Trump’s world strategy is to flood the zone with tariffs, executive orders, and chaos. Anti-Trump, aka Team Orange-Man-Bad (TOMB, get it?), fires back with temporary restraining orders. I haven’t watched newer television or movies for three or four decades because real-life drama is all around if you pay attention. And the outcome is uncertain, like a football game, so that’s my jam. The worst part of Trump’s chaos is the uncertainty.
To honor my mother for Mother’s Day, I realized my very first post, and indeed, these 750 or whatever Energy Rants over the past 15.5 years, may have resulted from my mom cajoling me to be an attorney. Read for yourself, October 9, 2009. Cheers, Ma! Be curious and rock on—that’s one of my mantras.
Trump’s Executive Order and States’ Rights
This week, I explored something likely important to all readers – something that spun the LinkedIn community into a frenzy: Trump’s Executive Order (EO), Protecting American Energy from State Overreach. The EO states, “When states target or discriminate against out-of-State energy producers by imposing significant barriers to interstate and international trade, American energy suffers, and the equality of each State enshrined by the Constitution is undermined.” Other points from the EO include:
- New York’s “‘climate change’ extortion law that seeks to retroactively impose billions in fines (erroneously labelled ‘compensatory payments’) on traditional energy producers for their purported past contributions to greenhouse gas emissions not only in New York but also anywhere in the United States and the world.”
- Vermont’s “extort[ion of] energy producers for alleged past contributions to greenhouse gas emissions anywhere in the United States or the globe.“
- California’s “dictation of national energy policy”… “punishes carbon use by adopting impossible caps on the amount of carbon businesses may use, all but forcing businesses to pay large sums to ‘trade‘ carbon credits to meet California’s radical requirements.”
Energy efficiency and anti-climate-change advocates applaud states’ rights, also known as federalism. Why? States and cities are where energy efficiency, electrification, and greenhouse-gas-reduction policy actions are deployed. That’s a good thing because the federal government is (more) bloated, corrupt, and wasteful than other forms of government, probably by orders of magnitude.
Federalism
States’ rights are enshrined in our beloved Constitution. Straight from the Library of Congress: “Although the Framers’ sought to preserve liberty by diffusing power, Justices and scholars have noted that federalism has other advantages, including that it allows individual states to experiment with novel government programs as ‘laboratories of democracy‘ and increases the accountability of elected government officials to citizens.“ Agreed.
The tenth amendment of the Constitution reads, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. “
Commerce Clause
The rub? Article I, Section 8, Clause 3 of the Constitution, aka, the Commerce Clause, gives Congress the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;…“ The Commerce Clause gives Congress (not the executive, Article II, I would add) authority to regulate interstate commerce to restrict states from impairing interstate commerce.
My read of the commerce clause is that states are allowed to reward or punish their citizens with low or high energy, education, food, etc., costs provided it doesn’t bleed over to neighboring states or the entire nation.
Groove on the MOPR
As I mentioned a couple of weeks ago, Trump’s MO is to throw bombs first to create chaos and then exploit the situation. Sometimes, such tactics can look foolish. Consider an RTO Insider article authored by one of my favorite sources of genius, Steve Huntoon. The article is Groove on the Rubble, which ironically describes what to do when a political movement is destroyed – the rubble.
Huntoon wrote that Team Trump cluelessly issued another EO, Zero-Based Regulatory Budgeting, to Unleash American Energy. In it, Trump ordered the Federal Energy Regulatory Commission, FERC, to sunset its regulations within five years. Huntoon says Trump doesn’t know what FERC does. I’ll add an example. You’re welcome.
FERC issued the MOPR (minimum offer price rule) to do precisely what Trump claims to want: insulating neighboring states from electricity price suppression caused by heavy renewable buildout in states with renewable energy portfolio standards. Groove on the MOPR.
FERC’s Charter
FERC’s major charter is ensuring open access to the nation’s grid, namely, the transmission system, which is electricity’s superhighway of electrical power and energy. To deregulate is to give local distribution companies unimaginably excessive market power, precisely what Trump supposedly doesn’t want.
There are no deregulated electricity markets—only facades of deregulation. As I have written many times, I’m not a fan.
- Burnin Down the House
- 1,500 Pages of Deregulation
- Electricity Deregulation and Disasters
- Betting with Deregulation – A Risky Proposition
- Years of Dominoes Fall in Texas
- Rumblings of Utility Reregulation
Other Opinions from an Attorney Who Wasn’t
Here are a few other takes on the commerce clause and federalism from the sometimes wannabee attorney:
- New York’s ban on natural gas hookups for new buildings, which I think is nuts, is likely legal because the damage is constrained to New Yorkers. A U.S. District Court Judge recently agreed. Trade and labor groups don’t like it. They will get their turn at the ballot box.
- If New York banned gas pipelines from delivering Marcellus shale gas to the Northeast, it would likely be struck down by courts because that would be restricting interstate commerce. Gas pipeline expansions in New York have recently been approved.
- When I alluded to food inflation above, I had California’s animal welfare law (Prop 12) in mind. That law requires minimum pen sizes for pigs, calves, and chickens. Prop 12 was upheld by SCOTUS in 2023. Like the New York gas-hookup case, this mainly impacts Californians who enjoy higher bacon prices. See Figure 1.
- On the other hand, California’s EV mandate may be overturned by SCOTUS this spring, in my opinion, because it reorders the entire automobile industry. It shifts the supply/demand curves on the nation and maybe even the globe. To comply, automakers say they must cut prices on EVs in California and make it up with higher prices for gasers everywhere else. Are cars different than bacon? As Klaus Schwab would say, vee, vill see.
Figure 1 Pre and Post Prop 12 Bacon Prices
