Overnight Energy: EPA weakens power plant pollution rule | DOJ lets companies skip paying penalties during pandemic | Trump eyes plan to pay companies to keep crude in the ground

IT’S ALL ABOUT THE COST BENEFIT ANALYSIS: The Environmental Protection Agency on Thursday finalized a decision that critics say threatens regulations designed to limit pollution from power plants. 

The finalized rule doesn’t roll back the Mercury and Air Toxics Standards (MATS). Instead, it undermines the rule by preventing the agency from weighing certain “co-benefits” in its justification for the standards. 

The two administrations have very different interpretations of the same pollution standards. 

An Obama administration analysis said benefits like reducing other toxins from power plants would save consumers as much as $90 billion. 

But the Trump administration found the rules would save between $4 million and $6 million. They argue power producers will spend up to nearly $10 billion on adding pollution controls, so the costs will outweigh those benefits.

EPA Administrator Andrew Wheeler argued that The Trump administration’s approach was better because it only considered “targeted” pollutants like mercury rather than the co-benefits from reductions of additional pollutants. 

“Under the Obama-era approach, the cost-benefit scales are set so any regulation could be justified regardless of costs,” he told reporters on a Thursday press call. 

Critics have expressed concern that the lower numbers remove the mercury standards’ legal underpinnings, making the power plant regulations more vulnerable to court challenges. 

“All that Wheeler is doing is fudging the numbers to give polluters a tool to challenge MATS in court,” Sierra Club Executive Director Michael Brune told reporters ahead of the official announcement. 

“Andrew Wheeler’s attempt to undercut the basis of the Mercury and Air Toxics Standards reminds us that not even a global pandemic will stop him from being a coal lobbyist in an EPA administrator suit,” Brune added. 

Mercury has been found to damage the lungs and brain and is linked with developmental disorders.

The Trump EPA has argued that the Obama administration had inflated the co-benefits in its past analysis, leaving companies spending more to fight hazardous air pollutants (HAP) than society would benefit from the decrease in pollution.

Wheeler said in a statement that agency’s action showed that it was “following the law while making reasonable regulatory decisions that are fully protective of the public health and environment.” 

However, Clinton administration EPA chief Carol Browner told reporters Thursday that she believes the change will “undermine how the EPA considers science and evaluates economic benefits of regulations in the future” if a court upholds this type of cost-benefit analysis. 

Wheeler told reporters that the cost-benefit analysis is “unique” to this particular rule, but that the agency is working on a broader cost-benefit rule for all Clean Air Act regulations. 

He also pledged to defend the MATS standard in court, saying “we defend all of our rulemakings.”

Courts may not be inclined to keep regulations on mercury if they cost more than they save.

Read more about MATS here. 

 

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SEE YOU IN COURT, PART 9238087: Environmental groups are suing the Environmental Protection Agency (EPA) over a March memo signaling that the agency would not seek penalties against companies that do not monitor their pollution during the coronavirus outbreak.

The March 26 memo allows any number of industries to skirt environmental laws, with the agency saying it will not “seek penalties for noncompliance with routine monitoring and reporting obligations.”

The EPA has argued the controversial memo was necessary as employees would otherwise be overwhelmed by case-by-case requests to halt pollution monitoring, but critics have called it a license to pollute.

“During a pandemic that is hitting people with heart and lung disease the hardest, it is senseless to push forward a ‘don’t ask, don’t tell’ policy for polluters that will allow them to make our air and water dirtier without warning or repercussion. This policy benefits polluters and polluters alone—and all at our expense,” Natural Resources Defense Council (NRDC) President and former EPA administrator Gina McCarthy said in a statement.

The NRDC filed the lawsuit with 14 other environmental groups. 

The EPA would not comment on the litigation, but said the policy “is a lawful and proper exercise of the Agency’s authority under extraordinary circumstances.”

The agency’s memo, which is temporary but has no set end date, asks companies to log when they were not able to monitor pollution and explain why COVID-19 was the cause, but critics say the damage will already be done.

Companies are expected to “comply with regulatory requirements, where reasonably practicable, and to return to compliance as quickly as possible,” the agency wrote in a release announcing the change.

But the case argues monitoring and reporting also serve as a crucial deterrent from polluting.

People need accurate and timely information about their environment in order to protect themselves from pollution, the NRDC argues. If people cannot obtain timely information about air and water emissions, they will be unable to protect themselves from pollution — or take action against polluters. 

Read more on the suit here. 

 

CHILL BABY CHILL: The Trump administration is contemplating paying oil companies to leave their product in the ground, a measure that could help boost the struggling industry while the market has been crushed by an oversupply of crude.

According to reporting from multiple outlets, the Department of Energy (DOE) is drafting a plan that would pay companies to leave as much as 365 million barrels untapped by considering it part of the nation’s emergency stockpile.

The plan was reported first by Bloomberg, and DOE did not respond to request for comment from The Hill.

Such a plan would be unprecedented and likely to face resistance from Congress, where Democrats were able to thwart a $3 billion request to fill the Strategic Petroleum Reserve (SPR) outright.

But President Trump has said the government should stock up on oil while prices are at historic lows, and the DOE plan appears to already have some support from Republicans.

“While we have not received a formal proposal from the Department of Energy, we look forward to fully reviewing the idea to purchase and store crude oil onsite in producing fields,” said Grace Jang, a spokeswoman for Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska). 

Jang said the office “continues to look for ways to support the American oil and gas industry … and believes that SPR purchases make sense at this time given market conditions.”

Read more on keeping it in the ground here. 

 

DOJ THE DAY AWAY: The Department of Justice (DOJ) is giving a temporary pass to companies that are required to make penalty payments to the federal government, citing the financial strain of the coronavirus.

The new policy, which extends until at least June 1, affects firms that are required to pay civil penalties after entering into a legal settlement with the federal government.

The DOJ first informed its attorneys of the change in a March 31 memo that was updated Monday, and companies began being notified this week.

While DOJ says the move is intended to “mitigate the financial impact” of the coronavirus, enforcement attorneys who have spent years going after the companies say they were shocked by the blanket policy.

“It’s unprecedented in how broad it is,” said Francis Lyons, a partner with Schiff Hardin LLP who previously worked on environmental enforcement issues at the Justice Department. “I think this policy goes beyond what is necessary under the circumstances.”

The new policy isn’t just affecting a handful of businesses either.

In the last week alone, DOJ announced settlements ranging from a few million dollars to tens of millions. In Florida, a Tampa-based firm was fined $41 million for its alleged role in fraudulently charging Medicare and other government health care providers for unnecessary tests, while care providers based in Ohio and Michigan will pay a combined $14 million for allegedly charging the government for unnecessary therapy.

In another case, a South Korean company will pay $2 million after rigging a bid in order to secure an oil supply contract with the military. And in February, Wells Fargo agreed to a $3 billion settlement after bank employees were pressured to sign customers up for various banking products without their consent.

Critics argue that if companies are allowed to suspend payments because of the coronavirus, they need to show how the pandemic is creating financial hardship.

Read more on the memo here. 

 

MAILBAG: Republican governors from five states are asking the Environmental Protection Agency to let refineries off the hook from adding ethanol to their products, arguing the oil industry is in too dire of financial straights to do so. 

“The macroeconomic impacts of COVID-19 have resulted in suppressed international demand for refined products, like motor fuels and diesel,” Govs. Greg Abbott (R-Texas), Kevin Stitt (R-Okla.), Gary Herbert (R-Utah) Mark Gordon (R-Wyo.) and John Bel Edwards (D-La.) wrote.

Having to add ethanol “present[s] a clear threat to the industry under such circumstances,” the governors said.

 

OUTSIDE THE BELTWAY:

Michigan’s Ex-Gov. Rick Snyder (R) Knew About Flint’s Toxic Water—and Lied About It, Vice reports

Study finds the Southwest is locked in the grips of the first human-caused megadrought, The Washington Post reports 

Shell vows to become carbon neutral by 2050 despite oil industry crisis, Evening Standard reports

 

ICYMI: News from Thursday…

Keystone XL pipeline hits court setback

Green groups sue after EPA suspends enforcement of pollution monitoring due to coronavirus

Trump administration eyes paying oil companies to keep crude in the ground: reports

DOJ lets companies skip paying penalties during pandemic

EPA issues rule critics say threatens power plant pollution regulation

With corporations vying for tribal stimulus, some call for resignation of head of Indian Affairs

 

FROM THE HILL’S OPINION PAGES: 

“In a giant favor to the coal industry, the Trump administration is poised to undermine the Mercury and Air Toxic Standards (MATS) that control mercury and other toxic air pollution from coal-fired power plants,” writes Ellen Kurlansky, a former air policy analyst and advisor in EPA’s Office of Air and Radiation.