EPA Administrator Scott Pruitt and Interior Secretary Ryan Zinke are hard at work undoing the Obama administration’s onerous regulations against the fossil fuel industry. From the Clean Power Plan to the methane rule on natural gas wells, the Obama administration waged a war on coal-fired power plants and oil and gas facilities.
Scott Pruitt has indicated that he will carry out the functions of the EPA based on the laws enacted by Congress. EPA released the proposed volumes for the Renewable Fuel Standard for 2018 on time1 and Pruitt has announced a plan to restore EPA’s Superfund cleanup program to its rightful place as a top agency priority. Over 1,300 cleanup sites have been designated and Pruitt will reprioritize and accelerate action to remediate them.2 He is also planning on having an open, transparent discussion on climate change—a red team/blue team exercise.3
Ryan Zinke’s Interior Department is expediting the permit-approval process for oil and gas drilling and holding more lease sales on federal lands. Under the Obama administration, it took hundreds of days to approve permits for oil and gas drilling while states are able to approve them in days or weeks.
Additionally, Zinke ordered his Bureau of Land Management to have more lease sales. The Obama administration held fewer lease sales than prior administrations and it placed the Atlantic and Arctic offshore areas off limits to drilling in its 2017 to 2022 plan as part of the “keep it in the ground” program.
The following provides a summary of the major regulations that the Trump administration is tackling to provide relief to the fossil fuel industry.
The so-called Clean Power Plan (CPP) was designed to reduce carbon dioxide emissions from the power generating sector by 32 percent from 2005 levels by 2030. This regulatory scheme would retire coal-fired power plants that are in good operating condition mainly in favor of intermittent renewable energy—wind and solar power—causing electricity prices to rise. Because most of the coal-fired plants in the country have paid their capital costs, they are less expensive to operate than new wind and solar plants that have to pay capital costs and finance charges besides operating expenses.
Further, it was found through a freedom of information request that the health benefits that Obama’s EPA claimed for the CPP were, at best, misleading because the health benefits were the result of secondary or co-benefit emission reductions—that is, from reducing emissions of sulfur dioxide, nitrogen oxides and particulate matter. These emissions can be controlled by technology without the need to prematurely retire coal-fired power plants.5
On March 28, 2017, President Trump issued an executive order directing the EPA to review the CPP.6 Shortly thereafter, Administrator Pruitt advised governors that they had no obligation to comply with the CPP’s provisions because the U.S. Supreme Court had stayed the rule.7 On April 4, 2017, the EPA announced that it proposed to revoke the CPP entirely because it exceeds the statutory authority provided under Section 111 of the Clean Air Act, which was used to justify the rule.8
The Obama administration expanded the “waters” definition making a federal permit a requirement for any activity that results in a discharge into water covered by the new definition, including small streams, wetlands and seasonal accumulations (mud puddles). Over half of the states filed lawsuits against the rule since this expansion of federal authority would affect farming and virtually any uses of private land.
In August 2016, the U.S. Court of Appeals for the 6th Circuit stayed the water rule in reaction to a legal challenge brought by 31 states and nearly 100 House and Senate members. On February 28, 2017, President Trump issued an executive order to review the rule.
In July, the Environmental Protection Agency and the Department of the Army announced a proposed withdrawal of the new water rule, publishing it in the Federal Register with a 30-day comment period.10 The EPA is planning 10 public hearings this fall to obtain comments on rewriting the rule.11
The Obama administration’s rule on hydraulic fracturing would make companies that drill on federal and tribal lands subject to stricter design standards for wells and for holding tanks and ponds than are required for state and private lands. The companies would also be required to report any chemicals used in the process.
In June 2016, a U.S. district judge in Wyoming ruled that the Interior Department had exceeded its congressional mandate in choosing to regulate hydraulic fracturing. Obama administration officials appealed that decision to the U.S. Court of Appeals for the 10th Circuit, but the appeals court is holding the appeal in abeyance pending a new rulemaking on the issue. In July, the Bureau of Land Management began the process of rescinding the rule and announced it in the Federal Register.12
The EPA also tightened acceptable ozone levels to 70 parts per billion by 2025, down from the 75 parts per billion standard that was adopted in 2008, despite many areas being out of compliance with the previous standard. According to EPA’s own estimates, the new ozone standard is expected to cost $1.4 billion annually. Others suggest the actual costs will be much higher, and that the ozone regulation will be the most expensive regulation ever developed. EPA lowered the acceptable ozone level despite the fact that its own analysis shows ozone emissions have been reduced by over 30 percent since 1980. The rule prompted states to sue because they believe the new level is physically impossible to reach through man-made source reductions.13
In October of this year, the EPA is due to identify regions of the country that are over the new limit.14 Pruitt announced in June that he would hold off compliance by one year so the EPA would have more time to study the plan and avoid interfering with local decisions or impeding economic growth. After being sued by 15 state attorneys general for doing so, he reversed his decision and agreed to the original designated schedule. In a report to Congress, however, Pruitt indicated that he is still looking at ways to ease the impact of the ground-level ozone standard.15
In the meantime, on July 18, 2017, the House passed H.R. 806, the Ozone Standards Implementation Act of 2017.16 The act changes the EPA required period for review of the ozone standard from every 5 years to every ten years, which would delay implementation of the 2015 air quality standard for ozone until 2025. A similar bill (S. 263) is pending in the Senate.17
The Obama EPA’s methane rule requires oil and gas companies to find and repair leaks in new equipment, capture natural gas from the completion of hydraulically fractured oil wells, limit emissions from new and modified pneumatic pumps on well pads and limit emissions from several types of equipment used at natural gas transmission compressor stations. Further, Obama’s Bureau of Land Management limited how much methane could be “flared” by oil companies when they produce natural gas from both new and existing wells on federal lands.18
These methane rules are required despite the oil and gas sector having reduced methane emissions from natural gas production by 38 percent since 2005 while increasing natural gas production by 26 percent. According to the EPA, methane emissions from hydraulically fractured natural gas wells are down 79 percent since 2005.19
On June 13, Mr. Pruitt filed a proposal to delay the EPA methane regulations by two years, while the agency would rewrite them. But, the D.C. Circuit Court ruled in early July that the Trump administration overstepped its authority under the Clean Air Act when it tried to unilaterally delay the rule while it works to repeal it.20 That ruling was upheld by the United States Court of Appeals for the District of Columbia Circuit.21 The courts said Pruitt and industry groups had not shown that complying with the rule would cause a significant hardship.
The Congressional Review Act, a law that allows for Congress and the president to permanently erase regulations issued by a federal agency, was used in an attempt to overturn the BLM rule. However, the Senate failed to pass it.22
Obama’s Department of the Interior (DOI) ordered a moratorium on new leases for coal mined from federal lands as part of its review of the coal-leasing program. The moratorium was to last for 3 years while the DOI undertakes a review of the fees charged to mining companies.23 Most of the nation’s low-sulfur, sub-bituminous coal used in producing electricity is located on federal lands in the Powder River Basin, where the DOI leasing rules will have great impact. Coal resources on federal lands (excluding Alaska) amount to approximately 957 billion short tons, and approximately 57.5 percent of those coal resources are located in the Powder River Basin.
According to a study performed for the Institute for Energy Research, the long term effects of opening federal lands in the Powder River Basin to coal leasing would generate $87.9 billion annually for the U.S. economy, producing over 260,000 jobs each year with over $16 billion in additional annual wages. The federal government would receive an additional $16.7 billion annually in federal tax revenues, while state and local tax revenues would rise by $6.2 billion in Wyoming and by $0.5 billion in Montana.24
In March, Secretary Ryan Zinke formally lifted the ban on new coal leasing on federal land. Trump’s DOI also suspended a review of federal coal-leasing rates.25
The Obama administration banned new oil and gas drilling in most US-owned waters in the Arctic and Atlantic oceans, using a 1953 law that allows presidents to block the sale of new offshore drilling and mining rights and makes it difficult for their successors to reverse the decision. The Obama ban affects federal waters off Alaska in the Chukchi Sea and most of the Beaufort Sea and in the Atlantic from New England to the Chesapeake Bay.26
In April, President Trump signed an executive order directing Interior Secretary Zinke to review the five-year plan in which former President Obama banned drilling in parts of the Pacific, Arctic and Atlantic Oceans.27 The Obama administration’s five-year drilling plan restricts lease sales for new drilling to only the Gulf of Mexico and waters off south-central Alaska. The Interior Department is also reconsidering government regulations on activities like seismic testing.28
The Obama administration Stream Protection Rule was intended to revise regulations implementing Title V of the Surface Mining Control and Reclamation Act (SMCRA) to avoid or minimize the impacts of coal mining on surface water, groundwater, fish, wildlife and other natural resources by limiting the mining of coal in or through streams, placement of waste in streams and limiting the generation of mining waste. The Obama administration estimated that the coal industry would incur annual compliance costs of $52 million above baseline costs that would be incurred in the absence of the rule‚Äì$45 million per year for surface coal mining operations and $7 million per year for underground mining.29 In February, President Trump signed legislation ending the Stream Protection Rule. Congress used the Congressional Review Act to overturn the Obama administration regulation.30
The Obama EPA provided national regulations for the disposal of coal combustion residuals from coal-fired power plants. Coal ash is generated from the burning of coal at power plants and is disposed of in large ponds called surface impoundments and in landfills. The Obama rule establishes technical requirements for landfills and surface impoundments under Subtitle D of the Resource Conservation and Recovery Act (RCRA), the nation’s primary law for regulating solid waste. The rule sets minimum requirements under which companies could face legal action.
The Trump EPA is giving states more flexibility in complying with the rule, creating guidance for states to set up their own programs to dispose of coal ash, as well as finding beneficial uses for the byproduct. According to Scott Pruitt, “EPA expects that its new guidance will allow for the safe disposal and continued beneficial use of coal ash, while enabling states to decide what works best for their environment.”31
The Trump administration has done a lot to undo onerous regulations imposed by the Obama administration, as the above list indicates, and it took the initial steps toward the reversal in record time.
The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.Commenting Policy
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