January 2011

Last week the New Mexico Supreme Court blocked Governor Susana Martinez’s attempt to stop a cap-and-trade energy rationing scheme from taking effect, on the grounds that the Governor failed to follow proper administrative procedure. In delivering the ruling, Chief Justice Charles Daniels admonished Governor Martinez, saying that “no one is above the law.” This is ridiculous. Governor Martinez was trying to block a cap-and-trade that had been imposed by her predecessor (ex-Governor Bill Richardson), during a lame-duck session, and after the state legislature had opposed it. When a state executive imposes an energy tax over the will of the legislature, isn’t he acting “above the law”? Fortunately, Governor Martinez still can block the regulation. She’ll have to wait until it’s published in the state register, and then her administration will have to perform a formal rulemaking through the Environmental Improvement Board. We hope she doesn’t abandon the effort.

Senator John Barrasso (R-Wyo.) plans to introduce a bill early next week to prohibit the regulation of greenhouse gas emissions using existing legal authority, such as the Clean Air Act.  It is my understanding that the bill will not overturn the deal on Corporate Average Fuel Economy standards for cars and light trucks that the Obama Administration negotiated in secret with the State of California and the automakers.  However, it will block any future Clean Air Act waivers for greenhouse gas emissions, so that California won’t be able to do the same trick again after the new CAFÉ standards go into effect in 2016.

It remains to be seen whether Senator Barrasso’s bill will have any Democratic co-sponsors.  It has been rumored that freshman Senator Joe Manchin (D-WV) has decided not to co-sponsor the bill.  If true, then Senator Manchin is already retreating from his tough talk in the campaign.  He certainly won’t be living up to the television commercial that got him elected in which he is seen shooting a bullet through the cap-and-trade bill.

This shouldn’t be too surprising.  The Senate Democratic leadership and the White House are probably leaning hard on Manchin.  Majority Leader Harry Reid (D-Nev.) on Thursday announced committee assignments for the 112th Congress.  Manchin was given a seat on the Energy and Natural Resources Committee.  It would be cynical to suggest that there is any connection between that and deciding not to co-sponsor the Barrasso bill.

By Myron Ebell and Brian McGraw

President Barack Obama’s choice of Jeffrey Immelt, chairman and CEO of General Electric, to head his new Council on Jobs and Competitiveness demonstrates once again how clueless the president is about the economy. Having not caused enough damage in the past few years, Obama is doubling down on policies that are slowing the still fragile economic recovery. If the president really wanted to help the economy and create jobs, he would do the opposite of what Jeffrey Immelt has done at General Electric and has advocated for national policy.

As head of General Electric since 2001, Immelt has spent a decade driving what was once one of the greatest companies in the world into the ground. Under legendary CEO Jack Welch, General Electric’s stock rose from $5 a share in 1991 to over $40 per share when Welch retired in 2001. As Welch’s successor, Immelt has halved the value of General Electric over the last ten years, whose stock value has not exceeded $20 per share since late 2008. Despite his unsuccessful tenure at General Electric, President Obama is now giving Immelt free-rein to do the same to the American economy.

On broader issues of economic policy, Immelt is the perfect model of a crony capitalist. Instead of building his company to succeed in a competitive free-market, he has devoted most of his efforts to securing handouts, special deals, and subsidies for various General Electric businesses in Washington D.C. This is clearly what attracts President Obama to Immelt, a savvy political operator despite being a bust as the head of General Electric

Even more, Immelt, along with James Rogers of Duke Energy, has been among the biggest business promoters of cap-and-trade legislation. Cap-and-trade is now dead, but had it been enacted it would have been the biggest hit on the U.S. economy and on working Americans ever perpetrated by the U.S. government. Cap-and-trade would benefit many of General Electric’s businesses at the expense of American workers and consumers. This was no secret. As then-candidate Obama said in 2008, “electricity rates would necessarily sky rocket” under the proposed legislation supported by both Immelt and Obama.

Though cap-and-trade is dead, the Obama administration has decided to ignore Congress and pursue harmful energy-rationing policies through regulatory fiat. The EPA’s regulation of greenhouse gas emissions will bring higher energy prices and less money in consumer’s pockets to spend, causing an immense strain on the fragile budgets of American families during a recession. Higher electric rates will also make American manufacturing even less competitive with its foreign rivals, leading to the mass export of America’s manufacturing jobs.

In short, Immelt has put into practice at General Electric policies that are hurting his company, his shareholders, and his workers. He has advocated national economic policies that would do the same for America. As a reward for all of this, President Obama has selected Immelt to head yet another PR effort that will do nothing to roll back any of the job-killing policies enacted by the Obama administration.

This piece will be featured in the print edition of  The Tea Party Review (teapartyreview.com).

In the News

Cold Truths about Electric Cars
Charles Lane, Washington Post, 28 January 2011

Austerity Pulling Plug on Europe’s Green Subsidies
Eric Reguly, Globe and Mail, 26 January 2011

Chinese Checkmate: Beating Us at Our Own Game?
Larry Bell, Forbes, 26 January 2011

The Horrid Ms. Browner
Alan Caruba, FreedomAction.net, 25 January 2011

‘Gasland’ Like More and Gore
Paul Chesser, American Spectator, 25 January 2011

The Heat Is on GE’s Immelt
Greg Pollowitz, Planet Gore, 24 January 2011

Five Reasons To Be a Skeptic
FoxNews.com, 24 January 2011

Price of Junk Science
Investor’s Business Daily editorial, 24 January 2011

News You Can Use

State of the Union Roundup

Here’s a roundup of commentary on the green energy part of the President’s State of the Union Address

Inside the Beltway

Myron Ebell

State of the Union

I was in West Virginia on Tuesday night and luckily managed to miss President Barack Obama’s State of the Union address to Congress.  Perhaps his delivery gave it some zing, but it’s dismal and tedious to read.  Most of it is sophomoric, and in places it’s faintly creepy.  The President’s speech repackages some of his most catastrophic policies in a new rhetorical context.  We’re now going to win the future by innovating and responding to the challenges we face as the U. S. responded to Sputnik in the 1960s.

Instead of putting Americans on the moon in a decade, the goal is to require that 80% of our electricity be produced from clean energy sources by 2035.

The President didn’t mention global warming or climate change, but clearly he’s still pursuing the global warming alarmist agenda, just as he promised to do last fall when he acknowledged that cap-and-trade was dead, but there were other ways to skin that cat.  As my CEI colleague Marlo Lewis was the first to point out, 80% by 2035 was the mandatory target in the Waxman-Markey cap-and-trade bill that passed the House in 2009 but died in the Senate last year.

Higher electric rates have undoubtedly had an effect on economic growth wherever they have been required by government.  Look at California.  Or Spain.  I hope Jeffrey Immelt, CEO of General Electric and the new Chairman of the President’s Council on Jobs and Competitiveness, will mention to the President that China gets 80% of its electricity from coal.  If we’re trying to keep up with China, perhaps the President should consider a goal of producing 80% of our electricity from coal by 2035.  Since we already get 50% from coal, that’s a much easier target to reach. And lower electric rates will put more money in people’s pockets to spend on other things and lower the cost of manufacturing.

President Obama also made the astonishing statement that, “We have to make America the best place on Earth to do business.”  Since virtually every economic policy he has implemented or proposed makes America a worse place to business, one might have thought that he would have then done a bit of backtracking on his Administration’s regulatory strangulation of business and new investment.  No, instead we’re going to put people back to work in good paying jobs manufacturing “solar shingles” and by wasting even more hundreds of billions of taxpayer dollars on dead-end technologies.  But in 2015 we will be proud of the fact that America will be the first country to have one million electric cars on the road.

Barrasso To Introduce Bill To Block Federal Climate Regs

Senator John Barrasso (R-Wyo.) plans to introduce a bill early next week to prohibit the regulation of greenhouse gas emissions using existing legal authority, such as the Clean Air Act.  It is my understanding that the bill will not overturn the deal on Corporate Average Fuel Economy standards for cars and light trucks that the Obama Administration negotiated in secret with the State of California and the automakers.  However, it will block any future Clean Air Act waivers for greenhouse gas emissions, so that California won’t be able to do the same trick again after the new CAFÉ standards go into effect in 2016.

It remains to be seen whether Senator Barrasso’s bill will have any Democratic co-sponsors.  It has been rumored that freshman Senator Joe Manchin (D-WV) has decided not to co-sponsor the bill.  If true, then Senator Manchin is already retreating from his tough talk in the campaign.  He certainly won’t be living up to the television commercial that got him elected in which he is seen shooting a bullet through the cap-and-trade bill.

This shouldn’t be too surprising.  The Senate Democratic leadership and the White House are probably leaning hard on Manchin.  Majority Leader Harry Reid (D-Nev.) on Thursday announced committee assignments for the 112th Congress.  Manchin was given a seat on the Energy and Natural Resources Committee.  It would be cynical to suggest that there is any connection between that and deciding not to co-sponsor the Barrasso bill.

Across the States

New Mexico Supreme Court Issues Ironic Ruling

This week the New Mexico Supreme Court blocked Governor Susana Martinez’s attempt to stop a cap-and-trade energy rationing scheme from taking effect, on the grounds that the Governor failed to follow proper administrative procedure. In delivering the ruling, Chief Justice Charles Daniels admonished Governor Martinez, saying that “no one is above the law.” This is ridiculous. Governor Martinez was trying to block a cap-and-trade that had been imposed by her predecessor (ex-Governor Bill Richardson), during a lame-duck session, and after the state legislature had opposed it. When a state executive imposes an energy tax over the will of the legislature, isn’t he acting “above the law”? Fortunately, Governor Martinez still can block the regulation. She’ll have to wait until it’s published in the state register, and then her administration will have to perform a formal rulemaking through the Environmental Improvement Board. We hope she doesn’t abandon the effort.

Around the World

Hackers Shut Down EU Cap-and-Trade

Two weeks ago, more than $30 million of energy-rationing coupons were stolen and immediately resold on the European Union’s Emissions Trading Scheme, a multinational cap-and-trade energy-rationing program. Evidently, hackers were able to break into the system due to the lax information security policies in the Czech Republic. In response to the theft, the ETS was shut down, and it was originally scheduled to open again today. Yesterday, however, the EU decided to keep the ETS closed indefinitely, until it better understands how the scheme was hacked.

Number of Skeptics Doubles in UK

According to a new poll conducted by the Office for National Statistics, the number of climate change skeptics in the United Kingdom doubled in the last four years, from 12 to 23 percent. The likely reasons for the increase in skepticism are the Climategate scandal and two consecutive record-breaking winters in northern Europe.
The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary, check out the Coalition’s website, www.GlobalWarming.org

Last night’s State of the Union Address shows that President Obama learned only one lesson from the failure that was Copenhagen, the farce that was Cancun, the death of cap-and-trade, and the “slaughter” of House Democrats who voted for Waxman-Markey. Namely, dissemble, repackage Kyotoism in new verbiage, and press on with an agenda that voters rejected in November.

Anyone paying attention to Obama EPA’s campaign to ‘legislate’ climate policy through the regulatory backdoor would expect as much. But — true confession — I was surprised when Obama proposed to restructure the U.S. electric power sector along the lines contemplated by H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA), the infamous Waxman-Markey cap-and-trade bill.

In his SOTU speech, President Obama said:

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources. (Applause.)

Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen. (Applause.)

Upon hearing those words, I wondered: How does Obama’s 80% ‘clean energy’ target compare with the projected electric power sector fuel mix under Waxman-Markey?

The U.S. Energy Information (EIA) analyzed the energy market and economic impacts of H.R. 2454 under various “cases” based on different assumptions regarding the cost and performance of new technologies, the availability of “offsets” (credits for contributing to emission reductions abroad or in non-capped domestic industries), and the like.

Let’s stick with the “Basic Case,” which assumes (perhaps unrealistically) that low-emission technologies including nuclear, renewables, and carbon capture and storage (CCS) — a.k.a. “clean coal” — “are developed and deployed on a large scale in a timeframe consistent with the emissions reduction requirements of ACESA without encountering any major obstacles,” such as high cost. This procedure makes sense, because Obama’s proposal also assumes that nuclear, renewables, and CCS can be affordably scaled up over the next two decades.

Under EIA’s Basic Case (lines 1264-1272 of the Excel Spreadsheet), Waxman-Markey would change the mix of fuels used to generate U.S. electricity as follows:

waxman-markey-electric-power-generation-by-fuel-source-basic-case

The category “Other” is an assortment of ‘clean’ and ‘unclean’ fuel types, it’s tiny and doesn’t change much under Waxkey, so let’s ignore it. That leaves 4120 bkwh as total generation in 2010 and 4670 bkwh in 2030. The share of ‘clean’ fuels (natural gas, nuclear, renewable) is 51% in 2010, increasing to 70% in 2030.

EIA’s Basic Case also projects that coal with CCS will generate 513 bkwh by 2030 (p. 22). So electricity from all ‘clean’ sources is projected to reach 3786 bkwh in 2030, or 81% of total generation. Bingo!

Okay, Obama’s goal is 80% by 2035, not 81% by 2030, but it’s close enough for gomn’t work. In effect, Obama last night asked Congress to enact the Waxman-Markey emission-reduction target for the electric power sector.

When Obama was a presidential candidate, he acknowledged that under cap-and-trade, U.S. electric rates would “necessarily skyrocket.” He never said this again, but once the public understood that cap-and-trade would impose a stealth energy tax on the economy in the midst of a deep recession, they turned against it in droves.

Obama, however, never abandoned the big-government agenda of which cap-and-trade was an expression. The day after Election Day, he told the Washington press corps: “Cap and trade was just one way of skinning the cat; it was not the only way.  It was a means, not an end.  And I’m going to be looking for other means to address this problem.”

Well, now we know what other means besides EPA ‘lawmaking’ he intends to employ. The good news is this ploy is not going to work. As soon as Tea Party activists recognize the clean energy mandate for the de-facto energy tax/Waxman-Markey knockoff that it is, it’s toast.

Imagine if President Obama had said last night:  

I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources. This will restructure the electric power sector the same way Waxman-Markey would have if Congress had passed it. It will also cause your electric rates to necessarily skyrocket. As I’ve said before, there’s more than one way to skin a cat.

Such candor would not have won applause.

 

In today’s New York Times (Jan. 25, 2011), reporter Tom Zeller, Jr. reviews Alternative Fuels for Military Applications, a study by the RAND Corporation. He doesn’t mince words:

The United States would derive no meaningful military benefit from increased use of alternative fuels to power its jets, ships and other weapons systems, according to a government-commissioned study by the RAND Corporation scheduled for release Tuesday.

Well, that’s actually pretty obvious. Nobody argues that jets run better on fuel blended with liquids derived from animal waste, seed plants, or algae. Nor do defense planners worry that oil supply disruptions would force the U.S. military to mothball aircraft, ships, or other weapons platforms for lack of home-grown biofuel.

The RAND study [p. 12] goes further:

Ethanol and biodiesel are unsuitable for use in weapon systems. They pose a severe safety risk, reduce performance, unduly complicate fuel delivery and storage, and generate maintenance problems.

The bigger problem, though, as Zeller puts it, is that “most alternative-fuel technologies [are] unproven, too expensive or too far from commercial scale to meet the military’s needs over the next decade.”

This is not exactly the message one hears from top military brass. For example, on Earth Day 2010, Navy Secretary Ray Mablus crowed about the Navy’s experimentation with jet fuel blended from petroleum and camelina (a non-edible plant). Mablus neglected to mention the cost: $65 per gallon — about 30 times more expensive than commercial aviation fuel. (For more details, see “Bio Jet Fuel: the Real $600 Toilet Seat?“) 

The U.S. Armed Forces, or at least the Navy and Air Force, may be too bullish on biofuels to give the RAND report a fair shake. Too bad for us taxpayers. The Air Force, says RAND, “aims to be prepared by 2016 to acquire amounts of alternative fuel blends sufficient to meet 50 percent of its domestic requirements for aviation fuel. Air Force policy clearly specifies that this must be done in a manner that is cost-competitive and emits fewer greenhouse gases than fuels produced from conventional petroleum. Moreover, the alternative fuel component of the blend must be derived from domestic sources.”

Similarly, RAND reports, “In October 2009, Navy Secretary Ray Mabus committed the Navy and Marine Corps to “creating a Green Strike Group composed of nuclear vessels and ships powered by biofuels” by 2012 and deploying it by 2016. By 2020, at least 50 percent of the energy the Navy consumes is to come from alternative sources.”

These goals probably won’t be met, and can’t be met at reasonable cost: “It is highly uncertain whether appreciable amounts of hydrotreated renewable oils [alternative fuels derived from animal fats, waste, and vegetable matter] can be affordably and cleanly produced within the United States or abroad.” RAND estimates [p. xii] that the “available supply” of animal fats and waste oils “will likely limit production to no more than 30,000 barrels per day.” For perspective, the Department of Defense consumes about 337,000 barrels per day (bpd) of petroleum-based fuel [p. 6]; the U.S. economy consumes about 19 million bpd of petroleum-based fuel.

Similarly, “uncertainties remain” regarding the “commercial viability” of military fuels derived from seed plants:

Jatropha and camelina are often mentioned as ideal plants to meet these requirements, but there exists little evidence to back these claims. Even if low-greenhouse-gas approaches can be established and verified, total fuel production is likely to be limited. Producing just 200,000 barrels per day (about 1 percent of U.S. petroleum consumption) would require an area equal to about 10 percent of the croplands currently under cultivation in the United States. [p. xii]

Many tout algae-based biofuel as the next big thing. However, “Because all methods for liquid fuel production from algae are at early stages of development, lifecycle greenhouse gas emissions for commercially produced algae-derived fuels remain uncertain.” [p. 30] In addition, “the commercial prospects of this approach remain highly uncertain.” [p. 78]

The RAND study concludes:

Considering (1) the very limited production potential for fuels derived from animal fats and waste oils, (2) the highly uncertain prospects for affordable, lowgreenhouse-
gas fuels derived from seed crops, and (3) the early development status of algae-based concepts, hydrotreated renewable oils do not constitute a credible, climatefriendly
option for meeting an appreciable fraction of military fuel needs over the next decade. Because of limited production potential, fuels derived from animal fats, waste
oils, and seed oils will never have a significant role in the larger domestic commercial marketplace. Algae-derived fuels might, but technology development challenges suggest
that algae-derived fuels will not constitute an important fraction of the commercial fuel market until well beyond the next decade.

In the News

Say No to Green Energy
T. J. Rodgers, GreenTech Media, 21 January 2011

It’s Time Again to ‘Drill, Baby, Drill’
Jonah Goldberg, National Review, 21 January 2011

EPA Official Resigns Rather Than Face the Music over Mine Veto
Ron Arnold, Washington Examiner, 21 January 2011

The Tyranny of Eco-Sanctimony
Larry Bell, Forbes, 20 January 2011

France’s Solar Bubble Pops
Carl Shockley, Planet Gore, 20 January 2011

European Carbon Market Suspended over Fraud Fears
Rowena Mason, Telegraph, 19 January 2011

European History: Cooling Bad, Warming Good
Marlo Lewis, GlobalWarming.org, 18 January 2011

Obama’s Regulatory Proposal Doesn’t Pass the Laugh Test
Iain Murray, Washington Examiner, 18 January 2011

The Population Bomb Is a Myth
Dominic Lawson, Independent, 18 January 2011

Mean Green’s Cynical Makeover
Chris Horner, AmSpecBlog, 17 January 2011

News You Can Use

Marlo Lewis

Another Global Warming Scare Debunked

A popular “fact” peddled by global Warming alarmists is that rising ocean temperatures will melt frozen methane crystals (known as “clathrates”) on the deep ocean floor. As methane is a potent greenhouse gas, it has been claimed that this would cause a runaway loop whereby global warming causes more methane, which would cause more warming, and so on and so forth, until the planet is boiling. This claim, however, has been cast in doubt by a recent study published by ScienceExpress, demonstrating that previously undiscovered bacteria consumed in four months the massive volumes of methane released when the BP DeepWater Horizon well exploded last spring.

Inside the Beltway

Myron Ebell

The President’s Regulatory Smokescreen

President Barack Obama this week announced in a Wall Street Journal opinion article that he was going to order a comprehensive review of most federal regulations in order “to remove outdated regulations that stifle job creation and make our economy less competitive…. [and] … to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.”  That sounds good, but in fact the President has created a smokescreen to conceal his administration’s regulatory assault on the American economy.

In his op-ed, President Obama gives an example of the kind of result he is seeking from his regulatory review.  The Food and Drug Administration considers saccharin safe for people to use as an artificial sweetener, yet the Environmental Protection Agency has long wanted to regulate saccharin as a toxic chemical.  In the enlightened Obama Administration, the EPA recently dropped saccharin from its list.  He didn’t mention that last week the EPA also told the Army Corps of Engineers to revoke a Clean Water Act permit granted in 2007 after a decade of review, which will close an already operating surface coal mine in West Virginia.  This decision destroys high-paying jobs and sends a chilling signal to potential investors in new industrial projects: we might issue a permit, but we also might change our minds after you’ve made your investment.

The Clean Air Act is also highlighted by the President as an example of “common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.”  This is the same President who is trying to use the Clean Air Act to regulate greenhouse gas emissions and thereby raise energy prices and drive the current sluggish economic recovery into the ground.

Obama’s Favorite Crony Capitalist: GE’s Immelt

President Barack Obama on Friday created a new national Council on Jobs and Competitiveness and named his favorite crony capitalist, Jeffrey Immelt, as its chairman.  The appointment of Immelt, the Chairman and CEO of General Electric since 2001, is another clear sign that Mr. Obama is clueless about the economy and what his policies are doing to impede recovery.  If the President really wants to get the economy going and create jobs, he should do the opposite of what Immelt has done and of what Immelt advocates.

As the head of what was once one of the greatest corporations in the world, Immelt has been a bust.  GE’s share price was $40 when he took over.  For the past several years, it has bumped along at around $20.

As an advocate for national economic policies, Immelt is a much bigger disaster.  Along with James Rogers of Duke Energy, Immelt was the biggest corporate promoter of cap-and-trade legislation.  Cap-and-trade might have provided GE with some huge windfall profits for several of its businesses, but at the expense of doing immense harm to the U. S. economy.  Steeply increasing energy prices would make consumers poorer and price American manufactured goods out of the market.

But of course, Immelt’s shameless peddling of cap-and-trade is what makes him Obama’s favorite capitalist.  Immelt is the very model of a crony capitalist-that is, someone who wants to get government subsidies and use government mandates and twist government regulations to benefit his business.  Although he’s been a bust as a corporate executive, he’s a shrewd political operator who has put GE front and center at the federal government trough.

Across the States

West Virginia

Hundreds of West Virginians on Thursday protested the EPA’s decision to veto the U.S. Army Corps of Engineers Clean Water Act for the Spruce No 1 surface coal mine in Logan County. As the Cooler Heads Digest Reported last week, the EPA is blocking the mine, which would have created 250 well-paying jobs, in order to protect a short-lived insect that isn’t even an endangered species. Acting Governor Earl Ray Tomblin (D) told the crowd that, “What the EPA has done is fundamentally wrong.” Hear, hear.

California

The Wall Street Journal reported this week that California’s aggressive program to subsidize energy-efficient light bulbs is far less effective than was promised. The Golden State has spent more than $500 million to subsidize compact fluorescent bulbs, but according to Pacific Gas &Electric, one of the three major investor owned utilities in California, its program saved 73% less than originally projected.

The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary, check out the Coalition’s website, www.GlobalWarming.org

On December 23, 2010, one day before the Yuletide season when Members of Congress, the media, and Tea Party activists are least likely to watchdog the federal bureaucracy, the U.S. Environmental Protection Agency (EPA) announced rulemakings to establish New Source Performance Standards (NSPS) for greenhouse gas (GHG) emissions from power plants and refineries. Or maybe “whispered” would be more accurate.

If you didn’t read the text of EPA’s press release and just skimmed the headline, you would not know the agency had just launched the next phase of its greenhouse gas regulatory program. The release carried this bland and uninformative title:  “EPA to Set Modest Pace for Greenhouse Gas Standards/Agency stresses flexibility and public input in developing cost-effective and protective GHG standards for largest emitters.”

Then on Dec. 30, with public attention still diverted by holiday celebration, EPA published two proposed settlement agreements in the Federal Register outlining the agency’s plans to establish GHG performance standards for utility steam electric generating units and petroleum refineries. The proposed agreements are between EPA and a gaggle of State, municipal, and environmental litigants.

In a recent (Jan. 19, 2011) Alert, VanNess Feldman, a law firm specializing in environmental issues, explains the significance of this under-reported development:

These new regulations have potentially broader reach and impact than the New Source Review (NSR) greenhouse gas rules that became effective on January 2, 2011 under the “Tailoring Rule” timetable. Most notably, the NSPS, notwithstanding their name, can reach not only new and modified facilities but also existing facilities.

Unlike NSR “best available control technology” (BACT) standards, which are determined on a case-by-case basis for each new or modified “major emitting facility,” NSPS standards apply in advance to all new or modified major emitters within specific industrial categories. What’s more, as the Alert explains, EPA working with State environmental agencies can apply NSPS to existing, non-modified sources.

The Clean Air Act’s NSPS provisions—which require EPA to set industry-specific performance standards for facilities that emit significant quantities of certain air pollutants—include separate tracks for new and modified facilities (section 111(b)) and existing facilities (section 111(d)). Under section 111(b), EPA directly establishes NSPS for new and modified facilities. Section 111(d), by contrast, establishes a cooperative federal-state process under which EPA first establishes “emissions guidelines” for facilities in the relevant category.

These guidelines are then translated by states into enforceable performance standards for facilities within their boundaries. States may apply less stringent standards or longer compliance schedules if they demonstrate that following the federal guidelines is unreasonably cost-prohibitive, physically impossible, or that there are other factors that reasonably preclude meeting the guidelines. States may also impose more stringent standards or shorter compliance schedules in appropriate cases.

EPA, in cahoots with the usual pro-Kyoto State attorneys general and eco-litigation groups, is engaged in an end-run around democracy. The Clean Air Act was enacted in 1970, years before global warming was even a gleam in Al Gore’s eye. The statute does not even mention “greenhouse gases” or the “greenhouse effect.” The Act as amended in 1990 does include the terms “carbon dioxide” and “global warming potential” — but only in the context of non-regulatory provisions, and in each instance followed by a caveat instructing EPA not to jump to regulatory conclusions. That admonitory language would have no legal effect, and would have been pointless for Congress to include, if, as the Supreme Court mistakenly opined in Massachusetts v. EPA, the agency has separate authority under other provisions to ‘enact’ regulatory global warming policy.

The longer Congress tolerates this usurpation of legislative power, the harder it will be to stop, because firms that spend millions of dollars to comply with a regulation may gain little from its repeal. They may even acquire a vested interest in preserving the rule as a barrier to entry if it hobbles upstarts less able to bear the expense. Moreover, the proposed rulemakings are just step one of a broader campaign to establish GHG performance standards for numerous industrial categories such as steel plants, cement production facilities, and paper mills.

Things are moving swiftly. Under the proposed settlement agreements, EPA will propose NSPS rules for power plants by July 26, 2011 and finalize them by May 26, 2012, and propose NSPS rules for refineries by December 10, 2011, and finalize them by November 10, 2012. If the Tea Party Congress means to stop EPA from Kyotoizing America, it must do so in the very near future.

President Barack Obama frequently has cited the supposed success of the Spanish solar power market in order to justify the scores of billions of dollars of taxpayer money that his administration has given to the U.S. renewable energy industry. The President might want to rethink this allusion. A report last week estimates that the Spanish solar industry has lost more than 30,000 jobs since 2008, due to the rollback of solar subsidies.

The BP Deepwater Horizon Spill Commission report is out and its recommendations would spell bad news both for energy industry jobs and the future price at the pump.   The administration-selected panel, dominated by anti-drilling activists but devoid of anyone with actual experience producing energy, proposes to pile new layers of red tape onto a process that already leaves much domestic energy off-limits and creates years of delays for rest.    It even includes measures that would virtually shut down new oil drilling in Alaska, though the spill occurred thousands of miles away and under very different conditions in the Gulf of Mexico.

But buried in the report is an important truth – the spill occurred because of a series of blunders by BP and its contractors and was far from inevitable.   This contrasts sharply with the recommendations suggesting systemic problems to be fixed by an industry-wide crackdown.

There is ample reason to believe – along with the powerful circumstantial argument that the deadly April 20th explosion and subsequent oil spill is unique amidst the thousands of offshore wells drilled in Gulf – that this incident was due to gross mismanagement and is not a justification for closing the door further on domestic drilling.

The American public is more worried about a repeat of $4.00 gas than a repeat of Deepwater Horizon – and rightly so as the former is vastly more likely than the latter.  Reasonable changes to improve safety are warranted, but should occur in the context of a policy that ensures expanded offshore drilling.   To do this, Congress should not adopt the report’s recommendations or allow Obama regulators to impose them.