EPA’s Illegal Power Play

Last year, the U.S. Supreme Court delivered a significant blow to the Environmental Protection Agency (EPA) in its West Virginia v. EPA ruling. This ruling not only deemed President Obama's flagship climate regulation, the 2015 Clean Power Plan, unconstitutional but also severely curtailed the EPA's authority to regulate carbon emissions under the Clean Air Act moving forward.

In response, the EPA had two options: pursue pragmatic regulations with a better chance of surviving legal challenges or make a bold attempt to decarbonize the power sector, aligning with President Biden's commitment to net-zero carbon emissions. On May 23, 2023, the EPA chose the latter approach, proposing ambitious carbon emissions standards for power plants, surpassing the ones invalidated by the Supreme Court the previous year.

However, this proposal, along with other EPA climate regulations, isn't primarily focused on reducing emissions from standard power plants. Instead, it aims to accelerate the transition from reliable sources of power, like natural gas and coal, to intermittent renewables and unproven power technologies. When coupled with EPA's electric vehicle mandates, this proposed rule could have detrimental consequences for the U.S. electricity grid, economic competitiveness, and energy security, all without delivering substantial climate benefits.

It's worth noting that this proposal faces numerous legal vulnerabilities, making its survival through federal court review highly uncertain. The proposed rule, set to be finalized by the summer of the next year, imposes stringent carbon emissions reduction requirements on new or modified natural gas plants and existing coal plants, with a deadline of 2038 for compliance.

The EPA's decision not to set emission guidelines for coal plants and its concerns about feasibility regarding existing natural gas plants raise doubts about its confidence in the rule's legal standing. Section 111 of the Clean Air Act, the same provision challenged in West Virginia v. EPA, empowers the EPA to mandate emission limitations achievable through the "best system of emission reduction" that has been adequately demonstrated. However, the proposed rule falls short on several fronts.

Firstly, neither carbon capture and storage (CCS) nor green hydrogen technology is considered "adequately demonstrated" as required by Section 111. Secondly, the EPA has overlooked crucial cost considerations and impacts, which are essential for setting emission standards under Section 111. Thirdly, the proposed rule, like the one invalidated in West Virginia v. EPA, involves sweeping regulatory actions and infrastructure investments outside the regulated facilities, raising questions about its legality under the "major question" doctrine.

The EPA's claim that CCS and green hydrogen are "adequately demonstrated" for natural gas plants lacks sufficient evidence, as the examples provided are insufficient and not representative of the large-scale combined-cycle natural gas plants the rule targets. The proposed rule's reliance on emerging technologies, such as green hydrogen, lacks feasibility assessment, cost estimates, and a realistic timeline for implementation.

Furthermore, the rule fails to adequately consider costs, health, environmental impacts, and energy impacts. EPA has not provided clear evidence of measurable environmental benefits resulting from compliance. Moreover, its cost estimates are speculative, and the exclusion of federal subsidies from cost calculations raises concerns about transparency and accuracy.

The rule also overlooks the potential impact on electricity prices, which could significantly exceed the EPA's estimates. The shift from fossil fuels to CCS and green hydrogen would require massive infrastructure development with uncertain costs and timelines.

Simultaneously, the proposed rule does not acknowledge the potential consequences of implementing vehicle emissions standards, which could strain the electricity grid further, especially considering the grid's reduced capacity due to the proposed power plant rule. This lack of foresight demonstrates a failure to meet the necessary standards under Section 111.

Additionally, the proposed rule creates a loophole by favoring intermediate and peaker plants over baseload generators, potentially leading to increased emissions and undermining the original goals of the Clean Air Act.

In conclusion, the EPA's new power plant rule faces legal, technical, and practical challenges, similar to those seen in the West Virginia v. EPA case. It stretches the EPA's authority under the Clean Air Act and lacks the necessary foundations for adequate demonstration and cost consideration. The rule's ambitious goals may have significant repercussions for the electricity grid and the overall economy, necessitating a thorough evaluation of its legal standing and practicality. Ultimately, addressing climate change should involve a more comprehensive legislative approach, rather than relying solely on executive actions.