Why Trump's EPA Rollback to End 'War on Coal' Won't Rescue Industry

President Donald Trump is scaling back sweeping Obama-era curbs on greenhouse gas emissions from power plants burning coal, his biggest step yet to fulfill his campaign promise to stop a “war” on the fossil fuel.Yet the Environmental Protection Agency’s rewrite of the Clean Power Plan — which is being unveiled Wednesday — will do little to halt a nationwide shift away from coal and toward cheaper electricity generated by the wind, the sun and natural gas.

The U.S. is experiencing “a wave of coal retirements — and we don’t think we’re near the end of it,” said Nicholas Steckler, head of U.S. power for BloombergNEF. “Coal is inferior to natural gas in many ways today — it’s less flexible, it’s higher cost, even its fuel is generally more expensive, and, of course, it’s dirty. It has so many reasons stacked against it.”

Where the new plan focuses on what can be achieved at individual coal plants, the Clean Power Plan it is replacing aimed to drive broader changes in the U.S. electric mix and threatened to spur a wave of coal plant closures. That measure — one of former President Barack Obama’s signature initiatives to combat climate change — compelled states to make systemwide changes in the name of cutting emissions, from bolstering energy efficiency and adding renewables to shutting coal-fired plants altogether.

The EPA’s final “Affordable Clean Energy” rule is designed to pare carbon dioxide emissions by encouraging efficiency upgrades at individual power plants. Like an earlier proposal released last October, the final rule will empower states to develop performance standards for plants based on assumptions about the kind of efficiency gains — known as heat-rate improvements — that can be eked out by plugging duct leaks, installing advanced soot blowers and making other upgrades at the sites.

Environmentalists have already vowed to battle the replacement rule in federal court, setting up potential legal wrangling that could last years.

Industry advocates say the Trump administration is curbing federal government overreach and leveling the playing field.

“It won’t necessarily be the saving grace for coal,” but “this regulation gives coal a fighting chance,” said Nick Loris, an economist with the Heritage Foundation. The EPA is following the rule of law and removing “government-imposed barriers that will lead to increased innovation, competition and efficiency that will ultimately drive down pollution.”

The EPA’s new approach is rooted in Clean Power Plan foes’ arguments that the agency does not have legal authority to regulate emissions beyond the boundaries of existing plants. In some cases, efficiency gains spurred by the new rule could encourage utilities to run their coal power plants more often, undercutting potential environmental benefits.

The flexibility for states in the final rule should help stave off premature coal plant closures, said Michelle Bloodworth, president of the American Council for Clean Coal Electricity. “These improvements to coal plant competitiveness will help to increase the longevity of the existing fleet,” she said.

The Obama initiative also was seen by some as discouraging electricity made from natural gas.

“Besides exceeding EPA’s legal authority, the Clean Power Plan was also written to reduce gas and nuclear generation,” said Christopher Guith, acting president of the Chamber of Commerce’s Global Energy Institute. “That’s counterproductive climate policy and bad energy policy.”

Environmentalists attacked the Trump administration proposal, saying the EPA was shirking its responsibility to protect public health and the environment. The power plant measure comes as the agency separately moves to ease rules curbing greenhouse gas emissions from automobiles and oil wells.

“Any rule that resembles the proposal would amount to a do-nothing program that fails to protect Americans from climate change and fails to fulfill EPA’s responsibilities under the Clean Air Act,” said Sean Donahue, a lawyer representing the Environmental Defense Fund.

On the campaign trail in 2016, Trump promised to revive the coal industry and restore mining jobs — a message that resonated with the working-class voters who helped elect him. In coal-rich West Virginia, a once reliably Democratic state, Trump won 68% of the vote.

The Clean Power Plan rewrite is the Trump administration’s most tangible move to deliver on that promise, though the EPA has also proposed lifting a de facto requirement that any new coal power plants be built with expensive carbon-capture technology. The agency also has proposed that limits on mercury pollution from power plants are no longer “appropriate and necessary.”

Yet state regulations are also encouraging utilities to adopt more renewable wind and solar power. At the same time, the lower cost and cleaner-burning profile of natural gas has encouraged a shift toward that fossil fuel.

Power plant owners are unlikely to make dramatic shifts in their plans and portfolios based on the Trump administration policy change, especially given the prospects a new president could reverse course as soon as 2021 and amid competing pressure from state policies, said Bloomberg Intelligence analyst Kit Konolige.

“The economics and the desire in many jurisdictions for clean power continue to be the strong drivers of what gets done on the ground,” Konolige said.

While states and utilities with a significant amount of coal will have “more flexibility,” under the Trump administration approach, “everyone’s moving in the direction of eventually eliminating coal plants,” he said.

Some 65 gigawatts of coal-fired electric generating capacity have gone offline since 2011 — with another 41 gigawatts pending retirement and 105 gigawatts at risk of closure, according to BloombergNEF.

The Clean Power Plan never actually went into effect, having been halted by the Supreme Court in February 2016. Even without it, the U.S. is on track to meet its original goals of reducing greenhouse gas emissions 32% from 2005 levels by 2030, BNEF’s Steckler said.