EPA’s “Sue and Settle Rulemaking” Criticized in New Report

 

As pointed out in yesterday’s post “Attorney General Pruitt Leads Effort to Uncover EPA’s Apparent “Sue and Settle” the EPA has devised a loophole to usurp state authority and federally impose a strict new set of emissions. The following is taken from the “EPA’s New Regulatory Front: Regional Haze and the Takeover of State Programs.”

The EPA’s Regional Haze program, established by the Clean Air Act in 1977, seeks to remedy visibility impairment at federal national parks and wilderness areas. But because the rule is an “aesthetic regulation, and not a public health standard,” Congress stressed that the states, not the federal agency, should impose regulations that govern it, says the chamber’s July 13 report titled “EPA’s New Regulatory Front: Regional Haze and the Takeover of State Programs.”

“However, EPA—with some help from its friends at special interest groups and the controversial ‘Sue and Settle’ Rulemaking process—has devised a loophole to usurp state authority and federally impose a strict new set of emissions controls that cost 10 to 20 times more than the technology the states would otherwise have used,” alleges the report authored by William Yeatman, an assistant director of the Center for Energy and Environment at the free-market think tank, the Competitive Enterprise Institute.

Here’s how it works: In five Consent Decrees negoiated with environmental groups, EPA has willingly committed itself to deadlines to act on the states’ Regional Haze strategies. On the eve of any given deadline the agency, due to the Consent Decree, determines that it cannot approve a state’s strategy to reduce haze due to alleged procedural inadequacies. Then, EPA claims that it has no choice but to impose its preferred controls through a Federal Implementation Plan (FIP) in order to comply with the
Consent Decree.

Already, EPA has used this pretextual rationale to impose almost $375 million in annual costs on six coal-fired power plants in New Mexico, Oklahoma,and North Dakota. It has similarly proposed $24 million in annual costs on a coal-fired power plant in Nebraska. Unfortunately, the agency is only getting started. In the near term, EPA is poised to act in Wyoming, Minnesota, Arizona, Utah, and Arkansas. Its real goal is to impose another costly regulation on electric utilities and force them to shut down their coal-fired generating units. Ultimately, all states could be subject to EPA’s Regional Haze power grab.

In spite of the legal and regulatory history, which demonstrates that Congress wants states to call the shots on Regional Haze, EPA is now implementing a program that tramples over the states’ authority. EPA’s approach to Regional Haze appears to be less about cleaning up haze and more about furthering EPA’s agenda to shut down coal-fired power plants.

The heart of the matter is that the states, after years of deliberation, selected specific emissions controls to comply with the Regional Haze regulation. In each of these states, EPA prefers different, more stringent, and more costly controls. And EPA is determined to force the states to implement these more costly controls over any and all objections.The problem is that the law provides primacy for the states—not EPA—to address regional haze within the states’ borders.

Enter Sue and Settle. Beginning in 2009, a group of nonprofit environmental advocacy organizations—Sierra Club, WildEarth Guardians,Environmental Defense Fund, National Parks Conservation Association, Montana Environmental Information Center, Grand Canyon Trust, San Juan Citizens Alliance, Our Children’s Earth Foundation, Plains Justice, and Powder River Basin Resource Council—filed lawsuits against EPA alleging that the agency had failed to perform its nondiscretionary duty to act on state submissions
for regional haze. Rather than defend these cases, EPA simply chose to settle. In five Consent Decrees negotiated with environmental groups—and, importantly, without notice to the states that would be affected—EPA agreed to commit itself to various deadlines to act on all states’ visibility improvement plans.

What EPA did next is Washington politics at its worst.On the eve of the deadlines that EPA had set for itself in the Consent Decrees, the agency found that it could not approve the states’ submissions due to alleged procedural problems, such as inadequate cost estimates. The Consent Decree deadlines do not afford states sufficient time to correct the alleged procedural inadequacies.

By second-guessing these states’ cost-effectiveness calculations, EPA in the ordinary course could forestall the approval of a state’s Regional Haze implementation plan,but it could not on its own impose its preferred emissions controls. But by combining this tactic of delaying approval of the state plans with Sue and Settle and a court-imposed deadline to act, EPA has manufactured a loophole to provide itself with the ability to reach into the state haze decision making process and supplant the state as decision maker. EPA has, effectively, engineered a way to get around the protections of state primacy built into the Regional Haze statute by Congress.

The Obama administration has made no secret that it seeks to use regulations to put the coal industry out of business. The strategy is simple: Impose the most burdensome controls on all coal-fired power plants regardless of whether or not they are necessary. While campaigning for the presidency in January 2008, then-candidate Barack Obama told the editorial board of the San Francisco Chronicle that “If someone wants to build a new coal-fired power plant they can, but it will bankrupt them because they will be charged a huge sum for all the greenhouse gas that’s being emitted.”

It appears the EPA has found a means to do just that and - as this administration is apt to point out- usurp the constitution to get their way.

The Clean Air Act explicitly directs states to weigh costs against visibility benefits when they decide how to implement the Regional Haze program. Accordingly, Oklahoma declined to impose the most expensive sulfur dioxide controls on six power plants subject to Regional Haze requirements, because the capital costs—almost $1.8 billion—were deemed unreasonable in light of the imperceptible benefits (see the photo comparison above). Instead, Oklahoma proposed an alternative plan that would achieve even
greater emissions reductions by fuel switching from coal to natural gas.

EPA, however, refused to approve Oklahoma’s Regional Haze plan, because the agency objected to the state’s cost-effectiveness analysis. On the basis of alternative cost estimates prepared by a paid consultant who routinely serves as a witness for the very same environmental groups that sued to obtain the Regional Haze Consent Decrees and who had not visited the power plants at issue, EPA concluded that the most stringent sulfur dioxide controls were cost-effective and imposed them on December 28, 2011.

According to Oklahoma Gas & Electric, EPA’s imposed rule would “likely trigger the largest customer rate increase in OG&E’s history, while the resulting impact on regional haze would be practically imperceptible.”