Ag, States Challenge EPA Action on EVs: Ag Groups, States Say EPA, California Used Back Door to Spread Electric Vehicle Use

October 28, 2022

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by Todd Neeley (DTN Progressive Farmer) Agriculture, fuel interests and several states see EPA's March 2022 decision to reinstate California's legal authority to implement a zero-emissions vehicle sales mandate and greenhouse gas emissions standards as a back-door way to move the entire country away from gasoline-powered vehicles.

Several state-level agriculture interest groups, fuel companies and attorneys general in 17 states filed a series of legal briefs in the past week, arguing the action taken by the EPA violates the Constitution when it comes to states' rights to set their own standards or no standards at all.

In recent months, California regulators announced a plan to ban the sale of gasoline-powered vehicles in the state by 2035, setting the stage for moving to all-electric vehicles.

Since the beginning of the Biden administration, the ethanol industry has struggled to find a seat at the table when it comes to reducing greenhouse gas emissions in the transportation sector. The administration has primarily focused on the need to expand EV availability across the country to cut carbon emissions.

What's more, the Biden administration is expected to release a proposed reset of the Renewable Fuel Standard in the coming months, which has created angst among agriculture and ethanol interests.

That's because, according to the RFS statute, EPA assumes the authority to set biofuel volumes beyond 2022. In addition, there have been reports the Biden administration may be considering the creation of EV renewable identification numbers, or RINs, as part of the RFS reset.

The replacement of gasoline vehicles with EVs is seen as a direct threat to fuel companies, including ethanol producers.

"In recent years, Congress has grappled with how best to address global climate change," a group of ag interest groups said in a brief filed on Monday.

"It has embraced some regulatory approaches but not others, it has authorized federal agencies to take some actions but not others, and it has preempted states from regulating in some areas but not others. It has made difficult policy judgments about when and how to limit greenhouse-gas emissions, and when and how to regulate industries and spur economic growth.

"At no point, however, has Congress mandated a wholesale shift in the nation's vehicle fleet from traditional vehicles to electric vehicles -- a shift that would fundamentally transform the automobile industry, the oil and gas and petrochemical industries, motor-fuel retailing, the electric grid, and thousands of related manufacturing businesses and supply chains."

EPA 2022 ACTION

On March 9, 2022, EPA Administrator Michael Regan announced the agency rescinded Trump administration actions EPA found were taken in error.

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Both EPA and the National Highway Traffic Safety Administration, along with the state of California, promulgated their own regulations in this vein.

Those actions also are facing lawsuits. The court consolidated three cases that challenged the same agency action, including Iowa Soybean Association v. EPA, American Fuel and Petrochemical Manufacturers v. EPA, and Clean Fuels Development Coalition v. EPA.

The ag groups said the agencies' actions are "designed to achieve a goal Congress never set: 'that 50% of all new passenger cars and light trucks sold in 2030 be zero-emission vehicles.'"

"EPA and NHTSA hope to achieve that ultra vires (beyond their authority) goal in part by embracing aggressive state-law standards enacted by California," the ag brief said.

"EPA has purported to authorize those state standards by invoking an ill-fitting Clean Air Act provision that affords California a narrow waiver of federal preemption of state motor-vehicle emission standards."

The ag and fuel groups argue that Clean Air Act Section 209 reflects a determination by Congress that "regulating emissions from new motor vehicles is generally the responsibility of the federal government."

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CALIFORNIA REGS SPREADING

In a brief filed by the 17 states on Oct. 20, 2022, they said the actions taken by California and the federal government already are leading to other states adopting California's approach.

"To date, 17 states and the District of Columbia have adopted California's greenhouse-gas emission standards, its zero-emission-vehicle mandate, or both, under Section 177," the attorneys general said.

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In 2005, for the first time, California sought a waiver from EPA to establish its own emission standards, not for local pollutants but for greenhouse gases the state determined contribute to global climate change.

EPA denied the waiver in 2008 and concluded the Clean Air Act does not authorize California to tackle "diffuse national and international problems," according to the AG's brief.

"But instead covers 'air pollution problems that have their basic cause, and therefore their solution, locally in California."

With a change in presidential administrations, in 2013, EPA granted California another waiver.

"In 2019, EPA reconsidered and withdrew the 2013 waiver, once again explaining that standards aimed at global climate change fall outside Section 209(b)'s narrow exception to federal preemption and that, in any event, California did not 'need' its standards because they would not meaningfully address global climate change," the state's brief said.

"EPA got it right the first time (and again in 2019). Congress afforded California a targeted exemption from an otherwise uniform national regulatory scheme so that California could continue to address its local pollution conditions. Congress did not, and could not, authorize California, alone among the 50 states, to assume a role as a junior-varsity EPA and attempt to solve national and international issues like climate change." READ MORE

The Biden administration’s electric vehicle gambit is illegal and costly (Washington Examiner)

‘SCOTUS bait’: Legal battle over Calif. waiver begins (E&E News)

Excerpt from Washington Examiner: The opening gambit of Biden's plan has three main components. First, the Environmental Protection Agency promulgated new emissions standards for cars and trucks — standards that can be met only by electrification of at least 17% of the new fleet. Second, the EPA and the Department of Transportation worked together to bless California’s reimplementation of its separate (and illegal) greenhouse gas vehicle emissions standards and electric car mandate. Third, the Transportation Department set fuel-economy standards that cannot be achieved without electrification and that explicitly incorporate California’s electric car quota into their “baseline.” Manufacturers that don’t sell enough EVs have to buy credits or pay fines, increasing the price of all nonelectric cars. The EPA estimates the price hikes will reach thousands of dollars per car.

All of this is illegal.

The 1975 Energy Policy and Conservation Act grants the Transportation Department sole authority to regulate fuel economy for the entire nation and forbids states from making laws that are even “related to” fuel economy. Moreover, the law explicitly prohibits the department from “considering” electric vehicles in setting these standards.

Under the Clean Air Act, Congress gave the EPA authority to regulate pollutants from the tailpipe. California could request permission to impose separate standards under a narrow set of circumstances, given its unique topography and challenge with smog. Historically, the EPA and California have not used this authority to regulate greenhouse gas emissions from cars, both because it’s a stretch under the Clean Air Act and because there is a direct, scientifically verified relationship between fuel economy and carbon emissions.

The Supreme Court directed the EPA to change course in 2007, stating that there was no reason to believe the Transportation Department and the EPA could not regulate harmoniously. Both the Obama and Trump administrations issued joint rules by both agencies trying to do just that.

But in a bid to phase out conventional vehicles, the Biden administration has tried to sidestep the prohibition on DOT considering electric vehicles by having the EPA first issue its standards in a separate rulemaking and then restore California’s Clean Air Act “waiver” for its own standards and electric car quota. This completely inverts the statutory system, transforming it into a tool for forcing electrification rather than the technology-neutral, performance-based system Congress created.

Congress should use every means possible — whether through oversight, appropriations, or legislation — to expose and rein in the Biden administration’s power grab, which pursues its climate change agenda without regard for economic consequences or the rule of law. READ MORE

Excerpt from E&E News: Historically home to some of the nation’s worst air quality, California has for 50 years set pollution requirements stricter than those imposed by the federal government. But 17 Republican-led states have challenged that authority, arguing EPA violated the Constitution and states’ sovereign rights by granting California a Clean Air Act waiver allowing the Golden State to tackle planet-warming emissions on its own (E&E News PM, May 13, 2022).

The U.S. Court of Appeals for the District of Columbia Circuit is scheduled to hear oral arguments on California’s waiver in September. Environmental attorneys say the case could eventually land at the Supreme Court amid a conservative push to challenge the limits of the executive branch.

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“A colleague often refers to these types of issues as SCOTUS bait,” said Jonathan Brightbill, a partner at Winston & Strawn LLP, during a recent Federalist Society webinar.

The state sovereignty discussion could serve as the vehicle that grabs the interest of the high court, which rejects most cases that come its way, said Brightbill, who served as principal deputy assistant attorney general of the Justice Department’s environment division during the Trump administration.

California’s waiver was revoked — for the first time ever — under former President Donald Trump, with EPA citing a need for national uniformity. The Biden administration restored the waiver in March, calling it an important part of the broader effort to tackle climate change.

A Supreme Court showdown over California’s Clean Air Act waiver could build on the justices’ blockbuster climate ruling in West Virginia v. EPA.

In the June 2022 decision, the justices applied a legal theory championed by conservatives to find that EPA under former President Barack Obama had overstepped by crafting a rule that required power plants to shift from coal to renewable energy sources. The “major questions” doctrine states that Congress must speak clearly in order to authorize agencies to regulate matters of “vast economic and political significance.”

“In the wake of their success in the Supreme Court in West Virginia and the recognition of the long-simmering, but now recognized, major questions doctrine, the collection of states has returned to see if they can make more law to further restrain the administrative state,” Brightbill said.

He noted Ohio and other states opposing the Clean Air Act waiver had introduced a “parade of horribles” that could result from upholding California’s authority. For example, the red states have said, Congress could allow some states, but not others, to boycott Israel. Or it could pass legislation that allowed one state to enact and enforce immigration laws.

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Robert Percival, director of the environmental law program at the University of Maryland, said challenges to EPA regulations are routine, but “after West Virginia v. EPA, [litigants] are inventing new constitutional doctrines to feed off the major questions doctrine now that the Supreme Court was willing to bite.”

Percival called California’s waiver a “bedrock principle of environmental law” and argued at the Federalist Society webinar that red states may have trouble proving they’ve been injured.

“The red states don’t like what the blue states are doing, so they are challenging it,” he said. “But it’s difficult for red states to say how they’ve been hurt in any way other than their feelings might be hurt because California was authorized to do something really cool and innovative that’s been a dramatic success over the years.”

Ripple effect

Ohio Attorney General Dave Yost, the Republican leading the D.C. Circuit challenge against EPA, argued that California’s waiver upsets parity among the 50 states.

“The equal sovereignty doctrine helps preserve the constitutional balance,” Yost told the court on Nov. 2. “When Congress unequally limits the states’ sovereignty — when it allows some states but not others to exercise some aspect of sovereign authority — it reorders the constitutional division of power among the states.”

He added that “giving one state special power to regulate a major national industry contradicts the notion of a union of sovereign states.”

A ruling against EPA would ripple through the vehicle industry: Eighteen states and the District of Columbia now follow California’s tougher rules, representing nearly 40 percent of the national auto market. California itself is the largest economy in the country and fifth globally.

California’s waiver has allowed the state to enact a package of regulations called the Advanced Clean Cars Program, which was first passed in 2012 and included a mandate for automakers to sell an increasing number of zero-emission vehicles in the state. In August, the California Air Resources Board banned the sale of new gas-fueled passenger vehicles after 2035 in a rule called Advanced Clean Cars II.

EPA has argued that the red states have no standing to bring their case because they’ve shown no harm.

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Beyond issues such as bankruptcy and naturalization, Percival said, the Constitution has few “explicit guarantees of equal treatment among states.”

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Fossil fuel industry groups in Texas, Louisiana and Oklahoma wrote in a “friend of the court” brief that the waiver has given California outsize power over the U.S. car market, and oil-producing states are “undeniably dependent on the industry.”

They warned that the program, which they said is part of a Biden administration effort to “drastically reduce or even eliminate” internal combustion engine vehicles, poses a “clear and present danger to the oil and gas industry’s, the states’, and the nation’s prosperity and survival.”

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Health groups, including the American Medical Association and the American Academy of Pediatrics, also weighed in, saying that California’s ability to set its own regulations is “essential to protecting the state’s public health, particularly in a warming world.”

Five of the world’s largest automakers also defended EPA’s decision to grant California the right to set strict tailpipe emissions, saying in their amicus brief that upholding the decades-old waiver would “promote stability and regulatory certainty while the industry goes electric.”

And a group of administrative law professors, including George Washington University environmental law professor Robert Glicksman, wrote that the “text, structure, and history of the Clean Air Act show that Congress intended a waiver, once granted, to become settled law on which states and private parties could rely.”

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They added that it was “doubtful that this doctrine can be reconciled with Supreme Court precedent.” READ MORE