Senate Deliberates on Vote to Check EPA’s All Pain and No Gain Utility MACT

by William Yeatman on June 13, 2012

in Blog

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Here at the Competitive Enterprise Institute, we have been busy trying to inform Members of the Senate about S. J. Res. 37, legislation that would block EPA’s outrageous new Mercury and Air Toxics Standards Rule, also known as the Utility MACT.

EPA’s Utility MACT, simply put, is an affront to common sense. Industry and EPA agree that it would cost electricity ratepayers almost $10 billion per year, making it one of the most expensive regulations ever. Worse, it would effectively ban the construction of new coal-fired power plants, by establishing mercury emissions limits that are a third of detectable levels. Because pollution control equipment vendors cannot even measure the emissions limit required by the Utility MACT, they cannot offer a guarantee that new coal-fired power plants will be in compliance with the regulation. And without such a guarantee, utilities are unable to raise capital to build new coal-fired electricity generating units.

And for what? The regulatory purpose of the Utility MACT is to protect a supposed population of subsistence fisherwomen, who eat 225 pounds of self- or family-caught fish, from exclusively the 90th percentile most polluted fresh, inland water bodies, during their pregnancies. Notably, EPA has never identified a single member of this putative population; rather, they are modeled to exist.

To be sure, politics, not science, is the impetus for the Utility MACT. Environmental special interests form one of President Obama’s core constituencies. They have made no secret of their desire to close every single coal-fired power plant in America. The Sierra Club, for example, runs a “Beyond Coal” campaign that boasts of shutting down almost 43,000 megawatts of coal-fired electricity generation. While campaigning for the Oval Office, then-Senator Barack Obama openly identified with the anti-coal sentiment of his green base. In 2008, he infamously told the San Francisco Chronicle editorial board that he would, as President, “bankrupt” the coal-industry. Now, his EPA is fulfilling this promise.

In order to rein in EPA’s anti-coal agenda, Senator James Inhofe introduced S. J. Res. 37, legislation that would block the Utility MACT. The vote is expected by next Wednesday at the latest, and it could happen as soon as this week.

Yesterday, CEI published a study intended to inform the Senate debate on S. J. Res. 37, titled “All Pain and No Gain: The Illusory Benefits of the EPA’s Utility MACT.” It was authored by my CEI colleagues Marlo Lewis and Dave Bier, and also me.

Last evening, Forbes published an oped about the new study by Marlo Lewis. In the following excerpt, he explains the absurd cost-benefit ratios of the Utility MACT:

The EPA estimates that implementing the Utility MACT Rule will cost $9.6 billion in 2016. The agency also estimates that the required mercury reductions will provide $0.5 to $6 million in health benefits in the same year…For the HAP reductions that are the Rule’s statutory purpose, estimated costs exceed estimated benefits by 1,600 to one or even 19,200 to one.

In this morning’s Washington Examiner David Bier has a piece exposing EPA’s fraudulent economic analysis of the Utility MACT. The following passage aptly summarizes his point:

EPA’s conclusion that the Utility MACT will create coal jobs is based on a single paper by Resources for the Future’s Richard Morgenstern, which studied four industries in the 1980s — pulp and paper, plastics, steel and petroleum — and concluded that for every million dollars they spent on environmental compliance, 1.55 jobs were created in those industries.

Agency officials simply took this finding and plugged in the Utility MACT’s regulatory costs. If this sounds simplistic, they actually show their work in a footnote of their RIA — 1.55 jobs times $10.9 billion adjusted for inflation.

Using this formula, EPA can impose infinite costs on any industry and always claim that it will create jobs. Even if a rule costs trillions of dollars, EPA could still claim job growth!

How does EPA get away with this? With a little help from friendly environmental special interests, that’s how. Here’s how it works: Whenever lawmakers deliberate on a measure that would rein in EPA (be it a vote on EPA’s climate power grab; or its Clean Water Act power grab; or its Regional Haze power grab, or any of its power grabs), well-funded green groups like the Sierra Club, NRDC, or the League of Conservation Voters, immediately take to the airwaves to equate a vote against EPA with child abuse. This is a topic I’ve discussed before on this blog—see here, here, and here. Of course, these ads are nothing but lies. However, they are effective lies. No politician worth his or her salt wants to be accused of harming children. Thus, these green special interests have distorted the debate on environmental policy, such that common sense rarely prevails. As a result, EPA is free to implement the President’s political goals.

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