William Yeatman

Today, the Environmental Protection Agency imposed on Montana a Federal Implementation Plan under the Regional Haze Rule that will cost scores of millions of dollars, but achieve no discernible purpose.

Specifically, EPA is requiring $82 million in unnecessary capital expenditures at the Colstrip coal-fired power plant located east of Billings, Montana, in order to engender an ‘improvement’ in visibility that is imperceptible to the eye.

Don’t take my word for it! See the images directly below. They depict the visibility “benefits” wrought by EPA’s regulations. They were generated using WinHaze visibility modeling software, with inputs from EPA data.

Notably, these mandated controls are 500% more expensive than what EPA’s standing rules presume to be “cost-effective.” Given that the benefits are invisible, the severity of these Regional Haze requirements suggests that EPA’s motivations were political.

Remember, environmental special interests are a significant component of the President’s organizational base. And for them, coal is evil, because it is “dirty.” That’s why, way back in 2008, then-Senator Barack Obama told the San Francisco Chronicle editorial board that he would “bankrupt” the coal industry if elected President. Now, EPA is following through on the President’s promise. The powers of the presidency are the means by which he satisfies the environmentalists’ desired ends. To be sure, it’s an American outrage that the fate of an entire industry can thus be subjected to the capricious winds of presidential politics, but that’s a different blog post. For now, it suffices to say that this Administration is imposing billions of dollars of costs, in the midst of difficult economic times, in order to placate a political constituency, and for nothing else.

In mid-June, Sen. Lamar Alexander (R-Tenn.) led the opposition against S. J. Res. 37, legislation that would have blocked EPA’s all pain, no gain Utility Maximum Achievable Control Technology (MACT) regulation. On the floor of the Senate, he explained that the Utility MACT would prevent out-of-state pollution from hurting business in Tennessee, but this claim is false. According to EPA data, Tennessee’s compliance with Clean Air Act regulations is not adversely affected by air pollution from neighboring States. In light of the evident falsity of his avowed rationale for protecting the Utility MACT, Sen. Alexander’s true motivations for opposing S. J. Res. 37 were inexplicable.

Last week, however, the mystery of Sen. Alexander’s support for the Utility MACT appears to have been solved. The Environmental Defense Action Fund announced on Tuesday that it will spend $200,000 on television advertisements in Tennessee thanking Senator Lamar Alexander for “protecting the children.”

This blog leads the league in posts about EPA’s Regional Haze power grab. In a nutshell, the Agency is usurping the States’ rightful authority to set visibility improvement policy pursuant to a Clean Air Act provision known as Regional Haze.

EPA’s actions are out-of-bounds for two reasons: (1) The legal and regulatory history of the Regional Haze rule unequivocally demonstrates that the States—and not federal regulators—are the lead decision-makers; and (2) EPA’s preferred controls cost billions more than the States’ controls, in order to achieve a visibility “improvement” that is invisible to the naked eye.

To date, EPA’s has imposed nearly $400 million annually in unjustified costs on New Mexico, Oklahoma, and North Dakota. The Agency has proposed to impose almost $120 million per year in costs beyond what Wyoming and Nebraska officials had deemed to be appropriate. Arkansas, Utah, Arizona and Minnesota are next.

I’ve written regulatory filings, studies, opeds, and blogs about EPA’s Regional Haze program, and last week I was invited to testify about it before the Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform of the House Oversight and Government Reform Committee. My written testimony can be found here or here. Below, I’ve pasted video of my opening statement.

The Senate this week has an opportunity to check one of EPA’s worst regulations: the Mercury and Air Toxics Standards Rule, also known as the Utility MACT. On Wednesday, the upper chamber of Congress will vote on S. J. Res. 37, a Congressional Review Act resolution of disapproval that would effectively block the Utility MACT.

To read more about the merits of S. J. Res. 37, click here and here. Suffice it to say for this post, EPA’s Utility MACT would cost $10 billion annually, making it one of the most expensive regulations ever. It would also ban the construction of new coal-fired power plants. As against these compliance costs, the Utility MACT’s purpose is to protect a supposed population of subsistence fisherwomen, who consume 225 of pounds of self-caught fish, from exclusively the 90^th percentile most polluted bodies of water, during their pregnancies. I sincerely doubt that these women exist. My doubts are exacerbated by EPA’s failure to identify a single member of this putative population. Instead, they are modeled to exist.

For Members of the Senate—but especially among Members of the Minority Party—a “yes” on S. J. Res. 37 should be a no-brainer. After all, the Utility MACT is all pain and no gain. Inexplicably, however, Sen. Lamar Alexander (R-Tenn.) has steadfastly opposed the bill. I say “inexplicably” because Sen. Alexander’s rationale for opposing S. J. Res. 37 makes no sense.

According to Sen. Alexander, the Utility MACT would help Tennessee by reducing upwind air pollution that crosses into the Volunteer State, thereby making more difficult compliance with federal air quality regulations. In a speech last week, Alexander explained his thinking:

“I believe the EPA is right…and the reason is that it will stop dirty air from blowing into Tennessee because they are gong to require utilities from other states to put on the same pollution control equipment that TVA is putting on and we are going to pay for. So if we are going to do it, then they should do it because they are the source of a lot of our air pollution.”

Simply put, this is nonsensical. For starters, Tennessee’s air shed is already protected from upwind pollution by the “Good Neighbor” provision of the Clean Air Act. As its name would suggest, this provision requires that upwind States mitigate any pollution that adversely affects air quality in downwind States. Pursuant to the Good Neighbor provision, EPA last summer promulgated the Cross-State Air Pollution Rule, the purpose of which is to “stop dirty air from blowing into Tennessee” (to borrow Sen. Alexander’s terminology). Given that both the statute and code of federal regulations already protect Tennessee from upwind pollution, Sen. Alexander’s justification for supporting the Utility MACT is basically a call for duplicative regulation.

Sen. Alexander’s anti-S. J. Res. 37 reasoning is rendered even sillier by the fact that Tennessee is not currently victimized by out of state air pollution. If you follow this link to EPA’s website on the Cross-State Air Pollution Rule, there’s an interactive map that demonstrates all the “linkages” between upwind pollution and downwind areas whose ambient air quality is in violation of Clean Air Act standards. If you slide your mouse over Tennessee, it becomes evident that there are no upwind-downwind linkages adversely affecting Tennessee. Rather, the arrows are all pointing outside of the State, meaning that it is Tennessee about which neighboring States should worry.

In light of the fact that Sen. Alexander’s avowed justification for opposing S. J. Res. 37 is wrong, I remain perplexed as to why he seems to be doing everything in his power to protect the Utility MACT.

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.

By a 293-127 vote, the House of Representatives yesterday adopted a short-term extension of the federal highway bill. Fourteen Republicans voted against it, while sixty-nine Democrats voted for passage. The original highway bill, known as the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, was enacted in 2005. Yesterday’s action was the 10th extension passed by the House since the original SAFETEA-LU surface transportation law expired in 2009.

The House’s bill would extend highway funding for 90 days. In March, the Senate passed a bill that would extend it for 2 years. Next, House and Senate leaders from both parties will convene a conference committee, through which they’ll try to hammer out compromise language acceptable to both Congressional chambers.

Alas, it is extremely likely that little good will come of the Conference, at least with regards to transportation policy. The House bill only perpetuates a broken system. For more on the ills of the status quo, read these articles by my colleague Marcus Scribner. To be fair to the House, the Senate bill is much more terrible. It includes all sorts of special favors and gives-aways to special interests. Thus, the negotiating positions in the Congressional Conference are bad and worse!

The only language in either chamber’s bill that warrants ultimate passage is that pertaining to energy policy, and it comes exclusively from the version approved yesterday by the House. Indeed, these energy policy provisions are excellent.

For starters, the legislation included language that would fast-track the Keystone XL Pipeline, the $7 billion, shovel-ready project to deliver up to 830,000 barrels a day of tar sands oil from Canada to U.S. Gulf Coast refineries. Specifically, the legislation would give the Federal Energy Regulatory Commission thirty days to approve the project. This provision, if enacted, would effectively override the President’s self-serving decision* to veto the project.

The House’s bill also included an amendment that would block EPA from subjecting coal combustion byproducts, known as coal ash, to ultra-stringent regulations meant for hazardous wastes. Such a designation flies in the face of reason, given that almost 50 percent of coal ash is used to supplement cement in the production of concrete. The amendment would protect the coal ash recycling industry from becoming collateral damage in EPA’s war on coal.

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Energy policy in Georgia isn’t made by the State legislature. Nor is it made by Governor Nathan Deal. Indeed, energy policy in Georgia isn’t made by any public official in the State. Instead, the most important energy decisions in Georgia are rendered by unelected EPA bureaucrats and environmentalist lawyers.

Welcome to energy policymaking in the Obama age.

Georgia is one of the fastest growing States in the nation. With more people necessarily comes higher demand for electricity. In order to meet the State’s growing need for power, a consortium of non-profit local utilities known as Power4Georgians (P4G) planned on building two 850 megawatt coal fired power plants, one in Washington County and the other in Ben Hill County.

P4G intended to build the Washington County plant first, but the project has been held in up for two years in the courts by relentless anti-coal environmentalist litigation organizations led by the Sierra Club’s “Beyond Coal Campaign.” This is demonstrated by the following brief timeline:

• On April 8, 2010, the Georgia Environmental Protection Division issued the final air permits for Power4Georgian’s proposed coal-fired power plant in Washington County. They were immediately challenged by environmentalist litigants led by the Sierra Club.
• On December 16, Georgia Judge Ronit Walker ruled in favor of the environmentalist petitioners and rejected the air permit for Power4Georgians’ proposed coal-fired power plant in Washington County.
• On November 21, 2011, Georgia environmental regulators re-issued an air permit for the proposed coal-fired power plant in Washington Country.
• On December 16, 2012 the Southern Environmental Law Center and GreenLaw challenged the Georgia Environmental Protection Division’s air quality permit in the Georgia Office of State Administrative Hearings on behalf of the Fall-line Alliance for a Clean Environment, Ogeechee Riverkeeper, Sierra Club’s Georgia Chapter, and Southern Alliance for Clean Energy.

EPA acted as a de facto intervener on behalf the environmentalist petitioners. As this blog has explained repeatedly, EPA is now waging a regulatory war on the coal industry. The Agency is imposing a series of senseless regulations that serve no public health purpose, and whose only function seems to be to price coal out of the electricity market.

In particular, the challenges brought by Sierra Club et al. relied on EPA’s ridiculous Mercury and Air Toxics Standard. By EPA’s own estimate, the mercury regulation would cost $10 billion annually, and its purpose is to protect America’s supposed population of pregnant, subsistence fisherwomen, who consume more than 300 pounds per year of self caught fish from fresh, inland water bodies. EPA fails to identify any of these purported victims. Rather, they are modeled to exist.

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