Governors' Wind Energy Coalition

While EPA Administrator Scott Pruitt’s “secret science” plan has garnered a good deal of publicity and criticism, another proposal that could transform the agency’s rulemaking process has largely flown under the radar.

EPA last month quietly submitted a proposal titled “Increasing Consistency and Transparency in Considering Costs and Benefits in the Rulemaking Process” to the White House Office of Management and Budget.

The proposal is in the prerule stage and is under standard review at the Office of Information and Regulatory Affairs. EPA has not yet published a draft version.

Like the “secret science” plan, this proposal could have profound consequences for EPA’s overall approach to assessing the need for new or stiffer regulations to protect public health and the environment.

But while the “secret science” plan would restrict the types of studies that can be used in crafting new regulations, this proposal would improve the cost-benefit analyses that provide the economic justification for new rules.

An EPA spokeswoman told E&E News, “While we do not comment on the substance of an action under formal interagency review, the agency is seeking to provide consistency and certainty in the way EPA calculates costs and benefits of its regulations.” She declined to answer a list of emailed questions.

According to the site Reginfo.gov, EPA has already held meetings on the proposal with three industry groups: the American Petroleum Institute, American Forest & Paper Association and National Association of Manufacturers.

The three powerful trade associations regularly weigh in on environmental regulations. For instance, API has been a vocal opponent of the renewable fuel standard, while NAM has repeatedly urged EPA to reform its New Source Review permitting program.

All three groups were tight-lipped about the meetings.

API spokesman Reid Porter said in an email, “API regularly engages with members at all levels of the administration on public policies that will strengthen our country and benefit all American workers, consumers and the environment.” He declined to comment further.

A spokeswoman for AF&PA said Paul Noe, the lobbyist who was listed as attending an April 25 meeting with EPA, was unavailable for an interview. She declined to answer emailed questions.

NAM didn’t respond to multiple emails seeking comment.

When contacted for this article, regulatory policy experts at progressive organizations said they hadn’t heard of the proposal, but once they learned of it, they grew concerned.

“I think it’s just another way to put their thumb on the scale and rig how benefits are counted for EPA regulations,” said Yogin Kothari, Washington representative with the Union of Concerned Scientists’ Center for Science and Democracy.

“This, of course, is all window dressing for: (1) justifying weaker regulations and (2) wasting agency resources,” James Goodwin, a senior policy analyst with the Center for Progressive Reform, said in an email.

‘Justify whatever ends it wants’

In order to justify the repeal of major rules — defined as those that have an annual effect on the economy of $100 million or more — agencies must find that their costs outweigh their benefits.

Environmentalists have previously expressed concern that in its zeal for implementing President Trump’s deregulatory agenda, EPA has downplayed the benefits of rules in favor of emphasizing the compliance costs (Greenwire, Jan. 26).

For example, EPA’s proposal to ax the Clean Power Plan suggested the rule’s climate benefits could be about $20 billion less annually than the Obama administration contended, while the compliance costs could be about $20 billion more annually than previous estimates.

“I think the Clean Power Plan cost-benefit analysis — and the difference of opinion between this administration and the previous administration — shows that cost-benefit analysis is a means for any administration to justify whatever end it wants,” Kothari said. “This administration is using it to roll back and weaken a lot of science-based safeguards.”

And EPA’s proposal to repeal the Clean Water Rule maintained the previously calculated costs but reduced the benefits by 85 to 90 percent (Greenwire, July 7, 2017).

‘Consistent best practices’

Regulatory policy experts at conservative organizations, meanwhile, expressed cautious optimism that the proposal would introduce more consistency into the rulemaking process.

“We need to look closer at how [cost-benefit analyses] are being done and establish some consistent best practices,” said Diane Katz, senior research fellow in regulatory policy at the Heritage Foundation.

James Broughel, a research fellow at the Mercatus Center at George Mason University, said, “Whether or not what the Trump administration proposes is going to be a step in the right direction or not, I don’t know. But I think movement toward more consistency and more transparency is clearly a good idea.”

He added, “Up until the Trump administration, most of the air quality regulations tended to include estimates of co-benefits. So they could be trying to introduce more consistency into how these co-benefits are accounted for.”

Susan Dudley, who served as OIRA administrator during the George W. Bush administration, said she would reserve her judgment for when the draft text becomes available.

“It’s under review at OIRA now, and I really don’t know what to expect from it,” said Dudley, who now heads the George Washington University Regulatory Studies Center, in an email.

“It’s unusual to write a rulemaking to guide internal agency regulatory analysis,” she added. “I will be very interested to read it when OIRA concludes review!”