Commentary: White House Misadventures in Coal Ash Rule

5/18/2010

Unified Agenda Developments behind the scenes of a new EPA proposal to regulate coal ash undermine several core tenets of the Obama presidency, conflict with pledges to reform the way government works, and expose the flaws in a regulatory process that too often does not do enough for the public.

On May 3, the U.S. Environmental Protection Agency (EPA) released a proposed rule that would, for the first time, regulate the disposal of coal ash. Calls for regulation of coal ash, a byproduct of coal combustion that can contain arsenic, lead, chromium, and other heavy metals, began in earnest after an impoundment in Kingston, TN, failed, releasing 5.4 million cubic yards of coal ash. Reports have linked exposure to the toxic components in coal ash to cancer and other health problems.

EPA proposed two options for regulating coal ash under the Resource Conservation and Recovery Act (RCRA). The first proposal would list coal ash as a hazardous waste under subtitle C of RCRA, requiring federal monitoring and control of coal ash's handling, transportation, disposal, and any potential reuse. (Coal ash can be recycled into other products, including cement and wallboard. Subtitle C regulation would continue to allow beneficial reuse, EPA says.) The other proposal would regulate coal ash under subtitle D, which has typically been used to control solid wastes such as household garbage. Under the subtitle D option, EPA would have little authority over coal ash management.

Environmentalists see a clear choice between the two options. The subtitle D option "treats this hazardous waste as if it were not loaded with high levels of arsenic and other toxic metals," Scott Slesinger, legislative director for the Natural Resources Defense Council, said in a statement. "We expect EPA to choose the option that adequately protects the public, particularly our precious groundwater, and treats this hazardous waste as a hazardous waste."

Just days after unveiling its proposed rule, EPA released other documents showing significant changes that were made to the proposal while under review at the White House Office of Information and Regulatory Affairs (OIRA). (See sidebar at right.) EPA's original plans, prepared in 2009, did not include the subtitle D option.

One document, made available in EPA's online rulemaking docket at Regulations.gov, shows all the edits that were made during the OIRA review. Large tracts of text were moved or deleted and hundreds of new paragraphs added. The document shows changes made at any time during the six-month review with no indication of when the edits were made or who made them.

Observers have assumed a cause-and-effect relationship: the proposal was changed while under OIRA review – OIRA must have made the changes. Of course, it is possible that EPA changed its mind in light of some new evidence or upon greater reflection, but that scenario is only plausible if EPA's original draft was flawed or haphazardly crafted. Both EPA and OIRA have kept quiet about what happened during the review, but OIRA maintains that agencies remain in control of all decisions during the review process. However, neither EPA nor OIRA has offered any new factual evidence that would have led to the inclusion of the subtitle D option.

The original draft, sent to OIRA on Oct. 16, 2009, included language asking for public comment on possible subtitle D regulation. It did not, however, go so far as to include the subtitle D option as a co-proposal and clearly showed that EPA's first preference was to regulate coal ash under subtitle C.

In the past, OIRA has said its review process – in which the office circulates throughout the executive branch drafts of agencies' proposed and final rules before they are released to the public and makes edits or suggestions it deems appropriate – improves rules. The argument in favor of OIRA review says that the additional perspectives offered by OIRA and other agencies make rules more efficient and more defensible – legally, scientifically, or otherwise. OIRA maintains the same is true with the coal ash rule.

Yet from the perspective of many in the environmental and public health community, the coal ash proposal represents all that is wrong with the rulemaking process. The proposal came out worse, meaning the draft may lead to a less protective rule even before the public comment process begins. Even if some other agency or some other corner of the White House made the changes, both OIRA and EPA need to accept responsibility. OIRA Administrator Cass Sunstein has been part of President Obama's team of officials attempting to bring more openness and accountability to government, but, for the coal ash rule, his office failed to live up to this administration's lofty expectations.

The rule was not without controversy; unquestionably, powerful corporate interests opposed the focus on regulating coal ash under subtitle C. During the pre-public OIRA review, opposition to subtitle C regulation came from far and wide within the federal government, the documents also show. The Departments of Energy, Interior, Transportation, and Agriculture (USDA) all encouraged EPA to avoid designating coal ash a hazardous waste under subtitle C. The departments fear a hazardous designation will limit the amount of coal ash that can be beneficially reused, despite EPA's attempt to carve out reuse in the proposed rule. Some, including USDA, objected to the stigma that the hazardous designation carries. The Agricultural Research Service asked, "What farmer would want to apply 'hazardous waste' to his fields?"

The White House Council on Environmental Quality (CEQ) also opposed subtitle C regulation, the document shows. Despite being an environmental office, CEQ cited economic concerns as a reason to avoid the hazardous designation.

In a truly perverse turn of events, OIRA allowed the Tennessee Valley Authority (TVA) to comment on the pre-public proposal. TVA, a government-owned corporation that was created by Congress as a public works program during the Great Depression, is the owner of the Kingston Fossil Plant responsible for the 2008 coal ash spill. Not surprisingly, TVA also opposed subtitle C regulation.

It's almost as though the process is designed to create less protective rules. An agency spends months, sometimes years, writing regulations consistent with statute and responsive to some public need, only to be second-guessed by those without the substantive or technical expertise possessed by the agency that proposed the rule. It's like replacing all the plumbing in your brand-new house after the walls are painted and the carpets installed – and your plumber is actually an electrician!

EPA's coal ash rulemaking illustrates exactly how the public can get snookered in OIRA's process. Issues were debated, alterations were made, and tones were set during a process that completely shuts out the public.

What's so wrong with edits made during an OIRA review? That's a valid question, especially in this instance, when a second regulatory option was added for the public to comment on. It's not as though EPA's original idea was supplanted by a weaker version; it was supplemented by another option. And in the face of political pressure from corporate interests, this seems like a reasonable compromise, especially since EPA still has to write the final rule.

However, the way the second option was added, and the impetus for its addition, should worry the public. In an opaque process that only Washington insiders can possibly access, changes were made, or at least encouraged, to an environmental protection rule that seem to weaken the overall regulation. Years of similar activity have left the public distrustful of its government's ability to make decisions in the public interest, and even if the Obama administration's motives in the coal ash case are pure, the controversy only feeds into a culture of mistrust born of years of decisions made in secret.

The time that elapsed during OIRA's review impacts the public as well. The coal ash proposal's review lasted more than six months. According to longstanding policy, OIRA reviews are to be completed within 90 days. If the rulemaking agency agrees, OIRA may extend the rule once by 30 days, for a total of 120 days. OIRA reviewed the coal ash rule for 200 days. By comparison, the public's opportunity to comment in the formal process is only expected to last 90 days.

Ultimately, EPA will be free to finalize a rule fully protective of public health and the environment. Nothing occurring during the OIRA review, or even the public comment process, can force EPA to choose a certain option.

The changes can, however, alter the debate. The addition of a second, weaker regulatory option tilts the proposed rule away from public and environmental protection. Advocates at groups like the Natural Resources Defense Council, Earthjustice, and Ohio Citizen Action have a steeper hill to climb in making their case that coal ash ought to be regulated as hazardous waste. Opponents of the regulation now have a decided advantage.

Moreover, since these decisions are made in a black box, without transparency, what is to stop the same interests that changed the draft proposed rule from altering the final rule?

All of these issues are symptomatic of a faulty process that has survived for decades because those who operate it see too many risks to their power to reform it. On Jan. 30, 2009, President Obama issued a memo asking the Office of Management and Budget (OMB) for recommendations on a new executive order to replace the order that currently governs the OIRA review process (E.O. 12866, signed in 1993). OMB then asked the public for its views. More than 170 groups and individuals submitted comments.

OMB Watch and others called for an end to the myopic, rule-by-rule review OIRA currently engages in and instead encouraged the office to transform itself into a facilitator and a resource for agencies. Since the public comment period ended, Obama administration officials have given no indication as to the status of the recommendations or the replacement order. OIRA and others seem content to continue to operate the same old process.

While the process has remained the same, the regulatory landscape has changed in other ways. One of the starkest changes witnessed during the Obama administration has been in personnel, specifically, agency heads. Top agency posts are no longer filled with people who come through a revolving door, regulating the same interests they had been employed by for years. Strong and dedicated leaders like EPA's Jackson have shown a willingness to make tough and sometimes unpopular choices when they believe the public's interest would be well served.

The coal ash rulemaking has been an uncharacteristic turn of events for Jackson. After moving aggressively in the face of great anti-regulatory and industry pressure on issues like climate change and smog emissions, Jackson allowed the proposed coal ash rule to be co-opted by OIRA’s review process.

That begs the question of whether other officials in the White House were involved, officials with more clout than Cass Sunstein or even Lisa Jackson. Coal ash regulation is one element in a complex suite of legislative and regulatory issues the Obama administration faces in trying to reform energy policy in the United States. One of the Obama administration's top priorities, climate change legislation, is bound to be an important consideration in any related decision making.

We may never know the answer because the OIRA review process offers little transparency. EPA is one of the few agencies to provide detailed information on the review of its rules. While disclosure of the changes made is helpful in promoting accountability, too many questions are left unanswered when OIRA and agencies fail to disclose who made what changes and for what reasons.

Determining the reasons for the changes made to EPA's coal ash proposal, and assigning motive more broadly, is nearly impossible. Was the White House overly sensitive to the reactions of industry-friendly congressional Democrats whose support is necessary on climate change legislation? Was it a philosophical shift at the urging of Cass Sunstein, or was it something else entirely?

Many have pointed to industry's potential influence on the coal ash rulemaking. While the rule was under review, OIRA and EPA met with outside stakeholders on at least 43 different occasions. 30 of those meetings were with representatives of a variety of industries opposed to or fearful of coal ash regulation. These included electric utilities, chemical companies, and many whose businesses rely on the beneficial reuse of coal ash. (The remaining meetings were with environmental groups and citizen advocates.)

Even if the changes to EPA's coal ash proposal were made completely independent of industry opposition, the appearance of impropriety can be just as damaging, both to the administration's credibility and public confidence. President Obama came into office pledging to stem the influence of special interest lobbyists and has taken steps toward that end. The coal ash rulemaking is a blemish on an otherwise positive record.

The OIRA review process clearly does not always comport with some of President Obama's stated goals and priorities. It is time for Cass Sunstein and OIRA to come to this realization and urge Obama to recommit himself to regulatory reform. In the case of coal ash, if the rule is not legally or scientifically defensible, let the public see that debate through the notice and comment period. If other agencies have additional evidence about why the original EPA draft was unacceptable to them, that evidence and feedback should be part of the public record, not provided behind closed doors in what looks to the public like some cloak-and-dagger maneuver designed to evade accountability. Instead of providing an open and accountable exchange of data and ideas that would benefit all stakeholders, the current process makes it possible for special interests to influence a rule long before the public even has an opportunity to comment.

Let’s keep an eye on how the final rule is developed. If it runs counter to scientific information about the health dangers of coal ash and the substance remains unregulated under subtitle C, the public loses – and the Obama administration should be held accountable.