The Governors of Georgia, Texas, Arkansas, Delaware, Maryland, New Mexico, and North Carolina have petitioned EPA Administrator Lisa Jackson to waive the mandatory ethanol blending requirements established by the Renewable Fuel Standard (RFS). The petitioners hope thereby to lower and stabilize corn prices, which recently hit record highs as the worst drought in 50 years destroyed one-sixth of the U.S. corn crop. Corn is the principal feedstock used in ethanol production.

Arkansas Gov. Mike Bebe’s letter to Administrator Jackson concisely makes the case for regulatory relief:

Virtually all of Arkansas is suffering from severe, extreme, or exceptional drought conditions. The declining outlook for this year’s corn crop and accelerating prices for corn and other grains are having a severe economic impact on the State, particularly on our poultry and cattle sectors. While the drought may have triggered the price spike in corn, an underlying cause is the federal policy mandating ever-increasing amounts corn for fuel. Because of this policy, ethanol production now consumes approximately 40 percent of the U.S. corn crop, and the cost of corn for use in food production has increased by 193 percent since 2005 [the year before the RFS took effect]. Put simply, ethanol policies have created significantly higher corn prices, tighter supplies, and increased volatility.

Agriculture is the backbone of Arkansas’s economy, accounting for nearly one-quarter of our economic activity. Broilers, turkeys, and cattle — sectors particularly vulnerable to this corn crisis — represent nearly half of Arkansas’s farm marketing receipts. Arkansas poultry operators are trying to cope with grain cost increases and cattle familes are struggling to feed their herds.

Section 211(o)(7) of the Clean Air Act (CAA) authorizes the EPA to waive all or part of the RFS blending targets for one year if the Administrator determines, after public notice and an opportunity for public comment, that implementation of those requirements would “severely harm” the economy of a State, a region, or the United States. Only once before has a governor requested an RFS waiver. When corn prices soared in 2008, Gov. Rick Perry of Texas requested that the EPA waive 50% of the mandate for the production of corn ethanol. Perry, writing in April 2008, noted that corn prices were up 138% globally since 2005. He estimated that rising corn prices had imposed a net loss on the State’s economy of $1.17 billion in 2007 and potentially could impose a net loss of $3.59 billion in 2008. At particular risk were the family ranches that made up two-thirds of State’s 149,000 cattle producers. Bush EPA Administrator Stephen Johnson rejected Perry’s petition in August 2008.

In the EPA’s Request for Comment on the 2012 waiver petitions, the agency indicates it will use the same “analytical approach” and “legal interpretation” on the basis of which Johnson denied Perry’s request in 2008. This means the regulatory decks are stacked against the petitioners. As the EPA reads the statute, CAA Section 211(o)(7) establishes a burden of proof that is nearly impossible for petitioners to meet. No matter how high corn prices get, or how serious the associated economic harm, the EPA will have ready-made excuses not to waive the corn-ethanol blending requirements.

According to the EPA, Petitioners must show that the “RFS itself” would cause severe economic harm, not merely “contribute” to it. Petitioners therefore must also show that the relief sought would achieve a substantial reduction in the prices of corn, feed, and food.

This reading of the statute effectively prejudges the issue. ”Severe” economic harm typically results from a combination of factors, not one single cause. An ethanol mandate that causes little economic harm when unemployment rates are low, corn production is high, and China’s demand for U.S. corn imports is low could inflict severe harm when the opposite conditions obtain — as they do today.

If Congress wanted the EPA to grant a waiver only when the RFS alone causes severe economic harm, it could have easily said so. The statute specifies no such limitation. CAA Section 211(o)(7) does not tell the EPA to ignore non-RFS factors that might also adversely affect food and feed prices, agricultural employment, and the competitiveness of U.S. livestock producers.

The EPA’s demand that the waiver be a ”remedy for the harm” is the flip side of this same trick coin. By law, the EPA may grant a waiver for only one year at a time. Although a series of waivers might provide a complete remedy, a one-year waiver may have little impact on markets shaped by the RFS’s 17-year (2006-2022) production quota schedule. So the EPA could reject the waiver petitions on the grounds that a piecemeal solution is no solution at all.

Note: The EPA argues the exact opposite when the issue is whether or not to pull a regulatory trigger. In such cases, even small contributions to an alleged harm are considered sufficient grounds for regulation, and even minute regulatory contributions to the hoped-for solution are deemed fully justified and legally required.

Take, for example, the EPA’s heavy-duty truck greenhouse gas (GHG) emission standards. The EPA estimates that the standards for model year (MY) 2014-2018 heavy-duty vehicles will reduce atmospheric carbon dioxide (CO2) concentrations by 0.732 parts per million, which in turn will avert an estimated 0.002-0.004°C of global warming and 0.012-0.048 centimeters of sea-level rise by the year 2100 (Proposed Heavy Truck Rule, p. 74289). Such changes would be too small for scientists to distinguish from the “noise” of inter-annual climate variability. The EPA acknowledges no obligation to demonstrate either that heavy-truck GHG emissions alone harm public health and welfare or that regulating MY 2014-2018 heavy-truck GHG emissions would have a major impact on global warming.

Consider also the EPA’s Utility MACT Rule for coal-fired power plants. The agency acknowledges that U.S. mercury (Hg) emissions constitute only 5% of global anthropogenic Hg emissions and only 2% of the total global Hg pool, and that U.S. power plant emissions account for only 0.6% of the global pool. More importantly, the EPA estimates  — based on dubious epidemiological evidence and questionable demographic modeling – that the MACT Rule’s Hg emission reductions will avert the loss of 0.00209 IQ points per child in a guesstimated population of 240,000 subsistence fishing households. IQ points cannot be measured out to five decimal places. The MACT Rule’s microscopic mercury-related health benefits are literally undetectable and unverifiable. The EPA is completely undaunted by such facts. In the agency’s words (Proposed Utility MACT Rule, p. 24978):

However, as the U.S. Supreme Court has noted in decisions as recently as Massachusetts v. EPA, regarding the problem of climate change, it is not necessary to show that a problem will be entirely solved by the action being taken, nor that it is necessary to cure all ills before addressing those judged to be significant. 549 U.S. 497, 525 (2007).

In stark contrast, when the issue before the EPA is whether to grant regulatory relief, then the regulation itself must be shown to cause severe harm, and even temporary relief must be shown to cure all ills (or most of them). This is not surprising. Being a regulatory agency, the EPA does not accord the harms of over-regulation the same weight as the harms of under-regulation.

So in all likelihood, the EPA will deny the Governors’ waiver requests, even though a waiver would undoubtedly lower and stabilize corn prices to some extent.

This cloud may have a silver lining. If the EPA once again refuses to balance the interests of corn farmers against those of other industries and consumers, it will furnish new evidence that the RFS is a policy disaster. Especially if the drought persists into 2013, an EPA that won’t heed the reasonable requests of domestic livestock producers, seven governors, 156 House members, 26 Senators, the head of the UN Food and Agriculture Organization, and other food security advocates will build support for RFS reform — or repeal.

Earlier this month, the House Oversight and Government Reform Committee issued a staff report on the Obama Administration’s fuel economy/greenhouse gas (GHG) regulatory program. The report, A Dismissal of Safety, Choice, and Cost, is the product of a “multi-year Committee investigation” that includes three hearings, a transcribed interview of EPA Assistant Administrator Gina McCarthy, and a review of more than 15,000 documents obtained by the Committee from the EPA, the National Highway Traffic Safety Administration (NHTSA), the California Air Resources Board (CARB), and 15 automobile manufacturers.

Some key findings:

• The Administration performed an end-run around the law and ran a White House-based political negotiation, led by “czars” who marginalized NHTSA, the federal agency charged in statute with setting fuel economy standards.
• Contrary to the statutory scheme Congress created, the EPA became the lead agency in fuel economy regulation and NHTSA was sidelined. Contrary to Congress’s preemption of State laws or regulations “related to” fuel economy, CARB became a “major player” and an “aggressive participant in the process,” allowing unelected state regulators in Sacramento to set national policy outside the federal rulemaking process.
• The Administration violated the spirit – and possibly the letter – of the Administrative Procedure Act, Presidential Records Act, and Federal Advisory Committee Act by negotiating agreements on both the Model Year (MY) 2012-2016 and MY 2017-2025 standards behind closed doors with only a select group of stakeholders.
• The new fuel-economy/GHG standards will add thousands of dollars to the cost of new vehicles. Consumers are likely to incur net financial losses unless annual gasoline prices reach $5-$6 per gallon.
• Compliance with the new standards will require mass reductions that will, in turn, compromise vehicle safety. EPA and CARB officials mocked and belittled safety concerns raised by NHTSA.

In a law journal article and regulatory comment letter, I also make the case that the administration’s fuel-economy agenda trashes the separation of powers and administrative procedures. But the Committee’s report provides the first, detailed behind-the-scenes chronology of Team Obama’s fuel economy machinations, confirming what other critics suspected but could not document.

Some secrets of the sausage factory, though, may never come to light: “Despite multiple requests, the Executive Office of the President refused to provide any information on its involvement in developing the fuel economy and GHG emissions standards.”

In related news, House Oversight and Government Reform Chairmain Darrell Issa (R-Calif.), Rep. Jim Jordan (R-Ohio), who chairs the regulatory affairs subcommittee, and Rep. Mike Kelly (R-Pa.), an auto dealer, yesterday requested the White House Office of Information and Regulatory Affairs (OIRA) ”to return the [MY 2017-2025 fuel-economy/GHG] rule to the agencies for further consideration of its adverse consequences to consumers and the economy” (Detroit News, Aug. 22, 2012).

It’s doubtful OIRA will grant the request, and not only because NHTSA administrator David Strickland said the rule would be published “in days, not weeks,” and Department of Transportation Secretary Ray LaHood said, “It is going to happen . . . there’s no backing away.”

Team Obama wants to lock in the fuel-economy/GHG rule before the November elections. As the Committee’s report notes, “The Administration rushed to set the second round of fuel economy standards before the 2012 presidential election because, according to one EPA official, the President ‘wants to secure his legacy.’”

Particularly revealing in this regard is the November 2011 joint press release that LaHood and EPA Administrator Lisa Jackson issued when they proposed the new fuel-economy/GHG rule. The two agency heads actually boasted they were bypassing Congress: ”Today‘s announcement is the latest in a series of executive actions the Obama Administration is taking to strengthen the economy and move the country forward because we can’t wait for Congressional Republicans to act” [emphasis added].

A legislative proposal boosting average fuel economy to 54.5 mpg would not pass in the 112th Congress. Note also that NHTSA need not propose fuel economy standards for MYs 2017 and later until 2014. “We can’t wait” really means: We won’t let the people’s representatives decide — not now, not after the 2012 elections.

So don’t hold your breath waiting for EPA and NHTSA to reconsider their handiwork. In the meantime, check out this informative YouTube video by the National Automobile Dealers Association (NADA).

The EPA and NHTSA estimate the fuel-economy/GHG rule will add $3,000 to the average cost of a new motor vehicle in 2025. According to NADA, the $3,000 higher price tag means that 7 million drivers who can now afford to buy a new vehicle, won’t in 2025. The rule will also regulate out of existence the most affordable new vehicles, i.e. those costing $15,000 or less.

The worst drought in 50 years has destroyed one-sixth of the U.S. corn crop. The USDA’s World Agricultural Supply and Demand Estimates (WSDE) report, released Friday, projects the smallest corn crop in six years and the lowest corn yields per acre since 1995.

As acreage, production, and yields declined, corn prices spiked. Last week, corn futures hit a record high of $8.29-3/4 per bushel.

If corn prices remain  high through 2013, livestock producers who use corn as a feedstock will incur billions of dollars in added costs. “These additional costs will either be passed on to consumers through increased food prices, or poultry farmers will be forced out of business,” warn the National Chicken Council and National Turkey Federation.

Even before the drought hit, corn prices were high. Prices increased from $2.00 a bushel in 2005/2006 to $6.00 a bushel in 2011/2012, notes FarmEcon LLC. A key inflationary factor is the Renewable Fuel Standard (RFS), commonly known as the ethanol mandate. Since 2005, the RFS has required more and more billions of bushels to be used to fuel cars rather than feed livestock and people.

Suspension of the mandate would allow meat, poultry, and dairy producers to compete on a level playing field with ethanol producers for what remains of the drought-ravaged crop. That would reduce corn prices, benefiting livestock producers and consumers alike.

EPA Administrator Lisa Jackson has authority under the 2007 Energy Independence and Security Act (EISA) to waive the RFS blending targets, in whole or in part, if she determines that those requirements “would severely harm the economy or environment of a State, a region, or the United States.” The pressure on her to do so is mounting.

On July 30, a coalition of meat, dairy, and poultry producers petitioned Jackson to waive the 2012 and 2013 RFS blending requirements. From the petition:

As detailed below, the extraordinary and disastrous circumstances created for livestock and poultry producers by the ongoing drought in the heart of our grain growing regions requires that all relevant measures of relief be explored and taken where possible. One of these measures must be the amount of grain utilized for the production of renewable fuel. The ongoing drought is taking an enormous toll on the nation’s corn crop. As we detail below, the 15.2 billon gallon  renewable fuel standard (“RFS”) in 2012 coupled with the prospect of a 16.55 billion gallon standard in 2013 will require the renewable fuels industry to utilize a major portion of the drought-limited available corn supply. The drought-induced reductions in the corn supply means that the mandated utilization of corn for renewable fuels will so reduce the supply of corn and increase its price that livestock and poultry producers will be forced to reduce the size of their herds and flocks, causing some to go out of business and jobs to be lost. In addition to this direct harm, these herd and flock reductions will ripple through the meat, milk and poultry sectors, causing severe harm in the form of more job and economic losses. This drought-induced harm exists now, will continue to exist into the latter part of 2012 and 2013, and could continue to be felt in 2014 depending on the policy choices made now.

On August 1, bi-partisan groups of 156 House Members  and 26 Senators sent letters to Jackson asking her to “adjust” the RFS targets in light of the drought and rising corn prices. The House letter argues, in part:

As you are aware, U.S. corn prices have consistently risen, and the corn market has been increasingly volatile, since expansion of the RFS in 2007. This reflects the reality that approximately 40 percent of the corn crop now goes into ethanol production, a dramatic rise since the first ethanol mandates were put in place in 2005. Ethanol now consumes more corn than animal agriculture, a fact directly attributable to the federal mandate. While the government cannot control the weather, it fortunately has one tool still available that can directly impact corn demand. By adjusting the normally rigid Renewable Fuel Standard to align with current market conditions, the federal government can help avoid a dangerous economic situation because of the prolonged record high cost of corn.

 On August 9, Secretary General of the U.N. Food and Agricultural Organization (FAO) Jose Graziano da Silva called for an “immediate, temporary suspension” of the mandate  to help avert a repeat of the 2008 food crisis.

Also on August 9, the Govs. of Delaware (Jack Markell) and Maryland (Martin O’Malley), both Democrats, sent Jackson a letter in support of the industry coalition’s petition. From the Governors’ letter to Jackson:

In 2012, more than 40% of the U.S. annual corn supply was to be used to meet the RFS corn based ethanol requirements established annually by the EPA. If you were to exercise your statutory authority to waive the RFS standards for the next year, it would make more than 5 billion bushels of corn available to the marketplace for animal feed and foodstuffs, driving down costs and significantly lessening the financial impact to Delmarva’s [Delaware-Maryland-Virginia] poultry farms and consumers. While there may be some who question the true price impact of waiving the RFS standards for a limited period, those debates are quantitative, not qualitative, as it is not in dispute that a waiver would put downward pressure on corn pricing. Given the likely impacts to the poultry industry, not to mention the increased cost of food for consumers, of this dramatic increase in price due to the undersupply of corn, it is hard to imagine any scenario when exercising your authority would be more appropriate.

There is, alas, little chance Jackson will waive any part of the RFS. That would be asking an executive agency to put economic rationality ahead of political calculation in a presidential election year. President Obama today makes his fifth visit to Iowa this year. Iowa, with six electoral votes, is the heart of corn country. Supporting a waiver to lower corn prices would spoil the President’s photo ops.

Today’s Greenwire (subscription required) reports that the USDA has announced it will purchase up to $170 million worth of meat, poultry, and catfish to help producers who have been adversely affected by high corn prices. The fix on offer is not to scale back regulatory excess but to expand corporate welfare.  

There’s a big lie making the rounds that EPA’s ultra-expensive new mercury regulation is worth the cost ($10 billion annually) because it will protect fetuses from developmental disorders.

EPA Administrator Lisa Jackson is the most prominent perpetrator of the mercury lie. Recently, she gave a pep talk to a group of collegian environmental activists trying to shut down campus coal fired power plants, during which she said:

“It’s so important that your voices be heard, that campuses that are supposed to be teaching people aren’t meanwhile polluting the surrounding community with mercury and costing the children a few IQ points because of the need to generate power.  It’s simply not fair.”

Over at Think Progress Green, Brad Johnson does his part to spread mercury disinformation, by pooh-poohing Rep. Ed Whitfield (R-Kentucky) for having claimed (correctly) that the mercury rule won’t have any benefit for babies and pregnant women. According to Johnson,

“The glimmer of fact in Whitfield’s claims is that the health costs of mercury poisoning of our nation’s children over decades of unlimited coal pollution are difficult to quantify. Mercury poisoning is rarely fatal and hard to detect, but causes undeniable, insidious developmental harm to fetuses and babies.”

Naturally, environmentalist special interests are the worst propagators of this mercury mendacity. The day that EPA Administrator announced the final mercury rule, Sierra Club launched a television advertisement depicting a little girl learning to ride a bike, while a voiceover states:

“When this little girl grows up her world will have significantly less mercury pollution because President Obama and the EPA stood up against polluters and established the first-ever clean air standards. This action means that our air, water, and food will be safer from mercury pollution and heavy metals generated by coal-fired power plants. Like you, President Obama understands that reducing toxic mercury pollution increases the possibilities to dream big.”

Global atmospheric mercury might or might not be a problem—I don’t know. But I do know that mercury emissions from U.S. coal fired plants pose a negligible danger to fetuses. And I know this because EPA told me so.

Mercury emissions aren’t a direct threat to humans; rather, they settle onto bodies of water, and then make their way up the aquatic food chain. Because mercury is a neurotoxin, the fear is that pregnant women can engender development disorders in their fetuses by eating fish that have bio-accumulated mercury. Accordingly, EPA identifies pregnant women as the population at highest risk from U.S. power plant mercury emissions.

The graph below is taken from page 51 of EPA’s Technical Support Document: National-Scale Mercury Risk Assessment Supporting the Appropriate and Necessary Finding for Coal and Oil-Fired Electric Generating Units, which is essentially EPA’s justification for regulating mercury. I’ve crudely photo-shopped the graph to highlight the supposed threat posed by U.S. coal fired power plants to pregnant women.

Three notes: (1) In the proposed rule, EPA stated that 2016 projections for mercury emissions (29 tons) reflect current emissions, so this graph (the “2016 scenario”) represents the current mercury threat; (2) EPA “interpreted IQ loss estimates of 1-2 points as being clearly of public health significance” (p. 17 of the Technical Support Document); and (3), the columns of the graph, “Watershed percentiles,” refer to freshwater, inland bodies of water, and the degree to which they have been polluted by mercury (i.e., the 99^th watershed percentile refers to the top one-percent mercury-polluted freshwater, inland body of water).

According to EPA’s own analysis, the new mercury regulation serves to protect America’s population of pregnant, subsistence fisherwomen, who eat 300 pounds of self-caught fish reeled in exclusively from the most polluted bodies of water.  Notably, EPA failed to identify a single member of this supposed population. Instead, these people are assumed to exist. Is that a plausible assumption?

Even if there are one or two pregnant super-anglers with voracious appetites for self-caught fish from the most polluted lakes and rivers, a 1.1 improvement in IQ is such a slight benefit that it could not possibly be disassociated from statistical noise. EPA’s mercury regulation, therefore, is a double whammy of nonsense. It would benefit an apparitional population with a statistically invisible improvement, all for only $10 billion a year. What a deal!

Mercury is making the rounds in the news, with an op-ed in the Wall Street Journal, a Lisa Jackson appearance on The Daily Show (and part two), and a bunch of angry blogs. From the angry blogger:

Famed science deniers Willie Soon and Paul Driessen, both of whom have worked for groups that accept cash from Exxon Mobil to pretend global warming isn’t happening, have a new crusade: Mercury denial!

That’s right: They have an op-ed in Wednesday’s Wall Street Journal claiming that breathing toxic mercury isn’t bad for you.

Willie Soon, astronomer. And Paul Driessen, lobbyist with a degree in geology. Expertise in public health? Limited. Willingness to take cash from the coal polluters that pump tons of mercury into our air every year? Extensive.

What’s that? You want to know what actual medical researchers have to say about the subject? Fine, have it your way:

Note that the post begins with a personal attacks on the individuals (as well as their funding), and ignores the number of valid arguments brought up in the piece. It also ignores the similarly esteemed medical researchers have noted that the U.S. accounts for less than 1% of global mercury emissions, so eliminating our mercury emissions (which comes at a cost, despite Lisa Jackson’s assertion that it will create jobs for those who install mercury scrubbers) won’t have a significant effect on atmospheric mercury content, and thus the alleged negative health effects. This paper estimates that man-made mercury emissions account for approximately 30% of total annual emissions, with 70% coming from natural sources. As the WSJ piece notes, this helps to put the ‘coal plants are killing your babies’ into perspective:

How do America’s coal-burning power plants fit into the picture? They emit an estimated 41-48 tons of mercury per year. But U.S. forest fires emit at least 44 tons per year; cremation of human remains discharges 26 tons; Chinese power plants eject 400 tons; and volcanoes, subsea vents, geysers and other sources spew out 9,000-10,000 additional tons per year.

All these emissions enter the global atmospheric system and become part of the U.S. air mass. Since our power plants account for less than 0.5% of all the mercury in the air we breathe, eliminating every milligram of it will do nothing about the other 99.5% in our atmosphere.

In the face of these minuscule risks, the EPA nevertheless demands that utility companies spend billions every year retrofitting coal-fired power plants that produce half of all U.S. electricity.

Furthermore, its the dose that makes the poison. Almost all of us have some traces of mercury in our blood (remember, 70% of this is exposure is from natural sources humans have no control over):

According to the Centers for Disease Control’s National Health and Nutrition Examination Survey, which actively monitors mercury exposure, blood mercury counts for U.S. women and children decreased steadily from 1999-2008, placing today’s counts well below the already excessively safe level established by the EPA. A 17-year evaluation of mercury risk to babies and children by the Seychelles Children Development Study found “no measurable cognitive or behavioral effects” in children who eat several servings of ocean fish every week, much more than most Americans do.

The World Health Organization and U.S. Agency for Toxic Substances and Disease Registry assessed these findings in setting mercury-risk standards that are two to three times less restrictive than the EPA’s.

It’s simply mind boggling that someone is willing to accuse another of dishonesty while creating so much of it on his own. Here is a longer post criticizing Lisa Jackson’s statements on The Daily Show. Here is a 2008 CEI study on mercury pollution and human exposure.

Last week the Consumer Federation of America issued another of those consumer “surveys” supposedly showing that the public solidly supports higher energy efficiency standards.  The previous one in this series was a Federation survey in March of alleged consumer demand for more stringent home appliance standards.  Even though affordable top-loading washers have pretty much been ruined by existing federal regulations, the March survey “found” that consumers wanted even tougher regs. The Federation’s trick: just ask pie-in-the-sky questions that portray these mandates as win-win situations.  Never suggest that the mandates mess up appliance performance, even when the evidence is staring you in the face.

The topic of last week’s survey was autos and fuel economy standards.  The Federation dressed its report up in the usual language of “ending our addiction to oil”.  But if you think oil is addictive, are you really fighting that addiction by squeezing more miles out of every gallon? Doesn’t that make oil even more addictive?

But let’s leave that question aside for the time being, and get back to the Federation’s surveying expertise.  Only one question in the survey hints at any downside to higher efficiency regs.  That downside is the possibility these regs will raise new car prices.  But aha—not to worry!  The question then has us imagine that these higher prices will be offset by lower gas costs over 3, 5 or 10 years.  In this fairytale land, support wavers only slightly as the payback period grows.

I wonder how people would have responded if the Federation had admitted that the higher car prices might never be recouped?  Or that the cars would perform worse, or be less safe (as a National Academy of Sciences concluded in 2002)?

Or let’s take a fuel economy measure reported just yesterday—that some carmakers are planning to eliminate spare tires from new cars in order to boost fuel economy? Will this milestone in the regulatory history of the car be mentioned in the Consumer Federation’s next survey?

Don’t hold your breath.

(And by the way, a major government announcement on fuel economy regs is reportedly scheduled for this morning, so you may want to watch your wallet as well.)

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.

On Thursday, the Water Resources and Environment Subcommittee of the House Transportation Committee held a hearing on “Environmental Protection Agency Mining Policies: Assault on Appalachia.” Video and written testimony are available here. For detailed descriptions of the EPA’s outrageous war on Appalachian coal production, click here, here, or here. Suffice it to say, EPA has subverted the Administrative Procedures Act to enact a de facto moratorium on mining. It engineered a new Clean Water Act “pollutant,” saline effluent, which the EPA claims degrades water quality downstream from mines by harming a short lived insect that isn’t an endangered species. The hearing yesterday was part 1; next Wednesday, the subcommittee is scheduled to hear from EPA administrator Lisa Jackson.

It was a bipartisan bashing. The only Democrat to show up was Ranking Member Rep. Nick Rahall (WV), whose opposition to the EPA exceeds that of Republicans, due to the fact that his State is the largest coal producer in Appalachia, and is, therefore, harmed most.

For the “Part 1″ hearing on Thursday, the primary topic was the EPA’s procedural shenanigans. For part two next week, with Administrator Lisa Jackson, I very much hope they address the EPA’s shoddy science on the ecological impact of mountaintop mining.

The star of the show was Rep. John J. Duncan (R-TN). Either he is an incredible speaker, or he has a great stump speech about “environmental extremism.” He said that his district used to produce 12 million tons of coal every year. Now, he said it produces 2 million tons annually. He noted how environmentalists tend to be the upper middle class, while environmentalist policies hurt the poorest the most. It was a great speech.

Kentucky Energy and Environment Secretary Dr. Leonard K. Peters said something very interesting during the hearing. He claimed that EPA Region 4, which serves Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee, was amenable to Kentucky’s concerns about the unreasonableness of the EPA’s Appalachian coal crackdown, but that the federal office would not budge. If true, this is a damning indicator of how the Obama administration is willing to harm Appalachia economically in order to sate its coastal environmentalist base.

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.

Elsewhere, I’ve described two fronts the Obama administration is waging against coal production in Appalachia (see here and here).

Since the President took office, environmentalists have been urging the administration to open a third front against Appalachian coal. This one pertains to the so-called “fill rule.” Here’s how the Sierra Club describes it: “In 2002, the Bush administration changed a key Clean Water Act rule to allow mining companies to dump their waste into waterways. Known as the “Fill Rule,” it allows mountaintop removal coal mine operators to bury Appalachian streams with their waste.”

As I demonstrate below, virtually the whole of the Sierra Club’s characterization of the “fill rule” is incorrect, starting with the fact that the rule originated with the Clinton administration, not the Bush administration. In fact, the “fill rule” is a relatively innocuous regulation that acts primarily to allow the EPA’s long held definition of “fill material” to trump that of the U.S. Army Corps of Engineers.

The “Fill Rule”: A Tortuous History

The Clean Water Act prohibits all pollution discharges into navigable waters, unless the “polluter” obtains a permit. Generally speaking, there are two such variances: (1) Section 402 permits, for “point source” discharges (like a pipe), which are issued by the EPA or by a state agency whose guidelines are EPA-approved and (2) 404 permits, for “dredge and fill” projects (such as filling a swamp to create a new housing development), which are issued by the U.S. Army Corps of Engineers in accordance with guidelines set by the EPA.

The “fill rule” controversy pertains to Section 404 permits, and is based on an ambiguity in the definition of “fill material.” In 1975, the EPA adopted an “effects based” definition of “fill material.” That is, a discharge is “fill material” if its effect is to replace navigable waters with dry land.

Initially, the U.S. Army of Corps of Engineers adopted an identical definition, but in 1977, it changed its interpretation of “fill material” from the EPA’s “effects based” definition, to a “purpose based” definition. In particular, the U.S. Army Corps of Engineer’s definition excluded from the definition of “fill material” any material discharged with the purpose of waste disposal.

The diverging definitions created a problem for surface coal mining in Appalachia. When you dig up coal, the loosened dirt and rock, known as overburden, have more volume than when they were compacted. Much of this overburden is used to reconstruct the approximate original contour of the mined terrain. However, there is almost always “extra” overburden, and this excess dirt and rock is placed in the valley at the base of the mine, often resulting in the burial of ephemeral or intermittent streams. This is known as a “valley fill.” These valley fills are inherent to surface coal mining in the steep terrain of Appalachia. Furthermore, they are unambiguously authorized by the 1977 Surface Mining Control and Reclamation Act.

However, this “extra” overburden can be construed as mining waste. Under the EPA’s “effects based” definition of “fill material” the fact that overburden is “waste” is immaterial, because its “effect” is to replace water. But under the U.S. Army Corps of Engineers “purpose based” definition of “fill material,” interpreting mining overburden as “waste” means that it cannot obtain a Section 404 dredge and fill permit.

In 1986, the EPA and the U.S. Army Corps of Engineers sought to reconcile their respective definitions with a “Memorandum of Agreement on Solid Waste,” by which the U.S. Army Corps of Engineers agreed to exercise its Section 404 authority over certain “solid wastes,” despite its “purpose based” definition of “fill material.” Under the Memorandum, jurisdictional authority over valley fills would be determined on a case-by-case basis.

Importantly, the Clean Water Act gives the EPA primacy over the U.S. Army Corps of Engineers and, in 1988, the Agency conducted a formal rulemaking to affirm its original “effects based” definition of “fill material.” Moreover, the 1986 Memorandum was an ad-hoc solution, that necessitated an extra regulatory process (i.e., determining who had authority over solid waste permitting on a case by case basis). In order to clarify the Clean Water Act, and also simplify the regulatory process, the Clinton administration in April 2000 initiated a rulemaking to effectively abandon the U.S. Army Corps of Engineer’s “purpose based” test. After due process, this rule was finalized by the Bush administration in 2002.

Environmentalist Priority

Environmentalists hate the 2002 “fill rule” because it ended the definitional ambiguity on “fill material,” and, thereby ended an avenue to litigate coal. If mining overburden—the material that goes into a valley fill—can be interpreted as “waste,” then environmentalist lawyers could argue that this “waste” is excluded from the U.S. Army Corps of Engineers’s “purpose based” definition of “fill material.” As a result, these litigants would allege that the Corps doesn’t have the authority to issue section 404 permits to valley fills.

To be sure, such litigation would have been unfounded. It would require a federal judge to discard the 1986 Memorandum, and even if he/she did, then the judge would then have to ignore EPA’s primacy over the U.S. Army Corps of Engineers regarding the section 404 permitting process. However, environmentalists have proven adept at getting their court cases before sympathetic judges (for example, Judge Charles Haden), before whom law takes a backseat to ideology.

A year ago, it seemed as if the Obama administration would seek to overturn the 2002 “fill rule.” In a January 2010 interview with Rolling Stone magazine, EPA Administrator Lisa Jackson said that the Agency was working on it. However, GreenWire reported last week that the Administration is having second thoughts about reworking the rule, much to the displeasure of green special interests. It is still unclear why the administration is backing off. My guess is that a more restrictive, “purpose based” definition of fill material would cause problems for other industries in addition to coal, and that the administration wanted to avoid a head ache.