House

Time to Face the Facts on EPA Regulation

A witty observer of the human condition Mark Twain wrote, “Few things are harder to put up with than the annoyance of a good example.” He likely would have had a few choice quips about opponents of greenhouse gas (GHG) regulation who have a lot to put up with these days. They continue claiming that new regulations are a de facto construction moratorium, a burden on the economy, the illegal act of unelected bureaucrats, and doomed to be overturned by Congress. Yet the facts themselves provide overwhelming evidence to the contrary.
 

Before the Environmental Protection Agency (EPA) began regulating GHGs this January, there were claims that these regulations would shut down entire industries and create a construction moratorium on new projects. In reality, the New Source Review program requires new sources of pollution and major modifications to existing sources of pollution, like power plants, refineries, and factories, to install the best available control technology to reduce GHG emissions. EPA’s guidelines for implementing these requirements focused mainly at increasing energy efficiency of facilities without requiring expensive add-on controls or fuel switching.
 

Despite these dire warnings, there are plenty of examples of how this scenario did not occur. Even before the regulations were in place, Calpine voluntarily and successfully underwent a determination of the best available control technology for its new natural gas power plant in the Bay Area. In a more recent example, one of the most vociferous industrial opponents of the regulations, Nucor Steel, came to Congress to testify at a hearing about the impossibility of compliance with the regulations, but the company had by that point already received a permit under that program for a facility in Louisiana. More permits have also been issued, and others are on the way.
 

Other attacks have fixated on the legality of the new regulations. Yet, in the 2007 case Massachusetts v. EPA, the Supreme Court ruled explicitly that EPA had the authority to regulate GHGs under the Clean Air Act if the Agency determined that they posed a significant threat to public health and welfare. This threat was overwhelmingly demonstrated in the 2009 endangerment finding, which documented the risks of climate change posed by GHGs. This endangerment finding was issued by the Obama Administration, but the Bush Administration had come to exactly the same conclusions. A Supreme Court ruling in favor of regulation is a hard example to be confronted with, but that hasn’t stopped opponents.
 

Although there has been little problem with implementation of these new requirements, it has taken the political rhetoric some time to catch up with the facts. Some on Capitol Hill have remained fixated on these regulations. This debate came to a head, as votes were taken to repeal or delay the EPA regulations. In the Senate, votes on four different permutations failed to meet the required 60-vote majority. The Baucus Amendment would have codified EPA’s tailoring rule and exempted agricultural sources from EPA GHG regulations. It failed 7-93. The Stabenow Amendment would have allowed EPA to continue work on drafting regulations, but it would have delayed implementation of existing GHG rules (except for the existing transportation standards) for two years, excluded the agriculture sector, and expanded some manufacturing tax credits. It also failed 7-93. The Rockefeller Amendment would have delayed the implementation of all EPA GHG regulations (except for car rules) by two years. It failed 12-88. The McConnell Amendment was a version of the Whitfield-Upton-Inhofe proposal that would have explicitly prohibited any GHG regulation using Clean Air Act authorities and repealed the EPA’s scientific finding about the dangers of climate change. The preferred bill of the Minority, it failed 50-50. In the House, a standalone bill (The Energy Tax Prevention Act) mirroring the McConnell amendment passed by a substantial, largely partisan majority, but with the failure of all four proposals in the Senate, it was clear that there was no hook to conduct a House-Senate conference on the legislation. For those who wanted a Congressional rebuke for action on climate, these votes should have served as an example of political opposition to repeal of regulatory authority.
 

In the face of those votes, opponents tried one more political maneuver: holding the federal budget hostage to the inclusion of the failed McConnell Amendment. After threatening a shutdown of the federal government to oppose regulations that have been shown not to prevent new facilities from being permitted, not to lead to economic destruction, and which were upheld by the Senate just days earlier, opponents eventually relented and withdrew their demands.
 

It has been tough to put up with these examples, but some opponents of the regulations are finally accepting the results. “I think this is probably the end of our EPA little session here,” said Sen. Jay Rockefeller (D-WV). “I’m not going to be pushing for another vote,” echoed Sen. Carl Levin (D-MI). After everything that has occurred on this matter, and regardless of other attempts that might be made, it’s clear that the existing regulations are here to stay and the path forward for future reasonable regulations has strong economic, legal, and political foundations. In the coming months, EPA will turn to the next step in its legally-required regulatory process, proposing New Source Performance Standards for the utility and refining sectors.
 

Our leaders should use their energies to ensure that these regulations result in low-cost emissions reductions rather than continuing to fight battles for which the outcomes are already known. There is a real possibility for positive engagement in this process but only if one is willing to take a rational look at the challenges and potential policy tools available. For those that want to continue to fight past battles in the face of all that has happened, another Twain quote comes to mind: “Denial ain’t just a river in Egypt.”


Michael Tubman is the Congressional Affairs Fellow

Hearing on the Energy Tax Prevention Act: Truth vs. Fiction

Last Wednesday’s House Energy and Power Subcommittee hearing on the Energy Tax Prevention Act lived up to its billing as being the first clash between the new majority and minority on the committee. For eight hours, the Members opposing regulation argued that EPA was overstepping its authority in regulating greenhouse gas (GHG) emissions. They asserted that such action would kill jobs and harm the economy. Members supporting regulations argued that EPA is required to act and is doing so in the interest of public health.

The Energy Tax Prevention Act, a draft proposal jointly released by Rep. Upton (R-MI), Rep. Whitfield (R-KY), and Sen. Inhofe (R-OK), would prevent EPA from regulating GHGs, remove GHGs from the Clean Air Act, and specifically repeal all actions related to climate change, including the scientific Endangerment Finding, the Tailoring RuleNew Source Review regulations, reporting requirements for GHG emissions, and proposed New Source Performance Standards. The lone exemption is the Clean Car rule, which would remain untouched.

Climate & Energy Cutbacks Pose Costly Impacts

It’s instructive to look at the funding levels recently proposed by the House leadership for the remainder of this fiscal year in light of the eight hour hearing on climate change held last week before the House Energy and Power subcommittee. 

At the risk of oversimplification, the key messages from the Members who organized the hearing were that the science behind and risks associated with climate change are uncertain, EPA regulations will impose substantial costs and result in job losses, and U.S. industry needs regulatory certainty in order to invest in new facilities here in the United States.

Will the House Climate Bill Protect U.S. Competitiveness?

Yes, according to a recent government report examining the impacts of the House-passed climate bill.

An important concern in any climate legislation is the negative impact it might have on domestic energy-intensive producers that compete in global markets.  Climate policy can raise the production costs of U.S. manufacturers relative to their unregulated foreign competitors, and as a result production and emissions could shift overseas.  Responding to a request by five Democratic senators, the Obama administration recently released an interagency report on the competitiveness impacts of the climate bill that passed the House in June.  It finds that most U.S. energy-intensive, trade-exposed industries (EITEs) will experience only small increases in their production costs.  As a result, emissions "leakage" to countries that do not adopt climate policies will be minimal. 

How the Senate Divides up the Climate/Energy Issue

In the House, the committee chaired by Rep. Henry Waxman (D-CA), the House Energy and Commerce Committee, has jurisdiction over most matters touched on by the climate/energy bill.  In the Senate, jurisdiction over the bill is divided between six major committees.  This makes things complicated, since Congress does most of its work in its committees.

The House committee’s membership made it an excellent crucible for producing a balanced comprehensive climate and energy bill.  Even with most committee Republicans not involved in the drafting, there was a large enough majority of Democrats (36 out of 59) to pass the American Clean Energy and Security Act on Democratic votes alone.  Moreover, committee Democrats were roughly divided between those eager to pass a bill and those more cautious, out of consideration for the bill’s possible impacts on the manufacturing or energy sectors in their districts.  This meant Rep. Waxman had to balance the bill’s economic and environmental objectives just to get it out of committee.

This is not as true with the Senate Environment and Public Works Committee (EPW), the committee largely in charge of writing the GHG cap-and-trade provisions of the bill.  The committee is not quite as regionally diverse as the House Energy and Commerce Committee.  This morning we heard that EPW Chairman Boxer plans to start holding hearings on the Kerry-Boxer bill around mid-November, presumably moving shortly thereafter to a “mark up” (the arcane term for when a committee formally amends and decides whether to pass a bill).  EPW passed a cap-and-trade bill in 2007 and is expected to do so again this year.  Even after it does so, however, it will take a few more twists and turns for the bill to win the support of 60 Senators. 

One option for doing this would be to have all six relevant committees tackle the aspects of the climate issue within their jurisdiction.  Eighty-one of the Senate’s 100 members sit on at least one of these six committees.  A robust committee process could therefore engage a much larger group of Senators than the 19 EPW members.  The Senate Energy and Natural Resources Committee (ENR) did in fact earlier this year pass a major bipartisan energy bill with provisions corresponding with many of the energy measures of the House bill.  The ENR Committee is going to continue exploring the climate issue next Wednesday with a hearing on energy and economic effects of climate change legislation.  Aside from ENR’s bill, however, it is not clear at this point whether all relevant Senate committees will be sitting formally to address the climate aspects of the bill.

Another option would be for key Senators, those especially focused on the bill’s implications for manufacturing, agriculture and energy supply, to rise up outside the committee process and engage in the specifics of the bill.  In fact, several ad hoc groups of moderate Democrats have crafted statements on the factors that would need to be addressed in a climate bill, the use of trade measures, the amount of allowance value needed to prevent carbon leakage, and the treatment of coal, setting a good precedent for their engagement.

Regardless of process by which the Senate at large is engaged, observers expect Senate Majority Leader Reid ultimately to be the one to forge the various inputs into a 60-vote bill – no doubt with major input from the President.  I will write more on this in a later post.

Manik Roy is Vice President, Federal Government Outreach

Climate Change Legislation: On to the Senate

Regardless of how enthusiastic one is about the Waxman-Markey climate and energy bill passed by the House of Representatives in June, passing the bill in six months through a body that had never before wrestled with climate action was a major accomplishment.  (For the record, the Pew Center was enthusiastic about the achievement, while seeing some room for improvement in the bill itself.)  This week, Senators Barbara Boxer and John Kerry introduced their climate bill.  It takes nothing from the House’s accomplishment to recognize that passing a bill through the Senate will be a steeper climb. 

First, there’s the math.  House passage requires a simple majority, which Waxman-Markey just managed, at 219 – 212.  Passage through the Senate will essentially require a supermajority of 60 votes, because of the filibuster.  (If you aren’t familiar with the filibuster, you don’t really need to be.  Just trust me, it takes 60.)

Second, the rules of the House give the Speaker a great deal more control over the chamber’s agenda than the Senate gives its leader.  Speaker Nancy Pelosi very adroitly defined the process by which her chamber hammered out a workable balance of competing objectives.  Senate Majority Leader Harry Reid will be herding cats.

We can get climate change legislation through the Senate, but it’s going to be a completely different animal.  I’ll explore the hows and whys in future posts.

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