Contact: Matt Dempsey Matt_Dempsey@epw.senate.gov

2010 Year of Vindication, But New Battle Looms with EPA in 2011 

Inhofe Floor Speech November 18, 2010

As prepared for delivery

Mr. President, as Mark Twain might have put it, reports of the death of cap-and-trade have been greatly exaggerated. 

Yes, we defeated Waxman-Markey and Kerry-Boxer and McCain-Lieberman and Lieberman-Warner and Kerry-Lieberman.  And over the past year, we had:

 - the revelation of Climategate;

 - the failure in Copenhagen;

 - the admission of the futility of unilateral climate action;

 - the year of the skeptic; and

 - vindication at the ballot box on November 2nd.

With all this, one might be tempted to declare victory-I  have to admit, for a short time, I did. 

After all, it was one year ago today that I gave a speech, right here on the Senate floor, noting that the tide had turned decisively against global warming alarmism. 

Then, just two days later, Climategate exploded into view, as thousands of emails were released that showed, at a minimum, that the very scientific spokesmen for alarmism were scheming to block open and honest assessments of their work.  Behind the veil of email, they showed their true colors: they weren't acting as scientists, but as political hacks, promoting and defending a political agenda. (See Senate Report)

The damage has been done, to say the least.  And so I think the chapter on the climate science wars has closed.  Of course, Climategate scientists and their allies want to keep fighting.  They are practically begging us to bring them before committees to question their work.  But we won't-because they are irrelevant. 

We are going to talk about jobs, and competitiveness, and manufacturing, and small businesses, and real people who will have to pay more for electricity, food, and gasoline. 

What do I mean here?  Well, even with all the progress we've made, cap-and-trade is alive and well.  That may sound strange, especially given the events of the last year, and given Senator Reid's recent declaration that cap-and-trade is dead in the next Congress. 

What Sen. Reid said may be true for the massive, thousand-page bills filled with mandates, taxes, regulations, bureaucracy, and much else.  But it's not true for the more subtle strain of cap-and-trade now moving through the Environmental Protection Agency. 

That's right: this is backdoor cap-and-trade, hidden behind an administrative curtain. 

Now I can already hear what my friend, EPA Administrator Lisa Jackson, will say.  She will say, "Now Sen. Inhofe, you know we're regulating in broad daylight, we're inviting public comment, we're providing guidance-it's all above board, it's all out in the open."   That may be true, and I trust Administrator Jackson wants EPA to be transparent. 

But the reality is backdoor cap-and-trade is hidden behind acronyms like PSD and BACT, SIPs and FIPs, BAMM and GHGRP, and arcane legal provisions in the Clean Air Act.  It's all a great muddle, which benefits bureaucrats and lawyers, but it's a profound disaster for jobs and small businesses.

But make no mistake.  The intent here, and ultimately the effect, is no different than Waxman-Markey: to eliminate fossil fuels and impose centralized bureaucratic control over America's industrial manufacturing base.  And unless we stop them, that it was they will achieve.

Of course President Obama will say that we could have avoided all this had we just stood aside and passed cap-and-trade-that is, we could have passed legislation with provisions pre-empting EPA's authority to regulate. 

But that's wrong on two counts.  First, what kind of deal involves accepting a really bad bill in place of really bad EPA regulations?   That's no deal at all. 

Second, the supposed deal wasn't an either/or proposition: Waxman-Markey didn't fully eliminate EPA's ability to regulate under the Clean Air Act.  President Obama and cap-and-trader supporters wanted both options: cap-and-trade including regulation under the Clean Air Act.

Well, we got rid of one option; we got rid of Waxman-Markey.  Now it's time to get rid of the other one. 

But we have a long, difficult fight ahead.  This fight goes back to December of 2009, when EPA promulgated the endangerment finding-the finding that CO2 endangers public health and welfare.  We know that finding is wrong; we know it's based on flawed science. 

Let me explain. Before I went to Copenhagen last December, I asked Administrator Jackson the very question: what is your endangerment finding based on?  The science of the IPCC, she told me.  Well, thanks to Climategate, we found out that the IPCC Fourth Assessment report was riddled with errors-errors that call into question the IPCC's basic scientific competence.  I won't repeat that litany of errors here today-I did that last year.  And by the way, I did that five years ago, in 2005, when I gave a speech questioning the IPCC and its process of compiling scientific reports. 

The list of IPCC errors is long, so I won't repeat it here.  We already know, for example, that the claim that the Himalayan glaciers would melt in 2035 was off by about 300 years. 

What is important now is that the endangerment finding triggered regulations that will eventually reach into every corner of the American economy.  This will be the greatest bureaucratic intrusion into American life that we've ever seen. 

Let's put some specifics on that.  We are talking about 6.1 million sources subject to EPA control and regulation. That's not me saying this; it comes directly from EPA.  Based on these numbers, the US Chamber of Commerce found that these 6 million sources could include:

 - 260,000 office buildings;

 - 150,000 warehouses;

 - 92,000 health care facilities;

 - 71,000 hotels and motels;

 - 51,000 food service facilities;

 - 37,000 churches and other places of worship; and

 - 17,000 farms

Now EPA understands the political peril of regulating all these sources.  So they decided to change the law, without Congressional authorization, to exempt many of the sources I just mentioned. 

The Clean Air Act says that so - called "major sources" are those that have the potential to emit 250 tons or more of a given pollutant.  These are stationary sources - power plants, refineries, big industrial facilities. 

Now 250 tons of say, sulfur dioxide or nitrogen oxides, is a good deal of pollution.  But when it comes to CO2, it's not.  Lots of facilities emit that amount and more: you're talking about schools, nursing homes, restaurants and much else-sources, mind you, that we're never contemplated to be regulated when Congress passed the Clean Air Act. 

So what did EPA do?  Well, they promulgated something called the "Tailoring Rule."  That rule says that, with respect to CO2, major stationary sources are defined as those that have the potential to emit 75,000 tons or more of "CO2 equivalent" and are already regulated under the Clean Air Act.  Next July, all major stationary sources that emit 100,000 tons or more of CO2 will be regulated as well. 

Sources emitting above the prescribed amounts have to get permits that require so-called "Best Available Control Technology" to reduce CO2.  Of course we don't know that is.  EPA issued draft guidance on BACT last week.  But it provided no help, just more confusion and uncertainty on what the requirements will be.

So there you have it.  EPA has the law in front of it-it say clearly that major sources are those that have the potential to emit 250 tons or more-and it says the new number is 75,000 tons or more.  So now EPA can conveniently say that schools, hospitals and the like won't be regulated-at least not until 2016, when the agency says it will consider whether to regulate such sources. 

And there's the catch.  This supposed exemption through the Tailoring Rule only lasts for a few years, not to mention the fact that it blatantly violates the Clean Air Act.  

On that last point, the Tailoring Rule, along with the endangerment finding and other greenhouse gas rules, is being litigated, so we will know eventually whether the Tailoring Rule survives.  I think it will be thrown out.  And depending on exactly what the court says, we in Congress will have to deal with the fallout. 

But again, I want everyone to understand: regulation of global warming by EPA, backdoor cap-and-trade, begins on January 2-it's here, just a month away.  I'm not the only one who's concerned about it.  On Feb 19, Senator Rockefeller, joined by seven of his Democratic colleagues, wrote to Administrator Jackson:

"We write with serious economic and energy security concerns relating to the potential regulation of greenhouse gases (GHGs) from stationary sources under the Clean Air Act...[W]e remain concerned about the possible impacts on American workers and businesses in a number of industrial sectors, along with the farmers, miners, and small business owners, who could be affected as your agency moves beyond regulations for vehicle greenhouse gas emissions..."

So we need to address this, because employers and small businesses are afraid to hire and expand in large part because of EPA's global warming regulations.  To get this economy moving again, and create jobs for those who need them, we need to stop EPA.

I also want my colleagues, and the American public generally, to know that EPA is moving in all directions-beyond just implementing job-killing global warming regulations.  EPA is threatening jobs on a host of fronts.  A few months ago, I released an oversight report examining the thousands of jobs at risk because of EPA's regulations.   Here's what I found:

 - New standards for commercial and industrial boilers: up to 798,250 jobs at risk;

 - The revised National Ambient Air Quality Standard for ozone: severe restrictions on job creation and business expansion in hundreds of counties nationwide; and

 - New standards for Portland Cement plants: up to 18 cement plants at risk of

 - shutting down, threatening nearly 1,800 direct jobs and 9,000 indirect jobs;

 Where are these rules going to hurt most?  The heartland, and by that I mean, for example, Pennsylvania, Ohio, Kentucky, Virginia, Michigan, Indiana, Illinois, Missouri, Wisconsin, Nebraska, Minnesota, North Dakota, South Dakota, and Montana.  Of course my own state of Oklahoma is feeling the brunt.  Others will as well. 

Here's my bottom line: back-door cap-and-trade is alive and well; it's moving forward; and the fight over the future of America's industrial base is underway. 

I want to put the Administration on friendly notice that I will investigate these rules vigorously, to expose the impacts on jobs, energy prices, competitiveness, small businesses, energy security, and the true extent of their environmental benefits. 

My sincere hope is that EPA will pull back, revise, reform, and balance its regulatory agenda to protect jobs as well as the environment.   If EPA persists on moving down a more extreme path, then our 9.6 unemployment rate won't look much better in 2012.

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