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US EPA caps busy year of regulatory action on energy, air and water policy

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US EPA caps busy year of regulatory action on energy, air and water policy

The U.S. Environmental Protection Agency has had a busy year of regulatory activity.

Some of the 2018 highlights included a proposed replacement for the Obama-era Clean Power Plan, a proposal to relax national fuel economy and emissions standards for cars and light-duty trucks, significant changes to an Obama-era rule regulating coal ash storage, and the reconsideration of an Obama-era rule restricting emissions of mercury and other airborne toxics from fossil fuel-fired power plants.

The EPA has also proposed a more limited definition of federally protected waters and made major changes to the way it reviews and implements the National Ambient Air Quality Standards, or NAAQs. The year was also marked by the resignation of former EPA Administrator Scott Pruitt, who stepped down from his position amid a cloud of ethics investigations.

President Donald Trump recently said he plans to soon nominate EPA Acting Administrator Andrew Wheeler to officially lead the agency, who is expected to advance the administration's deregulatory agenda in 2019.

S&P Global Market Intelligence's Policy Tracker provides a brief overview of the major regulatory actions the EPA has undertaken in 2018, their status, and links to relevant stories in our archive.

ACE rule

Following through on a directive from Trump to repeal the Obama-era Clean Power Plan, the EPA on Aug. 21 unveiled its proposed replacement: the Affordable Clean Energy, or ACE, rule.

Unlike the Clean Power Plan, which encouraged a system-wide shift away from coal-fired generation, the ACE rule is designed to incentivize efficiency upgrades at coal-fired power plants while nixing requirements for plant operators to install expensive pollution controls when those modifications lead to higher emissions.

Supporters of the plan say it will reduce carbon dioxide emissions by allowing retrofitted plants to burn less fuel, but critics argue it could increase net CO2 emissions by extending the lives of aging plants while allowing them to run more often.

Status

A 60-day public comment period on the proposal concluded on Oct. 31. The EPA said in its fall unified agenda that it plans to finalize the rule sometime in March 2019.

CO2 limits for new coal plants

In tandem with its effort to repeal the Clean Power Plan's tough performance standards on existing fossil fuel-fired generators, the EPA also proposed to replace a companion Obama-era rule regulating new coal-fired power plants.

The Obama-era rule set a limit of 1,400 pounds of CO2 per MWh on new and reconstructed coal-fired power plants, effectively requiring plant operators to install CO2-reducing technology known as carbon capture and storage, or CCS. The EPA's new proposal, unveiled Dec. 6, would raise the limit on large coal-fired generating units to 1,900 pounds of CO2 per MWh and smaller units to 2,000 pounds.

Status

A 60-day public comment period will start when the rule is published in the Federal Register. The agency is expected to issue a final rule sometime in 2019.

SAFE rule

The Trump administration on Aug. 2 proposed to suspend rules that would boost fuel efficiency standards for cars and light-duty trucks and to revoke California's permit to set its own standards. The proposed rule — called the Safer Affordable Fuel Efficient, or SAFE, rule — released by the EPA and the U.S. Transportation Department's National Highway Traffic Safety Administration has set up a potentially messy legal battle between the federal government and a number of states, led by California, over their right to set higher Corporate Average Fuel Economy standards.

Status

A 60-day public comment period on the proposal concluded on Oct. 26. The EPA said in its fall unified agenda that it plans to finalize the rule sometime in March 2019.

Coal Combustion Residuals rule

In July, the EPA finalized the first of what it says will be multiple proposals revising a 2015 rule regulating the disposal of coal ash from the nation's power plants. In general, the proposal would provide states with more leeway to manage coal ash issues provided they establish criteria that the EPA determines to be as protective as existing federal requirements.

Status

In October, a coalition of environmental groups challenged the rule in the U.S. Court of Appeals for the District of Columbia Circuit, arguing the changes are even less stringent than Obama-regulations the D.C. Circuit struck down in August for being too weak. In its fall unified agenda, the EPA said it planned to propose a fresh round of revisions to the 2015 rule sometime in December, with another final rule slated for December 2019.

MATS review

In August, the EPA took aim at the 2012 Mercury and Air Toxics Standards, or MATS rule, advancing a plan to reconsider the cost-benefit analysis used by the Obama administration to justify the regulation. Between January 2015 and April 2016, about 87 GW of coal-fired plants installed pollution-control equipment and nearly 20 GW of coal capacity retired as a result of the rule, according to the U.S. Energy Information Administration.

Opponents of the rule argued the rule's cost of compliance far outweighed the direct benefits associated with a reduction in mercury emissions. Supporters point to tens of billions in public health "co-benefits" linked to a reduction in emissions of fine particulate matter. Environmental attorneys, meanwhile, have warned that rescinding the EPA's appropriate and necessary finding could open the rule to a legal challenge by private coal interests.

Status

The EPA reportedly plans to publish its review of the MATS rule by the end of 2018 or early January 2019.

New WOTUS rule

The EPA and U.S. Army Corps of Engineers on Dec. 11 unveiled a new proposed definition of federally protected waters that would rescind federal protection for thousands of miles of streams and millions of acres of wetlands.

The Trump administration's revised definition of what constitutes a water of the United States, or WOTUS, under the Clean Water Act is a scaled-back version of the Obama administration's 2015 Clean Water Rule.

The Obama-era regulation had incensed farmers and rural property owners by extending federal protection to ephemeral streams and some drainage ditches, but it was applauded by environmentalists for recognizing the latest hydrological findings in science.

Status

A 60-day public comment period will start when the rule is published in the Federal Register. The agency is expected to issue a final rule sometime in 2019.

Streamlined NAAQS review

In May, Pruitt issued a "Back-to-Basics" memo outlining an expedited approach to reviewing the National Ambient Air Quality Standards, or NAAQS, for ozone and fine particulate matter.

A few months later, Wheeler installed five new members on the EPA's Clean Air Scientific Advisory Committee, or CASAC, which is required by law to advise the administrator in deciding whether to revise or maintain the NAAQS.

At the same time, Wheeler sparked an outcry within the scientific community by disbanding two panels of dozens of scientific experts on ozone and particulate matter tasked with helping the seven-member CASAC review the latest science on the air pollutants.

Wheeler said the move was consistent with the CASAC's charter under the Clean Air Act, but air pollution experts and public health advocates have warned the reconstituted committee lacks the depth and breadth of scientific expertise to perform adequate NAAQS reviews.

Status

The NAAQS reviews for ozone and particulate matter are both scheduled to conclude in late 2020 — an aggressive timeline that former CASAC chairs and members of the recently disbanded panels have called unprecedented.