Environmental Protection Agency (“EPA”) Administrator Lisa Jackson’s sudden resignation last week is not surprising in light of the recent revelations about the EPA’s use of “alias” e-mail accounts, purportedly for private communications between EPA officials. The use of such “aliases,” to protect confidential agency communications, appears on the surface benign. However, in the face of the statutory mandate for Federal government transparency, represented by the Federal Freedom of Information Act, 5 U.S.C. § 552, et seq., (“FOIA”), it is an ominous harbinger of the secretiveness of those who are appointed to serve the American public.
Day Two of the Hearings on the American Clean Energy and Security Act, also known as the Waxman-Markey bill, proved to be as contentious as expected. There was much evidence that the Bill would not have an easy road ahead of it, since the Committee is deeply divided. Although there were a few forays into the ridiculous, (Rep. John Shimkus (R.-Ill.: "I think this is the greatest assault on democracy and freedom that I’ve ever seen in Congress;" Energy Secretary Steven Chu comparing the Bill to Wayne Gretsky’ famous comment that "I was good because I skated to where the puck will be" (upon reflection, that comparison does work)), the Committee focused its questions to Panels (which featured EPA Administrator Lisa Jackson, Energy Secretary Steven Chu and Transportation Secretary Ray LaHood) on the issues of jobs, allowances, energy costs, and American leadership in the world.
In these times of economic uncertainty, no issue pulls at the hearts of politicians than jobs, especially when it can be used to hammer a point home. Rep. Joe Barton (R.-Texas) led the way citing statistics from the National Association of Manufacturers, the Heritage Foundation, and Charles Rivers Associate claiming that the bill would result in anywhere from 1.8 to 7 million jobs "destroyed." Rep. Shimkus made his statement about jobs in a more theatrical way, stating that "those of us who want jobs are going to try to defeat this bill" while hoisting a small lump of coal for the panelists to see.
On the other hand, the proponents of the Bill were not about to concede that the Bill would cause mass unemployment. Rep. Waxman asked EPA Administrator Jackson, Secretary Chu, and Secretary LaHood if they believed that the Bill would create jobs. Administrator Jackson replied that she believed the Bill is a "jobs bill." Secretary LaHood added that the legislation would create jobs, "especially green jobs." Secretary Chu agreed that the Bill would create millions of jobs and reduce America’s dependence on foreign oil.
Cap-And-Trade and Allowances
The part of the Bill that drew the most fire were the allowances: should they be given away or should be they auctioned or should there be some sort of hybrid. Administrator Jackson stated for the record that the Obama Administration supported the idea that 100 percent of the allowances should be auctioned. In response to Rep. Jay Inslee’s (D.-Wash.) statement that we have to multiple approaches to addressing the problem through EPA regulations and a cap passed by Congress, Administrator Jackson stated that she "could not agree more." A cap-and-trade law, she continued, was "powerful and necessary," but we need other regulations as well.
Understandably, the energy company officials who testified were not so eager to embrace a 100% auction. They wanted at least some free allowances, while various scientists ad economists stated that a cap-and-trade with an auction is the only way to go. Rep. Cliff Stearns (R.-Fla.) stated that "free carbon credits were windfall profits in Europe." Contrast that statement with Rep. Ralph Hall’s (R.-Texas) statement that "we’ll be in a weakened position if adopt cap-and-trade." Thus, there is much work to get to a point where there can be agreement on whether there should be a cap-and-trade, let alone whether it should be a 100% auction of allowances or something else.
The other big issue at the Hearing, particularly with respect to the later panels, was energy costs. Rep. Barton told the Committee that "the debate is not about whether cap-and-trade legislation will raise energy costs; the only dispute is by how much." He then went on to cite "findings" that the Bill would increase household energy costs up to $3,128 per year and that "filling your gas tank will cost anywhere from 60 to 144 percent more. The cost of home heating oil and natural gas will nearly double." Rep. Fred Upton (R.-Mich.) commented that this was not a "cap-and-trade," this was a "cap-and-tax."
The response to this onslaught was a little more nuanced. Secretary Chu responded that "it would be unwise to want to increase the price of gasoline" and then went on to outline the plans to lower transportation costs with electric cars, and low-carbon fuels, among other things. In response to a question from Rep. Jane Harman (D.-Calif.) Secretary Chu indicated that refrigerators use one quarter the amount of energy they used in 1975 and these are real savings seen by households. He then concluded by stating his belief that the "overall costs of living . . . can be held constant." Even the ConocoPhilips Executive Red Cavaney stated that although there will be costs "the benefits to the overall American economy will outweigh these costs."
Another area of concern addressed at the Hearing was the wisdom of the United States regulating climate change when there are no assurances that the number one and two emitters in the world – China and India – will also take steps to reduce their emissions. Rep. Ed Whitfield (R-Ky.) asked Secretary Chu: "If we unilaterally move to take steps and China and India and other countries are not, how do we deal with that?" Chu responded that that he believed that the United States should take a leadership role on this issue. This sentiment was echoed by Rep. Diana DeGette (D-Colo.) who stated that she believed that America should lead and not wait for India and China to get their act together.
Outside the Committee Room Rep. Rick Boucher (D.Va.) and Rep. Jim Matheson (D.Utah) stated that they would meet with Chairman Waxman to discuss a comprehensive amendment that could be presented on Thursday. Rep. Boucher stated that the Bill’s schedule was "achievable" but it would depend on whether an agreement could be quickly reached on issues including how to allocate credits to existing industries, the schedule for reducing carbon emissions and flexibility in meeting renewable electricity requirements.
Click on "continue reading" for a complete Witness List with links to the witnesses written testimony and links to the video of the Hearing.
Over two years ago, on April 2, 2007, the Supreme Court in Massachusetts v. EPA, 549 U.S. 497 (2007), directed the EPA Administrator to determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. Finally, after two years and much hand-wringing, EPA Administrator Lisa Jackson issued her proposed finding that carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride may endanger public health or welfare.
In actuality, the EPA proposed two findings: (1) an endangerment finding, that the six GHG endanger public health and welfare; and (2) a “cause and contribute finding” that the combined emissions of carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence add to the threat of climate change.
EPA characterizes its proposed Endangerment Finding as follows:
This is not a close case in which the magnitude of the harm is small and the probability great, or the magnitude large and the probability small. In both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act.
The EPA, however, was careful to walk a fine line between complying with the dictates of Massachusetts and actually regulating GHG. While this proposed rule does not actually regulate GHG, it does propose defining greenhouse gases as “air pollutants” under the Clean Air Act. EPA proposes defining the six GHG as a single pollutant, rather the defining them individually – similar to the approach the EPA took with ozone years ago. EPA explained its decision as follows:
It is the Administrator’s judgment that this collective approach for the contribution test is most consistent with the treatment of greenhouse gases by those studying climate change science and policy, where it has become common practice to evaluate greenhouse gases on a collective CO2-equivalent basis
Although the EPA usually issues emission control standards concurrently with an endangerment finding, in this case, the EPA indicated that the emission standards would be issued “several months from now.” This bifurcation of the normal process has been taken by observers to mean that these rules are meant to goad the Congress into action, rather than a serious proposal that EPA regulate GHG. Indeed, the EPA’s Press Release on the Endangerment finding specifically stated that “[n]otwithstanding this required regulatory process, both President Obama and Administrator Jackson have repeatedly indicated their preference for comprehensive legislation to address this issue and create the framework for a clean energy economy.”
And Congressional leadership seems ready to oblige. Rep. Edward Markey (D.Mass.), Chair of the Energy and Environment Subcommittee, had this to say about the EPA’s Endangerment Ruling:
This decision is a game-changer. It is now no longer a choice between doing a bill or doing nothing. It is now a choice between regulation and legislation. EPA will have to act if Congress does not act.
Markey and Rep. Henry Waxman (D-Calif.) have introduced the American Clean Energy and Security Act of 2009 (ACES) to set up a system for reducing emissions from all sources and creating a financial incentive for companies to stay within emission limits. See, “U.S. House Energy and Commerce Committee Releases Draft Climate Change Act,” posted April 2, 2009. Waxman wants to pass the bill from his Energy and Commerce Committee by the end of May, but its fate is uncertain in the Senate.
Aircraft and other aviation sources seem to have received a pass with respect to these regulations:
EPA has received a petition under the Act to consider the regulation of 64 aircraft emissions (water vapor and NOx) that lead to formation of contrails (in addition to aircraft greenhouse gas emissions), and EPA plans to evaluate this issue further. At this time, the Administrator is not proposing to include aircraft-related contrails or emissions that are not greenhouse gases within the definition of air pollution for purposes of section 202(a).
This does not mean, however, that once the emission control standards are promulgated (if they are promulgated), aviation sources will not also be regulated. Likewise, the Waxman-Markey bill may affect aviation sources as well.
A 60-day comment period will follow publication of the proposed rule in Federal Register, which has not yet occurred. There will be public hearings in Arlington, Virginia, and Seattle, Washington in May, 2009. Click on Continue Reading at the bottom of this post for details about written comments and public hearings.
Previous posts on this subject:
- “U.S. House Energy and Commerce Committee Releases Draft Climate Change Act,” posted April 2, 2009.
- “EPA Proposes National Reporting Rules for Greenhouse Gases,” posted March 10, 2009.
- “U.S. House Subcommittee Hears Testimony on Problems of Carbon Offsets in Climate Change Legislation,” posted March 5, 2009.
- “EPA Administrator Issues Memorandum Prohibiting Controls on Carbon Dioxide in Clean Air Act Permits,” posted December 21, 2008.
- “GAO Issues ‘Expert Opinion on the Economics of the Policy Options to Address Climate Change,’” posted June 9, 2008.
- “Senate ‘Debates’ Global Warming Bill,” posted June 9, 2008.
- “EPA Administrator States that Greenhouse Gas Regulation May Not Be Issued Until After January, 2009,” posted May 20, 2008.
- “States File Lawsuit to Enforce Ruling in Massachusetts v. EPA,” posted April 3, 2008