Tuesday, October 18, 2016

Economic Dynamism and Renewable Energy

By Ed Jewell, Energy Fellow

Photo Credit: whitehouse.gov
On October 8, 2016, President Barack Obama published an article in The Economist titled "The Way Ahead," in which he laid out four "major structural challenges" to the U.S. economy that must be addressed in order to restore faith in the nation’s economic (and by extension, political) system. The four major structural challenges identified by the President include: 1) boosting productivity, 2) reducing inequality, 3) reducing unemployment, and 4) building a resilient economy that will continue to grow.

President Obama has demonstrated—by leading the U.S. out of the worst economic crisis in over eighty years, saving the auto industry, and establishing an economy which gained 15 million private-sector jobs since 2010—that he has the requisite understanding of how a functioning economy works. President Obama’s strategies for creating economic dynamism promote the role of government in providing a stable landscape for investment, as well as a direct role in stimulating and guiding specific economic sectors that are crucial for overall societal functioning.

The history of federal involvement in the renewable energy industry demonstrates that direct federal spending is greatly beneficial to fledgling industries for at least three purposes: 1) researching and developing new technologies, 2) providing the early investment necessary to allow the new technologies to mature to a point in which they can stand on their own in a competitive market without federal subsidies, and 3) stepping in when economic conditions deteriorate.

Further, the history between the federal government and the renewable energy industry illustrates that when the federal government tries to substitute tax credits for direct federal spending, the major beneficiaries are the largest and wealthiest banks and mutual funds in the country, a result that does not encourage economic stability or promote the general welfare.

In sum, direct federal investment in renewable energy technologies should be increased under the next administration, and industry reliance on tax credits should be gradually reduced—as currently planned—in order to maximize societal and economic benefits of renewable energy development. 

I.             Boosting Productivity 

Strong public investment in renewable energy—much of which came as a response to the financial crisis—has benefited the renewable energy industry in multiple ways, and the renewable energy industry has returned the benefits to the American people through technological innovations, reduced carbon emissions, and living-wage jobs. The successes of these federal investments demonstrate that the federal government should continue and enhance these investments in emerging renewable energy and energy storage technologies.

A handful of provisions in the American Recovery and Reinvestment Act of 2009 (the stimulus package) were critical to enabling the fledgling renewable energy industry to survive and even grow through the financial crisis.

Section 1603 Treasury grants, provided for in the stimulus package, funded 30% of project costs for renewable energy projects from 2010 to 2014. In the wake of the financial crisis, nearly $25 billion of stimulus money was paid out through the program. These federal grants helped fund 105,178 renewable energy projects that brought 21,633 MW of wind power capacity and 8,283 MW of solar power capacity online in the U.S., creating 75,000 construction jobs and 5,000 long-term jobs in the process.

The stimulus package also established the Section 1705 loan guarantee program, which provided loan guarantees for renewable energy projects that employed "new or significantly improved" technologies that were not yet in commercial use. The loan guarantee program effectively launched the utility-scale solar industry in the United States. As Energy Secretary Ernest Moniz recently noted, the federal loan program helped spur the deployment of 1.5 GW of utility-scale solar capacity in the U.S.

Aside from the financial stimulus package, the federal government has historically been a major funder of research and development in the renewable energy field, such as through the SunShot Initiative and the various other R&D projects undertaken through the National Renewable Energy Laboratory. However, more funding is necessary to adequately mitigate the threat of climate change. From 1978 to 2014, federal funding for renewable energy research and development (R&D) accounted for only 17% of total federal energy-related R&D funding. The Executive Director of the International Energy Agency recently called on world leaders to triple the amount of funding for renewable energy R&D.

In addition to funding research and development, the government should play a major role in infrastructure development—an idea that, as President Obama pointed out in his article—used to share wide bipartisan acceptance. The President noted the need for bridge and airport upgrades, to which I would add the need to make major investments in the electricity transmission system to facilitate a transition to a renewables-based grid.

The federal programs created by President Obama’s stimulus package, as well as his administration’s enhanced investment in R&D, have successfully boosted productivity in the renewable energy sector. The incoming administration should continue to invest in emerging renewable energy technologies.   
II.            Reducing Economic Inequality
The tax incentives authorized by Congress for renewable energy projects have been a main driver of the renewable energy industry for years, and therefore are responsible for a great amount of societal good through lower carbon emissions, living-wage jobs, and technological development. However, a decent argument can be made that this incentive structure furthers economic inequality—at least to a small degree—by allowing a small group of the largest financial institutions in the country to capture an economic benefit from nearly every renewable energy project developed.

While there are numerous drivers of economic inequality throughout the economy, and the tax credits for renewables play a small and perhaps insignificant role in the overall level of economic inequality, it is worth noting that the tax incentive structure—which has been a primary driver of the renewable energy industry—is perhaps less than ideal from an overall economic health perspective.

In order to realize the financial benefits of the Investment Tax Credit (ITC) or Production Tax Credit (PTC), project developers must find investors who have a large enough tax appetite to take advantage of the tax credits. Because large-scale solar and wind farms cost tens to hundreds of millions of dollars, and the ITC and PTC can only be used to offset “passive” income, there are only a handful of large banks and hedge funds that are capable of monetizing the benefits of the tax credits.

Renewable energy development—even with the tax credit incentive structure—creates broad-based economic gains that combat economic inequality. Installation of renewable energy technologies cannot be outsourced, and installation jobs pay living wages for skilled workers in local communities. Additionally, farmers and ranchers can receive royalty payments for the use of their land while continuing to produce their primary products, and overall, entrepreneurship is encouraged in the dynamic renewable energy industry. However, other forms of incentives that do not depend on financing from only the largest financial institutions and instead rely on financing structures that do not limit the pool of investors to only those with outrageous levels of “passive” income, are certainly possible.

The ITC and PTC are scheduled to gradually phase down in the coming years, mitigating the influence of the credits and reducing the contribution of renewable energy to income inequality. The next administration should ensure that there are adequate incentives for renewable energy development, and explore options that reduce economic inequality as well as encourage renewable energy development.

III.            Reducing Unemployment 

Renewable energy development helps reduce unemployment by creating new jobs in a growing industry. In addition to job creation, renewable energy development has the potential to provide secondary employment benefits as well.  As long as tax incentives are not over-utilized, the placement of high capital technologies in local jurisdictions can increase the tax base. An increased tax base generates revenue for the local government, allowing it to provide greater social services that in turn fight societal ills that sap lives and workforces.

As President Obama pointed out, social problems, such as opioid abuse and entry and recidivism in the criminal justice system, negatively affect unemployment rates as well as overall societal health. A renewable energy-based economy can help combat these problems by creating more living-wage jobs and expanding the tax base. Further, job training programs and other social opportunities could be made available because of the benefits created by renewable energy development. 

The solar industry already employs 77% more Americans than the coal industry, and these jobs are spread across communities throughout the country. While certainly the transition from fossil fuels to renewable energy will hit specific communities hard, the economic benefits, including a reduction in unemployment rates on a national scale, will be shared widely.

IV.            A More Resilient Economy 

President Obama specifically addressed the need to align the national economy with ecological limits. “[S]ustainable economic growth requires addressing climate change. Over the past five years, the notion of a trade-off between increasing growth and reducing emissions has been put to rest.”  

The decoupling of emissions from economic growth is absolutely critical if both the capitalist system and the ecological systems of the planet are to continue to co-exist. The International Energy Agency estimates that on the global level, “the annual rate of reduction in global energy intensity needs to more than double – from 1.1% per year today to 2.6% by 2050.” Thus, while our gains in decoupling are important, they must be increased. Our society is locked in to a capitalist system, and as the President points out, “it is important to remember that capitalism has been the greatest driver of prosperity and opportunity the world has ever known.” Therefore, decoupling emissions from growth has to be a bedrock principle for growing the economy.

The President writes of an economy that "grows sustainably without plundering the future at the service of the present." There is no better single way to make a massive stride toward achieving such an economy than through the development of renewable energy.

In sum, President Obama effectively advocates for a strong role for the federal government in creating a structurally sound economy. The example of renewable energy development provides a good case study of President Obama’s principles being applied—e.g., stimulus package investments, R&D, and infrastructure—but also show that the renewable energy industry could make a greater overall contribution to the health of the economy if the incentive structure was adjusted to depend less on tax credits and more on direct federal spending.

Whether moving away from a dependency on tax credits in the renewable energy industry is politically possible is another question altogether. A reliance on direct federal spending carries with it its own perils, but renewable energy cannot prosper at the expense of the greater economy. Likewise, the overall economy cannot continue to grow without rapidly adopting renewable energy technology. The relationship is reciprocal and important to get right and will largely fall to the next administration. Be sure to vote.

Monday, October 3, 2016

Offshore Drilling: Have We Learned Our Lessons Yet?

By Joni Sliger, Energy Fellow
The U.S. Coast Guard responds to the Deepwater
Horizon explosion.
Credit: NOAA's Office of Response and Restoration

In recent weeks, I have discussed offshore renewable energy technologies like offshore wind and hydrokinetics. While offshore development for these renewable energy technologies is new, the same cannot be said for offshore fossil fuel development.

The U.S. Has a Long History of Offshore Fossil Fuel Development (and Spills).

Offshore oil drilling began in the Pacific Ocean over a hundred years ago, according to the American Oil & Gas Historical Society. Yet a 100 years’ worth of experience has not helped us to avoid the omnipresent risks of oil spills and subsequent environmental disaster.

About six and a half years ago, the U.S. suffered the worst offshore oil spill in history: Deepwater Horizon. On April 21, 2010, an explosion aboard the offshore drilling platform, Macondo, resulted in the release of approximately 168 million gallons of oil into the Gulf of Mexico. The oil spill devastated local ecosystems and wildlife populations, including some marine species critical to local fishing industries. Scientists continue to study the long-term effects of the spill. For example, just last week scientists released a study on how the oil coated and killed marsh grasses, causing marsh erosion that may be permanent, which means a potentially permanent reduction in how well the coastal marshes can serve as carbon sinks, wildlife ecosystems, and storm surge reducers. But we still do not know all the environmental effects. At a Senate committee hearing on the spill in 2015, experts reviewed lessons learned from the spill but lamented the continuing gaps in scientific knowledge.  

Deepwater Horizon did more than just wreak environmental havoc. Eleven crew members died, an oft-overlooked consequence of the explosion. The film Deepwater Horizon came out this past weekend to honor these workers, according to the movie director. Additionally, the spill continues to affect many Gulf state residents, as documented by first-hand accounts in the 2015 film, the Great Invisible. Last month, a division of the U.S. Department of Agriculture released a new $328 million three-year plan to continue recovery efforts for coastal agricultural areas. Offshore drilling for oil and gas threatens local economies as well as local ecosystems.

Unfortunately, so long as drilling continues, oil spills, big or small, are inevitable. While proponents argue that Deepwater Horizon was unusual and that new safety regulations decrease the chance of spills, critics remain skeptical. Deepwater Horizon was unusual in spilling such a large quantity of oil but not in spilling. According to the National Oceanic and Atmospheric Administration, oil spills (from rigs and other sources) happen “nearly every day.”

This week, the U.S. has over 500 oil and gas rigs off the coast. If one has a mishap, oil may spill. And oil spills are difficult to clean up. While the U.S. has established more safety protocols and regulations to govern offshore drilling (including some just this past April), it remains a dangerous enterprise.

But What if Drilling Does Not Continue?

Last Tuesday, over 70 Congressmen signed a letter asking President Obama to stop offshore drilling by withdrawing all Atlantic and Pacific Ocean waters from future leasing. The letter follows one submitted by major environmental groups the week before. The President has the power to do so under Section 12(a) of the Outer Continental Shelf Lands Act (OCSLA), which states “The President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.” 43 U.S.C. §1341(a). The letters note that if the president makes such a withdrawal—declaring the areas no longer available for leasing—it may permanently stop drilling, since the law does not authorize a future president to undo such an act.

If a president did withdraw all Atlantic and Pacific Ocean waters from leasing, he would do so under the congressional authorization of the 1953 OCSLA, but it would be highly controversial. The authorization is similar to that given to presidents to declare national monuments under the 1906 Antiquities Act. Last month, President Obama established the first marine monument off the Atlantic Coast, protecting almost 5,000 square miles of ocean. The declaration comes on the heels of the president’s declaration in August expanding the Papahanaumokuakea Marine National Monument near Hawaii by an additional 442,781 square miles, thus protecting a total 582,578 square miles. These monuments cover only a fraction of the areas the Congressmen proposed be withdrawn under OCSLA, but even these presidential declarations have fallen under critique.

When the president declares a national monument under the 110-year-old Antiquities Act, he may do so without consulting Congress or relevant state or local officials. Disgruntled officials claim the president is abusing his authority by declaring so many monuments that cover such large areas. The current Republican platform calls for amending the 1906 Antiquities Act to require the president obtain approval for future monuments from both Congress and from the relevant state’s congressmen. Because the president’s authority under OCSLA is similar to that under the Antiquities Act, the GOP would likely amend both if it gets the chance.

An arguably less controversial approach than using OCSLA to wholly withdraw all Atlantic and Pacific Ocean waters from leasing is already underway, thanks to the Obama Administration’s release of new regulations in August. The Council on Environmental Quality (CEQ) issues guidance to federal agencies on how to comply with the National Environmental Policy Act (NEPA); NEPA requires environmental analyses for most major federal actions. The CEQ’s new guidance, among other things, “recommends that agencies quantify a proposed agency action’s projected direct and indirect GHG emissions.” This is huge. Under the guidance agencies must consider direct, indirect and cumulative effects of proposed actions; this means before an agency could issue a drilling lease, it would have to consider the emissions likely to result from drilling and eventual use of the oil or gas obtained. While an agency could grant a lease regardless of the environmental effects, considering emissions may delay the process or at least make a decision to lease more politically unpalatable.

The Bureau of Ocean Energy Management (BOEM) is currently at work reviewing public comments and finalizing its Draft Programmatic Environmental Impact Statement (Programmatic EIS) for the 2017-2022 Outer Continental Shelf (OCS) Oil and Gas Leasing Program.  With the new CEQ guidance, BOEM will have to quantify the emissions likely to result from its program and it may face significant public and political opposition to leasing.

Perhaps the best option for opposing fossil fuels and offshore drilling, however, is the continued pursuit of renewable energy sources. If you can’t beat ‘em, make ‘em obsolete! 

Friday, September 30, 2016

State of Washington Takes Executive Action to Regulate Carbon Emissions From Largest Polluters

By Ed Jewell, Energy Fellow

Photo Credit: National Renewable Energy Laboratory
The Washington Department of Ecology recently finalized regulations that place limits on the amount of greenhouse gases (GHGs) that can be produced by the most GHG-intensive industries in the state of Washington. The Clean Air Rule, as the regulations are known (hereinafter “the Rule”), covers entities that emitted an average of 100,000 metric tons or more of carbon pollution annually over the baseline period of 2012–2016. Covered entities will be required to lower their emissions by an average of 1.7% per year over three-year compliance periods. By 2035, the Rule aims to achieve carbon emission levels 25% below 1990 levels. The Rule has drawn criticism from both industry groups and environmental groups for diametrically opposite reasons.

Climate activists, such as the youth and legal team at Our Children’s Trust (OCT), who have filed numerous lawsuits in federal and state courts around the country asserting that a stable climate is a fundamental human right, among other legal claims, are unhappy with what they see as a lack of ambition in the Clean Air Rule. They insist, for good reason, that the agency’s actions must be aggressive enough to putthe state on a path to 8% annual reductions in GHG emissions, the rate that the latest and best available climate science says is required for humanity to have a decent shot at maintaining stable ecological systems on Earth. Meanwhile, industry groups have already filed suit against implementation of the Rule, claiming that the Rule violates the dormant Commerce Clause, regulates extraterritorially, and unduly burdens interstate commerce.

The Rule is set to go into effect on Oct. 17, 2016 and will apply to the state’s 24 largest emitters. This number is likely to grow as the cap drops 5,000 metric tons each year beginning in 2020. Entities covered by the rule include natural gas distributors, petroleum fuel producers and importers, power plants, metal manufacturers, and waste facilities. The Rule contains special provisions for business sectors that the Department of Ecology determines to be vulnerable to out-of-state competition, such as pulp and cement manufacturers. Businesses in such industries are deemed “trade-exposed” and given leeway under the plan in order to prevent leakage (the flight of carbon polluters across state lines to avoid pollution regulation).

The Rule gives trade-exposed businesses an extra three years before they must be in compliance with emission standards. Additionally, trade-exposed businesses can choose to allow the Department of Ecology to set individual production-based emissions targets specifically for their businesses based on how they compare to others in their industry.

The Rule is an executive action under the authority of Washington’s Clean Air Act, and is quite clearly a political compromise. Governor Jay Inslee was not able to win legislative support for a full-fledged cap-and-trade program that would have established a cap on overall emissions. Concurrent to Gov. Inslee’s failure to gain a legislative majority for cap-and-trade, the legal team for Our Children’s Trust won a court decision last April in King County Superior Court that affirmatively declared that the Department of Ecology has a “duty to engage in rulemaking to reduce greenhouse gas emissions in Washington” and that it “shall issue the rule by the end of calendar year 2016.” The order contains strong language about the dangers of climate change and the duties of the Department of Ecology, but because of separation of powers doctrines inherent in the U.S. legal system, stops short of telling the agency how it must write the rules.

Rather than a full-blown cap-and-trade program, the Clean Air Rule instead takes a more streamlined approach and puts an individual cap on each of the state’s largest emitters. The covered sources can still buy and sell emission reduction credits from one another, but there will not be a central market to trade allowances, nor an auction of allowances by the state. The state will, however, maintain a registry of emission allowance transactions so as to ensure integrity in the trading system. Because the rule does not establish a state-run public auction of emission allowances, the rule avoids many of the complexities and administrative burdens associated with a full-on cap-and-trade program.

The Clean Air Rule is designed to help the state achieve and even surpass compliance with the EPA’s Clean Power Plan. The Clean Air Rule goes beyond the requirements of the Clean Power Plan in a few key respects. First, it goes into effect in 2017, whereas the CPP, if upheld against legal challenges, will go into effect in 2022 at the earliest. Second, the Washington Clean Air Rule possibly reaches a broader cross-section of the economy than will EPA’s CPP, which only directly targets emissions from power plants (though states can choose how to reduce GHG emissions across their respective economies). Finally, the GHG emission cuts mandated by the Rule are deeper than the cuts mandated by the CPP.

If Washington chooses a rate of emissions compliance path for the CPP, the average rate of Washington’s GHG emissions (represented in pounds of CO2 per megawatt-hour, or lbs. CO2/MWh) must fall from its current level of 1,566 lbs. CO2/MWh to 983 lbs. CO2/MWh—a 37.2% emissions rate reduction by 2030 compared to Washington’s 2005–2012 baseline. If Washington chooses a mass-based compliance path for the CPP, its overall CO2 emissions must drop from 15,237,542 short tons to 10,739,172 short tons, a 30% drop over the state’s 2005–2012 baseline. Each state may decide whether it wants to be subject to the mass-based or the rate-based limit under the CPP, or alternatively take no action and be subject to a federal implementation plan dictated by the EPA. Under the Clean Air Rule, Washington mandates that each individual covered entity reduce GHG emissions by 25% below 1990 levels by 2035 (or purchase compliance credits equal to that amount of emissions reductions).

If the Clean Power Plan is upheld in court and goes into effect, Washington’s Clean Air Rule contains a provision that specifies that it will no longer apply to power plants in the state. Power plants will be subject only to the federal regulation and its lower emission targets. According to the Department of Ecology’s air quality program manager, the nine baseload power plants that are covered under the CPP make up only about six percent of Washington’s emissions, highlighting the important role that industry in general—and not just the power generation sector—will have in fighting climate change.

While the Clean Air Rule does not give climate activists everything they were looking for, it is a step in the right direction. It is a program that can be built upon in the future. There is much groundwork that needs to be laid in terms of building institutional capacity and political will to regulate GHG emissions, and the Rule helps to further that process. Additionally, the severely entrenched opposition to GHG regulation from industry makes immediate transformative change politically untenable.

Incremental changes, such as the Clean Air Rule and even the Clean Power Plan, which contain the seeds of transformative action but are not by themselves revolutionary, are important pieces that must be put into place in order to create a comprehensive framework for mitigating GHG emissions. While those of us who are deeply concerned by the threat of climate change would like to see all the change happen at once, the nature of the political and economic beast demands that we will have to continue to rack up small but meaningful (and hard fought) victories such as the Clean Air Rule and the Clean Power Plan. With continued pressure on officials, advocacy (and increasingly, defense) in the courts, and refinement of programs, there is hope that such incremental changes will add up to transformative change before the science and physics of climate change slam the door shut on the hope of human civilization living harmoniously within ecological limits.  

Friday, September 23, 2016

The Path of Unprecedented and Unusual Occurrences: The Clean Power Plan Goes to Court

By Edward Jewell, Energy Fellow

Credit: Energy.gov
On Tuesday, September 27, the U.S. government will defend EPA’s Clean Power Plan (CPP) in front of an en banc panel of judges at the U.S. Court of Appeals for the District of Columbia. The CPP regulates the amount of carbon emissions that a state’s energy generation sector can emit into the atmosphere, and is considered the signature component of President Obama’s domestic efforts to mitigate climate change. It is under legal attack from 27 states and industry representatives (referred to herein as petitioners).

Tuesday will be the first time that a court will hear the merits of the petitioners’ case, West Virginia v. U.S. Envt’l Prot. Agency, but the CPP has already accumulated a lengthy and unique procedural history. This blog post will provide a brief primer on the legal drama thus far.

The first chapter in the CPP’s legal saga took place before EPA had even finalized the rule establishing the CPP. Despite clear statutory text in the Administrative Procedure Act stating that there must be a final agency action before a suit can be brought in federal court to challenge an agency action, 12 states and industry representatives sued on the proposed rule. Petitioners argued that due to the long planning time inherent in the electricity sector, states would have to start taking actions to comply with the proposed rule immediately. Therefore, they argued, they ought to be allowed to sue on the proposed rule. The D.C. Circuit readily denied this longshot (borderline superfluous) argument.

As soon as the final rule was released, petitioners again filed suit. Petitioners asked the D.C. Circuit to halt implementation of the CPP by granting a stay, but the D.C. Circuit denied the motion. However, as Staff Attorney Amelia Schlusser blogged about at the time, the U.S. Supreme Court (SCOTUS) itself stepped in to put a stay on the implementation of the CPP. Chief Justice Roberts and Justices Scalia, Thomas, Alito, and Kennedy voted to enjoin implementation of the rule pending disposition by the Supreme Court or denial of cert. This move was unprecedented and was also one of Justice Scalia’s last judicial actions before his death. His absence from the SCOTUS bench certainly alters the complexion of the case.

After SCOTUS issued the stay, the D.C. Circuit Court of Appeals decided to go straight to an en banc panel rather than the usual three judge panel, meaning that all judges on the D.C. Circuit would hear the case. Staff Attorney Amelia Schlusser covered this development here.

Until just this week (mere days before oral argument) it appeared that two of the twelve D.C. Circuit judges, including SCOTUS nominee Merrick Garland, were not going to hear the case, making the CPP’s en banc panel a nine-judge panel. However, continuing the theme of legal twists and turns that this case has taken before even reaching oral arguments on the merits, Judge Pillard, who did not participate in the court’s announcement of an en banc hearing and was therefore considered unlikely to sit for the case, was added to the panel. Thus, the panel (as it is currently constituted) sits at ten judges.

The three-judge panel initially scheduled to hear the case was considered by most observers to be an advantageous draw for the future of the CPP because two of the three judges were Democratic appointees. With the nine-judge panel, five judges were Democratic appointees and four were Republican appointees, more or less maintaining the ideological balance of the three-judge panel. Judge Pillard, however, is an Obama appointee, and thus the panel now sits at six Democratic and four Republican appointees. If you consider the party that appoints a judge to be a decent proxy for determining a judge’s ideology, then the panel appears favorable to the government.

Regardless of the makeup, the ten-judge en banc panel will certainly change the dynamics of the courtroom and how the case will be argued. With ten judges instead of three, advocates will be less able to target their arguments directly toward the sensibilities of particular judges.

Furthermore, a ten-judge panel obviously creates a much greater potential for a tie at the D.C. Circuit than did the three or nine-judge panels. Normally when an en banc panel in the D.C. Circuit results in a tie, the opinion of the original three-judge panel is upheld. There is no original opinion of a three-judge panel in this case. What happens in the event of a tie in this situation is not altogether apparent. Perhaps the case would be scheduled for rehearing and there would be an eleventh judge eligible to hear the case by that time. Perhaps not.

While the CPP is almost certainly destined for review in front of the U.S. Supreme Court, the ruling of the ten-judge panel at the D.C. Circuit Court of Appeals is nonetheless an important step in the CPP’s tumultuous journey. For starters, the current eight member composition of the U.S. Supreme Court creates the potential for another tie, this time a 4-4 split. Depending on how long the D.C. Circuit takes to issue an opinion, the earliest SCOTUS could hear the case would be next February or March. But more likely, the case would not be scheduled until October. Therefore, it’s possible that there will be a ninth justice when and if SCOTUS hears the case.

In the case of a 4-4 split, the opinion from the D.C. Circuit would be upheld without an opinion from SCOTUS. However, many observers have cautioned that SCOTUS is unlikely to issue a split opinion with no majority on a case of such extensive nationwide consequence. Ideologically speaking, a 4-4 split is by no means out of the question. Justice Kennedy, the ever critical swing vote, and essential piece to the liberal wing of the court being able to gain a 5-3 majority, is known as being sympathetic to states’ rights arguments. If SCOTUS lands on a 4-4 draw, the Chief Justice could then reschedule arguments on a rehearing for a later date and hope that reason prevails on the Hill and Justice Scalia’s vacancy is filled.

The ramifications of the case for the national economy and the global atmosphere are significant (though prone to hyperbole as well as legitimate debate). The substantive legal questions at the heart of the case are likewise significant. The high stakes and tough questions combined with the perplexing political climate and unexpected passing of Justice Scalia have all combined to make quite the buildup.

Tune in Tuesday morning to see how the plot thickens.