CLIMATE:

Will much-maligned EPA reg blueprint emerge as 'climate change bible'?

After a decade of petitions, court cases and political promises on climate change, U.S. EPA finally revealed last month how it could use the Clean Air Act to curb greenhouse gases.

The agency suggested in a nearly 500-page document using climate-related permits for new power plants and other industrial facilities, a cap-and-trade program for limiting emissions across many economic sectors, and a nationwide limit on carbon dioxide akin to standards used for lead, carbon monoxide and other pollutants.

But the report's prologue was written by eight senior-level Bush administration officials who made clear their distaste for EPA tackling climate regulation.

White House Council on Environmental Quality chief James Connaughton, for one, blasted EPA's "kitchen sink approach" for not accounting for the benefits of the new energy bill that Bush signed last December. And EPA Administrator Stephen Johnson added that the Clean Air Act is "an outdated law ... ill-suited for the task of regulating global greenhouse gases."

Vickie Patton, a senior attorney at Environmental Defense Fund, said the administration officials' views contrast sharply with those of EPA professionals who provide a detailed rundown of the science linking man-made emissions to global warming, as well as the regulatory chain reaction that could follow the EPA administrator's decision that greenhouse gases threaten public health or welfare.

"The inclusion of those letters had an unintended consequence," Patton said during a recent American Bar Association teleconference. "It really separated out EPA staff's dispassionate analysis from a very politically charged view."

Several EPA officials, who are not authorized to speak publicly about their work on the climate regulations, said in interviews the administration has unfairly criticized their work.

One staffer complained the White House restricted EPA to preparing an "advanced notice of proposed rulemaking," or ANPRM, instead of a formal regulatory proposal.

"The comments from other agencies didn't help," the EPA staffer said. "They suggested we had more definitive ideas than we did."

Roger Martella, who served as acting EPA general counsel from August 2006 until April, predicted the agency's work would be vital for future administrations and Congress crafting a U.S. response to global warming. "What I think you will find at the end of this process will be the climate change bible," Martella said last month in an interview on E&ETV's OnPoint.

It began in 1998

EPA's work on climate regulation dates to 1998, when the Clinton administration first considered addressing carbon dioxide emissions from power plants as part of a broad electricity restructuring plan.

House Republicans, already irritated by President Clinton's decision to sign the Kyoto Protocol, were outraged by EPA's climate change ideas. At a House hearing on the EPA budget, Rep. Tom DeLay of Texas, the Republican whip, demanded answers about the agency's work from EPA Administrator Carol Browner.

Browner tasked EPA General Counsel Jonathan Cannon with writing a memo outlining the legal rationale for controlling greenhouse gases. His six-page letter took pains to say the Clinton administration did not intend to regulate CO2, but he concluded that the agency had the authority to do so.

In 1999, the International Center for Technology Assessment -- a little-known Washington nonprofit -- took the lead in petitioning EPA to use its Clean Air Act authority to regulate greenhouse gases from motor vehicles.

Despite resistance from some mainstream environmental groups, ICTA and its partners urged Browner to assess studies linking automobile emissions to global warming threats, such as rising sea levels and a higher incidence of disease outbreaks. If Browner determined that motor vehicle CO2 pollution threatened either public health or welfare, she would be compelled to produce an "endangerment finding," the center said. And under Section 202 of the Clean Air Act, EPA would then need to respond with regulations for cars, trucks and other motor vehicles.

Browner sat on the petition for the remainder of Clinton's second term. And after Vice President Al Gore lost his bid for the White House in 2000, the motion fell into the lap of the new Bush administration.

The Bush EPA opened a public comment period on the petition that produced some 50,000 letters supporting it. But agency lawyers in 2003 denied the request on the grounds that the administration could address climate change through other policies. And Cannon's successor, EPA General Counsel Robert Fabricant, wrote his own memo rejecting the Clinton administration's legal interpretation of the Clean Air Act.

In July 2005, a federal court upheld the Bush EPA's reading of the law, although the unusual 1-1-1 opinion left a wide berth for appeals (Greenwire, July 15, 2005).

Massachusetts, which had become the lead plaintiff in the case seeking federal regulatory action on greenhouse gases, jumped at the chance to be heard before the Supreme Court. It scored a surprising 5-4 win in an April 2007 high court ruling that ordered EPA to re-examine whether greenhouse gases from motor vehicles threaten public health or welfare (Greenwire, April 2, 2007).

A day after the ruling, Bush promised to follow the court's mandate. "It's the new law of the land." he told reporters at a White House Rose Garden briefing.

A month later, Bush signed an executive order coordinating the government's response and outlining plans for an EPA proposal in December 2007 and a final rule before he left office in January 2009.

'Endangerment' focus on public welfare

Two EPA section chiefs with a combined 64 years of experience took the lead in writing the agency's response to the Supreme Court. Overseeing them was Susan Dudley, director of regulatory affairs at the White House Office of Management and Budget.

Brian McLean, director of the EPA's Office of Atmospheric Programs, wrote the endangerment finding and answered the question of whether science links auto emissions to climate change. Margo Oge, director of the Office of Transportation and Air Quality, began drafting new CO2-themed transportation rules.

By November 2007, as many as 70 EPA staffers had been assigned to the job. And another $5.3 million was spent on outside government contracts.

Oge wrote about 350 pages of auto regulations. And McLean produced more than 30 pages of an endangerment finding that concludes, "In sum, the administration is proposing to find that elevated levels of greenhouse gas concentrations may reasonably be anticipated to endanger public welfare."

Neither EPA document has been made public, but congressional investigators have been allowed to look at them after issuing or threatening to issue subpoenas. A former EPA associate deputy administrator, Jason Burnett, Johnson's go-to aide on climate issues, also has provided critical details during testimony on Capitol Hill and in interviews with the press.

Burnett told Greenwire that EPA officials had decided to focus on welfare as they wrote the endangerment finding. That meant wrestling with climate questions linked to visibility, weather, crop damage and soil and avoiding the more challenging direct connection to public health.

"By just finding welfare, at this point, we were meeting the obligations of the Supreme Court and not closing off options for other parts of the Clean Air Act," Burnett said. "At the end of the day, there will be greenhouse gas endangerments for both public health and welfare. It'd be nearly impossible for the agency to avoid making that conclusion eventually. But that conclusion wasn't needed at this point."

Burnett said EPA also addressed what it saw as the best way to regulate greenhouse gases from power plants, refiners and other stationary sources. Johnson agreed with his staff's recommendations to use Section 111 of the Clean Air Act, which deals with efficiency upgrades at big industrial plants.

The Clean Air Act language would need some important regulatory or legislative fixes, but Johnson and other EPA officials considered that section the best equipped area to deal with the potentially overwhelming issue of climate change. It would be much easier to use Section 111, Johnson determined, than to regulate for climate change using National Ambient Air Quality Standards, which limit emissions of individual pollutants.

Burnett says that Joel Kaplan, from the White House chief of staff's office, gave Johnson the green light to complete the endangerment finding around Thanksgiving 2007. Facing a December deadline to complete transportation rules, EPA officials also sent draft vehicle regulations to the Transportation Department.

Direction shifts suddenly

Then came an unexpected twist. Congress sat on the verge of passing a major new energy bill, complete with the first major change to automobile fuel-economy standards in several decades.

Bush began pushing for reduced U.S. gasoline consumption in his State of the Union address in January 2007, before the Supreme Court decision. While the details of the legislation and Bush's plans were not identical, the administration officials saw an opening to stop EPA climate regulations.

So in early December, Bush threatened to veto the energy bill unless it included a provision limiting EPA's ability to craft fuel economy standards.

"That was the first handwriting on the wall that we career folks saw," an EPA official said.

As the Senate debate on the energy bill progressed, Michigan Democrats Carl Levin and Debbie Stabenow tried adding language to the measure to stop EPA. Several California lawmakers pushed back, concerned that their state would lose its authority to set stronger air pollution limits than the federal government (E&E Daily, Dec. 14, 2007).

The Michigan lawmakers and the White House lost, but administration officials still saw an opportunity to halt the EPA rulemaking.

EPA's climate documents, now in transit between OMB and DOT, didn't move.

"I don't remember anyone saying not to work on it," an EPA staffer said. "We kept asking, 'What's the next step?'"

They got no answer.

"That's when folks realized nothing was happening," the staffer said.

In late March, Johnson wrote to House leaders that he was weighing the broader ramifications of an EPA endangerment finding on greenhouse gases. A mobile source rule, he wrote, "could automatically result in other regulations" for power plants and other smaller pollution sources never previously regulated under the Clean Air Act.

Bush used the same lines a month later when he visited the Rose Garden for a speech in which he declared a new climate goal to stabilize greenhouse gases by 2020. Environmentalists and many foreign leaders panned Bush's proposal, saying he had waited far too long to offer a plan that lacked substance (E&ENews PM, April 16).

Bush also used the speech to tell Congress it was responsible for action on climate.

"Decisions with such far-reaching impact should not be left to unelected regulators and judges," he said. "Such decisions should be opened -- debated openly. Such decisions should be made by the elected representatives of the people they affect. The American people deserve an honest assessment of the costs, benefits and feasibility of any proposed solution."

Bush quoted House Energy and Commerce Chairman John Dingell (D-Mich.), who had said EPA efforts to regulate greenhouse gases would yield a "glorious mess" (Greenwire, April 8). And White House spokeswoman Dana Perino warned of a "regulatory train wreck."

'Extreme patience' required

The six-month public comment period on EPA's advanced notice of proposed rulemaking closes in late January -- just days after the start of the next administration.

"I believe the importance of this process is you're speaking not to this administration, but you're speaking to the McCain, the Obama administrations on climate change," said Martella, the former EPA general counsel, who now works in the Washington offices of Sidley Austin.

Others are sure to play a role, too. Lawmakers tasked with writing global warming legislation in 2009 say they see how their work relates to the EPA rulemaking. And business groups such as the U.S. Chamber of Commerce want Congress to stop EPA efforts outright.

Environmental groups are pushing from both directions. They say the scientific warnings associated with climate change require an urgent response from EPA. But they are also open to what Congress may want to say on the topic.

Joe Mendelson, director of the International Center for Technology Assessment, whose 1999 petition seeking EPA regulation of greenhouse gases led to Massachusetts v. EPA, said his children have grown from toddlers to preteens during the long battle.

"The wheels of justice often turn slowly," Mendelson said in an interview. "But this is certainly a case where I think any sane person who cares about the environmental health impacts of climate change has had to exercise extreme patience."

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