The EPA's War on Jobs
Monday, June 13, 2011
The EPA's War on Jobs
Coal is from Earth, Lisa Jackson is from mercury.
President Obama's jobs council will make its first
recommendations today on lifting hiring and strengthening the
economy. Too bad the message doesn't seem to be reaching the
Administration's regulators, in particular the Environmental
Protection Agency.
The EPA is currently conducting a campaign against coal-fired
power and one of its most destructive weapons is a pending
regulation to limit mercury and other hazardous air pollutants like
dioxins or acid gases that power plants emit. The 946-page rule
mandates that utilities install "maximum achievable control
technology" under the Clean Air Act-and even by the EPA's lowball
estimates, it is the most expensive rule in the agency's
history.
In 1990, Congress gave the EPA discretion to decide if mercury
regulation is "necessary and appropriate," and the Clinton
Administration did so in its final days. The Bush Administration
created a modest mercury program, only to have it overturned by an
appeals court on technical grounds in its final days. The case was
still in litigation when Mr. Obama took office, and his appointees
used the opening to strafe the power industry, proposing a much
more stringent rule.
The EPA issued the utility rule in March, with only 60 days for
public comment. Basic administrative practice usually affords
between 120 and 180 days, especially for complex or costly
regulations of this scale. The proposal was obviously rushed, with
numerous errors like overstating U.S. mercury emissions by a factor
of 1,000. The word in Washington is that the openly politicized
process unsettled even the EPA's career staff.
The agency estimates that the utility rule will cost $10.9
billion annually but will yield as much as $140 billion in total
health and environmental benefits. Sounds like a deal. But most of
those alleged benefits are indirect-i.e., not from the mercury
reductions that the rule is supposed to be for. Rather, they come
from pollutants ("airborne particles") that the EPA already
regulates under other parts of the Clean Air Act. A good analogy is
a corporation double-counting revenue.
According to the EPA's own numbers, every dollar in direct
benefits costs $1,847. The reason is that electric generation-yes,
even demon coal-results in negligible quantities of air pollutants
like mercury. And mercury is on the decline: In 2005, the entire
U.S. coal fleet emitted 26% less than the EPA predicted.
The real goal of the EPA's rule is to shut down fossil fuel
electric power in the name of climate change. The consensus
estimate in the private sector is that the utility rule and eight
others on the EPA docket will force the retirement of 60 out of the
country's current 340 gigawatts of coal-fired capacity. Reliability
downgrades will hit the South and Midwest where coal energy is
concentrated. American Electric Power recently announced that the
rules will force it to shut down five plants in West Virginia and
Ohio, a quarter of its coal fleet.
The power industry estimates that the true costs of the utility
rule will far exceed the EPA estimates, which of course will be
passed to consumers and businesses as higher prices. The
International Brotherhood of Electrical Workers, normally a White
House union ally, says the rule will destroy 50,000 jobs and
another 200,000 down the supply chain. That's more jobs lost than
if Boeing went bust.
Astonishingly, EPA Administrator Lisa Jackson claimed in March
that the utility rule is "expected to create jobs," because it will
"increase demand for pollution control technology" and "new workers
will be needed to install, operate, and maintain" it. In other
words, the government should harm an industry and force it to ruin
working assets so maybe other people can clean up the mess.
Such theories help explain why the economic recovery and job
creation are far weaker than they ought to be, but the good news is
that even many Democrats are beginning to push back against the
EPA's willful damage. The least Congress can do is force the EPA to
delay the final utility rule to allow for more public debate,
though a better option would be to junk it.