Emissions rise from Refinery in Marcus Hook, Pennsylvania, U.S. (Photographer: Luke Sharrett/Bloomberg)

Trump Is Said to Argue Obama Clean Power Plan Violates Law

(Bloomberg) -- The Trump administration will formally propose repealing former President Barack Obama’s sweeping plan for curbing greenhouse gas emissions from power plants by arguing it went beyond the bounds of federal law, according to documents obtained by Bloomberg News.

The Environmental Protection Agency won’t prescribe an immediate replacement to the plan, and instead will soon ask the public to comment on whether -- and how -- to curb carbon-dioxide emissions from coal and natural gas power plants, according to a draft of the proposed rule and other government documents.

The proposal, set to be unveiled in coming days, is a first step to delivering on President Donald Trump’s promise to rip up the Clean Power Plan, which served as the cornerstone of Obama’s climate change agenda. Trump has moved to pull the U.S. out of the global Paris climate accord, and in the past has dismissed global warming as a hoax.

Obama’s initiative was designed to cut U.S. carbon dioxide emissions by 32 percent from 2005 levels by 2030. Because of legal challenges, it never actually took effect. The U.S. Supreme Court put it on hold in February 2016.

The Obama-era rule dictated specific carbon-cutting targets for states based on a complex formula tied to their 2012 power plant emissions -- and then gave them broad latitude to decide how to achieve those reductions, including retiring coal-fired plants, adding renewable power, and promoting energy conservation.

‘Single Source’

That was a unique and contentious approach. The EPA’s other air pollution regulations -- promulgated under the same provision of the Clean Air Act -- are based on a system that “can be applied to or at a single source,” the draft proposal says.

“The Clean Power Plan departed from this practice by instead setting carbon dioxide emission guidelines for existing power plants that can only realistically be effected by measures that cannot be employed to, for, or at a particular source,” the document says.

In order to comply with the Clean Power Plan, utilities were expected to shift generation away from coal-fired power plants to renewable wind and solar power or natural gas. The Trump administration is asserting that the plan’s reliance on “generation shifting” and “actions taken across the electric grid” instead of at individual plants is inconsistent with the EPA’s authority under federal law.

That dovetails with arguments EPA Administrator Scott Pruitt made in his previous role as attorney general of Oklahoma. Pruitt joined leaders of about two dozen other states in arguing the Clean Power Plan violated federal law by imposing broad energy market changes instead of individual requirements on specific power plants.

The administration’s rationale that suggests any replacement will have to focus on what can be done at individual facilities, which could lead to more modest requirements on utilities.

Repealing, Replacing

The administration will take two separate steps: repealing and then, possibly, replacing.

First, in the coming days, it will issue its proposed rule to rescind the earlier regulation. Later, it will issue a formal notice asking the public to comment on whether the EPA can and should develop a replacement rule -- and, if so, what options are legal, feasible and appropriate for curbing emissions at individual power plants. That could mean requiring efficiency upgrades or installation of carbon-capture technology at the sites.

The EPA hasn’t determined whether it will promulgate a new rule to regulate greenhouse gas emissions, according to the documents. It isn’t clear whether the EPA can abandon the rule entirely without altering its 2009 conclusion that greenhouse gas emissions endanger the public’s health and welfare.

“As long as the endangerment finding remains in place, EPA will be legally obligated to limit greenhouse gas emissions from the power sector in some manner to fulfill its mission to protect the public,” said Paul Bledsoe, a former Clinton White House climate aide who now lectures at American University’s Center for Environmental Policy. “This is another case where repealing without replacing is not a viable option.”

Benefits, Costs

The Trump administration is set to argue that repealing the Clean Power Plan could spare an estimated $33 billion in compliance costs in 2030, and that the Obama administration hyped the potential benefits the rule would deliver. 

“Repealing this Obama-era rule would close a chapter of regulatory overreach that set standards without regard to the steep costs or availability of technology necessary to meet them,” said Hal Quinn, president of the National Mining Association, in an emailed statement. The action also would spare coal production that was threatened under the Obama initiative, helping to safeguard mining jobs, Quinn said.

While Obama’s EPA factored global considerations into its cost-benefit analysis, the Trump administration uses a metric focused on the potential impacts of climate change anticipated to occur within U.S. borders. Even so, according to the documents, the repeal would result in forgoing an estimated $18.8 billion in energy efficiency benefits in 2030 and $500 million in unrealized climate benefits.

Former EPA Administrator Gina McCarthy, the architect of the Clean Power Plan, said the planned repeal was based on “contrived problems with our energy system.”

“They’re adding more pollution into our air and threatening public health at a time when the threats of climate change are growing and the costs are growing immeasurably higher on our children and their future,” McCarthy said in an emailed statement.

The EPA declined to comment on the authenticity of the documents. 

“The Obama administration pushed the bounds of their authority so far that the Supreme Court issued a stay -- the first in history -- to prevent the so-called ‘Clean Power Plan’ from taking effect,” EPA spokeswoman Liz Bowman said by email. “Any replacement rule that the Trump administration proposes will be done carefully and properly within the confines of the law.”

Obama’s EPA estimated the Clean Power Plan would impose annual costs of as much as $8.4 billion. But the costs of complying with the rule have actually dropped “significantly” since it was issued, in part because it is less expensive for utilities to invest in renewable power and use natural gas, according to a report from the Center for Policy Integrity at New York University.