Equality under Law and Energy Policy

by Marlo Lewis on December 12, 2013

in Blog, Features

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Equality under law is a core principle of every free society. It means the law does not discriminate among persons based on irrelevant characteristics. It sets the ground rules for competition but does not seek to advantage one person or group at the expense of others.

Equality under law is not an arbitrary preference but the logical implication of a more fundamental, natural equality rooted in the unity of the human species. The Declaration of Independence, which proclaims the equality of all human beings in respect to certain unalienable rights, is the locus classicus of this philosophy. Thomas Jefferson concisely explained the natural basis for equality under law when he stated that, “the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of god.”

Societies that reject (or do not recognize) the Declaration philosophy include not only those based on explicitly anti-egalitarian ideologies (Hitler’s master race, the feudal hierarchy of noble and serf), but also those based on the false equality of Marx and Lenin, who asserted that the human race is fundamentally bifurcated into two unequal classes — bourgeois and proletariat. Unsurprisingly, in Marxist-Leninist regimes all power ends up in the hands of a corrupt self-selected elite (nomenklatura) posing as the ‘vanguard of the proletariat.’

I’ve been thinking about this lately, because ‘progressive,’ activist government continually seeks to rig energy markets to favor some industries (those deemed green) at the expense of others (those deemed dirty). Moreover, interest groups continually lobby for special privileges, usually based on some public-interest pretext (‘What’s good for General Motors is good for the country’).

In his treatise The Law, 19th century French economist Frédéric Bastiat, discusses how to tell when law is perverted into a system of legal plunder:

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

Imagine if we had a government today that lived by Bastiat’s maxims! Bye-bye bridges to nowhere, the wind production tax credit, the ethanol mandate, green jobs programs, and Obamacare.

To Bastiat’s simple test for identifying legal plunder, I would add another — presumably with his approval were he alive today: The law aims to pick market winners and losers by imposing unequal burdens and/or conferring unequal benefits on different industries or firms.

The ethanol mandate clearly falls into the legal plunder category, and so does the campaign to restrict natural gas exports for the benefit of the chemical industry. I discuss those policies as equality-of-law-violating plunder schemes in recent comments on National Journal’s Energy Insiders blog. My comments (lightly edited) appear below. [click to continue…]

EPA Administrator McCarthy’s Star Turn in “The Spy Who Duped Me”

by William Yeatman on December 12, 2013

in Blog

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The plot is thickening with regard to EPA Administrator Gina McCarthy’s role in l’affaire Beale, the case of the phony spy who duped the agency out of almost a million dollars in undeserved bonuses and reimbursements.

John C. Beale—if that is his real name—will be sentenced this week in a federal court. He’s looking at a minimum of thirty months in prison, a stiff punishment that reflects the gravity of his crime. According to EPA’s press shop, Mr. Beale “went to great lengths to deceive and defraud the U.S. government.” The agency’s account, however, is belied by the evidence.

In fact, Mr. Beale fooled the EPA without much effort. He took fancy trips, and then charged EPA for reimbursements, and no questions were asked. He took paid leave time off, claiming that he was moonlighting for the CIA, and no questions were asked. These are not the devices of a criminal mastermind; rather, they are the markings of negligent oversight.

Imagine if you were a manager, and a high ranking official in your shop was receiving thousands of dollars of paid time while claiming to be working for the CIA. Wouldn’t you think: ‘Why isn’t he billing the CIA?’ That’s an obvious question, yet no one at EPA asked it. Again, this is oversight so lax that it borders, if not crosses into, negligence.

Absent spin, the Beale situation is an unfavorable mark on his superior’s record. Mr. Beale was a high ranking official at the EPA office of Air and Radiation. From February 2009 to February 2013, Beale’s boss was Gina McCarthy, who has since been promoted to EPA Administrator. Logically, Administrator McCarthy is where the buck stopped. As Beale’s boss, she shouldered some responsibility for his getting away with this outrageous ruse.

[click to continue…]

EPA Permitting of Greenhouse Gases: A Breathtaking Absence of Congressional Intent

by Marlo Lewis on December 11, 2013

in Blog, Features

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This post updates the analysis I presented last week in EPA Permitting of Greenhouse Gases: What Does Legislative History Reveal about Congressional Intent?

Petitioners’ merit briefs were due on Monday this week in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA regulation addressing greenhouse gases. Amicus briefs on behalf of petitioners are due next week.

The narrow question before the Court is whether the EPA permissibly determined that its May 2010 greenhouse gas Tailpipe Rule automatically triggered Clean Air Act permitting requirements for major stationary sources of greenhouse gases. In other words, the Court is reviewing the agency’s Timing Rule.

According to the Timing Rule, anyone seeking to build or modify a major source of greenhouse gas emissions must first obtain a “prevention of significant deterioration” (PSD) preconstruction permit. An applicant must conduct a multi-step analysis to determine the proposed facility or modification’s “best available control technology” (BACT) requirements. PSD permitting and BACT determinations are components of the Clean Air Act’s New Source Review (NSR) program.

As detailed in my post last week, I found a BREATHTAKING ABSENCE OF CONGRESSIONAL INTENT for the regulatory path prescribed by the EPA’s Timing Rule:

  • During the 101st through the 111th Congress, senators and congressmen introduced 692 bills containing the term “greenhouse gas” and 55 bills containing the term “best available control technology.”
  • Of those, only the SAFE Climate Act, introduced in the 109th and 110th Congresses, appears to contemplate a broad application of NSR/BACT to greenhouse gases (the terms NSR and BACT don’t occur in the statute). And then only at the EPA’s discretion, not, as per the Timing Rule, by automatic operation of the statute.
  • More importantly, although the SAFE Climate Act garnered 155 co-sponsors in the 110th Congress, the bill never got beyond the introduction stage of the legislative process. No committee approved it, and the House did not vote on it.
  • The bill’s chief sponsor, Rep. Henry Waxman (D-Calif.), did not reintroduce the SAFE Climate Act in the 111th Congress. Instead, he co-sponsored the American Clean Energy and Security Act (ACESA), the only cap-and-trade bill ever to pass in a chamber of Congress. ACESA specifically prohibited the application of NSR to stationary sources based on their greenhouse gas emissions.

In short, there is not a shred of evidence in the legislative history that Congress as a whole, the House or Senate separately, or any congressional committee ever intended for the EPA to broadly apply NSR/BACT provisions to greenhouse gases.

Just to make sure nothing fell through the cracks, I today did a search of all legislation introduced during the 101st through the 111th Congresses containing the term “prevention of significant deterioration” (PSD) — the specific type of NSR permit that is the focus of the Timing Rule.

Of 35 bills introduced containing the term, only one was a climate-related bill (S.1168 — the Clean Air/Climate Change Act of 2007). Significantly, it does not propose to apply PSD permitting to greenhouse gases.

The table below summarizes the results.

PSD Table [click to continue…]

What Happens to the U.S. Economy If ‘Progressives’ Kill Coal?

by Marlo Lewis on December 6, 2013

in Blog, Features

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A new study by Heritage Foundation analysts Nicholas Loris, Kevin Dayaratma, and David Kreutzer clarifies the economically-devastating potential of the war on coal.

In effect, the study asks: What if anti-coal ‘progressives’ get everything they wish for?

Using the Heritage Foundation Energy Model, which is based on the U.S. Energy Information Administration’s National Energy Model System (NEMS), the three researchers analyze the economic impacts of a regulatory agenda phasing-out coal electric generation between 2015 and 2038. They find that by the end of 2023:

  • Employment falls by nearly 600,000 jobs.
  • Manufacturing loses over 270,000 jobs.
  • Coal-mining jobs drop 30 percent.
  • A family of four’s annual income drops more than $1,200 per year, and its total income drops by nearly $24,400 over the entire period of analysis.
  • Aggregate gross domestic product (GDP) decreases by $2.23 trillion over the entire period of the analysis.

What accounts for those losses? First, phasing out coal generation will dramatically increase demand for natural gas, boosting gas prices by 28%. Gas is a key feedstock for several manufacturing industries:

Natural gas is not only a critical source of electricity generation; natural gas and liquids produced with natural gas provide a feedstock for fertilizers, chemicals and pharmaceuticals, waste treatment, food processing, fuel for industrial boilers, increasingly used as a transportation fuel, and much more.

The main reason, though, is simply that killing a major source of affordable electric power will increase business and household energy costs:

It will cost more to heat, cool, and light homes, and to cook meals. These higher energy prices will also have rippling effects throughout the economy. As energy prices increase, the cost of making products rises. Higher operating costs for businesses will be reflected in higher prices for consumers. Because everything Americans use and produce requires energy, consumers will take hit after hit. As prices rise, consumers buy less, and companies are forced to shed employees, close entirely, or move to other countries where the cost of doing business is lower. The result is fewer opportunities for American workers, lower incomes, less economic growth, and higher unemployment.

Two maps in the Heritage study should remove any doubt that the war on coal is an attack on a vital component of the U.S. economy and, thus, a danger to public health and welfare. [click to continue…]

Debunking the False Link between EPA’s Carbon Pollution Standard and Requirements in the 1970s for Sulfur Scrubbers

by William Yeatman on December 5, 2013

in Blog

Over at Master Resource, I debunk the myth that EPA’s proposed Carbon Pollution Standard is no different than the agency’s sulfur dioxide mandates for new coal-fired power plants in the 1970s. This false analogy, which is being peddled by high ranking EPA officials and influential Members of Congress, is based on the mistaken assertion that sulfur “scrubber” technology then was similar in development to carbon capture and sequestration now. In fact, there were two sulfur dioxide NSPSs in the 1970s. For the first, in 1971, “wet” scrubbers were deemed “adequately demonstrated.” For the second, in 1979, “dry” scrubbers were deemed NOT to be “adequately demonstrated.” To see how scrubber technology in the 1970s actually stacks up against CCS technology, see the chart below. Read the part 1 of the post here. In part 2 of the post, I demonstrate how proponents of the Carbon Pollution Standard undercut their legal case when they make the inapt CCS-scrubber comparison.

1 MR

EPA Permitting of Greenhouse Gases: What Does Legislative History Reveal about Congressional Intent?

by Marlo Lewis on December 3, 2013

in Blog, Features

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Next week, petitioners’ merit briefs are due in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA rule addressing greenhouse gases.

The Court is limiting its review to one question: “Whether EPA permissibly determined that greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” In other words, the Court will review the agency’s April 2010 Timing Rule.

According to the Timing Rule, “major” greenhouse gas emitters became subject to the New Source Review (NSR) preconstruction and Title V operating permit programs on the day the EPA’s greenhouse gas Tailpipe Rule took effect (January 2, 2011). To obtain an NSR preconstruction permit, a covered source must commit to meet case-specific emission limitations known as “best available control technology” (BACT).

What light does legislative history shed on the question before the Court? After reviewing 20 years of legislation containing the terms “greenhouse gas” and “best available control technology,” I conclude that neither Congress as a whole, nor the House or Senate separately, nor any congressional committee intended for the EPA to regulate greenhouse gases through the NSR and Title V programs.

Thomas, the Library of Congress search engine, identifies 692 bills containing the term “greenhouse gas” during the 101st through the 111th Congresses. Only one bill, the Safe Climate Act, introduced in both the 109th and 110th Congresses, arguably authorizes (but does not require) the EPA to apply NSR to greenhouse gases.

Although the Safe Climate Act boasted 155 co-sponsors in the 110th Congress, there were no hearings, committee votes, or floor debates on the bill. In the 111th Congress, the bill’s chief sponsor, Rep. Henry Waxman (D-Calif.), appears to have had a change of heart. The legislation he co-sponsored with Rep. Ed Markey (D-Mass.), the American Clean Energy and Security Act (H.R. 2454) — the only cap-and-trade bill ever to pass in either chamber of Congress — specifically prohibits the application of NSR and Title V to any source based solely on its greenhouse gas emissions.

Thomas also identifies 55 bills introduced during the 101st through 111th Congresses containing the term “best available control technology.” Of those, only one bill introduced (twice) in the 101st Congress and another bill introduced in 110th Congress appear to contemplate some application of NSR and BACT to CO2.

In the 101st Congress, S.676/S.333, the Global Environmental Protection Act of 1989, introduced separately by Senators Max Baucus (D-Mont.) and Patrick Leahy (D.-Vt.), would require the EPA to establish “best available residential technology” standards for CO2 emissions from household furnaces, water heaters, and air conditioners. But here the Senators merely borrow the terminology of NSR rather than actually propose to subject households to NSR permitting. The bills would simply require the EPA to promulgate the functional equivalent of energy-efficiency standards for the equipment in question.

Regardless, although elements of S.676/S.333 were incorporated in S.1630, the Senate version of the 1990 Clean Air Act Amendments, the proposed “best available residential technology standards” for CO2 did not make the cut.

In the 110th Congress, Senator Lamar Alexander (R-Tenn.) introduced S.1168, the Clean Air/Climate Change Act of 2007. Among other provisions, the bill would require new coal power plants to meet a new source performance standard of 1,100 lbs. CO2 per megawatt hour. Since this standard can only be met through carbon capture and sequestration (CCS), the bill would also void the existing BACT standard for coal power plants based on the performance of “conventional pulverized” coal facilities. There is no indication in the bill that BACT for CO2 pertains to stationary sources in general. Rather, BACT for CO2 would apparently be limited to NSPS-regulated new coal power plants equipped with CCS. In any event, the bill attracted only one co-sponsor, was not the subject of hearings or other committee action, and was not debated on the Senate floor.

Additional details of the legislative history follow. [click to continue…]

Conspicuously Absent from EPA’s Regulatory Priorities: “Doing Our Job”

by William Yeatman on December 2, 2013

in Blog

Last week the Office of Management and Budget Office of Information and Regulatory Affairs published the Fall 2013 Current Regulatory Plan and the Unified Agenda of Regulatory and Deregulatory Actions, a twice-yearly summary of regulatory priorities as determined by each executive agency.

EPA’s Fall 2013 Statement of Priorities is notable for what makes the list, but especially so for what is left off it. The agency’s priorities are:

  • making a visible difference in communities across the country;
  • addressing climate change and improving air quality;
  • taking action on toxics and chemical safety;
  • protecting water: a precious, limited resource;
  • launching a new era of state, tribal and local partnership; and
  • working toward a sustainable future.

The first priority—“making a visible difference in communities across the country”—sounds scary to me. I’d rather not encounter EPA meddlers like Walter Peck. Keep the green police out of my neighborhood.

bwpEPA’s second priority—“addressing climate change and improving air quality”—is misleading, because the agency itself concedes that its climate change regulations won’t engender a discernible difference,** due to the fact that the preponderance of present and future emissions originate in other countries where EPA has no authority.

The third priority—“taking action on toxics and chemical safety”—also is cause for suspicion, given that EPA’s foremost action on toxics to date, the 2012 Mercury and Air Toxics Standard, was an absurd, politically motivated regulation that cost $10 billion/year, in order to protect a supposed population of fisherwomen who consume 200 pounds of self-caught fish, from exclusively the most polluted freshwater bodies, during their pregnancies.

The fourth priority—“protecting water: a precious, limited resource”—is, in fact, a raw power grab.

The fifth priority—“launching a new era of state, tribal and local partnership”—is Orwellian boilerplate, as it imparts the opposite of reality. In fact, this administration’s EPA has seized the States’ rightful priorities under the cooperative federalism scheme of environmental regulation created by Congress.

And the sixth priority—“ working toward a sustainable future”—is empty enviro’ mumbo-jumbo.

So, EPA’s 2013 Statement of Priorities is a mess, establishing goals that range from frightening to pointless. However, the truly noteworthy aspect of the list is what it omits: Namely, an EPA priority along the lines of “doing our job.” As I explain in a recent paper, EPA has a woeful record meeting statutory deadlines for regulatory action, which are the agency’s priorities as dictated by Congress. Since 1993, for example, 98 percent of EPA regulations (196 out of 200) pursuant to three core Clean Air Act programs were promulgated late, by an average of 2,072 days after their respective statutorily defined deadlines.

Rather than abide by the mushy list enumerated in the Unified Agenda, it would be far better if the agency gave priority to effectuating the will of the nation’s elected representatives. That is, it would be ideal if the agency deigned to do its job.

** Consider the following exchange between Rep. Mike Pompeo (R-Kansas) and EPA Administrator Gina McCarthy during a September 18 House Energy and Commerce Committee hearing, in which she concedes that none of EPA’s climate regulations will have a discernible impact on the climate.

[click to continue…]

Skeptical Science’s Hiroshima Bomb Bombast

by Marlo Lewis on November 27, 2013

in Features

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SkepticalScience.Com this week unveiled a downloadable app that supposedly shows how fast heat is building up in the Earth’s climate system due to anthropogenic greenhouse gas emissions. The metric chosen is Hiroshima bombs. The Earth, according to SkS’s app, is warming at the rate of four Hiroshima bombs per second or 400,000 Hiroshima bombs per day.

I don’t know about you, but it sounds to me like someone is trying to tell us global warming could be the end of life as we know it.

SkS says the point of their Hiroshima bomb calculator is simply to explain in “ways that non-scientists can more easily relate to” how much heat anthropogenic greenhouse gases add to the climate system. It’s supposed to help us laymen understand the concept of radiative imbalance.

Let’s briefly examine that concept. Both incoming shortwave radiation (sunlight and ultraviolet light) and down-welling long-wave (infrared) radiation warm the planet. Conversely, reflected shortwave radiation and outgoing long-wave radiation cool the planet. Various observations (with varying degrees of uncertainty) indicate that incoming and down-welling energy exceed reflected and outgoing energy by 0.6 Watts per square meter (W/m2). That imbalance is attributed to mankind’s enhancement of the greenhouse effect. It is equivalent to the energy released by 400,000 Hiroshima bombs.

Today on WattsUpWithThat.Com, climate researcher Bob Tisdale posts a video commentary on SkS’s Hiroshima bomb calculator. To put 0.6 W/m2 into perspective, Tisdale references Stephens et al. (2012), a study of the Earth’s energy balance in Nature GeoScience.

Figure B1 from Stephens et al. illustrates six components (estimated from satellite and other data) of the Earth’s energy balance:

Energy Balance Stephens et al. 2012 [click to continue…]

House GOP: Last Laugh on “Carbon Pollution Rule”?

by Marlo Lewis on November 22, 2013

in Features

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My colleague Will Yeatman reports some fantastic climate policy news in this week’s Cooler Heads Digest:

House GOP Outwits EPA on Carbon Pollution Standard

Leading members of the House Energy and Commerce Committee recently made the EPA look foolish by pointing out a glaring flaw in the agency’s proposed Carbon “Pollution” Standard.

The proposed regulation would require new coal-fired power plants to install carbon capture and sequestration (CCS). And yet, under the Clean Air Act, EPA cannot require a technology that isn’t commercially viable. On the one hand, industry claims that CCS isn’t market-ready, citing as proof the fact that there isn’t a single CCS system in operation. EPA, on the other hand, claims that CCS is adequately demonstrated. As evidence, the agency referenced three CCS pilot projects in the U.S. that are either in planning or under construction in Mississippi, California, and Texas.

Last week, leading members of the House Energy and Commerce Committee pulled the rug out from under EPA’s evidence. In a November 15th letter to EPA Administrator Gina McCarthy, Reps. Fred Upton (R-Michigan), Ed Whitfield (R-Kentucky), Joe Barton (R-Texas), and Steve Scalise (R-Louisiana) brought to her attention a little-known provision of the 2005 Energy Policy Act that prohibits the agency from basing an “adequately demonstrated” determination on CCS projects that received subsidies pursuant to the law. As they helpfully note, each of the CCS projects in Mississippi, California, and Texas were beneficiaries of such subsidies, and are, therefore, inappropriate foundations for the Carbon Pollution Standard. The letter is available here.

Until I read the letter, I had been ignorant of this obscure provision of the 2005 Energy Policy Act. So, evidently, was EPA, which is quite rich.

Frankly, I’m impressed with these lawmakers. There’s a saying that Republicans are the stupid party. Not on this score. EPA’s Carbon Pollution Standard is the centerpiece of the Obama Administration’s climate agenda. EPA Administrator McCarthy, in a July speech, said that the Carbon Pollution Standard was the agency’s top priority, necessitating an “all hands on deck” approach.  And yet, despite this sense of urgency and a funneling of resources into the regulation, the agency stumbled into a tripwire set 8 years ago by four smart House Republicans. Bravo.

An old joke springs to mind.

Comedian: Go ahead, ask me, ‘What is the secret of great comedy?’

Audience member: What is the secret of. . .

Comedian: Timing!

Putting the kibosh on the “carbon pollution rule” would not have been nearly as funny had Upton, Whitfield, Barton and Scalise nipped this mischief in the bud when the EPA was only rumored to be proposing CCS as an “adequately demonstrated” basis for setting “carbon pollution” standards. Instead, the congressmen waited until the agency — and the Obama administration — inserted foot firmly in mouth. Bravo indeed! [click to continue…]

Social Cost of Carbon: Does EPA Rig the Game?

by Marlo Lewis on November 22, 2013

in Features

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In a new report, Heritage Foundation analysts Kevin Dayaratna and David Kreutzer examine one of the three main computer models the EPA uses to calculate the social cost of carbon (SCC).

The SCC is an estimate of how much economic damage an incremental ton of carbon dioxide (CO2) emissions allegedly does over time periods as long as 300 years. The model examined by the Heritage analysts is called Dynamic Integrated Climate-Economy, or DICE. Dayaratna and Kreutzer find it to be “flawed beyond use for policymaking.” Fittingly, they title their report: Loaded DICE: An EPA Model Not Ready for the Big Game.

The SCC estimates generated by DICE “shift substantially” — that is, are much lower — when reasonable alternatives are substituted for just a few of the assumptions made by the EPA. Specifically:

  • Using a discount rate (a measure of the time value of money) mandated by the Office of Management and Budget (OMB) that the EPA omitted reduces the 2020 estimate of SCC by more than 80 percent;
  • An updated estimate of the equilibrium climate sensitivity distribution (ECS)—a measure of CO2’s temperature impact—reduces the 2020 estimate of SCC by more than 40 percent; and
  • With an updated ECS distribution, a time horizon up to 2150,* and with the omitted discount rate, the 2020 estimate of SCC falls by nearly 90 percent, from $37.79 to $4.03.

The two Heritage analysts also note that the DICE and similar models’ damage functions are inherently speculative. No one today can forecast what humanity’s technological capabilities will be 50, 100, or 150 years hence. Which means no one knows how humanity’s adaptive capabilities will develop in a warming world. So even if scientists could accurately forecast future warming, projections of future damages would still be guesswork.

Dayaratna and Kreutzer conclude: [click to continue…]

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