Friends,

In this week’s edition of The Charge, we look at EPA’s finalized car emission rule, greenhouse gas slush funds, and President Biden’s proposed 15-fold price hike for drilling on federal land. Isaac Orr of the Center for the American Experiment appears on “The Power Hour” podcast to discuss power blackouts. Our “Ask the Experts” series features Heritage distinguished fellow Steve Bradbury, who responds to California’s locomotive regulations. In “The Regulatory Crusade,” Steve Bradbury pushes back on a new proposed car mandate.

The CECE Team

(Center for Energy, Climate, and Environment)

The Charge is edited by Andrew Weiss

For more information, please contact us at CECE.info@heritage.org.

For media inquiries, please contact heritagepress@heritage.org. 

Q: Should California be allowed to regulate locomotives entering the state? 

A: There are several rea­sons why EPA [Environmental Protection Agency] must deny Cali­fornia’s request for auth­or­ization to regulate locomotives within the State. Let me high­light two.

First, CARB’s [California Air Resources Board’s] locomotive rule would impose “standard[s] or other require­ment[s] relating to the control of emis­sions from…new loco­mo­tives and new [locomotive] engines” in violation of section 209(e)(1) of the Clean Air Act. Under section 209(e)(2), no auth­or­i­za­tion may be granted for such a regulation.

All provisions of CARB’s rule, including the Spending Account obli­ga­tions, are designed to force rail oper­ators to replace diesel-powered engines with new loco­mo­tives that produce zero emis­sions of specified pol­lu­tants. That is not permitted.

It doesn’t matter that CARB’s mandates are directed at the use of loco­motives, rather than their manufacture. Nor does it matter that EPA has recently redefined the preemption period to end with the transfer of a new locomotive to the purchaser.

As the Supreme Court has held [in Engine Manufacturers Asso­cia­tion v. South Coast Air Quality Management District, 541 U.S. 246, 255 (2004)]:

A command…that certain purchasers may buy only vehicles with par­ticular emission characteristics is [just] as much [a prohibited standard under section 209]…as a command…that a certain percentage of a manu­facturer’s sales volume must consist of such vehicles.

Regu­la­tions aimed at creating arti­ficial demand for new zero-emission loco­mo­tives are “effec­tively” the same as a production mandate for preemption purposes.

Second, CARB’s rule is separately prohibited by the ICC [Interstate Commerce Commission] Termi­na­tion Act [ICCTA], which pre­empts state regu­la­tions that “have the effect of man­aging or gov­ern­ing rail transportation” or “unreasonably burdening or inter­fering with” rail­road operations.

Every part of the rule is barred under the ICCTA—a conclusion EPA can­not ignore.

Congress wants uniform regu­lation of the rail industry, and to that end has given the Sur­face Transportation Board sole regulatory authority over the busi­ness of rail­roads—to the exclusion of states and the EPA.

CARB used to concede that the ICCTA shields rail­roads from direct state regulation of loco­mo­tive emis­sions and usage. But acting under orders from Cali­fornia’s gov­ernor, CARB has now pushed out its loco­mo­tive rule in defiance of federal law.

For these and other reasons, EPA is forbidden from grant­ing the requested auth­or­ization, period.

—Steve Bradbury, distinguished fellow at The Heritage Foundation, from testimony delivered on March 20, 2024, at an EPA public hearing.

Biden EPA’s Latter-Day Prohibition Targets Auto Industry

Diana Furchtgott-Roth, director of the Center for Energy, Climate, and Environment, likens the Environmental Protection Agency’s latest rule to the prohibition of alcohol in her most recent Daily Signal column.

This week, the Environmental Protection Agency released its final emissions standards rule, requiring that 70% of new vehicle sales be pure battery-powered electric or hybrids by 2032.

Not since Prohibition has the federal government sought to ban a product as popular as the internal combustion engine. This rule will put small businesses and farmers who need gasoline-powered pickup trucks out of business. They can’t do their jobs with electric vehicles, because recharging saps valuable time from a day.

This rule will put small businesses and farmers who need gasoline-powered pickup trucks out of business. They can’t do their jobs with electric vehicles, because recharging saps valuable time from a day. Consider landscapers who go from house to house improving people’s yards. No charging stations are nearby, and they can’t take two-hour breaks to find a charging station to recharge.

The disproportionate effect on small businesses and agriculture will result in higher prices for services and food, and upward pressures on inflation. People already follow food prices closely and complain that food costs more.

Raising the cost of transportation and meddling with Americans’ personal mobility is never wise. EVs are not suited for most of America, a large country of wide-open spaces, where inexpensive individual car transportation is a birthright.

Read the full article here.

Easy Way to Save $27 Billion: Repeal Greenhouse Gas Slush Fund That Picks Winners and Losers

Policy Analyst Miles Pollard finds a way to cut the deficit in his latest Daily Signal column:

The House Energy and Commerce Committee voted this week to repeal the $27 billion Greenhouse Gas Reduction Fund, which hasn’t been distributed yet.

The fund is structured to pick winners and losers in the energy market, to subsidize Chinese companies that use forced labor, and to undermine the reliability of the power grid.

As Rep. Bob Latta, R-Ohio, said at an Axios clean energy roundtable on Tuesday, “When we’ve [Members of Congress] picked, we [the American people] lose.”

America needs affordable, reliable, and secure energy sources. By repealing this fund, Congress, with HR 1023, can demonstrate its commitment to maintaining fiscal prudence, establishing a competitive and stable energy market, blocking financing of CCP [Chinese Communist Party] forced labor, and supporting people who want affordable electricity rates in inflationary times.

Read the full article here.

Biden’s Proposed 15-Fold Price Hike for Drilling on Federal Land Threatens US Energy Dominance

In his most recent column for The Daily Signal, research assistant Andrew Weiss warns about a new proposed regulation that would raise the costs of oil and natural gas exploration:

Although America has been a net energy exporter since 2019, and produced a record 13.3 million barrels of oil per day in December, this hard-won progress is now under direct threat from a new proposed regulation from the Bureau of Land Management.

One of the most striking aspects of the rule is a substantial increase in bonding requirements for drilling operators. A bonding requirement is like a security deposit that companies pay to the government. Currently, the minimum bond for an individual lease is $10,000, while a statewide bond covering all of a company’s leases tops out at $25,000. The bureau’s rule would dramatically raise those minimum levels to $150,000 per lease and $500,000 for a statewide bond.

Raising bond requirements increases the upfront cost for projects, demanding higher future profits to justify the expense, limiting the pursuit of projects with moderate profit potential, and stifling innovation. Small companies cannot afford the new bond prices, so that places those companies at a disadvantage.

Read the full article here.

Is America Heading for Blackouts?

Isaac Orr of the Center for the American Experiment is an expert on the electricity grid. In this episode of The Power Hour, he explains how poor policy choices are leading to instability in our electric supplies. Orr has done the hard work of modeling exactly what will happen to our electricity supply if the U.S. doesn’t change course. If you want to know what he found, you can listen to The Power Hour here. Hint: The news is not good.

Section 24220 [the provision of federal law that requires NHTSA to undertake the rulemaking] specifies that any impaired- or drunk-driving detection system mandated by NHTSA must operate “passively” and “accurately,” including in detecting that the driver’s blood-alcohol concentration (BAC) is above the legal limit. Accuracy is absolutely critical, and NHTSA should strive for 100% accuracy in considering any proposed detection technology in order to avoid a significant number of false positives. Even a success rate of 99.99% would not be acceptable, given the huge number of trips that Americans take in their personal vehicles. A false-positive rate of no more than one in 10,000 would still result in millions of improperly disrupted trips for American drivers every year, potentially putting many Americans in danger if their vehicles suddenly stop working in heavy traffic or if they are left stranded on a dark or lonely byway—simply intolerable.…

If mandated by the government to be installed in all new vehicles, these systems would represent a profound encroachment on the personal freedom, responsibility, and pri­vacy of Ameri­cans. It would move the surveillance state smack into the private space of every American’s per­sonal auto­mobile.…

In America, the personal vehicle has long been a freedom-and-prosperity machine, enabling indi­vid­uals to control their own daily activities, giving them the means of effi­cient, self-directed mobility. Now, if NHTSA were to mandate installation of tech­nologies that could, at any point, take over control of a vehicle on the road, all Americans’ freedom to use their cars and trucks would be conditioned on the operation of that technology and could be snatched away, potentially through a false positive, depending on the functionality of the system.

Read the full comment here.

—Steve Bradbury is a distinguished fellow at The Heritage Foundation.