After Congress failed to repeal Obamacare Friday, the Trump Administration will attempt to regain its footing next week by turning its focus to reversing another major Obama-era policy to decarbonize the US economy.
Fortunately, the Administration does not need any congressional action to repeal EPA’s Clean Power Plan (CPP). We expect President Trump to sign an executive order on Tuesday, March 28 that sets in motion a formal rulemaking at EPA to withdraw the CPP rule.
The CPP rules limited carbon emissions in states above a pre-determined baseline by requiring carbon sequestration at new and existing power plants and incentivized the use of wind, solar and other clean energy sources.
After looking for sites in Pennsylvania coal country to use as a backdrop for a signing ceremony, White House aides have decided to save travel time and just sign the executive order in Washington on Tuesday.
The executive order has been expected for the last two weeks but newly hired White House energy staffers have delayed the announcement while they carefully craft language designed to survive certain legal challenges.
After the selection of Scott Pruitt as EPA Administrator in December, we said the nomination showed that Trump was serious about fulfilling his campaign promise to roll back the Obama carbon regulation.
The executive order is actually not needed for EPA to start the rulemaking process on the CPP. But the executive order gives the President a public relations tool to put his imprimatur on the policy itself. Bloomberg reported earlier this week that some energy industry lobbyists were concerned that the executive order might put the rulemaking in legal jeopardy as it could be viewed as a pre-ordained outcome. However, White House aides are now confident that is not the case.
You may recall that President Obama made a similar move when he gave a speech on climate policy at Georgetown University that directed EPA to begin the rulemaking process to create the CPP.
The Supreme Court decision in Massachusetts vs. EPA held that the EPA has the authority to regulate greenhouse emissions under the Clean Air Act. Subsequently, the Obama EPA issued an endangerment finding and started the regulatory process with the CPP first addressing new power plants followed by a rule affecting existing plants.
As a result, in order for EPA to withdraw the Obama rule, Trump’s EPA is almost certainly required to start a new rulemaking process that develops a revised and likely less-harsh regulatory approach.
Meanwhile, the Obama rule was subject to legal challenges that resulted in a 5-4 Supreme Court decision halting the CPP implementation while litigation proceeded in lower courts. The Court vacancy after Justice Scalia’s death likely left the Court with a 4-4 tie on any future CPP case, a situation that would result the lower court’s opinion being upheld.
Last September, the DC Federal Circuit Court of Appeals heard oral arguments on the CPP but has not issued a decision to date. The Trump executive order and EPA rulemaking could affect the appellate court’s opinion on the merits if it is still not issued.
Lastly, Trump’s nomination of Judge Gorsich to the Supreme Court could also be the tie-breaking vote on the CPP case if a subsequent lower court decision gets appealed. Gorsich is viewed as being a critic of the Chevron doctrine which defers to agency interpretations of laws such as the Clean Air Act.
We certainly expect environmental groups and Democrat-controlled states to challenge the legality of the Trump executive order and EPA actions to roll back the Obama CPP. Therefore, it is another reason why the Gorsich confirmation is so significant.
The CPP was just the start of the Obama plan to decarbonize the US economy. Had Hillary Clinton won the White House, EPA would have likely moved to regulate other sectors of the economy, such as refiners, petrochemical, automotive and airlines.
