On Monday, EPA announced it was delaying its proposed rules that would apply greenhouse gas emission standards to power plants. EPA said it would push the proposal back from July to September to allow more time to consider comments. EPA still expects to finalize the rule by May 2012.
Its no secret that EPA regulations have been the focus of intense scrutiny due to the costs and the potential impacts on the country’s struggling economic recovery. Over the last several months EPA has delayed rule after rule. The delays include:
- Greenhouse gas rules for power plants (NSPS)
- Industrial/Commercial boiler rule (MACT)
- Ozone Federal Air Quality Standards (NAAQS)
- Fine Particle Air Quality Standards (NAAQS)
Each time EPA delays one of the major rules, it claims the delay is to consider more information or to allow for more public comment. Yet the frequency of the announced delays coupled with the timing suggests the Obama Administration is concerned with protecting the fragile economic recovery or it is simply responding to intense political pressure.
Debate Pitting Economy Versus the Environment Intensifies
EPA’s regulatory actions are under intense pressure on Capitol Hill. Republicans and some conservative Democrats have targeted the EPA rules, in particular those that impact power plants due to their potential to raise energy prices or de-rail the recovery.
While the announced delays may temporarily reduce the pressure on the Agency, in reality the delays have done nothing to cool down the rhetoric used on both sides. For example, Lisa Jackson testified before the Senate and disparaged lobbyists who had advocated against the new EPA rules:
“While Americans across the country suffer from this pollution, special interests who are trying to gut long-standing public health protections are now going so far as to claim that these pollutants aren’t even harmful. These myths are being perpetrated by some of the same lobbyists who have in the past testified before Congress about the importance of reducing mercury and particulate matter. Now on behalf of their clients, they’re saying the exact opposite.”
On the other side, AEP highlighted potential impacts to the economy last week by announcing the potential closure of a number of power plants and huge new compliance costs if the EPA rules moved forward. AEP said it would retire nearly 6,000 megawatts (MW) of coal-fueled power generation and switch to natural gas at many of its plants at an estimated cost of $6 billion to $8 billion by the end of the decade.This from a Press Release issued by AEP:
"We have worked for months to develop a compliance plan that will mitigate the impact of these rules for our customers and preserve jobs, but because of the unrealistic compliance timelines in the EPA proposals, we will have to prematurely shut down nearly 25 percent of our current coal-fueled generating capacity, cut hundreds of good power plant jobs, and invest billions of dollars in capital to retire, retrofit and replace coal-fueled power plants. The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling,” said Michael G. Morris, AEP chairman and chief executive officer.
EPA Delays Are Simply a Pyrrhic Victory
Each time EPA announces a delay, the Agency claims it will take a second look at its proposals. Yet, EPA seems very unlikely to make any fundamental changes. While some may view the announced delays as victories, it is only so long before either the rules will be released by EPA or EPA will be compelled by the courts to act.
A popular political strategy has been to attack the science behind EPA’s proposals in hopes of deflecting the proposal entirely. This "all or nothing" approach is unlikely to ultimately succeed given the 60 votes needed in the Senate to make changes to the statutes that shape the rules.
Rather than challenge the science in hopes of avoiding regulations altogether, it would be good to see meaningful policy discussion around the regulatory approach behind these major proposals:
- Ozone and Fine Particle- Time frames for compliance need to be reasonable and should be properly coordinated with existing federal rules that will drive down emissions. Also, as our air gets cleaner, improvements become more difficult. Do we cross a threshold where costs should be part of the equation in setting standards?
- Greenhouse gas– Application of the New Source Review program to greenhouse gas emissions is a recipe for disaster. While Cap and Trade became a dirty word, it offered a far more flexible approach than command and control regulations.
- Commercial/Industrial Boilers- EPA’s method for establishing the standards was based upon cherry picking the best emission rates for each individual pollutant from units across the country. A real effort needs to be made at looking at what is realistically achievable.
Unfortunately, meaningful discussion seems unlikely in today’s political environment.