New analysis from the U.S. EPA concerning several different clean air proposals has reignited debate over the White House's "Clear Skies" plan. Frank O'Donnell, executive director of Clean Air Watch, and Scott Segal, an industry attorney with Bracewell & Giuliani, go head to head over the findings and their potential effect on Clear Skies and alternative plans from Sen. Tom Carper (D-Del.) and Sen. Jim Jeffords (I-Vt.). Plus, the two experts examine EPA's existing authority under the Clean Air Interstate Rule, and the road ahead for addressing carbon dioxide emissions.
Darren Samuelsohn: Welcome to OnPoint. I'm Darren Samuelsohn. Joining us today in the E&ETV studios in Washington to talk about air quality issues is Frank O'Donnell, head of the Clean Air Watch, and Scott Segal, an industry attorney from Bracewell and Giuliani. Gentleman thanks so much for coming on the show again.
Scott Segal: Good to be here.
Frank O'Donnell: Thank you.
Darren Samuelsohn: It's been awhile since you were last on the show. Last time was in March and a lot's happened on the Clean Air Act front. Scott, give us your take. What's been the most important thing that the EPA has done on air quality issues since March?
Scott Segal: Well at long last the Environmental Protection Agency has finally clarified some of the really pressing issues about the definition of what constitutes an increase to trigger the New Source Review program. And they've done so in a proposed rule, that's actually quite exciting, that takes into account the actual realities of what's been going on in the appellate courts. And gives direction that will make for a clear New Source Review program, allow people to make maintenance projects that will go forward, allow people to increase the efficiency at their power plants and actually reduce emissions and increase workplace safety. All in all, it's been a wonderful development just a few weeks ago. We're very excited about it. They've also announced a change in priorities as far as their enforcement is concerned with putting more and greater priorities on getting the cap-and-trade programs up and running that will ensure 70 percent reduction in the emissions across the board. As opposed to the slower case by case analysis that one finds in the litigation heavy approaches. So these are two important developments.
Darren Samuelsohn: Frank, your take on what Scott said. And do you think that that's the most important thing that's happened?
Frank O'Donnell: Well, I would say if the most important bad thing that's happened. Where essentially they've said we're not going to enforce the law. Now I think the courts may have something to say about whether they enforce the law or not. And I hope they do say that. Sometimes people bash the courts, but really we need some public protection attorneys out there to make the government straighten up when the government abuses the law, which they're doing in this case clearly. In terms of the most important thing they've done, probably is setting the so-called Clean Air Interstate Rule, which is a step in the right direction. It's not the be-all and end-all. We don't think it went far enough. In fact we know that they doctored the final rule to parcel out more credits to some of the coal burning states. So in effect that rule is a little fuzzy, but we do think it's a step in the right direction. And in fact they pretty much admitted, this past weekend in its analysis given to Congress, that that Clean Air Interstate Rule is as good as the legislative initiative they put forward. So essentially they've taken away the rational for amending the law.
Darren Samuelsohn: Let's look ahead six months. If I gave you guys crystal balls, where you think we go in terms of air pollution issue six months from now Scott?
Scott Segal: Well the administration has certainly given a jumpstart the initiative with respect to the Clear Skies policy. That's what Frank was just talking about. That is the legislative component or legislative counterpart to the Clean Air Interstate Rule and the Clean Air Mercury Rule. One of the sticking points for moving forward with Clear Skies has been whether or not there's insufficient data advanced to satisfy the tastes of certain senators from Delaware and elsewhere. It does now seem that they've gotten everything they could have possibly wanted and a toy pony as well. So there shouldn't be any more data driven reasons to not move forward on legislation. One thing Frank had said is why do the legislation if you've already done the rules? I think first there's a sense of permanency that comes with actually doing it in legislation. Second, Frank was quick to point out about those public interest lawyers who do tend to gum up rules, better if you get it ensconced in legislation. And third, to the extent that the Clean Air Interstate Rule makes sense for the eastern half of the United States, wouldn't it be a more robust trading program if it applied to the entire United States? But you can only do that in legislation.
Darren Samuelsohn: Frank, do you want to respond to that?
Frank O'Donnell: Sure, a couple of things. The analysis last week was really quite fascinating because in effect it was like exhuming a corpse to do a DNA test. And they did the DNA test and they said yup, the administration plan is still dead. It still smells bad. Let's put it back in the box. And that's what's happened. It is not going to be revived. It is not going to rise from the dead at this point. And in fact a couple of things came out of that that are quite fascinating politically. One, it verified what we have said all along. We've been saying for four years that even moderate implementation of the current law is as good as this legislative initiative from a clean air standpoint. Maybe not from a corporate polluter protection standpoint, but from a clean air standpoint it is as good. And in fact they doctored that analysis to not even factor in some of the rollbacks and things and tools in current law that they would be taking away by that legislative initiative. And so in fact they have literally verified that we've been right all along. That current law is better. Secondly, that analysis, politically, has put Senator Carper fully in the catbird seat. I mean he sat there and, I've heard from some insiders who are in the room, he looked at the analyses when one of the other senators from Ohio was going, well, this shows it's going to be better than current law. And he said well look George, there are two lines here and they're the same. One is this plan and one is current law. So how can you say its better? Now my plan, the line is better. What do you say to that?
Scott Segal: And there was real silence at that point in the room from what I understand.
Frank O'Donnell: Let me play the role of George Voinovich and compare the Clear Skies policy to quote unquote, full enforcement of existing law. First of all, at the risk of sounding like a broken down academic, we have to deconstruct that phrase, full enforcement of existing law. What that means is automatic capitulation to the position the government takes in case by case litigation all across the board. Right now that litigation proceeds at a snail's pace. And worse yet the government is losing that litigation. So the question of what constitutes full enforcement is very much in doubt. At this point the sure thing, the one in hand if you will, is to do the Clear Skies policy, which mandates a 70 percent reduction coast to coast and creates a robust trading regime. That's far better.
Darren Samuelsohn: I had a feeling you guys were going to have some opinions about these first two questions to start off. Scott, Clear Skies and CAIR though essentially do arguably the same things. And that's what the analysis showed. There wasn't much of a difference between Clear Skies and CAIR in terms of cost, in terms of benefits. So what need does Congress really have to try and enact a law that's not going to do much more than what's already on the books?
Scott Segal: Yeah, it's a good question. The problem is this, there will be litigation concerning the Clean Air Interstate Rule. There already is litigation that's coming from ...
Darren Samuelsohn: That's coming from Florida utilities and some Texas utilities.
Scott Segal: That's right. There's litigation on all sides. And people have joined in interventions. So it's going to be your typical administrative law throw down that we always have in a comprehensive rule. By contrast, and the best example here is the acid rain program, which was constructed not by regulation, but was constructed by legislation. To make truly the Clean Air Interstate Rule the inheritor of the experience for acid rain you have to do it through legislation. Two reasons, first, geographical. You want to get both sides of the continent, not just the East Coast of the United States or the eastern half of the United States. The second point is you want to create certainty both for the public interest community and for the regulating community. You get certainty through legislation. And oftentimes you just get another lawsuit through regulation.
Darren Samuelsohn: Frank I know you're chomping at the bit to get in on this.
Frank O'Donnell: Yeah, and in fact I didn't mean to bash Senator Voinovich. I actually would like to praise him. I always like to throw a curveball to you all in these sessions. And he deserves a lot of praise for taking the initiative on the diesel issue, trying to promote federal funding for that. He's not alone. Senator Clinton is involved in it, Senator Carper also. But without somebody in the majority taking the lead it would go nowhere. So I think he deserves a lot of credit for that and I hope he keeps it up. But I think to go back to the issue with the committee, we really need to step back and address some of these things. Now the health and environmental community has been very consistent from the beginning on a couple of things. One, the Clean Air Act is a good law. Not perfect, not perfect by a long shot, but it's a good law. We shouldn't go changing it unless we change it for the better. Secondly, everybody has agreed, in the health and environmental world, that the best plan put forward so far is the tri-partisan plan that Senator Jeffords put forward, also on the other side by Congressmen Waxman and Boehlert, a bipartisan plan in the House. And it's got the most cosponsors of any plan. And the analysis last week showed why we're for that. One, it would make the biggest reductions in the dirtiest pollutants. And it would also do something about global warming pollution, which we're not seeing. Now the science, since we've last been here and since these bills have all been introduced, actually underscores the importance of addressing those issues. We all now know that fine particle pollution is more deadly than we thought before. Thousands of people literally are dropping dead at current standards. So we need to make that aggressively better, which Senator Jeffords' bill would do. And global warming pollution is worse than it was. We saw this big story in the New York Times last week with analogue; you need water skis to go through the Artic.
Scott Segal: Well, what's interesting about Frank's discussion of the different alternatives, comparing the Jeffords' bill, the Carper bill and the Clear Skies initiative, is what we agree on, not what we disagree on. What we agree on is that there needs to be an aggressive program put in place with an objective of reducing your emissions. It needs to work as quickly as possible. The question is what is the best way to achieve the objectives we collectively agree on? And what I would suggest is that the Jeffords' legislation imposes some unacceptable costs that make it not the best approach to achieve our shared objective. For example, right now natural gas is selling at three times its historic average. And we're entering into a winter season where we're going to have problems not only with natural gas, but of course with dreaded home heating oil as well. And now is exactly the wrong time to put in place a plan, which by virtue of its speed and its ultimate numbers would drive massive fuel switching to natural gas. That's not in the best interest of those living on fixed incomes, the elderly, those living in structural property. I mean those are the unaddressed groups that, quite frankly and with all respect to Frank, the environmental community does not like to address. By contrast the power sector has to address those groups. They're our customers every bit as much as any other demographic group. So we have to address them. The environmentalists don't. And as a result a lot of people are left out in the cold if you take the policies that Frank and some of the folks on the Hill would ...
Frank O'Donnell: Now technically, I don't think that's accurate. I haven't read it in a while, but I do believe that the Jeffords' legislation, through its credit trading system, would use some of the monies paid by the power industry to help subsidize some of the people who are actually suffering and cold and so forth. So I do think there is actually an idea in mind to try to deal with that kind of thing.
Scott Segal: And the power industry certainty supports additional funding for [Low Income Heating Emergency Assistance Program] LIHEAP, for example, which is a program designed to support those living in poverty as well. But I'm not sure that's enough if we have fuel switching to natural gas.
Frank O'Donnell: And maybe the political center is somewhere between Senator Jeffords' bill and Senator Carper's bill.
Scott Segal: Or between you and me?
Darren Samuelsohn: Exactly, that's exactly same thing. Because that's where I've been trying to go with this interview for the last 10 minutes. Let me interject the Carper bill into this debate. Because here this bill is now only, I think it's like $30 billion more, help me out here with the costs. I don't think it's that much more. The Carper bill is what the EPA analysis showed, then the Clear Skies or CAIR. So the benefits are I believe higher and the costs are just a little bit higher for putting the Carper bill into place. And you get the CO2 reductions, you start the CO2 reductions.
Scott Segal: The problem is, with all of the EPA analysis, is that it makes certain static assumptions, but the world around us is not static. We've seen massive increases in energy prices both on the transportation sector and with respect to stationary sources using natural gas for example, in the last couple of months. So even what appeared to be small differences in costs based on static assumptions related to energy can actually be quite significant increases in costs. One other thing, the primary feature of the Carper bill, that Senator Carper likes to tout, is that it too includes a carbon provision. And while he says it's not a showstopper to exclude carbon perhaps maybe. Although he has from time to time switched his argument about what would be sufficient to satisfy him. But assuming for a moment there has to be some form of carbon in it, I think it is well worth remembering that there is no consensus yet on the appropriate way to control carbon through domestic policy. So as a result, if that becomes the marker by which we judge air pollution policy, it's like saying we don't want to pass air pollution policy. Which I understand maybe a good result for some, but I don't think it's a good result for the U.S.
Darren Samuelsohn: Frank, the Carper bill?
Frank O'Donnell: Sure, well I'm a little bit biased. I'm going to have to admit I've appeared with him publicly to bash the Bush administration. The picture is on our Clean Air Watch Web site. So I'm not going to deny that, but I think people in the environmental community think that he is well intentioned, is looking to go in the right direction. We have had some concerns with some elements of his bill, don't think it's perfect. But one thing I will say about him I think he is genuinely concerned about the global warming problem. He reads the papers like we all do. I mean now the evidence is coming up that, as I said before, global warming is even worse than we thought before. Last week we had a number of scientists at the American Meteorological Society, very credible climate scientists, saying you know, global warming, these big deadly hurricanes, looks like there is a link. And maybe not every weathercaster in the country is saying it yet, but I think they will be pretty soon now that the idea is out there scientifically, in a credible scientific way. And when he has appeared publicly he has said, really his big focus has been, look, global warming is a problem. I'm a little late to this issue maybe, but I genuinely believe we need to do something about it now. And I don't think there's going to be any legislation in that committee without addressing global warming. That's why I say he's in the catbird seat.
Darren Samuelsohn: Scott, I know you want to pounce on the hurricane issue, but we're almost out of time. Just really quick give me your assessment. Are we going to see a Clear Skies bill before President Bush leaves office? Are we going to see any sort of Clean Air Act amendments before President Bush leaves office? Yes or no?
Scott Segal: Yes, yes. I'm going to go out on a limb and say we're going to push hard for it. And the case has been made for it. And the case is getting better everyday.
Darren Samuelsohn: After midterm elections or before?
Scott Segal: Probably after, there's not much time.
Darren Samuelsohn: OK. Frank?
Frank O'Donnell: The corpse is not going to rise from the dead. It is absolutely not going to happen even though we've recently had Halloween. That vampire has had a stake through its heart. You may see something better, but it's going to have to be addressing carbon. Senator Voinovich is going to have to actually come Senator Carper's way to see any kind of action at all. And there's still that big mess on the other side called the House of Representatives and the guy that the Dallas Morning News calls Smokey Joe Barton. And the senators are very concerned about dealing with him. Last week they wouldn't even deal with the so-called Gas Price Act because they knew they might have to go into a conference. And you saw a situation where the Republican members of that panel, most of them, looked like they were afflicted by a different kind of gas problem. I don't think they're going to want to vote on something unless it actually is something that's popular.
Scott Segal: Darren, you know it must be near Halloween because Frank is once again, just trying to scare people. I mean this whole notion about hurricanes. I don't know how many more experts, how broad the consensus has to be. The National Hurricane Center, which is not a partisan organization, is the recognized expert on hurricanes, has said that the current hurricane cycle is part of a natural cycle. It has nothing to do with global climate change. But that said, the best way to protect the American people, the best way to increase the efficiency of energy and at the same time to make sure that emissions decline is to make sure that there is regulatory certainty. That means legislation that addresses the principles of the Clear Skies Initiative. It's the best approach on the environment.
Darren Samuelsohn: All right gentlemen. We're going to have to cut it off here. We'll see you for a fourth round in probably another six months or so.
Scott Segal: Great.
Frank O'Donnell: Great, thanks a lot.
Darren Samuelsohn: Until next time, this is Darren Samuelsohn for another edition of OnPoint. Thanks for watching.
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