Post image for Social Cost of Carbon: DOE Rejects Petition to Reconsider Microwave Rule

On Christmas eve, the Department of Energy (DOE) rejected the Landmark Legal Foundation’s petition to reconsider the agency’s final rule establishing first-ever energy-efficiency standards for microwave ovens.

LLF argues that the rule violates the Administrative Procedure Act, the federal law governing how agencies develop and adopt regulations. The final rule’s cost-benefit analysis incorporates the Obama administration’s revised (higher) 2013 social cost of carbon (SCC) estimates. Those estimates were not in the proposed rule, so the public had no opportunity to comment on them. In addition, LLF warns, with this “unilateral change,” all agency cost-benefit analyses “will be drastically affected,” potentially influencing administration policy on “everything from power plants to the Keystone XL pipeline.”

Whether or not the microwave rule itself has such wide-ranging implications, SCC analysis is a potent weapon in the war on coal and other fossil fuels. As a pretext for expanding government control of the economy, redistributing wealth, and rigging energy markets, nothing beats the social cost of carbon.

The SCC is an estimate of damages allegedly inflicted on society by a ton of carbon dioxide (CO2) emissions in a given year. Ratchet up carbon’s estimated social cost by about 50%, as the administration did in 2013, and every mandated or proposed reduction in CO2 emissions suddenly appears to be 50% more valuable — i.e., 50% less costly. This is a critical political asset, notes Cato Institute scholar Chip Kappenberger, “as costs are often the greatest barrier to approval.”

DOE’s argument for rejecting the LLF petition may be summarized as follows: [click to continue…]

Post image for Supreme Court Global Warming Case: Does EPA Permitting of Greenhouse Gases ‘Deform’ the Statute?

In Utility Air Regulatory Group v. EPA, seven parties are petitioning the Supreme Court to overturn the EPA’s regulation of greenhouse gas emissions from stationary sources through the Clean Air Act’s prevention of significant deterioration (PSD) preconstruction permit program and Title V operating permit program.

The sole question before the Court is:

Whether EPA permissibly determined [in its April 2010 Timing Rule] that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.

UARG v. EPA is a very big deal. Congress has never enacted a bill to regulate greenhouse gases from stationary sources, and it’s far from certain courts will uphold the EPA’s proposed “carbon pollution rule” to regulate just one type of stationary source — electric power plants. Yet the Timing Rule extends regulatory requirements to potentially all “major” greenhouse gas emitters of whatever type or description, throughout the entire economy, in one fell swoop.

The Timing Rule codifies the EPA’s legal theory that regulation of any air pollutant under any part of the Clean Air Act automatically makes major sources of that pollutant “subject to regulation” under PSD and Title V. Thus, according to the Timing Rule, major sources of carbon dioxide (CO2), the chief anthropogenic greenhouse gas, became subject to regulation on Jan. 2, 2011, the day the EPA’s greenhouse gas Tailpipe Rule took effect.

As even the EPA acknowledges, however, the Timing Rule leads straight to absurd results, because CO2 is emitted in much greater quantities and by many more sources than any pollutant that can cause “significant deterioration” of air quality.

The Clean Air Act defines “major” source as one with the potential to emit 250 tons per year of an air pollutant (PSD) or 100 tons per year (Title V). Only large industrial facilities emit air quality contaminants in those quantities. In contrast, upwards of 1 million small entities, including office buildings, churches, hospitals, schools, and commercial restaurants, combust enough heating oil or natural gas to emit 250 tons of CO2 annually. An estimated 6.1 million small entities, including some large single-family residences, emit 100 tons of CO2 annually.

The regulatory results of the Timing Rule are absurd in two main ways:

  1. Regulation of myriad small “major” sources conflicts with Congress’s intent to exclude non-industrial facilities from PSD and Title V regulation.
  2. Expanding by orders of magnitude the number of PSD/Title V-regulated sources would overwhelm permitting agencies’ administrative resources, causing ever-growing bottlenecks and delays that cripple environmental enforcement and economic development alike.

Rather than draw the obvious conclusion that Congress never intended for the EPA to apply PSD and Title V to greenhouse gases, the agency in June 2010 issued a Tailoring Rule, which effectively rewrites the statutory definitions of “major” source so that only facilities emitting 100,000 tons of greenhouse gases will be subject to regulation. The Tailoring Rule is itself an absurd solution, however, because agencies have no power under the U.S. Constitution to amend statutes.

All seven petitioner groups in UARG v. EPA argue that the Timing Rule conflicts with congressional intent. However, the brief submitted by the Energy Intensive Manufacturers Working Group on Greenhouse Gas Regulation and the Glass Packaging Institute catalogues several ways in which the Timing Rule ‘deforms’ the permitting provisions. I found much of this discussion new and compelling.

Excerpts from the brief follow.

[click to continue…]

Post image for WUWT Launches Tornado Reference Page

The indefatigable Anthony Watts this week launched a Tornado Reference Page on WattsUpWithThat.Com (WUWT).

Further rebutting the “worse than we thought” mantra of the climate doomsters, Watts posts a graph from NOAA’s Storm Prediction Center:

Tornado  US Inflation Adjusted Annual Trend and Percentile Rating, Dec 22, 2013

The figure compares the 2013 tornado count as of Dec. 22 with those of the previous mininum and maximum years in the 58-year record from 1954 through 2012. As Watts observes, “the current tornado count of 790 for 2013 is 154 tornadoes below the historical minimum of 944, 497 tornadoes below the 50th percentile of 1287 and 1089 tornadoes below the historical maximum 1879.”

The data in the graph are “inflation-adjusted,” NASA explains, to offset “the increase in tornado reports over the last 54 years [that] is almost entirely due to secular trends such as population increase, increased tornado awareness, and more robust and advanced reporting networks.”

Even without inflation-adjustment, the preliminary tornado count “for 2013 year to date is 934, which is 544 tornadoes below the 2005 – 2012 average of 1478 and 134 tornadoes below the 2012 low of 1068 tornadoes,” Watts comments.

One might argue that U.S. tornado data may not show a link to global climate change because the U.S. comprises only 6.6% of the world’s land mass. However, if such a link exists, it ought to be discernible in the U.S. tornado record. As Watts points out, the U.S. “experiences approximately 75% of all the world’s tornados.”

The latter fact prompted one commenter to write:

You mean to say, that with only 5% of the world’s population, the United States consumes 75% of the world’s tornadoes? This over consumption of the Earth’s resources by the US, and particularly its unsustainable middle class lifestyle, has got to stop.
sarc  [click to continue…]

Post image for Equality under Law and Energy Policy

Equality under law is a core principle of every free society. It means the law does not discriminate among persons based on irrelevant characteristics. It sets the ground rules for competition but does not seek to advantage one person or group at the expense of others.

Equality under law is not an arbitrary preference but the logical implication of a more fundamental, natural equality rooted in the unity of the human species. The Declaration of Independence, which proclaims the equality of all human beings in respect to certain unalienable rights, is the locus classicus of this philosophy. Thomas Jefferson concisely explained the natural basis for equality under law when he stated that, “the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of god.”

Societies that reject (or do not recognize) the Declaration philosophy include not only those based on explicitly anti-egalitarian ideologies (Hitler’s master race, the feudal hierarchy of noble and serf), but also those based on the false equality of Marx and Lenin, who asserted that the human race is fundamentally bifurcated into two unequal classes — bourgeois and proletariat. Unsurprisingly, in Marxist-Leninist regimes all power ends up in the hands of a corrupt self-selected elite (nomenklatura) posing as the ‘vanguard of the proletariat.’

I’ve been thinking about this lately, because ‘progressive,’ activist government continually seeks to rig energy markets to favor some industries (those deemed green) at the expense of others (those deemed dirty). Moreover, interest groups continually lobby for special privileges, usually based on some public-interest pretext (‘What’s good for General Motors is good for the country’).

In his treatise The Law, 19th century French economist Frédéric Bastiat, discusses how to tell when law is perverted into a system of legal plunder:

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

Imagine if we had a government today that lived by Bastiat’s maxims! Bye-bye bridges to nowhere, the wind production tax credit, the ethanol mandate, green jobs programs, and Obamacare.

To Bastiat’s simple test for identifying legal plunder, I would add another — presumably with his approval were he alive today: The law aims to pick market winners and losers by imposing unequal burdens and/or conferring unequal benefits on different industries or firms.

The ethanol mandate clearly falls into the legal plunder category, and so does the campaign to restrict natural gas exports for the benefit of the chemical industry. I discuss those policies as equality-of-law-violating plunder schemes in recent comments on National Journal’s Energy Insiders blog. My comments (lightly edited) appear below. [click to continue…]

Post image for EPA Permitting of Greenhouse Gases: A Breathtaking Absence of Congressional Intent

This post updates the analysis I presented last week in EPA Permitting of Greenhouse Gases: What Does Legislative History Reveal about Congressional Intent?

Petitioners’ merit briefs were due on Monday this week in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA regulation addressing greenhouse gases. Amicus briefs on behalf of petitioners are due next week.

The narrow question before the Court is whether the EPA permissibly determined that its May 2010 greenhouse gas Tailpipe Rule automatically triggered Clean Air Act permitting requirements for major stationary sources of greenhouse gases. In other words, the Court is reviewing the agency’s Timing Rule.

According to the Timing Rule, anyone seeking to build or modify a major source of greenhouse gas emissions must first obtain a “prevention of significant deterioration” (PSD) preconstruction permit. An applicant must conduct a multi-step analysis to determine the proposed facility or modification’s “best available control technology” (BACT) requirements. PSD permitting and BACT determinations are components of the Clean Air Act’s New Source Review (NSR) program.

As detailed in my post last week, I found a BREATHTAKING ABSENCE OF CONGRESSIONAL INTENT for the regulatory path prescribed by the EPA’s Timing Rule:

  • During the 101st through the 111th Congress, senators and congressmen introduced 692 bills containing the term “greenhouse gas” and 55 bills containing the term “best available control technology.”
  • Of those, only the SAFE Climate Act, introduced in the 109th and 110th Congresses, appears to contemplate a broad application of NSR/BACT to greenhouse gases (the terms NSR and BACT don’t occur in the statute). And then only at the EPA’s discretion, not, as per the Timing Rule, by automatic operation of the statute.
  • More importantly, although the SAFE Climate Act garnered 155 co-sponsors in the 110th Congress, the bill never got beyond the introduction stage of the legislative process. No committee approved it, and the House did not vote on it.
  • The bill’s chief sponsor, Rep. Henry Waxman (D-Calif.), did not reintroduce the SAFE Climate Act in the 111th Congress. Instead, he co-sponsored the American Clean Energy and Security Act (ACESA), the only cap-and-trade bill ever to pass in a chamber of Congress. ACESA specifically prohibited the application of NSR to stationary sources based on their greenhouse gas emissions.

In short, there is not a shred of evidence in the legislative history that Congress as a whole, the House or Senate separately, or any congressional committee ever intended for the EPA to broadly apply NSR/BACT provisions to greenhouse gases.

Just to make sure nothing fell through the cracks, I today did a search of all legislation introduced during the 101st through the 111th Congresses containing the term “prevention of significant deterioration” (PSD) — the specific type of NSR permit that is the focus of the Timing Rule.

Of 35 bills introduced containing the term, only one was a climate-related bill (S.1168 — the Clean Air/Climate Change Act of 2007). Significantly, it does not propose to apply PSD permitting to greenhouse gases.

The table below summarizes the results.

PSD Table [click to continue…]

Post image for What Happens to the U.S. Economy If ‘Progressives’ Kill Coal?

A new study by Heritage Foundation analysts Nicholas Loris, Kevin Dayaratma, and David Kreutzer clarifies the economically-devastating potential of the war on coal.

In effect, the study asks: What if anti-coal ‘progressives’ get everything they wish for?

Using the Heritage Foundation Energy Model, which is based on the U.S. Energy Information Administration’s National Energy Model System (NEMS), the three researchers analyze the economic impacts of a regulatory agenda phasing-out coal electric generation between 2015 and 2038. They find that by the end of 2023:

  • Employment falls by nearly 600,000 jobs.
  • Manufacturing loses over 270,000 jobs.
  • Coal-mining jobs drop 30 percent.
  • A family of four’s annual income drops more than $1,200 per year, and its total income drops by nearly $24,400 over the entire period of analysis.
  • Aggregate gross domestic product (GDP) decreases by $2.23 trillion over the entire period of the analysis.

What accounts for those losses? First, phasing out coal generation will dramatically increase demand for natural gas, boosting gas prices by 28%. Gas is a key feedstock for several manufacturing industries:

Natural gas is not only a critical source of electricity generation; natural gas and liquids produced with natural gas provide a feedstock for fertilizers, chemicals and pharmaceuticals, waste treatment, food processing, fuel for industrial boilers, increasingly used as a transportation fuel, and much more.

The main reason, though, is simply that killing a major source of affordable electric power will increase business and household energy costs:

It will cost more to heat, cool, and light homes, and to cook meals. These higher energy prices will also have rippling effects throughout the economy. As energy prices increase, the cost of making products rises. Higher operating costs for businesses will be reflected in higher prices for consumers. Because everything Americans use and produce requires energy, consumers will take hit after hit. As prices rise, consumers buy less, and companies are forced to shed employees, close entirely, or move to other countries where the cost of doing business is lower. The result is fewer opportunities for American workers, lower incomes, less economic growth, and higher unemployment.

Two maps in the Heritage study should remove any doubt that the war on coal is an attack on a vital component of the U.S. economy and, thus, a danger to public health and welfare. [click to continue…]

Post image for EPA Permitting of Greenhouse Gases: What Does Legislative History Reveal about Congressional Intent?

Next week, petitioners’ merit briefs are due in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA rule addressing greenhouse gases.

The Court is limiting its review to one question: “Whether EPA permissibly determined that greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” In other words, the Court will review the agency’s April 2010 Timing Rule.

According to the Timing Rule, “major” greenhouse gas emitters became subject to the New Source Review (NSR) preconstruction and Title V operating permit programs on the day the EPA’s greenhouse gas Tailpipe Rule took effect (January 2, 2011). To obtain an NSR preconstruction permit, a covered source must commit to meet case-specific emission limitations known as “best available control technology” (BACT).

What light does legislative history shed on the question before the Court? After reviewing 20 years of legislation containing the terms “greenhouse gas” and “best available control technology,” I conclude that neither Congress as a whole, nor the House or Senate separately, nor any congressional committee intended for the EPA to regulate greenhouse gases through the NSR and Title V programs.

Thomas, the Library of Congress search engine, identifies 692 bills containing the term “greenhouse gas” during the 101st through the 111th Congresses. Only one bill, the Safe Climate Act, introduced in both the 109th and 110th Congresses, arguably authorizes (but does not require) the EPA to apply NSR to greenhouse gases.

Although the Safe Climate Act boasted 155 co-sponsors in the 110th Congress, there were no hearings, committee votes, or floor debates on the bill. In the 111th Congress, the bill’s chief sponsor, Rep. Henry Waxman (D-Calif.), appears to have had a change of heart. The legislation he co-sponsored with Rep. Ed Markey (D-Mass.), the American Clean Energy and Security Act (H.R. 2454) — the only cap-and-trade bill ever to pass in either chamber of Congress — specifically prohibits the application of NSR and Title V to any source based solely on its greenhouse gas emissions.

Thomas also identifies 55 bills introduced during the 101st through 111th Congresses containing the term “best available control technology.” Of those, only one bill introduced (twice) in the 101st Congress and another bill introduced in 110th Congress appear to contemplate some application of NSR and BACT to CO2.

In the 101st Congress, S.676/S.333, the Global Environmental Protection Act of 1989, introduced separately by Senators Max Baucus (D-Mont.) and Patrick Leahy (D.-Vt.), would require the EPA to establish “best available residential technology” standards for CO2 emissions from household furnaces, water heaters, and air conditioners. But here the Senators merely borrow the terminology of NSR rather than actually propose to subject households to NSR permitting. The bills would simply require the EPA to promulgate the functional equivalent of energy-efficiency standards for the equipment in question.

Regardless, although elements of S.676/S.333 were incorporated in S.1630, the Senate version of the 1990 Clean Air Act Amendments, the proposed “best available residential technology standards” for CO2 did not make the cut.

In the 110th Congress, Senator Lamar Alexander (R-Tenn.) introduced S.1168, the Clean Air/Climate Change Act of 2007. Among other provisions, the bill would require new coal power plants to meet a new source performance standard of 1,100 lbs. CO2 per megawatt hour. Since this standard can only be met through carbon capture and sequestration (CCS), the bill would also void the existing BACT standard for coal power plants based on the performance of “conventional pulverized” coal facilities. There is no indication in the bill that BACT for CO2 pertains to stationary sources in general. Rather, BACT for CO2 would apparently be limited to NSPS-regulated new coal power plants equipped with CCS. In any event, the bill attracted only one co-sponsor, was not the subject of hearings or other committee action, and was not debated on the Senate floor.

Additional details of the legislative history follow. [click to continue…]

Post image for Skeptical Science’s Hiroshima Bomb Bombast

SkepticalScience.Com this week unveiled a downloadable app that supposedly shows how fast heat is building up in the Earth’s climate system due to anthropogenic greenhouse gas emissions. The metric chosen is Hiroshima bombs. The Earth, according to SkS’s app, is warming at the rate of four Hiroshima bombs per second or 400,000 Hiroshima bombs per day.

I don’t know about you, but it sounds to me like someone is trying to tell us global warming could be the end of life as we know it.

SkS says the point of their Hiroshima bomb calculator is simply to explain in “ways that non-scientists can more easily relate to” how much heat anthropogenic greenhouse gases add to the climate system. It’s supposed to help us laymen understand the concept of radiative imbalance.

Let’s briefly examine that concept. Both incoming shortwave radiation (sunlight and ultraviolet light) and down-welling long-wave (infrared) radiation warm the planet. Conversely, reflected shortwave radiation and outgoing long-wave radiation cool the planet. Various observations (with varying degrees of uncertainty) indicate that incoming and down-welling energy exceed reflected and outgoing energy by 0.6 Watts per square meter (W/m2). That imbalance is attributed to mankind’s enhancement of the greenhouse effect. It is equivalent to the energy released by 400,000 Hiroshima bombs.

Today on WattsUpWithThat.Com, climate researcher Bob Tisdale posts a video commentary on SkS’s Hiroshima bomb calculator. To put 0.6 W/m2 into perspective, Tisdale references Stephens et al. (2012), a study of the Earth’s energy balance in Nature GeoScience.

Figure B1 from Stephens et al. illustrates six components (estimated from satellite and other data) of the Earth’s energy balance:

Energy Balance Stephens et al. 2012 [click to continue…]

Post image for House GOP: Last Laugh on “Carbon Pollution Rule”?

My colleague Will Yeatman reports some fantastic climate policy news in this week’s Cooler Heads Digest:

House GOP Outwits EPA on Carbon Pollution Standard

Leading members of the House Energy and Commerce Committee recently made the EPA look foolish by pointing out a glaring flaw in the agency’s proposed Carbon “Pollution” Standard.

The proposed regulation would require new coal-fired power plants to install carbon capture and sequestration (CCS). And yet, under the Clean Air Act, EPA cannot require a technology that isn’t commercially viable. On the one hand, industry claims that CCS isn’t market-ready, citing as proof the fact that there isn’t a single CCS system in operation. EPA, on the other hand, claims that CCS is adequately demonstrated. As evidence, the agency referenced three CCS pilot projects in the U.S. that are either in planning or under construction in Mississippi, California, and Texas.

Last week, leading members of the House Energy and Commerce Committee pulled the rug out from under EPA’s evidence. In a November 15th letter to EPA Administrator Gina McCarthy, Reps. Fred Upton (R-Michigan), Ed Whitfield (R-Kentucky), Joe Barton (R-Texas), and Steve Scalise (R-Louisiana) brought to her attention a little-known provision of the 2005 Energy Policy Act that prohibits the agency from basing an “adequately demonstrated” determination on CCS projects that received subsidies pursuant to the law. As they helpfully note, each of the CCS projects in Mississippi, California, and Texas were beneficiaries of such subsidies, and are, therefore, inappropriate foundations for the Carbon Pollution Standard. The letter is available here.

Until I read the letter, I had been ignorant of this obscure provision of the 2005 Energy Policy Act. So, evidently, was EPA, which is quite rich.

Frankly, I’m impressed with these lawmakers. There’s a saying that Republicans are the stupid party. Not on this score. EPA’s Carbon Pollution Standard is the centerpiece of the Obama Administration’s climate agenda. EPA Administrator McCarthy, in a July speech, said that the Carbon Pollution Standard was the agency’s top priority, necessitating an “all hands on deck” approach.  And yet, despite this sense of urgency and a funneling of resources into the regulation, the agency stumbled into a tripwire set 8 years ago by four smart House Republicans. Bravo.

An old joke springs to mind.

Comedian: Go ahead, ask me, ‘What is the secret of great comedy?’

Audience member: What is the secret of. . .

Comedian: Timing!

Putting the kibosh on the “carbon pollution rule” would not have been nearly as funny had Upton, Whitfield, Barton and Scalise nipped this mischief in the bud when the EPA was only rumored to be proposing CCS as an “adequately demonstrated” basis for setting “carbon pollution” standards. Instead, the congressmen waited until the agency — and the Obama administration — inserted foot firmly in mouth. Bravo indeed! [click to continue…]

Post image for Social Cost of Carbon: Does EPA Rig the Game?

In a new report, Heritage Foundation analysts Kevin Dayaratna and David Kreutzer examine one of the three main computer models the EPA uses to calculate the social cost of carbon (SCC).

The SCC is an estimate of how much economic damage an incremental ton of carbon dioxide (CO2) emissions allegedly does over time periods as long as 300 years. The model examined by the Heritage analysts is called Dynamic Integrated Climate-Economy, or DICE. Dayaratna and Kreutzer find it to be “flawed beyond use for policymaking.” Fittingly, they title their report: Loaded DICE: An EPA Model Not Ready for the Big Game.

The SCC estimates generated by DICE “shift substantially” — that is, are much lower — when reasonable alternatives are substituted for just a few of the assumptions made by the EPA. Specifically:

  • Using a discount rate (a measure of the time value of money) mandated by the Office of Management and Budget (OMB) that the EPA omitted reduces the 2020 estimate of SCC by more than 80 percent;
  • An updated estimate of the equilibrium climate sensitivity distribution (ECS)—a measure of CO2’s temperature impact—reduces the 2020 estimate of SCC by more than 40 percent; and
  • With an updated ECS distribution, a time horizon up to 2150,* and with the omitted discount rate, the 2020 estimate of SCC falls by nearly 90 percent, from $37.79 to $4.03.

The two Heritage analysts also note that the DICE and similar models’ damage functions are inherently speculative. No one today can forecast what humanity’s technological capabilities will be 50, 100, or 150 years hence. Which means no one knows how humanity’s adaptive capabilities will develop in a warming world. So even if scientists could accurately forecast future warming, projections of future damages would still be guesswork.

Dayaratna and Kreutzer conclude: [click to continue…]