WHITE HOUSE

Trump: The climate regulator?

President George W. Bush punted on the issue. President Obama's team tried but failed. President Trump might be the first chief executive to regulate power plants' greenhouse gas emissions.

The Trump administration is expected to soon release its much-anticipated plans for tearing down the Obama administration's Clean Power Plan. That rule would have set nationwide limits for greenhouse gases from utilities — the largest U.S. source of heat-trapping gases. But it was halted by the Supreme Court last year — well before states would have been required to write plans to comply and years before actual reductions were mandated. Trump's election was its death knell.

Sources tracking the regulation say they ultimately expect the administration to issue a dramatically scaled-back version of Obama's plan. A final rule would likely be much narrower — and could be months or even years away — but its enactment would make Trump the first president to crack down on utilities' heat-trapping emissions.

That might seem ironic, given Trump's past statements that global warming is a "hoax" and his moves to handcuff climate work at U.S. EPA and across the government.

"It will be highly ironic if that happens, but I don't think it's going to get him an award from the Sierra Club or the League of Conservation Voters," said Myron Ebell, a vocal skeptic of mainstream climate science. Trump tapped Ebell to lead his EPA transition team.

Indeed, Trump's proponents aren't preparing to hand him any trophies.

"If what we see is consistent with what the rumors have been, there will be a proposal that will be heavy on the climate change denialism [without] a lot of consideration of the scientific evidence and facts that the industry can reduce emissions," said Sean Donahue, counsel for the Environmental Defense Fund.

Being the first regulator of power plants' greenhouse gas emissions may not be a distinction Trump wants, either. But it could be the outcome as his administration tries to walk a fine line of showing the courts that it's meeting its Clean Air Act obligations, appeasing conservatives who want to see climate rules torn down and satisfying industry constituents who say having a rule in place would give them certainty.

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"Consistent with their broader regulatory agenda, I think what's in front of them is a process of rationalizing the excesses of the Clean Power Plan to make them legally defensible and manageable by the utilities," said James Connaughton, former White House Council on Environmental Quality chairman during the George W. Bush administration.

The administration is widely expected to issue a formal plan within the next two weeks — ahead of an Oct. 7 court deadline.

Litigation over the rule in a Washington federal court is on hold for now, after the Trump administration asked for time to plan its repeal. Last month, two Democratic-appointed judges to that court signaled that they wouldn't be willing to wait forever.

Judges David Tatel and Patricia Millett noted in one paragraph that EPA in 2009 issued an "endangerment finding" determining that greenhouse gases threaten public health and welfare. That finding prods EPA to clamp down on industry sectors' emissions under the Clean Air Act. The Supreme Court's move to freeze Obama's Clean Power Plan coupled with the stalled litigation in the D.C. appeals court "has the effect of relieving EPA of its obligation to comply with that statutory duty for the indefinite future."

Lawyers tracking the case say the Trump team read that paragraph as a shot across the bow, and they're hustling to get their plans formalized before the next court-mandated status update on Oct. 7. EPA's proposal has been under White House review since June.

So what's coming?

Sources tracking the rollback predict that the announcement coming soon will consist of several key parts: a legal analysis detailing why the Trump team thinks Obama's rule wasn't justified; an economic analysis showing why they think Obama overestimated benefits and downplayed costs; and a signal about what it's planning to put in place of the Clean Power Plan (if anything).

The administration is still working out some important technical details of its rollout, sources told E&E News. One pressing matter is whether to seek wide-ranging public input, or to put forward a more direct rule proposal.

One option seen as likely is to request feedback about whether and how to replace the rule.

"They'll accept comment on everything from no action to the Clean Power Plan," said one industry source. That person said the administration will encourage people to "give us your best shot" regarding what — if anything — should take the climate rule's place. That person doesn't expect EPA to put forward a preferred option.

The suggestions-box format of soliciting input might shield the administration from charges that it failed to seek broad input. But it also could stretch the regulatory process beyond a point where the administration could defend it in court should Trump serve just one term.

"It's a way to kind of test the ground before you start something. It also takes a significant amount of time," said Ross Eisenberg, vice president of energy and natural resources policy with the National Association of Manufacturers. "If the goal is to get a rule out and finalized in this administration ... then you've got to be careful with the amount of time you're spending on different pieces on this because you're going to want to defend it."

Janet McCabe, who worked on the Clean Power Plan as Obama's EPA air chief, said in an email that the process — known as an advance notice of proposed rulemaking — can add "considerable time," six months or more, to the rulemaking process.

Some industry insiders said that while an advance notice sets a more congenial public posture, there's not much left to be learned. Ideas about how to reshape the regulation have circulated for years, even before the Clean Power Plan as written today came to fruition.

There's also a possibility that EPA Administrator Scott Pruitt will argue that regulations of power plants' greenhouse gas emissions should be wiped away, although that's widely seen as a long shot.

When he challenged the Obama rule in court as Oklahoma's attorney general, Pruitt was one of the leading voices for the legal argument that EPA can't regulate greenhouse gas emissions from power plants because it already has a standard for mercury and air toxics emission from generators — known as the 112 exclusion, referring to a section of the Clean Air Act.

Such a move could please the administration's conservative base, but that move is viewed as risky by industry because it would lead to almost certain litigation.

"Ultimately, there is a crisis of predictability and certainty," said Miles Keogh, executive director of the National Association of Clean Air Agencies, which represents state environmental regulators. "In the end, the utilities will want to invest. They need to invest — the marketplace is changing."

Industry's wish list

A replacement that's favored by some industries — and is seen by some as the Trump administration's favored approach — is a narrow rule requiring individual power plants to become more efficient.

At the end of the day, industry wants certainty, said Paul Cicio, president of the Industrial Energy Consumers of America. His group of heavy-electricity users — including producers of steel and aluminum — was one of the more vocal against the Obama regulation. But he thinks his members could stomach a rule that solely requires power plants to improve efficiency, saying the increase in power prices would be small.

While Cicio's group hasn't taken an official position on what it wants in a new rule, some industry groups have advocated for limited standards that would establish efficiency metrics for power plants. The Edison Electric Institute, which represents investor-owned utilities, hasn't formally announced a stance but in the past has angled for a scaled-back version. In closed-door meetings with officials from the White House and EPA earlier this year, the heavy-hitting U.S. Chamber of Commerce and the National Association of Manufacturers promoted an "inside-the-fence" approach to power plant regulations (Climatewire, Aug. 1).

A group representing power companies called the Coalition for Innovative Climate Solutions has also been asking EPA to set a new rule that gives industry "regulatory certainty" and is based on "what can be achieved by individual facilities" (Climatewire, Sept. 21).

Gina McCarthy, former EPA administrator under Obama, said she's expecting Pruitt to replace the Clean Power Plan rather than expunge it.

That "may be the only rule that he actually replaces," she said during a recent interview with E&E News. "That will be very narrowly crafted ... that will still allow companies in a regulated market to get cost recovery, and you will see that challenged, and we'll see what happens in court."

McCarthy added, "We'll see what this administration proposes, but I think there's good reason to think that a narrow reading of the statute is just not sufficient from sort of meeting the obligation under the Clean Air Act, which is to continue to protect public health to the extent that the statute calls on. And I don't think that would do it. I don't think that'll drive significant reductions, and it might look even kind of silly, because if you look at it, the industry is moving at a much faster pace than that would ever require. So you'll be underpinning nothing."

Environmentalists warn that a narrower rule targeting specific plants could actually increase emissions.

"You can make things worse that way," said David Doniger, director of the Climate and Clean Air program at the Natural Resources Defense Council. "The effect of making coal-fired power plants a bit more efficient is that they become a bit more effective to run ... and they run more."

Trump's foes: Bring it on

Supporters of the Obama administration's climate rule are already readying their arguments against Trump's expected moves.

Environmental lawyers say EPA is compelled to regulate carbon emissions from power plants to some degree because of the 2009 endangerment finding that greenhouse gases are harmful to humans. EPA had also set out a separate finding in 2015 as part of the new source rule for power plants, specifically stating that the facilities contribute significantly to greenhouse gas emissions, harming human health.

"Basically they have an obligation to address pollutants that EPA has found to endanger public health. There is a fundamental failure to fulfill their duty under the statute," said Donahue, who represents EDF.

Many observers expect Pruitt to steer clear of a direct challenge to the endangerment finding, despite pressure from some conservatives.

"I don't think you're gonna see [Pruitt] challenge the endangerment finding," McCarthy told E&E. "I think it's a fool's folly to go down that road right now, and I don't think that he's a fool. I think he's very — he thinks through what he does, and he is following the path that he sort of crafted for himself before he went in there."

Still, Pruitt may try to challenge the constitutionality of the Clean Power Plan by suggesting it infringes on states' rights by altering their "energy mix," a theme that's come up in court challenges. Environmental lawyers will point to other power plant regulations on mercury and hazardous air pollutants that also impacted plants' relative competitiveness as evidence that the Clean Power Plan was well within the norm.

"EPA clearly has authority to regulate power plants directly," said Doniger of NRDC. "This is a bogus argument, this is not different than other regulations, than mercury or acid rain."

Doniger also dismissed the argument that EPA could not regulate carbon under one section of the Clean Air Act because it was already regulating hazardous pollutants under another section — the 112 exclusion. "Power plants are regulated six different ways under the Clean Air Act, that's normal," he said.

And if EPA ultimately puts forward a much more limited regulation of power plants requiring efficiency improvements at the facility level, that too will face legal challenges. The Trump administration will have to defend why it's putting forward a weaker standard and also why it's shifting course from the Obama administration's stricter rule.

"I think you'll find that the community — NRDC and the rest of the [environmental] community — are very well-prepared to take this on in multiple levels," Doniger said, including technically and legally. "[Pruitt's] going to use up a lot of time, but he's not going to succeed."

Twitter: @rbravender Email: rbravender@eenews.net

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