Post election update: EPA's Clean Power Plan

The CPP and other proposed EPA regulations would render many coal-fired power plants uneconomic and force a major restructuring of the electric power sector. The CPP is not justified from a scientific, economic, or legal standpoint, in our opinion, and the nation’s political leaders should try to put a stop to it.

This entry will provide context, report recent developments, and discuss the path forward.

1. Context – Rather than relying on what SAFE thinks, let’s consider the perspectives of some other observers.

Although supposedly based on science, the CPP is primarily motivated by political considerations. George Will: “Global warming is socialism by the back door,” realclearpolitics.com,
4/28/14.

For all the talk about a scientific consensus supporting the manmade global warming theory (MMGWT), the alleged threat was renamed “climate change” after a global warming trend inconveniently stopped. Wearing out words, Washington Times,
8/13/13.

Some MMGWT adherents seem allergic to debate, going so far as to characterize the expression of anti-MMGWT views as “criminal negligence.” If the science truly supports them, what are they so afraid of? Lord Monckton responds to climate alarmist, truthisreason.com,
3/17/14.

There is compelling evidence that fluctuations in solar activity, not atmospheric CO2 levels, are the primary driver of the Earth’s climate. Unstoppable solar cycles, the real story of Greenland, a 10-minute video featuring some lush pictures, interviews with local residents, and the commentary of scientists David Legates & Willie Soon,
2008.



If a decision was made to curb carbon emissions, the most straightforward way to do it would be to tax them. Time to tax carbon, interview with economist Dale Jorgenson, Harvard Magazine, Sept-0ct 2014.

The CPP would have essentially the same deterrent effect as a carbon tax on electric power producers with a lot of extra overhead. It is seen as more saleable, however, because the cost would be disguised. The gruberization of environmental policies, Paul Driessen, Townhall.com,
11/28/14.

II. Recent developments - After the CPP was proposed, SAFE advocated legislation to provide that the EPA has no authority to impose and enforce limits on CO2 emissions. In this way, Congress could “make clear that it takes its responsibilities seriously and is not about to be relegated to a subordinate, increasingly marginal role.” See “SAFE to Congress: Bin the Clean Power Plan,” 6/16/14, and an associated letter that was sent to all members of Congress.

Subsequently, in a presumably unrelated development, 53 senators signed a letter to the EPA requesting a 60-day extension of the comment period (until December 15, well after the elections) and the EPA granted an extension until December 1. Running an effective government is tough work,
10/6/14.

Last week, it was reported that an EPA rule limiting the amount of mercury and other hazardous substances emitted by coal power plants is headed to the Supreme Court. The appellants claim that cost of the regulations was not properly considered, and while hardly on point the decision (expected next June) could have implications for legal challenges to the CPP. Supreme Court to review EPA mercury limits, Mark Sherman, Washington Times,
11/25/14.

Another EPA rule impacting the electric power sector was proposed – more stringent limits (65 or 70 parts per billion vs. current standard of 75 ppb) on ambient limits of smog-causing ozone, which could be expected to force drastic cuts in the ozone emissions of power plants and factories. Mother of all battles over new smog rules, Zack Colman, Washington Examiner,
11/27/14.

And SAFE’s comments on the CPP were e-mailed to the EPA on November 26. The text follows (blue font):

Secure America’s Future Economy is an all-volunteer, nonpartisan organization, formed in 1996, which advocates smaller, more focused, less costly government.

This letter will comment on the Clean Power Plan Proposed Rule published in the Federal Register on June 18, 2014. For the reasons stated, we would urge that the CPP be withdrawn.

1.
The manmade global warming theory (MMGWT) has not been proven – and with no overall global warming since 1998 it is looking increasingly dubious.

Although the CPP refers to “climate change” rather than “global warming,” the two terms appear to be essentially synonymous. See, e.g.,
“Causes of Climate Change” on the EPA website, which asserts that “recent climate changes . . . cannot be explained by natural causes alone” and attributes “most of” the observed global warming “since the mid-20th century” to human activity, e.g., the burning of fossil fuels.

The COCA post neglects to mention that global warming stopped around 1998. This development contradicts predictions based on the MMGWT, as CO2 levels in the atmosphere have continued to rise, and one might infer that there is something wrong with the theory. Instead of acknowledging the problem, however, the principal response of MMGWT proponents has been to step up their attacks on critics (aka “deniers”). Stop denying climate science and ACT! (before people realize it’s a scam), Paul Driessen, Townhall.com,
8/31/13.

Contrary to the hype and hysteria, our planet stopped warming 16 years ago, even as atmospheric carbon dioxide levels continued to climb. That prompted climate catastrophists to start talking about “climate change” and blame every “extreme weather” event on CO2 emissions.

By the way, SAFE noted that global warming had stopped in its
6/4/09 comments on the EPA’s endangerment finding re carbon emissions.

[The EPA’s] description of the alleged global warming threat includes many questionable or exaggerated claims. Given that global warming stopped about ten years ago, for example, it is hard to credit the statement on page 18896 that “eight of the ten warmest years on record have occurred since 2001.”

EPA Administrator Regina McCarthy acknowledged a global warming “pause” during a recent public interview, but called it “a short-lived issue.” EPA chief: Pause in global warming “doesn’t represent climate,” Michael Bastasch, Daily Caller,
11/17/14.

Despite the lack of warming, the Obama administration has been pressing forward with climate rules to limit U.S. greenhouse gas emissions from the fossil fuels industry. The most contentious regulation so far has been the EPA’s rule to limit emissions from power plants, which will likely cause coal plants to shut down. “If you look at the science… nothing tells us we are being overly aggressive” in what the agency is doing, McCarthy told reporters Monday morning.

No doubt global temperatures will fluctuate in the future, as they have in the past, but some scientists are predicting global cooling – not global warming – based on observed changes in solar activity that resemble the pattern during the Maunder Minimum that preceded the onset of the last “little ice age.” Is a mini ice age on the way? Mark Prigg, UK Daily Mail,
1/18/14.

All things considered, the EPA might do well to reconsider its endangerment finding instead of proposing regulations to force a reduction in carbon emissions.

2.
The claim that there would be a net economic benefit from implementing the CPP is misleading. In reality, this plan would represent a huge tax on Americans, with only modest resultant benefits.

According to the CPP, “climate benefits” plus “air pollution health co-benefits” would exceed “compliance costs,” generally by a factor of 5 or more. Page 34840.

If there were no downside risk, it might seem justifiable to proceed with the CPP despite questions about the MMGWT. What has this country got to lose? But we believe there are serious questions about the estimated benefits and costs.

• Climate benefits are based on avoiding the assumed detriment of carbon emissions, so if the MMGWT is wrong or seriously exaggerated they could prove illusory. Moreover, we are not clear that the loss of CO2 benefits [for] the agricultural sector have been factored into the calculation. It would seem more realistic to assume net climate benefits of zero.

Air pollution health co-benefits – There isn’t much doubt that shuttering coal-fired power plants reduces the emission of true pollutants, such as SO2 or fine air-borne particles, with resultant health benefits. Many of these plants will probably be closed over time anyway, however, because fracking has increased the supply and lowered the price of natural gas.

As for the magnitude of health benefits, we would assume the law of diminishing returns is applicable, i.e., each successive cut in emissions produces less benefit at a higher cost then the previous cut.

Also, 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. The question Obama’s EPA pick Gina McCarthy can’t answer, Mark Drajem, Business Week,
5/23/13.

Ergo, 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. EPA concedes: We can’t produce all the data justifying clean air rules, Barbara Hollingsworth, cnsnews.com,
4/11/14.

Compliance costs – These estimates include monitoring, recordkeeping, and reporting costs. Page 34840. Only modest energy cost increases are projected, and it’s assumed that they would be largely offset by reductions in energy consumption. Page 34934.

Under Option 1, average nationwide retail electricity prices are projected to increase by roughly 6 to 7 percent in 2020 relative to the base case, and by roughly 3 percent in 2030 (contiguous U.S.). Average monthly electricity bills are anticipated to increase by roughly 3 percent in 2020, but decline by approximately 9 percent by 2030. This is a result of the increasing penetration of demand-side programs that more than offset increased prices to end users by their expected savings from reduced electricity use. *** The EPA also projects that electric power sector-delivered natural gas prices will increase by 9 to 12 percent in 2020, with negligible changes in 2030.

Other analysts have reached less optimistic conclusions. See, e.g., “Energy market impacts of recent federal regulations [the CPP plus several others] on the electric power sector,” Energy Venture Analysts,
November 2014.

Per the EVA study, average household electric & gas bills would increase by 15% in 2012 dollars between 2012 and 2020, double the EPA’s figure. Moreover, total US costs for electric power and natural gas would increase by 37% during the same period, presumably reflecting higher costs for industry that would be passed on to consumers via higher prices.

In addition to differences in methodology, the EVA study takes issue with several of the EPA’s assumptions:

• Considers the EPA assumption that existing coal-fueled generating facilities could achieve a 6% heat rate improvement by 2020 to be unrealistic; assumes no efficiency gain on average for these facilities.

• Believes the EPA assumption that existing combined cycle gas turbines would average a 70% utilization rate per year by 2020 does not reflect real-world experience or reasonable modeling of the US power markets.

• Projects that wind and solar (currently about 5% of the US generation supply) would grow about 70% by 2030 compared to the EPA estimate that state renewable energy policies would result in 209% more renewable power generation overall.

• Estimates that demand-side energy efficiency savings would increase 120% from 2020 to 2030 versus the EPA’s estimate of 250%.

Although we cannot express an informed opinion on all of these points, we believe the CPP would drive up energy costs by (a) forcing the closure of many coal-fired power plants before the end of their useful economic lives, and (b) increasing the demand (and therefore price) for natural gas. There may also be economic penalties associated with the reduction of energy consumption – including higher per unit transmission costs – which the EPA has not taken into account. Accordingly, the EVA estimates of what the CPP would cost seem much closer to the mark than the EPA projections.

Given that the CPP would impose a serious burden on the US economy, it should not proceed without convincing proof that manmade global warming poses a threat that must be addressed on a high priority basis. Such proof does not exist, in our opinion, and many informed observers agree. See, e.g., “‘Climate consensus’ data need a more careful look,” Roger Cohen (American Physical Society), William Happer (Princeton), & Richard Lindzen (MIT), Wall Street Journal,
8/13/12.

It is increasingly clear that doubling CO2 is unlikely to increase global temperature more than about one degree Celsius, not the much larger values touted by the global warming establishment. In fact, CO2 levels are below the optimum levels for most plants, and there are persuasive arguments that the mild warming and increased agricultural yields from doubling CO2 will be an overall benefit for humanity. Let us debate and deal with serious, real problems facing our society, not elaborately orchestrated, phony ones, like the trumped-up need to drastically curtail CO2 emissions.

3.
The CPP is not simply an environmental regulation, it represents an attempt to bypass Congress and make law by executive fiat.

Here is the issue in a nutshell: Can an administrative agency (following the president’s instructions) properly promulgate a plan that would surely be rejected if it were presented to Congress for approval? (A national cap and trade proposal failed to pass in 2009, and the composition of Congress is more “conservative” now than it was then.)

Overall, the EPA is proposing a national carbon emissions reduction from power plants of about 30% between 2005 and 2030. That certainly sounds like policy making, e.g., why 30% vs. 25% or 35%?

The national goal would then be apportioned to the several states based on the EPA’s ideas as to feasibility, with permissible emission levels in 2030 (“final goals”) ranging from 215 lbs. of CO2 per net megawatt hour in Washington to 1,783 lbs. of CO2 per net megawatt hour in North Dakota. Page 34895.

Some states would have a tough time meeting the assigned goals, and their purported flexibility to decide how to comply – by choosing between four prescribed strategies (“building blocks”), i.e., (1) improve thermal efficiency, (2) substitute natural gas plants for coal plants, (3) add wind, solar and nuclear power to the mix, and (4) promote energy efficiency - would not help a great deal. Natural gas, not location, key to state emission cuts under EPA proposal, Zak [Colman], Washington Examiner,
6/3/14.

The EPA would reserve the right to approve or reject plans submitted by the states, to develop plans for any state that declines to propose one, and to monitor progress towards goals and presumably sanction states for noncompliance.

The foregoing would represent an exercise in making policy, not executing policies established by Congress, which would contravene Article I, Section 1 of the Constitution: “All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and a House of Representatives.”

Also notable is the 10th Amendment, which provides “that powers not delegated to the United States by the Constitution, nor prohibited to by it to the States, are reserved to the States respectively, or to the people.”

Reliance on policy pronouncements of the president cannot save the CPP, as the president’s role under the Constitution is not to make the laws but rather (Article II, Section 3) to “take Care that the Laws be faithfully executed.”


III. Path forward – Although we would like to think SAFE’s comments on the CPP are logical and well supported, it’s almost inconceivable that the EPA would be persuaded to reconsider its position. Post-election statements by EPA Administrator Gina McCarthy express a “full speed ahead” mindset. EPA chief: Obama has our back vs. McConnell, Timothy Cama, The Hill, 11/17/14. The White House [John Podesta] perspective appears to be in synch. White House taunts GOP on climate change: “I don’t believe they can stop us,” Washington Times, 11/17/14.

With control of both houses of Congress for the next two years, Republicans will have some leverage in the coming battles over the CPP, ozone limits, and other EPA regulations impacting the electric power sector. However, none of the GOP’S strategic options appear to be clear-cut winners.

a. Direct attack - Our previous suggestion with respect to the CPP was that Congress should pass a simple bill, by a veto-proof majority, providing that CO2, a natural component of the atmosphere, shall not be regulated as a “pollutant” under the Clean Air Act. The selling point for Democrats would be reining in an errant executive branch and thereby preserving the institutional relevance of Congress in our system of government.

Problem: There is reason to believe that the next two years in Washington will be extremely acrimonious; Democrats will be more disposed to circle the wagons in such an environment than to cast votes based on high-minded principles.

b. Defunding – Spending for implementation of the CPP could be blocked. See the Congressional Research Service pronouncement in the context of the president’s executive order on immigration, which should be equally applicable to environmental matters. Actually, Republicans can cut the funding for Obama’s amnesty, Christopher Bedford, Daily Caller, 11/26/14.

Problem: Democrats would predictably refuse to support spending bills with such restrictions, and the bills could be vetoed by the president – triggering a government shutdown scenario that Democrats would seek to blame on Republicans.

c. Litigation – The CPP will be challenged in the courts, and could be blocked on grounds that this sweeping set of rules exceeds the authority of an administrative agency (or the president either). More likely, the upside potential would be to delay the CPP long enough so that the next president could take a different policy line. Obama’s bold climate change policies may end with his term, Ben Wolfgang, Washington Times, 11/27/14.

Problem: The courts are not anxious to arbitrate the debate about the MMGWT so the tendency would be to find a rationale for the administration’s position. In any case, court challenges would take several years to resolve, during which time power companies would have to make business decisions based on their best guesses as to the outcome.

In sum, it’s hard to foresee a quick and positive end to this story.

=========================COMMENT============================
Very impressive entry. Good job. – Leader, Climate Common Sense

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