Friday, April 15, 2011

Environmental rules change, Texas economy suffers

Wes Riddle’s Horse Sense #497
Reclaiming the Constitution (Part 8)
Yet another example of regulatory fiat by bureaucracy, in contravention of the express will of representative assemblies (state legislature and Congress) is the EPA’s invalidation in July 2010 of a state permit program that had been operating for 16 years under EPA oversight.  The Texas “Flexible Permitting Program” is one of the most innovative and successful air-quality programs in the country.  The program sets strict emission caps for facilities as a whole and allows some operational flexibility under the caps. Yet because it deemed that the permits were not detailed enough, EPA invalidated the state permitting rules. 
Overnight, legal authorization for most of the refineries, large manufacturers, and some power plants in Texas were thrown into legal limbo. Although EPA has yet to conclude how the state rules should be changed, EPA decreed the individual facilities holding Texas flexible permits to be in violation of the Clean Air Act.  Although the flex permit holders comply with the state issued permits, EPA elects to use coercion under the guise of a “voluntary” audit ending with an enforcement decree. 
EPA’s actions jeopardize major commercial projects on which thousands of new jobs depend.  Across Texas, planned expansions in capacity and employment now face a potentially prohibitive degree of regulatory risk.  The dispute over permits has struck at the heart of the state’s industrial base, one of the vital engines of the U.S. economy, which produces more than 25 percent of the country’s transport fuel and more than 60 percent of its industrial chemicals.
EPA also announced that it plans to adopt a new ozone standard this fall.  As Dr. Roger McClellan, former chairman of EPA’s own scientific advisory committee recently testified, the new standard “is a policy judgment based on flawed science and inaccurate presentation of the science that should inform policy decisions.”  Moreover, of 3,000 counties in America, only 85 fail to attain the current standard, but according to the Congressional Research Service, the number could increase to 650 counties.  Non-attainment of the ozone standard will shackle state authority and economic growth. 
The federal government has shown itself increasingly inimical to the domestic production of fossil fuels.  Indeed the intended effect of the Department of Interior’s moratorium on new deepwater off shore drilling was to halt virtually all new exploration—and the result has been crippling harm and job losses throughout the Gulf Coast economies, already struggling in difficult times.  Tellingly, many of the scientists whose names were cited as having recommended a blanket ban have since loudly protested that they did no such thing, and Under Secretary of Commerce Rebecca Blank recently testified that the administration didn’t bother to assess what the economic impact might be before it issued the ban.  The administration now admits that the ban will result in more than 8,000 job losses on the Gulf Coast.  The ban had no basis in the Oil Pollution Act, which permits the federal government to halt drilling on a case-by-case basis but not for the industry as a whole.  Three federal courts struck down the moratorium as an illegal “arbitrary and capricious” exercise of regulatory power, but the administration simply ignored them and reissued the moratorium in a slightly different form. 
By the time Secretary of the Interior Ken Salazar declared an end to the off shore drilling moratorium on October 12, 2010, the regulatory uncertainty had already driven five major drilling rigs to other countries, with millions of dollars in disrupted contracts.  The new head of the Bureau of Ocean and Minerals Management assures environmentalists that he will not be in any hurry to approve new permits, and industry leaders have taken that as further evidence of a hostile regulatory environment.  For example, the processing of permit applications for shallow water drilling (in less than 500 feet of water) has slowed to a tiny fraction of what it was before the BP spill—putting at risk perhaps 40,000 jobs on the Gulf Coast.  This is in addition to the tens of thousands of jobs at risk because of the moratorium on off shore drilling and its long-term effects. 
Thus, the current administration has devised a sophisticated and highly effective way of using regulatory uncertainty to shut down economic activity that it sees as incompatible with its agenda.  Not even federal court judgments against its policies have impeded their effectiveness in stifling economic activity.  This is an example of the federal government exercising powers illegally—according to explicit judgments of federal courts—in an effort to impose radical federal policies on States and the economic freedom of individuals. 
If these unilateral environmental actions are allowed to stand, the consequences will be simple and devastating: States will lose control of their economic policies, and the Nation’s economic policies will be increasingly driven by whatever ideology (environmental or otherwise) happens to prevail in Washington.  The “laboratory of democracies” that has allowed States to innovate and compete in order to develop the most successful models, will be increasingly impaired, replaced by the virtual nationalization of a big-government approach that consistently leaves unemployment and lost opportunity in its wake.  The States and the people will be forced into a “one size fits all” approach to public policy, a top-down mode that is at odds with both the American tradition of self-government and the Constitution that codifies that tradition. 
Wesley Allen Riddle is a retired military officer with degrees and honors from West Point and Oxford.  Widely published in the academic and opinion press, he ran for U.S. Congress (TX-District 31) in the 2004 Republican Primary and is currently Chairman of the Central Texas Tea Party.  Article condensed from an essay by Ted Cruz and Mario Loyola (Texas Public Policy Foundation, Nov 2010).  Email: 

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