Many weapons in 'War on Coal' deployed long before Obama took office

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The coal industry can be excused for thinking there's a massive, organized, palm-rubbing effort to make its life difficult -- the war on coal, in short.

It's a "war" that's been decades in the making, with few regulations actually originating with the Obama administration. Yet the current swarm of actions also underscores the extent to which the White House can influence which rules get written, enforced or buried by delays and litigation.

"It's not a war on coal for warring on coal's sake," said David Spence, associate professor of law, politics and regulation at the University of Texas.

Rather, it's kind of a perfect storm of actions that have been simmering for a long time.

Consider the Mercury and Air Toxics Standards, which were a major contributor to Akron, Ohio-based FirstEnergy Corp.'s decision to shutter 11 coal-fired power plants, including the Mitchell and Hatfield's Ferry power stations in southwestern Pennsylvania.

Rules this complicated and consequential didn't spring up overnight: Their seeds were planted in the Clean Air Act amendments signed in the early 1990s by then-President George H.W. Bush. The amendments called on the EPA to conduct a study that Congress would use to determine if regulating mercury and "air toxics" -- hazardous air pollution -- is appropriate.

The agency finally issued the study in 1998, nudged by a lawsuit, and Congress concurred they should be regulated. The deadline for the rules was pushed back several times until the EPA finally issued standards in 2005, during the President George W. Bush administration.

Then, just before the rules were set to go into effect, the D.C. district court threw them out. The revised standards were finally issued in April and are scheduled to go into effect in March 2015 -- nearly a quarter of a century after the whole process began.

The Cross State Air Pollution Rule, which regulates sulfur dioxide and nitrogen oxide that floats from power plants across state lines in the eastern part of the U.S., is another example: The regulation went into effect in 2012 as a replacement for the Clean Air Interstate Rule of 2005. The earlier rule was challenged by industry, and in 2008, a district court judge ordered the EPA to try again.

Even the effort to regulate carbon dioxide and other greenhouse gases -- the EPA issued a draft rule for new power plants in 2011 -- has been in the works since 1998.

That's when the EPA's general counsel issued an opinion that greenhouse gases fit within the definition of pollutants under the Clean Air Act. But the agency stopped there.

Environmental groups sued the EPA to act on that opinion, but in 2003, after the White House changed hands from Bill Clinton to George W. Bush, the EPA reversed its stance. The agency said it didn't think the Clean Air Act was the appropriate vehicle for greenhouse gas regulation. More petitions and lawsuits followed.

Eventually, the case went up to the U.S. Supreme Court, which sided with the environmental groups. That was in 2007, and it paved the way for the current EPA to issue these rules.

The Obama administration would have preferred for Congress to pass legislation to curb greenhouse gas emissions, according to Mr. Spence, and it looked like a strong possibility in 2009. Then, momentum shifted during the 2010 election, and "EPA action was really the second-best alternative from their point of view."

Congress, especially Republican lawmakers, has been railing against this strategy.

Earlier this month, Rep. Bill Shuster, R-Blair, introduced a bill to "stop the Obama Administration's War on Domestic Energy" which would require congressional approval for any environmental regulation that would decrease the production of fossil fuels in the U.S.

In 2012, Republican lawmakers tried something similar with the "Stop the War on Coal Act" which, among other things, would require the EPA to hold a public hearing in any location where its regulations might cost $1 million or 100 jobs.

A 'bull's-eye' on coal

However political, the bull's-eye on coal belongs there, said Mr. Spence said.

"The fact is that coal does just tremendous amounts of damage -- orders of magnitude above other fossil fuels," he said.

But environmental regulations are just one factor clouding its future, said Robert Burns, an attorney with Buchanan Ingersoll & Rooney PC.

Depressed demand for power and plentiful, low-cost natural gas are pushing coal off its perch, so much so that FirstEnergy spokeswoman Jennifer Young said that even without EPA requirements, current market conditions would still have the company deliberating on which plants to close.

Denise Foster, vice president of state and member services at Valley Forge-based PJM Interconnection -- the country's largest grid operator, which manages electricity for 13 states including Pennsylvania -- said that even with about 9 percent of the system's total generating capacity set to retire in the coming years, "We don't have a concern about resources adequacy."

PJM's most recent capacity auction, which secured electricity generation for 2016 and 2017, notably pushed out coal plants, including Hatfield's Ferry and Mitchell power stations, in favor of less expensive power sources.

Currently, 42 percent of installed capacity at PJM is coal, and 29 percent is gas. Going forward, more than 60 percent of the generation being planned or constructed will come from gas.

Back on the regulation front, natural gas also stands to win big when the EPA's New Source Performance Standards go into effect, although it's unclear when that will be.

The standards set pollution limits that would not require any adjustments for new natural gas power plants but would necessitate any new coal plant be outfitted with carbon capture technology.

The proposed rules are seen as a nail in the coffin of new coal generation.

"It's entirely possible that these rules will be weakened, either by future administrations or by a court," Mr. Spence said. "They'll be challenged all the way along, because they always are."

All of this is par for the course with complicated air regulations, Mr. Burns said. It takes years for agencies to finalize rules. Interest groups sue the EPA for missing deadlines. Courts compel it to act. Presidential administrations come and go, setting their own priorities and, sometimes, reversing the work of their predecessors.

"You have an administration that's trying to get some things done, before it's done," Mr. Burns said.

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Anya Litvak: or 412-263-1455


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