REPLACING THE EPA

We Need To Replace the EPA with a new Environmental Solutions Agency,

Engage in Smarter Regulation of the Environment,
And Put an End to the Economically Harmful War on American Energy
--DISCUSSION DRAFT--

Summary
America is faced with a challenge, and with that challenge comes a historic opportunity.

The challenge is rethinking how we can protect the environment and public health, such that we
do not needlessly sacrifice jobs, economic growth, and the creation of new wealth.

The Environmental Protection Agency (EPA) has transformed from an agency with the original
animating and noble mission to “protect human health and to safeguard the natural
environment”1 into a job-killing, centralizing engine of ideological litigation and regulation that
blocks economic progress at every turn while failing to fulfill its basic mission of protecting
human health and the environment in an economically affordable manner. In the name of
safeguarding the environment, the EPA has become a tool of ideologues to push an anti-business
agenda that would never survive the scrutiny of the American voter. Even worse, the EPA has
become the bureaucracy of choice for Presidents to exert more control over the decision making
of the private sector and local and state governments, stifling the very innovation and
entrepreneurship that is necessary to achieve and protect a clean environment.

The EPA’s current attempts to regulate greenhouse gases such as carbon dioxide, and thereby
the entire American economy, are the latest and definitive proof that the EPA is acting well
beyond its original mandate.

The EPA should be replaced with an agency dedicated to bringing together science, technology,
entrepreneurs, incentives, and local creativity to maintain a clean environment. The result will
be a stronger economy that generates more American jobs and more American energy at lower
cost while protecting human health and safeguarding the environment through smarter
regulations.

The Environment Is Cleaner and Americans Are Living Longer

The EPA is currently 40 years old. For the first half of its existence, the EPA did a noteworthy
job of cleaning up the environment. The result is that the environment – air, ground, and water --
has been remarkably clean for some time by various technical measures.

1
Environmental Protection Agency – Our Mission and What We Do: http://www.epa.gov/aboutepa/whatwedo.html
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For example, the EPA creates air quality trends using measurements from monitors located
throughout the United States. Since 1980, America has reduced carbon monoxide emissions by
80%, nitrogen dioxide emissions by 48%, and sulfur dioxide emissions by 76%. Lead has also
been reduced by an astounding 93%.2

With respect to emissions of toxics, data from the EPA’s Toxic Release Inventory similarly
shows increasing reductions over time.

Water quality is a similar story. A report on man-made chemicals in drinking water released in
2008 by the U.S. Geological Survey concluded:

The laboratory analytical methods used in this study have relatively low
detection levels – commonly 100 to 1,000 times lower than State and
Federal standards and guidelines for protecting water quality.
Detections, therefore, do not necessarily indicate a concern to human
health but rather help to identify emerging issues and to track changes in
occurrence and concentrations over time ….

The annual mean concentrations of all compounds detected in finished

water were less than established human-health benchmarks, and
concentrations of most compounds were several orders of magnitude less
than human-health benchmarks. With the exception of one detection of
atrazine at one site, maximum measured concentrations of all commonly
detected compounds in finished wates were less than established human-
health benchmarks.3

It thus comes as no surprise that Americans’ life expectancy collectively has continued to rise
over the decades. According to the U.S. Centers for Disease Control:

In 2006, life expectancy at birth was 77.7 years, increasing by 0.3 years
from 77.4 years in 2005. This increase is typical of the average annual
changes that have occurred during the last 30 years. Throughout the past
century, the trend is U.S. life expectancy was one of gradual improvement
and this trend has continued into the new century.4

Despite the Record of Environmental Improvement and Protecting Human

Health, the EPA is Increasing Its Regulatory Burden on Society
Data from the White House’s Office of Information & Regulatory Affairs (OIRA) confirm that
the EPA is increasing, not decreasing, the pace of its issuance of burdensome regulations. On

2
Environmental Protection Agency – Air Quality Trends: http://www.epa.gov/airtrends/aqtrends.html
3
For more information, see generally F. Hayward, Index of Leading Environmental Indicators 2009 (Pacific
Research Institute) (available at http://www.pacificresearch.org/docLib/20090414_Env_Index_09.pdf).
4
National Vital Statistics Reports, Vol. 58, No. 21, United States Life Tables, 2006 (available at
http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_21.pdf).
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January 26, 2011, Rep. Cliff Stearns (R-FL) noted that in April 2010 the Obama Administration
had issued 190 economically significant regulations (those with an impact of $100 million or
more), and that by December of 2010, that number had climbed to 224. At the same hearing,
OIRA Administrator Cass Sunstein answered “about 500” in response to a question about how
many new regulations had been issued since the Obama Administration took office. Not all of
those 500 regulations are from the EPA, but OIRA data confirm that the EPA remains the
dominant issuer of major new regulations within the federal government bureaucracy.

So what risks are EPA regulating, given that the environment is dramatically cleaner and human
health is improving? The answer is ever and ever more miniscule risks, without regard to a
thoughtful analysis of whether elimination of such risks is warranted based on fundamental
principles of risk assessment (which of course takes into account exposure) and cost-benefit
analysis (which takes into account whether the costs of regulation exceed the benefits).

Examples of this regulatory overreach abound. For instance, the EPA has decided that, since
milk contains oil, it has the authority to force farmers to comply with new regulations to file
“emergency management” plans to show how they will cope with spilled milk and how they will
train “first responders,” while also requiring them to build “containment facilities” if there is a
flood of spilled milk.

The EPA has also proposed new particulate emissions standards that would regulate farms so
stringently that even driving a tractor across a field could trigger federal oversight, as the EPA
believes the dust produced from such a routine activity is a threat to public health.

There is also strong evidence that the EPA, through regulatory overreach, bears a considerable
amount of blame for the national resurgence of bed begs. By the early 1990s, bed bugs had
largely been eliminated due to the use of several pesticides, including Propoxur. But in the mid-
1990s the EPA banned Propoxur and other similar pesticides. At the University of Kentucky, the
academic headquarters for studying bed bugs, researchers concluded in January 2010 that
“today’s products are not as effective as the ones we had previously.”5 Even though the EPA
admits that part of the growing bed bug problem is due to “ineffective pest control practices,”6 its
ban on proven pesticides remains intact.

Nor is EPA’s overreach limited to imposing new regulations; it also includes administering
existing rules on an ad hoc basis. For example, in 2006 Shell Oil acquired leases to drill in the
Beaufort and Chukchi seas, and the EPA granted the company an air quality permit shortly
thereafter. But after several environmental organizations sued, the EPA sent the permit back for
further review using a more restrictive and complicated methodology. Although Shell appealed
the decision, achieving a reversal is such a time-consuming and uncertain process that the
company recently decided it would rather scrap its current plans and focus on other future
prospects. Since 2006 Shell has spent more than $3 billion just in lease costs and annual
payments while the federal government, particularly the EPA, waffled on its decisions and held
up permitting. To date, a half decade has passed and EPA has still not been able to issue a usable

5
College of Agriculture, University of Kentucky: http://www.ca.uky.edu/news/?c=n&d=531
6
Environmental Protection Agency – Bed Bug Information: http://www.epa.gov/pesticides/bedbugs/
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permit for Shell to even begin to explore for what oil and gas may exist in the Beaufort and
Chukchi seas.7

But perhaps the most egregious example of EPA overreach is the agency’s new regulatory
program targeting emissions of greenhouse gases. The EPA maintains that it is obligated under
the Clean Air Act to regulate carbon dioxide, an obligation that was borne from an “order” by the
U.S. Supreme Court. Both parts of the claim are completely dubious. The Clean Air Act's
statutory language clearly indicates that it was not intended to address carbon emissions. The
Supreme Court, however, said that if EPA classified carbon dioxide as a pollutant that impacts
public health, then it could regulate it under the Clean Air Act. The EPA then predictably issued
its official “endangerment finding” in December 2009 declaring carbon a threat to the public.
But, since the Clean Air Act was not intended to address carbon dioxide, the EPA said it had to
rewrite the law to make feasible such regulation, specifically by changing the threshold
requirements for regulating covered “pollutants.” The Clean Air Act, and its subsequent
amendments, were all passed by Congress and signed by the President, meaning no federal
agency has the power to rewrite any of them at its own discretion. If the Clean Air Act was
intended to address carbon dioxide, then why would it need to be amended to make regulation
allowable?

Less well-known is the extent to which the EPA’s climate assault already has crept into everyday
life for most Americans. Thanks to the EPA’s new greenhouse gas emissions standards for
automobiles, Americans are already being urged to drive lighter, less safe cars. On January 31,
2011, the EPA closed the comment period on a new rule that will dictate the amount of diesel
fuel that heavy-duty trucks will be allowed to burn in the future. As proposed, this rule would
prohibit trucks, through the use of technology, from idling their engines to keep the driver safe
and warm in extreme weather conditions such as those that have gripped much of the United
States this year. Given a choice between saving a trucker’s life or imposing another regulatory
assault on America’s trucking industry, the EPA has chosen the latter. Such a decision is quite
perplexing when you consider that the EPA is supposedly dedicated to protecting public health.

Simply put, the regulatory system at EPA is fundamentally broken.

How is the EPA getting away with all of this? There are several factors. For starters, the EPA
claims that all of its regulations provide stunning benefits at minimal costs. If you look a bit
closer, however, you will see that the EPA is now measuring “benefits” through the use of non-
quantifable factors such as “human dignity.” Other problems include partnering with
environmental groups through tactics such as “cooperative litigation” under which
environmentalists sue the EPA for alleged non-enforcement of the law, then the EPA settles the
litigation through an agreement that binds the EPA to even more regulatory actions.

The approach at the EPA generally is “if we can measure it, we should regulate it.” Such a
position not only contradicts basic economics, but also defies common sense.

7
Alaska Dispatch, Feb. 3, 2011: http://www.alaskadispatch.com/dispatches/arctic/8614-alaska-offshore-drilling-
delay-roundly-denounced-by-governor-delegation
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Prior Efforts At Reforming EPA Have Failed

The story of EPA overreach is not new, and the repeated failures of reform highlight just how
broken the EPA has become.

A long line of Republicans and Democrats alike have attempted to fix them. These efforts are
reflected, to some degree, in (1) disparate statutes such as the Administrative Procedure Act, the
Paperwork Reduction Act (PRA), the Small Business Paperwork Relief Act, the Data Quality
Act, and the Regulatory Flexibility Act; (2) various regulatory review and reform executive
orders that numerous Presidents have issued and endeavored to enforce over the decades,
including but not limited to E.O. 12866 and President Obama’s new executive order on
regulatory review; and (3) “good guidance” and related policy documents issued by the Office of
Management & Budget’s Office of Information & Regulatory Affairs (OIRA). OIRA was
created in 1980 under PRA and since that time has adopted a mission of providing “adult
supervision” over federal agencies and their tendency to engage in regulatory overreach.

Historically, these and related principles have fallen under the rubric of “regulatory reform.”
The precursor of all modern regulatory reform efforts was the “Quality of Life” review process
begun by President Gerald Ford.8 In 1978, President Jimmy Carter established the Regulatory
Analysis Review Group (RARG). Regulatory reform was a basic component of the
administration of President Ronald Reagan. President George H.W. Bush deviated little from the
“commonsense government” approaches of President Reagan; for example, President Bush
replaced RARG with a Council on Competitiveness to review all federal regulations to weed out
those that inhibited U.S. competitiveness.

In its most recent incarnation, the modern regulatory reform movement was initiated more than
15 years ago by President Bill Clinton, who at that time wrote these words:

“Our country needs a government that is smaller and more responsive –

that has lower cost but a higher quality of service – that moves more
authority away from the federal government to states and localities, and to
entrepreneurs in the private sector – that has more common sense and
seeks more common ground …

“That kind of change in government is important for three reasons: First,

government needs to change along with the people it serves. After all, we
have moved through a rapid transition at the end of the Cold War, and at
the end of the tranditional industrial economy. We’ve moved into a global
economy with new challenges, new conflicts characterized by a high rate
of change, rapid movement of money and capital, and a revolution in
information technology. In that environment, the model that we have used
to deliver government services and fill public needs is simply no longer
relevant to the present, let alone the future.

8
The following history is largely taken from M. Weidenbaum, “Regulatory Process Reform: From Ford to Clinton”
(Cate Institute) (available at http://www.cato.org/pubs/regulation/regv20n1/reg20n1a.html).
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“Second, even though we have cut our huge budget deficit in half, we need
to eliminate it completely. Yet we still need to invest more money in
critical priorities that help people convert … the the twenty-first century
global economy: life educating and training young people and adults,
research and development, and new technologies. Our objectives are to
build the American economy, to strengthen the American society, and to
free up investment so that the American people can live to the fullest of
their potential…

“Third, we need to cure the anxiety and alienation many people feel
toward their government. People will regain confidence in government if
we make it work better …

“Above all, this is about fundamental values. Go back and read the
Declaration of Independence and our Constitution. Americans created
our government to do those things that can only be done by government –
by all of us working together …

“We in the government have a moral obligation to make government work

right – to use the hard-earned money of the America people only in ways
that further the public interest. If we can’t do that, we can’t justify being
here and we can’t justify taking the money.”9

President Clinton’s noble efforts were joined by the Congress. In 1995, the Republican-
controlled House, during the 1st session of the 104th Congress, passed the Job Creation and Wage
Enhancement Act of 1995 (H.R. 9) by a vote of 277-141. H.R. 9 included the following findings:

“The Congress finds that:

(1) Environmental, health, and safety regulations have led to dramatic
improvements in the environment and have significantly reduced human
health risks; however, the Federal regulations that had led to these
improvements have been more costly and less effective than they could have
been; too often, regulatory priorities have not been based upon a realistic
consideration of risk, risk reduction opportunities, and costs.
(2) The public and private resources available to address health, safety, and
environmental concerns are not unlimited; those resources need to be
allocated to address the greatest needs in the most cost-effective manner and
so that the incremental costs of regulatory options are reasonably related to the
incremental benefits.
(3) To provide more cost-effective and cost-reasonable protection to human
health and the environment, regulatory priorities should be based upon
realistic consideration of risk; the priority setting process must include
scientifically sound, objective, and unbiased risk assessments, comparative

9
Vice President Al Gore, “Common Sense Government: Works Better and Costs Less” (1995) (foreword by
President Bill Clinton).
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risk analysis, and risk management choices that are grounded in cost-benefit
principles.
(4) Risk assessment has proven to be a useful decision making tool; however,
improvements are needed to both the quality or assessments and the
characterization and communication of findings; scientific and other data must
be better collected, organized, and evaluated; most importantly, the critical
information resulting from a risk assessment must be effectively
communicated in an objective and unbiased manner to decision makers, and
from decision makers to the public.
(5) The public stake holders must be fully involved in the risk-decision making
process. They have the right-to-know about the risks addressed by regulation,
the amount of risk to be reduced, the quality of the science used to support
decisions, and the cost of implementing and complying with regulations. This
knowledge will allow for public scrutiny and promote quality, integrity, and
responsiveness of agency decisions.
(6) Although risk assessment is one important method to improve regulatory
decision-making, other approaches to secure prompt relief from the burden of
unnecessary and overly complex regulations will also be necessary.”

H.R. 9 also included a variety of regulatory reform measures. The bill ultimately died in the
Senate, which instead took up its own regulatory reform effort that same year: S. 343, the
Comprehensive Regulatory Reform Act of 1995, sponsored by Sen. Bob Dole (R-KS). That bill
failed to pass. Since that time, Congress has not taken up a comprehensive reform of the
regulatory system with a focus on the EPA.

So why did some of the prior bipartisan regulatory reform efforts fail to achieve their well-
intentioned and lofty goals? In some instances, as in 1995, Congress came close but fell short. In
other instances, the reforms enacted by Congress – such as the Data Quality Act – failed to
include mechanisms such as judicial review, which had the effect of rendering them ineffective.

But the primary reason why prior regulatory reform efforts failed is because they endeavored to
work within the current system by reforming, not replacing.

Replace Not Reform

An anti-business and anti-economic development ideology is so entrenched inside the EPA that
mere reform of the agency is no longer a workable option if the goal is a clean environment
through more technological development, more entrepreneurship, and more economic growth.
The EPA’s current embedded methods are simply inconsistent with those goals, so efforts just to
work within the agency’s flawed structures are destined for failure.

For these reasons, the EPA should be replaced with a new and improved Environmental
Solutions Agency (ESA) complete with a new charter and a new mission. The new ESA will be a
successor agency to the EPA, incorporating the statutory responsibilities of the old EPA while
making necessary changes that will eliminate the job-killing regulatory abuses and power grabs
of the old EPA.
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Principles of the New Environmental Solutions Agency

The ESA will be organized under the following principles:

 Maintaining a clean environment and protecting public health

 Sound, peer-reviwed science
 Smarter, more cost-effective regulation
 Risk assessment
 Transparency
 Adherence to statutory mandates
 Performance standards instead of command and control regulation
 States rights
 Support for technological development and entrepreneurship
 Judicial review rights where necessary and appropriate to ensure agency compliance
 Limited cooperative litigation

These principles are perfectly in line with what Americans value: a clean environment, a strong
economy, and limited government. Consider the polling data American Solutions compiled in
2007:

 73% of Americans believe we can have a healthy economy and a healthy environment;
 79% of Americans believe we will solve our environmental problems faster and cheaper
with innovation and new technology than with more litigation and more government
regulation;
 72% of Americans believe that entrepreneurs are more likely to solve our energy and
environmental problems than bureaucrats;
 88% of Americans believe we must rely on innovation and technology if we are going to
compete successfully with India and China

The current EPA is simply unfit to carry out the will of the people it was designed to protect
because it relies on an operating model that the American people reject. The EPA’s bureaucrat-
driven, litigation and regulation system is not only unpopular, but it’s also an inferior and
outdated strategy for addressing 21st century problems. It’s time for a new approach based upon
new principles that emphasize solutions, not more red-tape and more unnecessary bureaucracy.

Replacement of Federal Agencies Has Been Done Many Times Before

Replacing federal agencies has been done many times before; in fact, the history of the federal
government confirms that agencies and departments – including regulatory agencies – come in
and out of existence as times change and agencies outlive their original missions. The Office of
Strategic Services (OSS) was replaced by the CIA in 1947. The Nuclear Regulatory
Commission replaced the Atomic Energy Commission in 1974. In fact, even the creation of the
EPA involved replacing through reorganization and consolidation many federal research and
standard-setting offices, all to boost efficiency and eliminate waste.

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In 2010, President Obama acknowledged the utility of replacing federal agencies when his
Secretary of Interior Ken Salazar replaced the Minerals Management Service with the Bureau of
Ocean Energy Management, Regulation, and Enforcement. (Unfortunately, this particular
replacement strategy was to increase the size of government, not increase efficiency and
effectiveness.)

Replacing the EPA with a new and improved Environmental Solutions Agency would be rooted
in decades of comparable federal government reorganizations, including the actions taken to
create the agency itself 40 years ago.

Replacement Can Also Address Cultural Problems

Case Study: New York City

A perfect example of how replacement-through-cultural-change can lead to dramatically

improved results within a government agency is Mayor Rudy Giuliani’s decision to replace New
York City’s welfare offices with “Job Centers.” In his book Leadership, Giuliani describes how
he recognized that New York City was “being destroyed by the preaching of entitlement,” a
cultural institution that “locked people into poverty.” Instead of continuing to dole out
entitlements to people who were out of work, Mayor Giuliani changed emphasis and focused on
the solution: getting people back to work. That kind of transformation would not have been
possible had the mayor simply reformed how public assistance was distributed; it required a
cultural shift to make people think about what will actually fix the problem.

Giuliani’s decision to enact cultural change through a replacement effort was a near-
unprecedented success. From 1996 to 2003, the city’s welfare caseload dropped by 57%. Five
years after the mayor’s plan took effect, the percentage of single mothers who were employed
jumped from 42% to 61%. For single mothers without a high school diploma, employment
jumped from 16% to 42%. Over that same period, the poverty rate dropped from 27% to 20%.

These remarkable accomplishments came about not because the mayor pushed to abolish public
assistance, but because he knew that the system was fundamentally broken and was doing
nothing to get people back to work. It was a bold proposal that paid enormous dividends because
it replaced the problem with a clear solution.

This is why a fundamental cultural shift is also needed in the way the federal government
approaches safeguarding the environment. The EPA has built up forty years of internal standards
and procedures that are simply unfit to deal with 21st century problems. The EPA’s model is
based on the idea that environmental problems can only be addressed by adding more regulations
and more bureaucrats. The emphasis is not on solutions, but rather creating new ways to clamp
down on economic growth. Like Giuliani’s decision to change attitudes about welfare, it’s time
for Americans to demand that the federal government change its attitude about protecting the
environment.

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Principles To Limit the ESA’s Regulatory Authority

In order to ensure that the new Environmental Solutions Agency does not revert to the abuses of
the EPA, a new set of limiting principles on regulatory authority will be codified in law and
rigorously enforced, which will include, but not be limited to:

1. Regulatory Powers Limited to Matters Involving Interstate Commerce. The U.S.

Constitution places limits on the exercise of federal power through the enumeration of
specific powers that the federal government can exercise, with other powers retained by
the several states or by the people themselves. Specifically, the Interstate Commerce
Clause in Article 1, Section 8 of the Constitution provides Congressional authority to
regulate commerce among the states with respect to protecting the environment. A
federal environmental agency does not therefore have the authority to regulate
environmental matters that do not involve or affect interstate commerce. A new and
improved ESA will strictly adhere to this constitutional requirement. Moreover, on a
practical basis, most pollution is inherently local, which is why every state has its own
regulatory authority to deal with pollution and other environmental concerns. These state-
based regulators are often very effective, as they not only live in the area they are in
charge of regulating – and thus have a better understanding of local environments – but
also because they regularly meet with businesses and citizens to discuss best practices.
For this additional practical reason, any pollution or environmental impact that does not
affect interstate commerce should not be within the jurisdiction of the Environmental
Solutions Agency. The ESA will thefore have the burden to prove that every proposed
regulation is addressing an environmental challenge that affects interstate commerce.

2. Mandatory Analysis Detailing Impact on Jobs. Every environmental regulation

represents a new cost to businesses, and those costs result in higher prices passed along to
consumers and the loss of jobs. Regulations should be cost effective, and they should
also be developed in a way that minimizes job losses. Under the EPA’s current practice,
analyses of job loss from proposed regulations are either non-existent or woefully
inadequate, often times confusing subjective matters (i.e. “human dignity”) with concrete
objective assessments of costs and benefits. For example, the agency’s carbon regulations
have begun to take effect, but the EPA has not yet issued a full analysis of the impact on
jobs these regulations will have, even though the Clean Air Act (under which the EPA
has assumed its power to regulate CO2) explicitly requires such an assessment be made.
The Environmental Solutions Agency will be forced to create a comprehensive jobs-
impact report for each regulation, both as it is being proposed and at regularly scheduled
intervals after implementation to assess how well or poorly the regulation has done to
protect jobs. Requiring such a report will force regulators drafting new rules to think
more deeply about what costs will be incurred and how their regulations will impact not
just the environment, but also the American workforce.

3. Regularly Scheduled Cumulative Cost Impacts. The current EPA is supposed to

perform cost-benefit analyses for each new proposed regulation, but the studies assess
cost in a vacuum and irrespective of how that cost could change if other proposed
regulations go into effect. The ultimate cost can only be accurately determined by

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assessing the “cumulative” cost -- how a particular mandate will interact with other
proposed or existing regulations, especially if pending regulations are set for full
approval. Because future restrictions impact current business decisions, in particular
infrastructure investment and job creation, the ESA will be required to provide a
cumulative impact analysis for each mandate or regulation that was proposed or went into
effect during a pre-determined period of time (i.e. every five years).

4. Permit Certainty. The EPA recently voided a previously-approved permit issued for the
Spruce No. 1 mine in West Virginia. This marks the first time in the Clean Water Act’s
entire forty year existence that an approved permit has been retracted by the EPA. This
sets a dangerous precedent for all future operations, as the EPA’s decision means all
currently approved permits are now subject to agency review, which in turn means no
company that has followed the rules and obtained the necessary approval can have any
confidence or certainty about its operations. As Sen. Joe Manchin (D-WV) said on
February 3, 2011:

“I believe it is fundamentally wrong for any bureaucratic agency, including the

EPA, to regulate what has not been legislated, to have absolute power to change
the rules at the end of the game and to revoke a permit, as the EPA did in
southern West Virginia’s Spruce Mine, after it was lawfully granted and
employees were hired.”10

The Environmental Solutions Agency, upon granting a permit, will honor that contractual
obligation, even if Congress later changes the law under which the permit was issued. For
the economy to function properly, companies need investment certainty, and contractual
obligations must be upheld. If laws change, then the permit approval process will have to
change with it. But permits legitimately sought and obtained – even if under different
parameters – should always be honored. If extreme circumstances (i.e. emergency to
public health, national security) dictate the withdrawal of a permit, the federal
government will be required to provide just compensation to the permit holder.

5. The “Keep Them Honest” Provision. When the current EPA issues a new rule or
regulation, entrepreneurs and business owners must begin changing their long-term
strategies to comply with new requirements. This process necessarily incurs a cost,
sometimes significant, even while the EPA’s proposal is still pending. If the regulation is
challenged in court and overturned, a process that could take years, business is still stuck
with the tab for adjusting its operations, a cost that often includes laying off employees.
The Environmental Solutions Agency will be held responsible for the costs incurred by
companies who shift their operations and reallocate capital to comply with rules that
cannot stand constitutional muster in the courts. There is no reason a small business
owner should have to suffer from misguided and irresponsible rule making, and this
“Keep Them Honest” rule will help guarantee that the ESA’s decisions are fully within
the confines of the law and not based upon an ideological bent or the political goals of a
particular administration.

10
Office of Senator Joe Manchin: http://manchin.senate.gov/record.cfm?id=330863
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6. Greater Deference to State Regulatory Authority. One crucial element of the

Environmental Solutions Agency will be to give state environmental authorities more
authority in enforcing rules and regulations pertaining to pollution. Although state and
local authorities are often the most capable of regulating state-level activities, recent
trends have served to centralize more and more power in the federal EPA. For example,
hydraulic fracturing – a technique used to obtain natural gas from shale deposits and
which has been employed more than one million times – has been safely and effectively
regulated by state authorities for decades. But new rules and regulations currently under
consideration by the EPA could strip this power from the states and put federal
authorities in charge. Similarly, the federal EPA recently took over the authority to
regulate certain forms of air pollution from the state of Texas, even though the state’s
existing regulations have helped achieve a considerable decline in ozone and nitrogen
oxide emissions.

Such decisions by the federal EPA have consequences beyond a blatant repudiation of
federalism and state-designated powers. Each new federal restriction comes with new
administrative and enforcement costs, new compliance costs for businesses, and new
costs for American consumers. Consistent with the new agency’s commitment to limit its
jurisdiction to interstate commerce, the Environmental Solutions Agency will allow states
more leeway in addressing state-based and localized sources of pollution. When pollution
crosses state lines, the ESA will supervise state-determined regulatory reduction efforts
and compliance.

7. Enhanced Risk Assessment and Communication Tools, and Requirements That

They Be Used. The EPA must be required to apply established principles of risk
assessment, risk characterization and risk communication. Legislation to accomplish
these common sense goals passed the House in 1995 as H.R. 9 – it’s time for Congress to
finish the job.

8. The Data Quality Act Should Be Amended to Provide Judicial Review Rights.
Unfortunately, the courts have interpreted the Data Quality Act to not include the right of
judicial review. This is an easy fix by Congress, and can be done in the same legislation
creating the Environmental Solutions Agency.

9. EPA’s Environmental Justice Policy Must Be Modified To Include An Assessment

of Economic Harm to the Poor and Disadvantaged, With Resulting Negative
Impacts on Their Health, Whenever a Regulatory Program Halts the Construction
of New Job-Creating Infrastructre.

10. Congress Should Limit the Standing Doctrine to Ensure that Only Those Entities
With A Demonstrable Interest in a Matter May Litigate. With the tacit support of the
EPA, a well-funded cottage industry of environmental groups now challenges every new
infrastructure project in the United States, from coal to solar. Converting the phrase “If
you build it, they will come” to “If you endeavor to build it, we will sue you,” these
groups serve no environmental purpose but instead have become a powerful network of

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lobbyists and lawyers devoted to the cause of thwarting free enterprise and economic
development.

11. EPA Funding of Environmental Groups and Related Activities Should be Assessed.
The EPA hands out millions of dollars in grants each year. Congress should know where
that money is going.

Current EPA Regulatory Powers and Practices To Be Eliminated or Modified

When Congress recently called for industry leaders across the country to identify regulations
they deemed burdensome, the EPA was the number one target of complaints; representatives
from the agriculture, energy, manufacturing, business, and iron and steel sectors all listed EPA
rules and regulations as the top impediment to growth.11 Because the Environmental Solutions
Agency will complement the business community instead of operating in spite of it, the new
agency will naturally have to undo many of the duplicitous and needlessly burdensome
regulations already on the books.

For example, the EPA is currently pursuing a series of new regulatory actions ranging from
clamping down further on sulfur dioxide and nitrogen oxide emissions to new mandates on
industrial boilers. Many of these rules are set to go into effect in the next 3-5 years, a timeline to
which most energy companies will find it nearly impossible to adhere. Construction of new
plants to comply with these regulations could take five or more years alone, and licensing and
permitting can take longer than three years as well. These mandates, coupled with an unrealistic
timeline for compliance, translate directly to shutting down a considerable number of America’s
coal plants, as many as 30% if you include the costs imposed by pending regulations on carbon
dioxide. The monetary costs imposed by these regulations are upwards of $200 billion in
increased capital expenses, a cost that will lead directly to considerably higher energy prices for
American consumers. In terms of jobs, this translates to about 1.2 million jobs lost starting in
2015.

Ironically, many companies would be able to comply with these mandates were the timeline
extended to allow for reasonable capital adjustments. But once again, the EPA’s model of
regulation and litigation is intended to thwart economic development; sustaining economic
growth while protecting the environment is a principle completely foreign to the current EPA.
The fact that its own proposed regulations would drive jobs and investment overseas to countries
like China and India (two countries rapidly expanding investments in oil and coal development)
apparently matters little to the fundamentally flawed Environmental Protection Agency.

The following is a list of some of the rules or policies or claims of power that will be abolished
or, at the very least, fundamentally overhauled:

1. Eliminate EPA’s Asserted Power to Regulate Carbon Dioxide. The Clean Air Act was
written to address numerous air pollutants, including nitrogen oxides and sulfur dioxide,

11
Wall Street Journal, February 7, 2011:
http://online.wsj.com/article/SB10001424052748703989504576128132645791552.html
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 - 14 -

that contribute to ozone pollution and acid rain. It was not, however, intended to regulate
carbon dioxide. The EPA’s decision to regulate carbon dioxide under the Act actually
confirmed that fact: Under the EPA’s plan, the Clean Air Act would have to be rewritten
to delinate that carbon will be regulated at a different threshold than other air pollutants.
Miraculously, the EPA has granted itself the power to rewrite its own statutory authority,
a power that is constitutionally reserved only for Congress. If the Clean Air Act must be
changed to justify the regulation of carbon, then it’s clear that the law as written was
never intended to cover carbon. Otherwise, why would a change be necessary?

2. Stop the Enforcement of Regulations That Provide Little or No Environmental

Benefits. For example, the EPA’s own economic analysis of new National Ambient Air
Quality Standards (NAAQS) for nitrogen dioxide concluded that the costs of this
regulation would dramatically outweigh the benefits. In fact, under virtually all possible
scenarios the EPA found that the benefit in dollars would be zero. While the
Environmental Solutions Agency will continue to uphold standards necessary to achieve
and safeguard clean air, including a fairer and more accurate implementation of the Clean
Air Act, there is absolutely no justification for a regulation that imposes millions of
dollars in costs and minimal-at-best benefits.

3. Stop the Enforcement of Regulations that are Cost Prohibitive. For example, in June
2010, the EPA proposed the National Emission Standards for Hazardous Air Pollutants
for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters.
Also referred to as the “Boiler MACT” rule, this proposal sets limits on mercury,
hydrogen chloride, and other hazardous air pollutants (HAPs). While reducing these
emissions is necessary, the EPA’s proposed rule is so stringent that virtually none of the
covered entitites will be able to comply with it. The Industrial Energy Consumers of
America (IECA), which represents several companies employing 750,000 people, has
noted that of their six best performing units, “none can comply with the standards” as set
forth by EPA. While pollution reduction always incurs a cost, it is important to craft
regulations that are actually feasible to achieve. If covered sources cannot meet the
requirements, the result will be either perpetual and economy-wide noncompliance, or a
complete shut down of industry. Neither of these are acceptable options, and it should be
noted that the EPA has requested an extension for the review period for this new rule
because of the massive costs it would impose. The Environmental Solutions Agency will
cancel the existing proposal and work to reduce mercury emissions and other HAPs in a
way that protects public health and America’s economic competitiveness. In fact, a
bipartisan group of U.S. Senators (18 Democrats and 23 Republicans) wrote to the EPA
in September 2010 asking for the EPA to redo the boiler rule, and that fundamental
review will be one of the first major actions taken by the ESA.

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Conclusion
Protecting Human Health and Safeguarding the Environment is Possible through Smarter
Regulation and a Stronger Economy that Generates More American Jobs
and More American Energy at Lower Cost

It is a demonstrable fact that expanding affordable energy supplies leads to economic growth.
Access to affordable energy has been a path out of poverty for hundreds of millions of people
around the world, and sustaining access to affordable energy means sustaining a healthy and
prosperous populace. For example, China’s poverty rate has been more than cut in half since
1990 as its access to inexpensive energy has dramatically expanded. India is on a similar path.
America’s own path toward becoming the strongest economy in the world was due in large part
to its commitment to developing affordable and abundant domestic energy supplies.

The way to keep energy affordable is to encourage and incentivize technology and
entrepreneurship. Free and open markets have brought countless populations out of poverty, and
have led not only to higher standards of living but also cleaner and safer environments. The
poorest nations in the world are also the worst offenders when it comes to protecting the
environment and public health, while the strongest economies are able to maintain the necessary
technological capabilities to keep the air, land, and water clean.

America’s commitment to a clean environment is unquestionable, and Americans rightfully

demand that the proper safeguards be put in place to combat air pollution, to keep our rivers
clean, and to protect the public’s health. But Americans also recognize that economic growth and
technological innovation are the best ways to achieve these ends, complementing basic
environmental standards and common-sense regulations. Maintaining a clean environment does
not require bigger government; it requires a bigger commitment to what works.

Since the EPA’s first operating budget (fiscal year 1970), the agency’s workforce has more than
quadrupled, which coincides with the EPA now costing taxpayers more than ten times what it did
forty years ago. At more than $10 billion, the EPA’s budget exceeds the GDP of about 60
countries worldwide, and it has entrenched in the American psyche the notion that protecting the
environment must come with high costs and a destructive culture of litigation.

But by emphasizing a culture of economic growth, innovation, and technology, the

Environmental Solutions Agency can achieve and safeguard the same goals – clean air, clean
water, improved public health – for much less cost to taxpayers through regulatory reform and
smarter regulatory approaches. This will result in a clean environment while preserving and
expanding economic growth and domestic energy resource development. It also will minimize
frivolous litigation that, while cast in the guise of environmental protection, is actually used by
the EPA and environmental groups to stifle economic progress and job growth to the detriment
of all Americans. By providing regulatory clarity and consistency through a new Environmental
Solutions Agency, American businesses will create more jobs and generate more wealth, which
will contribute to an even safer environment. It will be a welcome change from the job-killing
policies being carried out by the current EPA.

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