President Donald Trump’s second inaugural address identified making America “energy dominant again” as one of four America First Priorities. Having issued several statements and executive orders in January that focused on expanding domestic energy production, the administration took action on April 8 to promote greater use of coal and clean coal technology.
The administration has taken two related actions on coal and clean coal technology to further promote the “energy dominant” pillar of the Priorities.
First, the administration issued the executive order “Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241,” which declares that “coal is essential to our national and economic security,” extolling the reliability of coal-fired electric generation and the domestic abundance of coal. The order then sets out a national priority of removing federal policies aimed at discouraging the production of coal and that discriminate against coal as an electric generation source.
The executive order requires the following actions in support:
Second, the administration issued a presidential proclamation, Regulatory Relief For Certain Stationary Sources To Promote American Energy, which declares that “[c]oal-fired electricity generation is essential to ensuring that our Nation’s grid is reliable and that electricity is affordable for the American people, and to promoting our Nation’s energy security.” This proclamation identifies the Biden-era rulemaking National Emissions Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units Review of the Residual Risk and Technology Review (the Emissions Standard Rule) as contrary to this declaration.
The proclamation states that the Emissions Standard Rule “places severe burdens on coal-fired power plants and, through its indirect effects, on the viability of our Nation’s coal sector” because it relies upon “emissions-control technologies that do not yet exist in a commercially viable form.” The administration thus views the Emissions Standard Rule as creating an “unacceptable risk of the shutdown of many coal-fired power plants, eliminating thousands of jobs, placing our electrical grid at risk, and threatening broader, harmful economic and energy security effects.”
Accordingly, effective immediately, this proclamation exempts specified stationary sources from the Emissions Standard Rule for two years beyond its compliance date of July 8, 2027, i.e., the exemption extends compliance until July 8, 2029. Until the expiration of the exemption, these exempt stationary sources will be subject to the compliance obligations to which they were currently subject under the preexisting Mercury and Air Toxics Standards, as these standards existed prior to the Emissions Standard Rule.
Given the president’s directive to federal agencies to “revise or rescind any guidance, regulations, programs, and policies that seek to transition away from coal production and electricity generation,” industry participants are beginning to speculate what this might mean for the Environmental Protection Agency’s (EPA’s) Standards and Guidelines for Fossil Fuel-Fired Power Plants, a final rule issued last May aimed at lowering pollution from existing coal-fired power plants and ensuring that new combustion turbines are built to achieve greenhouse gas emissions reductions on par with those attained through carbon capture and sequestration (CCS).
Under the rule, coal-fired power plants operating between 2032 and 2039 are required to achieve emissions reductions equivalent to co-firing 40% by volume natural gas. Coal-fired power plants operating after 2039 are required to achieve emissions reductions equivalent to 90% capture of carbon dioxide through CCS. While industry has been making efforts to comply with the rule, it is worthwhile to note that the rule has been challenged on the grounds that it is in excess of the EPA’s authority and reliant on unproven and expensive technology, and in March the EPA announced it was reconsidering the rule.
We continue to expect additional executive, regulatory, and legislative action in the coming months to implement President Trump’s energy policy. We will provide additional analysis and guidance as these policies become available. Please visit Morgan Lewis’s energy blogs Power & Pipes (FERC, CFTC, DOE, State) and Up and Atom (Nuclear) for updates on the administration’s energy policies.
Visit our US Administration Policies and Priorities resource center and subscribe to our mailing list for the latest on programming, guidance, and current legal and business developments.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following: