Obama Administration Revisits California Waiver Decision

By Todd J. Guerrero | March 09, 2009
With due respect to Maine, as California goes, so (it appears) goes the nation.

Last March I wrote about how states-particularly California-continue to drive renewable fuel laws and policies. California's economy is by far the dominant force in the U.S. economy. According to sources, if California were an independent nation, its economy would rank between the seventh and 10th largest in the world. California's impact on the transportation sector is equally significant. Approximately half of all the energy used to drive California's economy is consumed to fuel its cars, trucks and buses. Indeed, California uses more than 16 billion gallons of gasoline per year, apparently enough to drive a car getting 30 miles per gallon to the sun and back three times.

Given California's weight, it wasn't surprising when President Barack Obama's administration, acting through the U.S. EPA, recently decided to reconsider the EPA's March 2008 decision in which it denied California's earlier request for permission to set its own standards for controlling greenhouse gas emissions from motor vehicles.

Responding to a Jan. 21, 2009, letter request from the California Air Resources Board, Obama signed a Jan. 26 memorandum directing the EPA to reassess whether the EPA's decision to deny California an earlier waiver was appropriate in light of the Clean Air Act and the EPA's past actions regarding previous requests by the state.

To refresh, in March 2007, former EPA administrator Stephen Johnson found that California's request to adopt separate greenhouse gas motor-vehicle standards was far different than previous California waiver requests, all of which had been granted. The EPA noted that greenhouse gases are global in nature and contribute to global climate change, which "poses challenges for the entire nation and indeed the world." Unlike the emissions covered by past waiver requests, the EPA concluded that greenhouse gas emissions are by definition global and that the challenges presented by climate change are not unique to California.

In its reconsideration request, CARB was blunt in its assessment of the EPA's previous denial. It states that Johnson misinterpreted the Clean Air Act by establishing new and "flawed" tests, and then intentionally misapplied the facts to the invented test in order to deny the waiver. According to CARB, Johnson wrongly concluded that in allowing California to set its own motor-vehicle emission standards, Congress intended to limit California's standards to those addressing only local or regional factors unique to the state's topography, meteorology, climate, or human and vehicle population. Instead, CARB is asking the new EPA administrator, Lisa Jackson, to evaluate California's need for greenhouse gas standards not "in isolation" but instead as "part of the state's complete motor-vehicle emission-control program." CARB argued that while the issue isn't necessarily determinative, one reason for the waiver is that California does in fact have more pressing air quality and other resource impacts than other parts of the nation.

On Feb, 6, 2009, the EPA issued a notice asking for public comments no later than April 6, 2009. Jackson is almost certain to reverse the decision of her predecessor and grant California's waiver request. In initiating the reconsideration process, Jackson stated that there are "significant issues" surrounding Johnson's denial, and that the earlier denial was a "substantial departure" from the agency's "long-standing interpretation" of the Clean Air Act and its treatment of previous California waiver requests.

Meanwhile, an appeal of Johnson's decision is presently before the U.S. Court of Appeals in Washington, D.C.

Todd J. Guerrero is an attorney practicing with the Agribusiness and Energy group at Lindquist & Vennum PLLP. Reach him at tguerrero@lindquist.com or (612) 371-3211.
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