Marlo Lewis

Post image for EPA Permitting of Greenhouse Gases: What Does Legislative History Reveal about Congressional Intent?

Next week, petitioners’ merit briefs are due in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA rule addressing greenhouse gases.

The Court is limiting its review to one question: “Whether EPA permissibly determined that greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” In other words, the Court will review the agency’s April 2010 Timing Rule.

According to the Timing Rule, “major” greenhouse gas emitters became subject to the New Source Review (NSR) preconstruction and Title V operating permit programs on the day the EPA’s greenhouse gas Tailpipe Rule took effect (January 2, 2011). To obtain an NSR preconstruction permit, a covered source must commit to meet case-specific emission limitations known as “best available control technology” (BACT).

What light does legislative history shed on the question before the Court? After reviewing 20 years of legislation containing the terms “greenhouse gas” and “best available control technology,” I conclude that neither Congress as a whole, nor the House or Senate separately, nor any congressional committee intended for the EPA to regulate greenhouse gases through the NSR and Title V programs.

Thomas, the Library of Congress search engine, identifies 692 bills containing the term “greenhouse gas” during the 101st through the 111th Congresses. Only one bill, the Safe Climate Act, introduced in both the 109th and 110th Congresses, arguably authorizes (but does not require) the EPA to apply NSR to greenhouse gases.

Although the Safe Climate Act boasted 155 co-sponsors in the 110th Congress, there were no hearings, committee votes, or floor debates on the bill. In the 111th Congress, the bill’s chief sponsor, Rep. Henry Waxman (D-Calif.), appears to have had a change of heart. The legislation he co-sponsored with Rep. Ed Markey (D-Mass.), the American Clean Energy and Security Act (H.R. 2454) — the only cap-and-trade bill ever to pass in either chamber of Congress — specifically prohibits the application of NSR and Title V to any source based solely on its greenhouse gas emissions.

Thomas also identifies 55 bills introduced during the 101st through 111th Congresses containing the term “best available control technology.” Of those, only one bill introduced (twice) in the 101st Congress and another bill introduced in 110th Congress appear to contemplate some application of NSR and BACT to CO2.

In the 101st Congress, S.676/S.333, the Global Environmental Protection Act of 1989, introduced separately by Senators Max Baucus (D-Mont.) and Patrick Leahy (D.-Vt.), would require the EPA to establish “best available residential technology” standards for CO2 emissions from household furnaces, water heaters, and air conditioners. But here the Senators merely borrow the terminology of NSR rather than actually propose to subject households to NSR permitting. The bills would simply require the EPA to promulgate the functional equivalent of energy-efficiency standards for the equipment in question.

Regardless, although elements of S.676/S.333 were incorporated in S.1630, the Senate version of the 1990 Clean Air Act Amendments, the proposed “best available residential technology standards” for CO2 did not make the cut.

In the 110th Congress, Senator Lamar Alexander (R-Tenn.) introduced S.1168, the Clean Air/Climate Change Act of 2007. Among other provisions, the bill would require new coal power plants to meet a new source performance standard of 1,100 lbs. CO2 per megawatt hour. Since this standard can only be met through carbon capture and sequestration (CCS), the bill would also void the existing BACT standard for coal power plants based on the performance of “conventional pulverized” coal facilities. There is no indication in the bill that BACT for CO2 pertains to stationary sources in general. Rather, BACT for CO2 would apparently be limited to NSPS-regulated new coal power plants equipped with CCS. In any event, the bill attracted only one co-sponsor, was not the subject of hearings or other committee action, and was not debated on the Senate floor.

Additional details of the legislative history follow. [click to continue…]

Post image for Skeptical Science’s Hiroshima Bomb Bombast

SkepticalScience.Com this week unveiled a downloadable app that supposedly shows how fast heat is building up in the Earth’s climate system due to anthropogenic greenhouse gas emissions. The metric chosen is Hiroshima bombs. The Earth, according to SkS’s app, is warming at the rate of four Hiroshima bombs per second or 400,000 Hiroshima bombs per day.

I don’t know about you, but it sounds to me like someone is trying to tell us global warming could be the end of life as we know it.

SkS says the point of their Hiroshima bomb calculator is simply to explain in “ways that non-scientists can more easily relate to” how much heat anthropogenic greenhouse gases add to the climate system. It’s supposed to help us laymen understand the concept of radiative imbalance.

Let’s briefly examine that concept. Both incoming shortwave radiation (sunlight and ultraviolet light) and down-welling long-wave (infrared) radiation warm the planet. Conversely, reflected shortwave radiation and outgoing long-wave radiation cool the planet. Various observations (with varying degrees of uncertainty) indicate that incoming and down-welling energy exceed reflected and outgoing energy by 0.6 Watts per square meter (W/m2). That imbalance is attributed to mankind’s enhancement of the greenhouse effect. It is equivalent to the energy released by 400,000 Hiroshima bombs.

Today on WattsUpWithThat.Com, climate researcher Bob Tisdale posts a video commentary on SkS’s Hiroshima bomb calculator. To put 0.6 W/m2 into perspective, Tisdale references Stephens et al. (2012), a study of the Earth’s energy balance in Nature GeoScience.

Figure B1 from Stephens et al. illustrates six components (estimated from satellite and other data) of the Earth’s energy balance:

Energy Balance Stephens et al. 2012 [click to continue…]

Post image for House GOP: Last Laugh on “Carbon Pollution Rule”?

My colleague Will Yeatman reports some fantastic climate policy news in this week’s Cooler Heads Digest:

House GOP Outwits EPA on Carbon Pollution Standard

Leading members of the House Energy and Commerce Committee recently made the EPA look foolish by pointing out a glaring flaw in the agency’s proposed Carbon “Pollution” Standard.

The proposed regulation would require new coal-fired power plants to install carbon capture and sequestration (CCS). And yet, under the Clean Air Act, EPA cannot require a technology that isn’t commercially viable. On the one hand, industry claims that CCS isn’t market-ready, citing as proof the fact that there isn’t a single CCS system in operation. EPA, on the other hand, claims that CCS is adequately demonstrated. As evidence, the agency referenced three CCS pilot projects in the U.S. that are either in planning or under construction in Mississippi, California, and Texas.

Last week, leading members of the House Energy and Commerce Committee pulled the rug out from under EPA’s evidence. In a November 15th letter to EPA Administrator Gina McCarthy, Reps. Fred Upton (R-Michigan), Ed Whitfield (R-Kentucky), Joe Barton (R-Texas), and Steve Scalise (R-Louisiana) brought to her attention a little-known provision of the 2005 Energy Policy Act that prohibits the agency from basing an “adequately demonstrated” determination on CCS projects that received subsidies pursuant to the law. As they helpfully note, each of the CCS projects in Mississippi, California, and Texas were beneficiaries of such subsidies, and are, therefore, inappropriate foundations for the Carbon Pollution Standard. The letter is available here.

Until I read the letter, I had been ignorant of this obscure provision of the 2005 Energy Policy Act. So, evidently, was EPA, which is quite rich.

Frankly, I’m impressed with these lawmakers. There’s a saying that Republicans are the stupid party. Not on this score. EPA’s Carbon Pollution Standard is the centerpiece of the Obama Administration’s climate agenda. EPA Administrator McCarthy, in a July speech, said that the Carbon Pollution Standard was the agency’s top priority, necessitating an “all hands on deck” approach.  And yet, despite this sense of urgency and a funneling of resources into the regulation, the agency stumbled into a tripwire set 8 years ago by four smart House Republicans. Bravo.

An old joke springs to mind.

Comedian: Go ahead, ask me, ‘What is the secret of great comedy?’

Audience member: What is the secret of. . .

Comedian: Timing!

Putting the kibosh on the “carbon pollution rule” would not have been nearly as funny had Upton, Whitfield, Barton and Scalise nipped this mischief in the bud when the EPA was only rumored to be proposing CCS as an “adequately demonstrated” basis for setting “carbon pollution” standards. Instead, the congressmen waited until the agency — and the Obama administration — inserted foot firmly in mouth. Bravo indeed! [click to continue…]

Post image for Social Cost of Carbon: Does EPA Rig the Game?

In a new report, Heritage Foundation analysts Kevin Dayaratna and David Kreutzer examine one of the three main computer models the EPA uses to calculate the social cost of carbon (SCC).

The SCC is an estimate of how much economic damage an incremental ton of carbon dioxide (CO2) emissions allegedly does over time periods as long as 300 years. The model examined by the Heritage analysts is called Dynamic Integrated Climate-Economy, or DICE. Dayaratna and Kreutzer find it to be “flawed beyond use for policymaking.” Fittingly, they title their report: Loaded DICE: An EPA Model Not Ready for the Big Game.

The SCC estimates generated by DICE “shift substantially” — that is, are much lower — when reasonable alternatives are substituted for just a few of the assumptions made by the EPA. Specifically:

  • Using a discount rate (a measure of the time value of money) mandated by the Office of Management and Budget (OMB) that the EPA omitted reduces the 2020 estimate of SCC by more than 80 percent;
  • An updated estimate of the equilibrium climate sensitivity distribution (ECS)—a measure of CO2’s temperature impact—reduces the 2020 estimate of SCC by more than 40 percent; and
  • With an updated ECS distribution, a time horizon up to 2150,* and with the omitted discount rate, the 2020 estimate of SCC falls by nearly 90 percent, from $37.79 to $4.03.

The two Heritage analysts also note that the DICE and similar models’ damage functions are inherently speculative. No one today can forecast what humanity’s technological capabilities will be 50, 100, or 150 years hence. Which means no one knows how humanity’s adaptive capabilities will develop in a warming world. So even if scientists could accurately forecast future warming, projections of future damages would still be guesswork.

Dayaratna and Kreutzer conclude: [click to continue…]

Post image for Social Cost of Carbon: How to Make Fossil Fuels Look Unaffordable No Matter How Low the Market Price

In a recent post, I discussed how the pseudo-science of social cost of carbon (SCC) estimation can be used to repackage uneconomic renewables as a bargain at any price. A White Paper by electric power industry analyst Bob Kapplemann makes the same point but, in addition, explains it by the numbers.

As background, the SCC is an assumption-driven guestimate of the long-term damage allegedly resulting from an incremental ton of carbon dioxide (CO2) emissions. In May 2013, the Obama administration’s Interagency Working Group on the Social Cost of Carbon published “updated” SCC estimates that were about 60% higher than its 2010 estimates.

Kappleman’s concise (4-page) White Paper contains three tables. Table 1 illustrates the current wide range of SCC estimates ($12-$129/metric ton CO2 in the administration’s 2013 update; $306/ton according to the Natural Resources Defense Council).

Table 2 illustrates how easily SCC estimation can make low-cost power look unaffordable. The administration attributes over $210 million a year in social costs to a 600 MW pulverized coal power plant and over $74 million a year to a natural gas combined cycle plan. In the case of the coal plant, the CO2 portion of the costs is 75% and in the case of the gas plant, CO2 is 97% of the costs.

Table 3 illustrates how easily SCC estimates can make wind, solar, and biomass look cheaper than energy from coal-fired power plants, and make “even radical reductions” in existing coal-fired generation look economically justified.

Let’s look at the tables and the accompanying figure explanations.

SCC White Paper Table 1

Figure explanation: As discussed previously, in addition to using non-validated climate sensitivity assumptions and completely speculative damage functions, the Interagency Working Group, flouting OMB best practices, further inflated its SCC estimates by not using a 7% discount rate and by not estimating the domestic SCC.  [click to continue…]

Post image for EPA Scales Back Ethanol Mandate for First Time!

For the first time in the history of the federal Renewable Fuel Standard (RFS) program, the Environmental Protection Agency today proposed to scale back the government’s overall biofuel blending target for the forthcoming year. Specifically, the EPA is proposing to cut the 2014 blending target from 18.15 billion gallons to 15.21 billion gallons.

Market realities forced the agency’s hand. Like all central planning schemes, there comes a point where even the commissar has to admit that it’s just not working.

Two factors compelled the EPA to make this adjustment. One is that the RFS requires obligated parties – refiners, blenders, and fuel importers – to sell 1.75 billion gallons of cellulosic ethanol in 2014. However, despite years of research and taxpayer support, commercial production of cellulosic biofuel was only 20,000 gallons last year.

The second factor is the blend wall — the maximum quantity of ethanol that can be sold each year given legal or practical constraints on how much can be blended into each gallon of motor fuel. The most common blend today is E10 — motor fuel with up to 10% ethanol. Although the EPA approved the sale of E15 in October 2010, potentially increasing by 50% the total amount of ethanol sold annually, lack of appropriate fueling infrastructure, warranty and liability concerns, and consumer skepticism effectively limit the standard blend to E10.

The EPA’s proposal is a welcome step in the right direction but does not go nearly far enough. Nobody likes the RFS program except the special interest groups who directly profit from it. Even as environmental policy, the RFS is a bust, as an extensive AP investigation published this week confirms.

Even if the RFS did not inflate food prices, increase pain at the pump, exacerbate world hunger, expand aquatic dead zones, or contribute to habitat loss, Congress should still repeal it, because the RFS flouts the core constitutional principle of equality under law. [click to continue…]

Corn Ethanol: Not Green – AP

by Marlo Lewis on November 15, 2013

in Blog

Post image for Corn Ethanol: Not Green – AP

An extensive investigation by the Associated Press (AP) confirms what many critics of the Renewable Fuel Standard (RFS) program have been saying for years — the ethanol mandate does more environmental harm than good.

The AP article begins with an overview of key findings:

But the ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today. 

As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies, an Associated Press investigation found. 

Five million acres of land set aside for conservation – more than Yellowstone, Everglades and Yosemite National Parks combined – have vanished on Mr. Obama’s watch.

Landowners filled in wetlands. They plowed into pristine prairies, releasing carbon dioxide that had been locked in the soil.

Sprayers pumped out billions of pounds of fertilizer, some of which seeped into drinking water, contaminated rivers and worsened the huge dead zone in the Gulf of Mexico where marine life can’t survive.

* * *

All energy comes at a cost. The environmental consequences of drilling for oil and natural gas are well documented and severe. But in the president’s push to reduce greenhouse gases and curtail global warming, his administration has allowed so-called green energy to do not-so-green things. [click to continue…]

Post image for Re-Revised King James Bible for the Green Investor

Why do wind and solar power generate a mere 3.46% and 0.11% of U.S. electricity, respectively, despite billions of dollars in taxpayer and ratepayer subsidies and Soviet-style production quota for renewable electricity in 29 states?

The chief reason is the inherent economic and technical drawbacks of high-cost, low-density, intermittent energy.

A more politically-correct explanation these days is the so-called Valley of Death — a period when a high-tech startup firm may perish from poor or negative cash flow before it has had a chance to commercialize its invention.

Although most technology startups fail, the Valley supposedly got even deadlier for greentech companies in recent years. As Bloomberg BusinessWeek reporter Christopher Martin put it, “Hundreds of U.S. cleantech startups find themselves stuck on the road to serious revenues because of the toxic combination of a stalled economy, scarce funding, and Washington’s failure to enact comprehensive climate and energy legislation.”

The Department of Energy’s Stimulus loan guarantee program, administered under Section 1705 of the 2005 Energy Policy Act, was designed to plug the “funding gap” and shepherd greentech companies through the Valley of Death. Yet several recipients of DOE loan guarantees failed, most notably solar panel manufacturer Solyndra, which burned through more than half a billion taxpayer dollars before filing for bankruptcy. What went wrong?

Solyndra’s execs were counting on Congess to enact the Waxman-Markey legislation, with its cap-and-trade scheme and renewable electricity mandates. Like President Obama, they believed regulations handicapping fossil fuels would make renewable energy “the profitable kind of energy” in America. Rigging energy markets may indeed enrich campaign contributors; it can only make society as a whole poorer. But I digress.

The ongoing debate on DOE’s role as green venture capitalist (socialist?) inspired my colleague, Heritage Foundation economist David Kreutzer, to compose a psalm. I post it here with his permission.

[click to continue…]

Post image for What I Told EPA at Its D.C. “Listening Session”

Yesterday, the EPA held an all-day “listening session” at its Washington, D.C. headquarters, ostensibly to gather ideas and information from the public about how best to reduce carbon dioxide (CO2) from existing power plants. The event was one of eleven listening sessions the agency hosted over the past three weeks. I was one of many people who “testified” at EPA HQ. We each had three minutes to speak.

I was there about an hour, and during that time none of the other witnesses presented ideas or information about how to reduce CO2 emissions from existing power plants. Rather, they deplored the climate “crisis” and implored the EPA to do everything in its power to replace “dirty coal” with “clean, renewable energy.”

In September, the EPA proposed its “carbon pollution” rule for new power plants. The listening sessions are on the agency’s planned follow-up measure in 2014 — guidelines instructing States how to reduce CO2 emissions from existing power plants. About 40% of U.S. electric generation comes from existing coal-fired power plants.

Here is more or less what I said when my turn came to speak:

I am Marlo Lewis, a senior fellow at the Competitive Enterprise Institute. I have come to offer you a word of caution: Don’t try to get cute with your guidelines. Don’t use the guidelines either to shut down existing coal plants, or to enact a national clean energy standard through the regulatory back door.

This caution is in order because of something I call the “bait-and-fuel-switch.”

Back in March 2011, the EPA published PSD and Title V permitting guidelines for greenhouse gases. The document stated that best available control technology (BACT) standards for CO2 would not require utilities planning to build new coal-fired power plants to “fuel switch” and build natural gas combined cycle (NGCC) power plants instead.

But only one year later, in March 2012, the EPA proposed a “carbon pollution” rule establishing new source performance standards (NSPS) for CO2 that nearly all NGCC plants already meet but exactly zero commercial coal power plants can meet. The proposal was transparently a fuel-switching mandate. And it was that even though NSPS is less stringent than BACT, and the agency had assured stakeholders that BACT for CO2 would not require fuel switching. [click to continue…]

Post image for Keystone XL Pipeline: What Are the Core Issues?

In the protracted conflict over the Keystone XL Pipeline, too much attention is paid to peripheral issues and not enough to the core issues.

Peripheral issues include whether the pipeline will create many or few jobs, lower or raise Midwest gasoline prices, reduce or increase the risks of oil spills, reduce or increase incremental greenhouse gas emissions.

Why are those issues peripheral?

Let’s begin with oil spill risk and gas prices. Surely if Keystone is built, there will be incidents of leaks and spills. There will also be regional effects on gas prices. But look at the big picture. The State Department (ultimately, President Obama) is supposed to make a “national interest determination” about the pipeline. The U.S. already has more than 2.5 million miles of oil and gas pipelines.

Oil and gas pipelines map U.S.

Can anyone argue with a straight face that the U.S. national interest is harmed by those pipelines? That adding another 1,179 miles of pipeline will push America over some kind of national interest ‘tipping point’? That we would be better off shipping all oil and petroleum products by truck, train, and barge? Or that we’d be even better off if there were no oil companies?

Humanity has been there, done that. It’s called medieval squalor. [click to continue…]