2014

Interview with SNL Energy on Energy/Environment/Climate Policy

by William Yeatman on January 24, 2014

in Blog

Over the weekend, I conducted an email interview with SNL Energy’s Taylor Kuykendall on energy/environment/climate policy. Below, I pasted our first two exchanges; read the whole thing here.

SNL Energy: Your organization champions free markets and limited government. From that perspective, what is the biggest threat to the energy industry today, particularly for fossil fuels like natural gas and coal?

William Yeatman: The biggest threat to the energy industry today is regulatory capture by environmental special interests. Most environmental statutes were enacted during the 1970s, at a time when intellectuals and policymakers alike believed that New Deal-era regulatory agencies had been “captured” by the industries that they regulated. In order to mitigate this regulatory capture, these environmental laws accorded then-nascent green litigation groups legal privileges to influence both implementation and enforcement of regulatory regimes.

Fast-forward 40 years, and circumstances have reversed course. Environmental organizations like the Sierra Club and the Natural Resources Defense Council now operate with near-hundred-million-dollar annual budgets. It is from their ranks that political positions are filled in federal agencies. Most importantly, they now run sophisticated and expensive political campaigns, including heavy media buys and get-out-the-vote efforts. Thus, they are now big-time political players. In short, green groups are exhibiting virtually the same behaviors as industry in the 1970s, which, at that time, were pejoratively labeled as regulatory capture.

To be sure, if these groups’ purposes were purely in the public interest, then regulatory capture wouldn’t necessarily be a concern. But that’s not the case. Instead, they’ve made a political cause of demonizing fossil fuels.

SNL Energy: What do you think is right about the current climate debate, and what is wrong? And what is our best bet for addressing the issue of climate change?

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Bill Ritter’s Recommendations for Executive Action on Climate Actually Undercut Obama’s Signature Executive Action on Climate (Thanks, Bill!)

by William Yeatman on January 23, 2014

in Blog

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On Tuesday, former Colorado Governor Bill Ritter was in Washington, D.C. to unveil a report, titled Powering Forward, that offers more than 200 suggestions for how President Obama can circumvent Congress to “move America toward a clean energy future that curbs climate change.”

I don’t quite understand why, but authoritarianism is all the rage in climate policy circles these days. Last week, the top UN climate diplomat endorsed Communism as a global warming solution. This week, a former U.S. governor is trumpeting policies that can be imposed by a second term President unaccountable to the electorate, in the face of inaction by Members of Congress, the government branch most responsive to voters.

Whatever the case, Ritter’s report, an effort which grew out of energy meetings at the White House and which, moreover, included input from former White House climate and energy advisor Heather Zichal, actually undercuts the President’s signature regulatory agenda to fight climate change.

Talk about your all time backfires!

In early January, EPA proposed the Carbon Pollution Standard, a regulation that would effectively ban the construction of new coal-fired power plants by requiring them to install a technology, known as carbon capture and sequestration, that isn’t yet market ready. As I’ve explained here, the Clean Air Act stipulates that EPA cannot require a technology that is not “adequately demonstrated.” This is key distinction; courts will strike down the rule if carbon capture and sequestration is not commercially viable.

EPA, of course, insists that CCS is ready for prime time; others, myself included, dispute EPA’s claim. Evidently included among our ranks are Bill Ritter and Heather Zichal. On page 134 of the report (which I’ve reposted below), in a section titled “Recommendations for Presidential Action,” it is explained that CCS is “commercially unavailable.” [click to continue…]

At Last: A Report on the Social Benefits of Carbon

by Marlo Lewis on January 22, 2014

in Features

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Although invented by academics curious about the economic implications of climate models, social cost of carbon analysis quickly became a form of computer-aided sophistry. Its political function is to hoodwink the gullible into believing that fossil fuels are unaffordable no matter how cheap and that so-called renewable energy technologies (chiefly wind and solar power) are a bargain at any price.

The social cost of carbon (SCC) is an estimate of the damage supposedly inflicted on society by the emission of a ton of carbon dioxide (CO2) in a given year. SCC estimates derive from a host of assumptions about highly speculative issues including: climate sensitivity (how much warming results from a given increase in CO2 concentrations); the impacts of warming on weather patterns, ice-sheet dynamics, and eco-system services; the economic impacts of the latter on agriculture and other climate-sensitive industries; and how human adaptive capabilities will evolve (how technology will develop) as the world warms. In addition, because the SCC is a guesstimate of cumulative damage over time, modelers can get big, scary-sounding numbers just by selecting low discount rates to calculate the present value of future projected damages.

But, as noted repeatedly on this blog, even if SCC analysis were an exact science, it would still tell only one side of the story. It would still tell us nothing about the social benefits of carbon energy, hence nothing about the social costs of carbon mitigation. Divorced from analysis of carbon’s social benefits, SCC estimation even at its theoretical best is partisan advocacy posing as objective research.

The Office of Management and Budget (OMB) requires federal agencies to estimate both the costs and benefits of proposed regulations and, to the extent permitted by law, ensure that the benefits of regulation justify the costs. In 2009, the Obama administration convened an interagency working group (IWG) on the social cost of carbon, which has so far produced two reports (2010 and 2013). Unsurprisingly the 2013 SCC estimates were about 50% higher than the 2010 estimates. The next report’s estimates will no doubt be higher still because warmism demands that its votaries always conclude that climate change is “worse than we thought.” That the administration would ever convene an IWG on the social benefits of carbon is unthinkable.

So where can citizens turn to for balance? I have good news. In The Historic, Present and Future Societal Benefits of Fossil Fuels, a report prepared for the American Council for Clean Coal Energy (ACCE), Dr. Roger Bezdek of Management Information Systems, Inc. (MISI) not only documents the manifold economic and health benefits of carbon energy, he also makes a powerful case that the evident societal benefits of carbon outweigh the conjectural costs by orders of magnitude — a range of 40-1 to 400-1. [click to continue…]

EPA Bamboozles Science Advisory Board on Carbon Pollution Standard [Updated 1.23.2014]

by William Yeatman on January 22, 2014

in Blog, Features

Post image for EPA Bamboozles Science Advisory Board on Carbon Pollution Standard [Updated 1.23.2014]

Yesterday, I listened in on an EPA Science Advisory Board (SAB) teleconference call regarding a possible SAB review of the science underlying the agency’s proposed Carbon Pollution Standard, and what I heard was shocking.

Simply put, EPA misled the SAB, in order to avoid a potentially embarrassing review. By my count, EPA told the SAB three whoppers about the Carbon Pollution Standard. On the basis of this duplicity, the SAB declined to conduct a review of the regulation’s technical feasibility, one that surely would have exposed the rule’s untenable assumptions.

Here’s the back story: SAB was created by the 1978 Environmental Research, Development, and Demonstration Authorization Act. Under the act, EPA is required to make available to the SAB its proposed regulations for review. SAB may then advise the administrator on the adequacy of the scientific and technical basis of the proposed action.

In September 2013, EPA issued a pre-publication version of the Carbon Pollution Standard. The regulation requires that all new coal-fired power plants install carbon capture and sequestration technology to control greenhouse gas emissions. Pursuant to its legal mandate, the SAB delegated to a Work Group the task of performing a preliminary review, on which basis the group would make a recommendation to the full SAB whether or not to conduct a more comprehensive review. On November 12, 2013, the Work Group recommended that the full SAB review “the science supporting” the Carbon Pollution Standard. Directly below, I’ve pasted the Work Group’s conclusion (formatting added):

The Work Group finds that the scientific and technical basis for carbon storage provisions is new science and the rulemaking would benefit from additional review. The specific technical and scientific matters that can be examined as part of the discussion include the scientific basis to develop separate standards for new gas-fired and coal-fired units, carbon capture and storage as a Best System of Emission Reductions for coal-fired plants and underlying scientific assumptions around carbon pollution emissions technological controls.

During yesterday’s teleconference, the full SAB considered whether to further review the Carbon Pollution Standard. And a key determinant of the SAB’s decision was the Work Group’s recommendation. Yet between November 12th and yesterday, the Work Group changed its recommendation 180 degrees. Before, the group had recommended a review; now, it advised that the SAB decline to review the Carbon Pollution Standard.

What happened? According to the Work Group, it was persuaded to change its mind by EPA during a December 17 “fact finding teleconference.” To be precise, here’s what EPA claimed, as interpreted by the Work Group in its recommendation:

  1. “EPA has made a policy decision that this action only applies to carbon emissions and the capture of carbon emissions, and thus does not directly address carbon sequestration.”
  2. “EPA staff explained that the agency’s consideration of feasibility and commercially availability of CCS provisions would be binding only on coal-fired EGUs and were based on three examples of implementing partial CCS.”
  3. “They [EPA staff] state that the agency’s considerations meet the statutory requirements to determine if technologies will be available for the regulated community at the time of construction”

In fact, the SAB was duped. On the truthiness spectrum, EPA’s claims (on which basis the SAB Work Group rendered its advice) range from lies of omission to bald face untruths. Below, I address each one in turn.

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Last Week’s Onion Editorial Cartoon Pillories Gore

by William Yeatman on January 19, 2014

in Blog

In a welcome sign of the times, Gore’s act is wearing thin with the tastemakers.
alOn a related note, Gore last week took to his blog to decry the possibility of geoengineering as a solution to global warming climate change. My colleague Marlo Lewis had this to say about Gore’s post (from last week’s Cooler Heads Digest):

Al Gore this week warned that use of geo-engineering to counter global warming would be “utterly mad.”

Geo-engineering refers to a set of techniques designed to cool the planet by limiting the amount of solar energy reaching the surface. Potential techniques include injecting small particles into the stratosphere to scatter sunlight, and spraying sea-water mist into clouds to make them brighter and reflect more sunlight back to space.

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

by William Yeatman on January 18, 2014

in Blog

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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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McConnell Files Resolution To Block EPA Greenhouse Gas Rule

by Myron Ebell on January 18, 2014

in Blog

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).

Cooler Heads Digest 17 January 2014

by William Yeatman on January 17, 2014

in Blog

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Announcement

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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Greens’ “Climate Impact Lens” an Even Worse Catchphrase Than “All of the Above” [updated 1.18.2014]

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by William Yeatman on January 17, 2014

in Blog, Features

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 PM — In 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.’

Video: RealClearPolitics Panel on Energy Policy

by William Yeatman on January 16, 2014

in Blog

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
 

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