Bait-and-switch is one of the oldest tricks of deceptive advertising. The used-car dealer “baits” you onto the lot with an ad promising low interest payments on the car of your dreams. When you get there, the dealer regretfully informs you the car has already been sold. But, no, you haven’t wasted your time, because he’s got this other great car – the “switch” — which has so many superior features and it will only cost you a little more per month.

An even less ethical variant of this tactic is employed in politics. Party A in a negotiation gives an assurance or promise to obtain Party B’s support for a law or regulation. Party A then reneges on the deal once the policy is on the books. EPA’s recently proposed “Carbon Pollution Standard” Rule is a posterchild for this tactic.

EPA is proposing a carbon dioxide (CO2) “new source performance standard” (NSPS) for fossil-fuel power plants under section 111 of the Clean Air Act (CAA). EPA has developed NSPS for numerous industrial source categories such as municipal waste combustors, solid waste landfills, medical waste incinerators, cement plants, nitric oxide plants, copper smelters, steel plants, pulp mills, coal utility boilers, auto and truck surface coating operations, and natural gas turbines.

For each source category, the NSPS ”reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.”

Okay, what does this have to do with bait and switch?

In general, NSPS are less stringent than “best available control technology” (BACT) standards — the individually-tailored emission control requirements owners or operators must meet to obtain a CAA permit to build or modify a major emitting facility. NSPS establishes the minimum emission control standard or “floor” for determining a facility’s BACT requirements. Under CAA sec. 169(3), application of BACT may not result in emissions that exceed those allowed by the applicable NSPS. The point of BACT is to push individual sources to make deeper emission reductions than the category-wide performance standard requires. In EPA’s words:

The NSPS are established after long and careful consideration of a standard that can be reasonably achieved by new source anywhere in the nation. This means that even a very recent NSPS does not represent the best technology available; it instead represents the best technology available nationwide, regardless of climate, water availability, and many other highly variable case-specific factors. The NSPS is the least common denominator and must be met; there are no variances. The BACT requirement, on the other hand, is the greatest degree of emissions control that can be achieved at a specific source and accounts for site-specific variables on a case-by-case basis.

Since an applicable NSPS must always be met, it provides a legal “floor” for the BACT, which cannot be less stringent. A BACT determination should nearly always be more stringent than the NSPS because the NSPS establishes what every source can achieve, not the best that a source could do.

As EPA interprets the CAA, new and modified major emitting facilities became subject to BACT for CO2 on Jan. 2, 2011 — the day EPA’s motor vehicle greenhouse gas emission standards took effect, making CO2 a “regulated air pollutant.” A big concern of the electric power industry was whether EPA might define BACT so stringently that a coal-fired power plant seeking to build a new unit or modify an existing unit would have to switch from coal to natural gas. (Natural gas power plants emit only about half as much CO2 per megawatt hour as coal power plants do.)

There was much angst and speculation about this in 2009 and 2010 but no definitive statement from EPA until March 2011, when the agency published a guidance document for ‘stakeholders.’ The document states that BACT for CO2 will not require fuel switching, nor will EPA ”redefine the source” such that coal boilers are held to the same standard as gas turbines:

The CAA includes “clean fuels” in the definition of BACT. Thus, clean fuels which would reduce GHG emissions should be considered, but EPA has recognized that the initial list of control options for a BACT analysis does not need to include “clean fuel” options that would fundamentally redefine the source. Such options include those that would require a permit applicant to switch to a primary fuel type (i.e., coal, natural gas, or biomass) other than the type of fuel that an applicant proposes to use for its primary combustion process. For example, when an applicant proposes to construct a coal-fired steam electric generating unit, EPA continues to believe that permitting authorities can show in most cases that the option of using natural gas as a primary fuel would fundamentally redefine a coal-fired electric generating unit.

EPA reiterates this assurance in a Q&A document accompanying the guidance:

12. Does this guidance say that fuel switching (coal to natural gas) should be selected as BACT for a power plant?

• No.
• BACT should consider the most energy efficient design and control options for a proposed source.
• BACT should also include consideration of “clean fuels” that may produce fewer emissions but does not necessarily require a different type of fuel from the one proposed, particularly when it can be shown that using another type of fuel would be inconsistent with the fundamental purpose of the facility.

Yet despite EPA’s assurance that BACT, which usually is more stringent than NSPS, will not require fuel switching or redefine coal power plants into the same source category as natural gas power plants, EPA’s “carbon pollution standard” does exactly that.

Under the proposed standard, new fossil-fuel power plants may emit no more than 1,000 lbs of carbon dioxide (CO2) per megawatt hour. About 95% of all natural gas combined cycle power plants already meet the standard (p. 115). No existing coal power plants come close; even the most efficient, on average, emit 1,800 lbs CO2/MWh (p. 134). Because carbon capture and storage (CCS) is prohibitively expensive, raising the cost of a conventional coal plant by 80% (p. 124), the only feasible way for a new coal power plant to comply is to be something other than what it is — a natural gas power plant.

As noted previously, EPA is pretending that natural gas combined cycle — a type of power plant — is a “system of emission reduction” that has been “adequately demonstrated” for coal power plants. That is absurd.

To make the “carbon pollution standard” seem reasonable, EPA proposes to redefine source categories so that coal boilers and gas turbines are both equally “fossil-fuel electric generating units.” But redefining coal power plants is exactly what EPA said it would not do in the BACT guidance document.

As should go without saying, Congress never voted to ban new coal generation. Indeed, Congress declined to adopt similar CO2 performance standards for coal power plants when Senate leaders pulled the plug on cap-and-trade. Section 116 of the Waxman-Markey bill (the American Clean Energy and Security Act) would have established NSPS requiring new coal power plants to reduce CO2 emissions by 50% during 2009-2020 and 65% after 2020. Congress did not adopt this agenda because the public rejected it. Waxman-Markey became politically radioactive soon after it narrowly passed in the House. In the November 2010 elections, 29 Democrats who voted for Waxman-Markey got the boot.

Congressional efforts to rein in EPA — particularly Sen. Lisa Murkowski’s Congressional Review Act resolution of disapproval to overturn EPA’s Greenhouse Gas Endangerment Rule and Sen. James Inhofe’s Energy Tax Prevention Act – would have gained more traction had EPA fessed up in 2009, 2010, or even 2011 that, come 2012, it would promulgate CO2 performance standards that no commercially viable coal plant could meet.

It’s an old story, but one that can’t be told too often. EPA is legislating climate policy – implementing an agenda the people’s representatives have not approved and would reject if put to a vote.

Sen. James Inhofe (R-Okla.) has vowed to kill the “carbon pollution standard” via a Congressional Review Act resolution of disapproval (Greenwire, subscription required). For those of us who still respect the separation of powers, ’tis a consummation devoutly to be wished.

Barack Obama swept into the Presidency promising a new political order, one characterized by “transparency” and “openness.” Three years later, the President’s lofty campaign promises are belied by the Environmental Protection Agency’s record of suppression.

Federal agencies cannot issue regulations willy-nilly; rather, they are bound to rules stipulating administrative procedure, in order to ensure the voice of affected parties is heard. Obama’s EPA, however, evinces a troubling tendency to circumvent these procedural rules. Regulated entities are being subjected to controversial, onerous regimes, before they even have the opportunity to read the rules, much less voice an objection. The wayward Agency is exercising an unanswerable power, straight out of a Kafka novella.

Consider, for example, EPA’s Cross-State Air Pollution Rule (CSAPR) as it pertains to Texas.  In the August 2010 proposed CSAPR, the Lone Star State was found to be in compliance with the regulation’s particulate matter emissions limits. Without notice, in the July 2011 final CSAPR, EPA imposed on Texas the harshest particulate matter emissions limits of any State. The technology required by EPA’s final CSAPR requires three years to install, but EPA gave the State only 6 months to do so. Recently, the non-partisan operator of Texas’s power grid warned that the CSAPR could lead to blackouts.

Texas was left out of EPA’s deliberations for the CSAPR, but the State will have a voice before the judicial system. In late December, a federal district court in Washington, D.C. stayed implementation of the CSAPR, which was supposed to take effect on January 1, until the court decides on the merits of Texas’s allegations that EPA violated federal laws regarding proper administrative procedure.

The previous example is as blunt a violation of due process as one could imagine. Elsewhere, like in Appalachia, EPA has proven subtler. Mountaintop mining is sanctioned by the 1977 Surface Mining Control and Reclamation Act, and it essential for the competitiveness of Appalachia’s coal industry. Yet it is loathed by environmentalists, which is why EPA has had this industry in its cross-hairs since President Obama took office.

To that end, EPA alleges that West Virginia and Kentucky’s existing water quality standards are unacceptable because they insufficiently protect an insect (the mayfly) from surface coal mining operations. However, EPA already has approved these states’ Clean Water Act permitting regimes, and this complicates matters for the Agency. For environmental federalism conflicts such as this, the Clean Water Act stipulates a resolution process, one that allows states significant participation. EPA, however, didn’t want to delay its crackdown on mountaintop mining removal. Therefore, in April 2010, EPA issued new water quality standards that were officially “non-binding,” but which EPA nonetheless informed States to follow when it issues Clean Water Act permits. And if they do not, EPA has demonstrated that it will veto permits thus granted. The result is that West Virginia and Kentucky are beholden to a regulatory regime characterized by what Rep. Nick Rahall (D-West Virginia) describes as “do or dare permits”: Appalachian States must follow EPA’s “non-binding” guidance, or risk EPA’s veto.

While West Virginia and Kentucky have been shut out of EPA’s deliberations on new water quality standards, they will have their day in court. These States sued EPA, and this spring a federal district court in Washington, D.C. will decide on the merits of their allegations that EPA violated administrative procedure laws in its rush to halt mountaintop mining removal.

EPA is being similarly sneaky in its dealings with New Mexico on a visibility protection policy pursuant to the Clean Air Act. Instead of relying on “non-binding” guidance documents in order to suppress input, EPA is claiming that it has no choice but to ignore New Mexico, due to deadlines established by environmentalist special interest lawyers.

Here’s the background: Under the Regional Haze provision of the Clean Air Act, States are required to improve the view at federal National Parks and Wilderness Areas. On June 2, the New Mexico Environmental Improvement Board unanimously approved a Regional Haze plan that would meet the federal law and EPA’s own rules, at a cost of $34 million.

EPA, however, refused to even consider New Mexico’s visibility strategy. On August 5, the Agency imposed a Regional Haze plan that would cost New Mexico ratepayers $370 million–a nearly tenfold increase over those approved by New Mexico officials. EPA claimed that it did not have the time to consider the state’s plan, because it had to act before an August 22 deadline established by a consent decree with WildEarth Guardians, and environmental litigation organization. At best, EPA’s claim that it had no discretion is malarkey—it has plenty of legal latitude, and EPA’s claim to the contrary is absurd. At worst, this is an incidence of wink*wink* consent decrees, whereby EPA and environmentalist litigation outfits enact policy in the court-house, instead of having to deal with the rigors of proper administrative procedure.

In either case, the result was the same: EPA refused to consider New Mexico’s plan. The state may have been shut out by EPA, but it will be heard by a group of judges. New Mexico has a pending case against EPA in the 10^th federal Circuit Court of Appeals in Denver, Colorado.

For rule-of-law proponents like me, the silver lining is EPA likely will get spanked in the courts. Even so, the country loses, because the President’s campaign talk about transparency and openness has been exposed as mumbo-jumbo.

In a recent blog, I explained how the Environmental Protection Agency is hybridizing disparate provisions of the Clean Air Act in order to engineer greater regulatory authority for itself. EPA is using these “Franken-regs” to trump the states’ rightful authority on visibility improvement policy and impose billions of dollars of emissions controls for benefits that are literally invisible.

Yesterday, for example, EPA relied on this hybrid authority to impose a federal regulatory plan on Oklahoma over the Sooner State’s objection. (A copy of the federal register notice is available here). In February, Oklahoma submitted a visibility improvement plan that would require fuel switching from coal to natural gas at six power plants by 2022, but EPA rejected this approach in March. In its stead, EPA proposed a federal plan that would require almost $2 billion in emissions controls, in addition to fuel switching. EPA’s proposed plan was finalized yesterday.

Although the Clean Air Act clearly gives states primacy over EPA in decision-making for visibility improvement, Oklahoma is one of three states subject to a federal plan. In August, EPA imposed a plan on New Mexico that costs $740 million more than the state’s plan. In September, EPA proposed a federal plan for North Dakota. All three states are challenging EPA in federal court.

On October 17, EPA proposed to disapprove Arkansas’s visibility improvement plan, using the same dubious legal logic that the Agency employed to run roughshod over New Mexico, North Dakota, and Oklahoma. Earlier this week, I submitted comments to the EPA on its proposal. They are available here. They detail the regulatory inconsistencies of EPA’s regulatory regime for visibility improvement. In a nutshell, EPA is evaluating state plans by different criteria, without explaining why it is doing so. Under administrative procedure law, EPA must respond to each unique comment. I look forward to reading the tortuous reasoning the Agency will use to justify its actions.

This blog has kept a close eye on the Environmental Protection Agency’s aggressive expansion of its own authority (see here and here). The latest such power grab is taking place in the western United States, where the EPA is hybridizing disparate provisions of the Clean Air Act in order to engineer greater regulatory authority for itself. These Franken-regs are being used to trump the states’ rightful authority on visibility-improvement policy and impose billions of dollars of emissions controls for benefits that are literally invisible.

In 1977 and 1990, Congress passed amendments to the Clean Air Act providing that states work together to improve visibility at federal National Parks and Wilderness Areas. Together, these amendments are known as the Regional Haze provision. Notably, this provision accords states a uniquely high degree of control relative to the EPA. According to the EPA’s 2005 Regional Haze implementation guidelines, “[T]he [Clean Air] Act and legislative history indicate that Congress evinced a special concern with insuring that States would be the decision-makers” on visibility-improvement policy making. The courts, too, have interpreted the Clean Air Act such that states have primacy on Regional Haze decision making. In the seminal case American Corn Growers v. EPA (2001), which set boundaries between the states and the EPA on Regional Haze policy, the D.C. Circuit Court remanded the EPA’s 1999 Regional Haze implementation guidelines for encroaching on states’ authority.

The important take-aways about Regional Haze are that (1) it’s an aesthetic regulation, and not a public health regulation and (2) it accords states a unique degree of authority. Despite the Congress’s “special concern” that states take the lead on Regional Haze, the EPA in 2011 has proposed to impose a federal plan in North Dakota and Oklahoma, and it has imposed a plan in New Mexico.

• Oklahoma proposed to comply with the Regional Haze rule by fuel switching to natural gas at 6 coal-fired power plants by 2026. In March, the EPA rejected the state’s plan, and issued a federal plan requiring that Oklahoma install sulfur dioxide “scrubbers” that cost $1.8 billion. State officials and the affected utilities claim that the EPA’s preferred controls would increase electricity bills 15% to 20%.

• New Mexico proposed emissions controls that met EPA’s own recommended guidelines for visibility improvement, but the EPA nonetheless refused to even consider the state’s Regional Haze plan.  In August, the Agency imposed a federal plan that cost $700 million more.

• In September, the EPA rejected North Dakota’s Regional Haze submission, and proposed in its stead a plan that is $700 million more expensive. According to peer-reviewed research, the Agency’s preferred plan would affect visibility at the Theodore Roosevelt National Park by such an insignificant amount that only 40 percent of people would be able to perceive the “improvement.”

In light of the fact that the Congress structured the Regional Haze program such that state decision-making is paramount, it’s uncertain whether the EPA has the authority to run roughshod over these states. Indeed, Oklahoma and New Mexico already have filed suit, alleging that the EPA usurped their rightful authority. North Dakota undoubtedly will follow suit when the EPA finalizes the state’s federal implementation plan, as soon as this month. As such, the EPA is going to have to answer for its actions in court.

Presumably in order to preemptively bolster its case against these lawsuits, the EPA attempted to beef up its regulatory power, by claiming that it has an additional, independent source of authority to improve visibility under the Clean Air Act. The first, Regional Haze, is described above. The second is as unprecedented as it is illogical: The Agency claims that the revision of two health-based air quality standards fourteen years ago somehow gives it the authority to impose a federal implementation program for visibility improvement in New Mexico, North Dakota, and Oklahoma.

Here’s what the EPA is arguing. Under the “Good Neighbor” provision of the Clean Air Act, which was added by the Congress in 1990, states must ensure that emissions from upwind states do not impact compliance with federal air quality regulations in downwind states. In 1997, the EPA tightened national ambient air standards for two criteria pollutants–particulate matter and ozone. Accordingly, the Good Neighbor provision requires that states must ensure that their emissions of these two pollutants do not interfere with compliance in downwind states of the 1997 revisions.

Simply put, the EPA updated its emissions limits for two pollutants, so the Good Neighbor provision logically pertains to those two pollutants (particulate matter and ozone). Now, however, the EPA claims that the 1997 revisions to health based standards for particulate matter and ozone requires the agency to ensure that emissions of other regulated pollutants from upwind states do not interfere with downwind states, in addition to particulate matter and ozone. Specifically, the Agency alleges that the Regional Haze plans submitted by New Mexico, North Dakota, and Oklahoma are insufficient to ensure that these states do not adversely affect visibility protection in downwind states.

This is a dubious legal reasoning, because the Regional Haze provision explicitly mandates that states control emissions of haze-causing pollutants that significantly diminish visibility in all federal National Parks and Wilderness Areas, not just ones within their own borders. That is, the Regional Haze provision effectively requires states to meet the Good Neighbor provision. It makes no sense for Congress to create a program requiring states to work together to reduce visibility impairment in the Regional Haze provision, and then to also create a vague, amorphous, ill-defined separate source of authority with one phrase in the Good Neighbor provision, an altogether different section of the law.

More importantly, the EPA has yet to fully approve a single Regional Haze plan. How can the EPA know whether one state is adversely affecting other states’ visibility improvement programs that do not yet exist? Indeed, this is the exact reasoning used by the EPA in 2006, when it published implementation rules for the Good Neighbor provision. In the rules, the EPA said that, “is not possible at this time to assess whether there is any interference with measures in…another State designed to ‘protect visibility’…until regional haze [plans] are submitted and approved.”

New Mexico and Oklahoma already are challenging the EPA’s Good Neighbor Provision power grab in court; North Dakota soon will follow suit. I suspect that they will win. However, if they don’t, and the courts uphold the EPA’s expansive interpretation of the Good Neighbor provision, then the balance of power in America’s system of environmental federalism will have been tipped significantly away from the states and to the federal government. For starters, the EPA would gain a powerful new authority to trump the states’ rightful authority on visibility improvement. But it would affect other air quality regimes, too. On September 15, the EPA used its new interpretation of the Good Neighbor provision to partly justify its plan to impose greenhouse gas regulations for large stationary sources in Texas, over the objection of state officials.

Earlier this week, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) sent letters to three Obama administration officials regarding the veracity of their testimonies at an October 12 subcommittee hearing on the administration’s fuel economy policies.*

Issa’s letters — to National Highway Traffic Safety Administration (NHTSA) Administrator David Strickland, EPA Assistant Administrator for Air and Radiation Gina McCarthy, and EPA Director of Transportation and Air Quality Margo Oge – are identical in content.

The gist of the letters is that each administration witness denied under oath that EPA and California’s greenhouse gas emission standards are “related to” fuel economy standards, whereas in fact, according to Issa, ”regulating greenhouse gases and regulating fuel economy is a distinction without a difference.”

This matters for three inter-related reasons: (1) EPA is currently regulating fuel economy by setting motor vehicle greenhouse gas emission standards even though the Clean Air Act provides no authority for fuel economy regulation; (2) EPA in June 2009 granted California a waiver to establish motor vehicle greenhouse gas emission standards despite the Energy Policy Conservation Act’s (EPCA’s) express prohibition (U.S.C. 49 § 32919) of state laws or regulations “related to” fuel economy; and (3) the California waiver, by threatening to create a market-balkanizing “regulatory patchwork,” enabled the Obama administration to extort the auto industry’s support for EPA’s new career as greenhouse gas/fuel economy regulator in return for California and other states’ agreement to deem compliance with EPA’s greenhouse gas/fuel economy standards as compliance with their own.

As I will demonstrate below, greenhouse gas emission standards are highly “related to” fuel economy standards, and the administration witnesses cannot possibly be ignorant of the relationship. Do their denials of plain fact rise to the level of perjury?

In his letters to the Obama officials, Issa excerpts pertinent exchanges between them and Members of the Subcommittee:

Chairman Jordan: I guess maybe here’s the question — I’m not a legal scholar on this — but it seems that when you read the statute [EPCA], it talks about a regulation related to fuel economy standards, and greenhouse gases are certainly related to fuel economy standards, is that right?

Administrator McCarthy: They are closely aligned but they are different, Mr. Chairman.

*  *  *

Vice Chair Buerkle: I just have a quick question for the three of you. It’s a yes or no question, if you wouldn’t mind. Are the greenhouse gas rules — either EPA’s or the California rules — are they they related to fuel economy? Mr. Strickland, yes or no?

Administrator Strickland: No, they regulate greenhouse gas emissions.

Administrator McCarthy: They regulate greenhouse gas emissions.

Ms. Oge: They regulate greenhouse gas emissions.

Vice Chair Buerkle: So they’re not related to fuel economy, under oath.

Administrator Strickland: No. They’re greenhouse gas emission regulations.

Administrator McCarthy: We do not regulate fuel economy standards.

Vice Chair Buerkle: And all three of you agree with that?

Ms. Oge: Yes.

Administrator Strickland: Yes.

When asked if EPA and California’s standards are “related to” fuel economy standards, the administration witnesses offer a tautology: Greenhouse gas emission standards regulate greenhouse gas emissions. It is as if John Smith were asked whether he is related to Joe Smith and replied, “I am not my brother, I am me.”

Motor vehicle greenhouse gas emission standards implicitly – and inescapably – regulate fuel economy. EPA and NHTSA confirm this – albeit not in so many words – in their joint May 2010 greenhouse gas/fuel economy Tailpipe Rule.

As the agencies acknowledge (Tailpipe Rule, pp. 25424, 25327), no commercially proven technologies exist to filter out or capture carbon dioxide (CO2) emissions from fossil fuel-powered vehicles. Consequently, the only way to decrease grams of CO2 per mile is to decrease fuel consumption per mile, i.e., increase fuel economy. Carbon dioxide constitutes 94.9% of vehicular greenhouse gas emissions, and “there is a single pool of technologies . . . that reduce fuel consumption and thereby reduce CO2 emissions as well.”

That EPA and CARB are regulating fuel economy is also evident from the administration’s current plan to increase average fuel economy to 54.5 miles per gallon by 2025. The plan derives from EPA, NHTSA, and the California Air Resources Board’s (CARB’s) Interim Joint Technical Assessment Report, which proposed a range of fuel economy targets from 47 mpg to 62 mpg. The mpg targets are determined by – are simple reciprocals of – CO2 reduction scenarios:

Four scenarios of future stringency are analyzed for model years 2020 and 2025, starting with a 250 grams/mile estimated fleet-wide level in MY 2016 and lowering CO2 scenario targets at the rate of 3% per year, 4% per year, 5% per year, and 6% per year [p. viii].

The 54.5 mpg target represents a negotiated compromise between the 4% per year (51 mpg) and 5% per year (56 mpg) CO2 reduction scenarios (p. ix).

That the California greenhouse gas motor vehicle emissions law, AB 1493, is highly “related to” fuel economy is obvious from CARB’s 2004 Staff Report presenting the agency’s “initial statement of reasons” for its regulatory program.  The Staff Report’s recommended options for reducing greenhouse gas emissions (Table 5.2-3) are identical in substance, and often in detail, to fuel saving options presented in the National Research Council’s (NRC’s) 2002 fuel economy report (Tables 3-1, 3-2). A few options in the CARB list are not included in the NRC list. In each case, however, the CARB option is a fuel-saving technology, not an emission-control technology.

In addition, the text of AB 1493 clearly implies that CARB is to regulate fuel economy. AB 1493 requires CARB to achieve “maximum feasible” greenhouse gas reductions that are also “cost-effective,” defined as “Economical to an owner or operator of a vehicle, taking into account the full life-cycle costs of the vehicle.”  CARB rightly interprets this to mean that the reduction in “operating expenses” over the average life of the vehicle (assumed to be 16 years) must exceed the “expected increases in vehicle cost [purchase price] resulting from the technology improvements needed to meet the standards in the proposed regulation” (Staff Report, p. 148). Virtually all of the “operating expenses” to be reduced are expenditures for fuel. The CARB program cannot be “cost-effective” unless CARB regulates fuel economy.

Strickland, McCarthy, and Oge could not acknowledge what they must know to be true because otherwise they would have to admit:

1. EPA is regulating fuel economy, which is outside the scope of its delegated authority; and
2. CARB is regulating fuel economy, which is prohibited by EPCA.

Since EPA contends that its greenhouse gas/fuel economy motor vehicle standards compel the agency to regulate greenhouse gas emissions from large stationary sources, the administration witnesses also could not acknowledge the obvious without admitting that EPA’s entire greenhouse gas regulatory agenda rests on shaky legal grounds.

* I testified at the Subcommittee’s October 12 hearing on the first, private-sector witness panel, which also included Jeremy Anwyl (Edmunds.Com), Roland Hwang (Natural Resources Defense Council), and Scott Grenerth (Independent Trucker). The three Obama officials testified on the second, public-sector witness panel.   

Pretty darn near the height of absurdity. That’s not just my opinion. It’s a key premise of EPA’s “Tailoring Rule,” which exempts small greenhouse gas (GHG) emitters from regulation under the Clean Air Act’s (CAA) Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program.

As EPA explains in a brief filed last week with the D.C. Circuit Court of Appeals, once the agency’s GHG emission standards for new motor vehicles took effect on January 2, 2011, “major stationary sources” of GHG emissions became “automatically subject” to PSD and Title V permitting requirements. A facility with a potential to emit 250 tons per year (tpy) of a regulated air pollutant is a “major source” under PSD. A facility with a potential to emit 100 tpy is a “major source” under Title V. Whereas only large industrial facilities emit 100-250 tpy of smog- and soot-forming air pollutants, literally millions of small entities — big box stores, apartment and office buildings, hospitals, schools, large houses of worship, Dunkin’ Donut shops – use enough natural gas or oil for heating or cooking to emit 100-250 tpy of carbon dioxide (CO2).

EPA and its state counterparts lack the administrative resources to process millions of PSD and Title V permit applications. Thus, applying the CAA as written to GHGs leads to “absurd results” — an ever-growing backlog of permit applications that would cripple both environmental enforcement and economic development. Massive increases in the budgets and staff of environmental agencies would be required to handle the mountains of paperwork. From EPA’s brief:

EPA studied and considered the breadth and depth of the projected administrative burdens in the Tailoring Rule. There, EPA explained that immediately applying the literal PSD statutory threshold of 100/250 tpy [tons per year] to greenhouse gas emissions, when coupled with the “any increase” trigger for modifications under 42 U.S.C. §§7479, 7411(a)(4), would result in annual PSD permit applications submitted to State and local permitting agencies to increase nationwide from 280 to over 81,000 per year, a 300-fold increase. 75 Fed. Reg. at 31,535-40, 31,554. Following a comprehensive analysis, EPA estimated that these additional PSD permit applications would require State permitting authorities to add 10,000 full-time employees and incur additional costs of $1.5 billion per year just to process these applications, a 130-fold increase in the costs to States of administering the PSD program. Id. at 31,539/3. Sources needing operating permits would jump from 14,700 to 6.1 million as a result of application of Title V to greenhouse gases, a 400-fold increase. When EPA [in an earlier asssessment] assumed a mere 40-fold increase in applications – one-tenth of the actual increase – and no increase in employees to process them, the processing time for Title V permits would jump from 6-10 months to ten years. Hiring the 230,000 full-time employees necessary to produce the 1.4 billion work hours required to address the actual increase in permitting functions would result in an increase in Title V administration costs of $21 billion per year. Id. at 31,535-40, 31,577 [emphasis added].

For perspective, EPA’s budget request for FY 2012 is $8.973 billion. Hiring the 230,000 bureaucrats needed to process Title V applications from GHG emitters under the statutory definition of “major source” would cost more than twice as much as EPA’s total budget.

As expected, EPA fails to draw the obvious conclusion from its own analysis, namely: Regulating GHGs via the CAA leads to absurd results because Congress never designed or intended for the Act to regulate GHGs.

EPA seeks to avoid absurd results — and an angry, political backlash — by “tailoring” the CAA’s clear, unambiguous, numerical definitions of “major source” to exempt all but the largest GHG emitters from PSD and Title V. But “tailoring” is just bureaucrat-speak for amending. Under the U.S. Constitution, an administrative agency has no power to amend statutes. Certainly the CAA nowhere authorizes EPA to revise statutory provisions to avoid administrative debacles of its own making. The Tailoring Rule just substitutes one absurdity for another.

EPA claims it had no choice but to regulate GHGs once it made an endangerment finding, because the Supreme Court in Massachusetts v. EPA ruled that GHGs “fit well within the Clean Air Act’s capacious definition of air pollutant.” True, but to reach that conclusion, the Court’s 5-4 majority had to play fast and loose with the statutory definition of “air pollutant” in CAA Sec. 302(g). As I explain elsewhere:

The Court argued that, under CAA Section 302(g), CO2 and other greenhouse gases are “air pollutants” because they are “emitted into” or “otherwise enter” the air. The CAA exists, of course, to control and prevent “air pollution.” Therefore, the Court concluded, EPA has authority to regulate such substances if the agency determines that greenhouse gases endanger public health or welfare.

But 302(g) does not define “air pollutant” as anything “emitted.” It says that “air pollution agents” – substances that damage air quality – are “air pollutants” when emitted. The Court decoupled the term “air pollutant” from its plain English meaning – as if any “emitted” substance is an “air pollutant” whether or not it actually damages air quality. Carbon dioxide – like water vapor, the atmosphere’s main greenhouse gas – is a necessary constituent of clean air.

As Justice Antonin Scalia quipped in dissent, as defined by the Court, “everything airborne, from Frisbees to flatulence, qualifies as an ‘air pollutant.’” Indeed, even absolutely clean, pollution-free air qualifies as an “air pollutant” the moment it moves or circulates, which is plainly absurd.

Section 302(g) is only two sentences long. The Court not only ignored a key term (“air pollution agent”) of the first sentence, it also ignored the entire second sentence, which holds that a “precursor” of a previously designated air pollutant is also an “air pollutant.” Congress would not have needed to say that if, as the Court opined, anything emitted per se is an “air pollutant,” because precursors form air pollutants only by being emitted.

Courts are not supposed to assume that Congress pads statutes with surplus verbiage. For a court to ignore a key term and an entire sentence of a two-sentence definition, in a case where the provision’s meaning is critical to the outcome, is not kosher. The entire greenhouse of cards EPA is now putting in place, with all its enormous economic and political ramifications, rests on the Court’s tortured reading of the CAA definition of “air pollutant.”

In addition, the Court would have been less likely to rule that GHGs “fit well within the Clean Air Act’s capacious definition of air pollutant” if counsel for EPA had made clear that such a ruling would set the stage for “absurd results,” and that EPA would have to play lawmaker and amend the CAA to avoid an administrative meltdown. However, not once in the four years when Mass. v. EPA was litigated before the D.C. Circuit Court of Appeals and the U.S. Supreme Court did counsel for EPA mention these ramifications.

Nor did EPA’s counsel make the fundamental point that EPA could not issue an endangerment rule without eventually regulating GHGs from numerous categories of mobile and stationary sources under the CAA as a whole, effectively ‘legislating’ climate policy for the nation. That is obviously not an authority Congress meant to confer on EPA when it enacted the CAA in 1970.

Indeed, even after almost two decades of global warming advocacy, if Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), instead of introducing a cap-and-trade bill, had introduced legislation authorizing EPA to regulate GHGs via the CAA as it sees fit – i.e. do exactly what the agency is doing now — the bill would have been dead on arrival. How absurd, then, to suppose that Congress authorized EPA to legislate climate policy in 1970, years before global warming became a policy issue!

Why did EPA’s counsel pull its punches in Mass. v. EPA? Not being privy to the inter-agency discussions that shaped the Justice Department’s brief, we can only speculate. This much however is clear: By losing the case, EPA gained the truly awesome, economy-restructuring power to regulate CO2, the most ubiquitous byproduct of industrial civilization.

* The Institute for Energy Research posted an excellent commentary on EPA’s brief last Friday. It is available here.

The 2012 presidential election is starting to bend some of the Obama Administration’s environmental and energy policies.  I have noted previously that the White House realizes that gas prices are a huge threat to President Barack Obama’s re-election.  Consequently, the President is trying to shift the blame to oil companies and speculators while at the same time talking up what his Administration is doing to increase domestic oil production.  The reality, of course, is that the Obama Administration has moved across the board to decrease oil production in federal lands and offshore areas.

Another sign of the Administration’s focus on the President’s re-election is that the Environmental Protection Agency has suddenly started paying attention to the concerns of industry.  The timetables for new regulations of coal ash disposal and of surface coal mining in Appalachia have been extended.  EPA announced last week that it was reconsidering, but not delaying, some parts of its new Clean Air Act rule for cement plants.  This week EPA suspended indefinitely a similar rule for industrial boilers that it had promulgated in February.  EPA said that it will conduct more analyses and re-open the public comment period for the boiler rule.

EPA is also considering acceding to requests from Congress and electric utilities to extend the public comment period for its proposed Clean Air Act rule for coal-fired power plants. A good excuse for extending the comment period is that a simple mathematical error in EPA’s calculations has been pointed out by the Utility Air Regulatory Group, a utility industry coalition.

The boiler MACT (which stands for Maximum Achievable Control Technology), cement MACT, and utility MACT rules would limit air emissions of mercury and approximately 70 other metals and other substances.  The delays in finalizing and implementing these three rules may postpone the considerable economic damage that each of them will do until after the election.  Environmental pressure groups are naturally not happy with anything that delays shutting down the U. S. economy, but there are rumors that they have been told by the White House to shut up until after the election.

The latest alarmist talking point is that “global warming will cause asthma in children.” To wit,  the Massachusetts League of Women Voters is running sleazy advertisements that essentially equate baby-abuse with Senator Scott Brown’s vote for excellent legislation that would strip the Environmental Protection Agency of the authority to regulate greenhouse gases. The purported link between baby-abuse and global warming is increased asthma.

It’s not just lobbyists. At a recent House Energy and Commerce Committee hearing on global warming policy, Democrats on the panel—in particular, Reps. Henry Waxman and Jay Inslee—made much hay about the supposed increase in asthma suffering in a warmer world.

The media, too, is parroting this talking point. Here’s Brad Johnson at the Wonk Room:

Sen. Claire McCaskill (D-MO), after a recent vote to protect coal polluters at the expense of children’s health, is now attacking the League of Women Voters. The 91-year-old good-government organization is running television spots that hold McCaskill and Sen. Scott Brown (R-MA) accountable for voting to block enforcement of Clean Air Act rules that limit greenhouse pollution, threatening the hundreds of thousands of children with asthma in their states.

Clearly, this claim that warmer temperatures will increase asthma is reverberating throughout the vast green echo chamber. But is it true? The claim is predicated on the hypothesis that global warming will cause longer growing seasons, which will result in the release of more pollen, an asthma trigger. OK…that makes some intuitive sense, and while there is peer review literature suggesting a link between asthma and pollen, there is also literature contesting such a link (“No association was found between visits for asthma attacks and airborne pollen levels,” Association of severe asthma attacks with weather, pollen, and air pollutants,” 0 V J Rossi, V L Kinnula, J Tienari, E Huhti, Thorax 1993; 48:244-248).

As I understand it, and as is intimated by the conflicting studies noted above, asthma is poorly understood. There does, however, appear to be agreement in the scientific community that asthma has many potential causes, including pollen, dust mites, cigarette smoke, and…cold weather. According to the peer reviewed literature, “A decrease in air temperature is an aggravating factor for asthmatic symptoms, regardless of the geo-climatic areas under study” (c.f., “Effects of Climate Change on Environmental Factors in Respiratory Allergic Diseases,” G. D’Amato and L. Cecchi, Clinical and Experimental Allergy, 38, 1264-1274). Cold weather triggers asthma directly, and also indirectly, by making people sick with cold and flu, which is another major asthma trigger (“Upper respiratory infections play a key role in exacerbation of asthma, contributing to the typical increase of hospitalizations and medical calls in cold months and during spring,” ibid).

Using a public health/medicine database search (EBESCO’s MEDLINE), I found peer reviewed research suggesting a link between global warming and asthma exacerbation due to increased pollen exposure caused by longer growing seasons, but I couldn’t find any study that also addressed the fact that global warming logically would mitigate asthma suffering caused by the cold. After all, if asthma hospitalizations peak during cold months, then doesn’t it stand to reason that global warming, which disproportionately affects winters, would decrease the number of these asthma attacks? If I’m wrong, and a study has considered the potential benefits of global warming for asthmatics, please send it my way: wyeatman@cei.org. Until I see otherwise, it seems to me that the green echo chamber’s alarmist asthma claims are based on only half the picture.

In any case, Americans shouldn’t be concerned. According to a recent peer reviewed article in the pre-eminent scholarly journal Science, global warming isn’t happening in the U.S.

Three of the Congress’s most influential energy policymakers this week “urged” the Environmental Protection Agency to delay an ultra-costly regulation targeted at coal-fired power plants, the source of 50 percent of America’s electricity generation.  For the sake of keeping the lights on, all Americans should hope the Obama administration heeds these Congressmen’s request.

Senate Environment and Public Works Ranking Member James Inhofe (R-OK), House Energy and Commerce Chair Fred Upton (R-MI), and House Energy and Power Subcommittee Chair Ed Whitfield (R-KY) yesterday sent a letter to Environmental Protection Agency Administrator Lisa Jackson demanding a longer comment period for a proposed regulation known as the Utility HAP MACT

[The HAP stands for “Hazardous Air Pollutant,” and the MACT stands for "Maximum Achievable Control Technology"; to learn what these terms entail, read this summary of the regulation, Primer: EPA’s Power Plant MACT for Hazardous Air Pollutants.]

The EPA issued the Utility HAP MACT in mid-March, and it gave the public 60 days to comment. The Congressmen “urge the agency [to] extend the comment period to a minimum of 120 days to allow adequate time for stakeholders to assess and comment on the proposal.”

The extended comment period is well warranted. For starters, the EPA included a number of “pollutants” in the proposed regulation that shouldn’t be there. The EPA’s authority to regulate hazardous air pollutants from power plants is derivative of a study on the public health effect of mercury emissions. The EPA’s proposed regulation, however, would regulate acid gases, non-mercury metals, and organic air toxins, in addition to mercury. Yet the EPA’s evidence only pertains to mercury. The EPA’s authority to regulate these non-mercury emissions, despite their not having been a part of the aforementioned study, will be challenged, and the DC Circuit Court ultimately will decide.

Why would the EPA include these non-mercury emissions into its proposed regulation? My guess is that the agency wanted to leave no stone unturned in its war on domestic coal demand. Thanks to an emerging technology known as “sorbent injection,” removing mercury from post-combustion emissions could be achieved at many power plants without having to install flue gas desulphurization equipment, a.k.a. “scrubbers,” which are far more expensive, and which had been the primary method of mercury control. But the EPA wants all power plants to install these “scrubbers.” Consider the title of slide 8 of this EPA presentation on the proposed Utility HAP MACT rule, “Many Exiting Coal Units Lack Advanced Controls.” The only way to ensure that ALL plants have to install expensive “scrubbers” was to include non-mercury “pollutants” into the regulation.

As Inside the EPA reported on March 18,

Despite the focus on mercury emissions, the major upcoming fight over the rule could center on the proposed limits for emissions of other hazardous air pollutants (HAPs) including hydrogen chloride (HCl). EPA is proposing to set a “conventional” MACT limit for HCl that will act as a surrogate for limiting acid gases.

The HCl limit could set such strict limits on acid gases that even the smallest coal-fired power plants with the lowest emissions levels might have to install expensive “scrubber” technology to cut their emissions, an industry source has said, boosting concerns from mining and other industries about the rule’s potential costs…

…The National Mining Association (NMA) is warning that the HCl limit has the biggest potential for opposition from industry because it could require almost every coal-fired power plant in the country to invest in expensive scrubbers to reduce acid gas emissions.

The EPA’s Utility MACT overreach engenders serious reliability concerns. Many utilities will find it cheaper to shutter older, smaller units, rather than to install “scrubbers.” According to a study by Bernstein & Associates, mandating scrubbers, which is essentially what the EPA proposes, would result in the premature closure of almost 33,000 megawatts of coal fired power capacity. Moreover, most of that capacity is located east of the Mississippi, and this geographical concentration accentuates the regional threat to grid reliability. To put it another way, if you live in the Ohio Valley, you should be very concerned.

Then there’s the cost. “Scrubbers” entail huge capital expenditures, usually $100 million to $200 million per power plant. The EPA concedes that its proposed Utility HAP MACT regulation would cost $10 billion a year by 2015, making it one of the most expensive regulations, ever. This is likely a low ball. According to the Electric Reliability Coordinating Council, the price tag is as much as $100 billion a year.

Environmentalist lobbying outfits run some of the sleaziest political attack ads in the business. Their stuff would make Lee Atwater grin. My colleague Marlo Lewis wrote an excellent, extensive analysis of one such sleazy ad, from the folks at Move On. Another colleague, Chris Horner, caught Greenpeace apparatchiks rummaging through his garbage, no doubt looking for attack fodder.

Interestingly, industry refuses to defend itself from these black arts PR tactics. “Big Oil,” for example, runs silly ads denigrating its core business, like BP’s “Beyond Petroleum” campaign and Chevron’s “I will use less energy” commercials. Then there’s “Big Gas,” which promotes itself by talking about “Dirty Coal.” (Sigh.)

But that’s a separate issue. This post is about how the greens’ sleaze tactics are backfiring in Massachusetts. In that State, the League of Women Voters is running ugly advertisements that essentially equate baby-abuse with Senator Scott Brown’s vote for excellent legislation that would strip the Environmental Protection Agency of the authority to regulate greenhouse gases. Unfortunately, there’s nothing new about this zero class, wrongheaded attack analogy. Move On made the same insinuation in a similar, recent advertisement.

A cursory internet search suggests that these advertisements are dishonest. The League of Women Voters/Move On’s accusation is based on a supposed link between increased temperatures and asthma attacks. I googled “asthma+attacks+U.S.+peak+months” and, at the top of my search results, was this 2008 report from the Minnesota Department of Health, from which the first sentence reads,

“In Minnesota, asthma hospitalization rates follow seasonal patterns. The greatest number of hospitalizations is seen in the fall months, usually September, with a smaller peak in the spring. The lowest rates are generally seen in July.”

Maybe Minnesotans are not representative of American asthma patients, but if they are, then this whole warming-asthma link seems dubious to this non-scientist.

Sen. Scott Brown, who deserves kudos for his Senate vote to rein in the EPA’s power grab, decided to make an issue of these unfounded, underhanded attacks. He wrote an oped to defend himself. Regarding his Senate vote, he correctly noted,

“Burdening our businesses with even more bureaucracy will kill jobs, and that is the last thing our economy can afford right now when we are barely starting to recover.”

For a detailed discussion of why Sen. Brown is right, click here. As for the League of Women Voter’s tactics, Sen. Brown wrote,

“By misrepresenting one of my many votes and running a shameful attack ad, the LWV has put its reputation at risk. It has gone into the gutter and become part of the negative politics that voters have rightly rejected.”

Sen. Brown is a politician, so his decision to politicize the League of Women Voters’s sleazeball ads was politically based, likely backed by polling data. This apparent blowback against the League of Women Voters is the subject of a Boston Globe column today, by Joan Vennochi. Here’s the gist,

“But the anti-Brown attack ad launched recently by the League of Women Voters isn’t going to help. It may thrill the liberal base, but it also threatens to chill the independent swing vote that both a Republican and a Democratic candidate need to win in Massachusetts.

Why is Brown drawing attention to the League’s ad a full 18 months before election day? Not because it hurts him, but because it helps him. It reminds people of the unflattering “League of Women Vultures’’ moniker that detractors like to use to describe the organization. And, its depiction of a coughing, rasping child who is suffering because of Brown’s vote against air pollution standards illustrates the same old stereotypical scare tactics that turn off voters of all ideological persuasions.”

Hear, Hear!