by Chaim Mandelbaum, FME Law Executive Director
On March 28, President Trump signed an executive order directing the EPA to reconsider the Clean Power Plan imposed by the Obama Administration. This order may temporarily halt the long running legal battle over the plan, thought it surely won’t end it. This directive by the President is critical in moving the country away from the economy limiting approach to energy taken by the Obama Administration, and pushing towards a more prosperous and energy independent nation.
The order directs the Administrator of the EPA to “immediately take all steps necessary to review the final rules” regarding the three sections that make up the Clean Power Plan and then “if appropriate” to “suspend, revise, or rescind” those rules or else to “publish for notice and comment proposed rules suspending, revising, or rescinding the rules.”
Three rules together make up what is known as the Clean Power Plan. Two were finalized by the Obama Administration while one is still pending. The first, the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units” rule under section 111(d) of the Clean Air Act, regulates existing power plants. The second, the Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units under Section 111(b) of the Clean Air Act regulates any new power plants that will be built or refurbishments of existing plants. Finally the proposed rule the Federal Plan Requirements for Greenhouse Gas Emissions From Electric Utility Generating Units Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations was intended to govern operations of power plants in places where the State refused to assist in participating in the Obama Administrations folly.
Both the rules on existing power plants and the one on any new power plants were already challenged before the D.C. Circuit by a coalition of State governments, unions, industry groups, and think-tanks on the basis that these rules go beyond the statutory and constitutional limits of power granted to an agency like the EPA. The Supreme Court had already issued a stay preventing the rule on existing power plants from taking effect, a rare decision, highlighting how unusually and divisive the rule is. The rule on existing power plants had already be argued before the DC Circuit in September of 2016, with a ruling expected soon, while arguments on the new power plants were scheduled for April 2017.
The Executive Order however directs the Department of Justice to seek an abeyance of these cases while the EPA reviews and reconsiders these rules. This means that the government will ask the Court to avoid issuing a ruling that may prove unnecessary since the agency may decide to rewrite or scrap the regulations put forth by the Obama Administration.
This Executive Order was needed from both an economic and legal standpoint. The Clean Power Plan would have imposed an enormous economic cost, driving up the price of electricity by forcing unnecessary and costly expenses to existing power plants or else forcing power companies to shut down working plants long before their lifespan expired. It also helped cause a collapse in the value of coal, putting coal miners out of work. The benefits of the plan however were harder to see. Even the Obama Administration admitted the plan would at best reduce global temperatures of .01 degrees Celsius. Far more likely the effect would have been negligible.
Legally the Clean Power Plan represented an enormous power grab for the EPA, giving it the power to reshape the national electricity market, an area that traditionally has been regulated by state governments, not by federal bureaucrats. It would have allowed the EPA to force power companies to direct their investment dollars towards power generation sources that the Obama Administration found acceptable in order to “offset” the actual working plants that generated electricity today. This was certainly not the sort of power Congress intended to grant to the EPA in the Clean Air Act.
The Executive Order also directed federal agencies to stop using the artificial “Social Cost of Carbon” which was a pricing scheme devised by the Obama Administration that set an artificial cost for each ton of carbon that federal agencies were required to use when undertaking any cost/benefit analysis for projects and programs. Instead, agencies will return to more tried and true practices for estimating costs and benefits based on the decade old guidance of the Office of Management and Budget. This move follows along with other orders the Administration has issued in recent weeks, such as suspending the economically devastating “Waters of the United States” rule that would have put virtually all waterways under EPA control, ordering a review of the extremely expensive increase in CAFÉ standards imposed by the Obama Administration, and ending the Obama moratorium on leasing federal lands for energy development, such as coal mining. Together these moves show the determination by this Administration to put economically sound policy first, instead of policy which raised costs while doing little for the environment.