Eighty percent of success is showing up: Or “How a pro se farmer won a default against the United States in his suit to invalidate the permit for half of Keystone XL (& why it probably won’t last)”

On April 25, Michael Bishop, a farmer acting pro se, filed a lawsuit in the U.S. District Court for the Eastern District of Texas to revoke TransCanada’s permit to construct the southern half of the Keystone XL project.  This part of the project, known as the “Gulf Coast Project” or “Phase III”, travels from Cushing, Oklahoma to the Gulf Coast.  Bishop sued the Army Corps of Engineers and its Commanding General, Thomas Bostick, because the Army Corps issued the permit to TransCanada.  The complaint that Bishop filed asked the court to order the Army Corps to revoke Keystone’s permit. Bishop then served this complaint on the Army Corps of Engineers, its officers, and the Attorney General of the United States.

Now, you might not like the chances of a pro se farmer aligned against the U.S. Attorney General, the Army Corps of Engineers, and TransCanada.  But as Sheriff Bell would say: “even in the contest between man and steer the issue is not certain.”  And, as it turns out, no one showed up to contest the lawsuit.  Even though the permit at issue belonged to TransCanada, it is not a defendant.  It was up to the government, and the government did not show up.  As a result, on Wednesday, the clerk entered a default against the Army Corps and its officers.
Mr. Bishop had won, and national news stories trumpeted his victory–e.g. Bloomberg “Texas Farmer Wins Entry of Default in Keystone Lawsuit“.  He told Bloomberg, “Tomorrow I’m going to ask the judge for everything I had in my original petition. I’m going to ask him to revoke the permit and effectively shut this pipeline down until they comply with the law.”
The victory will likely prove short-lived, however. On Thursday, the U.S. Attorney’s office for the Eastern District of Texas filed an emergency motion to vacate the clerk’s entry of default.  Although acknowledging that the AG, Army Corps, and officers had been served, the government pointed out that the U.S. Attorney’s office had not been served, a requirement under Federal Rule of Civil Procedure 4(i).  As a result, the government also suggested that the complaint itself should be dismissed “due to failure of service.”
In the end, it seems unlikely that a lawsuit of this importance will end in a default.  But it’s an important reminder of three things: 1) the variety of legal venues and strategies available to environmental plaintiffs looking to slow the flow of oil, 2) the difficulty of keeping track of the myriad resulting lawsuits, and 3) the importance of showing up.

Cross posted on ABlawg: The University of Calgary Faculty of Law Blog.

Smooth It Out Now (or We Need Analog Climate Policy Analysis)

In my first year after university, I had five roommates who were extremely smart basketball fans.  I’m your typical Minnesotan hockey player, so I had a lot to learn about basketball.  I often asked my roommates questions like: Is Scott Pollard a good center? Are the Hornets hard to beat?  Does zone defense work?  They made fun of me, noting that all my questions reduced to: is X good or bad?
At the time, I thought: “Fine-grained knowledge can come later, right now I need the basics, and good versus bad is important info.”  But over the years I’ve grown to appreciate how digital thinking–i.e. 0 versus 1, on versus off, good versus bad–can lead conversations astray.
Climate policy thinking is in need of more analog thinking.  That is, we need to be more careful to note the continuous gradations between total climate policy failure and climate policy success.  Analog climate policy thinking would give us a 1) clearer picture of current climate policies and likely future policies, and 2) let us design more effective climate regulations going forward.  Let me give two examples.
1. Current and Future Climate Policies: A Continuous Spectrum
When you talk climate policy you’re usually talking about unilateral national, state, provincial, or local regulations, because there’s no enforceable international greenhouse gas treaty.  At the same time, greenhouse gas emissions are global, so one of the primary goals of these domestic regulations is to encourage other countries to adopt stricter climate regulations.
When I present research on domestic climate regulations around the world, I almost always get a very digital question: “How can you encourage other countries to act?  Good countries will help out voluntarily, and you’ll never convince the bad actors.”  When I present to an audience of U.S. generalists, they generally mention China as an example of a bad actor, and when I present outside the U.S. (or to U.S. environmentalists) they usually mention the U.S. as a bad actor.  Almost everyone mentions Europe as a good actor.
This question makes clear that the good actor/bad actor frame is actively confusing the questioner.   Even if we could say that some countries are doing better than others, every country is constantly striking a balance between climate and economic goals, and each could regulate incrementally more or less.  Europe has a cap & trade system, it’s true; but it doesn’t cover all emissions, and its permit price to emit a ton of carbon has fallen below 5 EUR.  (That’s less than half Alberta’s 15 CAD carbon price, although Alberta’s regulation applies to far fewer emissions.)  And on the flip side, China has adopted numerous policies that will slow its rising greenhouse gas emissions, including massive deployment of renewable energy.  (Here’s a useful Congressional Research Service summary from 2011: http://bit.ly/1dIi1Je).  Even Saudi Arabia is planning a gigantic expansion of clean energy. (http://bit.ly/1dIi1Je).  Digital thinking is giving academics an inaccurate view of the world.
2. Climate Policy Mechanisms: Encouraging More Action in a Continuous Climate Policy World
Digital on/off thinking has infected our climate policy design as well.  Again, one of the most important goals for unilateral climate regulations is encouraging action elsewhere.  And one of the most promising ways to do that is with matching commitments: adopting climate regulations that automatically grow more strict when other countries strengthen their own climate regulations.  As I explain in this paper, http://bit.ly/uniclimreg (see pp. 15-21), these matching policies would encourage other countries to act by rewarding them with increased environmental benefits.

But the limited attempts at using matching commitments so far have been fatally flawed by on/off thinking.  For instance, the EU has said it will increase its greenhouse gas reductions from 20% to 30% if developed nations adopt “comparable” reductions through a “global agreement.”  And Australia has a similar scheme.  But these matching commitments provide no incentive to the actual policymakers around the world who are struggling with decisions to marginally tighten or loosen greenhouse gas regulation almost every day, because no individual regulator can secure a global agreement.  These on/off commitments should be replaced with matching commitments that target climate regulations that foreign regulators can actually deliver, and smoothly ratchet up in response to stricter commitments.  Perhaps the EU could commit to match a specific percentage of reductions in the US, Canada, or Australia.  And these commitments could even target regulators in important states or provinces like California and Alberta that are calibrating the strictness of their climate policies.

Analog thinking also reveals the problems with the current global treaty paradigm. No country can credibly commit to years of “good” climate regulation in a single treaty.  Climate policy is too complex and covers too many politically-charged areas.  Often even countries that have “model” policies, like Australia’s ill-fated carbon tax, have found loopholes with major climate impacts, such as coal exports.  (See also, British Columbia’s tax and its proposed LNG exports.)  And even on their own terms emissions pledges will always be fragile in a democracy, as has been repeatedly shown in Australia, Canada, and Japan.
This same problem will likely hamper more modest plans for climate clubs.  I share the general interest in the recent climate pact between California, Oregon, Washington, and British Columbia.  But remember the Western Climate Initiative: it was formed by Arizona, California, New Mexico, Oregon, and Washington in 2007 . . . and then abandoned by Arizona, New Mexico, Oregon, and Washington in 2011.  Fool me twice, shame on me:  analog climate thinking says we cannot be surprised when other states and countries do not live up to their climate commitments.  We need to find ways to continuously encourage them to adopt somewhat stricter regulation, whether or not they are living up to the terms of these commitments.  We need to focus more on analog matching commitments and less on promises to be good.
And yes, I’m still working on my analog basketball analysis.  But my former roommates still make fun of me.  After watching this recent clip (starting at 1:30), one told me I was simply ahead of my time: http://watch.thecomedynetwork.ca/the-daily-show-with-jon-stewart/full-episodes/the-daily-show-with-jon-stewart—october-29-2013/#clip1033595. (U.S. version: http://huff.to/18Tm0xu.)

China’s Energy Future: Coal, Gas, & A Gargantuan Climate Policy Challenge

With about a fifth of the world’s population, China plays a crucial role in the world’s energy and climate futures.  Right now, the developed world comprises an outsized portion of global energy use and greenhouse gas emissions compared to its population, (http://bit.ly/1bDyIIp), but per capita energy use in developing countries like China will gradually converge with levels in the developed world because of 1) catch-up growth in the developing world, 2) climate and efficiency regulations in the developed world, and 3) movement of heavy industry from the developed world to the developing world.  So one way of thinking about global energy futures is that Chinese policy may some day be of comparable importance to the policies of North and South America, Western Europe, and Australia combined.   (Or maybe “US policy is to China’s policy as Turkey’s policy is to US policy.”)


Map of the world divided into five regions, each with the same population as China.

So China’s climate policy is crucial.  And it is currently in flux.  Many years of rapid growth in coal-fired power have produced acute particulate matter air pollution problems in China:  a recent study estimated that this air pollution reduced the life expectancy in northern China by 5.5 years.  http://bit.ly/19aFY91.  As a result, China has been seeking to develop alternative power sources such as natural gas and renewable power.  Some hope that this will help slow China’s rapidly rising greenhouse gas emissions.  Citi Research recently put out a report with the hopeful title, “The Unimaginable: Peak Coal in China” (http://citi.us/1cpecdP), and Bloomberg New Energy Finance published one titled “The Future of China’s Power Sector: From Centralized and Coal-Powered to Distributed and Renewable?”  Two recent analyses, however, show why China’s energy policy remains a daunting challenge.
The first analysis, from Armond Cohen and Kexin Liu at the Clean Air Task Force, http://bit.ly/16tPtlf, offers a bracing reality check by simply digging into the Bloomberg and Citi studies.  What they find is that China’s coal-fired plants will be a climate challenge for decades to come.  As a result of the recent boom China now has 750 GW of coal-fired capacity, and even as construction slows, it is due to add 343-450 GW of new coal-fired plants by 2030.  By comparison, the U.S., which until 2008 was the world’s biggest emitter of greenhouse gases, has only 300 GW of coal-fired capacity.  So, China will soon have 3.5-4 times the coal-fired capacity of the United States.  And unlike, the United States where most coal plants are aging, Chinese plants will still be in their prime, and may continue to operate for decades.
The second analysis, published in Nature Climate Change, analyzes China’s plans to produce synthetic natural gas (SNG) from coal at over 40 massive plants.  http://bit.ly/1a675Ru.  Burning SNG instead of coal would lower particulate matter pollution in China’s cities, but SNG takes large amounts of energy to produce, which means that, all things considered, it leads to even more greenhouse gas emissions than coal.  (SNG has roughly seven-times the greenhouse gas impact of regular natural gas, and 136-182% the impact of coal-fired plants.)  Thus, if coal is replaced with SNG, it will just make the world’s climate problems worse.
The Clean Air Task Force analysis suggests that carbon capture & storage may be the only viable option to control greenhouse gas emissions from China’s burgeoning coal plants.  And the SNG paper suggests that shale gas might be a viable alternative to SNG within China.  Both potential solutions have detractors.  What is clear, however, is that Chinese energy policy will be a crucial and daunting challenge for decades to come.

Obama Climate Speech Sets New Standard for Keystone Pipeline

On June 25, President Obama unveiled a Climate Action Plan in a speech at Georgetown University (see here). This plan highlighted upcoming U.S. greenhouse gas standards for fossil-fuel power plants, directing the U.S. Environmental Protection Agency to issue new proposals for both new and existing power plants.  But the speech is making the most news for an unexpected reference to the Keystone XL pipeline, which is designed to transport oil sands bitumen from Hardisty, Alberta to Steele City, Nebraska.

The surprising reference to Keystone XL came in the middle of the President’s speech when he said:

I do want to be clear:  Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest.  And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution (Remarks by the President on Climate Change).

Under Executive Order 13337 the President approves a cross-border pipeline when it is in the “national interest.” So President Obama’s words seemed to prescribe a new standard for the pipeline:  even if the pipeline would provide benefits in terms of oil prices or energy security, it would only be approved if it would not “significantly exacerbate” greenhouse gas emissions.

This new standard places significant pressure on the U.S. State Department, which is responsible for assessing the environmental impact of the project under the National Environmental Policy Act, 42 USC 4321 et seq.  In March 2013, the State Department issued a draft environmental impact statement for the pipeline, which addressed the concern that approving the pipeline would cause increased development of the Canadian oil sands, which would, in turn, lead to more greenhouse gas emissions.  The State Department rejected this analysis, concluding that the pipeline would cause “no substantive change in global GHG emissions.”  (See State Department, Draft Supplemental Environmental Impact Statement 4.15-107).  This is because rejecting the pipeline would merely “force more crude oil to be transported via other modes of transportation, such as rail.”  (See State Department, Draft Supplemental Environmental Impact Statement 1.4-1).  Thus, in the State Department’s view, the oil sands would be developed with or without the pipeline.

Pipeline opponents have attacked this conclusion, arguing that other transportation options would be more expensive, so stopping the pipeline would slow oil sands production.  For example, the National Resources Defense Council along with other environmental groups formally asked the State Department to submit a new draft environmental impact statement because of subsequent analysis that, they claimed, showed “there are high cost and technical and logistical barriers to rail transport.”  (See Natural Resource Defense Council et al., Request for Supplemental Environmental Impact Statement for the TransCanada Keystone XL Pipeline Based on Significant New Information (June 24, 2013)). The U.S. Environmental Protection Agency itself laid the groundwork for this critique, telling the State Department that it “recommend[s] that the Final EIS provide a more careful review of the … rail transport options,” and suggesting that “recognizing the potential for much higher per barrel rail shipment costs” could affect “the level and pace of oil sands crude production.”  (See U.S. EPA Keystone XL Project Comment Letter (Apr. 22, 2013)).

Ultimately, President Obama’s words suggest that the Keystone XL pipeline will only be approved if the State Department largely stands by its analysis that the pipeline will not significantly increase global emissions.  This raises the stakes for the State Department’s final environmental impact statement, which does not have a firm due date, but will be released after the State Department reviews the hundreds of thousands of comments that were submitted on its draft impact statement.  (See Update, New Keystone XL Pipeline Application).

Cross-posted at ABlawg, the University of Calgary’s Law Blog: http://bit.ly/18h6pdG

Competing views on Lac-Mégantic explosion and the pipeline debate

An interesting divide has emerged in analysis of the effect of the Lac-Mégantic train disaster on the continuing debate over crude oil pipelines.

Early Saturday morning, a train carrying carrying crude oil from the Bakken oil shale in North Dakota derailed and exploded in the town of Lac-Mégantic, Quebec. (http://bit.ly/172FTU2)

Andrew Leach, at the University of Alberta, suggested that this will hurt the prospect of pipeline approvals–such as the Keystone XL pipeline that is currently being reviewed by the U.S. State Department–because it “highlights the hazards of transporting crude oil.”  (http://bit.ly/1a9ueVl)  Many media stories–and particularly headlines–have followed this theme.

On the other hand, Tim Worstall at Forbes represents another camp, which argues that the danger of transporting crude by rail makes pipelines look safer by comparison, because pipelines “tend not to go through the centre of towns.”  (http://onforb.es/1a9v9oN)

This debate is further complicated by the analysis that the U.S. State Department presented in its draft environmental impact statement on TransCanada’s proposed Keystone XL pipeline.  The State Department said that rejecting the pipeline would simply force “more crude oil to be transported via other modes of transportation, such as rail,” so approving the pipeline would not significantly increase greenhouse gas emissions from crude production.  (http://1.usa.gov/1aXcQpD)

Pipeline proponents, accepting this argument, may now argue that rejecting the pipeline will shift crude oil into more dangerous modes of transport, such as rail.  In contrast, pipeline opponents will say that focusing on the danger of rail shipments should mean new restrictions on these shipments.  As a result, they will reject the State Department’s premise:  they believe that if Keystone XL is stopped, other modes of transport can be stopped as well, significantly impacting crude production.

Thus, proponents are assuming that crude oil production will continue, and looking for the safest and most efficient mode of transport, while opponents are betting that it can be significantly slowed through a multi-pronged regulatory clamp down on transport.

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