 Good afternoon everyone. My name is Carol Werner. I'm the executive director of the Environmental and Energy Study Institute. We are so glad to welcome you to the briefing this afternoon on the Supreme Court and EPA carbon rules. We're very excited to have this discussion this afternoon. We know that there has been a lot of interest in this whole topic because the Environmental Protection Agency and the administration have been relying very heavily on EPA's authority under the Clean Air Act to regulate greenhouse gas emissions. Obviously, that is a huge issue for policy makers as they have been looking at what is the best way to move forward and there has been great interests all over the hill in terms of looking at these cases and the people who have petitioned to bring the cases to the Supreme Court as well as those states that have been strongly supporting EPA's authority to regulate greenhouse emissions. We have two very interesting special people with us this afternoon. I think to really take us through what's going on with regard to the Supreme Court case and to walk us through the process what really is at stake? What are the issues involved? What matters? What do we anticipate based upon what we heard during the oil arguments on the on this case? And obviously the oil arguments were before the Supreme Court just a little over a week ago on February 24th. So we are most anxious to hear from our presenters this afternoon who will discuss this case and after they have gone through and talked about it then we'll open it up for your questions and comments. So I would like to introduce our speakers this afternoon. First we will hear from Michael Gerard who is the Andrew Saban Professor of Professional Practice at Columbia Law School. He teaches courses on environmental and energy law and directs the Center for Climate Change Law and is also I think very importantly from from our perspective as well the Associate Chair of the Faculty of Columbia's Earth Institute. He brings a long experience in terms of working on environmental law cases was a partner in charge of New York's Arnold and Porter's New York Law Office and is still senior counsel to that firm, but he practiced environmental law in New York City for over 20 years and tried many cases argued many appeals before federal and state courts and he has also written very extensively and has done an environmental law column for over 25 years and has edited a monthly newsletter on environmental law also for many years as well as having written a number of books and we should feel really excited because to have a law professor and have it to be named best law book of the year is really I think a distinction that we should take very seriously, don't you? and so he brings all of this wealth of experience and perspective. Our other speaker also has a very interesting and very very appropriate background for our discussion this afternoon and that is Amanda Leiter who teaches environmental law, administrative law and towards at American University's Washington School of Law. Prior to that Professor Leiter was an associate professor at Catholic University's Columbus School of Law and she also had been a Beagle HLS fellow at the Natural Resources Defense Council but particularly interesting perhaps for our discussion this afternoon too is the experience that she brings from having clerked for several judges including Nancy Gertner for the Federal District Court in Massachusetts also for David Tatl who is a judge on the DC Circuit Court of Appeals and also clerked for Supreme Court Justice John Paul Stevens. And so she also is able to look at things through eyes that have worked very very closely with a Supreme Court justice as well as as federal other federal judges. So I am delighted at this time to turn to first to Professor Gerard and then we and then we will hear from Professor Leiter and as they lead us through this whole discussion. Thank you. Thank you Carol. It's a pleasure to be here. So I'm going to start by giving some of the background how we got to the case. Then Professor Leiter will talk about the oral argument that took place and the range of possible outcomes and then I'll come back and talk about where it fits in the context of the overall climate action plan by the president and what the significance might be. So as everyone here knows under President George W. Bush EPA took the position that EPA did not have the authority to regulate greenhouse gases under the Clean Air Act. Then came Massachusetts versus EPA the landmark decision from the Supreme Court in 2007 and that decision hinged largely on this provision in title two of the Clean Air Act the portion that regulates mobile sources and saying that EPA shall issue standards for air pollutants that in his judgment may endanger public health and welfare and it was for any any air pollutant from any class of vehicles air pollution air pollutant is defined broadly in the Clean Air Act and the Supreme Court in the Massachusetts case said that this included greenhouse gases and EPA needed to make a decision on the endangerment issue. Not much happened for the balance of the Bush administration, but as soon as President Obama took office EPA started acting and set off a cascade of regulatory action. So the Massachusetts case came out then EPA issued the greenhouse gas endangerment finding in 2009 that was a prerequisite to anything happening. Then EPA issued its tailpipe rule that had the greenhouse gas standards for passenger vehicles and then the that in turn led to regulation of stationary sources and the reason it led to regulation of stationary sources is this is one EPA regulation. There are a number of other statements EPA's position over a period of many years has been that as long as a pollutant is regulated anywhere in the Clean Air Act it triggers stationary source regulation. The problem with that or one problem with that is that for the for one program in the Clean Air Act the prevention of significant deterioration program Congress set numerical thresholds that attempted to distinguish between minor sources and major sources with the idea that EPA shouldn't have to regulate everything only the major sources and they set these quantitative limits that for certain kinds of facilities it was facilities that admitted at least 100 tons a year and for others it was 250 tons a year. Those thresholds made perfect sense for the conventional air pollutants like particulates and sulfur dioxide and nitrogen oxides because it had to be a pretty good size facility before it crossed those thresholds. Those numbers make no sense at all for greenhouse gases if those numbers were applied to greenhouse gases we would be regulating perhaps a million or more facilities and nobody certainly not EPA had any interest in that level of regulation. So EPA in order to deal with that problem adopted the tailoring rule which is a rule that greatly increased the thresholds and phased them in and so initially it was going to be apply only to sources that already required a prevention of significant deterioration permit. Those are called the anyway sources and for those greenhouse gas limitations would be imposed if they admitted at least 75,000 tons a year, a far cry from 100 tons a year in the statute and then kicking it into sources eventually that did not otherwise require PSD permits. Meanwhile, while all of this was going on the issue of greenhouse gases returned to the Supreme Court in 2011 in the case of American electric power versus Connecticut, which arose from a completely different procedural context. That was a common law nuisance case brought by Connecticut and several other states against half a dozen electric utilities saying that under common law nuisance doctrines they should have to lower their emissions. The Supreme Court by 8 to 0 said no, that couldn't proceed because in the Massachusetts case we the court had said that the Clean Air Act authorizes EPA to regulate greenhouse gases and therefore that fills the field. Congress has decided that EPA is the decision-maker here. It's not it's not the courts. And so that case amounted to a reaffirmation of Massachusetts versus EPA and specifically of the authority of EPA under section 111 of the Clean Air Act, which is a different section that we'll talk about later on. So EPA had issued the endangerment finding and the tailpipe rule, the rule for motor vehicle emissions and the tailoring rule and a couple of other rules, unsurprisingly, they were sued in about in more than 100 lawsuits brought by various industry groups and a number of states that were opposed to that kind of regulation. All those cases were brought in the DC circuit. They were argued together in a two-day marathon session. Judges Santel and Rogers and Tatl issued a percurium decision that resoundingly upheld all of EPA's actions. It upheld the endangerment finding. It upheld the tailpipe rule. It upheld EPA's findings on the applicability of the prevention of significant deterioration program. And it found that the tailoring, it didn't go to the merits of the tailoring rule because it said that the plaintiffs who are challenging, it didn't have standing to sue because it was really a deregulatory measure. It was a law that made fewer sources subject to regulation. The counterargument had been that well, it would be so intolerable in that case that Congress would surely act and the DC circuit had so little opinion of that view that as their citation for how difficult it is to enact legislation, they appended a link to the YouTube video of the schoolhouse rock how a bill becomes law. The the petitioners then petitioned the full court, the full DC circuit, all the active judges for on-bond review. That was denied and there were two dissents from that denial. Significantly one of them by Judge Kavanaugh said that in order to avoid the absurd results that sort of everybody agreed, led by EPA, would result if we would apply the strict numerical thresholds. Rather than making up new numbers, EPA should have interpreted the statute differently and said that the PSD rule should have been interpreted not to be applicable here. There was a cert application, a bunch of cert applications. The Supreme Court refused to reopen the endangerment finding. They refused to reopen the motor vehicle rule. They expressed no interest in those, but they did certify one question, which is the applicability of the prevention of significant deterioration program and with that I will turn it over to Professor Leiter. So I'm going to walk you through the Supreme Court's analysis in this case. As Professor Gerard said, the court granted cert or agreed to hear a very narrow issue in the case. And I think the first big takeaway is that that already, in my view, was a big win for the agency. They were quite vulnerable here. They had issued, as you just heard, this endangerment finding where they said greenhouse gases do indeed in our view endanger and in the view of all reputable scientists do indeed endanger human health and welfare. That then obligates us, the agency, to regulate emissions of greenhouse gases from the tailpipes of cars. And then, and then this is where it gets trickier, that triggers in the Clean Air Act this regulatory cascade, this set of additional regulations that come into play automatically as soon as we have regulated greenhouse gases from any source. So EPA's position for a long time has been, as soon as we regulate any pollutant from any source, such as greenhouse gases from the tailpipes of cars here, that then triggers a series of other programs under the Clean Air Act so that we are regulating that same pollutant everywhere that it shows up. That's been EPA's consistent view of how these sort of regulatory modules under the Clean Air Act work over a period of three decades. So EPA said, now we've regulated greenhouse gases from the tailpipes of cars. That means they are automatically, not through any action of the agency, automatically regulated when they are emitted from industry sources, stationary sources, power plants, large chemical producers, things like that. But for the reason that you just heard, the statutory numerical trigger for greenhouse gases would also automatically bring in things like large apartment buildings, Walmart stores, etc. And EPA didn't want to have to reach those smaller sources and also frankly couldn't. There was no sort of bureaucratic way that they possibly could extend their permitting program to all of those sources. So they issued this tailoring rule. And what they really tried to do was narrow the trigger. They tried to say, OK, we've regulated greenhouse gases from tailpipes. We're going to regulate them only from the largest of the stationary sources. And they interpreted this number of 100 tons per year of emissions in the statute to be a much larger number. So as soon as you hear an agency trying to interpret statutory, very plain statutory text, I mean, you saw it spelled out 100 tons per year. As soon as you see an agency trying to interpret statutory language that is as plain as that to mean something completely different, I don't know, lights should go off or something. I mean, it's a problem for the agency. And courts rarely sort of allow them to get away with that. And so the question was what EPA was going to do under these circumstances, how they were going to try to defend this alternative trigger that they had suggested. But I think it's important, before I even walk through the court's analysis, to remember that by focusing in just on that question of what the right trigger is, the court had already essentially sanctioned EPA's endangerment finding, sanctioned the tailpipe rule, et cetera. So there were a lot of potential bullets that EPA dodged just with this narrow CERT grant. Okay, so from the narrow CERT grant, focusing really in on what is the trigger for these stationary source permitting requirements, there are a range of potential outcomes that the court could have reached. So the court could say EPA had no authority to regulate tailpipe emissions in the first place. That answer is basically off the table because the CERT grant was so narrow, right? They're not going to go back and revisit whether EPA had this authority to regulate the tailpipe emissions in the first place. So that was a potential sort of threat that was out there when the CERT petitions were filed, but it's off the table once the grant is so narrow. The second possibility, and this was pushed fairly hard by industry, was to say the stationary source provisions of the statute apply only to what are known as criteria pollutants, sort of standard pollutants that EPA has been regulating for decades, particulate matter, carbon monoxide, nitrogen oxides, sulfur dioxide, lead and ozone. And if that were the case, then when we look back at this trigger, the answer would be once you regulate greenhouse gases from the tailpipes of cars, essentially we lose the trigger to stationary sources. So the regulatory modules that I talked about would be severed in the Clean Air Act, essentially. We'd only regulate greenhouse gases from the tailpipe of cars and not the other places they come from. So that's one potential way that the statute could be interpreted, or one potential outcome from the court case. Another potential outcome is to say, okay, we understand these two regulatory modules have to be linked, but the way that EPA tried to link them by sort of elevating these statutory numerical thresholds from 100 tons per year to 100,000 tons per year was an awkward way to link them, and the court could come up with some alternative linkage between these two regulatory programs. And then the final way that the case could come out is for the court to say we owe deference, courts quite regularly defer to agencies' expertise, they could do that here, they could defer to agencies' sort of greater expertise in the regulation of air pollutants, and defer to the tailoring rule as it was written, defer to this sort of reinterpretation of what the statutory thresholds would be. So now I want to walk you through some of the language in the case and try to establish that in my view the most likely outcome here is going to be somewhere in this third box. I don't think they're going to go so far as to completely sever the stationary source provisions from the tailpipe provisions, but I do think they're likely to narrow the particular trigger for what sources, which particular sources are subject to stationary source regulation. And I'll walk through what a couple of the potential triggers might be and tell you where I think the court is most likely to land. So to do that I want to show you some language. This is Mr. Keisler for the industry petitioners starting out the case and you can see right away what the industry's sort of line of attack is going to be. They say this case is unprecedented for two reasons. First, EPA is itself saying essentially we can't do what the statute commands. We can't regulate all sources that emit more than 100 tons per year of greenhouse gases because there are too many of them, regulatory impossibility. So he says EPA agrees that if it went ahead and did this the way the statute requires it would lead to absurd results. And then EPA took that as a basis for rewriting the numerical thresholds in the act because the agency in the industry's view wrongly believes that that fixes the problem. So he's sort of underlining for the court that the agency is rewriting the statute, which is a big no-no, particularly for the conservatives on the court. So Justice Sotomayor comes back, well, wait a minute, it hasn't really rewritten them. All it has said is that it can't implement the statute as it's written. That would overburden the agency. It hasn't said it absolutely can't do it, it just said it can't do it right away. And the agency was trying to get away with sort of implementing the statute over time. So they don't just say we're going to elevate the threshold from 100 to 100,000. They say, and you saw the stages in Professor Gerard's slide, they say we're going to elevate it to 100,000 first and then slowly over time we're going to grow our program. They thought they were placating the court by doing that, right? They thought they were placating the court by saying we're not completely rewriting the statute, we're just phasing in the statutory requirements over time. Well the industry comes back and says that's actually an even bigger problem for the agency. Because Congress's intent here, and this is true, Congress's intent was to target the largest, most problematic sources. Large power plants in the country, large chemical producers, and not to target Walmart's and large apartment buildings and hospitals and things like that. And so if you now tell us that you're going to slowly over time actually come down to the statutory thresholds, you're actually contravening the congressional intent there. Because you're actually now going to move beyond the major sources that Congress intended to target. And you're going to start roping in all of these smaller sources. And so the solution that EPA thought it had come up with to sort of phase this in over time, industry is arguing is actually an even bigger problem, even more inconsistent with congressional intent. So I put this in mostly for humor. Justice Breyer has a habit of introducing hypos that don't always advance the ball. This one involved bubble gum. If there were a statute that said you have to throw out all bubble gum that's been around for more than a month. What about bubble gum used in display cases that nobody ever intends to eat? You see? To which the only answer is no, Your Honor. I don't see. Justice Kagan I think had the clearest view of the case. Maybe I think it's clearest because it's also my view. But she says, wait a second. The problem here is we have sort of two clear and inconsistent congressional intents. Congress very clearly does intend for EPA to have authority to regulate greenhouse gases from stationary sources once it has regulated them from the tailpipes of cars. It also very clearly intends only to target major sources. It also very clearly intends, in fact the numbers are there in black and white, very clearly intends to target any source that emits more than 100 tons per year. Those three things are mutually inconsistent. You can't possibly implement them all at the same time. Her view is once you have those inconsistent congressional intents, that's essentially the same as having ambiguous congressional intent. Because we don't know which of those intents should take priority. And when you have ambiguous congressional intent, there's a sort of long standing doctrine that says you defer to what the agency does. When there's ambiguity in the statute, the agency has a lot more room to maneuver. And so she's saying we should take these inconsistent congressional intents, recognize that as ambiguity in the statute and potentially defer to EPA's resolution of that ambiguity. And now maybe we all need to evacuate or something. No? It's a vote. So I included this just to indicate that it was clear, really the tenor of the argument from all the justices, very clear that they have no intent to go back and revisit Massachusetts versus EPA. So the narrow cert grant means what it says. The court is not interested in revisiting whether the very broad question of whether the Clean Air Act grants EPA the authority to regulate greenhouse gases. They are just focusing on the connection between the tailpipe rule and the stationary source provisions. So in addition to the narrow cert grant, this was sort of reassuring to the agency in the argument. Even the Chief Justice saying I was in the dissent there but we're not going to revisit that outcome. Now we'll see whether he remains true to that. He has written at least one dissenting opinion questioning the outcome in that case. But at least here he's saying we're not going to go back and revisit that. So the industry concludes by, and it's a really important sort of tactical move by the industry. The industry concludes by reminding the court of its Connecticut versus American Electric Power decision that you just heard discussed, which held that the agency does have authority to regulate these same stationary sources under a different set of provisions in the act. The NSPS program it's called. This is the industry being enormously tactical here. They're essentially saying look they can get at most of these sources in a different way. And so this very strained reading that they're trying to use to get at these sources through the PSD program is unnecessary. They don't need to go in this direction. It's interesting and somewhat ironic that the industry is underlining this as much here as they are. They underlined it also in Connecticut versus AEP. There they were underlining it to say this nuisance suit doesn't have to go forward. They don't need to get sued because EPA can go ahead and regulate us. Here they're saying they don't need to regulate us via this program because they can regulate us via another program that's not on the table right now. But it's important to note that the NSPS program there's a proposed rule out that you'll hear about in a little bit that has already been challenged by the industry. So here they're touting this industry power as a way to avoid PSD regulation. But we'll see challenges to that same power as soon as EPA tries to flex that particular muscle. Okay so then we move over. I'm omitting apologies to him the Solicitor General of Texas who also argued here. But moving over to the Solicitor General of the US, General Verrilli. So he starts out with a different sort of avenue. He says greenhouse gases pose the same threat no matter where they come from. We recognize that EPA has authority to regulate them from some sources. It makes no sense essentially to decouple these provisions of the act that are supposed to work together to enable the agency to address a threat wherever it comes from. It makes no sense to say well they only have power here but not over here. It's the same threat no matter where these pollutants come from. But he gets in trouble right away and I should have started by saying I don't have a very dismal view of this case but I don't think EPA is going to win outright. And the Solicitor General, you'll see why in a minute. The Solicitor General gets in trouble right away. Justice Scalia who's been quite silent up to this point jumps in right away and says why? Why doesn't it make sense to decouple these two things? Entirely reasonable to say you can regulate the pollutant over here but it starts to create all sorts of bureaucratic nightmares if you try to regulate it under this program. Decouple the two programs. What's so unreasonable about that approach? So General Verrilli says well wait a second these two programs the NSPS and the PSD programs are supposed to work together. The NSPS program which if you remember is the one that Mr. Keisler had been touting right? That's a program that enables the agency to set category wide emissions controls for all stationary sources that emit greenhouse gases as opposed to source by source technology based controls. And General Verrilli says well these programs are supposed to work together. They set a category wide floor via the NSPS program and then they use the individual source by source permitting program in a sort of technology forcing way to push the technology to advance. And then the floor gets reset every eight years and the floor can be upped. The emissions control requirements can be upped as the technology improves. So he's trying to make the point that these two programs are supposed to work hand in hand they're supposed to complement each other. But the point gets lost pretty quickly and you see that first with a question from the Chief Justice. He says well wait a second if the greenhouse gases can be regulated through the PSD program with respect to some sources that are where the trigger is an easier trigger essentially. That gets you to 83% of where you want to go essentially. Why do you need this additional power? Why do you need to sort of torture the statute in this way to get these additional sources? So he's not fully understanding how these programs are supposed to work together and Justice Kagan too seems to have problems with the way the agency has done this. Her problem is with what I mentioned earlier the fact that the agency is saying that it's going to set a threshold initially but eventually over time it's going to try to grow the program down to the statutory thresholds essentially. It's going to get around eventually to regulating sources all the way down to maybe not all the way to the 100 ton per year statutory threshold but it's eventually going to start bringing in more sources. She actually finds that sort of slow accretion of regulatory authority even more problematic than if the agency had just elevated the threshold once and stopped there. So she says the solution EPA came up with seems to give it complete discretion to do whatever it wants so we're going to give it some room to maneuver if the statute is ambiguous but it's taken more room than we can really allow it to have. So this as I was reading through the transcript this was the first quote that gave me significant pause because she seemed like she was the sort of biggest agency supporter and had the clearest understanding of what EPA had tried to do and yet here she seems to be signaling that she's she's not fully on board. And then Justice Sotomayor says I know litigants hate this question but if you're going to lose how do you want to lose. So litigants do indeed hate that question except that it gives them some ability to shape what the loss looks like to find a fallback position. And so then at the end you do see General Verrilli offering this fallback position which is to say we still want to have a trigger in place. We still want to be able to say that when these greenhouse gases are regulated from the tailpipes of cars that triggers the obligation to regulate them also from large stationary sources. The problematic pollutant for this purpose is carbon dioxide because that is the one that is emitted in such large quantities that if you use the statutory trigger you start to get to hospitals and apartment buildings. So what he's saying is let's keep the trigger in place and let's just read carbon dioxide out of that trigger because it's a different it's emitted in such a larger quantity than the other pollutants. So his sort of compromise solution is to say let the statutory trigger these regulatory modules work in exactly the way Congress intended for every other pollutant but not carbon dioxide. We can go ahead and regulate carbon dioxide once the stationary source provisions are triggered for a different pollutant but for triggering purposes we're not going to include carbon dioxide. That's his fallback position he emphasizes several times I'm not endorsing that but you know if the court needs a compromise this is the compromise. And so I just want to leave you with the potential outcomes from the case. The one that I think the agency most feared was largely off the table from the cert grant and that was a sort of complete decoupling of the tailpipe provisions of the act from the stationary source provisions. If there had been a complete decoupling that's my sort of red arrow at the top there. There would be no trigger and the fact of regulation of greenhouse gases from the tailpipes would not trigger regulation of them from stationary sources at all. I think that's off the table it seems to be off the table from the question presented and it continued to seem to be off the table from the way the tenor of the court's discussion. So what remains are some sort of narrower potential triggers. One is to say that the program is only triggered for sources that emit above the statutory threshold of those criteria pollutants that I mentioned before ozone sulfuric acid particulate matter things like that. But once it's triggered you can still regulate greenhouse gases from those large sources. So that's the anyway sources solution that you heard mentioned earlier sources for whom the stationary source permitting provision would be triggered anyway. Well now we're going to tack on some obligations to control their greenhouse emissions as well. But we're not going to add obligations to any new sources. That's one possibility. Another possibility is this all but carbon dioxide possibility that General Verrilli tried to plant in the court's mind at the end of oral argument. My guess is that that may be the outcome we'll see because the court seemed somewhat accepting of it. Another possibility is something that the industry offered which is to focus the stationary source provisions on pollutants that have only local effect that is effect right around the power plant and not global effect like greenhouse gases. The problem with that for EPA is that they already regulate a bunch of pollutants that have more global or at least regional effect like sulfuric acid mist and things like that where the effect is not purely local. And if the agency were to adopt that approach I don't have an arrow for it but it's sorry if the court were to adopt that approach EPA would lose some of the regulatory authority it is now exercising. So that would sort of interfere with some existing regulation. Then there's the tailoring rule at the bottom. I'm fairly pessimistic for the survival of the tailoring rule as it's currently written. And then finally is the outcome that nobody likes which is that they would have to regulate all sources above the statutory threshold and that's where the agency said that leads to absurd results and administrative impossibility. So what do these outcomes mean for the president's climate agenda? I'm going to turn it back over to Professor Gerard. Thank you. So as you all know last June President Obama issued his climate action plan. It talks about power plants as the principal target for regulating greenhouse gases and rightly so when you look at the toxic greenhouse gas inventory power plants are 72% of the emissions from stationary sources. But the president's plan did not say a word about the PSD program. It was talking entirely about the new source performance standard program. And so it does not rely in the least on the PSD program. In focusing a little bit on the differences between the programs of the new source performance standards under section 111 of the Clean Air Act. Then the other two it's confusing terminology but there's a new source review program which unfortunately still has the same words new source. But the two on the right are often talked about together as the PSD program. It's really one program and parts of it apply only in attainment areas meaning areas where there is compliance with the national ambient air quality standards and the other non attainment areas. But just sort of treating them together the new source performance standards program the NSPS you have a national standard set by EPA that applies everywhere. The other programs the PSD program are run primarily by the state and less of a direct role. So the most the best known and the most often used portion of the new source performance standard program falls under section 111B of the Clean Air Act. And it calls on EPA to publish these categories and then to come out with regulations for each category. EPA has been thinking about doing that for some time for fossil fuel plants. They issued an initial proposal in April 2012. It wasn't clear what was going to happen. President Obama's plan last June put EPA on a schedule. I gave them a deadline on the last day on the deadline date. They issued a revised proposal that would have slightly different standards for natural gas plants and coal plants. And essentially could not be met by coal plants unless they installed carbon capture and secretation which is not a technology that is yet in widespread commercial use. There was no clear timetable that was set for issuing the final rule. But the most important thing to say about this is nobody is starting up new coal fired power plants anyway. There are a couple that are still under construction but we are seeing almost no new proposals for coal fired power plants primarily because of the low price of natural gas. Also because of a whole lot of non greenhouse gas related environmental regulations that are causing problems. So in one sense this standard is symbolic but it does take on a particular legal importance. And that is when we talk about section 111D, the other big program under section 111. 111B that I just showed is for new plants. 111D is for existing plants. And it is the existing plants that are this huge wedge here. It is the existing plants dominated by coal that are the largest source of greenhouse gas emissions in the United States today. And so the question is how do you get it though? So we have 111D which is sort of very narrowly applicable. It is almost like threading the needle to make it applicable but it does seem to apply to greenhouse gases. So EPA administers regulations which shall establish a procedure similar to that under section 7410. Section 7410 is the part of the Clean Air Act that calls for state implementation plans. Most of the Clean Air Act is left to the states. EPA sets the national ambient air quality standards. It is up to the states to figure out how to meet them. So the states come up with their own plans that will hopefully allow the states to meet the air quality standards. So 111D says unlike with 111B with the new plants for these old plants we are going to require the states to come up with plans to meet these. But there will be EPA guidance on how the states ought to do that. And then significantly it only applies 111D, A, little I, I to pollutants through a standard of performance under the section would apply as such existing source was a new source. In other words you need to have the new source standard, the 111B standard in order to trigger 111D. And then going down to B, 111D1B, the EPA has to come out with the overall guidance. So EPA is now working on that. Here again the president has put them on a schedule. EPA needs to propose its guidelines in June of 2014. It finalizes the guidelines after it thinks about the presumably million plus comments it will receive in June of 2015. Then the states submit their state implementation plan like documents a year later in June of 2016. And then we will undoubtedly have a lot of fights with a lot of states that don't want to do that. And that will take a long time. The following January there will be a new president and so much of this litigation and administration will happen under the regime of the next president whoever he or she may be. But this is the schedule that they are now under. There are a lot of open questions about just what these new standards are going to look like. And here similar questions are also faced with the new source performance standards program. But some of the issues that EPA is going to have to confront are they going to require a plan to switch its fuel? For instance are they going to require a plan to switch from coal to natural gas? Are they going to require for coal, carbon capture and sequestration even though that technology is not very far along? What is going to be the role of energy efficiency as part of the measure? What triggers it? How long is it going to take? Should EPA be picking technologies? Now one of the big open questions that EPA is going to have to confront in the 111D standards is called the beyond the fence issue. Everybody recognizes that there are ways to improve the energy efficiency and hence reduce the emissions of a power plant within the power plant. There are lots of technologies that will make it run more efficiently so it will generate fewer greenhouse gases for a unit of electricity produced. But there are also even more opportunities for reducing energy use outside the fence line by going to the customers and having various measures, appliance standards and building standards and many other things that will reduce the overall emissions. And so one legal question that EPA is going to have to and policy question that EPA is right now thinking about is does it regulate beyond the fence line or only within the fence line? They know that whichever way they go they'll be sued six ways to Sunday but it's one of the challenges that they face. Meanwhile the environmental community for some years ago set the objective of preventing the construction of any new coal-fired power plants. That for the most part has happened and so the environmental community's focus has now moved to trying to shut down the existing coal-fired power plants to the extent that they can't. They don't need greenhouse gas regulations in order to accomplish a significant portion of that because there are lots of other environmental regulations on top of cheap natural gas. Lots of other environmental regulations that are making it more expensive to continue to operate a coal-fired power plant. And the mercury rule is in effect, it was argued in the D.C. Circuit in December, somehow the same day the Supreme Court heard argument on the cross-state air pollution rule which is another set of important non-greenhouse gas air pollution regulations. There are other regulations that are coming down the pike and all of them will add up to a burden on coal-fired power plants. Now the World Resources Institute did an interesting study of the different techniques that are available for each of the sectors to reduce their emissions and we'll post these but let me just show this. They also took a look at where do these various standards get us in relation to the announced plan that we're going to be reducing emissions to 17% percent below a 2005 baseline in 2020 and then much further down the road. So even with a vigorous federal program and some state programs, we don't quite get there. We make a lot of progress but we don't quite get there. And the there that we don't get to is still not enough to achieve the UN standards for a two degree limitation on increases in global temperatures. Even greater ambition is required for that but there isn't much discussion of that right now. So just to close and open it up for discussion, just about everybody agrees that the Clean Air Act is far from an ideal tool to regulate greenhouse gases. That would be much better if we had a congressional enactment that were aimed specifically at greenhouse gases but it's clear that we won't get that anytime soon. And so in the absence of that the Clean Air Act is the strongest tool the administration has and it's trying to use it. The decision from the Supreme Court in this case is going to have an effect on the margins. It doesn't affect the most important program that's relevant here, section 111. But I think it will give us a strong reading of how much flexibility the court is going to give EPA in the other programs. As we've discussed there are a lot of policy choices and legal choices EPA is going to have to make under section 111 and some of them are closer to the strict statutory language than others. So I think the decision that we get from the Supreme Court in the case that was just argued will be a good indicator of how much flexibility EPA is going to have when it issues the much more important section 111D regulations. Great. Thank you very, very much. Now that we've been through this law school seminar let's open it up for your questions or comments and if you could just identify yourself please. Go ahead over here first. Hello. Two quick questions about possible outcomes. If the court were to go with the must be NAACS pollutant in order to trigger PSD program the environmental groups involved in the case I was speaking to you think there's a statutory problem with that? Like what happens to the deadly sounding sulfuric mist? How could the court resolve that? And then the second question is if they were to go with the Kagan scenario that was saying that you know I have a problem with EPA continually adjusting this. How do they do that without throwing out the entire tailoring rule? On the first you're quite right. There are a few other non-national ambient air quality standard pollutants that have been regulated under the same theory. And there is you know one scenario under which that would be thrown out and therefore the regulation of those pollutants would also be in trouble. At least except those from the anyway sources. The sources that already trigger that issue. And on the second I guess I think the tailoring rules days are numbered and I think that I mean that's my personal view of the outcome of the oral argument although it's dangerous to predict this court. But what's really interesting about that is that the DC circuit said that no one had standing to challenge the tailoring rule. The Supreme Court chose not to address the standing issue and yet the question you know and they said they were focusing instead on the relationship between these two regulatory modules. But the upshot of the case is very much going to be the survival of the tailoring rule and I don't think it's going to survive. I think we're going to get a narrower trigger that is a one time change to what the statutory trigger is. I do still think there'll be a trigger. I my prediction is that it won't be as limited as the next only trigger. We didn't really fall back if I recall correctly about just picking out CO2. I think she seems to think the court couldn't just pick out one greenhouse gas after saying previously that it has the authority to do this. Well so one possibility is that there won't be a majority rule on what the right trigger is right because they didn't seem to be unified in what the right trigger would be. And that arguably is the right outcome here anyway would be to say OK EPA you didn't get the trigger right for these reasons go back to the drawing board and figure out what the right trigger is. That's a possibility. And of course the the only tea leaf that matters I think is Justice Kennedy and he was some combination of silent and also not quite up to speed in the oral argument. So I didn't wasn't really able to get a read on where he was going. But if they do send it back a very important question will be what happens meanwhile do these standards remain in effect while EPA thinks about it. Or are they off the table. We saw a similar issue with the interstate rule which is now under adjudication led to all kinds of chaos when the rule was was vacated and it was reinstated. We also have the perspective I certainly hope not that if we have a fractured court we could end up with a situation comparable to what we have with the wetlands definition under Rapanos which drives everybody crazy where you have a bunch of different decisions. And it's hard to figure out it's really good for all professors. But it's hard for everybody else to figure out what the regulations are. So we hope that's not what happens. Hi John Weinberger I'm a freelance lobbyist. I'm wondering is there as an outcome from the court where the EPA could not regulate stationary sources. I don't think that's I mean complete lack of authority to regulate stationary sources is not on the table in this case. No. Well I mean what it would have happened had they had they reopened the endangerment finding then absolutely. But what if what if they say to the EPA you know you cannot you know write these thresholds for which you know which stationary sources qualify for regulation. And so you're you know you're in violation of the statute and you know you can't go forward with this program. But the thresholds only apply to the PSD program. They do not apply to the new source performance standard program. So sort of worst case scenario for EPA I think is that the prevention of significant deterioration program doesn't apply to greenhouse gas. Isn't it the most important program the PSD program. No no and as I just said in the president's plan he he relied entirely on one eleven didn't didn't even mention the PSD program. OK. Hi thanks very much. It's Dawn Reeves with inside EPA. I had two quick questions. I was wondering if you could both maybe go back and talk a little bit more about the standing issue given that it was such a huge part of the lower courts ruling. And given that a major issue in the Massachusetts case was whether the states had standing in here just disappeared somehow. And the second question I had is the difference between the eighty three percent and the eighty six percent. I'm I've never been clear where that number comes from. So I don't know I don't know if you do. But isn't there also a huge time difference between you regulate now under PSD version of NSPS for every single sector. And those rules take a long time. So let's do standing first. Do you want to address that. Sure. And I'll say then quickly the numbers are complicated. I was able to sort of back calculate how the American Chemistry Council got there. And I'm happy to explain it. But not in this setting. They calculated it. It worked for their argument. It's not inaccurate. The standing issue isn't is a really interesting one. So the tailoring rule is expressly deregulatory. It is EPA's effort to say we don't want to have to regulate this million plus sources. We're going to regulate a subset of them. Industry wanted to challenge it because they don't want to be regulated at all. But the only injury they could point to is that there were a bunch of people or the only consequence they could point to from that rule is that there were a bunch of entities that were not being regulated because of it. And there was a sort of spirited discussion in the DC circuit of how is that an injury to you? I suppose they could have come back and said it was some sort of competitive injury, but they didn't. So the DC circuit said no injury. What was really interesting about it is that there were some environmental groups initially that were going to be in the case. And it's pretty clear they would have had standing because their complaint would have been the failure to regulate all of these intermediate sources. Causes an environmental injury and they would have had standing. There may or may not have been some back door negotiations to get them out of the case. So that's why we're left with no standing. And it was interesting to me that the Supreme Court was not interested in revisiting that although they've ended up being able to have their cake and eat it too because they don't have to address the standing issue. But they're going to be able to address the continued vitality of the tailoring rule anyway. So I don't think that standing was an issue in this case unlike in the Massachusetts case because in this case you had industries that were adversely affected economically by the regulations. And that was enough. Massachusetts was necessary for the plaintiffs to establish that they were hurt by the lack of regulations such as the sea level rise and Cape Cod which is what gave them standing. So it appeared in a different posture. And as Professor Leiter said here it looks like we're going to have sort of a collateral challenge to the tailoring rule via the effect that these particular provisions of the Clean Air Act have on the PSD rule without having to get to standing. Now on the question of the 83%, 86%, what that's about is those of you who have read the transcript over there know that there's a number in the American Chemistry Council brief saying that if you regulate greenhouse gases from the anyway sources, from the sources that trigger this requirement because of their other pollutants you're getting at 83% of all the greenhouse gas emissions. And if you also regulate the sources that only trigger the rule because of the greenhouse gas emissions you get up to 86%. And so it's not that huge a difference. It's not really apples and oranges. I mean for one thing this is still only applying to new or modified sources. It's not getting at all existing sources. So there's still a lot of existing sources that would escape under any pathway. But the fact that there's such an apparent narrow difference between the two I think was of significance to some of the justices and may persuade them that the way to come out is to just regulate greenhouse gases. Emissions from the anyway sources and not have it as a trigger in and of itself. But I think the bigger point is that it misses the connection that these two programs are supposed to have with each other, right? I mean that's at this point in time NSPS would get you to 83% of the emissions, the greenhouse gas emissions from stationary sources that would be regulated anyway. And PSD would get you to 86%. But they're not static. They're the PSD program is supposed to be technology forcing. It's supposed to improve what options are available for controlling these emissions. And then having improved those options, the NSPS floor is supposed to be raised every eight years over time. And you lose that ratcheting effect if you lose the PSD program. And the New Source Performance Center was adopted by the Clean Air by Congress in 1970. And then in 77 when Congress went back to revise it, it said the NSPS program isn't good enough. And they added the PSD program on top of that because the NSPS program wasn't going to get to where we needed to be at least fast enough in cleaning up the air. So they did want to add that other thing. It's not a trivial program. But when we talk about fossil fuel plants, we do have the powerful tool of 111. Okay. Other questions or comments? We have time for a couple more. Gil McGuire, private attorney. I'm kind of new to the issue, but it seems to me that if there's a strict statutory standard, how is the court going to get around that to allow the EPA to. Interpret? Well, Justice Kagan was saying that we have contradictions within the statute and we have to come out one way or the other. And that's what they're struggling with. The question of what is the precedent for that is exactly what Justice Kennedy asked. He said, what's the precedent you can come up with for there being a quantitative standard set forth in a statute and an agency coming out with a different number. And so far, I haven't seen a lot of citations emerge. No. I mean, the only one that just, sorry, General Verrilli was offering was Morton versus Ruiz, but it's not particularly satisfying. If you go back and look at it, it doesn't do this. So they don't have a great precedent. I mean, but the squarely conflicting intent of on the one hand numbers laid out there in black and white. But on the other hand, Congress is very clear intent to aim only at the larger sources. In this case, you can't effectuate both of those intents. There's just no way to do it. So there needs to be a compromise solution. Either approach is a compromise of the other. You couldn't say all or nothing. In other words, there's a standard. You can't change the standard. So send it back to Congress. Well, we know how much that'll accomplish. Okay. Any other last questions? Dan Watkes. I'm an attorney with McDermott, Will and Emory. I was just wondering if you got any views on the viability of 111D to reach CO2 emissions from existing plants. If the court were to adopt that if you lose, really fall back position. I don't see how it affects that. I mean, I think it's a completely different program. The 111D does not defend, depend at all on any of these thresholds. You know, there are 111D has its own issues, which are surely going to be litigated. They're already been being litigated in the lower views. But I don't see that decision from last week's case directly affecting that. Beyond what I said, what it'll tell us about how much slack the court is going to give EPA and its interpretation of the statute. I agree. But of course, all of this is going to end up kind of getting happening kind of all at the same time in terms of when we expect the ruling from the Supreme Court to come out. By 1st of July, right, before the recess for the summer. And then also EPA's moving forward with regard to 111D. Right, EPA would love to know the decision in this case before they issued the 111D standards. And as you say, they may happen right around the same time. Which will create a very, very interesting scenario. So don't go away in June. That's right. We may very well want to revisit this whole issue because it is going to be such a very huge issue that I think so many policymakers are very, very interested in and concerned about. And are certainly hearing from a lot of people across the country about that. And I know that just in terms of thinking about 111D that we have been hearing from so many different states that are very, very interested in terms of as you raised, in terms of looking beyond the fence. And what this means in terms of efficiency, renewables and how that can be put into greater flexibility for the state's implementation plans. So it is going to be very, very interesting. So everybody stay tuned. The briefing today and the materials will be posted on our website. And please join me in thanking Professor Leiter and Professor Gerard. This was really, really interesting and I hope very helpful to you. Thanks.