EPA's rules may force power failures

It was easy last week, when President Obama scrubbed an expensive proposed environmental regulation, to wonder whether the world had turned right side up. Without doubt, Obama made the wise decision when it came to proposed new ozone regulations. As Mitch McConnell said on the Senate floor today, the president created more jobs by reversing one regulation than he ever will with a speech. But as I wrote this weekend, only if Republicans continue to hammer away at other job-killing regulations will this have been a first step worth celebrating — otherwise, it’s just a chance for Obama to tout a job-creation gesture and a supposed spirit of compromise.

May I humbly suggest one such regulation to next spotlight for elimination? The Cross-State Air Pollution Rule, when combined with another proposed regulation (the Utility Maximum Achievable Control Technology or “Utility MACT” rule), will cost the country $17.8 billion a year and put 175,000 jobs at risk each year, as well. Now, that’s nowhere near as expensive as the proposed ozone regulations — which would have cost the country up to $90 billion a year, with as many as 7.3 million jobs lost by 2020 — but I’d say 175,000 newly employed is nothing to sneeze at. Plus, the two regulations would increase electricity rates by more than 23 percent in some areas of the United States that rely on coal for electricity. In addition, consumers will be paying more than $8 billion a year in higher natural gas prices because of these proposed rules.

But just in case you’re still not sold that the Cross-State Air Pollution Rule ought to be repealed before it takes effect Jan. 1, the Electric Reliability Council of Texas provides another reason (ERCOT released this information Friday — the same day Obama announced his reversal of the ozone regs):

Rolling blackouts will be much more likely in Texas next summer should new Environmental Protection Agency rules go into effect on Jan. 1 as planned, according to a report released Thursday by the state’s main electric grid manager.

The rules, which industry says caught it by surprise when they were unveiled in July, could lead to the shuttering of as much as 1,400 megawatts of coal-fired power plants capacity in Texas during the summer and up to 6,000 megawatts during other times of the year, according to the study by the Electric Reliability Council of Texas.

ERCOT has declared power emergencies several times this summer as record demand met unplanned power plant outages. Plant operators say the long, hot summer has meant more wear-and-tear due to longer operating hours for power plants.

Predictably, the EPA dismissed the ERCOT study, saying the state of Texas could find a way to meet the requirements of the new rule “without threatening electricity reliability or the continued operation of coal-burning units.” But agency representatives didn’t bother to substantiate that claim.

It’s not as though coal companies don’t want to do their part to help the environment. Consider this statement from Steve Miller, president and CEO of the American Coalition for Clean Coal Electricity: “The EPA is ignoring the cumulative economic damage new regulations will cause. America’s coal-fueled electric industry has been doing its part for the environment and the economy, but our industry needs adequate time to install clean coal technologies to comply with new regulations. Unfortunately, EPA doesn’t seem to care.”

In other words, energy companies would appreciate at the very least a more sensible, economically sensitive timeline. No doubt the president senses this. Politically speaking, the president has to show he’s serious about jobs and one way to do that is to abandon the ideologically-driven regulations that threaten whatever anemic recovery the nation has experienced. But he probably won’t stay on the anti-regulation bandwagon for long, as that might cost him among one of his own constituencies. Kevin Book and Chase Hutto, principals in the energy policy consulting firm Clearview Energy Partners, probably predicted accurately when they wrote: “For a president pinned between a green base and an anemic recovery, the best political outcome may be for the White House to stand behind EPA rules as either Congress or the Courts intervenes to delay them.”