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

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

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

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

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

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

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

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

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

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

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

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

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

Not every State is suffering economically.  According to a recent Wall Street Journal op-ed by Joel Kotkin,  unemployment in North Dakota is 3.8 percent (nation-wide, it’s about 9 percent), due primarily to increasing production of oil and gas. And, as noted by Bonner Cohen in a letter to the Journal, North Dakota’s energy boom was made possible primarily because almost all of North Dakota’s rich deposits of oil and natural gas lie beneath privately-owned land. Otherwise, it would have been locked up by the Obama administration.