Repeal of Obama Energy Mandate Cheered by Industry

Early last week, Environmental Protection Administrator Scott Pruitt announced the start of the repeal of an Obama energy mandate for power plants. The true goal of the mandate wasn’t lower global temperatures, as trumpeted by the Obama administration, but the crippling of the coal industry through manipulation of the fuel supply mix for power plants.

Just three years earlier, then Oklahoma Attorney General Pruitt relied on the same argument, when he joined 11 other states in a suit against the EPA over the mandate. As chief of the EPA now, he argues that the agency had no authority – an unfortunate, but common method of operation in the Obama administrative state – to threaten states with the loss of highway funds if they didn’t adopt policies to force plants to reduce carbon dioxide (CO2) emissions by a third below 2005 levels by 2030. The other eminently defensible argument Pruitt has is that the plan wasn’t just founded on bad science, it was founded on no science at all; even the EPA acknowledged that the effect on global temperatures would be too miniscule to measure.

But the plan would have succeeded, as per its true intentions, in thwarting the construction of any new coal fired plants and eventually shuttering existing ones by forcing costly alternative fuels into the power generation mix.

“The Obama Administration illegally distorted the energy markets to destroy America’s coal production,” said PMA President David N. Taylor. “Homeowners and businesses would have paid more for electricity generation with no perceivable corresponding gain in environmental quality or human health.”

The news of the rollback was cheered by the coal industry. Rachel Gleason, Executive Director of the Pennsylvania Coal Alliance, said that that the “proposed rulemaking to repeal the ‘Clean Power Plan’ means that this far reaching and costly rule will no longer threaten our state’s economy and the jobs of over 30,000 hard working men and women in Pennsylvania.

“The rule exceeded the EPA’s authority and circumvented state’s rights by mandating energy policy disguised as regulations,” she said, “and was particularly discriminatory against Pennsylvania as one of the top producers of affordable baseload generation. The repeal protects the reliability and resiliency of the power grid, protects ratepayers from significant electricity price increases, and protects our Commonwealth’s position as a net energy exporter.”

The overreach by the EPA falls in line with other Obama mandates that sidestepped Congress’s authority by contriving powers through creative interpretations of the law. It did so with federal subsidies under the Affordable Care Act when only Congress has the power to appropriate funds (another overreach the Trump Administration recently reeled in), and the creation of a political slush fund in the Department of Justice (DOJ). There, the DOJ sued lending institutions for alleged violations of banking law, violations with racial undertones, which the banks would settle rather than endure lengthy, expensive court fights and the bad PR that comes with them. The DOJ would then direct the settlement money to grass roots political groups that supported local Democratic candidates. Attorney General Jeff Sessions has ended that practice.

In the case of the energy mandate, the EPA took a creative reading of a portion of the Clean Air Act - Section III, which arguably prevented the agency from taking this action rather than empowering it to do so.

“The legal foundation of the ‘Clean Power Plan’ was so rickety that the Supreme Court took the extraordinary step of blocking its implementation pending all the lawsuits against it,” wrote National Review editor Rich Lowry. “The presumption of the plan was jaw dropping. The EPA usually targets pollutants; carbon dioxide isn’t one (though the Supreme Court erroneously said it meets the definition in the case of Massachusetts vs. EPA).”

Even if the EPA mandate were permissible under law, the agency had no scientific justification for pushing it out the door, and on to the states.

Benjamin Zycher, a scholar with the American Enterprise Institute, wrote in 2014, when the plan was in its final drafting stages that, “under the climate model developed at the National Center for Atmospheric Research — used by both the United Nations and the EPA —the new rule, even if implemented immediately, would reduce global temperatures in 2050 by less than a hundredth of a degree, and less than two-hundredths of a degree by 2100. Those trivial temperature effects are much smaller than the annual variability (11-hundredths of a degree) of the surface temperature record. They could not be measured reliably.”

The costs for squashing the coal industry would have reached far beyond the industry itself. The U.S. Chamber of Commerce estimated that the plan would could have cost $50 billion a year in gross domestic product, and much of it would have been borne by the red states, a development that Zycher characterizes as political retribution.

But, when President Obama said in 2012,  “Who are we kidding. We can’t drill our way to lower gas prices,” what could industry really have expected? 

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