Amicus Curiae Brief — Nacco Natural Resources Corporation, Applicant v. Environmental Protection Agency, et al.
Supreme Court briefAug 5, 2024
Ask Donna
What actually matters in this document.
Text
Nos. 24A95, 24A96, 24A97, 24A98, 24A106, and 24A116
IN THE
Supreme Court of the United States
________________________________
STATE OF WEST VIRGINIA, et al.,
Applicants,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,
Respondents.
To the Honorable John G. Roberts, Jr.,
Chief Justice of the United States and
Circuit Justice for the District of Columbia Circuit
BRIEF OF THE CHAMBER OF COMMERCE OF THE UNITED STATES OF
AMERICA AS AMICUS CURIAE IN SUPPORT OF APPLICANTS’ MOTIONS
FOR STAY PENDING REVIEW
Brent A. Rosser
Hunton Andrews Kurth LLP
One South at the Plaza, Suite 3500
101 South Tryon Street
Charlotte, North Carolina 28280
(704) 378-4700
Elbert Lin
Counsel of Record
Hunton Andrews Kurth LLP
951 East Byrd Street, East Tower
Richmond, VA 23219
(804) 788-7202
F. William Brownell
Matthew Z. Leopold
Erica N. Peterson
Hunton Andrews Kurth LLP
2200 Pennsylvania Ave. NW
Washington, DC 20037
(202) 955-1500
Andrew R. Varcoe
Christopher J. Walker
U.S. CHAMBER LITIGATION CENTER
1615 H Street, NW
Washington, DC 20062
(202) 463-5337
Counsel for Amicus Curiae
Additional Captions Listed on Following Page
NATIONAL RURAL ELECTRIC COOPERATIVE,
Applicant,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,
Respondents.
NATIONAL MINING ASSOCIATION, et al.,
Applicants,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,
Respondents.
NACCO NATURAL RESOURCES CORPORATION,
Applicant,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,
Respondents.
ELECTRIC GENERATORS FOR A SENSIBLE TRANSITION,
Applicant,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,
Respondents.
EDISON ELECTRIC INSTITUTE, et al.,
Applicants,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al.,
Respondents.
TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................i
TABLE OF AUTHORITIES .................................................................................... ii
INTEREST OF AMICUS CURIAE............................................................................ 1
INTRODUCTION AND SUMMARY OF ARGUMENT ....................................... 1
ARGUMENT ............................................................................................................. 3
I.
II.
If The D.C. Circuit Upholds The Rule, This Court Would Likely
Grant Review And Reverse. ............................................................................ 3
A.
EPA Misinterpreted its Authority Under Clean Air Act Section
111. ........................................................................................................ 4
B.
EPA’s Chosen System of Carbon Capture and Sequestration
Has Not Been Adequately Demonstrated. ............................................ 8
1.
EPA Failed to Show That 90% Capture of CO2
from EGUs Had Been Adequately Demonstrated......... 9
2.
EPA Failed to Show That Development of a
Sufficient Pipeline System for CO2
Transportation Had Been Adequately
Demonstrated. .............................................................. 12
3.
EPA Also Failed to Show that a Sufficient System
of CO2 Sequestration Had Been Adequately
Demonstrated. .............................................................. 15
4.
Since EPA Promulgated The Rule, It Has Become
Even Clearer That EPA’s BSER Is Based On
Crystal Ball Speculation. ............................................. 16
The Equities Favor A Stay Because EPA’s Rule Will Jeopardize the
Reliability of the Nation’s Power. ................................................................. 18
CONCLUSION ........................................................................................................ 23
i
TABLE OF AUTHORITIES
Cases
Page(s)
Am. Forest & Paper Ass’n v. EPA, No. 23A351, 2023 WL 7040199 (Oct.
13, 2023) .................................................................................................................. 18
Deep S. for Envt’l Just. v. EPA,
No. 24-60084 (5th Cir. June 12, 2024) ................................................................... 17
Essex Chem. Corp. v. Ruckelshaus,
486 F.2d 427 (D.C. Cir. 1973) .............................................................................. 4, 7
Facebook Inc. v. Duguid,
592 U.S. 395 (2021) .................................................................................................. 5
HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association,
594 U.S. 382 (2021) .................................................................................................. 5
Lignite Energy Council v. EPA,
198 F.3d 930 (D.C. Cir. 1999) .......................................................................... 7, 8, 9
Loper Bright Enters. v. Raimondo,
144 S. Ct. 2244 (2024) .......................................................................................... 5, 8
Michigan v. EPA,
No. 98-1497 (D.C. Cir. June 22, 2000) ................................................................... 19
Murray Energy Corp. v. EPA,
577 U.S. 1127 (2016) .............................................................................................. 18
Ohio v. EPA,
144 S. Ct. 2040 (2024) ........................................................................................ 2, 18
Portland Cement Association v. Ruckelshaus,
486 F.2d 375 (D.C. Cir. 1973) .......................................................................... 7, 8, 9
Ross v. Blake,
578 U.S. 632 (2016) .................................................................................................. 5
S.C. Pub. Serv. Auth. v. FERC,
762 F.3d 41 (D.C. Cir. 2014) .................................................................................. 21
Sierra Club v. Costle,
657 F.2d 298 (D.C. Cir. 1981) .................................................................................. 4
ii
West Virginia v. EPA,
577 U.S. 1126 (2016) .......................................................................................... 2, 18
West Virginia v. EPA,
597 U.S. 697 (2022) .............................................................................. 1, 2, 4, 6, 7, 8
West Virginia v. EPA,
No. 24-1120 (D.C. Cir. June 11, 2024) ................................................................. 2, 9
Statutes and Rules
Supreme Court Rule 37.6 .............................................................................................. 1
16 U.S.C. § 824o(a)....................................................................................................... 21
42 U.S.C. § 7411(a)(1) ................................................................................................ 2, 4
Regulations
88 Fed. Reg. 33,240 (May 23, 2023) ............................................................................ 12
89 Fed. Reg. 39,798 (May 9, 2024) ............................ 2, 3, 5, 6, 7, 10, 11, 12, 13, 14, 15
Ill. Pub. Act 103-0651 .................................................................................................. 16
Other Authorities
Andrew Adams, After Years of Controversy, Illinois pauses CO2
pipeline construction, for now, CAPITOL NEWS ILLINOIS, July 19,
2024 ......................................................................................................................... 16
Carlos Anchondo, Major coal CCS project hits delays, cost spikes, E&E
NEWS, June 25, 2024 .............................................................................................. 17
J.J. Dooley et al., Pacific Northwest National Laboratory, PNNL18520, An Assessment of the Commercial Availability of Carbon
Dioxide Capture and Storage Technologies as of June 2009 (June 2,
2009)........................................................................................................................ 11
Leah Douglas, Navigator CO2 Ventures cancels carbon-capture pipeline
project in US Midwest, REUTERS (Oct. 20, 2023) .................................................. 14
Stavroula Giannaris, et al., SaskPower's Boundary Dam Unit 3 Carbon
Capture Facility-The Journey to Achieving Reliability, Proceedings
of the 15th International Conference on Greenhouse Gas Control
Technologies (Mar. 15-18, 2021) ............................................................................ 10
iii
Ethan Howland, PJM capacity prices hit record highs, sending build
signal to generators, UTILITYDIVE (July 31, 2024) ................................................ 22
Institute for Energy Economics and Financial Analysis, The carbon
capture crux: Lessons learned (Sept. 2022) ........................................................... 11
Angela C. Jones, CONG. RESEARCH SERV., R48033, Class VI Carbon
Sequestration Wells: Permitting And State Program Primacy (2024).................. 15
MISO, Response to the Reliability Imperative at 1 (Feb. 2024) .......................... 20, 21
NACCO Application for Immediate Stay, No. 24A98 (U.S. July 23,
2024)........................................................................................................................ 18
Nara Schoenbert, Wolf Carbon Solutions pauses its bid for Illinois
approval of a controversial 260-mile CO2 pipeline (Nov. 26, 2023) ..................... 14
Nat’l Mining Ass’n Application for Immediate Stay, No. 24A97 (U.S.
July 23, 2024) ......................................................................................................... 18
NERC, 2023 Long-Term Reliability Assessment (Dec. 2023) .................................... 21
Nina Elkadi, A battle in rural Midwest as farmers fight carbon capture
pipeline, THE NEW LEDE (July 16, 2024)................................................................ 17
Paul W. Parfomak, CONG. RESEARCH SERV., IN11944, Carbon Dioxide
Pipelines: Safety Issues (June 3, 2022) ............................................................ 13, 14
PJM, PJM Statement on the Newly Issued EPA Greenhouse Gas and
Related Regulations (May 8, 2024) ........................................................................ 21
Regulatory Impact Analysis (Apr. 2024), EPA-HQ-OAR-2023-00728913 ......................................................................................................................... 20
Timothy Puko, Washington Post, Why these environmentalists are
resisting part of Biden’s climate push (June 25, 2023) ......................................... 13
Karen Rives, Only still-operating carbon capture project battled
technical issues in 2021, S&P GLOBAL MARKET INTELLIGENCE (Jan.
6, 2022).................................................................................................................... 10
Jared Strong, Summit says pipeline system won't be operational until
2026, IOWA CAPITAL DISPATCH (Oct. 19, 2023) ...................................................... 14
U.S. Steel Corp. v. EPA, No. 23A384, 2023 WL 7163329 (Oct. 26, 2023) ................. 18
Webster’s New World Dictionary of the American Language (1970) .......................... 6
iv
Webster’s Seventh New Collegiate Dictionary (1970) .................................................. 6
Webster’s Third New International Dictionary (1986) ................................................ 6
Sean Wolfe, Indiana's consumer advocate wants to thwart Duke
Energy's carbon capture study, POWER ENGINEERING (July 16, 2024) ................. 17
World Resources Institute, Working Paper, Meeting the Reliability
Challenges of the Clean Energy Transition (Nov. 2023) ....................................... 22
v
INTEREST OF AMICUS CURIAE
The Chamber of Commerce of the United States of America (“Chamber”) is the
world’s largest business federation.1 It represents approximately 300,000 direct
members and indirectly represents the interests of more than 3 million companies
and professional organizations of every size, in every sector, and from every region of
the country. An important function of the Chamber is to represent the interests of
its members in matters before Congress, the Executive Branch, and the courts. To
that end, the Chamber regularly files amicus curiae briefs in cases, like this one, that
raise issues of concern to the business community.
The Chamber supports policies that reduce greenhouse-gas emissions as much
and as quickly as reasonably possible, consistent with the pace of innovation and the
feasibility of implementing large-scale technical change. The Chamber also has a
strong interest in ensuring that agency regulations comply with the law, and that
judicial review of regulations is timely and effective.
INTRODUCTION AND
SUMMARY OF ARGUMENT
Yet again, EPA is coloring well outside its statutory lines. In 2015, with the
Clean Power Plan, EPA claimed to find “in the previously little-used backwater of
Section 111(d)” of the Clean Air Act (“CAA”), West Virginia v. EPA, 597 U.S. 697, 730
(2022), the unprecedented power to force a transformation of the nation’s power
1 Pursuant to Supreme Court Rule 37.6, amicus curiae states that no counsel for any party
authored this brief in whole or in part and no entity or person, aside from amicus curiae, its members,
or its counsel, made any monetary contribution intended to fund the preparation or submission of this
brief.
1
sector. This Court stayed that rule, West Virginia v. EPA, 577 U.S. 1126 (2016), and
then, in West Virginia, 597 U.S. 697, confirmed that EPA had exceeded its authority
in choosing generation-shifting measures as a “best system of emission reduction”
under section 111(d). Now, just two years later, EPA is back with a different “best
system of emission reduction” that stretches another part of section 111(d) past its
breaking point. Among its other “meaningful constraints,” section 111 requires that
EPA “make sure the best system has a proven track record.” Id. at 759 (Kagan, J.,
dissenting). EPA has not done so. The primary “best system of emission reduction”
in the Rule2— 90% carbon-capture-and-sequestration (“CCS”)—does not even exist
for electric generating units (“EGUs”), much less have a proven track record for
EGUs.
This Court should grant the motions for a stay.
As this Court recently
observed, “[w]hen States and other parties seek to stay the enforcement of a federal
regulation against them,” the resolution often “turns on the merits and the question
who is likely to prevail at the end of th[e] litigation.” Ohio v. EPA, 144 S. Ct. 2040,
2052–53 (2024). Here, the merits strongly favor the Applicants. The Rule is premised
on a system of technologies that has not “been adequately demonstrated” as required
by section 111. 42 U.S.C. § 7411(a)(1). Indeed, EPA concedes that “no commercial
power plant is consistently achieving 90% capture,” Resp’ts’ Opp’n to Mots. to Stay
Final Rule at 44, West Virginia v. EPA, No. 24-1120 (D.C. Cir. June 11, 2024), and
2 “New Source Performance Standards for Greenhouse Gas Emissions From New, Modified,
and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse
Gas Emissions From Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the
Affordable Clean Energy Rule,” 89 Fed. Reg. 39,798 (May 9, 2024).
2
instead argues that section 111 gives it authority to “project the development of a
control system at a future time.” 89 Fed. Reg. at 39,801. But that reading is contrary
to the plain text of the Act.
The other stay factors are also satisfied. If the Rule takes effect, it will cause
serious irreparable harm. Regulated parties, and the U.S. economy more generally,
will suffer major costs that cannot be recovered if the Rule is later invalidated. In
addition, the Rule will jeopardize the reliability and affordability of the nation’s
power, which is critical to the functioning of our national economy and the activities
of daily life. EPA itself projects that its Rule will result in widespread retirement of
dispatchable generation while severely restricting pathways for reliable electricity
supplies necessary to replace it, even as demand for electricity is increasing and
projected to soar in the coming decade. For similar reasons, the balance of the
equities and the public interest favor staying the Rule pending review.
ARGUMENT
I.
If The D.C. Circuit Upholds The Rule, This Court Would Likely Grant
Review And Reverse.
Applicants are likely to succeed on the merits because, among other reasons,
the Rule exceeds EPA’s authority under section 111 of the Clean Air Act by selecting
a system of emission reduction that has not “been adequately demonstrated.” First,
the Rule misinterprets that statutory requirement. And second, even under EPA’s
own mistaken standard, EPA has far exceeded its statutory limits by selecting a
system that is not currently operational for EGUs anywhere in the country, based on
speculation about capabilities that may emerge in the future.
3
A.
EPA Misinterpreted its Authority Under Clean Air Act Section
111.
Section 111 authorizes EPA to regulate power plants by setting a “standard of
performance” for their emission of pollutants. 42 U.S.C. § 7411(a)(1). That standard
must be “achievable” and reflect the “best system of emission reduction” (“BSER”)
that EPA determines “has been adequately demonstrated” for the particular source
category. Ibid (emphasis added). This means, at the very least, that EPA must “make
sure the best system has a proven track record.” West Virginia, 597 U.S. at 759
(Kagan, J., dissenting). A system “has been adequately demonstrated” if it “has been
shown to be reasonably reliable, reasonably efficient,” Essex Chem. Corp. v.
Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973), and not “unreasonably costly,”
Sierra Club v. Costle, 657 F.2d 298, 384 (D.C. Cir. 1981). EPA cannot select a system
that is “purely theoretical or experimental,” Essex Chem., 486 F.2d at 433–34, or
based on only “prototype” or “pilot scale” demonstration facilities. Sierra Club, 657
F.2d at 341 n.157.
The Rule, however, features a primary “best system of emission reduction” that
lacks any meaningful track record and is not realistically available to the electric
power industry. The Rule seeks to reduce GHGs from new natural gas-fired, and
existing coal-fired, EGUs, mainly by identifying carbon capture and sequestration
(“CCS”) technology with 90% CO2 capture as BSER for these units. CCS technology
is highly promising, and Chamber members are investing in developing and
commercializing the technology for a range of applications. But as explained below,
EPA’s hypothesized CCS system for EGUs (including 90% capture) does not exist at
4
this time, and there is no evidence that it will be available in the near future. See
infra I.B.
EPA acknowledges as much, but asserts that section 111 authorizes it to
project a BSER that might be demonstrated in the future. 89 Fed. Reg. at 39,831.
EPA asserts that “the BSER can be forward-looking in nature and take into account
anticipated improvements in control technologies” and, accordingly, that the Agency
“may reasonably project the development of a control system at a future time.” Id. at
39,801. EPA supports its reading by saying that the word “demonstrated” in section
111 should be interpreted to mean “to ‘explain or make clear by using examples,
experiments, etc.,’” suggesting all that is needed is a pilot “demonstration project” or
“demonstration plant” as “examples of technological feasibility.” Id. at 39,830–31.
As this Court recently made clear, the judiciary “must exercise independent
judgment in determining the meaning of statutory provisions.” Loper Bright Enters.
v. Raimondo, 144 S. Ct. 2244, 2262 (2024). That inquiry begins, of course, with the
text. Ross v. Blake, 578 U.S. 632, 638 (2016). And in reviewing that text, the Court
looks to the ordinary meaning of statutory terms where a definition is not provided,
HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, 594 U.S. 382,
388 (2021), as well as the “conventional rules of grammar,” Facebook Inc. v. Duguid,
592 U.S. 395, 402 (2021).
EPA’s reading, which suggests that the base technology underlying the chosen
system need merely be in existence, should be rejected for at least three reasons.
First, EPA misunderstands the verb tense of the phrase “has been adequately
5
demonstrated.” The Agency rewrites the phrase to require only that “the technology
is in existence.” 89 Fed. Reg. at 39,830. But that changes the meaning of the phrase,
which applies to the system and uses the present perfect tense “has been
demonstrated.”
That mandates not merely that some aspect of the underlying
technology “exist” today; the chosen system must have “a proven track record.” West
Virginia, 597 U.S. at 759 (Kagan, J., dissenting).
Second, EPA uses a secondary definition of “demonstrate”—namely, to
“explain or make clear by using examples, experiments, etc.”—to support its view
that a proven track record is unnecessary. That interpretive move is not plausible.
The most common definitions at the time of the Clean Air Act’s enactment required
far more than what EPA suggests. “Demonstrate” meant “to show clearly,” “to prove
or make clear by reasoning or evidence,” or “to illustrate or explain esp. with many
examples.”
Webster’s Seventh New Collegiate Dictionary 220 (1970); see also
Webster’s New World Dictionary of the American Language 376 (1970) (defining
“demonstrate” as “to show by reasoning; prove”).
Third, EPA ignores that the system must not only be “demonstrated” but
“adequately demonstrated.”
“Adequately” means “in an adequate manner” with
“adequate” defined as “fully sufficient for a specified or implied requirement.”
Webster’s Third New International Dictionary at 25 (1986). That forecloses EPA’s
position that it need only establish “technological feasibility” by way of a single “test
or study—as in, for example, a ‘demonstration project’ or ‘demonstration plant.’” 89
Fed. Reg. at 39,831–32. It is not enough that the technology can work in some form
6
(say, CCS with 30% CO2 capture) and might therefore evolve eventually into the
BSER. The word “adequately” requires that the chosen system (CCS with 90% CO2
capture) is “reasonably reliable, reasonably efficient, and . . . can reasonably be
expected to serve the interests of pollution control without becoming exorbitantly
costly.” Essex Chem., 486 F.2d at 433. That is one of the “meaningful constraints”
imposed by section 111 on EPA’s authority to “find the best system of emission
reduction,” and it must be honored. West Virginia, 597 U.S. at 758–59 (Kagan, J.,
dissenting).
To support its strained reading of the text, EPA relies on Portland Cement
Association v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973), and Lignite Energy Council
v. EPA, 198 F.3d 930 (D.C. Cir. 1999). 89 Fed. Reg. at 39,835. Those cases do not
provide EPA the shelter it seeks.
First, Portland Cement and Lignite Energy were not about whether a BSER
“has been adequately demonstrated,” which is the relevant question here. Instead,
these cases were about the “degree of emission limitation” for certain new sources. In
Portland Cement, the petitioners challenged stationary source standards for new or
modified Portland cement plants.
486 F.2d at 378.
And thus, it was “the
‘achievability’ of the proposed standard that [wa]s in issue” when the court said it
could consider “what may fairly be projected for the regulated future.” Id. at 391.
Likewise, Lignite Energy was also about “extrapolat[ing] from … studies … in setting
. . . [a] new source performance standard.” 198 F.3d at 934.
7
Second, whatever these cases have to say, they are arguably both founded on
the mistaken understanding that section 111 concerns new emission sources only. In
Portland Cement, the court rejected any focus on “the state of the art at present”
because, in its view, section 111 “is addressed to standards for new plants” only. 486
F.2d at 391. And in Lignite Energy, the court similarly based its conclusion on the
premise that section 111 “applies only to new sources.” 198 F.3d at 934. In the D.C.
Circuit’s view at the time, because section 111 “applies only to new sources . . . [it]
looks toward what may fairly be projected for the regulated future, rather than the
state of the art at present.” Ibid. (cleaned up). But as this Court has since recognized,
section 111 applies to both new and existing sources. West Virginia, 597 U.S. at 706.
The D.C. Circuit’s stay denial order did not consider any of this. It concluded
that the Applicants were not likely to succeed, “given the record in this case,” on the
claim that EPA “acted arbitrarily or capriciously in determining that carbon capture
and other emission control technologies are adequately demonstrated.”
States’
Emergency Application for Immediate Stay at App. 2a, No. 24A95 (U.S. July 23,
2024). But it did not even acknowledge, much less address, the Applicants’ contention
that EPA incorrectly interpreted the statute in the first place—a legal question over
which the court was required to “exercise independent judgment.” Loper Bright
Enters., 144 S. Ct. at 2273.
B.
EPA’s Chosen System of Carbon Capture and Sequestration
Has Not Been Adequately Demonstrated.
In any event, the Rule fails even EPA’s preferred standard under Portland
Cement and Lignite Energy.
Under Portland Cement, any “projection based on
8
existing technology” is “subject to the restraints of reasonableness and cannot be
based on ‘crystal ball’ inquiry.” 486 F.2d at 391. Nor may EPA rely on “mere
speculation or conjecture.” Lignite Energy, 198 F.3d at 934. But that is all the Agency
has presented, as explained below.
EPA’s primary “best system of emission reduction” comprises three main
components: (1) capturing CO2 at a rate of 90%; (2) transporting it by pipeline to a
storage site; and (3) storing it in deep underground sites. Contrary to the D.C.
Circuit’s conclusory statement, EPA has not shown that each of these components
“has been adequately demonstrated” as an integrated “system of emission reduction”
for EGUs. And developments since EPA issued its rule only further confirm that CCS
does not have a proven track record.
1.
EPA Failed to Show That 90% Capture of CO2 from EGUs
Had Been Adequately Demonstrated.
To start, EPA has not shown any—much less a proven—track record for 90%
capture of CO2 from EGUs. Indeed, EPA concedes that “no commercial power plant
is consistently achieving 90% capture,” Resp’ts’ Opp’n to Mots. to Stay Final Rule at
44, West Virginia, No. 24-1120, yet that is precisely what the Rule requires.
EPA acknowledges that the primary example it offers—Unit 3 of
Saskatchewan Power’s Boundary Dam coal plant—has failed to demonstrate capture
at the sustained rate of 90 percent required by the Rule. EPA cites a report detailing
the facility’s operations and efforts to make Unit 3 more reliable despite technical
9
challenges.3 Although the report states that the facility was designed to achieve a
90% capture rate, 89 Fed. Reg. at 39,848; Giannaris at 3, the report shows that such
a rate was rarely achieved.
As EPA acknowledged, “the capture plant has not
consistently operated” at 90% total capture efficiency. 89 Fed. Reg. at 39,848. That
is an understatement. The chart below (included in Giannaris at 10, Fig. 8) indicates
that the facility achieved 90% capture on just a few days during a five-year period of
operation—in other words, less than 1% of the time.
The data above align with more recent statements by SaskPower indicating
that Boundary Dam Unit 3 cannot achieve 90% capture. The “carbon capture rate in
2021 was less than 37% of the official target of 90%.”4 Monthly reports dating back
to early 2020 show “frequent” outages due to issues like “‘wet coal,’” “‘plugging,’”
“‘issues in the powerhouse,’” “‘trip,’” “‘water cooling issues’” and other technical
issues. Ibid. As SaskPower itself said in comments on the Rule: “SaskPower’s CCS
facility is not capturing 90 percent of emissions from Boundary Dam Unit 3.”
3 See 89 Fed. Reg. at 39,848, n.290 (citing Stavroula Giannaris, et al., SaskPower's Boundary
Dam Unit 3 Carbon Capture Facility—The Journey to Achieving Reliability, Proceedings of the 15th
International Conference on Greenhouse Gas Control Technologies (Mar. 15-18, 2021), EPA-HQ-OAR2023,0072-0053_Attachment 28 (“Giannaris”)).
4 Karen Rives, Only still-operating carbon capture project battled technical issues in 2021, S&P
GLOBAL MARKET INTELLIGENCE (Jan. 6, 2022), available at https://tinyurl.com/2mzruwwx.
10
SaskPower Comment (Aug. 4, 2023), EPA‐HQ‐OAR‐2023‐0072‐0687; see also 89 Fed.
Reg. at 39,848 (“Boundary Dam has more recently been capable of achieving capture
rates of 83 percent when the capture plant is online”) (emphasis added). Another
report similarly concluded: “Boundary Dam 3, the only active carbon capture project
in the power sector worldwide, has captured less than its pre-specified target by a
wide margin (about 50%).”5 Contrary to EPA’s claims, Boundary Dam’s record is
strong evidence that CO2 capture at 90% has not been adequately demonstrated.
EPA also errs in claiming that 90% CO2 capture “has been further
demonstrated at other coal-fired steam generating units” and “other industrial
processes.” 89 Fed. Reg. at 39,888, 39,926. EPA relies on a 2009 report6 to assert
that certain plants “clearly show the technical feasibility of post-combustion carbon
capture.” Id. at 39,849. But that report states that only “[a] small fraction of the
power plant[s’] overall CO2 [was] captured”; the rest was “vented to the atmosphere.”7
Finally, EPA mistakenly claims that the former CO2 capture facility at the
Bellingham Energy Center demonstrated the viability of carbon capture on a
combined cycle (natural gas-fired) combustion turbine EGU.8 The agency report cited
by EPA actually states that carbon capture systems for natural gas systems “have
5 Institute for Energy Economics and Financial Analysis, The carbon capture crux: Lessons
learned at 47 (Sept. 2022), available at https://tinyurl.com/mv8m4r4a.
6 Id. at 39,849 n.301 (citing J.J. Dooley et al., Pacific Northwest National Laboratory, PNNL18520, An Assessment of the Commercial Availability of Carbon Dioxide Capture and Storage
Technologies as of June 2009 (June 2, 2009), EPA-HQ-OAR-2023-0072-0053_Attachment 4).
7 J.J. Dooley et al., Pacific Northwest National Laboratory, PNNL-18520, An Assessment of the
Commercial Availability of Carbon Dioxide Capture and Storage Technologies as of June 2009 at 8
(June 2, 2009), EPA-HQ-OAR-2023-0072-0053_Attachment 4).
8 89 Fed. Reg. at 39,926 n.763 (citing DOE, Carbon Capture Opportunities for Natural Gas
Fired Power Systems, EPA-HQ-OAR-2023-0072-9008 (“DOE Natural Gas CCS Report”)).
11
not been proven at full scale” and that “more effort and R&D is required to advance
into full commercial application.”9
2.
EPA Failed to Show That Development of a Sufficient
Pipeline System for CO2 Transportation Had Been
Adequately Demonstrated.
Next, EPA also has not shown any—much less a proven—track record for the
development of a pipeline system sufficient to transport CO2 from generating
facilities nationwide, each capturing CO2 at a 90% capture rate, to sequestration
sites. According to EPA, 20,000 to 25,000 additional miles of pipeline are needed to
capture over 1 billion metric tons of CO2 emissions from large coal and gas EGUs per
year.
Proposed Rule, “New Source Performance Standards for Greenhouse Gas
Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired Electric
Generating Units; Emission Guidelines for Greenhouse Gas Emissions From Existing
Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean
Energy Rule,” 88 Fed. Reg. 33,240, 33,369 (May 23, 2023). In its proposal, EPA
asserted that such build-out is feasible because the domestic CO2 pipeline network
has “steadily expanded and appears primed to continue to do so.” Id. at 33,293. But
EPA acknowledged that only 5,339 miles of CO2 pipelines currently exist in the U.S.,
which is only a “13 percent increase in CO2 pipeline miles since 2011.” Id. at 33,294.
Put another way, on average over the last 12 years, only 50 miles of CO2 pipelines
have been constructed per year. At that rate, only a few hundred miles of additional
9 DOE Natural Gas CCS Report at 2, 4.
12
CO2 pipeline would be constructed by 2030, falling woefully short of the 20,000 to
25,000 miles that EPA indicates are necessary. Id. at 33,369.
In the Rule, EPA does not address this fundamental problem, but rather
attempts to sidestep it. EPA still “anticipates . . . in the coming years” that a “largescale interstate pipeline network may develop to transport CO2.” 89 Fed. Reg. at
39,855 (emphasis added). But it admits that it did “not base its analysis of the
availability of CCS on the projected existence of a large-scale interstate pipeline
network.” Ibid.
Instead, EPA pivots to predicting “the construction of relatively short lateral
pipelines that extend from the source to the nearest geologic storage reservoir.” Ibid.
But this would require a massive number of shorter pipelines to be rapidly permitted
and constructed. There is no basis in the Rule, or reality, to believe that will happen.
Pipeline permitting and construction face significant obstacles. In a 2022
report, for example, the Congressional Research Service noted that pipeline
developers repeatedly “face opposition among affected landowners and advocacy
groups,” often struggling to secure “agreements with landowners for pipeline rightsof-way through their properties.”10 Certain representatives of environmental justice
communities recently vowed to stop the build-out of CCS infrastructure “in the
permitting stage.”11 Without landowner agreements, “developers may . . . secure
property rights through eminent domain authority,” but CO2 pipeline “siting
10 Paul W. Parfomak, CONG. RESEARCH SERV., IN11944, Carbon Dioxide Pipelines: Safety Issues
at 2 (June 3, 2022), available at https://tinyurl.com/mrxa6v69.
11 Timothy Puko, Washington Post, Why these environmentalists are resisting part of Biden’s
climate push (June 25, 2023), available at https://tinyurl.com/432636v2.
13
authorities, landowner rights, and eminent domain laws reside with the states and
vary from state to state, so securing rights-of-way for interstate projects is not
guaranteed.”12 The end result, in the words of the Congressional Research Service,
is that (1) opposition “may prevent CO2 pipeline development in certain localities and
increase development time and costs in others”; and (2) the “actual or perceived risks
associated with CO2 pipelines may limit the potential of CCS as a greenhouse gas
mitigation option.”13
Nevertheless, EPA suggests that the design and implementation of CO2
transport can be completed within 3.5 years. 89 Fed. Reg. at 39,875 n.594. But EPA
cannot point to any CO2 pipeline project that has been permitted, constructed, and
operational within that timeframe. The two main projects that EPA cites have either
been cancelled (Heartland Greenway) or significantly delayed (Midwest Carbon).14
With respect to the latter, Midwest Carbon’s CEO recently announced that the
company was pushing back the estimated operational date of its proposed CO2
pipeline from 2024 to 2026, citing “regulatory hurdles and environmental and
landowner opposition.”15 And in November 2023, Wolf Carbon Solutions withdrew
its application for a proposed 260‐mile CO2 pipeline in light of concerns expressed by
state regulators.16
12 Parfomak, Carbon Dioxide Pipelines: Safety Issues at 2.
13 Ibid.
Leah Douglas, Navigator CO2 Ventures cancels carbon-capture pipeline project in US
Midwest, REUTERS (Oct. 20, 2023), available at https://tinyurl.com/44r57b8u.
15 Jared Strong, Summit says pipeline system won’t be operational until 2026, IOWA CAPITAL
DISPATCH (Oct. 19, 2023), available at https://tinyurl.com/2mznfdpn.
16 Nara Schoenbert, Wolf Carbon Solutions pauses its bid for Illinois approval of a controversial
260-mile CO2 pipeline (Nov. 26, 2023), available at https://tinyurl.com/3hmkjszd.
14
14
3.
EPA Also Failed to Show that a Sufficient System of CO2
Sequestration Had Been Adequately Demonstrated.
Finally, EPA has not shown a proven track record for geologic sequestration of
CO2 at the scale required by the Rule. Commercial storage for the amount of CO2
that would result from a 90% rate of capture is neither available now nor anticipated
in the near term. Application of NRECA for Immediate Stay App. 288–89a, No.
24A96 (U.S. July 23, 2024).
Instead of identifying available commercial storage, EPA again turns to
speculation.
EPA claims to have satisfied its burden by identifying “potential
geolog[y]” for storage within 100 kilometers of every state with existing units affected
by the Rule. 89 Fed. Reg. at 39,857 (emphasis added). But “potential” storage sites
are very different from storage sites that can be used today, or even tomorrow. As
EPA admits, it will require significant study to determine whether these storage sites
can ever be used for sequestration, and if so, how much capacity they have. Id. at
39,855 n.378.
The regulatory hurdles to CO2 storage further mean that storage at the scale
contemplated by the Rule will not be possible in the near future. Geologic storage of
CO2 may take place only through compliance with regulations under one of two
regulatory classes—Class II or Class VI—in EPA’s Underground Injection Control
(UIC) program.
Class II with respect to CO2 refers to the process of enhanced
recovery. But opportunities for enhanced recovery are limited to a subset of oil- and
gas-bearing formations, which are not distributed throughout all areas of the country.
15
With respect to the Class VI program, only a small number of permits have been
issued since 2015 (eight by EPA and 11 by States).17
4.
Since EPA Promulgated The Rule, It Has Become Even
Clearer That EPA’s BSER Is Based On Crystal Ball
Speculation.
Recent developments only confirm that 90% CCS for EGUs has not been
adequately demonstrated and will not be anytime soon. Illinois recently passed a law
that will significantly delay the construction of CO2 pipelines there. On July 19, 2024,
for example, the Governor of Illinois signed a bill that banned the construction of CO2
pipelines until July 1, 2026, unless the Pipeline and Hazardous Materials Safety
Administration (“PHMSA”) finalizes new federal safety regulations before that
date.18 Even after July 1, 2026, however, the new law does not allow the Illinois
Commerce Commission to issue a certificate to construct until the applicant has
obtained “all required permits or approvals from [PHMSA], the U.S. Army Corps of
Engineers, and the Illinois Department of Agriculture, in addition to all other permits
and approvals necessary for the construction and operation of the pipeline prior to
the start of any construction.”19 As explained, the permitting and approval process
alone can take several years and often times far longer in light of significant local and
national opposition to the construction of CO2 pipelines.
17 Angela C. Jones, CONG. RESEARCH SERV., R48033, Class VI Carbon Sequestration Wells:
Permitting And State Program Primacy at 7–8 (2024), available at https://tinyurl.com/cd8ks2b9.
18 Andrew Adams, After years of controversy, Illinois pauses CO2 pipeline construction, for now,
CAPITOL NEWS ILLINOIS, July 19, 2024, available at https://tinyurl.com/pskbfsak.
19 Ill. Pub. Act 103-0651.
16
There is other local opposition, too. Just last month, the Indiana Office of
Utility Consumer Counselor (“OUCC”) filed testimony opposing a proposed CCS
study for a power plant in the state, claiming that “the feasibility and affordability of
a CCS system” is “speculative.”20 Across the Midwest, local residents are continuing
their “fight[] to kill” the construction of CO2 pipelines through their states.21 In North
Dakota, a utility is reconsidering its planned $2 billion CCS power plant project in
light of the significant amount of “uncertainty” created by EPA’s section 111 rule, as
well as economic concerns.22
And in Louisiana, environmental groups recently
challenged an EPA rule granting the state authority over wells used to sequester
captured carbon, arguing that Louisiana lacks the requisite expertise “in light of . . .
the state’s past failures regulating less complicated wells.”23
If history is any
indication, such litigation can take years to resolve.
The timeline for regulatory approvals has also not improved. Approvals for
CO2 capture wells continue to lag at the federal level, with 145 applications pending
before EPA as of July 19, 2024, and only four final permit decisions issued.24 In some
cases, EPA projects that it will take nearly three years to complete its “technical
review” of a single well application.
20 Sean Wolfe, Indiana’s consumer advocate wants to thwart Duke Energy’s carbon capture
study, POWER ENGINEERING (July 16, 2024), available at https://tinyurl.com/4tej2n7k.
21 Nina Elkadi, A battle in rural Midwest as farmers fight carbon capture pipeline, THE NEW
LEDE (July 16, 2024), available at https://tinyurl.com/3rwkm69v.
22 Carlos Anchondo, Major coal CCS project hits delays, cost spikes, E&E NEWS, June 25, 2024,
available at https://tinyurl.com/4wsuhrst.
23 Opening Brief of Petitioners at 1, Deep S. for Envt’l Just. v. EPA, No. 24-60084 (5th Cir. June
12, 2024).
24 Underground Injection Control (UIC) Class VI Permit Tracker (last updated July 19, 2024),
available at https://tinyurl.com/34h4tm6d.
17
II.
The Equities Favor A Stay Because EPA’s Rule Will Jeopardize the
Reliability of the Nation’s Power.
As this Court recently recognized, when “parties seek to stay the enforcement
of a federal regulation against them, often the harms and equities [will be] very
weighty on both sides” and thus the resolution of the stay requests often “ultimately
turns on the merits.” Ohio, 144 S. Ct. at 2052–53 (cleaned up). This case is no
different.
Applicants showed that, absent a stay, they will suffer substantial irreparable
harm from complying with the Rule during the pendency of this litigation.25 Though
the deadlines are still years away, States and other entities must begin taking actions
now if they are to have any chance of meeting those deadlines. The D.C. Circuit
puzzlingly belittled these actions as “long-term planning,” States’ Emergency
Application for Immediate Stay at App. 2a, No. 24A95, but that was clearly wrong.
These are the same kinds of “weighty” harms that this Court recognized as
irreparable in Ohio, 144 S. Ct. at 2053, and in granting the stay in West Virginia v.
EPA, 577 U.S. 1126 (2016).26
25 See, e.g., States’ Emergency Application for Immediate Stay at 26–38, No. 24A95; Nat’l
Mining Ass’n Application for Immediate Stay at 17–26, No. 24A97 (U.S. July 23, 2024); NACCO
Application for Immediate Stay at 33–35, No. 24A98 (U.S. July 23, 2024); NRECA Application for
Immediate Stay at 35–39, No. 24A96 (U.S. July 23, 2024); Electric Generator for a Sensible Transition
Application for Immediate Stay at 23–33, No. 24A116 (U.S. July 26, 2024).
26 See, e.g., U.S. Steel Corp. v. EPA, No. 23A384, 2023 WL 7163329, at *24 (Oct. 26, 2023)
(“U.S. Steel cannot wait before it must incur substantial costs on work plans that EPA does not have
the authority to impose, and on the design, permitting and installation of boiler and reheat furnace
modifications that are unnecessary and may be subject to withdrawal or modification in a revised
rule.”); Am. Forest & Paper Ass’n v. EPA, No. 23A351, 2023 WL 7040199, at *25-26 (Oct. 13, 2023)
(“[t]o reach compliance in time, [Applicants and their members] will have to immediately begin the
process of installing prohibitively expensive emissions controls, incurring hundreds of millions of
dollars in capital compliance and construction costs” and that “sources ‘will need to immediately make
a decision . . . on whether to upgrade or retire’ units”); Application of Utility and Allied Parties for
18
The D.C. Circuit also clearly erred in reasoning that “a stay will not help
because the risk remains” that the Rule’s deadlines will “come back into force at the
end of the case.” States’ Emergency Application for Immediate Stay at App. 2a, No.
24A95. It is well settled that, in the event that a stayed rule survives judicial review,
a court has the power to order the rule’s deadlines to be extended day-for-day for the
period of the stay. See, e.g., Michigan v. EPA, No. 98-1497 (D.C. Cir. June 22, 2000),
Doc. No. 540209 (extending SIP deadline after expiration of stay so that states would
“have 1,309 days for implementing SIP revisions, as provided in the original rule”);
id., Doc No. 524995 (granting covered States the same 128 days they had left for
compliance at the time of the stay in order to “restore the status quo preserved by the
stay”). And parties that obtain a stay of a rule can and do cease compliance efforts in
reliance on that expectation. Were it otherwise, there would often be no point in
seeking a stay.
The balance of the equities and the public interest also support a stay here.
Precisely because the Rule sets unworkable standards based on unrealistic
assumptions, the Rule will threaten electric reliability, as well as impose major costs
on regulated parties and the U.S. economy that cannot be recovered if the Rule is
later set aside.
Because it imposes a system that has not yet been adequately
demonstrated and currently is very costly, the Rule is likely to cause widespread
Immediate Stay at 12, Basin Elec. Power Coop., 577 U.S. 1126 (No. 15A776) (“to meet the rule’s
requirements and have replacement generation online by 2022, the power industry must act now”);
Coal Industry Application for Immediate Stay at 31, Murray Energy Corp. v. EPA, 577 U.S. 1127 (2016)
(No. 15A778) (“Decisions to implement [plant] closures must begin immediately, and planning for
future retirements is underway now.”).
19
retirement of dispatchable generation while simultaneously preventing the
development of new, dispatchable generation resources.
That is particularly
concerning because such generation is needed to balance the expansion of renewables
and to satisfy the significant increase in electricity demand that is expected over the
coming years and decades, due in part to data center and AI growth, as well as the
widespread electrification of transportation, manufacturing and housing sectors.
EPA’s own modeling projects that the vast majority of regulated EGUs will not
implement CCS but will instead retire to achieve “efficient compliance” with the Rule.
Regulatory Impact Analysis at 3-25 to 3-28 (Apr. 2024), EPA-HQ-OAR-2023-00728913 (“RIA”). That prospect is highly concerning—not only to the Chamber, but to
regional and independent electric power system operators.
For example, the Midcontinent Independent System Operator, Inc. (“MISO”),
which manages the delivery of energy to roughly 45 million people throughout the
middle of the United States, is already operating near the limits of its resource
capacity. In a recent report, MISO stated that it is time “to face some hard realities,”
including “immediate and serious challenges to the reliability of our region’s electric
grid.”27
MISO recognized the need for “new dispatchable generation”—that is,
generation “that can be turned on and off and adjusted as needed”28—in light of “the
conventional dispatchable coal and natural gas resources that are being retired.” 29
“[A] key risk is that many ‘dispatchable’ resources . . . are being replaced with
MISO, Response to the Reliability Imperative at 1 (Feb. 2024), available at
https://tinyurl.com/ya7tz7y9.
28 Id. at 1, 2.
29 Id. at 2.
27
20
weather-dependent resources such as wind and solar,” which lack “certain key
reliability attributes that are needed to keep the grid reliable every hour of the
year.”30 While “several emerging technologies may someday change that calculus,
they are not yet proven at grid scale.”31 Until then, MISO “will continue to need
dispatchable resources for reliability purposes.”32
MISO’s warnings about grid reliability are echoed by the North American
Electric Reliability Corporation (“NERC”), the Electric Reliability Organization that
the Federal Energy Regulatory Commission (“FERC”) has certified pursuant to the
Federal Power Act to establish and enforce reliability standards, subject to FERC
review, for the nation’s bulk-power system.33 In a recent assessment, NERC found
“clear evidence of growing resource adequacy concerns over the next 10 years,” and
identified large areas of the country at a “high” risk of failing to meet demand,
including MISO’s 15‐state area.34 In just four years, “MISO is projected to have a 4.7
GW shortfall if expected generator retirements occur despite the addition of new
resources that total over 12 GW.”35
PJM Interconnection, the regional grid operator responsible for ensuring
reliability for 65 million people across 13 states and the District of Columbia, has
30 Id. at 1 (emphasis omitted).
31 Ibid.
32 Ibid.
33 See, e.g., S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 51, 79 (D.C. Cir. 2014) (discussing
NERC); 16 U.S.C. § 824o(a).
34 NERC, 2023 Long‐Term Reliability Assessment at 6‐9 (Dec. 2023), available at
https://tinyurl.com/bdm36c27.
35 Id. at 7-9. For context, 1 GW is generally enough energy to power about 750,000 homes.
California ISO, Understanding electricity, available at https://tinyurl.com/2p9tbykp.
21
expressed similar concerns.36
According to PJM, EPA’s rule is likely to “drive
premature retirement” of EGUs and “dissuade new gas resources from coming
online,” even though such resources are needed to meet “significant increases” in
demand “as a result of new data center load, electrification of vehicles and increased
electric heating load.”37
This new reality has also led to the recent, dramatic
increases in electric generation capacity prices across the PJM region.38
The
functioning of our national economy, and the vast majority of the small and large
businesses within it, depends on a power system that can routinely handle demand
increases without risking interruptions in service or dramatic market disruptions.
EPA does not explain how the fossil generation forced to retire as a result of
its Rule can or will be replaced at current levels and with similar dispatch
characteristics, notwithstanding strong evidence that electricity demand is expected
to grow rapidly in the coming years and decades, as noted above. As one global
environmental organization recently put it: “the United States . . . does not have a
plan to manage the reliable transition of its electricity sector.” 39 EPA has finalized
“binding power plant emissions reduction targets, but fully decarbonizing the
electricity sector requires coordinated, regional planning and targeted investments
for specific types of resources, many of which are not yet commercially available.”40
36 PJM, PJM Statement on the Newly Issued EPA Greenhouse Gas and Related Regulations at
2-3 (May 8, 2024), available at https://tinyurl.com/3uu34edn.
37 Ibid.
38 Ethan Howland, PJM capacity prices hit record highs, sending build signal to generators,
UTILITYDIVE (July 31, 2024), available at https://tinyurl.com/bdzfzr78.
39 World Resources Institute, Working Paper, Meeting the Reliability Challenges of the Clean
Energy Transition (Nov. 2023), available at https://tinyurl.com/mr7exsv4.
40 Ibid.
22
CONCLUSION
This Court should grant the applications for immediate stay of the Rule.
Respectfully submitted,
/s/ Elbert Lin
Elbert Lin
HUNTON ANDREWS KURTH LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219
(804) 788-8200
elin@huntonak.com
Brent A. Rosser
Hunton Andrews Kurth LLP
One South at the Plaza, Suite 3500
101 South Tryon Street
Charlotte, North Carolina 28280
(704) 378-4700
F. William Brownell
Matthew Z. Leopold
Erica N. Peterson
Hunton Andrews Kurth LLP
2200 Pennsylvania Ave. NW
Washington, DC 20037
(202) 955-1500
Andrew R. Varcoe
Christopher J. Walker
U.S. CHAMBER LITIGATION CENTER
1615 H Street, NW
Washington, DC 20062
(202) 463-5337
Counsel for Amicus Curiae Chamber of
Commerce of the United States of
America
August 5, 2024
23
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.