Court Holds Clean Power Plan Litigation in Abeyance

Today, the D.C. Circuit granted EPA’s motion to hold the consolidated cases challenging the Clean Power Plan in abeyance.  The court ordered a 60-day abeyance and directed EPA to file status reports at 30-day intervals.  The court further directed supplemental briefing from the parties addressing whether the cases should be remanded to EPA rather than held in abeyance.  These supplemental briefs are due May 15, 2017.

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Columbia University Report Shows that Environmental Regulations are Not the Primary Threats to Coal

A recent report by Columbia University’s Center on Global Energy Policy has found that declines in coal generation, while due to a variety of factors, are unlikely to be significantly reversed by implementing all the actions in last month’s energy Executive Order.  In Can Coal Make a Comeback?, researchers looked at the reasons for the decline in U.S. coal consumption of 20% from 2011 to 2015—and the bankruptcy filings of a number of coal mining companies.  The report also looks at the impacts on those who work in the coal industry and their communities.  At the end of 2011, there were over 130,000 people working in the coal mining industry; now that number is just over 70,000.  And drops in coal production have reduced tax revenue in coal communities.

This report finds that 49% of the decline in U.S. coal consumption was due to decreased natural gas prices, 26% was due to decreased electricity demand, and 18% was due to growth in renewables.  Environmental regulations accelerated coal generator retirements, but were less significant contributors to the overall decline.  The report also finds that issues in international coal markets—including lower Chinese coal demand that depressed global prices—were a relatively large factor.

The report identifies increases in natural gas prices as a crucial factor for coal to rebound.  Rolling back environmental regulations promulgated under the Obama Administration would not, standing alone, markedly increase coal consumption.  (The report assumed the removal of the Clean Power Plan, CO2 New Source Performance Standards for new power plants, methane rules for new oil and gas production, methane rules for new and existing oil and gas production on federal lands, and the coal leasing moratorium on federal lands.)

On employment, the report is skeptical that a full reversal to pre-2015 levels is likely to occur.  While acknowledging the difficulties of revitalizing impacted communities, the report discusses several community-driven economic diversification efforts that may provide some relief rather than “false hope that the glory days can be revived.”  The report identifies federal government actions that can assist these programs, including infrastructure investment, tax credits, and repurposing of abandoned mine land.

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5th Circuit Grants Abeyance and EPA Postpones Compliance Deadlines for Effluent Limitation Guidelines; EPA Submits Further Abeyance Motions

Yesterday, the Fifth Circuit issued an order granting EPA’s motion to hold Southwestern Electric Power Co. v. EPA (consolidated challenges to EPA’s “Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category” (Rule)) in abeyance for 120 days, until August 12, 2017.  The Court also granted EPA’s request to file a motion to govern further proceedings upon the conclusion of the 120 day period.  In today’s Federal Register, EPA published a notice stating that it will be reconsidering the Rule.  EPA also stated that it is postponing the Rule’s compliance dates that have not yet passed, pending judicial review.

And adding to the EPA’s list of requests to postpone judicial rulings on cases involving its regulations, EPA has filed motions in:

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DOE to Conduct Study of Electricity Markets’ Impact on Baseload Generation

Last week, Secretary of Energy Rick Perry issued a memo directing his staff to conduct a study examining electricity markets and reliability.  The memo centers around the concern of the erosion of critical baseload resources, particularly coal-fired power generation.  Secretary Perry writes that this has resulted from “regulatory burdens introduced by previous administrations that were designed to decrease coal-fired power generation” as well as “federal subsidies that boost one form of energy at the expense of others.”

As a result, Secretary Perry is directing DOE to study the “critical issues central to protecting the long-term reliability of the electric grid,” and to explore three specific topics:

  • The evolution of wholesale electricity markets, including the extent to which federal policy interventions and the changing nature of the electricity fuel mix are challenging the original policy assumptions that shaped the creation of those markets;
  • Whether wholesale energy and capacity markets are adequately compensating attributes such as on-site fuel supply and other factors that strengthen grid resilience and, if not, the extent to which this could affect grid reliability and resilience in the future; and
  • The extent to which continued regulatory burdens, as well as mandates and tax and subsidy policies, are responsible for forcing the premature retirement of baseload power plants.

This study is to be completed 60 days from the date of the memo, or June 13, 2017.  According to the memo, yesterday the DOE Chief of Staff was to present Secretary Perry with a plan for how DOE will complete the study within the prescribed time limit, but this plan has not been made publicly available.  Secretary Perry ends his memo by noting that he has committed to the President that the report will not just analyze problems; it will also provide concrete policy recommendations and solutions.

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D.C. Circuit Grants DOJ Request to Hold EPA’s 2015 Ozone Standards Cases in Abeyance

In an order issued last week, the D.C. Circuit granted DOJ’s request in Murray Energy Corp. v. EPA, No. 15-1385, to hold in abeyance challenges to EPA’s 2015 update to the ozone National Ambient Air Quality Standards (NAAQS).  The Clean Air Act requires EPA to issue NAAQS for certain air pollutants including ozone, and to review those standards every five years.  EPA previously revised the ozone NAAQS in 2008, and set primary and secondary ozone standards at 75 parts per billion (ppb).  Upon finding that a more stringent standard was required to protect the public against the health effects associated with long- and short-term ozone exposure, the Obama Administration’s EPA lowered the primary and secondary standards to 70 ppb in October 2015.  Litigation challenging the rule began almost immediately after it was promulgated.  Industry groups as well as a group of states filed petitions for review in the D.C. Circuit, arguing that the 70 ppb standard was too stringent.  Environmental organizations also challenged the rule, arguing that it did not go far enough.

DOJ’s motion, submitted to the court earlier this month, asked the court to either continue oral argument that was scheduled for April 19, or in the alternative, hold the case in abeyance until the EPA has completed a review of the 2015 update.  DOJ made arguments similar to those it offered in its motions to hold in abeyance the Clean Power Plan and New Source Performance Standards, including that, “in light of the recent change in administration, … EPA intends to closely review the 2015 Rule, and the prior positions taken by the Agency with respect to the 2015 Rule may not necessarily reflect its ultimate conclusions after that review is complete.”  In addition, DOJ argued that the “continuance is appropriate because recently-appointed EPA officials in the new Administration will be closely scrutinizing the 2015 Rule to determine whether the standards should be maintained, modified, or otherwise reconsidered.”

DOJ also stated that the industry and state petitioners did not oppose the request to hold the case in abeyance.  Public health and environmental organizations including American Lung Association, Appalachian Mountain Club, National Parks Conservation Association, Natural Resources Defense Council, Physicians for Social Responsibility, Sierra Club, and West Harlem Environmental Action, Inc. filed a motion in opposition.

The D.C. Circuit’s order removes the case from its oral argument calendar, holds the case in abeyance, and directs EPA to file status reports on the agency’s review of the rule at 90-day intervals.  The court commented that it “disfavors motions to postpone oral argument” and reminded DOJ that “it is imperative that the court be notified promptly when a potential issue arises that affects the date of oral argument.”

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