June 2014

On Sunday morning’s Platts Energy Week with Bill Loveless, Janet McCabe, acting head of EPA Office of Air and Radiation, told the host that the agency is “very sensitive” to the reliability impact of its rules. All the evidence suggests otherwise.

For starters, consider that EPA Administrator Gina McCarthy recently said that she’s “tired” of hearing about the reliability threats posed by the agency. Of course, it’s improbable that one can be “very sensitive” to an issue one is “tired” of discussing.

Consider as well Commissioner Philip Moeller’s opening remarks during last week’s Federal Energy Regulatory Commission reliability conference, in which he stepped on EPA’s reliability analysis in the course of praising the North American Electric Reliability Council:

[At the 48:15 mark] FERC Commissioner Philip Moeller: The final observation is that I hope you’ll [he is referring to NERC] always keep your independence…we want you to tell it like it is. And I think back to your projections on what the bulk power system—on what would happen with MATS rule (the “the Mercury and Air Toxics Standards,” also known as the “Utility MACT”)—and you took public criticism from the Chairman of this commissions and the administrator of the EPA for essentially predicting exactly what would happen. Losing 67 GW. You were right. You did the right thing. [You] took heat for it, and going forward we’re going to need that sort of honesty and objective analysis.

To summarize Moeller’s remarks: EPA was wrong to criticize NERC’s warning over the ridiculous Utility MACT. At that time, EPA defended itself/offended NERC by pointing to a reliability assessment that the agency had conducted in the course of crafting the pointless, politicized Utility MACT. According to EPA’s analysis of its own rule, there was nothing to worry about, as the regulation would have a negligible impact.

As noted by Commissioner Moeller, events have since discredited the agency’s reliability assessment.

With EPA’s history of undue optimism regarding the reliability impact of its rules in mind, it is disconcerting that the agency is projecting that its just-released climate regulations for existing power plants would adversely affect reliability in three regions of the country. Reports InsideEPA’s John Siciliano ($):

EPA in the resource and reliability analysis concedes that in three regions of the United States the changes caused to the grid by the ESPS could cause at least a 5 percent decrease in their electricity reserves. “The EPA believes changes below 5 percent are unlikely to raise concerns over reliability,” the agency says.

The three regions where EPA’s Integrated Planning Model (IPM) review of the ESPS shows potential reserve impacts above 5 percent that could cause reliability problems are: New England under the control of the New England Independent System Operator; the Southeastern Reliability Corporation states of Georgia, Alabama, part of Mississippi, and the panhandle of Florida overseen by the North American Electric Reliability Corporation (NERC); and the state of Florida comprising its own NERC reliability corporation, known as FRCC.

See for yourself. Below, I’ve reposted EPA’s reliability analysis, according to which three regions–encompassing New England, the deep South, and the Gulf panhandle–will face potential problems keeping the lights on as a consequence of the regulation. In light of EPA’s history of low-balling the impact of its rules, one wonders how much worse is the threat in reality. [click to continue…]

An article I wrote was published last week in the Appalachian Natural Resources Law Journal. It’s titled “Deadline Citizen Suits: An Idea Whose Time Has Expired.” In it, I argue that Congress included two legislative innovations in the Clean Air Act of 1970–(1) deadlines and (2) citizen suits to enforce these deadlines–in order to achieve two ends: (1) limiting regulatory capture and (2) expanding participation in the regulatory process. However, in the ensuing decades, these statutory means, far from achieving their intended purpose, have instead engendered the very problems they were originally intended to mitigate. EPA’s chronic non-performance of its non-discretionary, date-certain duties has facilitated deadline citizen suits establishing virtually all of the agency’s priorities. By this dynamic, EPA’s regulatory initiative has been captured by environmental special interests. These green groups, moreover, exhibit many of the characteristics, including a revolving door and also heavy political spending, that were attendant to the “capture” of New Deal regulatory agencies by industry. Below, I’ve posted a copy.


Deadline Citizen Suits: An Idea Whose Time Has Expired


Platts Energy Week with Bill Loveless: EPA Office of Air & Radiation acting head Janet McCabe gave an Orwellian interview on Sunday morning’s Platts Energy Week with Bill Loveless. Below, I’ve parsed a few of her statements:

Janet McCabe opens the interview by saying, “Flexibility is really the key to this proposal, and it comes from the Clean Air Act itself.”

[Truth of the Matter: By “flexibility,” she means piling unfunded mandate upon unfunded mandate. The agency’s climate rule is based on 4 “building blocks.” The first, efficiency improvements at individual power plants, is in line with EPA’s historical interpretation of the Clean Air Act. The second, third, and fourth “building blocks”—environmental electric dispatch, green energy mandates, and demand-side management programs—comprise the preponderance of the standard, and each one is a discrete policy of the sort that has been the exclusive preserve of State governments since the New Deal. Of course, States would have the “flexibility” to use less energy to meet the goals based on these “building blocks,” either outright or indirectly via a cap-and-trade energy rationing scheme.]

Bill Loveless: “What happens if States don’t meet these goals in 2030? Would they be penalized in the end, if they were just short of those goals?”
Janet McCabe: “No. EPA approach is always to work with States to get them to be successful.”

[Truth of the Matter: What McCabe claims was indeed once true, before the Obama administration, which has demonstrated an unprecedented willingness to run roughshod over States.]

Bill Loveless: “Is there a risk that this plan would result in much higher electricity prices and much less reliability in electricity markets.”
Janet McCabe: “Of course, we’re very sensitive to that…We think that the costs are very reasonable, especially when you look at the economic and public health benefits.”

[Truth of the Matter: EPA is, in fact, insensitive to reliability. And the costs of the rule are very unreasonable, because there are no economic and public health benefits.]

Watch the whole interview below: [click to continue…]

Post image for American Lung Association Manipulates ‘Maternal Instinct’ to Sell EPA Power Grab

The American Lung Association (ALA) has launched a TV and digital ad campaign touting EPA’s Clean Power Plan, also called the carbon “pollution” rule for existing power plants.

ALA’s Facebook page offers a brief explanation:

Power plant pollution is a serious threat to our health, especially to kids. Check out our new television commercial to see what we’re doing to standup for little lungs vs. big polluters.

The commercial, titled “Mother’s Instinct,” features a baby boy in a crib with a monitor that lets Mom (and us) hear him breathing.

Here’s the text:

The Clean Air Act stops polluters from poisoning his [the baby’s] air with arsenic, lead, and mercury. Now the loophole that let’s them pump unlimited carbon pollution into his air is closing too . . . if polluters and their friends in Washington don’t interfere. Don’t let polluters weaken our clean air protection.

As the narrator says the words “if polluters,” the baby disappears from the screen and instead we see what looks like smoke billowing out of the stack of a coal power plant.

Fact check time. First, mercury emissions from power plants do not poison anyone’s air. When mercury emissions deposit in soils and water bodies, bacteria can transform inorganic mercury (Hg) into methylmercury (CH3Hg), an organic compound that can bioaccumlate in aquatic food webs. In theory, American women who consume hundreds of pounds of self-caught (non-commercial) fish from the most contaminated water bodies can damage the cognitive and neurological development of their unborn children. However, in the 24 years since Congress tasked EPA to study the health risks of mercury, the agency has not identified a single child whose learning or other disabilities can be traced to prenatal mercury exposure due to maternal fish consumption. But even if mercury in fish were a significant health hazard, it would still be false to claim that power-plant mercury emissions poison the air kids breathe.

The case is somewhat similar for arsenic. Inhalation is a “route of exposure” but mainly as an occupational hazard at certain types of industrial facilities that emit arsine gas. For the general population, which includes children, the main route of exposure is ingestion of contaminated food or water.

More importantly, carbon dioxide (CO2), the substance targeted by EPA’s Clean Power Plan, is non-toxic to humans and animals at multiple times today’s atmospheric concentration (~400 parts per million) or any level reasonably anticipated for centuries to come. [click to continue…]

There’s a very interesting legal argument that the Clean Air Act forbids EPA from regulating greenhouse gases from existing power plants, which is the purpose of a major climate change rule proposed by the agency on June 2. In a nutshell, the argument goes like this:

  • EPA’s climate regulatory regime for existing sources is authorized by §111(d)
  • In 1990 Amendments to the Clean Air Act, Congress barred EPA from issuing §111(d) regulations for any source category that is also subject to §112 standards for hazardous air pollution. This exclusion is found in 111(d)(1)(A)(i)*
  • In February 2012, EPA promulgated §112 standards for power plants (the ridiculous Utility MACT).
  • Therefore, EPA is prohibited from subjecting power plants to §111(d) regulations.

Environmental special interests, on the other hand, currently claim that this line of reasoning has no merit. To this end, they point to the existence of a drafting error rendered during the Conference Committee to reconcile the House and Senate versions of the 1990 Clean Air Act Amendments. According to leading environmental lawyers, there are, in fact, two versions of §111(d)(1)(A)(i) as it pertains to the §112 exclusion, and, as a result, the text is ambiguous. Statutory ambiguity, in turn, is a classic trigger for judicial deference to agency interpretation.

Consider, for example, David Doniger, Policy Director and Senior Attorney, Natural Resources Defense Council Climate and Clean Air Program. Here’s what he said about the matter at a May 23 Federalist Society event (video above):

[At the 59:20 mark] When you look at this statute, it turns out that Congress really kind of screwed up in 1990. They adopted two provisions in two different sections of the 1990 Clean Air Act Amendments that both modified the same sentence of §111(d), and the codifiers didn’t know what to do. So they tried, and picked one version of it, and put it in the US code. But it turns out that what is really the law of the land, is the Statute at Large. So you have to reconcile these two inconsistent amendments adopted at the same time to a single sentence of the CAA. If there ever was a place when the Chevron doctrine applies, it’s gotta be that, where the statute is literally a mutation in the process in dividing and combining between the House and Senate. And the agency is going to end up with the leeway to resolve that. The EPA did produce a resolution to that in the [pause] I believe it was the mercury regulations or maybe it was a recent one. And I think the Supreme Court will spend five minutes on that one.

I’ve added the formatting to highlight Doniger’s correct claim that the EPA has indeed “produce[d] a resolution” to this textual discrepancy. The agency first did so in 2005, as part of its Clean Air Mercury Rule. Briefly, EPA’s 2005 mercury rule would have exempted power plants from §112 hazardous air pollution controls, and instead subjected them to §111(d) controls for mercury. NRDC, for whom Doniger works, opposed the 2005 Clean Air Mercury Rule. And a key component of NRDC’s legal reasoning–at that time, at least–was that the Clean Air Act bars EPA from imposing §111(d) requirements on a source that is already subject to §112 standards. See for yourself: At the bottom of this post, I’ve reposted NRDC’s reply brief in opposition to the 2005 mercury standards. (See Part II, “EPA May Not Adopt §111 Standards for EGU Emissions of Listed HAPS,” p 13, where the environmental plaintiffs state that the Clean Air Act “…prohibits EPA from setting §111 standard for pollutants like mercury “emitted from a source category which is regulated under section 112”…”)

[click to continue…]

[Editor’s Note“Primary Document Dump Fridays” is a new weekly feature at globalwarming.org. Every Friday, we’ll post all the primary documents relevant to a major issue]

For this week’s Primary Document Dump, we’ve chosen to highlight an ongoing “sue and settle” outrage that demonstrates everything insidious about this practice that has proliferated in the Obama Age.

Sue and settle refers to sweetheart lawsuits between EPA and environmental groups. The victims are States, which get left out of negotiations with a material impact on policy-making, despite the fact that they—the States—are EPA’s rightful partners (rather than green groups).

How Sue & Settle Works

In fact, the opportunity for such sue and settle shenanigans is created by the Congress’s overreliance on deadlines in environmental statutes. The Clean Air Act, in particular, contains far many more date-certain duties than the agency has proven capable of performing. Since 1993, of 200 date-certain duties pursuant to three core Clean Air Act programs, only 2% were completed on time, and the agency was, on average, late by almost 6 years.

Missed deadlines, per se, wouldn’t be problematic. However, they have become a policy problem because the Clean Air Act empowers environmental special interests to sue in order to compel the agency to perform any nondiscretionary duty. In the case of a “sue and settle,” an environmental group sues over a missed deadline, and, instead of litigating (and thereby defending its prerogative to set its own priorities), the agency immediately agrees to settle.

If the EPA is out of compliance with virtually all its Clean Air Act deadlines, as is demonstrated by the data above, then clearly the agency has limited resources relative to its responsibilities. As a result, establishing any deadline determines how the EPA deploys its limited resources, which is no different than rendering policy. Of course, if the EPA wants to give priority to its many outstanding responsibilities, it should do so in cooperation with the states, which have to actually implement these regulations, rather than the likes of environmental special interests like the Sierra Club and NRDC.

For more on sue and settle in general, see these studies:

Today’s Case Study—Sierra Club, et al. v. McCarthy—Is Especially Bad

The lawsuit we highlight today is unusually harmful to States. It’s one thing to establish the agency’s priorities, in the fashion described above. It’s a whole different matter to actually negotiate substantive policy behind closed doors under the auspices of consent decree discussions, to the exclusion of affected parties. Yet this is precisely what happened in Sierra Club et al. v. McCarthy, Civil Action No. 3:13-cv-3953. Below, I describe the case, in the course of presenting every primary document of import that is related to the case. [click to continue…]

Cooler Heads Digest 13 June 2014

Fossil energy production was a large contributor to fast GDP growth in five states in 2013, the Commerce Department’s Bureau of Economic Analysis (BEA) reports:

Although mining was not a significant contributor to real GDP growth for the nation, it did play a key role in several states. This industry was a large contributor in five of the fastest growing states: North Dakota, Wyoming, West Virginia, Oklahoma, and Colorado. In North Dakota, the fastest growing state in 2013, mining contributed 3.61 percentage points to the state’s 9.7 percent growth in real GDP. By contrast, Alaska was the only state where real GDP decreased in 2013, primarily due to a decline in mining that resulted from lower output on the state’s North Slope.


Okay, the BEA doesn’t actually say “fossil energy production” and instead uses the less descriptive term “mining.” But what’s mostly ‘mined’ in those states is fossil fuels:

For more detail (albeit with somewhat dated info), see EIA charts and table below the break.

Note, too, 2013 GDP growth was strong in Texas (3.7%), the nation’s top oil and gas producing state, and also strong in Utah (3.8%), a state with significant coal and gas production. Idaho was the only non-fossil energy producing state with fast GDP growth (4.1%) in 2013.

At the risk of belaboring the obvious, policies promoted by the Obama administration and/or its allies — carbon taxes, cap-and-trade, drilling/fracking moratoria, energy export bans — are designed to suppress or even ban fossil energy production.

[click to continue…]

Post image for How Can EPA’s ‘Clean Power Plan’ Deliver $Billions in Climate Benefits If It Has No Detectable Impact on Global Temperatures, Sea-Level Rise, or Other Climate Indicators?

EPA’s carbon “pollution” rule for existing power plants, dubbed the Clean Power Plan, requires states, on average, to reduce power-sector carbon dioxide (CO2) emissions 30% below 2005 levels by 2030.

EPA’s Regulatory Impact Analysis projects significant incremental annual compliance costs — $7.3 billion to $8.8 billion in 2030 (RIA ES-7) — but also much larger air quality and climate benefits. EPA’s Clean Power Plan “By the Numbers” Fact Sheet estimates the public health and climate benefits at $55 billion to $93 billion. The RIA projects net benefits of $46 billion to $84 billion in 2030 (RIA ES-23).

Reductions in premature fatalities attributed to coincidental reductions in ozone and fine particulate (MP2.5) pollution account for more than 90% of the estimated $23 billion to $59 billion in health benefits in 2030 (RIA ES-22). Those gigantic air quality “co-benefits” should be taken with several handfuls of salt.

Claims that PM2.5 pollution currently kills thousands of Americans annually are based on cherry-picked studies and extrapolation of health effects below the lowest PM2.5 concentrations associated with mortality in epidemiological studies. Such claims also conflict with toxicological studies, which indicate that current PM2.5 concentrations in U.S. cities are too low to cause significant disease or death.

As for ozone pollution, the rule’s purported health benefits are even less plausible, since asthma prevalence — especially childhood asthma rates — increased since 1980 while ozone concentrations declined by 25%.* The Clean Power Rule will reduce ozone precursor emissions chiefly by forcing states to shift base load generation from coal to natural gas. But the state with the worst ozone pollution is California, which obtains only 0.4% of its electricity from coal.

Those are my preliminary reactions to the rule’s co-benefit claims. I turn now to the main topic of this post — whether the rule’s alleged climate benefits justify the estimated costs.

EPA estimates that in 2030 the rule will deliver climate benefits of $9.5 billion to $94 billion, with a mid-range estimate of $31 billion (RIA ES-23). This seems to suggest that, just as the rule will impose $7.3 billion to $8.8 billion in compliance costs on the power sector in 2030, it will also spare Americans tens of billions of dollars in climate change damages in the same time frame.

Obama administration officials are only too happy to foster that impression. When announcing the rule, EPA Administrator Gina McCarthy said:

In 2030, the Clean Power Plan will deliver climate and health benefits of up to $90 billion dollars. And for soot and smog reductions alone, that means for every dollar we invest in the plan, families will see $7 dollars in health benefits.

Implication: U.S. climate benefits (CO2-related damages avoided) in 2030 will exceed $30 billion.* That is nonsense for three reasons. [click to continue…]

In today’s Federal Register, the EPA finalized its 50th regulatory takeover of a state Clean Air Act program, also known as a Federal Implementation Plan (“FIP”). Today, the victim was Washington. To be precise, the agency imposed visibility improvement requirements, known as Regional Haze, on a refinery and two aluminum manufacturing plants in the Evergreen State. While compliance costs are minimal for this particular regulatory takeover, the unfortunate effect of today’s action is to subject three sources to the purview of a Clean Air Act regulatory regime against the wishes of the State, and for no discernible environmental improvement. Below, I’ve provided an ongoing analysis compiled by globalwarming.org, of Clean Air Act FIPs rendered by each of the last four Presidents. As is rendered clear by the chart, President Obama has taken a very different view of Clean Air Act cooperative federalism than has his predecessors. Evidently, Obama’s is the age of uncooperative federalism.