2014

This week’s Platts Energy Week with Bill Loveless started with an interview with the co-chairman of the newly formed congressional refinery caucus, Rep. Pete Olson (R-TX). I’d never before heard Olson speak; he’s a peculiar monotone cadence that sounds sorta like Boomhauer from King of the Hill.

I’d like to draw attention in particular to Rep. Olson’s extremely impressive discourse on risk. About a third of the way through the interview, Host Bill Loveless referenced a couple recent refinery accidents, and questioned Rep. Olson about whether the industry should be subject to greater regulatory scrutiny.

Rep. Olson first executed some clever political jujit-su. He assured Loveless that the industry is safe, and then waxed lyrical about growing up near refineries along the Gulf Coast, even going so far as to recall how much enjoyed and appreciated as a child the refineries strewing Christmas lights during the holiday season.

The host pressed and then Rep. Olson got serious and delivered a great answer. He said, in effect, that refining entails the manipulation of volatile gases under high pressures at high temperatures and, as such, it cannot be risk-free. However—and this is his key insight—this state of risk is equally true for much of the advanced engineering on which modern society relies—from driving cars to building houses.  Humans make mistakes; ergo risk. The question then becomes: Is [further] federal regulation based on reasonable risk-management? Or is it championed by special interests for which fossil fuels are “dirty” and therefore evil, per se? Rep. Olson’s interview is posted below.

After Rep. Olson, Bill Loveless interviewed U.S. Department of State “energy envoy” Carlos Pascual. The segment was interesting insofar as it demonstrated how climate change policy is incompatible  with the art of diplomacy.

Ambassador Pascual is no doubt a brilliant mind. I suspect he learns languages as easily as I get sunburned. And whenever he discussed non-climate diplomacy, he demonstrated great agility of mind. But when he veered into environmental policy, he sounded loopy.

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Cooler Heads Digest 18 July 2014

Listen here.

Last Friday morning, the Energy and the Economy subcommittee of the House Energy and Commerce Committee held a fascinating hearing aptly titled “Constitutional Considerations: States vs. Federal Environmental Policy Implementation.”

Witnesses included law professors Jonathan Adler (Case Western University School of Law), Rena Steinzor (University of Maryland School of Law), and Richard Revesz (New York University School of Law), as well as the Congressional Research Service’s Robert Meltz. (testimonies hyperlinked). Click here for a background memo. Subcommittee chairman John Shimkus’s opening statement is available here. I’ve reposted video of the hearing at the bottom of this post.

My purpose today is not to describe the entire hearing; rather, it’s to highlight one particular exchange, concerning a putative “race to the bottom” among States on environmental standards absent federal regulations.

According to the “race to the bottom” thesis, unless the federal government intervenes, States would compete with one another to lower environmental standards in order to better attract industry. This proposition took hold in the mid-1970s, and was a major intellectual influence of the 1977 and 1990 Clean Air Act Amendments.

Simply put: The presumed existence of a “race to the bottom” justifies a federal presence in state environmental policymaking.

Thus aware, now consider the following exchange between Ohio Representative Bob Latta and professor Jonathan Adler, which casts considerable doubt on the very existence of a “race to the bottom” (!!!):

Representative Bob Latta: Is there any empirical evidence to support the assertion that leaving environmental regulation to the States will precipitate a race to the bottom.

Professor Jonathan Adler: No there actually really isn’t such evidence.

There’s one study that relies upon survey data that shows state officials are responsive to competitive concern, but that’s not sufficient in terms of showing a race to the bottom.

Professor Revesz [N.B.: A fellow panelist; his testimony is linked to above] has written what is probably the seminal article on the theoretical arguments related to race to the bottom, showing quite compellingly that, as an analytical matter, the race to the bottom theory rests on a lot of assumptions that aren’t justified.

As an empirical matter, I’ve done work in the area of wetlands showing that the pattern of state wetland regulation prior to federal regulation is the exact opposite of what the race to the bottom theory would predict.

There is a significant amount of literature, in both the economic literature and the political science literature, looking empirically at patterns of state regulation, again, showing that the patterns of state regulation are not consistent with the idea of a race to the bottom.

In fact, there is some scholarship that suggests that states in fact learn from each other. When one state…regulates more stringently in order to enhance environmental protection, that neighboring states become more likely to follow suit…as they learn from the positive experience of their neighbor.

There is also some work…suggesting that even non-preemptive federal regulation alters the incentives that state regulators face, and, in some cases, will discourage states from being innovative and being more aggressive and more experimental to confront aggressive environmental problems because of the way it alters incentives.

To which I say: WOW! Very notably, Professor Steinzor, who was the minority witness, had no rebuttable when afforded the opportunity to speak, despite the fact that her written and oral testimony both cited the “race to the bottom” as a key justification for federal environmental regulation. [click to continue…]

So I’m headed back to California from Las Vegas on I-15 when my eyes are dazzled by the light. Immense rectangular objects on three gigantic towers shine brighter than the desert sky in the noonday Sun. I avert my gaze, finding the discomfort level about the same as staring at an oncoming car with the brights on at night.

Taking in the panorama, I notice that the summits of the towers seem to be caught in the crosshairs of energy beams. The sci-fi fan in me is thinking, ‘Cool!’ What is this scene out of a Hollywood CGI extravaganza?

Google instantly sets me straight. This is Ivanpah Solar Electric Generating System — the controversial solar power project held up for years due to its potential adverse impact on the “threatened” Mojave desert tortoise. Relocation and private conservation may save the tortoise, but Ivanpah has another ecological downside: It incinerates birds.

Ivanpah began generating power in February of this year. Even before commercial operation commenced, news outlets reported accounts of singed, scorched, and possibly vision-impaired birds. In April, the National Fish & Wildlife Service (FWS) Forensics Laboratory published a preliminary analysis of avian mortality at three California solar facilities. Of those, Ivanpah was the worst offender.

FWS investigators found that cloud-like emanations near the rectangular boilers (see photo below) attract insects, which attract small birds, which attract birds of prey, creating a “mega trap” for both local and migratory winged creatures.

Environmental journalist Todd Woody ably summarized the FWS study in The Atlantic: [click to continue…]

Platts Energy Week with Bill Loveless: The invaluable Platts Energy Week ran a revelatory interview with Retired Vice Admiral Dennis McGinn, the Navy’s assistant secretary for energy, installations and environment. McGinn is the point man on the Navy’s pointless “Farm to Fleet” program, the purpose of which is to achieve “energy independence” by increasing use of biofuels. For the Navy, this means buying large volumes of ultra-expensive “advanced” biofuels, despite the fact that there’s an oil and gas boom in America.

About a minute into the interview, the host got down to brass tacks.

Bill Loveless: One of the requirements of this solicitation is that the bids be cost-competitive…as you know, the navy has taken some heat in the past for testing biofuels that cost as much as $30 a gallon. How do you expect these prices to come in this time?

Retired Vice Admiral Dennis McGinn: We have got a very good set of analyses that shows it [the price] will come in at under $3.50 per gallon. And we’ve verified that several different ways. We are absolutely confident and we are moving forward based on the assumption that it is going to be competitive with petroleum.

Hmmm…..Call me a cynic, but there are some big red flag code words in the Vice Admiral’s answer. Among them: “a very good set of analyses”, “we’ve verified that several different ways,” “absolutely confident,” “based on the assumption.” Pretty much the whole thing. It was a straightforward question—“how much will it cost?—of the sort to which the armed forces have long given obtuse responses.

The host then asked Retired Vice Admiral Dennis McGinn whether the premise of the program, which is the need for “energy independence,” wasn’t undercut by the American energy renaissance. Retired Vice Admiral Dennis McGinn responded that the Navy has to look far forward, beyond the present, when it assesses threats. This raises an obvious question: Why didn’t they foresee the oil and gas boom. Watch the whole interview below.

Other weekend media highlights: [click to continue…]

After three fun-filled days at Heartland Institute’s 9th Annual International Climate Conference at the beautiful Mandalay Bay hotel in Las Vegas, I moseyed on over to Planet Hollywood, site of the libertarian jamboree known as Freedomfest.

I gave a 20-minute presentation on a Heritage Foundation-sponsored panel discussion of the Obama administration’s energy policies.

Having come of age in the wild and wooly ’60s, I’ve encountered and debated lots of Lefty spin and progaganda over the years. However, I can’t recall an ideological campaign as thoroughly devoid of substance as the green crusade against the Keystone XL pipeline.

Hence the title of my talk: “Bogus Keystone Controversy — Fabrication of Green Politics.”

Below, I’ve posted my Power Point presentation.

Marlo Keystone Presentation by freedom1001

A popular Government without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or perhaps both. Knowledge will forever govern ignorance. And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives. 

James Madison

Regulating is an inherently legislative exercise, in that it entails the promulgation of rules that control private behavior. Indeed, most policy now is rendered via regulation, thanks to the geometric growth of the executive branch during the post-war years.*

However, unlike legislators in congress, executive agency bureaucrats are unaccountable to the electorate. As a result, there’s a danger that executive agencies are effectuating policy absent a popular mandate and away from the public eye.

In theory, the hazard of unaccountable policy-making could be mitigated largely by the 1966 Freedom of Information Act, which enables any person to request, without explanation or justification, access to existing, identifiable, and unpublished executive branch agency records.

b(5), e.g.

In practice, however, federal agencies routinely circumvent information requests, and the censors’ primary tool for achieving opacity is a statutory exemption from disclosing “deliberative process.” Colloquially, it’s known as the “b(5)” exemption, after its statutory provision (5 U.S.C. §552(b)(5)); among information seekers, it’s known as the “withhold it because you want to” exemption.

To be precise, the b(5) exemption covers any “intra-agency” or “inter agency” pre-decisional communications. Its general purpose is to prevent injury to the quality of agency decisions, by preventing agencies from being forced to “operate in a fishbowl.” Whatever its underlying merits, the broad scope of b(5) lends itself to abuse by agencies seeking to hide errors and failures.

According to the Associated Press, the Obama administration’s use of this “deliberative process” exemption set all-time records in 2012 and 2013. Nate Jones, the FOIA coordinator at the National Security Archive and ace blogger, has compiled a list of the Obama’s administration’s most dubious uses, including:

• Censoring the names of victims in the ongoing VA scandal
• Nazi protection
• Refusing to divulge information about the Bay of Pigs fiasco

The continued abuse of the b(5) exemption has engendered bipartisan backlash in the Congress. In late June, Chairman of the Senate Judiciary Committee Patrick Leahy (D., Vt.) and Ranking Member John Cornyn (R., Texas) introduced a bill to reform the b(5) exemption. Pursuant to their FOIA Improvement Act of 2014, agencies (and courts) now must balance the benefit to the public interest against the benefit of government employee confidentiality before withholding documents. For more on the bill, see this report by Washington Free Beacon’s CJ  Ciamarella (who, I might add, edits an edifying weekly FOIA newsletter).

Sens. Leahy & Cornyn’s effort is a laudable start, but I argue it doesn’t go far enough. If I had my druthers, Congress would exempt entire agencies from the b(5) exemption, starting with the EPA. [click to continue…]