As anticipated, the US Environmental Protection Agency (EPA) has issued a Notice of Proposed Rulemaking (NPRM), proposing to repeal the Clean Power Plan (CPP). Released in 2015 by the Obama Administration EPA, the CPP established the first national standards to limit CO2 emissions from fossil-fuel-fired power plants (Electric Generating Units, EGUs), with a target of a 32% reduction against a 2005 baseline by 2030. (Earlier post.)
The Trump Administration EPA has proposed to determine that the Obama-era regulation exceeds its statutory authority. EPA has now sent the NPRM to the Federal Register for publication. Upon publication, the public will have 60 days to submit comments.
In March, President Trump signed an Executive Order on Energy Independence, establishing a national policy in favor of energy independence and economic growth. EPA Administrator Scott Pruitt signed four Federal Register notices in response to the EO, including a formal announcement of review of the Clean Power Plan. After review, the Agency has proposed to determine that the Clean Power Plan (CPP) must be repealed.
Broadly, the EPA is arguing that the CPP is inconsistent with the Clean Air Act. The CPP was issued pursuant to an expansive view of authority under Section 111 of the Clean Air Act (CAA). The CPP required regulated entities to take actions “outside the fence line.” Traditionally, EPA Section 111 rules were based on measures that could be applied to, for, and at a particular facility, also referred to as “inside the fence line” measures. Prior to the CPP being issued, every Section 111 rule on the books, including a handful of existing source rules and around 100 new-source rules, obeyed this limit. As the CPP departed from this traditional limit on EPA’s authority under an “inside the fence line” interpretation, EPA is proposing to repeal it.
The repeal package includes the “preamble,” which lays out the proposed legal interpretation, policy implications, and a summary of the cost-benefits analysis of the proposed repeal; and the “Regulatory Impact Analysis (RIA),” an in-depth cost-benefit technical analysis.
The Trump administration estimates the proposed repeal could provide up to $33 billion in avoided compliance costs in 2030.
EPA argues that the previous administration’s estimates and analysis of these costs and benefits was, in multiple areas, highly uncertain and/or controversial. According to the Trump EPA, specific areas of controversy and/or uncertainty in the Obama EPA’s analysis of CPP include:
Domestic versus global climate benefits: The previous administration compared US costs to an estimate of supposed global benefits, and failed to follow well-established economic procedures in estimating those benefits.
“Co-benefits” from non-greenhouse-gas pollutants: The Obama administration relied heavily on reductions in other pollutants emitted by power plants, essentially hiding the true net cost of the CPP by claiming benefits from reducing pollutants that had nothing to do with the rule’s stated purpose.
Energy cost and savings accounting: The Obama administration counted “energy efficiency” results of their rule as an avoided cost, resulting in a cost estimate being considerably lower than it would have been if they used the appropriate practice of considering these effects as benefits, rather than subtracting them from costs. Had the Obama administration used the Office of Management and Budget’s longstanding requirements and accounted cost and savings accordingly, it would have presented a more accurate accounting of the total cost of the CPP, the EPA said.
As part of the notice-and-comment process for this proposed repeal, EPA will continue this analysis and inform the public, as necessary, to get feedback on new modeling and other information. The final action on this proposed repeal will address the results of this ongoing work.
Immediate reactions to the announcement predictably ranged from the supportive to the outraged. API President and CEO Jack Gerard welcomed the action, and observed that even without the Clean Power Plan’s implementation, greenhouse gas emissions from power generation have dropped by 25% since 2005 due to the increased use of natural gas. He also noted that even as the US has become the world’s top producer and refiner of oil and natural gas, carbon emissions are near 25-year lows.
On the other end of the spectrum, Sierra Club Executive Director Michael Brune said that Trump and Pruitt “will go down in infamy for launching one of the most egregious attacks ever on public health, our climate, and the safety of every community in the United States.”
EPA will accept comment on the proposed repeal of the Clean Power Plan for 60 days after publication in the Federal Register. Comments should be identified by Docket ID No. EPA-HQ-OAR-2017-0355 and may be submitted online; by email; or by fax, mail, or courier.