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  • A Banner Day for Rule of Law, Constitution, and Common Sense

    February 10, 2016 11:02 AM

    In an unexpected and unprecedented decision, the Supreme Court last evening granted an application by more than two dozen states to stay implementation of the Clean Power Plan during pendency of petitions for review.  

    Absent a stay, the imminent danger was that EPA could effectively escape judicial review in implementing the rule, which is President Obama’s marquee climate policy. Last year, for example, the Supreme Court checked EPA’s absurd Utility MACT, but not before 80 percent of utilities spent billions of dollars implemented the rule during the three years that it took for the legal challenge to run its course through federal courts. So, EPA had already won, even before the Court ruled the rule was impermissible.

    The Clean Power Plan posed the same threat. Capital-intensive businesses like utilities must plan on a multi-year horizon, at least five years out. Indeed, power plants take years to build. The electric sector simply cannot wait for the slow wheels of justice to turn. As such, utilities likely would have locked in compliance during judicial review, regardless whether the regulation was determined to be illegal.

    With last evening’s decision, the Court avoided a repeat of the Utility MACT injustice and, in so doing, scored a win for the rule of law, the Constitution, and common sense. Regarding the rule of law, I explained yesterday that the Clean Air Act plainly prohibits EPA’s Clean Power Plan, and the agency’s argument to the contrary is a “monument to disingenuousness.” From a constitutional perspective, the Court’s stay prevents EPA from “commandeering” states—in violation of the Tenth Amendment—by forcing them to spend significant administrative resources implementing federal climate policy they oppose. And from a common sense standpoint, the Court’s decision arrests EPA’s attempt to overhaul the nation’s electricity sector in order to achieve climate “benefits” that are too small to be measured.

    The states submitted their application in late January to Chief Justice Roberts, who, in turn, sought counsel from his peers. As per usual, Justice Kennedy was the swing vote in the 5-4 decision. Justice Kennedy has a history of being solicitous of states’ “dignity” within American federalism, so I suspect he was impressed by the number of states that opposed the Clean Power Plan.

    Where do we go from here?

  • In Defending Clean Power Plan before the Supreme Court, EPA/DOJ Misrepresent Clean Air Act with Lame Editing Tricks

    February 9, 2016 2:44 PM

    Lawyers for the EPA and the Department of Justice (DOJ) are trying to pull a fast one on the Supreme Court. Through creative formatting, they are misrepresenting the text of the Clean Air Act such that it omits a major constraint on federal power.

    At issue is Clean Air Act §7411(d)(1), which is a regulatory program to control emissions from existing stationary sources. Section §7411(d)(1) allegedly authorizes Obama’s marquee climate policy (known as the Clean Power Plan). Below, I’ve reposted the text of the provision in full.

    §7411(d)(1) The Administrator shall prescribe regulations which shall establish a procedure similar to that provided by section 7410 of this title under which each State shall submit to the Administrator a plan which (A) establishes standards of performance for any existing source for any air pollutant (i) for which air quality criteria have not been issued or which is not included on a list published under section 7408(a) of this title or emitted from a source category which is regulated under section 7412 of this title but (ii) to which a standard of performance under this section would apply if such existing source were a new source, and (B) provides for the implementation and enforcement of such standards of performance.

    To help you unpack this provision, I’ve ordered it below in an outline format that comports with the express structural instructions in the provision’s text: 

    §7411(d)(1) The Administrator shall prescribe regulations which shall establish a procedure … under which each State shall submit to the Administrator a plan which

    (A) establishes standards of performance for any existing source for any air pollutant

    (i) for which air quality criteria have not been issued or which is not included on a list published under §7408(a) of this title or emitted from a source category which is regulated under §7412 of this title but

    (ii) to which a standard of performance under this section would apply if such existing source were a new source, and

    (B) provides for the implementation and enforcement of such standards of performance.

    For challengers of the rule, the crucial language is in subsection §7411(d)(1)(A)(i), which acts to limit the EPA’s authority under the provision. Opponents of the rule argue that this subsection, by its plain terms, sets forth three independent disqualifying factors that constrain EPA’s authority:

    1. EPA can’t issue §7411(d) regulations (i.e., the Clean Power Plan) for pollutants for which air quality criteria have been issued;
    2. EPA agency can’t issue §7411(d) regulations for pollutants on the §7408 list;
    3. EPA can’t issue §7411(d) regulations for sources subject to §7412.
  • Don't Put Eco-Finance Measures in Energy Bill

    February 4, 2016 2:59 PM

    Cronyism and boondoggles in an energy bill is nothing new in the U.S. Congress. But this week, senators of both parties are taking the process to new lows in amendments they are offering to the pending S.2012—the Energy Policy Modernization Act.

    Not only are these politicos picking winners and losers through subsidies and mandates favoring selected “green” industries and technologies, they are roping in housing and finance agencies into their “environmentally correct” schemes. At best, this would divert the agencies away from their missions at a time of great economic volatility. At worst, it could cause a financial crisis of its own.

    First, there is an amendment from Sen Johnny Isakson (R-Ga.), a former real estate agent, which would loosen credit standards for “green” homes backed by taxpayers through the Federal Housing Administration. The FHA, created during Franklin D. Roosevelt’s New Deal in 1934 to help low- and middle-income borrowers obtain housing, now benefits many affluent borrowers as well by insuring from default mortgages up to a limit of about $625,000.

    This greatly reduces a bank’s risk from making these loans, but can also create a substantial “moral hazard” because of the taxpayer backing. As I wrote in The Wall Street Journal in 2007, “FHA-insured loans have also been at the center of some of the worst excesses of the housing boom, including mortgage fraud, loans made without income verification, and property ‘flipping’ with inflated appraisal.” The FHA received a $1.7 billion taxpayer bailout in 2013.

  • In FERC Ruling, Supreme Court Announces Dangerous New "No Man's Land" Principle

    January 28, 2016 1:07 PM

    On January 26, the Supreme Court ruled in favor of the federal government in a high profile case, FERC v. Electric Power Supply Association. Media reports have focused on how the Court’s ruling boosts federal efforts to advance a policy known as “demand-side management,” whereby grid operators “manage” ratepayer demand by paying retail consumers to not use electricity during periods of peak demand. In fact, demand-side management is a stupid idea because the alternative—lifting electric socialism and allowing the price mechanism to regulate demand—is so much more efficient.

    However, for this post, the policy implications of the Court’s decision are merely an unpleasant aside. Instead, the point of this blog is to explain how the Court’s troubling reasoning invites the federal government to expand its regulatory authority.

  • Is Any Component of Obama's Energy Policy Not Shrouded in Obfuscation?

    January 26, 2016 3:18 PM

    ​Last week, Bloomberg News’s Toluse Olorunnipa tweeted from a Detroit auto show that President Obama “slammed” Republicans for having predicted high gas prices during his administration. According to Olorunnipa, the president said, “I don't know what y'all paying right now, but it ain't no $6.50.”

    Only one year before, in a virtually identical context, President Obama was singing the exact opposite tune. Then, as now, gas prices were low. Then, as now, Americans were flocking to SUVs and light trucks, resulting in record sales for domestic car manufacturers. Then—last January, in an exclusive interview with The Detroit News—the president warned that it would be foolish to expect gas to stay cheap forever. His overall point was to admonish Americans who, spurred by low gas prices, were buying new SUVs instead of smaller cars that better comport with his administration’s CAFE standards.

    To recap: Last week, Obama lampooned Republicans for predicting high gas prices. Last year, Obama predicted high gas prices in the course of lecturing American car consumers.

  • Coalition Submits Comments to EPA on Proposed Clean Power Plan Model FIP

    January 21, 2016 12:48 PM

    Today, January 21, 2016, is the final day for submission of comments on the Environmental Protection Agency’s (EPA) notice of proposed rulemaking concerning a Model Federal Implementation Plan (FIP) for compliance with the Clean Power Plan.

    In other words, this is the opportunity for states who will be impacted by the Obama administration’s Clean Power Plan to voice questions and concerns about what implementation will mean for their state in terms of cost and legitimacy.

    CEI’s William Yeatman compiled comments for submission as part of an effort driven by numerous nonprofits around the country and in Washington, D.C.

  • SOTU Response: Fisking O's Climate Spiel

    January 13, 2016 9:55 AM

    PRESIDENT OBAMA: “Look, if anybody still wants to dispute the science around climate change, have at it. You’ll be pretty lonely, because you’ll be debating our military, most of America’s business leaders, the majority of the American people, almost the entire scientific community, and 200 nations around the world who agree it’s a problem and intend to solve it.”

    RESPONSE: President Obama has the politics all wrong. In fact, Obama ran to the right of Romney on energy policy in 2012. That Obama, the one trying to get elected by the American people, was pro-fossil fuel (even coal), and he avoided talking about climate change. Only after he was elected to a second term did Obama make climate change a legacy issue. Now, he’s claiming that the “majority of the American people” want him to implement climate policies. Of course he is being disingenuous. If he believed this was true, he would have run on the issue in 2012. Instead, he ran from it.

  • Fracking: The Gift Keeps Giving

    November 24, 2015 11:18 AM

    “U.S. proved crude oil reserves hit levels not seen since 1972, surpassing 39 billion barrels in 2014, according to newly released federal data,” Michael Bastasch reports in The Daily Caller. He continues:

    America’s proved crude oil reserves have grown for the past six consecutive years, according to the Energy Information Administration, and are now at levels not seen in 42 years. Crude reserves jumped 3.4 billion barrels from 2013 to 2014—a 9 percent increase.

    Similarly, U.S. proved reserves of natural gas are higher than at any time in the past 50 years.

    Proved reserves are those that can be extracted with current technologies under current prices. Recent increases in proved reserves are due to improvements in hydraulic fracturing and directional drilling, which allow drillers to find and extract oil and gas trapped in shale and other “tight” formations.

    The U.S. fracking boom combined with Canadian production from oil sands put downward pressure on global oil prices, “contributing to the price collapse in 2014 from more than $100 in the summer to about $50 a barrel today,” Bastasch observes.

  • Who's Playing Politics on the Keystone XL Pipeline?

    November 4, 2015 2:20 PM

    “The White House on Tuesday said President Obama had no intention of bowing to a request from the company behind the Keystone XL oil pipeline to delay a decision on the project, saying he wanted to take action before his tenure ends,” the New York Times reports. From the article:

    The State Department is reviewing a request made on Monday by the company, TransCanada, to pause its years-long evaluation of the proposed 1,179-mile pipeline, which has become part of a broader debate over Mr. Obama’s environmental agenda.

    Josh Earnest, the White House press secretary, said on Tuesday that “there’s reason to suspect that there may be politics at play” in TransCanada’s request. He strongly suggested that the review, which has been widely expected to result in a rejection of the pipeline as soon as this month, remained on track.

    “Given how long it’s taken, it seems unusual to me to suggest that somehow it should be paused yet again,” Mr. Earnest said about the evaluation at the State Department, which reviews proposed cross-border projects that require a presidential permit.

    The president wants an expeditious decision on KXL—whom does Earnest think he’s kidding? The State Department has been reviewing the project since September 2008—more than five times longer than the average review of cross-border infrastructure projects.

    TransCanada and its allies on and off the Hill have continually pushed for timely review and approval. During the administration’s seven-plus years of indecision, the State Department has conducted four major reviews—a Draft Environmental Impact Statement or EIS (April 2010), a Final EIS (August 2011), a Draft Supplemental EIS (March 2013), and a Final Supplemental EIS (Jan. 2014). The big-picture conclusion is always the same. Under the “No Action Alternative” (i.e. the project is not built and operated), Canadian crude still reaches Gulf Coast refineries, except it does so by other routes—rail, barge, smaller pipelines—that are less efficient, emit more carbon dioxide (CO2) per unit of oil delivered, and carry greater risk of oil spills, industrial accidents, and fatalities.

  • "Losing Our Minds" over Green Energy

    October 15, 2015 3:24 PM

    Eco-theocracy has swept America and Europe, resulting in governments devoting vast sums to build their Green Temples where “renewable energy” and “recycled materials” can be worshipped. High Priest Barack Obama advancing these themes in America often cited Spain as a nation that was leading the world in demonstrating how “green energy” could save the planet and grow the economy. As in the U.S., Spanish politicians from left to right rushed to expand government spending on these “noble” projects. President Aznar began all of this in 2004, launching the rapid development of renewables in Spain. Those programs were consolidated and expanded by subsequent governments led by President Zapatero. In the period from 2004 to 2011 expenditures on renewables grew rapidly, reaching €9 billion a year.

    Zapatero’s Minister of Industry and Energy, Miguel Sebastian, was the first to reign in this program, in 2010. Sebastian acknowledges in his recent book The False Bonanza that in the midst of the economic boom:

    Excited about [increased] economic activity and employment, we didn’t want to hear about the structural difficulties, of imbalances, or of sustainable growth.

    Sebastian’s mea culpa regarding the renewables mandate: “We lost our minds with green energy.” The resulting excesses were partly to blame for the problems, including skyrocketing consumer prices that Spain’s electricity sector has recently experienced.

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