Marlo Lewis

Okay, Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff didn’t actually say America doesn’t need coal-fired and nuclear power plants. He stopped short of openly embracing the We Can Solve It! agenda of ”repowering” America” with zero-emissions, non-nuclear electricity in 10 years.  He is not an avowed apostle of Gorethodoxy.

But he’s close enough for government work. Wellinghoff told reporters (Greenwire, subscription required) that we “may not need any [new coal and nuclear power plants], ever.” One reason being that new coal plants will be “too expensive.” Huh?

If coal plants are too costly, then why have eco-litigation groups fought so hard to stop coal plants from being built?

Silly me, Wellinghoff undoubtedly means that once Congress enacts the Waxman-Markey cap-and-trade bill, it will be too expensive to own and operate a coal plant. 

Wellinghoff, after all, is a member of Team Obama, and when the President was a candidate, he candidly admitted that his cap-and-trade plan would cause electricity prices to “skyrocket” and would ”bankrupt” anyone foolish enough to invest in coal-based power.

Wellinghoff believes that wind, solar, and biomass are poised to take off as sources of “distributed” generation, turning coal and nuclear baseload power into an “anachronism.” Funny, that’s what eco-visionaries told us in the 1970s. Yet, despite decades of taxpayer and ratepayer support and market-rigging rules, non-hydro renewables today provide about 3% of all U.S. electric power.

Does it worry you that folks like Obama and Wellinghoff are the anointed stewards of our economy in these troubled times? It does me.

The CO2 litigation campaign that begat Massachusetts v. EPA turns out to be too clever by half. As Roger Pielke, Jr. and Michael Shellenberger astutely observe, Team Obama’s threat to regulate greenhouse gases via the Clean Air Act (CAA) unless Congress enacts cap-and-tax legislation is tantamount to a promise to commit political suicide. However costly cap-and-tax might be, litigation-driven CAA regulation of greenhouse gases is potentially far more damaging to the economy. Instead of being a hammer that beats opponents into submission, EPA’s forthcoming endangerment finding–the first step in regulating greenhouse gases under the CAA–should strengthen Congressional Republicans’ resolve to fight cap-and-tax. By doing so, they will ensure that Obama and his allies bear all the blame for raising consumer energy prices, destroying jobs, and de-stimulating the economy. For further discussion, see my post on MasterResource.Org.

When I first eyeballed the 648-page draft cap-and-trade bill, authored by Reps. Henry Waxman (D-CA) and Ed Markey (D-MA), I was perplexed, even stunned.

Secs. 831-834 of the draft bill exempt carbon dioxide (CO2) and other greenhouse gases from regulation under the Clean Air Act’s (CAA) National Ambient Air Quality Standards (NAAQS) program, Hazardous Air Pollutant (HAP) program, New Source Review (NSR) pre-construction permitting programs, and Title V operating permits program.

This surprised me for two reasons.

First, it is tacit admission that free-market and industry analysts were correct when they warned that EPA could not control the cascading effects of CAA regulation of CO2 once it starts. It is implicit confirmation of our view that the Supreme Court’s Massachusetts v. EPA decision set the stage for an economy-choking regulatory morass.

What a difference one presidential election can make! Back in July 2008, Waxman and Markey bashed Bush’s EPA for responding to Mass v. EPA by issuing an Advanced Notice of Proposed Rulemaking (ANPR). EPA’s purpose was to inform and solicit public comment on the administrative, legal, and economic repercussions of greenhouse gas regulation under the CAA. Waxman denounced the ANPR as “a transparent delaying tactic.” Markey called it a ”shameful display of political interference with potential regulation of global warming pollution.” They demanded that EPA simply declare ”global warming pollution” a menace to society, and propose regulations to combat it.

Yet today, Waxman and Markey are peddling legislation that would exempt greenhouse gases from several CAA regulatory authorities. It’s as if they actually learned something from the ANPR and the comments free-market and industry analysts submitted to EPA spotlighting the perils of CO2 regulation under the CAA.

Or maybe they knew all along that Mass v. EPA created a Pandora’s Box, pretending otherwise gave them another stick to beat Bush with, but now that Obama is in the hot seat, they have to sober up and avoid a politically-damaging regulatory debacle.

Whatever their reasoning, I was also surprised by Secs. 831-834, because the provisions seemed so contrary to the economic interest the eco-litigation “community.”

For example, if EPA establishes greenhouse gas emission standards for new motor vehicles–the explicit policy objective of petitioners in Mass v. EPA–an estimated 1.2 million previously unregulated entities (office buildings, big box stores, enclosed malls, hotels, apartment buildings, even commercial restaurants) would become “major stationary sources” of CO2. As such, those facilities would be vulnerable to new regulation, monitoring, paperwork, penalties, and litigation under the NSR pre-construction permitting programs. Applying NSR to CO2 would produce a surge in NIMBY (”Not In My Backyard”) lawsuits. Construction jobs and economic development would plummet, but “green jobs” for trial lawyers would soar.

Why would Waxman and Markey deny a full-employment program to  the eco-trial bar? This puzzled me. Until yesterday, that is, when I read a blog post by Matt Dempsey of Senator Inhofe’s Senate Environment Public Works Committee staff. As Dempsey explains, the draft bill would dramatically expand “citizen suit” provisions under the CAA:

Over the next few days, EPW PolicyBeat will focus on the Waxman-Markey draft climate change legislation and several of the most interesting provisions therein. In our view, Section 336 is far and away the most interesting in the 648-page bill. Here the authors amend the citizen suit provision in Section 304 of the Clean Air Act. The Waxman-Markey bill authorizes a “person” to “commence an action” who has “suffered, or reasonably expects to suffer, a harm attributable, in whole or in part, to a violation or failure to act referred to in subsection (a).” Sounds innocuous enough…until one reads on. For then one discovers how “harm” is defined: “For purposes of this section, the term ‘harm’ includes any effect of air pollution (including climate change), currently occurring or at risk of occurring, and the incremental exacerbation of any such effect or risk that is associated with a small incremental emission of any air pollutant (including any greenhouse gas defined in Title VII), whether or not the risk is widely shared.” In other words, should the unfortunate happen and Waxman-Markey become law, courts could conceivably be flooded with lawsuits filed by environmental groups who perceive some risk—and they undoubtedly will perceive it—that is “associated with a small incremental emission” of a greenhouse gas—whether from a coal-fired power plant, a manufacturing facility, or some other entity covered by the bill. This provision will further empower the eco-trial bar to fight the ravages of climate change and the businesses it dislikes, with no effect on the former and disastrous consequences for the latter.

So there you have it. What the left hand taketh away, the other left hand restoreth. Secs. 831-834 appear to shield businesses from litigation-driven regulation under the CAA, but this is a slight-of-hand. Sec. 336 would open up a whole new field of climate-related regulatory litigation.

The Waxman-Markey draft bill is tricky in at least one other respect. Although it precludes regulation under the aforementioned CAA programs, it does not preclude regulation under CAA Sec. 111, the New Source Performance Standards (NSPS) program. Anyone who reads the ANPR can see that EPA staff are hot to propose greenhouse gas performance standards for coal-fired power plants, petroleum refineries, and other large industrial facilities.

Although the greenhouse gas performance standards, as envisioned in the ANPR, would mostly require “process efficiency” upgrades, eco-litigation groups entertain much bigger ambitions. Last November, Sierra Club climate council David Bookbinder advocated using NSPS to block construction of new coal-fired power plants and, in time, shut down existing coal plants:

So what next?  Logically, I think the answer is New Source Performance Standards for fossil-fuel fired power plants.  Just such a rulemaking is sitting in limbo at EPA and it is the appropriate vehicle for limiting new power plant emissions to 800 lb. CO2/MWh.  This would permit new gas-fired plants but would effectively stop any new coal-fired ones that did not employ carbon capture and sequestration (”CCS”).  Perhaps this rulemaking could also contain a second phase, effective 2016 or so, tightening the standard to approximately 250 lb. CO2/MWh.  This would be achievable via either combined gas/solar or gas/wind generation or 90% CCS.  And then they could start thinking about how to deal with existing power plants under Section 111(d) of the Act.  But one thing at a time.

Since coal provides about 50% of all U.S. electric power, an agenda that aims to suppress or even kill off coal generation in a decade or so should worry anyone who worries about the economy (and who doesn’t worry about the economy these days!).

To sum up, the Markey-Waxman bill leaves intact the NSPS threat to our electric supply system. It would create a new launchpad for litigation based on the perceived environmental risks of “small incremental” emissions. Any “regulatory certainty” it appears to offer is illusory.

Only if the costs decline dramatically, a recent Congressional Research Service report suggests, as I discuss here. Currently, the costs of carbon capture and storage (CCS) are too high to justify continuing investment in coal-based power–the source of 50% of U.S. electricity–under increasingly stringent caps or taxes on CO2 emissions.

In addition, the storage component of a CCS system must be very nearly leak proof or it will flunk federal environmental impact assessments. As Cal Tech chemist Nathan Lewis observes, “The collective leak rates of the reservoirs must be significantly lower than 1%, sustained over a century-to-millennium time-scale. Otherwise, after 50 to 100 years of sequestration, the yearly emissions will be comparable to the emission levels that were supposed to be mitigated in the first place.”

Finally, even if economical and leak-proof, CCS must overcome the NIMBY forces who seem bent on blocking any and all energy projects, from wind farms to desert solar concentrator arrays. According to an MIT report (see p. ix), the pipeline network required to transport all the CO2 from U.S. coal power plants to underground storage sites would rival the U.S. oil or natural gas pipeline networks in size. 

So, can CCS keep the lights on in a carbon-constrained future? Only if three conditions are met: costs fall dramatically, the storage sites are virtually leak proof, and NIMBYs get out of the way.

“Climate 350″–for 350 parts per million (ppm) of carbon dioxide (CO2) in the atmosphere–is fast becoming the new mantra of Gorethodox believers in climate doom and coercive energy rationing. Columbia University will host a conference on the topic next month, featuring NASA scientist James Hansen as the keynote speaker.

But as Newsweekreporter Sharon Begley points out, just to limit atmospheric concentrations to 450 ppm, nations would have to build 10,000 new nuclear power plants–one every other day from now until 2050–plus a mind boggling 1 million solar roof top panels per day from now until 2050. Even then, 450 ppm is attainable only if global energy efficiency improves by a whopping 500%, population grows only to 9 billion (instead of 10 billion or 11 billion), and global GDP grows at an anemic (near recession) rate of 1.6% per year.

What would it take to lower CO2 concentrations to 350 ppm? According to Begley’s source, Cal Tech chemist Nathan Lewis, global CO2 emissions would have to drop to zero by 2050.

Absent revolutionary changes in energy production, distribution, conversion, and storage–Nobel-caliber breakthroughs that nobody can plan or predict–lowering CO2 emissions to 350 ppm is impossible without draconian cutbacks in population, economic output, or both. Whether they realize it or not, the Climate 350 Club is asking us to go back to the caves.

For additional discussion, see my post on Masterresource.org.

Well, not overtly, but the Senate voted 89-8 for an amendment to the Fiscal year 2010 budget resolution (S. Con Res. 13), introduced by Sen. John Thune (R-SD), which would prohibit any future greenhouse gas cap-and-trade initiative from increasing gasoline prices and electricity rates for U.S. households and businesses.  

As University of Colorado professor Roger Pielke, Jr. points out, “The entire purpose of cap and trade is in fact to increase the costs of carbon-emitting sources of energy, which dominate US energy consumption. The Thune Amendment thus undercuts the entire purpose of cap and trade.” In other words, it is impossible to vote for the Thune amendment and support cap-and-trade and be consistent, candid, or straight with the American people.

Who voted for the Thune amendment? A whole bunch of cap-and-traders including Barbara Boxer (D-CA), Patrick Leahy (D-VT), Joe Lieberman (ID-CT), John McCain (R-AZ), Bernie Sanders (I-VT), and John Warner (D-VA).

Boxer tried to square the circle, proposing legislation, adopted 54-43, to compensate consumers for higher energy prices via tax rebates. But rebates after-the-fact are not the same as prohibiting measures that increase energy prices in the first place. Does anyone really believe that if carbon permit auctions under President Obama’s cap-and-trade initiative raise $646 billion or even $1.9 trillion for the Treasury, spendaholics in Congress will not use one dime of the boodle to fund pet projects, “green” jobs, or health-care “reform”?

Pielke, Jr. concludes on a cheery note:

The Thune Amendment effectively kills cap and trade as a mechanism for reducing emissions. I have little doubt that the legislation will go forward, and it likely will pass in some form and do many things. Its just that reducing emissions won’t be among them. Cap and trade is dead, but the charade will go on.

A consumation devoutly to be wished. On the other hand, it ain’t over ’till it’s over. We should not underestimate the capacity of politicians to insist on having their cake and eating it. Again, Boxer pretends to see no contradiction between voting for Thune and supporting Obama’s $646 billion to $1.9 trillion energy tax. The Thune amendment could also be jettisoned or vitiated by House-Senate conferees.

Nonetheless, the Thune amendment shows the path to victory. Cap-and-traders fear public retribution over high electricity and gasoline prices more than they fear the alleged horrors of global warming. Our task is obvious–keep calling cap-and-trade an energy tax, because that is what it is.

This funny headline is the title of a column in the March 26 issue of Wired Science.

“Scientists have devised a new way to transform coal into gas for your car using far less energy than the current [Fisher-Tropsche] process,” Wired reports. “The advance makes scaling up the environmentally unfriendly fuel more economical than greener alternatives.”

Now, you might think that inexpensive motor fuel is a good thing, especially in these times of financial peril, fiscal chaos, and high unemployment. In addition, since America is the “Saudi Arabia of coal,” conversion of coal to motor fuel, provided it is economical and market-driven, could enhance U.S. energy security.

So why is this “bad news”? Because coal-derived fuel “could produce twice as much CO2 [carbon dioxide] as traditional petroleum fuels and at best will still emit at least as much of the greenhouse gas.” Consequently, what these scientists are proposing to do “is simply not allowable if we want to avoid the perils of unconstrained anthropogenic climate change,” declares Pushker Karecha of NASA’s Goddard Institute for Space Studies.

Okay, then how about some candor in the energy policy debate? Climate activists claim repeatedly that their agenda will benefit consumers and achieve real energy security. How? By jump-starting a “beyond petroleum” economy, which will free consumers forever from pain at the pump and relegate OPEC to the dustbin of history.

But this deliberately confuses the green solar-hydrogen utopia, which may never materialize, or which may come about only after technological breakthroughs nobody today can plan or predict, with the restrictions, burdens, and penalties climate activists mean to impose on us today and for the foreseeable future.

If OPEC is a problem because it restricts oil supply to drive up price, how is cap-and-trade, which also–and by design–inflates motor fuel costs, a solution? If dependence on oil supplies from unstable or hostile foreign countries is a problem, how is banning domestic oil production in Alaska, the Eastern Gulf of Mexico, and the deep waters off the U.S. East and West Coasts, a solution?

Again, if volatile motor fuel prices and dependence on Mideast oil are problems, how is restricting imports of oil from Canadian tar sands a solution? And how, pray tell, is blocking development of unconventional motor fuel from Rocky Mountain oil shale or West Virginia coal a solution?

If greenies believe global warming is so terrible that we must pay any energy price and make any sacrifice of energy security to combat it, fine. Plainly say so, and we can then debate whether or not global warming is the planetary doom they claim it is.

But candor demands that they immediately stop posturing as defenders of consumer welfare and energy security. Their policies lead straight to more pain at the pump and an America more at the mercy of events in unstable and unfriendly parts of the world.

Last week, the U.S. Chamber of Commerce unveiled a NIMBY-Watch Web site called Project No Project .

With case studies from more than 30 states, Project No Project  chronicles how NIMBY (”not in my backyard”) activists “block energy projects by organizing local opposition, changing zoning laws, opposing permits, filing lawsuits, and bleeding projects dry of their financing.” Many of the projects blocked are not coal plants but alternative energy projects or infrastructure often touted as “green.”

The site invites readers to provide examples from their own locales of NIMBY efforts to block or stall energy-related projects.

Proponents of “green jobs” should be concerned as much as free-market and property-rights advocates, because ”stimulus” projects are vulnerable to the same NIMBY tactics that, for example, have immobilized the Cape Wind Project in Nantucket, Mass.

Although Project No Project does not mention it, we also know from  comments submitted by the U.S. Chamber and allied groups on EPA’s Advanced Notice of Proposed Rulemaking, that NIMBY forces will aquire powerful new litigation tools if EPA, in response to the Supreme Court’s Massachusetts v. EPA decision, establishes greenhouse gas (GHG) emission standards for new motor vehicles. (For more background, see my recent post on MasterResource.Org.)

In a nutshell, vehicular GHG emission standards will make carbon dioxide (CO2) a “regulated air pollutant” under the Clean Air Act (CAA). That, in turn, will automatically make CO2 “subject to regulation” under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program. 

The cutoff for regulation as a “major stationary source” under PSD is a potential to emit 250 tons per year (TPY) of a CAA-regulated air pollutant. Approximately 1.2 million previously unregulated entities (office buildings, hotels, big box stores, enclosed malls, even commercial kitchens) actually emit 250 TPY. All would be vulnerable to new regulation, monitoring, paperwork, controls, and penalties if EPA establishes GHG emission standards for new motor vehicles.

To qualify for a PSD permit, major stationary sources must comply with “best available control technology” (BACT) standards. Even part from any investments required for BACT compliance, the PSD permitting process is costly and time-consuming. In 2007, each permit on average cost $125,120 and 866 burden hours for a source to obtain. No small business could operate subject to the PSD administrative burden.

So NIMBY forces must be licking their chops at the prospect that EPA Administrator Lisa Jackson plans on April 30 to issue an “endangerment finding” for GHGs. An endangerment finding  is the prerequisite to establishing GHG emission standards for new motor vehicles and, thus, the critical first step to making CO2 a CAA-regulated “air pollutant.” 

When and if EPA regulates CO2, expect a surge of litigation demanding that EPA impose PSD and BACT requirements on developers proposing to build or renovate big box stores, strip malls, fast-food restaurants, or other projects NIMBYites deem undesirable or contrary to “smart growth.”

Bottom line: Applying PSD and BACT to CO2–the inexorable consequence of establishing vehicular GHG emission standards–will turn the CAA into a gigantic Anti-Stimulus package. Is Team Obama paying attention?