Over the past few years, EPA regulatory initiatives have led to a lot of head scratching over why Lisa Jackson and her lieutenants were acting in ways that made it difficult for the President to spark an economic recovery. The agency’s latest rules (Boiler MACT, Utility MACT, NAAQS revisions, etc.) offer good examples. They represent unrealistic and perhaps even imaginary benefits while grossly understating costs.
New York Times reporter Matthew L. Wald provided further proof of EPA’s disconnect from reality earlier this week. The agency plans to penalize U.S. fuel suppliers to the tune of $6.8 million for “failing to do the impossible.”
In 2007, Congress passed a law mandating refiners use a nonexistent product: cellulosic ethanol. Four years later, scientific advances still have yet to create a commercially viable fuel from cellulose. But EPA regulators aren’t letting the fact that the fuel is not available stop them from punishing refiners for not using it. (Next they’ll be fining delivery companies for not switching half their fleet to hover boards.)
The senseless action we’re seeing surrounding these fuel mandates hits the American public on multiple fronts.
Consider the federal spending angle. In a Solyndra-esque scenario, Range Fuels, a company founded under the promise of manufacturing cellulosic ethanol, had to admit defeat and close its doors—leaving U.S. taxpayers holding the tab for $156 million in federal loan guarantees and grants.
Then there’s the impact on gas prices. When federal officials increase an industry’s costs (via taxes, fines, etc.), the price of said industry’s goods or services increases as well. So if EPA goes through with its multi-million dollar fine on U.S. fuel producers, it will just be one more cost that ends up at the pump.
But the agency’s not backing down. EPA spokeswoman Cathy Milbourn told the Times “that her agency still believed that the 8.65-million-gallon quota for cellulosic ethanol for 2012 was ‘reasonably attainable.’”
If that’s not foolish enough, consider last year’s House hearing on the economic impact of the fuel efficiency guidelines. Top officials from both EPA and the National Highway Traffic Safety Administration denied under oath that greenhouse gas (GHG) emission standards are “related to” fuel economy standards (ie. CAFE standards). Yet, regulations aimed at reducing vehicle emissions implicitly relate to fuel economy, since tailpipe emissions are directly related to the quantity of fuel used. Even the joint EPA-NHTSA 2010 fuel economy rule admits that no commercially available technologies exist to eliminate carbon dioxide emissions from motor vehicles. The only means is reducing fuel consumption.
Yet, these federal officials seem to live by Humpty Dumpty’s mantra: “When I use a word, it means what I choose it to mean, neither more or less. So, there you have it.” And they denied the connection. In telling the truth, EPA would have to admit that it is exercising authority that it does not have. Since reducing fuel consumption is the means to reduce GHG, EPA’s approval of California’s AB-1493, which regulates auto GHG emissions, violates the Energy Policy And Conservation Act which preempts state laws on fuel economy.
From miles per gallon to fines of fantasy, the current state of federal energy regulation reads increasingly like a Lewis Carroll novel. In fact, it’s easy to imagine Administrator Jackson drawing inspiration from Alice in Wonderland:
If I had a world of my own, everything would be nonsense. Nothing would be what it is because everything would be what it isn’t. And contrary-wise; what it is it wouldn’t be, and what it wouldn’t be, it would. You see?
Everything may not be nonsense just yet. But each EPA overstep draws us closer.
