Blue vs. Grey Over Green in Murray v. EPA; Cross-Border Rule Goes Ahead

Happy Monday!  

As I posted earlier, in Murray, et al v. EPA , plaintiff Murray Energy Corporation seeks to enjoin EPA's Clean Power Plan rule even before it has been issued as a Final Rule.  The Clean Power Plan proposes to regulate the carbon emissions of existing power plants under the Clean Air Act. 

 Last week, the states of New York, State of Connecticut, State of Delaware, State of Maine, State of New Mexico, State of Oregon, State of Rhode Island, State of Vermont, State of Washington, Commonwealth of Massachusetts, District of Columbia filed notice of their intention to participate as amicus curiae 

In June, Alabama, Kentucky, Oklahoma, South Carolina, West Virginia, Alaska, Nebraska, Ohio and Wyoming also filed an amicus brief in this case.

Assuming that the northeastern states support the Clean Power Plan, it sets up a sort of "Blue v. Grey over Green" battle, with the western states thrown in as well.   

There was also an interesting decision in the D.C. Circuit last week, lifting a stay on the EPA's Cross-Border Pollution Rule.  But, additional issues remain to be resolved in the DC Circuit case, so there will likely be more action on this critical rule.    

The Slow Grind of Justice for EPA's Carbon Emissions Regulations

It was inevitable that EPA's Clean Power Plan, regulating carbon emissions from existing power plants was going to generate law suits.  Even if the suits are ultimately unsuccessful, an injunction against the Plan's adoption or implementation may slow or stop the EPA's ability to move forward for years. The wheels of justice grind slowly, after all.  

The first of these actions was filed on June 18 by Murray Energy, the largest privately owned coal company in the country (the complaint can be downloaded here). Murray alleged that EPA had exceeded its statutory authority under the Clean Air Act, and asked the D.C. Circuit Court of Appeals to stop the EPA from enacting the Clean Power Plan regulation.  A week or so later nine states — West Virginia, Wyoming, South Carolina, Ohio, Nebraska, Oklahoma, Alaska, Alabama, and Kentucky —petitioned to join the Murray Energy suit.

In essence, Murray is claiming that EPA and the states cannot double regulate power plants.  Certain specific "Hazardous Air Pollutants" from power plants are already regulated at the Federal level under Section 112 of the CAA.  Murray's argument is that Section 111(d), which allows state plans for regulation of emissions, only applies to sources that are not regulated under 112.  to interpret it otherwise would be to allow double, and potentially conflicting, regulation of the same sources.   

I wish I could say that the suit has no merit, but I cannot.  It is a close question, which is well analyzed here by Robert Nordhaus and Ilan Gutherz at the Environmental Law Institute.  My opinion is that EPA's authority to regulate will be upheld.  

However, the recent Supreme Court decision in Utility Regulatory Group v. EPA makes me wonder whether off-site energy efficiency programs and cap-and-trade protocols will be allowed as control technologies.  In the Utility Regulatory Group decision, Scalia all but invited a follow-up suit on the control technologies EPA chooses to implement its regulations, particularly energy efficiency:

We acknowledge the potential for greenhouse-gas BACT to lead to an unreasonable and unanticipated degree of regulation, and our decision should not be taken as an endorsement of all aspects of EPA’s current approach, no ras a free rein for any future regulatory application of BACT in this distinct context.

Regardless of the outcome of the suit, it simply should not be this hard to regular carbon.  EPA has been forced to take a challenging path to regulation because Congress has refused to act directly on this critical issue.  

I'm Not Dead Yet: Is coal doomed regardless of whether EPA regulates carbon emissions?

 I want to pass along three interesting articles I have read over the past day or so about coal's decline (or alleged decline) in the United States totally unrelated to EPA's recent proposed rule on carbon emissions from existing power plants. Here are the takeaways:

  1. From former Sierra Club CEO Carl Pope at EcoWatch:  Hundreds of years of mining existing coal seams has made coal harder and more expensive to extract.
  2. From Berkeley Professor Meredith Fowley at The Energy Collective: The low price of natural gas and limited opportunities for exports (at least not yet) has made it economically attractive to switch fuel sources. This article has some very nice graphs about the decline of coal as a fuel source. 
  3. From Rebecca Leber at the New Republic:  Retrospective of pro-coal ads shows that coal has been predicting its own demise for over 40 years. I especially love the 1976 Coal Ad about the OPEC energy embargo. 

Reading these articles reminds me a bit of the scene in Monty Python's Holy Grail about the bubonic plague.  Coal may be dying, but its not dead yet. 


Does The EPA Have A Thing Against Building Energy Codes?

What if there was a technology that had a 20 year track record of saving 4.8 quads of energy and 41 million tons of carbon, while saving consumers more than $44 billion over the past 20 years, and was anticipated to save consumers up to $230 billion on their utility bills, 53 quads of energy and 3,995 million tons of carbon from 2012-2040? 

What if the return on that technology was $400:$1--for every $1 of government program money spent, the return in cost savings was $400?

You would think that the EPA would have that technology at the top of its list of ways for states to reduce energy use and carbon emissions to comply with its new Clean Power Plan regulations. Instead, the EPA's response was "meh:"  

[Building energy codes*] might have substantial impact[], and the EPA does not want to discourage their implementation in state plans, but they might require development of appropriate quantification, monitoring, and verification protocols. The EPA and its federal partners intend to discuss the development of appropriate EM&V protocols for such measures with states in the coming years.

Federal Register, Vol. 79, No. 117, Wednesday, June 18, 2014 at 34921.

I don't know why the EPA seems to have a thing against energy codes.  Perhaps it is that energy codes do not require cool new technology like carbon capture.  They do not require states to implement new programs or hire new personnel, because all 50 states already have building codes in place, either at the state or municipal level.  Or maybe it is because when you go to a cocktail party and start to talk about building energy codes, people feel compelled to refill their plate of cheez-its.       

But what I do know is that the EPA's concerns about building energy codes seem to run contrary to recent scholarship and state experience with building energy code programs.  

Two recent publications—one from the Pacific Northwest National Laboratory and a joint study by the Northeast Energy Efficiency Partnerships, the Edison Foundation and the Institute for Market Transformation—have protocols for measuring and verifying building energy code program savings.  In addition, over 10 states have included building energy code programs in their utility energy efficiency programs, many of which include M&V protocols.  

Even if the EPA is correct that there is some uncertainty and variability in M&V of building energy codes, the evidence of energy and carbon reductions for other compliance pathways that EPA supports, like carbon capture and storage, are much, much less certain.  

You have until October 16, 2014 to submit a comment on the proposed rule, letting EPA know that building energy codes should be at the top of its list of compliance paths, not the bottom.  

* Building energy codes are  minimum  standards for energy efficient design and construction for new and renovated buildings.  Like all construction codes, building energy codes are adopted as law by states and municipalities, and enforced by building code officials.          

Greater Energy Efficiency Could Be An Unlikely Outcome of the Ukrainian Crisis

It seems like an odd “butterfly effect”—a plane shot down over Ukraine could boost energy efficiency?  But it is not as far-fetched as it seems. 

“Fuel switching”—changing power plants over to natural gas from coal—is one of the compliance paths for achieving the carbon emission reductions in the EPA’s proposed existing power plant carbon emissions reduction rule.  Fuel switching is expected to be a popular compliance path because power companies are already taking advantage of the economic attractiveness of cheap natural gas (vs. coal) to convert their power plants.  Natural gas conversions have been a significant contributor to the 15% decrease in carbon emissions since 2005.  

When the Ukrainian crisis first emerged this spring, discussions in Washington turned to accelerating natural gas exports in the event that Russia was either unable (due to sanctions) or unwilling to sell its NG to Europe.  The Energy Information Agency predicts that increased exports of natural gas will lead to lead to increased prices for natural gas domestically.  (See page 6 of the report).  

If the cost of natural gas increases, the comparative economic attractiveness of fuel-switching versus energy efficiency will change as well.  Energy efficiency applications that were previously not cost effective or more costly than fuel switching become more attractive.  As a result, states are likely incorporate more energy efficiency into their compliance plans than relying exclusively or largely on natural gas applications to achieve their emission reduction goals.