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EPA proposes repeal of Clean Power Plan

US Environmental Protection Agency (EPA) Administrator Scott Pruitt has issued a Notice of Proposed Rulemaking (NPRM), proposing to repeal the “Clean Power Plan (CPP).” After reviewing the CPP, EPA has proposed to determine that the Obama-era regulation exceeds the Agency’s statutory authority.

On October 10, US Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a Notice of Proposed Rulemaking (NPRM), proposing to repeal the Clean Power Plan (photo courtesy EPA).

Furthermore, repealing the CLean Power Plan (CPP) will also facilitate the development of domestic energy resources and reduce unnecessary regulatory burdens associated with its development, in keeping with the principles established in President Trump’s Executive Order on Energy Independence.

The Obama administration pushed the bounds of their authority so far with the CPP that the Supreme Court issued a historic stay of the rule, preventing its devastating effects to be imposed on the American people while the rule is being challenged in court. We are committed to righting the wrongs of the Obama administration by cleaning the regulatory slate. Any replacement rule will be done carefully, properly, and with humility, by listening to all those affected by the rule, said EPA Administrator Scott Pruitt.

Apparent inconsistency with the Clean Air Act

According to a statement released October 10, the CPP issued by the Obama administration was “premised on a novel and expansive view” of Agency authority that the Trump administration now proposes to determine is inconsistent with the Clean Air Act (CAA). The CPP was put on hold in February 2016, when the Supreme Court issued an unprecedented stay of the rule.

EPA will respect the limits of statutory authority. The CPP ignored states’ concerns and eroded longstanding and important partnerships that are a necessary part of achieving positive environmental outcomes. We can now assess whether further regulatory action is warranted; and, if so, what is the most appropriate path forward, consistent with the Clean Air Act and principles of cooperative federalism, said Administrator Pruitt.

The CPP was issued under Section 111 of the CAA requiring regulated entities to take actions “outside the fence line.” However, EPA Section 111 rules were based on measures that could be applied to, for, and at a particular facility, known as “inside the fence line” measures and prior to the CPP being issued, every single Section 111 rule followed this “inside the fence line” measure.

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 and has now sent the NPRM to the Federal Register for publication with a 60-day public comment submission from the date of publication.

The repeal package includes:

  • The “preamble,” which lays out the proposed legal interpretation, policy implications, and a summary of the cost-benefit analysis of the proposed repeal
  • The “Regulatory Impact Analysis (RIA),” an in-depth cost-benefit technical analysis

Repeal to save up to US$33 billion in avoided costs in 2030

The proposed repeal both examines the Obama administration’s cost-benefit analysis, as well as provides insights to support an updated analysis of the environmental, health, and economic effects of the proposed repeal. The Trump administration estimates the proposed repeal could provide up to US$33 billion in avoided compliance costs in 2030.

According to the statement, the previous administration’s estimates and analysis of these costs and benefits were, in multiple areas, “highly uncertain” and/or controversial. Specific areas of controversy and/or uncertainty in the Obama administration’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 previous 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 previous administration counted “energy efficiency” results as an avoided cost, resulting in a cost estimate being considerably lower than it would have been if the appropriate Office of Management and Budget practice of considering these effects as benefits, rather than subtracting them from costs had been used.

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 modelling and other information. The final action on this proposed repeal will address the results of this ongoing work.

Forthcoming is an Advanced Notice of Proposed Rulemaking (ANPRM) that will be “reflective of a thoughtful and responsible approach” to regulatory action grounded within the authority provided by the statute.

With this action, the Trump administration is respecting states’ role and reinstating transparency into how we protect our environment, said Administrator Pruitt.

Background

On March 28, President Trump signed an Executive Order (EO) on Energy Independence, establishing a national policy in favour of energy independence, economic growth, and the rule of law. The purpose EO is to facilitate the development of US energy resources and to “reduce unnecessary regulatory burdens” associated with the development of those resources.

Also on March 28, EPA Administrator Scott Pruitt signed four Federal Register notices in response to the EO, including a formal announcement of a review of the Clean Power Plan (CPP). After “substantial” review, the Agency has proposed to determine that the CPP must be repealed.

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