Economy, Regs, & Taxes

Challenging the EPA Steamroller

Supreme Court considers costly EPA rule-making abuse.

Lewis Morris · Mar. 27, 2015

The Supreme Court heard oral arguments this week in Michigan v. EPA, a case that has the potential to either check the Environmental Protection Agency’s runaway abuse of power or give it unchecked authority to bankrupt any industry it sees fit.

At issue is the agency’s duty to adhere to the Clean Air Act’s “appropriate and necessary” standard when issuing and enforcing regulations. The EPA published mercury and air toxin standards in 2012 that, by the agency’s own estimates, would cost the economy close to $10 billion annually. The public health benefits supposedly to be gained from the rules would amount to $6 million annually at the most, meaning that every $20,000 of regulatory fees that the energy industry pays would lead to only $1 in public benefit. What a deal.

The EPA argues economic cost is not a factor when considering whether regulations are appropriate and necessary, claiming environmental benefits alone are what concern the agency.

When the case was before the DC Circuit Court of Appeals, Judge Brett Kavanaugh’s dissent took the EPA to task: “Your only statutory direction is to decide whether it is ‘appropriate’ to go forward with the regulation. Before making that decision, what information would you want to know? You would certainly want to understand the benefits from the regulations. And you would surely ask how much the regulations would cost. You would no doubt take both of those considerations – benefits and costs – into account in making your decision. That’s just common sense and sound government practice.”

The EPA, though, is not concerned with common sense or legality. Its goal with the mercury regulations, among the costliest in history, is to drive coal-fired power plants out of business. And it’s all part of Barack Obama’s strategy to make sure electricity prices “necessarily skyrocket.”

During oral arguments before the Supreme Court, Justice Stephen Breyer, one of the Obama administration’s most loyal water carriers, tried to justify the EPA’s position. He suggested that the agency would consider the appropriateness of costs at some later point when enforcing the mercury rule since, under the Clean Air Act, the EPA has the power to apply rules in an “appropriate and necessary” manner.

It’s hoped that the legal minds of at least five Supreme Court justices will be sharp enough to recognize the contradiction of such an argument. If the EPA wasn’t concerned about whether its measures were appropriate at the regulatory rulemaking phase, then where’s the incentive to revisit the appropriate cost later on? Furthermore, if the EPA has the ability to decide whether the regulatory cost was appropriate at a later date, then it’s engaging in an action that it has stated in this case it need not do.

In Michigan v. EPA, the agency argues Rule of Law is irrelevant. If the Supreme Court rightly disagrees, then it will rule against this rogue EPA.

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