August 06, 2012


An in-depth analysis of cases and emerging legal issues

By Sheldon Gilbert, National Chamber Litigation Center(cross-posted at, "Brief Filed Supporting Lawsuit Against EPA's "Blackout Rule"")

The U.S. Chamber, along with a broad business coalition, filed a friend-of-the-court brief urging the U.S. Court of Appeals for the D.C. Circuit to invalidate the EPA's $10 billion "Utility MACT" rule, one of EPA's costliest rules ever. Indeed, as the Chamber has previously explained, the rule costs "40% more than the total cost of all the Clean Air Act regulations EPA has ever imposed on power plants."

The Utility MACT emissions standards have been dubbed the "Blackout Rule" by some because they will force a host of power plant closures and could impact the reliability of the grid. The business community's requests for adequate time for utilities to comply have fallen on deaf ears.

The rule has been under a haze of legal uncertainty since it was first proposed by EPA. It was no surprise that dozens of groups filed lawsuits challenging the rule on a number of grounds. A core legal issue in the combined lawsuits is whether the EPA violated the Clean Air Act by using a flawed methodology to set unachievable emissions standards.

In a nutshell, the EPA enacted a rule with standards so difficult to meet that it is questionable whether the technology even exists for many utilities to be able to comply. It's telling that pollution control vendors have been unwilling to offer guarantees to meet EPA’s new source MACT standards, even though such commitments are necessary to obtain financing for new projects. The amicus brief argues that a methodology with such an approach can't be what Congress intended.

The EPA’s controversial methodology used in the Utility MACT rule has already led to circumstances in which virtually all existing facilities in certain source categories will have to shut down or be significantly modified, and new sources will likely never be built because of the inability to achieve the standards based on EPA’s MACT floor determination. Moreover, the brief explains, some new facilities cannot be built, “even when such facilities present little or no risk at all to human health or the environment.”

Indeed, in another rule using the same controversial methodology, the EPA itself estimated that that rule would shut down 20 percent of the nation's cement plants within two years (if 20% was EPA's rosy prediction of the rule's impacts, one can only imagine what the real impacts could be).

As for the Utility MACT rule, EPA adopted it fully aware of public comments that explained that "no new coal-fired [power plants] will be built in the country." But EPA adopted the rule, anyway. A number of coal-fired power plants have already announced shutdown in Maryland, Pennsylvania, Ohio and West Virginia. That could be the tip of the iceberg, especially when you consider the EPA’s greenhouse gas standards applicable to new power plants. That rule unequivocally bans – given today’s technology – the construction of any new coal-fired power plants.

Certainly, the brief explains, Congress never intended the Clean Air Act to be implemented so as to wipe out an entire category of electric power generation – especially given that the EPA’s target has historically been the most abundant and affordable source available. Of course, wiping out the coal industry may not just be an incidental side-effect of the rule - some have argued that it is the EPA's intention. For more on the EPA's wide-ranging "war on coal," check out Chamber blogger Sean Hackbarth's "Don't Kill Coal" post as a good starting point.

You can download the brief and learn more about the case from the website of the National Chamber Litigation Center, the Chamber's public policy law firm which represents the Chamber in this case and others. The case is called White Stallion Energy Center v. EPA.