Thomas Zielin inserts a probe into the tailpipe of a car while performing an emissions test in San Francisco, Calif. A reported delay in cleaner fuels could harm the new engines designed to burn it. - 

The U.S. Supreme Court will hear oral arguments in a case on Monday which puts greenhouse gas emissions permits, and to some extent the political clout the Obama administration, at stake.

Up for consideration is whether a 2007 decision giving the EPA the right to regulate the greenhouse gases (coming out of vehicle tailpipes) also gave the agency regulatory power over those emissions in a broader way. The EPA says the wording of the Clean Air Act forced it to extend greenhouse gas rules to have the authority to grant and regulate permits for other polluters, such as factories and refineries.

The agency rewrote the Act to apply to bigger polluters, and critics say the EPA bypassed the regulatory authority of Congress in such matters.

"I think it's likely to be a very important decision," says Peter Glaser, an environmental lawyer with Troutman Sanders. Glaser expects the case to determine whether the EPA has a lot of latitude "or whether the Supreme Court will put some limits on its earlier decision, and make clear that that decision does not give the EPA broad power to regulate greenhouse gas emissions throughout the economy."

For the EPA, a loss wouldn't significantly hamper its regulatory powers, but it would be a political loss.

"If you're the President and you're the Environmental Protection Agency, the government does not like to lose" - former Obama administration official Jody Freeman, who heads Harvard's Environmental Law Program

A decision by the Supreme Court is expected later this summer.