Supreme Court Strikes Down Part of EPA Greenhouse Gas Permit Rule but Leaves the Rule Mostly Intact

by Perkins Coie

In 2011, the Environmental Protection Agency, acting under the Clean Air Act, required all new sources that would emit more than threshold quantities of “greenhouse gases” to get a preconstruction “prevention of significant deterioration” permit and commit to install “best available control technology” before beginning construction. On June 23, 2014, the Supreme Court, in Utility Air Regulatory Group v. Environmental Protection Agency, 2014 WL 2807314 (U.S. June 23, 2014), struck down this requirement for a small number of sources while leaving it in place for all others.

GHGs became “regulated pollutants” under the Clean Air Act in 2011 when EPA established GHG emissions standards for new motor vehicles. EPA claimed that this automatically required all new “major stationary sources” of GHGs to get a PSD permit.

The Clean Air Act says that all new stationary sources that will emit more than 250 tons per year (tpy) of any air pollutant are “major.” Since sources typically emit GHGs in far greater quantities than other pollutants, applying this threshold to GHG sources would have increased the scope of the PSD program roughly 100-fold, causing economic and regulatory chaos.

Accordingly, EPA “tailored” the applicability criteria, despite the express statutory language, so that PSD permits would be required for new sources that emitted more than 100,000 tons per year of GHGs (if subject to PSD requirements solely because of their GHG emissions) or 75,000 tons per year of GHGs (if subject to PSD requirements anyway due to other emissions).

A five-justice majority of the Supreme Court disagreed with this approach. In an opinion by Justice Scalia, the Court held that EPA erred both in finding that the PSD provisions automatically applied to all sources of “air pollutants,” broadly defined by EPA to include GHGs, and in assuming the power to amend the specific applicability thresholds in the statute. Instead, the majority ruled, EPA had the power to restrict the definition of “air pollutant” to air pollutants suitable to regulation under the PSD program only in its untailored form. Therefore, EPA’s own justification for “tailoring” showed that GHGs were not such a pollutant.

The decision exempts from the PSD permit requirements all new sources that would be subject to the requirements solely on account of their GHG emissions. The Court applied this same logic to exempt such sources from permitting under Title V of the Clean Air Act as well.

However, over 90% of all GHG sources subject to PSD permitting, including almost any energy project, would also be subject to the PSD permit program because of their emissions of other pollutants.

Here, the Court held that if a source was under the PSD rules anyway, EPA could properly require it to install “best available control technology” for GHGs if it emitted GHGs in “significant” amounts. The Court found that the relevant statutory language was not ambiguous and that applying it in this fashion would not lead to clearly “absurd results.”

The majority did express some concern about the potential burden that the BACT requirement could impose but noted EPA’s long-standing policy that BACT cannot be used to force a redesign of the project (for example, by requiring an applicant for a coal plant to build a gas plant instead) or to take measures to reduce emissions outside the project boundaries.

Justice Breyer and the other three liberal justices would have upheld EPA completely.

Justices Alito and Thomas would have struck down the PSD rules for sources of GHG emissions entirely.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Perkins Coie | Attorney Advertising

Written by:

Perkins Coie

Perkins Coie on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.