Despite court curbs, EPA regulators keep killing jobs, prosperity

The real casualties of the Environmental Protection Agency’s relentless war against fossil energy use, and coal in particular, will be businesses, jobs and household energy budgets, with few if any, health benefits. Thankfully, an encouraging series of court decisions challenging EPA’s blatant overreaches are coming to the rescue.

A.  As a recent example, on August 21, the U.S. Court of Appeals for the D.C. Circuit struck down the signature “Cross-State Air Pollution Rule” EPA enacted a year ago that was supposed to reduce air pollution emitted in one state and carried to another.  The rule would have enabled the Obama administration’s EPA to order the upwind state to reduce emissions even beyond federal air quality standards.

Two of the three judges on the appellate panel determined that under the rule “…upwind states may be required to reduce emissions by more than their own significant contributions to a downwind state’s non-attainment. EPA has used the good neighbor provision to impose massive emissions reductions requirements on upwind states without regard to limits imposed by the statutory text…. ”

President Obama is obviously using the EPA to make good on a 2008 campaign promise that “…if someone wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.” And, just as he predicted, thanks to his policies, energy prices did “necessarily skyrocket”.

[According to an industry source] the market-clearing price for new 2015 capacity for 13 states including Ohio was $136 per megawatt, eight times higher than the price for 2012. In Pennsylvania, the new market price is $167 per megawatt, ten times higher, and in northern Ohio, which is suffering from even more coal plant retirements, the 2015 price is an astounding $357 per megawatt….

B.  Another August ruling by the Fifth Circuit Court of Appeals spared Texas from “arbitrary and capricious” rejection of utility permitting processes that put EPA in the board rooms and boiler plants of industrial and utility companies. The court ruled that “…the EPA based its disapproval on demands for language and program features without basis in the Clean Air Act or its implementing regulations.”

The finding determined that 120 unjustly targeted permit holders were wrongly mandated to “de-flex” under threat of federal and civil sanctions with no environmental benefit. Although not a single pound of emissions reductions resulted, the companies had been forced to spend millions of dollars to satisfy what amounted to a bureaucratic paper exercise. The Fifth Circuit Court of Appeals emphasized in its ruling that, “It is clear that Congress had a specific vision when enacting the Clean Air Act: The Federal and State governments were to work together, with assigned statutory duties and responsibilities, to achieve better air quality….”

C.  In another ruling on July 11, Judge Reggie B. Walton of the U.S. District Court for the District of Columbia rejected EPA attempts to regulate Appalachian surface coal mining based upon “final guidance” which had been falsely characterized as “non-binding”…. The court agreed with plaintiffs that EPA had overstepped the authority given to it by Congress under the Surface Mining Control and Reclamation Act (SMCRA) and the Clean Water Act (CWA)….

[T]he court recognized that SMCRA’s unique regulatory structure under the Secretary of Interior (which shares regulatory authority with states) grants EPA only limited authority to comment on and provide written concurrence prior to Interior’s approval of a state SMCRA permitting program…not authority to “work with” permitting authorities, or to influence permit terms….

The court’s opinion validated the positions of state government parties and the regulated community that EPA cannot disrupt the regulatory balance Congress created for the complex permitting scheme governing mining in which the EPA has no direct role. Further, it provides a precedent for other legal challenges to EPA’s use of guidance documents for unauthorized regulatory purposes.

D.  In a similar case, the D.C. Court of Appeals in July 2011 had ruled to reject EPA’s reliance on guidance documents that were never adopted as administrative rules under the Clean Air Act which violated rights of states to propose alternatives to statutorily required fees for ozone “non-attainment areas” established by national ambient air quality standards (NAAQS). The CAA imposes deadlines on these non-attainment areas, giving states time to come into compliance with the NAAQS, requiring them to impose fees on major “stationary sources” (power plants) that fail to meet deadlines….

The Natural Resources Defense Council (NRDC) successfully challenged that the EPA violated the Administrative Procedures Act’s notice and comments requirements by unilaterally issuing “guidance” as a policy statement or interpretive rule on a case-by-case basis without notice and comment. EPA, in recent years, has tended to favor this approach when it can get away with it to avoid the statutory rule-making process. The D.C. court has subsequently joined with other courts in holding that guidance is not a substitute for rule-making.

Litigating against a continuing onslaught of EPA actions against America’s energy-driven future is a slow, daunting, costly and uncertain slog. As noted by H. Sterling Burnett, a senior fellow at the National Center for Policy Analysis (NCPA) [and CFACT advisor]: “The EPA is in the process of codifying a whole slate of new air quality rules, the sheer number and economic impact of which have not been seen at any time in the EPA’s history.” Burnett predicts that this will put millions more people out of work by 2020, shrink local tax bases as businesses cut staff or relocate, and force many more cities and counties into bankruptcy.

E.  Even the EPA estimates that its “Mercury and Air Toxics Standards” rule scheduled for enactment by 2015 will result in a loss nearly 1 percent of all U.S. electrical power generating capacity (10,000 megawatts). According to an August 12, 2011 New York Times report, some utility experts believe that EPA’s estimate is still way low. When combined with other restrictions on coal ash and cooling water EPA is planning, capacity losses will more likely be somewhere between 3.5% and 7%.

The North American Electric Reliability Corporation (NERC) that is responsible for reliability of the nation’s electric transmission grid projects that this will require modifications of up to 753 generating units, resulting in power shortages and supply instability. Researchers at Credit Suisse estimate that the rule will cost the industry $100 billion by 2017. The Brattle Group, an economic consulting firm, estimates that the Mercury and Air Toxics Standards rule can be expected to cost up to $120 billion by 2015, and further reduce the nation’s power supply by more than 55 gigawatts (almost 4%).

How much good will this rule really accomplish? Consider that America’s coal-burning power plants, which provide nearly half of all electricity, emit an estimated 41-48 tons of mercury each year. Compare this amount with U.S. forest fires that emit at least 44 tons; human cremation about 26 tons; Chinese power plants 400 tons; and volcanoes, subsea vents, geysers and other natural sources spew out 9,000-10,000 tons. Of all these emissions that enter the atmosphere, the power plants account for less than 0.5%….

F.  In arguably the greatest bureaucratic overreach of all time the EPA now claims permitting authority to restrict carbon dioxide and other “greenhouse gas” emissions from stationary sources they attribute to causing climate change.

A recent attempt to rein in this regulatory rampage was thwarted by a three-judge panel of the U.S. Court of Appeals for the District of Columbia. On June 26, the court dismissed challenges by various states and industry petitioners concerning a cascading series of EPA rule-makings that were consolidated into one case regarding merits of classifying greenhouse gases as air pollutants under the Clean Air Act….

The U.S. Government Accounting Office (GAO) reports that federal climate spending has increased from $4.6 billion in 2003 to $8.8 billion in 2010 (a total $106.7 billion over that period). This doesn’t include $79 billion more spent for climate change technology research, tax breaks for “green energy”, foreign aid to help other countries address “climate problems”; another $16.1 billion since 1993 in federal revenue losses due to subsidies; or still another $26 billion earmarked for climate change programs and related activities in the 2009 “Stimulus Bill”.

The American Council for Capital Formation estimates that the new EPA regulations will result in 476,000 to 1,400,000 lost jobs by the end of 2014. Management Information Services, Inc. foresees that up to 2.5 million jobs will be sacrificed, annual household income could decrease by $1,200, and gasoline and residential electricity prices may increase 50% by 2030. The Heritage Foundation projects that the greenhouse gas regulations will cost nearly $7 trillion (2008 dollars) in economic output by 2029….

As for impacts on jobs, the EPA wrote in February 2011 that “…in periods of high unemployment, an increase in labor demand due to regulation may have a stimulative effect that results in a net increase in overall employment.” And they’re probably right on this final point after all. It’s certainly going to require a lot more government hires to implement, monitor and enforce all those new regulations.

According to the annual “Regulator’s Budget” compiled last year by George Washington University and Washington University in St. Louis, the employment of federal government regulators has climbed 13% since Obama took office, while private sector jobs shrank by 5.6%.

Michael Mandel, chief economic strategist at the Progressive Policy Institute, found that between March 2010 and 2011, federal regulatory jobs climbed faster than either private jobs or overall government jobs. In fact, if the federal government’s regulatory operations were a business, their $54 billion budget would make them one of the 50 the largest in the country … bigger than McDonald’s, Ford, Disney and Boeing combined.

Who can possibly argue with an economic success story like that?

[Excerpted from Forbes online, September 4, 2012; for the full article, go to http://www.forbes.com/sites/larrybell/2012/09/04/court-curbs-on-epa-offer-a-breath-of-fresh-air-for-recovery/.]

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About the Author: Larry Bell

Larry Bell

CFACT Advisor Larry Bell heads the graduate program in space architecture at the University of Houston. He founded and directs the Sasakawa International Center for Space Architecture. He is also the author of "Climate of Corruption: Politics and Power Behind the Global Warming Hoax."