The idea of out-of-control bureaucrats has become a major topic of discussion in politics, with debates over the role of the Environmental Protection Agency (EPA) rising to the level of nationalized health care and government bailouts. Those on the right characterize the Agency as an Orwellian Ministry, with those on the left portraying it as the last hope against oil CEOs buying votes in dimly lit, smoke filled Capitol offices.
Once you dig through the partisan conjecture you get to the real problem: EPA is acting like President Obama is going to be a one-term president – meaning they need to act fast. With this in mind, the Agency is pushing through the most expensive set of regulations in American history.
Measures taken to protect the environment are necessary and welcomed. But concerns for air quality should always be measured against the larger context of the economy and real-world achievability.
Here are two current examples of EPA’s neglect for this principle.
“Boiler MACT” is the name given to EPA’s new standards aimed at cutting emissions from boilers used in industries like manufacturing and processing and in commercial use by the likes of malls and hospitals. These boilers burn fuels to produce steam, which is then used to produce electricity or heat.
Under the regulations, the majority of boilers will need to be retrofitted with new and costly emissions curbing technologies, with an upfront price tag of $10 billion and annual compliance costs of around $3 billion.
Boiler MACT is an example of EPA regulating outside of reality.
The Clean Air Act gives EPA authority to regulate boilers based on the best performing similar facilities. One could easily interpret this as monitoring facilities with the best pollution controls and then directing the industry to move towards similar technologies. Instead, the Agency looked at individual pollutants at facilities, cherry picked the best results, spiced them together, and set the bar there. Even if a facility is the worst polluter of a particular pollutant, it could still be considered a best performing facility if its emissions of another pollutant are low.
This approach has been dubbed the “Frankenboiler” by industry – a facility created in a lab which does not exist in the real world. In testimony before a House committee, Paul Gilman, EPA official turned industry representative, compared this approach to “asking that the decathlon champion at the Olympics be able to win not only the overall decathlon, but all of the 10 individual events as well.”
Picking on Texas
In July, EPA finalized their Cross-State Air Pollution Rule, an updated Bush-era program which regulates emissions from power plants in states that the EPA finds “contribute significantly” with the maintenance of healthy air quality in neighboring states.
The final rules came after a standard process in which the Agency proposes standards, allows stakeholders and the public an opportunity to comment on the proposal, and crafts a regulation, hopefully taking into account valid comments in their final product.
When the proposal was released a in 2010, EPA data that showed Texas’ contribution to out-of-state emissions were not high enough for inclusion.
But when the final rule was released in July, Texas found itself included in the program.
The last minute inclusion is based on a hypothetical linkage between Texas emissions and a pollution monitor hundreds of miles away in Granite City, Illinois. The monitor is located half-a-mile from a steel mill, and was placed there specifically to monitor it. In fact, the area meets air quality standards today after the Illinois Environmental Protection Agency and the mill agreed on the installation of pollution controls.
Texas was never given the opportunity to publicly comment on this information because it was not part of the proposed rule, which is when the public has the opportunity to share concerns.
Curiously, when six other states were added to the program after the proposal, EPA gave them additional notice and time to comment on the Agency’s findings. So why was Texas snubbed?
Compliance costs for this rule are estimated at $2.4 billion annually. Texas’ will be required to cut emissions by nearly 50 percent under the regulations, which go into effect in January 2012 – less than six months after the rules were released and Texas learned of its inclusion. Not surprisingly, a Texas utility company recently announced it would shut down plants and fire nearly 500 employees as a direct result of the regulation.
In January, President Obama ordered agencies to regulate using the "least burdensome tools" that take "into account benefits and cost" and "[promote] economic growth ... and job creation." The EPA, with 20,000 employees and a budget of $8.5 billion dollars, has simply ignored this. The President intervened in early September when he ordered the Agency to withdraw a burdensome regulation on ozone that would have cost $100 billion a year and shut down economic growth in hundreds of communities across the nation.
These are just two examples of EPA’s lack of discretion when crafting major rules that affect jobs, energy costs, and billions of dollars in diverted capital.
The EPA is acting like they’ll be out of a job in 2013, and with this tunnel-visioned lack of restraint they have become the biggest contributor to that cause.