William Yeatman

Two Wednesdays ago, the Senate Environment & Public Works Committee held a hearing on EPA’s illegitimate Clean Power Plan, about which I reported in last week’s Cooler Heads Digest. For the details, check out the Digest; for this post, my purpose is only to draw attention to the brilliant opening statement made by Sen. John Barrasso (R-WY). He took aim at the role special interests played in crafting the rule. Below, I’ve provided a partial transcript:

On July 6th of this year, the NYT wrote a piece about the outsized role that the Natural Resources Defense Council had in developing the EPA’s new regulations to curb power plant emissions…The article says it was a remarkable victory for the NRDC. Now, for those outside the beltway, NRDC is a $120 million a year lobbying machine, backed by Hollywood elites. It is absolutely shameful to me that the EPA, under the direction of this administrator, would allow a team of lawyers and lobbyists to draft their regulations…

…EPA has decided to push a rule that was drafted behind closed doors by powerful, wealthy Washington lawyers and lobbyists at the NRDC. Let’s be clear, NRDC is a wealthy, elite, powerful lobbying machine with more influence over decision making in Washington than any ordinary U.S. citizen. They have millions which gives them access. The EPA has turned a deaf ear on those that don’t.

…If I’m wrong, then NRDC and the EPA and its Administrator can and should provide all records and documents that are requested by Members of this Committee and my House colleagues on how these new regulations for coal-fired power plants were crafted. Because right now, it sure looks like a trio of high powered Washington lobbyists write their regulations for them.

If what the [New York] Times is reporting is what the EPA Administrator has called “preposterous,” then the EPA must comply with any committee and FOIA requests for these docs. Comply [with these requests], so we can know the truth. If the answer is no, that you will not comply, or that there are more record keeping mishaps, broken hard drives, or lost files, then we’ll know the truth as well.

Sen. Barrasso’s challenge is a welcome development. I wish his staff good luck and Godspeed in its efforts to uncover the extent to which special interests were given the run of the mill at EPA after having helped get the President elected. Alas, the staff’s task will prove a slog, something we know from experience.

[click to continue…]

Yesterday, CEI published a new study by me, on EPA’s Clean Power Plan. In a nutshell, I argue that the EPA’s rule lacks an electoral mandate, contravenes congressional intent, and was crafted by special interests. In a word, the regulation is illegitimate.

William Yeatman – EPA Climate Rule – FINAL

Yesterday I participated on a Heritage Foundation panel on ‘Extremism at the EPA: A Discussion on Federal Overreach, Regulation Costs, and Climate Realities.’ Fellow panelists were Rep. Mike Kelly (R-Penn.) and Heritage’s David Kreutzer. The event was hosted by Heritage Fellow Nicolas Loris. I’ve reposted the video below.

Rep. Kelly started things off with a rousing speech in defense of affordable energy. Kreutzer then debunked the so-called “social cost of carbon,” the dubious statistic on which EPA relies in order to justify its climate regulations. Finally, I discussed the illegitimacy of EPA’s recently proposed Clean Air Act regulations for greenhouse gases from existing power plants, known as the Clean Power Plan. Kreutzer starts at the 44th minute; I start at the 58th minute. Over at the Daily Signal, Natalie Johnson wrote a story on the panel.

Cooler Heads Digest 25 July 2014

In a recent post, I explained how the EPA and environmental special interests entered into a collusive consent decree that would effectively require States to use air quality models to demonstrate compliance with national ambient air quality standards. Thus, unelected bureaucrats and green special interests rendered policy, in a process known as “sue and settle.”

The underlying suit, Sierra Club, et al. v. McCarthy, was filed in the United States District Court for the Northern District of California, in Oakland. This is notable insofar as the court condoned a great deal of suspect behavior.

  • For example, in the course of the lawsuit, EPA and the environmental plaintiffs (Sierra Club & NRDC) litigated to oppose intervention in the legal proceedings by the States, even though the States are responsible for implementing the regulation in question. The Bay area court sided with EPA & the greens.
  • Moreover, EPA, Sierra Club, and NRDC pointedly refused to allow States to participate in settlement discussions. Despite this seeming affront to the Clean Air Act’s cooperative federalism structure, the Bay area court accepted the consent decree.
  • Finally, Clean Air Act “agency forcing” consent decrees are supposed to be limited solely to the establishment of agency deadlines,* as I explain in this article. The Sierra Club, et al. v. McCarthy consent decree, on the other hand, was naked policy: It mandated the use of a regulation that the agency has only proposed. In the face of this apparent procedural abuse, the Bay area court gave its imprimatur to the consent decree.

All of this brings me to the point of this post: I wonder how many courts would’ve objected to consent decree, either due to its non-participatory formulation or because of its inappropriate content?

After all, federal district court judges aren’t chosen based on merit; rather, they are nominated by the President, with consideration given to the recommendation by Senators from the State whose judicial district is at issue. They are political creatures. And, given California politics, it stands to reason that the Bay area court is one of the most “progressive” in the country.

So it makes sense that environmental special interests would want to get in this court. Alas, their primary legal tactic—the Clean Air Act deadline citizen suit (whence “sue and settle”)—allows green groups to file “agency forcing” suits in any federal district court in the country (42 U.S. Code §7604(a)). As a result, the opportunity presents itself for forum shopping, and that’s exactly what environmental litigants have done.

Recently, I crunched the numbers:

…[O]f all settlements pursuant to agency-forcing citizen suits from 1997 to 2013 affecting more than three states, 26 percent ( 12 of 46) were filed in the U.S. District Court, Northern California District, based in the Bay Area.

The U.S. Chamber of Commerce, in a wider sampling of “sue and settle” cases, found a similar bias towards the plaintiffs filing in this Bay area court:

sue and settle chart

This is something to which the Congress might direct its attention. For final EPA regulations, the Clean Air Act limits jurisdiction for judicial review to the D.C. Circuit Court of Appeals. There is, however, no such requirement for deadline citizen suits. As a result, green groups are piling into arguably the most progressive court in the country, where they are operating with EPA to push the boundaries of executive power. This is suboptimal, from a policy perspective.

*This “sue and settle” process affects policy, but it does so in an indirect fashion, by giving priority to the EPA’s limited resources.

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

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…]

Weekend Media Roundup

by William Yeatman on July 14, 2014

in Blog

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…]

Cooler Heads Digest 11 July 2014