New Executive Order Targets Clean Power Plan And ‘Job-Killing’ Restrictions on Western Energy Producers
The Trump White House today issued a new executive order to roll back the Obama administration’s climate agenda, including a number of regulations targeting energy producers in the West.
The “energy independence” order calls for a review of the so-called Clean Power Plan (CPP), which seeks to limit the amount of coal and natural gas states use to meet their energy needs. The order also takes aim at new federal methane restrictions on oil and natural gas development, which have been criticized for overlapping and conflicting with existing state regulations. And the Trump administration plans to lift a moratorium on new coal leases that was imposed across millions of acres of federal land by the Obama administration.
Today’s executive order aims to “cancel job-killing regulations,” President Donald Trump said in a signing ceremony at the headquarters of the U.S. Environmental Protection Agency (EPA) in Washington, D.C. “We’re going to have safety, we’re going to have clean water, we’re going to have clean air,” Trump said. “But so many [regulations] are unnecessary and so many are job-killing. We’re getting rid of the bad ones,” he said.
In a background briefing for reporters, a senior administration official said the executive order instructs federal agencies to identify “all regulations, all rules, all policies [and] guidance documents that serve as obstacles or impediments to domestic energy production.”
The order requires the EPA to conduct a review of the CPP, finalized the Obama administration finalized in mid-2015. The CPP takes aim at both coal and natural gas, fossil fuels that together provide two-thirds of the nation’s electricity.
According to the Natural Resources Defense Council (NRDC), the amount of coal-fired electricity on the power grid would drop 23 percent by 2030. Construction of power plants that run on natural gas would fall between 39 percent and 68 percent over the same timeframe, the NRDC said in a 2015 statement in support of the CPP. The CPP “accelerates the move away from gas and coal,” the NRDC said, by imposing a series of mandates on state electricity markets. The regulation uses “carbon reduction targets” and other policies to “expand the market for low-carbon resources like energy efficiency, wind and solar,” according to the NRDC.
The CPP was developed after President Barack Obama’s preferred program, legislation establishing a cap-and-trade system for carbon dioxide, failed to pass a Congress controlled by Democrats in 2010. But the CPP was stayed by the U.S. Supreme Court last year, pending legal challenges from states, trade unions, business groups and other stakeholders.
Environmental groups said they were outraged by the action against the CPP. “[T]he Clean Power Plan is a critical tool that helps every state benefit from the clean energy economy and plan for an orderly and effective transition away from fossil fuels,” said Michael Brune, executive director of the Sierra Club.” Today’s executive order “is the single biggest attack on climate action in U.S. history, period.”
California billionaire environmentalist Tom Steyer – a major political donor and supporter of “keep it in the ground” groups – also attacked the executive order. “These actions are an assault on American values and they endanger the health, safety and prosperity of every American,” Steyer told Reuters.
But the Sierra Club, Steyer and other environmental activists failed to mention that the fact that the fossil-fuel industry itself – through dramatic increases in domestic natural gas production – is largely responsible for U.S. carbon emissions being at their lowest levels since the early 1990s. At today’s signing ceremony, EPA Administrator Scott Pruitt said the policies of the Obama administration were more of an attack on the fossil-fuel sector of the economy than an effort to help the environment.
“We can actually achieve good jobs, good growth and pro-energy policies and protect the environment at the same time,” Pruitt said. “We’re no longer going to have a regulatory assault on any given sector of our economy.”
The Denver-based Western Energy Alliance, which represents the Western oil and natural gas industry, also hit back at critics of the executive order. “Natural gas has been the primary reason the United States has reduced greenhouse gas emissions more than the European Union or other countries that impose top-down climate change policies,” Kathleen Sgamma, president of the Alliance, said in a statement. “To keep it in the ground does not create a better future; on the contrary, it would cause us to import energy from overseas and make the country poorer while degrading the environment,” Sgamma said. The Alliance is a supporter of Western Wire.
While the CPP tried to restrict oil and natural gas producers from selling their products into the electricity sector, other regulations from the Obama administration would have made oil and natural gas more difficult to produce. Today’s order seeks to unwind some of those restrictions on oil and gas production, specifically new regulations targeting methane emissions, according to the senior administration official who briefed reporters on background. The regulations “affecting methane on oil and gas production both at EPA and the [Bureau of Land Management] … will be reviewed over the course of time,” the official said.
Methane is the primary constituent of natural gas, and the Obama administration argued that new regulations were needed to prevent these emissions from escaping during drilling and production. Supporters of the Obama methane rules also claimed the new requirements would be good for the industry because more gas would be captured and sold.
But critics of the Obama methane rules said the requirements were so restrictive they would prevent some wells from being drilled and force others to close prematurely, reducing energy production rather than increasing it. One of the Obama administration’s methane rules, targeting millions of acres of federal land in the West, was issued by the BLM two months before Obama left office, making it eligible for repeal under the Congressional Review Act (CRA).
A CRA disapproval motion passed the U.S. House last month and is now before the Senate. Critics of the methane rule issued by the U.S. Bureau of Land Management include New Mexico Gov. Susana Martinez (R), Utah Gov. Gary Herbert (R), North Dakota Gov. Doug Burgum (R) and Wyoming Gov. Matt Mead (R). The attorneys general of four states – Montana Wyoming, North Dakota and Texas – are trying to overturn the rule in court.
Other opponents include the Southern Ute Indian Tribe, Colorado Association of Commerce and Industry, Colorado Business Roundtable, the Greater North Dakota Chamber, the Grand Junction, Colo. Chamber of Commerce and Club 20, a coalition of local governments, tribes, businesses and citizens from Colorado’s Western Slope. Business groups in the Midwest and Appalachia, who are concerned about the rule’s impact on the nation’s energy supplies and broader economy, also want to see the last-minute methane regulation repealed.
Interior Secretary Ryan Zinke said today that removing unnecessary regulatory barriers to U.S. energy production serves the nation’s economic, security and environmental interests. “It is better to produce energy here under reasonable regulation than watch it get produced overseas with none,” Zinke said.
The order also lifts a moratorium on federal coal leasing, ordered last year by the Interior Department and BLM. “The coal moratorium that the Interior Department imposed, that will also be rescinded,” the senior administration official said.
The three-year moratorium was the result of pressure from “keep it in the ground” groups that oppose all fossil fuel production. The move was strongly opposed by Western leaders, including Gov. Matt Mead (R) of Wyoming and Gov. Gary Herbert (R) of Utah. U.S. Rep. Chris Stewart (R-Utah) even called the move “liberal fantasyland at its worst.”
Vice President Mike Pence said today that the executive order would restore an “all of the above energy policy” at the federal level to support the U.S. economy. “Lower energy costs mean more jobs, more growth and more opportunity for our country,” Pence said.
Before the order was signed, the White House said it would also require a review of the BLM’s hydraulic fracturing rule for federal lands and the Obama administration’s “social cost of carbon” policy.
The hydraulic fracturing rule was struck down by a federal judge last year, after state and industry officials filed a legal challenge. Critics of the rule argued that state-level regulations for hydraulic fracturing, or “fracking,” an essential technology for developing oil and natural gas wells, already applied and were better tailored to conditions on the ground. Imposing a second set of federal rules on top of the existing state regulations would result in confusion, delays and higher costs, driving energy companies away from federal lands altogether, they argued. The Obama administration appealed the ruling, but the Interior Department said this month it plans to rescind the rule.
The social cost of carbon was developed to support the economic case for new restrictions on the production and consumption of oil, natural gas and coal. It estimates the cost of every ton of greenhouse gas released into the atmosphere, and when new restrictions are imposed, it assigns a dollar value to the future emissions reductions that may result. Critics of the measure include Massachusetts Institute of Technology economist professor Robert Pindyck, who has called it “close to useless” and “misleading.”