On October 10, 2017, EPA announced  it is taking steps to repeal the Clean Power Plan (CPP), regulations put in place in 2015 which requires existing power plants to roll back their CO2 emissions by 2030.  EPA is taking the unusual position that the agency exceeded its powers under the Clean Air Act when it created the CPP. The new EPA intends to look into its own powers and reconsider whether, when and how to issue a rule regulating greenhouse gases from existing facilities.

The process launched today begins a procedure which can, and likely will, take years to complete. The end result is unclear and likely will be determined by a court.

Given that the CPP is a complete and formally - adopted set of regulations promulgated under the Clean Air Act, the Trump Administration cannot simply wave a wand or issue an executive order to erase it. Instead, it must follow certain procedures, essentially beginning its own rulemaking process. Thus, EPA issued a Notice of Proposed Rulemaking (NPRM)  which opens a 60 day public comment period (beginning upon publication of the NPRM in the Federal Register, and which can be extended).  According to EPA’s press release, the new procedure “proposes to determine that the Obama-era regulation exceeds the Agency’s statutory authority.” As a practical matter, the current EPA contends any regulation of CO2 must relate to an entity’s operations and cannot direct an entity to employ changes “outside the fence line.”

Further, in 2007 the United States Supreme Court has held that EPA is required to regulate CO2. In Massachusetts v. Environmental Protection Agency  the Court ruled that CO2 and other greenhouse gases are pollutants under section 202(a)(1) of the Clean Air Act as they can cause or contribute to the type of pollution which ”may reasonably be anticipated to endanger public health or welfare.” Subsequently, after years of scientific study and input, in 2009, EPA issued a formal Endangerment Finding, concluding Greenhouse Gases, including CO2, are in fact a threat to human health and wellbeing and should be regulated. At that point, Greenhouse Gases could be regulated under a new law or the existing Clean Air Act.

The current NPRM does not dispute the Endangerment Finding, and requests commenters refrain from opining on the potential health hazards of greenhouse gases in general.  Rather, it requests comments to be limited to the confines of the NPRM package.  The NPRM package includes a “preamble” which contains a legal interpretation and policy analysis of the costs-benefits analysis of the proposed repeal, as well as a new Regulatory Impact Analysis of its proposal.  The Regulatory Impact Analysis of this new proposal estimates that repealing the CPP will result in a “savings” of $33 billion (in avoided compliance costs by industry, but does not include an analysis of likely rising health care costs associated with the repeal).

For background, in 2015, the Obama EPA promulgated the final CPP regulations. Some states, including Oklahoma (and industries) immediately challenged the CPP in court, in actions brought by Scott Pruitt, then- Oklahoma Attorney General and now-EPA Administrator. Prior to the September 2016 oral arguments, in February that year the US Supreme Court stayed the enforcement of the CPP pending the lawsuit. Thus, while the CPP was formally “on the books,” any attempt to comply with the regulations was voluntary until the resolution of the lawsuit.

What it Means

The rationale supporting the NRPM, the “beyond the fence line” arguments, essentially mirror the arguments made in court by Pruitt when challenging the CPP in 2015-16. EPA contends the former administration failed to adequately consider (certain) states’ objections, and focused too broadly on promoting global climate benefits and energy efficiency.

EPA’s intent to scrap the CPP is obvious. It could have crafted ways to interpret and enforce the CPP regulations and encourage technological advances to strive for targeted reductions in CO2 emissions. Instead, it chose to erase the CPP as best it can, by beginning a long and “thorough” process, to discuss, re-analyze and calculate savings.

In other words, we are off the races, but it looks like it will be a slow-motion marathon, not a sprint, to a destination unknown.