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Congress shouldn’t rubber-stamp the LWCF

This summer, both chambers of Congress have been working towards a conference agreement between two energy bills, H.R. 8 (the base package) and S. 2012. The House passed its bill in late 2015, while the Senate agreed on its version this past April. The House then passed an amended version of the Senate bill, setting up the conference process that began in July.

The conference committee is now tasked with passing a package addressing a broad range of energy issues, including infrastructure and permitting reform, energy security, efficiency, and federal land policy, among others. While both bills cover a variety of policy areas, so far the negotiations have yet to significantly move the needle in the energy policy sphere.

However, one important policy provision is set to cause significant debate. The Land and Water Conservation Fund (LWCF) uses offshore drilling royalties to fund federal land acquisition projects. The LWCF expired at the end of FY2015, yet was reauthorized for three years in the FY2016 Omnibus negotiations. The Senate bill contains a permanent reauthorization of the LWCF, while the House amendment does not.

This impasse will likely tie up negotiations. Many environmentalists are pushing for permanent reauthorization, while a number of Republicans, led by Natural Resources Committee Chairman Rep. Bishop, oppose such a reauthorization. Rep. Bishop has long advocated for reforms to the LWCF before any reauthorization and strongly opposes permanent reauthorization. Indeed, the LWCF has strayed far from its original mandate by improperly managing its holdings and locking Americans out of more than one billions acres of land.

By and large, federal lands are poorly managed. For example, according to the Property and Environment Research Center, Montana, Idaho, New Mexico, and Arizona bring in on average $14.51 for every dollar spent on state trust lands. However, the U.S. Forest Service and Bureau of Land Management loses 27 cents per dollar spent on federal land management. Furthermore, since 2010 oil production is up 113 percent on private and state lands, but up a measly 0.8 percent on federal lands.

Rubber-stamping the LWCF will only perpetuate the federal government’s inefficient land management and would be an abdication of Congressional responsibility. Whatever the House and Senate agree on should not contain a permanent reauthorization of the LWCF, and both chambers should work to reform the program to account for inefficiencies in the management of funds.

California’s Mandate Madness

Next week, Advanced Energy Economy (AEE)—a group co-founded by billionaire environmental activist Tom Steyer—will host its annual event titled “Pathway to 2050.” The name of this conference is in reference to California’s renewable energy mandate that requires the state generate 50 percent of its electricity from renewable sources by the year 2050. California already has high electricity rates and rates are only going to increase.

California already has high electricity rates

 California already has very high electricity rates, compared to the national average and compared to its neighbors. California electricity rates are 69 percent higher than Oregon’s, 88 percent higher than Nevada’s, 38 percent higher than Arizona’s, and 48 percent higher than the national average. Retail electricity rates tend to reflect the policy choices made by the states in the past, and California has made expensive choices. Moving to 50 percent renewable will be even more expensive.

Retail Electricity Rates


Wind and solar are expensive

A new study from the Institute for Energy Research (IER) shows why the 50 percent goal will come at a huge cost to California ratepayers.

IER’s study, conducted by Tom Stacy and George Taylor, shows the cost of shutting down existing power sources—nuclear, coal, and natural gas—and attempting to replace them with new wind and solar power. On average, electricity from new solar is nearly five times as expensive as electricity from existing nuclear plants and over three times as expensive as electricity from existing coal and natural gas plants.

The numbers are similar for new wind power, which produces electricity that is on average over 3.5 times as expensive as electricity from existing nuclear plants and around three times as expensive as electricity from existing coal and natural gas plants.

The high cost of wind and solar might come as a surprise to some. After all, we’re constantly told that the wind and sun are “free fuel.” The wind and sun are indeed “free,” but the facilities to capture energy from the wind and sun and convert it to usable electricity are not free—not even close. Not only that, but because of wind and solar power’s intermittency issues (the sun isn’t always shining and the wind not always blowing) they impose severe costs on the power grid that result in higher electricity costs.

For the power grid to work, supply and demand need to be in balance at all times. Wind and solar power cannot satisfy this need because their output rises and falls with the weather, not with demand. In the case of solar power, it just so happens that as electricity demand peaks in the evening, solar power’s output begins to decline. IER Vice President Dan Simmons explained this in a recent Congressional testimony:

One of the biggest challenges in keeping the lights on and the electricity grid stable is making sure the electricity grid has sufficient electricity during times of peak demand. Because solar is non-dispatchable and dependent on the weather and time of the year, it cannot necessarily help meet times of peak demand.

For example, the best time of the year for solar is during the summer and the best day of the year should be the summer solstice. This year the solstice occurred on June 20th. In California on the summer solstice, peak electricity system demand occurred at 5:50 pm with demand of 44,550 MW. Solar peak production occurred at around 1 pm at 6,922 MW and by 6:00 pm near the time of peak demand solar production had fallen to 4,491 MW. By 7:00 pm, when system demand was still 44,000 MW, solar production had fallen to 2,629. By 9:00 pm solar production was zero while electricity demand was still nearly 42,000 MW.

This means that even when solar and wind power are producing electricity, the grid still needs sources like nuclear, coal, and natural gas online to satisfy demand.

California’s renewable mandate forces reliable sources to reduce their output when wind and solar are producing electricity. This increases the costs of operating these sources, which results in higher electricity costs. Without subsidies or mandates propping up wind and solar, these extra costs would not exist because reliable sources wouldn’t be forced to cater to intermittent wind and solar power. Simply put, wind and solar power are an unnecessary and expensive burden on the power grid.

However, for California to reach its 50 percent goal, the utilities are shutting down the very sources that keep the lights on to make way for more solar power. Recently PG&E announced plans to shut down its Diablo Canyon nuclear facility. In a press release, PG&E stated that one of the reasons for its decision is to satisfy the state’s renewable energy mandate:

Reflecting California’s changing energy landscape, PG&E today announced a Joint Proposal with labor and leading environmental organizations that would increase investment in energy efficiency, renewables and storage beyond current state mandates while phasing out PG&E’s production of nuclear power in California by 2025.

Let’s step back for a moment and think about why California is on this “Pathway to 2050” in the first place, which is allegedly to reduce carbon dioxide emissions to combat global warming. However, in the case of Diablo Canyon the state is shutting down a CO2-free power plant in favor of more solar power. But because of solar power’s intermittency issues, the state will likely need to add more natural gas to provide power when the sun isn’t shining. So not only will California’s 50 percent goal result in higher electricity rates, but also higher CO2 emissions.

Even if California’s leaders and groups like AEE are serious about their commitment to reducing CO2, the state’s 50 percent mandate will have little impact on global temperatures. In fact, according to models from the U.N’s Intergovernmental Panel on Climate Change, even if the U.S. were to stop emitting CO2 altogether by the year 2050, it would limit global temperature rise by a measly 0.14 degrees Celsius by the year 2100. California’s mandate would obviously have an even less significant impact.

Exporting Unreliable Power

Included in AEE’s agenda for their “Pathway to 2050” event is a session on expanding California’s power markets to other western states. To accommodate the 50 percent goal, California would need to rely on an accounting gimmick. California would export excess solar power to other states in times of high solar production but lower electricity demand, and it would import electricity from those same states during times of high demand and low or zero solar production. On paper, this would enable California to meet its renewable goals, but in reality the state would still depend on reliable sources of electricity generated in other states. This is akin to the “100 percent renewable” gimmick that many companies are using to market themselves as green.

In fact, California already imports electricity from coal generation in Utah, New Mexico, and Arizona. In fact, at times half of Southern California’s electricity comes from coal power in those three states.


California’s push to get 50 percent of its electricity from renewable sources will have a crushing impact on the state’s ratepayers. As IER’s study shows, electricity from new wind and solar power is much more expensive than electricity from existing sources like nuclear, coal, and natural gas. Beyond just being unaffordable, California’s renewable energy mandate is unrealistic and may actually cause CO2 emissions to increase.


Congressmen block arbitrary, unscientific regulatory schemes

Rep. Jenkins, along with Reps. Culberson, Womack, LaHood, and Mullin, recently introduced H.R. 5668, the Transparency and Honesty in Energy Regulation Act of 2016 (THERA). This bill would stop the use of the Social Cost of Carbon (SCC) and the Social Cost of Methane (SCM) in regulatory rulemaking. As explained many times before, the SCC and SCM are too flawed to be used in the rulemaking process.

The SCC is estimated using Integrated Assessment Models (IAMs). These models try to assess future climate and economic impacts of climate change. According to economists, the models are “close to useless.” Here is MIT Professor Robert Pindyck:

…I would argue that calling these models “close to useless” is generous: IAM-based analyses of climate policy create a perception of knowledge and precision that is illusory, and can fool policy-makers into thinking that the forecasts the models generate have some kind of scientific legitimacy. IAMs can be misleading – and are inappropriate – as guides for policy, and yet they have been used by the government to estimate the social cost of carbon (SCC) and evaluate tax and abatement policies. [Pindyck 2015, emphasis added.]

It turns out that neither theory nor data to back up how these models work. As Pindyck goes on to explain:

One of the most important parts of an IAM is the damage function, i.e., the relationship between an increase in temperature and GDP (or the growth rate of GDP). When assessing [the climate’s sensitivity to emissions], we can at least draw on the underlying physical science and argue coherently about the relevant probability distributions. But when it comes to the damage function, we know virtually nothing – there is no theory and no data that we can draw from. As a result, developers of IAMs simply make up arbitrary functional forms and corresponding parameter values.[Pindyck 2015, emphasis added, footnotes removed.]

The SCC is fatally flawed not only because it lacks statistical and theoretical justification, but it also violates the basic principles that the federal government has set out to produce cost-benefit analyses. The SCC fails to comply with OMB guidelines in two major and irreconcilable ways. First, OMB Circular A-4 clearly states that any regulation should assess the costs and benefits as realized domestically:

Your analysis should focus on benefits and costs that accrue to citizens and residents of the United States. Where you choose to evaluate a regulation that is likely to have effects beyond the borders of the United States, these effects should be reported separately.

The Interagency Working Group ignored this requirement. The Technical Support Document for the SCC states “the interagency group concluded that a global measure of the benefits from reducing U.S. emissions is preferable,” which is precisely what Circular A-4 directs not to do. The administration could have included both the domestic and global values, but they did not.

Agencies have put this into practice. In the EPA’s final Regulatory Impact Analysis (RIA) for its “Clean Power Plan” (CPP), the agency uses the SCC to assess climate benefits on a global scale, while accounting only for domestic costs. In its own breakout of benefits throughout the RIA, the agency admits “[t]he climate benefit estimate in this summary table reflects global impacts from CO2 emission changes and does not account for changes in non-CO2 GHG emissions.” This is an apples to oranges comparison that explicitly flies in the face of OMB guidance.

Further, agencies manipulate discount rates to produce favorable results using the SCC. Discount rates are intended to calculate the present value of regulatory action on the future economy. Essentially, it’s a way to account for costs and benefits down the road. Per OMB guidance, agencies should use a discount rate of 3 and 7 percent. Yet in the CPP RIA, the EPA admits:

…several discount rates are applied to SC-CO2 because the literature shows that the estimate of SC-CO2 is sensitive to assumptions about discount rate and because no consensus exists on the appropriate rate to use in an intergenerational context. The U.S. government centered its attention on the average SC-CO2 at a 3 percent discount rate but emphasized the importance of considering all four SC-CO2 estimates.

Again, the SCC violates Circular A-4, which states “For regulatory analysis, you should provide estimates of net benefits using both 3 percent and 7 percent.” The Obama administration’s Interagency Working Group used the 3 percent discount rate, but not the 7 percent discount rate. A 7 percent discount rate would have lowered the SCC.

This same process has been employed with the SCM metric. The SCM is very similar to the SCC, except targeted at methane emissions mainly associated with oil and natural gas development. In 2015 the Environmental Protection Agency published its final rule for emissions standards for new and modified oil and gas sources, which is the first regulation to use the SCM. In fact, the rule was justified solely using the SCM.

These metrics are arbitrary, unscientific, and misleading. It is irresponsible to use them to justify economically significant regulations, as those regulations–if abused–ultimately hurt the people they are designed to protect. Fortunately, THERA would end this practice and protect American taxpayers from further harm. By prohibiting the SCC and SCM from being deployed, and reviewing regulations that use them as justification, Congress would be taking a significant step in combatting flawed and detrimental agency overreach and overregulation.

Rep. Jenkins should be applauded for his effort to tackle this deeply flawed and damaging bureaucratic exercise. THERA should be supported by all Representatives who believe in transparency, accuracy, and a bureaucracy accountable to the American public.

Free-Market Groups Support Bill Targeting Arbitrary Social Cost of Carbon

WASHINGTON – Today the American Energy Alliance and a coalition of free-market groups sent a letter to Rep. Evan Jenkins in support of his bill, the Transparency and Honesty in Energy Regulations Act of 2016. This legislation halts the use of the administration’s fatally flawed and arbitrary “social cost of carbon” (SCC) and the “social cost of methane” (SCM) in agency rulemaking and regulatory action. Below is an excerpt from the letter:
The SCC and SCM are products of the Obama administration’s Interagency Working Group (IWG) on the Social Cost of Carbon. The problems with these calculations are many, but the most important are that these calculations are wholly arbitrary, that the IWG refuses to follow OMB’s guidelines for economic analysis, and that these are economic models which are calibrated to follow climate model projections, not actual, real-world data. The problems are too large to ignore, especially since they are being used to justify regulations that make energy more expensive for American families and businesses.
The biggest problem with the SCC was explained by MIT Professor Robert Pindyck, who writes that computer-generated SCC estimates are “close to useless” for guiding policymakers, and models are “arbitrary” having no basis in either economic theory or empirical observation.
If the arbitrary nature of the SCC and SCM wasn’t a big enough problem, OMB’s Circular A-4 outlines some requirements for “good regulatory analysis.” The administration’s IWG, however, refused to follow two of the important guidelines (an analysis at a 7 percent discount rate and an analysis of only domestic benefits instead of only global benefits). Their failure to comply has the combined effect of justifying much more costly regulations which, in turn, drive up the cost of energy in the United States.
Another major flaw is that the IWG tuned their calculation of the SCC to follow computer climate models, rather than real world data. If the calculations are re-run using empirical data, according to one SCC model the numbers should be 30 to 50 percent lower and according to another SCC model, the SCC should be over 80 percent lower. In fact, if the IWG only used this second model, there is a 40 percent chance that the SCC would be negative, i.e., carbon dioxide actually turns out to be a benefit to the economy. For more on this issue, see this op-ed and this paper.
Your bill recognizes that the government has been playing “fast and loose” with the SCC and SCM, in what can fairly be described as an attempt to generate numbers that justify their administrative actions in pursuit of their political Global Warming agenda. By putting a stop to it, your legislation will also put a stop to higher energy prices for American families and businesses. We applaud your efforts and thank you for this important initiative.

AEA Endorses Donald Trump for President

The American Energy Alliance is pleased to announce its endorsement of businessman Donald J. Trump for President.

AEA President Thomas Pyle issued the following statement:

“The U.S. is at a crossroads when it comes to our federal energy policy. Over the last eight years President Obama has subjected the American people to policies that fundamentally transform our energy economy into just another politicized arm of Washington. President Obama has rewarded his contributors with government mandates and taxpayer subsidies, rather than allowing Americans to choose what works for them. The outcome of this election will determine whether we continue this destructive agenda or take a more free-market approach that will result in affordable, reliable energy for every American.

“The contrast between the two candidates’ energy platforms could not be greater. Donald Trump’s message is one of optimism, prosperity, and abundance where the needs of consumers and workers are put first. Hillary Clinton’s message is one of political favors and cronyism that puts the agenda of her favored special interests above all else.

“Donald Trump has put forth a plan that would move our country forward by opening up more federal lands and waters for energy exploration of all kinds, utilizing cutting-edge technologies to tap into our vast resources, unwinding the Obama administration’s harmful regulations, and subjecting the Paris Agreement to the scrutiny it deserves. These policies will usher in an era of prosperity that will strengthen our economy, put more money in the pockets of American families, and lift many struggling Americans out of poverty.  It will make America more secure and more Americans better off.

“Hillary Clinton offers the American people a plan that would move our country backwards—hurting all American families, but especially the poorest among us.  At the bidding of special interest groups, Secretary Clinton has promised to ban production of natural gas, coal, and oil on federal lands, discourage the use of innovative technologies, and vigorously implement the Obama administration’s destructive regulations and the Paris Agreement that extends UN control over American citizens.

“Donald Trump and Hillary Clinton offer two very distinct paths for the future of our country.  Where Donald Trump promises prosperity and growth, Hillary Clinton promises a third term of President Obama’s regressive climate agenda.  The stakes are far too high to sit on the sidelines, which is why AEA is pleased to endorse Donald Trump for President.”


Click here for a pdf side-by-side comparison of Donald Trump and Hillary Clinton.

Key Vote: Interior Appropriations Amendments

The House will soon vote on the FY 2017 Interior, Environment, and Related Agencies Appropriations bill. The underlying legislation is a step forward and includes several promising policy provisions. Two amendments provide significant improvements to the bill. One amendment, offered by Rep. Boustany, will further improve the bill by blocking funds from being used to implement the Administration’s proposed offshore well control rule. Another, offered by Rep. Ratcliffe, will prohibit wasteful spending by blocking funds from being used to implement the Clean Energy Incentive Program (CEIP), part of the Administration’s crusade against affordable, reliable energy. The American Energy Alliance supports these measures and urges all Representatives vote YES.

In April 2015, the Bureau of Safety and Environmental Enforcement (BSEE) published aproposed rule imposing new regulations on the offshore drilling industry. The rule is very complicated and many policymakers, industry specialists, and others directly impacted by the rule are still trying to determine how and if it could be implemented.

This complexity has made evaluation difficult. However, analyses thus far suggest massive costs imposed by this rule. Wood Mackenzie estimated a cumulative GDP reduction of $260-$390 billion and roughly $70 billion in lost federal revenue through 2030. Most importantly, the rule could destroy up to 190,000 jobs by 2030.

API determined that the rule “ultimately could increase risk and decrease safety.” The group indicates the rule prescribes a one size fits all mentality, is far too rigid in its technical aspects, and imposes unnecessary and potentially detrimental administrative and bureaucratic requirements. Ultimately, the rule could actually “increase risk of harm to personnel and negatively impact the environment.”

The oil and gas industry shares the goal of the BSEE in increasing safety and protecting the environment. To that end, the proposed well control rule imposes significant hardship and dramatically higher costs. At the end of the day, innovation and private investment have yielded significant advancements in productivity and safety in offshore resources development. This trend will continue as long as Americans are allowed to experiment and improve. The well control rule will stifle industry development. Rep. Boustany’s amendment will ensure continued improvements in oil and gas safety and environmental stewardship, and all Representatives are strongly encouraged to vote YES on the amendment.

In June 2016, the Administration issued a proposed rule for CEIP design details. The CEIP is a program for states to apply for early credit under the so-called “Clean Power Plan” (CPP). In essence, the CEIP will incentivize the unnecessary shuttering of reliable power plants and instead  construct expensive, intermittent energy sources — specifically wind and solar power. Basically, states issue credits to compliant energy projects and the EPA matches said credit.

The CEIP is a quasi-grant/credit program (the Environmental Protection Agency calls them “allowances”) that incentivizes funding to projects that may not be entirely necessary, viable, or cost effective. In the proposed rule, the EPA does not specify if a qualified energy project must be commercially viable. That’s the whole point: without an incentive like the CEIP (or wind Production Tax Credit or solar Investment Tax Credit) this whole operation would be economically unfeasible. Replacing affordable and reliable energy sources like natural gas and coal with wind and solar is simply too expensive — and technically unsound — to make any sense.

Further, the Supreme Court stayed the implementation of the CPP earlier this year. This means the deadlines were all tolled, or delayed, including the CEIP. In fact, 112 Representatives recently requested Administrator McCarthy to clarify her statements regarding the stay. The legal debate surrounding the CPP (and the CEIP) will be tangled up in courts for months, far beyond this appropriations cycle. Federal funds should not be obligated towards the CEIP, especially as it’s legal standing is shaky.

Rep. Ratcliffe’s amendment would block taxpayer dollars from going towards this program. This amendment should be supported by any Representative who values fiscal responsibility and accountability. The American Energy Alliance urges all Representatives vote YES on the Ratcliffe CEIP amendment.

Key Vote: H.R. 4768

Today, the House will vote on H.R. 4768, the Separation of Powers Restoration Act (SOPRA). This bill will reel in the power of executive agencies and marks an much needed step towards regulatory reform. The American Energy Alliance supports H.R. 4768 and urges all Representatives vote YES.

In Chevron v. NRDC, the Supreme Court held that courts should defer to agencies for the interpretation of statutes unless the agency’s interpretations were unreasonable. Known as “Chevron deference,” this rule gives regulatory agencies regulatory authority that extends beyond what Congress had intended. Chevron deference has been used to expand executive branch overreach and has contributed to an imbalance of power among the three branches. This is particularly common with the Environmental Protection Agency (EPA) which has used Chevron to bend the Clean Air Act and Clean Water Act to comply with its burdensome and costly regulatory agenda.

H.R. 4768 pushes back on this practice by requiring courts to review all questions of statutory interpretation “de novo,” or outside the agencies own reading of the statute. This would end Chevron deference and require agencies to be much more conservative in their statutory interpretation. In the energy and environment space, this would provide a marked victory for constitutionalists and those who favor the free market. This would also significantly damage the prospects of many EPA rules and regulations, such as the Clean Power Plan, from surviving legal challenges.

Overall, H.R. 4768 provides smart, sound regulatory reform and helps rebalance the separation of powers that have been continually skewed towards the executive branch in recent decades. The American Energy Alliance urges all Representatives vote YES on H.R. 4768.

AEA Issues Statement on Green Climate Fund Vote

WASHINGTON – American Energy Alliance President Thomas Pyle issued the following statement after the Senate Appropriations Committee approved an amendment to funnel $500 million to the UN’s green climate slush fund:

“It’s disappointing that the Senate Appropriations committee has capitulated to the Obama administration’s climate agenda. The green climate slush fund is a political stunt to help politicians in developed countries feel good about themselves while their policies raise energy costs and consign millions of people around the world to poverty.

“Republicans have largely pledged to fight back against the president’s agenda, so it is inexcusable that they would even consider green lighting this blatant misuse of taxpayer funds. Even more appalling is the fact they did this through a voice vote to protect those who voted for it from scrutiny. This is exactly the type of action that has voters so upset with the established political class on both sides of the Atlantic. We’re confident that Majority Leader McConnell, Majority Whip Cornyn, and the rest of the Senate Leadership will swiftly announce their objection to this vote and will work with Speaker Ryan and the House Leadership to prevent the president from advancing his harmful climate agenda.”

Congress looks to Rein in the EPA

One of EPA’s main tactics in their assault on affordable energy is to get utilities, Public Utility Commissions, and others to implement a regulation before the courts have time to rule on its legality. If EPA can get power plant owners and other regulators to move fast enough, EPA can achieve its goal of closing affordable and reliable power plants before the courts even rule on the regulation. This is what happened with EPA’s MATS rule and is what EPA is trying to achieve with their regulation of carbon dioxide from power plants, even though the Supreme Court has stayed the rule. Congress has stood on the sidelines and let EPA go too far for too long, but Congress is starting to push back on EPA’s overreach.

While the MATS case was being heard in the courts, 40 gigawatts of electricity generation capacity prematurely closed to comply with the rule—that’s enough electricity capacity to power 30 million American homes. Ultimately, the Supreme Court ruled against EPA (the Supreme Court case did not overturn the rule, but required EPA to look at certain costs), but the damage was already done

Similarly, the Supreme Court imposed a stay on EPA’s regulation of carbon dioxide from power plants—what EPA’s PR team calls their “Clean Power Plan.” This stay means that all of the deadlines and other requirements of the regulation are put on hold until after the Supreme Court rules on the regulation.

Despite the Supreme Court’s stay, EPA would still like states to continue implementing the regulation. Administrator McCarthy testified before Congress in March and gave coy answers to questions about the tolling of deadlines under EPA’s regulation. When asked about whether the regulation’s deadlines were tolled, McCarthy said, “Well that’s not what the Supreme Court said, but we assume that the courts will make that judgement over time or will leave that to EPA to make their own judgement.” When she was pressed further, she responded, “. . . the Supreme Court didn’t speak to that issue. The only thing they spoke to was the stay of the rule. They didn’t speak to any tolling or what it meant in terms of compliance time.”

Responding to this evasive and murky testimony, Rep. Ratcliffe organized a letter signed by 112 Representatives asking McCarthy to explicitly clarify EPA’s position on the implications of the stay of the regulation of carbon dioxide from power plants. This effort should be applauded. It is a good reminder that EPA and other regulatory agencies’ job is to carry out the will of the American people as expressed through law passed by Congress—not carry out their own regulatory agenda. Congress has let EPA and regulatory agencies go too far. Hopefully this effort marks the beginning of a renewed effort from Congress to rein in EPA’s excessive overreach.

Obama’s Rough Week in Court

This week has been a bad week for President Obama’s policies in the courts. The Supreme Court handed a defeat to President Obama over his immigration plan and a district court struck down his administration’s unlawful attempt for the Bureau of Land Management to regulate hydraulic fracturing.

The court’s hydraulic fracturing opinion was straightforward and simple. The court explained to the Obama administration that they cannot do anything they want, but only what they have been delegated to do by the legislative branch. Here is the conclusion to the court’s order:

As this Court has previously noted, our system of government operates based upon the principle of limited and enumerated powers assigned to the three branches of government. In its simplest form, the legislative branch enacts laws, the executive branch enforces those laws, and the judicial branch ensures that the laws passed and enforced are Constitutional. See Marbury v. Madison, 5 U.S. 137, 176 (1803). A federal agency is a creature of statute and derives its existence, authority and powers from Congress alone. It has no constitutional or common law existence or authority outside that expressly conveyed to it by Congress. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988); see also Michigan v. EPA, 268 F.3d 1075, 1081-82 (D.C. Cir. 2001). In the absence of a statute conferring authority, then, an administrative agency has none. See American Petroleum Inst. v. EPA, 52 F.3d 1113, 1119-20 (D.C. Cir. 1995). This Court “must be guided to a degree by common sense as to the manner in which Congress would likely delegate a policy decision of such economic and political magnitude to an administrative agency.” Brown & Williamson, 529 U.S. at 133. Given Congress’ enactment of the EP Act of 2005, to nonetheless conclude that Congress implicitly delegated BLM authority to regulate hydraulic fracturing lacks common sense. Congress’ inability or unwillingness to pass a law desired by the executive branch does not default authority to the executive branch to act independently, regardless of whether hydraulic fracturing is good or bad for the environment or the Citizens of the United States. “[The Supreme] Court consistently has given voice to, and has reaffirmed, the central judgment of the Framers of the Constitution that, within our political scheme, the separation of governmental powers into three coordinate Branches is essential to the preservation of liberty.” Mistretta v. United States, 488 U.S. 361, 380 (1989).

Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing. The BLM’s effort to do so through the Fracking Rule is in excess of its statutory authority and contrary to law. As this finding is dispositive as to each of the Petitions for Review, the Court need not address the other points raised in support of setting aside the Fracking Rule. THEREFORE, the Court holds the Fracking Rule is unlawful, and it is

ORDERED that the BLM’s final rule related to hydraulic fracturing on federal and Indian lands, 80 Fed. Reg. 16,128 (Mar. 26, 2015), is hereby SET ASIDE.