On the Front Lines of the War on Coal

by Michael Cain

It’s been a tough year for coal in the United States. I generally dislike the use of war-on-this and war-on-that. But if the intended meaning is “make it much more difficult and/or expensive to continue burning large quantities of coal to produce electricity,” then the phrase is accurate. Where most people who use it are wrong though, is just who it is that’s fighting the war. It’s the federal courts, and to a lesser degree some of the individual states. The EPA is just the tool through which the courts are acting. Well, also ghosts of Congresses past, who left us with various environmental protection statutes in their current form. Since the SCOTUS hammered the coal side of the fight twice this just-concluded term, it seems like a good time to write a little status report. 

Just so everyone knows, I have a bias. My opinion is that coal is nasty dirty stuff and burning it in large quantities creates lots of problems. Burning it to generate electricity has two big advantages, though. First, it’s cheap, particularly when it can be mined from the surface; and if you don’t care about the by-products, the equipment for making electricity with it is also cheap. Second, there’s an awful lot of it. It’s the world’s most common fossil fuel. The world currently burns something over eight billion tons of the stuff each year. The US burns about a billion tons. In practice, the “war on coal” is about eliminating or reducing or properly managing the by-products, which makes the use of coal much more expensive. So far this year, the courts have hammered coal on three fronts: coal ash, noxious emissions like sulfur dioxide, and greenhouse gases (carbon dioxide specifically). 

Not all the constituents of coal are combustible. Anywhere from 3% and up are not and are left behind as ash, and even 3% of a billion tons is a lot of ash. A bit more than 40% of coal ash is typically reused in various ways: some of it can replace Portland cement in the right circumstances, some it can be used as fill for roadbeds, etc. The remainder winds up in landfills or ash ponds. Ash ponds contain an ash/water slurry; the wet ash stays where it’s put rather than being blown away by the wind. Ash pond spills are becoming more common. The federal EPA has not regulated ash ponds in the past; in January this year the DC District Court accepted a consent decree between the EPA and several plaintiffs that requires the EPA to issue final findings on ash pond problems by December. The expectation is that the findings will lead to significant new regulation, and increased spending on both existing and future ash ponds. Things are also happening at the state level. The North Carolina Senate unanimously approved a bill last week that would require the closure of all coal ash ponds in the state over the next 15 years. NC’s not exactly one of your liberal Northeastern or Pacific Coast states. 

Most of the visible pollutants that go up the flue at coal-fired plants have been eliminated. The picture up at the top of this post is the Intermountain generating station near Delta, Utah. The visible white stuff escaping from the stack is steam [1]. Not visible are things like mercury compounds, sulfur and nitrous oxides, and extremely small particles of soot. Those are all precursors to haze, smog, low-level ozone, and acid rain, as well as being direct eye, nose, throat and lung irritants. Some of these pollutants can travel significant distances in the open air. In April this year, a three-judge panel of the DC Circuit upheld a tougher rule for emissions of this type of pollutant (the MATS rule). Also in April, the SCOTUS approved the EPA’s Cross State Air Pollution Rule that will result in tighter controls on this type of emission. Approval of the cross-state rule has been a long time coming, as EPA rules that would regulate cross-state sources made multiple trips up and down the court system. The courts have always held that the EPA should regulate cross-state pollutants; the problem has been finding a technical approach that would satisfy the courts. In EPA v. EME Homerin April, the SCOTUS reversed the DC Circuit, and the CSAPR will now go into effect. 

Finally, last week the Supreme Court issued its opinion in the case of Utility Air Regulatory Group v. EPA. This opinion confirmed the Court’s 2009 opinion in Massachusetts v. EPA that the EPA must regulate greenhouse gases. Massachusetts was a suit brought by several states against the Bush EPA, which had decided the carbon dioxide was not harmful. I think Utility is an odd opinion, cobbled together out of three different factions on the court (more about that in a moment). The opinion has three conclusions: (a) the EPA can and must regulate greenhouse gas emissions from stationary sources, (b) the EPA can only regulate greenhouse gas emissions from stationary sources if those sources would have been regulated for non-greenhouse emissions anyway, and (c) the somewhat controversial approach the EPA is taking to the regulation is acceptable. The last one seems to me to have been sort of an afterthought. OTOH, it’s likely that we’ll see a number of cases about it later when the states make the details of their individual plans known. 

Regular readers may remember my thoughts about Chief Justice Roberts: he’s all about protecting large corporate interests, including protecting them from their own bad judgment. While Scalia delivered the opinion, I think it has Roberts’ fingerprints all over it. In effect, “This is the best deal I could get for you guys today; public opinion is moving against you; the deal I could get in a few years would likely be worse.” The Utility opinion is divided into several parts. The Court itself was divided into three factions of four, three, and two justices. Each faction had a different take on the law. Each piece of the opinion was approved by two factions. although in different combinations, and in some cases for different reasons. I would dearly love to have a transcript of the memos and conversations that led to the final product. 

I mentioned Congresses past and the form of the current law. Here’s the statutory phrase that all three factions parsed nearly to death (emphasis mine):

…regulatory requirements must be applied to any stationary source that has the potential to emit two hundred fifty tons per year or more of any air pollutant.

All three factions agreed that Congress’ intent was that the language should be interpreted so that regulation of stationary sources applied to a few thousand sources at most, not to tens or hundreds of thousands of sources. This is a problem when this language is applied to greenhouse gases because facilities as small as a large hotel or a hospital may emit more than 250 tons of CO2 per year.

• The middle faction, consisting of Scalia, Roberts, and Kennedy, said that CO2 was a pollutant that should be regulated, but the second “any” must be read flexibly and the EPA could regulate sources only if they would have regulated them “anyway.” That means that the source would have been regulated because it had the potential to emit more than 250 tons of a traditional nasty like sulfur dioxide. This lets the little guys like hotels and hospitals off the hook.
• The liberal faction, consisting of Breyer, Ginsburg, Sotomayor, and Kagan, said in an opinion written by Breyer that since CO2 was clearly a pollutant as defined elsewhere in the statute, the first “any” must be read flexibly and the EPA could chose to regulate a subset of the sources (ie, the EPA’s proposal to regulate only sources emitting more than 10,000 tons of CO2 was okay). This would leave future decisions about the little guys in the EPA’s hands, and was the ruling of the DC Circuit.
• The conservative faction, consisting of Alito and Thomas, said the correct interpretation is that “any” means “any” in both appearances of the word, and since there were at least tens of thousands of sources emitting more than 250 tons of CO2 per year, it follows that CO2 isn’t a pollutant that can be regulated. Alito’s opinion states explicitly that he believes the Court was wrong in Massachusetts.

The results of the various court decisions are going to have very different effects on different states. Compare California and North Carolina, to pick two (not exactly at random). North Carolina has 43 coal ash ponds; California has none. North Carolina, despite being a much smaller state, generates more than 30 times as much electricity from coal as California; the MATS rule will require much more effort to meet in North Carolina. The CSAPR does not apply to California; but North Carolina power plants will be required to make reductions to improve air quality in downwind states. North Carolina has to reduce the CO2 intensity of its generating plants by more than the national average; California’s required reduction is much less than the average, and decisions that California has already made at the state level will probably be sufficient to meet the EPA requirements. North Carolina’s electricity rates are likely, it seems to me, to be noticeably higher in the future; California’s rates will remain high and perhaps go higher, but aren’t going to be driven by these decisions. 


[1] Unless there’s a malfunction or some peculiar weather, the visible emissions from any coal-fired plant these days is steam. Photographers with a bigger ax than mine to grind are fond of taking power plant pictures on humid days when the steam looks much more like smoke, with low-hanging clouds, and underexposing the shot to make it all look darker and more evil.