This week, the Environmental Protection Agency’s (EPA) Administrator, Scott Pruitt, formally announced his agency’s decision to undo President Obama’s Clean Power Plan rule. The rule, finalized in late 2015, was never officially implemented due to a Supreme Court stay in February 2016. Pruitt’s decision begins a long path towards undoing the regulation.
The Clean Power Plan was the centerpiece of President Obama’s energy and environment agenda. The rule would have required drastic reductions in carbon dioxide, primarily through forced retirements of coal fired powerplants. Several states, energy companies, and outside groups challenged the legality of the rule, stating that the EPA was overstepping its boundaries in regulating power plants outside the fence line and usurping state regulatory prerogatives.
The rule was a mixed bag for natural gas interests. On the one hand, the rule would have likely increased the price of electricity due to a reduced amount of coal baseload power, forcing the grid to rely on intermittent and costly sources such as wind and solar. With rising electricity prices, the value of natural gas would have undoubtedly become more evident and the direct-use likely would have become even more justifiable.
On the other hand, this rule was likely just the beginning of an expanded regulatory affront to fossil energy sources. While the Clean Power Plan mainly targeted coal, many in the gas industry saw natural gas as the next target – it was only a matter of time before the same blueprint was used on the natural gas industry. Further, the Supreme Court upholding the EPA’s interpretation of the Clean Air Act in this context would have fundamentally altered how the agency can regulate emissions and would have expanded their authority well beyond the original intent of the law.
The EPA will now begin the lengthy process of undoing the rule. This will entail a new rulemaking process, which takes several years to complete. Legal challenges will also slow this process considerably. It is likely the Clean Power Plan will not be fully repealed until the next election.
For questions on this article, please contact Doug MacGillivray of APGA staff by phone at 202-464-2742 or by email at email@example.com