EPA’s Greenhouse Power Grab: Baucus’s Revenge, Democracy’s Peril
Last week, Sen. Max Baucus (D-Mont.) introduced an amendment to S. 493, a bill reauthorizing small business research and technology programs. Baucus’s amendment would essentially codify EPA’s Tailoring Rule, which exempts small emitters of greenhouse gases (GHGs) from regulation under the Clean Air Act’s (CAA’s) Prevention of Significant Deterioration (PSD) preconstruction permitting program and Title V operating permits program.
But that just means the Baucus amendment would codify the entire ever-growing ensemble of EPA climate policy initiatives of which the Tailoring Rule is only a small piece.
The Tailoring Rule presupposes EPA’s Tailpipe Rule, which establishes first-ever GHG standards for new motor vehicles, and, more importantly, EPA’s Endangerment Rule, which contains the agency’s “finding” that GHG emissions endanger public health and welfare. The Endangerment Rule both authorizes and obligates EPA to issue a host of other regulations — GHG emission/fuel-economy standards for all types of mobile sources, GHG/energy-efficiency standards for all categories of industrial sources, and even national ambient air quality standards (NAAQS) for carbon dioxide (CO2) and other GHGs.
Congress, however, never authorized EPA to determine fuel economy standards for motor vehicles, much less dictate national policy on climate change. The CAA, after all, was enacted in 1970, years before global warming was even a gleam in Al Gore’s eye. Adopting the Baucus amendment would put Congress’s legislative stamp of approval on EPA’s end-run around the legislative process.
The Baucus amendment has almost no chance of passing in the GOP-led House of Representatives. However, it does not need to pass to perpetuate EPA’s shocking power grab. All it has to do is peel off enough votes in the Senate to prevent passage of the Inhofe-Upton Energy Tax Prevention Act. That bill, which is almost certain to pass in the House, would repeal EPA’s Endangerment Rule and permanently stop the agency from implementing climate policies Congress never approved.
Like Sen. Jay Rockefeller’s (D-W.Va.) amendment to delay EPA’s GHG regulations for two years, the Baucus amendment provides political cover for Senators who want to appear to be doing something to rein in EPA while in fact protecting the agency’s purloined power to restrict America’s access to affordable, carbon-based energy.
Three points are especially worthy of note.
(1) Baucus’s amendment implicitly confirms that Congress never authorized EPA to regulate GHGs through the CAA.
EPA’s Endangerment Rule obligated the agency to issue a Tailpipe Rule establishing GHG emission standards for new motor vehicles. According to EPA’s Triggering Rule, once the Tailpipe Rule took effect (Jan. 2, 2011), CO2 became a “regulated air pollutant” and “major” stationary sources automatically became “subject to regulation” under the PSD and Title V permitting programs. The problem, as is now widely known, is that literally millions of non-industrial buildings and facilities (office buildings, apartment complexes, big box stores, hospitals, schools, large houses of worship, Dunkin’ Donut shops) emit enough CO2 — 250/100 tons per year — to meet the PSD/Title V numerical definition of “major” source.
Thus, the Endangerment Rule inexorably leads to what EPA itself calls “absurd results” – policy outcomes that conflict with and undermine congressional intent. EPA and its state counterparts would have to process an estimated 81,000 PSD preconstruction permit applications per year (instead of 280) and 6.1 million Title V operating permits per year (instead of 15,000). The permitting programs would crash under their own weight, crippling both environmental enforcement and construction activity. A more potent Anti-Stimulus Program would be hard to imagine. This is not what Congress authorized when it enacted the CAA in 1970, nor when it amended the statute in 1977 and 1990.
To avoid a red tape nightmare and an angry political backlash, EPA “tailored” the statutory numerical definitions of “major” source to exempt all but the largest GHG-emitters from PSD and Title V. “Tailoring,” however, is just bureaucrat-speak for “amending.” An administrative agency has no power to amend statutes. Certainly the CAA nowhere authorizes EPA to revise statutory provisions to avoid an administrative debacle of its own making.
Not once during the four years when when Massachusetts v. EPA was litigated before the D.C. Circuit Court of Appeals and the U.S. Supreme Court did counsel for EPA bother to point out that regulating GHGs via the CAA would lead to absurd results, nor did counsel mention that EPA would have to play lawmaker and amend the CAA in order to avoid an administrative meltdown. More fundamentally, EPA’s counsel never made the basic point that EPA could not issue a GHG endangerment rule without eventually regulating GHGs under the CAA as a whole– a gigantic shift in public policy that Congress could not possibly have intended when it enacted the CAA in 1970. That EPA’s counsel pulled its punches is hardly surprising. By losing the case in the Supreme Court, EPA gained the truly awesome, economy-restructuring power to regulate CO2, the most ubiquitous byproduct of industrial civilization.
Although ostensibly an amendment to a small business bill, what the Baucus amendment chiefly and more importantly amends is the CAA. That’s what codifying the legally dubious Tailoring Rule means. The amendment confirms in spades that the CAA is an unreasonable, even absurd framework for determining climate policy. The only way to make GHGs fit into CAA regulatory provisions without immediately disrupting the economy is to amend the Act so that it is no longer the same statute under which the Court decided Mass. v. EPA.
(2) Baucus’s amendment provides zero protection from the most absurd risk arising from EPA’s Endangerment Rule – GHG regulation via the NAAQS program.
EPA’s Endangerment Rule (p. 66516) holds that the “elevated concentration of greenhouse gases in the atmosphere may reasonably be anticipated to endanger public health and welfare.” Having made this “finding” under CAA Sec. 202, EPA could not without blatant self-contradiction fail to make the same finding in a Sec. 108 endangerment proceeding. Sec. 108 requires EPA to initiate a NAAQS rulemaking for “air pollution” from “numerous or diverse mobile or stationary sources” if the Administrator finds that such pollution “may reasonably be determined to endanger public health or welfare.” Carbon dioxide obviously comes from numerous and diverse mobile and stationary sources, and EPA has already determined that the associated “air pollution” — the “elevated concentration” – endangers public health and welfare. Logically, EPA must now establish NAAQS for GHGs, with the standards set below current atmospheric concentrations.
Eco-litigation groups were quick to pick up on this logic. In December 2009, the Center for Biological Diversity and 350.Org petitioned EPA to establish NAAQS for CO2 at 350 parts per million (about 40 ppm below current concentrations) and for other GHGs at preindustrial levels. Numerous other environmental organizations and activists (including Al Gore and NASA scientist James Hansen) have joined the 350 Petition.
Some EPA apologists assure us that the agency would never go down this road. In fact, the Obama administration has already hinted that it considers NAAQS a viable mechanism for regulating GHGs.
In an August 2010 brief filed on behalf of the Tennessee Valley Authority, the Obama Justice Department urged the Supreme Court to vacate an appeals court decision (State of Connecticut et al. v. American Electric Power et al.) that would allow states and other parties to sue coal-burning electric utilities for their alleged contribution to global warming-related “injuries.” The brief argues that EPA’s current and future GHG regulations preempt federal common-law litigation to control GHG emissions. The brief mentions Sec. 202 (motor vehicle standards), Sec. 165 (PSD permitting), Section 111 (new source performance standards), and Title V (operating permits) as applicable CAA authorities. No surprise there. But then we find this shocker:
Section 108 of the CAA also provides EPA with a mechanism for listing pollutants that “endanger public health or welfare” and meet certain other criteria. When an air pollutant is listed, the Act requires States to regulate emissions to prevent pollution from exceeding EPA standards.
If EPA would never issue NAAQS for greenhouse gases, then why mention Sec. 108 in a brief intended to prove that CAA regulation of greenhouse gases “displaces” federal common-law injury claims? Why not just discuss the authorities everybody knows EPA is currently using or plans to use? Including NAAQS as a regulatory option in a brief to the Supreme Courtis troubling, especially given the aggressive push eco-litigation groups are making on this front.
The potential for mischief is hard to exaggerate. Not even a worldwide depression permanentlyreducing global economic output and emissions to, say, 1970 levels, would stop CO2 concentrations from rising over the next 90 years. Note also that the CAA allows states only five or at most 10 years to attain NAAQS or face sanctions such as loss of highway funding. For perspective, the Waxman-Markey cap-and-trade bill, which Senate leaders considered too economically risky to bring to a vote, aimed to help stabilize CO2 concentrations at 450 ppm by 2050. The economic sacrifices required to implement a CO2 NAAQS set at 350 ppm hugely exceed those associated with any climate bill Congress has either rejected or declined to pass.
The Baucus amendment, if enacted, would do nothing to defuse this ticking time bomb. If it does not pass but merely prevents the Energy Tax Prevention Act from passing, the amendment will perpetuate the NAAQ threat and other regulatory uncertainties emanating from EPA’s Endangerment Rule.
(3) Baucus’s amendment would codify EPA’s end-run around Congress, allowing the agency to dictate national policy on climate change as it sees fit.
What would the Baucus amendment stop EPA from doing? Only that which the agency does not want to do anyway! EPA has no wish to apply BACT and PSD to small stationary sources of CO2. That’s why EPA issued the Tailoring Rule. Granted, the Tailoring Rule is such an overt flouting of the separation of powers that courts may overturn it. But the risk to small entities from PSD and Title V is not the main reason Congress should stop EPA.
The principal reason is that EPA is wielding powers beyond any plausible legislative mandate. Let’s start with the EPA Tailpipe Rule, which establishes GHG emission standards for new motor vehicles. As EPA acknowledges, 94-95% of motor vehicle greenhouse gas emissions are carbon dioxide from motor fuel combustion. And as both EPA and the National Highway Traffic Safety Administration (NHTSA) acknowledge, “there is a single pool of technologies for addressing these twin problems [climate change, oil dependence], i.e., those that reduce fuel consumption and thereby reduce CO2 emissions as well” (p. 25327). Because EPA’s GHG emission standards can only be met by decreasing motor fuel consumption, the standards implicitly regulate fuel economy. The CAA, however, provides no authority for fuel economy regulation. Congress delegated that power to the NHTSA under other statutes (1975 Energy Policy Act, 2007 Energy Independence and Security Act).
Having hijacked fuel-economy regulation, EPA is now poised to “enact” similar fuel-consumption standards for marine vessels, aircraft, non-road vehicles, and engines. No existing statute authorizes any agency to impose such controls. Congress typically deliberates for years before revising fuel-economy standards for motor vehicles, because the consumer and economic impacts are potentially so large. Congress has not held a single hearing on how or, more importantly, whether to adopt fuel-consumption standards for marine vessels, aircraft, and the like. Yet EPA charges ahead as if the authority it conferred upon itself, via the Endangerment Rule, eliminates the need for hearings, legislative debate, on-the-record votes, and political accountability to the people at the ballot box.
EPA is now administering “best available control technology” (BACT) determinations for new or modified large GHG-emitters such as power plants, refineries, pulp and paper mills, cement production facilities, and steel mills. It is also developing GHG performance standards for power plants and refineries. In time, EPA will establish GHG standards for every category of mobile and stationary source, effectively imposing an economy-wide climate and energy policy. None of these actions implements, or is pursuant to, any climate or energy bill that Congress has enacted.
Stranger than Fiction
The weird irony of this situation is that Sen. Baucus is almost uniquely qualified to rebut the claim that the CAA authorizes EPA to regulate GHGs. During congressional deliberation on the CAA Amendments of 1990, Baucus sponsored legislation requiring EPA to adopt CO2 standards for new motor vehicles. As originally introduced on September 14, 1989, S. 1630, the Senate version of the 1990 CAA Amendments, contained a Section 216 on “Carbon Dioxide Emissions from Passenger Cars.”
SEC. 216. (a) PROMULGATION OF REGULATIONS- The Administrator shall promulgate regulations providing for standards applicable to emissions of carbon dioxide from passenger automobiles (as defined in 15 U.S.C. 2001(2)). Such standards shall require that for model years 1995 to 2002, the average of such emissions from passenger automobiles manufactured by any manufacturer shall not exceed two hundred and forty two grams per mile, and for model year 2003 and thereafter, such average shall not exceed one hundred and seventy grams per mile.
The Senate declined to adopt that provision. Another part of Baucus’s legislation, Title VII of S. 1630, would have made “global warming potential” a basis for regulating “substances manufactured for commercial purposes,” such as chlorofluorcarbons and halogens. Although Title VII declared reductions in CO2 and methane emissions as a national goal, it did not explicitly provide authority to regulate those gases, which are byproducts of combustion and agricultural activity rather than “substances manufactured for commercial purposes.”
In any event, the House-Senate conference committee ultimately rejected even that limited basis for global warming regulation while also dropping Title VII’s goal of reducing CO2 and methane emissions. The only trace of Title VII’s climate language that survived is Section 602(e) of Title VI, which directs the Administrator to “publish” the “global warming potential” of ozone-depleting substances. To ensure that EPA’s trigger-happy regulators would not go off half-cocked, the phrase “global warming potential” is immediately followed by this admonition: “The preceding sentence shall not be construed to be the basis of any additional regulation under [the CAA].”
With the possible exception of Michigan Rep. John Dingell (see pp. 65-66 of this committee print), who chaired the House-Senate conference committee on the 1990 CAA Amendments, nobody on Capitol Hill should know better than Sen. Baucus that Congress never authorized EPA to regulate GHGs for climate change purposes. Baucus tried to persuade the Senate to approve CO2 standards for new motor vehicles — and failed. House and Senate conferees also rejected the other GHG regulatory provisions he had proposed. A lawmaker just doesn’t forget stuff like that.
So Baucus’s amendment might be titled Baucus’s Revenge. But it is also democracy’s peril.
By introducing his amendment, Baucus has joined the ranks of those who think the greenhouse regulatory agenda is more important than any constitutional principle that might interfere with it. Their unstated premise is that “We are entitled to win in politics even if our side loses in the halls of Congress and on Election Day.” It is a very strange notion of democracy. Unfortunately, several members of Congress seem to hold this view.
In last year’s debate on Alaska Sen. Lisa Murkowski’s resolution to overturn EPA’s Endangerment Rule,Sen. Barbara Boxer (D-Calif.) complained that if the public has to wait for Congress to enact controls on GHG emissions, “that might not happen, in a year or two, or five or six or eight or 10.” Yes, but how in the world does that authorize EPA to substitute its will for that of the people’s representatives? The fact that Congress remains deadlocked on climate and energy policy is a reason for EPA not to act, not a license for EPA to behave as a Super Legislature.
The legislative process is often frustrating and slow. It is supposed to be! By constitutional design, it is much easier to block and delay legislation than it is to pass legislation. This moderates our politics and promotes continuity in law and policy. The legislative process is more valuable than any result that an administrative agency might obtain by doing an end-run around it. Of all people, U.S. senators should understand this basic precept of representative government. How Senators vote on the Baucus amendment will be a test of their respect for the Constitution.