Scott Pruitt, Andrew Wheeler, and Regulatory Capture at the EPA

by |April 16, 2018

There’s a new deputy in town: Andrew Wheeler, a fossil fuel fanatic who once served on the staff of snowball-wielding climate denier Senator James Inhofe. Wheeler was recently confirmed as EPA’s deputy administrator, and is ready and in place to serve as acting administrator once Scott Pruitt has returned home to Oklahoma. While Pruitt is loud and visible, Wheeler is a classic insider who has quietly advanced fossil fuel industry interests in DC for about two decades. Pruitt may be the worst administrator in EPA history, but his sloppiness and ego impair his effectiveness. Wheeler, on the other hand, is known for being low-key and careful—and could end up having a more destructive impact on America’s effort to protect its environment.

U.S. Environmental Protection Agency. Credit: NRDC

The fundamental problem, though, is not Pruitt or Wheeler; it is President Donald Trump, who has given the management of the EPA over to the most polluting businesses in America. The EPA is now a regulatory agency that has been captured by some of the businesses it seeks to regulate. While ultimately Trump will fail in his effort to deregulate the environment, valuable time will be wasted fighting to maintain the protections we have, rather than advancing environmental policy to deal with new technologies and new threats. EPA has been captured by businesses that are far from representative of the American business community. While some business leaders are often annoyed at regulations, they still work hard to adjust their operations to comply with rules promoting health and safety. Typically, they understand and appreciate the goals of regulation, although sometimes disagree with the means (especially if it costs them money).

In some instances, regulatory capture takes place because industry is the only source of technical expertise needed to understand the production process and understand what might go wrong. This took place when the Department of Interior hired people from the oil rig industry to regulate the oil rig industry. Inadequate regulation led to the explosion at the Deepwater Horizon oil platform, resulting in loss of life and billions of dollars in damages. In the case of the environment, EPA’s scientists have long had access to industry, government and academic expertise. As a relatively tiny agency, it has always had to collaborate with external sources of expertise. EPA’s capture was not caused by an industry monopoly of expertise, but instead by the administration’s willful rejection of science in setting environmental policy.

This is a new form of regulatory capture based on fantasy and a disregard for expertise. Industry may wish that a toxic chemical won’t make people sick, and once they get sick they’ll try to blame it on something else, but a scientific fact is still a fact. EPA’s capture is based on the illusion that scientific fact is not real. If the attack on environmental rules goes unchecked, Trump’s deregulatory over-reach may result in visible, tangible environmental impacts that people will be able to see, smell and feel. If pollution effects the health of children in American communities, the political reaction will be fierce and persistent. Flint, Michigan, demonstrated what a relatively poor community can do when their water is poisoned. Wait until the air or water is polluted in a rich neighborhood.

There are a number of reasons that I do not believe the effort to deregulate our environmental protection will work. First, there is the simple matter of law. Current regulations are based on a set of environmental statutes that should be updated but have been relatively unchanged since 1990. Congress is not going to change these laws and even Trump knows better than attempt to change them. If EPA’s new rules do not adhere to the old laws, they will be challenged in court, and while we can always be surprised, most judges will have little choice but insist that EPA follow the law as written.

There are several other sources of opposition to deregulating the environment: 1) American business; 2) state and local governments; and, 3) the public. About 80 percent of America’s GDP is in the service sector, and while their costs may be affected by environmental rules, those costs are relatively invisible. In both the manufacturing and service sectors, some rules, such as fuel mileage and energy efficiency standards, can actually help lower the cost of doing business. But the primary basis for business support of environmental rules is that like the rest of us, business assumes that government will assure a clean environment and they are used to operating in compliance with rules that are predictable and slow to change. Predictability and uniformity are important for business planning and investment decisions. Moreover, people who run businesses often favor tough but reasonable environmental regulation. Like everyone else, they still like to breathe, are influenced by young employees pushing sustainability, and have travelled to parts of the world that do a poor job of regulating their environment.

The most important source of opposition to deregulating environmental protection is the general public. Trump, Pruitt and Wheeler insist that they are getting rid of frivolous and burdensome regulations. They argue that the administration is merely getting back to the basic EPA that we had before it “got out of control”.  While there are certainly instances of incompetent and unthinking environmental rules, EPA has always been a careful and prudent regulator. Pressure from economic interests has forced EPA to be deliberate and transparent in the rule-making process. In fact, environmentalists have long complained about the slow pace of regulation. Some hazardous waste rules required under a law enacted in 1976 (the Resource Conservation and Recovery Act) were not promulgated until the early 1990s. EPA has delegated most of its implementation authority to states, and state and local enforcement of environmental law is often more vigorous than EPA’s. I strongly believe that Trump has seriously underestimated the latent support for environmental protection. While public opinion polls have long registered high levels of support for regulating polluters, the overall issue has not ranked high on public priorities. This is because people believe that government has the environmental problem under control. Remove public confidence in environmental regulation and the political pressure to resist deregulation will be overwhelming. State and local governments are already challenging efforts to deregulate the environment in response to public pressure.

While I believe that Trump, Pruitt and Wheeler will ultimately fail, that does not mean they won’t cause damage. Pruitt’s personal conduct, excessive security, and resistance to science damages EPA and its long-term reputation. Like Trump, both Wheeler and Pruitt are the embodiment of the concept of conflict of interest. In February, the New Republic’s Emily Atkin observed that:

“In many ways, Wheeler is similar to Pruitt. Both men are climate-change deniers who speak in a disciplined legalese, thereby avoiding political gaffes. But environmentalists should consider Wheeler a more egregious nominee. His conflicts of interests are certainly worse: Pruitt may have worked closely with the fossil fuel industry before taking office, but Wheeler worked for the fossil fuel industry. Before he took office, Pruitt indirectly raised money from conservative dark money groups to stop the EPA regulations he’s now in charge of. But Wheeler directly raised money for the same Republican Senators who are [and now have] evaluating his nomination…”

Wheeler has worked for both government and industry, and presumably knows that when he works for government, his duty is to the public interest. If he adheres to the coal industry’s talking points, we can begin to assume he will someday return to their payroll. We can also assume that for the time being, EPA will be a fully captured subsidiary of the fossil fuel industry.

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