Trump's EPA just handed these states a way to keep burning coal

The Trump administration is giving states a pathway to keep coal power plants running, and many will likely seize the opportunity.

The window opened Tuesday when the Environmental Protection Agency revealed its plan to scrap President Barack Obama's greenhouse gas regulations for the nation's power plants. The Trump administration intends to replace the rules with a policy that will make it easier for states to continue burning coal.

President Donald Trump on Tuesday suggested the rule would help keep the nation's embattled coal plants online, advancing his goal of reviving the coal industry.

"We're canceling Obama's illegal anti-coal destroying regulations, the so-called Clean Power Plan," he said during a rally in Charleston, West Virginia. "Just today we announced our new Affordable Clean Energy proposal that will help our coal-fired power plants and save consumers — you, me, everybody — billions and billions of dollars."

There are at least 16 states that oppose Trump's move, but many governors will welcome the reversal. More than two dozen U.S. states took part in a lawsuit to overturn Obama's Clean Power Plan.

Much of that opposition came from regions where coal plants are fighting to maintain their foothold: Appalachia, the Great Plains, the Midwest, the Southeast and Texas.

Coal-fired facilities — one of the biggest contributors to climate change — have accounted for about half of U.S. power plant closures over the last decade. Obama's Clean Power Plan was poised to accelerate those retirements by setting ambitious emissions targets for states. Those goals encouraged states to build more wind and solar farms or convert coal plants to natural gas-fired facilities.

Trump's replacement for the policy — the Affordable Clean Energy rule — instead asks states to submit plans to make coal plants run more efficiently by improving their heat rate, or the amount of heat necessary to generate a unit of electric power. That already lowers the bar for emissions reductions, but the EPA also says it won't set a minimum requirement. Policy analysts say that will likely spark a race to the bottom in much of the country.

"Many states will try to find ways to opt out by putting in really modest standards," said David Konisky, an associate professor at Indiana University's School of Public and Environmental Affairs. "States may have the ability to put in place rules that are in the spirit of addressing climate change but they are not really significant."

The question is, where will weak rules have the greatest impact on climate emissions? To start, about 20 states still burn a significant amount of coal to generate power.

The states with the biggest incentive to take advantage of that leniency include Wyoming, West Virginia and Kentucky, according to Daniel Lashof, who leads U.S. operations for the World Resources Institute. All three states share two things in common: They are some of the nation's biggest coal producers, and they generate a lot of their electric power at coal-fired plants.

Pennsylvania and Illinois are also in the top five for coal production and the top 10 for coal-fired power generation. However, they're also among the states with Renewable Portfolio Standards, or policies that set goals for expanding clean power.

Wyoming and Kentucky haven't adopted standards, and West Virginia repealed its standards in 2015. There are 11 states with no standards, and eight with voluntary policies.

Politics will also play a role in the rulemaking. The coal industry has long wielded political influence, especially in conservative circles, and Republicans tend to oppose expansive federal regulation.

Republicans occupy the governor's mansion in 16 of the top 20 states for coal-fired generation. This year's race for governor in three of those Republican-held states — Ohio, Michigan and Florida — is listed as a toss-up by the Cook Political Report, and Illinois is currently leaning toward the Democratic candidate.

"I think you have to be concerned about the politics driving some states to do as little as possible, but on the other hand, the competitive advantage of renewable energy sources is pushing in the other direction," Lashof said.

Texas is a good example of that. The Lone Star State is the nation's top generator of electricity from coal and its largest contributor to carbon dioxide emissions from the power sector.

But the state also has Renewable Portfolio Standards and a competitive power market that favors low-cost wind farms and natural gas-fired plants. So while Lashof expects Republican Gov. Greg Abbott's administration to submit relatively lax emissions rules, he believes market forces will keep pushing coal out of Texas' energy mix.

Until this year, most of the coal plants that retired were small and old. But in 2018, Texas retired three large coal plants built since the 1970s, removing 20 percent of the state grid's coal-fired capacity.

"Coal plants in Texas have a hard time competing regardless of what Texas does as a regulatory matter at this point," he said.

To be sure, it would be several years before Trump's rule takes effect. It will likely face legal challenges from environmentalists, and a future Democratic president would probably try to dismantle it.

Creating the opportunity for states to pass weak emissions rules opens the possibility for conflict among regions. Since carbon pollution doesn't respect state boundaries, some attorneys general could take the EPA to court over the Affordable Clean Energy rule.

Last year, eight Northeast states sued EPA after the agency declined to impose air standards on nine mostly Midwest states. The Northeast states said the decision allowed pollution from the Midwest to blow into the region.


Get the best of CNBC in your inbox

Please choose a subscription

Please enter a valid email address
Get these newsletters delivered to your inbox, and more info about our products and service. Privacy Policy.