PACE in National Journal: EPA Disregards Facts, Ignores Recent Improvements

The National Journal this week posed the question to its panel of energy experts, “What are the economic, health and political significance of President Obama’s mercury standards for power plants?” Furthermore, “What are the factors that EPA should consider when implementing the rule? What are the longer term implications of this rule in terms of both public health and the economy? What, if anything, should Congress do in reaction to this rule?”

In response, PACE Executive Director Lance Brown submitted the following response, which was published on December 19th. The full text of the response appears below.

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Considering all of the troubling information that has been brought to light since the introduction of Utility MACT, it is incredibly discouraging that the EPA moved forward in finalizing the controversial rule – even though a diverse group of elected officials, federal regulators, power suppliers and grid operators have highlighted how the rule stands to put significant stress on consumers, local and national economies, and the reliability of the power grid. The EPA and the Administration have continually ignored any evidence that challenges the rule, which itself suffers from statistical errors, inaccurate technological assumptions, and inadequate economic and reliability analysis. In fact, a recent Associated Press survey found that more than “32 mostly coal-fired power plants in a dozen states will be forced to shut down and an additional 36 might have to close because of new federal air pollution regulations.”

It was recently reported that internal Federal Energy Regulatory Commission (FERC) emails to the White House illustrate FERC’s own reliability concerns created by the Utility MACT. David Kathan, a senior economist at FERC stated in an email, “I don’t think there is any value in continuing to engage EPA on the issues; EPA has indicated that these are their assumptions and have made it clear they will not change anything on reliability or gas availability in the proposed rule.” FERC actually went so far as to ask that the EPA change the notation that they had “worked closely with FERC and the DOE” on reliability concerns stemming from Utility MACT during an interagency review. It is clear that FERC agrees Utility MACT will put America’s energy security at serious risk.

In allowing the EPA to move forward in finalizing Utility MACT, the Administration is choosing to turn a blind eye to its own Executive Order issued in January 2011 stating that the regulatory system must promote economic growth, job creation, and predictability while reducing uncertainty. The EPA power-sector rules will not only cost nearly $11 billion annually, but it will also impose significant costs on consumers and on industries that depend on affordable and reliable power to remain competitive in the international marketplace. For every one job that may be created in order to comply with the rule, we expect four higher-paying energy and manufacturing jobs to be lost. That’s a loss of more than one million jobs in the next decade.

The projected benefits of Utility MACT have been way overblown by its proponents in an effort to increase support. There has not been a specific MACT rule since the Bush Administration’s Clean Air Mercury Rule, which was set aside more than six years ago. However, power-plant mercury emissions have continued to decline substantially over this period. Most of the rule’s benefits come from reducing soot emissions. Yet, those emissions are already well controlled by the Clean Air Act, so Americans can only expect a few incremental health benefits from this expensive rule. Maybe that’s why the EPA has yet to make its final rule public – or even signal when it might – drawing criticism from environment, public health and industry groups alike.

Many in Congress have recognized the need to take action against Utility MACT. Senator Jim Inhofe has filed a joint resolution disapproving the rule, an effort that I support and urge his peers to follow suit. An overturning of Utility MACT will send an important message to the EPA and the Administration. The EPA should have recognized recent emissions improvements before implementing a rule with unrealistic deadlines for compliance. The end result will restrain domestic energy, endanger jobs, and saddle consumers with higher power bills.