Stephen Johnson

Greenhouse Protection Racket

by Marlo Lewis on July 6, 2010 · 1 comment

in Odds & Ends

Climate policymaking in our Nation’s capital often resembles the heavy-handed dialogue of old-time mobster films.

“Are you gonna come along quietly, or do I have let the California Air Resources Board (CARB) muss ya up?” That was pretty much the line White House Environment Czarina Carol Browner took to obtain the auto industry’s support for the joint EPA/National Highway Traffic Safety Administration (NTSHA) greenhouse gas (GHG) emission/fuel economy standards rule. EPA is now in a position both to determine the stringency of fuel economy standards for the auto industry and to set climate policy for the nation. Yet the Clean Air Act provides no authority to regulate fuel economy and says nothing about greenhouse gases or global climate change. ”Badges? We don’t need no stinking badges.”  

Modus Operandi: Threaten in Order to Remove the Threat — for a Price

Here’s how the regulatory mugging went down. 

In February 2009, EPA Administrator Lisa Jackson commenced a rulemaking to reconsider Bush EPA Administrator Stephen Johnson’s denial of California’s request for a waiver to establish its own greenhouse gas emission standards program. Because the waiver would also allow other states to adopt the California program, because GHG emission standards are mainly fuel economy standards by another name, and because automakers would have to reshuffle the mix of vehicles delivered for sale in each “California” state to achieve the same average fuel economy in those states, Jackson’s proceeding threatened to subject automakers to inefficient, consumer-thwarting, regulatory patchwork.

In May 2009, Czarina Browner conducted secret negotiations with automakers, CARB Chairman Mary Nichols, and major environmental groups. Browner required participants to take a vow of silence and forbade anyone to take notes, violating the Presidential Records Act. The closed-door negotiations produced an “historic agreement” whereby automakers would support the EPA/NHTSA GHG/fuel economy standards rule and California and other states would deem compliance with the federal standards as compliance with their own.

In addition, observes Rep. Darrel Issa (R-Calif.), at the same time the Browner-led negotiations were taking place, ”the government was also engaged in bailout talks with General Motors (GM) and Chrysler,” resulting in “an ownership stake for the federal government of 61% of GM and 8% of Chrysler, respectively.” Whether Browner literally made the auto industry an offer it could not refuse, with the sweetener of financial assistance also contingent on the industry’s embrace of GHG regulation, we may never know.

This much is clear. By granting California’s request for a waiver, EPA created the threat of a regulatory patchwork, enabling the White  House to offer ”protection” in the form of the joint GHG/fuel economy standards rule. The protection “fee” was the auto industry’s unquestioning support for the joint rule and its prerequisite, EPA’s endangerment rule.

Thus, the Auto Alliance became the key industry lobby opposing Sen. Lisa Murkowski’s resolution to overturn EPA’s endangerment rule. The Alliance warned that if the endangerment finding were overturned, the “historic agreement” would unravel, confronting automakers with “the alarming possibility of having to comply with multiple sets of conflicting fuel economy standards.” 

That is correct, but only because EPA Administrator Jackson, reversing her predecessor’s decision, granted California a waiver to establish GHG emission standards for new motor vehicles. An obvious solution would be to overturn the waiver. After all, the Energy Policy and Conservation Act clearly prohibits states from adopting laws or regulations ”related to fuel economy,” and the California motor vehicle emissions program is basically a de facto fuel economy program. The waiver effectively repeals federal law, violating the separation of powers. Not that you’ll ever hear about that from Government Motors. Mum’s da woid.

Mirage of Regulatory Certainty

The auto industry is not the only target of the greenhouse protection racket. For years, the greenhouse gang has been saying that only cap-and-trade can end the intolerable ”regulatory uncertainty” facing the electric power sector, energy-intensive manufacture, and other CO2 emitters. But who created the uncertainty in first place if not the self-same advocates of cap-and-trade? If they were serious about relieving uncertainty, they would disavow the regulatory schemes for which they have been campaigning.

Businesses lobbying for cap-and-trade in the name of certainty should read the fine print. The Waxman-Markey and Kerry-Boxer bills, for example, have multiple escalater clauses setting the stage for dramatic increases in regulatory stringency well beyond the bills’ explicit emission reduction targets.  Similarly, the bills’ “findings” presenting the “scientific” rationale for cap-and-trade are not mere rhetorical fluff but precedents for litigation targeting emission sources considerably smaller than those explicitly identified as “covered entities.” Enact such legislation, and the only certainty is that regulatory burdens will grow unpredictably.

Too Clever by Half

Last but not least, cap-and-taxers sell their policy as protection from litigation-driven greenhouse gas regulation under the Clean Air Act.  The sales pitch goes something like this: “Pretty nice company you got deah, shame if sumpin’ bad waz to happen to it. Everybody needs protection. You need protection. It’s called Kerry-Lieberman.” Note the familiar pattern. The gang pushing cap-and-trade as protection from EPA are the same folks who sued EPA to regulate greenhouse gases and who vilified Sen. Murkowski and others for attempting to stop EPA.

This is all too clever by half. If cap-and-trade dies in the 111th Congress, which seems increasingly likely, the Obama administration and its allies on the Hill will take sole ownership of the compliance costs, job and GDP losses, and “absurd results“ arising from EPA regulation of greenhouse gases under the Clean Air Act. 

Democratic leaders may not recognize it yet, but they have painted themselves into a corner. They have become the Party of Endangerment — the party endangering the U.S. economy by championing the endangerment rule, with all its cascading regulatory effects.

Thank You CBD: Another Reason to Nix EPA Endangerment Finding

by Marlo Lewis on June 3, 2010 · 2 comments

in Global Warming

Twice during the past six months, the eco-litigators at the Center for Biological Diversity (CBD) have underscored the political necessity for Congress to overturn EPA’s endangerment finding.

Yes, that is very far from CBD’s intention. CBD is a fervent defender of the endangerment finding, the December 2009 rulemaking in which EPA concluded that greenhouse emissions endanger public health and welfare.

The endangerment finding compels EPA to establish greenhouse gas emission standards for new motor vehicles, which in turn makes carbon dioxide (CO2) a “regulated air pollutant”  under the Clean Air Act, which in turn makes ”major” stationary sources of CO2 ”subject to regulation” under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program and Title V operating permits program. CBD must be thrilled by the endangerment finding and the regulatory cascade it has triggered.

CBD wants EPA to follow through on all the regulatory commitments logically entailed by the endangerment finding and CO2′s new status as a “regulated air pollutant.” But that’s where things get dicey for President Obama and his congressional allies. Once the regulatory genie is out of the bottle, Obama officials may not be able to control it.

Even EPA acknowledges that applying the Act’s permitting programs to CO2 leads to “absurd results.” For example, EPA and its state counterparts would have to process 41,000 PSD permit applications per year (instead of 280) and 6.1 million Title V permits per year (instead of 14,700). The resulting administrative quagmire would paralyze environmental enforcement, slam the brakes on development, and force millions of firms to operate in legal limbo. A more potent anti-stimulus package would be hard to imagine. 

To avoid this red ink nightmare, EPA has issued a Tailoring Rule that exempts small CO2 emitters from the Act’s permitting programs for six years. However, nothing in the statute authorizes EPA to suspend or modify the permitting requirements. In reality, EPA’s Tailoring Rule is an amending rule. It’s anybody’s guess whether courts will uphold this breach of the separation of powers.

Even if they do, the endangerment finding will still endanger the U.S. economy and our constitutional system of separated powers and democratic accountability. Thank you, CBD, for bringing this peril to light!

Last December, CBD petitioned EPA to establish national ambient air quality standards (NAAQS) for greenhouse gases set below current atmospheric levels. CBD is only acting on the obvious implication of EPA’s assertion that endangerment comes from the “elevated concentration” of greenhouse gases in the atmosphere.

Why should Obama and congressional leaders worry? The Clean Air Act requires states to come into attainment with a primary (health-based) NAAQS within five or at most 10 years. Yet not even a global depression lasting several decades would suffice to lower CO2 concentrations from today’s level (390 parts per million) to the stabilization target (350 parts per million) demanded by CBD and its co-petitioners. Because EPA may not take compliance costs into account when establishing NAAQS, the endangerment finding sets the stage for eco-litigators to transform the Act into a de-industrialization mandate.  No elected official wants to take ownership of so crazy a policy. If CBD prevails, however, Obama and the Democrats — the Party of Endangerment — will be left holding the bag. 

Yesterday, CBD filed suit to overturn EPA Administrator Lisa Jackson’s reconsideration of her predecessor Stephen Johnson’s memorandum determining when a pollutant is “subject to regulation” under the PSD program. Jackson’s reconsideration held that a pollutant is subject to regulation not when EPA finalizes an emissions control rulemaking but when the rule takes effect. Since EPA’s greenhouse gas motor vehicle standards rule does not take effect until January 2011, Jackson concluded that EPA may not regulate greenhouse gases from stationary sources until then. CBD says EPA should have started already to regulate large emitters via PSD.

CBD’s lawsuit makes EPA regulation of greenhouse gases a real-time issue for this Congress, not just a post-election issue for the next Congress. It increases the pressure on Democrats to get the monkey off their back. If courts strike down Jackson’s reconsideration, they will be more likely to strike down the Tailoring Rule, which undeniably flouts statutory language. Courts will also be more likely to look favorably on CBD’s NAAQS petition, which simply demands that EPA, having made an endangerment finding, follow the letter of the law.   

Democratic Senators who don’t want to bet their political futures on EPA’s ability to control the cascading effects of greenhouse gas regulation under the Clean Air Act – or who simply believe that climate policy is too important to be made by non-elected bureaucrats, trial lawyers, and activist judges appointed for life – will soon get their opportunity.

On June 10, the Senate will vote on a resolution of disapproval (S.J.Res.26), sponsored by Alaska Sen. Lisa Murkowski, to nullify the legal force and effect of EPA’s endangerment finding. If enacted, S.J.Res.26 will:

  1. Avert the threat of an administrative meltdown under the PSD and Title V programs.
  2. Avert the threat of sky-is-the-limit, money-is-no-object regulation of greenhouse gases via the NAAQS program.
  3. Avoid the need for EPA to play lawmaker and ’amend” a statute it is supposed merely to administer.

Most importantly, enacting Sen. Murkowski’s resolution will ensure that the big decisions about the content and direction of national policy are made by the people’s representatives, as the Constitution requires.

What Happens If Congress Blocks EPA?

by Marlo Lewis on March 9, 2010 · 2 comments

in Global Warming

That’s the topic of this week’s National Journal energy blog. In my contribution, I argue that EPA has been playing a mischievous game that endangers democracy, and that Sen. Lisa Murkowski’s legislation to veto the agency’s endangerment finding would remove this threat. 

In a Feb. 22 letter to Sen. Jay Rockefeller (D-WV), EPA Administrator Lisa Jackson warns that enactment of the Murkowski legislation would scuttle the joint EPA/National Highway Traffic Safety Administration (NHTSA) greenhouse gas/fuel economy rulemaking, which in turn would compel the struggling auto industry to operate under a “patchwork quilt” of state-level fuel-economy regulations.

Ms. Jackson neglects to mention that the patchwork threat exists only because she, reversing Bush EPA Administrator Stephen Johnson’s decision, granted California a waiverto implement its own GHG/fuel economy program. Had Jackson reaffirmed Johnson’s denial, there would be no danger of a patchwork, hence no ostensible need for the joint EPA/NHTSA rulemaking to avert it.

As my blog post explains, EPA should not have approved the waiver in the first place. The California GHG/fuel economy program violates the Energy Policy and Conservation Act, which prohibits states from adopting laws or regulations “related to” fuel economy. Worse, the waiver creates a reverse right of preemption whereby states may nullify federal law within their borders — an affront to the Supremacy Clause. 

Specifically, the waiver would allow California, and other states opting into the California program, to nullify within their boundaries the reformed national fuel economy program that Congress enacted in the 2007 Energy Independence and Security Act (EISA). That leads straight to a patchwork of state-by-state compliance regimes inimical to a healthy auto industry.

The game EPA is playing is a classic case of bureaucratic self-dealing.

First, EPA endangers the U.S. auto industry by authorizing states to flout federal law and the Constitution. Then, EPA proposes to avert disaster via a rulemaking that just happens to put EPA in the driver’s seat in regulating fuel economy – a power Congress never delegated to EPA when it enacted and amended the Clean Air Act.

Nor is that all. The joint GHG/fuel economy regulation will compel EPA to regulate CO2 from stationary sources – another power Congress never delegated to EPA. By expanding its control over the transport sector, EPA will then have to expand its control over manufacturing, power generation, and much of the commercial and residential sectors, too, because all emit CO2.

In addition, the motor vehicle GHG rule sets the stage for EPA to “tailor,” that is amend, the Clean Air Act so that the agency can delay imposing pre-construction and operating permit requirements on small business, which would surely ignite a political backlash.

So thanks to the endangerment finding, EPA not only gets to play in NHTSA’s fuel-economy sandbox, and extend its tentacles throughout the economy, it also gets to play lawmaker, violating the separation of powers.

In light of all the new powers EPA now expects to wield, it is hardly surprising that EPA never made the strong case against Clean Air Act regulation of CO2 in Massachusetts v. EPA. Here’s what EPA should have argued:

  • EPA cannot regulate GHG emissions from new motor vehicles under Sec. 202 of the Clean Air Act without regulating CO2 under the Act as a whole. 
  • Aplying the Act as a whole to CO2 leads ineluctably to “absurd results” that contravene congressional intent.
  • Therefore, Congress could not have intended for EPA to regulate GHG emissions under Sec. 202.

Did EPA throw the fight in the 11th round? I dunno, but losing the Massachusetts case was surely sweet victory to those in the agency who long to regulate America into a ”clean energy future.” The Massachusetts decision laid the groundwork for EPA to deal itself into a position to bypass the people’s elected representatives, impose its will on the auto industry, and, in time, dictate national climate and energy policy.

What happens if Congress enacts Sen. Murkowski’s resolution, nixes the endangerment finding, and mothballs the GHG/fuel economy rule? The authority to make law and national policy returns to where the framers of the Constitution intended — the people’s elected representatives.

Will Lisa Jackson turn the Clean Air Act into a gigantic de-stimulus package?

by Marlo Lewis on February 19, 2009

in Deregulate to Stimulate, Energy, Global Warming, Legal

Earlier this week, in a letter to Sierra Club climate council David Bookbinder, EPA Administrator Lisa Jackson said the Agency would reconsider, via a notice-and-comment rulemaking, a Bush-EPA memorandum interpreting regulations that determine whether carbon dioxide (CO2) is currently subject to emission controls under the Clean Air Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program. [click to continue…]