Billion-dollar US energy firm opposes Trump plan to roll back mercury rules

A leading US energy company is lobbying against the Trump administration’s move to roll back a major Obama-era environmental regulation, arguing that weakening a rule on mercury emissions would potentially kill jobs across the south and waste billions of dollars of investment.

Exelon, one of the largest producers of electricity in the US, has also argued to the Environmental Protection Agency that compliance with the existing mercury rule, a 2012 regulation that limits how much of the toxic pollutant can be emitted from coal-fired power plants, has had “substantial” health and environmental benefits and has cost a small fraction of what was originally anticipated.

The campaign by Exelon, a $34bn company that produces nuclear energy, and other electric power companies against weakening the rule stands in stark contrast to the arguments that have underpinned the Trump administration’s efforts to reverse Obama-era health and environmental rules. It also reveals deep divisions within the energy sector about the alleged benefits of rolling back such regulations.

The Trump administration’s effort to change the mercury rule, which was previously litigated for years in the courts and is arguably one of the most costly environmental regulations ever to be implemented, is seen as benefitting one company in particular: Murray Energy Company, one of the largest US coal companies. Murray, which is controlled by Robert Murray, a major donor to Trump’s inauguration events, reportedly requested a change in the mercury rule shortly after the president took office. Andrew Wheeler, the acting administrator of the EPA, formerly worked for a law firm that represented the coal magnate.

The Trump administration is not proposing a straightforward reversal of the mercury rule. Instead, it has put forward a legal argument that challenges an Obama-era finding about how the federal government ought to regulate toxic pollution. The ground-breaking finding said that any cost analysis of such regulations must not only examine the cost to the industry, but also must take into account the good health-related economic benefits of the regulations.

The coal industry already challenged the mercury rule and lost its case in 2014. One judge on the DC circuit, Brett Kavanaugh, who was recently confirmed to the supreme court, dissented in that case, and argued that the Obama cost-analysis argument deserved more scrutiny.

The Trump administration’s legal strategy is important because dismantling the Obama-era economic analysis could have broader implications for the White House’s sweeping deregulatory agenda. If the so-called “co-benefits” of such regulations are no longer considered as part of the overall cost analysis of a regulation,it will make it easier for companies like Murray, the coal company, to sue the federal government and argue that the rules create a prohibitive burden on industry.

Regulatory filings show that Exelon held a meeting on November 1 with the EPA and the Office of Management and Budget to make its case. It submitted several papers, including one by a company called ADA Carbon Solutions, which argued that the EPA “should leave [the rule] unaltered”.

“The investments made in response to MATS [the mercury rule] have provided good-paying jobs, while also supporting employment in mining, transportation, distribution and other industries, including in the coal industry. Repealing MATS would itself eliminate jobs or inhibit job creation,” the company said.

Companies that oppose the rollback have also argued that any potential changes would create uncertainty for the groups going forward because they have already complied with the rule.

Mercury is a neurotoxin that humans can be exposed to through the ingestion of contaminated fish, seafood, and wildlife, causing damage to the nervous system in adults and neurological damage in infants.