Posted by: Steven M. Taber | October 8, 2009

EPA’s Proposed Regulation of CO2 and Other GHG Emissions from Large Sources: “Absurd Results,” Indeed!

Last week, when the EPA proposed regulations that would require permits of sources with a potential to emit over 25,000 tons per year of six greenhouse gases, they knew they had a legal hurdle to overcome.  As Marlo Lewis, a noted climate change skeptic, and Senior Fellow at the Competitive Enterprise Institute argued in a September 2, 2009, article that any exemption for smaller emitters of CO2 would be illegal:

A PSD source is “major” if it is in one of 28 listed categories and has a potential to emit 100 tons per year (TPY) of an air pollutant, or if it is any other type of establishment and has a potential to emit 250 TPY.  And there’s the rub.  Whereas only large industrial facilities have a potential to emit 250 TPY of air contaminants such as sulfur dioxide or particulate matter, an immense number and variety of entities – office buildings, hotels, big box stores, enclosed malls, small manufacturing firms, even commercial kitchens – have a potential to emit 250 TPY of CO2. . . . But if the Greenwire article is accurate, EPA is opting for the most brazenly illegal option of all.  It proposes to revise, on its own authority, the PSD threshold from 250 TPY to 25,000 TPY.

No doubt, the drafters of the EPA proposed regulation were aware of this problem, so when the proposed regulations were announced, it came as no surprise that the EPA spends considerable time in the Preamble (approximately 100 double-spaced pages) explaining the legal basis for the EPA’s authority to set the threshold at 25,000 TPY instead of 250 TPY.

The EPA relies on what has been called the “Absurd Results” doctrine.  In a nutshell, that doctrine states that an agency may depart from the literal application of statutory provisions when such literal application will produce results that are “so illogical or contrary to sensible policy as to be beyond anything that Congress could reasonably intended.”  EPA Preamble, p.63.  The “doctrine” dates back at least to the end of the 19th century when the U.S. Supreme Court in the case of Holy Trinity Church v. U.S., 143 U.S. 457, 460 (1892) decided that the term “any alien” as contained in the Alien Contract Labor Law does not apply to one who comes to this country under contract to enter the service of a church as its rector.  The Supreme Court went on to state:

It is a familiar rule that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit nor within the intention of its makers. This has been often asserted, and the Reports are full of cases illustrating its application. This is not the substitution of the will of the judge for that of the legislator; for frequently words of general meaning are used in a statute, words broad enough to include an act in question, and yet a consideration of the whole legislation, or of the circumstances surrounding its enactment, or of the absurd results which follow from giving such broad meaning to the words, makes it unreasonable to believe that the legislator intended to include the particular act. . . . The language of the act, if construed literally, evidently leads to an absurd result. If a literal construction of the words of a statute be absurd, the act must be so construed as to avoid the absurdity.

143 U.S. at 459; see also, U.S. v. Ron Pair Enterprises, Inc. 489 U.S. 235, 242 (1989) (the plain meaning of a statutory provision is not conclusive “in the ‘rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the intentions of the drafters’ . . . [in which case] the intention of the drafters, rather than the strict language, controls”).  Although rather an old rule, it has been cited with favor more recently, for example by the U.S. Court of Appeals for the District of Columbia Circuit in the case Mova Pharmaceutical v. Shalala, 140 F.3d 1060, (D.C. Cir. 1998) and Environmental Defense Fund v. EPA, 82 F.3d 451, 468-69 (D.C. Cir. 1996) (“This is one of those rare cases . . . [that] requires a more flexible, purpose-oriented interpretation if we are to avoid ‘absurd or futile results’”).

So what are the absurd results that the EPA predicts will happen should it be forced to regulate down to 250 TPY instead of 25,000 TPY? The EPA states that if the lower 250 TPY number is used—which was intended to cover the air pollutants specifically mentioned in the Clean Air Act, not air pollutants as pervasive as CO2 and other GHG— farms, restaurants, hospitals, schools, churches and other small businesses would be forced to comply with the PSD provisions of the Clean Air Act. The Clean Air Act was not designed to regulate small sources, since they could not afford the “best available control technology” required.  Moreover, the EPA and state air quality agencies are not equipped to handled the influx of Title V permit applications, which would increase to 41,000 per year, up from 300 today, while those subject to the EPA’s construction permitting would jump to 6.1 million from 14,000.  The EPA, in the Preamble states that a literal application of the law would lead to “an unprecedented increase” that would harm “an extraordinarily large number of sources.” The agency goes on to predict years of delay and bureaucratic backlog that “would impede economic growth by precluding any type of source—whether it emits GHGs or not—from constructing or modifying for years after its business plan contemplates.”

This has put anti-EPA organizations, like the National Association of Manufacturers (NAM) and the Chamber of Commerce, in the rather curious position of opposing the exemption for small businesses.  Here is the problem:  if they oppose the 25,000 threshold in court as being illegal, they stand a decent chance of having the regulation overturned.  However, the result could be that the threshold would be lowered to 250 TPY thereby subjecting their members to a regulation that would not have applied to them as proposed by the EPA.  Thus, the anti-EPA forces are reduced to decrying the proposed regulations as an attempt by the Obama Administration to strong-arm Climate Change legislation so that EPA does not have to (or is statutorily forbidden from) implementing the proposed regulations.  As a recent Wall Street Journal editorial concluded:

Shouldn’t the same “absurd results” theory pertain to shoehorning carbon into rules that were written in the 1970s and whose primary drafter—Michigan Democrat John Dingell—says were never intended to apply? Just asking. Either way, this will be a feeble legal excuse when the greens sue to claim that the EPA’s limits are inadequate, in order to punish whatever carbon-heavy business they’re campaigning against that week. Obviously President Obama is hellbent on punishing carbon use—no matter how costly or illogical. And of course, there’s no politics involved, none at all.

What the Wall Street Journal failed to take into account, however, was the fact that the U.S. Supreme Court decided in Massachusetts v. EPA that CO2 and six other GHG are “air pollutants” within the meaning of the Clean Air Act.  This forced the EPA to perform an endangerment finding (which, it might be added, the Bush Administration EPA had plenty of time to do, but did not) on CO2 and the six GHG.  Thus, whether the “primary drafter” says that the Clean Air Act was never intended to apply to “carbon,” was irrelevant once the Supreme Court held that CO2 and other GHG are “air pollutants” under the Clean Air Act.

With the use of the “absurd results” doctrine, a doctrine that is based on legislative intent rather than “judicial legislation,” the EPA successfully backed the anti-GHG regulation forces, such as Mr. Lewis, into a corner.  In the end, they will have to decide whether to throw the small-emitters and small businesses under the bus in the name of preserving the large-emitters’ right to emit vast quantities of CO2 and other GHGs.

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