Good Neighbors Delayed Are Good Neighbors Denied

Last Friday, the D.C. Circuit Court of Appeals ruled that EPA violated the Clean Air Act in failing to impose deadlines on upwind states violating the CAA’s Good Neighbor provisions.  The Court concluded that, where downwind states face significant consequences in not meeting statutory deadlines to attain National Ambient Air Quality Standards, but don’t control their own fate because upwind states are contributing significantly to the downwind states’ nonattainment, the statute requires that upwind states must comply with their Good Neighbor obligations on the same schedule.

First, the Court summarized its prior decision on this subject, in North Carolina v. EPA, which addressed EPA’s prior interstate rule:

EPA ignored its statutory mandate to promulgate CAIR consistent with the provisions in Title I mandating compliance deadlines for downwind states in 2010. … We explained that EPA needed to “harmonize” the “Phase Two deadline for upwind contributors to eliminate their significant contribution with the attainment deadlines for downwind areas.” Otherwise, downwind areas would need to attain the NAAQS “without the elimination of upwind states’ significant contribution.

The Court also concluded that EPA’s interpretation exceeded its discretion under Chevron:

The Rule’s open-ended compliance timeframe exceeds the bounds of EPA’s statutory authority by allowing upwind States to continue their significant contributions to downwind nonattainment well past the deadline for downwind areas to comply with the NAAQS.

The only other aspect of the decision worth note is its discussion of scientific uncertainty.  The agency justified not imposing a deadline on the uncertainty surrounding sources outside the electric generation sector.  Ever since Ethyl Corp. v. EPA, courts have concluded that EPA has authority to regulate, even where the science underlying its regulations is uncertain.  Here, EPA took the position that the uncertainty justified not imposing a deadline.

The Court wasn’t having it.  Uncertainty can justify regulation, but it can’t justify not regulating.

The statutes and common sense demand regulatory action to prevent harm, even if the regulator is less than certain.  …  It is only when “the scientific uncertainty is so profound that it precludes EPA from making a reasoned judgment” that it can excuse compliance with a statutory mandate.

Makes sense to me.

Environmental Protection Is an Afterthought at the Environmental Protection Agency

Last week, EPA and the Army Corps of Engineers promulgated the final rule repealing the 2015 rule defining the Waters of the United States.  The repeal rule is 172 pages in its pre-publication version.  The word “science” is used 18 times in those 172 pages.  Almost all of them are used in quotes from the 2015 rule or characterizations of the intent of the 2015 rule.

I did not find a single sentence in the repeal rule stating that the science does not support the 2015 rule.  As I noted when the Supplemental Notice of Proposed Rulemaking was issued, the mission of EPA and the Corps is to protect the Waters of the United States.  If they’ve concluded that the text of the Clean Water Act doesn’t give them the authority needed to do so, the Administration could certainly propose amendments to the CWA to give them that authority.

That’s what used to be called “governing.”

Hope Springs Eternal at the Climate Leadership Council

The Carbon Leadership Council, everyone’s favorite group of former grand poohbahs, is still working at building support for its “carbon dividends” plan.  Hope springs eternal.  And I don’t mean to make light of the CLC’s efforts.  We can use all the hope we can get.

The CLC has not make any huge changes to the plan, but they have tweaked it a bit and run numbers again.  Based on a fee starting at $40/ton and increasing each year by 5% above inflation, CLC asserts that U.S. GHG emissions would be 50% below 2005 levels by 2035.

The CLC has also clarified that it is only proposing to eliminate other stationary source GHG regulations.  It is not proposing to eliminate mobile source regulations and is not trying to provide any kind of liability protection against 3rd party claims.  This is interesting in that it kind of suggests that the CLC is more worried about opposition from the left than from the right.  Of course, another reason could be that, in order to get conservative support, they have to let the conservatives win something.  Thus, perhaps, the CLC is waiting for conservatives to say that they will support the carbon dividend program, but only if the regulatory and liability relief is expanded.

In any case, more power to the CLC.  As I’ve said in the past, my advice to my green friends is to leap at this deal.  Take it in a heartbeat and be glad about it.  My advice to those opposed to addressing climate change?  Get on the right side of history.

Hope springs eternal.

Particulate Matter Is More Dangerous Than We Thought: What Will EPA Do With the NAAQS?

EPA’s Office of Air Quality Planning and Standards has released a draft of its reassessment of the adequacy of the current national ambient air quality standard for particulate matter.  Here’s the primary takeaway concerning PM2.5:

The risk assessment estimates that the current primary PM2.5 standards could allow a substantial number of PM2.5-associated deaths in the U.S.

When taken together, we reach the preliminary conclusion that the available scientific evidence, air quality analyses, and the risk assessment, as summarized above, can reasonably be viewed as calling into question the adequacy of the public health protection afforded by the combination of the current annual and 24-hour primary PM2.5 standards.

I just noted this Administration’s tendency to ignore scientific evidence of negative externalities.  It will be interesting to see what EPA does when its own scientists are the source of the analysis.  It’s pretty clear that environmental and public health NGOs will argue for a standard no higher than 8.0 micrograms/cubic meter.  The analysis may give EPA sufficient wiggle room to propose a standard as high as 10 ug/m3.  The real question will be whether EPA somehow tries to figure out a way to keep the current standard.

I’ll go out on a limb and make a few early predictions:

  1. EPA will propose a standard of 10.0 ug/m3
  2. If EPA proposes to keep the current standard, it will lose in court.
  3. If EPA does propose a standard of 10.0 ug/m3, it will face challenges from both industry and environmental groups.  The industry challenges will definitely lose.  The environmental group challenges will be a close call.

You heard it here first.

Heads Trump Wins; Tails Regulation Loses

Earlier this week, the Department of Energy withdrew definitions of “general service lamps” and “general service incandescent lamps” promulgated under the Obama administration.  The effect is to eliminate requirements that such lamps move to more energy-efficient bulbs.  Examples include recessed fixtures, referred to, at least in my house, as “cans,” and chandeliers.

On this one, I’ll leave the legal issues to others.  To me, the noteworthy aspect was that DOE is defending the rule, in large part, on the ground that the rule isn’t needed, because the market is moving towards LEDs and other more efficient bulbs, even without regulation.  As a logical matter, that argument doesn’t quite work.  If the market is truly carrying all the weight here, then the regulations would not have any impact.  It’s obvious from DOE’s own analysis that that is not the case.  DOE is thus really just saying, consistent with this Administration’s general position, that the costs of the regulations are not worth the benefits.

More importantly, the rule seems to be evidence of the Administration’s “heads I win, tails you lose” approach to the role of markets in addressing externalities.  As far as I can tell, the Administration’s real project is to define the concept of externalities out of existence.

Thus, on the one hand, we have energy-efficient lighting, in which the Administration says that the market is solving the problem, so regulation is unnecessary.

On the other hand, where the Administration can’t even pretend that market developments are solving problems, they just pretend that the problem doesn’t exist, by making up their own science.  Nothing’s wrong and, if there is, the market is busy fixing it.

As I’ve said numerous times, I miss the middle, the people who do the hard work of identifying externalities and then figuring out ways to balance the cost of government and the cost of an unregulated market.

EPA Proposes to Eliminate Oil and Gas Methane Rules: Just Another Brick in the Deregulatory Wall

Last week, EPA proposed to eliminate regulation of methane emissions from the oil and gas industry.  The most noteworthy response to the proposal came from the large producers.  ExxonMobil, Shell, and BP all oppose the rollback.  In fact, Shell went on record not that long ago requesting the EPA increase the stringency of oil and gas methane regulation.  Anyone else hear an echo of the large automakers’ response to the Administration’s efforts to relax fuel efficiency standards?

I detect two related elements at work.  First, as I have frequently noted, it’s not obvious that Trump cares at all about the substance of policy.  He cares only about being able to trumpet further efforts to delegitimize government.  The soundbites for his supporters are all that matter here.

The related point is that, to the extent that any of his supporters care about the substance of the deregulatory effort, there is a clear split on this issue between the major oil companies and the smaller operations.  In a statement supporting the rule changes, the American Petroleum Institute noted the “disproportionate effect on small businesses” of the existing rules.  This too feeds into the Administration’s narrative that big business and big government have conspired to screw the little guy.  You have to love this statement from Anne Idsal, acting AA for Air and Radiation:

We don’t preclude anybody from going above and beyond if they think that’s the thing they need to do from a business and a compliance standpoint.

Very similar, don’t you think, to the Trump response when folks such as Gates and Buffett argue for higher taxes?

My only other note is that the administration is arguing in part that methane regulation isn’t necessary, because continued regulation of VOC emissions will mean that methane emissions are also effectively controlled.  I realize that the logic is different here, but does anyone else see an irony in EPA relying on a co-benefits argument to defend methane deregulation?  I’m only sorry I used “sauce for the goose” in another recent post.

EPA’s Ozone NAAQS Largely Survives: CASAC Still Rules

The D.C. Circuit today largely upheld EPA’s 2015 revisions to the National Ambient Air Quality Standard for ozone.  I’m not much of a prognosticator, but I pretty much called this one years ago.  The Court was never going to require EPA to consider costs in setting the NAAQS – not a surprise, given that the Supreme Court concluded in Whitman v. American Trucking Association that the CAA:

unambiguously bars cost considerations from the NAAQS-setting process.

Nor was it going to rule that EPA should have taken background ozone concentrations into account in setting the NAAQS.  As the Court recognized, the statute allows EPA to address background issues in implementing the NAAQS, but implementation issues are irrelevant to setting the NAAQS at the level, “allowing an adequate margin of safety, [that] are requisite to protect the public health.”

On the merits of EPA’s decision to lower the primary ozone NAAQS from 0.075 ppm to 0.070 PPM, the petitioners came squarely up against the recommendation of the Clean Air Science Advisory Committee that EPA set the NAAQS at somewhere in the range of 0.060-0.070 ppm.  The Court was never going to require EPA to pick a level outside CASAC’s recommended range.  Indeed, had EPA done so, the Court very likely would have vacated such a decision.

The more interesting aspect of the case was the Court’s decision to affirm the standard against environmentalists’ challenge arguing 0.070 ppm was not sufficiently stringent.  CASAC had recommended that EPA adopt a standard of 0.060 ppm.  However, as I predicted, EPA adequately protected its left flank.  As the Court noted, CASAC’s scientific recommendation was that the standard be in the 0.060-0.070 ppm range.  EPA selected a standard from within that range.  CASAC’s recommendation that EPA select 0.060 ppm was a policy judgment, not a scientific judgment – and EPA gets to make the policy judgments.

I have in the past noted that CASAC’s scientific recommendations are borderline sacrosanct and this case does nothing to change that view.  Thus, If this case highlights anything, it is that this Administration’s efforts to reshape EPA’s advisory committees are going to be really important.  What happens if a radically reshaped CASAC concludes that 0.075 ppm is “requisite to protect the public health”?  We may get an answer to that question sooner than we ever thought.

If It Walks Like a Duck and Talks Like a Duck, It May Still Not Be Sauce for the Gander

Earlier this week, the D.C. Circuit Court of Appeals held that the “Wehrum Memo,” which reversed EPA’s longstanding policy of “once in, always in” regarding MACT jurisdiction, was not final agency action subject to judicial review.  Like Judge Rogers, I dissent. 

The majority makes much of its effort to clarify this “byzantine” area of the law.  My take is that, to the extent the court has succeeded in that effort, it is only by reducing the law to this simple rule:  If the guidance document appears to impose obligations on the regulated community, then it is a regulation and can be challenged.  If it lessens obligations on the regulated community, then it is guidance and may not be challenged.

This may benefit my clients, but seems an odd view of the law.

The majority and dissent agreed that the Wehrum Memo was the “consummation” of EPA’s decision making process.  The question thus became whether it constituted an agency action “by which rights or obligations have been determined, or from which legal consequences will flow.”  The Court concluded that the Wehrum Memo does not have such an effect, because parties currently subject to MACT can only take advantage of EPA’s new policy by seeking to amend their Title V permit, and states can ignore the Wehrum Memo and permits can, in any case, always be appealed.

However, as Judge Rogers’s dissent noted, the Court pretty much had to ignore the decision Appalachian Power v. EPA, in which the Court stated that “’rights’ may not be created, but ‘obligations’ certain are….  The entire Guidance … reads like a ukase.”

When one reads Appalachian Power together with Sackett v. EPA, one conclusion becomes clear – courts are not going to allow agencies to promulgate guidance that allows them to exercise coercion against regulated entities who face significant costs and risks if they ignore the enforcement implications of agency “guidance.”

On the other hand, the courts seem to have concluded, if the guidance benefits the regulated community, then there is no harm to making those who want to challenge the guidance wait until some formal appellate opportunity becomes ripe at some point in the future.  However, as Judge Rogers pointed out, “legal consequences flow” from the Wehrum Memo as soon as major sources take enforceable limits to get below MACT thresholds.

I’m very skeptical that the decision contributes towards “clarifying this somewhat gnarled field of jurisprudence,” unless the Court really does intend the law to be that regulated entities can challenge guidance, but others cannot.

TMDL — It Means Total Maximum Daily Load. Literally.

Earlier this week, Judge Christopher Cooper of the District Court for the District of the Columbia, struck down EPA’s approval of Total Maximum Daily Loads established by the District of Columbia for the Anacostia and Potomac Rivers.  Why?

Because the District’s TMDLs did not conform to the plain meaning of the words “Maximum” or “Daily.”  The decision is lengthy and complicated, because the statutory framework is complicated.  What it boils down to is this:  TMDLs are not directly utilized in setting permit limits and longer term maxima might be better suited to guiding permit decisions.  Nonetheless, the statute requires that states and the District of Columbia must establish total maximum daily loads.

Here’s the Judge’s nice Article III take on the issue:

Readers could be forgiven for finding all this all somewhat bizarre. If the maximum load does not have immediate regulatory effect and EPA has put out sensible guidance that ensures that daily figures best assist those efforts that do have regulatory effect, what’s wrong with that? In this context, forcing the District to articulate a daily maximum may be especially odd because the 30-day geometric mean is designed to tolerate high daily spikes. Why, then, force the District to identify what will presumably be an astronomically high figure as the maximum load, when that load can only be reached in the rarest of circumstances? Why not simply allow the District, pursuant to EPA guidance, to establish a lower figure that articulates an upper target—something of a warning guidepost—that can better allow regulators and other stakeholders to monitor progress? The simple answer is that Congress said so.  (Emphasis added.)

In other words, the statute is stupid, but there’s nothing I can do about it.  As Judge Cooper put it, it may be bizarre, but it’s not legally “absurd.”

If Congress were a functioning legislative body, this might get fixed.  Don’t hold your breath.

Changes to ESA Regulations: How Significant Are They?

The Fish and Wildlife Service and the National Oceanic and Atmospheric Administration have released final rules amending significant parts of the regulations implementing the Endangered Species Act.

How big an impact will the changes have?  Well, there’s no doubt that the supporters of the regulations hope that they will be substantial and the opponents are worried that they will be substantial, so we should probably assume that they will be substantial.

Commenters have flagged three particularly significant changes:

  • The agencies’ determination to assess the economic impact of listing decisions.

The agencies repeatedly emphasize that they know that listing decisions must be made without reference to the economic impact of the decision and insist that nothing will change on that score.  They claim that this is only an effort to improve transparency and provide information.  Count me with the opponents on this one.  The agencies doth protest too much.  In a world where President Trump issued an executive order that essentially precludes agencies from adopting new regulations that impose new costs, without regard to the benefits that they provide, does anyone really believe that the agencies’ assessments of cost will have any basis in reality?

  • The elimination of the “blanket rule” that basically protects threatened species as though they were endangered.

In a perfect world, I’d have no objection to this change.  There’s a reason why the ESA has different categories and there’s no reason why threatened species should necessarily be treated the same as endangered species.  However, the change means threatened species will in fact only be protected if the FWS issues a special rule under § 4(d).  Given staffing constraints and how FWS has historically struggled to keep up with its ESA workload, does anyone want to guess how many 4(d) rules will actually get issued?  I’m betting on zero until FWS demonstrates otherwise.

  • Changes in the rules on designation of critical habitat, making it more difficult to establish critical habitat in areas not currently occupied by an endangered species.

To me, this is really a scientific question, but I don’t doubt that, in the majority of cases, the new rule will not be sufficiently protective.  Let’s take a simple example.  Assume that there are only 100 individuals left of some endangered species, living in a habitat that can support 250 individuals of that species.  Assume further that scientists have determined that the population will not be sustainable until there are 10,000 individuals.  In this example, which I’d bet is reasonably common, it will be necessary to have available enough critical habitat for 9,750 additional members of that species.  If we don’t protect that habitat now, then we’re never going to get back to a sustainable population.

I give the rules ¼ point out of 3 – and I’m dying to see the first economic analysis of a listing decision that this administration prepares.

More Sauce For the Chevron Goose

Last week, EPA proposed revisions to its regulations governing the issuance of water quality certifications under § 401 of the Clean Water Act.  The regulations are long-overdue and, notwithstanding the source, some of the changes are appropriate.  Nonetheless, the key element of the revisions is the provision that would preclude state and tribal agencies from considering issues other than those related to the water quality impacts of discharge being permitted – and to include that provision, EPA had to get around the clear holding in PUD No. 1 of Jefferson County v. Washington Department of Ecology, in which the Supreme Court unambiguously held that state and tribal agencies do have such authority.

And how did EPA manage to pull this regulatory authority out of a seemingly well-defined jurisprudential hat?

Chevron, of course!  Here’s how an agency avoids a seemingly definitive Supreme Court holding in four easy steps.

  1. Conclude that the holding was permissive under Chevron, rather than being based on the unambiguous language of the statute.
  2. Determine that the new interpretation is a permissible one under the Clean Water Act.
  3. Decide that the new interpretation is the better policy approach.
  4. Cite to cases making clear that interpretations of ambiguous statutory language under Chevron are subject to revision by the agency at a later point in time.

Voila!

Are conservatives ever going to concede I’m right that Chevron is not a liberal plot?

Climate Change Litigation Strategy: Swing For the Fences or Hit Singles?

Those seeking to address climate change through litigation have taken two different paths.  Some cases, probably best represented by Juliana v. United States, have plaintiffs who are swinging for the fences.  These are stereotypical examples of impact litigation; the plaintiffs are hoping to change the world.  Other cases involve plaintiffs who are just hoping – for now, at least – to hit a few singles.  Representative examples include cases brought by the Conservation Law Foundation against terminals in Massachusetts and Rhode Island, where CLF claims that the defendants are violating various federal laws by their failure to prepare for the impact of climate change.

Two recent stories reaffirmed my believe that, at least for the near term, the singles hitters are likely to do better than the home run hitters.  First, the home run hitters.  Last week, Judge Michael McShane dismissed a case brought by the Animal Legal Defense Fund in which the plaintiffs asked the Court to address the government’s failure to address climate change by creating a “right to wilderness.”  The Court did not hesitate to conclude that the relief sought was beyond the power of a humble District Judge.  Judge McShane found that the plaintiffs did not have standing, there was no justiciable case or controversy, and that the plaintiffs had not stated a claim for relief.  As the Court noted on the standing issue:

Plaintiffs’ allegations are, by their very nature, generalized grievances. They allege harm resulting from the government’s actions and inaction regarding climate change and seek broad declaratory and injunctive relief that would no more directly or tangibly benefit them than the public at large. Even if this Court were to recognize a fundamental “right to wilderness,” it would necessarily be a right held in common by all citizens, and the effects of climate change would be an abstract injury that all citizens share.

Next up, the singles hitters.  In a very helpful summary published yesterday, ClimateWire (subscription required) laid out the types of claims that are being brought now and that could be brought in increasing numbers in the fairly near future, particularly as attribution science becomes more mature.  The types of cases range from claims arising out of western wildfires, to shareholder lawsuits for insufficient disclosure of climate risks, to the types of terminal claims brought by CLF.

I think that there’s a pretty good chance that plaintiffs start prevailing in some of these cases fairly soon.  If that starts happening, we’re going to see a cascade and then a tsunami of such cases.  And if that starts happening, the home run cases may not matter so much.

The question then will be what happens when the targets of such litigation run to Congress and beg for a carbon tax combined with some kind of relief from private litigation.

The Trump Administration Provides Another Lesson in How to Lose An Environmental Case

Last week, the 4th Circuit Court of Appeals vacated the Fish and Wildlife Service’s Biological Opinion and Incidental Take Statement for the Atlantic Coast Pipeline.  It’s the second time that the Court has rejected the FWS approval of the project.  I have previously suggested that the Trump administration cares more about providing material for the President’s Twitter feed than advancing its deregulatory or energy dominance agendas.  Last week’s decision provides some compelling evidence in that direction.

Much of the opinion focuses on FWS’s assessment of the impact of the project on the rusty patched bumble bee, which sounds as though it is at extinction’s door.  The Court rejected FWS’s BiOp as arbitrary, “because it [was] not based on the best available information and in fact ignore[d] evidence that the agency itself has developed.”  Moreover, the Court noted, while FWS has guidance regarding how to survey RPBB nests, it conducted no surveys to do so.

In fact, the agency made a point of avoiding surveys in order to “fast-track” pipeline authorization. (“Our internal direction is that we can’t require surveys and will not make further requests for surveys that interfere with applicant’s project schedule since these are priority fast-track projects, and we will not state that we have insufficient information to initiate consultation and will not delay initiation of consultation based on lack of baseline/species survey data.”).

Can you imagine how the plaintiffs’ attorneys’ eyes must have lit up when they found this statement?  FWS admitted that they would not perform surveys on fast-track projects – and would deny that they have insufficient information!

My only question is why the Court of Appeals felt the need to write a 50-page opinion.  I think that this one paragraph was probably enough.

So much for any pretense that this administration cares about the rule of law.

Some Say the World Will End in Fire; Some Say in Floods

I’ve always understood that heat causes more fatalities than other weather-related phenomena.  It’s only going to get worse with climate change.  If you thought that climate change was all about rising sea levels, think again.  Earlier this week, the Union of Concerned Scientists released “Killer Heat in the United States:  Climate Choices and the Future of Dangerously Hot Days.”  I’d like to say it makes chilling reading. 

Here are just two of the predictions for mid-century conditions that caught my eye:

Nearly one-third of the nation’s 481 urban areas with a population of 50,000 people or more will experience an average of 30 or more days per year with a heat index above 105°F, a rise from just three cities historically.

Assuming no changes in population, the number of people experiencing 30 or more days with a heat index above 105°F in an average year will increase from just under 900,000 to more than 90 million—nearly one-third of the US population.

And yet, there are still people who actually maintain that carbon emissions are beneficial.

I thought about accompanying this post with one of the many versions of the song “Heat Wave,” but it’s much too upbeat.  Instead, I found this clip of Robert Frost reading “Fire and Ice in an appropriately apocalyptic voice.

Mitigating GHG Emissions From Buildings. The Drumbeat Is Getting Louder

I’ve posted a number of times about the coming wave of efforts to reduce or eliminate GHG emissions from buildings.  Notwithstanding Washington’s current intransigence, the electric sector is now decarbonizing.  With that under way, attention next focused on the transportation sector.  That’s moving along with efforts in California and the northeast and mid-Atlantic states pursuing the Transportation Climate Initiative.

However, it’s very clear that addressing the electric sector and the transportation sector still isn’t going to be enough.  Buildings are next.  And now the little state that could, the State of Rhode Island and Providence Plantations, is getting into the game.  Governor Gina Raimondo has issued an Executive Order requiring Heating Sector Transformation to Ensure Reliability and Protect Against Climate Change.  Although the Order does not require promulgation of regulations with limits on GHG emissions from the heating sector, it’s difficult to imagine the “transformation” that the Governor seeks without regulatory limits on GHG emissions.

The Department of Public Utilities and the Office of Energy Resources are directed to make recommendations on the transformation by April 22, 2020.  Time will tell.  As transformations go, eliminating GHG emissions from buildings will be fairly major!