PA Wrongly Endorses Carbon Rules: Other States Prepare Legal Action

Sixteen states, with many more on the way, have already banded together to pursue legal action to stop the implementation of Barack Obama’s “Clean Power Plan”. Unfortunately, Pennsylvania won’t be joining the party.

Governor Tom Wolf, in fact, rushed to release a statement last week in supporting the president after he announced the final rule that unrealistically slashes carbon emissions at power plants. The governor’s assurance to work “with industry leaders and legislators as well as citizens to find the right balance and develop and effective and responsible state plan," doesn’t alter the objective of the president’s plan.

The potential loss to Pennsylvania is staggering. The coal industry, in this commonwealth alone, sustains 36,000 jobs at an average salary of $79,127 a year, according to figures compiled by the Pennsylvania Economy League. The industry adds $4 billion to the economy, as coal remains a vital part of keeping energy affordable.

In recent testimony before the state Senate, Pennsylvania Coal Alliance CEO John Pippy, explained that coal provides a strong supply of baseload electricity, safeguarding ratepayers against spikes in demand and rapid price increases. This allows energy-intensive industries, such as manufacturing, to be able to forecast pricing and do business in Pennsylvania because of the predictable and reliable market.

“Any law or regulation that deliberately or unintentionally impedes coal usage by electric generators not only threatens the affordability and reliability of electricity to ratepayers but will also cause severe economic consequences to coal production, jobs and livelihoods, local tax bases and the overall state economy,” Pippy said.

“Pennsylvania’s General Assembly should refuse to comply with this unconstitutional federal power grab which will not survive judicial review,” said PMA President David N. Taylor. “With huge economic pain for zero environmental gain, ‘Clean Power Plan’ deserves to join ‘Affordable Care Act’ as one of the great misnomers of the Obama Administration.”

In a similar vein, the head of National Association of Manufacturers (NAM) chided the president for following through with his plan. “This regulation will be exceptionally difficult for manufacturers to meet and will increase energy prices and threaten electric reliability. Manufacturers are committed to being responsible stewards of our environment, leading the way in that effort, and we are disappointed that the Obama Administration has chosen to pursue this path,” said Jay Timmons, NAM’s CEO.

The hope is that the pending legal challenge by several states will at least delay implementation until a new administration takes over in Washington in January 2017. An administration more in tune to business needs could soften the impact of the rules, policy experts say. Ideally, the “Clean Power Plan” will be blocked outright.

The legal arguments to block the plan will focus on the EPA overstepping its jurisdiction by exceeding the authority of the Clean Air Act, according to a spokesman for West Virginia Attorney General Patrick Morrisey, who is leading the states’ legal challenge. “The Clean Air Act permits the EPA to target sources,” Jared Hunt said. “This is an attempt by the EPA to regulate the demand side of the industry.”

“It (the legal action) might throw enough sand in the gears to sufficiently slow the process down,” said Benjamin Zycher, scholar with the American Enterprise Institute (AEI), who wrote an analysis of the Clean Power Plan entitled All Cost, No Benefit. “The temperature reduction in the year 2100: fifteen one-thousandths of a degree. The effect would be too small even to be measured, let alone to affect sea levels and cyclones and all the rest. If we include the pseudo-agreement between the U.S. and China that was announced last November (even though the Chinese effectively disavowed it almost immediately), we can assume an additional 10 percent reduction by the U.S. by 2025, with no actual reduction by the Chinese. This gets us another one one-hundredth of a degree, for a grand total of twenty-five one-thousandths of a degree.”

Congress and many state legislatures are likewise engaged in preventing, or at least mitigating, the economic fallout from the new rules. The U.S. Senate Environment and Public Works Committee last week approved the ARENA Act, sponsored by Shelley Moore Capito (R-W.Va.), which would roll-back the Clean Power Plan by among other things, preventing mandates for unproven technology. Before the EPA can set a technology-based standard for new power plants, the standard must first be achieved for at least one year at six separate power facilities throughout the country. The bill also prevents the EPA from using any demonstration projects – projects that are reliant on federal support – from being used to set the standard.

On the state level, the General Assembly last session approved legislation, now Act 175 of 2014, in anticipation of the rules. The bill, sponsored by Rep. Pam Snyder (D-Greene), allows the legislature to review and, if it sees fit, veto a state implementation plan by the Department of Environmental Protection (DEP). However, the EPA rule requires state environmental agencies to submit implementation plans to Washington and they write a plan for states that don’t comply.

The DEP would then have 60 days to incorporate any recommendations the General Assembly includes in its veto before sending the final plan to Washington.

The specter of the new rules has already had negative repercussions where it hurts the most, on the local level with the workers.

“We are applying for federal grants to retrain miners for jobs that will pay less than half of what they can make in the mines,” said Robbie Matesic, Executive Director of the Greene County Department of Economic Development. “The hardest thing is telling a third generation miner that the layoff this time isn’t just a fluctuation in the market, but will be permanent.” Matesic added that they have started to work with economic development groups in 12 other Pennsylvania counties and six West Virginia counties to find markets outside the U.S. for their coal.

Whatever the final outcome, it will take some time for any change to work through the legal and political process. The new rules are scheduled to be published in the Federal Register on September 4, but that could be delayed, according to John Eick, the Energy, Environment and Agriculture Task Force Director with the American Legislative Exchange Council (ALEC).

“Once the rules are published Congress could move to scuttle them under the Congressional Review Act,” Eick said. “It’s unlikely they will have enough votes to override a presidential veto but the vote would still result in a bad optic for the president just before the United Nations’ Conference On Climate Change in December.”

We will continue to monitor these regulations closely and will report what happens next.