Opinion

Op-Ed: Beware of the back-door EPA effort to impose cap-and-trade on gasoline

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Photo - SAN FRANCISCO, CA - MARCH 01:  A gas pump nozzle sits in a car at a Chevron gas station on March 1, 2013 in San Francisco, California.  The California Board of Equalization voted on Thursday to implement a statewide excise tax on gasoline starting July 1 that will increase the tax by 3.5 cents to 39.5 cents per gallon.  (Photo by Justin Sullivan/Getty Images)
SAN FRANCISCO, CA - MARCH 01: A gas pump nozzle sits in a car at a Chevron gas station on March 1, 2013 in San Francisco, California. The California Board of Equalization voted on Thursday to implement a statewide excise tax on gasoline starting July 1 that will increase the tax by 3.5 cents to 39.5 cents per gallon. (Photo by Justin Sullivan/Getty Images)
Opinion,Op-Eds,Environment,Energy Department,EPA

Is the Environmental Protection Agency working behind closed doors to impose a global warming mandate on transportation fuels that will make drivers pay more for gasoline and weaken America's energy security? Consumers need to be vigilant in the months ahead to make sure that it doesn't.

For now, as EPA Administrator-nominee Gina McCarthy said recently in response to questions from Sen. David Vitter, R-La., and other members of the Senate Environment and Public Works Committee, "EPA is not considering, nor does it have any plans to seek to establish a federal Low Carbon Fuel Standard." So far, so good.

But there is reason to be cautious: EPA could still implement LCFS rules through another avenue known as "Sue-and-Settle."

Sue-and-Settle is an abuse of the regulatory process that is frequently used by Big Green environmental groups to force implementation of costly new standards and regulations.

Here's how it works: A group threatens to sue EPA over what it asserts to be a failure to issue rules required meet a statutory obligation. The group then meets with EPA in closed-door negotiations that result in a court-approved "settlement," in which EPA agrees to go through with the rules.

Of course, the particular rulemaking is usually one that the American people are vehemently against -- which is precisely why environmental groups prefer Sue-and-Settle: it occurs outside the legislative process, behind closed doors, with little or no participation from the very businesses and consumers who ultimately foot the bill.

The Sue-and-Settle alarm bell rang loud and clear last November when the Institute for Policy Integrity, an advocacy organization tied to New York University, threatened to sue EPA over a cap-and-trade program for transportation fuels based on a LCFS -- or, EPA's failure to produce one.

The idea behind IPI's potential lawsuit was to force EPA -- with a federal court's blessing -- to promulgate something IPI hasn't been able to achieve through the legislative process.

When its official "notice of intent" to sue EPA was exhausted on May 29, IPI decided not to sue -- for now -- but it left open the possibility that it may do so in the future. Thus, the importance of consumers keeping a watchful eye on EPA and IPI's drive for an LCFS.

Sue-and-Settle is an issue garnering a lot of attention, and for good reason. The U.S. Chamber of Commerce recently released a report, "Sue and Settle: Regulating Behind Closed Doors" that found EPA has, in conjunction with environmental groups, negotiated at least 60 such deals between 2009 and 2012.

Could an LCFS be next? It certainly won't go anywhere in Congress. As with the cap-and-trade bill that suffered an ignominious defeat in 2010, members of Congress are leery of global warming mandates because of the costs (for no meaningful benefit) that would be imposed on constituents.

Numerous studies have shown just how bad an LCFS would be for jobs and the economy. A study by Charles River Associates found that a it would destroy between 2.3 and 4.5 million American jobs, and increase the cost of gasoline and diesel fuel by up to 170 percent over 10 years.

Imposing such a regressive policy won't go over well with consumers. So it's no stretch to think that IPI is mulling a closed-door, Sue-and-Settle outcome with EPA. If IPI eventually decides to take this route, and EPA keeps its word and rejects an LCFS, then IPI will have to head to court, which is a more uncertain endeavor.

For the sake of American consumers, we'll be holding EPA accountable every step of the way.

Matt Dempsey is a spokesman for SecureOurFuels.org, a nonpartisan educational effort concerning the high costs of Low Carbon Fuel Standards.

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