EPA Rollbacks and What They Mean

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By: Maura Keller

Renewable energy technologies offer a tantalizing promise: clean, abundant energy gathered from continuously self-renewing resources. Conventional energy sources based on oil, coal and natural gas have proven to be highly effective drivers of economic progress, but at the same time, they are reported as damaging to the environment and human health.

During the burning of fossil fuels, emissions are released into the atmosphere, contributing to global warming and acid rain. There also are major worries about the safety of nuclear technology and how to dispose of radioactive waste.

Recently, President Donald Trump signed an executive order aimed at rolling back several climate policies put in place during the Obama administration. These pullbacks will affect more than a half-dozen measures in an effort to boost domestic energy production in the form of fossil fuels. In addition, Trump will initiate a review of the Clean Power Plan, which restricts greenhouse gas emissions at coal-fired power plants.

As Floyd Self, partner at Berger Singerman explained, the Administration has proposed a broad range of policy changes addressing virtually the entire spectrum of environmental initiatives pursued by the Obama Administration.

“Depending upon the posture of the regulations or policy, the Administration has issued executive orders, has withdrawn from the Paris climate accord, has sought to withdraw or delay the implementation of adopted rules or seek the remand of cases back from the court, and has proposed massive cuts to the budget of the EPA.

“The biggest immediate change may be the budget cuts to the EPA, and related cuts to other agencies with environmental/energy programs, but the consensus appears to be that while there may be some cuts, especially to the EPA, they will not be of the magnitude proposed by the Administration,” Self said.

So how will these modifications and pullbacks affect the alternative energy arena in terms of jobs and productivity?

“From what we have read, the Trump administration is proposing to cut the EPA’s budget rather substantially – around 30 percent – by eliminating programs and grants,” said Dennis Lacey, chief executive officer of RGS Energy. “We follow these developments like others that are concerned about our environment, but particularly for us, with an eye toward how it will impact solar systems, for our customers, vendors and our company. From what we have heard so far, we do not see these pull backs affecting solar.”

Lacey doesn’t feel that the proposed pull back would significantly slow growth in the alternative energy segments including solar sector employment.

“We feel confident that Americans will continue to choose renewable energies, like solar, to power their lives while preserving the environment for future generations,” Lacey said.

According to the Department of Energy and the World Resources Institute, about 800,000 Americans were employed in low-carbon emission generating technologies including renewables. Specifically, the solar workforce reached 374,000 employed in 2016 while 160,000 Americans worked in coal the same year. In 2016, 1 out of every 50 new jobs added was in the solar industry.

And while Self and his team have not done any independent analysis of the market, the reports he has seen suggest that solar-related employment is a growth industry.

“Just looking at Florida and the number of utility-scale solar projects announced or under construction already, certainly supports the narrative that solar employment is growing,” Self said. “As we have seen in Florida especially, the people want more solar, whether rooftop or utility scale. Even in a state like Florida that prohibits third party sales of electricity to other consumers, the implementation of Florida’s new constitutional amendment should see further solar deployments. If you look to states like Massachusetts and New York, that have state-incentive programs for customer owned solar generation, we do not see any reversal of those policies and only further growth in this sector.”

And consistent with the national trends, they are hiring here at RGS Energy. “We’ve grown our headcount 41 percent and are still hiring,” Lacey said.

Daniel Thompson, partner at Berger Singerman also said that generally, the immediate sense is that there may be little effect on the jobs within the alternative energy segments.

“In particular, with the President’s emphasis on restoring coal jobs, the actions of especially the utility industry is that coal is dead as a long term fuel source,” Thompson said. “The economics of natural gas – the available reserves, the impact of fracking in releasing the gas, the speed with which new natural gas power plants can be permitted and built, and the new pipelines planned and coming on line to serve natural gas plants – mean that natural gas is going to be the fuel of choice for at least the next 10 years or more.”

The fact that the Administration wants the U.S. to be an energy exporting nation means that only more natural gas needs to be produced in this country.

As Thompson explained, in addition, there has been substantial opposition to the pullbacks from environmental advocacy groups and certain states, which has resulted in litigation designed to slow or stop this pullback, particularly in situations where the administration may not follow proper procedures for changing or freezing the current regulatory regime, or is restricted from making changes by the current status of substantive legislation that Congress may not have the willingness to change.

As mentioned, at this time the industry doesn’t foresee an impact on solar from the proposed pull back. Having said that, this, coupled with the Trump administration’s decision to not join the Paris Accord, speaks to a theme that is less government resources focused on the environment.

“We believe small business owners and individual homeowners, each of whom are aware of these developments, can take action on their own, apart from the government, by installing solar systems on their homes and businesses,” Lacey said.

What other issues may arise within the alternative energy markets as a result of these pullback initiatives, and why should business owner and industry players pay attention to this?

Quite simply, any change in regulations is always an opportunity for businesses that can be at the front of the changes.

“Whether the court or the EPA is successful in revoking the clean power plan, utilities and other businesses are going to continue to make investments in technologies that make good business sense, such as natural gas power plants,” Self said.

Waste to energy and similar facilities that have invested substantial capital in advanced treatment technologies might find themselves at a competitive disadvantage in case of rollbacks, which could result in more litigation – this time from industry groups rather than environmental ones. In addition, certain states and/or local governments might try to enact more stringent laws and regulations to offset any federal rollbacks.

“It is hard at this point to determine how all of this will end up,” Self said. “The main climate issue at the moment is a climate of uncertainty.”

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