Following his appointment of professional Climate Change denier Myron Ebell to lead the transition at the Environmental Protection Agency (EPA), it has been clear that President-Elect Donald Trump was going to appoint someone to run the agency who was a deep loyalist to the fossil fuel industry.
Late yesterday we found out who that someone will be: Oklahoma Attorney General E. Scott Pruitt, who denies the scientific consensus on man-made Climate Change and has repeatedly sued the EPA to block regulation of power plants.
Pruitt’s appointment spells certain doom not only for President Obama’s Clean Power Plan, but also looks grim for federal regulation of power plants and the environment in general.
Since becoming Oklahoma Attorney General in 2011, Pruitt has sued the EPA to block the cross-state air pollution rule, mercury and air toxin regulations, joined Texas’ suit to block the Clean Power Plan, and even sued EPA on the bizarre allegation that it was encouraging environmental groups to sue states to force them to comply with EPA regulations.
Pruitt’s tenure as EPA will lead to dirtier air and fewer regulations on power plants. But as for how it will impact the energy sector, this is less clear. As we have written before, the Clean Power Plan is expected to have a minimal impact on U.S. solar markets.
These are largely driven by state-level renewable portfolio standards, state-level net metering policies, and increasingly by voluntary procurement and PURPA, a federal law which is implemented at the state level. EPA rules do not impact the U.S. Investment Tax Credit (ITC), the most important federal policy for solar.
Nor will the disappearance of EPA regulations necessarily revive the coal industry, as Donald Trump has promised voters. A number of utilities have stated that they expect to shut down more coal plants in coming years, largely due to the inability of these aging plants to compete with newer gas-fired power plants. And while the EPA mercury rule is also credited with having a negative impact on the economics of coal, the hardware to limit mercury emissions has already been installed on coal plants in the United States.
This does not mean there are no grounds for concern. Pruitt, acting as a mouthpiece for the oil and gas industry, has pushed back against EPA estimates of pollution from gas extraction. Wind and solar are primarily competing with new gas plants, and the elimination of regulations is likely to further lower the already rock-bottom cost of extracting gas through hydraulic fracturing.