Solyndra's Failure & Impacts On Alternative Energy Futures

Sep 14: The House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing on "Solyndra and the DOE Loan Guarantee Program" as part of its seven month investigation into DOE's $535 million stimulus loan guarantee to the now-bankrupt solar company involved in the manufacturing of cylindrical, thin-film, solar cells. Last year, Solyndra was recognized by the Massachusetts Institute of Technology's Technology Review as one of the "50 Most Innovative Companies in the World" and included by the Wall Street Journal in its review "The Next Big Thing: Top 50 Venture Backed Companies."

 

    The hearing included testimony from: Jeffrey Zients, Deputy Director, Office of Management and Budget; and Jonathan Silver, Executive Director, Loans Programs Office, U.S. Department of Energy. Solyndra President and CEO Brian Harrison and Senior Vice President and CFO W.G. Stover, Jr. were invited to testify but did not appear; however, counsels for Harrison and Stover assured the panel that both Solyndra executives will appear voluntarily to testify before the Oversight Subcommittee the week of September 19.

    Solyndra was awarded the first stimulus DOE loan in the spring of 2009 and has been widely promoted as a stimulus jobs "success story" ever since; with President Obama visiting the plant in May 2010. Solyndra announced its bankruptcy on August 31, 2011, and was the subject of an FBI raid on September 8, 2011. House Republicans indicated in a release indicated that, "Despite partisan roadblocks and repeated pushback, protest, and misleading claims on Solyndra's viability by administration officials, company executives, and Congressional Democrats, the Energy and Commerce Committee has continued investigating the highly publicized loan guarantee."

    Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) issued the following statement ahead of the hearing saying, "Solyndra was the hallmark of the President's green jobs program and widely promoted by the administration as a stimulus success story, right up until its bankruptcy and FBI raid. We had a sense Solyndra was a bad bet from the beginning and its failure raises significant red flags for the entire loan guarantee program. It is not the role of government to pick winners and losers in the market. With taxpayers potentially on the hook for this half-billion dollar bust, it's time to sound the alarm about the remaining $10 billion in loan guarantees set to expire September 30. Let's learn the lessons of Solyndra before another dollar goes out the door." 

    In an opening statement at the hearing, Chairman Upton said, "We started looking into the DOE Loan Guarantee program and Solyndra's deal in February. Some questioned the basis for this investigation. After four months of wrangling with the Obama Administration to produce relevant documents, the Committee was forced to issue a subpoena to OMB. I think Solyndra's recent

bankruptcy filing and last week's FBI raid clearly show that the Committee was more than justified in its scrutiny of this deal. Pursuant to our oversight functions, we have an important responsibility to pursue answers regarding the use of the taxpayer's money.

 

    "Our investigation raises several questions about whether the Administration did everything it could to protect taxpayer dollars. Why did the Administration think Solyndra was such a good bet? Why did the Administration push ahead with restructuring the Solyndra guarantee this year, when some in the government voiced serious concerns about the commercial viability of the company? Why did DOE and OMB allow the government to be subordinated to the private investors, in apparent violation of the law?. . .

 

    "Was Solyndra just one bad bet by an Administration rushing to claim credit for the first loan guarantee, or is it the tip of the iceberg? DOE has closed over $8 billion in loan guarantees to other "green tech" companies, and it has about $10 billion left to spend in the next few weeks, before the September 30 deadline. If the administration was so wrong about Solyndra after nine months of due diligence, how can it possibly exercise the proper controls when doling out $10 billion dollars in a matter of weeks?. . ."

 

    Representative Henry Waxman (D-CA), Ranking Member of the full Committee issued an opening statement saying, "Taxpayers have over $500 million at risk as a result of Solyndra's bankruptcy. We need to understand what happened, who should be held accountable, and how we avoid future losses. We also need to ask whether Solyndra misled federal officials. In July, the company's CEO met with me in my office. He assured me the company was in a strong financial condition and in no danger of failing. In fact, he said the company was going to double its revenues in 2011. I have a hard time reconciling those representations with the company's decision to file for bankruptcy one month later. Committee staff have now reviewed thousands of pages of internal documents from the Department of Energy and the Office of Management and Budget. They raise a number of questions.

 

    "The documents show that under both the Bush Administration and the Obama Administration, DOE officials strongly backed Solyndra. They believed its silicon-free solar panels offered cost savings and its tubular shape reduced installation costs. And they thought the internal reviews they conducted and the external studies they commissioned showed Solyndra could compete successfully in the global marketplace. . ."

 

    Rep. Waxman indicated in his statement that by late 2010, both DOE and OMB knew Solyndra was facing difficulty meeting its loan obligations. This triggered a vigorous internal debate about what the government should do to protect the taxpayer. DOE projected that an immediate liquidation would return less than 20 cents on the dollar to the government, so it favored restructuring because of the potential for recovering more of the taxpayer's investment. Some OMB officials, though, warned against restructuring on the grounds that it might not be enough to avoid bankruptcy and default.

 

    Aside from the factual and legal matters of the Solyndra issue which appear to have bipartisan concerns, Rep. Waxman highlighted the policy considerations and differences between Republican and Democratic positions. He said, "I disagree vehemently, however, with the policy conclusion my Republicans colleagues have already drawn. They say the collapse of Solyndra shows the folly of federal investments in solar and other clean energy technologies. And they argue the government should not pick 'winners' and 'losers' in the energy marketplace. This sounds superficially appealing, but there is a fundamental flaw in their logic. The majority of Republicans on this Committee deny that climate change is real. If you are a science denier, there is no reason for government to invest in clean energy. . ."

 

    OMB testified, "With respect to the Solyndra loan guarantee, OMB's approval of DOE's proposed credit subsidy cost was conducted in August and September of 2009. . . it is my understanding that OMB's review of the cost estimate was informed by the terms and conditions of the loan guarantee agreement, a credit rating report from an independent credit rating agency, additional independent reports on the engineering aspects of and market conditions surrounding Solyndra's proposal, and a proposed credit subsidy cash flow analysis by DOE. . .

 

    "In February 2011, DOE undertook a restructuring of Solyndra's debt in light of acute financial troubles the company was experiencing. . . OMB determined that DOE's analysis was reasonable, and reflected the information as it was understood at that time. . . Since then, a challenging global solar market has continued to affect a number of solar manufacturers, including Solyndra. The company's recent announcement that it was suspending operations and filing for bankruptcy. . . will limit the Government's recovery of funds loaned to the company. . . Congress designed the Title XVII loan guarantee program to fund innovative clean energy projects that might not otherwise receive the necessary capital for deployment. The program envisions that while some of these projects might not succeed, others will contribute to the United States' ability to achieve its clean energy goals. . ."

 

    DOE testified that "Solyndra submitted its initial application in 2006, and much of the extensive due diligence on the transaction was conducted between 2006 and the end of 2008. By late 2008, Solyndra was considered by those involved in the DOE loan programs to be the project most advanced in the due diligence process, and the likely recipient of the program's first loan guarantee. . . After the Obama Administration took office, the loan programs' staff, and their advisors, continued their comprehensive review of the transaction and, in March 2009, on the exact timeline that had been developed during the Bush Administration, the program issued Solyndra a conditional commitment for a $535 million loan guarantee."

 

    DOE said that, "Unfortunately, changes in the solar market have only accelerated in 2011, since the restructuring -- making it much more difficult for the company to compete. Chinese companies have flooded the market with inexpensive panels, and Europe — currently the largest customer base for solar panels -- has suffered from an economic crisis that has significantly reduced demand and forced cuts in subsidies for solar deployment that were important to Solyndra's business model. The result has been a further and unprecedented 42% drop in solar cell prices in the first eight months of 2011. . . Without DOE's agreement to restructure Solyndra's loan, the company likely would have faced bankruptcy much earlier -- in December 2010. . ."

 

    DOE summed up saying, "While we are all disappointed in the outcome, securing America's leadership in this vital new industry requires that we support innovation and deployment. Solyndra's situation should not overshadow the great work that the Department's loan programs have done to date, or the need to continue to find ways to support clean energy in this country. .  . developing a robust clean energy manufacturing sector in the United States is crucial to our long-term national interests, and we need to ensure that American companies and workers are given the tools they need to succeed in this competitive space. . . This isn't picking 'winners' and 'losers' -- it is helping ensure that we have winners here at all. We invented this technology, and we should produce it here."

    Access the prehearing statement from House Republicans (click here). Access Republican hearing website for a background memos, a slide show, opening statements from Reps. Upton & Stearns and the witness testimony (click here). Access a Republican Committee collection of news reports on the Solynda issue (click here). Access Democrat hearing website for an opening statement from Rep. Waxman, videos and the witness testimony (click here). [#Energy/Solar]

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Republican Back Lash Growing To Obama's American Jobs Act

Sep 13: As President Obama traveled to Columbus, OH to push for his $447 billion American Jobs Act [See WIMS 9/9/11] and urged Congress to pass the Act with "No Games. No Politics. No Delays."; Republican opposition to the proposal seems to be building.

    At a press conference with Republican leaders, House Speaker John Boehner (R-OH) warned against using "permanent tax increases…to pay for temporary spending," as President Obama has proposed. Speaker Boehner said, "The House is going to continue to work to create a better environment for economic development and job growth in our country. We're going to consider legislation this week that would stop the government from telling companies where and where they cannot locate. And we'll also have the Congressional Budget Office looking at the President's proposal as we prepare for hearings in the House on his proposal. 

 

    "As a former small businessman myself, I can tell you that we've got a little different approach to creating jobs than our friends across the aisle. When you look at what we saw in the President's pay-fors yesterday, we see permanent tax increases put into effect in order to pay for temporary spending. I just don't think that's going to help our economy the way it could. And the fact is, is that having talked to thousands of people over the August recess, and thousands of employers over the same recess, what the American employers want is they want some certainty about what's happening in Washington, certainty about what the tax rates [are] going to be, certainty about what their health care costs and commitments are going to be and certainty about the regulatory onslaught that they're under. These are the kind of things that I think need to be addressed if we're going to create the kind of environment where employers will feel comfortable in adding more employees to their company."

 

    On the Senate side, Minority Leader Mitch McConnell (R-KY) said, ""Last week, President Obama came up to Capitol Hill to unveil a stimulus bill he's calling a jobs plan; and yesterday, the White House explained how they'd like to pay for it. The first thing to say about this plan is that it's now obvious why the President left out the specifics last week. Not only does it reveal the political nature of this bill, it also reinforces the growing perception that this administration isn't all that interested in economic policies that will actually work. But none of this is really news. Over the past few days, press reports have made it perfectly clear that this legislation is more of a reelection plan than a jobs plan. It's an open secret which Democrats all over Washington have been acknowledging to reporters since the moment the President unveiled it. . .

 

    "But the specifics we got yesterday only reinforce the impression that this was largely a political exercise. For one, they undermine the President's claim that it's a bipartisan proposal — because much of what he's proposing has already been rejected on a bipartisan basis. The half-trillion dollar tax hike the White House proposed yesterday will not only face a tough road in Congress among Republicans, but from Democrats too. . . The President can call this bill whatever he wants. But in reality, all he's really doing is just proposing a hodge-podge of retread ideas aimed at convincing people that a temporary fix is really permanent and that it will create permanent jobs. And then daring Republicans to vote against it. . ."

 

    Access the release from Speaker Boehner (click here). Access the statement from Senator McConnell (click here). Access information from the White House on the American Jobs Act including state by state impacts (click here). [#All]

 

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Different Views On What NRC Yucca Mountain Vote Means

Sep 9: House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Environment and the Economy Subcommittee Chairman John Shimkus (R-IL) issued a response to the Nuclear Regulatory Commission's (NRC's) final vote on the Atomic Safety Licensing Board's (ASLB) ruling that Department of Energy may not withdraw its application for the Yucca Mountain nuclear repository. The House leaders said, "The commission announced a tie vote of 2-2, therefore the ASLB's legal decision is not overturned and the DOE's motion to withdraw the application is not granted." However, the tie vote effectively ends the review of the proposed Yucca Mountain nuclear waste repository, consistent with the strategy of the Obama Administration and the wishes of the Senate Majority Leader.

 

    According to the NRC staff requirements memorandum (SRM) regarding the matter, SECY-10-0102 – U.S. Department of Energy (High-Level Waste Repository), Review of LBP-10-11, Docket No. 63-001-HLW, "The Commission approved a Memorandum and Order on the question whether the Commission should review, and reverse or uphold, the Construction Authorization Board's decision denying the Department of Energy's motion to withdraw its construction authorization application. The Memorandum and Order states that the Commission was evenly divided on whether to take the affirmative action of overturning or upholding the Board's decision and directs the Board to complete all necessary and appropriate case management activities, including disposal of all matters pending before it, by the end of the fiscal year. Commissioner Apostolakis did not participate in this matter. (Subsequently, on September 9, 2011, the Secretary signed the Memorandum and Order.)"

 

     The House members said, "While the application is still legally pending, the Commission instructed the Board to "complete all necessary and appropriate case management activities" and document the history of the adjudicatory proceeding by the end of the fiscal year. Upton and Shimkus indicated that effective October 1, this places the license application review in a state of suspended animation awaiting a funding decision by Congress and President Obama. They said, "Today's action means the Yucca Mountain license application remains alive. The full House of Representatives voted this summer 297-130 on a strong bipartisan basis to increase funding for both DOE and NRC to process the license application. We expect the Senate and the President to put politics aside and cooperate with the full House so that license review may proceed, ensuring the billions of taxpayer dollars and nearly three decades of research is not wasted. Justice delayed is justice denied. It is critical we get America's nuclear future back on track and move forward with Yucca Mountain."

 

    Senator Majority Leader Harry Reid (D-NV) also issued a statement on the NRC action, which he said "directs the commission's licensing board [ASLB) to, by the end of this month, close and complete all necessary and appropriate case management activities, including disposal of all matters pending before it and comprehensively documenting the full history of the Yucca Mountain proceeding."

 

    Senator Reid said, "Today's decision by the NRC brings the Yucca Mountain saga closer to its final conclusion.  I am pleased that the commission is ready to wrap up all work on Yucca licensing by the end of this month. Congress has zeroed out funding for Yucca, the Administration has completely shut down the project, and there is a Blue Ribbon Commission [BRC] of venerable scientific, industry, environmental and policy experts working on a safer, more secure and realistic management strategy for nuclear waste.  Our nation is clearly prepared to move on and finally solve the nuclear waste problem. The Commission's long deliberation on this matter reflects the challenges our country faces in safely and securely managing nuclear waste without running roughshod over a single state or community. For 25 years, I have worked to stop the Yucca Mountain project. I look forward to using that experience to work with my colleagues in finally developing a plan to safely and securely manage nuclear waste in a way that protects Nevadans and all Americans from the most dangerous substance known to man."

 

    Christopher Guith, VP of the U.S. Chamber of Commerce's Energy Institute indicated in a blog post, "The rumors of Yucca Mountain's demise are greatly exaggerated. Now that the Nuclear Regulatory Commission has rightfully agreed the Department of Energy did not and does not have the authority to withdraw the application for Yucca mountain, it is clear the court system is the next stop on Yucca's long and expensive journey. While it is a further waste of taxpayer funds for DOE to defend its decision to ignore its legal obligation in court, I am confident that our judicial system will ultimately require DOE to actually follow the law.  I am also certain that the NRC's decision to close out work on the license application will be challenged in court and in Congress. After America's taxpayers and ratepayers have invested more than $20 billion in this project, it's naive and premature to conclude Yucca Mountain is dead."

 

    Access the release from Reps. Upton and Shimkus (click here). Access the NRC SRM (click here). Access the CLI-11-07 Memorandum and Order (click here). Access the release from Senator Reid (click here). Access the Blue Ribbon Commission on America's Nuclear Future (BRC) for related information (click here). Access the Chamber blog post (click here). [#Haz/Nuclear]

 

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POTUS $447B American Jobs Act "The Right Thing To Do Right Now"

Sep 8: In an effort to bolster a near-recession economy and historic unemployment, President Obama laid the groundwork for what will either be a remarkable coming together of warring political parties; or, the permanent fracture that drives both sides further apart. Following the political circus of the debt ceiling debate, that has driven public approval ratings of Congress and the President to all time lows, the President announced his $447 billion American Jobs Act. The proposed package includes $245 billion in tax cuts; $140 billion in investments in infrastructure and local aid; and $62 billion in continued unemployment benefits.

 

    In sum, the plan includes tax cuts for small businesses and workers; investments in infrastructure and schools via a National Infrastructure Bank a new "Project Rebuild" program; assistance to keep teacher, cops and firefighters on the job; and, extension of unemployment insurance for 5 million workers and program reforms. And, importantly, the President promised that the initiative would be "fully paid for" via additional deficit reductions which he will detail in a submission to the Joint Select Committee on Deficit Reduction (Supercommittee) within the next 10 days.

 

    The President emphasized repeatedly the seriousness and urgency of what he called "the economic crisis that has left millions of our neighbors jobless, and a political crisis that's made things worse. . . The people of this country work hard to meet their responsibilities.  The question tonight is whether we'll meet ours. The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy. . ."

 

    He said, "I know there's been a lot of skepticism about whether the politics of the moment will allow us to pass this jobs plan -- or any jobs plan. Already, we're seeing the same old press releases and tweets flying back and forth. Already, the media has proclaimed that it's impossible to bridge our differences. And maybe some of you have decided that those differences are so great that we can only resolve them at the ballot box. But know this: The next election is 14 months away. And the people who sent us here -- the people who hired us to work for them -- they don't have the luxury of waiting 14 months.  (Applause.)  Some of them are living week to week, paycheck to paycheck, even day to day. They need help, and they need it now. . . Regardless of the arguments we've had in the past, regardless of the arguments we will have in the future, this plan is the right thing to do right now.  You should pass it."

 

    In a direct affront to much of the Republican's Job Plan [See WIMS 9/8/11], the President said, "Now, I realize that some of you have a different theory on how to grow the economy. Some of you sincerely believe that the only solution to our economic challenges is to simply cut most government spending and eliminate most government regulations. . .  Well, I agree that we can't afford wasteful spending, and I'll work with you, with Congress, to root it out. . . [and] We should have no more regulation than the health, safety and security of the American people require. Every rule should meet that common-sense test. 

    "But what we can't do -- what I will not do -- is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy. We shouldn't be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards.  America should be in a race to the top. And I believe we can win that race. In fact, this larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everybody's money, and let everyone write their own rules, and tell everyone they're on their own -- that's not who we are. That's not the story of America. . ."

    Again, the President vowed to encourage public support and pressure in support of his plan and said, "I intend to take that message to every corner of this country. And I ask -- I ask every American who agrees to lift your voice: Tell the people who are gathered here tonight that you want action now.  Tell Washington that doing nothing is not an option. Remind us that if we act as one nation and one people, we have it within our power to meet this challenge."

 

    As of early this morning, the White House has posted support comments on the President's plan from: Steve Case, Chairman & CEO of Revolution LLC, Chairman of the Startup America Partnership; Mark Gallogly Co-founder and Managing Principal, Centerbridge Partners; Randi Weingarten, President, American Federation of Teachers; Philadelphia Mayor Michael Nutter; Ken Chenault, Chairman and CEO, American Express; Jeff Immelt, Chairman and CEO, GE; Matthew Rose, Chairman and CEO, BNSF Railway; Richard D. Parsons, Chairman of Citigroup; Senators Harry Reid (D-NV), Kent Conrad (D-ND), Carl Levin (D-MI), and Daniel Inouye (D-HI); and Representatives Nancy Pelosi (D-CA) Xavier Becerra (D-CA), Frederica Wilson (D-FL). 

 

    Republican support for the President's plan appears in question. Even before the President's speech, Senate Minority Leader Mitch McConnell (R-KY) issued a release saying, ". . .in a two-party system like ours, it shouldn't be surprising that there would be two very different points of view about how to solve this particular crisis. What is surprising is the President's apparent determination to apply the same government-driven policies that have already been tried and failed. The definition of insanity, as Albert Einstein once famously put it, is to do the same thing over and over again and expect a different result. Frankly, I can't think of a better description of anyone who thinks the solution to this problem is another Stimulus. The first Stimulus didn't do it. Why would another one?. . . This isn't a jobs plan. It's a re-election plan. That's why Republicans will continue to press for policies that empower job creators, not Washington. . ." Senator McConnell did not issue a release following the speech.

 

    House Speaker John Boehner (R-OH) issued a statement after President Obama's address and said, "American families and small businesses are hurting, and they are looking for the White House and Congress to seek common ground and work together to help get our economy back on track. Republicans have laid out a blueprint for economic growth and job creation -- our Plan for America's Job Creators -- that focuses on one thing: removing government barriers to private-sector job growth. The proposals the President outlined tonight merit consideration. We hope he gives serious consideration to our ideas as well. It's my hope that we can work together to end the uncertainty facing families and small businesses, and create a better environment for long-term economic growth and private-sector job creation."

 

    House Majority Leader Eric Cantor (R-VA) and author of much of the Republican Jobs Plan issued a series of statements. Rep. Cantor said in part, "We are very focused on making sure that we can do something to provide incentives for small business people to get back in the game of job creation. That is what last night's speech was about. We have a plan to do that. I was glad to hear the Vice President say they are willing to compromise, because last night the President said it is an all or nothing proposal here for us to pick up and pass his bill. I can say there are a lot of things, whether it's the trade agreements, whether it's tax relief for small business people, whether it's the reform of unemployment compensation, that are in our plan as well. We could very easily take these items, put them across the floor, and I believe pass them. Hopefully we can work together and create an environment for jobs. . . on the need for infrastructure spending, we believe that states have monies right now, but Washington has tied up their ability to use those monies. We want to straighten out the system of how money is spent before we start spending more. We don't support the idea of creating a Fannie and Freddie for roads and bridges in an infrastructure bank. We believe that you can facilitate a better flow of funds to construction projects by fixing the current system."

 

    The President said he will ask the 12-member Super Committee, [See WIMS 8/10/11] that is required to report legislation by November 23, 2011, to reduce the deficit by another $1.5 trillion over 10 years to add the cost of the American Jobs Act to their considerations. He said he is willing to consider modest adjustments to health care programs like Medicare and Medicaid, and reforming the tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share. He will details his proposals soon. A separate, September 9, White House communication from David Plouffe, Senior Advisor to the President indicated the Act would be "fully paid for by closing corporate tax loopholes and by asking the wealthiest Americans to pay their fair share."

 

    The Supercommittee is just now getting underway and includes the following 12 members. Senate Democrats: Patty Murray (D-WA, Co-Chair), Max Baucus (D-MT), and John Kerry (D-MA). Senate Republicans: Jon Kyl (R-AZ); Pat Toomey (R-PA), and Rob Portman (R-OH). House Republicans: Jeb Hensarling (R-TX, Co-Chair); Dave Camp (R-MI); and Fred Upton (R-MI). House Democrats: James Clyburn (D-SC); Democratic Caucus Vice Chair Xavier Becerra (D-CA) and Budget Committee Ranking Member Chris Van Hollen (D-MD).

 

    Access the full text of the President's speech and link to an enhanced video that includes charts, graphs and summary information (click here). Access an overview fact sheet from the White House (click here). Access a additional fact sheet on the American Jobs Act (click here). Access another 3-page summary of the Act (click here). Access links to various supporting comments on the White House website (click here). Access extensive follow-up on the Jobs Act including support and schedule of activities on the White House Blog (click here). Access a release from Senator McConnell (click here). Access a release from Speaker Boehner (click here). Access a series of statements from Rep. Cantor (click here). [#All]

House GOP & Romney Job Plans In Advance Of The President

Sep 8: As the country prepares to hear the President's job's plan this evening it's important to review the House Republican jobs plan that was detailed further on August 29, in a memo to House Republicans from House Majority Leader Eric Cantor (R-VA). Representative Cantor indicated, ". . .we released The House Republican Plan for America's Job Creators earlier this year. While the debt crisis has demanded much of our attention, our new majority has passed over a dozen pro-growth measures to address the equally troubling jobs crisis, such as the Energy Tax Prevention Act and the Putting the Gulf of Mexico Back to Work Act. Aside from repeal of the 1099 reporting requirement in ObamaCare, however, each House Republican jobs bill now sits dormant in the Democrat-controlled Senate.

 

    The Cantor memo indicates, "By pursuing a steady repeal of job-destroying regulations, we can help lift the cloud of uncertainty hanging over small and large employers alike, empowering them to hire more workers. Our regulatory relief agenda will include repeal of specific regulations, as well as fundamental and structural reform of the rule-making system through legislation like the REINS Act, the Regulatory Flexibility Improvements Act, and reform of the Administrative Procedures Act (all three bills are expected on the floor in late November and early December)." The memo provides a listing of "the 10 most harmful job-destroying regulations" as well as a "selective calendar for their repeal." Among the 10 regulations targeted, 7 are environmentally related. The following is excerpted from the Cantor memo regarding the environmental regulations including:

• Utility MACT and CSAPR (Week of September 19): "The Administration's new maximum achievable control technology (MACT) standards and cross-state air pollution rule (CSAPR) for utility plants will affect electricity prices for nearly all American consumers. In total, 1,000 power plants are expected to be affected. The result for middle class Americans? Annual electricity bill increases in many parts of the country of anywhere from 12 to 24 percent. H.R. 2401, the Transparency in Regulatory Analysis of Impacts on the Nation (TRAIN) Act, sponsored by Rep. John Sullivan (OK), would require a cumulative economic analysis for specific EPA rules, and specifically delay the final date for both the utility MACT and CSAPR rules until the full impact of the Obama Administration's regulatory agenda has been studied."
• Boiler MACT (Week of October 3): "From hospitals to factories to colleges, thousands of major American employers use boilers that will be impacted by the EPA's new 'boiler MACT' rules. These new stringent rules will impose billions of dollars in capital and compliance costs, increase the cost of many goods and services, and put over 200,000 jobs at risk. The American forest and paper industry, for example, will see an additional burden of at least $5-7 billion. H.R. 2250, the EPA Regulatory Relief Act, sponsored by Rep. Morgan Griffith (VA), would provide a legislative stay of four interrelated rules issued by the EPA in March of this year. The legislation would also provide the EPA with at least 15 months to re-propose and finalize new, achievable rules that do not destroy jobs, and provide employers with an extended compliance period."
• Cement MACT (Week of October 3): "The 'cement MACT' and two related rules are expected to affect approximately 100 cement plants in America, setting exceedingly stringent requirements that will be cost-prohibitive or technically infeasible to achieve. Increased costs and regulatory uncertainty for the American cement industry—the foundation of nearly all infrastructure projects—are likely to offshore thousands of American jobs. Ragland, Alabama, for example, recently saw the suspension of a $350 million cement production facility, putting 1,500 construction jobs on hold and additional permanent and high-paying plant operation jobs in limbo. H.R. 2681, the Cement Sector Regulatory Relief Act, sponsored by Rep. John Sullivan (OK), would provide a legislative stay of these three rules and provide EPA with at least 15 months to re-propose and finalize new, achievable rules that do not destroy jobs, and provide employers with an extended compliance period."
• Coal Ash (October/November): "These anti-infrastructure regulations, commonly referred to as the "coal ash" rules, will cost hundreds of billions of dollars, affecting everything from concrete production to building products like wall board. The result is an estimated loss of well over 100,000 jobs. H.R. 2273, the Coals Residuals Reuse and Management Act, sponsored by Rep. David McKinley (WV), would create an enforceable minimum standard for the regulation of coal ash by the states, allowing their use in a safe manner that protects jobs."
• Ozone Rule (Winter): This effective ban or restriction on construction and industrial growth for much of America is possibly the most harmful of all the currently anticipated Obama Administration regulations. Consequences would reach far across the U.S. economy, resulting in an estimated cost of $1 trillion or more over a decade and millions of jobs. Unlike her predecessors, EPA Administrator Lisa Jackson is pushing for a premature readjustment of the current ozone standards, dramatically increasing the number of "nonattainment" areas. The new readjustment rule is expected early this fall and I expect the Energy and Commerce Committee to act swiftly to prevent its implementation, in order to protect American jobs." [Note: On September 2, President Obama announced his decision to delay changes to the ground-level ozone standards until the regular review scheduled for 2013, See WIMS 9/6/11].
• Farm Dust (Winter): "The EPA is expected to issue revised standards for particulate matter (PM) in the near future. Any downward revision to PM standards will significantly impact economic growth and jobs for businesses and people throughout rural America that create dust, like the farmer in Atkinson, Illinois, who raised his concerns with the President at a town hall earlier this month. While the President may have sent him on a bureaucratic wild goose chase, the House will act promptly on H.R. 1633, the Farm Dust Regulation Prevention Act, sponsored by Rep. Kristi Noem (SD). H.R. 1633 would protect American farmers and jobs by establishing a one year prohibition against revising any national ambient air quality standard applicable to coarse PM and limiting federal regulation of dust where it is already regulated under state and local laws."
• Greenhouse Gas (Winter): "The EPA's upcoming greenhouse gas new source performance standards (NSPS) will affect new and existing oil, natural gas, and coal-fired power plants, as well as oil refineries, nationwide. While the impact on the economy and jobs are likely to be severe, the rules are quickly moving forward, once again revealing the Administration's disregard for the consequences of their policies on our jobs crisis. Again, I expect Chairman Upton and the Energy and Commerce Committee to move swiftly in the coming months to protect American jobs and consumers."

    Meanwhile, on September 6, Republican Presidential candidate Mitt Romney released his detailed 160-page book titled "Believe in America: Mitt Romney's Plan for Jobs and Economic Growth," which includes more than fifty policy proposals across seven different areas: Taxes, Regulation, Trade, Energy, Labor, Human Capital, and Fiscal Policy. Romney's plan is the first detailed plan to be released by the various Republican Presidential candidates. According to a release from Romney, the specific proposals include fundamental tax reform, a significant overhaul of the Federal regulatory system, innovative new approaches for opening foreign markets to American exports and for confronting China over its unfair trade practices, an aggressive commitment to developing America's energy resources, and a dramatically reduced role in the economy for the federal government.

 

    On September 6, House Speaker John Boehner (R-OH) and Majority Leader Cantor sent a letter to President Obama highlighting several House-passed jobs bills which they say "remain stalled in the Democrat-led Senate and outlining potential opportunities for Congress and the White House to work together this fall on jobs." In the letter the House Republican leaders indicate, "We understand that many in your party want to build on the $800 billion stimulus bill that you proposed (and the Democratic Congress passed) as the best method for improving the economy. As you know, we argued at the time that a large, deficit-financed, government spending bill was not the best way to improve our economic situation or create sustainable growth in employment. Given the current unemployment and deficit numbers, we believe our concerns have been validated. . .

 

    "Last week we also announced a legislative calendar for the fall with a heavy focus on repeal of excessive, job-destroying regulations and the pursuit of pro-growth tax relief.  . . Our hope is that both parties can work together in the coming weeks to reduce excessive regulation that is hampering job growth in our country. To facilitate such efforts, we hope that prior to your address to a Joint Session, you will disclose the cost estimates for the remaining 212 new regulatory actions planned by your administration. . ."

 

    Tonight at 7:00 PM EDT, President Obama will lay out his plan for creating American jobs and growing our economy in a speech before a special joint session of Congress. Senior Advisor David Plouffe recorded a short video to preview the speech and highlighted some key points (see the link below). Immediately following the President's speech, the White House will offer a live panel where policy experts from the White House will answer questions.

 

    Access the Cantor memo (click here). Access legislative details for H.R.2401 (click here). Access legislative details for H.R.2250 (click here). Access legislative details for H.R.2681 (click here). Access legislative details for H.R.2273 (click here). Access legislative details for H.R.1633 (click here). Access a 1-page summary of the House Republican jobs plan (click here). Access the complete 10-page House Republican jobs plan (click here). Access the Republican JobsBill legislative progress tracker (click here). Access a release from the Romney campaign and link to the complete plan (click here). Access the lengthy letter from House GOP leaders to the President (click here). Access the Plouffe video preview of the President's speech (click here). Access more information on the White House follow-up Q&A to the President's speech (click here). [#All]

 

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State Department Releases Final EIS On Keystone XL Pipeline Project

Aug 26: At a press teleconference briefing the U.S. Department of State (DOS), Assistant Secretary Dr. Kerri-Ann Jones of the Bureau of Oceans and International Environmental and Scientific Affairs discuss the proposed Keystone XL project Final Environmental Impact Statement and details on the upcoming public meetings. In an announcement, DOS indicated that the final EIS does not represent a decision on TransCanada's permit application to build the 1,700-mile oil pipeline from Alberta, Canada to the Gulf Coast. Rather, the final EIS is an environmental and safety analysis of the proposed project, developed to inform the decision. The data in the EIS will be used along with additional input to determine whether the Keystone XL project is in the national interest.

    DOS explained that it will now begin a 90-day consultation period with eight cooperating Federal agencies before making a decision on the Presidential Permit. During late September and early October, the Department also will host a series of nine public meetings around the United States to give individuals an opportunity to voice their views on whether granting or denying a Presidential Permit for the pipeline would be in the national interest. The Department will also be accepting public comments now through midnight on October 9, 2011. The meeting schedule includes meetings in: Port Arthur, TX; Glendive, MT; Lincoln, NE; Austin, TX; Pierre, SD; Midwest City, OK; and a final meeting in Washington, DC, on Friday October 7, 2011.

    At the press briefing, Dr. Jones said the final environmental impact statement "thoroughly examines and assesses the potential environmental impacts of this proposed project." She said, "I have been looking at the press, and I have noticed that some are touting that this statement is a victory and some are touting that it's a loss. And I would like to clarify at the beginning that these characterizations are wrong because we have -- this is not a decision document. This is a document that presents the analytical and the data information that we have regarding the environmental impacts. The process that was used to produce this impact statement looked to technical expertise across the U.S. Government and to engineering and technical experts outside of the U.S. Government, as well as extensive public feedback. We have listened to the comments received during this process and we have addressed the key issues raised in the final statement that we put out today."

    In response to a question regarding states' rights and for example: "could the state of Nebraska make a determination that the route needs to change or that the pipeline can't go through the state, or has that window passed?" Dr. Jones responded, "There are roles for the states in a lot of these different questions, but right now I'm really unable to comment on the specifics for what each of the states' actions may or may not do. I mean, the states – that's in the states' court to decide about that. And their future actions, I really can't comment on that."

    One question requested that in "plain English describe how you would characterize, as a result of this FEIS, what the potential environmental impact would be of this pipeline. . . if you had to say how extensive or not extensive you think you think the environmental impact of the construction and operation of this pipeline would be, it would be helpful to just get your characterization of that." Dr. Jones responded, "The FEIS does have a summary of findings, and what that summary states is that there would be no significant impacts to most resources along the proposed pipeline corridor. However, with that statement there are a lot of follow-on descriptions as to steps that the applicant is required to take and has agreed to take in terms of complying with all applicable laws and regulations, following some of the special conditions that I've already alluded to, and also following up on many of the other mitigation actions that they have agreed to. . . "

    Another question asked, ". . .the refining industry in the U.S. has said repeatedly, including those refiners in the Gulf Coast, that they're doing very well, they're making a lot of money exporting refined products overseas. And so I was wondering what assurances do we have that this – that this oil would be refined for products sold in the United States, and have you assessed how much of the tar sands crude would be used in the United States and how much of it might be exported?" Dr. Jones indicated, "What we have looked at is that certainly the refineries that would be receiving this oil do have the capacity and the demand to get this type of oil. . . DOE has also done a study -- a paper and a study that is in part of the FEIS that looks at the overall supply of crude oil and the market issues that you're raising and speaks to it. In addition . . . the broader kind of commercial energy security issue, and that's very much going to be dealt with in the national interest determination. So while there's some information in the FEIS regarding this. . . it will be further examined in the national interest determination."

    On the question of CO2 impacts, one question asked, "I just wanted to get clear exactly what you're saying about potential greenhouse gas and CO2 emissions increases as a result of the project going ahead." Dr. Jones responded, "Regarding the greenhouse gas emissions, I think there's a couple of different perspectives on that. One is the overall greenhouse gas emissions, sort of, life cycle from this type of crude oil. And the FEIS does say that this type of crude has a higher lifetime production of greenhouse gases relative to some others, but that really depends on what you're comparing it to. The other question is – I think you may be getting at is just in terms of whether or not this pipeline was built if the oil sands in Canada would be developed or not and how that may contribute to greenhouse gases. And we have – in the FEIS, there is a study that was commissioned by the Department of Energy to look at that issue, and the summary – that was the EnSys report, and the summary of that basically states that regardless of whether or not this pipeline would be built, there would be continued development of the oil sands, and there would be other methods for transporting that crude oil to refineries, and those would include such things as barges or tankers or rail."

    Regarding a question on routes and the Ogallalla Aquifer Dr. Jones said, "We analyzed a number of major alternative routes, I think about 14. Five of those in particular were looked at in order to avoid the Ogallalla Aquifer because we understand – we've had many comments about that. We are – recognize the importance of that. And we did analysis on those alternatives based on both the environmental conditions as well as some of the technical and economic considerations. And we've had a lot of feedback on that, and we feel that the proposed route of the applicant is the preferred route at this point, because there's – the environmental alternative seemed to all be rather worse or similar."

    American Petroleum Institute (API) issued a statement welcoming the DOS final EIS on the Keystone XL project and urged the agency to complete its national interest determination and issue permits for the pipeline without delay. API Refining Manager Cindy Schild said, "The nation's quintessential shovel-ready project is a step closer to reality. That's good news for tens of thousands of Americans who stand to find new jobs when this pipeline project is finally approved. If the State Department gives the final okay, hiring could begin immediately in hundreds of American companies in the Midwest and across the country. The President should support our biggest trading partner and number one importer of oil. More energy from a friendly ally makes sense. We need this critical project because more jobs and a move to secure energy equal a stronger economy."

    The timing of the release coincided with an ongoing civil disobedience campaign at the White House, where 275 peaceful protesters were arrested. In a release the Center for Biological Diversity (CBD) said, "From Alberta to the Gulf, tar-sands oil will hurt endangered species and sensitive habitats and have an inordinate impact on global climate change. Extraction of oil from tar sands generates from two to four times the amount of greenhouse gases as conventional oil production." Tierra Curry, a conservation biologist at CBD said, "The Keystone XL Pipeline is an environmental disaster in the making. The pipeline threatens the survival of at least 20 endangered species, risks contaminating the drinking water of millions of Americans, and spirals us further toward catastrophic climate change. It is outrageous that the final environmental impact statement was issued before U.S. Fish and Wildlife Service has had time to issue a biological opinion on the many impacts of the pipeline on endangered species -- a gaping hole that highlights the inadequacy of this hasty environmental impact statement."

    Nebraska's Republican Governor Dave Heineman sent a letter to President Obama and U.S. Secretary of State Hillary Clinton, urging the Federal government to deny the permit for the Keystone XL Pipeline. Governor Heineman said, "I want to emphasize that I am not opposed to pipelines. I am opposed to the proposed Keystone XL Pipeline route because it is directly over the Ogallala Aquifer." In his letter the Governor said, "Of the current proposed route, 254 miles of the pipeline would come through Nebraska and be situated directly over the Ogallala Aquifer. The aquifer provides water to farmers and ranchers of Nebraska to raise livestock and grow crops.  Nebraska has 92,685 registered, active irrigation wells supplying water to over 8.5 million acres of harvested cropland and pasture. Forty-six percent of the total cropland harvested during 2007 was irrigated. Maintaining and protecting Nebraska's water supply is very important to me and the residents of Nebraska.  This resource is the lifeblood of Nebraska's agriculture industry. Cash receipts from farm markets contribute over $17 billion to Nebraska's economy annually. I am concerned that the proposed pipeline will potentially have detrimental effects on this valuable natural resource and Nebraska's economy."

    On the question of groundwater contamination, the final EIS states, "DOS recognizes the public's concern for the Northern High Plains Aquifer System, which includes the Ogallala aquifer formation and the Sand Hills aquifer unit. The Northern High Plains Aquifer system supplies 78 percent of the public water supply and 83 percent of irrigation water in Nebraska and approximately 30 percent of water used in the U.S. for irrigation and agriculture. Of particular concern is the part of the aquifer which lies below the Sand Hills region. In that region, the aquifer is at or near the surface. DOS assessed the potential impacts of the proposed Project on many aquifer systems. The aquifer analysis included the identification of potable groundwater in water wells within 1 mile of the proposed centerline of the pipeline. More than 200 Public Water Supply wells, most of which are in Texas, are within 1 mile of the proposed centerline, and 40 private water wells are within 100 feet of the centerline. No sole-source aquifers, or aquifers serving as the principal source of drinking water for an area, are crossed by the proposed pipeline route."

 

    Access the lengthy full text of the press teleconference (click here). Access a DOS announcement and details on the meetings (click here). Access a fact sheet and map of the proposed pipeline (click here). Access a 27-page Executive Summary of the final EIS (click here). Access complete details and background from the DOS Keystone XL Pipeline Project website (click here). Access a comment form on the project website (click here). Access the statement from API (click here). Access the statement from CBD (click here). Access the release and letter from Gov. Heineman (click here). [*Energy/OilSands, *Energy/Pipeline]

 

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Obama Backs Away From New NAAQS Ozone Standard At This Time

Sep. 2: To applause from industry groups & Republicans and groans from environmentalist & Democrats, President Obama announced his decision on proposing an upgrade to the National Ambient Air Quality Standards (NAAQS) for ground-level ozone in advance of a regularly scheduled review in 2013. The President said, "Ultimately, I did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered."

 

    In a brief statement the President said, "Over the last two and half years, my administration, under the leadership of EPA Administrator Lisa Jackson, has taken some of the strongest actions since the enactment of the Clean Air Act four decades ago to protect our environment and the health of our families from air pollution. From reducing mercury and other toxic air pollution from outdated power plants to doubling the fuel efficiency of our cars and trucks, the historic steps we've taken will save tens of thousands of lives each year, remove over a billion tons of pollution from our air, and produce hundreds of billions of dollars in benefits for the American people.
 
    "At the same time, I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time. Work is already underway to update a 2006 review of the science that will result in the reconsideration of the ozone standard in 2013. . .  I want to be clear: my commitment and the commitment of my administration to protecting public health and the environment is unwavering. I will continue to stand with the hardworking men and women at the EPA as they strive every day to hold polluters accountable and protect our families from harmful pollution. And my administration will continue to vigorously oppose efforts to weaken EPA's authority under the Clean Air Act or dismantle the progress we have made."

 

    The official directive to U.S. EPA came in the form of a 2-page letter from OMB's Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein to EPA Administrator Lisa Jackson. Sunstein said the draft final rule, submitted to OMB on July 11, warrants reconsideration based on three related points. He cited: (1) "finalizing a new standard now is not mandatory and could produce needless uncertainty." (2) indicating that EPA's proposed rule is based on a 2006 scientific review, "work has already begun on a new and forthcoming scientific review, 'based on the best available science.'" (3) citing the recently finalized Cross-State Air Pollution Rule and other proposed rules [e.g. Utility Mact & Boiler MACT], "Cumulatively, these and other recently proposed and finalized rules count as truly historic achievements in protecting public health by decreasing air pollution levels, across the nation." The White House also released a summary by Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, summarizing the Obama Administration's actions "taken to reduce harmful air pollution while promoting the nation's economic growth and well-being." (see link below).

 

    EPA announced on July 26, that it would not meet its self-imposed July 29 deadline for releasing new NAAQS for ozone [See WIMS 7/26/11]. An Agency spokesperson said that although it would not issue the final rule on July 29th, which it had intended, it would be finalizing the standard shortly and it would be "based on the best science and meet the obligation established under the Clean Air Act to protect the health of the American people. In implementing this new standard, EPA will use the long-standing flexibility in the Clean Air Act to consider costs, jobs and the economy."

 

    EPA Administrator Jackson commented on the President's announcement and said, "Since day one, under President Obama's leadership, EPA has worked to ensure health protections for the American people, and has made tremendous progress to ensure that Clean Air Act standards protect all Americans by reducing our exposures to harmful air pollution like mercury, arsenic and carbon dioxide.  This Administration has put in place some of the most important standards and safeguards for clean air in U.S. history: the most significant reduction of sulfur dioxide and nitrogen oxide air pollution across state borders; a long-overdue proposal to finally cut mercury pollution from power plants; and the first-ever carbon pollution standards for cars and trucks.  We will revisit the ozone standard, in compliance with the Clean Air Act."

 

    On July 28, House Energy and Commerce Committee Chairman Fred Upton (R-MI), Energy and Power Subcommittee Chairman Ed Whitfield (R-KY), and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) pressed Jackson for more information concerning the Agency's "discretionary reconsideration of ambient air quality standards for ground-level ozone and its proposal to issue costly new standards." They said, "If finalized, these standards will impose unprecedented costs, ranging from $19 billion to $90 billion annually by your agency's own estimates, and result in new regulatory burdens for employers, businesses and already cash-strapped states and communities struggling to grow their local economies and create jobs. . ." [See WIMS 7/28/11].

 

    Environmental organizations argue that according to the Clean Air Act -- and reinforced by a 2001 Supreme Court decision in Whitman v. American Trucking Associations (Nos. 99-1257, 99-1426) -- ground-level ozone standards must be set solely according to the findings of EPA scientists and the EPA's Clean Air Scientific Advisory Committee, an independent panel of experts. According to the law, states and localities can take economics into consideration during the implementation process. As expressed recently by the Union of Concerned Scientists (UCS) [See WIMS 7/28/11], "The Obama administration promised in 2009 to revisit an unscientific Bush administration decision to define dangerous levels of ozone at 75 parts per billion. That decision, which was later challenged in court, disregarded public health scientists' finding in 2007 that only a standard of 60 to 70 parts per billion was scientifically justifiable. In 2010, the EPA issued a proposed rule in that range. However, a final rule with a specific numerical standard has been repeatedly delayed." [See WIMS 12/9/10]. 

 

    Following the announcement, the White House released a number of comment from state and local officials regarding the President's decision. Included in the comments were Michigan's Republican Governor Rick Snyder who said, "The President made the right decision to stop this move by the EPA. The present ozone standard was last reviewed a mere three years ago.  Michigan companies have worked hard to meet the standard, because we all support a healthy environment. It is important to balance environmental goals with the need for economic development, particularly as Michigan and the rest of the nation work to recover from the recession."

    Also included, Texas State Representative Garnet Coleman (D) said, "I want to thank President Obama and his administration for listening and working with state and local governments. Withdrawing the new standard allows an update of the science and the reconsideration of the ozone standard in 2013 while granting our state and local governments and businesses more regulatory certainty and flexibility. President Obama and his administration are strong partners with those of us on the state and local level of government in the fight for clean air and public health." 

    Senator Barbara Boxer (D-CA), Chairman of the Environment and Public Works (EPW) Committee, issued a statement saying, "I strongly believe that protecting air quality based on the science leads to more job growth because it brings so many positive health benefits to our workers. Although I am disappointed with this decision to delay action, I am heartened by the President's commitment to vigorously oppose any efforts to dismantle the Clean Air Act and the progress that we have made."

 

    Senator James Inhofe (R-OK), Ranking Member of the Senate EPW Committee said, "President Obama has finally pulled the plug on what would have been the most expensive EPA regulation in history. . .  I am pleased that today's announcement offers some good news for Oklahoma and the nation. . . Yet the ozone standard is just the beginning of the Obama EPA's regulatory 'train wreck' that is set to wreak havoc on our economy.  If the President is truly serious about reducing the regulatory burdens on our country, as he said today, he should immediately apply the brakes to this regulatory train and get on the right track to restoring the balance between environmental progress and economic growth."

 

    American Petroleum Institute (API) President and CEO Jack Gerard welcomed President Obama's decision and said, "The President's decision is good news for the economy and Americans looking for work.  EPA's proposal would have prevented the very job creation that President Obama has identified as his top priority. Ozone levels and air quality continue to improve under current regulations and our industry is committed to making the air we all breathe cleaner while creating new jobs. . ."

 

    U.S. Chamber of Commerce's President and CEO Thomas Donohue issued a statement saying, "The U.S. Chamber is glad the White House heeded our warning and withdrew these potentially disastrous – and completely voluntary – actions from the EPA. This an enormous victory for America's job creators, the right decision by the President, and one that will help reduce the uncertainty facing businesses. It's also a big first step in what needs to be a broader regulatory reform effort. If today's employment report reveals anything, it's that our economy is in neutral. Private sector studies predicted that the standards would have cost as many as 7.3 million American jobs by 2020. I'm pleased the administration recognizes that now is not the time to burden America's job creators with unwarranted regulations. . ."

 

    John Engler, president of Business Roundtable (BRT), an association of chief executive officers of leading U.S. companies said, "This is the number one regulatory priority for Business Roundtable member companies. Creating U.S. jobs and providing more economic certainty for all Americans, especially on the heels of today's news that the U.S. unemployment rate remains persistently high, is our greatest challenge. If President Obama's speech next week is as positive as this decision was today, it will be a success." Andrew Liveris, Chairman and CEO of The Dow Chemical Company and Vice Chair of BRT and Chair of BRT's Regulatory Reform Working Group said, "We applaud the president's decision to withdraw the ozone rule. This was the right decision and consistent with policy established in his executive order. It will have a direct and positive impact on the business community providing more certainty and will contribute to economic growth and job creation. We hope this sets the standard for future regulatory actions."

      

    Kieran Suckling, executive director of the Center for Biological Diversity (CBD) issued a statement saying, "This is a new low for President Obama. He sold out public health and environmental protection to appease polluters. Mr. Obama's shortsighted political decision will have long-term health consequences for millions of Americans. . ." Fred Krupp, President of Environmental Defense Fund (EDF) said, "This unfortunate decision puts millions of Americans, particularly children, at risk from industrial pollution. We're deeply disappointed that the administration has chosen to leave in place outdated standards that lag far behind what scientists have unanimously recommended."

 

    Natural Resources Defense Council (NRDC) President Frances Beinecke issued a statement saying, "The White House is siding with corporate polluters over the American people. The Clean Air Act clearly requires the Environmental Protection Agency to set protective standards against smog--based on science and the law. The White House now has polluted that process with politics. Our public officials, including in the White House, serve to protect us from harm. They need to get on with doing their jobs. Inaction cannot be an option when it comes to ensuring a healthy and prosperous America."   

   

    Access the statement from the President (click here). Access the 2-page letter from OIRA (click here). Access the White House comments from state and local officials (click here). Access the White House summary of clean air actions (click here). Access EPA's ground-level ozone regulatory website for complete background (click here). Access the statement from Sen. Boxer (click here). Access the statement from Sen. Inhofe (click here). Access the statement from API (click here). Access the statement from the U.S. Chamber (click here). Access the statement from the BRT (click here). Access the statement from CBD (click here). Access the statement from EDF (click here). Access the statement from NRDC (click here). [#Air]

 

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We will return on September 6, 2011

Thank you very much for visiting our blog.

 

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Daily Environmental News

CRS Report Analyzes So-Called EPA "Train Wreck" Regulations

Aug 8: A recent 50-page Congressional Research Service (CRS) report, EPA's Regulation of Coal-Fired Power: Is a "Train Wreck" Coming?, (No. 7-5700), provides an overview and analysis of many of the regulatory impact studies conducted by interest groups that discuss the impact of proposed regulations by U.S. EPA. The analysis emphasizes the impact on coal-fired power plants, but also includes discussions of regulations affecting other industry sectors. The report includes an important reference appendix of Bibliography of Analytic Reports which lists the various analytic reports with Internet links by policy and advocacy groups both for and against the regulations. CRS mission is to "serve the Congress throughout the legislative process by providing comprehensive and reliable legislative research and analysis that are timely, objective, authoritative, and confidential, thereby contributing to an informed national legislature."

 

    The report indicates that, "Given the central role of electric power in the nation's economy, and the importance of coal in power production, concerns have been raised recently about the cost and potential impact of regulations under development at the Environmental Protection Agency (EPA) that would impose new requirements on coal-fired power plants. Six of the rules, which have drawn much of the recent attention, are Clean Air Act regulations. Two others are Clean Water Act rules, and one is a Resource Conservation and Recovery Act rule. The majority are expected to be promulgated over the next 18 months. All together, these rules have been characterized by critics as a regulatory "train wreck" that would impose excessive costs and lead to plant retirements that could threaten the adequacy of electricity capacity (i.e., reliability of supply) across the country, especially from now through 2017.

 

    "Although some question why EPA is undertaking so many regulatory actions in such a short timeframe, supporters of the regulations assert that it is decades of regulatory delays and court decisions that have led to this point, resulting in part from special consideration given electric utilities by Congress under several statutes. Further, several of the current regulatory developments have been under consideration for a decade or longer, or are being reevaluated after an earlier action was vacated or remanded to EPA by the courts. The regulations are supported by proponents and EPA as having substantial benefits for public health and the environment.

 

    "Recent reports by industry trade associations and others have discussed potential harm of EPA's prospective regulations to U.S. electricity generating capacity, with emphasis on coal-fired generation. One of these reports, by the Edison Electric Institute (EEI), which represents investor-owned utilities, has attracted considerable attention by depicting a timeline in which multiple rules would take effect more or less simultaneously over the next five years. Congress has shown significant interest in these issues, and bills have been introduced that would de-fund or restrict EPA's ability to develop rules, and which would legislate new regulatory analytic requirements. The report describes nine rules in seven categories that are at the core of recent critical analyses, with background on the rule and its requirements and, where possible, a discussion of the rule's potential costs and benefits.

 

    "The EEI and other analyses discussed here generally predate EPA's actual proposals and reflect assumptions about stringency and timing (especially for implementation) that differ significantly from what EPA actually may propose or has promulgated. Some of the rules are expected to be expensive; costs of others are likely to be moderate or limited, or they are unknown at this point because a rule has not yet been proposed. Rules when actually proposed or issued may well differ enough that a plant operator's decision about investing in pollution controls or facility retirement will look entirely different from what these analyses project. Further, promulgation of standards is not the end of the road: court challenges are likely, potentially delaying implementation for years, and even when final, EPA rules must be adopted by states and implemented over time through

state-issued permits.

 

    "The primary impacts of many of the rules will largely be on coal-fired plants more than 40 years old that have not, until now, installed state-of-the-art pollution controls. Many of these plants are inefficient and are being replaced by more efficient combined cycle natural gas plants, a development likely to be encouraged if the price of competing fuel -- natural gas -- continues to be low, almost regardless of EPA rules."

 

    CRS concludes, ". . .evaluating regulatory impacts, compliance costs, and possible retirement decisions depends on facility-specific considerations—micro, not macro. Utilities and states will be affected differently. Rules when actually proposed or issued may well differ enough that investment or retirement decisions look entirely different. Technology options available to a unit or plant depend on the specific rule, and compliance costs may be less than projected. Even some units with high assumed control costs, or others that look to be marginal economically, may install controls and continue to operate. Many utilities have already installed technology needed to comply with new rules; for them, costs will be minimal: EPA said that, with regard to the most expensive proposed rule, the Utility MACT, more than half of the coal-fired units fall in this category. The EEI and NERC [North American Electric Reliability Corporation] reports did not account for the fact that plants' compliance costs may be less because of investments already made in pollution control equipment.

 

    "Frequently overlooked in analyses of EPA regulations are the benefits to public health and the environment that will occur, benefits that for the most part are difficult to monetize. EPA does estimate benefits of individual rules, while acknowledging that it is challenging to quantify benefits due to data limitations and uncertainties in approaches used to value benefits. The costs of the rules may be large, but, in most cases, the benefits are larger, especially estimated public health benefits. Neither the EEI nor the NERC report addresses benefits."

    

    CRS indicates that several other conclusions bear repeating:

• The studies sponsored by industry groups (EEI and NERC) were written before EPA proposed most of the rules whose impacts they analyze, and they assumed that the rules would impose more stringent requirements than EPA proposed in many cases.
• Of the regulations so far proposed, the Utility MACT, which will set standards for power plant emissions of mercury and other hazardous air pollutants, appears to be the most expensive. EPA's analysis concluded that it will impose annual costs of $10 billion to $11 billion annually
• Other rules that industry expected to impose major costs now appear less likely to do so. The Cooling Water Intake rule, for example, proposes a less costly, more flexible regulatory option than EEI and NERC anticipated. Further, NERC believes that few coal-fired EGUs will be affected by this rule, which will have greater impact on older, oil-fired units. The Coal Combustion Waste Rule has been delayed, with no deadline for promulgation.
• For coal-fired plants, the primary impacts will be on units more than 40 years old that have not, until now, installed state-of-the art pollution controls. Many of these plants are inefficient, and are being replaced by more efficient combined cycle natural gas plants.
• Lower prices for natural gas and recent increases in its projected availability may reduce the impact of the proposed rules on electric utilities and consumers, although they may lead to more retirements of coal-fired units.
• There is a substantial amount of excess generation capacity at present, due in part to the recession and also due to the large number of natural gas combined cycle plants constructed in the last decade, muting reliability concerns.

    CRS also provides concluding thoughts on the uncertainty of the actual implementation of EPA rules including changes in effective dates, court challenges, interactions and actual state-level implementation, permitting and compliance schedules -- all of which involves time periods of years in actual final implementation of regulations. CRS concludes, "In short, the road to EPA regulation is rarely a straight path. There are numerous possible causes of delay. It would be unusual if the regulatory actions described here were all implemented on the anticipated schedule, and even if they were, existing facilities would often have several years before being required to comply. Unable to account for such factors, which will vary from case to case, timelines that show dates for proposal and promulgation of EPA standards effectively underestimate the complexities of the regulatory process and overstate the near-term impact of many of the regulatory actions."

 

    Access the CRS report on the Foley Hoag's Environmental Practice Group website (click here). [#All]

 

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