Going to the MATS for Mercury

The biggest impact of the Supreme Court’s June 29 decision on the Mercury and Air Toxics Standards rule might not be on the MATS regulations that were under consideration but from the legal process the court’s decision sets in motion and the blowback from that process on the Obama Administration’s efforts to combat global warming.

MATS seeks to impose stricter emissions limits on mercury and other acid gases emitted by power plants. The Clean Power Plan, on the other hand, is the crown jewel of the Obama Administration’s fight against global warming and seeks to impose the first-ever limits on carbon dioxide and other greenhouse gases emitted by power plants.

In the MATS case, the Supreme Court ruled that the Environmental Protection Agency erred because it did not consider the costs of compliance before deciding whether its proposed regulations were appropriate and necessary.

The court’s argument has given hope to opponents of the Clean Power Plan who believe it is vulnerable to the cost argument. Unlike MATS, however, the EPA went out of its way when crafting the Clean Power Plan to weigh costs and benefits from the start. Critics say the EPA over estimated the benefits or that the compliance costs are so enormous that they are unreasonable, but the Supreme Court did not address the level of costs, only that they should be taken into account.

The more substantive threat to the Clean Power Plan comes from a legislative quirk that could take center stage thanks to the Supreme Court’s remand of MATS back to the Court of Appeals for the D.C. Circuit.

That flaw is small, but serious enough to knock the legal foundation out from under the Clean Power Plan. It involves an unresolved conflict that was introduced into the Clean Air Act when it was amended in 1990.

Under the Clean Air Act of 1970 pollutants from power plants are regulated under one of three “buckets.” “Criteria” pollutants, such as smog and ozone, are regulated under Sections 108, 109 and 110. Hazardous pollutants, such as mercury, fall under Section 112. All other pollutants fall under Section 111, with Section 111(b) handling new power plants and Section 111(d) covering existing plants.

That was fairly straightforward until 1990 when Congress amended the Clean Air Act. Because of a legislative oversight, the House and Senate markups of Section 111(d) were never reconciled. That rarely happens. Usually conflicts between House and Senate versions of a bill are ironed out in committee before the unified version is sent for a final vote. That didn’t happen with the 1990 amendment. The conflicting language of the House and Senate versions of 111(d) were never reconciled. Both versions stand in the law even though they are in conflict.

In the Senate version, Section 111(d) can be used to regulate emissions that do not fall into the criteria pollutant or hazardous pollutant buckets. In the House version, Section 111(d) does not differentiate by type of pollutant, but by the source of the pollutant.

Section 111(d) is obscure enough that the conflicting language has not mattered very much, until now, that is, until the EPA has made Section 111(d) the cornerstone of the Clean Power Plan.

So, how does the MATS decision enter into this equation?

When the DC Circuit looks at MATS on remand from the Supreme Court, which could happen as soon as this August, it could either vacate the rules or remand them back to the EPA.

If the circuit court vacates MATS, the inherent conflict within Section 111(d) could remain dormant. However, if the court upholds MATS and remands it to the EPA, the dormant conflict could spring to life. And the survival of the Clean Power Plan could depend on which reading of Section 111(d) holds sway.

Under the Senate version, the EPA could prevail because greenhouse gases are not covered by other sections of the Clean Air Act. However, under the House version, MATS would bring virtually all fossil fuel power plants under the jurisdiction of Section 112 thereby excluding those plants from regulation under other sections of the Clean Air Act, such as 111(d).

That is such a potent threat to the Clean Power Plan that it has been suggested that the EPA might even consider throwing the baby out with the MATS water.

The argument is that many of the emissions reductions sought from MATS have already been reaped, either from economic fuel switching as power plant owners switched from coal to lower cost natural gas or from pre-emptive compliance as some plant owners installed pollution control equipment in advance of MATS’ original April 2015 compliance date.

For the EPA it could be the lesser of two evils. The EPA could weigh the incremental gains of further mercury emission reductions from MATS against the possibility of losing the legal footing to curb CO2 emissions and decide that global warming is the more important battle.

The DC Circuit case is sure to be closely watched, not just for what it will mean for MATS, but for the arguments opponents and advocates of the Clean Power Plan bring to the party, and whether or not the EPA chooses to go to the mat for mercury.

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