E2 Law Blog

Is Cap And Trade Now Really Most Sincerely Dead?

Reed Rubinstein — Thu, 22 Jul 2010 14:19:21 -0500

Is cap and trade now really, most sincerely dead? Well, Politico is reporting "Senate Democrats pulled the plug on climate legislation Thursday, pushing the issue off into an uncertain future ahead of midterm elections where President Barack Obama’s party is girding for a drubbing."

However, even if cap and trade is truly dead and buried this time, the fact is that much more aggressive CO2 regulations are on the way. Expect EPA to accelerate its rule-making binge and give free rein to green ideologues, both in and outside of the agency. Also, the "energy bill" promised by Reid likely will contain billions in subsidies and pay-outs to a variety of favored industries and players. We expect to see a draft of the bill next week, and will analyze its terms, and the winners and losers, then.

CEIL "Green Procurement" Website Is Launched!

Reed Rubinstein — Thu, 22 Jul 2010 08:14:49 -0500

The Center for Environmental Innovation and Leadership (CEIL), has launched a new on-line community. CEIL aims to connect government and military professionals with providers of green goods and services, all to promote compliance with Executive Order 13514, and the website looks like it will be a useful portal for those seeking government contracts. Additionally, CEIL is presenting a "GovGreen Conference & Expo" here in Washington, DC November 9-10, 2010. Registration opens late July. Check it out.

Re: Climate Change, Should Government Just Chill Out?

Reed Rubinstein — Wed, 21 Jul 2010 07:47:48 -0500

Stanford University physicist and Nobel Prize Winner Robert Laughlin suggests that the best thing governments can do about climate change is to simply chill out. In an article titled "What The Earth Knows" appearing in the Summer 2010 issue of The American Scholar, Prof. Laughlin says “Common sense tells us that damaging a thing as old as [Earth] is somewhat easier to imagine than it is to accomplish – like invading Russia.” He notes “The geologic record suggests that climate ought not to concern us too much when we gaze into the future, not because it’s unimportant but because it’s beyond our power to control.” He recommends instead directing our focus and our money toward more traditional and much less glamorous conservation efforts - habitat preservation, for example.

The policy implications of Laughlin's argument are substantial and obvious. If Laughlin is right about the science - and his reasoning is grounded in very basic and well-accepted geology -then the entire basis for EPA's claim of right to regulate CO2 emissions falls away. At a minimum, Laughlin's argument suggests that those in Congress and EPA who rely on anthropogenic climate change as the justification for “remaking” our economy and imposing strict government regulation over consumption, production and transportation via cap and trade allowances, CO2 permits, and so forth, really ought to take a step back and slow down.

Developing Public Policy to Address Rising Sea Level.

Reed Rubinstein — Tue, 20 Jul 2010 10:48:14 -0500

From David Mandelbaum of GT Philadelphia.

The Delaware Department of Natural Resources and Environmental Control has announced that it is developing a Statewide Adaptation Plan for Sea Level Rise. Ultimately, this effort should affect coastal construction standards, beach protection and nourishment, and similar matters. It may point the way to some areas of public, or P3, infrastructure investment, as well as new regulatory controls on private projects. Put simply, you may not want to be owning or contemplating now a structure sea-ward of where the coastal storm hazard will be in 2030 or 2040, at least according to DNREC Secretary Colin O'Mara's comments on NPR. There is a somewhat parallel effort underway in Maryland, and a pertinent summary of what the Adaptation and Response Working Group is thinking posted here. Other coastal states are not focused on "adaptation" -- that is, coping with sea level rise and other climate change effects -- but instead seem to be pursuing mitigation -- that is, trying to avoid climate effects.

EPA Faces A New Raft Of New Data Quality Act Petitions Thanks To - GT?

Reed Rubinstein — Thu, 15 Jul 2010 14:28:33 -0500

The ever-useful Inside EPA reports, in a story titled "EPA Petitioned To Defend Data Underlying Key Regulatory Decisions" (subscription required), that numerous associations, businesses, and environmental advocacy groups have filed numerous petitions under the Data Quality Act (aka the "Information Quality Act") for correction of information disseminated by EPA and other administrative agencies in the wake of a recent D.C. Circuit case titled Prime Time v. Vilsack. [Full disclosure - I was Prime Time's counsel and argued the case before the Court of Appeals] The DQA directs the Office of Management and Budget (OMB) to issue government-wide guidelines that "provide policy and procedural guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated by Federal agencies". Essentially, OMB mandates that agencies show their work, and base their statements, directives, and information on good, methodologically sound science and statistics. The guidelines may be found here.

Contrary to the arguments made by both the Bush and Obama Administrations, Prime Time strongly suggests that agency actions (or lack thereof) are judicially reviewable. Opponents of the DQA, argue, as the Justice Department did in Prime Time, that a decision by the Fourth Circuit in a case titled Salt Institute v. Leavitt means the DQA creates no judicially enforceable rights. [More full disclosure - I was also Salt Institute's counsel.] The Fourth Circuit, however, ignored the DQA's plain language requiring agencies establish administrative mechanisms allowing "affected persons to seek and obtain correction of information maintained and disseminated by the agency that does not comply with the law." By contrast, the D.C. Circuit gave effect to the DQA's plain language and thus refused to cite or adopt the Fourth Circuit's ruling.

On its face, judicial review of agency action on DQA petitions would seem to be very a very positive and useful thing, because it forces administrative agencies to take care and be sure their information and actions are based on sound, transparent, and defensible science and not politically skewed agendas. Yet, those who favor activist agencies and extensive regulations are typically not DQA fans. Some have even argued that information quality requirements are the "nemesis" of regulation. This is hard to understand, for one would think that a law aimed at ensuring agencies get it right would garner support across the ideological divide, particularly with the federal government regulating so extensively. But there it is.

How Badly Have Climate Scientists Damaged Clean Energy Prospects?

Reed Rubinstein — Thu, 15 Jul 2010 10:49:19 -0500

Pretty badly, based on this piece by Clive Cook in The Atlantic on the fallout from the "investigations" of Climategate. He says:

By way of preamble, let me remind you where I stand on climate change. I think climate science points to a risk that the world needs to take seriously. I think energy policy should be intelligently directed towards mitigating this risk. I am for a carbon tax. I also believe that the Climategate emails revealed, to an extent that surprised even me (and I am difficult to surprise), an ethos of suffocating groupthink and intellectual corruption. The scandal attracted enormous attention in the US, and support for a new energy policy has fallen. In sum, the scientists concerned brought their own discipline into disrepute, and set back the prospects for a better energy policy.

I had hoped, not very confidently, that the various Climategate inquiries would be severe. This would have been a first step towards restoring confidence in the scientific consensus. But no, the reports make things worse. At best they are mealy-mouthed apologies; at worst they are patently incompetent and even wilfully (sic) wrong. The climate-science establishment, of which these inquiries have chosen to make themselves a part, seems entirely incapable of understanding, let alone repairing, the harm it has done to its own cause.

Read Cook's entire piece. Also, go here for the emails at the center of the controversy.

Are You Making The Most Of DOE Loan And Grant Opportunities?

Reed Rubinstein — Wed, 14 Jul 2010 14:39:52 -0500

DOE is handing out billions in grants and loan guarantees. And, as you might expect, there have been some bumps along the way. The watchdog GAO reports: "DOE's [loan guarantee program] has treated applicants inconsistently, favoring some and disadvantaging others."

So how is it that some companies are favored and others not? Well, take the case of Solyndra. According to Jim McTague in Barron's, Solyndra has already been awarded $535 million in taxpayer-backed federal loan guarantees. Its application for another $469 million in loan guarantees is pending. Solyndra "was supposed to be the cornerstone of Obama's vaunted green-energy future, but now is a king-size political embarrassment....[it] last month cancelled (sic) a $300 million initial public offering because auditor PricewaterhouseCoooper said its operating losses and negative cash flow raise doubts about its ability to continue as a going concern." However, according to David Freddoso in the Washington Examiner, "Solyndra has hired people that people in Washington listen to, spending $140,000 on lobbyists in just the first quarter of this year....The company's issues: the stimulus, the second stimulus, an energy subsidy bill and the cap-and-trade bill." Thus the funding flows.

To be clear, the DOE is no worse, and arguably much better, than most other Federal and State government agencies with respect to the distribution of loan guarantees and grant funds. And, Solyndra does bring new solar panel technology to the table. Even so, the McTague and Freddoso articles (and you should read both in their entirety) usefully demonstrate what corporate executives and their advisors must do to compete effectively for taxpayer dollars.

Cap And Trade Is Alive!

Reed Rubinstein — Wed, 14 Jul 2010 08:41:10 -0500

The always-useful Politico nails the Democrat plan for cap and trade legislation though Harry Reid won't use that term. Look for the Bill to have four sections: (1) oil spill response; (2) a clean-energy and job-creation title based on work done in the Senate Energy and Natural Resources Committee; (3) a tax package from the Senate Finance Committee; and (4) a section that deals with greenhouse gas emissions from the electric utility industry. Sections 1 and 2 seem to have bi-partisan support in concept and should pass (though more spending is somewhat problematic politically, given deficit concerns). Sections 3 and 4 may be jettisoned at the end of the day to assure passage of 1 and 2. Still, the Bill is being written and deals are being cut now.

We will post the Bill and analyze winners and losers as soon as the text is out.

Is it Safe to Be Cautious About Marcellus Shale Development?

Reed Rubinstein — Mon, 12 Jul 2010 13:26:59 -0500

David Mandelbaum of GT's Philadelphia office is a thoughtful and provocative commentator. His first in a planned monthly series of environmental law columns for The Legal Intelligencer and Pennsylvania Law Weekly © appeared on July 6, and is titled "Drill, Baby, Drill?" (See 33 Pa. L. Weekly 655.) In his column, David raises questions we've explored on this Blog in some depth: Is going slow or imposing a moratorium for new energy resources like unconventional natural gas actually a good idea? Does application of the "precautionary principle" make sense when the existing energy infrastructure relying primarily on coal and oil may be less sustainable environmentally or geopolitically? His answers might surprise you. Read the column here.

Risk Perceptions And Environmental Policy

Reed Rubinstein — Mon, 12 Jul 2010 13:08:43 -0500

The literature on the relationship between risk perceptions and environmental policy is extensive - exhaustive, even. See this, or this, or this. But here is the best analysis of risk perceptions and policy outcomes I've ever seen - and its from the Onion. With climate change and TSCA reform on the legislative agenda, and EPA issuing rafts of new regulations, the use of risk to justify governmental action is an issue of major significance. Check out the video.

EPA Messes With Texas.

Reed Rubinstein — Fri, 02 Jul 2010 14:25:10 -0500

From K.B. Battaglini, GT Houston.

The EPA, alleging that Texas' 16-year-old pollution permitting program does not comply with the Federal Clean Air Act, has issued a Final Rule "disapproving revisions to the SIP...that relate to the State's Flexible Permits Program." The program, which permits companies to combine emissions from multiple sources under a single facility cap instead of imposing specific emissions limits for each individual polluting source, supposedly damages "public health and the environment by allowing companies to avoid clean air requirements." The disapproval of the flexible permits program affects the existing permits of 125 or more industrial facilities in Texas. In turn, Texas has sued the EPA, asking the Fifth Circuit Court of Appeals to review the EPA's action.

The Texas Commission on Environmental Quality, the state regulatory authority, says its program not only complies with the Clean Air Act, but that it also has contributed to improved air quality in Texas. On June 16, the TCEQ had submitted proposed revisions to its flexible permitting program in an attempt to work with the federal government. According to TCEQ Chairman Bryan Shaw, the proposed revisions were not considered by the EPA in issuing the Final Rule. Texas Governor Rick Perry blasted the action, calling it "irresponsible and heavy-handed." Perry, believing that the EPA is blinded by an activist agenda, vowed to continue to fight "this federal takeover of a successful state program."

The Moratorium Mantra Reaches Texas.

Reed Rubinstein — Wed, 30 Jun 2010 06:22:04 -0500

Thanks to K.B. Battaglini of GT Houston for this post.

What with Interior Secretary Ken Salazar seeking to re-impose an unpopular moratorium on deep water drilling, and with New York and Pennsylvania experimenting with various moratoria to quell drilling in the Marcellus Shale, Texas State Representative Lon Burnam (Democrat, Fort Worth) has gotten into the act by calling for a moratorium on new natural gas drilling in the Barnett Shale due to allegedly high benzene levels from existing gas production. Burnam, a minority member of the Texas House Committee on Environmental Regulation, asserts in an editorial in the Fort Worth Star Telegram that "fugitive emissions" of benzene at compressor stations exceed the exposure limits recommended by the Agency for Toxic Substances and Disease Registry. However, the exposure cited by Burnam does not result from drilling but from compression, and Burnam does not address how a drilling moratorium is intended to address the compression issue.

Bryan Shaw, Chairman of the Texas Commission on Environmental Quality, who holds a Ph.D. in agricultural engineering and is an associate professor in the Biological and Agricultural Engineering Department at Texas A&M University, says the benzene levels pose no immediate health risk, because health problems would arise only after exposure for 24 hours a day for 70 years.

Burnam's proposed moratorium is an outgrowth of election-year politics in Texas, as the race for Governor pits incumbent Rick Perry (a Republican and proponent of drilling in the Barnett Shale) against Bill White (a Democrat and proponent of tough action against individual producers who violate pollution control standards).

Disgruntled Bureaucrats Say No Permit For You!

Reed Rubinstein — Tue, 29 Jun 2010 10:32:59 -0500

One of the most significant obstacles to deployment of clean energy in the U.S. is opposition litigation filed by “environmentalists.” For example, a support group for disgruntled government bureaucrats called “Public Employees for Environmental Responsibility” (PEER) has filed suit against the federal agencies that, after nine years of review, granted permits for a 130-turbine wind farm proposed for Nantucket Sound. The suit, filed in U.S. District Court for the District of Columbia, alleges violations of the Endangered Species Act, the Migratory Bird Treaty Act, and NEPA.

This perverse case demonstrates that the federal permit and review process is horribly broken. To begin with, nine years of government review is a prima facie disgrace. And, allowing lawsuits, whether by disgruntled “public employees” in all of their arrogance and disregard for the taxpayers (check out the PEER website - first you'll laugh, then you'll cry), or by anyone else, to delay an approved clean energy facility is irrational and indefensible. If Congress is serious about promoting clean energy, then it must make permit reform a top priority.

Robert Bryce On US Energy Policy.

Reed Rubinstein — Fri, 18 Jun 2010 08:35:04 -0500

Robert Bryce, a senior fellow at the Manhattan Institute, lays out a cogent "reality-based" analysis of US energy needs and policy in his new book, "Power Hungry." This book is not a simple-minded, ideological rant. On the one hand, Bryce opposes mountain top coal mining due to its ecological impact. But, on the other hand, he is honest enough to recognize the policy implications of the fact that just one coal mine in Kentucky produces the equivalent of 75% of the energy produced by all wind and solar sources in the U.S. combined.

Bryce says that energy policy must be based upon four imperatives: "power density, energy density, cost and scale." Wind and solar power fail due to storage problems and weather. He points out that Denmark, the poster child for renewable energy, nevertheless imports hydroelectric power from Norway and Sweden, relies heavily upon North Sea oil and coal, and increased its greenhouse gas emissions by 2.1 percent between 1990 and 2006. Given the environmental cost of hydro-power ("ruining habitats for aquatic life"), oil spills, and coal mining, Bryce makes a strong case for heavier reliance upon natural gas, a relatively clean and readily available carbon fuel, as a bridge technology: "The smartest, most forward-looking U.S. energy policy can be summed up in one acronym: 'N2N'," for "natural gas to nuclear power."

The Democrat leadership in the Congress, which is figuring out where to go with energy legislation, would be well-advised to give Bryce's prescription careful consideration.

Greenberg Traurig and Intertox Present Report on Nanotechnology, Health and the Environment

Reed Rubinstein — Fri, 11 Jun 2010 17:37:15 -0500

From our press release:

The beneficial effects of nanotechnology innovation on human health and the environment are the focus of a comprehensive report to be presented at the Nano Science and Technology Institute’s Nanotech Conference and Expo 2010 in Anaheim, CA, June 21-24, 2010....Nanotechnology may substantially improve the quality of both human life and the natural environment, according to the authors of the report: Chinh H. Pham, Chair of Greenberg Traurig’s Nanotechnology Practice; Reed D. Rubinstein, Shareholder in the Environmental and Administrative Law Practice at Greenberg Traurig in Washington, D.C.; Dr. Richard C. Pleus, Managing Director of Intertox; and Lynn Foster, CEO of BPT Pharmaceuticals, who was previously at Greenberg Traurig. The EHS risks of nanotechnology require additional study. However, initial indications are that these risks are generally remote, speculative, and manageable, according to the report. It is now available for download at Nanotechnology - Greenberg Traurig, LLP.

This is a good report. Go read it.

Murkowski Resolution To Stop EPA Fails On Party-Line Vote

Reed Rubinstein — Thu, 10 Jun 2010 16:14:33 -0500

The Senate has voted 47-53 to reject a resolution introduced by Sen. Lisa Murkowski (S.J. Res. 26) to block EPA regulation of greenhouse gases. Every Senate Republican, and six Democrats, supported the Resolution, which would have effectively killed EPA's efforts to promulgate and implement its new GHG regulations. The Obama Administration, supported by environmentalists and business who stand to profit from carbon trading and carbon controls, lobbied hard to defeat the Resolution to preserve EPA's power and support its aggressive regulatory agenda and to increase the pressure on Congress to pass a cap and trade bill.

You should expect to see the following: (1) The EPA's aggressive regulations will be a major campaign issue during the upcoming Congressional elections. The opponents' ad message may likely be "unelected bureaucrats are killing jobs and crippling the economy without improving the environment". (2) More pressure from the Administration on one or two wavering Republicans to break a potential filibuster and thus to pass cap and trade. The message will be cap and trade, plus the other incentives in Kerry-Lieberman, are the last best chance "to save the economy from EPA."

Fox or Hedgehog - Stewart Brand And Ecopragmatism.

Reed Rubinstein — Wed, 09 Jun 2010 07:50:47 -0500

Stewart Brand is one of the founders and intellectual leading lights of modern environmentalism. In October 2009, he published a book titled Whole Earth Discipline: An Ecopragmatist Manifesto. To the shock and dismay of some long-time allies, it turns out that forty years in the environmental policy business have led Brand to favor nuclear power and oppose using the Precautionary Principle to make government policy. As Peter Huber puts it in a thoughtful City Journal review:

The man who founded and then edited the Whole Earth Catalog for 16 years—a magazine guided by “biological understanding” and enamored with the planet-saving power of organic farming, solar, wind, insulation, bicycles, and handmade houses—now concludes: “Cities are Green. Nuclear energy is Green. Genetic engineering is Green.”

Huber's essay begins with Brand's admission that anti-nuclear greens are responsible for massive CO2 emission increases over the past forty years.

“One of the greatest dangers the world faces is the possibility that a vocal minority of antinuclear activists could prevent phase-out of coal emissions,” Brand writes, quoting Hansen. It’s an indubitable historical fact that the developed world was poised to break free from a carbon-centered energy economy 30 years ago. Greens locked us back into it. By demonizing nukes so effectively, they boosted U.S. coal consumption by about 400 million tons per year. We would instantly cut our coal consumption in half if we could simply conjure back into existence the 100-plus nuclear plants that were in the pipeline three decades ago. If global warming is a problem, Brand and his ex-friends own it [and] Brand admits it.

Huber then highlights Brand's assault on the Precautionary Principle, described by Huber as a "sliver of vacuous pedantry." Huber writes:

[According to Brand], “evidence of harm disappeared as a precautionary principle trigger, and science was explicitly devalued.” The Old Greens followed the science only when its predictions fit with a narrative of “decay,” “decline,” and “disaster.” This was a “formula for paralysis.” The New Brand supports the “freedom to try things,” subject to “ceaseless, fine-grained monitoring.”

Brand's deep commitment to environmental protection has not waivered, but it seems he is, when all is said and done, an empiricist. Thus:

It all comes down to how people think. Adopting Isaiah Berlin’s familiar taxonomy, Brand explains that Old Greens are intellectual “hedgehogs”—they start with a grand theory and then shore it up with mounds of factoids dredged up to reinforce what they already believe. “Foxes, on the other hand, are skeptical about grand theories, diffident in their forecasts, and ready to adjust their ideas based on actual events. Hedgehogs don’t notice or care when they’re wrong. Foxes learn. Hedgehogs are great proponents, but foxes are invariably better forecasters and policy makers.”

One can only hope, as Congress and EPA take up climate change/energy policy and TSCA reform, and issue an unprecedented raft of environmental regulations, that Brand's foxes prevail over the hedgehogs.

Cross-Examining Climate Science.

Reed Rubinstein — Tue, 08 Jun 2010 08:16:47 -0500

A “cross-examination” of global warming science conducted by Jason Scott Johnston, Professor and Director of the Program on Law, Environment and Economy at the University of Pennsylvania Law School concludes that virtually every claim advanced by global warming proponents fail to stand up to scrutiny. He summarizes his findings as follows:

Insofar as establishment climate science has glossed over and minimized such fundamental questions and uncertainties in climate science, it has created widespread misimpressions that have serious consequences for optimal policy design. Such misimpressions uniformly tend to support the case for rapid and costly decarbonization of the American economy, yet they characterize the work of even the most rigorous legal scholars. A more balanced and nuanced view of the existing state of climate science supports much more gradual and easily reversible policies regarding greenhouse gas emission reduction, and also urges a redirection in public funding of climate science away from the continued subsidization of refinements of computer models and toward increased spending on the development of standardized observational datasets against which existing climate models can be tested.

The full report is here. Expect Johnston’s analysis to resurface in the litigation against the EPA’s endangerment determination and to be used to counter the narrative behind the Kerry-Lieberman/Waxman-Markey legislative initiatives.

EPA On The Marcellus Shale.

Reed Rubinstein — Thu, 03 Jun 2010 15:15:46 -0500

This report sheds light on EPA's current thinking regarding the environmental risks associated with natural gas extraction in the Marcellus Shale, described by EPA as "the most expansive shale gas play in the U.S." EPA's primary concerns seem to be disposal of the wastewater from hydraulic fracturing used to extract natural gas and disposal of potentially radioactive waste generated during the extraction process. According to EPA, "shales contain naturally occurring radioactive material (NORM)...The Marcellus Shale is considered to have elevated levels of NORM."

Waxman-Markey/American Power Act Cap And Trade - All Pain And No Gain?

Reed Rubinstein — Wed, 02 Jun 2010 08:36:25 -0500

The justification for cap and trade, centerpiece of both Waxman-Markey and the American Power Act, is that placing a price on carbon emissions makes solar, wind, and other sources of alternative energy cost-competitive with fossil fuels. However, as James Kanter of the New York Times reports, the EU's experience with carbon trading suggests that carbon must be priced at approximately $76 per ton to make alternative energy economically viable. He writes:

Each permit, representing a ton of carbon, currently costs around $19, but most experts agree that permits need to cost around four times as much to make them cost-effective enough to build cleaner systems, like offshore wind farms and solar power plants.

To minimize economic dislocation, Waxman-Markey prices carbon emissions using a "soft collar" of $28 per ton going to 60% above three-year-average market price. The American Power Act prices carbon emissions using a “hard” collar between $12 and $25 per ton, floor increases at 3%+CPI, ceiling at 5%+CPI, plus permit reserve auctions. Yet, if Kanter's reporting is correct, then neither Bill prices carbon anywhere near the level needed to make solar and wind cost-competitive. The result? The worst of both worlds, it seems. Big economic pain without any environmental gain.