Reply Brief — Electric Generators for a Sensible Transition, Applicant v. Environmental Protection Agency, et al.

No. 24A106

IN THE

SUPREME COURT OF THE UNITED STATES

____________

ELECTRIC GENERATORS FOR A SENSIBLE TRANSITION,

Applicant,

v.

ENVIRONMENTAL PROTECTION AGENCY and MICHAEL S. REGAN, Administrator,

United States Environmental Protection Agency,

Respondents.

________________________

REPLY IN SUPPORT OF EMERGENCY APPLICATION

FOR IMMEDIATE STAY OF FINAL AGENCY ACTION

PENDING DISPOSITION OF PETITION FOR REVIEW

________________________

DIRECTED TO THE HONORABLE JOHN G. ROBERTS, JR.,

CHIEF JUSTICE OF THE SUPREME COURT OF THE UNITED STATES

AND CIRCUIT JUSTICE FOR THE DISTRICT OF COLUMBIA CIRCUIT

________________________

ALLISON D. WOOD

MAKRAM B. JABER

AARON M. FLYNN

MCGUIREWOODS LLP

888 16th Street NW, Suite 500

Black Lives Matter Plaza

Washington, DC 20006

(202) 857-2420

PAUL D. CLEMENT

Counsel of Record

C. HARKER RHODES IV

NICHOLAS A. AQUART*

CLEMENT & MURPHY, PLLC

706 Duke Street

Alexandria, VA 22314

(202) 742-8900

paul.clement@clementmurphy.com

*Supervised by principals of the firm who are

members of the Virginia bar

Counsel for Applicant Electric Generators for a Sensible Transition

August 23, 2024

TABLE OF CONTENTS

TABLE OF AUTHORITIES ............................................................................................. ii

INTRODUCTION ............................................................................................................. 1

REASONS FOR GRANTING THE APPLICATION ...................................................... 4

I.

The Rule Exceeds EPA’s Statutory Authority And Contravenes The

Clean Air Act .......................................................................................................... 4

A.

Congress Has Not Granted EPA the Authority to Restructure

the Nation’s Overall Mix of Electricity Generation ................................. 4

B.

The Rule Cannot Be Reconciled with Section 111’s

Requirements ............................................................................................ 10

C.

1.

90% CCS has not been “adequately demonstrated” ................... 10

2.

90% CCS is not “achievable” ......................................................... 15

3.

Co-firing coal-fired plants with natural gas is

impermissible generation-shifting and not achievable .............. 16

Other Statutes Underscore that the Rule Is Unlawful ......................... 17

II.

The Rule Will Cause Substantial Irreparable Harm ........................................ 18

III.

The Balance Of Equities And The Public Interest Favor A Stay ..................... 20

CONCLUSION ................................................................................................................ 20

TABLE OF AUTHORITIES

Cases

Ala. Ass’n of Realtors v. Dep’t of Health & Human Servs.,

594 U.S. 758 (2021) ....................................................................................................... 5

Biden v. Nebraska,

143 S.Ct. 2355 (2023) .................................................................................................... 5

Carr v. United States,

560 U.S. 438 (2010) ..................................................................................................... 10

Dep’t of Com. v. New York,

588 U.S. 752 (2019) ....................................................................................................... 7

FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120 (2000) ....................................................................................................... 6

League of Women Voters v. Newby,

838 F.3d 1 (D.C. Cir. 2016) .......................................................................................... 20

Loper Bright Enters. v. Raimondo,

144 S.Ct. 2244 (2024) ...................................................................................................11

Massachusetts v. EPA,

549 U.S. 497 (2007) ..................................................................................................... 20

MCI Telecomms. Corp. v. AT&T Co.,

512 U.S. 218 (1994) ....................................................................................................... 6

Nat’l Lime Ass’n v. EPA,

627 F.2d 416 (D.C. Cir. 1980)...................................................................................... 17

Ohio v. EPA,

144 S.Ct. 2040 (2024) .............................................................................................. 3, 19

West Virginia v. EPA,

597 U.S. 697 (2022) ................................................................ 1, 4, 5, 6, 8, 9, 10, 16, 20

Statutes

26 U.S.C. §45Q ................................................................................................................ 18

42 U.S.C. §7411 ..................................................................................................... 2, 15, 16

42 U.S.C. §7607 ............................................................................................................... 19

42 U.S.C. §15962 ....................................................................................................... 13, 17

Regulations

40 C.F.R. §60.5785b ........................................................................................................ 20

80 Fed. Reg. 64,662 (Oct 23, 2015) .................................................................................. 7

89 Fed. Reg. 39,798 (May 9, 2024)................................ 1, 7, 8, 10, 12, 13, 14, 15, 16, 17

ii

INTRODUCTION

Only two years ago, this Court made clear that Congress has not granted EPA

the authority to “substantially restructure the American energy market.”

West

Virginia v. EPA, 597 U.S. 697, 724 (2022). Instead of respecting that ruling or

obtaining new authority from Congress, EPA has viewed that ruling as an obstacle to

be circumnavigated, relying on the same statutory authority to set new emissions

standards that aim to achieve the same forbidden generation-shifting result. 89 Fed.

Reg. 39,798 (May 9, 2024) (“Rule”). The sole difference is that EPA now seeks to reach

that result indirectly rather than directly, by setting standards that cannot be

achieved through any existing adequately demonstrated technology. And one of EPA’s

new standards is not even indirect; it simply demands that coal plants convert to 40%

natural gas. That modest variation in approach should not change the outcome. Just

like the Clean Power Plan, EPA’s renewed effort to transform the Nation’s energy

industry exceeds its statutory authority under §111 of the Clean Air Act. And just

like the Clean Power Plan, EPA’s renewed effort to dictate fuel choice and phase out

disfavored generation should be stayed pending judicial review.

EPA’s opposition only confirms that a stay is warranted. The agency does not

contest the Rule will have sweeping economic impact and will substantially shift the

Nation’s overall mix of electric generation; it argues only that the major questions

doctrine should not apply because the Rule purports to rely on technology-based

standards rather than openly mandating generation-shifting. But that is not even

true as to the 40% “co-firing” requirement—a euphemism for a mandate that coal

plants convert to natural gas for nearly half their heat input—and beside the point

1

in all events. Every major questions case involves an agency purporting to ground

transformative change in existing statutory authority. The fact that EPA’s last power

grab was unusually overt does not give EPA a pass to achieve the same generationshifting end via more conventional means. As the Court has already recognized, EPA

lacks the statutory authority to tackle pollution by restructuring the Nation’s energy

sector and generation mix. This latest effort may be slightly more subtle, but it is no

less unlawful. If the federal government is going to require a fundamental shift in

the Nation’s generation mix or phase out coal generation, that policy change must

come from Congress, not unelected officials at EPA.

Even setting aside the major questions doctrine, the Rule cannot be reconciled

with the requirements of §111. After convincing the D.C. Circuit to deny a stay based

on circuit precedent that allowed EPA to rely on projections rather than technology

that has already been adequately demonstrated, EPA now shifts gears and concedes

that the statute limits the agency to imposing a system of emission reduction that

“has been adequately demonstrated” today, not one that might be demonstrated in

the future. 42 U.S.C. §7411(a)(1). That concession is fatal, as EPA still cannot point

to any power plant that has ever demonstrated carbon capture and storage with a

90% carbon dioxide capture rate (“90% CCS”) on a consistent facility-wide basis.

EPA’s reliance instead on experimental uses, planned future projects, and vendor

promises is nearly the opposite of adequate demonstration.

EPA also has no

meaningful response to the extensive (and expensive) infrastructure that would have

to be built to implement 90% CCS, which confirms that its standards based on that

2

technology are not “achievable” under §7411(a)(1). EPA’s attempts to justify its 40%

co-firing standards are even less successful; not only are those standards based on

direct generation-shifting, but they are unachievable as well, which EPA implicitly

recognizes by giving coal plants an “irrevocable” retirement out from this infeasible

conversion. EPA’s effort to pass this off as “regulatory flexibility” ignores that this

retirement option must be invoked early and irrevocably. For any and all of these

reasons, Applicant and the many others challenging the Rule are overwhelmingly

likely to succeed on the merits.

The remaining stay factors are amply satisfied. As Applicant’s members have

attested in their declarations, they face immediate and devastating impacts if the

Rule is not stayed, including significant compliance costs and the need to make

imminent and irreversible decisions about plant closures and replacement

generation. EPA’s contrary assertion that electric generators need do nothing at all

to comply with the Rule for nearly a year, and nothing but minimal “feasibility work”

for another year after that, is neither correct nor entitled to any deference. And given

the concrete harms that the Rule poses to the public at large in the form of higher

electricity prices, reduced grid reliability, and job losses, the balance of harms and the

public interest tip heavily in favor of a stay. This Court should grant the application

and stay the Rule pending judicial review. 1

EPA asserts that a party seeking a stay from this Court “must also show a

reasonable probability that the Court would grant certiorari.” U.S.Opp.13. That is

incorrect. See, e.g., Ohio v. EPA, 144 S.Ct. 2040, 2052 (2024). In any event, if the

1

3

REASONS FOR GRANTING THE APPLICATION

I.

The Rule Exceeds EPA’s Statutory Authority And Contravenes The

Clean Air Act.

A. Congress Has Not Granted EPA the Authority to Restructure the

Nation’s Overall Mix of Electricity Generation.

This case “is a major questions case.” West Virginia, 597 U.S. at 724. Like the

Clean Power Plan, the Rule affects “a significant portion of the American economy,”

id. at 722, targets an industry that is “among the largest in the U.S. economy, with

links to every other sector,” id. at 745 (Gorsuch, J., concurring), and “require[s]

‘billions of dollars in spending’ by private persons or entities,” id. at 744. And like the

Clean Power Plan, allowing the Rule to stand would represent “a ‘transformative

expansion in [EPA’s] regulatory authority,’” enabling EPA to “restructur[e] the

Nation’s overall mix of electricity generation” by the facile expedient of mandating

coal plants to either shift nearly half their heat input to natural gas, comply with

emissions standards that disfavored sources cannot meet, or commit to retire by 2032.

Id. at 720, 724 (majority op.). As this Court explained just two years ago, Congress

simply did not task EPA with “balancing the many vital considerations of national

policy implicated in deciding how Americans will get their energy.” Id. at 729. Those

“basic

and

consequential

tradeoffs”

are

instead

“ones

that

Congress”—

representatives of the People, including people living in states with important coal

and gas resources—“would likely have intended for itself.” Id. at 730.

D.C. Circuit were to uphold the Rule, this Court would likely grant certiorari for the

same reasons as in West Virginia.

4

1. EPA does not dispute the vast economic significance of the Rule or its

“substantial aggregate costs on regulated entities.” U.S.Opp.21-22. Instead, EPA

dismisses those costs as not “unusually large within the specific context of powerplant regulation” and insists that “cost alone does not trigger major-questions

analysis.” U.S.Opp.21. But the fact that this Court “often resolves multibillion-dollar

cases without invoking the major-questions doctrine,” U.S.Opp.21, simply reflects

that Congress sometimes expressly charges an agency with financially consequential

decisions.

And this Court has already held that the financially consequential

decisions concerning the optimal mix of generation sources and phasing out fossil

generation are not ones that Congress has granted to EPA. West Virginia, 597 U.S.

at 728-30. The financial costs of those weighty and controversial decisions are just

one factor that this Court has pointed to in definitively deciding that these issues lie

beyond EPA’s ken. See id.; accord, e.g., Biden v. Nebraska, 143 S.Ct. 2355, 2373 (2023)

(agency action whose “economic and political significance” was “staggering by any

measure” plainly “triggered analysis under the major questions doctrine”); Ala. Ass’n

of Realtors v. Dep’t of Health & Human Servs., 594 U.S. 758, 764 (2021) (per curiam)

(relying on “economic impact” in finding the major questions doctrine applicable).

Costs aside, EPA never disputes that the Rule would “substantially restructure

the American energy market”—precisely what West Virginia held EPA lacks the

authority to do. 597 U.S. at 724. Instead, EPA argues that all that matters is how it

goes about restructuring the market, such that it is only prohibited from using the

direct “generation-shifting approach that the Court disapproved in West Virginia,”

5

not from reaching the same result through a purported “source-based approach,” even

one requiring thousands of miles of new pipelines and vast storage sites. U.S.Opp.14.

Because EPA has opted for the latter approach, the agency claims, neither the major

questions doctrine nor West Virginia’s clear limits on EPA’s authority have any

application. See U.S.Opp.15, 20-21; States.Opp.18-19; Power.Cos.Opp.7-8.

That narrow reading of West Virginia misses the mark. Every one of this

Court’s major questions decisions involved an agency that purported to ground its

overreach in existing statutory authority. MCI Telecommunications Corp. v. AT&T

Co. purported to involve just another detariffing, 512 U.S. 218 (1994); FDA v. Brown

& Williamson Tobacco Corp. purported to involve just another drug regulation, 529

U.S. 120 (2000); and so on down the line. The fact that EPA’s last overreach was

unusually unsubtle does not give it license to achieve the same forbidden generationshifting result via a purported exercise of more ordinary statutory authority. The

fundamental problem with the Clean Power Plan was not that it relied on a novel

approach to standard-setting, but that it set standards that would “forc[e] a shift

throughout the power grid from one type of energy source to another.” West Virginia,

597 U.S. at 727-28; see id. at 714 (explaining that the Clean Power Plan’s standards

were “so strict that no existing coal plant would have been able to achieve them”

without engaging in generation-shifting).

This Court rejected that claim of

“unprecedented power over American industry,” explaining that Congress had not

tasked EPA with “deciding how Americans will get their energy.” Id. at 728-29. That

reasoning does not depend on whether EPA tries to impose its decision about how

6

Americans will get their energy through an explicit generation-shifting mandate or

through indirect “technology-based” standards. Contra U.S.Opp.15. And the Rule at

issue here does both—explicitly requiring many coal plants to shift 40% of their

generation to natural gas, or to comply with impossible technology-based standards

that effectively force early retirements and radically shift the generation mix across

the energy sector.

2. EPA argues that courts “generally must accept ‘an agency’s stated reasons

for acting,’” and so the Rule’s stated goal of reducing emissions should make it

immune to major questions scrutiny because reducing emissions generally falls

within EPA’s statutory authority. U.S.Opp.16 (quoting Dep’t of Com. v. New York,

588 U.S. 752, 781 (2019)); see U.S.Opp.16-17 (arguing that the major questions

doctrine does not apply because “[i]n promulgating the Rule … EPA stated that the

Rule ‘is not directed at improvement of the overall power system’” (quoting 89 Fed.

Reg. at 39,899)); Power.Cos.Opp.9-10. That is a pure non sequitur. Everyone in West

Virginia understood that shifting the generation mix in the Nation’s energy sector

would impact emissions; indeed, that was the point of the Clean Power Plan, see 80

Fed. Reg. 64,662, 64,662-63 (Oct. 23, 2015). The problem was that EPA’s more modest

statutory mission is to address the emissions of the Nation’s existing mix of

generation sources, not to attack the perceived source of the problem by restructuring

the national economy or the energy sector.

fundamental limitation.

7

The Rule here runs afoul of that

3. EPA contends that there is nothing special about the Rule, because all

emissions standards “impose some costs on regulated plants” and so “may prompt

some plants to close or reduce their operations,” meaning that all emissions standards

may have some effect on the nationwide generation mix.

U.S.Opp.17; see

Power.Cos.Opp.8-9. But as in West Virginia, there is an “obvious difference” between

standards that “may end up causing an incidental loss of coal’s market share” and

standards that will “restructur[e] the Nation’s overall mix of electricity generation.”

597 U.S. at 720, 731 n.4; see id. at 730-31 (rejecting EPA’s asserted “authority to

require a large shift from coal to natural gas, wind, and solar”). Here, the Rule

underscores that there is nothing incidental about its effect on the generation mix, as

it effectively mandates partial conversion from coal to gas and envisions (and locks

in) forced retirements. Like the Clean Power Plan, the Rule here is anything but

“just business as usual,” and the dramatic effects it will have on nationwide energy

markets are anything but “incidental.” Id. at 731 n.4.

4. As emphasized, EPA’s overreach in the Rule is not even disguised when it

comes to the 40% natural gas co-firing standard, which literally relies on generationshifting as EPA’s purported “best system of emission reduction.” See 89 Fed. Reg. at

39,801, 38,841. That cannot remotely be reconciled with West Virginia. See 597 U.S.

at 728 n.3 (“doubt[ing]” that EPA could “simply requir[e] coal plants to become

natural gas plants”); Appl.21. EPA claims again that West Virginia is satisfied as

long as the system “operates at the level of an individual facility rather than at the

grid level,” U.S.Opp.19, but West Virginia made clear that even at the facility level,

8

EPA cannot require a plant “to effectively cease to exist” or to transform into one

powered by a different fuel. 597 U.S. at 728 n.3. Indeed, EPA ultimately concedes

the point, admitting that it “could not carry fuel-switching to the point of … requiring

that an existing power plant effectively become a different kind of plant.”

U.S.Opp.19.

But West Virginia’s reasoning is not limited to generation-shifting

mandates that require complete transformation, contra U.S.Opp.19 (misreading 597

U.S. at 728 n.3); a mandate to shift 40% of a coal plant’s generation to natural gas is

no more defensible than mandating a 51% or 100% shift.

It is still a naked

generation-shifting mandate, and it is still forbidden by West Virginia and the major

questions doctrine.2

5. Given the economic significance and transformative nature of the power it

claims, EPA needs “more than a merely plausible textual basis” for its asserted

authority; instead, the agency must point to “clear congressional authorization” for

its action. West Virginia, 597 U.S. at 723. EPA cannot do so here—and indeed, it

does not even try.

authorization).

See U.S.Opp.13-22 (never asserting clear congressional

As in West Virginia, EPA’s general statutory authority to set

emissions standards does not clearly authorize it to set standards that would

substantially restructure the American energy market. 597 U.S. at 732-35. Instead,

While West Virginia noted that EPA itself had described “fuel-switching” as a

“traditional air pollution control measure[],” the Court said nothing remotely

approving of that approach. 597 U.S. at 727. Instead, the Court specifically rejected

the assertion that EPA could rely on fuel-switching to force coal plants to become

natural gas plants. Id. at 728 & n.3; contra U.S.Opp.19; States.Opp.18.

2

9

“[a] decision of such magnitude and consequence rests with Congress itself, or an

agency acting pursuant to a clear delegation from that representative body.” Id. at

735. Because no such clear delegation exists here, the Rule cannot stand.

B. The Rule Cannot Be Reconciled with Section 111’s Requirements.

1.

90% CCS has not been “adequately demonstrated.”

By its plain text, §111 requires a system of emission reduction that already

“has been adequately demonstrated”—not one that EPA believes will be or may be

adequately demonstrated in the future. Id.; see Carr v. United States, 560 U.S. 438,

448 (2010) (“Congress use[s] the present perfect tense to ‘denot[e] an act that has been

completed.’” (emphasis added) (citation omitted)). That statutory language forecloses

the Rule’s selection of 90% CCS as a best system of emission reduction. While that

approach may be a promising avenue for future emission reduction efforts, it is not

adequately demonstrated today. On the contrary, EPA’s opposition confirms that it

cannot point to a single full-scale facility that has ever achieved a consistent 90%

capture rate—which is the standard that EPA now seeks to impose on every existing

coal plant that intends to operate past 2038 and every new gas plant that intends to

generate more than 40% of its capacity. The limited experimental results that EPA

cites to justify that standard only underscore that adequate demonstration is lacking

and that the agency’s approach cannot be squared with the statutory text.

1. EPA recognizes—in a shift from its position below—that the “plain text” of

§111 requires that the technology EPA selects as its system of emissions reduction

must “currently be demonstrated,” not that it be adequately demonstrated at some

point in the future. U.S.Opp.30 (quoting 89 Fed. Reg. at 39,830); cf. U.S. C.A.Br.3810

39 (asserting based on D.C. Circuit precedent that adequate demonstration can be

based on a “reasonable projection of what can be achieved” in the future by

“extrapolating from reliable data”). That concession creates obvious problems for EPA

given the experimental nature of the system that EPA has mandated and the reality

that no plant today operates with 90% CCS.

Those problems are exacerbated in the post-Chevron world where claims to

agency deference to second-best constructions of statutes no longer carry the day.

EPA tries to revive a plea for deference by claiming that §111 “‘expressly delegate[s]’

to EPA the responsibility to judge adequate demonstration.” U.S.Opp.24-25 (quoting

Loper Bright Enters. v. Raimondo, 144 S.Ct. 2244, 2263 (2024)). But even when a

statute “delegates authority to an agency,” courts must still “independently identify”

and “police the outer statutory boundaries of those delegations,” to “ensur[e] that the

agency acts within” its authority. Loper Bright, 144 S.Ct. at 2268, 2273. And the

whole point of the “adequate demonstration” language is to focus the agency and

reviewing courts on what has been adequately demonstrated in the real world today

to guard against mandating the future or imposing aspirational standards in a

mandate-it-and-they-will-comply manner. The question whether a technology that

has never been implemented anywhere and has been unable to sustain the mandated

levels even in experiments has been “adequately demonstrated” is a question of

statutory interpretation, not a question of agency discretion.

2. EPA’s reliance on 90% CCS as a best system of emission reduction fails the

statutory text under any standard. EPA begins by arguing that “carbon capture writ

11

large has been adequately demonstrated,” because the technology “was patented

nearly 100 years ago in the 1930s” and “has been used in a variety of industrial

applications.” U.S.Opp.26; see NGOs.Opp.9-11. But the Rule is not based on “carbon

capture writ large,” or on 1930s-era carbon capture technology; it is based on 90%

CCS, which EPA does not dispute has never been consistently achieved at any fullscale facility. EPA cannot show adequate demonstration of the technology selected in

the Rule by relying on the demonstration of its Depression-era predecessor.

As to 90% CCS for coal plants, EPA relies on three facilities that it claims have

“already achieved” “the 90% rate required by the Rule”: Petra Nova, Plant Barry, and

Boundary Dam Unit 3. U.S.Opp.27; see NGOs.Opp.12-15. None comes close to

providing adequate demonstration of 90% CCS.

Petra Nova operated for only three years, 89 Fed. Reg. at 39,849-50, and was

offline with technical problems for more than a third of that time, NRECA Comments

at 11 (EPA-HQ-OAR-2023-0072-0770). EPA’s view that the “challenges faced by the

plant could be overcome,” U.S.Opp.37, cannot substitute for adequate demonstration

today, which EPA concedes is what the statute requires, U.S.Opp.30. Moreover, Petra

Nova came nowhere near achieving “92.4 percent” capture of the whole plant’s carbon

emissions, contra U.S.Opp.27; instead, it was a slipstream system designed to capture

only 33% of the carbon emissions from one of the plant’s four units, and it fell short

of even that goal. See 89 Fed. Reg. at 39,850. EPA also ignores emissions from the

“auxiliary” unit used to power its capture equipment, further reducing the total

capture rate. See id. Overall, applying the continuous, facility-wide standards of the

12

Rule itself, Petra Nova captured less than 10% of the facility’s emissions—a tiny

fraction of the rate the Rule requires. See Buckeye Institute Comments at 14 (EPAHQ-OAR-2023-0072-0622). On top of all that, Petra Nova was funded by the Energy

Policy Act of 2005, which precludes EPA from relying on Petra Nova (and other

similarly funded projects) alone to show adequate demonstration.

42 U.S.C.

§15962(i)(1); see 89 Fed. Reg. at 39,849 n.304, 39,852 n.334, 39,878-79 & n.613.

Plant Barry does equally little to show adequate demonstration, which is why

EPA gave it all of a paragraph in its 267-page Rule. See 89 Fed. Reg. at 39,850. It is

also a slipstream system, and it achieved less than 5% carbon capture from the plant

as a whole under the Rule’s facility-wide standards. See Buckeye Institute Comments

at 10. Plant Barry also received funding under the Energy Policy Act, see 89 Fed.

Reg. at 39,849-50, which precludes EPA from relying on it.

As for Boundary Dam Unit 3, another slipstream system, EPA concedes that it

did not achieve 90% CCS.

U.S.Opp.27.

More important, the system “has not

consistently operated at … total capture efficiency,” as the plant “ran less than 100

percent of the flue gas through the capture equipment” and achieved no carbon

capture at all whenever the system was “offline for maintenance.” 89 Fed. Reg. at

39,848. The Rule itself acknowledged that the system fell short of 90% due to

“technical challenges.” Id.; contra U.S.Opp.36-37. And the Canadian owner felt the

need to correct the record to clarify that the “CCS facility is not capturing 90 per cent

of emissions from Boundary Dam Unit 3” and “target[s]” a “65 to 70”% capture rate.

See SaskPower Comments (EPA-HQ-OAR-2023-0072-0687).

13

Unable to cite any coal plant that has actually achieved 90% CCS on a

consistent facility-wide basis, EPA turns to projects “in advanced stages of

development”

“designed

to

exceed

90% capture,”

and

vendor

statements

“guarantee[ing]” 90% capture rates.

U.S.Opp.27-28.

At the risk of stating the

obvious, plans and promises for the future cannot show adequate demonstration now.

3. The record is even worse for gas plants. EPA begins by relying on its

purported demonstration of 90% CCS at coal plants, claiming that evidence is

sufficient because carbon capture is “‘identical’ … in all its ‘essentials’” at coal and

gas plants. U.S.Opp.28 (brackets omitted) (quoting 89 Fed. Reg. at 39,926); see

U.S.Opp.37-38; NGOs.Opp.16. For all the reasons already described, the projects on

which EPA relies cannot show adequate demonstration of 90% CCS even as to coal

plants, let alone gas plants with completely different fuel that produces completely

different exhaust. See Comments of the Power Generators Air Coalition, Attachment

C, at 2 (EPA-HQ-OAR-2023-0072-0710) (“Power Generators Comments”) (explaining

the large difference in carbon dioxide concentrations in gas plant and coal plant

exhaust); Appl.17 n.4; cf. U.S.Opp.40 (declining to address this issue).

EPA briefly mentions two gas plants that it claims achieved 90% CCS,

U.S.Opp.28, but says little more about either one—and for good reason.

The

Bellingham Cogeneration Facility, which closed in 2005, used CCS only on a tiny 40megawatt slipstream, meaning that it achieved only about 10% capture with respect

to the entire facility. 89 Fed. Reg. at 39,926. And the Technology Centre Mongstad

is an even tinier 12-megawatt pilot plant testing site in Norway, id. at 39,852, 39,927

14

& n.768, which is exactly the kind of experimental use that is insufficient to show

adequate demonstration. Contra U.S.Opp.28, 38. EPA’s reliance on those

experimental projects simply highlights the lack of adequate demonstration today.

EPA protests that adequate demonstration does not require mandated technology to

be in “routine use” across the industry. U.S.Opp.32-35. But EPA’s problem is not that

adequately demonstrated technology is not yet in routine use; EPA’s problem is that

it is mandating technology that has not progressed beyond the experimental stage

and the promises of promotional materials. That problem is fatal under the plain

text.

2.

90% CCS is not “achievable.”

The Rule’s reliance on 90% CCS also defies the statutory requirement that

standards be “achievable.” 42 U.S.C. §7411(a)(1). By its plain terms, that statutory

requirement mandates that EPA set standards that are achievable now—not

theoretically attainable at some point in the future. The Rule contravenes that

requirement, relying not just on technology that has not yet progressed beyond the

experimental stage but also on infrastructure that has not yet been built. Appl.19.

EPA has no meaningful response. It does not dispute that “the necessary CO2

infrastructure does not exist today,” U.S.Opp.30 (quotation marks omitted); instead,

it simply insists that “regulated plants would be expected to install” the “pipelines

and sequestration sites” needed to meet the Rule’s requirements. U.S.Opp.31; see

U.S.Opp.29. A standard that requires constructing some 5,000 miles of pipelines for

carbon transport, 89 Fed. Reg. at 39,856, and storage facilities for some 1.4 billion

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metric tons of carbon dioxide, id. at 39,863, cannot plausibly be described as

“achievable” today, 42 U.S.C. §7411(a)(1), or even in 2032 given construction realities.

The massive costs that the Rule would impose further underscore the problem.

As EPA concedes, §111 prohibits it from setting a standard whose cost “would be

‘excessive’ or ‘unreasonable.’” U.S.Opp.41 (quoting 89 Fed. Reg. at 39,832). The

staggering costs of implementing 90% CCS, including billions of dollars to install the

systems, build the necessary pipelines, and develop the requisite storage capacity,

confirm that the Rule violates §111’s achievability requirement. See Appl.30; Power

Generators Comments at 35-37.

EPA does not seriously dispute the evidence

supporting those costs; instead, it simply demands deference to its contrary view.

U.S.Opp.43. Even EPA itself, however, estimates the compliance costs of the Rule in

the billions of dollars. See 89 Fed. Reg. at 40,005. And notably, the agency makes no

attempt to defend the Rule’s implausible assertion that, contrary to the views of the

relevant industry, installing CCS would result in a “significant economic benefit” to

existing coal plant owners. 89 Fed. Reg. at 39,789; see Appl.20-21.

3.

Co-firing coal-fired plants with natural gas is impermissible

generation-shifting and not achievable.

The Rule’s reliance on 40% co-firing for coal plants that commit to shut down

before 2038 is even more obviously unlawful. That system of emission reduction

explicitly requires shifting from coal to natural gas, which is precisely what West

Virginia held EPA lacked authority to do, 597 U.S. at 728 & n.3, and it requires those

plants to commit now to shutting down altogether by 2039. Calling that approach

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“fuel-switching” rather than “generation-shifting” does not make it any more lawful.

Supra. p.9; contra U.S.Opp.19.

The Rule’s 40% co-firing standard is also unachievable. EPA claims that “many

existing coal plants already use some amount of natural gas,” and that enabling cofiring “generally requires minor modifications to existing boilers.”

U.S.Opp.29

(brackets and quotation marks omitted). In reality, as the Rule itself concedes, only

about 4% of existing coal plants co-fire natural gas at a 40% level. See 89 Fed. Reg.

at 39,892 (counting 29 of 565 plants). Converting the rest to 40% co-firing would

require not only significant modifications to the plants themselves, but (as EPA

recognizes) would also require constructing new “natural gas supply pipelines,”

U.S.Opp.29 (quoting 89 Fed. Reg. at 39,893)—which would cost $4 million to $10

million per mile, require countless permits, and could not be completed in time to

comply with the Rule in any event, see Power Generators Comments at 59-60. EPA’s

cursory assertion that it “analyzed the costs” involved, U.S.Opp.43, does nothing to

show that its standard is remotely achievable “for the industry as a whole,” Nat’l

Lime Ass’n v. EPA, 627 F.2d 416, 431 (D.C. Cir. 1980).

C. Other Statutes Underscore that the Rule Is Unlawful.

EPA claims that the Energy Policy Act and the Inflation Reduction Act of 2022

indirectly support the Rule by showing congressional support for CCS. U.S.Opp.4546; see States.Opp.19-20. That gets matters exactly backwards. In the Energy Policy

Act, Congress provided funding for carbon capture research and development, while

explicitly precluding EPA from relying on any projects funded by the Act as sufficient

to show adequate demonstration under §111. See 42 U.S.C. §15962(i)(1). And in the

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Inflation Reduction Act, Congress provided a tax credit for power plants that capture

and store carbon dioxide. See 26 U.S.C. §45Q(a). Both statutes demonstrate that

Congress sought to provide incentives for industry to develop and adopt CCS

technology voluntarily—underscoring both that Congress understood that technology

was not yet developed (let alone demonstrated), and that Congress preferred

incentives to a mandatory restructuring of the industry. Neither of those statutes—

nor the floor statement from a single Congressman that EPA quotes at length, see

U.S.Opp.46—remotely suggests that Congress has authorized EPA to restructure the

American energy market, especially when the relevant technology has never been

demonstrated at any plant on a consistent facility-wide basis.

II. The Rule Will Cause Substantial Irreparable Harm.

The Rule will cause substantial irreparable harm absent a stay. As Applicant

explained in detail (and supported with numerous declarations), compliance with the

Rule requires major investments and irrevocable decisions that cannot be postponed

during judicial review. Appl.23-33. Leaving the Rule in place will saddle electric

generators with millions of dollars in short-term costs, force premature retirement of

existing coal plants, and obstruct the development of new gas plants. Id. The Rule

should not be allowed to impose those harms—and threaten a potentially irrevocable

shift in the American energy market—while judicial review remains pending.

None of EPA’s responses is persuasive. EPA does not attempt to defend the

D.C. Circuit’s plainly erroneous assertion that “a stay will not help” because the Rule

might “come back into force at the end of the case.” App.2; see Appl.27-28. Instead,

EPA claims that plants need do nothing until June 2025, and incur only “limited cost”

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for “feasibility work” until June 2026.

U.S.Opp.51-52; see States.Opp.34-35;

NGOs.Opp.21. Those projections are refuted by the declarations in the record, which

make clear that electric generators face millions of dollars in immediate costs for

tasks that must be accomplished now if the Rule remains in effect, such as “soliciting

and securing bids from contractors, procuring equipment, mobilizing resources and

employees, securing approvals for major capital expenditures, applying for and

securing the necessary local, state and federal permits and approvals, and

communicating and working with numerous stakeholders, including state

environmental agencies and local communities.” App.209 (Lafser ¶5); see also, e.g.,

App.37 (Beam ¶65); App.136-37 (Crockett ¶21); App.156-57 (Glenn ¶8).

Recognizing as much, EPA asks this Court to ignore those declarations

entirely, claiming that its own assessment of harm is “controlling.” U.S.Opp.54-55.

EPA cites no authority remotely supporting that proposition, and it is flat wrong. The

Clean Air Act (like the APA) applies an “arbitrary [or] capricious” standard to the

merits, 42 U.S.C. §7607(d)(9)(A); it does not extend that standard to the agency’s

assessment of irreparable harm. On that question, the government is entitled to no

more deference than any other litigant. See, e.g., Ohio v. EPA, 144 S.Ct. 2040, 205253 (2024) (reviewing asserted harms without deference); contra U.S.Opp.54-55.

EPA also disputes that leaving the Rule in place could force some existing coal

plants to shut down, claiming that “nothing in the Rule would force those plants to

close before 2032.” U.S.Opp.53. But if the Rule remains in effect, plants will have to

make irrevocable compliance decisions well before then—including whether to invest

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in other pollution control measures, see Appl.31-32, and committing to retirement in

federally enforceable state plans due by May 2026, see 40 C.F.R. §§60.5785b. Absent

a stay, plants will have no choice but to make those decisions on the assumption that

the Rule will remain in effect, committing them to their only feasible course (shutting

down before 2032) and effectively denying them the benefit of judicial review. That

is more than enough to establish irreparable harm.

III. The Balance Of Equities And The Public Interest Favor A Stay.

The equities and interests favor a stay. Allowing the Rule to remain in effect

threatens harm to generators and the public, who will bear the resulting increased

electric rates, reduced grid reliability, and job losses—none of which EPA seriously

denies. Appl.34-36. There is also “no public interest in the perpetuation of unlawful

agency action,” League of Women Voters v. Newby, 838 F.3d 1, 12 (D.C. Cir. 2016), and

no climate-change exception to that rule, see West Virginia, 597 U.S. at 735.

Still, EPA emphasizes the threat of climate change, and that any delay in

enforcing the Rule will add to that threat. U.S.Opp.56-57. But it does not quantify

the incremental threat that a brief stay would cause—presumably because any such

effect would be infinitesimally small and immeasurable. Cf. Massachusetts v. EPA,

549 U.S. 497, 543-45 (2007) (Roberts, C.J., dissenting) (explaining “the complexities

of global warming”). Those speculative concerns do not outweigh the substantial and

immediate costs to the public if the Rule is not stayed. See Appl.34-36.

CONCLUSION

This Court should stay the Rule pending judicial review.

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Respectfully submitted,

ALLISON D. WOOD

MAKRAM B. JABER

AARON M. FLYNN

MCGUIREWOODS LLP

888 16th Street NW, Suite 500

Black Lives Matter Plaza

Washington, DC 20006

PAUL D. CLEMENT

Counsel of Record

C. HARKER RHODES, IV

NICHOLAS A. AQUART*

CLEMENT & MURPHY, PLLC

706 Duke Street

Alexandria, VA 22314

(202) 742-8900

paul.clement@clementmurphy.com

*Supervised by principals of the firm who are

members of the Virginia bar

Counsel for Applicant Electric Generators for a Sensible Transition

August 23, 2024

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