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Businesses Ask EPA to Curb Clean Power Plan at Hearing

At the US Environmental Protection Agency’s only hearing to discuss the Clean Power Plan, the business community turned out and either asked for outright repeal or strict curbs on the proposal’s reach.

It’s an extension of the Trump administration’s outreach to businesses that it has said have been hurt the would-be regulation. The hearing was held in an area of the country loyal to Trump: West Virginia.

President Trump ran for office on a platform that said carbon restrictions are killing the coal industry, which is providing reliable and inexpensive fuel to the rest of the country. As a result, EPA Administrator Scott Pruit said in October that the Trump administration would seek to undo the Clean Power Plan.

“While ERCC believes that absent specific guidance in legislation from the U.S. Congress, market principles are the most sound basis upon which to proceed, we nevertheless support the process advanced by EPA,” Scott Segal, director of the Electric Reliability Coordinating Council said at the EPA hearing in Charleston, WV, where this reporter attended.

“Federal guidance of sufficient flexibility, and limited to actions within the fenceline, can provide regulatory certainty, diminish frivolous litigation, and can aide in planning,” he added.

Segal’s point is that CO2 is a release that is pervasive and that the EPA must focus on what individual companies can do to limit those releases — such as increasing efficiencies or heat rates. That is opposed to trying such things as a cap-and-trade program in which businesses trade credits with each other so as to collectively bring down CO2 levels.

Of course, the Obama administration had a completely different take on the Clean Power Plan, which had been the the cornerstone of its environmental achievements — one that sought to cut CO2 levels by 32% by 2030 using a variety of techniques: trading out old coal-fired plants for those that run on natural gas or renewables, increasing efficiency levels at facilities and using cap-and-trade.

Obama’s legal team had said that it is within its legal right to regulate companies “beyond the fence,” pointing to the cap-and-trade rules that govern sulfur dioxide, or SO2, which were enacted in 1990 under the elder President Bush as part of the Clean Air Act.

Trump’s EPA gave formal notice on October 10 that it plans to repeal the Clean Power Plan — an effort, however, that won’t be easy either politically, legally, or even economically.

Politically, at least 14 state attorneys general have said that the Clean Power Plan remains the law of the land unless a court would decide differently. To that end, they cite the “endangerment finding” in which the US Supreme Court upheld EPA’s earlier finding during the Obama years that CO2 is a harmful emission to be regulated under the Clean Air Act.

For that reason, some businesses are saying that the proposed regulation needs to watered down — and that it can’t be repealed. The US Chamber of Commerce argued at the hearing that any revisions to the regulation need to be “achievable.”

“We have always believed that there is a better way to approach greenhouse gas emissions reductions,” Karen Harbert, president of the US Chamber of Commerce’s Global Energy Institute said in a statement.

When it comes to the legal merits of the Clean Power Plan, those who say it is unconstitutional and it should be tossed aside argue that it usurps the rights of states and forces the retirement of at least 49,000 megawatts of coal-fired capacity.

But other legal experts say that it is EPA’s duty to protect the public from harmful emissions and that the current rule gives states several alternative options to comply. They also point out that while the market share of coal-fired electricity has fallen, it is now 30% and it is still the second leading fuel used to generate power in this country. That hardly amounts to a federal takeover.

Nevertheless, coal’s prospects are waning — more because of economics. That is, natural gas has become a more cost effective fuel that has far fewer emissions than does coal, including CO2. It now has 34% of the electricity portfolio and it is widely used in the chemical and manufacturing processes. At the same time, renewables are getting cheaper and their share of the electricity portfolio is also growing, now at about 15%, including hydro.

Where does the Clean Power Plan now stand? In January 2016, the US Supreme Court issued a stay. It then sent the case back down to the US Court of Appeals for the District of Columbia, which heard it in 2016 and which will soon make its decision. If it approves it as expected, the case would then head to the High Court.

“You can’t shift the burden from coal to wind and solar power,” Patrick Morrisey, West Virginia’s attorney general, told this reporter at the hearing. “You can’t go further than what the statute commands. We don’t speak to wind and solar. We speak to what the statute commands. The Obama administration had been engaged in (electricity) generation shifting.”

The businesses that turned out for this week’s hearing on the Clean Power Plan were sympathetic to either repeal or replace. But many other enterprises are in favor of carbon curbs and have been strong public advocates of the proposed regulation.

For that reason, even if the Trump administration is able to achieve a legal victory here, it is unlikely to overcome the laws of economics. That is, the market is favoring companies that limit their carbon emissions and that pressure will continue no matter what.

 

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