The Volokh Conspiracy

The American Bird Conservancy has renewed concerns that wind power development could threaten several bird species, according to this report. (HT: NYT Green Blog)

Officials with American Bird Conservancy . . . cited data from the U.S. Fish and Wildlife Service that estimates 400,000 birds of various species are killed by turbine blades annually.

The conservation group’s concerns come as state and national officials push to expand wind energy development in the coming years.

“Golden eagles, whooping cranes and greater sage-grouse are likely to be among the birds most affected by poorly planned and sited wind projects,” said Kelly Fuller, a spokeswoman for the conservancy.

“Unless the government acts now to require that the wind industry respect basic wildlife safeguards, these three species will be at ever greater risk.”

Such concerns aren’t new.  (I wrote a piece for the Weekly Standard about such concerns over ten years ago). Nor do these concerns mean wind power is a bad idea.  They are nonetheless a good reminder that there is no “perfect” source of power, and even the “greenest” alternative energy sources have their environmental downsides.

Intermittency is one of the biggest problems with solar and wind power. When the sun doesn’t shine or the wind doesn’t blow, there’s no power.  For this reason power storage technologies are essential if wind and solar power are to replace base load capacity and become more than bit players in energy markets.  The WSJ reports on plans to build a utility-scale solar plant with substantial storage capacity in the Arizona desert.

Abengoa Solar Inc. expects to start construction in mid-2011 on a plant in Arizona that will store sun-generated heat to provide six extra hours a day of electric-generating capacity. The heat creates steam that is used to turn power turbines.

Abengoa’s $2 billion Solana plant is expected to be the first major stored-heat plant in the U.S. when it enters service in 2013. Some already exist in Spain and a few more are on the drawing board for Nevada and California. . . .

The Solana plant will be able to meet winter heating and lighting needs by putting electricity on the grid early in the morning—before the sun is shining—and help satisfy summer cooling demand by producing power after sundown. The plant, which can power up to 70,000 houses, has signed a 30-year agreement to sell electricity to utility company Arizona Public Service.

The deployment of stored-heat technology like that proposed for the Abengoa facility is a significant development, but it comes at a price.  Solar power is already more expensive than wind power and carbon-based alternatives, including natural gas.  The WSJ reports that adding heat storage increases plant construction costs by approximately 20 percent.

I’ll leave it to the professional pundits to determine whether House Republicans, President Obama, or someone else got the better deal with last week’s announced compromise.  One winner in the deal, however, is the ethanol lobby.  Although conservative Republicans, environmental groups and even Al Gore had come out against extending ethanol’s tax breaks, Iowa lawmakers made sure ethanol got (more than) its share of the bargain.  Alas, ethanol’s not alone, as the lame-duck tax bill is beginning to look like a Christmas tree.

Maybe it’s the new mood in Congress.  Maybe the stars are aligned.  Whatever the cause, opposition to ethanol subsidies is cropping up in some unusual places — and just in time, as ethanol tax credits are set to expire in a few weeks.

Back in 2000, then-Vice President Al Gore touted ethanol subsidies as good for farmers and the environment.  This was no surprise, as the Clinton-Gore Administration worked to expand ethanol mandates under the Clean Air Act.  However much ethanol programs helped corn farmers, they were never much good for the environment, something Gore now admits.  Reuters reports:

“It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol,” said Gore, speaking at a green energy business conference in Athens sponsored by Marfin Popular Bank.

“First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.

“It’s hard once such a programme is put in place to deal with the lobbies that keep it going.”

Meanwhile, on the other end of the political spectrum, Senators Tom Coburn (R-OK) and Jim DeMint (R-SC) are taking aim at ethanol subsidies as yet another special-interest energy policy boondoggle that should be opposed by free-marketeers and environmental activists alike.  Greg Sargent reports:

With billions in ethanol subsidies set to expire this year, including a 45-cent-a-gallon tax credit for ethanol blenders that heaped nearly $5 billion on to the deficit last year, it appears senators DeMint and Coburn are dead serious about pressing the point.

DeMint, who bucked the GOP establishment by successfully rounding up enough support for an earmarks ban, said in a statement emailed my way:

“Government mandates and tax subsidies for ethanol have led to decreased gas mileage, adversely effected the environment and increased food prices. Washington must stop picking winners and losers in the market, and instead allow Americans to make choices for themselves.”

“We need to let the ethanol subsidies expire and we need energy developed based on market forces,” Senator Coburn added in an interview with me. He said Senators who are not willing to let them expire are “just protecting a parochial interest ahead of the national interest.”

Coburn added that a failure to let the subsidies expire would show that Republicans were not heeding the message their electoral victory sent about reining in spending — precisely what Tea Partyers argued about earmarks.

As Jonathan Zasloff notes, the ethanol issue also presents Republicans with an opportunity to show how less government intervention can be better for the environment.

Ethanol is a lose-lose proposition any way you slice it: it costs a big chunk of money, it’s horrible for the environment, and it does nothing but enrich special interests.  It’s particularly bad on the climate, because the amount of emissions requiring to produce a liter of ethanol is actually more than just using gasoline.  Kudos to Senators Coburn and DeMint for pushing this.

If Republicans fail to take action on ethanol, it will demonstrate the shallowness of their commitment to limiting government largesse and give credence to arguments that Republicans are only for less government when it’s good for special interests.

A draft report of the Department of Interior Inspector General has confirmed what many suspected: High-level White House officials edited an Interior Department report to create the false impression that Interior Secretary’s Ken Salazar’s decision to impose a deep-water drilling moratorium in the Gulf of Mexico had been peer reviewed and approved by outside experts.  It had not been.  The NYT‘s Green Blog reports:

Mary L. Kendall, the Interior Department inspector general, interviewed all the officials involved in preparing and editing the report and reviewed the e-mails between Interior and the White House in the final hours before the report was issued. She found that officials in the office of Carol Browner, the White House coordinator for energy and environment, had changed some wording and moved around some of the report’s findings in a way that made it look as though the independent scientists had endorsed the moratorium recommendation. Officials from the White House and Interior told Ms. Kendall that they had not intended to do so.

The original report said that the recommendations in the report had been reviewed by the panel of seven experts identified by the National Academy of Engineering. That statement was moved in the final report to come directly after the announcement of the six-month drilling ban, rather than after the safety recommendations. Ms. Kendall said that the placement of the sentence “implied that the experts had also peer reviewed and supported this policy decision.”

More from Politico and the AP.

This is not the only instance of misrepresenting science in the wake of the Deepwater Horizon blowout, further demonstrating that politicization of science is not a partisan phenomenon.

UPDATE: More from Greenwire and Dot Earth.

[Note: Post edited in response to a comment below.]

The stimulus bill included $5 billion for weatherization projects.  The idea was not just to create jobs, but also invest in energy efficiency.  The money didn’t get spent quite as quickly as some had hoped, but it was still worthwhile , right?  Maybe not.  The stimulus funds ramped up weatherization programs so much that quality control and oversight may have suffered.

Exhibit A is Illinois’ Weatherization Assisatance Program, which received $242 million in stimulus money.  As the NYT‘s Green blog reports, a new Department of Energy Inspector General audit of Illinois’ program finds serious problems.

An audit by the inspector general focused on some work done by the Community and Economic Development Association of Cook County, one of 35 agencies in Illinois that are expected to share $91 million over three years. The audit looked at 15 homes and found that 12 failed final inspection “because of substandard workmanship.” In some cases, technicians who tuned up gas-fired heating systems did so improperly, so that they emitted carbon monoxide “at higher than acceptable levels.”

In eight cases, initial assessments of the houses and apartments called for “inappropriate weatherization measures.” In one case an inspector called for more attic insulation but ignored leaks in the roof, which would have ruined the insulation, the audit said. And for 10 homes, “contractors billed for labor charges that had not been incurred and for materials that had not been installed.’’ . . .

The federal audit said that Illinois had found a 62 percent error rate when it re-inspected homes weatherized by CEDA. And sometimes CEDA was spending more for materials than an individual homeowner would spend, the audit found. Some of the work created fire hazards, the audit said.

These results may not be representative of programs in other states, but there is good reason to be concerned.  Thanks to the stimulus, state agencies got lots more money to spend.  In Illinois’ case, the stimulus increased weatherization funds ten-fold.  Agencies received the funds even if they lacked the administrative capability to spend it wisely — particularly if they were expected to spend it quickly.    As a consequence, high levels of waste were to be expected, and results like those found in the IG’s Illinois audit should not be a surprise.

This week, environmental analysts from left and right came together to offer a “post-partisan” approach to climate change.  In Post-Partisan Power: How a Limited and Direct Approach to Energy Innovation Can Deliver Cheap Energy, Economic Productivity, and National Prosperity, Steven Hayward (American Enterprise Institute), Mark Muro (Brookings Institution), and Ted Nordhaus and Michael Shellenberger (Breakthrough Institute) argues that the best path to a clean energy future is to make alternatives to fossil fuels much less expensive, and that this can be best achieved by increased support for technological innovation.  Specifically, the paper calls for a dramatic increase in federal support for clean energy R&D, an overhaul of the energy innovation system, and greater use of military procurement to drive the diffusion of clean energy technologies (including next generation nuclear power).  While not without flaws, the proposal represents a serious alternative to politically-moribund cap-and-trade proposals and the regulate-everything mindset that produced the Waxman-Markey bill.

The proposal has sparked a range of reactions.  Doctrinaire environmentalists are concerned, but some thoughtful progressives seem to realize this sort of non-regulatory approach to climate policy may be the only game in town.  (See also here.) Those truly concerned about the accumulation of greenhouse gases in the atmosphere should see this as a good thing.  As David Leonhardt notes, even some supporters of cap-and-trade have acknowledged that Waxman-Markey was oversold.  Despite its tremendous costs, the bill would not have driven down U.S. emissions all that much, and it would have done nothing to prevent massive emission increases in China, India and the rest of the developing world.  The reality is that unless it becomes cheap to power the world in a low-carbon way, it will not happen, and regulatory mandates are no way to achieve this goal.

The biggest question about Post-Partisan Power is how to pay for the proposals.  As a general matter, it’s much easier to increase spending than to impose wide-ranging regulatory controls on energy (and, I would argue, it’s would  also be easier to adopt a revenue-neutral carbon tax than Waxman-Markey-style cap-and-trade, but that’s the subject for another post).   Nonetheless, in the current political environment, it will be difficult to find the $25 billion or so necessary to fund the “post-partisan” plan.  Eliminating energy subsidies could get us only part way there, and a carbon tax to fund additional federal spending would be DOA in the new Congress.

Fortunately there are other options.  If the goal is to increase economic investment in clean energy innovation, not all of the money has to come from the federal government.  Indeed, if the goal is to induce $25 billion in investment, this does not require $25 billion in federal funding.  As I discuss in this paper, technology-inducement prizes can greatly leverage R&D investments.  The Ansari X-Prize offered $10 million for reusable, manned spacecraft but induced an estimated $100 million in investments in pursuing the prize.  Equally important, the resulting innovation sowed the seeds of a fledgling space travel industry, showing how properly designed prizes can lead to commercially viable technologies.  A ten-to-one multiplier is not guaranteed for all prizes, but with prizes the federal government need not put up $25 billion to spur that level of investment.  Federal procurement can also be used to increase the incentive for private sector investment in clean energy R&D  without greatly increasing costs to the taxpayer.

If there’s “post-partisan” support for increased investment in clean energy technology, there should also be such support for prizes.  John McCain proposed a battery prize in the 2008 presidential campaign and the Obama Administration has endorsed greater reliance on prizes in technology funding.  The authors of Post-Partisan Power are correct that there is no solution to climate change without substantial breakthroughs in clean energy technologies.  If their vision of increased clean energy R&D is to become a reality, technology-inducement prizes would be a great place to start.

Today the U.S. Department of the Interior lifted the moratorium on deepwater oil and gas drilling in the Gulf of Mexico.  As outlined in this memorandum of decision, Interior Secretary Ken Salazar has instructed the Bureau of Ocean Energy Management, Regulation and Enforcement (formerly known as the “Minerals Management Service”) to permit drilling by operators that comply with the relevant regulatory requirements, including new drilling safety rules, and have their CEOs certify to such compliance.  The WaPo reports on the decision here.

UPDATE: I should have added that the lifting of the moratorium does not mean that drilling will automatically resume.  Would-be drillers will have to apply for and obtain permits from BOEMRE, and this could take some time — weeks, if not months.

The Washington Post reports that constellation Energy is pulling out of a plan to build a third nuclear reactor at its Calvert Cliffs nuclear power plant.  In a letter to the Department of Energy, Constellation explained that the conditions and costs of the federal loan guarantee was not “workable” and had generated too much uncertainty for the company to go forward.  Wrote Constellation COO Michael Wallace:

in light of the continuing and ongoing uncertainty created by the Office of Management and Budget’s inability to address significant problems with its methodology for determining the project’s credit subsidy cost and the unreasonably burdensome conditions a loan guarantee under this approach would require, we regret to inform you that Constellation Energy does not see a timely path to reaching a workable set of terms and conditions that would be economically reasonable and statutorily justifiable.

Constellation Energy’s decision is a potentially significant setback for the revival of nuclear power in the United States.  The Calvert Cliffs reactorwas supposed to be the first of several new reactors that Constellation would build with a French company, Electricite de France.

The Post further reports:

economic factors have made nuclear power projects more challenging. Low natural gas prices make that fuel an attractive alternative. Congress also failed to pass climate legislation that would have boosted fossil fuel prices. And steep construction costs make the projects a financial stretch for utilities like Constellation. . . .

Obama administration officials said that they had proposed terms consistent with their fiduciary duty. “We want to see this industry go forward, but we also have a duty to protect the taxpayers’ money,” one senior administration official said.

The administration has approved only one conditional loan guarantee for a nuclear power project and that went to a Georgia plant to be built by Southern Co., which under state law can begin to recover costs while the plants are under construction. Maryland regulations say that power plant construction costs can be passed through to customers only once the plant is operating.

The AP and NYT report on draft reports from National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling critical of the federal government’s response to the spill.  Among other things, the reports accuse Administration officials of suppressing and misrepresenting scientific assessments of the spill and its potential consequences.

From the AP:

The Obama administration blocked efforts by government scientists to tell the public just how bad the Gulf oil spill could become and committed other missteps that raised questions about its competence and candor during the crisis, according to a commission appointed by the president to investigate the disaster. . .

Citing interviews with government officials, the report reveals that in late April or early May, the White House budget office denied a request from NOAA to make public its worst-case estimate of how much oil could spew from the blown-out well. . . .

The report shows “the political process was in charge and science really does not have the role that was touted,” said Christopher D’Elia, dean of environmental studies at Louisiana State University.

From the NYT:

In August, top administration officials said that 75 percent of the oil had evaporated, dissolved or been collected, implying that their efforts had been largely successful and that ecological damage had been limited. Carol Browner, the White House coordinator for energy and climate change, declared on Aug. 4: “I think it’s also important to note that our scientists have done an initial assessment and more than three-quarters of the oil is gone. The vast majority of the oil is gone.”

But the commission staff members said the government’s own data did not support such sweeping conclusions, which were later scaled back. A number of respected independent researchers have concluded that as much as half of the spilled oil remains suspended in the water or buried on the seafloor and in coastal sludge. And it will be some time before scientists can paint an accurate picture of the ecological damage.

More from FDL.

Today the United Steelworkers filed a complaint alleging that China is unfairly (and illegally) subsidizing clean energy exports, such as wind turbines and solar panels.  China has become one of the world’s largest producers of such technologies, but the Steelworkers allege it has gained market share through unfair trade practices.  The Obama Administration has 45 days to respond to the complaint and determine whether it will take formal action.  The NYT reports on the story here.

This filing places the Obama Administration in an awkward position. On the one hand, the Administration would like to support its union allies.  On the other, the Administration has sought to promote the deployment of clean energy technologies, including solar and wind.  The legal merits of the steelworkers’ case aside, China’s actions have made the purchase and installation of wind and solar technologies less expensive in the United States.  Given that cost is the greatest barrier to the proliferation of wind and solar power, China’s allegedly unfair trade practices have been a blessing for clean energy development in the United States.

Bradford Plumer has more here.

When I was in Montana with my family in July, we happened upon Vice President Joe Biden’s security detail.  He was apparently in the area to, among other things, give a talk in Yellowstone National Park about the economic and environmental benefits of federal stimulus projects.  In today’s WSJ, Roger Meiners looks closely at one such stimulus project in Montana — a $179,000 grant to a fish hatchery for the installation of solar panels — and finds it wanting.

The fish hatchery uses about 34,000 kilowatt hours (kwh) of electricity annually. At 10 cents per kwh, that means a bill of $3,400. The solar panels, we are assured, will generate 75% of the hatchery’s electricity, at zero cents per kwh. Assuming so, the annual electric bill will fall by $2,550. Applying that sum to the cost, the recovery period for the solar panels (ignoring interest rates) is 70 years.

Solar panel experts say that panels have about a 25-year life, but the latest models, which no doubt are used in Ennis, may have a 40-year life. Taking that estimate, the panels leave us in the financial dark by 30 years. The rate of return looks like Las Vegas housing the past couple years.

Wind farms sound like a great idea, until you have to live next to one — wind turbines can make a fair amount of noise.  For this reason, some residents of eastern Oregon were not too happy when a wind developer came knocking.  In some places, this would lead to a pitched political battle.  But Catihness Energy came up with an alternative approach: Paying local residents for noise easements.  Specifically, they are offering $5,000 to landowners who will sign a waiver agreeing they will not complain about wind farm noise.  Not every landowner is going along, but compensating those affected seems a more progressive appraoch than seeking de facto noise easements through regulatory fiat or eminent domain.

Politico is reporting on Majority Leader Harry Reid’s efforts to corral enough votes for a Senate climate bill.  Reid says that “cap-and-trade” is not in his vocabulary, but the whole plan is to enact something that can be conferenced with the House bill (“Waxman-Markey”) and enacted in a post-election lame duck session.  The problem is that it’s difficult to find 60 votes for a bill that imposes limits on carbon.

The latest gambit, according to Politico, is to propose a utilities-only cap-and-trade plan (a plan that looks something like what then-candidate Bush proposed in 2000).  While many utilities like the idea of carbon cap-and-trade – indeed, some utilities helped write key provisions of the House bill – they don’t like being singled out.  In return for their support, utilities are apparently demanding relief from other regulatory programs, including limits on emissions of mercury and sulfur dioxide.  EPA has been clamping down on these emissions, and some utilities see the opportunity to make a deal.

Trading carbon caps for relief from mercury and sulfur dioxide regulations would be a “disaster” according to TNR’s Bradford Plumer.  He’s not exaggerating by much.  Some of the regulatory measures from which utilities would obtain relief have actual near-to-medium-term public health consequences.  A single-industry cap-and-trade proposal does not, nor will it have any meaningful effect on atmospheric greenhouse gas concentrations, let alone projected warming.  The more comprehensive bill that passed the House will not do much of anything to regulate the planet’s thermostat, even if one makes the implausible assumption that it will deliver on its promised emission reductions, but a single-sector bill would do even less.  (More on Waxman-Markey here and here.) Scaling back existing rules for traditional pollutants could well have a meaningful impact on ambient concentrations and exposures. Even if some of these rules are overly rigid and burdensome, they do reduce emissions, and the utilities appear to be asking for direct relief, not reforms to make existing rules more flexible, cost-effective, or efficient.

The NYT has a cute item noting that the Department of Energy has had a hard time following its own advice on improving energy efficiency, such as by installing fluorescent lighting and auto-shut-offs.

In response to yesterday’s judicial decision granting a preliminary injunction against the Interior Department’s moratorium on  drilling in the Gulf of Mexico at depths greater than 500 feet, Interior Secretary Ken Salazar announced that in the next “few days” he would issue a new order, reimposing the moratorium and providing a more detailed explanation of why the moratorium is necessary.  One difficulty for Secretary Salazar will be that the draft report reviewed by outside experts on responses to the spill did not call for a six-month moratorium on drilling at depths greater than 500 feet and focused on the risks of drilling at greater than 1,000 feet.  As a consequence, Salazar cannot claim that the drilling ban was called for by experts, nor that the moratorium he imposed follows from his agency’s findings.  As Judge Feldman explained in his opinion:

On May 27, 2010 the Secretary issued a Report, which reviews all aspects of drilling operations and recommends immediate and long term reforms to improve drilling safety. In the Executive Summary to the Report, the Secretary recommends “a six-month moratorium on permits for new wells being drilled using floating rigs.” He also recommends “an immediate halt to drilling operations on the 33 permitted wells, not including relief wells currently being drilled by BP, that are currently being drilled using floating rigs in the Gulf of Mexico.” Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them. A factor that might cause some apprehension about the probity of the process that led to the Report.

The draft reviewed by the experts, for example, recommended a six-month moratorium on exploratory wells deeper than 1000 feet (not 500 feet) to allow for implementation of suggested safety measures. The Report makes no effort to explicitly justify the moratorium: it does not discuss any irreparable harm that would warrant a suspension of operations, it does not explain how long it would take to implement the recommended safety measures. The Report
does generalize that “[w]hile technological progress has enabled the pursuit of deeper oil and gas deposits in deeper water, the risks associated with operating in water depths in excess of 1,000 feet are significantly more complex than in shallow water.”

Given this background, it will be difficult for the Secretary to use the report as the primary basis for reimposing the moratorium.  As Judge Feldman explained in his initial opinion (excerpted here), there does not appear to be a rational relationship between the agency’s findings and the scope of the moratorium.  If a broad moratorium is justified (and it may well be) the agency will have to make additional findings or provide a more coherent justification for why the risks and uncertainty about deepwater drilling justify a more expansive, prophylactic moratorium.  The purpose of this explanation will be to demonstrate that the decision was motivated by reasoned analysis, and not just political considerations.  In this regard, the Secretary’s statement that the moratorium will be reimposed shortly is not particularly helpful, as it suggests the sort of decision-first, analysis-later sort of administrative decision-making that is the hallmark of arbitrary decision-making.

None of this means the Interior Department will be unable to justify the broader moratorium.  It will simply have to provide a fuller explanation for its policy choice and why it prefers an expansive moratorium, as opposed to a more limited set of restrictions, such as a halt to drilling focused on the deepest wells or contingent upon the adoption of additional safety measures at affected installations.  Reasons could include continued uncertainty about the precise causes of the BP spill and the government’s inability to provide adequate review and oversight of other wells while coping with the current spill.  The agency could also seek to appeal the district judge’s ruling, but it is unlikely an appeal would succeed.  Appellate review of a district court’s grant of a preliminary injunction is even more deferential than judicial review of agency action.

Meanwhile, Secretary Salazar has renamed the Minerals Management Service as the Bureau of Ocean energy Management, Regulation and Enforcement.

A federal district court judge in Louisiana has issued a preliminary injunction blocking the six-month moratorium on deep water oil drilling in the Gulf of Mexico imposed by the Interior Department.  Judge Martin Feldman found that the plaintiffs were substantially likely to prevail on the merits in their legal challenge to the moratorium on the grounds that the Interior Department failed to provide an adequate explanation for the scope of the ban and that the moratorithe Interior Department failed to adequately justify the drilling ban under the relevant federal statutes.  In his opinion accompanying the order, Judge Feldman explained that there was no apparent relationship between the agency’s findings and the scope of the moratorium imposed.  The Interior Department said it plans to appeal.  AP coverage is here. [UPDATE: I've posted an excerpt of the opinion below the fold.]

In other spill-related news, the Times-Picayune reports that Georgetown University law professor Richard Lazarus has been named staff director of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

Continue reading ‘Judge Blocks Offshore Drilling Moratorium’ »

I presented on a plenary panel discussing the implications of global warming for property law at the AALS Mid-Year meeting earlier this month.  My thesis, in short, was that concerns about global climate change do not justify abandoning or reconceiving traditional property norms.  To the contrary, I suggested, environmental problems generally – and the threat of global warming in particular – should prompt us to place an even greater emphasis on traditional property rights institutions.  A summary of my remarks is below the jump.  Eduardo Peñalver generously responded to my presentation at Prawfsblawg.  I will respond to his comments in an addendum or a follow-up post.

Continue reading ‘Property Rights & Climate Change at AALS’ »

On Saturday I participated in a panel on climate change policy, “Environmental Protection in a Climate of Change,” at the American Constitution Society’s National Convention in Washington, D.C.  In addition to yours truly the panel featured Vicki Arroyo of the Georgetown Climate Center, Interior Department Deputy Solicitor Rachel Jacobson, and Andrew Light of the Center for American Progress.  Georgetown’s Lisa Heinzerling, who is currently serving as Associate Administrator of the Environmental Protection Agency for the Office of Policy, Economics, and Innovation moderated.  Those hoping for fireworks or a fierce debate were likely disappointed, but I think the panel was informative and (I hope) insightful.  The video is available here.  Additional thoughts on the panel are below the jump.

Continue reading ‘Climate Policy Panel at ACS’ »

The University of Chicago’s Richard Epstein argues against liability limits for environmental accidents, like BP’s Gulf oil spill in today’s WSJ.

Tort remedies are essential to protect people (and their property) who do not have contractual relations with defendants from harms such as air and water pollution. The legal system should never allow self-interested parties to keep for themselves all the gains from dangerous activities that unilaterally impose losses on others—which is why the most devout defender of laissez-faire must insist, not just concede, that tough medicine is needed in these cases. . . .

A tough liability system does more than provide compensation for serious harms after the fact. It also sorts out the wheat from the chaff—so that in this case companies with weak safety profiles don’t get within a mile of an oil derrick. Solid insurance underwriting is likely to do a better job in pricing risk than any program of direct government oversight. Only strong players, highly incentivized and fully bonded, need apply for a permit to operate.

BP may have agreed to pay all legitimate claims, despite the Oil Pollution Act’s statutory limit on damages, but we should not assume future tortfeasors will act in a similar fashion.  And while there are serious questions about the advisability and constitutionality of altering BP’s liability after-the-fact, there is no reason not to remove statutory limits on damages going forward. A more sensible — and strict — set of liaiblity rules can do more to safeguard environmental values than muchprescriptive regulation.

Nate Oman has another take on Epstein’s op-ed at CoOp.

The Center for Biological Diversity has filed a notice of intent to sue the Environmental Protection Agency for authorizing the use of chemical dispersants to faciliate the cleanup of oil from the Deepwater Horizon accident in the Gulf of Mexico.  According to a CBD attorney, “The fact that no one in the federal government ever required that these chemicals be proven safe for this sort of use before they were set loose on the environment is inexcusable.”  CBD fears that use of the dispersant chemicals could increase the threats faced by some Gulf species.  More from BLT here.

University of Michigan law professor David Uhlmann, former chief of the environmental crimes section in the Department of Justice, had an op-ed in the NYT discussing the potential prosecution of British Petroleum and its executives for the Deepwater Horizon blowout and spill.  He writes:

If the spill had resulted from a hurricane or lightning strike, or if it had been an unavoidable accident — an equipment failure that happened without warning — it wouldn’t warrant criminal prosecution. Increasingly, however, it appears that there was negligence or worse in the events leading to the explosion of the rig.

News reports have described warning signs that went unheeded and deviations from standard industry practice: Gas was seeping into the well. The blowout preventer was leaking. Concerns were raised about the well casing. There were signs of trouble with the cement in the well. Mud circulation was limited. A final concrete plug was not properly installed. And when disaster struck, the blowout preventer failed.

Prosecutors must examine all witness statements, internal documents and any physical evidence that remains after the explosion. But if the news articles are accurate, the Justice Department should bring criminal charges against BP, and possibly Transocean and Halliburton, for violations of the Clean Water Act, the Migratory Bird Treaty Act and the Refuse Act — the same charges brought in the Exxon Valdez case. Exxon ultimately paid a criminal fine of $125 million, the largest ever for an environmental crime. . . .

No one thinks BP, Transocean or Halliburton intended to spill oil into the gulf. But given good evidence, the government could argue that the companies cut corners or deviated so much from standard industry practice that they knew a blowout could happen. Or, the government could argue that, even if the initial gusher involved only negligence (a misdemeanor under the Clean Water Act) each additional day represents a knowing violation. Both approaches are untested, because there have been so few oil spill cases — but the gulf disaster warrants trying aggressive strategies.

Even without a criminal prosecution, BP will pay dearly for its mismanagement and lax practices.  The federal Oil Pollution Act may cap BP’s liability for economic damages at $75 million, but that will barely scratch the surface of the moneys BP will pay.  According to company executives, BP has already spent over $1 billion on cleanup and recovery efforts, and some estimate the cleanup tag alone could reach $14 billion.  On top of that, it share price has taken a tumble, and over 100 lawsuits have been filed against it.  BP was irresponsible (as were Halliburton and Transocean) and they will pay, as they should.

BP’s lax operations and corporate culture contributed to the series of events that caused the spill. (See, e.g., this WSJ article.)  What’s ironic about this is it was not so long ago that environmentalists were lauding the oil giant for its “progressive” approach to environmental issues (and substantial financial contributions to environmental causes).  One CEO even sought to rebrand BP as “Beyond Petroleum” to reflect its commitment to alternative energy sources.  Yet it’s becoming increasingly clear that BP’s commitment to the environment was just window dressing.  The Gulf spill is hardly the first example of BP’s lax oversight and negligent operations.  Going Green was good PR, not meaningful commitment that should influence its operations so as to enhance worker safety and protect the environment.  how ironic that BP’s actual performance pales in comparison with competitors like ExxonMobil.  Those companies most aggressive in seeking to burnish their green credentials, and pronounce their progressive commitment, are often those with the worst records on the ground.

I am a sometime-contributor to the National Journal‘s Energy & Environment Expert Blog.  This week the focus is the Kerry-Lieberman climate change bill, the “American Power Act,” and the EPA’s decision to raise the threshold for stationary sources regulated under the Clean Air Act from emissions to 75,000 tons per year for carbon dioxide, even though the statute contains a far lower numerical threshold.  Here is my comment:

The American Power Act is an agglomeration of complex regulatory measures and corporate subsidies. In an effort to provide something for everyone, the bill provides little for the American people. As it stands, the bill is not in the economic nor environmental interest of the United States. Erecting an ever-more complex cap-and-trade scheme on an industry-by-industry basis invites rent-seeking and corporate gamesmanship at the expense of meaningful reductions. Directed subsidies and grants may reward powerful constituencies, but they won’t encourage the innovation and deployment of transformative environmental technologies. A partial directed rebate of the revenues from carbon allowances is half of a good idea. A far better, and much simpler, approach would be the adoption of an economy-wide carbon tax from which all revenues are directly rebated to American taxpayers, with no strings attached. This is the simplest and fairest way to provide marginal incentvies for increased efficiency and carbon-use reductions without hampering economic growth.

While the bill is bad, the EPA’s plans are not much better. This week the EPA finalized rules purportedly designed to fulfill the agency’s statutory obligation to regulate greenhouse gases as pollutants under the Clean Air Act. The rule EPA issued, however, is patently illegal and a flagrant violation of the plain text of the Act. The statute sets clear numerical thresholds for the imposition of PSD and Title V permitting requirements, and provides EPA with no authority to re-write these thresholds — turning 250 tons-per-year into 75,000 tons-per-year — by administrative fiat. The EPA may believe that the it is not practicable to apply the express terms of the Clean Air Act to GHGs, but that is not the agency’s call to make, especially not after the Supreme Court’s decision in Massachusetts v. EPA, which expressly rejected the argument that the CAA was unworkable for GHGs. If the EPA would like to follow a different course, it must go to Congress — and let’s hope Congress can come up with something better than the APA.

Interior Secretary Ken Salazar plans to break up the Minerals Management Service in the wake of the offshore well blowout in the Gulf of Mexico.  The rationale is that the MMS has an internal conflict-of-interest because it is responsible for both generating revenue through offshore leases as well as protecting worker safety and the environment.  To eliminate the conflict, the two tasks will be separated; one agency will focus on leasing, the other on regulation.

“The job of ensuring energy companies are following the law and protecting the safety of their workers and the environment is a big one,” Mr. Salazar said, “and should be independent from other missions of the agency.” . . .

In announcing his plan to split up the minerals service, Mr. Salazar said it had become clear that the agency’s two missions were often in conflict. He said that he had undertaken a number of steps to improve ethics and tighten safety enforcement at the agency but that he decided more radical steps were needed.

Mr. Salazar also announced that he had asked the National Academy of Engineering to conduct an investigation of the causes of the Deepwater Horizon accident, a task that now falls solely on the minerals management agency and the United States Coast Guard.

And he said he was seeking a change in the law to provide more time for regulators to review safety and environmental plans for new wells. The law now requires government to act within 30 days on an application for a new well; Mr. Salazar would lengthen that to 90 days or longer if needed.

Internal agency conflicts, such as between raising revenue and reducing environmental risk, pose the threat that one goal will become subordinate to the other.  But separating the  functions does not necessarily solve the problem, and can create new ones of its own.  Two separate agencies may each pursue their own goals, but insofar as they conflict, a Presidential Administration may still be able to privilege one over the other.  Without  internal conflicts, agencies may also be more prone to “tunnel vision” and the single-minded pursuit of narrow goals without adequate consideration of trade-offs and collateral consequences. Splitting up MMS may be a good idea, but I doubt it would have prevented this accident.  The costs of this spill to BP are far greater than any potential regualtory infractions, so I am not sure that reorganizing regulatory structures would necessarily prevent this sort of thing from happening again.

The latest National Journal poll of political bloggers asked: “With the Gulf of Mexico oil spill, does it make political sense for President Obama to stick to his plans to allow increased oil and gas development along the coasts?” Only 6% of the Left, but 75% of the Right thought that it did still make political sense. I thought it didn’t make political sense, unless the President were ready to make a strong affirmative case: “The president would have to convince the public why some types of new drilling would not pose the same risks that the BP well did.”

The other question asked what is best for the Democratic/Republican parties this year on immigration. Two-thirds of the Left thought Democrats would be best off with a pathway to citizenship, and without any tougher enforcement. Nobody on the Right thought that would be a good idea for Republicans. The Right bloggers split between citizenship + enforcement, enforcement without citizenship, and “stay away from the issue.”

My vote was for the middle choice, at least as the essential first step: “Effectively closing the border has to come first. Offering citizenship but without effectively securing the border would simply repeat the mistake of 1986 and result in even more illegal immigration.”

This poll marked the last of the National Journal’s weekly blogger polls as part of NJ’s “Blogometer.” The National Journal is undergoing major budget cuts, and Blogometer is disappearing, although parts of its will be folded into other National Journal coverage.

Far worse, from a social utility point of view, than the disappearance of the blogger polls is National Journal cutting Stuart Taylor’s weekly column. Taylor is one of the best legal journalists in the United States, and he will continue to write for a variety of other outlets. However, the loss of his weekly column is a major loss of high-quality legal journalism.