Regulatory rollback: energy policy

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The Trump administration proposes three strategies to boost the US economy: Reform taxes (but the legislative year is half over, and a tax bill has yet to be put on the table) – renegotiate international trade deals (count us as skeptical about potential gains) – dial back onerous regulations (probably the best bet, at least for this year).

Regulatory changes can often be made without legislation, and the administration got off to a quick start. A big push to cut regulatory red tape,
2/6/17. There has been considerable progress since February, notably including relaxed rules for the energy sector (our focus this week).

1. Energy goal – When global oil prices soared in the 1970s, it was said the US should do whatever it took to stop importing foreign oil. Politicians on both sides of the aisle embraced the “energy independence” slogan, although the seeming consensus was illusory. Liberals favored policies to constrain energy demand; conservatives were focused on increasing energy production. Consider this summary of arguments for and against exploiting previously untapped US oil resources to bring down gas prices. Tip for fiscal visionaries: be persistent or get run over, 4/25/11.

US oil production has roughly doubled since 2011, thanks to the new fracking and horizontal drilling technology. US Energy Information Administration,
March 2017. Meanwhile, gas prices have fallen dramatically.


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Based on the current outlook, the administration has adopted a new slogan. Trump vows to create “American energy dominance,” Timothy Cama, thehill.com, 6/29/17.

“The golden era of American energy is now underway” *** “[President] Trump told the fossil fuel industry executives, workers, lawmakers and others assembled. “Our country is blessed with true energy abundance, which we didn’t know of even five years ago and certainly 10 years ago,” he continued “With these incredible resources, my administration will seek not only the American energy independence that we’ve been looking for so long, but American energy dominance.”

Energy dominance sounds a tad jingoistic, but if the US can profitably become a net exporter of oil versus an importer that would be fine. Ditto becoming a big exporter of liquefied natural gas, which could provide European countries with an alternative to gas imports from Russia, and boosting coal exports (China will burn coal from somewhere; it might as well come from the US).

Some companies fret that rising US exports of fossil fuels will boost prices for supplies at home. Big energy users: Trump’s natural gas exports will take away jobs, John Siciliano, Washington Examiner,
6/28/17. Too bad, that’s how free markets work, i.e., prices are determined by supply and demand.

Watch out for the study of ways “to revive and expand our nuclear energy sector,” however, which was touted at the event. It might lead to proposed subsidies for nuclear power plants that are losing money due to the availability of low-priced natural gas. Why we shouldn’t bail out big nuclear, David Williams, Washington Examiner,
7/21/17.

2. Global warming (aka climate change) – Liberals are less enthusiastic about the US energy boom than conservatives. They see the growing use of fossil fuel is a bad idea, a step in the wrong direction for this country and the human race.

Various arguments have been offered to support this conclusion, notably the man-made global warming theory (MMGWT), which is supposedly supported by an overwhelming (97%) scientific consensus. Proponents of this theory attribute rising global temperatures since the beginning of the Industrial Revolution to a buildup of carbon dioxide in the atmosphere (currently about .04%) due to the burning of fossil fuels. They warn that humans must begin phasing out their use of fossil fuels – whatever the cost penalty – to avert a runaway warming trend that could do catastrophic damage.

For example, UK authorities recently proclaimed that the sale of cars with internal combustion engines will be banned by 2040; this was done with no apparent discussion of the costs or reliability of alternative modes of transportation. Electric cars win? Britain to ban new petrol and diesel cars from 2040, Kyle MacLelian & Guy Falconbridge, reuters.com,
7/26/17.

While not necessarily rejecting the MMGWT, we consider it far from proven. And much of what passes for discussion of the subject has been tainted by political considerations, i.e., perceptions of who would benefit from proposed government actions to fight global warming and who should pay the bill. Even scientific discourse seems to have been politicized, which makes a rational debate of the theory hard to arrange. The March for Science, part B,
4/17/17.

On the campaign trail, Donald Trump slammed the Paris climate agreement, which had been negotiated under UN auspices and approved for this country by then President Obama (without any input from Congress), but after the election President Trump’s advisers were reportedly split as to whether he should openly disavow this agreement or simply ignore any provisions that were deemed inconvenient.

After several months of discussion and deliberation, the president rejected the Paris agreement as a “bad deal,” albeit without reiterating his previous comments about the MMGWT being a “hoax.” Rethinking a plan to combat global warming,
6/12/17.

The Environmental Protection Agency; staff is loaded with climate alarmists, who can’t be readily replaced. Administrator Scott Pruitt has made a few changes since being sworn in, e.g., not renewing the terms of several members of a scientific advisory board – but even this modest step wasn’t accomplished without controversy. EPA science advisers resign “in protest,” John Siciliano, Washington Examiner,
5/12/17.

Then there is Francesca Grifo, a longtime activist at the Union of Concerned Scientists, who serves as the EPA’s Scientific Integrity Official. Created in 2013, this position is classified as administrative vs. policymaking so Civil Service protections apply. Since Pruitt’s arrival, Grifo has been working to preserve the status quo. Anatomy of a deep state, Kimberly Strassel, Wall Street Journal,
5/25/17.

In March the Sierra Club demanded that the EPA’s inspector general investigate whether the agency’s newly installed administrator, Scott Pruitt, had violated policy by suggesting carbon dioxide might not be the prime driver of global warming. The inspector general referred the matter to . . . the Scientific Integrity Official. So now an unelected, unappointed activist could pass judgment on whether the Senate-confirmed EPA chief is too unscientific to run his own agency. So much for elections.

Pruitt was a staunch supporter of withdrawing from the Paris climate agreement, but he has shown no inclination to reopen the EPA’s 2009 finding that the buildup of atmospheric CO2 from burning fossil fuels is environmentally hazardous. Some conservatives fault his inaction on this score, but they may not fully appreciate the difficulties of a battle over the endangerment finding. Highway for the endangerment zone, Wall Street Journal,
4/18/17.

Technical determinations about the state of the science are supposed to be entitled to judicial deference, but the reality is that the D.C. Circuit Court of Appeals that would hear the case is packed with progressive judges. Climate change has become a theological conviction on the left, so Mr. Pruitt would almost certainly lose either with a three-judge panel or en banc. The Supreme Court’s appetite for such a case is also minimal, since it would run directly at the 2007 ruling in Massachusetts v. EPA that prepared the way for the endangerment finding.

In lieu of a frontal assault on the MMGWT, Pruitt has endeavored to foster a more balanced discussion. Specifically, he envisions a “red team” (skeptics) to challenge the thinking of a “blue team” (proponents).

The red and blue teams would participate in ongoing policy discussions, and the resulting dialog might foster sounder conclusions than the group think culture that currently prevails within the EPA. Consider all the theories (there are many possible reasons for climate change, not just human activity) - review the evidence objectively - debate the conclusions – let the best theory(ies) win. Trump administration lining up climate change “red team,” John Siciliano, Washington Examiner,
7/24/17.

It’s also been suggested that the EPA could educate Americans about the MMGWT by sponsoring public debates. Scott Pruitt’s rumored televised climate debate would be a win for public discourse, Jeremy Beaman, Washington Examiner,
7/20/17.

3. EPA rules – Although the CO2 endangerment finding remains in place, a number of Obama-era rules have been delayed or rolled back. Here are some examples, most of which involve pending or threatened litigation.

#MERCURY AND AIR TOXIC STANDARDS – Adopted in 2012, the MATS rule was immediately challenged in the courts. Meanwhile, the agency began its implementation, which was expected to force the closure of hundreds of coal power plants. In June 2015, the US Supreme Court ruled that the EPA had erred by proposing the rule before doing a cost vs. benefits study. A setback for affordable energy [reference to the passing of Justice Antonin Scalia],
3/6/16.

In Michigan v. EPA, 6/29/15, the Court decided that the Environmental Protection Agency (EPA) had not considered the cost of its Mercury and Air Toxic Standards (MATS) in the manner required by statute. Accordingly, this and several companion cases were remanded to the Court of Appeals, D.C. Circuit “for further proceedings consistent with this opinion.” Justice Scalia wrote the majority opinion; the four consistently liberal justices dissented.

Seemingly giving short shrift to the Supreme Court’s order, the DC Circuit allowed MATS enforcement to resume eight months later even though the EPA had still not completed the study that should have been done before the rule was proposed in the first place. An appeal to stay enforcement until the EPA fully complied with the statutory requirements was denied by Chief Justice John Roberts without referring the matter to the other justices.
Ibid.

Further proceedings to determine the validity of the MATS rule continued in the DC Circuit, but in April 2017 the EPA – now under new management – requested a delay. EPA considers repealing two Obama air pollution rules, Timothy Cama, thehill.com,
4/18/17.

“In light of the recent change in Administration, EPA requests continuance of the oral argument to give the appropriate officials adequate time to fully review the supplemental finding,” the attorneys wrote, adding that “the prior positions taken by the agency with respect to the supplemental finding may not necessarily reflect its ultimate conclusions after that review is complete.”

The court granted this request, and the case is now apparently in limbo while the EPA reconsiders what it wants to do about the rule. DC Circuit grants Trump request to delay hearing on MATS rule, Robert Walton, utilitydive.com,
4/28/17.

#CLEAN POWER PLAN – This rule requiring state-by-state reductions in carbon emissions from existing power plants was challenged by over half of the states, and a stay on enforcement was granted by the US Supreme Court in 2016 until the validity of the rule could be determined on the merits. A setback for affordable energy,
3/6/16.

This year, it was requested that the proceeding in the District Circuit be put on hold while the EPA reassessed its position on the CPP and decided how to proceed. The proceeding was paused on April 28 for a period of 60 days, but with indications that a decision to withdraw the CPP would not go unchallenged. DC Circuit halts Clean Power Plan case in win for Trump, Robert Walton, utitlitydive.com,
4/28/17.

If the administration moves to repeal the CPP without a replacement, it could set up a legal showdown over the scope of the Clean Air Act or the EPA's 2009 endangerment finding on greenhouse gases. That's a fight the EPA administrator reportedly won’t take on in the near future.

#GROUND LEVEL OZONE – In June 2017, the EPA postponed the effective date for a 2015 rule lowering the ground-level ozone (or smog) standard from 75 to 70 parts per billion. In a letter to governors, Administrator Pruitt advised that the states would be allowed an extra year to meet the standard, giving the EPA time to address concerns re background level ozone coming in from China and other East Asian countries.

Compliance with the more stringent ozone standard could be very costly, and some areas (notably parts of California and the northeastern states) are still not in compliance with the 75 parts per billion standard (adopted in 2008). Moreover, alleged health benefits of the lower standards are primarily based on an associated reduction in particulate matter versus the ozone level as such.

Critics claimed the verbiage about accommodating state interests was just a ruse, i.e., the administration’s intent was to abandon the rule. Trump delays one of the most expensive EPA regulations ever, Michael Bastasch, dailycaller.com,
6/7/17.

Environmentalists, however, said EPA’s review is “code” for repeal. EPA is already rolling back and reviewing other regulations, per an executive order, and activists say the ozone rule could be next. [They] said EPA’s actions were illegal and would likely be challenged in court.

The House recently passed a bill that would cancel the ozone standard reduction. Prospects for Senate approval are cloudy, however, due to the likelihood of a filibuster. House votes to roll back Obama-era ozone standards, Devin Henry, thehill.com,
7/18/17.

#WATER – The federal government clearly has regulatory jurisdiction over navigable waters, but does its ambit extend to minor streams, ponds, wetlands, or even mud puddles? In 2015, the EPA adopted a rule that extended federal jurisdiction far beyond previously assumed limits. This rule was widely viewed as a power grab, and enforcement was stayed in ensuing litigation.

Acting in tandem with the Corps of Engineers, the EPA has now initiated a rulemaking process that would restore the status quo ante. EPA looks to rescind Obama-era “water of the US” regulation, Valerie Richardson, Washington Times,
7/26/17.

“We are taking significant action to return power to the states and provide regulatory certainty to our nation’s farmers and businesses,” EPA Administrator Scott Pruitt said in a statement. “This is the first step in the two-step process to redefine ‘waters of the U.S.,’ and we are committed to moving through this re-evaluation to quickly provide regulatory certainty, in a way that is thoughtful, transparent and collaborative with other agencies and the public.”

#METHANE – About a month after the EPA announced a 90-day stay on a rule imposing stringent limits on methane emissions from oil and gas wells, the stay was canceled by an appellate panel (2-1 vote) in the DC Circuit. The court rejected the EPA’s contention that oil firms hadn’t been given enough time to evaluate the rule before it was finalized (including provisions that had not been in the proposed rule).

This didn’t necessarily end the dispute, but the rulemaking process for rescinding or softening the rule would take a year or two – meanwhile, the agency that had thought better of the rule would be obliged to implement it. Environmentalists viewed this outcome as a big win. Court rejects EPA attempt to halt Obama-era methane rule, Ben Wolfgang, Washington Times,
7/3/17.

“Today’s ruling makes clear that Scott Pruitt lacks the authority to slam the brakes on common-sense methane pollution rules that help protect the climate and communities living near oil and gas wells,” said Tim Ballo, an attorney with the environmental group Earthjustice. “This is a big win for public health and a wake-up call for this administration. While Scott Pruitt and Donald Trump [bend] over backwards to do the bidding of big oil, Earthjustice and our clients and partners will use every tool at our disposal to hold them fully accountable for their actions.”

Judicial intervention in the nuts and bolts of the rulemaking process (as opposed to the validity of the final results) seemed rather extraordinary, and if this approach spreads, it could surely hamper the administration’s ability to reconsider other Obama-era regulations (including those in the cases discussed above). The DC circuit v. deregulation, Wall Street Journal,
7/17/17.

Look for a deluge of such lawsuits as progressives resort to the courts to compensate for their [electoral] defeat in 2016. The D.C. Circuit’s afflatus [divine creative impulse or inspiration] also underscores the stakes in judicial nominations and why even appellate courts have become political battlegrounds. We’re in dangerous political territory when judges appear to join the anti-Trump resistance on such flimsy legal grounds.

4. Other agencies – Here are some other pro-energy actions taken by the administration in recent months.

#PIPELINES – Federal logjams were broken to approve completion of the Keystone XL and Dakota Access pipelines. A big push to cut regulatory red tape,
2/6/17.

Regrettably, opposition to the northern stretch of the pipeline to bring in oil from the tar sands area of Canada continues and state environmental approvals in Nebraska are still pending. Keystone XL pipeline may not be built after all, John Siciliano, Washington Examiner,
7/28/17.

And while the Dakota Access pipeline has been essentially completed, this project continues to be challenged by protestors, including some who have been described as “low level terrorists.” The idiocy behind the Dakota Access pipeline protestors, Tom Rogan, Washington Examiner,
7/28/17.

#FEDERAL LANDS DRILLING – The Interior Department’s Bureau of Land Management (BLM) is pushing to speed up the processing of requests to drill for oil and gas on federal lands – both out of a sense of obligation to the firms involved and also to accelerate the government’s receipt of royalties. Trump makes huge move to give American oil and gas companies easier road to drilling, V. Saxena, conservativetribune.com,
7/25/17.

The BLM has also announced that it won’t require drillers on federal lands to comply with the EPA rule limiting methane emissions (principally from fracking operations). The agency cited legal challenges to the rule, and the EPA’s declared intention (infra) to reconsider it. Interior to delay Obama fracking rules, John Siciliano, Washington Examiner,
6/14/17.

#INTERMITTENCY – Battle lines are being formed about a forthcoming report (ordered by Energy Secretary Rick Perry) re how the reliability of the electric power grid is being affected by the growing (due to mandates and/or subsidies) use of wind and solar power.

“Clean power” interests like the American Wind Energy Association complain that the study will favor “baseload sources such as coal and nuclear.” Energy Department looks at green impact on power grid, Fred Lucas, dailysignal.com,
6/30/17.

For their part, large manufacturers complain of being driven to adjust their operations to compensate for erratic fluctuation in the level of power supply from the grid. As they see it, grid reliability has been and should be the responsibility of electric power producers operating in compliance with rules of the Federal Energy Regulatory Commission (FERC). Manufacturers fear losing electric grid independence to wind and solar, John Siciliano, Washington Examiner,
7/4/17.

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It’s striking how many of the foregoing disagreements can be explained by a basic difference in viewpoint. Liberals want to limit the production/consumption of energy, as though it were sinful, while conservatives view energy as an asset and are intent on ensuring that it will be reliably available at a reasonable cost.

These views cannot readily be reconciled, and emotions run high when they collide. Inconvenient facts are ignored. Arguments are exaggerated. Blatantly illegal behavior occurs, such as the sabotage of Dakota Access pipeline facilities. And ideological opponents are demonized.

As a depressing example of the last point, EPA Administrator Scott Pruitt has been accused of fudging facts in connection with his congressional confirmation testimony re “use of different email accounts during his six years as Oklahoma’s attorney general.”

He said he used just one email, when he actually had two. He sent official correspondence from a personal address, and appeared to deliberately delay public-records requests to cover his tracks before facing a Senate confirmation hearing.

Senator Sheldon Whitehouse (D-RI) will reportedly support an ethics complaint that an environmental group and a law professor have submitted to the Oklahoma Bar Association. Senator joins ethics probe that could get EPA chief Scott Pruitt disbarred, Alexander Kaufman, yahoo.com,
7/18/17.

Whether the misrepresentation claims are valid or not, we doubt they are the real issue. More likely this is an effort to undermine Mr. Pruitt’s credibility due to objections to his policies. It might be more productive to debate the policies in question.

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#This is a very lawyer-like perspective on energy issues.  Well done. My opinion is conservatives fight with two hands tied behind their backs.  How can they win? – Civic activist

#Scholarly and thorough. - SAFE director

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