West Virginia sets up roadblocks on Biden’s path to a decarbonized future

West Virginia's elected officials were able to stall, if not yet block, key pieces of US President Joe Biden's climate agenda towards the latter half of 2021 using approaches ranging from legislative tactics to legal action.

Their goal was to stall Biden's target of halving the nation's GHGs by 2030, decarbonizing the power sector by 2035 and wean it away from fossil fuels.

Biden's target, if realized, could prove calamitous for the Appalachian state, which is flush with coal and natural gas reserves and reliant on the mining and power generation industries supporting them for employment and revenues. On the other hand, it could also protect the state from the climate-driven, extreme weather conditions that scientists say are exacerbated by fossil fuel burning.

West Virginia faces threats from inland flooding and extreme heat between now and 2050 and was given a D+ rating for its preparedness to deal with inland flooding and C for extreme heat under the first-ever national report card prepared by Climate Central, a global consortium of scientists, and ICF International. The report card looked at each state's preparedness to deal with major climate-driven, weather-related threats.

"While the state is addressing its current risks, it has not assessed how its vulnerabilities could change under future climates, or has it created a climate change adaptation plan to address them," the report card said.

West Virginia is not the only state that has taken a stand against Biden harnessing the executive branch's power to tackle the threat posed by increasingly frequent and more intense climate-fueled weather events, according to Baker Botts partner Alexandra Dunn. But the state's elected officials have been the most public and vocal about their opposition, especially in recent months to what they see as federal regulatory overreach.

For starters, the West Virginia's congressional delegation has refused to support Biden's $1.75-trillion Build Back Better Act that contained $550 billion in clean energy tax credits and other incentives to move the country to a decarbonized future. And the state's attorney general's office is either leading or involved in coalitions of like-minded states that are taking the Biden administration to court over its climate and environmental regulations, notably power plant limits on GHGs that date back to the Barack Obama administration.

Basically, "West Virginia officials are using all the levers that are available to them to slow down Biden's climate agenda" said Thomas Lorenzen, a partner with law firm Crowell & Moring who co-chairs the law firm's Environment and Natural Resources Group.

Agreeing with Lorenzen is William Snape, director of the American University Washington College of Law Program on Energy and Environment.

"Yes, it appears West Virginia has some leverage right now," said Snape, who also serves as the senior counsel for the nonprofit Center for Biological Diversity.

"The real question might be why elected state officials are not pursuing cleaner economic policies that would clearly be better for their residents' future, today and tomorrow," he added, especially as climate-fueled impacts in the US alone have run into billions of dollars.

Clear signal from Congress

Right before the US Congress recessed for the holidays in December, US Senator Joe Manchin, Democrat-West Virginia, pulled his support from the Build Back Better Act containing billions in clean energy tax credits. Manchin's decision effectively jettisoned the bill's current chances of passage in the US Senate, where Republicans and Democrats are tied 50-50 and no GOP member supports the legislation.

Prior to Manchin's action, West Virginia Attorney General Patrick Morrissey persuaded the US Supreme Court in October to review a lower federal court ruling that ostensibly gave the US Environmental Protection Agency (EPA) more power than Congress granted under the national air pollution law to regulate GHGs beyond the fence lines of fossil fuel-fired power plants.

US Senator Shelley Moore-Capito, Republican-West Virginia, even persuaded 46 of her Republican colleagues in the chamber to file a legal brief in support of West Virginia's petition in the Supreme Court. She was joined by 44 members of the House of Representatives as well. The lawmakers agreed with West Virginia's delegation that "an administrative agency like the EPA may decide issues of such vast economic and political significance only when the agency can point to 'clear congressional authorization.'"

The Supreme Court is scheduled to hear oral arguments on 28 February.

Taking on fossil fuel reliance

Biden has made tackling the climate crisis and protecting vulnerable communities twin priorities. He has released a flurry of executive orders from the day he took office that range from setting renewable energy and electric vehicle targets to assessing impacts of climate-related financial risks, and ending overseas subsidies for coal-fired projects.

Biden signed onto the Glasgow Climate Pact following the UN COP26 climate meeting held in Glasgow, Scotland, in November. This accord for the first time in UN climate summit history got 190 countries, including the top five global GHG emitters—China, US, and India—to agree to "phase down" use of unabated coal power and fossil fuel subsidies at some uncertain date.

For West Virginia, this is threat to a key industry. Lorenzen said West Virginia wants to protect its coal and gas industry that employs a sizeable number of its population and provides the state significant revenues. But he said the state and their representatives are overlooking that market forces and public sentiment have shifted away from fossil fuels because of their key role in exacerbating global warming, and related climate impacts that have run into billions of dollars in the US alone.

Energy driving West Virginia economy

Energy will continue to remain the economic driver in West Virginia through 2026, with industrial consumption, according to the economic outlook for the state carried out by West Virginia University (WVU) John Chambers College of Business and Economics for 2022 through 2026.

The US Energy Information Administration (EIA) said West Virginia remains a significant consumer of energy and ranks among the top 10 states on a per-capita basis, but also a net-supplier to the rest of the country. Energy-intensive industries such as manufacturing chemicals, mining coal, and extracting oil and natural gas are key contributors to the state's economy.

In 2020, the year when the COVID-19 pandemic slowed energy production and usage, the EIA said West Virginia remained the second-largest coal producer in the nation after Wyoming, accounting for 67.2 million short tons—or 13% of US total coal production. But it recorded a drop of about 27.9% compared with 2019 when it produced roughly 93 million st.

"We forecast production will peak in late 2022 at about 75 million tons annualized, well below 2019's total volume of 93 million tons," the outlook said.

According to the EIA, West Virginia also is the source of the largest share of the nation's exported coal, and the state accounted for 33% of US coal exports to other countries in 2020.

Overseas demand for coal dropped, falling from $2.3 billion in revenue in 2019 to $1.4 billion in 2020. Although coal exports declined in 2020, India and Ukraine remained the top purchasers. This year, China surpassed all other countries as it beefed up its purchases of West Virginia coal to $306 million in the first two quarters of this year.

"If this pace continues through the end of the year, China will have imported nearly 15 times as much coal from West Virginia as in 2020, when the country purchased $38 million in total value," West Virginia University outlook said.

Moreover, coal-fired power plants account for almost all of West Virginia's electricity generation, and were responsible for supplying 88% of power needs in 2020, EIA said. Although natural gas generation increased in the state, EIA said eight of the state's 10 largest power plants, both by capacity and by generation, continue to use coal. And coal-fired electricity continues to be the cheapest in the region.

Manchin takes aim

Although Manchin has not directly targeted the clean energy provisions of the Build Back Better Act legislation, he did take aim at a prior climate change bill during a 2010 election campaign ad.

Manchin's concern remains inflation, unemployment due to the shift away from the state's main sources of revenue, and the increased annual budget deficits created by the additional spending in Build Back Better.

As a result, Biden is left only with the bipartisan $1.2-trillion Infrastructure Investment Jobs Act. Manchin described this bill 22 December as "a once-in-a-generation investment" that "makes the single largest investment in American history to upgrade our power infrastructure and facilitate the expansion of clean energy, allowing our electric grid to remain a marvel of engineering and the envy of the world."

As the Center for Strategic and International Studies noted in an August analysis, the infrastructure bill isn't enough to ensure a successful US energy transition. "It is unlikely to beget more than incremental progress in emissions reduction and technological leaps in some sectors," the center said.

Exercising role as state's chief legal officer

In contrast to Manchin, Morrissey and Capito have made no bones about their opposition to Biden's climate plan because they say it will shift energy generation to renewable energy from baseload fuels like natural gas, coal, and oil that are the mainstay of West Virginia's economy, and "skyrocket" energy prices.

"And that's the last thing we need already in an inflationary period," Morrissey said at a 20 December press briefing.

As West Virginia's chief legal officer, Morrissey has taken it upon himself to carefully monitor the Biden Administration as it takes steps to fulfill the climate mandate "and stand[s] ready to defend West Virginia's and America's interests and the rule of law."

And it is in this capacity that Morrissey is now leading a 19-state coalition to ask the Supreme Court to determine whether EPA or any federal agency has the authority to take "an action of such major financial, political or social consequence" without congressional approval.

Questioning scope of EPA authority

The action in question is a 2-1 decision by the US Court of Appeals for the District of Columbia Circuit about EPA's authority to regulate GHGs across the power sector.

At the start of the year, the appeals court vacated and remanded the Trump EPA's 2019 Affordable Clean Energy Rule (ACE) for a rewrite, saying it illegally restricted the measures that could be imposed to curb power plant GHGs.

The court stopped short of reinstating the 2015 Clean Power Plan (CP), which ACE rule replaced—but it affirmed EPA's authority to enact broad climate regulations, leading to the current appeal before the highest court in the land. The ACE rule restricted power plant GHG regulation to using technologies and approaches for improving the performance and operation of coal-fired units. The court disagreed with the reading and said the EPA's authority is broader and can be used to impose standards based on technology and approaches that were allowed in the CPP rule.

Morrissey and other state attorneys general claim in their brief that Congress did not explicitly give EPA the authority to go beyond the fence lines to regulate GHGs.

For West Virginia, Morrissey said the Supreme Court review of this ruling is significant because EPA is attempting to dictate how electricity is generated, which is the domain of the states. He and other plaintiffs also claimed that the Supreme Court needs to restrict the Biden administration's authority because it wants "to unilaterally decarbonize our nation, and they want to do it without authority to accomplish their goals."

Seeking preemptive strike

However, Vermont Law School Professor Patrick Parenteau said Morrissey and other state attorneys general should be careful about pursuing what he called an "anticipatory ruling, a preemptory strike, if you will," from the Supreme Court.

Parenteau said EPA has yet to propose a replacement for the ACE rule struck down by the DC Circuit. And EPA Administrator Michael Regan has stated publicly that the court ruling has allowed the agency to take a fresh look at the regulation that would build on the lessons learned from writing the CPP and ACE rules.

Moreover, the Supreme Court's 2007 Massachusetts v. EPA ruling made it clear that EPA has a mandatory obligation to impose meaningful controls on coal-fired power plants to reduce their sizeable GHG emissions. "If the Court rules that EPA's only option is to impose controls 'within the fence line,' then it will have to seriously consider carbon capture and sequestration technology at each plant, and that could prove ruinously expensive for many perhaps all existing facilities," Parenteau added.

Emblematic of partisan divide

West Virginia's stance is emblematic of the partisan divide not just in the US Congress, where no Republican is supporting Build Back Better Act, but also the rest of the country.

The same groupings of states that were supporting President Donald Trump's environmental rules in court are now challenging Biden's efforts.

North Dakota, for instance, asked the Supreme Court to review the same court ruling in a separate petition, but their petition was folded in with the one West Virginia filed. Kentucky didn't join the original complaint that West Virginia filed but filed its own legal brief in support.

Louisiana Attorney General Jeff Landry led a 13-state coalition that included West Virginia in successfully challenging the pause on new oil and natural gas leases on federally managed lands and waters that Biden imposed via an executive order in January. Ultimately, US Interior Department resumed the leasing program on public lands and waters in lieu of taking time to assess the GHG impacts of those leases.

Morrissey joined Landry in yet another case challenging the reinstatement of Obama-era social cost of carbon (SCC) of $51 per metric ton (mt) that the Biden administration imposed as an interim measure while it works on updating the estimate, which is due in January. Under Trump, the EPA and other federal agencies used a $1-7/mt range to account for just US impacts from climate change, while ignoring the global effects.

Biden ordered the federal government to use the higher value for SCC, which is the metric for assessing the calculate the economic impacts on farm productivity, human health, natural disasters, migration and more when GHGs are added, ton for ton, to the atmosphere and climate change worsens. Earlier this month, Landry tried to persuade the federal district court judge to place a temporary pause on the use of this metric while the case is heard.

In March, Morrissey warned the US Securities and Exchange Commission (SEC) of legal action if the federal agency moves forward with mandating climate-related financial disk disclosures from publicly traded companies.

The SEC is working on a proposal, which is due out in early 2022, but earlier in the year it had sought comment on how it should go about crafting the disclosure rule.

Morrissey said the SEC was engaging in "mission creep" and going beyond its statute that calls for disclosing risk only if it is "material" to protecting investors against fraudulent practices.

In June, Morrissey reminded the SEC that it has "a difficult mandate with respect to safeguarding public trading, but it is hard to see how it can legally, constitutionally, and reasonably assume a leading role when it comes to climate change."

Mandy Gunasakera, a principal with Section VII Strategies, a Washington DC-based boutique energy and environmental consulting firm, described Morrisey's office as a "legal powerhouse," which has developed a reputation for pushing back against over-regulation.

"It's not a surprise that [West Virginia] has re-emerged given the Biden Administrations dismissive approach to the rule of law and desire to use the Clean Air Act to push an otherwise unpopular and unauthorized regulatory agenda," Gunasakera, who served as the EPA Chief of Staff under President Donald Trump's administration, told Net-Zero Business Daily 28 December.