William Yeatman

EPA yesterday promulgated in the Federal Register the agency’s 52nd Clean Air Act takeover of a state air quality program, known as a “Federal Implementation Plan” (“FIP”). This time, the target was Arizona’s visibility improvement program, known as Regional Haze.

The agency’s latest takeover provides an unfortunate segue to a report I authored that was published this week by the Competitive Enterprise Institute, titled “How the Obama Administration Is Undermining Cooperative Federalism under the Clean Air Act.” The paper, which is reposted at the bottom of this blog, includes the latest survey of EPA regulatory takeovers of state air quality programs, known as federal implementation plans (“FIPs”). As noted above, Obama’s EPA has imposed 52 Clean Air Act FIPs. By comparison, the previous three presidential administrations—George H.W. Bush, William Clinton, and George W. Bush—accounted for a grand total of…FIVE! Mind you, there are still two lame duck years left of the current administration.

AAAAA FIP Chart

This is not a welcome trend. As I explain in the paper, a FIP is the most aggressive action EPA can take against a State government. It’s a direct usurpation of a co-sovereign. This is why previous administrations have resorted to FIPs so sparingly. Moreover, the paper details how 98% of EPA’s Clean Air Act FIPs are of dubious legitimacy. Finally, the paper proposes a number of legislative solutions to reestablish Clean Air Act cooperative federalism as the Congress intended it. The most provocative of these solutions is for Congress to level the deference accorded by Article III courts to agency-decision making when State and Federal Governments disagree how to implement the Act, such that EPA’s factual determinations and textual interpretations are no longer controlling in this circumstance.

FINAL William Yeatman -How the EPA is Undermining Cooperative Federalism

Last Friday, EPA’s staff issued its final recommendation for a revised national ambient air quality standard for ozone (“ozone NAAQS”), known as a Policy Assessment, which I’ve posted at the bottom of this blog. The document is supposed to represent “the latest scientific knowledge useful in indicating the kind and extent of all identifiable effects on public health or welfare which may be expected from [ozone],”* and thereby inform Administrator Gina McCarthy’s determination of where to set the standard. The ozone NAAQS was last revised to 75 parts per billion in 2008; on Friday, the EPA staff recommended that standard be revised to somewhere between 60 and 70 parts per billion.

But here’s the thing: The staff’s advice doesn’t matter. Thanks to a recent ruling in the D.C. Circuit Court of Appeals, the EPA—indeed, the federal government!—has no say in the setting of an ozone NAAQS. Instead, that prerogative has been bestowed on an obscure group of technocrats known as the Clean Air Scientific Advisory Council.

This is to be feared. The economic consequences of a revised ozone NAAQS are tremendous. There are literally trillions of dollars at stake. Such a decision is unequivocally a POLICY determination, especially given that we’re talking about non-mortal health impacts. In America, a POLICY decision should be rendered by a branch of government with an electoral foundation, not a roomful of epidemiologists enamored with the “profound policy implications” of their research. I explain this here and here.

*But rarely does.

 

PA

 

Cooler Heads Digest 8 August 2014

a bombThe Clean Air Act employs a “belt and suspenders” approach to mitigating air pollution, such that regulation begets further regulation.

In late 2009, for example, EPA determined that greenhouse gas emissions from automobiles “endangered” public health and welfare. As a consequence, the agency was compelled to regulate cars and trucks under the Clean Air Act. However, the agency’s responsibilities didn’t end there! Clean Air Act §165 requires that all new, “major” stationary sources of conventional pollution to achieve “best available control technology” for all pollutants subject to regulation under the statute. As such, EPA’s greenhouse gas rules for automobiles triggered greenhouse gas rules for stationary sources.

This redundant approach to regulating perhaps makes sense for conventional pollution, of the sort that Congress had in mind when it wrote the Clean Air Act in 1970, but it’s an irresponsible course for greenhouse gases, which are ubiquitous and for which there are no market-ready control technologies.

Simply put, the agency risks biting off more than it can chew. By starting down a path of climate regulation, the agency is accruing unmet responsibilities to control GHGs. This wouldn’t be a problem if the agency had the discretion to manage its own resources, but, alas, that’s not the case, because the Clean Air Act empowers environmental special interests to sue to force the agency to meet its non-discretionary duties.

Yesterday, another domino fell, when a coalition of green groups notified EPA of their intention to sue in order to force the agency to promulgate greenhouse gas standards for the aviation sector. Clean Air Act §231(a)(2)(A) requires EPA to determine whether emissions of a given pollutant may reasonably be anticipated to endanger public health or welfare. If such a determination is made in the affirmative, the agency must adopt standards to limit those emissions.

In fact, the Obama administration doesn’t want to subject the sector to regulations; to this end, it is proceeding with international negotiations. But I don’t see how they can avoid it. If greenhouse gases from cars “endanger” public health, then how could it be possible that emissions from airplanes don’t do the same?

All of these regulations—for cars, for plans, for new stationary sources—are tiddlywinks relative to the ever-present threat that environmental groups will sue to compel a Clean Air Act National Ambient Air Quality Standard for greenhouse gases. Under §108(a), EPA must set a greenhouse gases NAAQS if

  1. The agency determines that GHGs may reasonably be anticipated to endanger public health or welfare;
  2. The pollutant in question is emitted by a variety of stationary and mobile sources.

[click to continue…]

Last Friday, 12 Attorneys General filed a lawsuit challenging EPA’s recently proposed greenhouse gas regulations for existing power plants, known as the Clean Power Plan. Putting aside the significant procedural and jurisdictional matters attendant to the case, the meat and potatoes of the AGs’ complaint is that 1990 amendments to the Clean Air Act prohibit EPA from issuing the rule.

In response to a reporter’s query, NRDC’s David Doniger called the lawsuit “laughable.” And in a follow up post for NRDC’s blog, Doniger used the modifier “lame” to describe the litigation’s substantive allegations regarding the 1990 Clean Air Act Amendments.

In reality, however, it is Doniger’s comments that are “lame.” They’re actually worse than lame; they’re the epitome of legal cynicism. This is because NRDC used to make the same argument that is now being advanced by the States. Simply put: NRDC used to argue that EPA doesn’t have the authority to issue the Clean Power Plan. Talk about your all-time flip-flops!

In a previous post, I explained the legislative backstory:

EPA’s  recently proposed climate rule for existing power plants is based on Clean Air Act §111(d). This provision authorizes the agency to prescribe “regulations” for “any air pollutant” from “any existing source” …

As originally enacted in 1970, §111(d) included an exclusion that prohibited EPA from prescribing §111(d) regulations for any hazardous air pollutant already regulated under §112 of the Clean Air Act. The idea behind this “§112 Exclusion” was to avoid duplicative regulation.

In 1990, Congress amended the Clean Air Act…The House of Representatives passed a bill that fundamentally changed the nature of the §112 exclusion. Before the 1990 Clean Air Act Amendments, the exclusion from 111(d) applied to hazardous air pollutants regulated under §112; under the House bill, this exclusion applied to §112 source categories (rather than §112 pollutants).

Unlike the House, the Senate bill left unchanged the pre-1990 §112 Exclusion. That is, the Senate version maintained a prohibition on EPA’s issuance of 111(d) regulations for §112 hazardous air pollutants. However, in order to harmonize the pre-1990 §112 Exclusion with the language of the 1990 Clean Air Act Amendments, the Senate passed a “conforming” amendment to 111(d). Thus, the Senate’s amendment was a ministerial change.

The Conference Committee adopted the House’s substantive amendment. Logically, the adoption of the House language rendered moot the Senate clerical language. However, the Conference Committee failed to remove the Senate’s conforming amendment. As a result, the Statutes at Large contain both the House’s substantive amendment and the Senate’s conforming amendment.

In a nutshell, the 1990 Clean Air Act Amendments contained two provisions that circumscribe EPA’s authority under §111(d)—one originating in the House and one in the Senate. The House version prohibits EPA from issuing §111(d) standards for source categories subject to §112, while the Senate version prohibits EPA from issuing §111(d) standards for pollutants subject to §112.*

This “§112 Exemption” is important because EPA in 2012 subjected power plants to §112 standards. Due to the fact that this source category—power plants—is now subject to §112, it is exempt from §111(d) standards, pursuant to the aforementioned House version of the “§112 Exemption.” That is, the Clean Power Plan is illegal if the House provision is given any meaning. To this end, the Attorneys General argue** that the House and Senate provisions can co-exist cogently, such that each retains its meaning. Thus read, the 1990 Clean Air Act Amendments prohibit EPA from issuing the Clean Power Plan.

According to Doniger, this legal reasoning is “lame.” Yet NRDC used to make the exact same argument! Seven years ago, NRDC opposed a Bush-era rule that would have regulated mercury pursuant to Clean Air Act §111(d), and, in this capacity, Doniger’s employer argued that EPA doesn’t have the authority to issue §111(d) regulations for power plants.

Don’t take my word for it! Below, I’ve reprinted this key paragraph from NRDC’s brief seeking to overturn the Bush-era rule:

EPA fails to refute Environmental Petitioners’ argument that the plain statutory reading that most readily ‘fit[s]… all parts into an harmonious whole’ prohibits EPA from setting § 111 standards for pollutants like mercury “emitted from a source category which is regulated under section 112” or included on the §112(b) list of pollutants... [Formatting added; internal citations omitted].

NRDC’s words speak for themselves. The organization argued before the D.C. Circuit Court of Appeals that EPA does not have the authority to establish §111(d) standards for pollutants like greenhouse gases, which are “emitted from a source category which is regulated under section 112.” This raises an important question: How can the AGs’ argument be “lame” if the NRDC used to make it?***

In a July 6th New York Times article, Cora Davenport reports that David Doniger was one of three NRDC lawyers who wrote the “blueprint” for EPA’s Clean Power Plan. It is “laughable” that the NRDC would write the “blueprint” for a regulation whose legality it used to contest. [click to continue…]

Two events last Wednesday morning demonstrate well the EPA’s dichotomous approach to collaboration: If you’re an environmental special interest that helped Obama get elected, EPA welcomes you with open arms; if you’re anybody else, EPA will spurn you.

DOEThe first such event was a House Science, Space, and Technology Committee hearing on EPA’s regulatory regime for climate change. Panelists included Charles McConnell, who was assistant secretary for fossil energy at the Energy Department until early 2013. His office was responsible for facilitating federal assistance in the development of carbon capture and sequester (CCS) technology. In fact, EPA proposed to require CCS technology in its controversial carbon rule for new coal-fired power plants, the Carbon Pollution Standard. You’d think that the agency would welcome the Energy Department’s assistance, given that the EPA possesses no expertise in CCS technology. Alas, you’d be wrong. McConnell told the committee that “a true collaborative effort would have been far different from what I observed.” According to Mr. McConnell, EPA viewed the interagency process as a “box-checking exercise” and he called the agency’s attitude “disingenuous.”*

Thus, EPA rejected collaboration with a sister agency. Moreover, as I’ve long noted on this blog, Obama’s EPA has had an unprecedentedly poor relationship with States, which are supposed to be the agency’s partners under the cooperative federalism framework established by the Clean Air Act and other enabling statutes.  And it goes without saying that this EPA treats “dirty” industry with contempt. The upshot is that this EPA refuses to play nice with either the public or the private sector.

The second Wednesday event served to demonstrate that there’s at least one sector to which EPA is solicitous, and that’s environmental special interests. At 11:30 AM, the Senate Environment & Public Works minority staff released an informative new report, “Billionaire’s Club,” that neatly explains the web of elite political donors, green groups, and EPA political appointees that together have effectively seized the reins of policy-making at the agency. I found particularly edifying the EPW report’s section on the “revolving door” between environmental special interests and EPA, a subject that has been broached before on this blog.

Further evidence to this end—that of demonstrating regulatory capture of EPA by green special interests—is lent by a July 6th New York Times article, which reports that three lobbyists at the NRDC wrote the “blueprint” for EPA’s greenhouse gas regulations for existing power plants.   [click to continue…]

Cellulosic ethanol is a transportation “bio”fuel made from anything other than food. There was no cellulosic industry in the U.S. in 2007, when Congress decided to create one from scratch with the passage of the Energy Independence and Security Act. To this end, lawmakers simply mandated ever-increasing volumes of production, until 2022, when cellulosic ethanol is supposed to account for about 10% of the total market for transportation fuels.

In 2014, for example, the statutory mandate is 1.75 billion gallons. So how’s that working out for us?

No so well, according to Platts Senior Editor Herman Wang. In an interview in this Sunday’s Platts Energy Week with Bill Loveless, Mr. Wang estimates that the market has produced a paltry 50,000 gallons of cellulosic ethanol so far in 2014, or .003% of the requirement codified by law. Nor is there much hope of a production breakout in the second half of the year, as the industry is in total disarray, reports Mr. Wang.

This is an industry that has been billed a game changer in the U.S. transportation fuels sector, but reality has yet to catch up to the hype. Last year, there were signs this industry may be turning the corner. There was a company Kior that in March said it had generated its first renewable credits, called RINs…and in July, we had another company, Ineos Bio, say that they had produced there first commercial quantities. So things were looking up. Since then, it’s been bad news. Ineos bio has since said that it’s suffering what it called “unexpected startup problems.” And Kior had to shut down its facility due to finance problems…The EPA, which tracks biofuel production from month to month, just announced that in June, 0 gallons of cellulosic biofuels were produced. This is the second month in a row, there’s been no production.

In practice, EPA has been revising Congress’s impossible targets such that they become only somewhat less impossible. In 2011, for example, EPA revised the Congress’s 250 million gallon target to 6 million gallons, but, in fact, 0 gallons were produced. For 2012, Congress’s original target was greater than 500 million gallons but it was reduced down to 10.45 million gallons, which was still outrageous because the industry produced only 20,000. According to Mr. Wang, EPA revised the 2014 target to 17 million. This is, obviously, far higher than the 50,000 gallons that are likely to represent total production for 2014.

As I explain here, the absence of a breakthrough by the cellulosic industry presents a quintessential example of how the government is incapable of creating markets by command. This point is demonstrated visually in the graphic below, which plots the statutory requirements against EPA’s revised targets (which themselves are a proxy for actual production). As is readily evident, the gulf is widening between the congress’s command and reality. [click to continue…]

Cooler Heads Digest 1 August 2014

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