Mercury Rule Looks Like It Will Take Effect Now that the High Court Won’t Step In, Again

by | Jun 14, 2016

Supreme Court 2The Obama administration racked up a key victory over its mercury rule after the US Supreme Court refused to hear an appeal on Monday.

It”s an indication that the high court will remain sympathetic to the US Environmental Protection Agency on a host of ecological issues, especially in light of the current 4-4 split among justices.

As for the so-called Mercury and Air Toxics Standards (MACT), it had been before the DC Court of Appeals, where it got sent a year ago; it was then that the high court ruled 5-4 to send it back down to the lower court, saying that EPA had not properly weighed costs versus benefits. However, in December, that appeals court left the rule in place and the high court said, essentially, the case is now closed — that it won’t rehear the matter.

When the US Supreme Court made its ruling last year, critics of the Obama administration said that it would take the momentum out of its Clean Power Plan — that the rule to reduce carbon emissions would fail to meet same cost-benefit crunch.

They also said that EPA’s mandatory approach to reducing mercury levels say that the technologies to make huge cuts are not yet commercialized. Opponents have cited what they say would have been the expected financial toll: $170 billion and at least 183,000 full time jobs lost per year through 2020.

“This is a rare instance of good news for the coal business, but I’d expect any sense of enthusiasm to be short-lived,” says Rob Barnett, policy analyst with Bloomberg Intelligence, in an interview with this writer at the time of the high court ruling last year. He was right.

In 2012, EPA said it was acting under the authority of the 1990 Clean Air Act by proposing regs to cut mercury emissions by 90 percent, under the MACT rule. But it was challenged by the state of Michigan, as well as industry and coal-based unions and trade associations, and such companies as Peabody Energy, which have the called the proposal costly and burdensome, at $9.6 billion a year — the same folks who just asked the Supremes to step back in.

Those plaintiffs first took their arguments to the DC Circuit Court of Appeals, which had sided with EPA’s positions. However, the same plaintiffs appealed that ruling to the Supreme Court, which just said that EPA had to calculate the cost of proposed rulings from the get-go.

“One would not say that it is … rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits,” says Justice Antonin Scalia, in writing the majority opinion last year. Certainly, his death has hurt the cause of Peabody, Michigan, and the others.

To be clear, that mercury regulation would have applied to 1,400 coal-and-oil-burning power plants. Utilities were supposed to have installed the technologies to reduce those emissions by 90 percent starting this year, or in some cases, 2016. They would have had five years to comply.

The agency says that at least 60 percent have already acted while 40 percent, or about 600 units have not. Of those, it had been estimated that about 1 percent could choose to close rather than spend the money to buy new equipment.

While the cost of carrying out the proposed rule would be nearly $10 billion a year, EPA has said that the payback would be as much as $90 billion a year when all power plants are expected to be in compliance, or closed. That figure, however, also includes particulate matter and sulfur dioxide, which are not considered hazardous pollutants under the Clean Air Act and which cannot be used to add up the benefits of the proposed rule.

“Many of the retirement decisions have already been made, so I doubt too many companies will reverse course at this point,” says Bloomberg’s Barnett.

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