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[EPA's Clean Power Plan] has the potential to comprehensively reorder the jurisdictional relationship between the federal government and states as it relates to the regulation of public utilities and energy development. . . . .[States] will have entered a comprehensive “mother-may-I?” relationship with the EPA that has never before existed. – FERC Commissioner Tony Clark

Five Commissioners of the Federal Energy Regulatory Commission (FERC) testified today on EPA’s Clean Power Plan before the House Energy and Commerce Subcommittee on Energy and Power.

FERC's Tony Clark

FERC’s Tony Clark

EPA’s Clean Power Plan establishes carbon dioxide (CO2) emission reduction targets for the electric power sectors of 49 states. The Plan outlines four “building block” strategies states are likely use to meet their respective targets: (1) improve the efficiency of coal power plants, (2) shift base load generation from coal to natural gas, (3) shift electric generation from fossil fuels to renewables and nuclear, and (4) reduce electricity consumption through demand-side management (DSM) programs.

In his briefing memo, Subcommittee Chairman Ed Whitfield (R-Ky.) asserts that EPA’s proposed rule “would require significant changes to the way electricity is generated, transmitted, and consumed in States across the country.” Two witnesses spoke directly to that point.

FERC Commissioner Philip D. Moeller described the fundamental change contemplated by the Clean Power Plan as a switch from “economic dispatch” to “environmental dispatch”:

For decades we have relied on the concept of “economic dispatch” of electric generation. Simply put, the power plants with the lowest operating cost are called first to generate electricity — with various reliability requirements and other factors as part of the decision, depending on the structure of various markets. By moving to what is essentially “environmental dispatch,” units will be called to generate primarily based upon the emission profile of the unit.

It is hard to imagine how giving low-carbon generation priority over low-cost generation would not increase electric rates. It is also not hard to imagine how pushing renewables higher in the “merit order of dispatch” could complicate the task of balancing loads and ensuring grid reliability.

Commissioner Tony Clark views the basic change in political terms. The Clean Power Plan replaces cooperative federalism with a hegemonic system in which EPA has final say on how states generate, transmit, and consume electricity: [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.

Post image for Wasted in Margarita Island: Hugo Chavez as Climate Action Hero (Some People Say There’s a Capitalist to Blame)

The top story in international climate news this week is the Margarita Declaration issued in the name of 130 ‘social’ (non-governmental) organizations participating in the July 15-18 Social Pre-COP meeting on Margarita Island, Venezuela. The groups don’t sign the document, so we don’t know which (or how many) of them actually endorse it. Basically it’s a rant demanding that ‘social’ organizations have more clout in climate treaty negotiations. Participants seek in particular to influence the UN-sponsored COP 20 negotiations in December, in Lima, Peru.

The Margarita Declaration is attracting media attention because it (1) blames the climate ‘crisis’ of the “current capitalist hegemonic system” (par. 46), and (2) rejects solutions “whereby wealthy industrialized countries and corporations ultimately seek to use climate change as a source of profit” (par. 19). The latter include such ‘green economy’ policies as carbon trading and restrictions on deforestation in developing countries.

Some commentaries have pounced on the Declaration as smoking-gun proof that climate activists are watermelons — green on the outside, red on the inside. The environmental movement has no lack of collectivist impulses. Consider the obsession with “consensus” (groupthink), the popularity of social cost of carbon analysis (a pseudo science reminiscent of Marx’s labor theory of value), the zeal for green energy mandates (Soviet-style production quota), and the relentless lobbying for political-pricing of energy (cap-and-trade, carbon taxes) to correct alleged “market failures.”

Nonetheless, there are important differences. [click to continue…]

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.

EPA’s Clean Power Plan, its carbon “pollution” rule for existing power plants, proposes carbon dioxide (CO2) emission reduction targets that states can meet only by enacting (or tightening) three of the four main climate policies contained in H.R. 2454, the American Clean Energy and Security Act of 2009, popularly (or unpopularly) known as Waxman-Markey. Those policies are: cap-and-trade, renewable energy quota, and demand-reduction mandates.

The fourth Waxman-Markey policy, performance standards requiring new coal power plants to install carbon capture and storage (CCS) technology, is the centerpiece of EPA’s carbon “pollution” rule for new coal power plants.

Clean Power Rule & Waxman Markey Compared

Waxman-Markey narrowly passed in the House in June 2009, but once exposed as ‘cap-and-tax,’ it became a major political liability. Senate leaders tried to rebrand the proposal as “pollution limits” and “linked fee,” but that fooled no one, so eventually they pulled the plug on all companion bills. Cap-and-trade was a critical issue in the November 2010 elections. In the House, “virtually every close race was lost by a Democrat” who voted for Waxman-Markey, observes Cato Institute scientist Patrick Michaels. In contrast, “every close Senate race was won by a Democrat,” in no small part because they mothballed cap-and-trade.

In a democracy, policy is supposed to derive from statutes, which in turn are supposed to derive from elections. Cap-and-trade remains in such bad odor that neither President Obama nor other Democratic leaders campaigned for it in the 2012 election cycle. Indeed, President Obama ran to the right of Mitt Romney on energy issues, even accusing his rival of being anti-coal. Yet Obama’s EPA now acts as if it has a legislative and popular mandate to implement the old Waxman-Markey agenda.

A somewhat unique feature of American democracy is federalism. This allows each state to be a “laboratory of democracy,” empowering Americans to “vote with their feet” for and against state policy regimes they like or dislike. The Clean Power Plan would stifle such choice and competition. [click to continue…]

As discussed here last week, the Ivanpah Solar Electric Generating System, located about 40 miles southwest of Las Vegas in the Mojave Desert, kills butterflies, dragonflies, other insects, bats, and birds.

Tens of thousands of large mirrors (“heliostats”) focus sunlight on boilers (“receivers”) perched atop 459-foot towers. The “solar flux” field surrounding the boilers can reach temperatures of 800ºF — hot enough to melt, singe, and burn the feathers of birds that fly through it.

Ivanpah Solar Tower Glare All Three

The intense luminosity of the boilers attracts insects, which attract insect-eating birds, which in turn attract raptors. Fish & Wildlife Service (FWS) officials investigating the site observed “streamers” — trails of smoke from birds transiting the flux fields – about once every two minutes.

Ivanpah injured bird

Update: Environmental journalist Chris Clarke, who’s been reporting on avian mortality at Ivanpah since September 2013, reports that a federal study confirms that glare from Ivanpah’s heliostat arrays may create safety hazards for commercial and private aviation in the area.

Ivanpah Glare pilot hazard

In March, Ivanpah co-owner NRG Energy told Nevada aviation officials that potentially-hazardous glare was a temporary problem likely to abate once all heliostats were “calibrated” for commercial operation. But, reports Clarke, Sandia National Laboratories finds that the heliostats cause intense glare when they are in “standby position” — their default position when not aimed at the boilers. From the article: [click to continue…]

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.

[click to continue…]

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Cooler Heads Digest 18 July 2014