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SUPREME COURT OF THE UNITED STATES
_________________
Nos. 12–1146, 12–1248,
12–1254, 12–1268, 12–1269, and 12–1272
_________________
UTILITY AIR REGULATORY
GROUP,PETITIONER
12–1146 v.
ENVIRONMENTAL PROTECTION AGENCY,
et al.;
AMERICAN CHEMISTRY COUNCIL,
et al.,PETITIONERS
12–1248 v.
ENVIRONMENTAL PROTECTION AGENCY,
et al.;
ENERGY-INTENSIVE MANUFACTURERS
WORKINGGROUP ON GREENHOUSE GAS REGULATION,et al.,
PETITIONERS
12–1254 v.
ENVIRONMENTAL PROTECTION AGENCY,
et al.;
SOUTHEASTERN LEGAL FOUNDATION,
INC.,et al., PETITIONERS
12–1268 v.
ENVIRONMENTAL PROTECTION AGENCY,
et al.;
TEXAS, et al., PETITIONERS
12–1269 v.
ENVIRONMENTAL PROTECTION AGENCY, et al.;
and
CHAMBER OF COMMERCE OF THE UNITEDSTATES,
et al., PETITIONERS
12–1272 v.
ENVIRONMENTAL PROTECTION AGENCY,
et al.;
on writs of certiorari to the united states
court ofappeals for the district of columbia circuit
[June 23, 2014]
Justice Scalia
announced the judgment of the Court and delivered the opinion of
the Court with respect to Parts I and II.
Acting pursuant to the
Clean Air Act, 69Stat. 322, as amended, 42 U. S. C.
§§7401–7671q, the Environmental Protection Agency
recently set standards for emissions of “greenhouse
gases” (substances it believes contribute to “global
climate change”) from new motor vehicles. We must decide
whether it was permissible for EPA to determine that its
motor-vehicle greenhouse-gas regulations automatically triggered
permitting requirements under the Act for stationary sources that
emit greenhouse gases.
I. Background
A. Stationary-Source Permitting
The Clean Air Act
regulates pollution-generating emissions from both stationary
sources, such as factories and powerplants, and moving sources,
such as cars, trucks, and aircraft. This litigation concerns
permitting obligations imposed on stationary sources under Titles I
and V of the Act.
Title I charges EPA
with formulating national ambient air quality standards (NAAQS) for
air pollutants. §§7408–7409. To date, EPA has
issued NAAQS for six pollutants: sulfur dioxide, particulate
matter, nitrogen dioxide, carbon monoxide, ozone, and lead. Clean
Air Act Handbook 125 (J. Domike & A. Zacaroli eds., 3d ed.
2011); see generally 40 CFR pt. 50 (2013). States have primary
responsibility for implementing the NAAQS by developing
“State implementation plans.” 42 U. S. C.
§7410. A State must designate every area within its borders as
“attainment,” “nonattainment,” or
“unclassifiable” with respect to each NAAQS,
§7407(d), and the State’s implementation plan must
include permitting programs for stationary sources that vary
according to the classification of the area where the source is or
is proposed to be located. §7410(a)(2)(C), (I).
Stationary sources in
areas designated attainment or unclassifiable are subject to the
Act’s provisions relating to “Prevention of Significant
Deterioration” (PSD). §§7470–7492. EPA
interprets the PSD provisions to apply to sources located in areas
that are designated attainment or unclassifiable for any NAAQS
pollutant, regardless of whether the source emits that specific
pollutant. Since the inception of the PSD program, every area of
the country has been designated attainment or unclassifiable for at
least one NAAQS pollutant; thus, on EPA’s view, all
stationary sources are potentially subject to PSD review.
It is unlawful to
construct or modify a “major emitting facility” in
“any area to which [the PSD program] applies” without
first obtaining a permit. §§7475(a)(1), 7479(2)(C). To
qualify for a permit, the facility must not cause or contribute to
the violation of any applicable air-quality standard,
§7475(a)(3), and it must comply with emissions limitations
that reflect the “best available control technology”
(or BACT) for “each pollutant subject to regulation
under” the Act. §7475(a)(4). The Act defines a
“major emitting facility” as any stationary source with
the potential to emit 250 tons per year of “any air
pollutant” (or 100 tons per year for certain types of
sources). §7479(1). It defines “modification” as a
physical or operational change that causes the facility to emit
more of “any air pollutant.” §7411(a)(4).[
1]
In addition to the PSD
permitting requirements for construction and modification, Title V
of the Act makes it unlawful to operate any “major
source,” wherever located, without a comprehensive operating
permit. §7661a(a). Unlike the PSD program, Title V generally
does not impose any substantive pollution-control requirements.
Instead, it is designed to facilitate compliance and enforcement by
consolidating into a single document all of a facility’s
obligations under the Act. The permit must include all
“emissions limitations and standards” that apply to the
source, as well as associated inspection, monitoring, and reporting
requirements. §7661c(a)–(c). Title V defines a
“major source” by reference to the Act-wide definition
of “major stationary source,” which in turn means any
stationary source with the potential to emit 100 tons per year of
“any air pollutant.” §§7661(2)(B),
7602( j).
B. EPA’s Greenhouse-Gas Regulations
In 2007, the Court
held that Title II of the Act “authorize[d] EPA to regulate
greenhouse gas emissions from new motor vehicles” if the
Agency “form[ed] a ‘judgment’ that such emissions
contribute to climate change.” Massachusetts v. EPA, 549
U. S. 497 (quoting §7521(a)(1)). In response to that
decision, EPA embarked on a course of regulation resulting in
“the single largest expansion in the scope of the [Act] in
its history.” Clean Air Act Handbook, at xxi.
EPA first asked the
public, in a notice of proposed rulemaking, to comment on how the
Agency should respond to Massachusetts. In doing so, it explained
that regulating greenhouse-gas emissions from motor vehicles could
have far-reaching consequences for stationary sources. Under
EPA’s view, once greenhouse gases became regulated under any
part of the Act, the PSD and Title V permitting requirements would
apply to all stationary sources with the potential to emit
greenhouse gases in excess of the statutory thresholds: 100 tons
per year under Title V, and 100 or 250 tons per year under the PSD
program depending on the type of source. 73 Fed. Reg. 44420, 44498,
44511 (2008). Because greenhouse-gas emissions tend to be
“orders of magnitude greater” than emissions of
conventional pollutants, EPA projected that numerous small sources
not previously regulated under the Act would be swept into the PSD
program and Title V, including “smaller industrial
sources,” “large office and residential build-ings,
hotels, large retail establishments, and similar facilities.”
Id., at 44498–44499. The Agency warned that this would
constitute an “unprecedented expansion of EPA authority that
would have a profound effect on virtually every sector of the
economy and touch every household in the land,” yet still be
“relatively ineffective at reducing greenhouse gas
concentrations.” Id., at 44355.[
2]
In 2009, EPA announced
its determination regarding the danger posed by motor-vehicle
greenhouse-gas emissions. EPA found that greenhouse-gas emissions
from new motor vehicles contribute to elevated atmospheric
concentrations of greenhouse gases, which endanger public health
and welfare by fostering global “climate change.” 74
Fed. Reg. 66523, 66537 (hereinafter Endangerment Finding). It
denominated a “single air pollutant” the
“combined mix” of six greenhouse gases that it
identified as “the root cause of human-induced climate
change”: carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Id.,
at 66516, 66537. A source’s greenhouse-gas emissions would be
measured in “carbon dioxide equivalent units” (CO2e),
which would be calculated based on each gas’s “global
warming potential.” Id., at 66499, n. 4.
Next, EPA issued its
“final decision” regarding the prospect that
motor-vehicle greenhouse-gas standards would trigger
stationary-source permitting requirements. 75 Fed. Reg. 17004
(2010) (hereinafter Triggering Rule). EPA announced that beginning
on the effective date of its greenhouse-gas standards for motor
vehicles, stationary sources would be subject to the PSD program
and Title V on the basis of their potential to emit greenhouse
gases. As expected, EPA in short order promulgated greenhouse-gas
emission standards for passenger cars, light-duty trucks, and
medium-duty passenger vehicles to take effect on January 2, 2011.
75 Fed. Reg. 25324 (hereinafter Tailpipe Rule).
EPA then announced
steps it was taking to “tailor” the PSD program and
Title V to greenhouse gases. 75 Fed. Reg. 31514 (hereinafter
Tailoring Rule). Those steps were necessary, it said, because the
PSD program and Title V were designed to regulate “a
relatively small number of large industrial sources,” and
requiring permits for all sources with greenhouse-gas emissions
above the statu-tory thresholds would radically expand those
programs, making them both unadministrable and
“unrecognizable to the Congress that designed” them.
Id., at 31555, 31562. EPA nonetheless rejected calls to exclude
greenhouse gases entirely from those programs, asserting that the
Act is not “ambiguous with respect to the need to cover
[greenhouse-gas] sources under either the PSD or title V
program.” Id., at 31548, n. 31. Instead, EPA adopted a
“phase-in approach” that it said would “appl[y]
PSD and title V at threshold levels that are as close to the
statutory levels as possible, and do so as quickly as possible, at
least to a certain point.” Id., at 31523.
The phase-in, EPA said,
would consist of at least three steps. During Step 1, from January
2 through June 30, 2011, no source would become newly subject to
the PSD program or Title V solely on the basis of its
greenhouse-gas emissions; however, sources required to obtain
permits anyway because of their emission of conventional pollutants
(so-called “anyway” sources) would need to comply with
BACT for greenhouse gases if they emitted those gases in
significant amounts, defined as at least 75,000 tons per year CO2e.
Ibid. During Step 2, from July 1, 2011, through June 30, 2012,
sources with the potential to emit at least 100,000 tons per year
CO2e of greenhouse gases would be subject to PSD and Title V
permitting for their construction and operation and to PSD
permitting for modifications that would increase their
greenhouse-gas emissions by at least 75,000 tons per year CO2e.
Id., at 31523–31524.[
3]
At Step 3, beginning on July 1, 2013, EPA said it might (or might
not) further reduce the permitting thresholds (though not below
50,000 tons per year CO2e), and it might (or might not) establish
permanent exemptions for some sources. Id., at 31524. Beyond Step
3, EPA promised to complete another round of rulemaking by April
30, 2016, in which it would “take further action to address
small sources,” which might (or might not) include
establishing permanent exemptions. Id., at 31525.
EPA codified Steps 1
and 2 at 40 CFR §§51.166(b)(48) and 52.21(b)(49) for PSD
and at §§70.2 and 71.2 for Title V, and it codified its
commitments regarding Step 3 and beyond at §§52.22,
70.12, and 71.13. See Tailoring Rule 31606–31608. After the
decision below, EPA issued its final Step 3 rule, in which it
decided not to lower the thresholds it had established at Step 2
until at least 2016. 77 Fed. Reg. 41051 (2012).
C. Decision Below
Numerous parties,
including several States, filed petitions for review in the
D. C. Circuit under 42 U. S. C. §7607(b),
challenging EPA’s greenhouse-gas-related actions. The Court
of Appeals dismissed some of the petitions for lack of jurisdiction
and denied the remainder. Coalition for Responsible Regulation,
Inc. v. EPA, 684 F. 3d 102 (2012) (per curiam). First, it
upheld the Endangerment Finding and Tailpipe Rule. Id., at 119,
126. Next, it held that EPA’s interpretation of the PSD
permitting requirement as applying to “any regulated air
pollutant,” including greenhouse gases, was “compelled
by the statute.” Id., at 133–134. The court also found
it “crystal clear that PSD permittees must install BACT for
greenhouse gases.” Id., at 137. Because it deemed
petitioners’ arguments about the PSD program insufficiently
applicable to Title V, it held they had “forfeited any
challenges to EPA’s greenhouse gas-inclusive interpretation
of Title V.” Id., at 136. Finally, it held that petitioners
were without Article III standing to challenge EPA’s efforts
to limit the reach of the PSD program and Title V through the
Triggering and Tailoring Rules. Id., at 146. The court denied
rehearing en banc, with Judges Brown and Kavanaugh each dissenting.
No. 09–1322 etc. (Dec. 20, 2012), App. 139, 2012 WL
6621785.
We granted six
petitions for certiorari but agreed to decide only one question:
“ ‘Whether EPA permissibly determined that its
regulation of greenhouse gas emissions from new motor vehicles
triggered permitting requirements under the Clean Air Act for
stationary sources that emit greenhouse gases.’ ”
571 U. S. ____ (2013).
II. Analysis
This litigation
presents two distinct challenges to EPA’s stance on
greenhouse-gas permitting for stationary sources. First, we must
decide whether EPA permissibly determined that a source may be
subject to the PSD and Title V permitting requirements on the sole
basis of the source’s potential to emit greenhouse gases.
Second, we must decide whether EPA permissibly determined that a
source already subject to the PSD program because of its emission
of conventional pollutants (an “anyway” source) may be
required to limit its greenhouse-gas emissions by employing the
“best available control technology” for greenhouse
gases. The Solicitor General joins issue on both points but
evidently regards the second as more important; he informs us that
“anyway” sources account for roughly 83% of American
stationary-source greenhouse-gas emissions, compared to just 3% for
the additional, non-“anyway” sources EPA sought to
regulate at Steps 2 and 3 of the Tailoring Rule. Tr. of Oral Arg.
52.
We review EPA’s
interpretations of the Clean Air Act using the standard set forth
in Chevron U. S. A. Inc. v. Natural Resources Defense
Council, Inc., 467 U. S. 837 –843 (1984). Under Chevron,
we presume that when an agency-administered statute is ambiguous
with respect to what it prescribes, Congress has empowered the
agency to resolve the ambiguity. The question for a reviewing court
is whether in doing so the agency has acted reasonably and thus has
“stayed within the bounds of its statutory authority.”
Arlington v. FCC, 569 U. S. ___, ___ (2013) (slip op., at 5)
(emphasis deleted).
A. The PSD and Title V Triggers
We first decide
whether EPA permissibly interpreted the statute to provide that a
source may be required to obtain a PSD or Title V permit on the
sole basis of its potential greenhouse-gas emissions.
1
EPA thought its
conclusion that a source’s greenhouse-gas emissions may
necessitate a PSD or Title V permit followed from the Act’s
unambiguous language. The Court of Appeals agreed and held that the
statute “compelled” EPA’s interpretation. 684
F. 3d, at 134. We disagree. The statute compelled EPA’s
greenhouse-gas-inclusive interpretation with respect to neither the
PSD program nor Title V.[
4]
The Court of Appeals
reasoned by way of a flawed syllogism: Under Massachusetts, the
general, Act-wide definition of “air pollutant”
includes greenhouse gases; the Act requires permits for major
emitters of “any air pollutant”; therefore, the Act
requires permits for major emitters of greenhouse gases. The
conclusion follows from the premises only if the air pollutants
referred to in the permit-requiring provisions (the minor premise)
are the same air pollutants encompassed by the Act-wide definition
as interpreted in Massachusetts (the major premise). Yet no
one—least of all EPA—endorses that proposition, and it
is obviously untenable.
The Act-wide definition
says that an air pollutant is “any air pollution agent or
combination of such agents, including any physical, chemical,
biological, [or] radioactive . . . substance or matter
which is emitted into or otherwise enters the ambient air.”
§7602(g). In Massachusetts, the Court held that the Act-wide
definition includes greenhouse gases because it is
all-encompassing; it “embraces all airborne compounds of
whatever stripe.” 549 U. S., at 529. But where the term
“air pollutant” appears in the Act’s operative
provisions, EPA has routinely given it a narrower,
context-appropriate meaning.
That is certainly true
of the provisions that require PSD and Title V permitting for major
emitters of “any air pollutant.” Since 1978,
EPA’s regulations have interpreted “air
pollutant” in the PSD permitting trigger as limited to
regulated air pollutants, 43 Fed. Reg. 26403, codified, as amended,
40 CFR §52.21(b)(1)–(2), (50)—a class much
narrower than Massachusetts’ “all airborne compounds of
whatever stripe,” 549 U. S., at 529. And since 1993 EPA
has informally taken the same position with regard to the Title V
permitting trigger, a position the Agency ultimately incorporated
into some of the regulations at issue here. See Memorandum from
Lydia N. Wegman, Deputy Director, Office of Air Quality Planning
and Standards, to Air Division Director, Regions I–X,
pp. 4–5 (Apr. 26, 1993); Tailoring Rule
31607–31608 (amending 40 CFR §§70.2, 71.2). Those
interpretations were appropriate: It is plain as day that the Act
does not envision an elaborate, burdensome permitting process for
major emitters of steam, oxygen, or other harmless airborne
substances. It takes some cheek for EPA to insist that it cannot
possibly give “air pollutant” a reasonable,
context-appropriate meaning in the PSD and Title V contexts when it
has been doing precisely that for decades.
Nor are those the only
places in the Act where EPA has inferred from statutory context
that a generic reference to air pollutants does not encompass every
substance falling within the Act-wide definition. Other examples
abound:
The Act authorizes EPA to enforce new source
performance standards (NSPS) against a pre-existing source if,
after promulgation of the standards, the source undergoes a
physical or operational change that increases its emission of
“any air pollutant.” §7411(a)(2), (4), (b)(1)(B).
EPA interprets that provision as limited to air pollutants for
which EPA has promulgated new source performance standards. 36 Fed.
Reg. 24877 (1971), codified, as amended, 40 CFR §60.2; 40 Fed.
Reg. 58419 (1975), codified, as amended, 40 CFR §60.14(a).
The Act requires a permit for the construction
or operation in a nonattainment area of a source with the potential
to emit 100 tons per year of “any air pollutant.”
§§7502(c)(5), 7602(j). EPA interprets that provision as
limited to pollutants for which the area is designated
nonattainment. 45 Fed. Reg. 52745 (1980), promulgating 40 CFR
§51.18(j)(2), as amended, §51.165(a)(2).
The Act directs EPA to require “enhanced
monitoring and submission of compliance certifications” for
any source with the potential to emit 100 tons per year of
“any air pollutant.” §§7414(a)(3), 7602(j).
EPA interprets that provision as limited to regulated pollutants.
62 Fed. Reg. 54941 (1997), codifiedat 40 CFR §§64.1,
64.2.
The Act requires certain sources of air
pollutants that interfere with visibility to undergo retrofitting
if they have the potential to emit 250 tons per year of “any
pollutant.” §7491(b)(2)(A), (g)(7). EPA interprets that
provision as limited to visibility-impairing air pollutants. 70
Fed. Reg. 39160 (2005), codified at 40 CFR pt. 51, App. Y,
§II.A.3.
Although these limitations are nowhere to be
found in the Act-wide definition, in each instance EPA has
concluded—as it has in the PSD and Title V context—that
the statute is not using “air pollutant” in
Massachusetts’ broad sense to mean any airborne substance
whatsoever.
Massachusetts did not
invalidate all these longstanding constructions. That case did not
hold that EPA must always regulate greenhouse gases as an
“air pollutant” everywhere that term appears in the
statute, but only that EPA must “ground its reasons for
action or inaction in the statute,” 549 U. S., at 535
(emphasis added), rather than on “reasoning divorced from the
statutory text,” id., at 532. EPA’s inaction with
regard to Title II was not sufficiently grounded in the statute,
the Court said, in part because nothing in the Act suggested that
regulating greenhouse gases under that Title would conflict with
the statutory design. Title II would not compel EPA to regulate in
any way that would be “extreme,”
“counterintuitive,” or contrary to
“ ‘common sense.’ ” Id., at 531.
At most, it would require EPA to take the modest step of adding
greenhouse-gas standards to the roster of new-motor-vehicle
emission regulations. Ibid.
Massachusetts does not
strip EPA of authority to exclude greenhouse gases from the class
of regulable air pollutants under other parts of the Act where
their inclusion would be inconsistent with the statutory scheme.
The Act-wide definition to which the Court gave a
“sweeping” and “capacious” interpretation,
id., at 528, 532, is not a command to regulate, but a description
of the universe of substances EPA may consider regulating under the
Act’s operative provisions. Massachusetts does not foreclose
the Agency’s use of statutory context to infer that certain
of the Act’s provisions use “air pollutant” to
denote not every conceivable airborne substance, but only those
that may sensibly be encompassed within the particular regulatory
program. As certain amici felicitously put it, while Massachusetts
“rejected EPA’s categorical contention that greenhouse
gases could not be ‘air pollutants’ for any purposes of
the Act,” it did not “embrace EPA’s current,
equally categorical position that greenhouse gases must be air
pollutants for all purposes” regardless of the statutory
context. Brief for Administrative Law Professors et al. as
Amici Curiae 17.[
5]
To be sure,
Congress’s profligate use of “air pollutant”
where what is meant is obviously narrower than the Act-wide
definition is not conducive to clarity. One ordinarily assumes
“ ‘that identical words used in different parts of
the same act are intended to have the same
meaning.’ ” Environmental Defense v. Duke Energy
Corp., 549 U. S. 561, 574 (2007) . In this respect (as in
countless others), the Act is far from a chef d’oeuvre of
legislative draftsmanship. But we, and EPA, must do our best,
bearing in mind the “ ‘fundamental canon of
statutory construction that the words of a statute must be read in
their context and with a view to their place in the overall
statutory scheme.’ ” FDA v. Brown & Williamson
Tobacco Corp., 529 U. S. 120, 133 (2000) . As we reiterated
the same day we decided Massachusetts, the presumption of
consistent usage “ ‘readily
yields’ ” to context, and a statutory
term—even one defined in the statute—“may take on
distinct characters from association with distinct statutory
objects calling for different implementation strategies.”
Duke Energy, supra, at 574.
We need not, and do
not, pass on the validity of all the limiting constructions EPA has
given the term “air pollutant” throughout the Act. We
merely observe that taken together, they belie EPA’s rigid
insistence that when interpreting the PSD and Title V permitting
requirements it is bound by the Act-wide definition’s
inclusion of greenhouse gases, no matter how incompatible that
inclusion is with those programs’ regulatory structure.
In sum, there is no
insuperable textual barrier to EPA’s interpreting “any
air pollutant” in the permitting triggers of PSD and Title V
to encompass only pollutants emitted in quantities that enable them
to be sensibly regulated at the statutory thresholds, and to
exclude those atypical pollutants that, like greenhouse gases, are
emitted in such vast quantities that their inclusion would
radically transform those programs and render them unworkable as
written.[
6]
2
Having determined
that EPA was mistaken in thinking the Act compelled a
greenhouse-gas-inclusive interpretation of the PSD and Title V
triggers, we next consider the Agency’s alternative position
that its interpretation was justified as an exercise of its
“discretion” to adopt “a reasonable construction
of the statute.” Tailoring Rule 31517. We conclude that
EPA’s interpretation is not permissible.
Even under
Chevron’s deferential framework, agencies must operate
“within the bounds of reasonable interpretation.”
Arlington, 569 U. S., at ___ (slip op., at 5). And reasonable
statutory interpretation must account for both “the specific
context in which . . . language is used” and
“the broader context of the statute as a whole.”
Robinson v. Shell Oil Co., 519 U. S. 337, 341 (1997) . A
statutory “provision that may seem ambiguous in isolation is
often clarified by the remainder of the statutory scheme
. . . because only one of the permissible meanings
produces a substantive effect that is compatible with the rest of
the law.” United Sav. Assn. of Tex. v. Timbers of Inwood
Forest Associates, Ltd., 484 U. S. 365, 371 (1988) . Thus, an
agency interpretation that is “inconsisten[t] with the design
and structure of the statute as a whole,” University of Tex.
Southwestern Medical Center v. Nassar, 570 U. S. ___, ___
(2013) (slip op., at 13), does not merit deference.
EPA itself has
repeatedly acknowledged that applying the PSD and Title V
permitting requirements to greenhouse gases would be inconsistent
with—in fact, would overthrow—the Act’s structure
and design. In the Tailoring Rule, EPA described the calamitous
consequences of interpreting the Act in that way. Under the PSD
program, annual permit applications would jump from about 800 to
nearly 82,000; annual administrative costs would swell from $12
million to over $1.5 billion; and decade-long delays in issuing
permits would become common, causing construction projects to grind
to a halt nationwide. Tailoring Rule 31557. The picture under Title
V was equally bleak: The number of sources required to have permits
would jump from fewer than 15,000 to about 6.1 million; annual
administrative costs would balloon from $62 million to $21 billion;
and collectively the newly covered sources would face permitting
costs of $147 billion. Id., at 31562–31563. Moreover,
“the great majority of additional sources brought into the
PSD and title V programs would be small sources that Congress did
not expect would need to undergo permitting.” Id., at 31533.
EPA stated that these results would be so “contrary to
congressional intent,” and would so “severely undermine
what Congress sought to accomplish,” that they necessitated
as much as a 1,000-fold increase in the permitting thresholds set
forth in the statute. Id., at 31554, 31562.
Like EPA, we think it
beyond reasonable debate that requiring permits for sources based
solely on their emission of greenhouse gases at the 100- and
250-tons-per-year levels set forth in the statute would be
“incompatible” with “the substance of
Congress’ regulatory scheme.” Brown & Williamson,
529 U. S., at 156. A brief review of the relevant statutory
provisions leaves no doubt that the PSD program and Title V are
designed to apply to, and cannot rationally be extended beyond, a
relative handful of large sources capable of shouldering heavy
substantive and procedural burdens.
Start with the PSD
program, which imposes numerous and costly requirements on those
sources that are required to apply for permits. Among other things,
the applicant must make available a detailed scientific analysis of
the source’s potential pollution-related impacts, demonstrate
that the source will not contribute to the violation of any
applicable pollution standard, and identify and use the “best
available control technology” for each regulated pollutant it
emits. §7475(a)(3), (4), (6), (e). The permitting authority
(the State, usually) also bears its share of the burden: It must
grant or deny a permit within a year, during which time it must
hold a public hearing on the application. §7475(a)(2), (c).
Not surprisingly, EPA acknowledges that PSD review is a
“complicated, resource-intensive, time-consuming, and
sometimes contentious process” suitable for “hundreds
of larger sources,” not “tens of thousands of smaller
sources.” 74 Fed. Reg. 55304, 55321–55322.
Title V contains no
comparable substantive requirements but imposes elaborate
procedural mandates. It requires the applicant to submit, within a
year of becoming subject to Title V, a permit application and a
“compliance plan” describing how it will comply with
“all applicable requirements” under the Act; to certify
its compliance annually; and to submit to “inspection, entry,
monitoring, . . . and reporting requirements.”
§§7661b(b)–(c), 7661c(a)–(c). The procedural
burdens on the permitting authority and EPA are also significant.
The permitting authority must hold a public hearing on the
application, §7661a(b)(6), and it must forward the application
and any proposed permit to EPA and neighboring States and respond
in writing to their comments, §7661d(a), (b)(1). If it fails
to issue or deny the permit within 18 months, any interested party
can sue to require a decision “without additional
delay.” §§7661a(b)(7), 7661b(c). An interested
party also can petition EPA to block issuance of the permit; EPA
must grant or deny the petition within 60 days, and its decision
may be challenged in federal court. §7661d(b)(2)–(3). As
EPA wrote, Title V is “finely crafted for thousands,”
not millions, of sources. Tailoring Rule 31563.
The fact that
EPA’s greenhouse-gas-inclusive interpretation of the PSD and
Title V triggers would place plainly excessive demands on limited
governmental resources is alone a good reason for rejecting it; but
that is not the only reason. EPA’s interpretation is also
unreasonable because it would bring about an enormous and
transformative expansion in EPA’s regulatory authority
without clear congressional authorization. When an agency claims to
discover in a long-extant statute an unheralded power to regulate
“a significant portion of the American economy,” Brown
& Williamson, 529 U. S., at 159, we typically greet its
announcement with a measure of skepticism. We expect Congress to
speak clearly if it wishes to assign to an agency decisions of vast
“economic and political significance.” Id., at 160; see
also MCI Telecommunications Corp. v. American Telephone &
Telegraph Co., 512 U. S. 218, 231 (1994) ; Industrial Union
Dept., AFL–CIO v. American Petroleum Institute, 448
U. S. 607 –646 (1980) (plurality opinion). The power to
require permits for the construction and modification of tens of
thousands, and the operation of millions, of small sources
nationwide falls comfortably within the class of authorizations
that we have been reluctant to read into ambiguous statutory text.
Moreover, in EPA’s assertion of that authority, we confront a
singular situation: an agency laying claim to extravagant statutory
power over the national economy while at the same time strenuously
asserting that the authority claimed would render the statute
“unrecognizable to the Congress that designed” it.
Tailoring Rule 31555. Since, as we hold above, the statute does not
compel EPA’s interpretation, it would be patently
unreason-able—not to say outrageous—for EPA to insist
on seizing expansive power that it admits the statute is not
designed to grant.[
7]
3
EPA thought that
despite the foregoing problems, it could make its interpretation
reasonable by adjusting the levels at which a source’s
greenhouse-gas emissions would oblige it to undergo PSD and Title V
permitting. Although the Act, in no uncertain terms, requires
permits for sources with the potential to emit more than 100 or 250
tons per year of a relevant pollutant, EPA in its Tailoring Rule
wrote a new threshold of 100,000 tons per year for greenhouse
gases. Since the Court of Appeals thought the statute unambiguously
made greenhouse gases capable of triggering PSD and Title V, it
held that petitioners lacked Article III standing to challenge the
Tailoring Rule because that rule did not injure petitioners but
merely relaxed the pre-existing statutory requirements. Because we,
however, hold that EPA’s greenhouse-gas-inclusive
interpretation of the triggers was not compelled, and because EPA
has essentially admitted that its interpretation would be
unreasonable without “tailoring,” we consider the
validity of the Tailoring Rule.
We conclude that
EPA’s rewriting of the statutory thresholds was impermissible
and therefore could not validate the Agency’s interpretation
of the triggering provisions. An agency has no power to
“tailor” legislation to bureaucratic policy goals by
rewriting unambiguous statutory terms. Agencies exercise discretion
only in the interstices created by statutory silence or ambiguity;
they must always “ ‘give effect to the
unambiguously expressed intent of Congress.’ ”
National Assn. of Home Builders v. Defenders of Wildlife, 551
U. S. 644, 665 (2007) (quoting Chevron, 467 U. S., at
843). It is hard to imagine a statutory term less ambiguous than
the precise numerical thresholds at which the Act requires PSD and
Title V permitting. When EPA replaced those numbers with others of
its own choosing, it went well beyond the “bounds of its
statutory authority.” Arlington, 569 U. S., at ___ (slip
op., at 5) (emphasis deleted).
The Solicitor General
does not, and cannot, defend the Tailoring Rule as an exercise of
EPA’s enforcement discretion. The Tailoring Rule is not just
an announcement of EPA’s refusal to enforce the statutory
permitting requirements; it purports to alter those requirements
and to establish with the force of law that otherwise-prohibited
conduct will not violate the Act. This alteration of the statutory
requirements was crucial to EPA’s “tailoring”
efforts. Without it, small entities with the potential to emit
greenhouse gases in amounts exceeding the statutory thresholds
would have remained subject to citizen suits—authorized by
the Act—to enjoin their construction, modification, or
operation and to impose civil penalties of up to $37,500 per day of
violation. §§7413(b), 7604(a), (f)(4); 40 CFR §19.4.
EPA itself has recently affirmed that the “independent
enforcement authority” furnished by the citizen-suit
provision cannot be displaced by a permitting authority’s
decision not to pursue enforcement. 78 Fed. Reg. 12477,
12486–12487 (2013). The Solicitor General is therefore quite
right to acknowledge that the availability of citizen suits made it
necessary for EPA, in seekingto mitigate the unreasonableness of
its greenhouse-gas-inclusive interpretation, to go beyond merely
exercising its enforcement discretion. See Tr. of Oral Arg.
87–88.
For similar reasons,
Morton v. Ruiz, 415 U. S. 199 (1974) —to which the
Solicitor General points as the best case supporting the Tailoring
Rule, see Tr. of Oral Arg. 71, 80–81—is irrelevant. In
Ruiz, Congress had appropriated funds for the Bureau of Indian
Affairs to spend on providing assistance to
“ ‘Indians throughout the United
States’ ” and had not “impose[d] any
geographical limitation on the availability of general assistance
benefits.” Id., at 206–207, and n. 7. Although we
held the Bureau could not deny benefits to off-reservation Indians
because it had not published its eligibility criteria, we stated in
dictum that the Bureau could, if it followed proper administrative
procedures, “create reasonable classifications and
eligibility requirements in order to allocate the limited funds
available.” Id., at 230–231. That dictum stands only
for the unremarkable proposition that an agency may adopt policies
to prioritize its expenditures within the bounds established by
Congress. See also Lincoln v. Vigil, 508 U. S. 182 –193
(1993). Nothing in Ruiz remotely authorizes an agency to modify
unambiguous requirements imposed by a federal statute. An agency
confronting resource constraints may change its own conduct, but it
cannot change the law.
Were we to recognize
the authority claimed by EPA in the Tailoring Rule, we would deal a
severe blow to the Constitution’s separation of powers. Under
our system of government, Congress makes laws and the President,
acting at times through agencies like EPA, “faithfully
execute[s]” them. U. S. Const., Art. II, §3;
see Medellín v. Texas, 552 U. S. 491 –527 (2008).
The power of executing the laws necessarily includes both authority
and responsibility to resolve some questions left open by Congress
that arise during the law’s administration. But it does not
include a power to revise clear statutory terms that turn out not
to work in practice. See, e.g., Barnhart v. Sigmon Coal Co., 534
U. S. 438, 462 (2002) (agency lacked authority “to
develop new guidelines or to assign liability in a manner
inconsistent with” an “unambiguous statute”).
In the Tailoring Rule,
EPA asserts newfound authority to regulate millions of small
sources—including retail stores, offices, apartment
buildings, shopping centers, schools, and churches—and to
decide, on an ongoing basis and without regard for the thresholds
prescribed by Congress, how many of those sources to regulate. We
are not willing to stand on the dock and wave goodbye as EPA
embarks on this multiyear voyage of discovery. We reaffirm the core
administrative-law principle that an agency may not rewrite clear
statutory terms to suit its own sense of how the statute should
operate. EPA therefore lacked authority to “tailor” the
Act’s unambiguous numerical thresholds to accommodate its
greenhouse-gas-inclusive interpretation of the permitting triggers.
Instead, the need to rewrite clear provisions of the statute should
have alerted EPA that it had taken a wrong interpretive turn.
Agencies are not free to “adopt . . . unreasonable
interpretations of statutory provisions and then edit other
statu-tory provisions to mitigate the unreasonableness.” App.
175, 2012 WL 6621785, *16 (Kavanaugh, J., dissenting from denial of
rehearing en banc). Because the Tailoring Rule cannot save
EPA’s interpretation of the triggers, that interpretation was
impermissible under Chevron.[
8]
B. BACT for “Anyway” Sources
For the reasons we
have given, EPA overstepped its statutory authority when it decided
that a source could become subject to PSD or Title V permitting by
reason of its greenhouse-gas emissions. But what about
“anyway” sources, those that would need permits based
on their emissions of more conventional pollutants (such as
particulate matter)? We now consider whether EPA reasonably
interpreted the Act to require those sources to comply with
“best available control technology” emission standards
for greenhouse gases.
1
To obtain a PSD
permit, a source must be “subject to the best available
control technology” for “each pollutant subject to
regulation under [the Act]” that it emits. §7475(a)(4).
The Act defines BACT as “an emission limitation based on the
maximum degree of reduction of each pollutant subject to
regulation” that is “achievable . . . through
application of production processes and available methods, systems,
and techniques, including fuel cleaning, clean fuels, or treatment
or innovative fuel combustion techniques.” §7479(3).
BACT is determined “on a case-by-case basis, taking into
account energy, environmental, and economic impacts and other
costs.” Ibid.
Some petitioners urge
us to hold that EPA may never require BACT for greenhouse
gases—even when a source must undergo PSD review based on its
emissions of conventional pollutants—because BACT is
fundamentally unsuited to greenhouse-gas regulation. BACT, they
say, has traditionally been about end-of-stack controls “such
as catalytic converters or particle collectors”; but applying
it to greenhouse gases will make it more about regulating energy
use, which will enable regulators to control “every aspect of
a facility’s operation and design,” right down to the
“light bulbs in the factory cafeteria.” Brief for
Petitioner Energy-Intensive Manufacturers Working Group on
Greenhouse Gas Regulation et al. in No. 12–1254, p. 7;
see Joint Reply Brief for Petitioners in No. 12–1248 etc.,
pp. 14–15 (“BACT for [greenhouse gases] becomes an
unbounded exercise in command-and-control regulation” of
everything from “efficient light bulbs” to “basic
industrial processes”). But see Brief for Calpine Corp. as
Amicus Curiae 10 (“[I]n Calpine’s experience with
‘anyway’ sources, the [greenhouse-gas] analysis was
only a small part of the overall permitting process”).
EPA has published a
guidance document that lends some credence to petitioners’
fears. It states that at least initially, compulsory improvements
in energy efficiency will be the “foundation” of
greenhouse-gas BACT, with more traditional end-of-stack controls
either not used or “added as they become more
available.” PSD and Title V Permitting Guidance for
Greenhouse Gases 29 (Mar. 2011) (hereinafter Guidance); see Peloso
& Dobbins, Greenhouse Gas PSD Permitting: The Year in Review,
42 Tex. Env. L. J. 233, 247 (2012) (“Because [other
controls] tend to prove infeasible, energy efficiency measures
dominate the [greenhouse-gas] BACT controls approved by the states
and EPA”). But EPA’s guidance also states that BACT
analysis should consider options other than energy efficiency, such
as “carbon capture and storage.” Guidance 29, 32,
35–36, 42–43. EPA argues that carbon capture is
reasonably comparable to more traditional, end-of-stack BACT
technologies, id., at 32, n. 86, and petitioners do not dispute
that.
Moreover, assuming
without deciding that BACT may be used to force some improvements
in energy efficiency, there are important limitations on BACT that
may work to mitigate petitioners’ concerns about
“unbounded” regulatory authority. For one, BACT is
based on “control technology” for the applicant’s
“proposed facility,” §7475(a)(4); therefore, it
has long been held that BACT cannot be used to order a fundamental
redesign of the facility. See, e.g., Sierra Club v. EPA, 499
F. 3d 653, 654–655 (CA7 2007); In re Pennsauken
Cty., N. J., Resource Recovery Facility, 2 E. A. D.
667, 673 (EAB 1988). For another, EPA has long interpreted BACT as
required only for pollutants that the source itself emits, see 44
Fed. Reg. 51947 (1979); accordingly, EPA acknowledges that BACT may
not be used to require “reductions in a facility’s
demand for energy from the electric grid.” Guidance 24.
Finally, EPA’s guidance suggests that BACT should not require
every conceivable change that could result in minor improvements in
energy efficiency, such as the aforementioned light bulbs. Id., at
31. The guidance explains that permitting authorities should
instead consider whether a proposed regulatory burden outweighs any
reduction in emissions to be achieved, and should concentrate on
the facility’s equipment that uses the largest amounts of
energy. Ibid.
2
The question before
us is whether EPA’s decision to require BACT for greenhouse
gases emitted by sources otherwise subject to PSD review is, as a
general matter, a permissible interpretation of the statute under
Chevron. We conclude that it is.
The text of the BACT
provision is far less open-ended than the text of the PSD and Title
V permitting triggers. It states that BACT is required “for
each pollutant subject to regulation under this chapter”
(i.e., the entire Act), §7475(a)(4), a phrase that—as
the D. C. Circuit wrote 35 years ago—“would not
seem readily susceptible [of] misinterpretation.” Alabama
Power Co. v. Costle, 636 F. 2d 323, 404 (1979). Whereas the
dubious breadth of “any air pollutant” in the
permitting triggers suggests a role for agency judgment in
identifying the subset of pollutants covered by the particular
regulatory program at issue, the more specific phrasing of the BACT
provision suggests that the necessary judgment has already been
made by Congress. The wider statutory context likewise does not
suggest that the BACT provision can bear a narrowing construction:
There is no indication that the Act elsewhere uses, or that EPA has
interpreted, “each pollutant subject to regulation under this
chapter” to mean anything other than what it says.
Even if the text were
not clear, applying BACT to greenhouse gases is not so disastrously
unworkable, and need not result in such a dramatic expansion of
agency authority, as to convince us that EPA’s interpretation
is unreasonable. We are not talking about extending EPA
jurisdiction over millions of previously unregulated entities, but
about moderately increasing the demands EPA (or a state permitting
authority) can make of entities already subject to its regulation.
And it is not yet clear that EPA’s demands will be of a
significantly different character from those traditionally
associated with PSD review. In short, the record before us does not
establish that the BACT provision as written is incapable of being
sensibly applied to greenhouse gases.
We acknowledge the
potential for greenhouse-gas BACT to lead to an unreasonable and
unanticipated degree of regulation, and our decision should not be
taken as an endorsement of all aspects of EPA’s current
approach, nor as a free rein for any future regulatory application
of BACT in this distinct context. Our narrow holding is that
nothing in the statute categorically prohibits EPA from
interpreting the BACT provision to apply to greenhouse gases
emitted by “anyway” sources.
However, EPA may
require an “anyway” source to comply with
greenhouse-gas BACT only if the source emits more than a de minimis
amount of greenhouse gases. As noted above, the Tailoring Rule
applies BACT only if a source emits greenhouse gases in excess of
75,000 tons per year CO2e, but the Rule makes clear that EPA did
not arrive at that number by identifying the de minimis level. See
nn. 1, 3, supra. EPA may establish an appropriate de minimis
threshold below which BACT is not required for a source’s
greenhouse-gas emissions. We do not hold that 75,000 tons per year
CO2e necessarily exceeds a true de minimis level, only that EPA
must justify its selection on proper grounds. Cf. Alabama Power,
supra, at 405.[
9]
* * *
To sum up: We hold
that EPA exceeded its statutory authority when it interpreted the
Clean Air Act to require PSD and Title V permitting for stationary
sources based on their greenhouse-gas emissions. Specifically, the
Agency may not treat greenhouse gases as a pollutant for pur-poses
of defining a “major emitting facility” (or a
“modification” thereof) in the PSD context or a
“major source” in the Title V context. To the extent
its regulations purport to do so, they are invalid. EPA may,
however, continue to treat greenhouse gases as a “pollutant
subject to regulation under this chapter” for purposes of
requiring BACT for “anyway” sources. The judgment of
the Court of Appeals is affirmed in part and reversed in part.
It is so ordered.