II 114th CONGRESS 2d Session S. 3508 IN THE SENATE OF THE UNITED STATES December 6, 2016 Mr. Lankford introduced the following bill; which was read twice and referred to the Committee on Environment and Public Works A BILL To prohibit the Secretary of Energy and the Administrator of the Environmental Protection Agency from considering the social cost of carbon, the social cost of methane, the social cost of nitrous oxide, or the social cost of any other greenhouse gas in taking any action, and for other purposes.

1. Short title This Act may be cited as the Transparency and Honesty in Energy Regulations Act of 2016 . 2. Findings Congress finds that— (1) as a tool to justify Federal actions by the Secretary of Energy and the Administrator of the Environmental Protection Agency to address greenhouse gas emissions, including the regulation or prohibition of the exploration, mining, production, and use of coal and other fossil fuels as energy sources, the social cost of greenhouse gases, specifically the social cost of carbon and the social cost of methane, represents the hypothetical cost of 1 incremental ton of carbon dioxide or methane emissions in a given year; (2) the document of the Office of Management and Budget entitled Circular A–4 and dated September 17, 2003— (A) guides Federal agencies on the development of regulatory impact analysis required under Executive Order 12866 ( 5 U.S.C. 601 note; relating to regulatory planning and review) and other authorities; and (B) instructs Federal agencies to include discount rates of 3 and 7 percent and evaluate the costs and benefits of the regulatory action that accrue to citizens and residents of the United States; (3) the social cost of carbon estimates were first developed in 2009 by an interagency working group that included the Secretary of Energy and the Administrator of the Environmental Protection Agency and fail to comply with the 3- and 7-percent discount rates prescribed by the document of the Office of Management and Budget entitled Circular A–4 and dated September 17, 2003; (4) while the document of the Office of Management and Budget entitled Circular A–4 and dated September 17, 2003, specifies that, in carrying out an evaluation of the global effects of a rule, regulation, or action, the evaluation shall be reported separately from domestic costs and benefits of that rule, regulation, or action, the social cost of carbon instead calculates the global benefits in lieu of, not in addition to, the domestic effects of a rule, regulation, or action; (5) the use of the social cost of carbon estimates in rulemakings by the Secretary of Energy and the Administrator of the Environmental Protection Agency without an opportunity for public notice and comment violates scientific peer review requirements and the commitment of the President to transparent and open government, as outlined in the memorandum of the President entitled Transparency and Open Government: Memorandum for the Heads of Executive Departments and Agencies and dated January 21, 2009; (6) in July 2015, as part of a revision of the social cost of carbon in response to over 150 substantive comments and in acknowledgment of the faulty process by which the social cost of carbon estimates were developed, the Director of the Office of Management and Budget requested that the National Academies of Science, Engineering, and Medicine review and make recommendations for the improvement of the social cost of carbon estimates; (7) shortly after the commencement of the review referred to in paragraph (6), the Administrator of the Environmental Protection Agency used the social cost of methane estimate developed by the Administrator of the Environmental Protection Agency, without appropriate peer review or opportunity for public notice and comment, to justify the costs and benefits of— (A) the proposed rule entitled Oil and Natural Gas Sector: Emission Standards for New and Modified Sources (80 Fed. Reg. 56593 (September 18, 2015)); and (B) the final rule entitled Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources (81 Fed. Reg. 35824 (June 3, 2016)) and the accompanying regulatory impact analysis entitled Regulatory Impact Analysis of the Final Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources , prepared by the Environmental Protection Agency, Office of Air and Radiation, in May 2016 and identified by docket ID number EPA–HQ–OAR–2010–0505–7630; (8) continued use of the social cost of carbon and the social cost of methane by the Secretary of Energy and the Administrator of the Environmental Protection Agency ignores sound science for the purpose of eliminating the exploration, mining, production, and use of the abundant domestic sources of fossil fuel energy of the United States; and (9) the regulations of the Secretary of Energy and the Administrator of the Environmental Protection Agency are costing families of the United States billions of dollars each year and are justified, in large part, by the social cost of greenhouse gases, including the social cost of carbon and the social cost of methane. 3. Definitions In this Act: (1) Administrator The term Administrator means the Administrator of the Environmental Protection Agency. (2) Secretary The term Secretary means the Secretary of Energy. (3) Social cost of carbon The term social cost of carbon means— (A) the social cost of carbon described in— (i) the document entitled Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 , published by the Interagency Working Group on Social Cost of Carbon, United States Government, in February 2010; or (ii) (I) the document entitled Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 , published by the Interagency Working Group on Social Cost of Carbon, United States Government, in May 2013 and revised in November 2013 and July 2015, and published and revised by the Interagency Working Group on the Social Cost of Greenhouse Gases, United States Government, in August 2016; or (II) any successor or substantially related document; and (B) any other estimate of the monetized damages associated with an incremental increase in carbon dioxide emissions in a given year. (4) Social cost of greenhouse gas The term social cost of greenhouse gas means— (A) the social cost of any greenhouse gas that is described in any successor document to— (i) the document entitled Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 , published by the Interagency Working Group on Social Cost of Carbon, United States Government, in February 2010; or (ii) the document entitled Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 , published by the Interagency Working Group on Social Cost of Carbon, United States Government, in May 2013 and revised in November 2013 and July 2015, and published and revised by the Interagency Working Group on the Social Cost of Greenhouse Gases, United States Government, in August 2016; or (iii) the document entitled Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide , published by the Interagency Working Group on Social Cost of Greenhouse Gases, United States Government, in August 2016; and (B) any other estimate of the monetized damages associated with an incremental increase in greenhouse gas emissions in a given year. (5) Social cost of methane The term social cost of methane means— (A) the estimate of the social cost of methane described in— (i) the proposed rule entitled Oil and Natural Gas Sector: Emission Standards for New and Modified Sources (80 Fed. Reg. 56593 (September 18, 2015)); (ii) the final rule entitled Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources (81 Fed. Reg. 35824 (June 3, 2016)); (iii) the regulatory impact analysis entitled Regulatory Impact Analysis of the Final Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources , prepared by the Environmental Protection Agency, Office of Air and Radiation, in May 2016 and identified by docket ID number EPA–HQ–OAR–2010–0505–7630; or (iv) (I) the document entitled Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide , published by the Interagency Working Group on Social Cost of Greenhouse Gases, United States Government, in August 2016; or (II) any successor or substantially related document; and (B) any other successor or substantially related estimate. (6) Social cost of nitrous oxide The term social cost of nitrous oxide means— (A) (i) the social cost of nitrous oxide described in the document entitled Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide , published by the Interagency Working Group on Social Cost of Greenhouse Gases, United States Government, in August 2016; or (ii) any other successor or substantially related document; and (B) any other estimate of the monetized damages associated with an incremental increase in nitrous oxide emissions in a given year. 4. Prohibition on considering the social cost of greenhouse gas, including the social cost of carbon, the social cost of methane, and the social cost of nitrous oxide (a) In general The Secretary, under any authority, and the Administrator, under the Clean Air Act ( 42 U.S.C. 7401 et seq. ), may not consider the social cost of carbon, social cost of methane, social cost of nitrous oxide, or social cost of greenhouse gas— (1) as part of any cost-benefit analysis required under— (A) any law; (B) Executive Order 12866 ( 5 U.S.C. 601 note; relating to regulatory planning and review); or (C) Executive Order 13563 ( 5 U.S.C. 601 note; relating to improving regulation and regulatory review); (2) in any rulemaking; (3) in the issuance of any guidance; (4) in taking any other agency action; or (5) as a justification for any rulemaking, guidance document, or agency action. (b) Exception The Secretary and the Administrator may consider the social cost of carbon, social cost of methane, social cost of nitrous oxide, or social cost of greenhouse gas in carrying out an activity described in subsection (a) only if, after the date of enactment of this Act, a Federal law is enacted that explicitly authorizes the consideration. 5. Report of the Administrator Not later than 120 days after the date of enactment of this Act, the Administrator, in coordination and consultation with the Secretary, the Secretary of the Interior, and the Council on Environmental Quality, shall submit to the Committees on Environment and Public Works and Energy and Natural Resources of the Senate and the Committees on Energy and Commerce and Natural Resources of the House of Representatives a report describing the number of proposed and final rulemakings, guidance documents, and agency actions that, since January 2009, have used the social cost of carbon, the social cost of methane, or the social cost of nitrous oxide, including the use of the social cost of carbon, the social cost of methane, or the social cost of nitrous oxide as part of any cost-benefit analysis required under Executive Order 12866 ( 5 U.S.C. 601 note; relating to regulatory planning and review) or other relevant authority.