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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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Click here to continue reading.

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

Why Oil Prices Are Low in One Chart

February 25, 2016 by Daniel Simmons 2 Comments

With all the discussion in the media about OPEC, about the Saudis and the Russians, and about the relationship between oil prices and the stock market, there seems to be no discussion about the elephant in the room. The real reason we have low oil prices today is because since 2008, U.S. oil producers – along with some help from Canada – dramatically increased oil production. The U.S. government did nothing to help; in fact, oil production from U.S. federal lands and waters actually decreased since 2010. Private enterprise and free markets, here and in Canada, drove oil production up and oil and gas prices down.

In fact, 97 percent of the total increase in world oil production came from the U.S. and Canada alone.

From 2008 through 2014 (the most recent year for which data is available), world oil production increased by 6.686 million barrels per day. 6.491 million barrels per day of that increase came from the U.S. and Canada. In fact, 5.457 million barrels a day, or 82 percent, came from the U.S. alone.

Obviously, supply is just one half of the supply and demand equation that determines the price of oil. Oil consumption has not kept up with the increases in supply, and as a result, prices have dropped. The Energy Information Administration reports that global oil inventories increased by 1.8 million barrels per day in 2015 after also increasing in 2014. Greater supply than demand equals cheaper oil.

The problem today for U.S. and Canadian oil producers is that they’ve done too good of a job of producing oil. In fact, thanks to technological advancements in hydraulic fracturing, subsurface imaging, and horizontal drilling, 95 percent of oil producers can now extract oil at $15 a barrel.

Oil prices in the low $30 range are great for American motorists, who benefit from low gasoline prices. Unfortunately, low prices can be tough for oil producers, especially smaller independent companies, who may be forced to lay off workers and delay planned investments for future oil developments.

The good news out of all of this market turmoil is that Americans have proven that we can drill our way to cheaper prices for consumers – something President Obama said we couldn’t do – and that we have a lot more energy wealth than our own government would admit. The only thing that can go wrong is if the government makes it harder to produce energy, or tries to increase taxes on the energy producers and consumers that drive our economy forward.

Filed Under: Energy Development Tagged With: Canada, Obama, oil, oil prices, OPEC

Coalition to Congress: Reject a Carbon Tax

February 24, 2016 by AEA 2 Comments

WASHINGTON — Today the American Energy Alliance and over 20 free-market and conservative groups sent a letter to Majority Whip Steve Scalise in support of his resolution opposing a carbon tax. As the budget and appropriations process gets underway, Congress should reject efforts that would impose a carbon tax on American families, including President Obama’s recent proposal to levy a $10.25 per barrel carbon tax on oil. Below is an excerpt from the letter:

We write to collectively voice our support for House Concurrent Resolution 89, expressing the sense of Congress that a carbon tax would be detrimental to the United States economy.

As organizations that support free markets as a fundamental pathway to American prosperity, we oppose government policies – such as a carbon tax–that punish some and reward others in accordance with the government’s prevailing viewpoint on market ideals. Such marketplace manipulation represents a recipe for unintended consequences and self-inflicted economic damage. Too often, poor and middle class families bear the burden.

Indeed, independent studies demonstrate that a carbon tax would impose considerable harm on Americans. Such a tax will lead directly to higher electricity and transportation fuel costs for American families and businesses. This, in turn, will inexorably lead to increased costs for consumer goods across the board. Furthermore, a carbon tax would be regressive, imposing disproportionately high costs on middle- and lower-income families and thereby harming most those who can afford it least.

The Congressional Budget Office (CBO), in its 2013 assessment titled “Effects of a Carbon Tax on the Economy and the Environment,” plainly states: “A carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy.”

Click here to read the full coalition letter.

Click here to read AEA’s 10 Reasons to Oppose a Carbon Tax.

Filed Under: Carbon Tax, Press Releases Tagged With: carbon tax, Obama, oil tax

Sorry, Mr. President: Turns Out We Can Drill Our Way to Lower Gas Prices

February 23, 2016 by AEA 4 Comments

Four years ago today, President Obama proclaimed, “we can’t just drill our way to lower gas prices.” Once again, President Obama is on the wrong side of history. In 2012, gasoline was $3.72 per gallon. Today, it is $1.73 a gallon.

What’s changed is a massive increase in world oil production—almost all of which came from the United States. The chart below shows the increase in total world oil production in red and the increase in oil production from the U.S. Nearly 82 percent of the total increase came from the U.S. alone.

Source: EIA, International Energy Statistics, Total Oil Supply,
https://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=53&aid=1

Since the president made his claim, U.S. monthly oil production has increased by 52 percent. The price of a barrel of oil has fallen by over 70 percent since June 2014. And thanks in large part to technological advancements in hydraulic fracturing, subsurface imaging, and horizontal drilling, 95 percent of oil producers can extract crude oil for under $15 a barrel; a 30 percent increase since June of 2014.

The benefits of these innovations have rippled throughout the economy. Gas prices have dropped by more than 50 percent since February 2012, putting more money in Americans’ pockets. That means many low-income households, who spend a larger portion of their incomes on energy than wealthier households, may no longer have to choose between essentials like food, heating, and electric bills.

And as a recent study from the Institute for Energy Research shows, Americans would have even more money to save and spend if the Obama administration stopped holding our resources under lock and key. According to the study, opening federal lands to energy production would increase annual GDP by $127 billion, create 552,000 jobs a year, and raise annual wages by $32 billion over the next seven years. It’s the best economic stimulus the American people could ask for.

But instead, President Obama recently proposed a $10 tax on oil, which will raise gas prices by 24 cents a gallon. The oil tax sums up the president’s energy policy, which has consistently ignored the benefits of promoting affordable, reliable energy production—and endeavored to shut it down.

Much has changed in the last four years, as American energy producers have consistently innovated and reduced costs for families and motorists. In spite of President Obama’s previous claims and restrictive policies, increased energy production has provided hard-working Americans with lower gas prices. Imagine what we could do if the next administration simply let Americans get back to work?

Filed Under: Energy Development Tagged With: gas prices, hydraulic fracturing, Obama, oil, oil production, oil tax

Gov. Pence Stands Up for Indiana Families

February 22, 2016 by AEA Leave a Comment

Governor Confirms that Indiana Will Not Begin Work on EPA Carbon Rule

WASHINGTON — In a recent interview, Indiana Governor Mike Pence confirmed that Indiana would remain steadfast in their opposition to EPA’s carbon regulation following the Supreme Court’s stay of the rule.

American Energy Alliance President Thomas Pyle issued the following statement:

“Governor Pence’s decision is a great sign for Indiana families and businesses. The governor recognizes there is no reason for his state to waste precious time and resources on an increasingly legally dubious regulation, especially one that would increase electricity rates for his citizens. Even EPA Administrator Gina McCarthy acknowledged that nothing is going be implemented while the stay is in place.

“We encourage other governors and state leaders to follow the lead of Governor Pence, as well as Governor Walker of Wisconsin, and protect their citizens by ceasing all efforts to comply with EPA’s regulation.”

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: Uncategorized Tagged With: electricity, EPA, Governor Pence, Indiana, Obama

Why the Colorado Coal miners need you

February 17, 2016 by Mike Morrison 35 Comments

In March of last year, I had the privilege of traveling to northwest Colorado to film AEA’s “Eye of the Storm” video which chronicled the threats radical environment activists were making against the communities of Craig and Meeker. Thankfully, with your help, we were able to convince the federal government that the Colowyo mine should stay open. Unfortunately, the mine and these communities are under threat yet again.

While in Craig and Meeker, Colorado, I was blown away by the people that I met. Every person knew just how important energy is to their community. From the mayor to the hotel concierge, every single person I spoke with had a personal story about how the energy their community produces and responsibly utilizes makes their lives better. And as many miners pointed out to me, their work provides affordable, reliable energy to the entire region.

Father and son, who work together at Colowyo

Visiting the Colowyo mine was a surreal experience. At first, you drive up a winding dirt road through checkpoints, until you finally reach the mining area. Colowyo is a surface mine situated between the towns of Craig and Meeker. Cresting the ridge and looking down on the pit, you see these bright yellow trucks scurrying around with dirt and coal, but from that distance you can’t tell how massive they are. Realizing the immense scale of this project and the work these men and women do every day is profound—and in a way, beautiful.

One real surprise to me is that soon after stepping out of the truck at the mine, I noticed wildlife. You do not expect to visit a mine and see elk, antelope, deer, and even an owl, but I saw all four within the first hour of our time there. The staff pointed with pride to the areas that had been previously been mined, but were now restored and how well the land and wildlife were thriving.

After an area is mined, the company is obligated to return the land to “reclaim” the land which means to restore it to its prior state. This can take decades of care. The workers proudly pointed out previously reclaimed land, showing us areas where deer routinely bed down to sleep and eat. Nearly every miner was also an avid outdoorsman, enthralled with hunting and fishing, which the area offers in abundance. Clearly, responsible resource management was important to this talented crew.

Unfortunately, the mine and the wonderful communities it supports are now at risk. The federal government owns this land and President Obama has imposed a moratorium on new coal leasing. At the same time, EPA is trying to impose their “power plan” to reduce the use of coal to generate electricity, which would inevitably drive up electricity rates across the country. The president’s attacks on energy production, if they succeed, will devastate rural communities and threaten the continued operation of the Colowyo mine.

Right now the Office of Surface Mining Reclamation and Enforcement (OSMRE) is taking citizen comments on the Colowyo coal mine’s continued operations. They are considering whether the miners should be allowed to finish their planned work, or if the project should be ended early. Any shutdown would result in the immediate loss of more than 220 jobs and more than $200 million in economic activity in the community. Thankfully, the OSMRE wants to hear what you think about this project.

Downtown Craig, CO

You can help support this wonderful community and the energy they provide by sending an official comment to Obama’s Office of Surface Mining Reclamation and Enforcement (OSMRE). It’s important that the OSMRE hears that citizens support energy production and the responsible use of federal resources. We’ve made it easy to send a comment in: simply use this tool and send your official comment today. Together, we can send a message to the Obama Administration and help communities like Craig and Meeker across the country.

Filed Under: Blog, Climate Tagged With: CO, coal, Collum, colorado, Colowyo Mine, Craig, Trapper Mine

STOP WORK: States Should Cease All Efforts to Comply w/ Carbon Rule

February 12, 2016 by AEA 1 Comment

WASHINGTON — In response to the Supreme Court’s stay of the EPA’s carbon rule, or “Clean Power Plan,” AEA is mailing “Stop Work” orders to all Governors and other state officials urging them to immediately cease all efforts to comply with the rule.

Any action to comply with the rule before full legal resolution would be imprudent and a disservice to ratepayers. Speaking to a Congressional committee, EPA Administrator Gina McCarthy said, “Nothing is going to be implemented while the stay is in place. It is clearly on hold until it resolves itself through the courts.”

Thus, we’re delivering these orders to Governors, State Environment Departments, Public Utility Commissions, and State lawmakers.

States cannot be punished for waiting, since under the stay the compliance timeline no longer applies. With the stay in place and the future of the rule in jeopardy, there is no reason for states to move forward until litigation concludes.

AEA President Thomas Pyle issued the following statement:

“The Supreme Court rightly put the brakes on President Obama’s harmful climate agenda when it stayed EPA’s carbon regulation. But the fight doesn’t stop there. We are urging state leaders, including governors, public utility commissioners, legislators, and environmental agencies to put down their pencils and cease all efforts towards complying with the carbon regulation until the legal challenges have fully run their course.

“This ‘Stop Work’ approach is the best way for state leaders to protect their citizens from the higher energy costs and job losses that this unlawful regulation would undoubtedly cause. As a country, we should focus on ways to make electricity more affordable, not on implementing regulations that will raise energy costs, which hit the poor and middle class the hardest.”

You can visit www.StopWorkNow.org to find out more.

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Filed Under: Press Releases Tagged With: carbon rule, energy costs, EPA, stop work, Supreme Court

On EPA Rule, SCOTUS Stands Up For The Little Guy

February 9, 2016 by AEA 1 Comment

WASHINGTON – American Energy Alliance President Thomas Pyle issued the following statement on the Supreme Court’s decision to issue a stay on the Obama administration’s carbon rule:

“This is a significant victory for the American people and a strong rebuke of the Obama administration’s heavy-handed regulatory agenda. The Supreme Court should be applauded for standing up for American families after the D.C. Circuit failed to do so.

“The Supreme Court’s decision sends a clear signal to state leaders that they must avoid making any binding commitments until the legal process plays out, especially because EPA’s regulations are looking increasingly legally dubious. States should continue to pursue actions, such as legislation, to stop utilities from continuing their trend of shutting down low-cost, reliable power plants. A ‘do no harm’ approach, meaning avoiding binding commitments, is the best way to protect the American people from higher electricity costs. Now more than ever, states should follow this ‘do no harm’ approach.

“It is far too rare for the courts or Congress to back the little guy against red tape from Washington bureaucrats. Fortunately, that’s exactly what happened today.”

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Filed Under: Press Releases Tagged With: carbon rule, electricity, EPA, Obama, power plants, Supreme Court