Today we see more news of the devastating impact of the Environmental Protection Agency’s (EPA) overreaching Utility MACT regulations. FirstEnergy Corp. announced today that the company will be closing three power plants in West Virginia by September.

The closing of these plants will result in the loss of more than 100 jobs not to mention how it will impact the economies of the communities where the plants are located. We often forget about indirect impact of closings such as this which tends to ripple through the entire community.

Also, the reliability of our power grid is put at risk by the EPA’s regulations. Manufacturers are looking for certainty and regulations such as Utility MACT will only increase energy costs and cause them to at times wonder about the reliability of their power grid. Manufacturers consume one-third of our nation’s power and need access to all sources of energy.

An “All-of-the-Above” approach to energy should include everything including clean coal, manufacturers can’t afford increasing energy prices at a time when they are trying to recover, hire and create new jobs.

Today, the House Energy and Commerce Committee’s Subcommittee on Energy and Power held a hearing about the impact of the Environmental Protection Agency’s (EPA) Utility MACT regulation on electricity costs. The regulation, finalized in December 2011, requires the installation of emission control technologies by many coal-fired power plants over a relatively short time frame of three years.

The EPA estimates that the rule will have an annual cost of $9.6 billion, making it one of the most costly rules in the history of the agency. Manufacturers, as users of one-third of the energy consumed in this country, are extremely concerned that the regulation will increase electricity rates and also cause grid reliability issues.

One of the witnesses, Anne Smith of the National Economic Research Associates (NERA), argued that the EPA has made some “misleading public statements” about the health benefits of the rule in its Regulatory Impact Analysis (RIA). Her testimony states:

“A closer read of the RIA reveals that all the “saved lives” and virtually all of the $33 billion to $90 billion of estimated benefits EPA has attributed to the MATS [or MACT] Rule are for purported coincidental reductions of . . . fine particulate matter (PM_2.5) that is already regulated to safe levels separately under the [Clean Air Act].”

Thus, the EPA is “padding” its RIA with supposed health benefits that occur because of reductions in emissions not covered by the Utility MACT rule.

Her own economic analysis also indicates that the rule’s net impact to U.S. workers in 2015 will be a reduction in worker income that is the equivalent to approximately 200,000 full-time jobs.

Darren MacDonald, Director of Energy at Gerdau Long Steel North America, expressed concern that the regulations would increase electricity prices, hurt the company’s competitiveness and put jobs in jeopardy. He also noted that the Utility MACT regulation will place increased demand on the suppliers and installers of pollution control technology which could also drive up costs for manufacturers.

The NAM applauds the House of Representatives for passing legislation such as the TRAIN Act (H.R. 2401) which would delay implementation of the Utility MACT rule until an interagency economic study is completed. We urge similar action in the Senate.

Aicia Meads is director of resources and energy policy, National Association of Manufacturers.

As the Environmental Protection Agency (EPA) continues to move forward with its overreaching agenda the impact is beginning to be felt across the country. This week we’ve seen new reports in the news of jobs that will be lost as the result of facilities that will be forced to close because of new EPA regulations. These closing’s just don’t impact those who work at the plant, they impact the entire town.

A report from Williamsport, Maryland Herald-Mail yesterday tells the story of the impact the closing of the R. Paul Smith Power station will have on the entire community.

Williamsport resident Johnna Artz didn’t mince words Thursday about her opposition to the closing of the R. Paul Smith Power Station in town.

“This affects everybody,” she said. “It hurts the whole community with the number of jobs and revenue lost.” The plant, which went on line in 1927 and employs around 40 people, is being closed as a result of tougher emission regulations imposed by theU.S. Environmental Protection Agency.

Artz, 71, who has lived in Williamsport for 48 years, said that the plant closing will impact her family. She said the federal government could focus on other environmental issues instead of those that take away jobs.

And on the banks of Lake Erie FirstEnergy Corp facing the same regulations will be shuttering plants which will impact hundreds of employees and have a domino effect through the local communities. (continue reading…)

Today EPA air chief Gina McCarthy said that the final Boiler MACT regulations won’t be issued until May. The Boiler MACT regulations have been creating a great amount of uncertainty for manufacturers and will cost jobs. EPA released the revised proposed rules on Dec. 2 and just last week a judge removed the EPA’s stay on the original rules finalized in early 2011.

The Council of Industrial Boiler Owners estimates that the revised rules will put 232,078 jobs at risk and cost more than $14.5 billion in compliance costs. Manufacturers simply cannot afford this regulation to be piled on top of the already cumbersome regulatory burden they face.

The NAM has been urging the Senate to move forward with legislation to address the Boiler MACT rules and finally create some certainty. Business owners are eager to invest to grow and create jobs but regulations like Boiler MACT continue to be a bump in the road on the way to economic growth and jobs.

As much as EPA would like people to think they can resolve all the issues with this regulation they simple do not have that ability. Legislation under consideration by the House and Senate would provide EPA with the tools to make these regulations achievable and provide manufacturers with the time they need to comply.

At the end of 2011 it’s apparent that our economic recovery has been modest at best. A robust economy can be difficult to achieve under even the best circumstances, but it is made even more difficult when faced with a hostile environment for private enterprise. Manufacturers should be freed from unnecessarily burdensome regulations if they are to lead the economy. Efforts to foster economic growth and job creation have been stymied by an avalanche of overregulation from government agencies. A year-end review of the regulatory action taken by government agencies tells a sad story – one that manufacturers hope will reverse itself in the coming year.

This year alone we saw the National Labor Relations Board (NLRB), the Environmental Protection Agency (EPA), the Department of Transportation (DOT), and other agencies place more obstacles in the way of job creation and insert themselves further into the day to day decisions of manufacturers. Here are just a few examples:

2011 was a banner year for overreach for the NLRB, including the ambush elections rule, the decision in the Specialty Healthcare case, and the now-resolved complaint against the Boeing Company. These actions from the board have the potential to create disruptive and adversarial relationships between employers and employees - a result that simply isn’t conducive to growth. The NAM is currently suing the NLRB to prevent the implementation of the poster rule, a rule that has been delayed repeatedly after requests by the judge to allow time for a decision in the case. An NAM survey about the NLRB’s agenda revealed that nearly 70 percent of respondents said the NLRB’s actions will hurt job creation.

The EPA has put forth new rules and regulations that come with high price tags and puts hundreds of thousands of jobs at risk.  The costly and harmful Boiler MACT regulations checks in at $14.5 billion and threatens approximately 230,000 jobs. Sadly, it seems that the EPA may have outdone themselves with the Utility MACT rule – one of the most expensive regulations in EPA history –would have a draconian effect on power plants across the nation. According to the EPA’s own analysis, the Utility MACT regulation could cost more than $100 billion in the coming years and destroy an average of 183,000 jobs per year for the next decade.

The DOT pulled the rug out from under manufacturers that built their logistical operations based on the current trucking hours of service rule and have invested heavily in compliance since their implementation. Released just last week, the revised final rule will have a negative impact on manufacturers’ supply chains, distribution operations and productivity. To change these rules and limit the flexibility of manufacturers without sufficient reasoning is a mistake and will impede the ability of manufacturers to invest, grow and create jobs.

For manufacturers, a year living under the yoke of this overregulation is a year of living dangerously – hopefully Washington will come to its senses before it’s too late.

Early this evening the House passed H.R. 3630 by a vote of 234 to 193. The bill contains several provisions important to manufacturers.

The legislation will halt the EPA’s harmful Boiler MACT regulations in their current form. These burdensome regulations are causing uncessary uncertainty throughout the economy and impeding job growth.

Additionally, the bill moves the Keystone XL pipeline project closer to approval by requiring the Administration to approve the project within 60 days of enactment. The Keystone XL pipeline will create 118,000 much-needed jobs and get Americans back to work immediately.

Yesterday, several industry and agriculture groups sent a letter to both the House and Senate, urging members to support the adoption of measures within the FY2012 Appropriations package to curb overregulation and reduce spending.

The groups asked specifically for seven sections, already included in the FY2012 Interior, Environment and Related Agencies Appropriations bill, to be adopted into a final Appropriations bill. All seven sections, if included, would reduce the financial burden manufacturers and other producers in our economy face from new and expanded federal regulations.

The letter focused specifically on costly and overly burdensome actions taken by the Environmental Protection Agency (EPA) over the last few years. It has become more and more apparent that the recent EPA rulemakings are grossly out of line with the economic recovery of the United States.

Measures such as the regulation of Greenhouse Gases (GHGs) from stationary sources will cost businesses billions of dollars in compliance cost without substantial environmental advantages. In addition to regulations currently in process, both businesses and individuals should be alarmed by the slow but steady attempts to expand the authority and jurisdiction of agencies, for instance the broadening of “waters of the US” definition which could place things like farm ponds and drainage ditches under the regulatory jurisdiction of the EPA.

These and other regulatory actions, many taken by the EPA specifically, are impeding our economic recovery as business capital goes towards compliance costs rather than reinvestment and expansion projects.

The recent agency aversion to common sense regulation, that will promote economic growth as well as ensure community and environmental progress, has necessitated legislative intervention.

The NAM and all the other letter signatories are hopeful that Members of Congress will include the specified sections in any comprehensive Appropriations package, in order to foster an environment conducive to our economic recovery.   

Chip Yost is vice president for energy and resources policy, National Association of Manufacturers.

Today, the Secretary of Energy Advisory Board Subcommittee (SEAB) on Shale Gas Production released its second and final ninety-day report which analyzes the progress that has been made on the recommendations of its previous report, issued on August 18, 2011. The new report criticizes federal agencies, state governments, industry and public interest groups for not moving quickly enough on its recommendations of increased regulation on hydraulic fracturing – a critical technology that allow us to access the nation’s rich shale gas resources.

For example, the SEAB urges more regulatory action on the following areas:

• Air Emissions – Even though the Environmental Protection Agency (EPA) is currently working on regulations that would reduce emissions at hydraulic fracturing sites, the SEAB’s report claims the proposed rules do not go far enough and should be expanded to include more wells.
• Chemical Disclosure – The SEAB wants to see more disclosure of the chemicals used in hydraulic fracturing fluid and believes that there should be an extremely high bar for trade secret protection. The subcommittee quickly discounts current efforts underway including voluntary disclosure websites such as fracfocus.org and the Department of Interior’s (DOI) intent to require the disclosure of fracturing fluid composition on federal lands.
• Water Discharge Standards – The EPA is currently in the process of studying the impact of hydraulic fracturing on drinking water and has also announced a schedule setting waste water discharge standards for some fracturing activities. The SEAB, however, believes that the EPA should not wait until the study is complete to take additional regulatory actions.

The SEAB’s draft report outlines unrealistic expectations and does little to highlight the efforts that industry and regulators have already made to ensure that these activities are conducted safely. It is unreasonable to expect that industry and federal, state and local regulators could institute complex new regulatory programs in three months. Increased access to our nation’s shale gas resources means more affordable energy and more jobs for our nation’s struggling economy. The SEAB’s recommendations to pile on unnecessary and complex regulations could quickly put an end to the nation’s shale gas revolution.

Yesterday, The Hill’s Congress Blog posted two pieces on the impact and costs of the Environmental Protection Agency’s (EPA) regulations on manufacturing and economy. The EPA’s overreaching regulations have caused great uncertainty among manufacturers and businesses, both large and small, across the country.

The first post “EPA’s proposed power-sector air rules will weaken American Manufacturing”  is by Bernard Weinstein, associate director of the Maguire Energy Institute and an adjunct professor of business economics in the Cox School of Business at Southern Methodist University. In his piece Mr. Weinstein discusses the ramifications of the EPA’s Utility MACT and Cross-State Air Pollution Rules (CSAPR):

As designed, the Utility MACT would be the most expensive direct rule in EPA history.  Indeed, the EPA itself has estimated it would impose costs of about $11 billion a year on the U.S. economy, though third-party estimates of compliance costs are considerably higher.

For example, a recent analysis by National Economic Research Associates (NERA) finds that complying with the proposed standards would cost power companies close to $18 billion per year for the next 20 years.  Some coal-fired plants would be so expensive to retrofit they would simply be shut down.  The NERA study also projects that about 48 gigawatts of coal generation would be retired over the next five years, representing a 13 percent decline. 

Manufacturers use one-third of our nation’s energy supply and access to affordable sources of energy is crucial to our competitiveness. Utility MACT and CSAPR will have a severe impact on manufacturers and cost valuable jobs. (continue reading…)

Earlier today that House Energy and Commerce Committee to an important step in reining in the Environmental Protection Agency’s aggressive agenda by passing two bills on Boiler MACT and Cement MACT regulations. The EPA Regulatory Relief Act of 2011 and the Cement Sector Regulatory Relief Act of 2011 would stay the rules, give the EPA an additional 15 months to re-propose the rules, extend the compliance time frame from three to five years, and ensure that the new regulations are achievable in practice.

The EPA Regulatory Relief Act was approved by a vote of 36-14 and the Cement Sector Regulatory Relief Act of 2011 was approved by a vote of 33-12.

The Boiler MACT and Cement MACT regulations are causing a great deal of uncertainty for manufacturers that will cost jobs and stifle economic growth. We hope that these bills will make it to the House floor in the coming weeks for a vote.