National Association of Manufacturers study outlines EPA-induced costs

Study shows EPA rules on coal-fired plants have higher costs than EPA says

Barry Cassell | Dec 04, 2012

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A new study from the National Association of Manufacturers finds major new U.S. Environmental Protection Agency rules could cost manufacturers hundreds of billions of dollars and eliminate millions of American jobs, noted the Republican majority on the House Energy and Commerce Committee in a Nov. 30 statement.

The NAM report analyzes the cumulative cost of new major EPA rules affecting the nation’s power sector, including the Utility Maximum Achievable Control Technology (MACT) Rule, the Boiler MACT Rule, the Coal Ash Rule, the Coal Combustion Residuals Rule, the Cooling Water Intake Structures Rule, the Cross-State Air Pollution Rule and the anticipated new National Ambient Air Quality Standards for Ozone.

The report finds compliance costs for the six regulations could total up to $111.2bn by EPA estimates and up to $138.2bn by industry estimates. Total capital expenditures are projected at $174.6bn to $539.3bn according to EPA data, and from $404.5bn to $884.5bn according to industry.

“EPA’s expansion of red tape is strangling job creators and American consumers at a time when they can least afford it. This report offers further evidence that EPA’s policies will hinder our economic recovery and the growth of American manufacturing,” said Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky. “Rather than burdening American businesses with high compliance costs and uncertainty, we need commonsense policies that will foster investment and help bring manufacturing jobs back to America.”

The GOP majority on the Energy and Commerce Committee, in an effort to beat back EPA, has been advancing legislation like the Energy Tax Prevention Act, the TRAIN Act, the EPA Regulatory Relief Act, and the Coal Residuals Reuse and Management Act.

Study cites impact of higher electricity prices on the economy

“One immediate and incontrovertible impact of these new regulations would be an increase in electricity prices,” said the NAM study.

“Utilities would incur costs of up to $142 billion in the short run to comply with only three of the dozens of EPA rules and would likely pass most of these costs through to their customers in the form of higher prices. Residential consumers would be affected directly, but electricity is also an intermediate good for business. It is consumed at the commercial and industrial levels in the course of producing and providing goods and services. As consumers of more than 28 percent of electricity production, manufacturers in the United States would see production costs rise.

"That would lead to higher prices of manufactured goods and services, resulting in lost sales at home and abroad, which, subsequently, would encourage layoffs and discourage new hiring and investment, render exports less competitive and ultimately suppress U.S. GDP," the study continued.

Given the impact of potential costs, it would be prudent for policymakers and the public to take a serious look at the assumptions and analyses supporting the EPA’s assessments and compare those to recent industry studies, the study said. “In light of the precarious state of the U.S. economy and national goals for U.S. businesses to invest, hire and double the value of export sales by the end of 2014, burdening the economy with costly regulations in pursuit of highly uncertain benefits would further discourage economic growth with little or no potential public health gain,” it added.

The study said that several factors account for the differences between the industry’s and the EPA’s estimates of costs of compliance with these rules. For instance, it said, compared to industry estimates, the EPA:

includes more aggressive assumptions about the capacity of the industry to comply;

underestimates the true likely impact of the financial burden on the industry by assuming long-term amortization of capital requirements;

excludes real compliance costs attributed to compliance with other rules when those rules remain in doubt or under legal risk; and

fails to account for the costs of its regulations on the broader economy.


Barry Cassell is chief of coal generation for GenerationHub, a unit of Energy Central

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Comments

We should be able to measure it before we regulate it

After reading the entire NAM report, and being all for clean air and water, I'm thinking it's probably a good thing to be able to measure the emission before it is regulated.  According the the NAM report, regulated mercury levels are approx 1/3rd of the detectible limits with current state of the art sensors.  Acid forming gases are now regulated to approx 1/10th of the detectable limits.  It seems to me that the cost benefit of regulating something that we can't measure is going to be hard to substantiate.

EPA Regs Protect Children's Health

Asthmatic children living downwind from coal-fired power plants thank the EPA for finally pursing regulations to protect their health. Others benefit as well.

Coal is cheap simply because the massive external health costs of releasing mercury, particulate matter, nitrogen oxides, sulfur dioxide, and dozens of other substances known to be hazardous to human health are not paid for by the coal mining or coal power plant industries. Coal combustion in particular contributes to diseases affecting large portions of the U.S. population, including asthma, lung cancer, heart disease, and stroke. It interferes with lung development, increases the risk of heart attacks, and compromises intellectual capacity. These external public health impacts are instead paid for by the health care system, meaning you and me.

 

Real life example for raising electricity costs:

It doesn't really matter who writes the study. The fact is that coal is cheap. Industrialized society depends on cheap power to stay competitive. Check Americas Power.org to see which states have the cheapest power. The more coal usage, the cheaper the electricity. Real life example: how would you like to substitute unreliable, intermitant, and extreme costs of wind turbines to produce YOUR power? http://www.nationalreview.com/articles/334599/deval-ued-wind-power-kevin-d-williamson Princeton, MASS is struggling with electricity rates going up "more than a third!" The repair costs for this "power" exceed $600,000 a pop! That's if the German made turbines will honor warranties. And all those costs don't even consider what American taxpayers will pay IN ADDITION: $12 Billion is subsidies to wind in the PTC PER YEAR! Hello?? Energy solutions need to make sense economically, scientifically,and technically. The PTC should NOT be renewed. The EPA has nothing to suppport this economic push towards wind and away from coal.

EPA: You need to read this.

"Deval-ued Wind Power", December 3, 2012 "Green Energy delusions inflict a heavy cost on a MA town." http://www.nationalreview.com/articles/334599/deval-ued-wind-power-kevin-d-williamson

EPA/NAM

The National Association of Manufacturers is a political organization.  Having spent most of my life in manufacturing, I have little respect for them, because they are completely one-sided, a pressure group.

I trust my Master of Science in the integration of energy systems into the environment more than I trust a business group looking for more ways to take control.

And, yes, I include over seven years as Senior Engineer for Pacific Gas and Electric as part of my work.  Those of you with insufficient education in the entire set of fields continue to make unwise decisions regarding the integration of our activities into the Real World of the Newtonian Universe. 

We can live without an economy - we did it for almost all of Humanity.  We cannot live without our Environment which makes our Oxygen, cleans our aire abnd water, provides all our food, and supports us.