The EPA stumbles but will keep moving

In last week’s entry about the Supreme Court’s decision upholding GovCare (again), we reflected on limitations of the judicial process.

[Don’t] expect much help from the courts in resolving big policy questions. That’s true for healthcare, environmental regulations, education, and many other issues. Judges lack the institutional resources, political support, or expertise to play a constructive role. If the executive branch is to be stopped from dominating the government, Congress – elected by “We the People” – will have to do the heavy lifting.

Bang, the Court issued another decision that made our point in the environmental context. Michigan et al. v. EPA,
6/29/15 (download PDF).

The Michigan et al. cases involved restrictions on power plant emissions of mercury, etc., with reported compliance costs (ultimately borne by consumers) of some $10 billion per year. A lower court decision was reversed on grounds that the EPA had not considered the costs of its regulation in the manner required by the statute, and the cases were remanded to the Court of Appeals, D.C. Circuit, “for further proceedings consistent with this opinion.”

Other EPA rules are in the pipeline, such as the Clean Power Plan that will limit carbon emissions by existing power plants in the name of combating global warming (Postelection update,
12/1/14). The current decision sheds some light on how legal challenges to the CPP, etc. are likely to play out. Let’s take a look at it.

A. Background – The EPA’s “Mercury and Air Toxics Standards” were proposed several years ago and, after completion of the rulemaking process, issued in final form. The thrust was to require reductions in various toxic emissions (notably mercury, which we will focus on in the ensuing discussion) by coal-fired and oil-fired power plants.

Formally speaking, this was a first time regulation of mercury emissions by power plants, which however had already been somewhat reduced over time. Other industrial sources of mercury emissions had been curbed more substantially as a result of previously imposed regulations. MATS: Cleaner power plants, EPA.gov, downloaded
7/4/15.

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As mercury is clearly a toxic substance, its emission was subject to regulation under the Clean Air Act. The issue was whether the MATS restrictions were justified on a cost vs. benefit basis.

Estimated compliance costs of $10B per year for the power plants affected were presumably “in the ball park;” or at least no one seemed to be disputing them. MATS critics trained their fire on the claimed health benefits of $37B to $90B per year, which in turn were supported by estimates of between 4,200 and 11,000 fewer premature deaths from respiratory and cardiovascular causes, 3,100 fewer emergency room visits for asthmatic children, 4,700 fewer non-fatal heart attacks, and 540,000 fewer days of lost work.

FIRST, there are many sources of mercury in the air and water; reducing US power plant emissions of mercury would therefore have only a marginal effect on overall exposure levels. EPA’s mercury rule statistics smell fishy, Larry Bell, Newsmax.com,
4/13/15.

. . . while American coal-burning power plants emit an estimated 41 to 48 tons of mercury per year, U.S. forest fires emit at least 44 tons per year, and cremation of human remains discharges 26 tons. In stark contrast, Chinese power plants eject about 400 tons, while volcanoes, subsea vents, geysers, and other sources spew out 9,000-10,000 additional tons. U.S. power plants account for less than 0.5 percent of airborne mercury.

Ironically, another government-mandated rule is causing the uncontrolled introduction of mercury into the environment. We’re referring to the phase-out of incandescent light bulbs in favor of compact fluorescent (CFL) bulbs that contain a small amount of mercury. In theory, used CFLs will be taken to designated recycling centers for disposal, but many people (about 2/3 by some accounts) throw them in the trash. Mercury escaping from landfills is the inevitable result, so why doesn’t the government start worrying about CFLs instead of harassing power companies? Myth #3 about the incandescent light bulb ban, Amy Ridenour, conservativeblog.com,
4/5/14.

SECOND, there are substantial questions about the approaches used to estimate the health benefits (labeled co-benefits rather than direct benefits, although we’re not sure why this distinction matters) of reducing mercury emissions from US power plants.

The EPA reportedly “ignored evidence [steady decline in blood mercury counts for US women and children vs. levels previously found to be safe] and ignored clinical studies [e.g., Seychelles Children Development Study re children who eat several servings of ocean fish per week] that contradicted its regulatory agenda.” EPA: Environmental propaganda activists, Willie Soon & Paul Driessen, townhall.com,
6/6/11.

Some studies that were cited seem inherently implausible. EPA’s mercury rule statistics smell fishy,
4/13/15.

Take, for example, their whopper of a calculation that about 6 percent of all pregnant women in America eat as much as 300 pounds of lake fish annually which passes mercury from power plants to their unborn children. This, they assert, results in lowering their children’s IQs by an average 0.009 points. Never mind that, as a Cato Institute brief to the Supreme Court points out, the average IQ test has a 5 point error margin.

And all too often, the data supporting studies was not made available for independent evaluation – nor even reviewed by the EPA itself. Not only is such nondisclosure inimical to the scientific method, but it also violates the Information Quality Act and associated administrative guidance.
Ibid.

As Ron Arnold of the Center for Defense of Free Enterprise has observed, agency researchers often do little more than conduct “literature searches” of selected papers and reports that merely summarize results and opinions without ever seeing the underlying data — much less collecting it in the field.

IN SUM, there seemed to be ample reason not to accept the MATS analysis at face value, particularly given the ideological zeal that the EPA and other administrative agencies have exhibited in recent years. Regulate or subjugate?
12/9/13.

SAFE commented on an analogous cost/benefit presentation in the proposed Clean Power Plan, questioning among other things the huge “air pollution health co-benefits” that were claimed. Letter to the EPA,
11/26/14.

As for the magnitude of health benefits, we would assume the law of diminishing returns is applicable . . . some of the EPA’s health benefit estimates (re fine air-borne particles) are apparently based on decades old studies that are not available for independent evaluation and verification . . . critics are being asked to accept on faith that fine airborne particles are “killing thousands of Americans every year,” even though more recent studies have concluded otherwise.

Similar concerns were raised by MATS critics, no doubt, but rejected by the EPA. When lawsuits were filed, the EPA prevailed in the D.C. Circuit. Playing their final card, Michigan et al. appealed to the highest court in the land.

B. Supreme Court decision – According to the opinion of the Court (by Justice Antonin Scalia + 4), the issue presented was as follows:

The Clean Air Act directs the Environmental Protection Agency to regulate emissions of hazardous air pollutants from power plants if the Agency finds regulation “appropriate and necessary.” We must decide whether it was reasonable for EPA to refuse to consider cost when making this finding.

Never mind that the EPA developed an elaborate cost/benefit analysis in the course of working on the proposed rule, because the applicable section of the statute required the agency to make an “appropriate and necessary” determination before starting work on the project. And it would be unreasonable to make such a determination without any consideration of cost, so the government’s admission that cost had only been considered later was fatal.

According to the dissenting opinion (by Justice Elena Kagan + 3), the issue was whether cost had been appropriately considered in the course of the rulemaking process. Happily it had been, so everything should be fine. And notice that if the EPA had sought to take cost into account before starting work, it would have been hard pressed to develop an accurate estimate.

The Agency acted well within its authority in declining to consider costs at the opening bell of the regulatory process given that it would do so in every round thereafter—and given that the emissions limits finally issued would depend crucially on those accountings. Indeed, EPA could not have measured costs at the process’s initial stage with any accuracy. And the regulatory path EPA chose parallels the one it has trod in setting emissions limits, at Congress’s explicit direction, for every other source of hazardous air pollutants over two decades.

Perhaps there was more going on in the minds of Justice Scalia et al. than the opinion of the Court indicated, e.g., a feeling that the EPA had overreached in this matter and should be taken down a peg or two. On its face, however, this opinion seemed narrow and hyper-technical.

Justice Clarence Thomas joined in the majority opinion, but he also filed a concurring opinion that had more intellectual appeal (albeit zero chance of gaining general acceptance). By routinely deferring to administrative interpretations of ambiguous statutes, he suggested, the courts are vesting administrative agencies with essentially legislative powers.

Statutory ambiguity thus becomes an implicit delegation of rule-making authority, and that authority is used not to find the best meaning of the text, but to formulate legally binding rules to fill in gaps based on policy judgments made by the agency rather than Congress.

C. Path forward – Some observers interpreted the Michigan decision as a conservative victory, which could help brake the administration’s momentum in the environmental area. Obama climate change agenda faces legal, political resistance, Ben Wolfgang, Washington Times, 6/30/15.

The ruling dealt a major blow to Mr. Obama’s effort to wean the U.S. off of fossil fuels, and legal analysts say other pieces of the president’s environmental slate also are vulnerable in court. Among them is the EPA’s Clean Power Plan, which would dramatically limit carbon emissions from power plants.

Really? There has been no stay in enforcement of MATS, nor is there anything to prevent the EPA from reopening the rulemaking process in some fashion and purporting to cure the procedural defect that Justice Scalia had hung his hat on. Indeed, it appears that the EPA will seek to do just that. In perspective: the Supreme Court’s Mercury and Air Toxics rule decision, Janet McCabe, EPA blog,
6/30/15.

What’s next for MATS? From the moment we learned of this decision, we were committed to ensuring that standards remain in place to protect the public from toxic emissions from coal and oil-fired electric utilities. We will continue to work to make that happen. There are questions that will need to be answered over the next several weeks and months as we review the decision and determine the appropriate next steps once that review is complete.

As for other regulations in the pipeline, namely the Clean Power Plan, they were said to fall under a different statutory provision that the EPA had traditionally applied in a different fashion.
Ibid.

The Court’s conclusion that EPA must consider cost when determining whether it is “appropriate” to regulate toxic air emissions from utilities under section 112 of the Act will not impact the development of the Clean Power Plan under section 111. Cost is among the factors the Agency has long explicitly considered in setting standards under section 111 of the Act.

D. The big picture – In recent weeks, the EPA sent several “final” regulations to the White House re the administration’s agenda of combating global warming. This set in motion a review process that includes last minute discussions (non-public) with interested parties, e.g., industry and environmental advocacy groups. Hmm, sounds a bit like crony capitalism.

One of these regulations was published last week, namely a ban on the use of HFCs (at one time the supposedly safe replacement for “Freon”) in air conditioning and refrigeration equipment. EPA Director Gina McCarthy was quoted that “leading businesses” are taking action “to reduce HFCs with safer, climate-friendly alternatives.” EPA bans hydrofluorocarbons over climate change concerns, John Siciliano, Washington Examiner,
7/2/15.

A regulation applying to carbon emissions by new power plants, thought likely to effectively prevent the construction of any new coal-fired power plants, has completed the White House review process. This so-called “New Source” rule will probably be published within a couple of weeks.

Then there is the Clean Power Plan, which requires reduced carbon emissions from existing power plants and would force an accelerated phase-out of coal-fired plants. Intensive White House activity began on June 18 and is continuing with the objective of publishing the CPP by August. White House rushing to meet summer deadline for climate rules, John Siciliano, Washington Examiner,
7/2/15.

Finally, there was White House conference on June 22 that seemed more of a pep rally than a policy review. Numerous ominous claims were made or referenced at this event, e.g., a recent study predicting that ¾ of the world’s “familiar” species will be wiped out within just three human lifetimes. No more talk, it’s time for action! White House climate change summit highlights health danger, Kimberly Leonard, usnews.com,
6/23/15.

The White House and advocates at the summit also sent an unabashed message at the gathering: There would be no discussion there on whether climate change is real. The focus instead would be on how the country should act in response. "Climate change poses a serious, immediate and global threat to human health," [U.S. Surgeon General Dr. Vivek] Murthy said. "We're not here to debate whether it's real or whether human activity is contributing to it. We have settled that by science."

For her part, EPA Director Gina McCarthy lashed out at people on the other side of the argument. EPA chief says climate change deniers not “normal,” John Siciliano, Washington Examiner, 6/23/15.

I've batted my head against the wall too many times" trying to convince climate change deniers that global warming is occurring. *** In a normal democracy, it is not them that carries the day. It is normal human beings that haven't put their stake into politics above science.

This pattern of denigrating intellectual opponents is unfortunate, we think, and it seems to be in vogue among proponents of the manmade global warming theory. Whoever decides what is true will rule
, 3/30/15 (part 1). Conservatives attacked for questioning the MMGWT, Delaware Chatter, 6/29/15.

In the halls of Congress and around the country, however, there seems to be growing opposition to radical steps to combat climate change. Thus, the House recently passed a bill that would allow states to opt out of the Clean Power Plan under certain conditions and also block EPA enforcement until after the planned court challenges are resolved (which would delay action for several years). Even stronger legislation is reportedly being talked about in the Senate. House votes to weaken Obama’s climate rule, Timothy Cama & Cristina Marcos, The Hill,
6/24/15.

The House bill probably won’t get 60 votes in the Senate to break a filibuster, and even if it did the president would surely veto it. But we approve of the effort being made, because – as the Michigan v. EPA decision demonstrated – litigation takes too long and the results aren’t likely to be decisive.

In closing, SAFE believes the MMGWT should be evaluated based on the best evidence and scientific thinking available. If the theory proves out, so be it, but until then we see no need for a government-mandated makeover of the energy industry that would impose a major economic burden (higher energy prices and/or taxes) on the general population. Logical thinking, SAFE newsletter,
summer 2015.

**********FEEDBACK**********

I was a student of /Dr /Bruce Macduffy at SUNY in 1971 during the methyl mercury baloney. He shut down the Japanese swordfish industry with much fanfare and many suggestions he run for Congress. Later I inquired about the Hg problem and learned that he had assayed several hundred old sea samples and calculated there was 7X the amount of Hg in the oceans that had ever been mined by humans and that swordfish had a higher concentration of Hg since they were at the top of the food chain. He dropped the issue. – SAFE director

I agree with your assessment of failure to challenge the EPA’s cost/benefit analysis. It will lead to more black box models that are untested, unreliable, and unprovable. – Energy policy activist


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