In a major win for the energy industry, the Supreme Court ruled Monday against the Environmental Protection Agency's effort to limit certain power plant emissions -- saying the agency "unreasonably" failed to consider the cost of the regulations.
The rules curbing emissions of mercury and other hazardous air pollutants began to take effect in April. But the court said by a 5-4 vote Monday that the EPA failed to take their cost into account when the agency first decided to regulate the toxic emissions from coal- and oil-fired plants.
The challenge was brought by industry groups and 21 Republican-led states.
Writing for the court, Justice Antonin Scalia said it is not appropriate to impose billions of dollars of economic costs in return for a few dollars in health or environmental benefits.
"EPA must consider cost -- including cost of compliance -- before deciding whether regulation is appropriate and necessary," the court said.
The case now goes back to lower courts for the EPA to decide how to account for costs.
he decision is a blow to the Obama administration, just days after the court delivered President Obama a major win by upholding his signature health care overhaul. The White House also celebrated Friday's historic ruling legalizing gay marriage nationwide.
In the majority opinion on Monday, Scalia wrote that while the EPA decided to regulate power plants to improve public health and the environment, even the agency estimated it would cost power plants nearly $10 billion a year. "EPA refused to consider whether the costs of its decision outweighed the benefits. The Agency gave cost no thought at all, because it considered cost irrelevant to its initial decision to regulate," Scalia wrote.
In this, he wrote that the EPA over-reached.
The EPA did factor in costs at a later stage when it wrote standards that are expected to reduce the toxic emissions by 90 percent. They were supposed to be fully in place next year. The issue was whether health risks are the only consideration under the Clean Air Act.
The EPA said in a statement it would review the decision and take "any appropriate next steps" when the review is complete. "EPA is disappointed that the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance," EPA Press Secretary Melissa J. Harrison said.
She said that since the decision pertained to cost considerations -- and not the agency's overall Clean Air Act authority -- "EPA remains committed to ensuring that appropriate standards are in place" to curb air pollution.
"The Court's decision focuses on EPA's initial finding that it was appropriate and necessary to regulate these emissions and not on the substance of the standards themselves," she said, adding that for every dollar spent on reducing pollution under these rules, "the American public would see up to $9 in health benefits."
But Republicans cheered the decision. Sen. Lisa Murkowski, R-Alaska, chairwoman of the Senate Energy and Natural Resources Committee, said in a statement she hopes the opinion leads to some "balance" in these environmental standards. "It is heartening to hear that the court has reined in the EPA, especially on the issue of the costs of regulation," she said.
Scalia was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito.
In dissent, Justice Elena Kagan said it was enough that the EPA considered costs at later stages of the process.
"Over more than a decade, EPA took costs into account at multiple stages and through multiple means as it set emissions limits for power plants," Kagan said.
She was joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.
The case is the latest in a string of attacks against the administration's actions to use the Clean Air Act to rein in pollution from coal-burning power plants.
EPA is readying rules expected to be released sometime this summer aimed at curbing pollution from the plants that is linked to global warming. States have already challenged those rules even before they are final, and Congress is working on a bill that would allow states to opt out of any rules clamping down on heat-trapping carbon dioxide.
The legal and political challenges ahead could undermine U.S. efforts to inspire other countries to control their emissions, as they head into negotiations in Paris on a new international treaty later this year.
In the case of mercury, the costs of installing and operating equipment to remove the pollutants before they are dispersed into the air are hefty -- $9.6 billion a year, the EPA found.
