DOE Must Promulgate Energy Efficiency Standards Finalized By the Obama Administration

Last week, the 9th Circuit Court of Appeals affirmed a District Court ruling requiring the Department of Energy to publish in the Federal Register four rules finalized by the Obama administration, but not previously published.

Energy Efficiency with man holding a tablet computer

The Trump administration DOE tried to take advantage of DOE’s “error-correction rule”, which gives DOE time to fix mistakes in its rules before they are published in the Federal Register.

The problem with DOE’s argument is that the error-correction rule is clear that error correction is a ministerial task.  The rule explicitly states that, whether:  (1) no corrections are suggested; (2) corrections are suggested but rejected; or (3) corrections are suggested and accepted, DOE “will” publish the rule in the Federal Register.  The Court of Appeals, like the District Court, found the use of “will” to be mandatory.

The case is pretty much just another judicial back of the hand to this Administration’s feckless efforts to roll back regulations just for the fun of it.  I note it here in part because the Court specifically stated that “the absence of genuine ambiguity in the rule’s meaning precludes us from deferring to DOE’s contrary interpretation,” citing to the Supreme Court’s recent decision in Kisor v. Wilkie, in which SCOTUS upheld, but narrowed, Auer deference.

I’ve often argued that conservative skepticism about Chevron and Auer stemmed more from a view that regulatory agencies tend to be expansive than from any principled approach to separation of powers issues.  One thinks that they might have wished that the Court had granted DOE a little more deference here.  Can you say “hoist on one’s own petard?”

Boston’s Climate Action Plan Update: The Time Has Come For Buildings!

Last week, Boston released its Climate Action Plan 2019 UpdateThe Update identifies “priority actions” for the next five years necessary to put Boston on a trajectory towards carbon neutrality by 2050.  There’s a lot in the Update, but because it states that 71% of Boston carbon emissions come from buildings and it thus leads with its discussion of buildings, I’m going to focus there.

Here are among the initiatives that Boston wants to get in place in the next five years:

  • Construct new municipal buildings to a zero net carbon standard
  • Adopt a zero net carbon standard for city-funded affordable housing in Boston
  • Strengthen green building zoning requirements to a zero net carbon standard
  • Invest in energy efficiency and renewable energy generation in municipal buildings
  • Develop a carbon emissions performance standard to decarbonize existing large buildings

It’s a fairly ambitious agenda, I say with my usual gift for understatement.  And lest you think it’s all pie in the sky, these goals arrive together with some specific detailed steps for attaining them, and a schedule that includes dates for each step.

I don’t think that these dates will be met.  I do think that the City is going to give a truly massive shove to the real estate industry in the direction of zero net carbon and it does seem likely that our built environment is going to be very different in 2030 than it is today.

Particulate Matter Has Not Clouded My Crystal Ball

Last month, I noted that EPA’s Office of Air Quality Planning and Standards had released a draft reassessment of the particulate matter NAAQS.  In a bold moment of speculation, I indicated that it would be difficult for EPA to avoid lowering the PM2.5 NAAQS to between 8.0 and 10.0 micrograms/cubic meter.  Following issuance of the draft, and in order to ensure that EPA does not ignore the emerging scientific consensus, the Union of Concerned Scientists helped to convene the Independent Particulate Matter Review Panel to review the draft. 

And what is the mellifluously named IPMRP?  It’s basically the same group of scientists that used to advise EPA on these issues – also known as the same group that Andrew Wheeler determined to be surplus to requirements as far as EPA was concerned.

And what did the IPMRP decide?  According to Greenwire (subscription required), the IPMRV:

will likely recommend that the primary annual standard for exposure to fine particulates be cut from 12 micrograms per cubic meter of air to somewhere between 8 and 10 micrograms per cubic meter.

I calls ‘em like I sees ‘em.

One final note.  The scientists certainly seem to know who their real audience is.  Greenwire also reported that:

Though agency leaders may not pay heed to their findings, the panel members are optimistic that federal judges will listen.

The Other Shoe Drops on Upwind Ozone States

On Tuesday, the District of Columbia Court of Appeals vacated EPA’s “Close-Out Rule,” which basically concluded that upwind states contributing to exceedances of the National Ambient Air Quality Standard for ozone in downwind states did not have to undertake any additional actions to reduce their contribution to downwind state ozone concentrations.  The decision was inevitable following last month’s decision in Wisconsin v. EPA, in which the D.C. Circuit ruled that upwind states must eliminate any substantial contribution to downwind NAAQS exceedances by the same deadline faced by those downwind states to meet the ozone NAAQS.

As the Court noted in yesterday’s decision:

EPA acknowledges [that] the Close-Out Rule “relied upon the same statutory interpretation of the Good Neighbor Provision” that we rejected in Wisconsin. Thus, the agency’s defense of the Close-Out Rule in these cases is foreclosed.

While EPA has informed the Court that it might seek rehearing or rehearing en banc in Wisconsin v. EPA, for now EPA is in the position of figuring out how to require upwind states to eliminate significant contributions to downwind ozone NAAQS exceedances by 2021.  I think that the decisions in both Wisconsin v. EPA and New York v. EPA are correct, but they certainly highlight significant flaws with the Clean Air Act’s NAAQS provisions.  Does anyone think that such reductions will happen by 2021?  Let’s remember that we’re still talking about how to attain an ozone standard, 0.075 ppm, that was lowered in 2015 to 0.070 ppm.

As I have said in other contexts, if we had a working legislative body, the dysfunctional NAAQS process would have been fixed by now.

Injunctive Relief Is Available Outside the Fenceline

On Monday, District Judge Rodney Sippel ordered sweeping injunctive relief against Ameren Missouri, intended to remedy violations of PSD requirements he had previously identified resulting from upgrades to the Ameren Missouri Rush Island generating plant. 

Notwithstanding the lengthy opinion, most of the Court’s findings are fairly plain vanilla.  Basically, Judge Sippel ordered Ameren Missouri to submit a PSD permit application and he ruled that BACT for control of SO2 emissions at Rush Island required installation of wet flue gas desulfurization equipment.

The notable part of the opinion was Judge Sippel’s handling of what to do about the 162,000 tons of excess emissions he found resulted from Ameren Missouri’s failure to get the required PSD permit. First, he concluded that the emissions increased the risk of mortality among those impacted by the excess emissions.  He also concluded that the only way really to remediate those excess emissions was to require emissions reductions at another Ameren Missouri generating plant, the Labadie Energy Center.  The Judge thus ordered Ameren Missouri to install dry sorbent injection equipment at Labadie and to run it until the amount of SO2 emitted at Labadie had been reduced by an amount equal to the excess emissions at Rush Island (which are expected to reach almost 275,000 tons by the time the wet scrubbers are operational at Rush Island).

This requirement brought to mind arguments in the GHG context about EPA’s authority to regulate “outside the fenceline.”  After all, in order to address emissions at one facility, Judge Sippel is requiring emissions reductions at a different facility.  However, Judge Sippel’s careful opinion justifies the requirement to reduce emissions at Labadie.  The opinion demonstrates that:

  • The damages caused by the excess emissions at Rush Island are irreparable,
  • Reductions at Labadie will benefit the same population impacted by the Rush Island emissions,
  • The balance of hardships favors the plaintiffs,
  • Injunctive relief at Labadie does not constitute a penalty, and
  • Injunctive relief is narrowly tailored to address the harm resulting from the violations at Rush Island.

I think that the opinion – all 157 pages of it – is careful and thorough and likely to survive any appeal.  Equitable relief is a powerful tool.

The Trump Administration Couldn’t Spell Irony If You Spotted It the I, R, O, and N.

Yesterday, EPA and the National Highway Traffic Safety Administration released the “Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program,” more succinctly known as the withdrawal of the California’s § 209 waiver under the Clean Air Act.  As part of that announcement, EPA Administrator Andrew Wheeler was quoted as saying that “California has the worst air quality in the United States.”

And why is this ironic?  Because one of the criteria used in determining whether to grant a waiver to California under § 209 of the Clean Air Act is whether “such State does not need such State standards to meet compelling and extraordinary conditions.”  In the unlikely hypothetical where I was advising this administration, I would have suggested that all of the progress in controlling emissions over the past 50 years means that there are no longer compelling and extraordinary conditions in California that warrant a waiver at this point.  I think EPA has now waived that anti-waiver argument!

I just don’t see a basis for withdrawal of the waiver (and this is not the only reason for that conclusion).  As to the Administration’s position that the standards are preempted by the Energy Policy and Conservation Act, the Supreme Court has already ruled that EPCA does not preclude EPA regulation of tailpipe emissions, and lower courts since have concluded that EPCA also does not preempt state regulation under a § 209 waiver.  I don’t see any court other than the Supreme Court ruling in the Administration’s favor on this one.

And, yes, I do realize that the Supreme Court gets the final word.

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.