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THE REACH OF WV V. EPA: The Supreme Court’s decision last year in West Virginia v. EPA has become a core component of GOP-led legal challenges against the Biden administration’s environmental regulations, and they’ve had some success with it, showing the import of this key ruling for its limits on the scope of agencies’ rulemaking authorities.
Republicans and red states have cited the precedent and what the court had to say about who gets to decide “major questions” of economic and societal importance as they take on new rules, including President Joe Biden’s Waters of the United States rule and multi-pollutant vehicle pollution proposal.
Where it’s working: A 24-state coalition of Republican states challenged Biden’s WOTUS definition, arguing in part in a February complaint that it runs afoul of the major questions doctrine as set down in West Virginia v. EPA for purporting to tackle with its rule a question “that is major in every sense” for requiring millions of homeowners and businesses to comply with the costly rules.
District Judge Daniel Hovland was sympathetic and put a preliminary injunction on the rule on April 12, covering only the plaintiff states. Hovland’s ruling quoted West Virginia v. EPA’s determination that agencies may not exercise regulatory power over “a significant portion of the American economy” or “make a radical or fundamental change to a statutory scheme” through rulemaking without clear authorization by Congress.
“The definitions of WOTUS involve the regulation of a significant portion of American land mass, water, and economy,” Hovland wrote in his order. “However, a grant of general authority to the EPA is not without limits, and there exist serious questions whether Congress intended to allow the EPA to make such major policy decisions as are codified in the 2023 Rule through the rulemaking process.”
Where else the case is popping up: West Virginia Attorney General Patrick Morrisey, whose office led the challenges in West Virginia v. EPA and the above WOTUS case, teased legal action after the Biden administration proposed its new power plant rules and said the Supreme Court has placed “significant limits” on EPA’s regulatory authority.
More recently, Senate Republicans issued an appeal to EPA to withdraw its proposed rules limiting emissions from new vehicles on the grounds that the agency is trying to “substantially restructure the American energy market” in violation of major questions.
“Forcing a transition to battery electric vehicles (BEVs) through regulation without explicit delegated authority from Congress violates the separation of powers,” a group of 27 GOP senators wrote in a letter to EPA yesterday.
Regulating on old statutes: The statutes underlying these cases and regulations — the Clean Air Act and Clean Water Act — are decades old and are unlikely to be substantially updated with clearer directives (as SCOTUS would have it) in such a fiercely partisan, narrow-majority environment in Congress.
The ideal solution to that stalemate, according to some advocates of more rigorous regulations, would be leaving agencies a long leash to exercise their discretion and expertise to draw up regulations to improve public health and environmental quality, but the high court has been skeptical of that.
In Loper Bright Enterprises v. Raimondo, the court could limit agency discretion further as it weighs the future of the Chevron doctrine.
For now, Jay Duffy, litigation director for Clean Air Task Force, said he worries West Virginia v. EPA’s constraints around major questions will scare agencies away from proposing and finalizing rules with teeth.
“My biggest concern is that agencies shy away from proposing strong and very likely legal rules for fear of even getting close to that very vague threshold,” Duffy told Jeremy. “The vagueness of the [major questions doctrine] has a significant chilling effect and the cynic in me thinks that’s intentional.”
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DEMOCRATS ANNOUNCE TRANSMISSION BILL FOR DEBT CEILING TALKS: Rep. Scott Peters and Sen. John Hickenlooper announced electric transmission reform legislation yesterday that they hope can be integrated into a debt ceiling deal.
The BIG WIRES Act would establish a minimum-transfer requirement such that regional grids be prepared to transfer at least 30% of their peak electrical loads with one another, a way to avoid blackouts when extreme weather strikes.
Transmission reform is the no. 1 priority for Democrats writ large, who want to speed up interconnection of renewable energy projects, and Republicans have generally supported the idea of siting and building transmission more quickly (although it wasn’t a substantial component of the House GOP’s HR 1).
But the parties are still pretty far apart on how to achieve that goal, with leading Republicans writing off Democrats’ proposal for strengthening FERC’s authorities over siting.
Peters said he and Hickenlooper believe their bill would be palatable enough to go into a debt-ceiling package “because [interregional transfers are] a reliability issue and a competition issue and a lower cost to consumers issue,” Politico reported.
HYUNDAI PLANS NEW BATTERY CELL PLANT IN GEORGIA: Hyundai announced a new joint venture with fellow Korea-based LG Energy Solution to construct an electric vehicle battery cell manufacturing plant in Georgia.
The companies plan to construct the plant in Savannah adjacent to the site of the Hyundai Motor Group Metaplant at which the company plans to produce various Hyundai, Genesis, and Kia EVs, as well as batteries.
The battery cell plant will have a capacity of 30 gigawatt-hours per year, enough to support the production of 300,000 units of EVs annually, according to the announcement. Construction is slated to begin in the second half of this year, with production to ensue at the end of 2025 at the earliest.
INTERIOR ADVANCES WESTERN TRANSMISSION PROJECTS: The Bureau of Land Management advanced the environmental review process for two electric transmission projects in Nevada yesterday.
BLM published a draft environmental impact statement for the Greenlink West project, which would connect Las Vegas and Reno and supply four gigawatts of renewable energy.
The bureau also published a notice of intent to prepare an EIS for Greenlink North, a transmission line transiting Nevada that BLM said could unlock another 4 gigawatts of renewable energy.
NORWAY’S SOVEREIGN WEALTH FUND PRESSES EXXON AND CHEVRON ON CLIMATE: Norway’s $1.4 trillion sovereign wealth fund said today that it will back resolutions urging Chevron and Exxon to adopt more aggressive targets for greenhouse gas reduction, delivering a massive blow to the CEOs of both companies, which had asked the fund to vote against the measures.
Instead, it said it would back the resolutions proposed by climate activist group Follow This earlier this week.
The fund’s chief compliance officer, Carine Smith Ihenacho, told the Financial Times in an interview that in their view, neither U.S. company has been ambitious enough in their energy transition plans. “Exxon don’t really believe in the value of setting Scope 3 targets,” Ihenacho said. “We think the company should do so. Chevron, we don’t think they are ambitious enough in their transition plans.”
Norway’s sovereign wealth fund—and the single biggest stock market investor—owns 0.86% of Chevron and 1.13% of Exxon as of late 2022, according to Reuters. The resolution it supported pressures both companies to adopt a medium-term Scope 3 emissions reduction target, which includes emissions generated by the combustion of any of their fossil fuel products.
…MEANWHILE, TOTALENERGIES BOARD REJECTS THE PROPOSAL: Meanwhile, French police clashed with hundreds of climate activists today outside the annual meeting of TotalEnergies, the French energy and petroleum company, after it rejected the resolution urging it to move faster to cut its greenhouse gas emissions.
The resolution, put forth by the climate group Follow This and 17 other institutional investors, called on TotalEnergies to commit to steeper “absolute emissions cuts” by the end of the decade, as opposed to the intensity targets it has already adopted.
It obtained slightly more than 30% of the votes—still an improvement from 2020, when 17% of shareholders voted to approve a similar resolution.
Follow This founder Mark van Baal told CNBC that TotalEnergies has “no plan to drive down emissions this decade. Therefore, we expect that long-term and climate-conscious investors will exercise the only power they have as shareholders: the power of the vote.”
ANALYSTS ‘CAUTIOUSLY OPTIMISTIC’ ABOUT SUMMER GAS PRICES: Millions of drivers are slated to hit the road this Memorial Day weekend for the official start of summer driving season—but even with an increase in gas demand compared to last summer, analysts say it’s not likely that prices at the pump will be even near the painful points seen last summer.
Current national gas averages stand at just $3.57 per gallon, or roughly $1.02 less than the same point in 2022—and well below last summer’s record-high national average of more than $5 per gallon. That’s despite the fact that 37 million Americans are expected to hit the road this holiday weekend, up 6% from the same point last year.
That’s primarily due to lower global demand for crude, which accounts for more than half of U.S. retail gasoline prices. Average spot prices for international benchmark Brent crude are averaging $41 per barrel lower compared to May 2022, according to data from the U.S. Energy Information Administration.
And oil markets are much more comfortably supplied compared to last year, when fears about Russian production loomed large and sent future projections skyrocketing.
“I think we’re coming off a high of gasoline consumption last year, because of the recovery from the pandemic—but also the fact that Russia’s invasion of Ukraine has not led to a big drop in oil production” as some had predicted, Patrick De Haan, the head of petroleum analytics at GasBuddy, said in an interview.
GLICK STARTS CONSULTING FIRM IN POST-FERC LIFE: Former FERC chairman Richard Glick launched a new consulting firm, GQ New Energy Strategies, which his business partner said is going to focus on helping clients “navigate and thrive in the clean energy transition.”
Pamela Quinlan, a former chief of staff in the office of the chairman at FERC who worked under Glick, made the announcement yesterday in a tweet.
Others on the move: Citizens for Responsible Energy Solutions announced the addition of Andrew Morley, former legislative assistant and director of energy and natural resources policy for Rep. Pete Stauber, a Minnesota Republican, as the conservative energy group’s senior government relations manager.
The Rundown
Financial Times Power of Siberia: China keeps Putin waiting on gas pipeline
Bloomberg The beginning of the end of the US shale boom
E&E News Biden fossil fuel boost creates political storm on his left
