Coal Companies Challenge EPA Coal Regulations

The opening salvo of a brewing legal challenge to President Obama’s aggressive environmental policy that seeks to reduce carbon emissions produced by coal burning plants took place in a federal court this week.  Attorneys representing America’s two largest producers of coal argued before the United States Court of Appeals for the District of Columbia that the Environmental Protection Agency (EPA) has exceeded its constitutional authority by promulgating sweeping regulation of coal power in a proposed rule that is expected to take effect this summer.

EPA Takes Aim at Coal Emissions

The EPA is in the process of finalizing a rule requiring states to restructure their energy consumption to transition away from coal-fired plants and towards cleaner producers of power, completing a task President Obama outlined last summer when announcing his intention to protect the environment through regulatory action.  Mr. Obama pledged that the United States would cut pollution caused by greenhouse gas by 17% of 2005 levels by 2020, and 83% by 2050.  After failing to push a bill that would enable the federal government to control emissions through Congress, the President turned to the EPA to draft a rule limiting on coal-fired power under authority granted the agency by the Clean Air Act.

Although celebrated by climate change advocates, the EPA’s new direction was met with concern by several state governments and members of the coal industry who cautioned that the regulation could result in significant economic losses in both the public and private sector.  A report from the US Chamber of Commerce issued before President Obama’s announcement warned that the proposed regulation of coal-fire power could reduce the gross domestic product by $50 billion annually.  Undaunted, the EPA has worked to meet Mr. Obama’s June 2015 deadline by issuing a proposed version of the final regulation earlier this year with plans to formalize the rule on schedule. 

Shortly after the proposed text of the rule was announced, America’s largest coal producers were joined by 12 states to file a constitutional challenge to the EPA’s authority to pass such a strict regulation. 

President Obama’s Coal Regulation Faces Legal Challenge

Attacking the President’s regulation as a “war on coal,” twelve states, led by West Virginia and Kentucky, have denounced the EPA’s proposed regulation due to its potentially devastating effect on local economies.  West Virginia and Kentucky, both with Democratic governors, are joined by Alabama, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Wyoming, and two large producers of coal in an effort to prevent the sweeping restriction on coal power from becoming a finalized rule by challenging the regulation in federal court. According to the plaintiffs, coal companies are already considering layoffs in preparation for the rule, leaving many working-class families with the real possibility of unemployment when the regulation is finalized.

At the heart of the lawsuit is the argument that the EPA does not have the authority to issue this sanction under the Clean Air Act. Although the Clean Air Act allows regulation of carbon dioxide emissions, the plaintiffs claim that 2012’s regulation of mercury on the same power plants the EPA intends to target limits any further regulatory authority the agency has on coal-fired power.  The EPA has argued that it does have authority under the Clean Air Act, but has focused the bulk of its defense on arguing the issue is not ripe for judicial consideration because the rule is not yet final.

Challenge to EPA May Require Finalized Rule

During arguments before the federal court in Washington, DC, the judges took clear issue with the fact that the EPA rule is not yet finalized.  Judge Thomas Griffith noted the irregularity of the challenge by stating, ““It’s a proposed rule. We could guess what the final rule will be. But we’re not in the business of guessing. We typically wait to see what the final rule will be.”  Echoing this concern, Judge Brett Kavanaugh pointed out that the final version of the rule could change between now and early June when it goes live, which limits the effectiveness of a judicial decision on the merits of the case.

Attorneys for the plaintiffs acknowledged the unusual timing of the situation, but pointed out that states, coal producers, and coal-burning manufacturers are already being forced to issue economic cutbacks in preparation of the rule.  Arguing that they are suffering a real harm despite the rule’s incomplete status, the plaintiffs encouraged the judges to consider the merits despite the timing of the challenge.  The nature of the case ensures that even if the plaintiffs are unsuccessful at this stage of the litigation, a second lawsuit will certainly be filed once the rule is finalized.  The long legal battle over President Obama’s most enduring environmental impact has only begun, and could eventually find its way to the Supreme Court for an ultimate ruling settling the issue.