0:03

It's a comprehensive set of rules and you

0:05

hear some criticism that, oh boy, they're

0:07

targeting coal. But in fact, I think

0:09

what the agency's point of view is,

0:11

is that they're trying to give the

0:13

industry, the power sector and

0:16

coal plant operators what they have long said they

0:18

want, which is a roadmap

0:20

that fits together, that gives them guidance

0:22

on all of the pollution control rules

0:24

that could affect their industry, their

0:26

plants, so they can plan their

0:29

investments going forward. In April,

0:31

the Environmental Protection Agency passed four

0:33

new rules to reduce pollution from

0:35

fossil fuel fired power plants. One

0:38

of the new rules requires many new

0:40

gas and existing coal power plants to

0:42

control 90% of their

0:44

carbon pollution if they plan to operate beyond

0:46

2039. The

0:49

other three rules specifically target coal,

0:51

requiring the industry to clean up

0:54

various parts of the value chain,

0:56

including toxic metal emissions from power

0:58

generation, wastewater pollution and

1:01

coal ash management. And

1:04

while the Biden administration and other

1:06

proponents consider the new rules a

1:08

step in the right direction, opponents

1:10

argue they will undermine the reliability

1:12

of energy systems. So

1:15

how will the EPA's new regulations

1:17

impact the energy industry? What

1:20

makes these standards different from previous

1:22

attempts to regulate energy emissions? And

1:24

how might opponents try to overturn

1:27

them? This

1:31

is Columbia Energy Exchange, a weekly

1:34

podcast from the Center on Global

1:36

Energy Policy at Columbia University. I'm

1:39

Bill Lovelace. Stay

1:47

in the show, Jody Freeman. Jody

1:50

is the Archibald Cox Professor of

1:52

Law and the founding director of

1:54

the Harvard Law School Environmental and

1:56

Energy Law Program. Ten

2:00

she served as a counselor for

2:02

Energy and Climate Change in the

2:05

Obama White House. Jody has also

2:07

previously served on the Advisory council

2:09

of the Electric Power Research Institutes

2:12

and as an independent director of

2:14

Conoco Phillips. I talked with Jodie

2:16

about her work on emissions standards

2:19

under the Obama Administration's and what

2:21

she learns about the regulatory process.

2:23

We also discussed the technicalities of

2:26

the new He P A power

2:28

Plant rules and the legal. Avenues

2:30

opponents my pursue to overturn

2:33

them. Hope you enjoy our

2:35

conversation. Jody. Framers: Welcome

2:37

to Columbia Energy Exchange. It's

2:40

great to the receiver. Well.

2:42

I appreciate your being here. it's us

2:44

an important issue that will be discussing

2:46

us but you know first as I'm

2:48

want to do I like to lead

2:51

of the audience, know a bit about

2:53

our guest and in your case of

2:55

yours has been a long and distinguished

2:58

career including work as a counsellor and

3:00

the Obama White House On Energy and

3:02

Climate Change. You seen the regulatory process

3:04

from the inside out. What did he

3:07

learn from that. Well,

3:09

I've learned that. Is complicated.

3:11

Regulating is something that a lot

3:13

of people think is burden some

3:16

entire scene. You hear a lot

3:18

of criticism of government, but I

3:20

understand from my experience how careful

3:22

and how devoted on the civil

3:24

servants are who are mandated require

3:26

by congress or regulates to control

3:28

to loosen and do other things

3:31

and the economy. I keep the

3:33

sudden drug supply saved, protect public

3:35

health and ah you know protect

3:37

consumers and all the rest. And

3:39

Seth's my experience. Really taught me

3:41

a lot about how to respect that

3:43

process is is certainly imperfect, but you

3:46

know I. I'm a believer in the

3:48

sack that the government has to regulate

3:50

to put some guardrails. Around a

3:53

market economy and and the

3:55

have transfer specs for that

3:57

initiatives and Climate Energy. The

4:00

relation is extremely. Complex and difficult.

4:03

It's hard to ensure that the

4:05

government gets it right, you want

4:07

to make sure the rules incentivize

4:10

the right kinds of behavior. But.

4:12

You also need industry to do it's

4:14

part. so I guess I have learned

4:17

from my experience that's everybody is necessary

4:19

here to make the system work. Government's

4:21

guys, his job or industries private sector

4:23

has. To step up to the plate

4:26

and my other role as an academic

4:28

at Harvard. You know the institutions like

4:30

that, research institutions. same with Colombia and

4:32

your center. You know we have

4:34

to do our part in doing

4:37

the research and and understanding the

4:39

complexity these issues to help both

4:41

the public and private sector and

4:43

deal with the challenges that we

4:45

face swelled. Now we've seen a

4:47

he critical element of the Biden

4:49

Administration's climate player notes: regulation from

4:52

the Environmental Protection Agency that would

4:54

force coal fired power plants to

4:56

virtually eliminated planet warming pollution that

4:58

they released into the error or

5:00

so dumps. How do would this

5:02

regulation work? Well firstly

5:04

put it in context of so these are going

5:07

to be. Once implemented, the first

5:09

several rules to regulate the

5:11

power sector comprehensively and these

5:13

rules are about setting standards

5:15

for C O Two from.

5:18

The existing fleet of coal fired plants

5:20

and new actual gas plants are, but

5:23

we also anticipate that if he a

5:25

will be setting standards, For existing

5:27

gas plants in the coming

5:29

sort period said that will

5:31

be a comprehensive regime to

5:33

control a carbon pollution from

5:36

one of the major contributing

5:38

sectors in the Us economy.

5:40

So. If you consider that

5:42

the transportation sector cars and trucks

5:44

is the largest. Contributor of Ghg

5:46

emissions the Us economy and we see

5:48

that the power sector is seconds. We

5:51

also Cdt a setting standards for oil

5:53

and gas A related methane emissions they

5:55

are trying under the Clean Air Act

5:58

to do with that last set. Switches

6:00

to control pollution from all the major

6:02

sector is that endanger health and welfare.

6:05

so just. To put that in context

6:07

is not the Dps somehow decided oh cool.

6:09

Yo to say my call it that the Clean Air

6:11

Act says we have deal with police part of a

6:13

bigger plan. Part of the are plan. And but

6:16

this package that you're. Talking

6:18

about the recent package regulating

6:20

coal fired plants and new

6:22

natural gas plants, His focus

6:24

nice assigned to each deeply sense

6:26

that they also put out. A

6:28

rule to regulate mercury and air

6:30

toxics. The Up: Update the rules.

6:33

For that for power plants. they also

6:35

set new estimate limit guidelines under the.

6:37

Clean Water Act to control water

6:39

pollution for plants. The will operate

6:41

over the long term and they

6:43

also addressed call combustion residuals otherwise

6:45

known as cool. As an

6:47

especially legacy impoundments that cause

6:50

problems for water pollution. But.

6:52

Also can cause problems for.

6:54

Land these clues and so is. This is

6:57

a conference. A set of rules and you

6:59

hear some criticism that old boy, they're targeting

7:01

cold That in fact, I think that the

7:03

agency's point of view is is that they're

7:06

trying to give the industry. The

7:08

power sector and cool plan offers.

7:10

What they have long said they once

7:12

which is a road map that sit

7:14

together that gives them guidance on all

7:17

of the pollution. Control rules or to

7:19

the second their industry their plants so

7:21

they can plan their investments. Going forward.

7:24

So instead of doing a piecemeal and singer.

7:26

Here's one rule on air pollution. Here's

7:29

rule. More pleasant. They put together a

7:31

package for everything that addresses ah, the

7:33

use of coal to produce energy and

7:35

Das with these new rules represents and

7:37

we could talk more about some of

7:40

the. Features that

7:42

are attracting conflict and and very likely

7:44

legal challenge. but I'll I'll leave it

7:46

there for that. Yeah them and across

7:49

as always going to be that whenever

7:51

you have proposes like this and regulations

7:53

I'm the The Impact on coal dust

7:55

stand out coal power plants. It would

7:58

require a coal plants that. That

8:00

plan to stay open beyond Twenty

8:02

Thirty Nine to cut or capture

8:04

ninety percent of their C O

8:06

Two emissions by Twenty Thirty Two.

8:08

Again, that really stands out. I

8:10

think in this new rules. Yet.

8:12

Less of a comment them and there's a scene. Through

8:14

this will this was rise really complicated

8:17

because it out and try to read

8:19

them yeah the minds then secure a

8:21

civilian. Other Another somebody say said that

8:23

it is legal and regulations that. There's

8:25

a theme or to that that helped

8:27

make the make sense. As you said

8:29

if is of this of plan is

8:31

gonna retire by twenty thirty nine stand

8:34

it doesn't have to meet the test

8:36

the standard. Which is based on carbon capture

8:38

and sequestration and ninety percent reduction standard. You

8:40

meant it's if you retire before twenty three

8:42

nights, you can for. Example: Meet the

8:45

standards by cove firing with natural

8:47

gas. If. You

8:49

retire before twenty thirty two. Then

8:51

you are exempt from the rule

8:53

entirely. So. What's the same here

8:56

at the Seem? As if you're gonna run

8:58

your coal plant in perpetuity past twenty three?

9:00

Not, You're going to have to meet the

9:02

toughest standard of pollution control, which is based.

9:04

On carbon saffron sequesters and

9:06

technology. And that makes

9:08

some sense because you know. If

9:10

you're gonna opera in perpetuity needed to

9:13

seventy control your harmful pollution, and if

9:15

you're gonna retire earlier, you have to.

9:17

Do less. And so the stairs of

9:19

economic logic to the rule that says

9:21

a little. Want to make these owners

9:24

of coal plants invest in pollution control

9:26

and they plan to retire anyway. So

9:28

many of these power plants are likely to

9:31

be coal fired. Power plants are to be

9:33

are operating, erm, you know, beyond a twenty

9:35

thirty nine. Anyway, Well that

9:37

may be true, but of course you want

9:39

the rules to sync up with the trend

9:41

in the industry. This happen anyway and they

9:43

do this with they're really trying to say

9:45

as well as you say. That retire you

9:48

eat, you really need to. And

9:50

if you don't then you're gonna have to me. The

9:52

tougher set of controls. And that

9:54

that makes some sense. that the

9:56

standards for new gas plants are

9:58

basically have some. The graduated approach meanings.

10:01

Look, if you lose, Issue is to

10:03

use your plan a lot if it's.

10:05

Gonna be used as be slowed

10:08

over forty percent. Of it's capacity.

10:10

Then you have to me. That us a

10:12

standard based on what you can accomplish

10:14

to produce flu Since are using Ccs

10:16

Carbon Cap to seek assistance. But if

10:18

your loot using the plant less say

10:20

twenty to forty percent of the capacity

10:23

of the plants then you me the

10:25

less stringent standards and and so on.

10:27

And so the idea is that if

10:30

you're using your natural gas plant as

10:32

a p for plat very infrequently. Then

10:35

you're not. Going to be subject to

10:37

the very strict standards. so there's a

10:39

sort of a select the bull and

10:41

graduated approach that that runs through the

10:43

rule that. That makes some sense and

10:45

I should mention to the idea here

10:48

is it. This is typical. Performance Standards

10:50

which translates in English and

10:52

to. Win! The Environmental

10:54

Protection Agency says the standard it

10:56

uses a technology that he considers

10:58

to be the best system as

11:01

emission reduction has been adequately demonstrated

11:03

and that's what the agency did

11:05

hear they said look, Ccs has

11:07

been demonstrated technically. We can do it. And

11:10

there are a lot of economic incentives that are bringing.

11:12

It within reach and overtime will

11:14

become more more affordable. And so

11:17

we're basing our standard on Ccs.

11:19

Especially since we're not expecting you

11:21

to comply. For many years, so

11:23

there's a lotta lead time. but. What?

11:26

The companies can do is

11:28

a whole bunch. Of different things

11:31

as they can meet those standards. they

11:33

don't have to apply Ccs. They can

11:35

do anything. They can pull fire with

11:37

hydrogen. They can go far with Nasa.

11:39

Guess they can reduce their utilization. Their

11:42

darla choices that power plants can make

11:44

state the standard, tells them what they

11:46

have to a cheese but how they

11:48

get. There is really more flexible and

11:50

they have a lot of decisions to

11:52

make. What? What do you

11:55

make of the v complaints from the

11:57

utility industry? him obviously recall in the

11:59

streets of. The Who claims that

12:01

the reliance on carbon capture

12:03

and sequestration as Miss Miss

12:05

place that it's very expensive

12:07

and not fully deployed at

12:09

any Us coal plant Today

12:11

we're I think the record

12:13

is really quite a robust

12:15

on their some and we

12:17

always look at the kids

12:19

records because they're very elaborate,

12:21

may use all the evidence

12:23

set in but those economics

12:25

or information and data as

12:27

technological information. Data Studies, etc. And

12:29

I think that the agency would say

12:32

is there's no question that we. See

12:34

carbon capture demonstrated for

12:37

a power plants and

12:39

what. They'd say it is the

12:42

fact that there are and says in

12:44

the inflation were dashed nectar substantial tax

12:46

credits and incentive to building Ccs that.

12:49

Bring The costs vary significantly.

12:51

Down and they see

12:53

the technology. As. Increasingly deployable

12:56

over time as. Scale Snell.

12:58

One thing yet the know about the

13:00

Clean Air Act is when it says

13:02

that. The. Agency has to

13:04

set. Pollution. Standards based

13:07

on the best system

13:09

that there is flexibility

13:11

to be technology forcing.

13:14

The Clean Air Act has always

13:16

been understood and there's decades and

13:18

decades of case law on this

13:20

always understood as a technology forcing

13:22

static meaning status he doesn't have

13:25

to face or standards only on

13:27

technology that's. Used widely throughout the

13:29

entire industry already. It

13:31

can look out to see what's

13:33

been demonstrated and look forward to

13:35

seeing was achievable over the time

13:37

scale of setting. These regulations

13:39

and. Under. The

13:41

Clean Air Act is fair enough to

13:43

say we see something has been shown

13:46

to be demonstrated his We think it's

13:48

achievable and we will have to look

13:50

cause but we see the cause coming

13:52

down and. We. Point to the

13:54

sack. The Congress very purposefully

13:56

adopted a very generous tax.

13:58

Incentive system. That's when

14:00

I see Cs in. The inflation reduction

14:02

that. He so

14:04

it's the the timing I guess is important

14:06

here, right? I mean, if you look at

14:09

what's available today in terms of the technology

14:11

and the extent to which has been tested

14:13

in the United, Titan, United States or elsewhere.

14:16

You could certainly raised questions about

14:18

to it's effectiveness and it costs

14:20

today. But what you're saying is

14:23

the agency can take into account

14:25

what is likely what is possible.

14:27

For a given technology over a

14:29

period of time. Does. The ramp

14:32

that time right and they're the

14:34

We. We see compliance now. Move

14:36

to ah yeah of Twenty Thirty

14:39

Two. Back to twenty thirty that

14:41

they're still ramp up times for

14:43

companies to get. Into

14:45

Compliance and is your operating past twenty

14:47

thirty nine? You ought to be looking

14:49

at that already, right? They're already making

14:52

plans and investment decisions so I think

14:54

with the agency would say here is

14:56

there's plenty of time to get the

14:58

complex and have to remember that it's

15:00

unclear how many of the facilities. Really

15:02

will use really with install Ccs as

15:04

opposed to doing the other things they

15:06

can do to and compliance right? So

15:08

obviously as I said before if you

15:11

retire at the for twenty three two.

15:13

You're not even subject to the rule at all.

15:15

So their whole bunch of plans for. Whom those

15:17

requirements won't even. Kick in that it it

15:19

just it's just a pullback of people get the

15:22

appeal, You're tired of all the details and they

15:24

they sort of think well this a to complicate.

15:26

Thus the idea here is that. If

15:28

you're gonna do something about pollution,

15:30

about climate change and about pollution

15:33

that's harmful to human health, which

15:35

coal fired pollutions happens to be

15:37

very damaging to human health. And

15:39

and they're toxic pollutants that are

15:41

emitted from coal fired power plants.

15:43

As said, public health quite separately

15:46

from greenhouse gases issue. Is it

15:48

a d saying about it. You.

15:50

Want to do something that aligns

15:53

with the trend happening? In the

15:55

industry anyway and you want to put a

15:57

floor under that trance? This sector is transitioning

15:59

to cleaner. Okay, no matter, What

16:01

it's the result of go back to

16:03

the you know development of hydraulic fracturing,

16:05

the fact that natural gas displaced call,

16:07

the fact that renewables the come on

16:10

so strongly in that replacing both. Cola

16:12

Natural. Guess there is already in economic.

16:14

Trends for Martha Reasons that. Isn't

16:16

driven necessarily by regulations that these

16:19

rules in theory will cement. They

16:21

will put a floor underneath it

16:23

to ensure that it happens in

16:25

an orderly fashion. And so I

16:28

think that's what's really going on

16:30

here. And I think

16:32

if you put it together with what the by

16:34

the ministration. Is doing to control

16:36

greenhouse gas pollution from the

16:39

transportation. Sector and methane from

16:41

the oil and gas sector

16:43

it's He started to see

16:46

a comprehensive picture of pollution

16:48

reduction needing to happen along

16:50

with energy sector. Planning to

16:52

transition to a cleaner energy economy

16:54

I think it all fits together

16:57

and as part of a larger

16:59

larger cities he isn't the or

17:01

permitting causes a big issue these

17:03

days and and bro years ahead

17:05

of Edison Electric Institute and his

17:07

criticism of the theory rule set

17:09

among other things as is the

17:11

questions regarding just how long it

17:13

takes to permit anything can turn

17:15

these can These plants with this

17:17

additional equipment received a necessary permits

17:19

they need to comply with the

17:21

new regulation. For a Yes And

17:23

and you know. I I I agree there's

17:25

a real asked us to permit you

17:28

to not mad and how long it

17:30

takes for example, test site, new transmission

17:32

facilities. I mean it's very it's that

17:34

that is a largely state led process

17:36

and the stairs are always engaged in.

17:38

A planning process around citing new source

17:41

of electricity and it's not like they're

17:43

starting from nothing. The states are. Many

17:45

states are very sophisticated advanced on this

17:48

is. Integrated. Resource Planning in a

17:50

majority. Of Us states where

17:52

the utility sector. If it with

17:54

the Public Utility commission in those states is

17:57

always involved in a looking ahead at the

17:59

demand for. The trophy in the states will

18:01

the low demand though up right as their greater

18:03

demand on the grids. What kind of sources. Are

18:05

good that it's are they going to need. How

18:08

long are they gonna operates? Who will build

18:10

what where and that permitting process is

18:12

really in the hands of the state's

18:14

right? That's not a several. Problem by

18:16

and large. But to

18:19

the extent that the Federal government is

18:21

involved in permitting decisions, it's made some

18:23

moves to revise the permitting regimes that

18:25

can create an obstacle to this. So

18:28

we've seen some revisions to the neighbor

18:30

process, for example, the National Environmental Policy

18:32

a process that requires looking at environmental

18:35

costs and benefits to the stance attack

18:37

and slow permitting. I think the mysteries

18:39

and tried to address some of those

18:41

problems and we'll see if Congress gets

18:44

in the business of performing permitting right,

18:46

that that will be. Something Congress timers

18:48

could do in a sense of interest in. We'll

18:50

see if that. Comes in the in the

18:52

next Congress certainly a topic this continues to

18:55

get a lot of consideration of than were

18:57

all sort of holding your breath to see

18:59

if something can actually happened on that, but

19:01

amid a few would put yourself in the

19:04

in the critics shoes here. to what extent

19:06

you think they raise any legitimate concerns because

19:08

these are important business considerations for them. Yeah,

19:11

I mean no question that I'm very

19:13

sensitive to. This is regulation, has to

19:15

work for business and meet them where

19:17

they are. Did you know it's I

19:19

often say my experience. Of the business

19:21

world Knife was on a board

19:24

for been over a decade of

19:26

the sorted and one hundred company

19:28

board conquer cells and and in

19:30

that rule I really.of view of

19:32

the regulatory systems from the inside

19:34

of a private sector companies address.

19:36

His. And and. What? I

19:38

learned. His look is that regulators

19:41

are clear and consistent. And ten

19:43

provide a framework that business can then

19:45

react to. Zell see your out how

19:47

to comply right? is sort of like

19:50

I learned this to about the auto

19:52

sector when I was working in a

19:54

Obama station on auto sector transportation rules

19:56

for gas gases sites. So as the

19:59

road map. Give us a target, tell

20:01

us where to go and how to get

20:03

and we will figure out how to get

20:06

there. And so the idea is to make

20:08

sure the rags are flexible enough that they

20:10

can incorporate new technology is a comes on

20:12

mind that did. The regs can incorporate and

20:15

allow for a market based solutions to develop

20:17

like. Cap and Trade regimes. You

20:19

know, emissions trading regime you want?

20:22

Good. Regulation that can

20:24

allow them the best.

20:26

Most cost effective compliance mechanism sets which

20:28

are going for. Now when you

20:30

say what about the complaints of industry

20:33

look I it's I think what's gonna

20:35

happen here is litigation. Around these

20:37

rules. At in

20:39

which the challengers. This

20:41

will probably be in a Republican led

20:43

at the own attorney did republican attorney

20:45

general's. For. The states

20:48

add some industry players arguing

20:50

that the each year. Is.

20:52

Wrong about whether carbon tax her

20:54

is adequately demonstrated. That's what the

20:56

large and they'll say is that

20:58

their costs presents. Since the criticized

21:00

the cost projections of criticized. Ah,

21:04

the reliability of some of the he plays

21:06

a data and a some sense and that's

21:08

what the legal side or center on and

21:11

will see. I mean I think the record

21:13

is really very strong here and Eighty A

21:15

has built a. Of. Really good set of

21:18

rulemaking records for all of these rules that

21:20

they put together. In this

21:22

package at it's no longer a fight about

21:24

their legal authority. I would think if you

21:26

remember back the Supreme court decided the West.

21:29

Virginia case was a blockbuster case couple

21:31

years ago. In with the

21:33

Supreme court said to eat Ps:

21:35

you cannot regulate the power sector

21:37

using. This Obama era approach which

21:39

was called generation Shifting my you

21:41

can't set a standard to control

21:43

pollution from the power sector stats

21:46

based on an assumption about how

21:48

much clean energy can be substituted

21:50

for dirty energy. Essentially, you've got

21:52

a regulate each source independently, not

21:54

looking across the grid. at house,

21:56

you can substitute renewables. For. Coal and natural

21:58

gas can't do that. And when

22:00

super decided West Virginia s the P

22:03

was already. Taking this different approach

22:05

that you're seeing in this new rule, they weren't

22:07

using the Obama era prose, they weren't standing on

22:09

generation shifting what they were. Saying as we're

22:11

gonna set of standards that each of

22:13

these facilities can. Meet the Ccs best standards

22:15

for those that are going to operate in perpetuity

22:18

to but but if you're gonna retire earlier you

22:20

can do other things. Are going to use your

22:22

natural gas plant less often so you can do

22:24

other things. That.

22:26

Approach I think is highly legally defensible

22:28

in the sense that it doesn't violate

22:31

any thing in the West Virginia cases

22:33

by it's is follows the guidance of

22:35

the supreme court so I think that

22:37

what I would say as the agency's

22:40

is on very. Solid legal grounds in

22:42

terms of it's authority to do this.

22:44

The. Way it has done it and

22:46

the site will. Be about. is this

22:49

really a technology this adequately demonstrated and

22:51

this is what you alluded to. Build

22:53

a new sense, you know? Takes. A

22:55

while for permitting as well. I think the challenges

22:57

will say is what you know we're going to

23:00

have to have all these pipelines for Ccs were

23:02

also have their pipeline. For Hydrogen says you want

23:04

to cover of hydrogen. Where are

23:06

these plants are located will matter. Or

23:08

they geographically located in the aware.

23:11

there's poor space to store the

23:13

Us captured carbon. you know is

23:15

it's seasonal for all of the

23:17

reasons of the country is the

23:19

that are differently situated. So. That

23:22

this will be a big fight

23:24

about a what he be a

23:26

has done in terms of it's

23:28

reasoning and approach to. Setting the

23:30

standard? Nah, it's a site about

23:32

it's. Legal Authority Real. It's fitness.

23:34

Interesting you say that because we're

23:36

I was recalling that in the

23:39

West Virginia to serve. The court

23:41

said the Clean Power Plan the

23:43

Obama Plan was invalid under the

23:45

major Questions Zoc Yeah which is

23:48

a design. The stance that the

23:50

doctrine that bars agencies from resolving

23:52

questions of as a quote vast

23:54

economic and political significance cope without

23:57

clear statutory authority. Yes, the major

23:59

questions. doctrine, which I view as a

24:01

menace, a judicial invention

24:03

that is actually a mess. Basically

24:05

what West Virginia formally endorsed

24:08

was something the court has used

24:11

a few times, but now in West

24:13

Virginia it formally embraced it, which is

24:16

what you just read boils

24:18

down to if you're going to do something really

24:20

big and important and will decide what's big and

24:22

important, and we won't tell you exactly how you

24:25

should decide what's big and important. If you're going to do

24:27

something that has a major impact

24:29

politically or economically, we're

24:32

going to require extra super special clarity

24:34

from Congress in a statute to tell

24:36

you you can do it. And of

24:38

course, this doesn't cohere with reality because

24:41

many statutes provide very broadly worded authority,

24:43

especially for an agency that's dealing with

24:45

problems that evolve over time, right? Broad

24:48

authority to do things like

24:51

establish the best system, right, of emission

24:53

reduction, which could change depending on how

24:55

technology changes over time. And so

24:57

Congress often passes these very broadly worded

24:59

statutes giving agencies lots of flexibility

25:02

specifically because Congress knows things

25:04

evolve. And what the court

25:06

has said in West Virginia basically is, no,

25:09

we want the court, we want Congress to

25:11

have spoken to this issue you're dealing with

25:13

now. And so it

25:15

either means Congress needed to have been

25:17

prescient, right, and super specifically prescient

25:19

or agencies are going to

25:22

be disqualified from dealing with

25:24

new things. What's

25:26

changed here? I mean, why wouldn't

25:28

EPA trip up over this same

25:31

doctrine here? Well, because in

25:34

the first instance in the

25:36

West Virginia case, EPA was

25:38

interpreting best system of emission

25:40

reduction in a way

25:42

that hadn't been done before, which

25:44

is to say, well, look, we're

25:46

controlling carbon pollution from power plants.

25:48

The best system for that really

25:51

requires us to look at the

25:53

reality of the power system.

25:55

And we should look at the

25:57

grid, how it operates as an

25:59

interlocking machine. essentially. And

26:01

the grid allows us

26:03

already to ramp up certain sources of

26:05

electricity of energy and ramp down certain

26:08

sources. We can lower the amount of

26:10

natural gas we use, we can raise up

26:12

the renewables. Grid managers and operators already do

26:14

this. So EPA said let's look at the

26:16

grid as an integrated hole and let's

26:18

set a standard that assumes we

26:21

can substitute natural gas for coal-fired

26:23

power and assumes we can substitute

26:26

renewables for both fossil sources of

26:28

energy because grid managers already do

26:30

it. And the court basically said oh

26:32

no no that approach which

26:34

we call generation shifting, shifting one form

26:37

of generation for another, that's beyond the

26:39

Clean Air Act. The system, if

26:41

emission reduction, hasn't traditionally meant that.

26:44

It means at every

26:46

plant essentially you should

26:48

be able to meet the standard. It

26:50

shouldn't require substituting some forms of energy

26:52

for others. And so what the

26:55

court said is it is legally beyond

26:57

your mandate to use this generation

26:59

shifting approach. We need to see

27:01

Congress be super specific. So

27:03

now EPA has done something quite different

27:05

and that's why I say I think it's on much more

27:07

solid legal ground, at least in the courts view it will

27:09

be, because it says okay

27:11

the assistance of emission reduction means

27:15

the technologies that each

27:17

of these plants could use. Right?

27:19

It could, each plant could

27:21

actually install CCS-based technology

27:24

or it could,

27:27

if it wants to comply otherwise,

27:29

they can certainly use co-firing with

27:31

natural gas or hydrogen etc. So

27:33

I think we've solved the West

27:35

Virginia problem, I think is what I'd say in short.

27:37

And now in legal terms it's a

27:39

fight about is the standard arbitrary or

27:42

capricious? That's the legal phraseology. Is it

27:44

arbitrary or capricious? Because the challengers will

27:46

say the standard

27:48

based on CCS is just too ambitious

27:51

and not realistic and not credible and that's

27:53

what the fact will be about. And in those cases normally

27:55

courts deferred agencies, right? Because agencies are

27:57

the experts, agencies have the data, agencies

27:59

show these elaborate records and we'll see

28:01

what happens here. Yeah, I was going

28:03

to say, normally they would, but that's

28:05

not been the trend more recently. No,

28:08

all bets are off when you get to

28:10

the Supreme Court of the United States, which

28:12

has had a really serious problem with the

28:14

Environmental Protection Agency in particular and is a

28:16

quite anti-regulatory court at the moment. I mean,

28:18

that's the reality of the thing. It's

28:22

shown a lot of skepticism toward federal

28:24

regulation in a series of cases that

28:26

even, you know, dating back to the

28:28

COVID era cases with OSHA trying to

28:31

require testing or vaccination, court

28:34

strikes that down, court strikes down

28:36

a temporary eviction moratorium that the

28:38

CDC put in place in the COVID era

28:41

cases and on it goes into the West

28:43

Virginia case and so on. So,

28:45

and then they radically cut back the

28:47

authority of EPA to implement the Clean

28:49

Water Act. So if you put all

28:51

of these cases together, it's very hard

28:53

not to conclude that the court is

28:55

deeply skeptical about regulation and environmental regulation.

28:57

In particular, all these rules, these power

28:59

sector rules are going to be challenged.

29:02

The litigants are going to try very hard to

29:04

get them in front of the Supreme Court. I'm

29:06

absolutely convinced of it and we'll see how that

29:08

goes. But I think the records

29:11

here, as I keep saying, the rulemaking

29:13

records are really solid and EPA will

29:15

be arguing that they have lots of

29:17

evidence to back them up. Well

29:20

there's another development when it comes to

29:22

how the court might respond to a

29:24

rule like that and that's the so-called

29:27

Chevron doctrine, right? There

29:29

maybe there's a little bit of confusion. I

29:31

mean the court heard a

29:33

case earlier this year and the decision

29:35

is expected soon involving the Chevron doctrine.

29:38

You've written about this. What

29:41

are your concerns and how do we distinguish between

29:44

this Chevron doctrine and

29:46

the major questions doctrine?

29:49

Yeah, well this is for the real nerds. I

29:51

mean anybody listening to this... But it's important, right?

29:53

Yeah, no, it's super important and super interesting actually

29:56

but it takes a little patience. So if

29:58

you think about the... questions doctrine

30:00

as the Supreme Court saying look

30:02

there's just some things we think

30:05

are too big a deal for

30:07

you to do as

30:10

an agency without very express explicit statutory

30:12

authority. Think of it that way. A

30:14

constraint, a limit on agencies ability

30:17

to interpret broadly worded statutes

30:19

to authorize them to regulate.

30:22

The Chevron doctrine is really

30:24

some a

30:26

legal principle established in a case

30:29

called NRDC versus Chevron in the

30:31

1980s which says look if

30:34

the statute doesn't address an issue

30:36

it leaves a question ambiguous or

30:38

it leaves something a silence on

30:40

a matter. In the first

30:43

instance the interpretation

30:45

should go to the agency. They should be

30:47

able to interpret the gap or the ambiguity

30:49

of the silence and if they pick

30:51

a reasonable interpretation then

30:53

we should defer to them because they're

30:56

the experts they implement the statute every day and

30:58

they should be the gap fillers in

31:00

the first instance as long as the court says

31:02

what they've done is reasonable. What

31:04

the court is poised to do

31:06

in a case that they heard this term and

31:09

that I think will be decided this

31:11

June almost certainly is whether

31:14

they want to overturn that principle or

31:17

limit that principle to fewer

31:19

situations and what it essentially

31:21

stands for is a kind of the court

31:23

will decide what these laws mean without

31:26

giving any deference to the agency even

31:28

though the agency is the expert and the

31:30

agency was tasked by Congress with implementing the

31:32

law. If you combine

31:35

this possibility of overturning this

31:37

principle of deference with

31:40

the major questions doctrine what you really

31:42

get is a court that wants

31:44

to be the decider and

31:46

a displacement of the agency from

31:48

the primary role of implementing

31:50

these statutes filling in the gaps and

31:53

ambiguities in law as long as they're

31:55

reasonable you displace them and

31:57

you say the court essentially

31:59

will be Any more questions

32:01

of policy under the guise of

32:03

deciding legal questions? I think that's

32:05

very. Worrisome, The

32:07

major question darkness based on a premises. Says

32:10

will. Congress knows how to be

32:12

explicit and they can speak clearly.

32:14

And number One. That.

32:16

Overlooks the fact that Congress did speak clearly what

32:18

I wrote the Clean Air Act and gave broad

32:21

interpret of authority the agency or. It said we're

32:23

going to give them a lot of

32:25

room to maneuver, and it also assumes

32:27

Congress easily contract these things when as

32:29

we know, it's very difficult for Congress

32:31

to pass legislation in the modern era,

32:33

and there needs to be some flexibility

32:35

for. Agencies to interpret.

32:37

And implement these statutes on a

32:40

daily basis of that's what the

32:42

sites about. It's not something that

32:44

most people relate to in their

32:46

daily lives as has real consequences

32:48

for everyday Americans. because. As

32:50

much as we may dislike government bureaucrats

32:52

her a lot of criticism The sack

32:54

is you need of Food and Drug

32:56

administration to regulate the food and drug

32:59

supply Makes her it's safe and you

33:01

actually need any Be a makes Europe's

33:03

that you got safe drinking water see

33:05

for for recreation air the safe to

33:07

breathe and so on. and so does

33:10

agencies perform a critical functions and the

33:12

courts seems to have a lot of

33:14

skepticism about their essential role and for

33:16

all the repo justification that you see

33:19

on the Dp a rule in this

33:21

case and all that really is a

33:23

concern of those who would supporters move

33:25

by the agency how this will sit

33:27

with this particular court you know. Another

33:30

another consideration is something called the Congressional

33:32

Review Act Him and it allows of

33:34

as you know lawmakers to void rules

33:36

after they've been finalized. By the Executive

33:38

Branch and spent that. That's a big

33:41

concern for the by administration of Donald

33:43

Trump is elected and Republicans take control

33:45

of Congress, but it would apply only

33:47

to rules adopted in the last sixty

33:49

legislative days of the Twenty Twenty Four

33:52

Session Congressional session we own home until

33:54

Congress adjourns when that period as but

33:56

do you think this is much of

33:58

a risk for this. He be a

34:00

rule. Well I think this

34:02

package of rules. On the power

34:04

sector. Like many other rules

34:07

the administration's working. I'm related

34:09

to climate change related to

34:11

energy systems that. The

34:13

idea is there on a political

34:15

in a legal clock as the

34:17

way to think about. There's obviously

34:19

the election looming and so they

34:21

want to deliver on the rules

34:23

and policies that they said were

34:25

priorities. So they want to complete

34:27

their agenda on climate change and

34:29

these rules are a key part

34:31

of that. But there's the legal

34:33

clock as you mentioned, which is

34:35

that you have to sinners rules

34:37

by a certain deadlines in order.

34:39

To avoid them be being. Essentially,

34:42

disapprove or cancel this. you will

34:44

after the fact that. So you're for

34:46

to. He talks about this law called the Congressional Review.

34:48

Acts which essentially a mechanism that allows

34:50

a new congress and presumably a new

34:52

president because otherwise if it's the is

34:55

depressing gets real like that he just

34:57

veto this. Rights that allows a new

34:59

Congress. On a fast track basis

35:01

own with a majority only vote, no

35:04

filibuster possibility to reach back in. Town

35:06

So legally effective. Rules: As you say,

35:08

Going back only sixty legislative days. but

35:10

it turns out there's you count legislative

35:13

days as he really counts As in

35:15

this you wind up with that amounting

35:17

to about six months of reach back

35:19

potential. So that's why you see. Are

35:22

a real rush to get these rules done

35:24

by around now. Or.

35:26

You know, close and time to around at

35:28

to try. To avoid staying within the six

35:31

month window. If for example the

35:33

congress where to slip and be

35:35

republican controlled and we were to

35:37

get a new president's. There will be

35:39

some potential which is what happened in the early days of

35:42

the to. Trump administration rights

35:44

that they could reach back

35:46

and cancel some rules. And there

35:48

so people aware that this happens by the

35:50

way, in every administration's. There's always arrest to

35:52

make sure they sinister rules and time to

35:54

avoid the Congressional Review Act process you don't

35:56

want to get back to one other aspect

35:58

of the new Edu. On the power

36:01

plants you know there are always

36:03

concessions made when writing regulations and

36:05

in one of the concession here

36:07

was leave out of this new

36:09

rule. Gas fired power plants that

36:11

are currently an operation that said

36:13

it would apply it would apply

36:15

to suit your gas plus a

36:17

power plants. As we've discussed widely

36:19

vote existing gas power plants now.

36:21

It is just really complicated

36:24

because there's a certain amount

36:26

of gas. Were going to need

36:28

in the system for a transition period,

36:30

right? People talk about cast as a

36:32

bridge fuel an answer. You need to

36:34

get the rules right to ensure. That

36:37

you have enough gas and assistance

36:39

to say support renewables as they

36:41

come on lines ants but you

36:43

don't want us standard so stringent.

36:45

Leads for those. Gas

36:47

plants that you make it

36:50

impossible for any gas. To

36:52

operate in the system economically, you

36:54

certainly don't wanna have a counter

36:56

productive result where you're actually. It's

36:59

incentivizing more. call the stay

37:01

online longer because the requirements

37:03

for gas or so stringent

37:05

and said there's this inner

37:07

play here of trying to

37:09

balance the a malagasy still

37:11

need in the system against.

37:14

Wanting to move forward in driving

37:16

cleaner energy to reduce the public

37:18

health consequences? And the climate consequences. This

37:20

police it and I think it's just became

37:22

extremely hard and complicated to get that done

37:24

at the same time as the other pieces

37:26

and so they said will turn to this

37:29

next in the next. Cycle and I think

37:31

that's a priority for the agency. Said

37:33

the president be reelected. We

37:35

do. What about reliability Again, Would get

37:37

back to those who are been a

37:40

critical of the new rules. They say

37:42

at a time when know you be

37:44

demand for electricity is increasing and will

37:46

only increase that much more. So I'm

37:49

at the in, there is a riskier

37:51

of disrupting the reliability. Of. The

37:53

greatest is to be agency moves

37:55

are too quickly a to aggressively

37:57

as run a reasonable. The

38:00

back to that. I. Think it's always

38:02

legitimate to ask questions about reliability and

38:04

we all care about reliability. I do

38:06

think those the being hyperbolic about it.

38:09

And yeah, that the sky's falling and

38:11

this is a bit much. I mean,

38:13

you see a really concerted political effort

38:16

here to suggest that the grid just

38:18

can't do this. Just can't just can't

38:20

support a cleaner energy system? I don't

38:22

think that is. Quite right. Don't think it

38:25

reflects reality. If you think about this

38:27

and we already have a grid

38:29

managers grid operators. We have state

38:31

level processes. Already working on planning

38:34

for higher load which are projected

38:36

with the higher load. Because let's

38:38

face it, if we electrify everything

38:40

right, if we're moving to more

38:43

electrics transportation system, if we're making

38:45

buildings more efficient, doctor fine buildings

38:47

of Corso have an impact on

38:49

the. Demand. For Electricity, but

38:51

states are already well on in the

38:54

planning process. They have the tools they

38:56

need a to engage in planning for

38:58

this transition and so well. I'm not

39:00

saying it's always. Easy. but I'm.

39:03

Saying there are well established processes

39:05

at the state level. To

39:07

make plans for increase load to

39:09

adjust. What gets built, what get

39:11

used was just put where and how

39:13

the. Components of the

39:16

system worked together and A so I am

39:18

not alarmed. I don't give in to the

39:20

alarmists concern because it's It's not as if

39:22

it's. Grid managers are

39:24

standing still. And not as

39:26

if the state public utility commissions are unaware

39:28

that they have to plan for a future

39:30

that looks a little different than now. Do

39:32

you see now? Lot of attention paid to

39:34

Ai as you know it's going to crash

39:36

the system. Yeah, so much loader cramps. Well,

39:39

we know how to deal with loads. In

39:41

fact, the utility business. this is their business

39:43

rights. They shouldn't want us to electrify. everything

39:45

right because then it just increases

39:47

demand for their products that's i

39:49

think we we have a system

39:51

here that series capable of managing

39:53

the transition that these standards are

39:55

part of and that the market

39:57

has really already driving anyway You

40:00

know, at the end of the day, it's

40:02

up to Congress to make

40:04

sure that laws remain relevant and up-to-date,

40:06

laws like the Clean Air Act. But

40:09

that Clean Air Act hasn't been amended since 1990. So

40:12

that leaves us with agencies like EPA doing

40:14

their best to expand or reduce regulations based

40:16

on who sits in the White House. Not

40:20

necessarily a prescription for stability,

40:22

right? Well, I don't

40:25

think I'd put it that way. I think Congress

40:27

should do its job, first of all.

40:29

I agree with everybody who says that.

40:31

I think that the fact that Congress

40:33

hasn't revisited major environmental

40:35

laws in a very long time, as

40:38

you mentioned, the last update to the Clean Air Act was 1990.

40:42

I think that is a problem.

40:44

And I think it makes it

40:46

very, very difficult for agencies, whether

40:48

they're in Republican administrations or Democratic

40:50

administrations, to do their jobs because

40:52

new problems arise and they have to

40:54

adapt these old statutes to new technology,

40:57

new science, et cetera. At

40:59

the same time, these statutes were

41:01

built to last. Congress passed the Clean Air

41:03

Act. They passed other public health and safety

41:06

acts, food and drug act.

41:08

They passed these laws with flexibilities in them

41:10

to anticipate the fact that the future

41:12

may not look like the present and

41:14

to give discretion to expert

41:17

agencies. Now, you can say you don't believe

41:19

in the experts. You don't think they know

41:21

anything. I don't agree with that

41:23

assessment. I think we have a lot

41:27

of very serious

41:29

expertise in these agencies dealing

41:32

with these statutes over decades, career

41:34

staff who've been at this a very long time.

41:37

And we have a court,

41:41

I think, that, a Supreme Court at the

41:43

moment, that believes that that

41:45

expertise is essentially not

41:48

worthy of very significant respect

41:51

and that Congress, when it gives them

41:53

these rather broad powers, really,

41:55

in the course view, hasn't

41:57

spoken specifically enough. Or

42:00

in a moment where I think the

42:02

statutes have some flexibilities

42:04

in them that agencies, in

42:07

order to do the job they've been assigned to do,

42:09

have to have. They have to have some

42:11

flexibility and discretion. And I'm

42:14

not sure that this is

42:17

a bad system. Administrations

42:19

come and go. They have policy prerogatives.

42:22

And if they want to fill the

42:24

gaps in the statutes in a reasonable

42:26

way that the statutory language can tolerate,

42:29

that fits within, that's a reasonable solution

42:31

with the statutory language, I don't see

42:33

why we shouldn't defer to them. It's

42:35

funny because this idea that we defer

42:38

to agencies when they fill in the

42:40

gaps in statutes, that used to be

42:42

a conservative idea. The Chevron case was

42:44

a case during the Reagan

42:46

administration in which the EPA at

42:48

the time wanted

42:51

to give companies flexibility

42:53

to address pollution through bubbling and netting,

42:55

meaning trading off emissions in one part

42:57

of their facility. They could reduce them

43:00

in one place and that would allow

43:02

an increase in another place. It was

43:04

a market-based approach to pollution

43:06

control, a conservative idea. And

43:08

the Supreme Court said, yeah, you

43:10

can do that. That seems reasonable

43:12

within the language of the statute.

43:14

And suddenly this essentially conservative idea has

43:16

now become this bugaboo of the

43:18

conservative movement because agencies now they

43:20

think only do stuff when Democratic

43:22

presidents are in the White

43:25

House. So if we can hamstring agencies,

43:27

it will mostly hamstring Democratic

43:29

agendas. I think that's the theory against

43:31

Chevron, against this flexibility. So

43:33

I think that's what we're witnessing

43:36

here is an anti-regulatory moment, deep

43:38

skepticism about the federal regulatory state

43:40

and the Supreme Court completely buying into

43:42

that conservative agenda. Yeah,

43:44

how important it is to understand the perspective

43:47

in history behind

43:49

these laws and where

43:51

they put us today. Freddie

43:54

Freeman, thank you for joining us today on

43:56

Columbia Energy Exchange. It's been my pleasure. That's

44:03

it for this week's episode of Columbia

44:05

Energy Exchange. Thank you again, Jody Freeman,

44:07

and thank you for listening. The

44:09

show is brought to you by the

44:12

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44:14

University's School of International and Public Affairs.

44:17

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