Obama's Air Pollution Regulations Are Facing a Major Test at the Supreme Court

The fate of a crucial piece of President Obama's environmental legacy is in the hands of the Supreme Court—and two of the justices that the administration badly needs to win over are not rushing to its defense.

At stake are sweeping federal limits on mercury and other toxic pollutants that leak from power plants. More than two decades in the making, the Environmental Protection Agency's regulation is slated to take effect next month. But the high court could deal a serious blow to the rule—and Obama's green legacy.

On Wednesday, justices heard oral arguments in a case challenging whether the EPA was justified in deciding to regulate mercury and other pollutants based solely on the fact that exposure posed a public health threat.

A decision is expected in June.

At issue is the agency's decision not to consider how much the rule would cost for the utility industry to comply with before deciding it would set limits on toxic pollutants. The EPA says cost wasn't a necessary consideration in its decision; industry challengers don't agree. Compliance with the regulations would cost an estimated $10 billion a year, which the plaintiffs—a coalition of states and industry groups—say will trigger power plant shutdowns and threaten grid reliability.

The administration and its defenders hoped that Justices John Roberts and Anthony Kennedy—the latter of which is considered to be the court's swing vote—might support the EPA's thinking. After all, the two justices sided with the agency in a major challenge to environmental regulations last year. But during oral arguments, Roberts and Kennedy sounded skeptical of the administration's rationale. 

Administration officials say the EPA was justified in considering cost after making the decision to regulate, rather than before. But Kennedy suggested that it would have been better for the agency to take cost into account earlier on. "At that point, the game is over," he said, referring to calculating costs at a later stage.

Roberts wondered why the EPA would bar itself from calculating costs at the outset, suggesting that such a move could tie the agency's hands. "I think it's unusual for an agency to say, when they want to do something, that that's the only thing we could do," Roberts said. "Agencies usually like to maintain for themselves as much discretion as they can."

Justice Elena Kagan rushed to the agency's defense. She suggested that it may not have been possible to adequately determine the cost of the regulation early on, when so many variables remained unknown. That would be asking "the EPA make the cost calculation before it really can," she said.

EPA is quick to point out that the proposed benefits of the rule far outweigh its costs. The agency estimates that the rule will generate between $37 billion and $90 billion annually in public health benefits and could save up to 11,000 lives.

Research has shown that mercury, arsenic and other heavy metals can pose a serious threat to human health, including brain damage and death at high levels of exposure. Power plants are the country's largest source of mercury emissions.

The case highlights just how much of Obama's environmental legacy now rests in the hands of the high court. Nearly every high-profile environmental regulation proposed by the administration is expected to face intense legal scrutiny in the coming years.