Reps. Fred Upton (R-Mich.) and Henry Waxman (D-Calif.) yesterday issued their second white paper in a series intended as a first step to reviewing the Renewable Fuel Standard (RFS). The first white paper, released March 20, 2013, addresses Blend Wall/Fuel Compatibility Issues. The second white paper, released April 18, 2013, addresses Agricultural Sector Issues. Both white papers are clearly written, carefully documented, and provide excellent overviews of their respective topics.

The second white paper poses nine questions for public comment, and requests that responses be sent to rfs@mail.house.gov by April 29.

Two of the questions deal with the EPA’s denial in 2012 of petitions from ten governors who, seeking to reduce corn prices and alleviate harm to their states’ livestock industries, asked the agency to waive (suspend) RFS blending requirements. I comment on those questions, which are enumerated in the white paper as follows:

3. Was EPA correct to deny the 2012 waiver request? Are there any lessons that can be drawn from the waiver denial?
4. Does the Clean Air Act provide EPA sufficient flexibility to adequately address any effects that the RFS may have on corn price spikes?

My comments develop the following points:

• The EPA should have granted the waiver but the agency’s strained reading of the Clean Air Act virtually guarantees that petitions will be denied regardless of the RFS’s contribution to severe economic harm.
• Congress should revise the statute to preclude the EPA’s deck-stacking interpretation and clarify that the threshold issue is whether, in the context of actual market conditions, the RFS makes a non-negligible contribution to severe harm.
• In controversies arising under regulations the EPA administers, the agency is not an impartial umpire but the primary stakeholder — the main interested party.
• By putting the EPA in charge of deciding whether or not to suspend its own rules, the current waiver provision inadvertently flouts a core principle of constitutional government: No one should be judge in his own cause.
• Congress should transfer the authority to grant or deny waiver petitions to an independent body with no organizational interest in upholding or suspending RFS requirements. In this reformed process, the EPA’s role would be limited to submitting comments like any other stakeholder.
• Although the Clean Air Act provides adequate flexibility (albeit precluded by the EPA’s skewed reading of the statute) to address RFS effects on domestic corn prices, it provides no flexibility to address RFS effects on grain prices in developing countries.
• Congress should revise the waiver provision to include adverse impacts on world hunger among the harms for which petitioners may seek relief.

The full text of my comment letter is available here.

Today on National Journal’s Energy Experts Blog, I post a comment celebrating the Renewable Fuel Standard (RFS) as a triumph of centralized economic planning. You think I’m joking? Far from it. The RFS is working at least as well as other central planning schemes!

Well, okay, the RFS would be funny if it weren’t so destructive. A new report by NERA Economic Consulting warns that the RFS is heading for a “death spiral” — a vicious circle in which rising fuel costs, declining sales, and dwindling biofuel credits make compliance increasingly “infeasible.”

In one scenario analyzed by NERA, the death spiral produces a 30% increase in gasoline prices and a 300% increase in the cost of diesel fuel in 2015. Potential adverse macroeconomic impacts include a “$770 billion decline in GDP and a corresponding reduction in consumption per household of $2,700.” Ludwig von Mises coined a term for such debacles: “Planned Chaos.”

Last week, Reps. Fred Upton (R-Mich.) and Henry Waxman (D-Calif.) released the first White Paper in a series intended to help policymakers and the public review the RFS in light of the “wealth of implementation experience” accumulated over the past five years.

After poking fun at the mandate’s glorious achievements, my post concludes:

In all seriousness, Reps. Upton and Waxman are to be commended for launching a reassessment of the RFS. The exercise will be most valuable if policymakers gain a new sense of modesty about their ability to design markets and direct the future of economic evolution.

Stimulus spending on environmentalist policy is a green albatross around the neck of President Barack Obama. Inspectors General are having a field day auditing stimulus-funded programs for so-called “green jobs,” and the media LOVES stories about wasted taxpayer money. What started as a sop to his environmentalist base, now threatens to become a slow-drip nightmare of negative press. The timing couldn’t be worse for the President. It takes time to disburse scores of billions of dollars, so we are only now starting to scrutinize stimulus spending. By November 2012, we’ll be able to account for most of the money, and unless the current trend changes radically, the Executive in Chief is going to look conspicuously incompetent.

Here’s the back-story: In early 2009, the Executive and Legislative branches of government had a popular mandate to defibrillate America’s moribund economy with a huge injection of taxpayer dollars. Instead of limiting this “stimulus” to state bailouts and infrastructure spending, the Obama administration (led by climate “czar” and former EPA administrator Carol Browner) and the Congressional majority (led by House Energy and Commerce Chair Henry Waxman (D-Beverly Hills)) also sought to advance environmentalist policy.  As a result, the American Recovery and Reinvestment Act, a.k.a. the stimulus, included almost $70 billion in spending for green jobs and renewable energy infrastructure.

Every single link along the green energy supply chain was showered with subsidies. There was funding for green jobs training, funding for factories to make green products, and funding to incentivize demand for green goods and services. It was as like a green Gosplan!

Most of the money went to the Energy and Labor Departments. Budgets ballooned. To cite a typical example, in 2008, the Department of Energy’s weatherization program budget went from $450 million to $5 billion. Making matters worse, federal bureaucrats were told to spend the stimulus as fast as possible, in order to jumpstart job-creation. Exploding budgets and a mandate to rush money out the door—that’s a recipe for poor stewardship of taxpayer dollars. This is borne out by an increasing number of watchdog reports concluding that stimulus spending for green goals was wasteful. Here’s a laundry list of what they’ve found so far:

• On November 2, Eliot P. Lewis, the Department of Labor’s IG, testified before the House Oversight and Government Reform Committee that the Labor Department received $435 million to train 96,000 people in the renewable energy trade. The goal was to create 80,000 green jobs. Through June 30, according to Mr. Lewis’s testimony, the Labor Department had spent $130 million, which is 30% of the program budget, and created a scant 1,336 jobs, which is 2% of the program target.

• During the same Congressional hearing, the Department of Energy IG Gregory Friedman said that he had launched more than 100 criminal investigations into green energy spending. Each one is a potential scandal.

• GreenWire’s (subscription required) Annie Snider has reported on a series of IG investigations by the Department of Defense faulting the military for wasteful stimulus spending on green energy projects. The report titles say it all: “American Revoery and Reinvestment Act Wind Turbine Projects at Long-Range Radar Site in Alaska Were Not Adequately Planned”; “The Departmnet of the Navy Spent Recovery Act Funds on Photovoltaic Projects That Were Not Cost-Effective”; “U.S. Air Force Academy Could Have Significantly Improved Planning Funding, and Initial Execution of the American Recovery and Reinvestment Act Solar Array Project”; and “Geothermal Energy Development Project at Naval Air Force Station Fallon, Nevada, Did Not Meet Recovery Act Requirements.”

• On November 7, the Department of Energy Office of the Inspector General issued a “management alert” regarding the Western Area Power Administration’s $3 billion, stimulus-created loan program to facilitate the transmission of electricity from renewable energy projects in the west. According to the IG alert, “Western had not implemented the necessary safeguards to ensure its commitment of funding was optimally protected.”

• In October, Resources for the Future released a report suggesting that the $3 billion, stimulus funded “cash for clunkers” program, whereby the government subsidized the purchase of fuel efficient cars for consumers that agreed to junk their less fuel efficient cars, was an economic and environmental failure.

• Since February, the Energy and Commerce Committee has been investigating Solyndra, the California solar panel manufacturer that declared bankruptcy in September, leaving the taxpayer on the hook for a $535 million stimulus-funded loan guarantee from the Department of Energy.

Why is the green stimulus failing? As I note above, ballooning budgets and a mandate to spend fast are conducive to waste.

More fundamentally, central planning of the economy is a loser. Invariably, politics corrupts the process. Members of Congress are less concerned about the economic viability of the industries into which they invest taxpayer money, and much more concerned with getting pork to their districts. Civil servants, no matter how disinterested, know that their political overlords are watching their decisions carefully, so as to ensure that taxpayers give-aways reach their constituents. (For an archetypical example of a Member of Congress browbeating a civil servant, see this post about Sen. Al Franken shaking down Energy Secretary Steven Chu).

When parochial politics isn’t interfering, crony capitalism is. According to “Throw Them All Out,” a new book by Peter Shweizer, $16.4 billion of the $20.5 billion in loans granted by the stimulus-created loan guarantee program (whence the Solyndra debacle) “went to companies either run by or primarily owned by Obama financial backers.” Of course, political payback is a poor substitute for sound financial analysis.

Gross fiscal mismanagement by government attracts media like flies to dung. So far, most coverage is by local papers reporting on local failures. (See “Seattle’s Green Jobs Program a Bust,” by the Seattle Post Intelligencer and “Stimulus Funds Provide Training, But Openings Few in State,” by the Detroit News.) However, even the New York Times, whose editorial board supports green energy subsidies, published a story titled, “Number of Green Jobs Fails to Live up to Promises.” Expect many more of these types of articles as the watchdogs continue to do their work.

As the negative press mounts, the President will become ever-more burdened by his foolish bet on green energy.

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.

Tomorrow, the House Energy and Commerce Committee will hold its second hearing on Solyndra, the manufacturer of innovative non-silicon-based solar panels that borrowed $527 million only to file for bankruptcy, shutter its brand new Freemont, Calif. factory, and lay off 1,100 employees on September 6. Expect Committee Democrats to blame China and the allegedly unforeseen fall in the price of conventional silicon-based solar panels for the debacle.

That’s the line the Department of Energy’s (DOE) witness, Jonathan Silver, took at the Committee’s first (September 14) Solyndra hearing, noting China’s provision of more than $30 billion in subsidized financing to its solar manufacturers, which rapidly dropped silicon prices, “taking Solyndra, and many industry analysts, by surprise.” DOE’s blog, Energy.Gov, had already adopted this explanation on August 31, the day Solyndra announced it would file for bankruptcy.

Similarly, Solyndra’s August 31 announcement coyly cited the “resources of larger foreign [i.e. Chinese] manufacturers” and a “global oversupply of [mainly Chinese] solar panels” as factors foiling the company’s business plan. Solyndra’s ex-employees have applied to the Department of Labor (DOL) for aid under the Trade Adjustment Assistance (TAA) program, claiming that China put them out of work. If DOL approves the application, Solyndra’s former workers will receive allowances for job retraining, job searching, and health care for up to 130 weeks, or about $13,000 per employee. Blogger Scott Linicom decries such double dipping:

So to recap: massive government subsidies created 1,100 “green jobs” that never would’ve existed but for those massive government subsidies.  And when those fake jobs disappeared because the subsidized employer-company inevitably couldn’t compete in the market, the dislocated workers blamed China (instead of what’s easily one of the worst business plans ever drafted) in order to receive . . . wait for it . . . more government subsidies. Behold, the Circle of Government Life.

Whether it’s Solyndra execs and DOE officials trying to save face, ”progressives” defending the honor of green industrial policy, or former employees looking for more taxpayer freebies, they all would have us believe that Solyndra’s $535 million loan guarantee was a good bet at the time it was made. They need a scapegoat for Solyndra’s crash, so they blame China. Indeed, some (e.g. Grist) claim Solyndra’s collapse shows that the U.S. government isn’t doing enough to help our “clean tech” companies “compete.” Balderdash.    

Solyndra’s business plan was dubious from the getgo. Committee Ranking Member Henry Waxman (D-Calif.) claims that “under both the Bush Administration and the Obama Administration, DOE officials strongly backed Solyndra.” In fact, on January 9, 2009, Bush’s DOE declined to approve Solyndra’s loan guarantee application, citing several “unresolved” issues including lack of an independent study of the company’s long-term prospects, questions about the company’s financial strength, and concern about the scale-up of production assumed in the business plan (Documents Entered into Record, p. 1).

As for the allegedly unanticipated glut in rooftop solar panels, which made Solyndra’s thin-film panels uncompetitive, it was the topic of a January 12, 2009 USA Today article. In an email dated January 13, 2009, Bush DOE staff cited the glut, reported in USA Today, as the reason for the DOE Credit Committee’s “unanimous decision not to engage in further discussions with Solyndra at this time” (Documents Entered into Record, p. 2).

Emails obtained by the Committee suggest that White House pressure for quick approval may have compromised the depth and quality of DOE and Office of Management and Budget (OMB) review of Solyndra’s loan application (Documents Entered into Record, pp. 4, 11, 12):

• “There’s a recurrent problem with the [White House] scheduling office looking for events [loan guarantee approvals] before they are ready to go.” (March 10, 2009)
• “As long as we make it crystal clear to DOE that this is only in the interest of time, and that there’s no precedent set, then I’m okay with it. But we also need to make sure they don’t jam us on later deals so there isn’t time to negotiate those, too.” (August 27, 2009)
• “We have ended up in the situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week). We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around.” (August 31, 2009)

DOE approved the Solyndra loan guarantee on September 4, 2009 — an event timed to coincide with the ground breaking ceremony for the company’s Freemont, California factory. Speakers included DOE Secretary Steven Chu, California Gov. Arnold Schwarzenegger, and Vice President Biden (via satellite feed). But a scant two weeks before, on August 19 and 20, emails between DOE staff note that when Fitch modeled Solyndra’s cash flow over time, the company ”runs out of cash in Sept. 2011 even in the base case without any stress. This is a liquidity issue” (Documents Entered into Record, pp. 8-9). Rarely has a government business forecast been so accurate!

In addition to the liquidity problem, it is unclear whether Solyndra had a viable plan to reconcile its production costs and sale prices. According to an ABC News analysis:

While Energy Department officials steadfastly vouched for Solyndra — even after an earlier round of layoffs raised eyebrows — other federal agencies and industry analysts for months questioned the viability of the company. Peter Lynch, a longtime solar industry analyst, told ABC News the company’s fate should have been obvious from the start.

“Here’s the bottom line,” Lynch said. “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.”

Along the same lines, ELECTRO IQ (November 8, 2010) posed the question: “Can Solyndra reconcile cost-per-watt and sale price?” From the article:

In the last year, there have been numerous stories about CIGS [copper idium gallium selenide] thin-film manufacturer Solyndra’s troubles — a pulled IPO, a restructuring of the executive team, and, most troubling, the high cost of module production. (In an S-1 filing a year ago, the company said its average sales price was over $3.20 a watt, about 65% more than leading crystalline-silicon PV manufacturers. Its cost of manufacturing was over $6 a watt). Solyndra aims at $3.5 per watt by the end of 2011.

Tim Worstall, writing in Forbes (September 17, 2011), argues that, “Yes, it was possible to see this failure coming.” Defenders of the loan argue that the fall in silicon solar prices was unforeseen, hence “Solyndra’s non-silicon technology got bushwhacked by something no one could have anticipated.”

In reality, it was “blatantly obvious” that competitors’ prices would fall. In the mid-2000s demand exceeded supply and the price soared. But as Econ 101 tells us, soaring prices create incentives to increase supply, which then push prices down.

What’s more, says Worstall, by 2008, First Solar, a leading supplier of non-silicon modules, had already achieved lower cost-per-watt than Solyndra hoped to achieve by 2011.

Concludes Worstall: “It wasn’t an unexpected fall in silicon prices that did in Solyndra: they were never even close to being competitive on pricing against non-silicon technologies. They weren’t even in the right ballpark at all.”

Let’s take a closer look at DOE loan program director Silver’s ’don’t-blame-DOE-or-Solyndra’ explanation of why the company went bust:

In 2009, Solyndra appeared to be well-positioned to compete and succeed in the global marketplace. Solyndra manufactured cylindrical, thin-film, solar cells, which avoided both the high cost of polysilicon — a crucial component used in conventional solar panels — and certain costs associated with installing flat panels. But polysilicon prices subsequently dropped significantly, taking Solyndra, and many industry analysts, by surprise. Among the principal beneficiaries of this pricing environment were four of Solyndra’s Chinese competitors, which sell polysilicon panels and received $20 billion in credit from the China Development Bank in 2010.

* * *

Unfortunately, changes in the solar market have only accelerated in 2011, since the restructuring [of Solyndra's loan guarantee in February 2011] — making it more difficult for the company to compete. Chinese companies have flooded the market with inexpensive panels, and Europe — currently the largest customer base for solar panels — have suffered from an economic crisis that has significantly reduced demand and forced cuts in subsidies for solar deployment that were important to Solyndra’s business model. The result has been a further and unprecedented 42% drop in solar cell prices in the first eight months of 2011.

All of that may be correct, but the pertinent issue is whether anyone could have foreseen these changes in the marketplace in 2009 and 2010 when the U.S. government decided to bet taxpayers’ money on Solyndra. Far from being unforeseeable that China would subsidize its ”clean tech” companies to beat out U.S. firms and capture market share, this was a major premise of DOE’s loan guarantee program. We had to fight fire with fire or else lose the “clean energy race,” Obama officials warned. As DOE Secretary Chu said in testimony on October 27, 2009:

China has already made its choice. China is spending about $9 billion a month on clean energy. . . .The United States, meanwhile, has fallen behind. . . .We manufactured more than 40 percent of the world’s solar cells as recently as the mid 1990s; today, we produce just 7 percent. When the starting gun sounded on the clean energy race, the United States stumbled. But I remain confident that we can make up the ground. . . .The Recovery Act includes $80 billion to put tens of thousands of Americans to work developing new battery technologies for hybrid vehicles, making our homes and businesses more energy efficient, doubling our capacity to generate renewable electricity, and modernizing the electric grid.

Moreover, one did not need to be a rocket scientist to predict that if the U.S. government leverages billions of dollars in private investment to compete with Chinese firms, China would up the ante. After all, Beijing is flush with cash, whereas Washington is deep in debt.

Nor was any great acumen required to anticipate that the economic crisis would cut subsidies and thereby reduce demand for solar panels in Europe. In October 2009, the Rheinisch-Westfälisches Institut (RWI) reported that Germany’s feeder tariff system was on course to subsidize solar voltaic modules to the tune of $73 billion from 2000 through 2010, yet solar power was providing less than 1% of the nation’s electricity. Such lavish subsidies are unsustainable, especially during a financial crisis.

One also wonders why Solyndra had to hire 3,000 people to build a brand new factory (“Fab 2″). Wouldn’t it have been cheaper to rent space in an existing building? Ah, but then there would have been no groundbreaking and no photo-op for Secy. Chu, Gov. Schwarzenegger, and Vice President Biden. Mixing politics with business politicized Solyndra’s business plan.

Even if one makes the dubious assumption that Solyndra’s business plan was sound at the time DOE approved the loan guarantee, why did S0lyndra stick to the plan when it became clear the company was going broke?  ”The Fed money was explicitly tied to being *solely* used to build Fab 2. Solyndra could not use the loan proceeds for *anything* else,” according to an anonymous member of Solyndra’s management team. The DOE loan guarantee, it seems, reduced Solyndra’s ability to adapt to changing market conditions.

Sadly, the one lesson Team Obama will never draw from Solyndra’s failure is the most important one: the folly of government trying to play venture capitalist. Heritage Foundation economist David Kreutzer offers some choice words in two recent blog posts:

“We have such a great product that nobody will lend us the money,” was the nonsensical argument from Solyndra and its backers. Those who did not see the logical flaw in 2009 cannot help but see the flawed result in 2011. Unfortunately, some still do not see the logical problem that led to the mess.

Indeed, two of the criteria for the loan program show how silly it is to have government run a bank. One is that the loan must be for a commercially viable project. Another is that the applicants have to demonstrate that they could not get private financing. By definition, the second criterion rules out the first.

The United States imports almost half of its oil (49%), and about 25% of our imports come from one country — our friendly neighbor to the North, Canada. Today, Canada supplies more oil to the USA than all Persian Gulf countries combined.

With an estimated 175 billion barrels of technically recoverable oil, Canada has the world’s third largest oil reserves. About 170 billion of those barrels, or 97%, are located in geologic formations called oil sands — a mixture sand, water, clay, and bitumen, a sticky tar-like form of petroleum.

Unlike “conventional” oil, bitumen is too viscous to be pumped without being heated or diluted.

Last Wednesday and Thursday, courtesy of the good folks at American Petroleum Institute (API), I and other bloggers toured two large Canadian oil sands projects near Fort McMurray, Alberta.

The Surmont Project, operated by ConocoPhillips, uses a technology called steam assisted gravity drainage (SAGD) to melt the bitumen so that it can be pumped back to the surface. At each well site, two parallel pipes descend to about 1,000 feet below the surface and then extend horizontally for several thousand feet. Heated steam in the upper pipe melts the bitumen, which then flows back up to the surface through the lower pipe. Natural gas may also be injected in the upper pipe to further reduce the viscosity of the bitumen. Along with the melted bitumen, the lower pipe brings hot water and natural gas back up to the surface for capture and reuse in a closed cycle.

This process is relatively new but within a few years it is expected to dominate Canadian oil production, because about 80% of Canada’s oil sands are too deep to be mined. The Surmont Project, which started production in 2007, currently produces about 23,000 barrels per day (bpd). It is expected to be producing 136,000 bpd by 2015.

The Millennium site, operated by Suncor Energy, relies mainly on mining to access the bitumen. The oil sands here are at a relatively shallow layer — about 350 feet below the surface. Millennium started production in 1967, making it the world’s first commercially-successful oil sands venture and the longest-running oil sands project in Canada.

Millennium’s scale is truly breathtaking. Suncor’s leases (which also include SAGD drilling sites) cover more than 1,800 square kilometers. A fleet of giant trucks with shovels that remove 100 tons of earth at a bite operate day and night. Some trucks remove the “overburden” — a surface layer composed of muskeg (a peat-like substance), clay, and rock, while others dig up the oil sands beneath. The largest of these trucks, which are built by Caterpillar, haul loads up to 400 tons. Each day, the trucks haul about 2,000 loads of overburden and 1,600 loads of oil sands.

The next photo is me pretending to be the master of all I survey. The distant object to the left of my outstretched hand is a monster truck.

After being mined, the oil sands are sent to massive facilities that use water and steam to extract the bitumen from sand and other minerals, separate the bitumen from water, and chemically treat the bitumen until it has the consistency required for transport as crude oil through pipelines.

My reaction to the Millennium project was one of awe. I could not but marvel at the immense scale of market-driven coordination that has turned an otherwise worthless material – sticky, smelly, black sand – into a valuable resource empowering literally millions of ordinary people to enjoy a degree of mobility unknown to the kings and potentates of old.

Some of course may only see — and decry — the industrial footprint, the “scars upon the land,” as the John Denver song put it. What they may not know is that Suncor also engages in land reclamation on a gigantic scale.

The overburden is not only removed, it is also saved, so that it can used to restore landscapes and create habitat after mining operations are completed. In addition, Suncor has developed a process (Tailings Reduction Operation, or TRO) for accelerating the extraction of suspended particles called “mature fine tailings” (MFT) from its tailing ponds (small lakes where water, sand, and clay are sent after separation from the bitumen). After drying, the MFT hardens and is used as landscaping material.

Suncor’s first tailings pond operated for 40 years from 1967 through December 2006. This 220-hectare area today is a contoured medowland with more than 600,000 planted trees and shrubs. Called the Wapisiw Lookout Reclamation, the area’s rock piles provide habitat for small animals, its tree poles provide habitat for raptors, and its wetland provides habitat for aquatic waterfowl. The picture below shows three raptor poles. While our tour group was there, we spotted a black bear cub moving among the hillocks a few hundred yards away.

Canada already ships almost 2 million barrels of oil a day to the USA, but the existing pipeline infrastructure must be expanded not only to handle the larger volumes that Canada will produce in the future but also to transport Canadian oil to U.S. Midwest and Gulf Coast refineries, where it can be turned into gasoline, jet fuel, and other finished petroleum products.

In March 2008, the U.S. State Department granted TransCanada Keystone Pipeline a permit authorizing the company to construct pipeline facilities from Alberta to refineries in Illinois and Oklahoma.

Then in June 2008, Keystone proposed to build an extension, called the Keystone XL Pipeline, to move Canadian oil to refineries in Port Arthur and Houston, Texas. Initially, Keystone XL would be able to deliver 700,000 bpd of heavy crude to U.S. refineries.

From 2010 to 2035, this “shovel ready” project could create 85,000 U.S. jobs, provide $71 billion in U.S. employee compensation, and boost cumulative U.S. GDP by $149 billion, according to the Canadian Energy Research Institute.

Predictably, green pressure groups and their allies on Capitol Hill have mounted a campaign to block the Keystone project, alleging that the pipeline will expose neighboring communities, aquifers, and wetlands to oil spill risk and increase America’s “dependence” on “dirty” energy. Let’s briefly consider these accusations.

The State Department’s massive April 2010 Environmental Impact Statement (EIS) notes that the pipeline “would be designed, constructed, and maintained in a manner that meets or exceeds industry standards and regulatory requirements” (ES 6.13.3). Although some leaks and small spills are bound to occur, “There would be a very limited potential for an operational pipeline spill of sufficient magnitude to significantly affect natural resources and human uses of the environment” (ES 6.13.2). If zero risk of even minor spills is the only acceptable standard, then no petroleum should ever be shipped anywhere. That may be what green groups ultimately have in mind. Such a standard, however, would condemn mankind to Medieval squalor, not enhance public health and welfare.

By “dirty,” Keystone XL opponents refer to the fact that the process of transforming oil sands into petroleum emits more carbon dioxide (CO2) than conventional petroleum extraction. However, whatever Canadian oil does not get shipped to the United States will eventually go elsewhere — mainly to China and other Asian countries, which are investing billions of dollars in Canadian oil sands projects. Just last month, for example, the Chinese company CNOOC agreed to buy Canadian oil sands producer OPTI for $2.1 billion. On a life-cycle basis, shipping oil to China is more carbon-intensive than shipping oil to the USA, because it must be transported on mammoth CO2-emitting tankers.

As for the Keystone XL Pipeline itself, yes it will deliver more Canadian oil to U.S. refineries, but this will mostly offset declining oil shipments from Mexico and Venezuela. Thus, “the incremental impact of the Project on GHG [greenhouse gas] emissions would be minor,” concludes State’s EIS (ES 6.14.2). Again, if no incremental CO2 emissions is the only acceptable standard, then we should welcome high unemployment rates, because there’s nothing quite like a deep recession for cutting CO2 emissions.

The long and the short of it is that building the infrastructure to deliver oil from friendly, democratic, politically-stable, environmentally-fastidious Canada is in the U.S. national interest, as the State Department concluded in March 2008. The review process has dragged on, with State in March 2011 issuing a Supplemental EIS that affirms the findings of the earlier document. In May, the House Energy and Commerce Committee held a hearing on legislation to expedite a presidential decision on Keystone XL, and in July the House passed H.R. 1938, the North American-Made Energy Security Act, by 279-147. The bill would require the President to issue a final order granting or denying a permit to construct Keystone XL by no later than November 1, 2011.

Global demand for oil is growing and America will continue to import oil over the next 25 years even if biofuels and electric vehicles achieve unexpected breakthroughs. As Mark Milke of the Fraser Institute explains in a new report, what this means is that blocking Keystone XL and restricting U.S. access to Canadian oil would not move the world closer to some imaginary environmental utopia. The effect, rather, would be to increase U.S. imports from unsavory regimes where corruption is the norm, environmental safeguards are weak, autocrats brutally suppress dissent, and women are denied economic opportunity and equal protection of the laws.

Alas, I suspect this is actually one of the main reasons green groups oppose Keystone XL. They would like us to believe (a) that oil is a rapidly dwindling resource from which we will soon have to decouple our economy anyway, and (b) that using oil = sending $$ to OPEC. The vast potential of Canada’s oil sands and Canada’s emergence as the leading source of U.S. petroleum imports fractures both pillars of their gloomy, scaremongering narrative.

Driving is an American pastime on Memorial Day weekend. Indeed, today’s holiday is THE road trip occasion in American culture. This acute association explains why American politicians choose the lead up to Memorial Day to trot out plans to address high gasoline prices.

This year, it was dueling votes in the Senate. Roughly speaking, the Republicans tried to increase the supply of oil by ending the Obama administration’s de facto moratorium on domestic drilling, wrought by bureaucratic foot-dragging. The legislation already had been passed by the Republican-controlled House. On the other hand, the Democrats wanted to raise taxes on “Big Oil” companies, by eliminating tax breaks enjoyed by many—and in some cases, all—businesses. Neither party wooed enough votes to survive a filibuster, so they both failed. Of the two, the Republicans’ ideas were better this time, but there have been instances in the past when both parties were equally bad in the run up to Memorial Day weekend.

In May 2001, for example, President George W. Bush unveiled his administration’s much-hyped “Task Force Report on Energy.” To be sure, there were some great ideas in the unwieldy report, but there were also many awful ideas, foremost among them being the President’s proposal to waste taxpayer dollars on the FreedomCar initiative, a dead-end hydrogen fuel technology. The Task Force Report on Energy also called for a scientific report on the need for more stringent Corporate Average Fuel Economy Standards. This was the first step to the President ultimately signing into law increased fuel efficiency standards in late 2007. As has been covered extensively by my colleague Sam Kazman, CAFE standards are unwarranted violations of consumer choice that have the unfortunate side-effect of killing motorists.

The last Republican President’s transportation policies were losers, but Congressional Democrats are the league leaders in stupid energy policies issued near Memorial Day. Consider their run since 2006:

2006: Senate Democrats scuttled legislation to open ANWR with a promised filibuster.

2007: House Democrats passed the cleverly titled NOPEC (No Oil Producing and Exporting Cartels Act) bill, legislation that would somehow alter the resource acquisition decisions made by sovereign countries, among them allies. That is, the NOPEC bill was pure, unadulterated grandstanding.

2008: Senate Democrats tried to drum up drama over nefarious oil “speculators.” Like the 2007 NOPEC Act, targeting “speculators” sounds furious, but signifies nothing.

2009: House Democrats proposed a novel solution for high gas prices: higher gas prices. With the support of House leadership, Rep. Henry Waxman (D-Beverly Hills) pushed the American Clean Energy and Security Act, a cap-and-trade energy rationing scheme designed to raise the price of hydrocarbon energy like gasoline.

2010: BP’s Deepwater Horizon disaster dominated the energy policy debate for the entire summer. Funny how we don’t talk about that anymore.

California Superior Court judge Ernest Goldsmith ruled on Friday that the state’s Air Resources Board (ARB) must halt “any futher rulemaking and implementation of cap-and-trade” until the agency examines alternatives policies to meet the greenhouse gas-reduction targets established by Assembly Bill 32, the Global Warming Solutions Act. ARB must also, pursuant to the California Environmental Quality Act (CEQA), complete a review of the environmental impacts of its preferred regulatory strategy before adopting it.

Note: The ruling does not challenge AB 32 itself, and petitioners in the case are greenies who think ARB’s plan to curb greenhouse gas (GHG) emissions doesn’t go far enough. Nonetheless, this is a setback to California politicians and cap-and-taxers throughout the land. ARB has 15 months to provide the requisite analyses. ARB says it will appeal the decision. Rots of ruck!

AB 32 requires ARB to establish a statewide GHG emissions tonnage limit for 2020 equivalent to the state’s emission levels in 1990, and to develop a regulatory path, known as a Scoping Plan, to achieve ”maximum technologically feasible and cost-effective reductions in greenhouse gas emissions from sources or categories of sources of greenhouse gases by 2020.” Judge Goldsmith ruled that ARB “committed a prejudicial abuse of discretion when it failed to proceed in a manner required by law by inadequately describing and analyzing Project alternatives [other ways of reducing GHG emissions] sufficient for informed decisionmaking and public participation.”

Judge Goldsmith more extensively discussed the issues in his Jan. 24, 2011 Tentative Statement of Decision. Petitioners, led by the Association of Irritated Residents (AIR), asserted that  ARB “failed to meet the mandatory statutory requirements of AB 32 and the California Environmental Quality Act (CEQA) by essentially treating the Scoping Plan as a post hoc rationalization for ARB’s already chosen policy approaches.” Specifically, petitioners argued that ARB violated AB 32 by:

(1) excluding whole sectors of the economy from GHG emission controls and including a cap-and-trade program without determining whether potential reduction measures achieved maximum technologically feasible and cost-effective reductions; (2) failing to adequately evaluate the total cost and benefits to the environment, the economy, and public health before adopting the Scoping Plan; and (3) failing to consider all relevant information regarding GHG emission reduction programs throughout the United States and the world, as required by AB 32, prior to recomending a cap-and-trade regulatory approach.

The significance for national politics? This is another nail in cap-and-trade’s coffin. AB 32 was a point of pride for both former Gov. Schwarzengger and California Democratic legislators. Indeed, one purpose of the statute was to place California “at the forefront of national and international efforts to reduce emissions of greenhouse gases.” AB 32 became the much-vaunted “California model” that Rep. Henry Waxman (D-Calif.) and Sen. Barbara Boxer (D-Calif.) invoked during their multi-year campaign to sell cap-and-trade on Capitol Hill.

Cap-and-trade has been on the skids since its day in the Sun back in June 2009, when the House narrowly passed the Waxman-Markey bill. After passage, the bill became politically radioactive and never came to a vote in the Senate. The December 2009 Copenhagen climate conference ended in failure, producing no agreement on a successor treaty to the Kyoto Protocol.

In February 2010, Arizona Gov. Jan Brewer issued an executive order stating that Arizona would not implement the Western Climate Initiative (WCI) cap-and-trade plan, scheduled to begin on January 1, 2012. Aside from California, none of the other WCI states (Arizona, New Mexico, Oregon, Washington, Montana, and Utah) is close to implementing cap-and-trade. Yet in August 2010, ARB Chair Mary Nichols said that California would not go it alone: ”We won’t launch this program without partners to trade with. It doesn’t make sense for an economy even as big as California, to try to do this all by ourselves.”

In November 2010 the Chicago Climate Exchange emissions trading pilot program announced it would shut down “for lack of legislative interest.”

And now, thanks to the Irritated and Judge Goldsmith, ARB may not be able to implement cap-and-trade even if Ms. Nichols wants to fly solo.

Political movements fizzle without momentum. Judge Goldsmith just put the Golden State’s cap-and-trade plan on ice.

“California is experiencing the fastest rate of of companies relocating to out-of-state or out-of-country locations since a specialized tracking system was put into place two years ago,” reports business relocation coach Joseph Vranich. Seventy companies completely or partly moved their operations out of California since Jan. 1, 2011 for reasons other than business expansion. 

Vranich says the 70 “disinvestment events” understate the exodus of capital and jobs from California: ”It’s estimated that only one out of five losses becomes public knowledge, if that.”

Why are companies leaving the Golden State? As you might expect, California’s out-of-control spending, high taxes, and burdensome regulations figure among the top 10 reasons. Vranich, however, recently added high energy costs to the list:

The #10 Reason (New!) – Unprecedented Energy Costs: The California Manufacturers and Technology Association states that commercial electrical rates here already are 50% higher than in the rest of the country. However, a law enacted in April 12, 2011 requires utilities to get one-third of their power from renewable sources (e.g., solar panels, windmills) within nine years. Look for costs to increase by another 19% in many places to a whopping 74% in Los Angeles. Such new burdens along with upcoming regulations stemming from the “California Global Warming Solutions Act” set potentially overwhelming obstacles to companies here as they try to meet competition based in other states and in foreign nations.

 For many years, California Democrats — notably Rep. Henry Waxman and Sen. Barbara Boxer — have been at the forefront of congressional efforts to enact cap-and-tax and promote EPA’s greenhouse power grab. Waxman and Boxer have worked tirelessly to export California’s energy (or anti-energy) policies to the rest of the nation. They continue to push the “California model” as the path to a “clean energy future.” Vranich’s report is a sobering reminder of how foolish it would be for the nation to take their advice.

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.