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Despite Trump's CPP Repeal, Energy Industry Spokesman Touts GHG Cuts

October 17, 2017

Although President Donald Trump is directing EPA to repeal the Obama-era Clean Power Plan (CPP) for reducing power sector greenhouse gases, Frank Maisano, a senior principal with the Bracewell law firm and a frequent proponent of energy industry stances, says the United States will still achieve major GHG cuts from the sector's shift to lower-carbon generation and agency rules such as a pending aircraft GHG policy.

In an exclusive Oct. 17 interview with Inside EPA, Maisano also said that while the CPP repeal might create some uncertainty in the utility industry, it also increases flexibility among companies and states in determining their mix of power sources including coal, natural gas, and renewables such as solar and wind. “With the [CPP] being gone, it's a mixed bag: There's some limited loss of certainty, but you get an add back in of flexibility.”

The Trump EPA is moving to undo most of former President Barack Obama's climate regulations, including the CPP and first-time new source performance standards (NSPS) to regulate the potent GHG methane from new oil and gas facilities. But Maisano said the gas sector is already taking steps to capture valuable methane in order to sell it.

And he had some praise for a recent Commerce Department report that listed several EPA air policies as top priorities for reform, including the Clean Air Act new source review (NSR) program that can impose strict permitting mandates on facilities looking to upgrade or expand. Maisano said the program has been a “thorn” in the side of some companies, because the costs of the permitting mandates can discourage facility improvements.

But he cautioned that EPA would need an increase in staff -- both Senate-confirmed assistant administrators to head agency divisions and career staff to help implement policy changes -- to achieve NSR reform and other deregulatory goals from Trump and EPA Administrator Scott Pruitt.

“They have some very smart people at EPA but they need more, if they could get the rest through the [Senate] confirmation process we'd be way better off,” he said. “They need more bodies” to implement Trump's agenda.

Maisano's focus at Bracewell is on media relations, crisis communications and strategic counseling, according to the firm's website. He represents clients in a host of industries, including natural gas and renewable energy, with extensive experience including working as a communications adviser to current and former Reps. Joe Knollenberg (R-MI), Hal Rogers (R-KY), Toby Roth (R-WI), and Bill Schuette (R-MI), and in the press office of Sen. Richard Lugar (R-IN).

In 2003, he co-founded the strategic communications practice at Bracewell, which describes itself as “a leading law and government relations firm primarily serving the energy, finance and technology industries throughout the world” -- and his current work includes briefing reporters on energy policy or connecting them with Bracewell's experts, who include former George W. Bush Office of Air & Radiation Assistant Administrator Jeff Holmstead.

“What we've really been able to do is connect the policy side with the communications side,” Maisano said. In an era where the president decries some media outlets as providing “fake news,” Maisano said, “I've never really believed that -- the reality is that you have to deal with the media in front of you, not participating is not an option. Over the years I've had industry clients say they won't talk to the media, but we changed that mentality. It's about figuring out a way to play a better role, not necessarily to make the story favorable, but to get your voice into the story.”

He added that Bracewell's experts “have the chance to really influence the policy game and help reporters understand the complexities of what is oftentimes challenging policy they have to cover.”

Trump Agenda

Environmentalists are ramping up their opposition to Trump's EPA agenda and fighting what they see as too much deregulation of various industry sectors, citing plans to repeal the CPP and the Clean Water Act jurisdiction rule, and reconsideration of policies such as the methane NSPS and tighter ozone standard. But Maisano said that Trump is “in a similar place with us on a lot of issues, except for maybe trade.”

He added, “I think Scott Pruitt is an excellent, smart guy -- you've got to step back from the typical Democratic or environmentalists banter that's, 'He's rolling back the entire agency, he's in the pocket of industry,' because you'll see that play out whenever somebody doesn't like what they're talking about. I don't think it's a big surprise that Scott Pruitt is going to to pay attention more to industry because the previous administration really didn't do it at all.”

The power sector and other industries are “a regulated community, and so they are stakeholders just as much as environmentalists are stakeholders. They deserve to have a voice in this conversation,” he said.

The Obama EPA “did lots of things by regulatory fiat, and I think that has given this administration more liberty to be successful pulling some of those things back, and the Clean Power Plan is one example of that,” Maisano said, just days after the agency formally proposed repeal of the rule.

On the CPP, Maisano said the repeal “won't be as fast” as some critics of the rule might hope because of the lengthy administrative process EPA must undertake to justify the move. “If you want it to stand up you can't just push it off into the trash can, you have to go through the administrative hoops and hurdles,” he said -- and EPA is taking comment on the repeal. The agency also has sent for White House pre-publication review an advance notice of proposed rulemaking (ANPR) that will seek input on whether and how it should write a replacement power sector GHG rule.

Power companies have “a mixed view” of the CPP repeal depending on their generation mix, but he added that “for the most part, folks look at this and say, 'We were already doing a lot of stuff that the rule would have made [us] do,'” such as switching to lower-emitting power sources such as natural gas. “They always like certainty and to a point that certainty would be good,” he said when asked whether the repeal would cause more uncertainty. “But even in this uncertainty that we have now, what they're doing, they're moving in the direction the market is taking them and the market is taking them in a direction that's reducing emissions. That's a success story that we can't scoff at.”

Maisano also said the power market is “getting smarter as the generation mix is getting smarter” by being able to handle more renewable electricity sources on the grid. Increasing acceptance of renewable energy sources as well as ongoing low natural gas prices encourage less reliance on GHG-heavy power sources, he said. But, “I don't think you could enforce that nationally because of the difference in regional power demands.”

While the CPP might have provided regulatory certainty, it did so based on a “snapshot” of power supplies that did not account for future major changes in power markets, he said. “One of the flaws of the [CPP] was that it boxed people in” regarding their ability to adapt to power needs while also reducing GHGs. “My guys in the utility sector and others like having the flexibility to be able to be not be forced into something.”

He also said the CPP was flawed because it took power planning decisions away from state regulatory officials and transferred them to governors or federal officials. “They were taking the decisions out of the hands of state regulators who know their sector, know their reliability problems, know their energy issues.”

The CPP's focus on setting GHG goals based on the potential for cuts that occur outside the fenceline of a power plant was “a stretch,” he said. “I think you'll hear all of this in the ANPR process, basically a better strategy is to keep things inside the fenceline, certainly states can still manage their [power] mix.”

Greenhouse Gases

EPA is also reconsidering the methane NSPS, although the rule remains in effect after a federal appellate court vacated the agency's initial stay of the rule and the agency has yet to issue a pending two-year delay rule.

Maisano downplayed suggestions that gas companies might face compliance uncertainty while the rule is still in effect, saying the industry is more focused on trying to overcome hurdles to gas infrastructure such as roadblocks to constructing pipelines that could help supply power to regions such as New England. “That's the challenge that a lot of folks in the gas industry see right now as the bigger problems,” he explained.

He said that gas companies are already taking extensive steps to capture valuable methane from drilling operations rather than burning it off or venting it, because it can be sold for a host of business uses.

Environmentalists have raised concerns about the potential loss of GHG reductions if EPA were to scrap the methane NSPS or substantially weaken it, but Maisano suggested that existing industry efforts to curb methane will drive down emissions -- particularly when combined with U.S. efforts to implement the 2016 Kigali amendment to the Montreal Protocol on phasing out global warming-causing hydrofluorocarbons and a pending EPA rule to implement aircraft GHG standards issued by the International Civil Aviation Organization.

Meanwhile, Maisano welcomed the recent Commerce Department report that advocated for overhauling NSR and changing other EPA programs to remove barriers to industrial growth. But he argued that the agency needs its Senate-confirmed officials and more career staff to implement the changes.

“[NSR] has been a thorn in the side of power companies, so it would be a good place to start discussion about how you can upgrade facilities to make them more efficient and achieve significant reductions in emissions without making them go through” the extensive and potentially costly NSR permitting process, he said.

When Inside EPA jokingly suggested that EPA could try to combine CPP repeal and NSR reform into one “mega rule,” Maisano laughed and dryly said: “Right, like there'd be no lawsuits about that.” -- Anthony Lacey (alacey@iwpnews.com)

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