IER Comment on Proposed ACE Rule

The following comment was submitted by Kenneth Stein, Director of Policy, on behalf of the Institute for Energy Research regarding Docket No. EPA-HQ-OAR-2017-0355

The Institute for Energy Research has long supported the repeal of the so-called Clean Power Plan (CPP) and applauds EPA for undertaking that repeal.  However, IER is dismayed that instead of pursuing a full repeal of the uncalled-for regulation, EPA has sought this replacement in a misguided attempt to be kinder or gentler.  The CPP was an egregious overstep of federal authority, seeking to manipulate the entire energy system in a way Congress never authorized. The CPP was rightly opposed by a majority of states and implementation was halted by the Supreme Court.  This overreach does not require and should not be followed by a replacement.

The proposed rule’s efforts to mitigate regulatory harm by introducing a new definition of best system of emissions reduction is laudable, and indeed many of the regulated industries subject to this rule are applauding this change since it represents an opportunity to survive, where the CPP was a termination notice.  What EPA and these industry supporters ignore, however, is that EPA still leaves the underlying scope of federal power in this area unaddressed. EPA seeks to minimize the use of this posited power by allowing reasonable heat rate improvements to count as the BSER. But this leaves a future EPA with the ability to change its regulatory whim and resume a draconian interpretation.

The very unworkability and questionable authorities that have come to the fore in the CPP proposal, litigation, repeal, and replace process show the utter impracticability of regulating carbon dioxide like pollutants that are actually dangerous to human health.  Carbon dioxide is a non-toxic trace gas that is not harmful to humans in any ambient concentrations. It is fundamentally not analogous to actual dangerous pollutants like for example mercury or sulfur oxides. Trying regulate carbon dioxide like CAA pollutants consistently leads to absurd and statutorily questionable results.  This should not lead EPA to again try to fit a round peg into a square hole as it seeks to do with this rulemaking. It should lead EPA to the obvious conclusion that the CAA was not designed for, nor was it meant to apply to, a common diffuse element like carbon dioxide. The Supreme Court in Massachusetts v. EPA posited that in theory the CAA (in the view of the majority at the time) is so vague that it could be used to regulate any molecule in the air.  The Supreme Court did not say that EPA was thus required to regulate every molecule found in the air. Rather than seeking this replacement, EPA should acknowledge the truth: carbon dioxide is not a dangerous pollutant under the construction of the CAA.  That is ultimately the question that must be decided, this “replacement” (which will be swiftly disregarded by a future administration) notwithstanding.

EPA should carry its repeal of the Clean Power Plan to its conclusion and then work to roll back the absurd findings which resulted in the CAA application in this area in the first place.

New Source Review reforms:

IER supports EPA’s goal of encouraging efficient use of existing energy capacity and reducing burdens on states.  The proposed NSR hourly emissions test modifications are an important step in advancing this goal of efficient use of existing energy capacity.  However, EPA should go further. Far too often the NSR process acts as a deterrent to making improvements to existing industrial facilities. The exorbitant cost and indeterminant timeline of the NSR process means that projects that would increase efficiency or even reduce overall pollution are forgone because they cannot be financially justified.  This perverse outcome means that less efficient, less clean sources continue to operate, directly contrary to the statutory goals underlying the NSR and related laws. EPA should pursue maximum flexibility in the NSR process, and even should consider exempting efficiency improvements from the costly NSR process entirely. The NSR law was meant to ensure that upgrades to facilities improve environmental outcomes.  If the cost of the NSR is such that it prevents upgrades, then the process has become an impediment to the actual intent and function of the law. While the law itself is not within the purview of EPA to amend, the process certainly is as entirely a creation of the administrative state.

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