As a follow up to yesterday’s post, President Trump’s Energy Independence Executive Order (the “Order”) has now been posted on the White House website, a summary of which can be found here. Over the last week, many pundits and industry insiders have speculated on its contents, with many having a fairly clear crystal ball on the administration’s intent. This post sets forth initial commentary on the roadmap created by the Order that the Trump administration intends to follow in “ending the war on coal” and putting coal miners “back to work.”
Whether you support or denounce the current administration’s positions on energy-related issues, one cannot argue that the Order is a thorough rebuke of the prior administration’s positions on the same issues. The question that remains, however, is what practical impact the Order will have on America’s future energy production and policy.
On the one hand, 29 states plus the District of Columbia have adopted renewable portfolio standards, all mandating that some percentage of their electrical generation be from renewable energy sources. Leading examples in the Western United States include recent decisions by Oregon and California to transform their energy generation to 50% renewable portfolios. These and other state decisions had little to nothing to do with the Clean Power Plan, and instead reflect the understanding that renewable power is increasingly competitively priced when compared to other sources, has less exposure to fuel source price volatility, and renewable energy often creates jobs and new state and local revenue sources. Indeed, the U.S. Energy Information Administration’s Annual Energy Outlook 2017 paints a rather bleak future for coal-fired generation (natural gas and renewables appear to be the biggest gainers by 2040). Moreover, the investment in renewable energy is by no means a “blue state” phenomena. Major investment managers are betting heavily on renewable power. Recently, BlackRock, with its $5-plus trillion dollar fund ($970 million focused on its clean energy fund), reaffirmed that clean energy investments are a core of its assets, with BlackRock’s CEO expressing substantial annoyance with those who would slow the transition to clean energy. And finally, President Trump’s own “Business Council” is comprised of leaders of companies that are heavily invested in clean energy.
On the other hand, twenty-four states banded together to challenge the Clean Power Plan. Nearly all of those states joined together again for a subsequent lawsuit on the EPA’s carbon rule for newly constructed coal- and gas-fired power plants.
So where does that leave us? Formal rulemaking proceedings, rescinding existing rules and regulations, and the coal-first mantra will undoubtedly spawn extensive litigation on a variety of fronts. This will likely include suits against and involving EPA. But the real key to the Order, and why it matters, may lie less in a “coal renaissance” and more in setting a framework for natural gas development that helps ensure a transition to a clean energy future, which many states have already committed to pursuing. After all, of the twenty-four states suing EPA, ten have renewable portfolio standards. And the Order made a point to “respect the proper roles of Congress and the States.” States may therefore continue playing a significant and critical role in developing and implementing our Nation’s energy policy.