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Rolling back the EPA

The EPA’s new Utility MACT rule survived on June 20th as Senator Inhofe’s S.J. Res. 37 failed to pass the Senate. His resolution would have prevented the EPA’s expansive new rule from going into effect. 

In response to its passage, a new bill is being constructed by Senator’s Lamar Alexander (R-Tenn.) and Mark Pryor (D-Ark) that would delay the implementation of EPA’s new rule until the year 2018. Although this would allow power plants more time to adjust to the new regulation, it is not a long-term solution. And the prospects of new coal plants being built in America continue to look dim. The costly new mandates of the Utility MACT rule have put the final coffin in any attempts by the coal industry to expand and survive. 

But the EPA is not done yet. The Cross-State Air Pollution Rule (CSAPR), finalized in July of 2011, is yet another economically damaging rule. The CSAPR would impose caps in 26 eastern states, as well as Texas, on sulfur dioxide and nitrogen oxide. This new rule is “one of the most costly, burdensome and arbitrary” ever issued under the Clean Air Act, according to one of over 36 lawsuits filed against the EPA. 

A study was done by the National Economic Research Associates (NERA) on the four most current EPA rules, including Utility MACT, CSAPR, policies to regulate coal combustion residuals (CCR) under the Resource Conservation and Recovery Act, and policies to regulate cooling water intake under Section 316(b) of the Clean Water Act. Their findings on the negative effects of these four new rules are quite alarming:

“Over the period from 2012 to 2020, about 183,000 jobs per year are predicted to be lost on net due to the effects of the four regulations. The cumulative effects mean that over the period from 2012 to 2020, about 1.65 million job-years of employment would be lost. As noted, these net employment losses reflect net gains in some sectors and net losses in others. Of the 70 sectors in the REMI PI+ model, sectors that would gain jobs account for about 55,000 added jobs per year on average, and sectors that would lose jobs account for about 238,000 fewer jobs per year on average. On a cumulative basis over the period from 2012 to 2020, the sectors that would gain jobs represent about 499,000 job-years, and the sectors that would lose jobs represent about 2,149,000 job-years. U.S. GDP would be reduced by $29 billion each year on average over the period, with a cumulative loss from 2012 to 2020 of $190 billion (2010$). U.S. disposable personal income would be reduced by $34 billion each year on average over the period, with a cumulative loss from 2012 to 2020 of $222 billion (2010$). The average annual loss in disposable personal income per household is $270, with a cumulative present value loss of about $1,750 (2010$) over the period from 2012 to 2020.”

The rampage of the EPA on coal plants must be stopped. It’s not just an attack on power plants, but on the American people as well. Between job losses and a sharp rise in electricity bills, disproportionately hurting those with lower and fixed incomes, the negative results of EPA regulation outweigh the positives. 

Despite all of this new regulation, the EPA surges on. By 2015 the latest rules of the EPA’s New Source Performance Standards (NSPS) will be implemented. Concern over the NSPS’s job killing and cost raising regulation has been raised by the American Petroleum Institute and non-profit public policy groups such as the Competitive Enterprise Institute (CEI). According to Marlo Lewis of CEI, the EPA’s new NSPS, also known as the Carbon Pollution Rule, is a devastating new regulation. It would effectively ban the possibility of new coal-fired power plants from being built in America by making emission standards impossibly high. The rule goes back on the EPA’s promise that the NSPS would not require fuel switching from coal to gas and it stretches the powers given to the EPA by the Clean Air Act (CAA) all the while driving up energy prices by restricting energy supply.      

In addition to the EPA’s ambitious agenda, what should also be feared is a potential series of “midnight regulations” passed by the Obama administration if he loses the election in November. Historically, when a president’s term has ended, he tends to pass controversial regulations in the weeks before leaving the White House. House Speaker John Boehner (R-Ohio) and Senate Republican Leader Mitch McConnell (R-Ky.) have already sent letters to President Obama raising concerns about potential midnight regulations.

So what can be done to rein in the EPA’s draconian regulation on American businesses and on the American people? A bill must be proposed in Congress to reverse the effects of the Utility MACT rule, the Cross-State Air Pollution Rule, and other EPA job-killing regulation. Bipartisan efforts are underway to introduce new legislation specifically addressing the costs of these regulations. In addition, to provide better oversight and prevent future regulatory excess, a bill has been introduced by Rep. Geoff Davis (R-Ky.) called the REINS Act. The REINS Act would limit the power of the EPA by forcing all its new “major rules”, costing a $100 million or more, to go through Congress before enacted. Congress must do a better job at protecting the American people from the runaway regulatory power of the EPA. Efforts must also be taken to restrict the EPA’s jurisdiction under the Clean Air Act (CAA), and make sure the Science Advisory Board (SAB) is doing a better job at making sure new regulations are scientifically sound and economically feasible for American businesses.   


Alan Biddle

Senator Alexander is getting a huge, negative response from his constituents over his vote. This just looks like some cover, as he may well have a serious primary challenger in 2014.