PAYNE INSTITUTE COMMENTARY SERIES: COMMENTARY

By Anna Littlefield, Siddhant Kulkarni, and Simon Lomax

April 3, 2025

Introduction

As U.S. Environmental Protection Agency Administrator Lee Zeldin recently announced plans for the most significant rollback of federal regulations in U.S. history, a critical question emerges: Will delegating power to states foster innovation and economic growth or could it jeopardize essential protections for public health, safety, and the environment?

Zeldin’s push toward deregulation is in line with the shifting decision-making authority back to states, highlighting a long-standing tension in American energy policy-how to balance national environmental goals with local economic realities.

This tension has not been limited to energy policy (see Illinois’ BVO ban), and is often addressed through cooperative federalism, a framework in which federal and state governments share regulatory responsibilities, ideally blending federal oversight with state-level flexibility.  Yet, as America’s energy landscape diversifies, cooperative federalism may not fully capture the potential for collaboration beyond individual states.

Enter ‘cooperative regionalism’- a concept focused on fostering collaboration across regions defined by common resources, shared infrastructure, and economic interests. Cooperative regionalism offers a middle ground between rigid federal policies and fragmented state efforts, presenting an opportunity for tailored solutions that could accelerate the nation’s transition toward a resilient and sustainable energy future.

The Limits of Federal Mandates

Federal mandates seem logical at first glance: set national goals, establish clear targets, and watch as states fall into step.  But as energy policy has shown us, things aren’t that simple.  Take the Clean Power Plan for example- it set sweeping national emissions targets that felt achievable in some states (i.e. California) and entirely unrealistic in others (i.e. West Virginia) based on the carbon-intensity of electricity in those states.

One-size fits-all rules don’t always recognize the immense geographic expanse of the United States, and the resource, and economic diversity that comes with that.  Arizona’s solar potential is wildly different from Iowa’s wind power, which is still different from Oregon’s hydroelectric opportunities.  Ignoring these differences isn’t just impractical – it’s costly.  It can limit innovation, stall investment, and create resistance rather than enthusiasm for evolving energy generation methods.

From Cooperative Federalism to Cooperative Regionalism

Historically, the U.S. tackled federal-versus-state tensions through cooperative federalism, a policy framework where responsibilities were shared.  The idea was to combine the best of both worlds: federal oversight and local flexibility. But cooperative federalism falls short when challenges cross state borders or when opportunities require coordination on a larger, regional scale.

Cooperative regionalism refers to multi-state action designed around shared regional resources, economies, and infrastructure.   This framework doesn’t toss federal oversight aside- it complements it.  Instead of each state reinventing the wheel, states within regions can pool resources and expertise, driving more effective solutions that make sense geographically, economically, and environmentally.

Cooperative Regionalism in Action

The concept isn’t just theoretical.   Across the country, regional collaborations are already taking shape.  Seven projects were selected by the DOE to receive funding for hydrogen hubs, including five projects that cross state lines (the Mid-Atlantic, Appalachian, Midwest, Heartland, and Pacific Northwest Hydrogen Hubs). The fate of these and other projects, supported through the Infrastructure Investment and Jobs Act, are uncertain, but if given the greenlight (i.e. continued federal support) they could significantly advance the U.S. in the clean hydrogen production and transport space.

In the Midwest, the Midcontinent Independent System Operator (MISO) recently approved a major transmission upgrade, connecting wind-rich areas in Iowa, Minnesota, and Illinois. This regional initiative enables states to efficiently distribute renewable energy across state borders, cutting costs, improving reliability, and generating jobs along the way.

Here in the West, the Western Governors Association’s ‘Heat Beneath Our Feet’ initiative, launched by Colorado Governor Jared Polis in 2023, embodies regional cooperation by uniting multiple states to unlock the vast geothermal energy potential beneath their shared landscapes.  Recognizing that geothermal resources extend beyond state lines, this collaboration focuses specifically on addressing regulatory and technological barriers, facilitating the broader deployment of geothermal energy for both electricity generation and heating.

Economic Advantages of State Led Initiatives

When states lead their own energy policy initiatives, the economic payoffs can be substantial.  In Texas, for example, strategic state-level policies have driven massive economic growth around wind energy.   Programs like the Renewable Portfolio Standard (RPS) have attracted long-term investment, while initiative such as the Competitive Renewable Energy Zones (CREZ) have dramatically improved energy transmission infrastructure.  Along with falling technology costs, streamlined permitting and generous tax incentives, these and other policies have made Texas a national leader in wind, solar and energy storage as well as oil and natural gas development.

Many other states have demonstrated the power of state led initiatives – Iowa now generates more than 60% of its electricity from wind, driven by targeted tax incentives and strategic infrastructure investments, Washington passed the Clean Energy Transformation Act (CETA) to boost electric vehicle adoption and rooftop solar installations statewide, even Maine and Vermont are making strides in offshore wind policies, community solar, and net-metering programs. The two clearest success stories- California and Texas- are also the two largest states in the contiguous U.S. Both possess economies, resources, and populations capable of independently sustaining these ambitious policies.  For states with smaller populations, economies, and footprints, a collaborative regional framework could provide the scale, shared resources, and combined strengths necessary to emulate this kind of economic and energy policy success.

Federal Role in a Regionalized Framework

While regional cooperation holds great promise, it still requires direct or indirect federal buy-in.  The federal government can play a key role in coordination, supporting infrastructure projects, clarifying market rules, and providing funding incentives to encourage regional planning.

Importantly, this doesn’t mean heavy-handed mandates or micromanagement from Washington.  Instead, federal leadership means enabling cooperation across borders and ensuring fairness and consistency in energy markets.  Federal policy should provide the stage upon which regional initiatives perform best – or at a minimum, allow states to pursue regional approaches without reflexive assertion of the federal government’s constitutional authority over interstate commerce.

Potential Pitfalls and Challenges

Regional collaboration is promising but not without challenges. Regional approaches risk uneven development, where more resource-rich or economically stronger states dominate, leaving less affluent states behind.   The further risks associated with bureaucratic complexity are too numerous to fully capture, but could include conflicting regulations, permitting delays, tax and cost-share complexities, all areas in which federal input could be useful.

Toward a Resilient Energy Future

Ultimately, cooperative regionalism offers a way to balance flexibility with structure – embracing diversity in geography, resources, and economic strengths while maintaining national goals of improving our energy capacity and security. It is not a new concept, with great examples of regional cooperation nationwide, it is simply a new paradigm.  With the rapid shifts we’re seeing in U.S. energy policy and the evolving power dynamics between states and the federal government, embracing this new paradigm offers the clearest path forward- one that prioritizes economic growth and innovation without sacrificing the environmental goals we can’t afford to miss.

ABOUT THE AUTHORS

Anna Littlefield, Low Carbon Energy Technologies Program Manager
PhD Student, Geology and Geological Engineering, Colorado School of Mines

Anna Littlefield is the Program Manager for Low Carbon Energy Technologies for the Payne Institute at the Colorado School of Mines. As a current PhD student in the Mines geology department, her research focuses on the geochemical impacts of injecting CO2 into the subsurface as well as the overlap of geotechnical considerations with policymaking. Anna joins the Payne Institute with 8 years’ experience in the oil and gas industry, where she worked development, appraisal, exploration, new ventures, and carbon sequestration projects. Her academic background is in hydrogeology with an M.S. in geology from Texas A&M University, and a B.S. in geology from Appalachian State University. Anna is passionate about addressing both the societal and technical challenges of the energy transition and applying her experience to advance this effort.

Siddhant Kulkarni, MS Student, Mineral and Energy Economics, Colorado School of Mines

Siddhant is a student researcher at The Payne Institute at Colorado School of Mines.  Currently pursuing his M.S in Mineral and Energy Economics, his research focuses on the commercial and insurance side of CCS projects and their risk management, as well as government incentive programs and schemes promoting the use of renewable energy. Additionally, he holds a B.S Honors in Economics from Symbiosis School of Economics, Pune. He is dedicated to advancing energy transition to renewables while addressing the various societal challenges that may come with it.

Simon Lomax, Director, Accelerated Methane Reduction Initiative

Simon Lomax is a policy and outreach advisor with the Payne Institute at the Colorado School of Mines. He provides stakeholder engagement and communications support to the Accelerated Methane Reduction Initiative and other research areas at the Institute.

Simon also serves as an advisor to the Energy Emissions Modeling and Data Lab (EEMDL), a joint research initiative of Mines, the University of Texas at Austin and Colorado State University.

Simon has spent 25 years working in journalism, public policy and corporate affairs, with most of his career focused on energy security and the energy transition. He is a former energy and climate reporter for Bloomberg News and Argus Media. Simon also worked directly on cap-and-trade climate legislation as a staffer in the U.S. House of Representatives.

ABOUT THE PAYNE INSTITUTE

The mission of the Payne Institute at Colorado School of Mines is to provide world-class scientific insights, helping to inform and shape public policy on earth resources, energy, and environment. The Institute was established with an endowment from Jim and Arlene Payne and seeks to link the strong scientific and engineering research and expertise at Mines with issues related to public policy and national security.

The Payne Institute Commentary Series offers independent insights and research on a wide range of topics related to energy, natural resources, and environmental policy. The series accommodates three categories namely: Viewpoints, Essays, and Working Papers.

Visit us at www.payneinstitute.mines.edu

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DISCLAIMER: The opinions, beliefs, and viewpoints expressed in this article are solely those of the author and do not reflect the opinions, beliefs, viewpoints, or official policies of the Payne Institute or the Colorado School of Mines.