EPA administrator Scott Pruitt announced some major changes to how the U.S. is approaching clean energy.
Early on Monday, he announced that the EPA would be withdrawing the Obama-era Clean Power Plan once and for all.
I don’t know why anyone was surprised to hear this.
The CPP was a controversial project from the start, and had varying levels of support from every angle even before Trump took office.
Which means we saw this move coming long before President Trump pulled the U.S. out of the global Paris Accord, a much larger climate initiative with similar problems to the CPP.
And since none of this news was really new, investors took it with a grain of salt.
Energy stocks that would have been battered by the news took their hits early on, and are already recovering.
But there’s another industry hoping to see renewed support this week.
Is the War on Coal Over?
We also got notice from Mr. Pruitt that the EPA was rescinding several Obama-era restrictions on coal-fired power plants.
This move goes hand-in-hand with his comments on the CPP:
“When you think about what that rule meant, it was about picking winners and losers. Regulatory power should not be used by any regulatory body to pick winners and losers,” Pruitt is quoted as saying in a recent CNN article.
It’s true, that’s what the CPP was all about.
It gave disproportionate favor to cleaner energy sources at the expense of coal, with natural gas acting as a bridge between the two.
What people fail to realize, however, is that the U.S. was well on its way down that path before Obama did anything about it.
The country has seen unprecedented growth in natural gas, solar, and wind energy in the last decade.
The U.S. is actually a leader in emissions reduction. The country’s emissions peaked in 2007, and according to the Energy Information Administration, carbon emissions were already 14% lower than they were in 2005 as of last year.
None of that was due to any far-reaching federal mandates.
The CPP called for a 30% reduction from 2005 levels by 2040. Progress has continued on this front, and the country has managed to reach nearly half that goal even without the rules being fully in place.
It’s just the way the market is swinging.
Natural gas is cheap, abundant, and cleaner than coal.
Solar and wind technology has improved to the point that, in some places, it’s even cheaper than running fossil fuel plants!
If you’re still betting on coal, you may see a bright spot for the next few months as regulations disappear and the fuel’s outlook improves slightly.
But long term?
The war on coal is over, and coal has already lost.
To read more about the EPA’s decision to withdraw the CPP, click here to read the CNN article.
