Legal challenges filed almost immediately after President Obama announced the Clean Power Rule may be premature. That is what attorneys for EPA told the U.S. Court of Appeals for the District of Columbia Circuit recently in response to an action brought by West Virginia and several other states. The fundamental issue according to EPA attorneys is that a challenge is not ripe until the regulation is published in the Federal Register, and that may not occur for several weeks. (The Hill).
The particular issue raised by the petitioners is an effort to stay the effect of the Rule while the challenge is proceeding. As we have noticed previously, a failure to obtain a stay associated with a challenge to EPA’s Mercury and Air Toxics Standard (“MATS”) effectively resulted in substantial compliance with that rule during the COURSE OF lengthy litigation and before the Supreme Court invalidated MATS earlier this summer. As a practical matter, many power companies proceeded with actions necessary to comply with MATS, including the shutdown of some older power plants and a conversion from coal to natural gas for others. Indeed, the Governor of Michigan, the State that lead the challenge to MATS, announced earlier this week that the State will comply with the Clean Power Plan even though Michigan’s Attorney General is participating in the challenge led by West Virginia. (Michigan Stance Highlights Clean Power Plan Fray) EPA has indicated that publication of the Clean Power Rule in the Federal Register will occur in less than two months.
While challenges to the Clean Power Rule will certainly be pursued, the Rule’s goal of a substantial reduction in carbon emissions seems to be well along the way. This has apparently occurred primarily due to a substantial increase in the availability and use of natural gas resulting from the boom in hydraulic fracturing, particularly with respect to shale gas. Recent articles in Forbes (Fracking is Our Clean Power Plan) and (Greenhouse Gas Emissions Plunge) note the dramatic increase in the availability of fracked natural gas and that this has been a key to reducing carbon emissions in the U.S. to their lowest levels since 1988. Indeed, the argument is made that the goal set out in the Clean Power Plan for a 32% reduction in carbon emissions from 2005 levels by 2030, is substantially at hand. The indications are that there has already been approximately 25% reduction since 2007, deemed attributable to fracking specifically and the greater availability of natural gas generally. Viewed from a somewhat different prospective, by 2012, the United States had achieved approximately 70% of the CO2 emissions reductions targeted under the Kyoto Agreement.
While the coal industry has focused on what it refers as to as a regulatory “war on coal,” the dramatic shift in the source of energy for power plants appears, at least to this point, to be primarily due to the availability of relatively cheap natural gas. For example, electricity generated from coal-fired plants declined approximately 25% from 2007 to 2012 while generation from natural gas-fired plants increased by approximately 35%. While it is true that power generation from renewable sources has also increased, to date, the real shift appears to be to natural gas.
With this in mind, it bears noting that the Clean Power Plan will likely have an adverse impact on the use of natural gas for power generation. The Plan places a significant emphasis on renewable sources and away from those which generate CO2, including natural gas. Thus, and assuming that the Rule is substantially upheld in its present form, the question may become one of the significance of the individual state emissions budgets and how they might impact total CO2 emissions regardless of whether the source is coal or natural gas.