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.

Yesterday, the House Energy and Commerce Committee approved H.R. 910, the Energy Tax Prevention Act, as amended, by 34-19. The bill would stop EPA from ’legislating’ climate policy through the Clean Air Act. All 31 Republicans and three Democrats (Mike Ross of Arkansas, Jim Matheson of Utah, and John Barrow of Georgia) voted for the bill.

Opponents introduced several amendments, all of which were defeated.

Ranking Member Henry Waxman (D-Calif.) offered an amendment stating that Congress accepts EPA’s finding that “climate change is unequivocal.” Rep. Diana DeGett (D-Colo.) offered an amendment stating that Congress accepts as “compelling” the scientific evidence that man-made greenhouse gas emissions are the “root cause” of climate change. Rep. Jay Inslee (D-Wash.) offered an amendment stating that Congress accepts EPA’s finding that greenhouse gas emissions endanger public health and welfare. Rep. Bobby Rush (D-Ill.) offered an amendment limiting H.R. 910′s applicability until the Secretary of Defense certifies that climate change does not threaten U.S. national security interests. Rep. Ed Markey (D-Mass.) offered an amendment allowing EPA to issue greenhouse gas regulations that reduce U.S. oil consumption. Rep. Lois Capps (D-Calif.) offered an amendment limiting H.R. 910′s applicability until the Centers for Disease Control certify that climate change is not a public health threat. Rep.  Inslee also offered an amendment limiting H.R. 910′s applicability until the National Academy of Sciences certifies the bill would not increase the incidence of asthma in children.

These amendments had no chance of passing, but that was not their purpose. The objective, rather, was to enable opponents to claim later, when the full House debates the bill, that a vote for H.R. 910 is a vote against science, public health, national security, energy security, and children with asthma. This is arrant nonsense, as I will explain below.

Markey’s oil demand reduction amendment was perhaps the cleverest. After all, most Republicans are as alarmist about U.S. dependence on foreign oil as are most Democrats. All 31 Republicans voted against Markey’s amendment, but they had trouble explaining why.

Here’s why Markey’s amendment deserved defeat. Congress gave the National Highway Traffic Safety Administration (NHTSA), not EPA, authority to set fuel economy standards for new motor vehicles. Moreover, Congress gave NHTSA that authority under the 1975 Energy Policy and Conservation Act (EPCA) and 2007 Energy Independence and Security Act (EISA). The Clean Air Act provides no authority to any agency to set fuel economy standards.

Yet EPA is effectively setting fuel economy standards by establishing greenhouse gas emission standards for new cars and trucks.  As EPA acknowledges, 94-95% of motor vehicle greenhouse gas emissions are carbon dioxide from motor fuel combustion. And as both EPA and NHTSA acknowledge, “there is a single pool of technologies for addressing these twin problems [climate change, oil dependence], i.e. those that reduce fuel consumption and thereby reduce CO2 emissions as well” (p. 25327).

In short, by setting greenhouse gas emission standards, EPA has hijacked fuel economy regulation. EPCA authorizes EPA to monitor automakers’ compliance with federal fuel economy standards, but it gives EPA no power to set those standards.

The Markey amendment would reward EPA’s power grab by dramatically expanding the agency’s power! As Markey explained, his amendment would authorize EPA to reduce oil consumption throughout the economy — not just cars and trucks but also aircraft, marine vessels, non-road vehicles and engines, and industrial boilers. This exceeds any authority granted to any agency under any existing federal statute.

It is amazing that Markey would propose to make such a sweeping change in national policy in a one-sentence amendment based on five minutes of debate. Congress typically spends many years debating changes in fuel economy policy before enacting them because so many competing interests come into play even when the changes affect just one subset of one sector of the economy — passenger vehicles and light duty trucks. Yes, fuel economy standards may reduce oil consumption somewhat. However, fuel economy standards also increase the cost of motor vehicles and restrict consumer choice. More importantly, by encouraging automakers to produce lighter, smaller vehicles that provide less protection in collisions, fuel economy standards increase traffic fatalities and serious injuries.

What unintended consequences would ensue from applying fuel economy standards to planes, boats, boilers, etc.? Nobody knows. Congress has never held a hearing to find out. If Markey really wants EPA to control oil consumption throughout the economy, then he should draft a bill, try to find co-sponsors, try to persuade the majority to hold hearings, and try to persuade colleagues and the public to support it. Instead, he attempts through a one-sentence provision not only to legalize EPA’s hijacking of fuel economy regulation but expand it across the board to all oil-using machines! This sets a new standard for chutzpah.

All of the hostile amendments were designed to trick H.R. 910 supporters into abandoning their moral high ground. All were designed to suck supporters into affirming controversial positions that H.R. 910 neither presupposes nor implies. Opponents’ strategy was to change the subject so that H.R. 910 supporters would end up debating climate science, climate change risk, or oil dependence rather than the constitutional impropriety of EPA ‘legislating’ climate and energy policy through the regulatory backdoor. More than a few Republicans took the bait, allowing the other team to define, and thereby occupy, the moral high ground.

When the bill finally gets to the House floor, supporters need to do a better job of anticipating and foiling opponents’ rhetorical tricks. If I were writing a floor statement for an H.R. 910 supporter, it would go something like this:

H.R. 910 is called the Energy Tax Prevention Act. It could also be called the Democratic Accountability in Climate Policy Act. Or the Separation of Powers Restoration Act.

What are the premises on which this legislation is based? The Constitution puts Congress, not non-elected bureaucrats, in charge of determining national policy. Congress has never authorized EPA to determine national policy on climate change. The Clean Air Act was enacted in 1970, years before global warming emerged as a policy issue. The terms “greenhouse gas” and “greenhouse effect” do not even occur in the statute. The Clean Air Act is an even less efficient, less predictable, and potentially more costly framework for restricting the American people’s access to affordable energy than the cap-and-trade legislation that Congress and the public rejected last year.

Don’t take my word for it. Ask EPA Administrator Lisa Jackson, Rep. Ed Markey, and others who only last year warned that if we did not preempt EPA by enacting a cap-and-trade bill, we would get a greenhouse gas regulatory system that cap-and-trade critics would like even less.

I hope we can have a candid debate on H.R. 910. So far, however, opponents have tried to avoid the real issue, which is simply: Who shall make climate policy — the people’s representatives, or an administrative agency not accountable to the people at the ballot box? Our Constitution permits only one answer to that question.

Opponents say that Congress should step aside and let EPA make climate policy, because Congress won’t enact cap-and-trade or other measures they support.

That’s a very strange notion of democracy. Opponents seem to think they are entitled to win even if they lose in the halls of Congress and the court of public opinion.

H.R. 910 is designed to safeguard the constitutional separation of powers and the political accountability such separation was intended to secure. Opponents don’t want you to know that. That’s why they keep trying to change the subject. They want to have a debate on climate science. Or on oil dependence. They have their views on these topics. I have mine. What we think about climate science and oil dependence is irrelevant to what we are debating today.

Today we are not debating what climate and energy policy should be. We are debating who should make it. Some seem to think it’s okay for EPA to exercise power beyond any plausible legislative mandate because they and EPA share the same basic agenda. That’s not right.

No agenda is so important that it excuses congressional passivity or even complicity when an agency gets too big for its britches and starts acting like a Super-Legislature.

EPA is initiating major changes in national policy — changes fraught with large potential impacts on jobs and the economy. The Clean Air Act does not authorize EPA to establish or tighten fuel economy standards for new cars and trucks, yet that is effectively what it is doing. And EPA will soon be dictating fuel economy standards for aircraft, marine vessels, and non-road vehicles, even though no existing statute authorizes any agency to do that. If not stopped, EPA will eventually issue greenhouse gas performance standards for dozens of industrial categories, and could even be litigated into establishing national ambient air quality standards for greenhouse gases set below current atmospheric concentrations.

America could end up with a greenhouse gas regulatory regime more costly and intrusive than any climate bill Congress has declined to pass, or any climate treaty the Senate has declined to ratify, yet without the people’s representatives ever voting on it.

Making policy decisions of such economic and political magnitude is above EPA’s pay grade. It is above any administrative agency’s pay grade.

Our opponents claim that we seek to repeal a scientific finding, as if, like King Canute, we were trying to command the tides to halt. That’s very clever, but it’s an outrageous misrepresentation.

H.R. 910 does not repeal EPA’s endangerment finding. Rather, it repeals the Rulemaking in which EPA published its finding. H.R. 910 repeals the legal force and effect of EPA’s finding. H.R. 910 takes no position whatsoever on the validity of EPA’s reasoning or conclusions.

Opponents keep asking, ‘What is your plan’ to address climate and energy issues? That is putting the cart way before the horse. Our first order of business is to restore democratic accountability to climate policymaking. Then and only then can Congress, no longer distracted by EPA’s attempt to narrow our options and prejudge our decisions, consider these issues properly — on their merits.

Congress is a deliberative body. Sometimes Congress does not act as quickly as some Members would like. Sometimes Congress does not enact legislation that some Members support. That, however, does not authorize EPA to implement far-reaching policy changes Congress has not approved.

The legislative process is often frustrating and slow. It is supposed to be! It moderates our politics and promotes continuity in law and policy. This slow, deliberative legislative process is more valuable than any result that an administrative agency might obtain by doing an end run around it. Of all people, Members of Congress should understand this basic precept of our constitutional system.

There wasn’t much to report from yesterday’s climate change science hearing before the Energy and Power Subcommittee of the House Energy and Commerce Committee. Generally speaking, Republican lawmakers used the entirety of their allotted time to question the scientists they had invited, and Democratic lawmakers did likewise. Click here for opening statements, and also for an archived podcast of the hearing.

Truth be told, the hearing’s pedigree is more interesting than the hearing was. Last week, the same subcommittee held a hearing on pending EPA regulations for greenhouse gases, in order to inform the debate on H.R. 910, the Energy Tax Prevention Act of 2011, legislation that would check the EPA’s authority to enact climate policy under the Clean Air Act. During these hearings, Rep. Henry Waxman (D-Beverly Hills), who is a master parliamentarian, leveraged an obscure procedural rule to demand a hearing of the minority party’s choosing. Subcommittee Chair Rep. Ed Whitfield, in an act of Congressional comity, granted the request. Ergo, yesterday’s “dueling science” hearing.

There was one notable element to yesterday’s action: The extent to which the center is moving away from the Democratic leadership on energy and environment policy. Rather feebly, Rep. Waxman concluded by asking that the majority party agree to postpone tomorrow’s scheduled mark up of H.R. 910…until Tuesday. It was a weak negotiating tactic.

Waxman’s weakness harkened to Rep. Gene Green’s reported pitch last week for a 5 year delay on greenhouse gas regulations under the Clean Air Act. That was significant because, until then, Congressional Democrats had been willing to countenance only a 2 year delay.

Of course, hardliners like Waxman were undercut by the bi-partisan appeal of H.R. 910. As I noted yesterday, opposition to expensive energy policies has been bipartisan in recent Congresses. This is especially true now, as gasoline surges past $3.50 and starts to dominate the politics of energy. Already, the legislation has won the support of senior House Democrats Rep. Colin Peterson and Rep. Nick Rahall.

Yesterday (Feb. 16), House Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) engaged in a colloquy with Interior and Agriculture Subcommittee Chairman Mike Simpson (R-ID) on Sec. 1746 of H.R. 1, the One-Year Continuing Appropriations Act of 2011.

Sec. 1746 of H.R. 1 states:

None of the funds made available to the Environmental Protection Agency by this division or any other Act may be expended for purposes of enforcing or promulgating any regulation (other than with respect to section 202 of the Clean Air Act) or order, taking action relating to, or denying approval of state implementation plans or permits because of the emissions of greenhouse gases due to concerns regarding possible climate change.

Sec. 1746 would block EPA regulation of greenhouse gases from stationary sources for the remainder of fiscal year 2011, which ends on September 30. “The funding limitation will allow Congress to carefully and thoroughly debate a permanent clarification to the Clean Air Act to ensure it remains a strong tool for protecting public health by regulating and mitigating air pollutants, and that it is not transformed into a vehicle to impose a national energy tax,” explains Chairman Whitfield’s press release. Whitfield is a co-sponsor of the Energy Tax Prevention Act, which would overturn the legal force and effect of EPA’s Endangerment Rule, Tailoring Rule, and other rules imposing greenhouse gas permitting requirements on state governments and stationary sources.

In the colloquy, Chairman Simpson states: ”EPA’s GHG regulations need to be stopped in their tracks, and that’s what section 1746 does – it provides a timeout for the balance of the fiscal year, during which time EPA will be prohibited from acting on them or enforcing them.” In Whitfield’s words: “This CR [Continuing Resolution] provision is Congress hitting the pause button during the very brief period of the CR, allowing time to go through regular order and pass the Upton-Inhofe bill.”

Whitfield spotlights the constitutional principle at stake: “EPA’s regulations are an attempt by unelected bureaucrats to slip in through the regulatory backdoor what Congress has thus far wisely blocked from coming in through the front door.” The Energy Tax Prevention Act takes no position on climate science. As Simpson remarks, one need not be a global warming skeptic to be an ”EPA GHG [greenhouse gas] regulation skeptic.”

The political benefits of Congress passing Sec. 1746 are obvious. It would be a clear rebuke to EPA’s shocking power grab. It would put Team Obama on notice that Congress is determined to defend the separation of powers. It would energize congressional and public support for a more permanent solution to the ’EPA problem.’ It would draw a big bright line in the sand helping the public identify which Members of Congress want to raise energy prices and which do not.

This defunding, or appropriations rider, strategy, as it is sometimes called, however, is not without economic risk.

“Rider striking funds for EPA regs could cause unintended consequences for industry,” yesterday’s Greenwire (subscription required) reports. The article explains:

The rider does nothing to nullify the 2009 finding that greenhouse gases endanger human health, or to reverse EPA’s final rules, including its prevention of significant deterioration guidelines or the tailoring rule, which lays out the agency’s timetable for regulating greenhouse gases from large stationary emitters.

By simply defunding the agency’s greenhouse gas permitting programs, Congress would do nothing to remove EPA’s obligation to address greenhouse gases through the permitting process, the [unidentified industry] attorney said.

“It doesn’t change the fact that those rules and regulations are final,” the attorney said.

Which means, notes Rep. Jim Moran (D-VA):

“The legislation is there, you’re not repealing the legislation, so EPA has a legal responsibility to implement the Clean Air Act, the Clean Water Act, other pieces of legislation that are still on the books,” he said yesterday. “That’s their responsibility, and they really can’t shirk that responsibility just because Congress doesn’t provide them the resources. The Congress has to either repeal the law, or be it reluctantly, they’re just going to have to fund the resources to carry out the law.”

Both Moran and Greenwire miss a more important point. The Clean Air Act imposes obligations not just on EPA but also on regulated entities such as power plants, refineries, factories, and other emission sources.

Under the Act, before a firm may build or modify a “major emitting facility,” it must undertake a “best available control technology” (BACT) analysis and, on that basis, apply for and obtain a “prevention of significant deterioration” (PSD) pre-construction permit. Similarly, before a firm may operate a major emitting facility, it must obtain a Title V operating permit.

EPA has issued regulations applying PSD and Title V to greenhouse gases. Those are already on the books, and they impose legal requirements on private entities as well as on EPA and state permitting agencies. Thus, even if EPA lacks the funds to administer PSD and Title V for greenhouse gases, major greenhouse gas emitting facilities must still obtain PSD and Title V permits or they cannot lawfully build, modify, or operate.

Moreover, even if EPA lacks the funds to prosecute firms for failing to obtain permits, eco-litigation groups could still drag those firms into court under Clean Air Act citizen-suit provisions. Trial lawyers could have a field day as affected firms find themselves in a Catch-22. On the one hand, the law (the Clean Air Act as interpreted by EPA rules) would require firms to obtain PSD and Title V permits for greenhouse gases. On the other hand, the law (the appropriations rider) would prevent them from doing so.

It’s not even clear that Sec. 1746 would stop the government from enforcing EPA’s greenhouse regulations. The language says nothing about withholding funds from the Department of Justice, so DOJ prosecutors could enforce EPA’s regs even if EPA couldn’t.

The side effects of this bizarre situation are potentially serious. Construction projects might have to be mothballed or cancelled for lack of proper permits. Otherwise healthy firms facing novel litigation risks might be unable to obtain financing or venture capital.

Considerations of this sort led Alaska Sen. Lisa Murkowski to abandon an appropriations rider strategy she had been exploring in late 2009 and instead introduce legislation to overturn EPA’s Endangerment Rule — the headwaters of EPA’s greenhouse regulatory surge.

The question for opponents of EPA’s power grab, therefore, is whether the political benefits of a defunding strategy outweigh the economic risks. This is a prudential matter about which reasonable people may disagree. I will hazard two observations.

(1) The best way to minimize the potential collateral damage to regulated entities is to quickly enact legislation that overturns EPA’s greenhouse gas rules. If passage of Sec. 1746 galvanizes congressional action toward that end, then it would likely do more good than harm. (2) However, if enactment of Sec. 1746 leads to construction bottlenecks and an upsurge of anti-business litigation while Congress is still debating the Energy Tax Prevention Act or similar measures, the rider strategy could damage the credibility of EPA’s congressional critics.