In testimony before the House Committee on Energy and Commerce, energy and environmental regulatory attorney Mike Nasi articulated a stark warning about the EPA’s latest carbon rules, suggesting they are an example of massive federal overreach. He argued that the EPA’s policies would further destabilize our electric grid without providing significant environmental benefits. Nasi’s critique is particularly relevant as it echoes the sentiments of many who advocate for a return to “energy federalism,” where states utilize the authority granted them in the Federal Power Act of 1935 to tailor energy policies to their unique circumstances.
The EPA’s recent history of legal challenges provide a clear example of the broader problem. Under the Obama administration, the agency’s 2015 Clean Power Plan attempted to force states to limit carbon emissions through shifting generation from coal to natural gas, wind and solar. The agency’s overreach was struck down in 2022 by the Supreme Court in West Virginia v. EPA. The court ruled that the agency overstepped its authority under the Clean Air Act. In other words, Congress never gave the EPA the power to make significant policy decisions such as dictating how states produce their energy.
That didn’t seem to deter the EPA. The agency’s carbon capture requirement finalized in April 2024 sparked a lawsuit from more than half of the states, arguing that the mandates were “unachievable” and economically damaging. EPA’s strategy included imposing regulations that rely on technologies for carbon capture and storage and energy from hydrogen that aren’t currently viable at scale. This would stifle investment in new technology and energy projects and accelerate the retirement of coal plants at a time when power demand is increasing at historic levels.
A return to energy federalism got an additional boost from the Supreme Court last year when it overturned the 1984 Chevron doctrine, under which courts had to defer to a federal agency’s interpretation of an ambiguous statute. Now, courts must exercise independent review rather than automatically assuming an agency’s interpretation is correct.
Trump should view the trend of reining in the overreach of the federal administrative state as an opportunity to revive energy federalism. The incoming administration can and should return authority over power generation and natural resource development — such as oil, natural gas and mining — to the states. This approach respects the principle of federalism, allowing states to innovate and adapt energy policies that align with local needs, resources and economic conditions.
When President Richard Nixon established the EPA, most states didn’t have an equivalent agency at their level. Today, state energy and environmental agencies are better situated to handle generation and resource development.
Utah provides a compelling example of how states effectively manage energy and environmental policy. The state’s strategic energy framework emphasizes a holistic approach to ensure that energy is adequate, reliable, affordable, sustainable and clean. The policy supports a diverse energy portfolio and fosters research, workforce development and strategic infrastructure investments that align with growth and environmental stewardship.
Utah’s approach demonstrates that states are in the best position to balance economic development with environmental responsibility without the heavy hand of federal mandates rooted in ambiguous federal statutes that spend years going through the judicial system and might eventually be overturned by the Supreme Court. A Trump revival of state-led initiatives would contrast sharply with Biden’s one-size-fits-all federal sledgehammer approach that ignores local nuance and capabilities.
Under coercive federalism, elected officials in states like California and Colorado use the federal government as cover for their misguided policy decisions that drive up costs and destabilize their grids. Under energy federalism, voters can hold their local elected officials accountable for increased utility bills and blackouts.
Returning to energy federalism would also empower states like Utah to leverage their unique strengths in energy production while pursuing tailored environmental goals. It would encourage innovation in energy technologies, enhance grid resilience and lead to more effective climate strategies that enjoy local buy-in and thus greater impact.
Trump has a clear opportunity to prioritize energy federalism, shifting the balance of power back to the states. This approach aligns with our founding constitutional principles and fosters a robust, adaptive and innovative national energy and environmental policy. By embracing energy federalism, the nation can chart a pragmatic, achievable path toward an affordable, reliable energy future and a cleaner environment.
Amy O. Cooke is a visiting Energy Policy Fellow at the State Policy Network, which focuses on free-market solutions to policy challenges.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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