Daily Archives: 25 June 2012

Another Out of Control Regulation

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This regulation began as a Bush the Younger administration’s EPA attempt to work on an environmental problem now known to be non-existent.  Unfortunately, it’s being continued under an Obama administration EPA for no reason other than a cynical exercise in governmental power for the sake of that power.

The regulation in question is the EPA’s requirement that oil refiners mix into their refined fuels millions of gallons of a cellulosic ethanol, even though that additive does not exist.  This has the refiners in a quandary because the EPA is intent on fining them heavily for their failure to use this ghost chemical.

Tom Pyle of the Institute of Energy Research points out that

None, not one drop of cellulosic ethanol has been produced commercially. It’s a phantom fuel.  It doesn’t exist in the market place.

He goes on

Why would [the EPA] ask them to blend any at all if it doesn’t exist?  Because they know that they can squeeze some extra dollars out of them.

On the other hand, the EPA does have the authority to relax the requirement, and apparently they’re in the process of that.  The cellulosic ethanol blending requirement is, supposedly, being reduced by 98%.  Thus, in the end, the refiners only need to use 2% of this non-existent additive compared to their original requirement.  There’s a break.  Charles Drevna, representing refiners, has the right of this.

[The EPA is] forcing us to use a product that doesn’t exist; they might as well tell us to use unicorns.

He added

We’ve had to go to the courts and litigate this thing is because [the EPA] just turned a blind eye to us[.]

They have to because that mandate, the potential per centage reduction notwithstanding, just gets larger and larger: 500 million gallons of cellulosic ethanol this year, 3 billion in 2015, and 16 billion in 2022.  Never mind that nobody is making this stuff.

It shouldn’t have come to this.

Federal Overreach

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As C Boyden Gray and Jim R Purcell note in a recent Wall Street Journal op-ed, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is an especially egregious example, an Act that arrogates vast power to the Federal government and then concentrates it in the Executive Branch.

As they note,

Dodd-Frank created both the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, giving each agency effectively unlimited power. The FSOC can declare a financial firm “systemically important”—that is, too big to fail—based on “any” “risk-related factors” that it “deems appropriate.” And the CFPB can punish even responsible lenders who in good faith offer loans that the bureau later deems to be “unfair,” “deceptive” or “abusive.”

Demonstrating just how far this overreach is intended to go, the illegally appointed head of the CFPB, Richard Cordray, has instructed Congress that it is “probably not useful” to define in advance what an “abusive” lending practice is.  No, he’s just going to use his enormous, and unconstrained, his enforcement powers to retroactively punish lenders based on his carefully ex post definition of the “facts and circumstances” of each of their cases.  Nice company you got there.  Be too bad if something was to happen to it.

That this overreach is deliberate is demonstrated by the Act’s cynical elimination of any pretense of control by any branch of the government over these two Executive Branch bureaucracies, and the Act’s cancelation of even the most ephemeral separation of the three branch’s powers.

The CFPB is not subject to Congress’s “power of the purse,” which James Madison knew to be Congress’s “most complete and effectual weapon.”  Instead, Dodd-Frank lets the CFPB claim more than $400 million from the Federal Reserve each year and prohibits Congress from even reviewing that budget.  The president’s control over the CFPB is limited because by law he can remove the agency’s director only under strictly limited circumstances.  Finally, Dodd-Frank limits the courts’ review of CFPB’s legal interpretations.

And

The FSOC is similarly free from checks and balances.  For example, when the Council—a working group of the Treasury secretary, Federal Reserve chairman, comptroller of the currency, and other unelected regulators—anoints a financial institution as too big to fail, the courts are prohibited from even reviewing whether the regulators properly interpreted the applicable laws.

And that illegal appointment?  Cordray was given a recess appointment while the Senate was in session.

So much for the Constitution, that document that’s more than 100 years old and hard to understand.  So much for the Rule of Law.

RTWT.