William Yeatman

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That there are three kinds of untruths—“lies, damned lies, and statistics”—is an apocryphal phrase of great relevance to the modern regulatory state. For it is with ease that regulators manipulate math in order to legitimate their otherwise unjustifiable actions.

EPA’s top statistician

Of course, these sorts of shenanigans wouldn’t be necessary if the system worked as intended. If federal agencies were full of disinterested civil servants toiling on behalf of the public interest, then there’d be no need for fuzzy math. But that’s not what exists, alas. Instead, federal agencies have become political chips to be doled out to special interests,* in exchange for their having helped elect a given President. Having thus captured federal agencies, these special interests employ the power of the state to advance their narrow causes. And this is why statistical lies are necessary: They obfuscate the unsavory quid pro quo politics that undergird the modern regulatory state.

Consider, for example, the extreme degree to which EPA now serves NRDC and Sierra Club, rather than the American people. Over the last five election cycles, such green groups have become an increasingly important cog in the progressive political campaign machinery. As a result, they’ve enjoyed unprecedented access at the EPA. They dominate the ranks of political appointees, and have had an inordinately heavy hand in reg writing. From the fact that no agency has been as thoroughly captured as EPA, it follows that the agency long has excelled in the black arts of conjuring quantitative “benefits” from thin air.

Take EPA’s bedrock bullshit statistic: the value of a life “saved” by one of the agency’s air quality rules. Whenever you hear EPA administrator Gina McCarthy talk about the trillions of dollars in economic activity *created* by the Clean Air Act, her point is founded upon the value of a statistical life. There is no greater proffered justification for EPA’s existence than the statistical value of life. And how does the agency achieve this crucial figure? Here’s how EPA describes its calculation: [click to continue…]

EPA’s reliability mantra

When it comes to reliability, I don’t trust EPA for a simple reason: On this matter, the agency has demonstrated that it is untrustworthy.

Consider, for example, the agency’s absurd Utility MACT. The rule was promulgated in 2012, and it will remain the most onerous regulation ever imposed on the electricity sector, until the agency promulgates the Clean Power Plan this summer. Regarding reliability, the utility MACT threatens to shutter up to 25% of the nation’s fleet of coal-fired power plants upon implementation this spring; EPA’s analysis, alas, severely lowballed retirements due to the rule, as noted last year by FERC Commissioner Philip Moeller.

Worse still, EPA completely whiffed on the nature of the threat posed by the Utility MACT. In its reliability analysis, EPA focused on how the regulation would influence peak summer demand. In reality, the rule’s most pressing peril involves electric reliability in certain regions—primarily in the northeast—during the winter. The problem is that the Utility MACT, by closing coal plants, increases demand for gas for electricity during cold winter months when gas demand is already high (for space heating), and the gas infrastructure doesn’t yet exist to meet this aggregate demand.* If next winter (after the rule’s implementation this spring), is anything like the last two winters, then there could be serious problems in New England. EPA’s utter failure to identify this threat does not inspire confidence.

EPA’s reliability assessments of the Clean Power Plan have been similarly unimpressive. As is explained here, the Clean Power Plan would fundamentally overhaul the electricity sector. Obviously, such a significant change engenders reliability concerns; EPA’s own preliminary analysis suggests as much. Despite the high stakes, EPA Administrator Gina McCarthy has averred that she’s “tired” of talking about the rule’s threat to reliability. For the sake of the U.S. economy, I hope she’s not too tired to do a better job than the agency did on the Utility MACT.

Unfortunately, current events suggest she won’t. This week, Office of Air and Radiation chief Janet McCabe’s told the National Association of Regulatory Utility Commissioners that regulated entities, rather than the federal government, are responsible for ensuring that EPA’s Clean Power Plan doesn’t turn out the lights. [click to continue…]

Last week, the Senate Environment & Public Works Committee held a hearing featuring EPA Office of Air & Radiation chief Janet McCabe, on the subject of EPA’s climate regulations. During his five minutes of questions, Sen. David Vitter (R-Louisiana) pursued a line of inquiry regarding the outsized role played by NRDC in the drafting of the Clean Power Plan for existing power plants. As reported by the New York Times, 3 lobbyist/lawyers at the NRDC wrote the “blueprint” for the regulation, which would fundamentally overhaul the electricity sector. This is unseemly because, in 2008 and 2012, NRDC spent a great deal of resources getting President Obama elected. An impartial observer easily could conclude that NRDC was being rewarded with policymaking prerogatives, in exchange for having helped elect Obama.

In pressing his point, Sen. Vitter held up a placard featuring an email exchange between an NRDC lobbyist and a top EPA political appointee, in which the former pitches to the latter the idea of the drafting a template Clean Power Plan ‘federal implementation plan’ (a.k.a. a “FIP”). In seeming conformity with the NRDC’s direction, EPA last month proposed a Clean Power Plan model FIP (discussed here, here, and here at length).

Sen. Vitter expressed his belief that this behavior was inappropriately collusive. And it was, judging by the evidence at hand (i.e., the email depicted on the placard). Yesterday, however, NRDC alleged that Vitter doctored the email to make his case. According to E&E GreenWire’s Jean Chemnick ($): [click to continue…]

A Lively Debate, The Peril of Rushed Regulations, and a Classic Example of the Practice

• Last Friday, I participated in a Federalist Society Teleforum on “’Sue and Settle’ and the Endangered Species Act,” with Assistant Professor Justin Pidot of the University of Denver Sturm College of Law and Susan Combs, former Texas Comptroller of Public Accounts. It was a lively discussion, and I think all parties acquitted themselves well. Listen here.
• An adverse policy outcome often attendant to “sue and settle” agreements are low quality rulemakings due to impossibly tight deadlines. For example, consider EPA’s absurd Utility MACT, which threatens to shut down 25% of the nation’s coal-fired power capacity in order to achieve illusory benefits. EPA agreed in an October 2009 consent agreement to issue a final Utility MACT rule by November 16, 2011. Thanks to this too-ambitious schedule, EPA was forced to rush to complete the rule (which ultimately was finalized in February 2012). It is news to no one that rushed work is careless work; accordingly, the final Utility MACT was rife with errors. As a result, EPA constantly has been amending the rule. In the 3 years since the rule went final, EPA has: finalized a round of major corrections (4/19/2012); formally reconsidered the rule three times (11/30/2012; 4/24/2013; 11/19/2014); and partially stayed it once (8/2/2012). On Tuesday EPA proposed yet another round of significant corrections for the rule. Of course, this is terrible for regulatory certainty. Because the agency committed itself to an impossible deadline, it promulgated a highly flawed rule. As a result, about twice a year on average since the rule went final, utilities have had to deal with substantive changes to this hugely consequential rule. [click to continue…]

A month ago, during the State of the Union Address, President Obama averred that “no challenge—no challenge—poses a greater threat to future generations than climate change.” And ten days ago, the White House released a National Security Strategy that lists climate change alongside international terrorism and Russian aggression as the preeminent threats today facing the United States.

And yet, despite the President’s best efforts to elevate AGW as a clear and present danger, not one of the four Sunday political talkies (Fox News Sunday, Face the Nation, This Week, and Meet the Press) has fielded a full question about climate change since the SOTU. (As I’ve noted here, here, and here). This is notable insofar as these shows are the embodiment of the political establishment. By ignoring the putative AGW threat to national security, they suggest that conventional wisdom on the issue rests well to the right of the President.

This notion was reinforced yesterday, when ABC This Week became the first Sunday political talkie to ask a question about climate change since the SOTU. The query was delivered by ABC’s Jon Karl with mild incredulity, and its purpose was gauge whether Reps. Adam Schiff (D-Cal.) & Adam Kinzinger (R-Ill.) agree with the president that AGW and terrorism are on par as national security threats:

KARL: So I want to ask you quickly before we go, the president gave this interview to Vox where he suggested that climate change is a greater threat than terrorism. Do you agree with that? Start with you Congressman Schiff. [click to continue…]

There are three ongoing legal challenges to EPA’s proposed Clean Power Plan:

• On June 18, 2014, Murray Energy Corporation, an Ohio-based coal mining company, filed a novel lawsuit in the D.C. Circuit Court of Appeals seeking an all Writs Act injunction that would halt EPA from continuing with the Clean Power Plan. (Case no. 14-1112)
• On August 1, 2014, thirteen States led by West Virginia AG Patrick Morrisey filed a petition in the D.C. Circuit Court of Appeals seeking to overturn a non-judicial settlement agreement by which EPA committed itself to propose and finalize the Clean Power Plan. (Case no. 14-1146]
• On August 15, Murray Energy filed another petition in the D.C. Circuit seeking to overturn the regulation based on the judicial review provisions of the Clean Air Act. (Case no. 14-1151)

In late January, a D.C. Circuit panel established a parallel schedule for all three cases; oral arguments will take place on April 16.

Setting aside their respective jurisdictional hurdles, the challengers essentially share the same case on the merits. If you’ve read this far, then presumably you’re already acquainted with the inside-baseball legalese of these lawsuits; I’ve given the nitty-gritty details here. Very simply put, both the States & Murray Energy argue that the plain text of the Clean Air Act bars EPA from promulgating the Clean Power Plan.

In September, an NRDC lawyer called the lawsuits “laughable.” Nonetheless, NRDC felt it was necessary to intervene in all of them. Last week, NRDC and other environmental interveners submitted two briefs on behalf the EPA (one for the states’ case, and another for both the Murray cases). Notably, the two briefs adopt distinct arguments regarding the plaintiffs’ shared argument on the merits. In this short post, I will address the environmental interveners’ briefs. [click to continue…]

Over the last two days, energy reporters from Politico and National Journal have reached opposite conclusions regarding the congressional GOP caucus’s strategy on climate change.

Here’s Politico on Monday:

And here’s National Journal on Tuesday.

They both can’t be right! I suspect Politico’s Schor is closer to the truth, and that the GOP isn’t yet willing to challenge the President’ climate regulations. There are three tea leaves that suggest as much. [click to continue…]