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Four Things Congress Should Include in the Budget

March 18, 2016 by AEA Leave a Comment

The annual budget process continues to inch closer and closer to the (intended) April 15^th deadline, when a budget resolution is supposed to be passed by both Chambers. While nonbinding, the budget resolution does set topline numbers for Appropriations Committees and kicks off the appropriations process in earnest. The resolution also provides an important forum to stake out policy goals and priorities.

The House Budget Committee recently passed its version of a resolution, setting up debate in the full House. The proposed resolution makes a good first effort in promoting affordable, reliable energy. However, the House can and should do more to address important energy issues and protect taxpayers from aggressive federal overreach.

Here are four things the budget should include:

Block the Administration’s Clean Power Plan – The centerpiece of President Obama’s energy and environment agenda – the Environmental Protection Agency’s carbon rule – will shutter roughly 47 GW of reliable coal energy, increase the cost of electricity across the nation, and cost up to $39 billion per year. The benefits of this rule are miniscule; according to the EPA’s models we can anticipate a 0.019° Celsius change in global temperatures and 0.15 cm change in sea level by 2100.

In February, the Supreme Court issued a stay of the rule. Under the stay, the EPA can do nothing to assist states in complying with the rule. Thus, states have begun stopping work on implementation plans. The stay not only pushes back all initial compliance deadlines, but also postpones any legal resolution of the case until at least mid-2017, but likely longer.

Since the EPA is barred from working towards compliance on the carbon rule under the stay, the EPA should receive no funds for implementation or further development of the carbon rule. The House Budget Committee draft resolution addresses the rule and its significant negative impacts but it must go farther by codifying the logical implications of the Supreme Court’s stay and the rule’s harmful impact on all Americans. The Budget Resolution should fund the agency at a lower level and explicitly prohibit use of agency resources until judicial review is complete.

Prohibit taxpayer dollars from being sent to the Green Climate Fund and Reduce the Economic Support Fund – Amid much fanfare, diplomats agreed on the Paris climate accord in December. Key to this agreement is the Green Climate Fund (GCF). The GCF has been derided as nothing more than a slush fund and has raised questions as to its accountability and transparency mechanisms.

The year-end Omnibus funding legislation failed to adequately prevent funds from being diverted to the GCF. While the Omnibus did not directly appropriate for the GCF, the legislation did not provide enough of a safeguard against agency reprogramming. The State Department did exactly that, funneling $500 million from the Economic Support Fund account, circumventing Congressional approval.

Congress cannot be so naïve to think that the State Department will not reprogram funds again, if necessary. Any budget put forward by Congress must explicitly prohibit any funds from being sent to the GCF.

Furthermore, Congress should exercise its power of the purse and reduce the Economic Support Fund by $500 million. If the Obama administration can take $500 million from the fund, then it appears to be overfunded by at least $500 million.

Fully Repeal the RFS – The Renewable Fuel Standard mandates refiners blend increasing amounts of biofuels into gasoline. Since its inception in 2005, the RFS has proved to be a costly, burdensome, and ultimately ineffective program in large measure because Congress tried to mandate technology into existence. The vast majority of the RFS is met via corn ethanol, yet the EPA also mandates the blending of expensive and commercially unviable “advanced” biofuels, such as cellulosic ethanol. This is where the mandate can do the most harm.

Corn ethanol has proved to be an effective and inexpensive fuel octane, and will survive on the market without the RFS. On the other hand, advanced biofuels are not only expensive and scarce, but will be mandated in higher volumes under the RFS. This not only hurts consumers, but also ends up undercutting corn farmers who produce ethanol.

The only solution is to fully repeal the RFS. Half-measures that repeal only the corn portion do not go far enough and actually makes the RFS worse. The House Budget should take a cue from the Republican Study Committee’s budget and include a provision fully repealing the RFS.

Open Federal Lands for Natural Resources Development — Over the last eight years, natural resources development on federal lands has been stymied at nearly every turn. Just this year alone, the Administration has imposed a moratorium on new coal leases (which will undoubtedly include oil and natural gas in the near future) and eliminated oil and gas leases in the Atlantic from their next 5-Year Offshore Plan. Today less than two percent of offshore areas are even leased for energy production. This “keep it in the ground” mantra only serves to deprive Americans of bountiful energy resources.

The House Budget Resolution should note the vast resources that bless our nation and the enormous benefits that come from unlocking them. Chairman Ryan included this in his FY 2014 budget, noting the $14.4 trillion in additional economic activity from opening federal lands to oil and natural gas development. Today, the benefits are even greater: $20.7 trillion in increased economic output over the next 37 years, 552,000 new jobs annually over the next seven years, and $3.9 trillion in federal revenues over the next 37 years, all without raising or creating new taxes.

Conclusion

The goal of the House Budget Resolution should be to put American on a path to economic freedom and fiscal responsibility. Sensible energy policies can play a large part in achieving these goals. Allowing affordable and reliable energy ensures economic growth, and natural resources development can generate significant revenues without increasing the tax burden. Including such policies in the Budget Resolution can help put America on a path towards prosperity.

Filed Under: EPA, GHG, Renewable Fuel Standard Tagged With: budget, congress, EPA, Obama

The American People Should Decide the Future Direction of the Supreme Court

March 16, 2016 by AEA Leave a Comment

The President’s Pick is a Political Pawn; The Senate Should Reject this Effort

WASHINGTON – American Energy Alliance President Thomas Pyle issued the following statement on President Obama’s nomination of Merrick Garland for the Supreme Court:

“President Obama has decided to once again put politics over the best interests of the American people. With his decision today to nominate Merrick Garland for the highest court in the land, the president may succeed in mobilizing his political base, but he will fail in his attempt to remake the court in his final months in office. With so much at stake, the Senate should exercise its authority under the Constitution and reject this effort. Doing so will ensure the American people have a voice in choosing who will replace Justice Scalia.

“The Supreme Court’s role in the policymaking process has grown immensely in recent decades, as the Court has weighed in on many politically charged topics, including energy and environmental policy. The president’s executive agencies have regularly exceeded the boundaries of their power, bypassing the legislative branch and the will of the American people in the process.

“Nowhere is the administration’s overreach more apparent than with the EPA’s carbon rule. After failing to move cap-and-trade legislation through a Democratic-controlled Congress, the president turned to the EPA to operate outside the agency’s mandate and usurp states’ control over their energy policies. Confirming President Obama’s nomination would consolidate more power in the executive branch while taking it away from the democratically-elected legislative branch.

“EPA’s illegal carbon rule will take away states’ rights and force higher energy costs on the American people, which will have a severe and lasting impact on their day-to-day lives. For these reasons and many more, we applaud Senator McConnell and Senator Grassley for exercising their constitutional right to withhold consent from this president’s nominee and for protecting America’s voice in this decision.”

Click here to read AEA’s ten reasons why the next president should fill the Supreme Court vacancy.

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Filed Under: Press Releases Tagged With: cap and trade, Constitution, energy, EPA, Obama, Supreme Court

Energy Mandates of All Stripes Hurt American Families

March 10, 2016 by AEA Leave a Comment

From the federal Renewable Fuel Standard to state-level Renewable Portfolio Standards, mandating energy sources is destructive. A recent effort in the Oklahoma legislature, which would have required three-quarters of the state’s electricity to be generated from natural gas by 2020, demonstrates that the danger of these mandates is not limited to just wind and solar. While the bill was recently defeated, it is instructive nonetheless. Giving special treatment to specific energy resources—whether they are renewables or conventional fuels—is detrimental to American families.

Time and again we’ve seen energy mandates hurt Americans by driving prices higher. Several state Renewable Portfolio Standards (RPS) that require states to generate electricity from expensive, unreliable energy sources like wind and solar are prime examples. As one Manhattan Institute study explains, “RPS mandates make electricity more expensive. When retail consumers subsidize electricity supplies at above-market costs, retail prices inevitably rise, even if the fuel is ‘free.’”[1] By contrast, free markets are better at keeping prices affordable, preserving the environment, and creating opportunities for all Americans.

This principle extends beyond mandates for renewable sources. Electricity from new resources—even generally affordable natural gas plants—is more expensive than electricity from existing resources. A 2015 Institute for Energy Research (IER) study found that existing coal plants produce power at about one-third the cost of new wind facilities. Furthermore, electricity from existing coal is also almost half as costly as electricity from new natural gas plants, even though natural gas is the least expensive of new resources. Overall, competition allows the most effective energy sources to benefit consumers.

A distinct but related problem is the lack of fuel diversity these mandates can cause. For example, Oklahoma’s proposed natural gas mandate would have required that 75 percent of electricity come from natural gas. However, as recently as November 2015, the U.S. Energy Information Administration reported that Oklahoma generated over 50 percent of its electricity from sources besides natural gas. In other words, Oklahoma’s energy supply would have to become less balanced to meet the standard.

Experts from IHS Energy evaluated the impacts of reducing fuel diversity by increasing natural gas generation to three-quarters and found that the costs would be significant. Specifically, the cost of generating electricity would be “more than $93 billion higher per year and the potential variability of monthly power bills was 50 percent higher compared to the base case.” Allowing Oklahoma ratepayers to determine which sources are most appropriate for their state makes the electric grid more valuable for everyone.

Fuel diversity also recognizes the uniquely beneficial roles that certain energy sources play on the grid. For instance, nuclear and coal plants are generally best for generating base load power, while different types of natural gas plants are usually better for intermediate or peak load purposes. As another IER analysis concluded, even if the costs are sometimes hidden, prematurely closing existing power plants upset this beneficial relationship.

Despite the clear problems with energy mandates, government policies continue to pick winners and losers and prioritize politically favored sources. Even for natural gas, which plays an important role, government favoritism is problematic and should be rejected. Oklahomans can be thankful that their representatives recognized this danger and stopped the RPS mandate in its tracks.

[1] Jonathan A. Lesser, Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents, The Manhattan Institute, CEPE Report No. 17, July 2015, p. 2, http://www.manhattan-institute.org/pdf/eper_17.pdf.

Filed Under: Renewable Energy Mandates Tagged With: coal, electricity prices, natural gas, renewable energy, renewable energy mandate, Renewable Portfolio Standards, wind

Arkansas Agencies Stop Work on EPA’s Carbon Rule

March 8, 2016 by AEA 1 Comment

WASHINGTON – Today, the Arkansas Department of Environmental Quality and the Public Service Commission declared that they would not implement a state plan to comply with EPA’s carbon rule during the Supreme Court’s stay. American Energy Alliance President Thomas Pyle issued the following statement:

“The Arkansas DEQ and PSC’s decision to stop work on the carbon rule is a great victory for Arkansas families who would suffer under this regulation. With the Obama administration and the national environmental lobby pressuring states to continue work on the carbon rule, the agencies’ decision sends an important signal to utilities that they should halt their efforts to pass the costs of this rule on to Arkansans. States should avoid wasting resources on this unlawful rule and instead focus on ensuring their citizens have access to affordable, reliable energy.”

Following the Supreme Court’s stay of the rule, EPA Administrator Gina McCarthy stated, “Nothing is going to be implemented while the stay is in place. It is clearly on hold until it resolves itself through the courts.”

Visit www.SmartPowerPlan.org to find out where all the states stand on EPA’s carbon rule.

Click here to read more about AEA’s “Stop Work” efforts.
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Filed Under: Press Releases Tagged With: Arkansas, carbon rule, EPA, Supreme Court

On Climate Fund, Obama Prioritizes Politics Over the American People

March 8, 2016 by AEA Leave a Comment

WASHINGTON – Today, the Obama administration directed $500 million to the U.N.’s green climate slush fund. American Energy Alliance President Thomas Pyle issued the following statement in response:

“President Obama continues to prioritize his political interests over the interests of the American people. The administration intends to funnel hundreds of millions of taxpayer dollars into the U.N.’s climate slush fund while pursuing a domestic agenda that will raise energy costs and leave all Americans poorer.

“By diverting this money with little to no transparency or clear authorization, the Obama Administration implicitly ignores even more pressing demands, such as help for those grappling with the aftermath of the EPA’s Animas River spill. With no more campaigns to run, the president is no longer accountable to the American people. That makes it even more important that Congress holds him accountable. After all, they hold the power of the purse. Now they must show they can use it.”

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Filed Under: Press Releases Tagged With: climate change, EPA, Obama, UN

The Next President Should Fill Supreme Court Vacancy

March 7, 2016 by AEA Leave a Comment

Who should fill the vacancy on the Supreme Court—Barack Obama or the next president? As an advocacy organization focused on energy and environmental policy, we are keenly aware of the implications of a change in the Supreme Court’s composition. Justice Scalia was a critical voice in the ongoing conversation about the limits of executive agency authority. He spoke of the need for energy policies that properly consider the tradeoffs involved in promoting one energy source over another. Most importantly, though, he insisted on giving people a voice on government actions that directly impact their daily lives. For these reasons, we support Americans’ right to decide who should nominate Justice Scalia’s replacement and what direction the Court should take. Below are our reasons for why the next president, not Barack Obama, should fill the vacancy on the Supreme Court.

1) Replacing Justice Scalia means setting new policy on countless issues; isn’t that what elections are all about?

The Framers did not intend for the Supreme Court to set policy. The courts were supposed to be the umpires calling balls and strikes. However, over the past several decades, the legal system has assumed a much larger role—one that comes closer to ratifying legislative and executive actions that seemingly don’t recognize limits to the federal government’s authority. As a result, the courts have become an undeniable part of the policymaking process. During President Obama’s tenure, the nation’s highest court has resolved or weighed in on pressing political topics, ranging from energy and environmental policy to healthcare, free speech, immigration, gun rights, affirmative action, and voting rights. Replacing Justice Scalia is implicitly a referendum on the rights, responsibilities, and livelihood of all Americans. Such an important decision should be part of the November ballot.

2) President Obama’s constitutional authority to nominate a qualified individual to the Supreme Court applies equally to the next president.

Article II, Section 2, Clause 2 of the Constitution states, “The President…shall nominate, and by and with the Advice and Consent of the Senate…Judges of the supreme Court…”[1] Those words are worth reading for a few reasons. First, no further language specifies the time period for when this must occur. Second, the president does not appoint judges; he only nominates them. After that, the Senate takes over. Thus, like it or not, the Constitution does not mandate nor support any claim that President Obama must fill Justice Scalia’s seat. In fact, it explicitly subjects such appointments to the political process. What better resolution to the process than an election?

3) The Senate’s Advice and Consent role is a check on executive authority, not a rubber stamp.

Congress is a coequal branch of government charged with specific duties under the Constitution meant to check the Executive. The “Advice and Consent” power (quoted in point two) was created for precisely this reason. The Framers envisioned the political appointment process to be adversarial and inherently political. In order to adequately balance the Executive’s authority, the Constitution provides the Senate with the power to both grant and withhold consent. Any other conclusion would diminish essential constitutional principles, including the separation of powers and checks and balances.

4) The Supreme Court has had to rein in executive agency abuse under President Obama. Yet, any Obama nominee will most likely enable the executive branch’s aggregation of power.

The Environmental Protection Agency’s (EPA) so-called “Clean Power Plan” is a microcosm of the president’s approach to policymaking and working with the legislative branch. After failing to convince a filibuster-proof Democratic Senate to approve his cap-and-trade scheme in 2010, he turned to EPA to circumvent the legislative process. Now, the executive agency tasked with environmental protection is attempting to mandate a national energy policy. Not only does this usurp the well-established role of states’ control over energy policy,[2] but it’s also well outside the expertise or congressional mandate of the agency.[3] President Obama knew this, but chose to proceed anyway.

5) Giving the American people input into who will fill the vacancy is a natural response to the president’s elevation of his “pen and phone” to dictate federal policy.

No one articulated the logical result of this approach to governing better than Justice Scalia: “The American people love democracy and the American people are not fools … Value judgments, after all, should be voted on, not dictated; and if our Constitution has somehow accidentally committed them to the Supreme Court, at least we can have a sort of plebiscite each time a new nominee to that body is put forward.”[4]

6) Elections have consequences.

Yes, President Obama was elected in 2012. But he is merely half of the equation. In 2014, his party lost nine seats and control of the U.S. Senate.[5] Also, the American public’s disdain with the president’s use of executive authority to push his agenda is hardly a phenomenon limited to the U.S. Senate. Since Barack Obama took office in 2009, his party has taken a beating in elections. The numbers are quite astounding. According to Larry Sabato, “Democrats during Obama’s presidency have lost 11 governorships, 13 U.S. Senate seats, 69 House seats, and 913 state legislative seats and 30 state legislative chambers.[6] American people don’t want to rubber stamp the president’s agenda; they seek to reject it.

7) Traditional Senate prerogative urges waiting until the November election before proceeding.

The record is pretty clear on how the president and vice president would respond if the circumstances were reversed. According to The New York Times, then-Senator Joe Biden declared in 1992 that “there should be a different standard for a Supreme Court vacancy ‘that would occur in the full throes of an election year … It would be our pragmatic conclusion that once the political season is underway, and it is, action on a Supreme Court nomination must be put off until after the election campaign is over.’”[7] Then-Senator Obama echoed this sentiment in 2006:

There are some believe that the president, having won an election, should have complete authority to appoint his nominee…that once you get beyond the intellectual and personal character, there should be no further question as to whether the judge should be confirmed. I disagree with this view.[8]

After Democrats captured the Senate majority in 2006, Obama joined Senator Chuck Schumer in promising to prevent any new Supreme Court nominee from being appointed during President George Bush’s second term. It’s quite audacious of the Administration to entirely reverse their position now that the tables are turned.

8) Eight sitting justices can function perfectly well while the American people weigh in on the direction the Court should take.

Some have argued that the Court cannot meet its workload with less than nine sitting justices. This assertion ignores many instances where eight justices have decided cases when justices had to recuse themselves or the Court was waiting on vacancies to be filled. As constitutional scholars Josh Blackman and Ilya Shapiro have pointed out, “rather than making the judicial system grind to a halt, a Supreme Court vacancy merely delays rulings in a small number of cases.”[9] Several examples highlighted by Messrs. Shapiro and Blackman confirm this point.

9) Important cases that rely on narrow opinions can and likely will be reargued next year.

Justices on the Supreme Court have consistently recognized the importance of having a full court when deciding cases that set precedent and a ninth justice’s vote will be determinative. Here’s more from Messrs. Shapiro and Shapiro: “In the rare instances when eight justices split evenly, 25 times the court affirmed the lower-court judgment without opinion (or precedential value) and 54 times the court set the case for reargument.” Of the latter, “only 25 of those cases ended up 5-4, meaning the new justice made no difference in half of the reargued cases.”[10]

10) In the modern political era, there is no precedent guiding how the president should proceed.

As FactCheck.org explains, “This is the first time in 116 years that a Supreme Court vacancy occurred in a lame-duck president’s final year in office.”[11] Those who point to Ronald Reagan’s appointment of Justice Kennedy ignore that Justice Powell stepped down in June 1987, which is a far cry from the current situation where Justice Scalia died nine months before the next election. Further, in the one instance where a president attempted to fill a contemplated vacancy (Lyndon B. Johnson’s nomination of Abe Fortas to backfill Chief Justice Warren), the Senate refused to move forward because it was too close to the next presidential election. On a side note, when Justice Fortas did resign from the Court in 1969, his seat was open for more than a year until Harry Blackmun was confirmed. To the extent relevant precedent exists, it argues for the American people to decide who should make the nomination.

[1] U.S. Const. Article II, Section 2, Clause 2, http://www.heritage.org/constitution/#!/articles/2/essays/91/appointments-clause

[2] David B. Rivkin, Jr., Mark DeLaquil, Andrew Grossman, Does EPA’s Clean Power Plan Proposal Violate the States’ Sovereign Rights?, Engage Volume 16, Issue 1, June 15, 2015, http://www.fed-soc.org/publications/detail/does-epas-clean-power-plan-proposal-violate-the-states-sovereign-rights.

[3] William Yeatman, EPA’s Clean Power Plan Overreach, Competitive Enterprise Institute, OnPoint No. 204, July 28, 2015, https://cei.org/sites/default/files/William%20Yeatman%20-%20EPA%27s%20Clean%20Power%20Plan%20Overreach.pdf.

[4] Planned Parenthood of Southeastern Pa. v. Casey (91-744), 505 U.S. 833 (1992), https://www.law.cornell.edu/supct/html/91-744.ZX4.html.

[5] Guy Benson, Final Score: GOP Gains Nine Senate Seats, Will Hold 54–46 Majority, Townhall, December 8, 2014, http://townhall.com/tipsheet/guybenson/2014/12/08/final-score-gop-gains-nine-senate-seats-will-hold-5446-majority-n1928620.

[6] Katie Sanders, Have Democrats Lost 900 Seats in State Legislatures Since Obama Has Been President?, Politifact, January 25, 2015, http://www.politifact.com/punditfact/statements/2015/jan/25/cokie-roberts/have-democrats-lost-900-seats-state-legislatures-o/.

[7] Julie Hirschfeld Davis, Joe Biden Argued for Delaying Supreme Court Picks in 1992, The New York Times, February 22, 2016, http://www.nytimes.com/2016/02/23/us/politics/joe-biden-argued-for-delaying-supreme-court-picks-in-1992.html.

[8] The Federalist, 10 Times Democrats Vowed To Block Republican Court Nominees, February 16, 2016, http://thefederalist.com/2016/02/16/10-times-democrats-vowed-to-block-republican-nominees/.

[9] Josh Blackman and Ilya Shapiro, Only Eight Justices? So What, The Wall Street Journal, February 23, 2016, http://www.wsj.com/articles/only-eight-justices-so-what-1456272088.

[10] Blackman and Shapiro, Only Eight Justices?.

[11] Eugene Kiely, Cruz, Rubio Twist Court ‘Precedent’, FactCheck.org, February 17, 2016, http://www.factcheck.org/2016/02/cruz-rubio-twist-court-precedent/.

Filed Under: EPA Tagged With: EPA, Obama, Supreme Court

Wyoming Leaders Protect Citizens From Carbon Rule

March 4, 2016 by AEA Leave a Comment

WASHINGTON – This week, Wyoming Governor Matt Mead signed a two-year budget deal that includes a provision blocking funds from being used to implement the EPA’s carbon rule, or “Clean Power Plan.” American Energy Alliance President Thomas Pyle issued the following statement:

“Governor Mead and Wyoming lawmakers should be applauded for protecting their citizens by blocking funds from being used to implement President Obama’s illegal carbon rule. With the Supreme Court’s stay in place, it is irresponsible for states to waste precious time and resources to comply with a regulation that could ultimately be thrown out in court or undone by the next administration.

“As a major energy-producing state, Wyoming would be uniquely impacted by this harmful regulation. Not only would the regulation raise electricity costs for Wyoming families and businesses, but it would also severely hurt the state’s energy-producing communities, which provide nearly 40 percent of our nation’s coal. Wyoming’s leaders have taken a significant step to protect their citizens from the president’s carbon rule and we encourage other states to follow suit.”

Click here to find out more about AEA’s “Stop Work” efforts.

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Filed Under: Press Releases Tagged With: carbon rule, electricity, energy, EPA, Obama, Wyoming

10 Reasons States Should Stop Work on EPA’s Carbon Rule

March 1, 2016 by AEA Leave a Comment

In a historic decision, the U.S. Supreme Court recently blocked the EPA’s carbon rule —which the administration calls the “Clean Power Plan”— from taking effect pending judicial review. This is the first time the Supreme Court has imposed an injunction on a federal regulation prior to lower court review, a decision that shows the Court is likely to strike down the rule. The Court’s decision means EPA cannot force States to take any action to comply with the rule until judicial review is complete. Below are ten reasons states should immediately stop work on EPA’s carbon rule.

1. EPA’s carbon rule guarantees significant pain with no observable benefit. The rule increases the cost of electricity and provides minuscule climate change benefits. EPA admits that under the regulation, electricity rates will increase. This will hurt all Americans, particularly low-income families. The agency also acknowledges that the actual climate impacts are minuscule. Implementing a rule that drives up electricity rates for virtually zero benefits does not make sense, unless states are forced to do so or are unconcerned with their citizens’ welfare.

2. Promoting affordable energy should be states’ top priority. The price of natural gas is falling and the price of coal is holding steady, and yet the retail price of electricity is increasing faster than usual.[1] State policymakers should investigate this trend, not exacerbate these cost increases by working to implement EPA’s harmful regulations. Affordable energy is critical to improving people’s lives while protecting the environment.

3. EPA agrees that nothing is going to be implemented during the stay. When testifying before Congress the day after the stay was granted, EPA Administrator Gina McCarthy was clear: “Nothing is going to be implemented while the stay is in place. It is clearly on hold until it resolves itself through the courts.” Of course, statements by McCarthy and other officials have since been more aggressive, as environmental pressure groups realize the threat the stay poses to Obama’s climate legacy. States should resist this pressure and protect their citizens’ right to affordable energy.

4. States should learn the lesson from Michigan v. EPA. The Court likely granted a stay in large part to avoid a repeat of the saga of EPA’s mercury rule, which resulted in prematurely shutting down 40 GW of affordable energy, even though the regulation had not been okayed by the courts.[2] In Michigan v. EPA, the Court’s determined that EPA illegally failed to consider costs. But this decision came after dozens of power plants had already been closed to comply with the regulation. Continuing to plan for the carbon rule sends the wrong signal to utilities and could likely mean a repeat of the mercury rule. The decision to stop work comes down to protecting families and businesses.

5. Scarce state resources are on the line. There is no reason to waste resources on a rule that may never go into effect or may be radically altered. The court documents filed by the states protesting the regulation make clear that the planning and compliance efforts would require significant resources.[3] This distracts from other important efforts to manage the state’s energy needs and protect the environment. Continuing to dedicate resources to planning after the Court has agreed with their concern would be imprudent and irresponsible.

6. All deadlines are delayed until judicial review is complete. The Supreme Court’s stay of the rule stalled all deadlines for compliance, including the 2022 and 2030 deadlines, until judicial review is complete. In other words, if the stay is in place for 18 months before being lifted, ALL deadlines will be pushed back at least 18 months.

7. Success on the merits is likely. A stay, or preliminary injunction, requires the court to determine that success on the merits is likely. Policymakers and regulators should interpret the unprecedented Supreme Court stay as a sign of the rule’s questionable legal foundation. Further, Justice Scalia’s vacancy on the Court does not change the fact that four other justices believe the rule’s premature implementation posed irreparable harm to states and consumers.

8. The rule is in the next Administration’s hands. Regardless of the rule’s fate in court, a new presidential administration will determine whether attacks on affordable energy will continue and, if so, in what form. Legal experts agree the case will not be decided before mid-2017 at the earliest, and the legal proceedings could very likely extend into 2018. Making long-term planning decisions before some of these key questions are resolved is not prudent planning.

9. Significant procedural hurdles remain under EPA’s best-case scenario. If the rule is ultimately upheld in its current form and EPA wants to accelerate the compliance timeline to make up for time lost during the stay, the agency will have to initiate another formal rule-making process. This process would not be quick, as it would require more input from the public and stakeholders and be subject to legally enforceable procedural protections. In a nutshell, stopping work will not leave states worse off if the rule is upheld.

10. Any final rule will look very different. Major EPA regulations that survive prolonged judicial challenges rarely look the same when they are ultimately implemented and imposed on Americans. The rule is already set to become the most involved litigation in EPA’s rule-making history, and will almost certainly look very different if the courts uphold it. This uncertainty renders planning at this stage counterproductive at best, and harmful at worst.

Click here to find out more about AEA’s “Stop Work” efforts.

[1] Edgar Meza, Electricity prices to rise despite oil and gas plunge, PV Magazine, Feb. 26, 2016, http://www.pv-magazine.com/news/details/beitrag/electricity-prices-to-rise-despite-oil-and-gas-plunge-_100023440/#axzz41HrSh4GE

[2] EPA’s Mercury and Air Toxic Standards is included in EIA’s reference case and is a major reason for 40 38 gigawatts of coal-fired power plants retiring between 2014–2040 in that forecast. See, U.S. Energy Information Administration, Analysis of the Impacts of the Clean Power Plan, May 22, 2015, pp. 16– 17, http://www.eia.gov/analysis/requests/powerplants/cleanplan/. See also, EIA, Scheduled 2015 capacity additions mostly wind and natural gas; retirements mostly coal, March 10, 2015, http://www.eia.gov/ todayinenergy/detail.cfm?id=20292; and, Institute for Energy Research, How to Kill the Coal Industry: Implement EPA’s “Clean Power Plan”, May 26, 2015, http://instituteforenergyresearch.org/analysis/howto-kill-the-coal-industry-implement-epas-clean-power-plan/.

[3] Stay Application by the State of West Virginia, et al., January 26, 2016, p. 12, http://www.ago.wv.gov/publicresources/epa/Documents/Final%20States%20SCOTUS%20Stay%20App%20-%20ACTUAL%20%28M0116774xCECC6%29.pdf.

Filed Under: EPA Tagged With: carbon rule, climate change, electricity prices, EPA, Obama

Gov. Herbert Stands Up for Utah Families

February 26, 2016 by AEA Leave a Comment

WASHINGTON — Yesterday, Utah Governor Gary Herbert announced that his state has stopped working on all efforts to comply with EPA’s carbon regulation. In response, American Energy Alliance President Thomas Pyle issued the following statement:

“By stopping all efforts to comply with EPA’s regulation, Governor Herbert is taking a crucial step toward protecting Utah families from higher energy costs. With the rule on hold, the governor clearly recognizes that it is a waste of time and taxpayer-funded resources to move forward with any efforts to comply.

“States should focus their efforts on promoting affordable and reliable energy for their citizens, not on complying with a legally suspect regulation that will make energy more expensive. We encourage other governors and state leaders to join the growing chorus of opposition to this unlawful regulation by ceasing all efforts to comply.”

AEA recently issued “Stop Work” orders to leaders in every state urging them to cease all efforts to comply with EPA’s unlawful regulation. Find out more about this initiative at www.StopWorkNow.org.

Click here to visit SmartPowerPlan.org and stay up to date on how states are dealing with EPA’s rule.
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Filed Under: Press Releases Tagged With: carbon rule, EPA, Obama, Utah

ICYMI: States Should Stop Work on Obama’s Carbon Rule

February 25, 2016 by AEA Leave a Comment

Today, American Energy Alliance President Thomas Pyle published an op-ed at National Review Online explaining why states should cease all efforts to comply with EPA’s carbon regulation. Below is an excerpt from the piece:

“The states should stop work on the EPA’s climate agenda”
By Thomas Pyle
2/25/16

One of Justice Antonin Scalia’s last official acts may be among the most important of his distinguished career. Last week, he joined with four other justices to halt implementation of President Obama’s new carbon regulation for so long as it is under legal review — an unprecedented move to stay an unprecedented federal overreach into states’ energy decisions.

Titled by the administration the “Clean Power Plan,” the regulation would be one of the costliest ever, dramatically increasing electricity prices across the nation — all while producing essentially zero climate benefits, according to the Environmental Protection Agency’s own models.

Thanks to Justice Scalia and the four other justices who voted with him, Americans won the first battle against this reckless plan. But the fight is far from over. Even though the Supreme Court is not expected to issue a final ruling until at least 2017, the EPA is essentially flouting the stay order and encouraging states to continue developing their plans.

State officials — governors, legislators, regulatory agencies, public-utilities commissions, and utilities themselves — should reject the EPA’s offers of assistance. In fact, they should be issuing stop-work orders to prevent the regulation’s implementation until the courts have completed a full review.

That’s especially necessary with a regulation as harmful and unlawful as this one, which would force a dramatic shift in electricity generation over a period of just 15 years. NERA Economic Consulting predicts compliance costs of up to $39 billion per year during the regulation’s implementation. Most of this burden would fall on families through higher electricity bills and higher prices on the products they use each and every day. In fact, NERA estimates the regulation would hike energy bills in each of the 47 states subject to the regulation. Annual electricity price increases would reach as high as double digits across 41 states, with residents of 28 states facing yearly cost increases greater than 20 percent.

Thanks to the Supreme Court’s stay, however, states can halt developing implementation plans at no risk to taxpayers. As EPA Administrator Gina McCarthy testified to Congress after the Court issued its stay, “Nothing is going to be implemented while the stay is in place.” In the unlikely event the regulation is eventually upheld, legal experts believe any new compliance deadline before mid-2018 would be extremely unlikely.

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AEA recently issued “Stop Work” orders to leaders in every state urging them to cease all efforts to comply with EPA’s unlawful regulation. Learn more about this initiative at www.StopWorkNow.org.

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Filed Under: Press Releases Tagged With: carbon dioxide, climate, EPA, Obama, Supreme Court