With or without the EPA, coal is powering down

To climate activists, the Supreme Court’s decision last week to limit the authority of the Environmental Protection Agency was a step backward. To pro-energy advocates, it was a step forward. In reality, the decision does little to change the course that the energy industry was already on.

In a majority opinion written by Chief Justice John Roberts, the court found that the EPA’s Clean Power Plan had overstepped the authority granted by Congress in Section 111 of the 1970 Clean Air Act. By enacting rules that would require a substantial change in the makeup of the American energy industry, the EPA had taken on an authority that Congress would have likely reserved for itself, Roberts said.

“It is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme,” Roberts wrote. “A decision of such magnitude and consequence rests with Congress itself, or … a clear delegation from that representative body.”

The regulation in question, the EPA’s “Clean Power Plan,” would have theoretically cut coal power plants out of the American energy picture by requiring them to meet impossibly high carbon dioxide emission standards. Coal produces higher greenhouse gas emissions than other forms of fuel such as diesel, propane, and natural gas. Instead of trying to whittle down the amount of carbon dioxide coming from coal plants, the EPA argued, the plants should be altogether replaced with less harmful sources of energy.

And that’s what the Clean Power Plan was poised to do—but it never got the chance. Almost as soon as the regulation was announced back in 2015, a number of legal challenges stopped the EPA in its tracks. The rule was later retracted, but the Supreme Court agreed to hear the case anyway.

To figure out whether the EPA acted out of line, Roberts explained, the court applied the “major questions doctrine.” Under this standard, government agencies must display a clear congressional mandate to wield industry-changing power. In a 6-3 decision, the court’s majority ruled the EPA failed to demonstrate such a mandate.

The court’s three dissenting justices disagreed with the application of the major questions doctrine and critiqued the majority for what they saw as a jump to an unnecessary level of scrutiny. Justice Elena Kagan, joined by Sonia Sotomayor and Stephen Breyer, argued in her dissenting opinion that instead of focusing on what Congress “probably” meant, the court should have evaluated the case on three considerations: the rule itself, its relation to the regulatory body, and the context of the congressional statute.

Under that standard, Kagan asserted, the EPA had the authority to limit emissions—and had been expressly granted that power by Congress, if admittedly with vague boundaries. Kagan pointed out that the change required by the Clean Power Plan wasn’t as extreme as the majority was making it out to be. Coal had been on a downward trend for almost a decade, and the industry had shifted accordingly, moving to cleaner, more efficient sources of energy.

“In effect, the plan predicted market behavior, rather than altered it,” Kagan wrote.

Because of its less-than-industry-shifting change, she asserted, the regulation didn’t need a specific mandate from Congress. Since 2008, the volume of coal produced in the United States has gone down by more than half, according to the U.S. Energy Information Administration. Americans’ energy consumption has stayed relatively stable during that time but shifted more to the natural gas and petroleum sectors.

West Virginia v. EPA won’t become a landmark case because of what it changes, but because of the precedent it lays for future cases. The decision will likely narrow the scope of what regulatory agencies can do.

The absence of EPA regulations directly limiting technologies like coal might make it easier for them to stick around a little longer. Alan Hamlet, a professor of civil and environmental engineering at the University of Notre Dame, said because of the court’s decision, state representatives have a bit more wiggle room to protect coal-powered plants—even as their use continues to decline. Political candidates trying to win or retain office in states that have large coal industries have strong political incentives to represent their interests. According to the U.S. Energy Information Administration, Wyoming, West Virginia, Pennsylvania, Illinois, and North Dakota together produce more than 70 percent of the coal in the U.S.

“[The EPA’s regulation] would have made it difficult for politicians to protect the coal industry,” Hamlet said. “Now, with the EPA not allowed to suggest moving away from coal as one of the key things that needs to be done, that opens the door for politicians—either in individual states or collectively via Congress—to prop up the coal industry, even though it doesn’t make sense from a market perspective.”

He expects the court’s ruling will be challenged in some way in the next few months, but he said he doubts it will come from congressional action, citing a substantial political divide on the issue.

The Biden administration “will continue using lawful executive authority, including the EPA’s legally-upheld authorities, to keep our air clean, protect public health, and tackle the climate crisis,” the White House said in a statement after the decision last week. The president has not yet provided specifics on what that could look like.