Regulatory Developments

Reviews of GHG Rules Announced in Federal Register

With announcements of three rule reviews in the April 4, 2017, Federal Register (FR), EPA Administrator Scott Pruitt has begun to formally implement President Donald Trump’s March 28, 2017, Executive Order (EO), Promoting Energy Independence and Economic Growth.

power plant / GHG
In the EO, the president directed the EPA to review two Clean Air Act (CAA) rules affecting emissions of greenhouse gases (GHGs) from existing and new, modified, and reconstructed coal-fired power plants and one CAA rule governing emissions of carbon dioxide and volatile organic compounds (VOCs) from certain new, modified, and reconstructed equipment, processes, and activities across the oil and natural gas source category.

Following the reviews, the EO directs that the Agency must publish for notice and comment proposed rules suspending, revising, or rescinding those rules. Specifically, reviews were announced for the following three actions:

  • Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (Clean Power Plan [CPP])—October 23, 2015, FR.
  • Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units—October 23, 2015, FR.
  • Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources (and any rules and guidance issued pursuant to it)—June 3, 2016, FR.

Cooperation and Cost Benefit

In the announcements, Pruitt said the EPA would conduct the reviews in light of the principles and policies set forth in the EO and also in line with the Agency’s statutory authority and the rule of law.

“EPA will assess whether [the rules] or alternative approaches would appropriately promote cooperative federalism and respect the authority and powers that are reserved to the states,” says Pruitt. “EPA will also examine whether [the rules] and alternative approaches effect the Administration’s dual goals of protecting public health and welfare while also supporting economic growth and job creation. EPA will review whether [the rules] or alternative approaches appropriately maintain the diversity of reliable energy resources and encourage the production of domestic energy sources to achieve energy independence and security. Additionally, EPA will assess [the rules] and alternative approaches to determine whether they will provide benefits that substantially exceed their costs. In taking any actions subsequent to this review, EPA will use its appropriated funds and agency resources wisely by firmly grounding in the statute its actions to protect public health and welfare.”

End to ‘Coercive Federalism’

On March 30, 2017, Pruitt also sent a letter to the state governors advising them that they are under no obligation to adhere to the CPP (representative letter). Given that the U.S. Supreme Court has stayed the CPP while litigation continues in the U.S. Court of Appeals for the D.C. Circuit, Pruitt said that states and other interested parties have neither been required nor expected to work toward meeting the compliance dates set in the CPP.

“It is the policy of the EPA that states have no obligation to spend resources to comply with a rule that has been stayed by the Supreme Court of the United States,” wrote Pruitt. “To the extent any deadlines become relevant in the future, case law and past practice of the EPA supports the application of day-to-day tolling. The days of coercive federalism are over.”

CEQ Withdraws GHG Guidance

Also in the April, 4, 2017, FR, and in response to the EO, the Council on Environmental Quality (CEQ) issued a notice that it was withdrawing its Final Guidance for Federal Departments and Agencies on Consideration of GHG Emissions and the Effects of Climate Change in National Environmental Policy Act [NEPA] Reviews. A notice of the availability of that document was published in the August 5, 2016, FR.