The rapid pace and severity of Environmental Protection Agency (EPA) regulations on the energy sector during the past four years illustrates an ongoing problem—the government’s impediment to an economic recovery.
The EPA’s mandates have discriminated against certain sectors of the energy industry, most notably coal, killing needed jobs. On top of the regulations that have questionable benefits at best, the EPA has withheld permits for coal mining that were previously approved by other agencies and delayed others. There are real consequences to actions like this.
In January, Georgia Power Co. announced that it would shut down 15 conventional-fuel-operated electric units, affecting almost 500 jobs in the state. The company cited the cost of new EPA rules, like the Utility MACT rule, as a primary reason for this closure. The Utility MACT Rule mandates that coal-fired power plants reduce their emissions of hazardous air pollutants, such as mercury, by 90 percent. But mercury emissions have been steadily decreasing from 220 tons per year in 1990 to 103 tons per year in 2005. In other words, this regulation is unnecessarily killing jobs.
Sadly, this is not an isolated incident. The EPA has also forced a Wisconsinpower company to consider cutting jobs at two coal fired power plants in order to pay a $1.2 million fine to the EPA for a Clean Air Act violation. The company claims that many of the EPA’s charges were already being addressed with plant upgrades. Nevertheless, EPA also required the company pay $6 million for green energy projects in their service area, such as replacing or retrofitting old wood burning furnaces in severalWisconsin counties and supporting new or existing wind farms, and to the National Park and Forest Services to address “alleged” damages.
These closings were not a surprise. Indeed, the EPA predicted that their rules would kill jobs. But like so many EPA estimates, they inflate the supposed positive results of their rules while minimizing the costs. In fact, the total number of announced plant retirements across the country is already more than triple the quantity the EPA estimated. The American Coalition for Clean Coal Electricity reports that the EPA’s regulations have contributed to the announced retirement of more than 250 coal-fired units.
The EPA’s regulations do more than just destroy jobs. They drive up the costs of the necessities of life. National Economic Research Associates estimated that the EPA’s regulations could decrease U.S.gross domestic product (GDP) by $29 billion and disposable personal income by $34 billion. Households earning less than $50,000 a year spend a disproportionately large portion of their budgets on energy. Even if there were “meaningful benefits,” lower-income households would still be hurt more than others. And the benefits don’t necessarily accrue to those who bear the largest costs.
President Obama wants to “restore the basic bargain that built this country—the idea that if you work hard and meet your responsibilities, you can get ahead.” If he and Congress are serious about reversing this economic downturn, we must regulate the EPA, rather than allow the EPA to regulate us.
Hannah Fjeldsted is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.
CORRECTION: An earlier version of this blog mistakenly referred to an EPA rule that was invalidated by the U.S. Court of Appeals for the D.C. Circuit in 2012.