January 2014

Post image for Sen. McConnell’s Worthy CRA Resolution Likely Illegal, But It’s For the Senate Parliamentarian To Interpret (not the GAO)

On Thursday, Senate Minority Leader Mitch McConnell filed a resolution of disapproval pursuant to the Congressional Review Act that would, if enacted, block EPA’s proposed Carbon Pollution Standard, a regulation that effectively bans the construction of new coal-fired power plants. I support the purpose of McConnell’s resolution, but, as I explain in this post, I believe it to be impermissibly premature.

The Congressional Review Act was signed into law in 1996, and stipulates that “major” federal regulations must be submitted to both Chambers of Congress and the GAO “before [the rules] can take effect.” In addition, the law establishes fast-track procedures by which thirty Senators can get a simple majority vote on a resolution that disapproves (and therefore disallows) a “major” federal regulation. McConnell already has 40 co-sponsors. To become law, any such resolution would have to be passed by both Chambers of Congress and then signed by the President.

The Congress has only used this power once, to repeal a Clinton-era ergonomics rule, and it is the conventional wisdom that a CRA resolution of disapproval can be taken up only after an agency rule goes final. The Carbon Pollution Standard, by contrast, is only at the proposal stage of the informal rule-making process.

Minority Leader McConnell understands this prevailing legal interpretation, but he disputes it. His case is predicated on the strange applicability provision of the Clean Air Act provision that authorizes the Carbon Pollution Standard, pursuant to which the rule arguably goes into effect when it’s proposed. Here’s the exact language (§111(a)(2))

The term “new source” means any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source.

I formatted the important language. It’s not clear what the Congress means here. A regulation can’t take legal effect at the proposal stage, because doing so would violate the procedural rights accorded the public and interested parties in a different section of the Clean Air Act. (Specifically, the public and regulated entities have the right to comment on proposed rules and also to have their concerns answered by the agency.) Yet the above provision of the Clean Air Act suggests that the Carbon Pollution Standard goes into effect on proposal. Thus, the act seems to contradict itself.

McConnell has asked the Government Accountability Office to interpret the matter. In a letter to the GAO, he states:

I am not asking the GAO to address the question of whether all proposed rules are eligible for CRA review. EPA issued the Proposed GHG Rule under a very unusual provision of the Clean Air Act (CAA) that gives immediate legal effect to the notice of proposed rulemaking….Under these circumstances, it is clear that the Proposed GHG Rule is “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy” [this last quote is the definition of a “rule” in the CRA]

Whether or not GAO sides with the Senate Minority Leader’s interpretation is, in fact, moot, because his letter omits mention of the primary legal hurdles faced by his resolution of disapproval. Under the CRA, a Member of Congress can initiate a resolution of disapproval only during the process of reviewing “major” rules, and this process, in turn, is triggered only with the agency’s “submission” of the rule to both Chambers of Congress.

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Senate Minority Leader Mitch McConnell (R-Ky.) announced on 16th January that he and at least forty other Republican Senators would file a resolution of disapproval under the Congressional Review Act to block the EPA’s regulation of greenhouse gas emissions from new coal and natural gas power plants.  EPA finally published its second version of the proposed rule on 8th January.

Sen. McConnell also wrote a letter to the comptroller general of the Government Accountability Office asking for a determination that his resolution of disapproval complies with the CRA.  Final rules, not proposed rules, are subject to Senate and House votes under the CRA.  McConnell argues in the letter that the proposed rule falls into a special category because any power plants that begin construction after the proposed rule was published on 8th January will be subject to the rule when it becomes final.  Thus, the proposed rule is in a sense already final.  If the comptroller general agrees with McConnell, then under the provisions of the CRA McConnell and his Republican colleagues can force a floor vote and the resolution will pass if it gets a simple majority.

There is clear majority support in the House of Representatives to block the EPA rule.  This week, the Energy and Power (sic) Subcommittee of the House Energy and Commerce Committee marked up a bill that would block the proposed rule for new power plants and send the EPA back to the drawing board.  H. R. 3826, the Electricity Security and Affordability Act, passed the subcommittee by a vote of 18 to 11.  The bill’s chief sponsor is the subcommittee’s chairman, Representative Ed Whitfield (R-Ky.).  A similar bill has been introduced in the Senate by Senator Joe Manchin (D-WV).

Post image for Cooler Heads Digest 17 January 2014


EPA has initiated a 60-day public comment period on the Carbon Pollution Standard, a proposed regulation that would ban new coal-fired power plants. Click here to submit a comment. EPA will hold a public hearing on the proposed rule in Washington, D.C., at the William Clinton EPA building, on February 6th. Click here for details.

In the News

Another Year of Global Cooling
David Deming, Washington Times, 16 January 2014

EPA’s New Power Plant Rule Would Kill Coal
Tom Borelli, Real Clear Energy, 16 January 2014

The North Dakota Economic Miracle
David Kreutzer, Grand Forks Herald, 15 January 2014

‘Climate Change’: Unpacking a Political Term
Wayne Lusvardi, Master Resource, 15 January 2014

A Global Coal Revival?
Steven Hayward, Power Line, 14 January 2014

EU Mulls Renewable Retreat
Walter Russell Mead, Via Media, 13 January 2014

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Yesterday a flock of green special interests sent a letter to President Obama, asking the Commander-in-Chief to stop using the stupid shibboleth “all of the above,” and instead view all energy policy through a “climate impact lens.”

As you can probably tell by my choice of modifiers, I disdain “all of the above,” even more so than environmentalists. The reason I hate this phrase is that it fails to account for the inane. If an energy source is intermittent and expensive, then it makes no sense to require people to use it…unless you buy into dumb ideas like “all of the above.” Alas, such is our plight.

As much as I dislike “all of the above,” I think “climate impact lens” is an even stupider grouping of words. As I noted earlier this week, when you start seeing things through a “climate impact lens,” Communism looks like a global warming solution. Above, for the sake of reader clarity, I’ve depicted an artist’s rendition of the world as it appears through a climate impact lens.

[update, January 18, 2014, 12:49 PMIn the above post, I absentmindedly forget to heap scorn on that other oft-used energy policy phrase: “energy independence.” In the name of “energy independence,” motorists endure a Soviet-style production quota for ethanol (a fuel whose use increases the price of both food and energy), the Congress perpetuates a counterproductive ban on energy exports, and the EPA constricts consumer choice on the auto market. In general, I advise voters to be wary of all lazy phrases, but if I had to rank the three described above, from highest to lowest in terms of harmfulness, I’d go: (1) ‘climate impact lens’ ; (2) ‘energy independence’; and (3) ‘all of the above.’

Yesterday I participated on a panel discussion sponsored by the American Coalition for Clean Coal Electricity and produced by RealClearPolitics. The subject was “U.S. Energy Policy: The Road Ahead.” My fellow panel participants were National Association of Manufacturers vice president Ross Eisenberg, Institute for Energy Research vice president Daniel Kish, and Center for American Progress director of energy policy Peter Ogden. After the panel, RealClearPolitics Washington Bureau Chief Carl Cannon, who had moderated the roundtable, interviewed West Virginia Senator Joe Manchin. A writeup of that interview is available here; video of the event is found below.

U.S. Energy Policy: The Road Ahead from RealClearPolitics on FORA.tv

Post image for UN’s Top Climate Diplomat: Communism Is Key to “Doing It Right” on Global Warming

The People’s Republic of China is the #1 greenhouse gas emitter (having only recently raced past the U.S. to the top of this list), and last week the country’s government ordered a huge increase in coal production. Nonetheless, the Middle Kingdom is “doing it right” when it comes to climate change, according to Christiana Figueres, the top climate diplomat at the United Nations.

You might think to yourself: “What’s China’s secret for ‘doing it right’ (despite all those emissions)?” The answer, according to Figueres, is the absence of civil liberties.

As reported by Bloomberg’s Sangwon Yoon,

China is also able to implement policies because its political system avoids some of the legislative hurdles seen in countries including the U.S., Figueres said.

Key policies, reforms and appointments are decided at plenums, or meeting of the governing Communist Party’s more than 200-strong Central Committee. The National People’s Congress, China’s unicameral legislature, largely enforces decisions made by the party and other executive organs.

The political divide in the U.S. Congress has slowed efforts to pass climate legislation and is “very detrimental” to the fight against global warming, she said.

Already, there’s a consensus among social scientists that reducing GHG emissions to fight climate change would harm the economy. Now we learn from the United Nations that “doing [global warming policy] right” is facilitated by the forfeiture of freedom.

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Post image for EPA Seizes Wyoming Regional Haze Program (Agency’s 53rd State Takeover Since Obama Took Office)

EPA last Friday issued the prepublication version of a federal takeover of Wyoming’s Regional Haze program. This is the 3rd federal implementation plan imposed by EPA during Obama’s second term, and the 53rd since he took office in January 2009. By comparison, there had been 2 FIPs imposed by EPA during the 12 years prior to President Obama’s election.

Regional Haze is a visibility regulation added to the Clean Air Act in 1977 and amended in 1990. Because its purpose is to improve visibility, rather than protect public health, Congress intended for States to take the lead on Regional Haze. Indeed, the power exercised by States pursuant to the Regional Haze program is unique among Clean Air Act provisions.

Wyoming submitted a Regional Haze compliance plan to the EPA in September 2011. On June 20, 2013, the agency proposed to disapprove the State’s plan, and to impose a federal plan in its stead. The prepublication of the final rule released on Friday will go final when it is published in the Federal Register, which should happen in the next 2 weeks.

Specifically, EPA disapproved the State’s Regional Haze determinations for five power plants: Pacificorp Dave Johnston Unit 3, Pacificorps Wyodak Unit 1, and Basin Electric Laramie River units 1, 2, and 3. The State wanted to install a technology to control nitrogen oxides emissions known as Low Nitrogen Burners, at a total capital cost of about $20 million. EPA insisted on a technology known as Selective Catalytic Reduction, at a total capital cost of $659 million. Above, I’ve depicted the “improvement” in visibility that warranted EPA’s federal takeover and the imposition of well more than $600 million in controls. These images were generated by the WinHaze modeling software, using EPA’s inputs. As is plainly evident, there is no difference.

Rather than serving an actual purpose, EPA’s Wyoming takeover is just another salvo in the war on coal.

Post image for Does the 2005 Energy Policy Act Undercut EPA’s Carbon Pollution Standard?

Earlier this week, EPA finally published in the Federal Register the proposed Carbon Pollution Standard, a regulation that would effectively ban the construction of new coal-fired power plants. Publication in the Federal Register kicks off a 60 day period during which the agency will take comment on the rule. The Clean Air Act requires that EPA finish the rule within a year, although that’s a highly doubtful prospect, given EPA’s woeful record on deadlines.

As I explained last week, EPA completed the regulation last September, yet it remained suspended in some sort of executive branch limbo for three and a half months prior its publication, for reasons unknown. One speculated cause for this unusual delay is a November letter sent to EPA by leading members of the House Energy and Commerce Committee, informing Administrator Gina McCarthy that virtually all of the agency’s evidence supporting the technical feasibility of the rule is legally impermissible.

In a previous post, I gave the backstory:

The proposed regulation would require new coal-fired power plants to install carbon capture and sequestration (CCS). And yet, under the Clean Air Act, EPA cannot require a technology that isn’t commercially viable. On the one hand, industry claims that CCS isn’t market-ready, citing as proof the fact that there isn’t a single CCS system in operation. EPA, on the other hand, claims that CCS is adequately demonstrated. As evidence, the agency referenced three CCS pilot projects in the U.S. that are either in planning or under construction in Mississippi, California, and Texas.

Last week, leading members of the House Energy and Commerce Committee pulled the rug out from under EPA’s evidence. In a November 15th letter to EPA Administrator Gina McCarthy, Reps. Fred Upton (R-Michigan), Ed Whitfield (R-Kentucky), Joe Barton (R-Texas), and Steve Scalise (R-Louisiana) brought to her attention a little-known provision of the 2005 Energy Policy Act that prohibits the agency from basing an “adequately demonstrated” determination on CCS projects that received subsidies pursuant to the law. As they helpfully note, each of the CCS projects in Mississippi, California, and Texas were beneficiaries of such subsidies, and are, therefore, inappropriate foundations for the Carbon Pollution Standard. The letter is available here.

I’d been completely ignorant of this provision of the 2005 Energy Policy Act. Evidently, I wasn’t alone. According to InsideEPA, the letter caught both EPA and the White House off guard. It was, moreover, the rumored cause of the delay between the prepublication version of the Carbon Pollution Standard and its appearance in the Federal Register. If correct, the letter would deal a fatal blow to the regulation.

So, the $64,000 question is: Does the 2005 Energy Policy Act undercut the Carbon Pollution Standard?

The answer, alas, is to be determined by the courts, and it could go either way.

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Post image for Cooler Heads Digest 10 January 2014

In the News

Cold Comfort on Global Warming
Myron Ebell, Standpoint, January/February 2014

Oil Export Ban and Capitalists against Capitalism: When Will They Ever Learn?
Marlo Lewis, GlobalWarming.org, 11 January 2013

Global Warming’s Glorious Ship of Fools
Mark Steyn, The Spectator, 10 January 2014

Video: Incandescent Light Bulbs, the Dumbest New Ban in 2014
Reason TV, 9 January 2014

Lavish Energy Lifestyles
Lawrence Solomon, Financial Post, 9 January 2014

House Looks at Sue and Settle
William Yeatman, The Hill, 8 January 2014

Speaking Truth to Wind Power
Robert Bradley, Jr., Master Resource, 7 January 2014

Good Riddance to the Wind Energy Subsidy
Washington Post editorial, 6 January 2013

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Post image for Oil Export Ban and Capitalists against Capitalism: When Will They Ever Learn?

Capitalists against capitalism are a bane of modern society. Although sometimes clever, anti-market business lobbying is neither honorable nor genuinely prudent. Government would be smaller and our economy more prosperous if business leaders eschewed all forms of rent-seeking and corporate welfare.

What makes this evergreen reflection timely and even urgent is the debate over energy exports.

National Journal’s Amy Harder reports that, on Wednesday, independent refiner New Jersey-based PBF Energy hosted a phone call with six competitors to consider joint lobbying against repeal of the decades-old ban on U.S. crude oil exports. Other participants on the call included Valero, Marathon Petroleum, Philadelphia Energy Solutions (PES), and Delta Airlines’ Monroe Energy. According to one account, Valero and Marathon indicated they would not join the lobbying effort. Harder notes the similarity between PBF Energy’s agenda and that of Dow Chemical, which last year organized a coalition of chemical companies to restrict natural gas exports.

Freedom to export is an essential component of free enterprise. Economic liberty primarily means the right to offer one’s goods and services for sale. Exporting is just competing for customers on the other side of lines drawn on maps. In reality, every sale to anyone living outside the walls of your domicile is an export. What we today call capitalism Adam Smith more accurately called the “system of natural liberty” — the spontaneous order that flourishes when government protects rather than suppresses people’s freedom to “truck, barter, and trade.”

Somebody should remind PBF and Dow that private property is the bedrock institution of capitalism, and that export bans and restrictions violate property rights. Such policies are inherently confiscatory. [click to continue…]