William Yeatman

Post image for In Today’s Federal Register: EPA Seeks Nominations for Advisory Board Tasked with Investigating Agency’s Ridiculous Employment Impact Analysis

In a previous post, David Bier exposed the sleight of hand, known as partial equilibrium sector modeling, used by EPA to make the agency’s rules appear cost-effective. Partial equilibrium modeling entails an analysis of a regulation’s effect on only the directly affected industries, i.e., the regulated industry and the relevant pollution control industry, rather than an economy-wide analysis.

If, for example, EPA promulgated new sulfur dioxide emission standards for power plants, then a partial equilibrium sector modelling of the rule’s economic impact would project the employment changes on the utility sector and also the sulfur scrubber industry. Such an analysis would NOT take into account the economic effects of higher energy prices. In practice, EPA invariably finds that job creation in the pollution control industry more than offsets job losses in the regulated industry. Unbelievable as it sounds, EPA’s default assumption is that each $1 million spent on pollution control will engender a net increase of 1.5 jobs, with no ceiling.

Pause for a moment to let that sink in. Under EPA’s default assumption, there is no end to the employment benefits of the agency’s rules. If a given regulation costs $1 billion, it’ll create 1,500 jobs; and if it costs $1 trillion, it’ll create 1,500,000 jobs. And so on, all the way to infinity. Of course, this is plainly stupid.

Don’t take my word for it! Below, I’ve reposted an excerpt from an actual EPA regulatory analysis that employs this absurd assumption (from the Utility MACT):

voodoo3At the behest of Sen. David Vitter, Ranking Member on the Senate Environment & Public Works Committee, EPA has now started the process of updating its ridiculous employment analysis. To be precise, the agency is considering the use of full-economy modeling. Economy-wide modeling, if adopted, should limit EPA’s ability to pull such tricks and thereby result in a better regulatory impact estimate. In late 2013, in exchange for lifting his opposition to the nomination of Gina McCarthy to become EPA Administrator, Vitter won a concession that the Science Advisory Board, an EPA advisory body, would investigate the propriety of full economy modeling. That process has now begun.

In today’s Federal Register, EPA announced it is seeking nominations to staff the Science Advisory Board. If you know of a qualified economist, one that doesn’t suffer fools lightly, then please nominate him or her. Here’s the link to the notice. I’ve re-posted the announcement in its entirety below.

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Summary: Yesterday’s Supreme Court ruling in EPA v. EME Homer Generation, which upheld the EPA’s 2011 Cross State Air Pollution Rule (CSAPR), clarified more than a decade of contradictory interpretations of the Clean Air Act by the D.C. Circuit. For this, we can be thankful.  At the same time, however, there is reason to be wistful, because there can be little doubt that this Supreme Court would’ve upheld CSAPR’s predecessor, the 2005 Clean Air Interstate Rule. That rule was remanded by the D.C. Circuit Court in 2008, but the Bush administration didn’t have time for an appeal.

1. Michigan (2000) & North Carolina (2008): D.C. Circuit  Gives Conflicting Interpretations of the Clean Air Act’s Good Neighbor Provision; Judge David Sentelle’s Key role 

The Clean Air Act’s aptly named “Good Neighbor” provision addresses interstate pollution by prohibiting in-state sources from “emitting any air pollutant in amounts which will … contribute significantly” to downwind States’ non-compliance with national ambient air quality standards. See 42 U.S.C. §7410(a)(2)(D)

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Ruling below. Ginsburg delivered the Court’s opinion, in which Roberts, Kennedy, Breyer, Sotomayor, and Kagan joined. Scalia filed a dissenting opinion, in which Thomas joined.

SCOTUS CSAPR

 

End the Wind PTC

by William Yeatman on April 28, 2014

in Blog

On Friday, thirty-one non-profit organizations (including the free-market Competitive Enterprise Institute, where I work) sent a coalition letter to congressional leaders, urging lawmakers to resist reinstating the wind production tax credit, the wind industry’s lucrative subsidy that expired at the end of 2013. I’ve reposted the letter below.

Ptc Coalition Letter 4-25

 

On this morning’s Platts Energy Week with Bill Loveless, FERC Commissioner Philip Moeller gave a bombshell interview regarding the clear and present danger to electric reliability posed by the EPA.

By way of background, “FERC” stands for Federal Energy Regulatory Commission, and included among its responsibilities is helping to ensure that the lights stay on. While regional transmission organizations bear the primary burden for maintaining the reliability of the grid, the 2005 Energy Policy Act authorizes FERC to establish mandatory reliability standards for interstate power transmission. As such, Commissioner Moeller is well-positioned to assess threats to the grid. And according to him, EPA’s ridiculous Utility MACT has created the possibility of rolling blackouts. Excerpted transcript and video are posted below:

FERC Commissioner Philip Moeller: “We’re closing an enormous amount of coal generation, through a variety of rules, and a good number of those plants are set to retire next April. (Editor’s note: here, Moeller is referring to EPA’s absurd Utility MACT, which threatens to retire up to 25% of the nation’s coal fleet, starting next spring). But most people would say about 90% of that capacity was running and used and necessary during the polar vortex events. So the question is: Are we going to have mild weather for the next 2-3 years? If so, we can probably get through it. But if we have more extreme weather events, like we had this winter, and that power is no longer available, we could be in a real situation that’s not good for consumers.

Platts Energy Week: Are regional blackouts a possibility?

FERC Commissioner Philip Moeller: They are a possibility.

You’ve probably heard about Years of Living Dangerously, the big-budget, nine-part documentary on the supposedly dire threat posed by global warming.

Part three airs this Sunday on Showtime, and it stars Republican Representative Michael Grimm (NY). The story arc follows Rep. Grimm’s conversion from global warming skeptic to believer. In a nutshell, here’s the plot: Grimm had been a denier, but then he talked to former South Carolina Representative Bob Inglis,* and now he’s really scared of climate change.

marquee

This afternoon, only 48 hours before Rep. Grimm was to take his star turn on episode three of Years of Living Dangerously, Politico Breaking News sent out the following headline: “Michael Grimm Expected To Be Indicted.” Reportedly, the charges will include mail and wire fraud. What versatility! Denier, alarmist, mail fraudster, wire fraudster–what role can’t he play?

Snark aside, I think it’s safe to say that Rep. Grimm’s credibility has been damaged. By extension, the same can be said for this week’s episode of Years of Living Dangerously.

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Cooler Heads Digest 25 April 2014 by freedom1001

Secretary of State John Kerry: “Climate change can now be considered the world’s largest weapon of mass destruction, perhaps even, the world’s most fearsome weapon of mass destruction.” It is, moreover, “the greatest challenge of our generation.”

EPA Administrator Gina McCarthy: “If we don’t start dealing with climate change, which is the biggest public health challenge we face, as well as the biggest economic challenge we face…then I think we’re losing for the next generation and also for our own, frankly.”

Senate Majority Leader Harry Reid: “Climate change is the worst problem facing the world today.”

Rolling Stone reporter Jeff Goodell: Climate change is “the greatest challenge human civilization has ever faced.”

MSNBC host Chris Hayes: “The scientific consensus is that human civilization cannot survive in any recognizable form a temperature increase this century more than 2 degrees Celsius.”

Last, but certainly not least:

harry 69

EPA Administrator Gina McCarthy kicked off a jet-fueled, week-long tour to raise alarm about climate change with an appearance Monday on Comedy Central’s Daily Show (video below the break).

Of course, it’s a comedy show, but the host famously skirts the line between real and fake, and near the end of the segment, he asked Administrator McCarthy a very topical question: What would she do to fix the climate, if she had her “druthers.”

Below is her answer:

We’re going to regulate [greenhouse gases] under the Clean Air Act…we’re going to make it [greenhouse gas regulations] flexible, but you’re going to get significant greenhouse gas reductions out of it…We’re not talking about taking any fuel out of the system, we’re talking about making things more efficient, we’re talking about investments in efficiency [and] renewable energy.

Our job is to try to drive those reductions nationally, but to make sure that every state is differently positioned. Some have already done really impressive energy efficiency work. You know what? They could do a lot more.

In her answer, Administrator McCarthy is discussing EPA’s pending Clean Air Act §111(d) guidelines to control greenhouse gases from existing coal-fired power plants. The guidelines are due in June (although there is mounting evidence that the rulemaking is in disarray), and its contents are the subject of heavy speculation. To this end, looking at McCarthy’s quote, I’m struck by how often she stresses “efficiency.”

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Breathlessly reports today’s E&E PM ($):

Political spending by the fossil fuel industry has soared in recent years, and companies have been rewarded with billions of dollars in federal subsidies for oil, gas and coal projects, according to a report released today by environmental groups.

Contributions from the oil and gas industry increased by a staggering 11,761 percent from 2008 to 2012, according to a report released today by the Sierra Club and Oil Change International.

Conspicuously absent from E&E PM’s article is mention of the fact that Sierra Club took millions from the natural gas industry to attack the coal industry, DURING THE SAME TIME PERIOD THAT IS COVERED BY THE REPORT!!!

As I noted in February 2012,

Bryan Walsh in Time Magazine this week broke the big story that the Sierra Club received over $25 million from the natural gas industry to serve as a corporate shill and attack the coal industry.  Walsh wrote: “TIME has learned that between 2007 and 2010 the Sierra Club accepted over $25 million in donations from the gas industry, mostly from Aubrey McClendon, CEO of Chesapeake Energy—one of the biggest gas drilling companies in the U.S. and a firm heavily involved in fracking—to help fund the Club’s Beyond Coal campaign. Though the group ended its relationship with Chesapeake in 2010—and the Club says it turned its back on an additional $30 million in promised donations—the news raises concerns about influence industry may have had on the Sierra Club’s independence and its support of natural gas in the past.”

For shame!