Gina McCarthy’s Responses to Sen. Vitter’s Questions Part I: Bait-and-Fuel-Switch

CO2 Litigation: Court and EPA Can’t Both Be Right — and Both May Be Wrong

EPA Doubles Down on E15 — Literally

Biofuels Policy Itself is Warning That It’s Near Breaking Point

Why Is Congress Lethargic about Energy?

William Yeatman

House Natural Resources Committee Subpoenas Interior Department over Radical Rewrite of Mining Law

by William Yeatman on April 9, 2012

in Blog

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In a recent post, I explained how President Obama’s Interior Department has undertaken a radical reinterpretation of the 1977 Surface Mining Control and Reclamation Act (SMCRA) that threatens to shut down coal production in Appalachia. In a nutshell, SMCRA authorizes coal surface mining, but now the Obama administration is poised to reinterpret the law such that it bans surface coal mining. (Read all about it, here). This is the latest salvo in the President’s war on coal; if implemented, it would effectively destroy the Appalachian coal industry.

Despite the enormous consequences at stake—an industry hangs in the balance—the Department of the Interior has deliberated largely in secret. Besides an Associated Press report on a leaked draft impact analysis, which suggested that the reinterpreted law would eliminate 7,000 jobs in Appalachia, information about the proposed rewrite has been scant.

For more than a year, House Natural Resources Committee Chairman Doc Hastings (R-Washington) has been asking the Obama administration for information about the pending SMCRA rulemaking. And for more than a year, the Interior Department has refused to comply with Chairman Hasting’s requests. This is particularly galling given that the information sought by Hastings can hardly be deemed as controversial. Basically, he wants the Interior Department to produce the draft Environmental Impact Statement and Regulatory Impact Analysis. These are standard procedural documents common to almost all major regulations. More importantly, these analyses were financed by taxpayers. Why wouldn’t a Member of Congress have a right to see documents that were created with taxpayer money, and which pertain to a reinterpretation of a law passed by the Congress? Simply put, there is no legitimate reason for the Obama administration to resist, especially in light of its boasts of being the most open and transparent administration, ever.

Last week marked the end of Chairman Hasting’s patience with the administration’s stonewalling. On Thursday, he subpoenaed the Interior Department, seeking:

All recordings, and complete and unredacted transcripts of recordings, of meetings between the Department and contractors regarding the rewrite of the rule. This includes, but is not limited to, the known 43 digital audio recordings totaling approximately 30 hours.
Complete and unredacted versions of email communications previously provided to the Committee and documents reviewed by Committee staff in camera.
All documents related to the development of the Advanced Notice of Proposed Rulemaking and Notice of Intent to prepare a Supplemental Environmental Impact Statement for the coal production regulation.
Complete drafts of the Environmental Impact Statement and the Regulatory Impact Analysis as of January 31, 2011 for the Administration’s rewrite of the coal production regulation.
Complete current drafts of the Environmental Impact Statement and the Regulatory Impact Analysis for the Administration’s rewrite of the coal production rule, as well as versions created since January 31, 2011.

Chairman Hastings gave the Interior Department until April 12, 2012 to comply. In a press release, his office indicated that this action was only the first step, and that “Additional categories of documents, not included in this subpoena but previously requested as far back as February of 2011, that are broader in scope and will likely produce a greater volume of responsive material are anticipated to be sought in the near future.”

EPA Sweeps Another Fracking Fail under the Rug

by William Yeatman on April 6, 2012

in Blog

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In December 2010, the Environmental Protection Agency ordered Fort Worth, Texas-based Range Resources Corporation, a natural gas company, to provide drinking water to residents in Parker County, because EPA tests had concluded that hydraulic fracturing (a.k.a. “fracking”) operations by the company “caused or contributed to the contamination of at least two residential drinking water wells.” EPA rendered this decision over the staunch objection of Texas officials, who argued that water in the Parker County wells had been contaminated by naturally occurring methane. Subsequent lab tests by the state Railroad Commission, which regulates oil and gas extraction in Texas, exonerated Range Resources.

Last Friday, EPA informed Range Resources that it was dropping its order. Although EPA’s letter to the company did not identify why the Agency was abandoning its case, it would appear that the move is a vindication of the conclusions drawn by the Railroad Commission.

This is the second time in three weeks that EPA has suffered egg on its face for an overreach on fracking regulation. In mid-March, EPA informed residents of Dimock, Pennsylvania that drinking water there has not been contaminating by hydraulic fracturing drilling. That revelation was uncomfortable for the Agency, because it had decided to test the Dimock water over objections from Pennsylvania officials.

In both instances, EPA took care to be discreet. In Dimock, the Agency hand delivered the negative lab results to residents; in Texas, EPA informed Range Resources general counsel with a brief letter. In neither case did EPA issue a press release.

EPA’s tight lipped approach to divulging information in these two cases stands in stark contrast to the Agency’s trumpeting of controversial, preliminary lab results suggesting that hydraulic fracturing “likely” contaminated water in Pavillion, Wyoming. Despite the severe public relations ramifications of the Pavillion press release (it was immediately seized upon by enviros as “evidence” that fracking threatens the nation’s water supplies), EPA issued it: (1) without having peer-reviewed the lab results and (2) in the face of substantial criticism about methodology leveled by Wyoming officials.

EPA thus demonstrates a striking public relations inconsistency regarding hydraulic fracturing. When lab results are good for the gas industry, they are announced to a handful of people. When lab results are bad for the industry, however, they become the subject of a press release that is rushed out the door before it is properly vetted.

Watchdog: Military Spending on Renewables Lacks Safeguards

by William Yeatman on April 6, 2012

in Blog

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According to a new Government Accountability Office audit, the military lacks proper safeguards to ensure that spending on politically fashionable green energy isn’t wasted. I am not shocked. After all, taxpayer investments in renewable energy are inherently wasteful, for reasons that I explain here and here. And military spending is mythically wasteful: It’s commonly held urban legend that Army screws cost $10 each. Together (investment in politically-favored energy sources + the military’s tendency to spend big), the only question is whether they engender a greater degree of waste than their mere sum would suggest. This GAO report indicates that such a synergy does indeed accelerate the flow of taxpayer money down the drain.

A Sign of Decline

by William Yeatman on April 6, 2012

in Blog

I didn’t think it was possible to loathe green cars any more so than I already did, but I was wrong.

For long I have hated electric vehicles because I, like all taxpayers, am forced to subsidize their purchase, to the tune of $7,500* per car (although some estimates of the taxpayers’ contribution are much, much higher). This galls me, because the only people who purchase electric cars are rich. For example, Brad Pitt bought a $100,000 luxury Tesla Roadster, and I had to help him. Of course, Mr. Pitt is super rich, so he didn’t need my help. Moreover, I’d prefer not to help him, as I have a trillion other priorities that take precedence over a movie star’s choice of car. I don’t think this arrangement is fair and, as a result, I disdain green cars. You could say that I hate the player, and I hate the game.

Now, in addition to taking my money, green cars are usurping Americans with disabilities. The photo above was sent to me on Wednesday by my colleague Christine Hall Reis. Look how close that spot is to the store! It must be a retrofitted handicap space.

*Since February, President Barack Obama has been pushing to increase the regressive taxpayer subsidy for electric vehicle purchases, from $7,500 to $10,000.

Massachusetts in Danger of Being Markeyed…

by William Yeatman on March 26, 2012

in Blog

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Markey [mar-kee] intransitive verb, mar-keyed, mar-keying

To be sold a false bill of goods

Origin: 1976-present; after Rep. Ed Markey (D-Massachusetts), ironic rhetorician

On a routine Google News search, I encountered the headline: “Mass. Bill Aims to Ease High Cost of Electricity.” At first glance, this seemed like welcome news. After all, electricity rates in Massachusetts are among the highest in the country.

According to news accounts, however, the method by which State Senate President Therese Murray’s legislation would lower electricity bills is…to make electricity more expensive! Specifically, the legislation would double the amount of costly, intermittent “green” energy that must be provided by utilities serving the State.

I’ve no idea how Sen. Murray will rationalize the discrepancy between her expressed intent (lowering electricity costs) and her preferred means to this end (raising electricity costs). I’ll update this blog when I find out.

Good Guys Win Big Battle in EPA’s War on Appalachian Coal Production

by William Yeatman on March 26, 2012

in Blog, Features

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Last week, property-rights advocates were ecstatic with the Supreme Court’s ruling in Sackett v EPA that citizens subject to EPA Clean Water Act “compliance orders” can have their day in court. Before, EPA had interpreted its power in a Kafkaesque fashion, whereby the Agency could levy fines for alleged Clean Water Act violations without any recourse for the accused. (My colleague Hans Bader wrote an excellent blog on the case here).

Because that high profile case captured all the attention, it was little noticed last Friday when property rights advocates won a similarly consequential victory. That afternoon, United States District Court for the District of Columbia Judge Amy Berman Jackson ruled that EPA overstepped its authority when it vetoed a Clean Water Act permit that had already been issued to the Mingo Logan Coal Company, a subsidiary of Arch Coal, for a mountaintop removal mining project in Logan County, West Virginia. The profound matter at hand was whether EPA could revoke a Clean Water Act permit, after it became the possession of the applicant. Had EPA carried the day, permit (i.e., property) owners nationwide would be subject to the cessation of business, depending on EPA’s whims.

Here’s the background: The Clean Water Act prohibits the discharge of pollution into navigable waters of the United States, unless the polluter has a permit. There are two kinds of permits: (1) Section 402 permits for “point-sources,” which are basically any singular discharge outlet for pollutants (like a pipe); and (2) Section 404 permits for “dredge and fill” activities, like mountaintop removal mining*. The former permits are issued by States after their permitting regimes are approved by EPA. The latter permits are issued by the U.S. Army Corps of Engineers, in accordance with guidance established jointly with EPA. Importantly, the Clean Water Act affords EPA a veto over the U.S. Army Corps of Engineers decision to permit.

The case that was decided last Friday pertained to a Section 404 permit that was issued in late 2009 by the U.S. Army Corps of Engineers to Mingo Logan Coal Company for the Spruce No 1 Mine in Logan County, West Virginia. EPA retroactively vetoed this permit on January 2011. Mingo Logan Coal Company then sued in the U.S. District Court for the District of Columbia. The coal company argued that the Clean Water Act only authorizes EPA to veto a pending Section 404 permit (i.e., while the Army Corps deliberates). EPA countered that the veto power was everlasting. Judge Jackson agreed with the petitioners. She wrote,

“Based upon a consideration of the provision in question, the language and structure of the entire statutory scheme, and the legislative history, the Court concludes that the statute does not give EPA the power to render a permit invalid once it has been issued by the Corps. EPA’s view of its authority is inconsistent with clear provisions in the statute, which deem compliance with a permit to be compliance with the Act, and with the legislative history of section 404.”

Notably, the Court did not rule on EPA’s scientific rationale for the permit veto. If Judge Jackson had ruled that EPA has the authority to retroactively veto a Section 404 permit, next she would have considered whether the veto itself was reasonable. In a 2011 study, I argued at length that the “science” behind EPA’s veto was unacceptably shoddy. In a nutshell, EPA claims that the Spruce No. 1 Mine would significantly harm wildlife up and down the food chain—including fish, salamanders, and birds–while in fact the Agency only presents evidence of harm to a single order of insects (Ephemeroptera, a.k.a. the mayfly). Moreover, the scientific literature suggests that overall insect biodiversity isn’t adversely impacted by surface coal mining in Appalachia. That is, hardier species readily thrive in the wake of the mayfly’s decline.

Judge Jackson’s ruling will no doubt come as a relief to the people of West Virginia. In May 2010, I attended EPA’s public hearing on its proposed veto at the civic center in downtown Charleston. The floor was packed with hundreds of people. Conservatively, I’d estimate that the crowd was 99 percent outraged by EPA’s “jobs for bugs” permit veto. I wrote about that experience here.

This is the second consecutive victory for the Appalachian coal industry over EPA in the U.S. District Court for the District of Columbia. Last October, Judge Reggie Walton ruled that EPA had overstepped its authority when it implemented an extra-layer of oversight over Clean Water Act permitting deliberations by States and the U.S. Army Corps of Engineers for applications from the coal industry in Appalachia.

*Pursuant to the 1977 Surface Mining and Control Act, mountaintop removal mining practitioners must recreate the approximate original contour of the mining area. To put it another way, they have to replace the mountaintop as best they can. However, it is an engineering impossibility to recreate the mountaintop perfectly. There is always leftover dirt and spoil. This “overburden” is deposited at the base of the mountain, becoming a “valley fill.” Invariably, valley fills bury intermittent streams that form in valleys whenever it rains. As such, a valley fill requires a Section 404 dredge and fill permit (because it “fills” intermittent streams).

It’s Like Déjà vu, All over again

by William Yeatman on March 22, 2012

in Blog

Here’s a headline from today’s Energy & Environment News PM (subscription required):

…and here’s a Wall Street Journal headline from 1978:

Today, solar power accounts for a small fraction of one percent of U.S. energy needs.

Dim Duo Done in by Dimock Data [updated 6:46PM with comment from Pennsylvania DEP]

by William Yeatman on March 19, 2012

in Blog

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Last Thursday, the Environmental Protection Agency conceded that preliminary lab results from samples taken from wells in Dimock, Pennsylvania indicate that drinking water there has not been contaminating by hydraulic fracturing drilling.

The news is embarrassing to both agit-prop film director Josh Fox and EPA.

For the fabulist Fox, the Dimock lab results are yet another official rebuke of his terrible, fact-free, Oscar-nominated documentary Gasland. Already, Colorado state officials debunked Fox’s false claims that groundwater in Colorado had been poisoned by hydraulic fracturing. Now, a federal agency is suggesting that Fox again misidentified the cause of one of his fracking cause-célèbres—he has long accused the gas industry of contaminating well water in Dimock with toxic chemicals.

For EPA, the Dimock results are egg on the face. That’s because the Agency had decided to test the Dimock water over ~~strong~~* objections from Pennsylvania officials. In early January, Pennsylvania Department of Environmental Protection Secretary Michael Krancer wrote a letter asking EPA not to second-guess the State’s handling of allegations that gas drilling had contaminated well water in Dimock. Secretary Krancer warned EPA that it would be acting despite the Agency’s possessing only “rudimentary” knowledge of the situation. In a critical response to the letter, EPA Administrator Lisa Jackson insinuated that Pennsylvania was failing to ensure the protection of its own citizens. EPA’s preliminary results suggest that Pennsylvania is capable of ensuring safe, responsible drilling, without the Agency’s oversight.

*[Updated 6:46 PM--I received a nice email from the Pennsylvania Department of Environmental Protection informing me that the situation is more complex than I had thought. While the DEP does feel EPA has overstepped its bounds, the Department is very much willing to work with EPA to ensure that Dimock water is safe to drink. I've crossed out the word "strong" in the second sentence of the paragraph above because it is too strong a modifier: They disagree, but it's not combative. Here's the official DEP press statement, which demonstrates the nuance of the matter.

DEP just received EPA’s voluminous package today and we are reviewing it. We will take more time to fully evaluate all the information and data that EPA has presented, which it says is behind the action it proposes taking and the requests it is making. Our review, so far, tells us that EPA does not seem to have presented any new data here. More than a year ago, DEP’s enforcement action addressed this issue and ensured funds were set aside to resolve the water quality issues for these homeowners. Funds were set aside for each homeowner to have a water treatment system installed. The system would address parameters EPA references here, including arsenic and manganese, and would provide water that meets and exceeds safe drinking water standards. We agree that additional sampling should be conducted in Dimock and we are actively working with EPA to conduct additional sampling at the affected homes and at 57 other residences.]

[click to continue…]

But how can one fly planes when the carrier deck is turned into a solar energy farm?

by William Yeatman on March 19, 2012

in Blog

The title above was my boss’s (CEI President Fred Smith’s) funny reaction to the email solicitation below, for a conference call held by the biofuels lobby, on how the biofuels industry can help meet the Commander-in-Chief’s goal of powering the U.S. military with 25% renewables by 2025.