Energy Blog

Energy Blog

US Chamber of Commerce Blog

Leonardo Dicaprio walking with flight attendants in the movie Catch Me If You Can.Leonardo Dicaprio pretending to be a pilot in the movie Catch Me If You Can.

On the evening of February 9th, 2016, a collective sigh of relief was heard in state capitals across the country.  In response to requests from 27 states, the U.S. Chamber, and numerous other business and labor organizations, the U.S. Supreme Court issued an order that blocked EPA from implementing the Clean Power Plan (CPP), the agency’s unprecedented takeover of America’s electricity sector, until after the courts have a chance to review its lawfulness.

The legal effect of such a court order – a “stay” – is to press pause, effectively resetting the world to the day before a rule was finalized so that states and regulated parties are not forced to sink extraordinary resources into complying with a rule that might not even be lawful.  Or at least, that’s what it is supposed to be, as explained in a new legal white paper released today.

In response to the Supreme Court’s stay of the CPP, EPA Administrator Gina McCarthy has engaged in an escalating pattern of defiant rhetoric, culminating in her outrageous statement earlier this week that “[l]ife is continuing [in] the exact same direction it was before the stay,” that the stay “didn't mean that anything on the ground really had changed,” and that the stay “is not going to slow us down.”.  Her most recent claims follow on the heels of the agency’s equally outrageous suggestion that the stay won’t push back the CPP’s compliance deadlines.

EPA’s claims that the stay hasn’t really changed anything seem calculated to goad utilities and state air regulators into continuing to work towards compliance with the CPP during the period of judicial review, despite the stay. Whether the CPP deadlines are extended by the length of the stay – or “tolled,” to use the legalese – matters tremendously, because it has the potential to put states in a serious pickle. If the deadlines are not “tolled” by the stay, as EPA claims, then EPA could jam states with truncated compliance deadlines in the unlikely event that the courts uphold the Rule.

Notwithstanding EPA’s blustery claims to the contrary, the law is crisp and clear that a court stay of a regulation delays (or tolls)  all of the deadlines included in a rule for at least as long as the amount of time that a rule is stayed.  What’s more, EPA itself already admitted to this in its own filings with the U.S. Supreme Court and the D.C. Circuit.

A new legal white paper by the U.S. Chamber coalition's law firm, Sidley Austin LLP, spells it out:    

As described below, we believe the proper interpretation of the Court’s order is that the Stay tolls all the Rule’s deadlines—not just those that actually fall during the Stay—for at least the period of time the Stay is in place. In the hypothetical scenario in which the courts might eventually uphold the Rule, EPA is required to move all the Rule’s deadlines into the future by at least the amount of time between the Stay’s issuance and its expiration. Tolling of the deadlines is required by straightforward operation of the Stay; indeed, EPA itself represented to the Supreme Court that the Stay would toll all of the Rule’s deadlines if granted. This conclusion is also consistent with Supreme Court and D.C. Circuit case law, which holds that a stay preserves the status quo and that deadlines must therefore be tolled, and with EPA’s own past statements regarding the impact of a stay on deadlines. It is further necessary to toll all of the Rule’s deadlines in this case to avoid the concerns expressed by EPA in the Rule itself that the states and industry must be given sufficient time to prepare for compliance in order to avoid “compromising electricity system reliability” and other adverse impacts.

In other words:

Requesters of the stay asked for tolling; In opposing the stay request, EPA itself warned that granting the stay would force tolling; Existing court precedent requires tolling; and Upon finalizing the Rule, EPA itself stated that it had given states and utilities the bare minimum amount of time possible to comply with the rules without threatening grid reliability, inherently acknowledging that shortening such timelines could in fact cause reliability problems.

So what’s in it for EPA to engage in this public relations campaign dismissing the effect of the stay on the CPP and its deadlines? Well, EPA has already learned from experience that if it can enforce compliance while the courts are reviewing a rule (judicial review often takes years), then it can achieve its goals regardless of the legality of its rules.  Under this scenario, it doesn’t really matter whether the courts ultimately hold that a regulation is unlawful: the irreversible damage from a rule has already been done by the time the courts catch up.

The most recent example of EPA’s “Catch Me If You Can” regulatory strategy was on full display just last year, when the Supreme Court invalidated EPA’s MATS regulation, but not until the Rule contributed to the shutdown of up to 20% of the country’s coal-fired power plants.  

On the eve before the Court held that the MATS rule was unlawful, HBO’s Bill Maher asked Administrator McCarthy what EPA would do if the Court invalidated the rule.  McCarthy seemed nonplussed by the possibility, explaining that the rule was finalized “three years ago” and that “[m]ost of [the utilities] are already in compliance, investments have been made…”

In other words, EPA already forced the irreversible compliance investments and power plant retirements it wanted out of the rule – so what did it matter if the Court now found the rule to be unlawful?

That’s why the U.S. Supreme Court’s stay of the CPP is important—it keeps EPA from relying on its “Catch Me If You Can” regulatory strategy yet again.  States deserve to have the complete picture about the real legal effect of the Supreme Court’s stay before they fall for EPA’s misinformation campaign. EPA should have admitted to the states directly that the Agency had already told the courts that the deadlines must be tolled by a stay.

In the interest of transparency the EPA must tell states, utilities, and electricity users that it will honor the tolling requirements inherent in the stay decision.

Editor's note: This originally appeared on the Institute for 21st Century Energy's blog.

Sean Hackbarth The Asia Vision LNG sits docked at Cheniere Energy's Sabine Pass LNG terminal.The Asia Vision LNG sits docked at Cheniere Energy's Sabine Pass LNG terminal. Photo credit: Lindsey Janies/Bloomberg.

Just like a ship filled with U.S. crude oil left Corpus Christi, Texas in December, ending the 40-year-old export ban, a tanker that just left a Louisiana port on its way to Brazil made history by becoming the first LNG shipment from the continental United States, Reuters reports:

The United States has exported its first liquefied natural gas (LNG) cargo from the lower 48 states, after a tanker set sail from Cheniere Energy's Sabine Pass export terminal in Louisiana.

The Asia Vision LNG tanker left the dock at the Sabine Pass terminal at 0139 GMT (7.39 p.m. on Wednesday local time), shipping data on Reuters showed.

Expected to become an importer of LNG just a decade ago, the shale gas revolution in the United States unlocked cheap, abundant gas supplies, allowing the country to become an exporter instead.

Cheniere Energy expects 8 to 10 more tankers to deliver LNG to global markets in the next two months.

This is just the start.

According to a 2015 Government Accountability Office report, five LNG facilities will be operational by 2018 with the ability to export almost 10 billion cubic feet (bcf) of natural gas a day. This “constitutes about 12.4 percent of expected U.S. natural gas production26 and approximately 18.1 percent of the world’s expected LNG capacity in 2020.” If operating at full capacity, 100 LNG tankers will be needed.

gao_lng_exports_12_2015.png  Obtaining and Processing Liquefied Natural Gas for Transport.GAO chart: Obtaining and Processing Liquefied Natural Gas for Transport.Source: Government Accountability Office.

In its most-recent projections, the Energy Information Administration sees the United States being a net natural gas exporter by 2017 and remaining that way through 2040. By 2040 anywhere from 0.2 trillion cubic feet (Tcf) to 10.3 Tcf of LNG is projected to be exported on net.

eia_2015_natgas_exports.png  U.S. net natural gas trade, 2005-40.EIA chart: U.S. net natural gas trade, 2005-40.Source: Energy Information Administration.

More markets for U.S. LNG along with customers looking to diversify its energy sources will mean more ships will follow in the Asia Vision LNG’s wake.

Eric Nelson Photo credit: Luke Sharrett/Bloomberg

Happy Super Tuesday. The 2016 election goes national on this day, as voters head to the polls in a dozen states.

To put voters in the right state of mind as they head to the polls, we wanted to share some of our stories about the states participating and highlight issues that are most important to the employers, executives and entrepreneurs that create opportunities across the nation.

And read more at Dear 45. We're telling the 45th president what's important to the business community by reaching out to business owners and corporate executives to contribute their thoughts to the policy debate in this important election year:

Give American Business a Chance to Show the World What We Can Do

"From our perspective, the state of American business in 2016 is filled with uncertainty, risks, and challenges. Yet we are optimistic about the future of our country. We know America has extraordinary capacities, talents, resources, opportunities, and freedoms that are simply unmatched anywhere on earth."

The Place to Start: Be the 'Small Business President'

"There's a constructive role for government to help small firms compete and produce good jobs. And there are strong ideas from both sides of the aisle."

Dear 45: Always Remember Small Businesses – and Their Local Impact

"We think about all the entrepreneurs who dream big, take risks and inspire our country’s next generation of small business owners by reminding us what the American Dream is all about. We hope you think about them, too, because they could sure use a hand from their next president."

Play to America's Strengths with Trade

"In the United States, trade drives our economy, ignites innovation and powers job creation."

Two Rules. Two Brickmakers. Immeasurable Damage.

"'Our regulators are targeting an industry that has been absolutely crippled by the recession,' said [Davis] Henry], noting that his [Selma, Ala.] company has already had to shut down one of its two brick kilns (a reflection of the downward trend across the brick industry, which is currently operating at less than 50 percent capacity)."

Health Care Law is Too Much for Nashville Deli to Stomach

"Vanderbilt University students will have to find another place for matzo ball soup, Reuben sandwiches, and other New York City deli staples. After 19 years, Noshville is closing its Midtown Nashville location."

Houston, Dallas Meeting EPA’s Ozone Standard? Mission ‘Impossible,’ Rice Professor Says

"Reducing ozone is tricky business--so tricky that a Rice University professor concludes, 'The EPA’s new 70 ppb [parts per billion] standard will prove impossible to attain by 2025 in several regions — including Dallas-Fort Worth and Houston.'"

Report: Thanks to EPA, Texas Will Pay More for Less-Reliable Electricity

"Texas will see higher electricity prices and a greater likelihood of power disruptions from EPA’s carbon regulations, the Lone Star State’s power grid reliability monitor warns."

A Small Business, a Symbolic Bridge and a National Transportation Crisis

"The Memorial Bridge — which connects the District of Columbia to Northern Virginia, where Glazier's luxury car service company is based — is failing. ... For the country, a rapidly deteriorating landmark at the gates of the nation’s capital is an embarrassment. For many Washington area commuters, already accustomed to the Beltway’s brand of infamously dense congestion, it’s yet another traffic jam on the way to work. But for local business owners like Glazier, it’s an even more serious problem."

How Clogged Roads are Draining this Small Plumbing Business

"[Alexandria, Virginia-based] Michael and Son, which has been in business for four decades, spends more than a million dollars on vehicle repairs annually, a large share of that directly tied to wear and tear that the firm’s roughly 500 vehicles sustain from outdated and overextended roads."