EPA Administrator Scot Pruitt joined me this morning to discuss the new rulemaking on the Obama Era “Clean Power Plan,” which was enjoined by federal courts:
HH: In the swirl of breaking news, including the awful smoke hanging over Northern California, where the destruction of 2,000 homes, the death of 17 Americans, the missing of 240 other Americans, is obscured a lot of important news. One of those, the announcement yesterday by U.S. Environmental Protection Agency Administrator Scott Pruitt, of the rulemaking to reverse the Clean Power Plan rule, which was originally promulgated on October 23rd, 2015 by the EPA. Administrator Pruitt joins me now. I always say when he does come on he is my friend. My son works at EPA. That’s called self-regulation, so people don’t suggest that I am keeping other than transparent disclosure from you. Administrator Pruitt, welcome back.
SP: Good morning, Hugh.
HH: I have to begin with the Congressional Research Service assessment of the Clean Power Plan. It says on October 23rd, 2015, the U.S. Environmental Protection Agency published its final Clean Power Plan rule to regulate emissions of greenhouse gasses, specifically carbon dioxide. The Clean Power Plan would require states to submit plans to achieve state levels specific CO2 goals, reflecting emission performance rate, and that the Clean Power Plan has been one of the more singularly controversial environmental regulations ever promulgated by the EPA. The Congressional Research Service goes on to discuss how it has been enjoined by the courts. So what did you do yesterday against that backdrop?
SP: Well, breathtaking in light of what the previous administration did, Hugh, because for the first time ever, the EPA took its authority and said we can dictate, really coerce states and utility companies across the country and tell them how to generate electricity. You know, when you look at how we generate electricity in this country, we obviously use multiple energy sources. Fuel diversity is very key and important to keep costs down, but also stability and resiliency of the grid. That’s coal, oil, natural gas, hydro, renewables, an entire mix of energy sources. What the last administration did is no, we’re going to dictate to you. We’re going to use our authority to say fossil fuels should not be used. We’re going to shift to renewables across the country, and really is was a power grab over the power grid, Hugh. And so it had never been done in history. And so it’s so unprecedented, that the U.S. Supreme Court, you mentioned October of 2015. In February of 2016, the U.S. Supreme Court entered an historic and unprecedented stay against the rule going into effect, because it was so breathtaking as to how the previous administration interpreted their authority. So what we did yesterday is begin the process, propose a rule to withdraw that very deficient rule, and provide clarity to folks across the country with respect to how we generate electricity, and really, respect mostly, Hugh, the statutory framework that Congress has given us to regulate.
HH: Now Administrator Pruitt, when you roll back something called the Clean Power Plan, or put it in peril of roll back, which is what you did as you began the rulemaking to change the Clean Power Plan, immediately, the kneejerk reaction is oh, my gosh, Team Trump is rolling back clean air in America. That is not what happened yesterday. Would you explain to people what the rulemaking process is, and why in fact this rule has never gone into effect in the first place?
SP: Yeah, there’s been no effect whatsoever. No impact other than negative impact and uncertainty across the country. It’s never truly been used or even complied with. So the supposed benefits of the rule, we have not obviously received those. And there was a great amount of questions, Hugh, to begin with about the cost benefit analysis about the cost, extraordinary cost this was going to cost consumers, utility consumers across the country. In some states, it was going to increase utility rates upwards of 40-50%. So this was a tremendously costly rule with very little benefit to the environment. In fact, right now, Hugh, this is what’s lost in this whole discussion. We’re at pre-1994 levels with respect to our CO2 footprint. And we have done that largely through technology and innovation, not government mandate. You know, when we talk about the results we have as a country, we ought to celebrate the progresses we’ve made. Those pollutants, as an example, that we regulate under the Ambient Air Quality Program have been reduced over 65% since 1980. So we are making tremendous progress, because industry and states and citizens and innovation and technology are truly being utilized today than ever before. And we need to always keep in mind as we generate electricity, it serves the manufacturing base, the jobs base in this country, an economy that needs robust growth. And we need reliability in the power grid to achieve that. And the past administration just simply ignored all aspects of the statute, all aspects of how we’ve done regulation historically, and then tried to impose their will upon this country in a way that was entirely deficient under the law. So the U.S. Supreme Court intervened, stopped that from happening, and what we are now doing is responding from a regulatory perspective to hopefully, as we go forward, do it the right way, as opposed to the overreach that we saw in the past administration.
HH: Because I know you know from your time as Attorney General of Oklahoma that the Agency is obliged to take seriously the comments it receives during this process, you will not prejudge the conclusion. But I am curious about the debate in the media and what you think of it. There are some critics who say you ought to have proposed a new rule, and you ought to have withdrawn the so-called Endangerment Finding at the same time. I replied to them, no, there’s an A-B-C order here. The first thing is you have to revoke a deficient rule if indeed it is found by the notice and comment process to be deficient. Is that in fact correct, Scott Pruitt? Is that the order you’re following?
SP: Yes. Yes, yes, Hugh, I think that as we look at the sequencing of this, I mean, you’ve got a rule that’s been stayed by the U.S. Supreme Court. But you don’t know how long that stay is going to, you know, remain in place. And as such, those folks that are regulated across the country, they don’t want the uncertainty, because what did the rule require? It actually required them to displace certain investments that they had made in coal generation facilities. I mean, let’s make no mistake about it. The last administration declared a war on coal. Now that is amazing in and of itself. You know, for a president and for an EPA, a federal body, a federal agency to declare war on any sector of our economy is absolutely astounding. But they did it unapologetically, and they made tremendous progress in reducing and contracting mining jobs in this country. That’s wrong. A regulatory body ought never engage in a war on any sector of our economy. We’re to make things regular for those across the country so that they know what’s expected of them as they invest money, allocate resources, and try to achieve good outcomes on behalf of the environment. So this is a situation, Hugh, that we had to provide clarity first and foremost about the deficiency of this particular rule. But we have also been doing our work to prepare for, you know, what does the statute allow us to do? I actually introduced something in June of 2015, Hugh, called the Oklahoma Plan. I went through a Section 111 of the Clean Air Act and evaluated what authority existed to regulate CO2 under Section 111, which deals with power generation facilities. I was at the National Press Club that very month about five or so days before the Clean Power Plan came out, and was debating someone from the NRDC, and shared this entire plan with them. There are steps that we can take with respect to this issue. But they are modest. They are humble, because frankly, when you look at the Clean Air Act and the tools that Congress has given us, it is, they’re not robust in dealing with this issue. And the reason that is, is because the Clean Air Act hasn’t been amended since 1990. It’s been 27 years ago, and the folks that were involved in amending the Clean Air Act in 1990 were very, very clear that they saw the Clean Air Act as focused on regional and local air pollutants, to reduce those air pollutants, and not this global phenomena called GHG, or CO2 reductions. And so we only have the tools that Congress give us, Hugh. You know that. That’s 5th grade civics. We can’t reimagine authority.
HH: I also know, I also know the power of the market is much more extraordinary than the power of regulation, and that natural gas is displacing other sources of energy on its own in accord with the market forces driving it, but that interventions by the government in the acceleration in some areas can be counterproductive, in fact. Administrator Pruitt, the regulatory reform agenda overall, I’ve told people that you’re going through it with Waters of the United States, the WOTUS rule. I believe the market is up, because it’s pricing regulatory reform into it. Other people think it’s because it’s pricing the tax cut in. But these rule reforms do have enormous impacts on the GDP of the United States.
SP: Look, I mean, if you ask folks over the last several years what has been the greatest impediment to economic growth, they would tell you regulatory uncertainty. And that’s not just in the energy and environmental space. That’s in the finance area, that’s in health care. It was across the full spectrum of the past administration, because we all know this. The previous administration ruled by executive order. And when you rule by executive order, when you actually legislate in the executive branch, you tell your administrative agencies, executive branch agencies that you govern to say go out and make the law, that that created tremendous uncertainty, because those that are regulated look at a statute passed by Congress, and it says one thing. And then an executive branch agency is passing regulation that says exactly the opposite. So what do you do if you’re in the finance, health care, energy area? You don’t invest money. You don’t put money at risk, because if you put money at risk, that means you may lose it because of the arbitrary type of response of the executive branch agencies. So what we’re trying to get back to today, Hugh, is sending a message across the country that we are going to do what the statute requires. And when we do what the statute requires, that provides certainty to those that are regulated, and here’s the real important thing. It benefits the environment, because it allows people to then invest and deploy resources to achieve outcomes and not face the prospects of displacement of capital, uncertainty, and litigation. When you think about the WOTUS rule, CPP, these plans we’re talking about, every one of them was subject to litigation and a stay of a federal court. And they never went into effect, because the past administration simply made it up. And that’s just, that’s not our authority to do that, and we’re not going to do that.
HH: Scott Pruitt, it is always good to talk to you, Administrator. Press on. I am sure the process will be long and arduous, but legal in the end and upheld by the courts because it’s being administered by a former state Attorney General.
End of interview.