GHG Rules Allowable for Sources Otherwise Subject to Federal Clean Air Act Permitting -

On June 23, 2014, the U.S. Supreme Court issued its widely anticipated decision in Utility Air Regulatory Group v. EPA concerning the U.S. Environmental Protection Agency’s regulation of greenhouse gas emissions (GHGs) from stationary sources. In a divided decision with a majority opinion written by Justice Antonin Scalia, the Court ruled that EPA may require stationary sources to control GHGs if those sources would be required to obtain PSD or Title V permits for conventional pollutants. However, the Court rejected EPA’s rewriting of the Clean Air Act 100- or 250-ton permitting thresholds to expand its regulatory net to capture sources that would become newly subject to PSD or Title V permitting based only on their potential to emit GHGs in amounts less than 100,000 tons per year.

Background -

In the Court’s landmark 2007 decision in Massachusetts v. EPA—widely known as the “single largest expansion in the scope of the Clean Air Act in its history”—the Court held that Title II of the Act authorized EPA to regulate GHGs from new motor vehicles if the Agency formed a “judgment” that those emissions contributed to climate change. EPA leveraged this opportunity and interpreted the Act and its rules to mean that once GHGs were regulated under any part of the Clean Air Act, Title V and PSD permitting requirements would automatically apply to any stationary source with the potential to emit GHGs in excess of the respective 100- or 250-tonstatutory air pollutant thresholds. Recognizing the regulatory burden this interpretation would impose on smaller sources never before subject to PSD or Title V requirements—such as malls, apartments buildings, and schools—EPA attempted to “tailor” its program for those “new” sources by redefining the statutory threshold for GHGs to 100,000 tons per year, as opposed to the statutorily-required 100 or 250 tons...