U.S. EPA Goes Unconstitutional: Time to Rein in a Rogue Agency

By Marlo Lewis -- March 30, 2010

Synopsis: The U.S. Environmental Protection Agency, by pulling its punches in the Massachusetts v. EPA Supreme Court case, granting California a waiver to regulate greenhouse gas emissions from motor vehicles, and declaring greenhouse gas emissions a danger to public health and welfare, has positioned itself to regulate fuel economy, set climate and energy policy for the nation, and amend the Clean Air Act – powers never delegated to EPA by Congress. It is time to rein in this rogue agency. The Congressional Review Act Resolution of Disapproval introduced by Sen. Lisa Murkowski (R-AK) is the way to do it.

When did Congress tell the U.S. Environmental Protection Agency (EPA) to license California and other states to adopt non-federal fuel economy standards within their borders? When did Congress tell EPA to act as co-equal or even senior partner with the National Highway Traffic Safety Administration (NHTSA) in setting fuel-economy standards for the auto industry?

When did Congress tell EPA to establish climate and energy policy for the nation? And when did Congress tell EPA to “tailor,” that is amend, the Clean Air Act to avoid an administrative debacle of its own making?

The answer, of course, is never, never, never, and never. EPA is flouting federal law and the Constitution. 

Murkowski Resolution: Averting the Regulatory Avalanche

Congress may soon get its first real opportunity to rein in this rogue agency. Sometime between now and May 25th the Senate is expected to vote on Sen. Lisa Murkowski’s Congressional Review Act (CRA) Resolution of Disapproval. This measure would veto the legal force and effect of EPA’s endangerment finding — the agency’s official determination that greenhouse gas (GHG) emissions endanger public health and welfare. If allowed to stand, the endangerment finding will trigger a regulatory cascade through multiple provisions of the Clean Air Act.  As explained in previous posts (here, here, and here), America could end up with a regulatory regime far more costly than any climate bill Congress has either rejected or failed to pass, yet without the people’s elected representatives ever voting on it.

By EPA’s own admission, the endangerment finding leads to “absurd results” — administrative burdens that undermine environmental protection, economic growth, and congressional intent.

For example, EPA and its state counterparts would have to apply the Clean Air Act’s Prevention of Significant Deterioration (PSD) preconstruction permitting program to an estimated 41,000 previously unregulated small entities each year, and the Act’s Title V operating permits program to an estimated 6.1 million previously unregulated small entities. These administratively impossible undertakings would induce regulatory paralysis, bring construction activity to a screeching halt, and force millions of firms to operate in legal limbo — all in the midst of the worst economic downturn since the Great Depression.

EPA says relax, don’t worry, we can “tailor” the PSD and Title V programs so that they apply only to large industrial facilities emitting 25,000 tons per year (TPY) — or maybe even 100,000 TPY — of CO2-equivalent greenhouse gases. But the Act plainly states that a source is subject to PSD if it has a potential to emit 250 TPY of a regulated air pollutant and Title V if it has a potential to emit 100 TPY. In effect, EPA proposes to re-write, that is amend, the statute.

Even if courts uphold this obvious breach of the separation of powers, the Tailoring Rule’s protections for small entities would phase out after six years, whereupon EPA plans to extend PSD and Title V requirements to smaller and smaller entities. Absurd results are to be delayed rather than avoided. Because these small business protections are by design temporary — and are legally dubious — they leave a cloud of regulatory uncertainty hanging over the economy.      

The Tailoring Rule also offers zero protection from what is arguably the most absurd result of the endangerment finding — the obligation to establish National Ambient Air Quality Standards (NAAQS), set below current atmospheric concentrations, for CO2 and other GHGs.

Section 108 of the Clean Air Act obligates EPA to initiate a NAAQS rulemaking for “air pollution” from “numerous or diverse mobile or stationary sources” that may “reasonably be anticipated to endanger public health or welfare.” Carbon dioxide is obviously emitted from numerous and diverse mobile and stationary sources, and EPA’s endangerment finding declares that the associated “air pollution” (whatever that is) endangers public health and welfare.

What is more, EPA attributes endangerment to the “elevated concentration” of GHGs in the atmosphere (p. 66516). By “elevated,” EPA means elevated above pre-industrial levels.  Substantively, EPA has already made the case for establishing NAAQS for CO2 set below current atmospheric levels.

And there’s the rub. Even a global depression lasting several decades would not be enough to lower CO2 concentrations from today’s level (389 parts per million) to 350 ppm — the new politically-correct “stabilization” target advocated by Jim Hansen, Al Gore, Rajendra Pachauri, the Center for Biological Diversity, and many others. Yet under the Clean Air Act, states are obligated to attain NAAQS within five years or at most 10 years. The endangerment finding thus sets the stage for eco-litigation groups to transform the Clean Air Act into a deindustrialization mandate — an economic suicide pact. The Murkowski resolution would nip all this mischief in the bud.

Smear Campaign

Since many in Congress are loath to take responsibility for the costs of climate policy, and since many in the environmental movement are heirs to the “by any means necessary” ethos of ’60s New Left radicalism, it is hardly surprising that many talk trash about the Murkowski resolution, which would stop EPA from doing an end-run around the democratic process.

Climate Progress (CP) calls the Murkowski resolution the “Dirty Air Act,” claiming it is “polluter crafted.”  Specifically, CP claims former Bush EPA air administrator Jeffrey Holmstead helped Murkowski “write her proposed amendment” to block Clean Air Act regulation of CO2 “last fall,” and Holmstead is a registered lobbyist for Bracewell and Giuliani, which represents coal companies and electric utilities. That may be correct, but it is false evidence for the smear CP is trying to paint on the Murkowski resolution.

As explained in an earlier post:

Murkowski’s draft legislation “last fall” was an amendment to the Debt Ceiling bill. It would have prohibited EPA from spending money to regulate CO2 from stationary sources. Conceivably, industry lawyers could have “crafted” it. But Murkowski’s CRA Resolution of Disapproval is a completely different animal. Its form is fixed by the CRA itself. A lawmaker seeking via the CRA to veto an agency action has one choice and one choice only — which rulemaking to insert into the blank space. There is simply no room for “crafting,” whether by polluters or anyone else!

MoveOn.Org is running TV ads against three Democratic Senators — Mary Landrieu of Lousiana, Ben Nelson of Nebraska, and Blanche Lincoln of Arksansas — who are co-sponsors of the Murkowski resolution. The ads castigate these Senators for working to “roll back” the Clean Air Act, which we’re supposed to be outraged about because, according to MoveOn, “Many Americans are already smoking the equivalent of a pack a day just from breathing the air.”

The MoveOn ads are absolute rubbish. Smoking just one cigarette a day delivers 12–27 times the daily dose of fine particulate matter (PM2.5) that non-smokers get from the air in cities with high PM2.5 levels, according to an American Heart Association study by C. Arden Pope and colleagues. Pope, be it noted, was a key figure in the campaign to establish NAAQS for PM2.5. MoveOn is blowing smoke — nowhere in the United States is breathing the equivalent of a pack a day or even one cigarette a day.

Contrary to MoveOn’s propaganda, the Murkowski resolution would in no way hinder EPA’s efforts to clean the air. Carbon dioxide emissions do not damage air quality, U.S. air quality has improved decade by decade without controls on CO2 emissions, and under current law U.S. air quality will continue to improve whether the Murkowski resolution passes or not.

Nor would the Murkowski resolution “roll back” the Clean Air Act. It would not change one word of the statute. It would not alter any program that EPA currently administers under the Act. It would not reduce funding for any current EPA program. The Murkowski resolution would, however, avert an era of unaccountable regulation and bureaucratic empire building. It’s this defense of democracy that MoveOn.org vilifies.

Senator Barbara Boxer (D-CA) and others contend that vetoing EPA’s endangerment finding would be like vetoing the Surgeon General’s 1964 report linking cigarette smoking to cancer. This is a false analogy. The Surgeon General’s report was purely that – an assessment of the medical literature. It had no regulatory force or legal effect. In fact, it proposed no remedies at all. It was Congress, not the Surgeon General or any executive agency that, in 1965, required all cigarette packages to carry a health warning, and that later banned cigarette advertizing on television and radio.

If the endangerment finding were simply EPA’s assessment of the scientific literature, Congress would have no business voting on it. However, it is much more than that. It is the legal trigger and precedent for sweeping regulatory changes that Congress never approved.

Although a strong case can be made that EPA’s endangerment finding is scientifically flawed, that is not what the Murkowski resolution is about. Contrary to Sen. Boxer’s misrepresentation, the Murkowski resolution is not a referendum on climate science. It is a referendum on who shall make climate policy — politically-unaccountable bureaucrats or the people’s elected representatives. The resolution would veto the “legal force and effect” of the endangerment finding — not its scientific reasoning or conclusions. Indeed, Sen. Murkowski is not a global warming skeptic, nor is she opposed in principle to greenhouse gas regulation. She simply believes that climate policy is too important to be made by non-elected bureaucrats.

The Strange Case of the Disappearing, Reappearing Patchwork

In her Feb. 22 letter to Sen. Jay Rockefeller (D-WV), EPA Administrator Lisa Jackson observes that vetoing the endangerment finding would scuttle the joint EPA/NHTSA GHG/fuel economy standards rulemaking. That, in turn, would undo the “historic agreement” whereby California and other states agreed to deem compliance with federal GHG/fuel economy standards as compliance with their own.  And that, she warns, would be very bad, because California and other states would be free to enforce their own standards, creating a regulatory patchwork inimical to a healthy auto industry.

Well, excuse me for pointing out the resemblance between EPA’s actions and a protection racket! Ms. Jackson neglects to mention that the patchwork threat exists only because she, reversing Bush EPA Administrator Stephen Johnson’s decision, granted California a waiver to implement its own GHG/fuel economy program. Had Jackson reaffirmed Johnson’s denial, there would be no danger of a patchwork, hence no ostensible need for the joint EPA/NHTSA rulemaking to “protect” the auto industry.

That the waiver would lead to a regulatory patchwork was one of Johnson’s reasons for rejecting it. Johnson’s critics vehemently denied that the waiver would create a patchwork. California Governor Arnold Schwarzenegger and 12 other Governors denied it in their January 23, 2008 joint letter to Johnson. David Doniger of the Natural Resources Defense Council,  Connecticut Gov. M. Jodi Rell, Maryland Gov. Martin O’Malley, and Pennsylvania Gov. Edward G. Rendell denied it in their testimonies before the Senate Environment and Public Works Committee (January 28, 2008). Yet now the anti-Murkowski forces warn of a regulatory patchwork. Predictably, they do not confess to having changed their tune, nor acknowledge that Johnson was correct.

Unlawful, Incompatible Standards

Ms. Jackson should have denied the waiver. California and other states opting into the California program cannot enact their own GHG/fuel economy standards without violating the 1975 Energy Policy and Conservation Act (EPCA), which states:

When an average fuel economy standard prescribed under this chapter is in effect, a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under this chapter.

Note the broad language. States are prohibited from adopting or enforcing any law or regulation “related to” fuel economy standards. This means a state may not adopt a fuel economy standard by relabeling it as something else (e.g., “climate protection”) or commingling it with other measures (e.g., controls on air-conditioner refrigerants based on their global-warming potentials). 

Carbon dioxide makes up 94-95% of all GHG emissions from motor vehicles, and there is no commercially-proven technology to filter or capture CO2 emissions from tailpipes. Consequently, the only way to achieve significant decreases in GHG emissions per mile is to decrease fuel consumption per mile. As EPA and NHTSA state in their joint rule (p. 49458), “there is a single pool of technologies” for reducing fuel consumption and, thereby, CO2 emissions from motor vehicles.  The California Air Resource Board’s (CARB) motor vehicle GHG standards program is basically fuel economy by another name. As such it is preempted by EPCA, and Jackson had no business approving it.

Indeed, granting the waiver allows California and other states to adopt fuel-economy standards that are not only different from but also incompatible with federal standards. The waiver is an affront to the Supremacy Clause.

Specifically, the CARB program conflicts with fuel economy reforms that Congress enacted in the 2007 Energy Independence and Security Act (EISA). In EISA, Congress replaced the “flat-rate” standards of the original Corporate Average Fuel Economy (CAFE) program, which apply to an automaker’s entire fleet, with “attribute-based” standards that vary according to a vehicle’s “footprint” (the area formed by the wheel base multiplied by vehicle track width).

The original program had serious drawbacks, including an adverse impact on vehicle safety. The easiest way to comply with flat-rate standards is to make the average car lighter and smaller. Lighter vehicles have less mass to absorb collision forces; smaller vehicles provide less space between the occupant and the point of collision. NHTSA estimates that CAFE contributed to an additional 1,300 to 2,600 fatalities and 13,000 to 26,000 serious injuries per year.

Although California’s GHG standards are calibrated in grams CO2-equivalent per mile rather than miles per gallon, they are “flat-rate” rather than “attribute-based.” Since the California standards substantially regulate fuel economy, they conflict in basic approach with the EISA reforms.

The “flat-rate” character of the CARB program is also what produces the “patchwork” incompatible with a competitive auto industry. Consumer preferences differ from state to state, so the same automaker typically sells a different mix of vehicles in each state. Only by sheer improbable accident would the average fuel economy (or grams CO2/mile) of an automaker’s vehicles delivered for sale in one state be identical to that in other state. But under the CARB program, each automaker would have to achieve the same average fuel economy in every “California” state. If all 50 states adopt the California program, then each automaker would have to manage 50 separate fleets, reshuffling the mix in each state regardless of consumer preference. A more cockamamie scheme would be hard to imagine. 

The solution to the patchwork threat should be obvious — overturn the California waiver. Instead of allowing EPA to deal itself into a position to regulate fuel economy and determine climate policy for the nation, Congress should uphold EPCA and reassert its authority under the Supremacy Clause.

Granted, vetoing the waiver might be even more difficult politically than vetoing the endangerment finding, because congressional delegations from the “California” states would fight it tooth and nail. But if denied the cover of the endangerment finding and the “historic agreement,” they would be in the awkward position of claiming a right to wreck what remains of the U.S. auto industry. Litigation to overturn the waiver is another option. U.S. automakers are too financially dependent on the Obama administration to consider mounting such a challenge, but others, such as the National Association of Auto Dealers and the U.S. Chamber of Commerce, have already filed suit. 

Dirty Deal

Rep. Darrell Issa (R-CA), ranking member of the House Oversight and Government Affairs Committee, spotlights another reason to nix the “historic agreement” — it was reached in violation of federal law. In a Mar.  24, 2010 letter to White House Counsel Robert Bauer, Issa argues that Obama Administration Energy and Environment Czar Carol Browner “may have deliberately violated” the Presidential Records Act (PRA) when she brokered the fuel-economy/GHG standards deal with California and the auto industry. Sec. 2203(a) of the PRA states: 

Through the implementation of records management controls and other necessary actions, the President shall take all such steps as may be necessary to assure that the activities, deliberations, decisions, and policies that reflect the performance of his constitutional, statutory, or other official or ceremonial duties are adequately documented and that such records are maintained as Presidential records pursuant to the requirements of this section and other provisions of law [emphasis added].

Yet the Browner-led negotiations culminating in the “historic agreement” appear to be completely undocumented. Citing a May 20, 2009 New York Times article, Issa describes the agreement as a “secret deal” behind “closed doors” under a “vow of silence”:

There was a deliberate “vow of silence” surrounding the negotiations between the White House and California on vehicle fuel economy standards. Great care was taken to “put nothing in writing ever.” These meetings culminated in a Rose Garden Ceremony on May 19, 2009, where President Obama announced an “historic agreement” between the Automobile industry, the State of California, and the Obama Administration to set fuel economy standards through 2016.   

Noting that the industry faced the “alarming possibility” of having to comply with conflicting fuel economy requirements, and that General Motors and Chrysler were concurrently “engaged in separate negotiations with the Obama Administration to develop restructuring plans in an attempt to avoid bankruptcy,” Issa writes that the agreement “reeks of back room deals and pay-for-play strong arm tactics on the part of this administration.” At a minimum, the Browner-led back-room negotiations make a mockery of Lisa Jackson’s and President Obama’s high-profile commitments to transparency and openness in environmental policymaking.

NHTSA Will Miss Its CAFE Deadline: Boo-Hoo!

In recent letters to the Hill, the Auto Alliance , UAW, and NHTSA offer a new reason to oppose the Murkowski resolution: NHTSA won’t be able to “de-couple” its half of the joint GHG/fuel economy rulemaking quickly enough to meet the April 1, 2010 deadline for finalizing federal fuel economy regulations for the 2012 model year. Well, NHTSA could probably accomplish this feat in a few days if it weren’t so busy lobbying against the Murkowski resolution. NHTSA should wake up! The Murkowski resolution would restore NHTSA’s statutory leadership in fuel economy regulation.

Besides, what’s so terrible about fuel-economy standards not ratcheting up as fast as CARB and EPA would like? Retaining model-year 2011 fuel economy standards for an additional year would make no perceptible difference in either average global temperature or U.S. energy security, but would save the distressed auto industry an estimated $5.4 billion (Table I.E.2-4, p. 49481).

Another benefit of NHTSA missing its deadline is that fewer motorists will die! Even “attribute-based” fuel-economy regulation induces some downsizing. EPA and NHTSA estimate that their joint fuel economy/GHG rule could cause an additional 493 fatalities in 2016 (Table IV-G-7-1, p. 49730). A less aggressive schedule for tightening fuel economy standards during 2012-2016 would mean fewer deaths.

EPA’s Pattern of Self-Dealing Exposed

Let’s review the steps by which EPA is amassing powers not delegated by Congress.

1. EPA grants California a waiver repugnant to both federal law and the Supremacy Clause.
2. The waiver threatens to subject the auto industry to a patchwork of conflicting fuel-economy requirements.
3. The patchwork threat enables the White House to broker a deal whereby EPA gets to be co-equal or even senior partner to NHTSA in regulating fuel economy — a power not granted to EPA in the Clean Air Act. 
4. The joint GHG/fuel economy regulation compels EPA to regulate CO2 from stationary sources – another power Congress never delegated to EPA.
5. EPA is now in a position to regulate fossil-energy production and use in all sectors (manufacturing, power generation, commmercial, and residential) and, thus, to determine climate policy for the nation — an issue of vast economic and political significance that Congress is still debating.
6. In addition, because applying the Clean Air Act to CO2 leads inexorably to “absurd results,” EPA gets to amend (“tailor”) the Act to save us from another regulatory nightmare of its own making. 
7. In sum, by granting the California waiver and issuing the endangerment finding, EPA not only gets to play in NHTSA’s fuel-economy sandbox and expand its control over the economy, it also gets to play lawmaker.

In light of all the new powers EPA is poised to acquire, it is not unreasonable to wonder whether the agency deliberately pulled its punches in Massachusetts v. EPA, the April 2007 Supreme Court decision that authorized and indeed pushed the agency to find endangerment and regulate GHG emissions from new motor vehicles under Sec. 202 of the Clean Air Act.

Here’s the strong case against regulating GHG emissions under Sec. 202 that EPA neglected to argue before the Court:

• EPA cannot regulate GHG emissions from new motor vehicles under Sec. 202 without regulating CO2 under the Act as a whole, including PSD, Title V, and NAAQS.
• Applying the Act as a whole to CO2 leads ineluctably to absurd results — “extreme measures” (Mass. v. EPA, 531) that directly conflict with congressional intent.
• Therefore, Congress could not have intended for EPA to regulate GHG emissions under Sec. 202.

The Tailoring Rule and EPA’s earlier (July 2008) Advanced Notice of Proposed Rulemaking leave no doubt that regulating GHGs under Sec. 202 automatically leads to regulation under other provisions, produces absurd results, and inexorably expands EPA’s power far beyond any visible congressional mandate. Why didn’t EPA point this out when it really mattered? 

There are two possibilities: (1) EPA didn’t understand how the Clean Air Act works, (2) EPA wanted to be thrown into the greenhouse briar patch all along. EPA is the expert on the Clean Air Act. Ergo . . .