Beyond Sensibility: New Culture Threatens Regulatory Foundation

Can the existing federal and state environmental regulatory structure provide adequate certainty for energy production given our US climate-change goals?

According to conclusions from a recent Texas electric grid-forecasting study, ‘Over the next 20 years, due to the free market alone, ERCOT can expect to see a cleaner grid that relies on Texas-produced natural gas, wind and utility-scale PV solar power at little additional cost to consumers.”

But the report probably did not consider challenges to regulatory certainty that have become increasingly common in the environmental permitting process for energy producing states.

Power generation in Texas could include even more renewables, cleaner natural gas, and emission free nuclear power at little increased cost to meet US greenhouse gas (GHG) adapting goals.

But between now & then, how do we get there? The “one size fits all” White House Clean Power Plan (for now delayed for review by the U.S. Court of Appeals D.C. Circuit) does not consider variables in market forces and the process of environmental regulation at the state level. Large energy production states, like Texas, are often portrayed to be in denial of climate science by opposing the Environmental Protection Agency (EPA), but acquiescence to federal control will not yield adequate guidance for certainty needed in energy planning investments.

The process of environmental regulation relies on legally achievable thresholds, with the presumption that public health and safety can be achieved when state-issued permit guidelines are followed and enforced. States have delegated federal authority to implement environmental standards and enforce through the permitting process as partners with the EPA.

But the notion of acceptable environmental standards for energy production is increasingly challenged at all levels. Perception of environmental injustice has added another dimension to the discussion. Skeptics of environmental regulatory certainty often focus on pollutants-CO2 emissions, effects on wildlife, and a desired democratization of advocacy, etc. Supporters of power generation want regulatory focus on permit predictability and reliability concerns. If permits, federal, state, or local are not attainable, financing of needed power production will not be either.

Even wind energy, which is emission free, very low–cost, and not subject to fuel price risk has been criticized for accidental bird kills. U.S. Fish and Wildlife recently proposed changes to policy from 5-year permits to 30-year permits for wind energy producers, and US wind capacity could triple by 2030 under the Clean Power Plan. Should we accommodate an industry that collectively reduces US greenhouse gases, or should we consider threats to iconic wildlife and vistas more important?

Can the US achieve a collective balance, to accommodate the numerous objections to regulatory compromise? What happened to the concept of federalism, the principle that the states– not the national government– are in control and responsible for developing their own policies?

Despite challenges, Texas leadership will continue to address and pursue regulatory certainty by relying on sound science, advanced technology, and common sense. Public acceptance not withstanding, balancing energy production and consumption needs will continue to require a strong regulatory structure.

Adapting to environmental challenges resulting from an ever growing Texas population requires a combination of strong, enforceable legal thresholds in the permitting process and increased public support for sustainable environmental limits.

Link to article in Austin Lawyer

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SCOTUS decision validates TX complaints regarding EPA

Last week the US Supreme Court (SCOTUS) ruled the EPA can limit greenhouse gas emission’s from large producers but took issue with the EPA regarding how it does so. The justices said in a 5-4 vote that the EPA cannot “tailor” the federal Clean Air Act to regulate greenhouse gases from power plants, refineries and factories. EPA’s rewriting of the Clean Air Act to fit its own agenda has been a source of consternation to many states, especially Texas, although few have noticed or cared about the rationale or reasoning for the objection’s, until now.

Regarding the EPA “tailoring rule”, Justice Antonin Scalia said, “the EPA could not just rewrite the statute” to bring greenhouse gasses under a provision dealing with facilities that would increase the overall amount of air pollution.

Not only did EPA make substantive changes in lieu of Congress, they did so “tailoring” their new rules to affect only certain “violators” and exempting others assuming broad authority. No due process, no public comment period.

I remember when I was TCEQ Commissioner as a member of the US Clean Air Act Advisory Committee, then EPA Deputy Administrator Gina McCarthy addressed the committee and told us how the “tailoring” would work. When asked to include “Early Action Compacts” (attempts by local communities to address factors that lead to non-attainment status), she said although they were productive she could not consider the Compact’s beneficial results because they were “illegal under the Clean Air Act”. When asked about the “tailoring rule” being outside of the scope of the Clean Air Act, she said that simply, “I am in charge and this is how it is going to be”.

Question for me was never whether EPA can regulate greenhouse gasses, it was HOW they did it which was unproductive, unfair, costly and now the SCOTUS has ruled inappropriate.

The Clean Air Act (passed during the Nixon Administration) covers pollution at thresholds (some cases 100 tons-250 tons per year) intended to limit dangerous pollutant emissions from the worst polluters—not greenhouse gas (GHG) regulation. By choosing to use the Clean Air Act to limit carbon dioxide (declaring CO2 a pollutant of that caliber), EPA chose to utilize the wrong “regulatory tool” so it would not have to rely on new legislation to regulate CO2. EPA then “tailored” the Clean Air Act to include energy producers while exempting other CO2 producers.

Rather than constructing a way to increase pollutant controls within permitting methods, vetting costs & including public input, EPA did not want to do so via Congress or through a transparent rule making process. If left to Congress, the House of Representatives would surely force EPA to work toward regulations implemented by states, that hinge on balancing both jobs and the environment (EPA not mandated to consider cost).

EPA’s goal this whole time has been to control by fiat. They used broad discretion in interpreting the Clean Air Act to force acquiescence by all energy producing states to implement “tailored” rules, and utilize the Clean Air Act to get around congressional approval. According to the SCOTUS that is “rewriting” and “an agency has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.”

If EPA want’s to ban coal or any other domestic fossil fuel production, convince Congress to implement a strategy to accomplish this. Don’t set up a myriad of “tailored” rules that exclude some and force others to pay for GHG. Force all GHG polluters, hospitals, schools, whomever to get regulated, and see how much it costs and the backlash. If its bad GHG, then it is not just the industrial polluter who should get penalized. But recognize that carbon dioxide is naturally occurring and emitted from many sources not just energy production.

Not sure what caught the eye of the US Supreme Court, but the way EPA chose to go about limiting emissions, the “how” it was done, went too far and the SCOTUS warned EPA that they too must consider the limits of the law and due process in limiting greenhouse gases.



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With water prices going up, rainwater collection may be best option for Texas

Drought and population increases force the reaction of water conservation since current supplies are not replenishing fast enough. Cities are scrambling to secure water rights, and have to charge customers enough to cover the costs associated with operating water and wastewater systems.

But costs to the average Texan will drastically increase even more as new water source supplies and conveyance systems are required just to turn on the faucets, something many here in the past couple of generations have never experienced. Water users will have to pay for the required water systems and the cost will be more drastic for those served by private providers.

For generations we have been able to get through drought with eventual rainfall and better management techniques. But the population increases and water uses of today dwarf the delivery needs of the 50’s when the last drought of this magnitude occurred.

The difference between adapting in present day Texas, and in other places worldwide that regularly experience water scarcity: rainwater collection is standard if not mandatory in those places, and government requirements for water pressure and cleanliness are not a factor. Rare are cisterns or rainwater systems in America unless in rural settings. Perhaps it is time for Texans to collect every drop of rain we can when possible?

For a variety of legitimate reasons (water system integrity, water pressure & water quality legal requirements as examples), we have regulated ourselves into a “no-win” scenario regarding conventional water supply availability and alternatives. Rainwater, for example, could supplement the demand for freshwater to an ever increasing population in Texas if it became common practice.

Due to perception of availability or common practice, treated water in particular is far underpriced. Costs associated with its regulated delivery are rarely understood by the average household and will almost certainly continue to be a source of consternation for elected officials tasked with reigning in the cost of government for their political survival, while being expected to produce efficient and swift water conveyance to all parts of the state.

Leadership cannot make it rain and unfortunately that is the first thing that needs to happen.

But they can address the second thing that needs to happen, establishing a standard for and encouraging rainwater collection statewide. It is something political leadership can do in preparation for when the “rainy days” do occur and the best sustainable defense against increasingly arid conditions in Texas.

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Law and statistics validate Texas challenge of “Cross-State Air Rule” implementation before US Supreme Court

It may seem like irrelevant due process driving the Texas lawsuit currently before the US Supreme Court but if EPA followed the standard for implementing new rules, like the “cross- state air” effort, then implementation of a transport rule may be underway by now.

“Notice” would have been given to all states and parties prior to the comment period, which would have revealed discrepancies with EPA assumptions and data used in determining their new rules. Then “guidance” from the feds to states for compliance would have been issued so states would have a “how to” guide on why all the changes are required and how to do it. All necessary for state’s to be successful in meeting any requirements.

Texas Attorney General Greg Abbott is arguing on Texas’ behalf before the US Supreme Court this week against a proposed federal rule intended to limit the downwind effects of air pollution across state lines.

EPA did not follow rule implementation procedures required by law for the “rulemaking” process and consequently Texas was unfairly included with no opportunity to prove why EPA was using redundant data, or inaccurate readings in making its conclusions. If any state regulatory authority avoided such details in “rulemaking” they would be sued and lose.

States like Texas were included at the last minute in spite of data showing assumptions of downwind contributions being flawed, wrong, or under the threshold. Even ERCOT did not include Texas power reserve limitations based on this new rule because there were no threshold breaches to indicate Texas inclusion.

Due process is a big part of predictable rule making. If business will indeed be able to adapt to circumstances sustainably, EPA should follow the law so pollution limits can be accomplished and benefits truly realized. If they want to make it impossible for coal or other fossil fuels to continue then say so, but consider how the new rules can be implemented for successful outcomes.

The way EPA went about the “cross-state air rule” was vulnerable to challenge because they did not implement it in a way that is fair to those affected, nor genuine in its purpose. Until Texas challenged, other states acquiesced (probably due to cost) in spite of data redundancies and false projections. Texas, whose TCEQ is the second largest environmental agency in the world, had the resources to disprove federal calculation’s of pollution and particulate matter conclusions.

Texas has more than its fair share of challenges from “cross-state air” blowing our way from Latin American burns and African dust yearly. But expanded federal regulations on air quality problems that originate in another state are a real concern based on EPA “command and control” method’s, manipulation of the facts, and their rationale for doing so.

Texas should make certain that all sources of pollution within the state jurisdiction are regulated to the best of its ability. Source and non-source pollution are increasing as a result of population increases and lifestyles. Changes required should be as inclusive as required by law, for maximum effectiveness.

But EPA was not interested in assisting states to anticipate or collaborate on justification for the various aspects of the rule. It was a “gotcha” approach intended to force rules that Congress would never approve.

Manipulating data and illegally implementing rules by “any means necessary” is not productive or sustainable. Everyone wants clean air, but how we regulate pollutant activity must include due process and adherence to the law, even by the EPA, before state implementation of a “cross-state air rule” can be effectively realized.

I hope the US Supreme Court agrees or the consequences can be exponentially costly with no predictability or real benefits for Texas to come.

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US Court to feds: “Cease nuclear waste disposal fee”

Since 1983, federal law has required utilities to pay fees into a fund to finance permanent federal nuclear waste storage. Due to a variety of factors, the fee collection has continued while the federal government has produced no strategy for implementing this law to completion.

Yesterday, the U.S. Court of Appeals for the District of Columbia said the federal government must stop charging utilities until it decides on a permanent way to store the nuclear waste, ostensibly either at the long-planned Yucca Mountain site in Nevada or somewhere else.

This decision, halting collection of this fee, reveals a larger dilemma potentially for America; the feds are “punting” on the issue of necessary storage of nuclear waste at a “national site” to states and the private sector. For whatever political reason, whether it be Yucca Mountain or some other repository, on this topic our federal government appears to want nothing to do with the required burden, responsibility, or consequences of nuclear waste storage.

That is understandable and facilities can be easily run by the private sector and regulated at the state level, but the US Court decision to cease collection of this fee means the federal government has NOT developed a systematic method of depositing waste nationally as mandated. Perhaps the federal government should have addressed barriers to implement the law some time ago, but at one time a federal repository was considered a good idea or the utility fee collection would not have been in law.

Waste will continue to be produced and stored, but no federal facility will be involved. The private sector, whose mission is economic & not necessarily protecting the public wellbeing, will be in the “driver’s seat” regarding viable nuclear waste storage. Doing this safely and regulating responsibly is not difficult to anticipate or control effectively.

But knowing the federal leadership was willing to collect a fee for nuclear waste storage while not using the appropriated funds for that purpose (when they are required to by law), & when the illegal consequences of black-market waste burial could be so devastating to the environment long term is revealing.

I believe standard policy is not the goal as much as avoiding value judgments and fear of protests. It appears the general rationale is to focus on pollution reduction, making permitting standards more rigid, but not endorse Yucca Mountain or develop a sustainable approach to waste storage at the federal level as mandated by law.

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Matagorda Bay…Safe for now?

Environmental advocates and fishermen from along the Texas Gulf Coast met in Bay City Wednesday to discuss the future of Matagorda Bay, a major destination for tourism, recreation and commercial fishing that has suffered greatly in recent years due to a lack of freshwater inflows from the Colorado River.

According to an article by Neena Satija in the Texas Tribune this week, the participants concluded saving the bay “will require tremendous political pressure on the Lower Colorado River Authority (LCRA) and the Texas Commission on Environmental Quality (TCEQ) — the agencies chiefly responsible for managing water resources in the Colorado River basin. And if that doesn’t do the trick, a lawsuit might”.

Thankfully pulse flows on the Colorado River from heavy rains this fall have occurred naturally (for example a couple of weeks ago with the Austin Halloween flood) and will greatly benefit the Gulf coast. But when in drought, Matagorda Bay and the estuaries along the coast of Texas suffer.

I do not agree that pressure on the LCRA or TCEQ will yield one more drop of water, they are bound by surface water delivery requirements that dictate implementation under certain conditions, and have very little legal leeway or incentive to alter course from their predictable delivery method schedule.

But the problem of surface water sustainability is real and requires a better way of conveying and distributing surface water. If not addressed legally soon, I predict the courts WILL address it in the name of the “whooping crane” or some other species or downstream reason/rationale.  And they will impose remedies that may include methods not anticipated or workable by the state or local’s.

The sustainability of those upstream or downstream will require lawmakers to address a better “drought” surface water availability method (especially detailed for extreme conditions) including all affected by senior and junior water rights, cities, industry, etc. It should include more than just cutting water off for downstream needs that depend on that “piggy back ride” of water when certain conditions are reached. Surface water is still state water* (*although the “right’s” are issued in a first come method more or less) and it was never anticipated to have a limit. We have arguably exceeded our limit.

Implementation of very different specific rules should be decided by Texas, not the courts. And both upstream and downstream users should have to conserve much more drastically until we get rain/floods where we need them and can store more of it.

A “water bank” for surface water right holders who are interested in selling or inactivating those rights could be established and necessary flows could be maintained and released by water master. How to pay for this? State lawmakers would decide, but ideas need to be deliberated soon.

Seems an anticipated effort to reduce the pain when the inevitable occurs, courts intervene and water is siphoned off at rates that drastically affect lifestyles, would be useful and help display willingness enough to avoid federal or court intervention.

Or we can just allow the status quo and hope it rains.

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Prop 6 passed – Now what to expect?

Many are probably right to sense the direct impact from Prop 6 passage has yet to be determined, and that the Texas Water Development Board (TWDB) will have a tough job of ranking “apples and oranges” water infrastructure projects statewide once it passes.

A couple of clarifications to add to the naysayers; a percentage of rural and conservation interests must be included, and projects eligible have to be in the state water plan already per region to be considered. Speculative discussion from stakeholder groups (representing the various regions at a work session of the TWDB recently) revolved around the perceived advantage of municipal strategies compared to agricultural interests and how difficult it will be to rank projects equally due to a variety of factors.

All legitimate challenges, but Prop 6 passing is the first step toward funding the envisioned statewide water plan. The thought is if water conveyance/delivery infrastructure is improved strategically, then the whole state benefits. Support from a wide variety of interests on both sides of the aisle should be inferred by voters as legitimate rationale to vote in favor of this effort. The development of both a line of state credit ($6 billion approved already approved by Texas voters as a line of credit if TWDB deems appropriate to use) coupled with the $2 billion CASH to use as a revolving leverage fund from Prop 6 passage, is anticipated to actually produce $27 billion worth of projects over 50 years.

The TWDB, led by Chairman Carlos Rubinstein and fellow members Bech Bruun and Mary Ann Williamson, will be tasked with developing criteria standards for project application and implementation once Prop 6 passes. I can think of no one better qualified for leading successful implementation than Rubinstein, a former Brownsville City Manager, Rio Grande River Watermaster, & TCEQ Commissioner who knows well the direct and indirect impact from prolonged drought on water systems large and small throughout Texas.

Aside from the financial aspect, support of Prop 6 is more of a “we’re all in this together, so let’s sharpen the tools to meet the demand” kind of approach to water in general, and thus far has produced a wide variety of odd allies. Focus on statewide water infrastructure needs and understanding of why water is so scarce & underpriced is necessary for public support of lifestyle changes necessary to adapt to reality.

Limitations of available surface water rights and ground water availability notwithstanding, the problems placed on our water supplies from desired development/population growth can be offset by strategic investment in critical water systems. Statewide challenges associated with Texas using more water than is replenished annually in the hydrologic cycle can be addressed by lawmakers with greater efficacy if the strategy includes implementation of the State Water Plan.

Prop 6 passage will facilitate worthy investment and is fair and just for all Texans.

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