U.S. formally proposes scrapping Obama's carbon-cutting plan

[October 11, 2017]  By Timothy Gardner and Emily Flitter

WASHINGTON/NEW YORK (Reuters) - The head of the U.S. Environmental Protection Agency formally proposed on Tuesday to scrap the agency's Obama-era plan to reduce greenhouse gas emissions from power plants, as the Trump administration seeks to slash fossil fuel regulation.

EPA Administrator Scott Pruitt issued a notice that the agency intended to repeal the Clean Power Plan, which it said relied on controversial calculations of economic costs and benefits.

The agency said it is "committed to righting the wrongs of the Obama administration by cleaning the regulatory slate."

The EPA is obliged to regulate carbon emissions after it found in 2009 that pollution caused by such emissions endangers human health.

But it left open the question of when a new plan would emerge. "Any replacement rule will be done carefully, properly, and with humility, by listening to all those affected by the rule," said the EPA.

Pruitt said on Monday in Kentucky that he would sign the repeal proposal, but the EPA unveiled the notice in a press release on Tuesday with little fanfare.

Ending the plan could save up to $33 billion in compliance costs in coming years, it said.

The move is part of Republican President Donald Trump's plan to revive the coal industry and boost domestic fossil fuel output. His administration has promised to reduce regulations on coal and drilling, which tend to be in states that form part of Trump's voter base.

But environmentalists and other supporters of the plan said Pruitt's cost estimates "cooked the book" and did not fully consider billions of dollars in savings from reduced medical bills that would result from steep cuts in pollution from coal.

The estimate also did not fully consider the future damage done from carbon emissions and the costs of U.S. carbon pollution abroad, critics say.

The EPA did not issue a timeline on replacing the plan, only saying it would issue a rule in the "near future."

The ambiguity could delay fresh investment in electricity generation, an industry rife with aging plants, analysts said.

"This doesn't help steady the waters at all with regards to where the next billion dollars should be spent" by power companies, said John Larsen, a director at economic research consultancy the Rhodium Group.

Environmental Protection Agency Administrator Scott Pruitt speaks during an interview for Reuters at his office in Washington, U.S., July 10, 2017. REUTERS/Yuri Gripas

ALTERNATIVE STRATEGIES

The Clean Power Plan was finalized in 2015 but never came into effect. Last year, the Supreme Court put the brakes on it after energy-producing states complained the EPA had exceeded its legal reach.

The plan had sought to reduce emissions from power plants by 32 percent below 2005 levels by 2030.

Pruitt said the plan went beyond the law by forcing plants to take action to cut emissions not just at the plants but also "outside the fence line" - for instance, by investing in renewable energy.

Electricity generators have pressured the Trump administration to not simply kill the plan but to form an alternative strategy, so they can avoid any future lawsuits for not taking action on emissions.

An alternative plan could require plants to make boilers more efficient, for instance, but that could result in fewer overall emissions reductions, environmentalists say.

Republicans praised Pruitt's move. Senator John Barrasso, chairman of the Senate's environment committee, said the Clean Power Plan would have hurt energy workers in his state of Wyoming, the country's top coal producer.

David Doniger, a lawyer at non-profit environmental group the Natural Resources Defense Council, said it would put Americans in greater danger from extreme weather and particulate pollution from coal plants, linked to heart and lung problems.

Doniger said Tuesday's action would trigger a legal battle, and promised to take "Pruitt and his Dirty Power Plan to court."

(Reporting by Timothy Gardner and Emily Flitter; editing by Rosalba O'Brien)

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