OVERNIGHT ENERGY: Coal company sues EPA over power plant pollution regulation | Automakers fight effort to freeze fuel efficiency standards | EPA watchdog may probe agency’s response to California water issues

TGIF! Welcome to Overnight Energy, The Hill’s roundup of the latest energy and environment news. Please send tips and comments to Rebecca Beitsch at rbeitsch@digital-stage.thehill.com. Follow her on Twitter: @rebeccabeitsch. Reach Rachel Frazin at rfrazin@digital-stage.thehill.com or follow her on Twitter: @RachelFrazin.

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Programming note: There will be no Overnight Energy on Monday, May 25 because we’re off for Memorial Day. We’ll be back on Tuesday, May 26. 

COAL GOALS: A coal company has challenged an Environmental Protection Agency (EPA) power plant pollution regulation in court after the agency recently finalized changes that weaken the standards’ legal underpinnings. 

Westmoreland Mining Holdings sued the EPA in federal court in Washington, D.C., on Friday over its Mercury and Air Toxics Standards (MATS) rule, which regulates the emission of mercury and other toxins emitted from power plants. 

The Trump administration last month issued a final rule concerning the standards. The final rule did not change the Obama-era standards but did alter the cost-benefit analysis that justifies them. 

The Obama administration found in its analysis that benefits from the rule would save consumers as much as $90 billion, but the Trump administration said the rules would only save between $4 million and $6 million.

The Trump administration also argues that power producers will spend up to nearly $10 billion on adding pollution controls, so the costs will outweigh the benefits.

The cost benefit analysis will prove important for the legal nitty gritty…

Critics of the changed analysis have argued that it makes the standards more vulnerable in court. 

Sierra Club Executive Director Michael Brune accused EPA Administrator Andrew Wheeler last month of “fudging the numbers to give polluters a tool to challenge MATS in court.” 

An EPA spokesperson declined to comment on the Friday lawsuit but noted in a statement to The Hill that under its changes, power plants still “must comply with the mercury emissions standards of the MATS rule, which remains fully in effect notwithstanding the revised cost-benefit analysis.”

Last month, Wheeler also pledged to defend the standards in court, saying, “We defend all of our rulemakings.”

Lawyers from the firm BakerHostetler, which is representing Westmoreland, have previously argued against what they view as “one-size-fits-all” standards in comments to the EPA. 

The Trump administration’s cost-benefit analysis differs so greatly from the Obama administration’s because it only considered “targeted” pollutants like mercury rather than the co-benefits from reductions of additional pollutants. 

Late last year, the EPA’s Scientific Advisory Board criticized the new cost-benefit calculation, saying that its recommendations “do not seem to have been taken into consideration in the published analysis.”

The story is here. 

IT’S CARS, SO IT’S COMPLICATED: Some of the nation’s automakers are set to intervene in a lawsuit from a conservative group challenging the Trump administration’s plans to drastically reduce fuel economy standards.

The suit from the Competitive Enterprise Institute filed earlier this month argues the administration erred in requiring automakers to increase fuel economy by 1.5 percent each year instead of freezing or reducing the standards even further.

The Alliance for Automotive Innovation announced Friday that it will intervene in the suit, fighting the effort to weaken the standards.

“The auto industry remains united in its desire for yearly improvements in fuel economy and greenhouse gas reductions,” John Bozzella, president and CEO of the group, said in a statement. 

“Despite calls by interest groups for flat standards, our members are committed to increasing standards that support investment in vehicles that improve fuel efficiency, and that balance affordability, safety, and the environment.”

But the intervention shows automakers are divided on the case, and the standards at large…

It’s unclear how large of year-over-year improvements automakers involved in the suit are willing to make, as other manufacturers that already signed a deal with California to meet more aggressive standards did not join the rest of the industry in the intervening suit. 

That includes Ford.

“We aren’t participating in the Alliance’s intervention because of the voluntary framework to reduce emissions that we are working on with the California Air Resources Board. We believe this path is what’s best for our customers, the environment, and the short- and long-term health of the auto industry,” Ford said in a statement to The Hill.

Some fear the latest suit will cause further division in the industry. 

“I was disappointed by the announcement today. I have argued it’s in the long-term interest for the administration, California and the auto industry to be on the same page,” Rep. Debbie Dingell (D-Mich.) said in a statement. 

“Today’s action sets us further back from this goal. The parties that made the move today are the same ones that joined the Trump Administration’s lawsuit against California. The fact of the matter is the global auto market is already significantly decarbonizing. The American auto industry can either lead or be led.”

Read more on the case here. 

WATCH OUT: The Environmental Protection Agency’s (EPA) internal watchdog is weighing a probe into the agency’s actions toward California after President Trump made numerous claims about the state’s water quality.

At issue is what California lawmakers described as “inconsistencies” in how the agency has responded to California water quality issues compared to those in other states, an issue the EPA’s Office of Inspector General said Thursday it may investigate.

A September letter from the EPA focused on the state’s homelessness issues in Los Angeles and San Francisco, citing articles on human feces on streets and warning the state was “failing to meet its obligations” on sewage and water pollution. It followed a letter written just days before threatening to withhold highway funds over the state’s air quality issues. 

“There’s tremendous pollution being put into the ocean because they’re going through what’s called the storm sewer that’s for rainwater,” Trump said aboard Air Force One the week prior to the letter. “And we have tremendous things that we don’t have to discuss pouring into the ocean. You know there are needles, there are other things.”

The agency later reversed course on a permit for a San Francisco’s wastewater treatment center. 

Sens. Diane Feinstein and Kamala Harris, both Democrats of California, said the move stood in contrast to “EPA’s lack of enforcement action against other municipalities with highly similar treatment systems for water quality discharges.”

The inspector general did not commit to an investigation, but told lawmakers it is weighing a project “to review aspects of the EPA’s oversight of state water enforcement that could include California, as well as other states, and are coordinating with the U.S. Government Accountability Office to avoid duplication.”

Read more on the potential probe here. 

A LIFELINE: Two vulnerable GOP senators got a boost to their reelection bids Thursday when Senate Majority Leader Mitch McConnell (R-Ky.) promised to bring a major outdoor recreation bill to the floor next month.

McConnell handed a win to Republican Sens. Cory Gardner (Colo.) and Steve Daines (Mont.) when he said the chamber would take up their Great American Outdoors Act next month.

The legislation would permanently fund the Land and Water Conservation Fund, which provides money to protect and conserve habitats of endangered species, develop parks and outdoor recreation sites and protect sensitive forests. It’s a boon to hunters and fishers as it protects certain areas from development.

McConnell made the announcement after working out a deal with Gardner on Thursday afternoon to allow the Senate to recess for the week of Memorial Day — something Gardner threatened to object to because the Senate has failed to draft a new round of coronavirus relief legislation after reconvening in Washington on May 4.

Now let’s check in with his opponent…

Former Colorado Gov. John Hickenlooper (D), however, hit him for not getting more from the GOP leader.

“Cory Gardner made a big stink about keeping the Senate in Washington, but less than a day later, he’s given up and seems happy to do whatever Mitch McConnell says,” Hickenlooper said. “Coloradans need help now.”

Read more on the bill here. 

Meanwhile, out in Montana…

Montana Gov. Steve Bullock (D) out-raised Daines (R) in the state’s high-profile Senate race as Democrats hope to score an upset.

Bullock raised about $2.4 million in the first half of the second quarter and has about $4.1 million in the bank, according to his campaign’s latest filing with the Federal Election Commission.

Daines raised $1.3 million and has a war chest of $5.8 million.

Read more on that here. 

OUTSIDE THE BELTWAY:

‘We’re screwed’: The only question is how quickly Louisiana wetlands will vanish, study says, Nola.com reports

Prince Charles leads global meeting on climate change and economy, Axios reports

‘Expect more’: Climate change raises risk of dam failures, The New York Times reports

ICYMI: Stories from Friday…

McConnell gives two vulnerable senators a boost with vote on outdoor recreation bill

Coal company sues EPA over power plant pollution regulation

EPA watchdog may probe agency’s response to California water issues

Republicans push for help for renewable energy, fossil fuel industries

Automakers fight effort to freeze fuel efficiency standards