Lawyers for Coal

, senior energy analyst, Climate & Energy Program | March 17, 2015, 10:11 am EDT
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Laurence Tribe – popularly known as “President Obama’s old law professor” – is testifying today against the Clean Power Plan before the House Subcommittee on Energy & Power, on behalf of Peabody Energy. But here he’s not acting as a teacher- he’s a lawyer fiercely advocating for his paying client.  We have a full preview of how he will distort the case against CO2 regulation from the comments he co-wrote with Peabody Energy on December 1, 2014.

Midcontinent ISO projections of fuel mix in 2030 with EPA rules

Midcontinent ISO projections of fuel mix in 2030 with EPA rules

Now most people are not familiar with the name ‘Peabody Energy.’ But the coal giant shares some things in common with Big Oil companies, such as ExxonMobil, that are household names. You see Peabody Energy ranks among the top producers of industrial carbon pollution.  You won’t find that in Tribe’s testimony.

In his comments to the EPA last year, Professor, sorry, Lawyer Tribe asserts without any reference to any evidence that the EPA Clean Power Plan is “unquestionably designed to drastically cut and eventually eliminate the use of coal.”

Well, no.

The proposed rule provide for reductions of CO2 emissions from power plants, not the end of burning fuel. And in the fuel mix that power system operators predict in 2030, when the full emissions reductions are required, still include lots of coal. The initial analysis by the Midcontinent Independent System Operator (released in November) projects that coal will be used for 33% – 40% of the electricity supply for their region.

The lawyer for Peabody argues that the Constitutionality of the proposed rule depends on the “sheer depth of impact,” but he has conjured up a scenario of the end of coal that is simply not in the proposed rule or in any projections of its implementation.

Attorney Tribe says another key to his argument is that the rule interferes with investor expectations. In my experience in the electric power industry, there’s a pretty healthy concern for regulatory risk.  In more than one instance, I have witnessed a new rule or a change to a rule that put an end to a product or money-making opportunity. Now recognize I have toiled amongst the regulations governing the transmission impacts of electricity generation, not exactly a fast-moving arena. Tribe’s argument that the government has provided such encouragement over many years that the “phase out” of coal will be judge an illegal taking fails on both the hyperbole of the non-existent “phase out,” and the nature of the investment risks.

More hyperbole

At the outset of today’s testimony, Tribe includes an informative exclaimer. “I claim no expertise in, nor will I be testifying about the pros and cons of EPA’s plan as a response to the issues posed by climate change,” he admits, before going on to make erroneous assertions about this very subject. Tribe claims that the EPA made no attempt to quantify the benefits of the Clean Power Plan. In fact, EPA did just that and found that the climate and health benefits far outweigh the costs of the proposal.

Worse, Tribe speaks dismissively of CO2 as a “benign gas” and seems to go to great lengths to absolve individual polluters of any responsibility for the impacts of their CO2 emissions. “There is simply no cause-and-effect relationship between the actions of any individual emitter and any specific harm,” he says. That would certainly be convenient for Tribe’s sponsor Peabody Energy, which ranks among the world’s top producers of industrial carbon emissions. Similarly, the power plants that are subject to Clean Power Plan represent the nation’s single large source of CO2 emissions. I am not a lawyer, but to me it is clear that those most responsible for the emissions that cause climate change bear responsibility for cleaning them up.

What’s the business case?

Attorney Tribe co-wrote, and this week appears on behalf of the coal mining company Peabody Energy. The regulations affect coal-burning power plants, Peabody’s customers. The majority of those power plants are over 40 years old, which is their original accounting lifetime. Peabody has also suffered a significant loss in sales in recent years due to the lower price of natural gas, and the competition the old coal plants see from newer, more efficient gas-burning power plants. I have not seen what Peabody projected would happen to coal sales when cheap gas from hydro-fracturing came available.  Wouldn’t it be ironic if Peabody management was convinced that environmental concerns over this gas production were going to frustrate investor expectations?

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