Former White House CEQ official Guzy discusses future of air regulations

Source: Monica Trauzzi, E&E • Posted: Friday, March 21, 2014

After leaving his post as deputy director of the White House Council on Environmental Quality earlier this year, how is Gary Guzy now advising industry clients to prepare for the Obama administration’s air regulations? During today’s OnPoint, Guzy, senior of counsel at Covington & Burling, gives his take on the current state of play on regulation and the possibility for litigation resulting from U.S. EPA’s New Source Performance Standards. Guzy also discusses the impact White House counselor John Podesta is having on the administration’s climate narrative.Click here to watch today’s OnPoint.Monica Trauzzi: Hello and welcome to OnPoint. I’m Monica Trauzzi. With me today is Gary Guzy, senior of counsel at Covington & Burling and the former deputy and general counsel at the White House Council on Environmental Quality. Gary, it’s great to have you here.

Gary Guzy: It’s very nice to be here, Monica. Thank you.

Monica Trauzzi: Gary, you recently left CEQ at a time when Nancy Sutley and Heather Zichal also exited the administration. What does the change of the guards tell us about what’s happening behind the scenes at the White House on climate and energy?

Gary Guzy: I think there’s been an enormous amount of work that’s been done that’s laid the groundwork for the next three years. The president laid out a very ambitious Climate Action Plan that puts together international work, domestic emissions reductions, and preparedness and resilience. And that sort of charts the path for the next three years. There are amazingly capable people who now are in place at each of the agencies that are charged with the primary responsibility for doing that work. And having woven together each of those pieces, being able to tell a story about what the administration’s done, what it’s going to do, when it’s going to do it, why it’s going to do it and how it’s going to do it — I think the path for the next three years looks relatively clear.

Monica Trauzzi: Right, and you were directly involved with and facilitated the creation of a lot of the policies that are really going to be seeing prime time over the next couple of months. Do you feel some sense of ownership over these policies, and how do you take those experiences into your new work?

Gary Guzy: Oh, I mean, I feel some pride in what we were able to accomplish, but none of that would’ve happened were it not for the very clear commitment from the president from the start that to have a sustainable economic recovery, you need a clean energy transformation in this country. And the president’s been absolutely consistent about that from day one. And each of the pieces that we were able to implement and the path that we were able to start really stem from that initial commitment.

Monica Trauzzi: What has the addition of John Podesta to the White House meant to the conversations on climate and energy, and how does that have an impact on the role of CEQ, because there’s a lot of crossover there?

Gary Guzy: Oh, absolutely. I think it’s hard to underestimate the significance of that appointment by the president. John is someone who has been thinking about climate issues for a very long time, has deep expertise in the role of the executive branch in carrying out policies from his days as the chief of staff for President Clinton, is able to articulate an agenda as evidenced by his work at the Center for American Progress, and really is able to think strategically about what the administration should be doing and how to work with Congress or, when that proves impossible, use executive authorities to get the job done. So I think he’ll be enormously important; he’s already demonstrated that in a range of actions that he’s taken. For example, today’s announcement on climate data focused on preparedness and resilience — a very important weaving together of capabilities. And I think you’ll continue to see that CEQ, the Domestic Policy Council, the various White House offices, the Office of Science and Technology Policy, and the National Security Council, all of whom have some role in addressing and helping to solve the climate challenge will be woven together in a very high-profile way through his work.

Monica Trauzzi: Some people question whether CEQ remains relevant and necessary because there are so many different voices involved right now. Do you think that it’s lost some of its relevance?

Gary Guzy: I think that the role of CEQ has changed from 30 years ago when what it was was the voice within the White House that flagged when the federal government had an environmental issue. And that’s when it was first set up, and it’s a very different circumstance now because of the president’s commitment, because of the internalization of that commitment at agencies. So what that means is that what CEQ can do is have the luxury of coordinating and finding … government solutions, and that’s an amazing thing. The Climate Data Initiative is a great example of that. The work that I was able to do on bringing together EPA, Department of Transportation on fuel efficiency regulations and greenhouse gas regulations in a comprehensive program — those are the kinds of solutions that the White House really can be instrumental in bringing about. And it has an amazing convening power, and that’s a central piece of what CEQ can do.

Monica Trauzzi: So let’s talk about greenhouse gas regulations. Legal challenges to EPA’s new and existing source standards …

Gary Guzy: Right.

Monica Trauzzi: … are a near certainty. Are these rules an inevitability, or do you think that once the courts step in that we might see some major changes to the direction that the agency has taken? How do you advise your clients at this point?

Gary Guzy: Well, how I advise my clients is to be very open-minded and to really think about the opportunities that being active in the environmental arena creates. And many of them are really finding value in addressing environmental issues early and in relating to their customers and their businesses in a new way. The challenge around greenhouse gas regulation is the level of uncertainty that generally exists. And what the administration has tried to do is to put out as much information as possible and to engage in as active a way as possible in the midst of that uncertainty. So it set forth a very clear timetable. The president wrote a Presidential Memorandum that set forth when these rules are going to happen, the process by which they’ll happen, some boundary conditions like effect on — you know, avoiding effects on electricity reliability and pricing and availability so that it’s — the administration’s trying to make this as clear and trouble-free a path as possible.

My own sense is that what the Supreme Court has done in addressing greenhouse gases, the argument from a few weeks ago, is a narrower issue that won’t have a material effect on what EPA is thinking about going forward. Nonetheless there are a series of very complicated, difficult, challenging legal issues that the agency is working through, and it’s trying to do it in a very open and collaborative fashion.

Monica Trauzzi: But now that you’re on the outside, do you think that that timetable is just simply too aggressive to meet by the time the president leaves office?

Gary Guzy: I think that the agency has a robust policy, a robust approach underway that is very open and is engaging all sorts of stakeholders. And there’s an opportunity to get it done on the time frames that the president set out. It’s going to be challenging; there’s no doubt. Those issues are not straightforward. They haven’t been fully tested under the Clean Air Act. They’re not easy. There are a variety of views. Courts may well step in and intervene. I would discount the likelihood of that happening, but you never know. So the ability to remain nimble, the ability to use a variety of tools to get to the end of a comprehensive program of greenhouse gas regulation that the president laid out will be critical as the administration moves forward.

Monica Trauzzi: How close is EPA to having their existing source proposal ready to go?

Gary Guzy: They’ve been working hard on it, and the deadlines are approaching, so …

Monica Trauzzi: Like you said, the Supreme Court has taken up greenhouse gas cases, three in the last seven years.

Gary Guzy: Exactly.

Monica Trauzzi: Talk to me about the significance of that and what it means moving forward for future challenges.

Gary Guzy: Right, right. I mean, one of the challenges is that because Congress has not chosen to legislation in this area, what EPA and the administration has had to do is to apply existing tools under the Clean Air Act that might not be an optimal fit. And the Supreme Court now has three times, as you say, looked at these issues. In the previous two times it acknowledged that it was appropriate for EPA to be regulating in this area, that the Clean Air Act could accommodate that kind of regulation and contemplated addressing carbon dioxide as a pollutant. And in this instance what it’s doing is it’s looking at the particular application to permitting for new sources and stationary sources. But the vast bulk of what EPA has done on regulation has been untouched by the courts or ratified by the courts. The Supreme Court let go forward EPA’s fundamental endangerment finding. It let go forward its finding on greenhouse gases and automobiles and its regulation in that area. So huge parts of the administration’s overall program remain in place, untouched by what the Supreme Court has done. It’s I think fascinating that the court continues to have an appetite for these issues, as they generally have had for environmental issues over the last several years. That interest has not waned at all, even as their docket has gone down some.

Monica Trauzzi: So the top spot at CEQ remains open.

Gary Guzy: It does.

Monica Trauzzi: Who do you think would be a good fit?

Gary Guzy: I think there’s lots of great candidates, and I am a little reluctant to [laughter] endorse any particular person today. But, you know, this continues to be a vital organization. It’s the voice of the environment within the executive office of the president. The person who’s the chair serves as a key adviser to the president on these issues, so it’s an amazing opportunity over these next three years to really help to influence and shape and execute, deliver on the kinds of policies that have been laid out.

Monica Trauzzi: All right, Gary, we’re going to end it right there. Thank you for coming on the show.

Gary Guzy: Sure, my pleasure. Thank you.

Monica Trauzzi: And thanks for watching. We’ll see you back here tomorrow.

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