Lobbyists rush to block EPA action on climate change

Introduction

Like a lot of industry groups, the farm lobby says it would prefer that Congress tackle climate change rather than leaving the job to the bureaucrats at the Environmental Protection Agency. But now, the prospect of EPA greenhouse gas regulation looms large — mostly because agriculture and so many other interests haven’t liked any of the climate bills so far on Capitol Hill.

Not to worry. The same onslaught of lobbyists and lawyers that helped dim prospects for climate legislation in this Congress (representing about 1,170 businesses and interest groups by the fourth quarter of 2009) is now engaged in an energetic, multi-front offensive to delay or block any attempt by the Obama administration to enact an alternative through regulation. Overt and covert support for Alaska Republican Senator Lisa Murkowski’s pending resolution to stop the EPA from regulation (and similar legislation introduced in the House) is but one prong of this assault. Opponents of federal curbs on fossil fuel emissions are also seeking allies in the states and in other federal agencies, while paving the way for court action to directly challenge EPA’s initiative.

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Rick Krause, the American Farm Bureau Federation’s senior director for congressional relations, says the EPA’s Clean Air Act permitting system — the vehicle for its proposed climate change regulations — has “very little flexibility.” Although he says the Farm Bureau would prefer a congressional climate bill, he admits the group hasn’t backed any bills so far: “We don’t feel that the threat of bad regulation is enough to warrant the enactment of bad legislation.”

So the Farm Bureau supports the Murkowski resolution, says Krause, and also has been talking to state regulators about the problems they could face administering the EPA program — especially the changes meant to moderate the impact on small businesses. State regulators, for their part, indeed have asked EPA for one to two years to get their own rules in line. But Bill Becker, executive director of the National Association of Clean Air Agencies, says that should not be read as opposition to the EPA regs. “I kind of laughed at industry friends I hadn’t seen for years treating me as their best ally because they read our comments,” he said. Becker said the states’ administrative problems likely can be dealt with in months, and are no reason to block the whole program.

But some argue that EPA’s effort to avoid hurting the little guys has not gone far enough. The Small Business Administration’s Office of Advocacy argues that EPA should have convened a Small Business Advocacy Review Panel before proposing the rules. The SBA has identified at least 1,200 small businesses — including foundries, refineries, coal mines, and municipal utilities — that would be swept into the program. Susan Miller, vice president of the Brick Industry Association, shared concerns with SBA that EPA’s air pollution permitting process “would take both time and money — something the industry doesn’t have a lot of right now,” in the housing downturn aftermath.

EPA spokeswoman Cathy Milbourn said in an e-mail that the agency complied with rulemaking requirements, but is considering the SBA Advocacy Office’s recommendations as it works to finalize the rules. In fact, the EPA has plenty of such recommendations. The agency received more than 400,000 letters, e-mails and briefs on just on one rule to alleviate the impact on businesses with modest emissions. It received somewhat fewer comments (380,000) on its Dec. 7 finding that greenhouse gases posed a danger to public health and welfare — the action that paved the way for regulations.

Groundwork also is being laid for another line of assault on EPA — through the courts. Jeff Holmstead, partner at the law and lobbying firm Bracewell & Giuliani LLP, which represents Southern Company, Duke Energy, and other electric power interests, says the EPA’s effort to craft a rule delaying the impact on those small emitters is on “pretty shaky ground as a legal matter.”

“It makes sense that EPA wants to avoid placing additional burden on mom and pop businesses, but the courts are unlikely to allow EPA simply to rewrite the Clean Air Act,” he says. Holmstead, one of the lobbyists who advised Murkowski on her resolution, has personal experience regarding the courts and EPA. As assistant administrator in charge of EPA’s air program during the Bush administration, he helped write the Clean Air Interstate Rule, an effort to address pollution that moves across state boundaries. But a federal appeals court struck down that rule in 2008, finding no explicit authority in the Clean Air Act for what EPA did. Holmstead argues the agency has gone further this time—proposing initially to regulate only facilities that emit more than 25,000 tons per year of greenhouse gases. The law spells out thresholds as low as 100 tons per year for other pollutants.

The EPA maintains it is on solid legal ground, because courts have held such language in the law need not be applied if doing so would produce “absurd results” or would be impossible to administer. But even if the agency can defend its pragmatism, it may not escape a trial on global warming science. The National Cattlemen’s Beef Association, Massey Energy Company, and other mining interests already have filed a petition for court review of the EPA’s endangerment finding. “We think the EPA had a pre-selected outcome, then shaped the science to fit that outcome,” says lawyer Paul Phillips of the Holland & Hart law firm in Denver. But at least 16 states and four major environmental organizations have asked for court permission to join in that case. The latter group reprises much of the coalition that proved successful in the 2007 Supreme Court case that found greenhouse gases were a pollutant under the Clean Air Act, paving the way for EPA regulation.

Meanwhile, the EPA is working to finalize its first phase of those greenhouse gas rules — for cars and light trucks — by March, in time for the 2012 model year. That was the deal the Obama administration struck last spring with the auto industry, which has pledged not to challenge the rules. No one else has made a similar promise. “Up to the end there will be calls for delay, and anyone and everyone will be seeking to influence the process in any way they can,” says Frank Maisano , spokesman for the Bracewell lobbying firm. “And it will continue through to the legal battle that is sure to follow.”