I’ve spent much of the last five months following (and fighting) the Environmental Protection Agency’s power grab on visibility policy. As I explain here, EPA is hybridizing disparate provisions of the Clean Air Act in order to engineer greater regulatory authority for itself. The Agency is using this trumped up authority to run roughshod over state decision making on policy to improve visibility.
At issue is a provision amended to the Clean Air Act in 1977, known as Regional Haze, that requires measures to improve vistas at federal National Parks and Wilderness Areas. A hallmark of the program is state primacy over EPA. The Congressional Record for the 1977 Clean Air Act amendments explains that the House of Representatives and Senate passed markedly different Regional Haze provisions. The House’s version gave EPA primacy; the Senate version made states the lead decision-makers. The Conference Committee, whose duty it is to reconcile the differences between the bills passed by the two chambers of Congress, adopted the Senate language. In the seminal case American Corn Growers v. EPA, a federal court remanded EPA’s proposed Regional Haze rule, because it insufficiently accorded states the lead role in policymaking to improve visibility. EPA’s own rules recognize the Agency’s secondary role. According to the preamble of EPA’s 2005 Regional Haze Guidelines, “…the [Clean Air] Act and legislative history indicate that Congress evinced a special concern with ensuring that States would be the decision makers (70 FR 39137).”
The legal and regulatory record is clear: States get to make visibility policy.
Fast forward to January 2009: President Barack Obama takes office, and launches a war on coal. On the supply-side, the administration moves to end surface coal mining in Appalachia. On the demand side, the administration is trying to force every existing coal fired power plant to install the most expensive controls—namely “selective catalytic reduction” systems for nitrogen oxides, “scrubbers” for sulfur dioxide, and electrostatic filters for particulate matter—regardless whether these retrofits are warranted. For the average 500 megawatt coal fired power plant, costs of these controls range anywhere from $400 o $600 million. Presumably, EPA’s idea is to raise the price of generating electricity with coal, and thereby “bankrupt” the industry, to borrow a term turned by the President.
However, in achieving this objective, EPA had a regional problem. One of its most consequential weapons in the war on coal is the Cross State Air Pollution rule, which was issued in July. I wrote about it here and here. This regulation effectively requires the installation of selective catalytic reduction systems to control nitrogen oxides and electrostatic filters for particulate matter, but it applies primarily to states east of the Mississippi. As such, EPA didn’t have a means to impose the most burdensome controls, especially those for nitrogen oxides, on western power plants.
Enter the Regional Haze provision, which, unlike the Cross-State Air Pollution rule, applies to all states. There was, however, a catch: The Regional Haze provision accords states to the states to a uniquely high degree among provisions of the Clean Air Act. Therefore, EPA had to beef up its authority, if it was to get what it wanted.
EPA is increasing its regulatory muscle mass by abusing the Clean Air Act’s Good Neighbor provision, which requires that upwind states ensure that their emissions do not adversely affect downwind states’ compliance with federal air quality regulations. Interestingly, it is the source of authority for the Cross State Air Pollution rule. This latter regulation was what the Congress had in mind when it wrote the Good Neighbor provision in 1990. However, President Obama’s EPA is interpreting the Good Neighbor provision such that it devolves to the Agency an independent source of authority to improve visibility. This is not what the Congress had in mind when it wrote the law. Indeed, EPA’s current interpretation is contrary to the agency’s own rules. In 2006, EPA published guidance for states to help them comply with the Good Neighbor provision. At the time, EPA drew the obvious conclusion that it is impossible to know whether or not one state affects visibility improvement regimes in other states, until those states have visibility improvement regimes to begin with. Accordingly, EPA’s 2006 guidance tells states to make a “simple submission” that it is impossible to know whether they interfere with one another’s visibility programs until the Agency approves their visibility programs (by approving their Regional Haze compliance plans).
By melding the Regional Haze and Good Neighbor provisions, EPA is granting itself the authority to impose controls much more expensive than the sum of these disparate provisions implemented independently. In New Mexico, for example, EPA is hybridizing these unconnected provisions to mandate emissions controls 10 times as expensive as would have been required by a linear combination of the individual provisions. As a result, New Mexico ratepayers are facing $120 annual increases in their utility bills. In October, I partnered with the Albuquerque-based Rio Grande Foundation to publish a study on EPA’s outrageous visibility machinations in New Mexico.
Worse still, EPA is applying its newfound power in a haphazard fashion. Under the Agency’s current interpretation of the Good Neighbor provision, different states are being held to different standards. In a nutshell, EPA claims that a state fails to comply with the Good Neighbor provision if its federally enforceable emissions limits at major stationary sources differ from assumptions used by regional air quality modeling used by neighboring states. For some states, like Oregon and Colorado, EPA allowed for wide discrepancies between federally enforceable limits and modeling assumptions; for other states, like Arkansas and North Dakota, EPA seems to have brooked no discrepancy. In either case, EPA has yet to issue new guidance explaining its current interpretation of the Good Neighbor Provision, so there’s no referent to understand what the Agency is thinking. Last week, I detailed EPA’s arbitrary interpretation, in comments submitted to the Agency. Under administrative procedure law, EPA has to reasonably respond to all unique comments. I look forward to reading the Agency’s response to my comment, which I will make available on this blog.
In the meantime, New Mexico and Oklahoma are suing EPA over its visibility power grab in the 10th Circuit Court of Appeals in Denver. It is likely that their cases will be consolidated. It is also likely that they will be joined by North Dakota and Arkansas. In light of the legal record, I strongly believe they will prevail.
In the Congress, Rep. Rick Berg (R-North Dakota) has introduced H.R. 3379, the Regional Haze Federalism Act, a bill that would check EPA’s usurpation of states’ rightful authority on visibility policy. Earlier in December, H.R. 3379 won the sponsorship of a key Member of Congress–Rep. Colin Peterson (D-Minnesota)–who is very influential with rural Members on both sides the aisle. I hope this excellent legislation continues to pick up momentum in 2012.
I’ve come to understand that the New Mexico House of Representatives in January likely will take up a resolution to condemn EPA’s imposition of a federal visibility improvement plan in the Enchanted State. As is explained in the aforementioned study co-published with the Albuquerque-based Rio Grande Foundation, New Mexico is suffering the worst abuse at the hands of EPA. Democrats are the majority party, but the issue cuts across party lines due to its severe local economic impact. State Representatives from the Four Corners region, Republicans and Democrats alike, are opposed to EPA’s actions, because they would impose almost $700 million in superfluous costs on the San Juan Generating Station. President Obama needs New Mexico in November 2012. If a critical mass of New Mexicans become aware of EPA’s visibility policies in their state, it wouldn’t shock me if the President reined in the Agency.