Fossil Fuels Tout Win as Supreme Court Halts EPA’s Ozone Plan

States and fossil fuel industry associations hailed the Supreme Court’s decision Thursday to temporarily halt the implementation of the federal “Good Neighbor” plan, a decision that advocates say slashes crucial wandering ozone protections.

The contested rule is made up of two parts: a rejection of state air plans that don’t adequately meet the new limits, and the implementation of a federal replacement. Thursday’s decision freezes the second prong of the rule, which challengers insist will put an undue burden on utility operators and force the early retirement of crucial coal-fired plants.

“The Court’s decision prevents the risk of electric power outages and crippling delays to industrial supply chains for now,” American Petroleum Institute general counsel Ryan Meyers said in a statement.

National Rural Electric Cooperative Association CEO Jim Matheson said the court’s decision “directly speaks to the gravity of EPA’s unlawful Ozone Transport Rule which directly threatens the American economy and way of life.”

Justices granted an emergency stay request from Republican-led states and industry on Thursday in Ohio v. EPA, ruling that the Environmental Protection Agency’s rule fails to “reasonably explain” how its two-part ozone plan will work without states that are temporarily exempt from the program.

“This is a significant victory for states’ sovereignty and the rule of law,” according to Ohio Attorney General and case applicant Dave Yost.

The decision puts a pin in stronger ozone limits during the sweltering summer—when ozone pollution and its health effects are at its worst.

“Obviously we’re disappointed in the decision—especially now, during the middle of the summer ozone season, where we have so many people across the country that are impacted by pollution that is crossing state lines,” EPA Administrator Michael Regan said Thursday at an event at the agency’s headquarters.

Critics claimed that, since multiple states have received temporary stays of the first prong of the program from various regional circuits, the national replacement’s cap-and-trade program can’t be fully implemented.

The majority of Justices agreed, holding that states and industry challengers are likely to prevail in their claims that the EPA’s decisions about the now-fragmented program implementation weren’t adequately reasoned.

‘Death Sentence’

The EPA’s rule—even with adjusted “severability” provisions that account for missing states—still “likely runs afoul” of administrative procedure standards, according to the decision authored by Justice Neil Gorsuch.

“Perhaps there is some explanation why the number and identity of participating States does not affect what measures maximize cost-effective downwind air-quality improvements,” according to Gorsuch. “But if there is an explanation, it does not appear in the final rule.”

The ruling also stoked concern from those worried about the public health effects of air pollution.

States and industry looking to quash ozone regulations and other major air rules are deepening impacts on communities already burdened with increasingly hotter summers and cumulative pollution, according to Rev. Lennox Yearwood Jr., president and CEO of the Hip Hop Caucus.

“The reality is that their business plan is a death sentence for communities who are downwind from their pollution,” Yearwood said.

The hasty decision disregards public health in areas heavily affected by ozone pollution, according to Clean Air Task Force attorney and Ohio v. EPA counsel Hayden Hashimoto.

“While this is a significant setback, we continue to believe EPA is on firm legal and factual ground in implementing the good neighbor provision and are optimistic that the rule will ultimately be upheld by the courts,” Hashimoto said.

Litigation Wave

Justices heard arguments in February, leveling questions on the timing of the petition and whether the EPA had considered all stakeholders in the program’s development.

Though there were signals that much of the bench was leaning against the EPA, Justice Amy Coney Barrett expressed skepticism over the timing of the case—concerns she echoed in her dissent, joined by Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson.

A win for EPA challengers isn’t likely on the merits, nor did the Court “recognize that EPA’s SIP disapprovals may, in fact, be valid,” she said.

With the national replacement rule paused, the EPA’s broader ozone program is fully stalled while the wide smattering of litigation continues across regional circuits, which are in the early stages and may take some time to play out.

Twenty-one states had their air plans denied by the EPA in order to make way for the stronger federal alternative, which prompted a wave of judicial stays that froze the agency’s rejections in multiple GOP-led states. The agency pivoted with an interim rule that only applies the national program in 11 states—the rule paused Thursday by the Supreme Court.

“Today’s decision effectively deciding the fate of EPA’s rule regarding air pollution that travels across state lines using the emergency docket confirms that this Court is going to find a way to step in whenever it disagrees with how EPA is regulating on difficult environmental issues,” Alston & Bird partner Kevin Minoli said in an email.

The case is Ohio v. EPA, U.S., No. 23A349, Decision 6/27/24.