Trump EPA’s “Dirty Power Plan” Coming Soon

As the nation and the world suffer another summer of record heat waves, devastating wildfires, and alarming weather extremes, EPA’s Acting Administrator Andy Wheeler is preparing to issue the Trump Administration’s “do-nothing” replacement proposal for the Clean Power Plan this month. 

Power plants and motor vehicles are our top two sources of the carbon pollution that drives this increasingly dangerous climate change. EPA and the Transportation Department just proposed to eviscerate the nation’s landmark clean car and fuel economy standards. By all accounts, Wheeler’s Clean Power Plan replacement proposal will do likewise for power plants. 

Carrying forward the “Dirty Power Plan” designed under former Administrator Scott Pruitt, we expect Wheeler’s proposal will be designed to ensure that power plants are required to make no meaningful carbon pollution reductions—and it may even make emissions increase. 

The proposal is now under review at the Office of Management and Budget. The rush to issue it by the end of the month is motivated by fear of what the D.C. Circuit Court of Appeals—increasingly frustrated by EPA’s “indefinite delay” in meeting its “obligation under the Clean Air Act to regulate greenhouse gases”—may do when its latest 60-day “abeyance” of the long-pending Clean Power Plan litigation runs out in late August.

Former Administrator Scott Pruitt proposed a full-out repeal of the Clean Power Plan last year, but Bill Wehrum (long a lawyer for the coal power industry and Trump’s appointee to run EPA’s air program) apparently convinced him a full repeal would be dead on arrival given prior Supreme Court and D.C. Circuit rulings. So the focus shifted to developing a replacement that appears to satisfy the obligation to do something, while really doing nothing. That approach was advertised for public comment last December in an “advance notice” of proposed new guidelines.  

The coming proposal would fit hand-in-glove with the Department of Energy’s rumored plans for subsidies and market-rigging gimmicks to prop up money-losing coal-fired power plants.

NRDC registered our objections to both Pruitt proposals here and here, as did dozens of other environmental organizations, state and local governments, clean energy groups, and hundreds of thousands of Americans.  As we wait for Wheeler’s next move, here is a recap of the long struggle to curb power plants’ climate pollution, and a reprise of the legal and factual framework for judging the coming proposal.

The History of Carbon Pollution Law in 30 Seconds

Though we could go back much farther, we can find ample evidence of scientists’ and political leaders’ concerns about carbon pollution and climate change in the 1950s and 1960s. Here’s a Frank Capra film on climate change for the Bell Telephone Science Hour in 1958.  In 1965 President Johnson sent Congress a scientific panel report on pollution with an entire section on CO2 and climate change, and he asked for comprehensive new air pollution legislation covering this threat, among others.  Johnson told Congress:  “Air pollution is no longer confined to isolated places. This generation has altered the composition of the atmosphere on a global scale through radioactive materials and a steady increase in carbon dioxide from the burning of fossil fuels.” In 1970, the Council on Environmental Quality’s first annual report to Congress devoted a chapter to CO2-driven warming of the planet. 

And Congress took notice, expressly building the duty of climate protection into the fundamental architecture of the 1970 Clean Air Act by including effects on “climate” and “weather” in the definition of adverse effects to be prevented.  

This is the authority that the Supreme Court confirmed in 2007, 2011, and 2014, and that the Obama administration used to set the first limits on heat-trapping pollution from vehicles and power plants. 

And this is the authority the Trump EPA is bound and determined to shut down, or at least to avoid using.

How Did the Clean Power Plan Work? 

The Clean Power Plan was designed to mirror the way the power sector actually works. To define the “best system of emission reduction,” the Obama EPA took account of the fact that carbon dioxide mixes evenly in the atmosphere, so that a ton of emission reductions from any plant provides equal climate benefit. Power plants—both those that emit CO2 and those that do not—are part of an interconnected electric grid and are jointly operated to supply exactly the amount of electricity demanded at any given time. To meet a given level of electricity demand, increased generation by one plant necessarily causes decreased generation by other plants. Power companies and grid operators routinely ramp facilities’ generation up or down to meet demand subject to economic and environmental constraints.

• Reflecting these well-established means of reducing carbon pollution, the 2015 Clean Power Plan set two CO2 emissions limits—one for coal plants and one for gas plants—and allowed each plant to meet its applicable limit by a combination of reducing its own emission rate by installing emission control equipment or using cleaner fuels, and using CO2 emission reduction credits created by ramping up operations at other, cleaner plants. 
• EPA concluded this was the “best system of emission reduction” for power plants, because it reflects how power plants are actually operated and because it is the most economically efficient, achieving the greatest pollution reductions at the lowest cost. This is how EPA has regulated other power plant pollutants for decades.  
• The Clean Power Plan translated these coal and gas emission rates into state targets reflecting the mix of plants in each state. Under the Clean Air Act and EPA’s long-standing regulations, each state then had the option to adopt a state plan enforcing those emission rates, adopt an alternative plan that achieved the same result, or do nothing—in which case the Clean Air Act requires EPA to establish a federal plan to directly regulate the power plants in that state.

The Clean Power Plan has not been put into legal effect, because state and industry opponents convinced the Supreme Court, by a 5-4 vote, to put its implementation on hold pending the D.C. Circuit’s decision on the merits, and any subsequent appeal.  As we know, that court has yet to rule. Since President Trump announced his intent to roll back the Clean Power Plan, the D.C. Circuit has suspended its consideration of the case in 60-day increments. This has had the effect of extending the Supreme Court stay far longer than originally anticipated.  It is the appeals court’s growing impatience, recounted above, that seems to be driving Wheeler to issue the proposal this month.

But here’s the thing. In reality, the power sector is going through a profound shift in how it generates electricity, with overall demand flat (because businesses and homeowners are investing in energy-efficient lighting, appliances, machinery, and buildings), and with companies replacing coal with gas and renewable generation (which are out-competing even old coal plants). The Clean Power Plan called for a 32 percent CO2 reduction from 2005 levels by 2030. By the end of 2017—13 years ahead of the deadline—emissions were already down 28 percent. 

It turns out the Clean Power Plan targets were way too conservative.  To meet the urgency of climate change, we should be strengthening the Plan, not substituting a do-nothing replacement. Our analysis shows that if we properly updated the Clean Power Plan using its original target-setting process, we could reduce power sector CO2 emissions 55 percent by 2030.

What’s Wrong with the Wheeler-Wehrum Replacement?

By all accounts, Wheeler’s and Wehrum’s replacement proposal is a multi-layered effort to neuter the Clean Air Act as an instrument to curb carbon pollution from power plants. 

To start, the proposal is expected to ignore how the power system actually works and invent a fictional world in which individual power plants operate in isolation, disconnected from the grid.  That way, the interactions between power plant operations, and the opportunities to reduce emissions across the power system, can be ignored.  

Thus the proposal will likely restrict EPA’s gaze to only a subset of the available means to reduce CO2, focusing only on “heat-rate improvements” at individual coal plants—minor “tune-ups” through better combustion efficiency. 

At most, heat-rate improvements can achieve only a several percent reduction in a plant’s CO2 emission rate. At worst, they can lead to higher total emissions, because power plant owners will run a more efficient coal plant more hours each year.  By displacing cleaner resources, this can make things worse.

If it follows last year’s efforts, the Wheeler proposal will justify these blinders and blinkers by asserting a narrow legal interpretation that restricts EPA to requiring only (quoting the Pruitt EPA) “emission reduction measures that can be applied to or at an individual stationary source . . . rather than measures that the source’s owner or operator can implement on behalf of the source at another location.” 

• This is, firstly, a fictional description of what the Clean Power Plan did.  The Clean Power Plan set limits for each source. It did not require that owner/operator to control the operation of any other source. Rather, it gave the owner/operator the compliance option to purchase credits from the owners and operators who chose to build and operate cleaner plants. 
• Secondly, Wheeler and Wehrum appear ready to ignore other steps that power plants can take at their own facilities, like co-firing coal plants with gas and adopting carbon capture and storage.
• Thirdly, the market-based option—to comply either by curbing the plant’s emissions with control measures on site or to comply by using credits created by other cleaner plants—has been part of power plant regulation under the Clean Air Act for decades. And it has been repeatedly upheld by the courts, including a 2014 Supreme Court decision upholding the analogous program to curb interstate power plant pollution that causes dangerous air quality levels downwind.

But Wheeler and Wehrum are just getting warmed up.  We expect the proposal will seek to end EPA’s legal and historical role of setting the performance benchmark that power plants must actually meet. 

The statute and EPA’s longstanding regulations provide that the agency may approve a state plan only if it includes emission limits that will meet the federal pollution reduction targets. If a state submits a plan that falls short, or no plan at all, then EPA is legally bound to issue a federal plan that directly regulates the power plants in that state.

As foreshadowed in the advance notice, Wheeler’s proposal will likely change that, giving states a virtually unlimited option to let their power plants off the hook.  EPA will let states set weaker standards, or even exempt plants entirely, under the guise of considering plants’ “remaining useful life.” This is a blatant distortion of the Clean Air Act. (For a longer-than-blog-length explanation why, read pp. 12-13 of our advance notice comments.) 

And for the pièce de resistance, the proposal will likely include a set of so-called reforms to “New Source Review” that Wehrum pursued in vain when he served in the same post in the George W. Bush administration—exemptions and weakening changes that were repeatedly rejected by the D.C. Circuit. (That tale is told in pp. 14-17 of our comments.) These changes will magnify the risk that heat-rate improvements will cause total emissions increases.

Further, the proposal is expected to cook the books on the science and economics of the Clean Power Plan.  As we explained here and here:

• It will likely say little, if anything, about the dangers we face from unbridled carbon pollution. (The Administration seems to be just fine with seeing CO2 concentrations skyrocket to near 790 parts per million by 2100—more than triple pre-industrial levels and nearly double today’s levels—and condemning the world to runaway sea level rise and extreme weather.  See p. 28 of the recent clean car rollback proposal.) 
• It will propose to slash the estimate of the benefits of curbing CO2 (the social cost of carbon) by ignoring the impacts of our pollution outside our borders (and the effects of other countries’ pollution on us), and by discounting away the harm to our children and following generations (in violation of the very OMB guidelines President Trump instructed EPA to use—see Section 5(c) of his March 2017 Executive Order).
• It is likely also to propose to establish, contrary to the best scientific evidence, a “threshold” below which the fine particle pollution from coal fired power plants will be declared harmless. Through this unscientific trick, the administration’s ideologues hope to make the massive health “co-benefits” of the Clean Power Plan magically disappear.
• It will tamper with cost estimates to make it seem that curbing carbon pollution is expensive, when the evidence shows it just keeps getting cheaper.

What Happens Next?

NRDC and our many partners will submit detailed comments on why the new proposal fails the test of the Clean Air Act and abdicates EPA’s responsibility to confront the escalating dangers of climate change and curb the pollution that’s driving it. Thousands of people are likely to testify at public hearings, and hundreds of thousands will add their voices in written comments.

Then we’ll go to court. We’re confident that the courts will find this do-nothing proposal falls far short of meeting EPA’s duty to act on carbon pollution under the Clean Air Act.