Hill Heat

Originally posted at the Think Progress Wonk Room.

In October of last year, the administration of Kansas Gov. Kathleen Sebelius (D) denied permits for two new coal-fired plants in her state because the greenhouse gases such coal plants would emit constitute a threat to the environment and public health. Last Friday, she vetoed a legislative attempt to allow the plants to be built. Opponents of the veto claimed “the decision is costing the state jobs and economic investment” and warned of “higher electric bills for Western Kansas,” where the plants were proposed.

But a landmark report released yesterday by an esteemed financial research firm finds that, in fact, Sebelius has been acting in her state’s best economic interests.

Innovest Strategic Value Advisors finds that Sunflower Electric Power Corporation, the company whose proposal was denied, failed to account for the effects of the likely regulation of carbon dioxide on the cost of coal-fired electricity when it sought to build two 700 MW coal plants in Holcomb, Kansas:

Innovest examined the economics of the transaction and determined that under the most plausible regulatory scenarios the decision to build new coal generating capacity will put Sunflower Electric’s ratepayers – who in this particular case are the actual owners – at significant risk. The report concludes that Sunflower’s management has not adequately addressed the competitive and financial risks associated with climate change in deciding to pursue the expansion of its Holcomb Station power plant.

Sunflower was remiss in not considering that federal legislation that places a price on carbon emissions is extremely likely, considering the bipartisan support and strong international pressure for such action.

The report compares the economics of coal plants versus natural gas plants, which have a considerably smaller carbon footprint, and concludes:

In general, this analysis demonstrate that gas is the more financially sound choice for the construction of baseload generating capacity in all scenarios except 100% free allocation [to power companies] of carbon allowances.

It is thus unsurprising that the coal lobby attacked the natural gas industry when the decision was made.

The report also notes that western Kansas has “among the nation’s most abundant wind resources” and that the cost of wind power has plummeted 80% in the last 20 years.

In an interview with Darren Samuelson of E&E News last Thursday, Douglas Holtz-Eakin lays down significant markers for Sen. John McCain’s (R-Ariz.) climate policy.

On policies such as a low-carbon fuel standard or renewable portfolio standard:

“The basic idea is if you go with a cap and trade and do it right with appropriate implementation, you don’t need technology-specific and sectoral policies that are on the books and that others are proposing simultaneously.”

On the rise in CAFE standards in the 2007 energy act:

“He’s not proposing to eliminate those. He simply wants to check as time goes on if they become completely irrelevant. You might want to take them off the books, but we’re not there yet.”

On McCain-Lieberman:

“When he introduced that bill, the floor statement was pretty clear that this was an ongoing process. He wasn’t so much committed to the bill as to an issue.”

On Lieberman-Warner:

“The Lieberman-Warner is a good bill. It’s not his intention to suggest anything different. . . We don’t take positions on Senate legislation given it will change. He’s going to realistically need to have time to study the bill. It’s premature.”

On nuclear subsidies:

“He wants to see the use of nukes. The ultimate policy proposal will be designed to make sure that’s true.”

Holtz-Eakin, director of the Congressional Budget Office from 2003-2005 and chief economist for President Bush 2001-2002, is the top economic advisor for Sen. John McCain’s 2008 presidential campaign.

On Thursday March 20, Sen. Boxer (D-Calif.), chair of the Senate Environment and Public Works Committee, sent a letter to Secretary of the Interior Dirk Kempthorne asking him “to appear before the Committee as soon as possible for an oversight hearing” on the “considerable delays in taking final action” over the Endangered Species Act listing of the polar bear. Boxer told him that the hearing would be planned for April 2 or 8.

The following day, Lyle Laverty, Assistant Secretary for Fish, Wildlife, and Parks, faxed back a response at 5:56 PM saying:

I understand Secretary Kempthorne called you on March 17, 2008, and expressed his commitment to testify before the Committee on the polar bear proposal once a decision is made on the issue. I also understand the Secretary committed to calling you on Tuesday, April 1, 2008, with an update on the progress towards a decision.

Boxer immediately responded, calling the offer of a telephone briefing and a hearing after a decision has been made “wholly inadequate,” and again requested the April 2 or 8 date for a hearing discussing “this serious breach of the Department’s duty to follow the law.”

It has been nearly a month since FWS director Dale Hall stated in a House Appropriations Committee hearing that he had submitted his decision on the polar bear listing to Secretary Kempthorne.

Originally posted at the Think Progress Wonk Room.

Last October, the Kansas Department of Health denied air quality permits to a proposed coal plant expansion near Holcomb, KS, because of the danger greenhouse gas emissions pose to the climate.

Today, Sebelius issued a long-expected veto of the legislature’s plan to not only approve the plant but also strip the Department of Health of its regulatory capacity. From her veto statement:

This decision not only preserves Kansans’ health and upholds our moral obligation to be good stewards of this beautiful land, but will also enhance our prospects for strong and sustainable economic growth throughout our state. Instead of building two new coal plants, which would produce 11 million new tons of carbon dioxide each year, I support pursuing other, more promising energy and economic development alternatives.

Industry opposition to the Sebelius administration has been intense. Following the air permit denial, Peabody Energy, one of the largest coal companies in the world, funded newspaper ads attacking the natural gas industry. Sunflower Electric Power Corporation, the rate-payer-owned company making the bid for the new plants – offered a quid pro quo to Kansas State University, promising millions of dollars to fund energy research if the coal plants were approved.

Originally posted at the Think Progress Wonk Room.

Under subpoena by Rep. Henry Waxman (D-CA) to turn over documents involving the White House, the EPA instead requested documents from him, in a letter revealed Wednesday by E&E News.

On March 10, House Oversight Committee Chairman Henry Waxman (D-CA) kicked off a new round the latest installment in his ongoing investigation of the EPA with a letter to Environmental Protection Agency Administrator Stephen L. Johnson:

“I am writing to request that EPA provide to the Oversight Committee documents that the agency has improperly withheld from the Committee…relating to your decision to reject California’s efforts to reduce greenhouse gas emissions.”

This request includes not only specific documents that EPA eventually turned over in heavily redacted form, but also “hundreds of documents” that involve EPA and the White House that top-level EPA officials told Waxman’s committee are being withheld.

On March 12, Waxman sent a detailed timeline of events to Johnson based on the EPA interviews showing that the EPA’s efforts to regulate CO2 stopped after the White House became involved.

On March 13, Waxman issued a subpoena for 196 of the documents.

The next day, the EPA’s Christopher P. Bliley – who was White House budget director Jim Nussle’s chief of staff when Nussle was in Congress – sent a letter to Waxman, saying that the documents “raise very important Executive Branch confidentiality interests” and that “we need additional time to respond to your request.”

Then he one-upped Waxman, making a document demand of his own:

EPA would also like to request copies of the transcripts from the Committee’s interviews of seven Agency employees.

His reason?

The Agency has an interest in ensuring that the information provided to the Committee by Agency employees in their official capacity is accurate and complete, particularly here where that information appears to be the basis for a new and expansive document request.

In other words, the White House wants to make sure their stories don’t contradict what Waxman already knows.

Needless to say, the EPA does not have oversight or subpoena power over the House of Representatives.

Waxman has also opened an investigation into Bush’s manipulation of the new smog standards issued by the EPA last week.

This is crossposted from the newly launched Think Progress Wonk Room, which will be covering policy news from climate change to national security. The issues covered by Hill Heat writer Brad Johnson will enjoy deeper coverage at the Wonk Room, where he is now a full-time staffer.

The Public Employees for Environmental Responsibility today highlighted the ethical conundrum facing scientists currently serving under Fish & Wildlife Service Director H. Dale Hall.

In addition, this month the Interior Inspector General opened a preliminary inquiry into whether Hall violated the code of conduct for repeatedly missing Endangered Species Act deadlines to list the polar bear, despite clear scientific guidance.

PEER Executive Director Jeff Ruch asks: “How can we expect scientists to obey a code of conduct that their director ignores?”

The latest delay has also triggered a lawsuit from environmental groups.

Allison Winter reports for E&E News:

The Interior Department’s internal watchdog said today it has begun a preliminary probe of the delayed polar bear decision.

Responding to requests from environmental groups, the Inspector General’s Office official said its preliminary review will determine if there is a need for a full investigation.

The Sierra Club, Alaska Wilderness League and four other organizations requested a review by Inspector General Early Devaney, claiming the delay violates the Fish and Wildlife Service’s scientific code of conduct and rules of the Endangered Species Act by allowing MMS to proceed with Chukchi lease sales.

The Alliance for Energy and Economic Growth (AEEG) (an industry coalition organized in 2001 to support the administration’s Energy Task Force efforts), the National Association of Manufacturers, and the U.S. Chamber of Commerce are hosting a series of state climate change dialogues in 2008 in Ohio, New Hampshire, Montana, and North Dakota, with Margo Thorning of the American Council for Capital Formation, a conservative corporate think tank. The first such forum was held in Manchester, NH on Wednesday, March 12.

Jim Rubens, of the Union of Concerned Scientists attended the event. Below is his story of what transpired, a Hill Heat exclusive.

The American Council for Capital Formation and the U.S. Chamber of Commerce – fronting for coal, oil and the fossil-heavy utilities – last Wednesday road tested their forum on what they claim are the dire economic consequences of the Lieberman-Warner climate bill. It was train wreck I am certain they will not want repeated.

First, in response to a letter from 8 utility CEOs asking that exaggerations be removed from the Charles River Associates analysis forming the basis for the phony projections, lead ExxonMobil-funded economist Dr Margo Thorning announced that no specific impact numbers would be provided. We’d need to wait to see the new, even more slanted ACCF-sponsored study due to be released the next day.

Next, a couple of global warming denialists in the audience asked the Chamber rep why the nation’s business lobby was buying into the need for anything at all to be done, given that glaciers are growing worldwide, Mars is getting colder, etc. The response: the IPCC report is in, and attacking the science is no longer politically tenable. Subtext read in the facial expressions from the dais: we’d love to, but we’re stuck now fear mongering the economics of an American energy future of stable prices, domestic job growth, and intact Florida coastlines.

Next, Tufts economist Dr Julie Nelson asked Dr. Thorning whether the new ACCF-sponsored analysis would be any better than the CRA version, allowing peer review, disclosing assumptions, etc, like all the competing 25 climate-economy models which project only very modest impacts. Answer: an embarrassed no.

Next, yours truly asked Dr. Thorning whether the ACCF analysis – to correct the CRA’s failings – would model the costs of projected warming under the business as usual or baseline scenario at greater than zero, given that New Hampshire’s $650 million ski industry will be wiped out by 2100, or would assign a return greater than zero to stepped-up efficiency and conservation investments, or a value greater than zero for future energy technology innovation. Answer: another hang-dog faced no. Given the lack of data, there is no way to assign any number, she said.

I then asked Dr. Thorning whether it would therefore be fair to footnote the baseline scenario GDP and energy cost numbers, with a statement to the effect that the predicted cost of L-W is high because the baseline number is likely to be low, in that the cost of global warming under business as usual is greater than zero. She acknowledged some merit to that before quickly retreating from the room to work her cell phone.

Recommendations for the three future ACCF fora: be sure to have credible economists and clean energy and efficiency experts and developers in the room. Call them on every false, exaggerated and unsupported statement. Talk about what American entrepreneurs are doing right now in the states where the fora are held to make the American economy stronger while reducing the risks of future climate change. Make sure the media is present to witness it.

EPA administrator Stephen L. Johnson has taken significant heat from environmental groups, state officials, and Congress for his December denial of California’s Clean Air Act waiver request to enact AB 32 to regulate tailpipe greenhouse gas emissions (and the February release of his justification). Congressional investigations, though stonewalled repeatedly by Johnson, have revealed that unanimous staff recommendations to approve the waiver were overturned by the administrator.

The Supreme Court decision Mass. v. EPA, which compelled the agency to make a decision on the waiver, also required the agency to make an endangerment finding as to whether greenhouse gases pose a threat to human health and if so, to issue motor vehicle regulations. On Wednesday Rep. Henry Waxman (D-Calif.)’s Oversight Committee investigation revealed that Johnson in fact attempted to issue an endangerment finding and motor vehicle regulations in December, but was evidently overruled by the White House and Department of Transportation. Johnson is still being unresponsive to Waxman’s investigation, as well as the one newly opened by Rep. Ed Markey (D-Mass.) of the Global Warming Committee.

Late Wednesday night, the EPA issued new smog regulations, lowering the public health (primary) and public welfare (secondary) standards to 75 parts per billion from 84 ppb. The Washington Post’s Juliet Eilperin revealed that the EPA scientific panel was overruled in its recommendation to establish a much lower seasonal secondary standard to protect plantlife during the growing season:

Nearly a year ago, EPA’s Clean Air Scientific Advisory Committee reiterated in writing that its members were “unanimous in recommending” that the agency set the standard no higher than 70 parts per billion (ppb) and to consider a limit as low as 60 ppb.

She goes on to note that on March 6, the Office of Management and Budget’s Susan E. Dudley sent a letter to the EPA asking them to consider the effect of a too strict regulation on “economic values and on personal comfort and well-being,”. EPA Deputy Administrator Marcus C. Peacock replied that “EPA cannot consider costs in setting a secondary standard,” with the cutting retort: “EPA is not aware of any information that ozone has beneficial effects on economic values or on personal comfort and well being.”

Today Eilperin further revealed that President Bush personally stepped in at the last minute to block the EPA’s intended secondary standard.

The president’s order prompted a scramble by administration officials to rewrite the regulations to avoid a conflict with past EPA statements on the harm caused by ozone. Solicitor General Paul D. Clement warned administration officials late Tuesday night that the rules contradicted the EPA’s past submissions to the Supreme Court, according to sources familiar with the conversation. As a consequence, administration lawyers hustled to craft new legal justifications for the weakened standard.

Tomorrow morning, the House Select Committee on Global Warming and Energy Independence will be holding a hearing on the implications of Massachusetts v. EPA nearly one year later. Chairman Edward Markey (D-MA) plans to question EPA Administrator Stephen Johnson on why he’s delayedaction on the EPA’s remand (which might result in another lawsuit). Committee members will also hear from a panel that includes Kansas Secretary of Health and the Environment Roderick Bremby, who made national headlines this fall by utilizing his legal authority under state law to deny permits for two new coal-fired power plants—citing the growing scientific consensus surrounding warming-related impacts and the Court’s ruling in Mass v. EPA to justify his landmark decision. 

The hearing WILL NOT be broadcast online (though it is being videotaped), but Warming Law will be in attendance and might be able to liveblog the proceedings, and will report back later regardless. We’ll be particularly noting whether any members decide to take up the "common sense questions" proposed today as talking points by the Heritage Foundation, which hyperbolically warns that an endangerment finding for CO2 would require the EPA [to] completely de-industrialize the United States." Heritage and the Competitive Enterprise Institute—which has similarly argued that an EPA global warming program would amount to "policy terrorism"—have actively taken credit for Johnson’s recent decision to suddenly halt work on an endangerment finding.

Amidst such boasts of outside influence on EPA, Markey’s counterpart on the House Oversight and Government Reform Committee, the indomitable Rep. Henry Waxman (D-CA), has started investigating the White House’s apparent interference in short-circuiting an endangerment finding. In a letter sent to Johnson today, Waxman notes on-the-record conversations with senior EPA officials that—combined with Johnson’s public statements up through the last couple of weeks—depict a process that was suddenly halted as it neared completion:

Multiple senior EPA officials [cited directly in this letter] have told the Committee on the record that after the Supreme Court’s landmark decision in Massachusetts v. EPA, you assembled a team of 60 to 70 EPA officials to determine whether carbon diioxide emissions endanger healt hand welfare and, if so, to develop regulations reducing CO2 emissions from motor vehicles. According to these officials, you agreed with your staff’s proposal that CO2 emissions from motor vehicles should be reduced and in Decemer forwarded an endangerment finding to the White House and a proposed motor vehicle regulation to the Department of Transportation…

The senior EPA officials who spoke with the Committee did not know what transpired inside the White House of the Department of Transportation or what directions the White House may have given to you. They do know, however, that since you sent the endangerment finding to the White House, "the work on vehicle efforts has stopped." They reported to the committee that the career officials assigned ot the issue have ceased their efforts and have been "awaiting direction" since December.

Rep. Henry Waxman (D-Calif.), chair of the Oversight Committee, and Rep. Ed Markey (D-Mass.), chair of the global warming committee, today jointly introduced the Moratorium on Uncontrolled Power Plants Act of 2008 (H.R. 5575).

The bill, if enacted, would require any new coal plant constructed before the U.S. implemented a strong greenhouse gas emissions reduction program to have state-of-the-art carbon-capture-and-sequestration (CCS) technology.

From the bill text, the CCS technology would have to capture “not less than 85 percent of the total carbon dioxide produced by the unit on an annual average basis and permanently sequesters that carbon dioxide” and the emissions reduction program would have to require requires “immediate and significant reductions in greenhouse gas emissions across the economy and increases the reductions over time to reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050.”

This target is considerably more stringent than that of Lieberman-Warner (S. 2191), which calls for an approximately 60% reduction below 1990 levels by 2050, though at the minimum of the IPCC-recommended 80-95% reduction (Box 13.7 in the Fourth Assessment Report, p. 776).

Update: This bill would implement one of Al Gore’s legislative recommendations.