On Tuesday, President Donald Trump reiterated his support for energy freedom during his 2018 State of the Union Address. Trump called for lawmakers and members of his administration to continue eliminating the costly and unnecessary regulations placed on the U.S. energy industry. Trump also touted the resurgence of “beautiful, clean coal.”
Since coming into office one year ago, Trump’s administration has been steadily working to reverse the years of regulatory damage created by the Obama administration.
In late 2017, Environmental Protection Agency (EPA) Administrator Scott Pruitt announced to a crowd of Kentucky coal miners the environmental agency’s decision to scrap the Clean Power Plan (CPP), which has faced legal challenges since it was first enacted by the Obama administration in 2015.
In 2016, the U.S. Supreme Court issued a stay on the implementation of CPP while its judicial review is pending. In March 2017, Trump issued an executive order initiating EPA’s review of this controversial plan. Trump’s EPA contends CPP, which restricts carbon-dioxide emissions and effectively forces existing power plants to shift from fossil-fuel generation to renewable generation, exceeds its legal authority. EPA further concludes CPP should be repealed on these grounds.
On January 17, 2018, The Heartland Institute formally submitted to EPA regulators its public comment on the proposal to repeal the Clean Power Plan. Heartland’s Peter Ferrara, senior fellow for legal affairs, and Isaac Orr, research fellow for energy and environment policy, coauthored this 68-page comment applauding EPA’s proposal to repeal CPP.
Ferrara and Orr offer four main reasons to oppose CPP:
- CPP is based on an erroneous interpretation of the Clean Air Act, and therefore has no legal authority.
- Fossil fuels lead to economic growth, while renewables such as wind and solar are not plentiful and affordable enough to facilitate prosperity and meet consumers’ needs.
- America has the potential to be the world’s top supplier of oil, coal, and natural gas. An economic renaissance spurred by these low-cost energies will create new jobs and raise real wages.
- Carbon-dioxide emissions are mainly caused by natural variation, not human action, and pose no real threat of catastrophic global warming.
The comment also included Orr and Heartland Senior Fellow Fred Palmer’s recent Policy Study titled “How the Premature Retirement of Coal-Fired Power Plants Affects Energy Reliability, Affordability.” The study analyzes the premature closing of coal-fired power plants across the country and how these closings are resulting in higher electricity prices and, subsequently, higher prices for products and services throughout the economy.
Orr and Palmer also tell of the unfortunate case of California’s mandate requiring electricity providers to produce at least 50 percent of their power from green-energy sources by 2030 and discuss the state’s cap-and-trade program. Because of these policies, virtually none of the electricity generated in California is from coal-fired power plants, which are typically able to produce power at cheaper rates. As a result, Orr and Palmer note California residents and businesses continue to pay more money for electricity than their counterparts in other states.
State legislators should not imitate the costly, economically destructive California model. Instead, they should support policies that are pro-energy, such as repealing renewable power mandates on public utilities – a move made by West Virginia in 2015 – and halting the implementation of CPP standards – an important policy decision made in states such as Florida, Indiana, and Michigan, among many others.
What We’re Working On
Nebraska Should Move Forward on Direct Primary Care
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines a new proposal in Nebraska that would create a direct primary care pilot program within the Nebraska State Insurance Program for state workers. “Direct primary care empowers patients and doctors, giving them greater freedom to establish and participate in health care provider models that work best for their unique needs. Nebraska’s proposed pilot program reaffirms the state’s goal to remove unnecessary regulatory barriers to direct primary care to help revitalize the state’s primary health care system,” wrote Glans.
Budget & Tax
Wisconsin Should Embrace the Flat Tax
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines flat taxes and the potential for tax reform in Wisconsin. “Flat taxes are beneficial for several reasons. They avoid penalizing the citizens who produce the majority of jobs and economic activity with higher tax rates. Flat taxes simplify the tax code by eliminating credits, exemptions, and deductions, taxpayers will no longer need to hire expensive tax accountants or use expensive computer programs to file their state taxes,” wrote Glans.
Time is Right to Empower Missouri Parents with ESAs
In this Research & Commentary, Policy Analyst Tim Benson writes about a proposal to create the Missouri Empowerment Scholarship Accounts Program. Funds for this ESA program would be provided in a way that is similar to how tax-credit scholarship programs are funded. Benson notes a Show-Me Institute analysis found an ESA program funded in this fashion could save Missouri school districts up to $39 million per year and have a combined state and local net fiscal impact greater than $57 million in annual savings.
Energy & Environment
Washington State’s Carbon Tax Proposal Would Harm Residents, Businesses
In this Research & Commentary, Policy Analyst Tim Benson writes about Washington State Gov. Jay Inslee’s (D) plan for a $20-per-ton tax on carbon dioxide emitted. The tax would increase annually by 3.5 percent. If passed, it would amount to a whopping $3.35 billion tax increase over four years, as well as a 20-cents-per-gallon increase in the cost of gasoline. Benson argues carbon taxes are inherently regressive and disproportionally harm low-income families. Benson also says carbon taxes provide few, if any, environmental benefits. Washington State voters understand this, Benson says, which is why a carbon tax ballot initiative failed so spectacularly at the polls in 2016.
From Our Free-Market Friends
Reforming Medicaid in Louisiana
The Pelican Institute has released a new report about the effects of Medicaid expansion in Louisiana. The report offers several important solutions to reform the welfare program. After Medicaid was expanded in 2016, Louisiana experienced 450,610 new Medicaid enrollees, 47 percent higher than originally projected. Medicaid spending for these additional enrollees is 20 percent higher than for non-expansion enrollees. The steep increase in state dollars funneled to Medicaid over the past few decades has meant fewer dollars dedicated to other essential state services, such as education and transportation. The Pelican Institute would like Louisiana to submit a comprehensive 1115 waiver to the U.S. Department of Health and Human Services that, if approved, would allow Louisiana to add work requirements to its Medicaid program, increase wellness incentives, and reduce fraud.
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