Saturday, April 28, 2018

EPA, the nature of regulation, and democracy

My Hoover colleague Richard Epstein posted a revealing essay on the nature of environmental regulation last week, with environmental regulation as a particular example. The contrast with "Environmental Laws Under Siege: Here is why we have them"  in New York Times  and the New Yorker's  Scott Pruitt's Dirty Politics is instructive

Epstein's point is not about the raw amount of or even what's in the regulation, but the procedure by which regulation is imposed:
As drafted, NEPA [National Environmental Policy Act of 1970 ] contains no provision that allows private parties to challenge agency decisions in court. Instead, the NEPA approval process is a matter for internal agency consultation and deliberation that takes into account comments submitted by any interested parties. 
One year after its passage, NEPA was turned upside down in a key decision by Judge J. Skelly Wright of the D.C. Circuit Court of Appeals... Wright read the law as giving private parties the right to challenge government actions. Indeed, Wright welcomed such challenges, writing (admiringly) that the change, “promises to become a flood of new litigation—litigation seeking judicial assistance in protecting our natural environment.”
Giving private parties the right to challenge an agency decision grants enormous leverage to the private parties most opposed to letting projects go forward. In the case of nuclear power, delay became the order of the day, as the D.C. Circuit on which Judge Wright sat arrogated to itself the power to find that any EA or EIS was insufficient in some way, so that the entire project was held up until a new and exhaustively updated EIS was prepared—which could then be duly challenged yet again in court.

Epstein offers another case:
... the approval process for the construction of the 1,172-mile Dakota Access Pipeline (DAPL), and its offshoot, the 163-mile Bayou Bridge Pipeline, ...Both pipelines are capable of transporting close to 500,000 barrels of crude oil per day by incorporating state-of-the-art technologies that make them far safer than the alternative means used for shipping crude oil long distances: the railroads and trucks that create logistical nightmares and are capable of causing catastrophic spills, and the older pipelines that are still in service....
In case you missed it, the pipelines have large net environmental benefits. Pipelines are better than trucks.
Nonetheless, the completion of DAPL has been delayed by fierce objections from both Native American groups and environmental groups. Under NEPA, they have legal standing to object to any proposed project by pointing to improbable risks while ignoring the undisputed gains in safety and efficiency that these pipelines promise. ...
...The sustained objection to the pipelines is driven not by any concern for safety, but by an overarching effort to use the NEPA process to stop the production, distribution, and use of fossil fuels.
If you want a left of center example, environmental suits have been used to slow down the still nonexistent California high speed train.

Epstein offers procedural remedies, not ram-my-view-down-their-throats
NEPA thus needs to be cut down to size. For starters, courts should reject Calvert Cliffs. Today’s courts must be much more sensitive to the necessary trade-offs before overturning the detailed factual findings that government agencies make on technical matters in approving projects. In addition, courts should be reluctant to stop projects because of some gap in an EA or EIS.... And third, they must explicitly take into account the major environmental, economic, and political gains that the project has to offer, such as the removal of more dangerous modes of transportation in the case of the pipelines.
This reflects my larger view in an earlier essay on regulation. The issue is not a simple "more vs less" regulation, the issue is how regulation proceeds.

The New York Times offers an interesting contrast. In an article titled "Environmental Laws Under Siege: Here is why we have them" --- in the news section, not opinion -- reporters Livia Albeck-Ripka and Kendra Pierre-Louis remind us of some of the environmental disasters of the 1960s. For example, the Cuyahoga River really did burn, 13 times. They conclude
Waterways across the United States are markedly cleaner though half still fall short of national goals. Recent decisions, though, could lead to backsliding. 
The E.P.A. has suspended the Obama-era Waters of the United States rules, which sought to clarify which waters are considered part of the national water system...
Air and water is a lot cleaner than in the 1970s, a huge and praiseworthy accomplishment of environmental law and regulation.  But that does not mean every current action of the EPA is "progress," and any criticism is "Backsliding."

All the Times offers a reader is a simple morality play of "progress" vs. evil forces of reaction. If you have doubts about the Waters of the United States rules, which basically put every mud-puddle under federal control, then you must be part of a cabal who wants to "backslide" us all the way to rivers that burn. And likely bought off by nefarious corporate interests.

Not even the article title is right. The Waters of the United States is a rule, not a law. The law gave the EPA authority over "navigable waters." The EPA decided to interpret that rather broadly to put it mildly. Your kitchen sink is connected to navigable waters too. And your kitchen sink is not unregulated. States forbid you to throw motor oil down the kitchen sink, so the issue is federal preemption of state regulation -- which can cut both ways, forbidding states to impose higher standards. (Politico's coverage, the first that came up in a google search, was actually pretty good on covering both sides.)

Anyway, you can see there are subtle procedural issues here. Did the EPA exceed its legal authority over "navigable waters?"  The house thought so and passed an over ride of the rule. Should, as politico mentioned, federal environmental impact review be triggered every time a farmer drains a mud puddle? Maybe. Should you be able to file environmental suits to stop your neighbors from construction projects you don't like, as Epstein bemoans?

These are the tough questions in a democracy, which you do not learn from the Times' simple morality tale.

In the New Yorker, ground zero of Trumpoplexy,  Margret Talbot finished her  long attack on Scott Pruitt (yes, I read the New Yorker, and yes, I often actually finish articles) with
"One of the engineers said that it might take a while to “rebuild capacity” after Pruitt. But it would be done. The public, he reminded everyone, “is expecting us to protect the planet.” He said, “Pruitt is a temporary interloper. We are the real agency."
My jaw dropped. No, I am not making this up. This is not fake news from some alt-Right website. Here's a screenshot.



Nor was it at all ironic. Ms. Talbot clearly meant this to reassure us that everything will be ok.

In case I have to pound you over the head with it, this is exactly the kind of bureaucratic obstructionism that those who bemoan the "deep state" point to.

This would not be so ironic if it were not so blatantly hypocritical. The New York Times and the New Yorker are also ground zero for authoritarian alarmism -- Trump is trampling democracy, checks and balances, he is the new Mussolini. Yet notice here who is for democracy and who is against it.

Democracy worries that unchecked power -- the power to write laws (regulations are laws), interpret them after the fact, impose large fines and jail sentences, hear appeals to such judgments, and to set standards on which citizens can sue each other and block each other's affairs --  must be constrained by judicial review, congressional review, and the ballot box. If those get it wrong at times, so be it. Democracy was never about superb technocratic competence (!) Democracy is a last ditch safeguard against little tyrants run amok. And large ones.

Democracy is not about what is the right answer and then ram it down their throats. Democracy is  about the subtle question of who shall decide that answer and how.

If the New Yorker and New York Times were honest, they would write that in their view, the environment (along with about 50 other issues) is so important that democracy must be abolished. If deplorable yahoos vote in a president who clearly campaigned on a regulatory roll back, and then appoints agency heads who do exactly that, then the president's power -- the electorate's power -- to change the nature of regulation must be abolished. Likewise if the same deplorable yahoos vote in a Congress who passes a law countermanding the agencies action. Hooray for the agency that can obstruct these efforts and fight on! (It will be interesting to see their attitude when Trump appointees at, say, the CFPB, similarly resist President Elizabeth Warren's reforms.)  The right of people to even express contrary views is dubious in the quest for "progress." Just who decides what news is "fake" will soon be up for grabs.

That would be honest, and a fair description of their position. Authoritarians have made similar arguments through the ages. China makes it today. Democracy is too messy, the wrong people can take power.

Let's just be clear who is making the authoritarian argument, and who the democratic one. And this predates Trump by decades.

Let us indeed celebrate the remarkable improvement in the environment in America. And let us hope that the anti-democratic forces among us do not succeed in their effort at such over-reach that the whole edifice loses its bipartisan credibility and comes tumbling down, or the nation screeches to a halt.




20 comments:

  1. I think your writing here would benefit from adopting Yascha Mounk's framework (https://play.google.com/books/reader?id=_t1MDwAAQBAJ) in distinguishing between a liberal democracy and a populist democracy. A liberal democracy includes institutions to protect the rights of minorities (I mean "minority" here in a general sense, not limited to race). In a populist democracy, the leader interprets the voice of "the people" and tramples anyone who gets in his way.

    This is relevant where you accuse supporters of the EPA's resisting the president of "authoritarianism". They are not authoritarian. Minorities have rights too. You sound like you accept Trump's election as a mandate to roll over any institution slowing his implementation of his (or your) interpretation of the majority opinion. This is populist democracy in action — something that we should all be very afraid of because sooner or later, each of us will be in one of the minorities being trampled, and we may wish for a return of strong institutions to protect us from the populist ruler's interpretation of the will of the people.

    You write as though democracy is always good. Democracy is good only with checks and balances to protect the rights of everyone. An unchecked implementation of the "people's will" (whether interpreted by Trump or by Cochrane) is very frightening, and calling that "democracy", and it's unhelpful when you imply that anyone who disagrees must hate democracy, that anyone who disagrees must believe in the EPA's supremacy, that anyone who disagrees must be an authoritarian. The correct framing is that we need a balance between the ability of a majority to express their will and see that implemented, with the rights of everyone who is not part of that majority. I'm certainly open to the idea that institutional power has thwarted the popular will to an unhealthy extent, i.e., maybe things are out of balance in places, but let's please acknowledge that there's a balance to achieve, and that seeking that balance does not make someone an "authoritarian" who wish to abolish democracy.

    Kenneth Duda

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    2. Well, I'm solidly in what you call the "liberal democracy" camp, and as a libertarian with very strong minority rights. I'm not sure where you read otherwise, but no point in quibbling about it. The NYT and NY seem firmly in the camp of authoritarianism by self-appointed technocracy.

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    3. Kenneth,

      Not every dispute between elected officials and bureaucratic institutions is one between the majority and a minority. Nor is the minority always the one at risk of having their rights violeted; sometimes, the institution serves a minority at the expense of the rights of the majority. Siding against the majority, or against the unelected institution, is not always the liberal democratic position.

      More over, this is clearly *not* a case of the majority vs. the minority. We're talking about the right of individuals or corporations to act freely less encumbered by regulatory agencies, whether those agencies are acting on their own accord or at the behest of a different private entity. If anything, the position favoring *limiting* bureaucratic purview is the liberal position. Opponents may criticize it for being too liberal, too permissive; that freedoms need to be abridged for the good of the many. But it is most certainly not a populist or authoritarian position.

      The NYT and New Yorker, however, essentially take the position that bureaucratic agencies must continue restricting economic behavior (or restrict it even more) regardless of whether democratically elected officials agree. Again, you may agree with that position, but it's not a particularly liberal position. Rather, it's a position that contends the status quo is already too liberal. To them, the environmental cause is more important than certain individual liberties. Their position is not a liberal democratic critique of democratic populism, as their position is neither more liberal nor more democratic than that of the administration.

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    4. Thanks for the thoughtful responses. Reacting to one:

      ============
      The NYT and New Yorker, however, essentially take the position that bureaucratic agencies must continue restricting economic behavior (or restrict it even more) regardless of whether democratically elected officials agree.
      ===========

      I would not agree that bureaucratic agencies should maximally restrict economic behavior. I want them to do what they've been chartered to do. If they aren't doing that, the president has a duty to fix things. If the legislature doesn't like their charter, the legislature can change it.

      What I do not want is for a president to interpret the "will of the people" to be "less regulation", and then steamroll right over a well-functioning agency, override its rule-making process in capricious and arbitrary ways, and trample on the rights of minorities (established by existing legislation, e.g. clean air act) to live in a healthful environment. If a president interprets the "will of the people" to be to allow as much pollution as possible, that's too bad, it's an improper use of presidential authority to prevent the EPA from doing its job under the law. My reading of John's blog post here is that it's fine for a president to do that. I think that's an illiberal position, placing democracy over the rule of law.

      Specifically, John writes:

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      If deplorable yahoos vote in a president who clearly campaigned on a regulatory roll back, and then appoints agency heads who do exactly that, then the president's power -- the electorate's power -- to change the nature of regulation must be abolished
      =============

      This is exactly what I object to. The president should not be allowed to appoint a head of agency who seeks to prevent it from fulfilling its mission as established by law. If the legislature revised the clean air act, and the president signed it, that would be a different story. But, when John writes that a president who has "clearly campaigned on regulatory rollback" should be able to eviscerate legislation, I must strongly object. That is not within the president's power.

      I do not know the details of environmental regulation well enough to assess whether or not the EPA's rules are by and large lawfully promulgated and consistent with the agency's legislative mission and with scientific fact, or if they represent an "authoritarian" power grab by "little tyrants". It might be interesting to look at specific examples of EPA overreach, or specific instances of Trump's stooge preventing the EPA from doing its job, for example by mandating specific determinations regarding the link between carbon emissions and climate change, regardless of scientific evidence.

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  2. Lots of thoughtful commentary, including that of Kenneth Duda.

    But getting back to basics: The price signal fails on pollution. He who excretes at lowest cost (to himself) wins. "Subsidize the cost (pollution) and privatize the gain." A great individualist credo!

    There are additional problems.

    Does anyone have the right to pollute another citizen's land and water? How about the right to pollute the air everyone breathes?

    Okay, so we need non-market solutions to pollution, even by tenets of classic economics.

    I think pollution taxes are a good idea but they are rarely used. The right-wing, which posits itself attuned to classic macroeconomics, is usually mute on pollution taxes (as with property zoning).

    On pipelines, I tend to agree they should be built, although this inevitably calls for ignoring property rights of those on the pipeline and seizing passage by eminent domain. So we go into hysterics on sacred property right and eminent domain....but only when it is PC to do so.

    Lastly I agree there is a deep state, or perhaps more appropriately a "perma-state."

    What I wish for is that John Cochrane and others would be as annoyed by right-wing perma-state archipelagoes (VA, DoD, the Fed and banking regulation, USDA, Commerce, property zoning, routine criminalization of push-cart and truck vending, etc.) as left-wing versions.

    I am a pro-business kind of guy. I want a good pro-business party or group to affiliate with.

    But the right-wing in America today is too often, indeed almost invariably, much too selective when they are expanding upon free markets, or oppressive bureaucracies. Plus the rampant federalized militarism of the right-wing perma-state is difficult to overlook….

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    1. I don't agree with you. You can be pro-business and pro-free market and want clean air. There are trade offs. We do have pollution taxes in the US-they might be in the form of regulations (scrubbers on coal chimneys for example). The problem is what is the marginal cost of getting cleaner air? If the air is 99.7% pure, does it make economic sense to spend the money to get it to 99.8% pure?

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    2. I don't see how we disagree.

      Please expand.

      Of course, I am not in favor of silly and expensive standards.

      On the other hand, if a carcinogen at 0.2% of volume in the air will give you lung cancer after relatively brief exposure….then 99.8% pure is not good enough.

      I find everyone becomes a greenie-weenie when carcinogens are afoot...in their neighborhood.

      That's different!

      And there are no libertarians when neighborhood property-zoning is under review….

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    3. I think it is worthwhile to distinguish between Republican politicians and people who lean right (mildly or strongly). If your statement was referring to right wing politicians then I agree with the characterization. But I know a number of people who generally vote R over D who are not picking and choosing when they support free markets or in their disgust with oppressive bureaucracies. But, they only have two real choices when they cast their vote so they pick who they feel is the slightly lesser of two evils.

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  3. Respectfully, I must say that I disagree with a lot of you have written. Let me focus on just one issue, your characterization of government as some sort of deep state due to 'bureaucratic obstructionism'. I'll do so via two points.

    Firstly, I feel that, and I have no doubt that you will disagree, you characterizing government in an excessively idealized way. Some degree of continuity stemming from long running employees is to be expected and, indeed, is mostly necessary. Government requires specialists and experts who should not change from government. Otherwise, how can governments have the necessary knowledge to, for example, make sure that they do efficient investments in construction and maintenance? I read a recent article (https://www.citylab.com/transportation/2018/04/why-new-york-city-stopped-building-subways/557567/) that points out, very reasonably, that European construction projects are continuous, meaning that acquired knowledge of how to build cheaply is maintained, unlike what happened in NYC (as the article points out, this is far from the only reason). This suggests that you can't have it both ways, either there is continuity and lower costs, or there is continuous change and less efficiency.

    Furthermore, it's not just construction, but a plethora of technical areas where such continuity would help immensely and, I believe, is expected. For example, the diplomatic corps, central banks and finance ministries, science and research policy/grants, environmental science, etc. Companies do not change dramatically all the time when CEOs/CFOs/management changes, why should government be any different?

    Now, does this mean that new governments should be completely constrained by a technical group of experts? Of course not, and I am not arguing as much. But having them be a influence (and let me emphasize, a influence, not having control), due their continuity is expected, as long as it within a certain degree of reason. The quote you give does not, in my mind, exceed this, especially since the EPA has lost an immense amount of experts recently (see below); I read the quote provided in that context and it is relatively untroubling. Furthermore, as I will discuss below, Pruitt has been able to implement many changes: sure, these have been contested in courts of law, but that is consistent with the normal checks and balances of a democracy.

    If this doesn't convince you, then let me ask, do you the UK is not a functioning democracy? In the UK there is a class of civil servants that are largely unchanged from government to government. They precisely represent the sort of experts I am speaking of and, in some ways, they end being another sort of influence on government policy. This is explicitly accepted as a bargain for having this sort of system, and I would accept the UK as a functioning democracy. Perhaps it is the lack of a more explicate bargain the US that makes you abhor this so much?

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  4. Secondly, and here I will be briefer, let me link to an Economist article: https://www.economist.com/news/united-states/21741140-new-policies-would-hamstring-clean-air-and-pesticide-standards-scott-pruitt-embarks . Here is the key quote:

    "Mr Pruitt has already barred university scientists who receive federal grants from the EPA, as many leading researchers do, from sitting on boards advising the agency, on the ground of conflict of interest. He has no such qualms about scientists who work for industries regulated by the EPA, such as chemical manufacturers and coal producers. The result is that the number of university scientists on the boards has fallen by half, while the number from regulated industries or consulting companies has increased threefold."

    It is within the realm of democracy to implement changes when a new government arrives. But, and I sincerely hope you can agree with this, to deliberately sideline research scientists in exchange for industry scientists is, de facto, a policy to create misleading or, if I can be bold and provocative, government lies. Yes, government lies, for that is what deliberately engineered bad science is. We now have many, many studies showing how scientists working in certain industries deviate from scientific consensus and/or hide results and/or act against good scientific norms in clearly motivated ways, to the benefit of their companies. And these deviations are not in small ways either: it is hard to conclude that this is not a policy to improve the quality of scientific assessment done at the EPA, but the exact opposite.

    If you agree that this is essentially a government policy to thus create lies, then surely, as a libertarian, you'd want to fight such lies and a system engineered to do so, no? We can debate what is the best way to do so, and I am not sure myself, but it would explain, without necessarily justifying the resistance Pruitt faces.

    If you disagree with me that is a policy to create lies (or bad science), then we have diametric viewpoints about the nature of science, especially when it pertains to the areas the EPA oversees. In such a case, perhaps I am mistaken in my understanding of the incentives and structures faced by industry scientists, so could I perhaps I ask that you send me some studies that would validate the notion that industry experts in the areas that the EPA works in (air, water, etc) showing otherwise? I am being sincere in this, and I will readily admit that the studies that I am aware of may be for other areas and/or that I have biased reading of this literature. I.e., it is based on my previous knowledge that I go so far to call this a policy to create lies, and I am ready to say that I may be wrong. But I would ask that you consider the other possibility too.

    Finally, I should point out that you do have points which I agree with, and further points I disagree with. My apologies for not going any further on them, but I fear I have written enough already.

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    1. I don't think this point is related to the article. The article highlights process over outcome and points out hypocrisy in some groups on this measure. None of that is in support of Pruitt or his decisions. That does not preclude Pruitt committing similar acts or doing other things we would consider inappropriate.

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  5. Liberal Democracy emphasizes inherent rights of the individual, and immunity from the arbitrary exercise of authority. The NYT moral arbiters present irony in their virtue. The tyranny of the minority, as Epstein points out, can be limited, I believe, if we follow the money and force a reduction in the EPA's budget. While a threatened environment is a huge externality, so is an arbitrary EPA. There is a place for government in protecting a broad well defined public good such as our environment. To make the EPA a "TRUSTEE of THE ENVIRONMENT" is just wrong. If they were trustees of the Sahara Desert, as Friedman once commented, there would be a shortage of sand in five years. Do we really believe, in this case , belief with evidence, the EPA is a better steward of the environment than private parties contracting in free markets with impartial courts redressing disputes?

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    1. "Do we really believe, in this case , belief with evidence, the EPA is a better steward of the environment than private parties contracting in free markets with impartial courts redressing dispute."

      Yes, and wholeheartedly so. That's not to say there aren't numerous areas of improvement.

      If you want private enterprise to "protect" common goods, you have to put a price on the common good. Appropriately painful pollution/consumption taxes would be a good start.

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  6. Good blog post.

    It is curious how folks will oppose oil pipelines that exhibit a tiny ecological footprint compared to most resource extraction activities but will support highly subsidized agriculture trashing watersheds (and sometimes airsheds), sprawling low-density suburbs or the lowest excise/Pigouvian/green/carbon taxes on diesel and gasoline in the rich OECD club.

    The obesity and COPD epidemics in the USA appear to be caused by factors that enjoy significant public support.

    That said, putting up with the expensive hold up of infrastructure projects for dubious reasons is part of liberal democracy, is it not? If modern resource extraction firms are expected to seek and retain 'social buy-in', the so-called corporate social license, local community and similar, should not elected officials do the same?

    For example, the arrogant attitudes of the top executive officers and employees in the field of TransCanada Crop, the pipeline company, appeared to have fueled local opposition to the Keystone XL pipeline as well as the Energy East pipeline in Canada (though frankly the economics of EE were dubious from the get-go).

    As for bureaucratic opposition to Trump administration nominees, recall that Trump's mandate is weak. He did earn less than 50% of the popular vote. It is not as weak as the mandate of President Allende who used 1/3 of the popular vote to run Chile into the ground but the point remains that President Trump does not have a strong mandate.

    Americans have decided to keep a presidential system that combines the head of state and the head of government in the same person along with a paternalistic electoral college system that dates from the 18th century. Frankly, I see nothing but a recipe for domestic blowback against executive rule whether it comes from public bureaucracies, the courts or Congress.

    -Erik

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  7. I think it is Rand Paul, Senator from Kentucky, who has a proposal to let all rules and regulations issued by government agencies (like the EPA, OSHA, etc) expire after two years. And then Congress must vote whether to extend them for another period of time.
    The point being, take away that unelected law making from those agencies.

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  8. Polluting industry seems to be located most often close to poorer communities. Swine CAFOs' contain unlined lagoons AKA 'cesspools' and are not practically navigable.

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  9. I need to quote your quote.

    Under NEPA, they have legal standing to object to any proposed project by pointing to improbable risks while IGNORING the undisputed gains in safety and efficiency that these pipelines promise. ...

    It is common for the IPCC to ignore the benefits of additional CO2 in its models, which stimulates crop growth. They also like to exclude the Sun (for example, Sun Spots) in some of their models as having no significant impact on the Earth's temperature. We have been experiencing this assault on Science for decades.

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  10. I need to quote your quote.

    Under NEPA, they have legal standing to object to any proposed project by pointing to improbable risks while IGNORING the undisputed gains in safety and efficiency that these pipelines promise. ...

    The IPCC likes to ignore in its models the fact that additional CO2 stimulates plant growth. It also prefers to consider the Sun (such as Sun Spots) insignificant in influencing our climate.

    This assault on Science has been going on for decades. Galileo would not be very welcomed in today's world.

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  11. EPA can be challenged in court by anyone who has standing under Administrative Procedure Act, 5 USC 704. See Sackett v. EPA 566 U.S. 120 (2012).

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Comments are welcome. Keep it short, polite, and on topic.

Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name.