Supreme Court ruling not a clear win for Wyoming coal

Market forces along with state and regional climate policies will likely continue to pressure utilities to shift from planet-warming coal-fired power to wind and solar resources in Wyoming, despite the Supreme Court’s ruling Thursday to limit the U.S. Environmental Protection Agency’s powers, according to a state energy analyst.

“This will not really change the reality of the situation — that our energy market outcomes are determined by users elsewhere,” University of Wyoming energy economist Rob Godby said.

In a 6-3 opinion in the case of West Virginia v. EPA, the court delivered a blow to the Obama-era Clean Power Plan, limiting EPA’s powers to regulate carbon emissions from power plants through programs such as a cap-and-trade model. 

However, the Clean Power Plan was never enacted in a meaningful way regarding power plant emissions, according to proponents of the plan. The court’s decision actually affirms EPA’s authority under the Clean Air Act to regulate greenhouse gases and other emissions in the energy sector, according to industry analysts.

Though the court’s decision limits EPA’s powers and will be welcomed by Wyoming’s ruling politicos, Godby said, it won’t hand the state more powers to fight against market forces driven by energy policies in the more than 20 states that consume Wyoming coal. 

“Our markets will continue to be affected by what other places choose to do regardless of the federal government’s powers,” Godby said.

Wyoming joined West Virginia in its lawsuit against the EPA, and Gov. Mark Gordon declared a victory on Thursday.

“Today’s Supreme Court decision regarding the Environmental Protection Agency’s regulatory authority is a clean win for Wyoming,” Gordon said in a prepared statement Thursday. “The legal authority to regulate emissions properly lies with Congress and the states, not an overzealous federal bureaucracy insulated from practical accountability.”

SCOTUS opinion

With the SCOTUS decision, the EPA is left with the authority and obligation to regulate greenhouse gas emissions within a more narrow lane — setting carbon-emission-reduction standards for coal and gas power plants based on available technologies rather than the Clean Power Plan and the carbon pricing or cap-and-trade strategies it purported to deliver, according to the Natural Resources Defense Council’s David Doniger.

“That is a significant authority that EPA still has,” Doniger told reporters during a press conference Thursday. “And we will be pressing for the EPA to use that authority to set standards. In fact, we think that’s the direction the Biden administration was headed anyway.”

Notably, the court’s opinion underscores that the Clean Air Act does not guarantee a certain market share for any particular fuel source, Doniger added. The opinion also does not diminish the EPA’s authority regarding vehicle tailpipe emissions or methane gas emissions in the oil and gas industry.

“Basically, West Virginia has won the last war,” Doniger said. “They succeeded in getting struck down a rule that wasn’t ever going to go into effect.”

However, the SCOTUS opinion is still a setback, according to some climate action proponents. 

It ruled that Congress did not grant EPA the authority under Section 111(b) of the Clean Air Act to institute sweeping initiatives via emissions caps or carbon trading, which many utility interests considered viable, flexible options. Those strategies — now unavailable to EPA to enforce — would require explicit direction from Congress. 

Yet the ruling makes clear that states still enjoy full authority to go beyond EPA standards in limiting greenhouse gas emissions.

“Today’s decision unambiguously has no impact at all on state and local authority” to set their own carbon emission standards, Sierra Club Senior Attorney Andres Restrepo said Thursday.

What it means for Wyoming

Wyoming maintains primacy over the federal Clean Air Act, which means EPA sets emissions standards and the state decides how it will direct industry to meet them. In many cases, the state has chosen to go beyond federal minimum standards and practices — such as being the first state to implement a methane leak detection and remediation rule for the oil and gas industry.

The same primacy applies to emissions from power plants.

While the West Virginia v. EPA SCOTUS opinion underscores the states’ authority to implement and go beyond emissions standards under the federal Clean Air Act, it’s unclear whether it gives Wyoming more footing to delay the retirement of coal-fired power plants within its borders — a goal that both the Legislature and the governor’s office have pursued for several years.

“I am not sure what impact this will have here in Wyoming,” Wyoming Department of Environmental Quality Public Information Officer Keith Guille told WyoFile.

PacifiCorp, which operates as Rocky Mountain Power in Wyoming, owns and operates several coal-fired power plants in the state. The utility, which serves customers in Wyoming and five other western states, said it was still analyzing the SCOTUS decision when reached by WyoFile on Thursday.

However, the states that hold power over utilities that ship electricity to them from Wyoming — mostly on the western grid — may be more emboldened to set more restrictive carbon emissions standards as a result of the SCOTUS opinion and continuing inaction from Congress, according to energy industry analysts. Wyoming will remain prone to those states’ authoritiy to enact standards that pressure utilities to abandon coal-fired power.

“That will not change as long as we export most of our energy, whether by truck, rail, pipeline or transmission line,” UW’s Godby said.

Wyoming’s powers and influence over utilities with power plants within its own borders are substantial, but still limited given the fact that the state exports most of its electricity. State lawmakers have struggled for years to figure out how to buck the trend of utilities shifting from coal to renewable sources of electrical generation.

“The [Wyoming Public Service Commission] does not have the means of controlling the fate of all of these plants,” Wyoming Public Service Commissioner Chris Petrie told a legislative committee this week. “We’re simply not a big enough customer.”