Michigan v. EPA: The EPA Must Consider Costs in Emission Limits

On June 29, in a 5-4 decision, the United States Supreme Court held in Michigan v. EPA that the Environmental Protection Agency (EPA) must consider the costs of industry when deciding to set limits under the Clean Air Act on the emissions of hazardous air pollutants from certain stationary sources such as power plants. The decision, written by Justice Scalia, reversed the decision of the D.C. Court and held that ignoring costs was unreasonable.

The EPA had estimated that the cost of its regulations to power plants would be $9.6 billion per year, and estimated that the benefits from the resulting reduction in emissions would be between $4 million to $6 million each year. However, the EPA conceded that its cost analysis had “played no role” in finding that its regulation was appropriate and necessary. The Court held, “The Agency must consider cost – including, most importantly, cost of compliance – before deciding whether regulation is appropriate and necessary. We need not and do not hold that the law unambiguously required the Agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value. It will be up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost.”

The Court remanded the EPA’s mercury and air toxic standards (MATS) to the D.C. Circuit for further proceedings consistent with the opinion.

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U.S. Supreme Court Refuses to Consider Colorado Rancher's Attempt to Bar Oil Drillers from Ranch

On April 27, 2015, the U.S. Supreme Court denied a petition for writ of certiorari to review a Colorado rancher's attempt to prevent oil development and related access on his ranch. Petitioner Stull Ranches had requested that the high court review and reverse a 2014 decision of the 10th U.S. Circuit Court of Appeals decided in favor of the federal mineral lessee, Entek GRB, which allowed Entek reasonable surface access to drill for oil and to use a road to access another unitized Entek well.

The federal mineral rights at issue had been reserved by and for the federal government pursuant to the Stock-Raising Homestead Act of 1916 [Pub.L. No. 64–290, 39 Stat. 862 (codified at 43 U.S.C. §§ 291–301)] and, pursuant thereto, the land-grant surface successor acquired its real property interests subject to the government's reservation of mineral rights and interests, which includes: "(1) the right to enter and use so much of the surface as might be 'reasonably incident' to the exploration and removal of mineral deposits, and (2) the right to enact future laws and regulations regarding the 'disposal' of the mineral estate." Entek GRB, LLC v. Stull Ranches, LLC, 763 F.3d 1252, 1254 (10th Cir. 2014), cert. denied sub nom. Stull Ranches, LCC v. Entek GRB, LCC, No. 14-1007, 2015 WL 730880 (U.S. Apr. 27, 2015). According to the 10th Circuit, this "second right … sweeps broadly when it places the minerals at the government's 'disposal,' signifying not just the government's power to 'bestow[ ]' or 'assign[ ]' the minerals, but also a power to 'manage[ ],' 'make use of,' and 'deal with [them] as [it] pleases.'" Id. (Citation omitted.) The legal framework for disposition is that provided by the 1920 Mineral Leasing Act [Pub.L. No. 66–146, 41 Stat. 437 (codified in scattered sections of 30 U.S.C.)] as amended, which entitles the federal lessee the reasonable right to access and explore the mineral estate, a statutory right to unitize, and a reasonable right to access unitized wells and minerals.

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