North Carolina's challenge guts air rule

A federal appeals court strikes down Bush's signature pollution initiative

A federal appeals court Friday upheld a challenge by North Carolina and struck down the regulatory cornerstone of the Bush administration's efforts to control air pollution.

The state was joined by Duke Power and other utilities, which charged that the Environmental Protection Agency exceeded its authority when it established the 2005 Clean Air Interstate Rule. At their most stringent, the regulations covering 28 Eastern states would have required 70 percent reductions in such major pollutants as sulphur dioxide and nitrogen oxide beginning in 2015.

The unanimous ruling handed down by the U.S. Court of Appeals for the District of Columbia said the EPA regulations had "fatal flaws."

Environmental groups favored the rules, creating a rare instance in which they were allied with President Bush. Some called Friday's decision a colossal blow.

"This is probably the biggest air quality setback ever suffered by the EPA under any administration," said John Walke, clean air director and senior attorney for the Natural Resources Defense Council, an advocacy group.

In its challenge of the rules, North Carolina opposed some parts of the regulation, particularly a cap-and-trade provision that allowed utilities to barter power plant emissions like a commodity. State officials argued that the system would allow some upwind facilities to avoid installing better pollution controls, creating pollution hotspots that would continue to harm the environment and sicken residents.

"We're pleased that the court has agreed that we need tougher rules to clean up and protect the air we breathe," state Attorney General Roy Cooper said in a statement. "We'll continue our fight against out-of-state pollution that hurts North Carolina's health and economy."

Duke Energy objected to the EPA measure because of the low number of emission allowances the rule would give Duke. Spokesman Tom Williams said the company had not intended to overturn the rules but to ensure it got more allowances.

Williams pointed out that North Carolina enacted a law in 2002 that set limits on sulfur dioxide and nitrogen oxide that were tougher than those in the now-defunct federal rule.

Bill Becker, executive director of the National Association of Clean Air Agencies, said Friday that few states, aside from North Carolina, had laws that would fill the void created by the ruling.

Efforts 'demolished'

The ruling, along with a February court decision striking down the EPA's rule controlling mercury emissions from power plants, means that virtually all new controls imposed on the electric utility industry by the Bush administration have no force.

"The implications are huge," said Lisa Heinzerling, a professor at Georgetown University Law Center. "This is the administration's major air pollution initiative."

Heinzerling said the law was intended to deal comprehensively with a variety of air-pollution issues, including the interstate transport of pollutants and the states' obligations to enforce standards to protect the public health.

With Friday's decision, she said, all this administration's efforts -- aside from those involving motor vehicles -- are gone.

"They are demolished," Heinzerling said. "Anything they've done that has any relation to pollution control has been invalidated."

Stephen L. Johnson, the EPA administrator, said Friday at a news conference in Washington that the agency was "very disappointed" with the court ruling but was still studying it and had not yet decided on its response.

Walke, of the Natural Resources Defense Counsel, said that as a result of this ruling, the earlier decision on mercury and a statement issued Friday by Johnson that the Clean Air Act is the "wrong tool" to regulate greenhouse gas emissions, "the utility sector walks out of eight years of the Bush administration without having to reduce any air pollution."