Cooler Heads Digest 13 December 2013

13 December 2013

In the News

Equality Under Law and Energy Policy
Marlo Lewis,, 12 December 2013

Scandal Brewing at Stimulus-Beneficiary SolarCity
Christopher Helman, Forbes, 12 December 2013

Negative Pricing Distortions of Wind Power
Lisa Linowes, Master Resource, 12 December 2013

Third EPA Official Implicated in $900k Scam
C.J. Ciaramella, Washington Free Beacon, 12 December 2013

Coal in the Global Energy Landscape
Nicolas Loris, Heritage Backgrounder, 11 December 2013

Earth Isn’t as Fragile as Greens Would Have You Believe
Walter Williams, Investors Business Daily, 11 December 2013

We Are Drilling, Baby!
David Kreutzer, Foundry, 10 December 2013

Green Energy Kills Eagles
Robert Bryce, National Review Online, 9 December 2013

News You Can Use
Cairo Snow

For the first time in 100 years, it snowed in Cairo, Egypt. Three feet of snow fell in Jerusalem.

Inside the Beltway
Myron Ebell

Obama Names John Podesta as Counselor, Will Focus on Energy and Climate

President Barack Obama on 10th December named John Podesta as counselor to the president.  Podesta has reportedly agreed to help the President in his time of troubles for a year.  The White House announced that Podesta would advise the President on a range of issues, but specifically mentioned climate and energy.

Podesta was a co-chair of the Obama-Biden transition team in 2009 and has been an unofficial but highly influential outside adviser to the Obama Administration for the past five years.  In 2003, he founded and became president of the Center for American Progress, the leftist think tank and advocacy organization that provided much of the ammunition to oppose the policies of the George W. Bush Administration.  CAP continues as a major influence on the Democratic Party in Congress and on the Obama Administration.  This fall Podesta announced that he was founding the Washington Center for Equitable Growth, which will promote share-the-wealth and other class warfare policies.

Podesta served as deputy White House chief of staff and then chief of staff from 1998 to 2001 in the Clinton Administration.  Before joining the Clinton White House, Podesta was one of then-Senator Tom Daschle’s closest advisers and served in several high level committee and leadership staff positions in the Senate.   Podesta is from Chicago.  Although I don’t know whether Podesta has ever been active in Chicago politics, he knows how politics is played in Chicago.  He is extremely able, politically shrewd, and tough.

Podesta is especially interested in global warming, energy, federal lands, and environmental issues in general.  CAP’s web site, Think Progress, has a separate page called Climate Progress, which posts Joe Romm’s rants.  When the energy issue was cutting against President Obama early in the 2012 election, Podesta wrote a memo which laid out what needed to be done to win the energy issue for Obama and the Democrats.  The Obama campaign followed most of Podesta’s advice and did turn public opinion in favor of Obama on energy policies. 

Podesta has criticized the Obama Administration on several occasions for focusing too much on legislation and not using executive authority to make policy to the full extent possible.  Those of us who have watched the Obama EPA stretch its regulatory authority far beyond that of any previous administration might be surprised by this criticism.  But the fact is that abusing authority tends to grow and become habit forming.

The White House announced that Podesta will not be involved in the decision on permitting the Keystone XL Pipeline.  As one of the leading opponents of the pipeline, he will not need to be involved.  Everyone in the Administration, including President Obama, already knows that he has worked closely with billionaire Tom Steyer to kill the pipeline.  The real question is how much further Podesta will urge the President to go in implementing energy-rationing policies that will widen the wealth gap between rich and poor. 

Expiring Wind PTC Likely to Come Back in 2014

The wind production tax credit will expire on 31st December, and there is little chance that the Congress will extend it before it expires.  However, the wind PTC has expired several times in the past and has always been extended retroactively.  The first sign that this is going to happen again came this week.  Alex Guillen in Politico’s Morning Energy reported that Senator Ron Wyden, the chairman of the Energy and Natural Resources Committee, may push the Senate to consider a tax extenders package if comprehensive tax reform legislation does not move quickly in the new year. 

“If you didn't have tax reform and you didn't have extenders, you'd do crushing damage to solar, wind and renewables,” Wyden told Morning Energy. “Clearly the decision by the House to in effect hold back on tax reform has given new urgency to the energy extenders,” Wyden noted.

Across the States
William Yeatman

Supreme Court Weighs EPA’s Cross State Air Pollution Rule

On Tuesday, the Supreme Court heard oral arguments on EME Homer Generation v. EPA, an appeal of the D.C. Circuit Court’s ruling last January to vacate the Cross State Air Pollution Rule (CSAPR). The regulation, which was promulgated in July 2012, would require 27 eastern States to participate in a cap-and-trade scheme for nitrogen oxides (NOx) and sulfur dioxide (SO2), in order to eliminate these upwind States’ contribution to pollution in downwind States.

While it is a legitimate purpose for EPA to adjudicate interstate conflicts over air pollution, CSAPR was nonetheless a flawed rule that imposed an unfair burden on upwind States. EPA has the air quality modeling expertise to identify the exact contribution of upwind States to pollution in downwind States. Logically, an equitable regulation would require reductions from upwind states that equaled their contribution to the problem of interstate pollution. However, this is not what EPA did. Instead, the agency adopted a creative interpretation of the Clean Air Act that resulted in emissions reduction requirements that far exceeded upwind States’ rightful responsibilities.

EPA also deprived regulated States of their procedural rights. Under the cooperative federalism scheme established by the Clean Air Act, the agency is responsible for establishing emissions targets, and States have the responsibility for crafting strategies to meet these targets. Congress’s thinking was that state officials are best positioned to tailor compliance plans with local circumstances. EPA, however, imposed the CSAPR without allowing States the time to create their own plans.

CSAPR was challenged by industry and also Texas, Alabama, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Nebraska, Ohio, Oklahoma, South Carolina, Virginia, and Wisconsin. In a majority decision delivered in January 2013, the D.C. Circuit Court of Appeals sided with the plaintiffs, and vacated CSAPR. EPA appealed the decision to the Supreme Court. Tuesday’s oral arguments lent little insight into what the Justices are thinking.

Notably, downwind States will continue to be afforded protection from upwind emissions, even if the Supreme Court upholds the D.C. Circuit Court’s decision. EPA has operated a multistate cap-and-trade for NOx and SO2 designed to mitigate interstate pollution since 2005. CSAPR would have replaced this existing program.

Legal Update
Marlo Lewis

What Does Legislative Intent Reveal about EPA Permitting for Greenhouse Gases? Part 2

This week, seven petitioners filed merit briefs in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA greenhouse gas regulation. Six of the briefs are posted on SCOTUSBlog.Com (bottom of page). All seven briefs are available on the U.S. Chamber’s Web site.

The Court is reviewing the EPA’s April 2010 Timing Rule, which asserts that the agency’s greenhouse gas motor vehicle emission standards automatically subject major stationary greenhouse gas emitters to the Clean Air Act’s preconstruction permit program, known as New Source Review (NSR), and the Act’s Title V operating permit program.

As noted in last week’s Digest, using Thomas, the Library of Congress search engine, I examined all 692 bills introduced during the 101st through 111th Congresses that contain the term “greenhouse gas,” as well as all 55 bills that contain “best available control technology” – the emission standard associated with NSR.

I found that neither Congress as a whole, nor the House or Senate separately, nor any congressional committee approved legislation authorizing the EPA to regulate greenhouse gases through the permitting programs.

To make sure nothing fell through the cracks, I used Thomas to identify all bills introduced during the 101st through 111th Congresses containing the term “prevention of significant deterioration” – the specific type of NSR permit that is the focus of the Timing Rule.

Of 35 bills containing the term over a 20-year period, only one – S. 1168, the Clean Air/Climate Change Protection Act of 2007, introduced in the 110th Congress – proposed to regulate greenhouse gases. However, the sole reference to “prevention of significant deterioration” is separate from and not connected to the bill’s greenhouse gas regulatory provisions. Hence the title of my analysis: EPA Permitting of Greenhouse Gases: A Breathtaking Absence of Congressional Intent.

The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary, check out the Coalition’s website,