In an important ruling on EPA’s ability to develop regulations under the Clean Air Act, the U.S. Supreme Court on Monday ruled that the agency did not properly consider the costs of its new MATS rule. In May of 2012, PACE joined others in warning that the MATS rule, which governs the emission of mercury and other substances, “could ultimately be the costliest energy regulation in American history.” The rule will technically remain in place while the Court of Appeals for the District of Columbia Circuit decides how the EPA can proceed.
See the Full Text of the Ruling Here
The court’s 5-4 ruling, justices found that EPA should have considered the cost of its mercury regulation before setting limits in 2011. At the time, EPA offered estimates that the regulation would come with a minimal price tag, while producing billions in benefits and preventing thousands of deaths. However, many doubted the validity of EPA’s figures. According to EPA’s official analysis, for example, 99.98% of the benefits from the regulation come not from mercury reductions, but from projected improvements in air quality, which are already governed by other EPA rules.
In the majority ruling, Justice Antonin Scalia wrote that “EPA strayed well beyond the bounds of reasonable interpretation in concluding that cost is not a factor relevant to the appropriateness of regulating power plants.” Justices joining Scalia in the majority opinion were Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, and Anthony Kennedy.
EPA officials were predictably not happy with the court’s ruling, with spokeswoman Melissa Harrison stating, “EPA is disappointed that the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance.”
EPA’s spokesperson is correct, of course. For most utilities, spending to meet the agency’s mercury regulation is water under the bridge. With relatively short compliance deadlines, utilities were forced by EPA’s rule to either spend immediately to upgrade the control technology at existing plants or to shut down plants altogether, passing the costs of their decision along to customers. In that light, the court’s ruling on Monday might do little to roll back money already spent on mercury compliance, but it could serve as a warning to EPA that it must consider the costs of future regulations.
“The mere fact that the EPA wished to ignore the costs of its rules demonstrates how little the agency is concerned about the effects it has on the American people,” House Majority Leader Kevin McCarthy (CA) said in a statement. “The Supreme Court’s decision today vindicates the House’s legislative actions to rein in bureaucratic overreach and institute some common sense in rulemaking.”
The following blog piece comes from PACE Executive Director Lance Brown.
Just a few days ago, in a meeting of TVA’s Regional Energy Resource Council (RERC), I listened to RERC Chairman Dus Rogers express his complicated feelings about the closing of the Widows Creek coal-fired power plant. Rogers, whose day job is President and CEO of the Jackson County Economic Development Authority, knows the importance of energy projects to his county. He watched not long ago as the plug was pulled on Bellefonte Nuclear Plant, which originally started construction in 1974, and he watched again as a combination of factors spelled the doom of the Widows Creek plant. Rogers acknowledged that while both plants were shut down for valid reasons, the community they supported would feel the effects in lost jobs and lost tax revenue.
That’s why a revelation on Wednesday that Google would use the shuttered power plant as a data center was particularly timely. Sure, it’s big news when a national brand invests $600 million anywhere, but it couldn’t have come at a better time for Jackson County and the small communities that lay claim to Widows Creek.
“Having Google set up shop in our backyard will not only benefit Jackson County but also the entire region because we can say that one of the world’s best-known brands decided to be our partner,” Dus Rogers told the media.
According to figures released to the press, the Jackson County site will be Google’s 14th data processing center. When fully operational, it will employ 75 to 100 people with an average salary of $45,000. On Wednesday, a posting on Google’s official blog described the company’s reasoning for the initiative.
“This time, we’re doing something we’ve never done before: we’ll be building on the grounds of the Widows Creek coal power plant in Jackson County, which has been scheduled for shutdown,” the blog post states. “Data centers need a lot of infrastructure to run 24/7, and there’s a lot of potential in redeveloping large industrial sites like former coal power plants. Decades of investment shouldn’t go to waste just because a site has closed; we can repurpose existing electric and other infrastructure to make sure our data centers are reliably serving our users around the world.”
PACE has written extensively about data centers and the energy sector. In January of 2014, I explained to a gathering in Destin, Florida, that data centers now account for more than 2% of all global electricity use. The heavy use of power by the information sector is part of the reason that data-intensive companies like Google have chosen states like Alabama for their data center locations. A diverse power portfolio keeps prices down and power flowing.
“There is a lesson to be learned from the data center experience: no matter how the economy changes, affordable and reliable power will run it,” I wrote in the follow-up to my data center presentation. “Whether a company is making rolled steel or storing user-generated videos, jobs will depend on our nation’s ability to keep power prices low and electrons flowing.”
For its part, TVA has embraced the conversion of its former plant. The utility will directly serve the data center with electricity, helping to replace some of the lost tax revenue the county would have experienced from the total closure of the Widows Creek power plant. TVA also seems to recognize, though, that Google’s infusion of jobs and capital into Jackson County is more than just a decision about energy.
“The real mission isn’t electricity; the real mission is to improve the quality of life of the people who live here,” said TVA CEO Bill Johnson said. “Google could have located their next data center anywhere in the world, but they chose this site.”
The people of Jackson County are glad they did. And so am I.
Among the many narratives put forth in domestic energy discussions, the notion that the U.S. lags behind China in climate action remains one of the most popular. Whether it is US News reporting that China is outpacing America in renewable energy deployment or the World Wildlife Fund arguing that the Chinese are more aggressively embracing technology, the story being told to the domestic public is that U.S. policy makers can learn much from China’s approach to climate.
However, such a narrative belies what is happening in each of those nations. As PACE wrote about three years ago after a visit to China with economic development leaders, it is the Chinese who are actively using all of their energy resources to build the future, while U.S. policy seems intent only on blocking ours. True, the Chinese have invested heavily in renewable energy sources. But then again, they are investing heavily in all energy resources. While U.S. policy makers argue about an ‘all of the above’ approach to energy, China is busy developing ‘more of the above.’
In that context, a recent expose published by The Guardian should raise lots of questions for anyone focused on American energy and its role in the world. According to the report, “Chinese miners last year dug up 3.87 billion tonnes of coal, more than enough to keep all four of the next largest users – the United States, India, the European Union and Russia – supplied for a year.” The report goes on to add that “the fuel China dug up last year alone will produce around 9 billion tonnes of carbon dioxide as it burns, more than all the coal used around the world in 1990.”
Meanwhile, back home, the Environmental Protection Agency’s landmark mandate governing carbon dioxide emissions, called the Clean Power Plan, will shutter at least 45,000 megawatts of the U.S. coal-fired power fleet. Many voices, including PACE, have argued that the rule will increase power prices nationwide and endanger the reliability of the grid. Worst of all, EPA’s rule will have no real effect on climate change, a fact that Administrator Gina McCarthy admitted to the House of Representatives in September of 2013.
To be fair, China has made efforts to reduce its use of coal as part of the nation’s climate change policy, resulting in a slight drop in coal use for the first time in more than a decade. However, the sheer volume of China’s coal-fired generation should continue to raise eyebrows in Washington, DC, and throughout state governments.
China still dwarfs all developed nations, including the U.S. when it comes to carbon dioxide emissions. Moreover, China is producing about four times as much coal as the U.S., which is energy that will be used by someone, somewhere, with little hope of being burned as cleanly as it would by plants here at home.
As The Guardian puts it, “The problem for those fighting to keep global warming within 2 [degrees centigrade] though, is that Chinese demand has expanded so fast that anything short of a dramatic cut in coal use – something no one is even advocating – leaves terrifying amounts of carbon dioxide pumping into the atmosphere.”
The implications for U.S. policy should be clear. It is obvious that China intends to use the energy resources it has to compete in the global marketplace. That includes coal, and lots of it. That has implications for anyone concerned about climate change, but it also raises significant questions about the efficacy of U.S. climate measures. In particular, if even EPA’s chief admits that a U.S. carbon dioxide mandate won’t affect climate, why are we doing it?
Few in the energy debate suggest the U.S. should do nothing to reduce our nation’s carbon footprint. We should – and we are – through new environmental control technology and smarter energy use. But it should be clear by now that we can’t save the world alone. We can’t afford it. And given the picture painted by The Guardian, doing it alone isn’t possible either.