Do You Think That's the Only Permissible Regulation?

In this episode, lawyer Jay Duffy, who represented environmental groups in West Virginia v. Environmental Protection Agency, explains the ins and outs and potential implications of the Supreme Court’s final ruling in the case.

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Text transcript:

David Roberts

On June 30th, the Supreme Court handed down a ruling in the case of West Virginia v. Environmental Protection Agency. There was a great deal of dread in the climate community in advance of the ruling, and a great deal of hyperbolic coverage in its wake. But what did it actually say?

Volts listeners will already be familiar with the case thanks to a pod I did on it a few months ago with Jack Lienke and Kirti Datla, and they will recall that it was somewhat bizarre for the court to take this case at all, since it regards a set of regulations that never were and never will be put into effect. Rather, the court seemed eager to pass judgment on the legal justification that it anticipates EPA might use when regulating greenhouse gases under Biden. It was, in other words, an advisory opinion, which the Supreme Court is not supposed to do.

Nonetheless, it took the case and now it has ruled. The headline is that the majority opinion is not as bad as many anticipated, especially in the wake of the unhinged Dobbs decision that overturned Roe v. Wade. This was a Chief Justice Roberts special, carefully parsed and hedged.

To get clear on what the ruling does and doesn't actually say, I contacted one of the lawyers on the case, Jay Duffy of the Clean Air Task Force. Duffy was responsible for several of the key briefs and arguments in the case, so I thought he would have a good read, not only on what the Roberts decision says, but what it portends for subsequent cases.

So, without further ado, Jay Duffy, welcome to Volts. Thanks for coming.

Jay Duffy

Thanks so much, David. It's a pleasure to be here. Thank you for asking me to come on.

David Roberts

Let's start just really briefly, tell us about your involvement in the case.

Jay Duffy

Sure. So I represent a number of environmental and public health groups. American Lung Association, American Public Health Association, Appalachian Mountain Club, Cleaner Council, Clean Wisconsin, Conservative ... "Conservative no", Conservation Law Foundation, and Minnesota Center for Environmental Advocacy. We challenged the ACE rule in the CPP repeal when it came out in the DC Circuit. I argued a portion of that oral argument on a nine hour zoom call. Yeah, I hope this pod won't be as painful as that was. We won below, and then that was, of course, appealed by State Attorney General and coal interest, and I continued to represent the same clients before the Supreme Court.

David Roberts

So at a headline level, everybody saw the Dobbs ruling, which was a Sam Alito special, i.e. completely unbound, and unrestrained, and deranged, and I think were subsequently filled with fear about this ruling. But this is a Roberts decision, not an Alito decision. And it seems to bear the sort of typical characteristics of a Roberts decision, in that it is sort of a little bit of this, a little bit of that, kind of trying to cut it down the middle, not quite dramatic, slightly more technical, slightly more narrow. So am I right in thinking that in the spectrum of outcomes that climate people anticipated or imagined, this is toward the better side?

Right. This is one of the better outcomes we could have envisioned. Is that roughly right?

Jay Duffy

That's roughly right. I think there are two kind of lanes in this decision. There is what is the path forward for regulating greenhouse gases from power plants? And I think there is still a lane there. And we were concerned that we would have a roadblock on the major questions, doctrine expansion, that piece is more troubling and I think we could probably get into that. But I do think, even though the Roberts opinion kind of throws shade on multiple pathways forward, at the end, he says, "this is just a narrow opinion. All we're saying is that the Clean Power Plan and the system underlying the Clean Power Plan is outside of EPA's authority."

David Roberts

Right? So they didn't nuke Mass vs. EPA. They didn't take away EPA's ability to address CO2. They didn't try to mess with the endangerment finding whereby EPA found that CO2 is a danger. There's a lot of bigger things they could have done that they didn't do. And we'll get into later sort of where we think they're going from here. Let's talk about then what Roberts did say. And when I first was reading about this, I thought that Roberts was focusing on the sort of inside the fence-line versus outside the fence-line question, which for listeners who don't have the background on this, the question is, if you're regulating coal plants, do you have to confine your regulations to the coal plant itself?

Or in some sense, can you regulate the fleet, or can you do what the Clean Power Plan did, which is regulate the entire electricity fleet, not just coal plants? But that's not quite right. He specifically didn't speak on the inside versus outside the fence-line question. It sounds like all he did is just say whatever regulations you pass on coal plants, they cannot require utilities to shift generation to non-coal plants, i.e. generation shifting. Is that all he said? Is that it?

Jay Duffy

Well, and he also didn't say that ... The interesting thing about this section 111 of the Clean Air Act, which is what we're under right now, is EPA doesn't actually require any sort of pollution control. What it does is come up with, okay, what's the best system of pollution control out there? Comes up with a standard, and then it's up to the states to then set standards for their individual power plants that they comply with in any way they see fit.

David Roberts

Right.

Jay Duffy

So in this ruling, it does seem like even complying with generation shifting is still on the table, you could have a rule based on cofiring, or CCS, or some other quote unquote inside the fence-line measure. It seems like the pathway forward could still be an individual plant deciding to shift generation.

David Roberts

Right. So I think, as I understand it, what he said was when EPA is contemplating output standards for coal plants, it cannot take generation shifting into account when setting the standard.

Jay Duffy

Right, that's exactly right.

David Roberts

It has to set the standard based on inside the fence-line options like cofiring, like CCS, things like that. But in complying with that standard, the state can still use generation shifting. That's right?

Jay Duffy

I think so. I mean, there is a lot of ambiguity in this opinion. I think we'll be parsing through it for a while. I mean, as I said at the end, Roberts kind of says, "hey, even though I just said a lot of stuff negative about cap-and-trade, and I've said some other things about fuel switching, et cetera, I'm not ruling on that. This opinion doesn't rule on that. All this opinion is saying, the Clean Power Plan, don't do that again." I think we're going to have to read the tea leaves and find out which pollution controls have been cast more doubt upon in order to think about what the future of these regulations will look like.

So yeah, it's a mixed bag and what is still on the table is a little unclear. I think the inside the fence approaches are definitely still on the table. Whether or not market mechanisms like trading or other things like that are still on the table, I'm not as clear. As part of basing the standard on those. Could you do a CCS based standard, carbon capture and sequestration based standard in conjunction with trading and set the BSDR and the standard on that? That's unclear in this opinion, to me.

David Roberts

Right, but if you could do it, it would have to be trading among coal plants, right? It would have to be trading among the regulated plants.

Jay Duffy

Yes. I think thats ...

David Roberts

Seems like he's trying to sort of cut non-coal plants out of the picture entirely.

Jay Duffy

I think that's exactly right. I think that cannot be the basis of the standard. Shutting down the plant can't be the basis of the standard. We certainly know those are off the table and frankly, we've known that since they stayed the rule in 2016.

David Roberts

Yeah. So I guess if we're just confining ourselves to this ruling and not trying to sort of contemplate what might come next or what else they might do, it seems to me that the sort of sole implication of this ruling is that standards for coal plant emissions are going to have to be less stringent than they otherwise could have been. That seems, because before you're setting the standard based on this broad set of possibilities, and now he sort of narrowed the set of possibilities, and so a standard based on that narrowed set of possibilities is probably going to be less stringent. Is that fair?

Jay Duffy

I think we could reach the same sorts of stringencies as the Clean Power Plan. You and Jack and Kirti talked about this a lot too, is that the Clean Power Plan was met eleven years in advance. So query whether that was all that stringent. The pathways forward of cofiring with natural gas or a carbon capture sequestration based standard, those techniques can, especially CCS, lead to near zero emissions. So I think there's still pollution control technologies out there that can do it, but that's yet to be seen.

David Roberts

And so to use those as the basis for your standards, say, if the EPA says we're going to set output standards for coal plants based on CCS, EPA has to demonstrate that CCS is what available? And does it have to show anything about the cost? Like, what does it have to demonstrate to allow it to use CCS as the standard?

Jay Duffy

Sure. So all those factors are listed in the statute. And is it adequately demonstrated? Is it cost reasonable? Does it reduce emissions? Is it the best? Does it take into consideration energy considerations such as reliability? So those are kind of the kind of things that they need to think about. In 2015, when the Obama administration promulgated the Clean Power Plan in it, they said, "we've looked at CCS, we've looked at cofiring, and they meet all the criteria of Section 111, but they're more costly than generation shifting. And we think even if we set a standard based on CCS or cofiring, that the bulk of the compliance would come from generation shifting. So we're just going to go with that."

So to me, with that taken off, with generation shifting taken off the table, the record is already there for a kind of CCS/cofiring based standard. And right now, if anyone wants to build a new coal plant, that is the standard. Right now, it's based on partial CCS

David Roberts

Right. For new plants?

Jay Duffy

That's right.

David Roberts

Am I wrong in thinking that the sort of net effect of this might be the coal industry just punching itself in the face because a standard that requires them to use CCS is going to be, it seems to me, way more destructive of the coal fleet than the alternatives.

Jay Duffy

I would say it w iill be more costly than generation shifting was, but still within the parameters of cost reasonableness under the Clean Air Act, with a forward looking, kind of technology forcing statute. And we have things like sulfur scrubbers in the 70s, which EPA promulgated rules in order to deal with acid rain. When the standard was imposed, there were only three in operation, these sulphur scrubbers, and there's only one vendor. By the end of the 70s, there were 16 vendors, and the cost of those scrubbers had been cut in half in 20 years. So I think the forward looking nature of the Clean Air Act provides a good pathway to cost declines.

You know, that's not to say that the you know, obviously EPA has already found that CCS is cost-reasonable when it did so in 2014 and 2015.

David Roberts

Well, and surely in the subsequent seven years it has come down in cost.

Jay Duffy

The cost has come down, and also the climate crisis has gotten worse. So the necessity to reduce these emissions is even higher.

David Roberts

Let's get back to what EPA should do next here in a little bit. First I want to talk about the ruling a little bit more. So let's talk about then major questions. Doctrine. The doctrine, as I understand it, is just, "if Congress intends agencies to do major things, it will specify so in law and statute. And we don't want agencies sort of interpreting vague statutes such that they are given major powers." Right? I mean, that's sort of the idea. And I think the idea in this case is the ability to regulate CO2 in the US economy is a major thing.

So it is impermissible for EPA to sort of ring that out of the Clean Air Act because the Clean Air Act does not specifically say that. Is that more or less Robert's reasoning here?

Jay Duffy

Well, would you mind if I read you something before I hop into his reasoning?

David Roberts

Please.

Jay Duffy

Okay. "The Court's alarm over global warming may or may not be justified, but it ought not distort the outcome of this litigation. This is a straightforward administrative law case in which Congress has passed a malleable statute giving broad discretion not to us, but to the Executive Agency. No matter how important the underlying policy issue at stake, this court has no business substituting its own desired outcome for the reason judgment of the responsible agency." Who wrote that?

David Roberts

Was that Scalia in Chevron?

Jay Duffy

That's Scalia in Massachusetts versus EPA, along with his friends Chief Justice Roberts, Justice Thomas, and Justice Alito.

David Roberts

Hilarious.

Jay Duffy

I've been reading it over and over again.

David Roberts

This is Chevron, right? This is what's known as Chevron, which is the idea, which has been practice, as far as I know, for quite a while in the Court, which is just giving agencies sort of broad ability to interpret statutes as they see fit and more or less trying to keep judges out of it. This has been standard practice for a long time, right?

Jay Duffy

That's right. I mean, this is how Congress works, right? There's not a bunch of scientists and engineers, et cetera, over in Congress trying to figure out what the best pollution controls are and how a power plant works. So what Congress does is they want these laws to last for a long time. They want them to be able to adapt to new problems and new solutions. And so they write these kind of broadly worded statutes like, "Find the best System of Emission Reduction."

David Roberts

And the Clean Air Act and the Clean Water Act are sort of legendarily designed to be flexible designed to incorporate new information and change and grow over time. That's partially why conservatives hate them so much,

Jay Duffy

right? That's exactly right. There are plenty of guardrails here. There are a lot of factors that Congress confined EPA with in order to find the best system of emission reduction. But up until this point, the "major questions doctrine" to me and to the dissent and what we argued in our briefing was Congress delegated this authority to this agency. And it's okay that it's broad words, but is it acting within its lane, its expertise? And is there anything in the statute or in any other law that kind of really conflicts is a mismatch between what they're trying to do and something else is pushing back on it.

The interesting shift that happened here is the "major questions doctrine" used to be defined under this utility air case as, "Congress should speak clearly if it wishes to assign an agency decision of vast economic and political significance." And now there is a subtle shift here that does a lot of work in the West Virginia case. And it says to overcome the skepticism of this is a major rule the government has to point to clear congressional authorization to regulate in this manner.

So it went from, "do you have the right to make the decision? Is this your decision to make?" To, "what decision did you make? What is the how? how you made the decision?" That actual rule needs to be kind of pre-authorized. And to me that subtle shift does a lot of work.

David Roberts

Yeah. And it just seems completely counter to the spirit of the Clean Air Act because the whole point of the Clean Air Act is lawmakers in the 60s and 70s saying, "we don't know everything that's in the air that hurts people. So we're just going to say whatever that turns out to be, EPA should regulate it, right. Like whatever science discovers is in the air hurting us, EPA should regulate it." So sort of by definition, it can't specify in that law how EPA should regulate new threats. It doesn't know what the new threats are. That's the whole point.

Jay Duffy

Right. This section and a lot of these sections apply to a variety of different sources, a variety of different pollutants. So if you regulate X pollutant from a cement plant, can we not figure out what the best system of emission reduction is? We have to go knock on Congress's door and say, "is this too big? Is this a good approach here?" That's not how this is designed. It would really gum up the works.

David Roberts

Yes, it would gum up the works. And I'm sort of obsessive about this, but it just seems like "major questions doctrine" as it's being interpreted on its face, counter to the literal spirit of a bunch of laws that Congress passed. It seems like in and of itself, it's thwarting Congress's intent under the guise of doing the opposite.

Jay Duffy

Right? That's right. I think Nathan Richardson wrote an article recently called "Anti-Deference".

David Roberts

Right.

Jay Duffy

It's not even just Chevron. It's now you've got a thumb on the scale against doing something important, and it's anti-regulatory in nature. As you spoke about with Kirti and Jack, there isn't an issue brought up, there aren't any court rulings out there that say, "oh, you're not doing something important." That's a major question. And you could see that throughout, looking at the factual background as they laid it out, was a lot of focus on the cost to the industry without any description of the benefits to society.

David Roberts

Yes, this is a sort of theme lately. They wrote a gun ruling that had virtually nothing in it about the victims of gun violence. They wrote an abortion ruling that had virtually nothing in it about the impact on women. And now they've written a pollution ruling that says almost nothing about the effects of pollution.

Jay Duffy

Yeah. The humans who breathe.

On humans.

Yeah.

David Roberts

It's striking. And so why ... that quote you read was the pretty standard Chevron reading of agency discretion, why do you think Roberts has shifted? Is it just as simple as because he can and has a giant majority now?

Jay Duffy

We can kind of see this thread from Roberts over the course of the past decade or so. He, in a dissent to this case called City of Arlington, said that deferring to agency's broad interpretation of laws isn't quite the very definition of tyranny, but the danger posed by ... don't worry, it's not the very definition, but the ...

David Roberts

Tyranny adjacent.

Jay Duffy

Exactly. But the danger posed by the growing power of the administrative state cannot be dismissed.

David Roberts

I mean, yes, it can. I can dismiss it. Watch me. I just did.

Jay Duffy

So at the time in that dissent, justice Scalia actually responded to that dissent and said, you can characterize anything as a major question. You can characterize anything as over jurisdiction.

David Roberts

Indeed. Based on vibes.

Jay Duffy

Exactly. Vibes only, a nod to our friends at the other pod. But he explained that everything could be characterized as a question about agency and authority, and that sort of rule would be an inappropriate transfer of interpretive power from the agencies to the court. I think that's kind of the path we've been on. The interesting kind of detour that Roberts took was in the Affordable Care Act case, he essentially said there, this is a major question. "The treasury shouldn't be making health care decisions. But I'm not going to say that the rule is illegal. I just am going to say that it's the court's decision to make."

And there he upheld the quote, unquote, major rule. So we've kind of seen a shift just since the Affordable Care Act, and I was hopeful for a more narrower approach to the "major questions doctrine" than what we saw here, knowing that the Roberts opinion in King versus Burwell did actually end up upholding the major rule. It just didn't grant deference to the agency.

David Roberts

And now he is thwarting the agency directly. Let's talk about then. Maybe there's no answer to this, but what in the hell is a "major question"? What are the characteristics, what are the sort of metrics or standards by which an agency contemplating a rule sitting around, I'm just picturing them sitting around a conference table contemplating a rule, thinking, "well, but is this major?" How do they know what standards or metrics have been offered by Roberts for other people to judge whether something is major? Or is it literally just feels major to John Roberts?

Jay Duffy

He literally said, in the opinion, "does it raise an eyebrow? Does it raise an eyebrow?"

David Roberts

Whose eyebrow? John? Who's eyebrow?

Jay Duffy

And how high does your eyebrow have to go?

David Roberts

I know, raise it a millimeter. 2 millimeter.

Jay Duffy

That's the most striking. There are some parameters or factors, although even in Gorsuch's concurrence, he said, this is not an exhaustive list. Come with us. Come to us with further suggestions as to what might make something major.

David Roberts

Oh, God.

Jay Duffy

But is it old? Which strikes me saying, as the Constitution is 235 years old, has it not been used a lot? They just kind of use it or lose it idea. Is it an ancillary provision? I saw someone on Twitter earlier today say I love all of my Clean Air Act provisions equally, there are no ancillary provisions. They were all written by Congress, a sort of anti-novelty principle, which I think Jack made a great point on your last pod about, so once a law is enacted, if the agency doesn't go and do something big at the outset, they kind of get locked into what it is, even though here we're dealing with a portion of the statute that deals with an entirely different pollutant and a different source category.

So of course, the solution is different.

David Roberts

Not to pound the table on this, but the whole freaking point of the Clean Air Act is to say we don't know all the pollutants yet. There might be new pollutants. Let's do scientific reviews every few years and see if there are new pollutants. So by definition, if you find a new pollutant that's novel, it it's going to be the first time like this. These are all Catch-22s.

Jay Duffy

That's right. And I also think that the interesting thing here is that, it kind of goes back to that Scalia quote, that you can characterize anything as major. And I would characterize the Clean Power Plan as the most cost effective, efficient means of reducing emissions from the power sector based on decades of them doing exactly that, and then they continue to do it such that they reduce their emissions beyond the targets of the Clean Power Plan. But if you read the opinion, that is not what you come away with. You come away with this idea that there was an EPA takeover of the entire electric grid.

And so that's what's troubling to me is that you can use these kind of squishy factors and characterize things however you see fit, to kind of fit the factors almost

David Roberts

Well this is one of the great ironies, and this is one of the things that makes me laugh about this whole judgment, is the particular provisions being characterized as major here, in this judgment. The targets were met without the regulations ever passing, meaning almost by definition, if they had passed, the targets would have been met at zero cost, since they were going to be met anyway. So if a regulation that would have had almost literally no effect on anyone at all, if that counts as major, what wouldn't count as major? Literally? We know how major this would have been.

We can now see in historical retrospect how major it would have been. It would have been tiny. It would have been completely marginal. It would have done almost nothing.

Jay Duffy

Well, there is some interesting back and forth with Justice Alito at the oral argument where he was arguing, "that it's not about what's happening in this actual rule, it's about what could it, what is the most you could do with this new interpretation? That's the stick by which we should be looking at." Yeah, and I don't know how much that played into the thinking here, but you're right. I mean, there was no rule at issue. Justice Roberts essentially admitted that this was an advisory opinion upfront. So the standing here was based on this idea of voluntary secession exemption to mootness, which essentially says, "you EPA have told us that you're not going to bring the CPP back into effect, but you could, couldn't you?"

And then they could look at the record and said, "no, the state plans were due to the agency in 2018. The targets have already been met." And so then they move on and fairly explicitly say that EPA needed to somehow demonstrate unequivocal abandonment of generation shifting, henceforth.

David Roberts

But how could it demonstrate that? What does it even mean?

Jay Duffy

Right, well, it's by definition, the concept of generation shifting is not what was before the Court. The Clean Power Plan repeal, not even the Clean Power Plan was what was before the Court.

David Roberts

Yeah, this is the most sort of tortured, obvious effort to insert itself in agency deliberations and just like scrabbling together the most thin justifications for it. It's really striking the deeper you get into it. So I wanted to ask briefly about concurrences. As I said, this seems like a very Roberts-esque ruling as opposed to an Alito-esque ruling. So were the other conservatives on the Court, did they have, as they want to do, crazier things to say in their concurrences?

Jay Duffy

As someone who will be litigating before this Court again in the future, I'm sure I will not opine on anyone's craziness, however. So we've all known for a while that Justice Gorsuch is a fan of the non-delegation doctrine, and he provided us with a reading list in his concurrence. Interestingly, Thomas, who has signed on to these sort of concurrences on the non-delegation doctrine, especially on the shadow docket cases about vaccines and eviction moratorium, Thomas didn't sign on to this one, so I'm not quite sure yet what to make of that.

David Roberts

Yeah, it's not like Thomas to show any restraint.

Jay Duffy

Right. Essentially, what Justice Gorsuch, he wanted to get into what the "major question doctrine" does, and I think he sees it as a way to vindicate his concerns about non-delegation, without all the messiness of essentially striking down multiple laws. He says that, "'the major question doctrine' is something that preserves Congress's power to legislate and for the lay people to have their say." But they did. The Clean Air Act was written, and it was supposed to do important things, and I think it discounts what Congress actually did. And there's a lot of public input that goes into these.

David Roberts

Yeah, that's what I wanted to emphasize. They are trying to characterize agency actions as anti-democratic, as though there is this cabal of bureaucrats up there doing things with no care for the common man. But if you look at actual American governance, the EPA, in coming up with one of these rules, arguably takes in a lot more public input and is more responsive to public input than the friggin legislature is. Like, these rulemakings are arguably one of the most democratic things America still does.

Jay Duffy

Yeah, that's right. And they are required under the Administrative Procedure Act to provide public comment. They can't change the rule too much after they provide the public notice of the rule. They need to take into account and respond to the thousands of comments that come in. This is, as you said, kind of more democratic than what we get to do with legislation. So I think it undermines that significantly.

David Roberts

I mean, I'm cynical about this, but this idea of non-delegation is basically just Congress shouldn't hand off important things to agencies. It should do the important things itself. Again, what counts is important. Again, why? This is the thing about non-delegation and "major questions doctrine". It's just like, where is this coming from? There's nothing in the Constitution. The word major does not appear. You know what I mean? Like, all these principles are just made up by conservative jurists. Am I wrong about this? Is there textual or constitutional basis for these things? Or are these just like, kind of how these guys feel?

Like "they shouldn't be doing major stuff, It just feels wrong." What is the basis for these doctrines?

Jay Duffy

Yeah, and I think the idea is that there's a separation of powers concern that Congress is supposed to be making the major decisions, and that the agencies are just supposed to be there to fill up the details pursuant to them making the major choices. But as we've talked about what constitutes major, and there's plenty of scholarship out there talking about the legislature delegating authority to agencies since the founding.

David Roberts

Yes, the dissent had quite a bit on that, I think.

Jay Duffy

That's right.

There's also a really strange and gratuitous footnote about Woodrow Wilson in the concurrence. It was one of the stranger things I've read in a case in a long time. Gorsuch essentially says that, "Woodrow Wilson was a racist, which I believe is true and didn't like laymen, and that his attitude was that we need more experts making policy." And so the insinuation here is that you need to pick Woodrow Wilson's side or scientists and engineers making technical determinations about complicated pollution controls. Pick a side with Woodrow.

David Roberts

It's a little bizarre guilt by association there.

Precisely.

"This racist liked scientists. Do you like scientists? Sounds racist." The cynical take on non-delegation is just Congress doesn't have the expertise or the time to get into nitty gritty detail about specific decisions that administrative agencies might make. So if you say that all major decisions have to be made by Congress, in effect, you're just radically reducing federal power, right? You're just going to get a lot less law and regulation out of Congress because Congress just doesn't have the capacity to do what it's being asked to do, right?

I mean, that's Gorsuch's long term goal, right? It's just to shrink the federal government and reduce federal power. Is that too cynical?

Jay Duffy

Elena Kagan, Justice Kagan says in her dissent that all signs here point to just an animosity toward the administrative state. So the system, the way it works right now is a conservative Court can decide what is major and kick it back to a Congress who isn't working right now in a lot of ways.

David Roberts

Yes, the very conservatives saying, oh, this is the job for Congress are the same conservatives who have spent decades rendering Congress completely useless, and frozen, and unable to do anything. It's almost like they just don't want the government to work at all.

Jay Duffy

I'll give them what one ... on our side of the briefs, we did understand and acknowledge that the Clean Power Plan was novel. We believed that the generation-shifting mechanism was fully supportable, and was demonstrated, and cost effective, and the best means of doing this, but we did in our briefing, we understand that creating a formal role for renewables to generate credits is novel and could be envisioned as outside of EPA's authority.

David Roberts

It is a bit of a stretch.

Jay Duffy

It's a bit of a stretch, and we admitted that in our briefing. And our hope was that that would create an off ramp within the "major questions doctrine", even, to say that the EPA has overstepped kind of in those same ways that they've overstepped before in the case law. They're looking at, like, treasury looking at healthcare or something like that. EPA kind of bringing in unregulated sources formally into a program. Maybe that was too far. And our hope was that that would lead to the Court being able to give a nod to "major questions doctrine" and sort of, are you staying in your lane the same sort of way as Justice Kagan describes the "major questions doctrine" in her dissent?

But unfortunately, they decided that they needed to go further and kind of say, "is the rule that you came up with, is that pre-authorized by Congress?" Not just "is this within your lane?"

David Roberts

Right. But it is narrower than it could have been. So they're saying you can't take generation shifting into account. But I thought it was clever of you guys to argue this. In a sense, you gave them that as a sort of modified, limited ruling to sort of forestall them ruling in a much broader way. So the sort of generation-shifting thing is kind of like a sacrificial lamb that you offered up for them to kill. So they didn't kill the whole thing.

Jay Duffy

Well, not even the generation shifting amongst sources. The hope was that you could then preserve even just shifting between covered sources. What we kind of expressed was novel was including non-Clean Air Act sources in the program.

David Roberts

So shifting amid regulated plants is still on the table.

Jay Duffy

I don't know.

David Roberts

We'll find out in future lawsuits.

Jay Duffy

Right. I don't think anyone's chomping at the bit to test that one.

David Roberts

Right.

Jay Duffy

But he did say the way the Clean Power Plan did it exceeded EPA's authority. And there's a lot of language in there that says that just reducing generation at a source is not a system of emission reduction. So I would doubt that that is within anything anyone wants to pursue and may just be precluded by the decision.

David Roberts

Well, I want to talk about what avenues EPA should pursue, but first, let's just talk briefly about my sense, is that what Roberts would have preferred to do on Dobbs and on abortion is shave away at it incrementally, bit by bit, because he kind of scolds the majority in that case for the jolt. This is too big of a jolt, and we're not supposed to jolt people. I want to erode abortion rights bit by bit by bit, like I'm eroding voting rights and money in politics. So we're easing our way into this new reactionary future. That seems to me like what he wanted to do on abortion and was upset that Alito didn't go along with it.

It seems like that is what he's doing on the Administrative State question. So I'm curious about two things. One, I'm curious since he doesn't really control the majority anymore, right? Like if Alito, and Gorsuch, and Coney Barrett want to get together and go big, he can't really stop them anymore. So I'm curious about two things. One, why you think they signed on to the kind of slower, more incremental strategy this time, and then, secondly, what you think is next, because this is surely not the last word this court is going to have on the Administrative State.

Jay Duffy

Right. I mean, I think on the power plant side and the paths forward there, I think that was incremental. It's pretty narrow. It takes off just the Clean Power Plan approach. But I do think that the Chief is actually more aligned with the conservative, less incremental side on the administrative state. As I said, it's tyranny adjacent. I think this opinion actually is an opinion that the rest of the conservatives wanted to sign on to. It kind of creates this you don't need to get into Chevron or any sort of deference and it's actually an anti-deference canon.

David Roberts

They never mentioned Chevron. It's quite striking.

Jay Duffy

No, and the interesting thing too is that the Trump administration, when they repealed the Clean Power Plan, they came in with this Chevron one claim language. Every system that you utilize to control pollution from these plants needs to be to or at an individual source. It was a 65 page Federal Register notice. And, you know, half a page talks about the "major questions doctrine" and they say our plain reading of the Clean Air Act is that you can't, you can't use generation shifting and everything needs to get bolt on control. And we think the "major questions doctrine" confirms that.

They don't even get into it all that much.

David Roberts

So that's, in a sense, Roberts did not confirm that interpretation, right? The idea that the only permissible regulation here is something that you bolt onto a coal plant, which was sort of the Trump EPA's take. He didn't affirm that and sort of by implication said that's wrong, right? I mean, in some sense this is a ruling against that interpretation as well.

Jay Duffy

I think that's right. And I actually think that would have been a more dangerous decision for regulating power plants and for a path forward for power plants. They kind of were narrower on this. What does 111 say? And is it as confined and extreme as the Trump EPA had proposed? They were a little more narrow there, but then used the "major questions doctrine" much more than the Trump administration did in order to do the work of knocking down the Clean Power Plan.

David Roberts

What's next then? Are there other particularly significant cases regarding the administrative state that are on the docket? Or do we know sort of what the next step? I mean, I'm just assuming that Roberts is going to be trying to sort of destroy the administrative state in pieces. Is there any sense of what's coming next?

Jay Duffy

Well, I work on transportation litigation as well, and we're currently in the DC Circuit Court of Appeals litigating a challenge over light duty vehicle standards. And we have the statement of issues in from the red state attorneys general and there they're saying any reliance on transitioning to zero emitting vehicles ...

David Roberts

Of course.

Jay Duffy

Raises the specter of the "major questions doctrine".

David Roberts

Same basic thing, right? Same idea. You can't make standards based on the idea that fleets could switch to electric right?

Jay Duffy

That's right. And the same sort of thing too, where a lot of the automakers, they're fine with the standards that EPA is coming out with. And as we saw in West Virginia, it was the coal interest and the red states. It wasn't the power industry. The power industry was actually arguing for this sort of interpretation because they know that this is the way that the industry has worked for years.

David Roberts

And I bet they would like to just know what the hell they're supposed to do at this point.

Jay Duffy

I know. I mean, that's the real troubling thing going forward is now everyone's guessing as to what's major.

David Roberts

I know this whole idea that conservatives care about regulatory certainty is such a freaking joke. They've just inserted very fundamental uncertainty into every agency decision now.

Jay Duffy

Right. Even thinking about the power plants, I've been on the briefs here. I've argued portions of the case and even I can't quite tell you what is on and off the table. And I've read the opinion ten times already. So I don't know how exactly we figure out on a variety of rules. There's always going to kind of be this looming big brother of major questions.

David Roberts

Well, this again is a cynical take on it, but I feel like cynicism is justified these days. It's almost if he had been more specific and clearer, it just seems like Roberts left quite a bit of vagueness in there on purpose. Because the effect of vagueness is that the agencies will start being cautious on their own, right. They're going to start sort of patrolling themselves, policing themselves, being cautious themselves, rather than take chances. So in a sense, it's almost leaving the vagueness out there seems deliberate. It seems like a deliberate play to sort of just signal to agencies, "hey, rein yourselves in," across the board.

Jay Duffy

Right? I mean, I don't know can't speak to the intentions, of course, but I know that it is going to raise that for all the agencies trying to figure out what the lines are. It also leaves very little guidance and a lot of breadth to lower courts who deal with, you know, the majority of these, these sorts of decisions. Most agency decisions, you know, go to the DC Circuit, and now they kind of have to parse through, you know, what exactly is major here.

David Roberts

Knowing that at any time the Supreme Court could just take something away from them, reverse them. Like the way the Supreme Court is treating these lower court rulings. Must be discouraging to be a judge at that level, I would say. Let's conclude then by talking about what EPA should do. So it cannot do what the Clean Power Plan did, which is make output based standards for existing power plants based on a wide array of compliance strategies, including generation shifting. You can't do that. But Roberts didn't specifically preclude a lot of other routes forward. I know you're not in charge of EPA.

You're not in the administration, but sort of your sense of what EPA is going to take from this and the likely route it's going to try to take forward now addressing greenhouse gases from existing power plants.

Jay Duffy

Right? I mean, I go back to the 2014 and the 2015 rulemakings where EPA said that cofiring and CCS are available and meet all the criteria of Section 111. To me, that seems like the natural path forward to stringent standards. That's what I anticipate.

David Roberts

And that's just to clarify, EPA is saying, "you have to bolt this thing onto your power plant to bring it down to meet this output standard." You cannot get more straightforwardly legal than that, right? I mean, there's no fuzziness about whether EPA is allowed to do that, is there?

Jay Duffy

Well, as I said before, EPA can't tell you to do that, but they can base standards on it, and then you can apply however you see fit. But yes, CCS is a carbon scrubber, just like other scrubbers that are bolted onto plants. Cofiring with CCS is at the source just like other things that have been used for decades. I am certain that even in the ... there's currently a case over that 2014 new source performance standards for coal plants, that's based on CCS, that has been stayed for years and years now because the Trump administration said it was going to repeal it, and then it ended up not repealing it.

And now this EPA is reviewing it. So there are challenges there essentially saying CCS is not adequately demonstrated, and it's too costly. So I'm sure we'll have those arguments, but those are more the sort of like record based, "let's go through a bunch of engineering diagrams and modeling and cost metrics," which is not usually, and I say that with a long pause, the thing that the Supreme Court spends their time on.

David Roberts

So you think probably that question will be resolved by the DC Circuit Court and the Supreme Court will not mess with it. Is that your guess?

Jay Duffy

That is my guess. Based on historically, the types of cases that the Supreme Court takes up because that they don't waste their time kind of like parsing through an administrative record on sort of engineering details.

David Roberts

Yeah, I'm just trying to exercise my tragic imagination more these days and imagine what they could do if they woke up grumpy one day. So am I right in saying the reason EPA didn't do that in the first place was because it wanted to make a system that was more flexible, and adaptable, and lower cost? So am I right in saying that by eliminating these novel possibilities of treating the whole electric fleet as one system and requiring you to, more or less, make your standards based on what you can bolt on the coal plant, you're going to end up with a system that is tougher on coal plants, are you not? I mean, this really seems like the coal industry shooting itself in the foot, like you're going to end up with standards that are more difficult to meet and are probably going to lead to more coal plants closing.

Is that wrong?

Jay Duffy

I don't think that's wrong. I think there is a path forward to do it. I think there's a bunch of compliance alternatives, as I said before, with the sulfur scrubbers. I think once a regulation is put into place, it is remarkable how quickly industry can innovate, and learn, and decline costs, and things of that nature. So it could be something that spurs some real action based on the technology forcing nature of the Clean Air Act and what it requires, which is putting on the best system. And those are the best systems right now.

David Roberts

Yeah, we're all, I guess, just speculating at this point, but so many of these coal plants are just kind of lumbering, half-dead giants anyway because as you say, compliance wise, utilities can comply by shifting generation if they don't want to plow a bunch of money into a half-dead coal plant. So I just sort of anticipate, if the choice comes down, bolt CCS onto this already not particularly competitive coal plant, or just let it die. I'm guessing let it die is going to be the more common route, but we'll see about that. So what's the schedule then?

Now EPA is in the midst presumably of analyzing this, because they weren't going to use the CPP anyway. So I guess by way of wrapping up, I'm sort of curious like where EPA is on this. Are they starting over now with a new rulemaking or do you think they've got a lot of work done? Sort of like when do you think we can anticipate a new rule out of EPA?

Jay Duffy

So EPA has said in it they do a unified regulatory agenda in the spring, and they said that there will be proposals on new and existing power plants for their carbon emissions in March 2023. They have been working, they have been thinking — at Clean Air Task Force, we go in and have meetings with EPA and provide them with our analysis. And we have a whole bunch of engineers, and scientists, and policy folks who do modeling and all sorts of analysis that we go in and provide to EPA to help them form their rules. And we've done that.

So we know that they've been taking meetings with us and and others to work on on this new set of rules, and my God, the the record for for what you can do on on these fleets. You know, we've been giving them materials since 2012, you know, we've written written the same sort of comments over and over again for a decade now. So they certainly have a lot of information to build on and we're urging them to move as swiftly as possible.

David Roberts

Yeah, just trying to imagine what happens if these rules slip in under the deadline, and then Trump administration comes in and then whoosh, the whole thing. Like, if they pass rules on new power plants and existing power plants, and there are lawsuits, as there will be, and those lawsuits are resolved in the lower courts in EPA's favor, would that mean that a Trump EPA is stuck with these rules, like legally? Or can they just throw them out all over again and start this whole damn thing over again?

Jay Duffy

They certainly could.

David Roberts

They would have to have a legal rationale for doing so, though, right?

Jay Duffy

Yeah. An agency can change its mind. It depends also on what the DC Circuit ruled. If they said that heat rate improvements alone are insufficient, then that's the law of the land on 111, and they wouldn't be able to do something like that, or even something along those lines. There can be holdings that will bind future administrations, but if it's EPA just using their broad authority to come up with what that agency at that time thinks it's the best system, then in the future, another administration could find that a different system is the best system. It is a bit of a whirlwind.

It is exhausting. We've been litigating what the meaning of a system is here, for most of my career has been the word system and what it means.

David Roberts

Oh, it never ends. Okay, well, we'll leave it there. We'll leave it there with the modified, limited, hopeful statement that EPA, after this ruling, still has authority over greenhouse gases, still has authority over existing power plants, and still can and will pass regulations forcing existing power plants to reduce their emissions. So that's all happy and positive.

That is, although the "endangerment finding" was challenged in the DC Circuit last week.

Surely SCOTUS is not going to take on reanalyzing the "endangerment finding". Just tell me they're not going to do that.

Jay Duffy

I know. I actually think that the West Virginia opinion strengthens the "endangerment finding". It makes clear that EPA has authority to regulate greenhouse gases from power plants. So I think that is a very weak case.

David Roberts

Okay, well, on that extremely limited positive note, let's wrap it up. Thanks so much for coming on at such short notice and for clarifying all those for us. Thanks a lot, Jay.

Jay Duffy

Thank you, David. Happy Fourth.

David Roberts

You too. Bye now.

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