On Elephants, Mouseholes, and EPA’s Climate Plan for Existing Power Plants

by William Yeatman on June 4, 2014

Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholesWhitman v. American Trucking Associations 531 US 457, 468 (2001)

During the last month, both Politico and the New York Times have published reports on the origins of Clean Air Act §111(d), the statutory provision that authorizes a major climate change regulation for existing power plants that EPA rolled out this week. Notably, both of these major media outlets chose the word “obscure” to describe §111(d).

The modifier is apt. At 291 words, §111(d) is a relatively tiny provision in the Act, a proportion that befits its limited purpose (as intended by the Congress). In fact, §111(d) is defined primarily by what it isn’t. The foundational air quality regulatory regime established by the Clean Air Act is the National Ambient Air Quality Standards program; NAAQS addresses 6 “criteria” pollutants. The other major air quality program for stationary sources in the Act targets hazardous air pollutants from industrial categories. The objective of §111(d) is to regulate existing sources of pollution that IS NOT a “criteria” pollutant (i.e., subject to a NAAQS) or a hazardous air pollutant.

Not surprisingly, applications of this catch-all provision have been few and far between. Since implementing regulations were first promulgated in 1975, EPA has used §111(d) to regulate four pollutants from five source categories: (1) sulfuric acid mist emissions from sulfuric acid production plants; (2) fluoride emissions from phosphate fertilizer plants; (3) fluoride emissions from primary aluminum production plants; (4) total reduced sulfur from kraft pulp mills; and (5) landfill gases from solid waste landfills. All told, these regulations have affected maybe 80 sources (and that’s a very conservative estimate).

So…§111(d) has been employed by EPA a handful of times to a few score sources during the last 40 years. Moreover, it has never been controversial. Indeed, many of EPA’s approvals of state plans to meet §111(d) requirements were promulgated as “direct final rules,” which the agency only uses when it’s confident the matter is ultra-mild and no one will object. The length of EPA approvals of State plans averages 2 pages in the Federal Register. This is truly an obscure provision.

And yet…§111(d) is, today, the basis of an EPA regulation that would overhaul electricity oversight in 50 States. Costs no doubt will be significant, but more important is the gross expansion in federal power, a subject that I explain here and here (audio). Eighty years ago, Congress explicitly barred federal energy regulators from interfering with State management of the electricity sector within that State’s borders.* Now, for the first time ever, EPA is claiming such powers over States—authority, again, that has long been denied the Federal Energy Regulatory Commission (and it precursors). And the legal foundation of this unprecedented (and expensive) growth of the federal government is…an “obscure” provision of the Clean Air Act. To my eyes, this is the quintessential elephant in a mousehole.

*To be sure, I’m dissatisfied with the State regulatory model for electricity markets, which I’ve compared to socialism. However, EPA’s proposal would make matters much, much worse, by adding a needless layer of bureaucratic oversight, one that is readily captured by special interests. For an idea of what good reforms would look like, see this post.

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