Environmental update

Author: Andrew E. Skroback Publication | October 2017

A US appeals court heard arguments in mid-September on the legality of permitting rules that the US Environmental Protection Agency issued in 2014 for cooling water intake structures at power plants. A decision is expected in the case by early next year.

The case involves competing challenges seeking to overturn Obama-era rules under the Clean Water Act, with the power sector arguing the rules are too strict and environmental groups arguing that the rules leave local regulators with too much discretion in determining whether Clean Water Act standards are met on a case by case basis.

The rules are supposed to limit harm to fish and other aquatic species from water intake structures at existing power plants by setting technology standards for preventing them from being pulled into the cooling system.

Environmental groups want the agency to designate a single method as the “best technology available,” but EPA instead offered a list of options that regulators can choose from when issuing a permit for a particular facility. Permit writers have considerable latitude under the rule as written to consider site-specific factors in deciding which technology to require.

Briefing in the case was completed before President Trump took office. Government attorneys at oral argument continued to defend the rule using largely the same arguments set out in the Obama-era briefing.

The case is Cooling Water Intake Structure Coalition v. EPA.

Clean power plan

The extent of US regulation of greenhouse gas emissions will remain uncertain for the power sector for the foreseeable future. EPA moved formally on October 10 to withdraw the Obama-era Clean Power Plan covering existing power plants, but did not indicate clearly what would follow. The options still under consideration by the Trump administration range from simple repeal—a course more easily challenged in court—to repeal with some form of substantial substantive replacement.

EPA is expected to make a firmer decision after collecting public comments, with the issuance of an advance notice of proposed rulemaking to follow. EPA Administrator Scott Pruitt has been reexamining historical assessments of the authority EPA has under the Clean Air Act to regulate greenhouse gas emissions, and it was no surprise that EPA said it plans to withdraw the Clean Power Plan because the plan exceeds EPA’s legal authority.

The Clean Power Plan would set limits on greenhouse gas emissions by existing power plants. The limits vary by state.

Current betting is that the Trump administration will eventually propose to replace the Obama-era plan with one that sets greenhouse gas emissions targets in a manner that will vary from one power plant to the next depending on what can reasonably be done at each power plant.

Most industry advocates have been pushing for a more easily defended replacement approach, recognizing the hazards of outright repeal given that the US Supreme Court has said EPA is required by the Clean Air Act to regulate greenhouse gases.

The coal power industry argues that states should have authority to establish source-specific standards based on factors such as the useful life remaining in a particular power plant, cost and the difficulties of installing emissions control equipment at particular existing coal plants.

A Trump replacement plan will probably give each state significant latitude to decide what each plant within its borders must do to limit greenhouse gas emissions. The states would probably have the primary role in regulating greenhouse gas emissions from existing power plants through the establishment of carbon performance standards under section 111(d) of the Clean Air Act.

In contrast, the Obama Clean Power Plan relied mainly on a cap-and-trade regime. It would have given each state broad authority to determine how statewide obligations must be met within that state, and focused less on how facility-specific emissions targets could be reached based on “inside-the-fence” considerations. The plan was stayed by the US Supreme Court in 2016.

Any move to limit such emissions on a facility-by-facility basis is more likely to keep aging facilities with greater emissions in service for longer.

The power industry also wants changes to the “new source review” permitting program that affects new power plants and existing power plants that have been significantly modified. EPA recently announced the formation of a new source review task force that will consider options for scaling back the air program that requires new power plants and existing power plants that undergo major modifications to install state-of-the-art pollution control equipment.

It will take years for whatever regulatory changes are made in these areas to take effect, possibly extending into the next administration. It will take that long for the inevitable legal challenges to work through the courts. Many in the power sector recognize that regulation of greenhouse gas emissions is inevitable and have advocated for certainty over the regulatory and policy vacuum that will likely follow the expected announcements.

Environmental groups argue that any narrow replacement of the Clean Power Plan would be insufficient and inconsistent with the Clean Air Act. For example, if an “inside-the-fence” rule replaces the Clean Power Plan, EPA would be forced to explain why it is changing its previous interpretations, such as its conclusion that regulators should consider the option of switching fuel sources at coal-fired power plants when regulators set emissions reduction goals.

Any replacement based on a narrow interpretation of EPA’s authority is unlikely to reduce the nation’s greenhouse gas emissions meaningfully in comparison to the reductions projected under the Clean Power Plan, which was the key means by which the United States intended to meet its obligations when it signed the Paris climate agreement.

EPA Deputy

President Trump nominated coal industry lobbyist Andrew R. Wheeler in early October to serve as deputy EPA administrator, the number two position at the agency. Wheeler is a former aide to Senator James Inhofe (R-Oklahoma), a vocal critic of climate change science. Wheeler was Inhofe’s chief counsel and served as the staff director for the Senate Committee on Environment and Public Works before becoming a lobbyist.

Infrastructure environmental review

President Trump issued an executive order in August that is intended to accelerate approval of infrastructure projects by streamlining the environmental review and permitting process.

The order applies to energy production and transmission, water treatment, transportation and certain other infrastructure projects. Under the order, agencies may be held accountable if they fail to meet new, tighter deadlines it sets for completing environmental review and permitting.

The White House Council on Environmental Quality will oversee its implementation and resolve interagency disputes relating to environmental review and permitting.

The on-the-ground impact is somewhat uncertain as the deadlines imposed are not binding and the enforcement authority provided to the executive may be affected by congressional oversight of agency budgets.

Flood risk management

Trump also revoked by executive order in August an order issued in 2015 by the Obama administration that requires projects built in coastal areas and other flood plains to be built to more rigorous standards so that they can withstand 500-year storms. The timing was awkward coming shortly before Houston was pummeled by Hurricane Harvey leading to widespread flooding. It was the third “500-year” flood to hit Houston in three years.

The rescission means federal agencies are no longer required to make the ability to withstand floods and heavy storms a condition for issuing permits for new construction. However, the Trump order does not explicitly preclude the discretionary consideration of these risks. It also does not change the obligation to consider the potential impacts of climate change under other laws, such as the National Environmental Policy Act.


Contacts

Andrew E. Skroback

Andrew E. Skroback

Washington, DC