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EPA Faces Rulemaking Petitions and Litigation As Greenhouse Gas Endangerment Decision Nears

February 27, 2008

The United States Environmental Protection Agency (“EPA”) will soon have to decide whether greenhouse gases “endanger public health or welfare” and, as a consequence, are subject to regulation under the Clean Air Act. In April 2007, the United States Supreme Court, in Massachusetts v. EPA, remanded a rulemaking petition to EPA with instructions to determine whether greenhouse gases from new motor vehicle emissions endanger public health or welfare.[1] EPA reportedly submitted its determination to the White House Office of Management and Budget (“OMB”) in December 2007.[2]

A determination that greenhouse gases threaten human health would not only require EPA to develop emission regulations for new motor vehicles, but would potentially open the door for widespread regulation of greenhouse gases from a broad range of mobile and stationary sources under the Clean Air Act. Even if EPA is able to sidestep making an endangerment finding on the motor vehicle rulemaking petition, a number of states and environmental groups have filed three new greenhouse gas rulemaking petitions in recent months which may require EPA to address the issue anyway. These rulemaking petitions cover a variety of mobile sources, including airplanes, ocean vessels, and nonroad engines such as agricultural, mining, and construction equipment.

I. Massachusetts v. EPA

States have been petitioning EPA to address climate change through Clean Air Act rulemaking petitions for over eight years. In October 1999, twelve states and various environmental organizations filed a rulemaking petition which asked EPA to regulate greenhouse gas under section 202(a)(1) of the Clean Air Act. This statutory provision requires EPA to develop standards for emissions from new motor vehicles that “cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.”[3] Following a lengthy review and public comment period, EPA denied the rulemaking petition in September 2003.[4] Rather than addressing the merits of whether greenhouse gases “endanger public health or welfare,” EPA concluded that it lacked statutory authority to address global climate change under the Clean Air Act. EPA also contended that even if it did have statutory authority to regulate greenhouse gases, doing so would be unwise given scientific uncertainty and political and foreign policy considerations.[5] The original petitioners, joined by several states and local governments, appealed EPA’s denial of the petition to the Court of Appeals for the District of Columbia Circuit, which upheld EPA’s denial[6], and the Supreme Court subsequently granted petitioners’ writ of certiorari.

In April 2007, a sharply divided Supreme Court issued its milestone decision in Massachusetts v. EPA, holding that EPA’s denial of the rulemaking petition was arbitrary and capricious.[7] After determining that petitioners had standing, the Court held that carbon dioxide and other greenhouse gases fell within the Clean Air Act’s “sweeping” and “unambiguous” definition of “air pollutant.”[8] While the Court acknowledged EPA’s “significant latitude as to the manner, timing, content, and coordination” of its rulemakings, the Court held that EPA’s “reasons for action or inaction must conform to the authorizing statute.”[9] Thus, EPA acted arbitrarily and capriciously when it denied the rulemaking petition based on foreign relations and other policy factors.[10] The Court remanded the matter back to EPA with instructions to resolve “[t]he statutory question [of] whether sufficient information exists to make an endangerment finding.”[11]

II. The Pending “Endangerment” Finding & New Rulemaking Petitions

Nearly a year has passed since the Supreme Court remanded the motor vehicle emission rulemaking petition for a determination on whether greenhouse gases endanger human health, but despite consistent pressure from states and environmental NGOs, EPA has not yet publicly issued its decision. EPA has reportedly prepared its initial decision, but it is unclear if and when the agency will make its endangerment determination public. Indeed, EPA Administrator Stephen Johnson has indicated that the increased fuel efficiency standards (CAFE standards) in the December 2007 Energy and Independence Security Act fulfilled EPA’s obligation to regulate greenhouse gas emissions from automobiles.[12] Robert Meyer, the EPA deputy administrator for air and radiation, echoed Administrator Johnson’s sentiments, noting that EPA is still determining whether an endangerment finding is necessary in light of the new energy bill.[13] Although EPA’s decision may be forthcoming, states and environmental organizations have apparently lost patience with EPA and are threatening additional legal action. On January 28, 2007, attorneys general from seventeen states issued a letter to Administrator Johnson, requesting that EPA announce its specific intentions on the endangerment finding by February 27, 2008.[14]

A determination by EPA that greenhouse gases endanger human health and the environment will undoubtedly result in significant new regulation. Initially, such a determination would require EPA to develop greenhouse gas regulations for new motor vehicles under section 202 of the Clean Air Act. Additionally, the “endangerment” language in section 202 is pervasive throughout the Clean Air Act, so an affirmative endangerment finding would open the door for regulations aimed at a host of other mobile, as well as stationary, sources.

Even if EPA concludes that an endangerment finding on the motor vehicle emission rulemaking petition is not necessary in light of the new motor vehicle CAFE standards, additional rulemaking petitions are currently pending which may require EPA to address the merits of whether greenhouse gases pose a risk and are subject to regulation under the Clean Air Act. In October 2007, California and various environmental organizations filed petitions requesting that EPA regulate greenhouse gas emissions from ocean-going vessels under section 213(a)(1) of the Clean Air Act, which requires EPA to regulate emissions from “nonroad vehicles” if such emissions “may reasonably be anticipated to endanger public health or welfare.”[15] According to California’s rulemaking petition, the global ocean-going vessel fleet emits up to 3% of the total world inventory of greenhouse gas emissions.[16] California’s petition asks EPA to regulate emissions from cargo and other vessels that operate in United States’ waters regardless of whether the vessels are flagged in the United States. In January 2008, the California South Coast Air Quality Management District filed a similar petition with EPA requesting regulation of greenhouse gas emissions from ocean-going vessels.[17]

California has recently filed two other rulemaking petitions seeking regulation of greenhouse gas emissions by EPA. In November 2007, California petitioned EPA to develop greenhouse gas emission regulations for airplanes under section 231(a)(2) of the Clean Air Act, which contains identical “endangerment” language.[18] Most recently, California and five other states submitted an additional petition requesting that EPA develop greenhouse gas emission regulations for nonroad vehicles and engines under section 202(a)(1) of the Clean Air Act.[19] This most recent petition covers a broad range of sources, including outdoor power equipment, recreational vehicles, farm and construction machinery, logging equipment, mining equipment, and small marine vessels.

III. Implications

EPA has 180 days to respond to rulemaking petitions, so the agency must issue its response to the ocean vessel rulemaking petition by the end of March 2008, and shortly thereafter for the subsequently filed aircraft and nonroad vehicle petitions. These petitions make clear that EPA will likely need to address the merits of the endangerment issue in the near future. Regardless of whether the determination is made on the motor vehicle rulemaking petition at issue in Massachusetts v. EPA, or the recently-filed aircraft, ocean vessel, and nonroad vehicle and engine petitions, a determination by EPA that greenhouse gas emissions endanger human health will have widespread impacts and will likely necessitate significant federal greenhouse gas regulation over large swaths of the economy.

While much media attention has been focused on state and federal climate change legislation, including recently adopted state greenhouse gas caps and the Lieberman-Warner bill[20] which passed out of the Senate Environment and Public Works committee in December 2007, the pending greenhouse gas rulemaking petitions will likely have far-reaching impacts if EPA’s endangerment finding results in the conclusion that greenhouse gas emissions are a threat to public health or welfare. Furthermore, an endangerment finding that triggers EPA’s obligation to develop greenhouse gas regulations may result in significant regulatory confusion. Greenhouse gas regulation has largely been adopted on the state level, and it is unclear how federal regulations would coincide with the growing patchwork of state-level mandates. Indeed, regulatory action by EPA that applies nationwide could potentially precede federal climate change legislation – a concern that EPA raised when it denied the motor vehicle petition in 2003.

For more information, please contact any member of Marten Law Group’s Climate Change/Sustainability practice group.

[1] Massachusetts v. EPA, 127 S. Ct. 1438 (2007).

[2] Janet Wilson and Richard Simon, “EPA Staff Finds Emissions Threat” Los Angeles Times (Jan. 24, 2008). See also Letter from Senator Feinstein to EPA Administrator Johnson (Jan. 25, 2008).

[3] Clean Air Act § 202(a)(1), 42 U.S.C. § 7521(a)(1).

[4] Control of Emissions from New Highway Vehicles and Engines, 68 Fed. Reg. 52922 (Sept. 8, 2003).

[5] Id.

[6] Massachusetts v. EPA, 415 F.3d 50 (D.C. Cir. 2005).

[7] Massachusetts, 127 S. Ct. at 1463.

[8] Id. at 1459.

[9] Id. at 1462.

[10] Id. at 1463.

[11] Id.

[12] “Agency to Confront Greenhouse Gas Controls as Litigation, Probes, Rulemakings Loom” 39 BNA Environment Reporter 3 (Jan. 18, 2008). See also the Energy and Independence Security Act of 2007, Pub. L. No. 110-140 (2007).

[13] Id.

[14] Letter from Attorney General of the Commonwealth of Massachusetts, et al. to EPA Administrator Johnson (Jan. 23, 2008).

[15] California Petition for Rule Making Seeking the Regulation of Greenhouse Gas Emissions from Ocean-Going Vessels (Oct. 3, 2007); NGO Petition for Rulemaking Under the Clean Air Act to Reduce the Emissions of Air Pollutants from Marine Shipping Vessels that Contribute to Global Climate Change (Oct. 3, 2007). See also 42 U.S.C. § 7547(a)(1).

[16] California Petition at 6.

[17] Southern California Air District Asks EPA to Reduce Greenhouse Gases from Ships, 39 BNA Environment Report 3 (Jan. 18, 2008).

[18] Petition for Rule Making Seeking the Regulation of Greenhouse Gas Emissions from Aircraft (Nov. 6, 2007).

[19] Petition for Rulemaking Seeking the Regulation of Greenhouse Gas Emissions from Nonroad Vehicles and Engines (Jan. 29, 2008).

[20] America’s Climate Security Act, S.2191.

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