The US Supreme Court ruling just before the July 4 holiday weekend to limit the regulatory powers of the Environmental Protection Agency (EPA) over emissions from power plants is seen reducing legal challenges on the US hydrocarbon industry, including against LNG export developments and natural gas pipeline infrastructure.
In a 6-3 opinion the Supreme Court in Washington DC ruled in the case of West Virginia versus the EPA that the federal agency did not have the authority to regulate industry greenhouse-gas emissions that would affect individual power plants.
The case stems from former President Barrack Obama's Clean Power Plan (CPP), which would have enforced mandates for how much GHG emissions from power plants were allowed.
The policy was never officially implemented as it faced legal challenges and was side-lined under the Administration of President Donald Trump.
Analysts said the Court ruling leaves the Administration of President Joe Biden dependent on passing legislation if it wants to introduce regulations to reduce GHG emissions at plants and facilities.
“A decision of such magnitude and consequence rests with Congress itself,” the Court ruled,
The justices stated that they doubted Congress intended to delegate the question of “how much coal-based generation there should be to any administrative agency” of the federal government.
Analysts added that the Court ruling marked a setback for Biden, who was elected President on an anti-hydrocarbon platform and several of his first moves included blocking oil and gas projects.
The most high-profile Biden cancellation was of the Keystone XL pipeline extension to deliver more cheap Canadian oil for refining in the US into petroleum products such as gasoline.
Biden and his Democratic Party also opposed LNG, a policy they have now rowed back on, and blocked the Jordon Cove LNG export project proposed for the northwest state of Oregon as an outlet to Asia for abundant US natural gas.
Biden has also pledged to remove carbon from the US power grid by the middle of the next decade, setting the country on a path to net-zero emissions.
However, his efforts to implement more extreme climate-mitigation legislation in Congress have stalled and could disappear after the mid-term elections in November 2022.
US lawyers were quick to comment and asserted that the Supreme Court ruling in the case for West Virginia, the US coal state, should be interpreted as a warning to federal agencies not to overstep their explicit statutory authority in crafting new regulations.
Though the Obama CPP never took effect, its opponents were concerned that a similar policy against coal, oil and gas could be enacted unless the courts intervened and this led to the West Virginia case.
The petitioners in the case were West Virginia, supported by the state of North Dakota, along with two coal companies and they asked the Court to decide whether the EPA had blanket authority to force changes in the power generation mix in the name of GHG reductions and the answer was no.