Now a Kerry-Lieberman-Graham Climate Bill is in the Works

And it won't have much to offer if you don't support offshore drilling or believe in "clean coal".

Tossing another layer on top of the anarchy that has erupted in the Senate Environment and Public Works Committee over the proposed Kerry-Boxer climate bill, Senator Kerry himself announced today that he would also be pushing a second climate bill on a "dual track" outside of the committee process, even as his first bill struggles forward. He will be working on this bill behind closed doors with Senators Graham (R, SC), and Lieberman (I, CT).

As this Washington Post article notes, other Senate committees have been working on their own climate bills as well, and all will have to be reconciled in the end. This just adds another to the heap. But the action by Kerry, who made his announcement alongside Senators Lieberman (I, CT) and Graham (R, SC) today, shows that Senate leaders don't have much faith that the Kerry-Boxer bill will win the necessary 60 votes in the end. (Or, you could look at all this with rose-colored glasses, like the Boston Globe, which is reporting that "Sens Kerry, Graham, Lieberman join forces to rescue climate bill.")

This country has a lot to do to curb GHG emissions, and strong federal mandates for renewable generation and energy efficiency should form the core of any good bill. Waxman-Markey emerged from the committee process in the House so badly weakened that environmentalists were privately dismayed, and publicly almost ready to withdraw support. So its a major (major) disappointment that the Senate may end up pitching more of the Waxman-Markey framework overboard. (Kerry-Boxer was 90% based on Waxman-Markey.) Even more worrisome, according to the Post "Graham said that the bill should protect the climate, but also allow for more offshore drilling, an expansion of nuclear energy and an emphasis on 'clean coal' technology." And Lieberman confirmed that the three were committed to a "cap and trade" scheme, "but noted that the scheme had 'a lot of moving parts you could negotiate on.'"

The Huffington Post does not mince words, reporting the story as "Kerry, Graham, Lieberman Working on Weaker Climate Compromise," here.

California Beats Back DOE Refusal of Right to Set Efficiency Standards

In California Energy Commission v. U.S. Department of Energy, handed down by the Ninth Circuit today, the California Energy Commission (CEC) appealed from DOE's denial of a waiver it sought from preemption under the Energy Policy and Conservation Act (“EPCA”), 42 U.S.C. § 6297, so it could establish water efficiency standards for residential clothes washers. (As the panel explains, the "EPCA expressly preempts state regulation of energy efficiency, energy use, or water use of any product covered by federal energy efficiency standards.") To get the waiver, CEC had to show that the state regulation was “needed to meet unusual and compelling State or local . . . water interests.” 42 U.S.C. § 6297(d)(1)(B).

If you haven't heard, California has been having a drought for a while now.

In 2002, California passed a state law mandating water-efficiency standards for washing machines, which the CEC duly issued. The CEC petition for a waiver of express EPCA preemption, and the (Bush II) DOE accepted its application as complete in December 2005. DOE rejected the petition a year later, giving the following reasons:

First, CEC’s proposed regulations purported to take effect on January 1, 2007, far less than the statutory three-year minimum, and CEC did not provide any information necessary to support a different effective date.

Second, CEC did not meet the statutory standard, which requires a state to show unusual and compelling water interests. CEC contended that a cost-benefit analysis showed that its regulation would be preferable to non-regulatory alternatives, but CEC’s petition did not support its conclusions with the underlying data that would have allowed DOE to determine whether the statutory standard was satisfied.

Third, the record demonstrated that CEC’s proposed regulation would make a class of washers unavailable in California, requiring denial of the waiver petition.

CEC appealed to the Ninth Circuit.

As a preliminary matter, the panel had to establish that it had jurisdiction. DOE challenged the court’s jurisdiction under the EPCA to review the denial of the waiver, on the basis that EPCA granted appeals only from specific EPCA provisions to the circuit courts. This wasn't one of them, so CEC should have gone to federal district court first. The Ninth Circuit responded that, well, EPCA grants appeals from another specific set of provisions to the federal district courts, too, and this wasn't one of those, either. Since the logic could be applied both ways, obviously this was left up to the discretion of the courts, and, duly filling in the blanks from Florida Power & Light Co. v. Lorion, 470 U.S. 729, 741-45 (1985), as to how it should exercise this jurisdiction, the Ninth Circuit said yup, we should take it. (I'd go into the reasoning, but its pretty clear to me that if the panel had not wanted to take the case, and order CEC to head to district court, it could have filled in the blanks that way, too.)

On the substance, the Ninth Circuit panel rejected DOE's reasons for refusing to grant the waiver as arbitrary and capricious, in violation of the APA. The panel's reasoning for rejecting the first justification is, to be honest, a bit opaque: Basically, they said that its ridiculous to reject an application for a waiver on the basis that when it finally got approved, there would not be a long enough wait, because they could have just changed the effective date or consulted with CEC on that point. And further, since the DOE approval timeline was unpredictable, it was arbitrary for DOE to be strict about what dates the information provided pertained to. See Slip Op at 14581 ("The DOE argues, in effect, that it was entitled to reject the CEC’s data and analysis as entirely irrelevant and inapplicable because the proposed implementation timeline could not be granted under the EPCA. This argument is contrary to the preponderance of evidence standard, as well as common sense.").

As for the second justification, the panel noted that, contrary to what DOE contended, CEC did support its conclusions with underlying data sufficient for DOE's purposes, as shown by the record itself. In the record, "the CEC provided 'a full explanation of its assumptions, data, and analyses' in the form of its own rulemaking record" for the California regulations. In fact, the Ninth Circuit noted, DOE referred to that portion of the record itself--proof that it not only was there, but that DOE actually knew it was there.

Finally, the Ninth Circuit panel rejected the third justification, because the preponderance of the evidence did not show that the class of washers in question--top loading washing machines--would not be available in 2010, when that part of the regulations was to go into effect. DOE, it said, had to "weigh the commenters’ evidence of future availability of top-loaders against that offered by the CEC. The DOE’s finding cannot be sustained on the strength of its citation only of the commenters’ evidence with reference to present capabilities." (emphasis added).

The panel remanded the petition to the DOE for re-consideration. The tone of today's opinion betrays a strong suspicion that the rejection of the waiver petition was pretextual. Therefore, what the (Obama) DOE does with the petition on remand will be telling.

Morning News Roundup on Kerry-Boxer Bill

This morning, several newspapers have unfurled their analyses of the newest version of the Kerry-Boxer climate bill, which was released in its "Chairman's Mark" form late Friday night. The bill is similar to Waxman-Markey in its awesome length (923 pages) and breadth. For now, though, now it has a lower overall reduction target (GHG emissions 20% below 2005 levels by 2020, as compared to 17% in Waxman-Markey), and seems to place a greater emphasis on shoring up the coal power industry through carbon capture and sequestration (CCS). As the New York Times describes it, the Kerry-Boxer bill

largely mirrors a House version of legislation that passed in June, with a few tweaks here and there. The similarities between the two bills leave lobbying interests largely in the same place they were in months ago[ with e]nvironmentalists . . . settling in to defend the new bill's stronger emissions reduction targets, . . . [and] many industries and interest groups . . . unsatisfied with their share of the proceeds.

Of course, the idea that environmentalists are simply settling in to defend the bill is a little misleading, since internally at least, the environmental community was quite disappointed in the final version of Waxman-Markey. (In their eyes, it started out a little weak, and got significantly weaker, and more compromised, as it went through the committee process.) What environmentalists would have liked to see was a much stronger version of the bill coming out of Boxer's committee, with reinvigorated renewable and energy efficiency targets, stronger protections for forests and natural resources in the scramble for biofuels, and less emphasis on trying to curb the negative effects of (what they see as) irredeemably dirty sources of energy, like coal. (Many in the environmental community have severe doubts that CCS will ever happen.)

The rest of the Times story can be read here. The Wall Street Journal, which notes that the oil industry, in particular, is unhappy with its share of the pie, posted an article here. The Washington Post's take can be found here.

Energy Efficiency Rankings

While not strictly a legal development, it is worth noting that the American Council for an Energy Efficient Economy (ACEEE) has released a new ranking of U.S. states' energy efficiency efforts.

Once again, California, which has long been making strides in cutting per-capita energy use, is ranked number one. The top states are clustered in the Northeast, West Coast, and Upper Midwest.

Utilities in states that lag in the rankings--the Southeast, plus much of the Eighth and Tenth Circuits (i.e. those states cutting from the Southeast up to the north and west across the middle of the country, with the striking exception of Colorado) cite different "structural" conditions in their states, including weather conditions and energy prices, as reasons for why they lag behind in cutting their energy use and thereby greenhouse gas emissions. But as a former client, John Wilson of the Southern Alliance for Clean Energy, has found, legal and regulatory regimes are the most important predictor for energy efficiency rates. So ACEEE's rankings roughly reflect the progress that each state has made in making its legal requirements and regulatory environment friendly to progress energy efficiency.

This shows the importance of an energy efficiency resource standard at the federal level--without it, the U.S. will only achieve a portion of the greenhouse gas reductions it could from the electricity sector. Unfortunately, Representative Markey's proposed national EE standards survived in the final Waxman-Markey Bill that passed the House last spring only in a watered-down form. There is little hope that the Senate will add an EE standard, if and when it produces its own version of a climate bill.

An abstract of the report can be found here. The full report (visible after registering) can be read here. And ACEEE's press release here.