• Texas Challenges EPA's Endangerment Finding for Greenhouse Gases: Cites Unsubstantiated Scientific Basis and Impact on Texas Business
  • March 3, 2010 | Authors: Jacob P. Arechiga; Michael J. Nasi; Christopher B. Pepper; Peter K. Wahl; Travis W. Wussow
  • Law Firms: Jackson Walker L.L.P. - Austin Office; Jackson Walker L.L.P. - Dallas Office; Jackson Walker L.L.P. - Austin Office
  • On February 16, 2010, Governor Rick Perry announced the filing of the State of Texas’ Petition for Review in the U.S. Court of Appeals for the District of Columbia Circuit and Petition for Reconsideration with the U.S. Environmental Protection Agency (“EPA”) challenging EPA’s promulgation of the endangerment finding for greenhouse gases ("GHGs") under the Clean Air Act.1 The endangerment finding states that GHGs constitute a threat to the public health and welfare, enabling EPA to regulate GHGs under the Clean Air Act without additional legislative action.

    Describing EPA’s action as a “misguided plan [that] paints a big target on the back of Texas agriculture and energy producers and the hundreds of thousands of Texans they employ,” Governor Perry, in his announcement, stated that these petitions were filed to protect the Texas economy, Texas jobs, and “defend Texas’ freedom to continue ... successful environmental strategies free from federal overreach.”  Texas joins the U.S. Chamber of Commerce, the Southeastern Legal Foundation, and other organizations and businesses in filing petitions in opposition to the endangerment finding.

    Background on the Endangerment Finding

    EPA’s endangerment finding does not itself regulate GHGs.  However, the finding provides the legal foundation for EPA to regulate GHG emissions from all sectors of the U.S. economy.  EPA has already relied upon the endangerment finding in multiple regulatory proposals, so a successful legal attack on this linchpin of EPA’s GHG regulatory strategy will fundamentally undermine EPA’s authority to proceed with GHG regulations without Congressional action. 

    Texas is Uniquely Impacted by the Endangerment Finding

    According to the Petition for Reconsideration, the endangerment finding would have specific and unique impacts on a number of industries that are central to the Texas economy, such as the agriculture and energy industries.  For instance, the Petition cites the impact that additional fuel and fertilizer costs, as well as additional regulation and litigation, would have on the more than 1.7 million individuals, or 16.6% of the Texas workforce, who are employed by farm and farm-related industries.  According to the Petition, the oil and gas industry alone directly employs 312,000 Texans while also contributing a substantial portion of the State’s tax revenues.  Finally, as illustrated in the Petition, Texas has earned over $3.6 billion in revenue over the last five years from mineral interests, which provides significant funding for public schools, universities, the Parks & Wildlife Department and the Texas Department of Transportation.

    Texas Cites Leadership and Accomplishments on Clean Energy Initiatives

    Texas has rejected additional federal regulation as harmful to economic interests, while not efficiently benefitting the environment.  As stated by Governor Perry in his February 16, 2010, announcement, “Texas is aggressively seeking its future in alternative energy through incentives and innovation, not mandates and overreaching regulation.”  Among the clean energy accomplishments the Petition references is the impressive lead Texas has taken in wind energy and the reductions in Texas power-sector CO2 emissions since 2004. Other examples of Texas leadership in clean energy incentives can be found in the several “clean carbon” incentives (discussed more here), as well as alternative fuels programs and continued renewable energy incentives (discussed more here) recently passed by the Texas Legislature and signed by the Governor. 

    Texas’ Primary Legal Basis for Requesting Reconsideration

    Texas’ Petition for Reconsideration primarily attacks the scientific data relied upon by EPA in arriving at the conclusion that GHGs pose a health and welfare risk.  Texas claims that Administrator Jackson’s decision was “(1) not well-reasoned, (2) based on faulty scientific analysis, and (3) not truly her own but instead a blind-faith acceptance of flawed scientific conclusions by third parties.” 

    Specifically, Texas questions EPA’s extensive reliance on data provided by the United Nations International Panel on Climate Change (“IPCC”), which has come under attack due to email exchanges among scientists that Texas, and others, argue undermine the validity of climate change evidence; this has been referred to as “Climategate” by commenters in the media.  Texas argues that its Petition for Reconsideration demonstrates “data manipulation, loss or destruction of information, reliance on questionable source materials, abuse of the peer review process, suppression of dissent, conflicts of interest, and failure to comply with freedom of information laws.”  Therefore, Texas believes that EPA should reconsider the endangerment finding.

    Next Steps for Texas’ Challenge

    After Texas’ challenge, the first step is that EPA must respond to Texas’ request for reconsideration and decide whether to reconsider the finding or change its basis for the finding.  If EPA does not reconsider the endangerment finding, Texas’ legal challenge—and all other challenges to the endangerment finding—will be heard by the U.S. Court of Appeals for the District of Columbia Circuit.  If the D.C. Circuit overrules the endangerment finding, it would likely be remanded to the EPA for reconsideration.

    If EPA decides to reconsider its endangerment finding or if the endangerment finding is overruled by the D.C. Circuit, EPA would no longer have the authority to issue any regulations for GHG emissions under the Clean Air Act.  This would suspend or delay the finalization of the Corporate Average Fuel Economy (CAFE) standard for the auto industry and the requirement that new or modified major sources of GHG emissions install the Best Available Control Technology to reduce GHG emissions.

    1 Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009).