A new “Clean Power Plan 2.0” is coming soon from Joe Biden’s EPA, as detailed by the New York Times over the weekend, marking the administration’s latest attempt to curb greenhouse gas emissions from power plants — and kill coal power along the way. The rule, which is currently with the Office of Management and Budget and subject to change, could cause already soaring energy prices to spike even more.
This is being couched as a leak, but it is in fact a deliberate trial balloon that includes some extreme aspects not likely to be included the final proposal. When the agency forgoes some of the provisions from the leaked version, Team Biden can pretend that the Federal Register version is reasonable.
Also pertinent is the legal history. This rule will be the new version of the original Clean Power Plan (CPP) proposed by the Obama Administration that the U.S. Supreme Court stopped in its tracks in 2016 due to illegality. The Trump Administration then rescinded the CPP and replaced it with the Affordable Clean Energy (ACE) rule, which would have reduced carbon dioxide emissions from the utility sector 35% by 2030. The DC Circuit court, however, vacated the rule and sent it back to the EPA weeks before Team Biden was sworn in.
As the Biden EPA was drafting the newest version, the US Supreme Court issued a massive blow to the Obama/Biden legal theory finding that EPA did not have an unfettered ability to reshape the entire energy industry. In effect, the Supreme Court decision made clear EPA would be better suited sticking with the traditional approach of regulating at a source within its fence line – the legal tact taken by the Trump Administration’s ACE.
By the NYT account, the new rule has all the trappings of the Clean Power Plan with some legal maneuverings meant to subvert the limits imposed by the Supreme Court in West Virginia v. EPA. Notably, the NYT suggests the rule will set standards based on changes that can be made at the plant. Included is the installation of carbon capture and control technology, a promising but not yet proven technology that’s extremely expensive. In an admission of this high cost, the new rule addresses the “financial feasibility” by referencing tax credits that are available to power plant operators. These types of subsidies won’t make technology more affordable. It simply hides the increased costs from the consumer by stealing from the taxpayer and enriching the recipient. For the taxpaying ratepayers it’s a lose-lose outcome.
Also included for technical compliance is switching from coal or natural gas to a preferred fuel source. For natural gas, the stated preference is green hydrogen which is characterized as “the most expensive form of hydrogen to produce.” In simple terms, this is the same type of generation switching that solidified the downfall of the Obama-era CPP. Once again, the rules are not designed to improve the environmental performance of coal and natural gas, but rather squeeze them out of business.
In a soft attempt to bolster this legally suspect approach, the NYT references language included in the Inflation Reduction Act (IRA) they believe bolsters the EPA’s ability to regulate greenhouses gases and would “make new regulations much tougher to challenge in court.” But legal experts disagree. As one clearly stated, the IRA provisions are consistent with current legal precedent and “are not going to discourage litigation, nor do they do much of anything to protect future EPA regulation of GHGs from legal attack.”
If the NYT portrayal is accurate, the proposal will face a steep legal path. It also reeks of the administrative arrogance displayed during the Obama Administration when senior officials sniped that “investments had already been made” after a similar Supreme Court loss.
However legally designed, the consequences of the new rule stands to be the same as the old. A forced closure of power plants that provide around 60% of our daily energy means electricity will become even more expensive and less reliable. It may even become the luxury good leftist elites think is necessary to stop the average American from using too much power. But don’t worry, private jet emissions will not count.
More broadly, undermining low-cost, reliable energy will place another arbitrary hardship on our floundering economy, shipping jobs and productivity overseas to China. As of last year, the country is on track to build two new coal plants a week that fail to use pollution control technology American coal plants have been using for decades.