Daily on Energy: Trump EPA leaves overhaul of key pollution rule at risk by using Obama’s numbers

Trump EPA officials and many in the coal industry have made clear they thought agency officials then went way too far and counted too many benefits, ones that weren’t directly associated with mercury reductions (so-called “co-benefits”).

In a long-awaited rule Thursday, the Trump EPA sought to correct the record, eliminating the legal basis for the mercury standards (known as the MATS rule) by performing what EPA Administrator Andrew Wheeler called an “honest accounting.” The EPA relied only on the direct benefits of mercury reductions, which, at $4 million to $6 million, didn’t come close to outweighing the $9.6 billion cost of controls.

But critics, including environmental groups, Democratic attorneys general, and former EPA officials, say the agency made a glaring mistake: It used the nine-year-old numbers from the Obama administration’s analysis.

That’s despite the EPA having years’ worth of actual data about how much utilities spent to comply with the rule, the critics say. And it’s despite evolving scientific research showing that the direct benefits of mercury reductions could be greater than previously estimated. That includes studies linking mercury to increased risk of heart attacks.

Some of those recent health studies measure the benefits of mercury reductions “in the billions, not millions,” said Mary Evans, a professor of environmental economics at Claremont McKenna College.

At the very least, the EPA should revisit the relationship between mercury emissions and public health, Evans told Abby. Evans co-chaired the EPA’s Environmental Economics Advisory Committee, which Trump officials disbanded. The committee conducted a review of the Trump EPA’s MATS finding that detailed several of these issues.

EPA acknowledged it didn’t do any new analysis: An EPA official told reporters Thursday that the information appearing in their new finding is “consistent with the 2011 calculations entirely.” The Trump EPA’s finding simply removes the co-benefits of fine particulate matter reductions also captured by the mercury controls. Those co-benefits accounted for a bulk of the benefits the Obama EPA had outlined.

Wheeler, speaking to reporters on Thursday evening, said the EPA typically doesn’t do new analysis for rulemakings like this. “We take the costs and benefits as we found them,” he said. “Changes to that would have been contrary to what we typically do” in these kinds of efforts.

Does this leave the EPA vulnerable to legal attack? Critics are already using the magic legal words.

“This is the hallmark of arbitrary and capricious, a failure to look at the information in front of you in your own record,” said Ann Weeks, senior counsel and legal director of the Clean Air Task Force. She also told Abby EPA officials “haven’t bothered” to quantify the benefits of reductions in the 80+ other air toxics, including nickel, arsenic, and acid gases, emitted from fossil fuel plants that are also covered by the EPA’s regulation.

Fine particulate matter reductions are often used as a proxy to help quantify the benefits of reductions of those other air toxics, Weeks said.

“This administration is simplistically, stupidly simplistically, saying, ‘Well, that’s fine particles so it doesn’t count,’” she said. “That just is a denial of science.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

INCOMING…CHEAP SAUDI OIL TO THE GULF COAST: A flood of cheap Saudi oil in tankers carrying roughly seven times the normal monthly amount is coming to the U.S, threatening to worsen an already historic glut and price crash.

Most of the tankers are set to arrive in May, according to new reporting from the Wall Street Journal this morning, bringing almost 32 million barrels to Texas and Louisiana ports. That would be the largest month for Gulf Coast imports of Saudi crude in more than six years, the Journal reported.

The tankers took off for America before Saudi Arabia changed course from its strategy of flooding the market after the temporary breakup of its OPEC+ pact with Russia. OPEC+ has since agreed to a deal to cut oil production by nearly 10 million barrels per day in order to raise prices and ease the glut.

The Journal said some of the incoming crude could still be rerouted, with the Trump administration and Republicans in Congress monitoring the situation, armed with data showing U.S. crude oil stockpiles increased by a record 19.2 million barrels last week, according to the Energy Information Administration.

THE NUMBERS TELL THE STORY OF MARKET CHAOS: U.S. refineries used less capacity last month than at any point in the last five years, according to the American Petroleum Institute’s monthly statistical report for March.

Crude oil production of 12.9 million barrels per day represented the first monthly decrease in March since 2010, before the shale boom, the report released Thursday showed. The U.S. returned to being a net oil importer last month.

Demand for petroleum, including jet fuel and gasoline for transportation, decreased by 0.9 million barrels per day (4.6%) from February, dropping to 19.4 million barrels per day. Consumer motor gasoline demand was 8.2 million barrels per day in March, down 8.7% from February.

The U.S. benchmark West Texas Intermediate oil price, averaging $29.21 per barrel in March, fell that month by the most on record since 1946.

TRUMP’S SOLAR TARIFFS WILL EXTEND TO BIFACIAL PANELS: The U.S. Trade Representative is withdrawing a prior exclusion for bifacial solar panels, saying in a Federal Register notice Friday the exclusion is “undermining the objectives of the safeguard measure.”

The Trump administration issued the section 201 tariffs on imported solar panels and modules in 2018. They started at 30%, with a decrease of 5% each year through 2021. The solar industry had sought, and won, an exclusion for bifacial panels. But the U.S. Trade Representative now says that exclusion “disincentivizes” U.S. production and hampers domestic manufacturers’ ability to increase sales to utilities, the fastest growing buyers of solar panels in the U.S.

What the industry has to say: Solar developers had initially sought the exclusion because there “will be for the foreseeable future, an acute shortage of domestic panels used in utility-scale solar projects,” said John Smirnow, vice president of market strategy and general counsel for the Solar Energy Industries Association, in a statement. Removing the exclusion “will needlessly increase the financial burden on America’s energy consumers,” he added.

The solar industry has already estimated the tariffs will cost 62,000 jobs between 2017 and 2021 and result in a loss of $19 billion in investments.

2019’S STRONG TAILWINDS: The U.S. added 9.1 gigawatts of wind power in 2019, pushing wind power to the largest provider of renewable energy in the country at 7% of last year’s generation, the American Wind Energy Association said Thursday in its annual report.

A few notable records set in 2019: For the first time, two states, Iowa and Kansas, generated more power from wind than any other resource — more than 40% of each state’s electricity last year. More utilities owned wind projects in 2019 than ever before, with power companies adding just under 2.5 GW last year. 2019 was also a record year for corporate and other non-utility purchases of wind, Celeste Wanner, a research and analytics manager for AWEA, told reporters. Twenty-two companies, including Ford, McDonalds, Gap, and Sprint, signed first-time wind deals in 2019. And for the second year in a row, Google ranked among the top 10 wind purchasers in the country. (The rest of the top 10 are utilities.)

But the coronavirus creates some headwinds in 2020: AWEA has estimated 25 GW of new projects are at risk, which equates to $35 billion in investment, tens of thousands of jobs, and $8 billion in tax and land lease payments to local communities, said John Hensley, AWEA’s vice president of research and analytics.

Offshore wind projects could also take a hit, even as they’re largely in very early stages of development. For example, Hensley noted that some surveys offshore projects have to complete, particularly related to wildlife, require workers to be on site for a specific window. If a certain species is only there for a certain time of year, “you may miss a full year before you’re able to come back and complete that survey again,” he said.

EPA’S VIRUS ENFORCEMENT POLICY DRAWS A LAWSUIT: A coalition of environmental groups are suing the EPA to force it to immediately publicly disclose any companies that seek enforcement discretion for routine pollution monitoring and reporting during the pandemic.

The EPA’s temporary enforcement discretion policy has drawn the ire of Democratic lawmakers, state attorneys general, and environmentalists, who have all blasted it as a potential giveaway to polluters. Several environmental groups petitioned the EPA to issue a rule requiring companies to document and justify to the agency any pause in pollution monitoring, and requiring the EPA to make those notices public. California’s attorney general has also backed the petition, which the agency hasn’t responded to yet.

“Late disclosure of such violations—six months or a year down the road—is of no help; the harm will be done,” reads the lawsuit filed Thursday by the Natural Resources Defense Council, Public Citizen, and several environmental groups. They add the EPA’s policy is “especially dangerous” given recent research showing areas with greater long-term exposure to air pollution are experiencing higher death rates from the coronavirus.

SPEAKING OF LAWSUITS… Clean energy groups hinted Thursday they are preparing to sue after FERC’s Republicans declined to review the commission’s controversial December decision targeting state-issued clean energy subsidies in the PJM power market.

“We will be exploring our options to ensure that state policies are respected and renewable deployment moves forward,” said Gregory Wetstone, president and CEO of the American Council on Renewable Energy.

FERC Republican Chairman Neil Chatterjee defended the decision in a phone call with reporters after the commission’s remote meeting.

“I am a big believer in markets and competition,” Chatterjee said. “That is the essence of what the commission is trying to protect. I am also a big believer in the business case for renewables. They can compete without subsidies.”

The chairman also swatted away concerns that states providing clean electricity subsidies could exit the nation’s largest power market.

“Organized competitive markets bring significant benefits to consumers,” Chatterjee said. “State leaders will be very hard pressed to ignore that.”

FERC is making exceptions to what would trigger the “price floor” in PJM, excluding renewable energy credits purchases voluntarily, rather than through state mandates. The Regional Greenhouse Gas Initiative, an electricity cap-and-trade program that includes some PJM states, will also not be subject to the price floor.

OIL COMPANIES PAY ‘BARGAIN’ RATE FOR PUBLIC LANDS’ DRILLING, ANALYSIS SHOWS: Oil and gas companies paid $2 per acre or less for 30% of all public lands currently under lease that were purchased since 1987, a rate that environmental groups consider a bargain that has shortchanged taxpayers and encouraged speculation.

Those low payments incentivize oil and gas companies to sit on leased public lands without developing it, said the Wildnerness Society and Center for Western Priorities in an analysis released Thursday. Leases purchased for $2 per acre or less expire or are terminated at higher rates than leases purchased competitively, the groups said.

As of February, nearly half (47%) of the 22.1 million acres leased by oil and gas companies across 10 states in the West are currently sitting idle and undeveloped.

That prevents those lands from being protected for conservation or managed for recreation, the groups said.

Since 2017, the analysis showed, the Trump administration has offered 24.5 million acres of public land for leasing to the oil and gas industry, with only 5.2 million of those acres offered actually leased.

The Rundown

Washington Post The western US is locked in the grips of the first human-caused megadrought, study finds

Reuters Trump administration looking to ease drilling industry cash crunch

Politico Trump Interior official helped clear way for payments to ex-employer

New York Times ‘There’s no more water’: Climate change on a drying island

Vice Michigan’s ex-Gov. Rick Snyder knew about Flint’s toxic water—and lied about it

Calendar

FRIDAY | APRIL 17

Neither the Senate nor the House is expected to meet before May 4.