OHIO VS EPA DECISION: In the first of two consequential decisions with ramifications for environmental and energy policy this morning, the Supreme Court this blocked the Environmental Protection Agency’s “good neighbor” plan, which would have strictly limited ozone pollution from power plants and other industrial sources in 11 states, as well as air pollutants that the agency said can drift downwind into other states and cause additional harm.
Justices Sonia Sotomayor, Elena Kagan, Amy Coney Barrett, and Ketanji Brown Jackson dissented.
Why this is important: The 5-4 ruling comes as the Supreme Court’s conservative majority has taken a more skeptical view of the discretion that administrative agencies should have on the rulemaking process, including regulations related to matters on climate and the environment.
The backstory: In September 2023, Ohio, Indiana, and West Virginia filed an emergency request to the Supreme Court, arguing that the EPA had overstepped its authority in imposing the plan and that it imposed costly and ineffective burdens on their states.
Plaintiffs further argued that the EPA rule should not be enforceable because it relied on the assumption that all 23 states the rule would apply to would participate in the “good neighbor” plan. Read more from Breanne here.
The fallout: Green groups were furious at the high court’s decision, stating the ruling “shows just how radical this court has become.”
“The court is meddling with a rule that would prevent 1,300 Americans from dying prematurely every year from pollution that crosses state borders,” Charles Harper, Evergreen Action’s senior power sector policy lead, said in a written statement. “While we ultimately expect EPA to prevail in court, today’s stay order is a temporary step in the wrong direction.”
On the flipside: Fossil fuel groups cheered the ruling. The American Petroleum Institute released a statement in which Senior Vice President and General Counsel Ryan Meyers called the EPA rule “flawed” and said that the ruling “prevents the risk of electric power outages and crippling delays to industrial supply chains for now.”
Read on for more from the court this morning, and for what is still to come…
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment writer Nancy Vu (@NancyVu99), with help from policy editor Joseph Lawler. Email nancy.vu@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
ANOTHER MAJOR SCOTUS DECISIONS IMPLICATIONS FOR REGULATORS: The high court ruled this morning in another case with major implications for the EPA and other agencies, issuing a decision that limits the power of agencies to punish law violators via in-house proceedings.
The case, SEC v. Jarkesy, involved a trader accused by the Securities and Exchange Committee of fraud whose case was adjudicated by an administrative law judge. The plaintiff said his 7th Amendment right to a jury trial was violated.
The conservative majority ruled that the agency does not have the right to impose civil penalties without a jury trial. Read more on the decision from our Kaelan Deese here.
What it means: The decision has implications for other agencies that use administrative law judges, such as the EPA and USDA, although the exact ramifications will have to be seen. The majority opinion steered clear of addressing other issues regarding the constitutional limits on ALJs.
In a dissent that was co-signed by the two other liberals on the court, Sotomayor wrote that the decision would entail “chaos” for the government.
For the agencies that rely on ALJs to resolve business, “all the majority can say is tough luck; get a new statute from Congress,” Sotomayor wrote.
STILL TO COME – A CHEVRON DECISION: Still to come from SCOTUS is the highly anticipated case relating to Chevron deference. That could come tomorrow or next week.
House Republicans game out response: A memo sent out Tuesday to members of the Republican Study Committee outlines the congressional implications of a Supreme Court decision to scale back, or even overturn, Chevron deference. Republicans have been steadfast in their advocacy to overturn the doctrine, arguing that it blurs the line on a separation of powers between the branches, and gives agencies the ability to “over-regulate.”
Notable quotable: “Chevron deference has given agencies the ability to regulate on matters where Congress is silent or ambiguous,” the memo reads. “Allowing the agencies to engage in rulemaking beyond Congress’s clear direction conflicts with Article I of the Constitution.”
What their game plan is: If Chevron is weakened or overturned, House Republicans are proposing to reverse the doctrine completely through legislation – a bill from GOP Rep. Scott Fitzgerald, labeled the “Separation of Powers Act.” The bill would codify a post-Chevron doctrine by requiring federal courts to conduct a “de novo review” of any agency action.
House committees are also being ordered to review the Biden administration’s regulations and “highlight any that should be considered for judicial review post-Chevron.”
“House conservative should seek opportunities to advocate for Congress to repeal or defund such regulations,” the memo reads.
The memo also suggests a number of bills that would enact bold regulatory reforms over the executive branch and further clamp down on agencies’ powers. For example, a bill from GOP Rep. Kat Cammack, which had passed the House last year, would require Congress to approve any regulations that have an annual economic impact of $100 million or more.
Reality check: Many of these bills would be, or are already, stalled in the Democratic Senate. Any chance of movement would be predicated on Republicans maintaining the House majority and winning back the Senate and White House.
FERC APPROVES CP2: The Federal Energy Regulatory Commission voted 2-1 today to approve the Calcasieu Pass 2 LNG export terminal on Louisiana’s Gulf Coast. The project, though, is still in regulatory limbo because of the Biden administration’s pause on new DOE authorizations for LNG exports.
The kicker here: The Energy Department made waves in January when it announced it would temporarily pause approval of new LNG export terminals, which it said will allow it to consider the environmental and climate effects of the facilities, along with economic and national security considerations.
What’s at stake: The $10 billion LNG terminal is owned by Venture Global and is expected to have an expected export capacity of 20 million tons per year—giving the U.S. a major boost as it looks to help the European Union reduce its reliance on Russian fossil fuels. The company said it has already inked LNG supply deals with buyers in the EU and in Ukraine. Read more from Breanne here.
DOUBLE LAWSUITS AGAINST CAFE STANDARDS: States and industry groups filed separate lawsuits Wednesday to overturn the Biden administration’s fuel economy standards for vehicles, which aim to reduce both oil consumption and greenhouse gas emissions, Nancy reports.
A coalition of 26 states, led by West Virginia and Kentucky, is suing the National Highway Traffic Safety Administration to overturn the agency’s finalized rules enacting stricter fuel economy standards —calling the requirements “unworkable” and arguing they would lead to a forced transition to electric vehicles. The lawsuit was filed in the U.S. Court of Appeals for the 6th Circuit.
API, along with the American Farm Bureau Federation and other agricultural and automotive groups, challenged the rules in a separate suit. The groups had similar arguments to the states’ lawsuit but furthered the case by arguing it would cause particular harm to rural and agricultural areas, which do not have as robust charging infrastructure for EVs as cities. The agricultural groups also stated the standards would endanger ethanol demand — which is integral to the business of corn farmers.
Both filings argue that the NHTSA’s final rule exceeds the agency’s statutory authority and is “arbitrary, capricious, an abuse of discretion, and not in accordance with law.”
The latest lawsuits come at the heels of trade groups and states filing multiple legal challenges to overturn the Environmental Protection Agency’s tailpipe emission standards. Read more from Nancy here.
REGAN COMPARES TRUMP AND BIDEN EPA: EPA Administrator Michael Regan gave a speech today to the agency’s staff, highlighting the “historic environmental progress and investments” made under President Joe Biden.
Regan issued a reminder to staff in which he said that the Trump administration worked to minimize the agency, while the Biden administration has sought to rebuild it. He also said that the Trump administration looked to silence scientists, while morale plummeted within the agency and the workforce shrunk. In contrast, Regan will announce that 5,200 new employees have been hired since Biden won the White House.
IRA REDUCES DEFICIT IN LONG RUN EVEN WITH HIGH TAKE-UP FOR TAX CREDITS: Center for American Progress analysts said in a new analysis today that the IRA will reduce the deficit in the long term even after accounting for the fact that take-up of its clean energy subsidies has been much higher than initially expected.
Remember that the Congressional Budget Office revised up the estimate for the cost of the clean energy provisions by $428 billion – more than the original total $369 billion projected cost for the 10-year budget window.
The analysts at the left-of-center think tank said, though, that the bill’s savings for the federal government will prove even larger in the years ahead. Those cost reductions include drug pricing reforms and several tax hikes: the corporate minimum income tax and the stock buyback tax, in addition to stepped-up IRS enforcement. Altogether, the bill will reduce the deficit by $535 billion from 2025 through 2034, they conclude.
Critically, the revenue-raising provisions do not expire. But nearly all the clean energy tax incentives end in 2034 or earlier.
Rundown
Washington Post How water could be the future of fuel
Bloomberg After Oil, Russia May Now Be Building a Shadow Fleet for Gas
WyoFile Wyoming coal country remains frustrated with Gov. Gordon over federal ‘war on fossil fuels’