New Study Highlights Damaging Economic Impact of EPA Boiler Rule

By September 15, 2010Economy, Energy, Regulations

A new study from the Council of Industrial Boiler Owners (CIBO) predicts that the EPA’s proposed rule to impose stricter emission limits on industrial and commercial boilers and process heaters – the “Boiler MACT” rule – could potentially put 300,000 U.S. jobs at risk.

More specifically, the study found that every $1 billion spent on compliance costs could jeopardize 16,000 jobs and reduce the U.S. GDP by $1.2 billion. One NAM member company with three large coal-fired boilers estimates it will spend over $100 million to install the necessary technology needed to reduce certain emissions. Installing this expensive control technology is no guarantee that the stringent emissions limits can be met.

This afternoon, the NAM and several other trade associations joined CIBO at a briefing for key U.S. Senate staff on this critical manufacturing issue. The NAM stated that this proposed rule is another example of EPA overreach as manufacturers are attempting to fully recover from the steepest economic downturn since the 1930s and bring back the 2.2 million high wage jobs lost during the previous recession. In addition to the Boiler MACT rule, manufacturers are also confronting the reconsideration of the 2008 ozone standard, the proposal to regulate coal ash, and the imposition of first-time federal regulations on greenhouse gas emissions.

Manufacturers need to be focused on creating jobs and staying competitive in the global marketplace. Both small and large companies are operating under extremely tight profit margins, and expensive, burdensome and unachievable rules from EPA could mean the difference between staying in business for another year and shutting the plant doors.

Join the discussion 2 Comments

  • Carter Wood says:

    I’m afraid your argument relies on the “broken window” fallacy that Bastiat disproved. In declaring existing boilers to be in essence “broken windows,” the federal government is mandating that they “be fixed,” and the hope is positive economic activity will result. Yes, some will, but those are dollars that could be put to more efficient use elsewhere, producing more profits and jobs.

    In addition, we live in a global economy. If the EPA dictates that U.S. Company X makes $100 million in improvements for no apparent benefit, while Company Y in Germany is not required to make those changes, then Company X is liable to lose marketshare. The only one who gains is Company Y.

  • It is regrettable that none of these major jobs-loss studies have taken into account the jobs that will actually be created in the boiler, boiler-auxiliary equipment, combustion equipment, emissions controls and catalyst, controls & instrumentation and boiler repair/installation/aftermarket-services industries. While there are some outside of the boiler industry that claim some type of market knowledge that minimizes any job-creation probabilities – and some mistakenly, we think, believe that EPA’s actions will depress the boiler industry – those of us more intimately involved in reality see the opposite effect and, in some areas, we are seeing it even before final standards are issued. So with all the however-appropriate hand-wringing over possible job losses, let’s not forget the offset of all the new hard-manufacturing and service jobs that will be created, and let’s not forget or minimize the very real people who will gain employment in some otherwise very hard times as a result of any final action by EPA.

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