EPA’s end-of-year announcement about its intention to propose greenhouse gas (GHG) New Source Performance Standards (NSPS) for power plants and refineries has ignited a debate about likely effects on the economy, and is sure to attract scrutiny from the incoming Congress. However, any predictions about economic impacts should be informed by the actual structure of the NSPS provisions of the Clean Air Act.

NSPS vs. PSD. First, it is important to understand the difference between the NSPS and the Prevention of Significant Deterioration (PSD) permitting obligations, which kicked in on January 2 under the EPA’s “Tailoring Rule” timetable. In short, the NSPS will have far greater impact than the PSD obligations.

The PSD obligations apply only to certain new or modified facilities and involve case-by-case determinations. The NSPS provisions, by contrast, can reach all existing facilities—e.g., all power plants and all refineries. Furthermore, the NSPS rulemakings will result in across-the-board emission standards, not case-by-case determinations.

Broad Discretion for EPA. A striking aspect of the NSPS provisions of the Clean Air Act is the breadth of EPA’s discretion for crafting emission standards. The Clean Air Act defines “standard of performance” as a standard which generally reflects “best demonstrated technology,” taking into account costs of compliance.

Relative to other standards outlined in the Clean Air Act (including the “Best Available Control Technology” requirement), this standard-setting process provides EPA with wide latitude in setting a performance standard for GHG emissions from power plants and refineries. It, for example, could provide broad running room for those interests advocating stringent approaches—for example, that the performance standard for power plants should be based on the emissions associated with the use of natural gas. At the same time, the reference to compliance cost will provide a basis for opposing standards that could threaten an already-weakened economy. Given the broad authority conferred by the statute, scrutiny by Congress may provide the ultimate check on EPA’s level of ambition in standard-setting.

Important Role for States. The NSPS provisions reach existing facilities through a federal-state process. Under section 111(d) of the Clean Air Act, EPA establishes “emissions guidelines” for facilities in a particular category—and then each state transforms those guidelines into enforceable performance standards for the facilities within their boundaries.

Given this structure, it will be important to see how prescriptive EPA’s “guidelines” are and how states use their authority. In the end, much of the action on the NSPS could occur at the state level.

Market-based Approach? In the past, EPA has asserted that the NSPS provisions authorize various kinds of market-based approaches, including allowance trading programs. Given the current political stigma around “cap-and-trade,” however, EPA officials already have made clear that the agency has no intention of using the NSPS to impose a top-down cap on overall emissions.

However, many in industry would prefer at least some sort of flexible approach (even if not cap-and-trade) to rigid “command-and-control” regulation. So, one key question is whether EPA will explore a politically-acceptable pathway for using such market-based approaches? One such pathway might be through the states. In its “emission guidelines,” EPA could outline conventional standards but acknowledge the authority of states to use market-based measures at their option. In the same or a subsequent rulemaking, the agency could even provide a model rule to promote uniformity and linkage among the states.

* * * * *

There certainly will be concerted efforts in the Congress to defund, delay, or de-authorize EPA’s regulation of GHG emissions. Unless and until Congress acts, however, EPA will be developing regulations with potentially far-reaching impacts on the power and refining sectors.

It is not clear whether or not Congress or the courts will allow the Obama administration’s irresponsible greenhouse gas regulations to wreak havoc on the economy. These regulations are already harming the economy by creating uncertainty that increases the price of energy and the price of using energy (i.e. the fuel economy regulations). If Congress or the courts halt these reckless regulations soon, the economic damage will not be too great, but the longer they are in place the greater the harm will be.

What is crystal clear is that these regulations will not usher in a new era of clean-energy technologies. The simple fact is that lavish incentives have not worked to usher in the wind, solar, and renewable renaissance that the special interests claims these incentives will create. Consider a few vignettes from history.

In 1983, Booz, Allen & Hamilton did a study for the Solar Energy Industries Association, American Wind Energy Association, and Renewable Energy Institute. It stated: “The private sector can be expected to develop improved solar and wind technologies which will begin to become competitive and self-supporting on a national level by the end of the decade [i.e. by 1990] if assisted by tax credits and augmented by federally sponsored R&D.”

In 1986, Amory Lovins of the Rocky Mountain Institute lamented the untimely scale-back of tax breaks for renewable energy, since the competitive viability of wind and solar technologies was “one to three years away.”

In 1990, two energy analysts at the Worldwatch Institute predicted an almost complete displacement of fossil fuels in the electric generation market within a couple decades [i.e. 2010]:

Despite decades of happy talk from their promoters, and decades of substantial subsidies, set-asides, and special treatment wind, solar, and renewables are not close to begin cost-effective or competing with fossil fuels. After more than a generation of subsides wind and solar failed to produce more than 2 percent of U.S. electricity production and cheap natural gas makes the wind and solar economic even less economic.

New regulations from EPA will make coal, natural gas, and oil more expensive to use, but these energy-rich sources of energy will continue to be more efficient and cost-effective for years to come. History provides a clear guide that wind, solar, and other sources of energy are expensive and will continue to be expensive. When their promoters claim otherwise, it’s a good reminder that special incentives only make sense for the special interests that promote them. These special interest are trying to get rich at the expense of average American families—they have been taking advantage of taxpayer and ratepayers for decades and they show no signs of stopping letting up.

It is not clear that Congress or the courts will put a stop to EPA’s costly and misguided regulations. What is clear is that by issuing these regulations, the Obama administration could care less about the economy or creating jobs.

The permitting requirements that EPA and 49 states will gradually implement beginning this week affect a very small number of large plants that would require a pre-construction permit for other reasons. To obtain the permit, these large power plants and industrial facilitiesmust accept an emissions limitation reflecting the installation of the “best available control technology” (BACT) for greenhouse gas (GHG) emissions as well as other regulated pollutants emitted above regulatory thresholds. Several things are important to note about the rollout of permitting requirements:

• From January 2 to June 30, no company planning a large new project will have to apply for a pre-construction permit covering its GHG emissions, unless the project would have needed a permit anyway because the project emits other pollution in large amounts. In other words, there is little added permitting burden in the first 6 months of 2011.
• Beginning July 1, BACT will begin to apply to very large new and modified plants based on their greenhouse gas (GHG) emissions. Specifically, it will affect new plants that emit 100,000 tons per year or more of greenhouse gases, and very large modified sources that increase their greenhouse gas emissions by at least 75,000 tons per year. To put this in perspective, for a modified unit to trigger this threshold they would need to burn an additional 393 rail cars of coal.
• States will be able to use the first six months of 2011 to build additional administrative capacity for permits they will need to process beginning July 1.
• EPA has issued permitting guidance and has committed to assist permitting authorities to ensure a smooth transition to GHG permitting.
• Every state except Texas has agreed to this path forward. Most states are ready for these regulations and they have considerable flexibility to implement BACT in a manner that is sensitive to the concerns of regulated industries based on the specific facts presented with each project proposal. The permitting agencies in the states are required to carefully consider potential cost impacts on industry.

These permitting requirements are not new regulations. Rather, they are contained in the federal Clean Air Act and were automatically triggered as soon as EPA began regulating greenhouse gases from motor vehicles.

Industry, EPA and Congress all agree that the Clean Air Act is the wrong tool to regulate greenhouse gases. Yet, the EPA’s recent actions put in motion excessive regulation which imposes high costs and business uncertainty for little or no global environmental benefit. Further, these new regulations are in direct conflict with the Administration’s efforts to promote renewable energy such as biomass.

Our economy is still attempting to recover amidst unemployment hovering around 10 percent. People need jobs, and businesses need to operate in an environment of consistency. Overly burdensome regulations put American business at a competitive disadvantage in the global marketplace. Jobs and economic impact must be factored into the equation when such issues are addressed.

Regulations shouldn’t be made in a vacuum without consideration of the potential impacts on jobs. The Greenhouse Gas regulations are the latest example of those that would bring huge costs and uncertainty, hampering job growth and putting obstacles in the way of American business to compete on a level playing field internationally. Inexplicably, this is happening as other parts of the Administration are promoting the need for more exports and job creation.

To reduce GHG emissions over the long term, it is critical that this renewable source of fuel be encouraged by ensuring that carbon neutrality of biomass combustion is recognized in greenhouse gas regulations. In addition, policymakers should adopt policies that will mitigate high energy prices, promote breakthrough technologies, encourage equivalent GHG reduction commitments from high-emitting competitor nations, and recognize the positive greenhouse gas benefits of forests and forest products. This is good policy for our air, our energy use, and for future generations.

There is a way forward to achieve environmental goals while preserving an environment that allows for successful business. Congress and the Administration should agree to a “time out” on carbon regulations under the Clean Air Act and work instead on a regulatory structure that will promote job creation and sustained environmental performance for American businesses.

EPA’s announcement last week that it will soon issue performance standards to control greenhouse gas emissions from coal-based power plants, among other facilities, is another in a series of new regulations directed at the nation’s largest and most affordable electricity provider—coal-based generation—that EPA is rolling out at dizzying speed. The cumulative impact, based on estimates from our customers and outside analysts, is staggering.

Combined, these regulations result in the loss of a significant amount of generation capacity, require extensive capital costs to comply, put upward pressure on energy prices for industries and households and weaken the reliability of our electricity generation system.

EPA’s regulatory web is woven with weak legal arguments and incomplete economic analyses; witness the challenges already before the courts and the plethora of outside analysts ringing alarms. Nor will these standards achieve the certainty claimed for them. Rather, they only confirm fears that regulatory costs are piling up on the nation’s major source of electricity generation and, therefore, on the entire economy.

Our nation’s energy policy and global competitiveness should not be undermined by a rush to regulate. Rather, they merit a more rigorous accounting by EPA of the impact of its complete regulatory agenda on jobs and the nation’s energy and economic security. We are hopeful Congress will take seriously its oversight authority and legislation introduced by Sen. Jay Rockefeller and others that would force a time-out at EPA.

Absent a confident and robust economy, we have little chance of battling unemployment or the national debt—priorities embraced by the voters and both political parties in the November elections. EPA’s regulatory agenda, however, poses a significant threat on all fronts.

The EPA’s first steps toward regulating carbon emissions require only that the largest stationary power generators identify and deploy the best available control technologies to reduce emissions. The regulations and federal policy in general do not go far enough in promoting technologies that can displace fossil energy use and stabilize U.S. emissions of greenhouse gases along with other pollutants.

The EPA has yet to make an important decision on whether the use of biomass for energy, chemicals and fuels will be regulated under the same standards as fossil fuels. The agency should quickly issue rules recognizing that the proper use of renewable biomass can recycle atmospheric carbon and mitigate the growth of emissions while still providing the energy and transportation fuels necessary for economic growth.

Federal policy overall should incentivize use of technologies that make use of renewable biomass and that make manufacturing and industry more energy efficient. Biotechnology is one such technology. The EPA has recognized that biotechnology can prevent pollution in manufacturing, including carbon emissions. But current regulations do not give manufacturers and energy generators the direction they need to shift to these cleaner technologies. Instead, they encourage energy generators to maintain the status quo.

The development and commercialization of technology can generate new jobs not just in the lab, but also in other areas of the economy. The production of advanced biofuels, for instance, could generate nearly 200,000 direct jobs by 2022; overall, though, nearly 800,000 jobs would be created in the economy through impacts on transportation and distribution. Hundreds of thousands of additional jobs can be created in growing and transporting renewable biomass, and producing renewable chemicals other biobased products.

Multiple choice - EPA regs will:

I. Cause material harm to the economy because higher energy costs will reduce output with no offsetting increase in energy productivity as decades-old energy technologies are replaced.

II. May hurt today's economy, but not materially because de-carbonization will come gradually over decades, new energy technologies tend to be more domestic and labor-intensive, and U.S. investment in long-lived plant & equipment is already stymied by policy uncertainty.

III. Have no offsetting benefit because the fat-tailed risk of climate damages is either spurious, hits mostly developing countries, or impacts only future generations of Americans where our social discount rate to invest on their behalf is too high to justify action.

IV. Be blocked by Congress because forcing coal, oil, and natural gas prices to reflect the greenhouse gas externality reduces the benefits Americans (or at least elected officials) receive by protecting incumbents from new competitors.

V. (Should) be replaced by legislation. Greenhouse gases, by warming the planet, fit the economic construct of an externality causing market failure (see Hayek, Pigou, Samuelson, and Coase). As a remedy, limits on price (a carbon tax) or quantity (cap & trade) reflect the externality while letting markets pick winners.

a. I only

b. I and III

c. I, III, and IV

d. II only

e. II and V

Answers:

a. A pessimist

b. An amoral pessimist

c. A conflicted amoral pessimist

d. An informed realist

e. A free-market informed realist

The full impact of EPA's greenhouse gas regulations will not be felt -- or fully appreciated -- until various legal challenges are settled in the courts. EPA will (and should) win some of these cases, but not others. In the end, however, it will be up to Congress to determine what shape U.S. greenhouse gas emission policy should take.

The EPA's endangerment finding should withstand legal challenge. As this is the legal predicate for regulating greenhouse gases under the Clean Air Act, the EPA will be able -- indeed, required -- to regulate GHG emissions from mobile and stationary sources, and cannot be faulted for moving ahead with regulations governing vehicle emissions and new source performance standards for various categories of industrial facilities. So long as GHGs are pollutants under the Clean Air Act, this is what the EPA must do. If Congressional leaders don't like this, their only option is to amend the Act.

While the EPA must regulate GHGs under existing law, this does not excuse the agency's approach. The "Tailoring Rule" in particular, which begins to take effect this week, is one of the most outrageous and audacious efforts by an agency to rewrite statutory requirements for political purposes. Unwilling to bear the political consequences of enforcing the relevant Clean Air Act provisions as written, and imposing GHG emission controls on over one million industrial, commercial, and even residential facilities, the EPA has claimed it is necessary to revise express numerical emission thresholds written into the Clean Air Act. Though the agency appeals to doctrines of absurd results and administrative necessity to justify this move, there is no precedent for such a stark revision of clear statutory text. The "Tailoring Rule" as written is utterly lawless, and it should only be a matter of time before a court so rules.

The EPA is correct that applying the Clean Air Act as written would produce a regulatory and administrative nightmare, but this does not excuse rewriting the law, particularly after the Supreme Court explicitly rejected claims that the Clean Air Act could not be sensibly applied to GHGs. In Massachusetts v. EPA the Bush Administration and others argued that the Act was unworkable as applied to GHGs, but the Court's majority was not convinced. As a consequence, the EPA is stuck applying a statute written for local and regional air pollution to GHGs.

If applying the Act, as written, to GHGs makes no sense, it is up to Congress to fix it. If the emission thresholds for stationary sources are too broad, only Congress can narrow them. And if it would make more sense to reduce emissions through an economy-wide cap-and-trade system or (even better) a revenue-neutral carbon tax, this too is a step only Congress can take. The new Congressional leadership has shown itself able to complain about costly EPA GHG regulation. In the coming years we'll see whether they're willing to do anything about it.

(These comments were submitted by Conrad Schneider, Advocacy Director for the Clean Air Task Force)

On January 2, 2011, something amazing happened, or more accurately, didn’t happen. Despite the direst predictions of climate deniers and regulatory naysayers, the sky didn’t fall, or even begin to fall. Because on that day, the U.S. Environmental Protection Agency started to roll out long-awaited Clean Air Act regulations that will eventually require major stationary greenhouse gas emitters like power plants, oil refineries and industrial facilities, to reduce their emissions. As a result, our country, and our atmosphere, will be better off, not worse.

We have long known that coal-fired power plants are the largest source of a host of environmental ills, and according to a recent Clean Air Task Force study (http://www.catf.us/resources/publications/view/138), the cause of 13,000 deaths annually from cardiovascular and respiratory diseases. They are also the source of 40% of U.S. carbon emissions, the largest industrial source of smog emissions, and produce enough coal ash annually to fill the Grand Canyon. But since coal-fired power plants are also the largest source of electric power in this country, and there is widespread recognition that coal is not going away any time soon, phased-in regulatory action is now the most effective way to keep the lights on, as well as to protect us from the worst effects of global climate change.

Public opinion polls show consistent support for EPA action in cleaning up power plant pollution, including CO2 pollution. So in the absence of federal legislation setting an economy-wide cap on greenhouse gas emissions in the near future, EPA has no choice but to act on its mandate to protect this country’s environment from a vast diversity of pollutants, including greenhouse gas emissions, by intelligent, economically-astute regulation.

Under the Clean Air Act and other environmental laws, EPA is required to issue regulations cutting SO2, NOx, toxic chemicals such as mercury, coal ash waste, and CO2 from coal-fired power plants. Right now, EPA is in the process -- dictated by court order -- of issuing regulations on the first four and last week, in settlement of litigation, announced its intention to propose performance standards on CO2 for new and existing power plants by July 2011, with final rules by May 2012.

The new proposed carbon performance standards should ensure that no new coal plants are built in the U.S. without greenhouse gas emissions controls, and that the existing coal fleet is gradually modernized to significantly reduce all of its harmful emissions. Setting performance standards for fossil fuel plants will provide a clear road map for America's clean energy future, leveling the economic playing field between clean energy sources and giving electric utility companies the certainty they need to make sound decisions that can help avoid sunk investment in incremental clean up technologies. Done right, the EPA power plant regulations will drive billions of dollars of investment in new, clean energy technology and the clean up of existing power plants, which will help create tens of thousands of new jobs. But if the new regulations call for weak performance standards, not only will we fail to drive sufficient CO2 reductions, but we will also risk overinvestment in old, out-of-date plants.

At the same time, the federal government must partner with private industry in this process, as the most logical pathway to cleaning up GHG emissions from stationary sources will be the development of a robust carbon capture and storage (CCS) industry. CCS demonstration projects already exist in North Dakota, the North Sea and Algeria while new projects have been proposed in the US, China, and Europe. We must significantly ramp up these efforts, in order to accelerate the move from demonstration projects to a supply of technology vendors that offer cost-effective commercial options.

But the process cannot stop at coal. As utilities look increasingly at natural gas as a “cleaner,” more cost-effective energy source, new source performance standards should be set tightly enough to not only require capture and sequestration of GHG emissions from coal, but also from natural gas emissions. Otherwise we will never achieve the reductions necessary to stabilize our global climate.

So as we enter the New Year, instead of Chicken Little hand-wringing, we can take hope in the realization that finally, this country is taking bold action to begin to ratchet down the sources of global climate change. These gains won’t come without enormous battles, but no matter what, the sky will still be there next year, and the year after that, and may be a little bit cleaner every year.

In his weekly radio and Internet address Saturday, President Obama said “my resolution for the coming year” is “to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class.” President Obama has made a wise resolution. The Environmental Protection Agency should now act to support his commitment.

Unfortunately, at a time when the national unemployment rate remains nearly 10 percent – and tragically higher in some areas and among some groups – EPA is rolling out new regulations this week on greenhouse gas emissions in the United States that will work against President Obama’s stated top priorities of job creation and economic recovery.

The EPA regulations, which the agency claims are justified by the Clean Air Act, will destroy millions of American jobs, increase our reliance on imported products, decrease U.S. exports, raise energy costs for American families and businesses, and strike a terrible blow at our economy as it struggles to recover from a devastating recession.

Incredibly, these far-reaching regulations that would have such a profound effect on every American have never been authorized by Congress. Cap-and-trade proposals to cut greenhouse gas emissions passed the House but never even came to a vote in the Senate last year. And all sides acknowledge that the 112th Congress elected by the American people in November will not support legislation to limit greenhouse gas emissions in these tough economic times.

An argument might be made in favor of economically punishing greenhouse gas regulations if they actually did something to improve our environment. Unfortunately, the regulations EPA is implementing do not, and would actually cause greater environmental harm than benefit.

This is because, as photos from spacecraft so dramatically illustrate, the Earth has a common atmosphere that pays no heed to national boundaries. By reducing job-creating activity in the United States to cut greenhouse gas emissions in our nation, the EPA regulations will simply send that activity and those jobs abroad. As a result, foreign manufacturing facilities will prosper, take the jobs of American workers, and send more greenhouse gases into the atmosphere we all share.

Forcing Americans to import more products from abroad will actually increase greenhouse gas emissions as these products are shipped long distances.

Significantly, India, China and other growing economies that have taken millions of American jobs in recent years and dramatically increased exports to the United States are not imposing the type of greenhouse gas restrictions on themselves that EPA is imposing on the American economy. As a result, the international playing field among manufacturers will become less level, and American manufacturers will have an even harder time competing.

According to the U.S. Bureau of Labor Statistics, manufacturing employment in the United States has taken a nosedive from 19.6 million jobs in June 1979 to less than 12 million jobs today. That’s the lowest number of manufacturing jobs in this country since 1941, when our nation’s population was far smaller. EPA’s new regulations will drive those numbers even lower.

Our manufacturing base has already eroded so badly that the consulting firm IHS Global Insight has forecast that China will replace the United States as the nation with the largest manufacturing output in the world this year – a position the U.S. has held since the 1890s.

In addition to creating economic pain and worsening unemployment in our country, increasing America’s reliance on imports also weakens our national security.

The bottom line is that exporting American industries, jobs, cash and prosperity to other nations – and then importing greenhouse gases and manufactured goods from those countries – makes no sense. It’s the wrong action at the wrong time, as our nation struggles to recover from high unemployment and a devastating recession.

The National Petrochemical & Refiners Association will join with others to urge Congress to vote to stop EPA from implementing these greenhouse gas regulations, which were never contemplated by members of Congress who passed the Clean Air Act. We trust that our elected representatives will listen to American voters, who showed in November that they oppose job-destroying regulations and favor a return to American economic strength and international competitiveness.

We also are continuing our efforts in the courts to oppose the tailoring rule on greenhouse gas emissions and other EPA actions that we believe are unlawful and would set a dangerous precedent of giving federal agencies the ability to go around Congress to change our nation in ways not supported by the elected representatives of the American people.

(These comments were submitted by Frank O’Donnell, president of Clean Air Watch)

I don’t know whether to laugh or cry at the hyperbolic claims made by industry pitchmen and their congressional friends about the alleged damage to the economy from EPA’s climate-related enforcement of the Clean Air Act.

A “power grab,” warns Rep. Fred Upton (R-MI) and Tim Phillips, president of the astro-turf Americans For Prosperity, as if they were describing Lenin’s bloody takeover of Russia. http://online.wsj.com/article/SB10001424052748703929404576022070069905318.html

A “permitorium,” screams the editorial page of the Wall Street Journal, which on December 23 took the bizarrely anti-capitalist line of denouncing clean energy companies for that horror of horrors—trying to make a profit! (Note to my former boss, Journal owner Rupert Murdoch: start minding the store, mate. After all, it was Murdoch who declared that "Climate change poses clear, catastrophic threat.") http://mediamatters.org/research/201001220027

The alleged threat cited by these corporate Chicken Littles: EPA, consistent with a Supreme Court ruling, will now require the biggest industrial sources of climate emissions to obtain a permit when breaking ground on a major new project or upgrading an old facilility in ways that would boost emissions. Even worse, EPA has distributed guidelines that would urge states (other than Texas, which appears en route to seceeding from the Union) to require improved energy efficiency for affected facilities. Corporate planners, take heed: improved energy efficiency means you’ll spend less over time to operate the plant. Eventually, EPA will craft additional guidelines for electric power plants and refineries.

Will these extremely modest steps by the EPA actually harm the economy by preventing companies from building or upgrading their facilities? Not according to the association which represents state and local clean air regulators—the folks who actually issue the permits. These agencies note they will be open for business, and ready to move expeditiously on permits.

http://www.4cleanair.org/Documents/NACAAGHGSIPCallletterssummaryfinal.pdf

Indeed, many state agencies are urging Congress to permit EPA and the states to do their jobs. http://www.nescaum.org/

Are they right, or is the sky actually about to fall?

Although author Gore Vidal has described our nation as the “United States of Amnesia,” history perhaps can serve as a guide in this matter.

Literally 30 years ago, similar gloom-and-doom claims from sections of corporate America could be heard on virtually the same issue. In that case, it involved clean air permits for big companies that spewed “conventional” air pollutants such as sulfur dioxide, but the industry whining was identical to that of today.

One of the leading whiners of that era, interestingly, was the Procter & Gamble Company, otherwise perhaps best known for inventing daytime soap operas such as Another World, The Edge of Darkness, and As the World Turns so it could peddle Pampers and Charmin. According to the Procter & Gamble argument, EPA and state agencies were responsible for massive permit delays which threatened the business. And so, to make the world safe for Pampers and the daytime soaps,P&G and fellow companies urged Congress to weaken the Clean Air Act and rein in the regulators.

The companies enlisted allies not only among congressional recipients of campaign contributions, but the head of EPA itself – Reagan appointee Anne Gorsuch, who, following the lead of Reagan budget director David Stockman, urged Congress not only to weaken the law but to gut her own agency. (If you wants details of this history lesson, I urge you to read the book A Season of Spoils, written by my old friend Jonathan Lash, who now heads the World Resources Institute.)

http://www.amazon.com/Season-Spoils-Reagan-Administrations-Environment/dp/0394721462

I was a young reporter in that era and got to know some of the EPA professionals who came under virtual siege by their own management. Despite risking his job, one courageous EPA staffer leaked to me a very detailed analysis of all the alleged clean air permit delays that had been cited by industry lobbyists.

The Reagan political leaders had kept this report under wraps because it demolished their argument. It showed conclusively that the relatively few permit delays weren’t caused by regulator laziness or ineptitute, but because of bungling within corporate bureaucracies.

As the facts became known, Congress stood down. Brave leaders such as Rep. Henry Waxman (D-CA) and the late Senator Robert Stafford (R-VT) repelled the Visigoths. And somehow corporate America went on to survive and prosper even as the air got cleaner.

Most of the old soap operas are gone, but you can still squeeze the Charmin. (Procter & Gamble does remain part of a corporate alliance that whines about EPA permit requirements. The lobbyists need something to do, after all. http://www.nedacap.org/ )

So take all the hyperbole with a large grain. We’ve seen it before and know it for what it really is—and Charmin can help.

Nothing good can come from the proposed greenhouse gas rules. They are based on a flawed, politically correct, Supreme Court decision and a tailoring rule and endangerment finding that are inconsistent with the clear intent of the Clean Air Act. As such, the regulations, and unfortunately EPA, fail the test of legitimacy. The only winners will be lawyers who will find an unending number of reasons to litigate.

EPA claims the steps it is and planning to take are modest common sense ones. No one should seriously believe that. The Obama EPA has shown that it is pursuing an extreme environmental agenda and using unrealistic assumptions to justify its actions. Claims about common sense simply do not square with its approach to post 2016 CAFE standards or the proposed boiler and NAAQ’s regulations which would throw virtually the entire nation into non-attainment, cost well over $100 billion, and lead to more not less unemployment. EPA is pursuing a course that will result in a widespread moratorium in permitting new construction and investment.

If the goal is to accelerate the turnover of old coal fired power plants, there are more efficient and cost-effective ways of achieving that. EPA could either rehabilitate the CAIR rule or support 3P legislation that has bi-partisan support in the Senate. Either approach would accelerate the transition from older coal fired units to new natural gas power generation. If President Obama is serious about promoting greater use of natural gas, he would not be supporting EPA actions that will make that more difficult. How will natural gas meet the as yet defined BACT requirement?

It is doubtful that many, if any, states are prepared to move ahead with a smooth implementation of the rules that go in effect on January 2. The timeline that will have to be followed will almost certainly cause permitting to grind to a halt and the cost of implementing any permits granted to sour. New investment and jobs that come with it will be chilled.

Even if these “first steps” could be justified, which they can’t, this is the wrong time and the wrong way to bring about reductions in greenhouse gas emissions. The Administration’s first priority should be economic growth and job growth and adopting the “first do no harm” philosophy in pursuing it. These regulations are the antithesis of that approach. Since reducing greenhouse gases involves the suppression of fossil energy use, which is directly related to job creation and growth, EPA in effect is driving economic policy.

The net effect of these new regulations will be very large costs and an imperceptible impact on global emissions. Since the onset of the recession, emissions have fallen about 5 percent but the price of achieving that reduction is unacceptable. This should have taught EPA a lesson about cause and effect. It hasn’t and the White House seems not to care.

The history of regulation, litigation, and settlement agreements shows that EPA’s approach will be a slippery slope. Whatever EPA does will lead to wasteful litigation and uncertainty with environmental activists suing for broader coverage and tighter standards. Unless the regulations are tossed out by the Courts, EPA will settle and the choke hold on the economy will get tighter, if history is any guide.

History also shows that technology forcing regulations rarely achieve their objectives and when they do the cost is higher than necessary. So called “green technologies” will come from private sector innovation in meeting consumer needs and realistic regulatory objectives; not from top-down mandates.