The ChamberPost

The EPA's GHG Tailoring Rule

by Bill Kovacs

The U.S. Chamber welcomes exemption of small businesses and farms under the EPA’s proposed Prevention of Significant Deterioration and proposed Title V Greenhouse Gas Tailoring Rule required under the Clean Air Act; common sense prevailed at the EPA and we are thankful. However, we fear this proposal rests on shaky legal ground. As a result, EPA may have only kicked the problem down the road -- or into the courthouse -- and may have to regulate all small businesses should some environmental groups prevail in likely lawsuits.

The EPA’s proposed rule puts major roadblocks in the way of U.S. efforts to build new major facilities and projects as the country tries to work its way out of the recession and provide affordable and reliable energy for the future. Specifically, EPA is proposing to require all facilities that emit 25,000 tons of CO2 to secure new permits for these emissions before they can do a major expansion of their facilities or build new facilities. These pre-construction permits cost hundreds of thousands of dollars and can take anywhere from eight months to over a year to complete.

A typical PSD permit costs a regulated entity $125,000 and takes 866 hours to complete, according to EPA data. The requirement to obtain these permits takes effect the second EPA makes the rule effective, the Chamber added. In short, all new construction of major projects that would emit 25,000 tons of CO2 in a year would need to obtain a PSD permit before construction could begin. In addition each regulated entity could be subject to a citizen suit brought against that facility by any citizen anywhere in the United States.

Transparency, Science and the EPA - Episode Three

by Brad Peck

Last week the U.S. Chamber followed up our June request to the EPA with a further filing seeking transparency. Today the National Journal asks:

"Should the Environmental Protection Agency be required to publicly defend its finding that greenhouse gases endanger public health and welfare?"

William O'Keefe from the George C. Marshall Institute, Sen. James Inhofe and, of course, the Chamber's Bill Kovacs say yes.  Here is a bit from Kovacs' post:

Before responding to the National Journal’s question, let me clarify a few things. The U.S. Chamber of Commerce is not denying or otherwise challenging the science behind global climate change. Many of the news articles on our petition the past few days made that claim. They are not correct. The anti-business lobby quickly jumped on these news articles without actually reading the substance of the Chamber’s petition, casting us as climate "deniers." That is certainly unfortunate, but not unexpected. For many of these special interest groups, dogma trumps facts, and they’ve been calling us deniers for years, even though the Chamber supports sensible and ambitious congressional and international action on global climate change.

...With that said, what the Chamber is doing is requesting that EPA conduct a formal on-the-record hearing on the evidence underlying its finding of endangerment. EPA wants to use the Clean Air Act to regulate CO2 emissions from cars. Before it can do this, EPA must first find, as a matter of law, that U.S. greenhouse gas emissions from new motor vehicles endanger U.S. public health and welfare. Because EPA has proposed that man-made greenhouse gas emissions cause or contribute to rising global temperatures, to make the endangerment finding EPA must now establish that the rising temperatures threaten public health and welfare—that is their burden of proof. EPA is, by all accounts, on the verge of answering this question in the affirmative. We don’t think the evidence EPA set forth meets the legal criteria to support such a finding, and we think a judge would agree with us.

Normally, such issues could be worked out through an ordinary informal rulemaking process (i.e., notice and comment). However, this rulemaking has been anything but ordinary.

First, the proposed endangerment finding acknowledges that the Administrator’s decision must be based on sound science, not speculation. Then it proceeds to run through a laundry-list of “uncertainties” that not only undermine its finding but also that the Administrator simply plans to ignore.

See Kovacs' post for examples, one more clip from his conclusion:

...The facts listed above, when considered in their entirety, point to an inescapable conclusion: the informal rulemaking process has broken down here. The process to date has not been open and transparent, nor has it been conducted with scientific integrity, free from politics, ideology, and ex parte consultations. That is why the U.S. Chamber is asking for a formal on-the-record hearing: to bring into the open the reasoning behind this finding...I am sure at least one of the respondents to today’s blog question will assert that, because the Chamber is against an “endangerment finding,” it must mean that we don’t support the environmental objectives behind reducing greenhouse gas emissions. This once again confuses “endangerment” with “climate change.” Endangerment in the Clean Air Act context is a bureaucratic turn of a phrase; one can be against an endangerment finding and still supportive of strong, effective action to reduce carbon emissions. Indeed, the Chamber’s platform of technology, efficiency, and a global approach would actually do more to reduce global greenhouse gas emissions than a finding of “endangerment” by EPA ever could. And under the Chamber’s approach, we could achieve these benefits while creating American jobs and avoiding severe economic disruption.

Hydraulic Fracturing - Laws, Laws Everywhere and Not an Ounce of Sense

by Bill Kovacs
 
It seems as though the number of new and duplicative laws Congress can propose is only limited by its unsteady imagination!  And to think that just a decade or so ago it was common wisdom to believe that “everyone is presumed to know the law.”  Today we have so many new, complex, mind-numbingly huge laws that common wisdom can only conclude that some of the proposals are literally the tales told by an idiot to ensure that economic progress cannot continue.
 
The most recent federal proposal, H.R. 2766, to  repeal the exemption for hydraulic fracturing in the Safe Drinking Water Act (and companion legislation, S. 1215, introduced in the Senate) is a clear example of Congress attempting to take over a regulatory process that has flawlessly worked at the state level for 60 years and has created billions of dollars of wealth for our communities, huge tax receipts for our government, tens of thousands of jobs for our citizens and has produced vast amounts of energy to heat our homes and run our factories.
 
So what is “hydraulic fracturing” and why should we care if Congress screws it up?
 

An Explosion and/of CO2 Regulation

by Brad Peck

Warning received via email:

For the filming of a TV pilot, there will be a simulated explosion on Wednesday, March 25 between 9:30 a.m. and noon near Key Bridge in the District. The explosion will produce a 20 to 30' fireball that will last for approximately 2 minutes...The explosion will take place on the Potomac River just north of the Key Bridge and Jack's Boathouse (K / Water Street, NW under the Whitehurst Freeway). In the scene to be filmed, there will be six (6) sculling boats on the Potomac River and one of them blows up.

And a warning corrected...that is two seconds, not two minutes, settle down pyros. In other warnings yesterday the EPA Administrator cautioned:

"If the nation is serious about regulating greenhouse gases the Clean Air Act is the wrong tool for the job and it's really at the feet of Congress to come up with good legislation that cuts through what will likely be decades of regulation and litigation," Johnson told reporters in a teleconference.

Oops, sorry, my bad that is from last July, here is yesterday's:

The Environmental Protection Agency's new leadership, in a step toward confronting global warming, submitted a finding that will force the White House to decide whether to limit greenhouse gas emissions under the nearly 40-year-old Clean Air Act.  Under that law, EPA's conclusion -- that such emissions are pollutants that endanger the public's health and welfare -- could trigger a broad regulatory process affecting much of the U.S. economy as well as the nation's future environmental trajectory.

But what does it mean man! Bill Kovacs explains in the news:

Bill Kovacs, vice president of environment, technology and regulatory affairs at the U.S. Chamber of Commerce, said the finding would automatically provoke a tangle of regulatory requirements for businesses large and small. The “EPA is putting in motion a set of decisions that may have far-reaching unintended consequences,” he said. “Specifically, once the finding is made, no matter how limited, some environmental groups will sue to make sure it is applied to all aspects of the Clean Air Act. (KansasCity.com)

"By moving forward with the endangerment finding on greenhouse gases, EPA is putting in motion a set of decisions that may have far-reaching unintended consequences," said Bill Kovacs..."This will mean that all infrastructure projects, including those under the president's stimulus initiative, will be subject to environmental review for greenhouse gases. Since not one of the projects has been subjected to that review, it is possible that the projects under the stimulus initiative will cease. This will be devastating to the economy." (Washington Post Chat)

Bill Kovacs, vice president of environment, technology, and regulatory affairs at the U.S. Chamber of Commerce, said a so-called endangerment finding by the EPA is the wrong path to limiting emissions. The EPA should let Congress establish a system because lawmakers could set emissions standards that won’t harm businesses, he said. (Bloomberg)

And the Administration agrees:

"The president has made quite clear on this that the way to deal with greenhouse gases is to work with Congress in order to put together a plan that deals with this and creates a market for renewable energy,"  White House spokesman Robert Gibbs said yesterday. (ibid)

Of course there are those who disagree with us, and the White House, according to them all that is needed for this to work is for the EPA to:

"enforce new global warming regulations with common sense, focusing on large emitters of greenhouse gases to achieve reasonable reductions while spurring trillions of dollars worth of economic growth and green-collar jobs."

Hold on, give me a minute, "common sense...reasonable," must stop laughing.  Ok, I will concede one point, this approach will spur economic growth and create thousands of jobs...for the EPA.

Green Jobs Meet Green Tape

by Bill Kovacs

The Washington Post ran a story in December, which we posted on, about the role Californians plan to play in creating a new order in Washington. My favorite quote was from Senator Boxer: "It's like the EPA has been asleep for eight years. The Californians are coming to wake the sleeping beauty."

A wake up call was certainly issued by one of the Californians Senator Feinstein a few days ago when she "announced her intention to introduce new legislation to establish a national monument to preserve hundreds of thousands of acres in the Mojave Desert."  Sounds good right? But while waking up this desert beauty, she was telling renewable energy to take a coma.

"That's why I am very concerned about wind and solar development proposals intended for these lands. I'm a strong supporter of renewable energy and clean technology -- but it is critical that these projects are built on suitable lands. The former Catellus lands shouldn't be eligible for development."

Not only would this bill bar the installation of industrial solar facilities, but it would probably make it very difficult (if not impossible) to construct the Green Path North, a renewable transmission line from the Imperial Valley to Los Angeles. The link goes to ProjectNoProject.com a new site we launched to give the gory details on the delays that the project has experienced. 

As you can imagine, we didn't build the entire site around that one project. In fact hundreds of projects necessary for the production and transmission of renewable energy have been delayed by folks who are a "strong supporter of renewable energy and clean technology" but feel that the definition of "suitable land" is "Not In My Back Yard."

We strongly support the development and deployment of new energy technologies. In fact we support "green jobs" so much we think that they should actual be created, here and now, not somewhere else and never. We hope that by listing out these projects the absurdity of it all will become evident and policy makers will stop talking and start walking. To the store. To buy a pair of scissors. To cut the "green tape."

All of this obstruction is for the birds, so check out the site, and please comment with other projects that have been delayed in your backyard. The vision of a green energy future is a promising one, but vision without resources is merely a hallucination.  Do we wake or sleep?

Bagging CO2 Emissions

by Bill Kovacs

The Wall Street Journal asks "If Bag Fees Won’t Fly, Why Would Cap and Trade?"

Consider the fate of plans in bicycle-friendly Portland to slap at least a nickel fee on every plastic grocery bag. The plan has been scrapped because the cost would be too onerous during the economic downturn...Take California, a self-styled leader in environmental legislation. It just scrapped tough diesel-emissions standards for the construction industry to spare some pain for a troubled sector...It’s happening everywhere. Europe and Australia are having second thoughts about the full cost of their cap-and-trade schemes; Europe is scrambling to appease certain industries, while Australia is just rethinking the whole idea.

In the cold light of harsh days rigid dogmatic environmentalist are having a rough go of it -- perhaps because they spent years telling people it wouldn't cost anything -- but under the cover of bureaucratic darkness the EPA is still preparing to regulate CO2 under the Clean Air Act, economic impact be damned. And blah, blah, blah, we are a bunch of "do nothing deniers", so don't take our word for it, here is the New York Times.

If the environmental agency determines that carbon dioxide is a dangerous pollutant to be regulated under the Clean Air Act, it would set off one of the most extensive regulatory rule makings in history...Even some who favor an aggressive approach to climate change said they were wary of the agency’s asserting exclusive authority over carbon emissions. They say that the Clean Air Act, now more than 40 years old, was not designed to regulate ubiquitous substances like carbon dioxide. Using the law, they say, would capture carbon emissions from new facilities, but not existing ones, blunting its impact. They also believe that a broader approach that addresses all sectors of the economy and that is fully debated in Congress would be better than a regulatory approach that could drag through the courts for years.

My bold, and my point. Far from doing nothing, let's sit down and figure out the right thing -- for the environment and our economy.

More Regulations, More Cost, No Solution

by Brad Peck

A joint transportation and environment question from the National Journal:

House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., is promising to pass global warming legislation through his panel by Memorial Day. As lawmakers begin to craft a climate change package, how should they design a cap-and-trade program to control greenhouse gases from the transportation sector?

What part of the fuel chain should be forced to obtain emission allowances? Should revenues from transportation sources be returned to the industry to help companies reduce their greenhouse gases? And if so, how?

Answered with a question and a very good point by Bill Kovacs:

Why is the solution to every issue another complex law followed by dozens and dozens of complex regulations that take years to prepare, more years to litigate and then even more years of agency reconsideration, depending on the outcome of judicial review. This nation has millions of pages of laws and regulations so why don’t we just try to make some of these countless laws work before we add more cost and complexity to the system.
...
To reduce transportation sector emissions we need to increase vehicle miles-per-gallon through flexible actions that promote the use of better batteries, innovative engine technologies and designs, and alternative fuel source capabilities. The federal government already has the authority under present law to stimulate such technological innovations. Let’s use them rather than enact a complex cap and trade system that will impose huge costs on the U.S. at a time when we can least afford it.

Green Jobs for Breakfast

By William Kovacs

Yesterday morning I appeared on the nationally syndicated public radio program The Diane Rehm Show, to discuss "green jobs" and the economic aspects of environmental policy. Joining me were David Leonhardt of the New York Times, and Bracken Hendricks of the Center for American Progress.

What is a green job? It turns out this seemingly simple question has a very broad answer, from jobs at windmill manufacturing plants to plumbers who might do things in a slightly more efficient way than before. Like many environmental labels its applicability is apparently in the eye of the beholder. Unfortunately I think this vagueness could make it extremely difficult to collect objective data on green jobs--making it difficult to accurately measure the economic effects of policy.

David Leonhardt said that "green jobs are the single best hope for driving the post-bubble economy," but rightly pointed out that we use the energy sources we do for a reason--they're the most affordable. (He said "cheap" but $4/gallon gas wasn't that long ago). So how to move toward new energy sources?

The proposed answer is apparently to raise the price of current energy sources, which would make newer energy sources "relatively more affordable" and therefore more able to compete in the marketplace. Of course doing so would also make energy more expensive on an absolute price basis. I think if a person's heating bill exceeds their budget, it's of small comfort that they have a broader array of energy sources they cannot afford. As a nation we must remember that energy costs are borne every day by real families and businesses, and reflected in the prices we pay for almost everything.

The sustainable way forward is to remove barriers to energy innovation. Take, for instance, renewable energy technologies--64 plants in the last several years have been blocked by NIMBYs. Diane asked for an example, which I was happy to supply. Congressman Jay Inslee (D-WA) called into the show and I was very encouraged to hear him condemn the NIMBY phenomenon.

You can listen to the full panel discussion online. The show opens with a taped interview of Secretary of the Interior Ken Salazar; the panel begins about 10 minutes in.

Note: the Chamber's National Chamber Foundation will be hosting an event examining green jobs next Tuesday.

Auto-Eco-Devastation

by Bill Kovacs

In recent weeks we’ve discussed the impact of the faltering economy on U.S. automakers and parts suppliers, now there are new estimates of the potentially devastating impact on car dealerships. Auditing firm Grant Thornton’s Detroit office predicts that 3,800 of the nation’s 20,000 dealerships would need to close to maintain sales per dealer at last year’s level. GM has said it expects to pare at least 1,700, or about a fourth, of its dealers by 2012. Meanwhile, parts suppliers are ramping up a major lobbying effort to get relief from the stimulus package or from financial rescue programs.

In other news:

Green car rules give auto industry a new challenge - President Barack Obama wants automakers to make greener cars at a time when General Motors and Chrysler are hanging by the thread of a massive government loan and auto sales have plummeted to their lowest levels in more than two decades.  Obama's plans could bring smaller cars, more hybrids and advanced fuel-saving technologies to showrooms, but car shoppers will probably pay more upfront because the new rules are expected to cost the hamstrung industry billions of dollars...Obama on Monday directed the Environmental Protection Agency to review whether California and more than a dozen states should be allowed to impose tougher auto emission standards on carmakers to fight greenhouse gas emissions. The Bush administration had blocked the efforts by the states, which account for about half of the nation's auto sales.

The best quote in the article is from Roland Hwang, a senior policy analyst with the Natural Resources Defense Council:

"Without California standards and without federal standards, there's a real danger of Detroit falling back in their old gas-guzzling ways,"

Of course by "Detroit", Hwang means "All car buyers" since you don't see many news stories about people being forced to purchase a specific vehicle at gun-point.  Here is our take on the matter:

California should not set national standards for environmental regulation. The President already has the authority to regulate greenhouse gas emissions from motor vehicles under the Energy Independence and Security Act of 2007.  Allowing the California waiver would create a patchwork of regulations, be inefficient, and not achieve the desired outcome.  As Congress tries to bail out the auto industry, California wants to punch more holes in the bottom of the boat.

FOIA - Transparency and Accountability

by Bill Kovacs

In one of his first acts of office, President Obama directed the U.S. Attorney General and the Director of the Office and Management and Budget to immediately develop the new FOIA guidelines that reflect a profound national commitment to transparency. Improving FIOA as his first order of business provides a clear indication of President Obama’s commitment to an open government.  It shows that he intends to make data access, data quality, accountability, and transparency – policies essential to good business and good government – the hallmarks of his Administration.
 
President Obama has instructed his agencies to adopt a presumption in favor of disclosure when it comes to information. This is a very sound policy, but it is only the first step in achieving transparency in the federal government. Hopefully, transparency will be extended to the use of the best quality science under the Data Quality Act, peer review, and that all studies used by agencies in the rulemaking process are available to the public.