DUK Duke Energy Corp New

By Louise Radnofsky and Cassandra Sweet 

WASHINGTON -- President Donald Trump Tuesday took steps to begin unraveling the centerpiece of the Obama environmental agenda, signing an order to reverse rules aimed at pushing U.S. utilities to shift from coal plants to cleaner-burning fuels.

"My administration is putting an end to the war on coal," Mr. Trump said ahead of the official signing at the Environmental Protection Agency, repeating a campaign slogan he used to champion policies he said would bring back mining jobs.

He said he was ending a "crushing attack on American industry" and paring back regulations that impeded job creation, while still ensuring clean air and water.

But while the moves are being billed as job savers, companies and energy experts said the order is unlikely to reverse the U.S. utility industry's shift to natural gas, solar and wind as leading sources of electricity.

The order begins a formal review of President Barack Obama's Clean Power Plan, which would have required utilities to reduce power plant carbon-dioxide emissions to 32% below 2005 levels by 2030. It also initiates a review of a regulation that would impose tougher missions requirements on new plants.

It further pulls back 2016 guidance from the Council on Environmental Quality on climate change and official estimates of the social cost of carbon, methane and nitrous oxide and rescinds a temporary ban on new coal leases on federal lands, which Mr. Obama's Interior Department issued early last year.

The moves are all but certain to trigger legal and political pushback from environmentalists, and Democrats announced swift opposition on Tuesday. The actual repeal could take years as the litigation and rule-making process run their course. The White House on Monday night acknowledged it would likely take "some time."

"Ultimately, litigation will keep these agencies on course, but this order is a big waste of time and effort, done to appease a dirty industry and right-wing climate-denial fanatics," said Sen. Sheldon Whitehouse, a Rhode Island Democrat.

The White House action is part of a broad push across the government to rein in what Republicans and businesses say is a burdensome and costly regulatory environment created under the Democratic administration. It also gave the president an opportunity to move beyond the difficult collapse of health-care legislation in the House last week and hand a win to allies who have fervently opposed the power plant rules.

Energy and environmental regulations have been among the Trump team's highest priorities for review. The administration has given the green light to two contentious oil pipelines, Dakota Access and Keystone XL, and last month Mr. Trump ordered the EPA to begin the process of repealing a regulation that brings more bodies of water under federal jurisdiction as a means to protect drinking water supplies. Federal courts temporarily blocked both the carbon and water rules during the Obama administration.

The move also raises questions about what steps, if any, the Trump administration might take to comply with a global pact to address climate change that roughly 200 nations agreed to in Paris in 2015.

The order Tuesday drew a rebuke from the European Union. "Now, it remains to be seen by which other means the United States intends to meet its commitments under the Paris Agreement," said Miguel Arias Canete, climate action and energy chief at the European Commission, the EU's executive arm.

A senior White House official said Monday that the Trump administration hasn't reached a decision on how to proceed with the Paris agreement.

While companies and energy experts said Tuesday's move may extend the life of some aging coal-fired power plants, there are other factors at work.

Many energy companies face state requirements to increase renewable power generation and are under pressure from investors such as pension funds and university endowments to clean up their operations.

Cheap U.S. natural gas unlocked by hydraulic fracturing and horizontal drilling has prompted many companies to scrap older coal plants in favor of gas-fired plants, which require fewer workers to operate.

Companies are also taking advantage of tax credits for renewable power to build out solar and wind farms, which are becoming more cost-competitive with fossil-fuel generation thanks to economies of scale and advances in technology.

"Investors want to see companies that are moving away from coal, to other energies," said Fiona Reynolds, managing director at Principles for Responsible Investment, a London-based nonprofit that helps funds figure out how to cut the carbon footprint of their investments.

Nearly 700 institutions valued at more than $5 trillion have pledged to divest themselves from fossil-fuel companies, according to a December report by consulting firm Arabella Advisors.

And many utilities are already orienting themselves toward cleaner fuels.

Duke Energy Corp. said it planned to invest $11 billion in natural-gas and renewable power generation over the next 10 years, as the company aims to cut its greenhouse-gas emissions by 35% from 2005 levels, by 2026.

That represents a long-term company strategy and isn't likely to change, Duke Chief Executive Lynn Good said in a February interview.

Southern Co. plans to invest at least $1 billion a year over the next five years in new wind farms. It now uses natural gas to generate 47% of its power. Coal provides 31%, nuclear 15%, and hydropower, wind, solar and other renewable sources 7%.

"Going forward, we anticipate an increase in renewable generation capacity and declining utilization of coal," said Terrell McCollum, a spokesman for the Atlanta-based utility.

Still, the symbolism surrounding the action was important for Mr. Trump and loyal constituencies in the mining industry, where the power plant rules were viewed as a government betrayal for regions whose mines had long provided steady employment.

At Tuesday's signing, Mr. Trump, flanked by coal miners, singled out West Virginia Republican Sen. Shelley Moore Capito, who was one of around two dozen members of Congress present, according to the White House.

Ms. Capito said he "kept his promise to roll back one of the most harmful acts of overreach by the Obama administration" and that the Obama-era rules "would have completely decimated West Virginia's vital coal industry while having no meaningful climate impact."

In addition to the coal miners and lawmakers, the event included Vice President Mike Pence, Energy Secretary Rick Perry, Interior Secretary Ryan Zinke, and Environmental Protection Agency Administrator Scott Pruitt.

Mr. Pruitt said the president was "rejecting the narrative that this country cannot be pro-energy and pro-environment" and said that under his leadership, "We're not going to allow regulations here at the EPA to pick winners and losers."

Shares of some coal companies jumped on news of the order. Peabody Energy Corp., the world's largest private-sector coal company, which is in the process of exiting bankruptcy, rose 15.8% to $2.20. Arch Coal Inc. rose 1.85% to $69. Environmental groups blasted the order, saying it would lead to dirtier air and water for Americans in addition to increasing greenhouse gases.

Emre Peker contributed to this article.

Write to Louise Radnofsky at louise.radnofsky@wsj.com

(END) Dow Jones Newswires

March 28, 2017 19:48 ET (23:48 GMT)

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