Republicans Would Target EPA Power Plant, Ozone, Water Rules if Senate Changes Hands

By Dean Scott and Anthony Adragna

Oct. 20 — With fall elections just two weeks away, Republicans may be on the verge of wresting control of the Senate from Democrats who have blocked efforts to roll back environmental rules on carbon dioxide pollution from power plants, ozone and expanded Clean Water Act jurisdiction over U.S. waterways.

A Republican-led Senate would energize House Republicans, who have few victories to show for their nearly four-year battle to roll back environmental regulations they see as overly burdensome to the coal industry and detrimental to economic growth.

The Environmental Protection Agency's power plant rule—which would for the first time set limits on greenhouse gases emitted from electricity production—is by far the biggest target for Republican leaders, including Sen. Mitch McConnell (R-Ky.), who has relentlessly attacked the administration's proposed carbon limits as Senate minority leader. McConnell is likely to become the majority leader if Republicans win the Senate—and if he holds onto his own Senate seat.

There would be multiple ways of attacking the EPA's carbon dioxide limits for existing power plants, which President Barack Obama wants to be finalized in 2015. The Senate could pass a resolution to nullify the requirements using Congressional Review Act procedures that allow Congress to overturn rules, or Republicans could attach language to appropriations bills that would block the EPA from using funds to develop or implement the regulations.

Since the president would almost certainly veto any resolution to kill the centerpiece of his climate agenda, the greater threat to the regulation could be through the appropriations process. Spending bills could prove more difficult for Obama to veto, particularly must-pass measures needed to avoid a government shutdown.

Increased Scrutiny From Inhofe 

Environmental rules and other regulatory actions would also be under intense scrutiny in Republican-chaired committees, particularly at the Senate Environment and Public Works Committee, where Sen. James Inhofe (R-Okla.), a leading climate skeptic, is expected to take the helm. Inhofe would be expected to “put the agency through its paces” on its power plant regulations, through hearings focused on how its carbon rules could hurt job growth and through repeated requests for documents, Scott Segal, an attorney with Bracewell & Giuliani, told Bloomberg BNA.

A Republican takeover of the Senate also would put Sen. Lisa Murkowski (R-Alaska) in charge of the Senate Energy and Natural Resources Committee, where she would be likely to hold hearings on electricity grid reliability and other impacts of the power plant regulations. Murkowski in 2007 co-sponsored climate legislation to set mandatory caps on greenhouse gas emissions, but in more recent years she has become a staunch opponent to EPA climate regulations.

A net gain of six seats would put Republicans back in control of the Senate following the Nov. 4 midterm elections. Democrats currently hold a 53-45 majority, with two independents joining their caucus. Most polling suggests the Republicans are favored to win between five and eight seats.

Republicans have not controlled both the House and Senate since the 109th Congress during President George W. Bush's second term; Democrats took control of both chambers after the fall 2006 elections but lost the House to Republicans in 2010.

Appropriations Riders Greatest Threat

Beyond the additional scrutiny regulatory agencies would face before committees, many observers said the appropriations process could pose the greatest threat to the high-profile EPA regulations.

“If you do a one-sentence bill that says EPA can't go forward with its [carbon pollution] regulations, the president will veto that,” Thomas Lorenzen, a partner at Dorsey & Whitney, who previously served in the Justice Department's Environment and Natural Resource Division, where he defended EPA regulations, told Bloomberg BNA. “The most effective way they have to accomplish their ends is through appropriations. If you attach [a one-sentence de-authorization bill] to must-pass legislation, I'm not sure you're going to get the votes to override a veto. If you attach it to funding, that becomes much more difficult calculus for the White House.”

McConnell, who would control the Senate agenda as majority leader, has vowed to “begin to restrict the funding” to the EPA on its proposed carbon pollution regulations and to hold votes on standalone bills to block the rules. Others, including Sen. John Hoeven (R-N.D.), have publicly announced their intentions to use the appropriations process to block funding for the proposed waters of the U.S. rule, which would clarify the scope of waters subject to Clean Water Act jurisdiction.

Others expect Congress to pursue more modest changes to many of the regulations rather than seeking to block them outright.

Smaller revisions to the carbon regulations—such as delaying an interim compliance deadline that under the EPA proposal would require states to begin reducing emissions in 2020—could make a “profound difference” in reducing compliance costs without attempting to set aside the broader regulation, Segal said.

“I find it very difficult to believe that the president would shut down all or part of the government” in a “skirmish over interim deadlines,” Segal said.

But many advocates for climate protection expect the president to hold the line. Bill Becker, executive director at the National Association of Clean Air Agencies, told Bloomberg BNA he'd be “astonished” if Obama were to sign any legislation making significant changes to his clean power plant rule, given that addressing climate change is one of the president's top domestic initiatives.

“For something like climate, I think he would dig in his heels,” Becker said. But he acknowledged that the White House cannot stiff-arm both chambers of Congress indefinitely. The president is “going to have to pick and choose his fights,” Becker said.

Hopes for Compromise

While much of the attention surrounding potential Republican recapture of the upper chamber has focused on how regulations might be struck down, some observers believe a Republican-controlled Congress could usher in targeted opportunities for compromise.

Bill Kovacs, senior vice president for environment, technology and regulatory affairs at the U.S. Chamber of Commerce, believes a Republican-controlled Senate could help advance permit streamlining legislation with the support of Democrats and might not attract Obama's veto.

“I think if there was a Republican Senate it would be an early priority,” Kovacs told Bloomberg BNA. “We feel comfortable on this one because it hasn't been an issue we've gotten enormous push-back on.” There is significant frustration from both parties about the lack of predictability and length of time required for project permits that could push Congress to get a legislative fix through, Kovacs said.

There have been modest improvements in permit streamlining even in the Democratic-controlled Senate. In September, the chamber unanimously approved legislation—the BLM Permit Processing Improvement Act of 2014 (S. 2440)—to streamline the approval process for oil and gas drilling permits on federal lands, led by Sens. Tom Udall (D-N.M.) and John Barrasso (R-Wyo.).

The Chamber of Commerce, one of the most influential industry groups nationally, also sees the potential for real compromise during the final two years of the Obama administration given the lessons learned from a similar dynamic that occurred under Republican control of the chambers during the last years of the Clinton administration.

“If you get a Republican majority in the Senate, things might work out the way they did late in the Clinton administration, where there was actual compromise” after Republicans took control of both chambers, Kovacs said. He and other industry representatives said the late 1990s—while often remembered for when Republicans impeached President Bill Clinton—also was a time when both parties compromised over balancing the budget, regulatory reform tools like the Congressional Review Act and other issues.

“You shouldn't take that off the table,” Kovacs said, recalling discussions he had with White House aides during Clinton's second term. “It was interesting how practical they became, not out of love, but out of necessity.”

Senior members of Congress, including House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), also told Bloomberg BNA they see opportunities for compromise on issues such as energy efficiency legislation, although perhaps with additional Republican priorities like approval of the Keystone XL pipeline attached.

“I'm convinced that if we do get a Republican Senate, it's still going to be narrow,” Upton said. “We've got to work together. We need to do that. No one likes dysfunction.”

Approval of the Keystone XL pipeline is believed to top the list of Republican energy priorities should they win back control of the Senate in the midterm elections.

Leadership Pushing Standalone Measures

Despite optimism from Upton that both parties could work together on shared priorities, many other senior congressional leaders told Bloomberg BNA they intend to push standalone measures to block regulations such as the carbon pollution standards for power plants and proposed waters of the U.S. jurisdictional rule.

“We've passed a lot of really good bills over to the Senate,” House Majority Whip Steve Scalise (R-La.) told Bloomberg BNA. “The Senate hasn't acted on any of them. If we get the Senate—which I feel confident we will—we can finally start moving those bills to the president.”

Scalise said many of those bills were included in a consolidated energy package that passed the House Sept. 18. Hinting at what Republican priorities might be with control of both chambers, the legislation included measures to approve the Keystone XL pipeline, block power plant carbon pollution limits, limit regulation of hydraulic fracturing and expand onshore as well as offshore drilling. 

Sen. Roy Blunt (R-Mo.), a member of Senate Republican leadership, said legislative action to block the carbon pollution standards for power plants and halt the proposed waters of the U.S. regulation would be his “top two” priorities if the chamber flipped.

“Those two regulatory acts that EPA has out right now will do unbelievable economic damage and not produce the result that EPA suggests,” Blunt told Bloomberg BNA. “The one on carbon only raises utility bills with very little to be gained on solving the carbon problem, and the one that expands the Clean Water Act goes way beyond the law's intention of navigable waters.”

In addition to Keystone, the power plant standards and the Clean Water Act jurisdiction regulation, other House and Senate members said they would prioritize a review of the situation at Yucca Mountain, speed the permitting process for energy projects, examine how the administration developed its social cost of carbon figure and take other actions targeting a host of EPA regulations.

Democrats, for their part, told Bloomberg BNA they would work hard to prevent rollbacks of Obama administration regulations. But Sen. Bernie Sanders (I-Vt.), summarizing the sentiment among many others in the majority caucus, said the feeling was a Republican-controlled Congress would be a “disaster” for environmental protections.

Possible Compromise on Jurisdiction Rule 

One of the regulations on which observers believe Obama might ultimately compromise is the joint EPA-U.S. Army Corps of Engineers proposal published in April to clarify the Clean Water Act's jurisdiction over the nation's waters and wetlands (79 Fed. Reg. 22,188). Opponents, including farmers and ranchers, argue that the proposal would unduly expand federal jurisdiction to farm ditches and other minor streams.

“Now this is a rule that has [drawn] significant Democratic opposition,” in large part due to rural concerns in red and blue states, Kovacs said. “Every member of the House and Senate, virtually, has farmers in their district. Forty percent of roads are administered by the counties, not the states, and virtually every one of those roads has a ditch on each side,” that opponents of the regulation argue could fall under EPA authority, Kovacs said.

“I would be surprised if that [waters rule] would be the kind of thing that Obama would say, `This goes against what we're doing at my EPA so I have to veto it,' ” Kovacs said.

Don Parrish, senior director for congressional relations at the American Farm Bureau Federation, said he believes Congress will look at all opportunities to stop the EPA from completing its work on the regulation, including standalone legislation and the appropriations process.

“We think some action will take place on the waters of the U.S. rule in the next Congress,” Parrish told Bloomberg BNA.

But EPA efforts to more clearly define the jurisdictional issues surrounding waterways have their defenders. Rep. Tim Bishop (D-N.Y.), the top Democrat on the House Transportation and Infrastructure Subcommittee on Water Resources and Environment, told Bloomberg BNA he doubts the Republican-led efforts to block the joint rule have much of a chance of success. The Republican-controlled House approved a bill in September—the Waters of the U.S. Regulatory Overreach Protection Agency (H.R. 5078)—by a vote of 262-152, but it is not expected to move in the current Senate.

“Even if the Senate flips, you still need 60 votes to move, and I don't see” that measure getting enough Democratic support to clear the chamber, Bishop said. “First off, I don't think the Senate will flip, and secondly, I don't see there being 60 senators who are going to vote for a bill that leaves in place a set of guidance that has been universally rejected by the regulated community and the stakeholder community.”

“It will have no chance in this Congress, which is obviously over, and I can't see it going forward in any further Congresses,” he said.

Ozone Standard Targeted

Another EPA regulation already named by Republicans as a top target next year is the agency's forthcoming possible revision to the ozone standard. If the EPA sets a more stringent ozone standard, as recommended by its independent science advisers and agency staff, it would trigger new emissions control requirements for power plants, industrial facilities and other sources in areas that do not attain the new standards.

House and Senate Republicans have already released companion legislation (H.R. 5505, S. 2833) targeting the yet-to-be released proposal on whether the EPA will revise or retain its national ambient air quality standard of 75 parts per billion for ozone. The bills would effectively block the EPA from revising the ozone standard until 85 percent of the counties that are not in attainment with the current standard are in compliance.

One of the House bill's sponsors, Rep. Pete Olson (R-Texas), said action pushing back on the EPA proposal would be likely in the first half in 2015, and he vowed that fighting the ozone standard would be his top energy priority in the new Congress.

Becker said he can't imagine the president would go along with legislation to prevent EPA from setting a more stringent standard, but said he really wasn't sure. With a Republican Senate, advocacy groups would need to analyze such far-reaching proposals more clearly and make the true effects of those proposals clear to policymakers, rather than counting on the Democratic-controlled Senate to block them, Becker said.

“Many would hope that [Obama] would not back off,” Becker said, “but who knows?”

The Senate sponsor of the bill to effectively block any potential ozone revisions, Sen. John Thune (R-S.D.), is a member of Senate Republican leadership and would be likely to push for consideration of the measure to fight against what he described as the most costly and burdensome EPA regulation in history.

Other Attacks on Climate Agenda

While it's clear that the EPA power plant regulations would be at the center of attacks on Obama's climate action plan, observers say other areas of the climate change agenda could also be at risk with a Republican-controlled Senate.

House Republicans have already indicated in their fiscal year 2015 budget blueprint that they want to cut international climate financing. The blueprint, released in April, specifically called for eliminating contributions to two funds established by the Obama administration to provide foreign assistance for energy efficiency and climate mitigation efforts.

If Republicans take over the Senate, too, it's possible they could go after “some high-profile, resonant elements of the budget” for climate science, according to Alden Meyer, director of strategy and policy for the Union of Concerned Scientists. Potential targets include international work through the Intergovernmental Panel on Climate Change and federal research conducted by the U.S. Global Change Research Program, he told Bloomberg BNA.

Climate research and observations carried out by agencies such as the National Oceanic and Atmospheric Administration or the National Aeronautics and Space Administration might also face budget cuts, Meyer said.

“It wouldn't surprise me if 2015 looked a lot like 1995,” Daniel J. Weiss, senior vice president for campaigns at the League of Conservation Voters, told Bloomberg BNA. In 1995, the government shut down after Republicans, led by then-House Speaker Newt Gingrich, “loaded up” spending bills with provisions that were unfavorable to the president, including some to block enforcement of the Clean Water Act, the Clean Air Act and other environmental controls, Weiss said.

TSCA Reform Implications

Looking beyond air and water regulations, congressional attempts to modernize the Toxic Substances Control Act are likely to continue under the next Congress, said Charles Franklin, senior counsel with Akin Gump Strauss Hauer & Feld LLP; Lawrence Culleen, a partner in Arnold & Porter LLP; and Lynn Bergeson, managing partner of Bergeson & Campbell PC. But the legislative approach could vary significantly depending on who controls the Senate.

If the Republicans win the Senate majority, they may be more likely to move the original Chemical Safety Improvement Act (S. 1009), introduced by Sen. David Vitter (R-La.) and the late Sen. Frank R. Lautenberg (D-N.J.) in May 2013, because it might be more acceptable to the House.

Sen. Barbara Boxer (D-Calif.), who currently chairs the Senate Environment and Public Works Committee, has been a key obstacle to moving legislation due to her concerns that TSCA reform not impinge on state programs. But if Republicans take back control of the chamber, Boxer would not be in a key leadership position, and that could make TSCA reform more probable, Bergeson said.

“There are signs the House will remain engaged, suggesting that 2015 could be the year for TSCA reform,” Bergeson said. “How extensive the reform, whether it will address all the TSCA issues that have been discussed for years, whether it will stem the tide of state chemical-specific measures and whether consumer confidence will be restored in TSCA are all open questions.”

Negotiations between Boxer and Vitter in hopes of reaching a compromise on TSCA reform collapsed in September.

Stream Buffer Rule at Risk?

Both Democratic and Republican House staff members told Bloomberg BNA a Republican majority in both chambers could also mean a halt in the Interior Department's promulgation of a stream protection rule.

An Office of Surface Mining Reclamation and Enforcement rule that was promulgated in 2008, which the mining industry touted as an economic boost to the nation, was vacated by a federal court in February (Nat'l Parks Conservation Ass'n v. Jewell, D.D.C., No. 1:09-cv-00115, 2/2014).

The rule would have significantly relaxed restrictions regarding how close mining waste could be dumped near streams, which a House Democratic aide said would significantly harm drinking water and aquatic life. Meanwhile, a House Republican aide told Bloomberg BNA that a rewrite of the rule could cost thousands of coal mining jobs and harm the economies of roughly 22 states.

House Republicans have sought to block the Office of Surface Mining from issuing a new, more stringent stream protection rule through legislation, including passage of H.R. 2084 in March.

Ongoing Gridlock Predicted

Among all the predictions for congressional priorities and potential ways to address regulations, many observers said the most likely outcome would be a familiar one: Congressional gridlock and an inability to work together on environmental and energy issues would prevent much from being accomplished.

“This spectacularly unproductive Congress will likely continue to do as little as possible after the midterm elections as there is no basis to conclude otherwise,” Bergeson said.

With assistance from Andrea Vittoria, Amena H. Saiyid, Pat Rizzuto, Rachel Leven, Andrew Childers and Patrick Ambrosio in Washington

To contact the reporters on this story: Dean Scott and Anthony Adragna in Washington at dscott@bna.com and aadragna@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

 


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