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Pruitt Opens CPP Repeal Process; Impact on Energy Industry Unclear

Sides were predictably drawn in the early debate over Environmental Protection Agency (EPA) Administrator Scott Pruitt's announcement that the Trump administration will issue a proposed rule to end the controversial Clean Power Plan (CPP), but what practical impact the move will have is less clear.

Coal interests and groups supporting regulatory reform were among those supporting the Trump administration's proposed end to CPP, while environmental groups were the loudest voices speaking out against the proposal. The Obama-era EPA overstepped its legal authority when it issued the CPP, which established for the first time federal limits on carbon emissions for the nation's power plants, Pruitt said Monday.

Pruitt followed through on his promise Tuesday when he issued a Notice of Proposed Rulemaking (NOPR), saying the CPP appears to be inconsistent with the Clean Air Act.

"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," Pruitt said.

The public will have 60 days to to comment on the NOPR following publication in the Federal Register.

The Obama administration unveiled the final version of the CPP in August 2015. The plan, which embraces renewables, solar and wind power, but not so much natural gas, calls for states to reduce emissions by 32% below 2005 levels by 2030.

Under the CPP, states must develop and implement plans that ensure power plants in their state -- either as single plants or as a collective group -- achieve goals for reducing carbon dioxide (CO2) emissions between 2022 and 2029, and final CO2 emission performance rates by 2030. The CPP gives states the option of choosing between either an emissions standards plan or a state measures plan to reduce emissions. They would also have the option of trading emissions rate credits with other states.

Cost Too High, Says Administration

EPA's proposal calls for an examination of the Obama administration's cost-benefit analysis. The Trump administration estimates that the proposed repeal of CPP would provide up to $33 billion in avoided compliance costs in 2030.

The CPP has been on hold pending legal challenges working their way through the courts. Twenty-seven states -- among them Oklahoma, where Pruitt was then the state's attorney general -- have sued over the CPP, arguing that it is an overreach by EPA. In February 2016, the U.S. Supreme Court temporarily blocked implementation of the rule until all legal challenges have been resolved.

"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," Pruitt said. "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."

Further muddying the waters are promises from some environmental groups that they will mount legal challenges to any revocation of CPP.

Some Business Groups Cheer...

West Virginia Gov. Jim Justice, whose state has major deposits of coal and a long history with that industry, was among those cheering Pruitt's announcement.

"This is great news for our state and the coal industry," Justice said. "Coal has been steadily recovering, we’ve seen an upturn in severance taxes and this decision will clearly help put our coal miners back to work.

"President Trump promised me he was going to take care of our miners and he is doing just that. We are pleased that the director of the EPA is taking these steps to repeal the current rule."

The U.S. Chamber of Commerce's Global Energy Institute (GEI) said it welcomed the opportunity to work with EPA to develop power plant standards that would lower emissions while preserving America's energy advantage.

"We have always believed that there is a better way to approach greenhouse gas regulations than the CPP," said GEI CEO Karen Harbert. "The CPP exceeded EPA’s authority, but we are optimistic that a true collaboration between the federal government, states, and affected stakeholders will provide a more durable and achievable approach."

Groups including the Institute for Energy Research and FreedomWorks Foundation said they support EPA's effort to repeal the CPP.

"The Clean Power Plan was never about clean power," said IER president Thomas Pyle. "The nation's electricity generation fleet is already very clean and getting cleaner -- as shown by the nearly 70% reduction in criteria pollutants since 1970. The plan was really about instituting more federal control over a dispersed system and driving up the cost of reliable electricity in line with the previous administration's climate ideology."

...Environmentalists Jeer

Environmental groups were among those taking up the other side of the argument, saying the CPP is needed to lower emission levels and reduce pollution.

"Derailing this 2015 rule, whose goal is to clean up our dirty power plants, is part of Trump’s broader assault on our environment and health, his reckless disregard for grave and gathering threats, and his habit of putting fossil fuel profits ahead of the national interest," Rhea Suh wrote on a Natural Resources Defense Council blog Monday.

"...As a nation, we’ve cut our carbon footprint 14% since 2005, while our economy has grown more than 17 percent. In the process, we’ve reduced other types of fossil fuel pollution, including toxic chemicals that can aggravate heart disease and trigger asthma attacks. We’ve accomplished all this by investing in efficiency, so we do more with less waste; building some of the world’s best all-electric cars and hybrid cars; and getting more clean power from the wind and sun."

"It is unfathomable that the Trump administration is turning a blind eye to the realities of climate change, even as millions of Americans have been affected by climate-accelerated storms in the past month," said Jordan Estevao, senior strategist at People's Action Institute. Repeal of the CPP will cost workers jobs -- 260,000 people are employed in the solar industry compared to only 54,000 in coal mining -- according to Estevao. "This move by the Trump administration is completely out of touch with economic as well as environmental reality."

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