EPA’s Coal Ash Rule Demonstrates Worthiness of White House Regulatory Review

Earlier today, I posted a primer on the EPA’s pending coal ash rule. In fact, the rule is almost assuredly going to be a far superior regulation than the shoddy version EPA originally drafted. And the means by which the rule improved in quality sheds much light on a little noticed yet supremely important component of the rulemaking process: White House regulatory review.

White House Regulatory Review: The Bare Bones Basics

White House regulatory review is conducted by the Office of Information and Regulatory Affairs (OIRA). OIRA (pronounced inside the beltway as “O-Eye-Ra”) was created by Congress with the enactment of the Paperwork Reduction Act in 1980. OIRA’s broad mandate is help alleviate the paperwork burdens imposed by the federal regulatory state on American businesses and private individuals.

In 1981, President Ronald Reagan substantially increased OIRA’s authority with the promulgation of Executive Order 12291, which required that federal agencies submit their proposed and final regulations to OIRA for review. Thus, OIRA became a primary means by which the President could affect regulatory policy. President Clinton updated the terms of OIRA’s regulatory review in 1993 with the issuance of Executive Order 12866. The two Orders did not engender materially different procedures.

All “major” rules are subject to OIRA review, although rules promulgated by independent executive agencies are exempt from the process.

OIRA Review of EPA’s Coal Ash Rule: An Interagency Smack Down

In late 2009, EPA submitted its original draft to OIRA, which proceeded to lay the smack down. A summary of its brutal review is available here, and a redline version of OIRA edits is available here. The documents demonstrate that it was amateur hour at the EPA during the first months of the administration when it put together the proposal:

• OIRA noted that, “the organization of [the] proposal does not clearly present options and alternatives in a manner that allows public or readers to clearly discern distinctions between the options.”

• OIRA, moreover, found the EPA’s justification for its preferred option to leave much to be desired. Its comments state that, “EPA never clearly articulates in the document what the actual need is for federal enforcement and permitting beyond what states could provide if empowered.”

• Almost 40 percent of coal ash is recycled to render products as diverse as bowling balls and concrete. However, OIRA found that EPA failed to “fully explore[]” the “implications” for resuse of coal ash.

• Finally, OIRA took issue with EPA’s cost-benefit analysis, pointedly noting “we estimate that the proposed rule will avert 0.5 cancer cases at a cost-per-life-saved of $59 billion.” [Editor’s note: What a deal!]

There is much, much more. Read it all for yourself here. Above, I cataloged the major mistakes, but OIRA exposed the elementary errors, too (such as failing to distinguish among the types of coal ash and thereby account for their varied chemical composition). The important point is that EPA was made to look like a fool for having drafting a conspicuously sub par and politically motivated rule.

Fortunately, the agency heeded the lessons of its interagency spanking. The version that EPA officially proposed in the Federal Register was much more reasonable than the version it had sent to OIRA. Between the pre-OIRA draft and the final proposal, EPA dropped its evident intent to impose the most stringent possible measure.*

The Major Flaw of White House Regulatory Review

While I support OIRA review, I’d be remiss if I failed to note that it suffers from a major flaw. Namely, the process is conducted in secret. It is very rare for OIRA comments to be made publicly available. In this instance, it only occurred by mistake. EPA accidentally posted OIRA’s comments, and, to the agency’s credit, it refused to take them off the docket. It is imperative that OIRA review be subject to public scrutiny.

*As I explain in this morning’s primer, the Resource Conservation and Recovery Act authorizes two pathways for EPA to regulate coal ash: Subpart C for “hazardous” wastes and Subpart D for “nonhazardous wastes.” In practice, the two Subparts would achieve the same ends, but by dramatically different means. Subpart C imposes a draconian regulatory regime, with permits required at virtually every instance when the regulated materials are handled. Subpart D, by contrast, relies on back-end enforcement via state or interest group lawsuits pursuant to the Resource Conservation and Recovery Act’s citizen suit provision.

In the original version, EPA expressed a strong preference for coal ash regulation pursuant to Subpart C, and the agency further structured the proposal to highlight this option at the expense of others. This preference, explicit and implicit, was dropped from the final proposal. A host of other improvements were made as well.