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Trump kicks off potentially long, slow death of Clean Power Plan

The long-delayed, much maligned Clean Power Plan is now heading back to the drawing board under an administration that has pledged to withdraw it following an executive order issued by the president.

President Donald Trump signed an executive order March 28 ordering the U.S. EPA to begin a review of the carbon-cutting rule for existing fossil fuel power plants. The agency is now run by a foe of the Clean Power Plan, former Oklahoma Attorney General Scott Pruitt, who has made the elimination of the rule an early priority as he begins to shift the agency away from climate change initiatives that were the focus under President Barack Obama.

Trump's order itself does not rescind the Clean Power Plan. Instead, Pruitt and his staff will initiate a traditional notice and comment rulemaking process seeking to revoke the regulation in its current form.

On the legal front, the U.S. Court of Appeals for the District of Columbia Circuit in September 2016 heard oral arguments in a case, West Virginia, et al. v. EPA, (No. 15-1363), challenging the legality of the rule. The suit, brought by nearly half of the states as well as industry and other stakeholders, argued the EPA did not have the authority to issue the rule, but a dozen or so other states, as well as environmental groups and policy think tanks, disagree.

Jeff Holmstead, an attorney for Bracewell LLC who served from 2001 to 2005 as assistant administrator for the EPA's Office of Air and Radiation under former Republican President George W. Bush, said the Trump administration's path for rolling back the regulation and the litigation will follow a familiar pattern. Just like presidents before him, Trump will direct the Department of Justice to ask the court to put the litigation on hold, Holmstead said.

"This happens routinely when a new administration takes office from a different party," Holmstead said. "So we've seen this with [the] change from George H.W. Bush to [Bill] Clinton, and from Clinton to George W. Bush, and then most recently with the transition from George W. Bush to Obama."

Obama took issue with a number of environmental regulations promulgated by his predecessor. In those cases, and in similar instances facing other new administrations, the courts have been willing to grant requests to hold a matter in abeyance to allow a new administration time to review a predecessor's rules.

There is no guarantee that the court will agree, but Holmstead cannot remember such a request being turned down. The response is typically swift, Holmstead said. He expects that the DOJ will file a request the same day as the executive order to repeal the Clean Power Plan. He further predicted that the court, which has been mulling the rule for almost six months, will respond within a week.

The legal matter could then remain on hold for years, during which Pruitt will begin the process of actually revoking the regulation. Once the rule is revoked, the DOJ can ask the court to dismiss the lingering lawsuits — a request that will certainly be granted if the rule no longer exists in the form that was brought before the courts in the first place.

Repeal and replace?

With the legal matter aside, Holmstead explained that Pruitt will be responsible for shepherding a new regulation that will supersede the carbon-cutting rule. He has a number of options for doing so.

One possibility is that Pruitt will seek to revisit the agency's thinking on the section of the Clean Air Act under which the EPA promulgated the Clean Power Plan. One of the key arguments in the legal matter was whether the EPA can regulate an emissions source under Section 111(d) when that same source is already regulated under Section 112. Power plants are already regulated for mercury and other pollutants through the Mercury and Air Toxics Standards rule under Section 112.

Holmstead said the EPA previously insisted that regulation of a source under Section 112 precludes additional regulation under Section 111(d). As part of the Clean Power Plan, the Obama administration issued a clarification of the conflicting statutes to bolster the rule's legal standing. Pruitt could simply issue a rule or guidance declaring sources regulated under Section 112 to be off limits to further regulation under Section 111(d).

According to Holmstead, this approach could fairly quickly eliminate the need to regulate carbon from power plants and the Clean Power Plan using a straight-forward legal rationale. Holmstead sees the review of the rule taking anywhere from five to 18 months depending on how Pruitt chooses to seek repeal of the rule. Addressing the 111(d)/112 conflict could be the fastest approach.

Other options include simply withdrawing the rule since it never actually went into place, or revisiting any one of a number of petitions for review that were filed to challenge aspect of the rule.

In his executive order, Trump also targeted a carbon-cutting rule related to the Clean Power Plan, which sets emissions standards for new and modified power plants. The rules are tightly intertwined, and the elimination of the new source rule means there is no statutory need for the existing source rule. Baker Botts attorney Megan Berge thinks Pruitt could attack the new source rule as a means to eliminate the Clean Power Plan. Berge has represented power companies in litigation over environmental issues including the Clean Power Plan.

Regardless of what approach Pruitt uses, Holmstead said the administration has several important legal choices to make, not least of which is whether the rule will be replaced after it is repealed. Holmstead could not speculate as to whether a Clean Power Plan 2.0 will ever see the light of day.

While Trump's supporters are certainly cheering the first step in repealing the Clean Power Plan, environmental groups that supported the EPA under the Obama administration and the rule itself will now find themselves as the challengers of the agency's agenda. Holmstead expects them to ask the court to reject the motion to hold the matter in abeyance, but given the deference often given to new administrations to review a predecessor's rules, they are unlikely to have success. Otherwise, their options for continuing to fight for the Clean Power Plan are limited until Pruitt issues a new rule revoking it.

"They really do have to wait for a new final rule to come out. There's nothing they can do in the interim," Holmstead said. "Once there's a new final rule to revoke the Clean Power Plan, they can challenge that."

Environmental groups were vowing to do just that, ensuring a yearslong legal fight for clean energy regulation.

"Trump can't reverse our clean energy and climate progress with the stroke of a pen, and we'll fight Trump in the courts, in the streets, and at the state and local level across America to protect the health of every community," Sierra Club Executive Director Michael Brune said.