Monday, December 5, 2016

Desperate Democrats turn to states to salvage climate agenda, but will it work?

By Johnny Kampis

President-elect Donald Trump seems intent on repealing the Clean Power Plan (CPP), one of the cornerstones of President Barack Obama’s environmental legacy. But don’t expect environmentalists to give up.

Instead, they will be taking the fight to the state level. But recent setbacks suffered by two attorneys general who sued Exxon over the company’s supposed suppression of climate change data don’t bode well for that strategy, either.

Meanwhile, the debate continues to simmer in federal court.

The CPP is an Environmental Protection Agency rule aimed at reducing carbon dioxide emissions from power plants by 32 percent from 2005 levels by 2030. On Feb. 9, the U.S. Supreme Court ordered the EPA to stop enforcement of the plan until the U.S. Court of Appeals for the District of Columbia Circuit could rule on a legal case brought by the energy industry and 27 states trying to halt implementation of the rule.

Trump has said dispensing with the proposed regulations will be a priority of his administration.

International financial firm UBS said during a recent conference call that the next step depends on the actions of the appeals court. If a decision hasn’t been made, Trump would likely ask the court for a stay to give his administration the opportunity to revise the current plan, said Tom Lorenzen, environmental rule expert for the law firm Crowell and Morning, during the UBS call.

“My guess is that we have some battles going on inside the D.C. Circuit at the moment, where the pro-EPA judges, those who want to write an opinion upholding the rule, are working feverishly to get that decision done and push it out before Jan. 20,” Lorenzen said. “The liberals on the court will want to get a decision on the books to lay down some markers before the Trump administration.”

David Rivkin and Andrew Grossman, two attorneys representing Oklahoma and the Oklahoma Department of Environmental Quality in their challenge to the CPP, recently wrote in a Wall Street Journal op-ed that one of Trump’s first orders of business should be axing that plan, using the executive order privilege that Obama frequently exercised.

“Even if a court were to find that the EPA’s interpretation of the Clean Air Act underlying the plan is permissible, that would still not compel the Trump EPA to accept that interpretation as the only permissible one,” they wrote. “And even if a court were to rule — erroneously, in our view — that the Clean Power Plan does not violate the Constitution’s vertical separation of powers, that would still not absolve the executive branch of the responsibility to consider that constitutional issue for itself and then act accordingly.”

Trump could still expect such an executive order to face serious scrutiny from advocates of the CPP, such as the Sierra Club and Center for Biological Diversity, which would likely appeal to the Supreme Court if the rule is reversed. Potential litigants would have 90 days after the appeals court decision to ask SCOTUS to take up the case.

Congress could moot the entire argument by refusing to fund implementation of the rule.

Has the Clean Power Plan already made a mark?

Robert Bryce, a senior fellow and energy-sector expert at the Manhattan Institute, told the CPP has already, in many ways, taken effect regardless of what Trump does.

“Sure, the states are fighting it, but overall, the goal of the Obama administration was to kill as much coal-fired generation as possible. That has happened due to increased regulations and lower-cost natural gas,” Bryce said. “So while some aspects of the CPP can be terminated by the new regime at EPA, the U.S. [has] already seen major cuts in its carbon dioxide emissions. And due to the political risk of the litigation over the CPP, electric utilities are simply not going to build any new coal fired plants.”

Trump has expressed interest in making a number of policy changes that could be a boon to the energy industry, from withdrawing from the international Paris climate accord to opening up federal lands to drilling for oil and natural gas and mining for coal. He has talked about shrinking the role of the EPA and eliminating many regulations.

Stephen Brown, vice president of government relations for oil refiner Tesoro, told the Washington Post the Trump administration will be much more energy-sector friendly than a Hillary Clinton administration would have been.

“The Clean Power Plan will die a slow death,” Brown hypothesized.

But as that same news story showed, environmental advocates don’t plan to quit. Erich Pica, president of Friends of the Earth, told the Post that “after the fights to kill the Keystone XL pipeline, the fights to ban fracking and the successful efforts to shut down coal plants, the environmental movement is stronger than we have ever been.”

Whether that self-assessment proves valid will be tested in state capitals over the next few years.

Finding few friends in the Trump administration, the green army is shifting its gaze to states, many of which are still taking steps to reduce carbon emissions despite the legal turmoil. That includes some states with Republican governors such as Arizona, New Jersey and South Carolina. Nearly 30 states have implemented renewable electricity standards that require utilities to increase their use of renewable energy.

Exxon takes on the AGs

Recent development in a fraud investigation, though, are not promising for the most extreme activists.

Massachusetts Attorney General Maura Healey and New York Attorney General Eric Schneiderman are to be deposed later this month in connection with fraud investigations the duo launched against Exxon. They claimed the oil giant committed fraud by questioning the conclusions of climate scientists in communications with investors and the public. Exxon argues the AGs were using political motivations to hurt the oil and gas industry.

Texas U.S. District Court Judge Ed Kinkeade gave the go-ahead for Healey and Schneiderman to be questioned. The two AGs were among a group of top state attorneys that said in March at the Al Gore-headlined conference “AGs United for Clean Power” they would sue oil companies for allegedly violating securities laws by downplaying the effects of climate change.

“Fossil fuel companies that deceived investors and consumers about the dangers of climate change should be, must be, held accountable,” Healey said at the conference. “We can all see today the troubling disconnect between what Exxon knew, what industry folks knew, and what the company and industry chose to share with investors and with the American public.”

Kinkeade said in a statement in October he was worried Healey’s subpoena of Exxon might come with “bias or prejudgment about what the investigation of Exxon would discover.”

Exxon had asked that court to throw out a subpoena that would force it to hand over decades of documents in relation to the fraud case.

“We have no choice but to defend ourselves against politically motivated investigations that are biased, in bad faith and without legal merit,” Exxon spokesman Alan Jeffers said of the depositions in a statement. “We did not start this, but we will see it through and will vigorously defend ourselves against false allegations and mischaracterizations of our climate research and investor communications.”

Late last month the Supreme Court of New York ruled that Schneiderman’s office failed to comply with the state’s Freedom of Information Law after the Competitive Enterprise Institute sought documents related to the AGs’ attacks on oil companies. The court said his office must submit a response to the original request within 30 days that “fully complies with the intent and purpose.”

CEI general counsel Sam Kazman said the decision was a blow to Schneiderman’s “anti-free speech campaign.”

“While the campaign by him and his cohorts that began in March continues against those who disagree with him on global warming, we are glad to see that it is being held subject to the basic laws of the land,” Kazman said in a statement. “By requiring Schneiderman to fully comply with our freedom of information request, the court is ensuring that agencies cannot use shortcuts as a means of skirting New York’s Freedom of Information law.”

This article originally appeared at

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