The head of the Environmental Protection Agency, Scott Pruitt, on Tuesday began the unraveling of the Clean Power Plan, an Obama-era regulation meant to cut carbon dioxide emissions from power plants by 30 percent.
The 2014 rule would have dealt coal production in Wyoming a crippling blow, affecting thousands of jobs and millions of dollars in annual school funding and state revenue. But it was frozen in litigation before it ever got started. With compliance dates on the rules still five years away, the Clean Power Plan’s undoing may not have much of an impact in the largest coal-producing state or anywhere else.
What is the relevance in Wyoming of a regulation that fell like a bomb and never went off?
Some say the coal sector has already been hurt by the plan, as it introduced uncertainty for coal in the long term. Others are more attuned to the rapidly changing electricity market that coal, an old man in the electricity sector, is competing against regardless of regulations. Industry is pushing to change the anti-coal momentum, hopeful that other regulations will follow the way of the CPP and utilities will turn back to their longtime partner.
“You don’t just wave a magic wand and these things go away,” said Travis Deti, director of the Wyoming Mining Association. “But I think it gives utilities pause going forward that ‘Hey, this policy we had planned on being there in the future is not going to be there.’ Maybe coal is back on the table. Maybe it is looking a little more attractive as we go forward.”
It’s been three years since the Clean Power Plan hit Wyoming with its demand for a 44 percent reduction in Wyoming’s carbon dioxide output. The state provides about 40 percent of the nation’s coal for power plants across the Midwest all the way to the Appalachian mountain range that cuts through coal-producing states like Kentucky and West Virginia.
It wasn’t only the plan’s restriction on coal plants that shook Wyoming. The greater threat was losing customers as other states cut coal-fired power. Wyoming was looking at losing as much as 50 percent of its annual production at worst, shattering a cornerstone of the state economy, experts said at the time.
So Wyoming fought it, along with nearly 30 other states. Leaders in the Cowboy State, naturally, celebrated the repeal.
Gov. Matt Mead called the repeal a “catalyst for growth” in a statement Tuesday.
“The process that gave us the Clean Power Plan was flawed and the rule itself is flawed,” he said.
The state’s congressional delegation also put out a flurry of statements, applauding the Trump administration for its direction and hinting at support for a replacement that will not harm the coal industry.
The Clean Power Plan was a forced solution to a problem identified in federal law: climate change. Something has to replace the regulations, and coal companies are voicing their suggestions on what that should be.
Peabody Energy, which operates the country’s largest coal mine, the North Antelope Rochelle complex south of Wright, used the repeal news to plug new technologies like carbon capture to address environmental concerns.
Gillette-based Cloud Peak Energy, which has also lobbied for carbon capture and clean coal research, views the repeal as a start to more durable regulations.
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“Withdrawing the illegal CPP is most welcome, but what impact it may have on the future depends on what replaces it,” said Rick Curtsinger, spokesman for the coal company. “What the country needs is a just, long-term peace that ensures reliable, affordable, fossil energy for the long-term, that protects coal jobs and coal communities from the caprice of future administrations, and that addresses the legitimate concerns that Americans have about CO2 and climate.”
What industry wants is a turning of the tide, a reversal of the years when the Obama administration took an antagonistic approach to the industry, they argue.
The Clean Power Plan may not have been in place, but it did cause a stir that may have had long-lasting repercussions.
It gave utilities an idea of the country’s direction in regard to carbon dioxide emissions, and it made those companies less willing to build their 20-year plans around coal, some argue.
In short, it put pressure on coal and likely helped other industries, like wind and natural gas, said Bill Russell, chairman of the Wyoming Public Service Commission, which oversees utilities in the state.
“The renewable revolution has begun, and there is no going back,” Russell said. “The Clean Power Plan, the threat of it actually going through, probably had an impact in accelerating it.”
Russell said he had opposed the rule because compliance would have forced utilities to abandon some coal plants before their time, increasing customer utility rates.
While the Clean Power Plan lurked on the horizon, tremendous changes were happening in the electricity sector that did not favor coal.
Rocky Mountain Power, the largest utility operating in Wyoming, gets nearly half of its power from coal-fired plants, but it began a move away from the resource before the Clean Power Plan, said David Eskelsen, spokesman for the company.
Utilities argue that the price of new power sources is really the bottom line when it comes to a choice between coal and natural gas, for example.
Rocky Mountain Power built its most recent power plant in 2012, and it was natural gas. The company also expanded its wind resources before the CPP, and it is about to spend nearly $3 billion expanding and rebuilding its wind fleet in Wyoming.
“Quite frankly, the projected consumer costs of new generation pointed the company strongly towards a combination of natural gas and wind power,” Eskelsen said of the company’s decisions nearly a decade ago. “It’s a pretty complicated landscape that we are looking at, but it’s driven by factors other than the regulatory regime right now.”
The fact is that no one expected natural gas to fall as low as it did or remain that low. Coal was king, and it seemed unmovable. Then it moved.
The Clean Power Plan was significant for Wyoming years ago, but it’s not as relevant in the new terrain for energy, said Rob Godby, the director of the Center for Energy Economics and Public Policy at the University of Wyoming. Godby was one of authors of a UW report on the Clean Power Plant’s implications in the state.
“Long story short, it wasn’t going to start till 2022, and there is just so much turmoil in energy markets now anyway that that was a long way off,” the energy economist said. “Coal-fired power plants are being retired right now not because of the Clean Power Plan but because they can’t compete in current energy markets.”
Follow energy reporter Heather Richards on Twitter @hroxaner