E2 Law Blog : Environmental Lawyers & Attorneys : Greenberg Traurig Law Firm : Climate Change, Energy Legislation

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.

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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.

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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.    

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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.

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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.  

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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.

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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.

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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. 

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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.  

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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.

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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."

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