I had the opportunity this past week to spend an hour with EPA administrator Gina McCarthy at this years Wall Street Journal ECO:nomics conference. Twelve to fifteen of us had the chance to do a what the WSJ called a “Deep Dive” with the Administrator before her main stage interview by Gerard Baker later in the evening. I was able to get a question in about the Renewable Fuels Standard (RFS) and the mandated levels that have still not been set for 2014 let alone established for this year, but we’ll get to that in a post all it’s own, I want to focus on the Clean Power Plan discussion that dominated the time we had with McCarthy. The CPP proposes to cut US CO2 emissions by 30% as compared with levels in 2005.
It was clear very early that Administrator McCarthy is a gifted talker with a no-nonsense manner and who is quick to use self deprecating humor to make her points. Her conference room manner is no doubt sharpened by many hours of hard testimony in front of the US Congress, an opportunity she says she still feels “honored” to be able to do. Honored or not it is intense and brutal at times and while we asked many pointed questions one quickly formed the impression that McCarthy was enjoying being able to make her points without a microphone or camera in her face.
McCarthy’s main theme throughout the discussion was that the Clean Power Plan as proposed was the most collaborative effort the EPA has ever undertaken when engaging with the states. Each state has the freedom to develop their own State Implementation Plan or SIP. When challenged about what EPA will do if some states do not develop a SIP as some have stated they will not do, McCarthy was quick to say that they would then be forced to adopt a Federal Implementation Plan or FIP. She went on to say that the FIP would likely be more expensive, less flexible, and less well fit to an individual states needs than what they could accomplish with their own SIP.
This general discussion had some pointed moments that resulted in polished statements from McCarthy that she has clearly used before. When asked about the thousands of jobs lost by shutting down a forecast 45,000 megawatts of coal generation McCarthy was quick to state that, “I am sticking to my lane and regulating pollution not choosing fuels.” She went on to say that states will decide how much coal to keep in their mix of generation capacity but that she expected around 30% of power generated would be produced from coal. This well practiced statement clearly intended to reinforce the EPA’s legal perspective on the CPP overall, that it is all about implementing the law under the Clean Air Act and not some new extra legal over reach that flies in the face of the constitution or states rights.
So McCarthy’s prepared answer was in line with what one would expect given the current and future legal challenges to the CPP but given the relaxed atmosphere of the exchange what was easier to gather was her belief that global warming is a major catastrophe that must be managed. She made several comments along the lines of “this is a modest target” or “we would like to go far further in addressing greenhouse gasses but this is a start”. If the CPP survives legal challenge without significant modification I think we can count on even more aggressive follow up actions if a democratic administration wins again in 2016.
After our “Deep Dive” session Gerard Baker the Editor in Chief of the WSJ interviewed Administrator McCarthy on the main stage and immediately dove into the legal challenges facing the proposed rule. After repeatedly asking McCarthy about the various legal suits underway and anticipated, to which McCarthy simply kept replying that, “we will win”, Gerard finally asked what I thought was his best question of the night, “What if you don’t?” Undaunted McCarthy simply retorted that she will win. Pressed further by Gerard, McCarthy finally conceded that if the CPP falls to legal challenge that they would simply repackage the plan to account for the rulings and then keep trying. There will clearly be no giving up on regulation of greenhouse gasses from this EPA administrator. While McCarthy may claim to be “sticking to her lane and implementing the law”, she is more clearly pursuing her passionate belief that we are all doomed without EPA intervention.
Thinking On Energy 