these issues, most power plants and refineries would still be required to install best available control technology to limit greenhouse gases, said Sean Donahue, a lawyer representing environmental groups at Donahue & Goldberg.

(Reporting by Lawrence Hurley and Valerie Volcovici, additional reporting by Eileen Houlihan; Editing by Ros Krasny, Howard Goller and Prudence Crowther)

Source: http://news.yahoo.com/u-supreme-court-agrees-hear-climate-change-regulation-134254247--finance.html
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