Thursday, May 21, 2009

Inhofe Says New Obama Regulations Will Make Cars More Expensive and Less Safe

Senator James Inhofe (R-Okla.) issued a statement Tuesday in response to an announcement by the Obama Administration that the Environmental Protection Agency (EPA) and the Department of Transportation will raise fuel economy standards.

“Today, President Obama announced a policy that will force industry to make cars that are more expensive and less safe—a policy that will harm consumers while doing virtually nothing to address climate change,” Senator Inhofe said. “While the President appears to recognize that granting the California waiver by itself would create a patchwork of federal and state emission standards, under this proposal, bureaucrats from EPA and California are effectively deciding what kind of cars consumers in the rest of the country should drive.  This is yet another instance of government-run industrial policy, which, as history has proven, is bound to fail.”


EPW Minority Hosts Rountable Discussion : Carbon Cost Control Strategies

On Monday, the Senate Committee on Environment and Public Works Minority staff conducted its second roundtable discussion for House and Senate staff, this time focused on “Understanding the Effectiveness of Carbon Cost Control Strategies” 

The climate roundtables conducted by the minority staff feature non-partisan climate change policy experts discussing various aspects of a cap-and-trade program with Senate staff.  The first roundtable, conducted on March 30, 2009,  covered allocation of allowances through cap-and-trade. 

Proponents of a cap-and-trade program to reduce greenhouse gases are divided over the inclusion and details of cost containment mechanisms, whether through the use of a safety valve, offsets, banking, borrowing, or some combination of these.  This debate involves important issues concerning, among other things, program cost, regional impacts, and market oversight.  The purpose of this non-partisan briefing was to explore these issues in depth with some of the nation’s leading experts on climate change policy.  Speaking and Answering Questions were representatives from:

Resources for the Future

Karen Palmer 

National Commission on Energy Policy

Jason Grumet 

Pew Center on Global Climate Change

Janet Peace  

EPW Hearing on the Economic Development Administration

Yesterday, Senator Inhofe made the following statement at an EPW hearing on the Economic Development Administration:


Thank you, Chairman Boxer, for holding this hearing on the Economic Development Administration.  Oversight is an important function of our Committee, and with reauthorization of the agency several months overdue, as well as a more than tripling of funding over the past year through regular appropriations, disaster-related supplemental funding and stimulus bill funding, an oversight hearing now is very timely.


I would like to welcome our witnesses, especially LaVern Phillips, President of the Woodward Industrial Foundation in Oklahoma.  I visited the city many times, including just last week.  I also want to note that I understand that Mr. Phillips and the rest of Woodward will be welcoming former President George W. Bush to the city to celebrate the 4th of July this year.


 I’ve had the pleasure of working with state and local interests to begin addressing several infrastructure needs for Northwest Oklahoma and the Panhandle.  For example, WRDA 2007 authorized water and waste water treatment related infrastructure, including $1.5 million for Woodward, $16 million for Guymon and $275,000 for Oklahoma Panhandle State University.  We were able to secure funding for transportation improvements as well, including $6.4 million to construct a viaduct on US Highway 270 over the railroad tracks in Woodward and $1 million to widen US Highway 54 from north of Optima to the Kansas state line.  I intend to continue working with dedicated professionals like Mr. Phillips to improve the infrastructure, and therefore the economic viability and quality of life, of this area.


One of my trips to Woodward was last August for a $1 million EDA check presentation that will help build the Woodward Community Campus.  I will let Mr. Phillips talk more about the details of the project, but I would like to mention that I very much support this project and was pleased to see it recognized for funding by EDA. 


The Woodward project is a recent one in a long line of smart and incredibly beneficial investments EDA has made in Oklahoma.  In fact, over the past six years, EDA grants awarded in my home state have resulted in more than 9,000 jobs being created or saved.  With an investment of about $26 million, we have leveraged another 30 million in State and local dollars and more than 558 million in private sector dollars. 


That’s real economic development with real jobs.  I only wish more of the so-called “stimulus” bill had been dedicated to programs like EDA that are truly successful at spurring economic development.


My belief in EDA’s success is not just anecdotal either.  Studies show that EDA uses federal dollars efficiently and effectively, creating and retaining long-term jobs at an average cost that is among the lowest in government.  Today’s hearing gives us an opportunity to discuss possible tools to improve performance even further during the reauthorization process. 


The EDA=s authorization expired on September 30, 2008.  I am concerned that the lapse in authorization may leave the agency vulnerable to funding cuts during this appropriations cycle and more generally result in uncertainty for the agency as well as the struggling communities that depend on its assistance.


I had introduced a reauthorization bill in July 2008, and this Committee reported a bipartisan bill in September.  Unfortunately the bill was never enacted.  In February of this year, I again introduced a bill to reauthorize and improve EDA’s programs. 


Madam Chairman, I hope that this hearing is the first step in our Committee again reporting an EDA reauthorization bill and this time seeing it through to enactment.  I look forward to working with you and our colleagues to accomplish that task as soon as possible.  Thank you.

EPW Hearing on Business Opportunities and Climate Policy

On Tuesday, Senator Inhofe provided the following statement for a full committee hearing on business opportunities and climate policy:

Madame Chairman, I commend you for having this hearing and I welcome all of the witnesses from the various businesses before this Committee today.  I’d especially like to welcome Tim Healy from Lange Stegmann fertilizer company and Jack Armstrong with BASF. 

The message I have is very simple and I hope it begins to make sense to my colleagues on the other side as we continue our global warming cap-and-trade debate this year. True innovation, job growth, and business opportunities should stem from the open and free market and not from creation of more taxes and government spending. Yet that is exactly the direction we will go if we pass cap-and-trade and establish a new, government-created market based on carbon, all at the taxpayers’ expense.


I am not opposed to new green jobs, or any kind of jobs that make sense in the global economic market.  In fact, my state of Oklahoma knows a thing or two about making wind power cost effective.  Oklahoma Gas and Electric’s wind energy program has recently been ranked number one in the country by the Department of Energy’s National Renewable Energy Laboratory for the price premium it charges for new customer-driven renewable power.


What I am opposed to is increasing taxes. And cap-and-trade is, plain and simple, a tax. It’s an indirect, hidden, sneaky tax, but it’s a tax. And it’s a tax on the American people and businesses that will raise energy prices as well as all goods and services that are produced using energy.  It’s a tax that will fall more heavily on poorer people because poorer people spend a higher percentage of their incomes on energy than do wealthier people. And finally it’s a tax that, for every business opportunity it will create, it will destroy others, especially in energy-intensive industries, which are concentrated in the states that use coal for electricity.  The result is a net loss for jobs and the economy.


I want to commend Senator Bond for his recent report on the cost of green jobs.  The report very effectively highlights how government-created green jobs can kill existing jobs.   


In the meantime, I also point you to a new study out of Spain, which I understand the President has used in many of his speeches as an example of the direction we are heading.  Spain has real world examples over the past decade of implementing these types of policies. It found that for every 4 green jobs created, 9 other jobs were lost. Other findings from this study show that Spain spent 571,138 Euros on average to create each green job.  Spanish energy regulators estimate that the rate paid by end consumers for electricity must be raised by 31% to repay this debt.


Now as the House moves towards marking up their bill, I am hopeful we will have more hearings to discuss these types of substantive issues and how they factor into the debate on cap-and-trade.  All sides of the issue should be heard.


As we have learned though mandates in the past, with the most recent example being the RFS and biofuels, there will be many unintended consequences. I am hopeful that as we move forward we provide real market-based incentives, rather than mandates, caps, and government subsidies, for new job creation.


While I understand that today’s hearing is mostly focused on small businesses and startups, I want to comment on this issue of industry support for cap-and-trade policies. My colleagues on the other side frequently rail against “big polluters” for obstructing passage of cap-and-trade legislation.  Yet it is not ironic that many of these selfsame “polluters” are supporting and lobbying for passage of cap-and-trade. 


While House Democratic leaders are attempting to mark up their bill this week, they are picking winners and losers by distributing billions of dollars in pollution “allowances” to favored industries.  Not surprisingly, many of these companies are in turn supporting the Waxman-Markey bill. 


As former Congressional Budget Office Director Peter Orszag said, “If you didn't auction the permits it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.  All of the evidence suggests that what would occur is that corporate profits would increase by approximately the value of the permits.”  It didn’t stop there. CBO also found that “giving away allowances could yield windfall profits for the producers that received them by effectively transferring income from consumers to firms' owners and shareholders.”


Now I am all for companies seeking to generate a profit in the open market and making a buck, but when the burden lands on the backs of my constituents in an artificially created market that is not economically sustainable, I must object. 


Once again I welcome all the businesses here before the Committee today and I look forward to hearing their testimony.

EPW Fact of the Day: A Unitary Executive?

What role should the White House play in agency decision making?  During eight years of the Bush Administration, the Democrats answered: none.  Recall the colorful investigative extravaganzas over the denial of California’s waiver to set tailpipe emissions standards.  The House Government Reform and Oversight Committee, then chaired by Rep. Henry Waxman (D-Calif.), was particularly incensed by White House intervention in the waiver process at EPA.  Former EPA Administrator Steve Johnson, the committee concluded in a report, was forced by a rogue White House, contrary to law, into denying the waiver.  “It appears that the White House played a significant role in the reversal of the EPA position,” the committee wrote.  “This raises questions about the basis for the White House actions.” 

Indeed, in the committee’s view, the White House role raised some weighty constitutional and legal questions: “The President has an obligation under the Constitution to take care that the laws of the United States are faithfully executed.  In this case, the applicable law is the Clean Air Act, which requires that California's petition to regulate greenhouse gas emissions from motor vehicles be decided on the merits based on specific statutory criteria.  It would be a serious breach if the President or other White House officials directed Administrator Johnson to ignore the record before the agency and deny California's petition for political or other inappropriate reasons. Further investigation will be required to assess the legality of the White House role in the rejection of the California motor vehicle standards.” 

No question this is a serious charge, and one would therefore expect the committee, and the Democratic majority, to investigate, as they see it, similar breaches of legal authority within the Executive branch whenever they occur.

FACT: When Democrats control the White House, one man’s legal breach is another man’s effort to save the planet.  As recounted in a recent report the legal authority of the EPA Administrator was apparently overridden by Carol Browner and Mary Nichols, head of the California Air Resources Board (CARB), both of whom “were key in crafting a plan to impose the first-ever national carbon limits on cars and trucks.” 

In fact, it seems that Administrator Jackson was, at best, a marginal player in the decision to regulate greenhouse gas emissions from cars.  As Greenwire reported, “In an interview yesterday, Nichols said Browner quietly orchestrated private discussions from the White House with auto industry officials.”  “Browner started the talks,” Greenwire found, “soon after becoming Obama's special assistant on energy and climate.”  It was then that “Nichols and Browner decided to keep their discussions as quiet as possible, holding no group meetings and taking care to not leak updates to the press. This strategy, they felt, would help facilitate fast progress outside the media frenzy that often dominates Washington politics.”  Nichols made a special trip to Washington to “meet with Browner only after the former U.S. EPA administrator had contacted industry officials individually and the White House staff had mastered the technical and legal issues associated with California's attempt to regulate the auto industry.”  A new standard has thus emerged: So long as the White House supports the right policies, White House influence is perfectly fine.

Link to Article


In the News . . . Follow the Science on Yucca

New York Times



May 21, 2009


The administration’s budget for the Energy Department raises a disturbing question. Is President Obama, who has pledged to restore science to its rightful place in decision making, now prepared to curtail the scientific analyses needed to determine whether a proposed nuclear waste repository at Yucca Mountain in Nevada would be safe to build?


It is no secret that the president and the Senate majority leader, Harry Reid, who hails from Nevada, want to close down the Yucca Mountain project, which excites intense opposition in the state. The administration has proposed a budget for fiscal year 2010 that would eliminate all money for further development of the site, and Mr. Reid has pronounced the project dead.


But the administration at least claimed that it would supply enough money for the Energy Department to complete the process of seeking a license from the Nuclear Regulatory Commission, if only to gain useful knowledge about nuclear waste disposal. Unfortunately, the budget released this month looks as if it will fall well short of the amount needed.


Money for the Yucca Mountain project, nearly all of which is used to support the licensing application, would fall from $288.4 million in 2009, the current year, to $196.8 million in 2010, a precipitous drop. And the agency intends to rely heavily on its own staff personnel rather than on more costly outside consultants from the national laboratories or private contractors. There is great danger that the department will lack the expertise needed to answer tough technical questions that emerge during the regulatory commission’s reviews.


These ramp-downs are occurring at the worst time. The regulatory commission is just beginning its licensing process, which is scheduled to take three to four years, and its relevant boards have ruled that at least eight intervenors can raise some 300 issues for technical challenges, an unusually high number. The cutbacks increase the odds that the agency will stumble in trying to justify a license — or that the hearings and evaluations won’t be completed within statutory deadlines.


Meanwhile, the administration, Congressional leaders and the nuclear industry are calling for a blue-ribbon panel to study alternative ways to dispose of nuclear waste. Surely it would be useful for any such panel to know whether the Yucca Mountain project was sound or flawed.


Before approving this truncated budget, Congress needs to ensure that it contains enough money to sustain a genuine licensing effort. We have no idea whether Yucca Mountain would be a suitable burial ground for nuclear wastes. But after the government has labored for more than two decades and spent almost $10 billion to get the site ready for licensing hearings, it would be foolish not to complete the process with a good-faith evaluation. Are Mr. Obama and Mr. Reid afraid of what the science might tell them?

EPW Policy Beat: Climate and the Keystone State

EPW Policy Beat came across an interesting perspective on climate change legislation—this time from three Pennsylvania utility commissioners.  In a May 7 letter to the Pennsylvania Congressional delegation, Tyrone Christy, Kim Pizzingrilli, and Robert Powelson, all of whom, incidentally, were nominated by Gov. Ed Rendell (D), wrote that climate legislation, “[l]eft unexamined and unchecked,” will have “a profound adverse impact on the Commonwealth of Pennsylvania.”  How so?  For one thing, as the commissioners note, Pennsylvania gets 58 percent of its electricity from coal, and is the nation’s 4th largest coal producer, distributing over “75 million tons of coal” each year.  “However,” the commissioners warn, “if the Waxman-Markey bill were to pass, Pennsylvania is looking at a bleak scenario by 2020: a net loss of as many as 66,000 jobs, a sizeable hike in the electric bills of residential customers, an increase in natural gas prices, and significant downward pressure on our gross state product.” 

As such, “Pennsylvania and other coal-reliant states will be severely and disproportionately harmed by carbon legislation.”   As numerous economic reports have shown, this fact is undeniable.  The commissioners also rightly point out that carbon legislation poses serious reliability challenges: “It will be impossible for these states to rapidly or immediately stop using power generated at existing coal-fired or natural gas-fired power plants without causing severe and protracted reliability problems.”   Getting a good bill versus an economically disastrous one boils down to, in the commissioners' words, “common sense.”  What, then, is to be done?  “Is Pennsylvania ready to acquiesce behind federal legislation that will choke off our economy by displacing thousands of jobs and increasing utility bills for residential ratepayers?”  Their answer, directed at the Pennsylvania Congressional delegation, was clear and simple: “We hope not.”  

Link to commissioners’ letter