Tag: EPA

Ross Eisenberg Testifies at House Committee on Natural Resources Subcommittee

Last Friday, I testified at a House Committee on Natural Resources subcommittee hearing on the Spruce Mine in Logan County, West Virginia, and the impact the EPA’s retroactive veto of Clean Water Act permits for that project had on manufacturers.  EPA’s 2011 decision to renege on Spruce Mine’s validly-issued 2007 permit sent shock waves through a wide range of manufacturing sectors, who receive 60,000 of these permits each year and condition $220 billion worth of investment annually on issuance of these permits.

My testimony addressed the uncertainty the EPA’s after-the-fact veto could have caused for manufacturers had it not been vacated by a federal court two months ago.  I also discussed EPA’s broader water policy agenda and the concerns manufacturers have with some of EPA’s more recent Clean Water Act regulations and guidance.  A copy of my testimony can be found here.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

NAM VP NAM Vice President of Energy and Resources Policy Ross Eisenberg testifies at House Committee on Natural Resources subcommittee.

 

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Boiler MACT Regs go to OMB for Review

Today several news outlets reported that the Environmental Protection Agency (EPA) has sent the final Boiler MACT regulations over to the Office of Management and Budget (OMB) for final review. It’s expected that OMB will finish the review in the next few weeks, and the EPA will issue the regulations in the next month or so.

The Boiler MACT regulation will only add to the already cumbersome regulatory burden facing manufacturers of all sizes. These regulations will hurt our ability to compete and stifle job creation. The Council for Industrial Boiler Owners estimates the regs will cost more than $14 billion to implement.

The NAM has been urging the EPA to extend the compliance time for implementation and we hope that EPA will make these changes in the final rule. Manufacturers plan years in advance and the changes that these Boiler MACT regulations call for will require significant time for implementation.

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EPA Appealing Spruce Mine Veto Decision

On Friday, EPA filed a notice of appeal in the case Mingo Logan v. Environmental Protection Agency, litigation over EPA’s retroactive veto of a validly-issued Clean Water Act permit to Mingo Logan Coal Company to discharge fill material from it Spruce Mine No. 1 coal mine.  I guess I shouldn’t be surprised by this, but given the tone of U.S. District Judge Amy Berman Jackson’s opinion in the case, I am.

Judge Berman Jackson held that EPA exceeded its authority when it retroactively vetoed the Spruce Mine permit, a move that was “unprecedented in the history of the Clean Water Act.”  The Court concluded that the Clean Water Act “does not give EPA the power to render a permit invalid once it has been issued by the Corps,” and that “EPA’s interpretation of the statute to confer this power on itself is not reasonable.”  Later in the opinion, the Court described EPA’s actions as “the air of a disappointed player’s threat to take his ball and go home when he didn’t get to pitch.”

There’s a good public policy reason for holding as much, because the precedent created by EPA’s veto would have been significant.  As Judge Berman Jackson wrote:

It is further unreasonable to sow a lack of certainty into a system that was expressly intended to provide finality. Indeed, this concern prompted a number of amici to take up their pens and submit briefs to the Court. They argued that eliminating finality from the permitting process would have a significant economic impact on the construction industry, the mining industry, and other “aggregate operators,” because lenders and investors would be less willing to extend credit and capital if every construction project involving waterways could be subject to an open-ended risk of cancellation. See Brief of Amicus Curiae The National Stone, Sand and Gravel Association in Supp. of Pl. Mingo Logan Coal Co., Inc. at 5–13; Brief of Amici Curiae the Chamber of Commerce of the United States et al. in Support of Pl. at 7–14. EPA brushed these objections away by characterizing them as hyperbole, Tr. at 66, but even if the gloomy prophesies are somewhat overstated, the concerns the amici raise supply additional grounds for a finding EPA’s interpretation to be unreasonable.

So the question then is, what could EPA possibly argue as a reason for appeal?  That it should be allowed under the Clean Water Act to create the uncertainty that all of these industries warned against?

Ross Eisneberg is vice president of energy and resources policy, National Association of Manufacturers.

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Facts Get in the Way of a Controversy Yet Again

On Friday, EPA announced that it had finished testing the drinking water in Dimock, Pennsylvania–a town that has become the epicenter of the hydraulic fracturing debate–and found no contaminants at levels of concern.

Will this settle things once and for all?  Of course not.  But it does seem to indicate that Pennsylvania’s fracking regulations are working.  That’s important because, partly based on fears that contamination may be occurring, the federal government jumped in and started regulating hydraulic fracturing.

One month ago, President Obama issued an Executive Order that not only recognized that “states are the primary regulators of onshore oil and gas activities,” but also that having ten different federal agencies all trying to regulate in addition to those states was a bad idea.

The Executive Order made sense.  What happened in the weeks afterwards didn’t.  Since the order was issued, the industry received three new federal regulations on fracking (two from EPA and one from the Department of Interior), which will undoubtedly interfere with state regulations.  The same state regulations that, according to EPA, made  61 out of 61 wells in Dimock safe.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

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EPA Moves Ahead on Implementing Ozone Air Quality Standards

Forty-five areas across the country got some bad news from the Environmental Protection Agency (EPA) today when it released information about what parts of the country are not meeting the 2008 air quality standards for ground-level ozone (i.e. ozone NAAQS). The map below shows the regions that are considered “non-attainment” areas:

Getting slapped with a non-attainment designation is a big deal for the geographic regions highlighted on the map. Just a few of the economic consequences of being a non-attainment area include:

  • Restrictive permitting requirements for new industrial facilities or for existing facilities that make major modifications.
  • Greater EPA involvement and oversight in permit decisions and continuing oversight by the Agency in permitting decisions even after the area has met the air quality standards.
  • Loss of federal highway and transit funding – beginning one year from the date of the designation, federally-supported highway and transit projects cannot proceed in the area unless the state can demonstrate that the project will cause no increase in ozone emissions.
  • Loss of industry and economic development in the area – any company interested in building a facility that emits ozone will probably not build a facility in the area due to the increased costs associated with the restrictive and expensive permit requirements.

Manufacturers continue to be extremely concerned about the EPA’s implementation of the current air quality standards and new standards for particulate matter (i.e. PM2.5) which are scheduled to be proposed in the next few months. As our nations job creators try to get our economy back on track, stringent air quality regulations and standards continually work to derail their progress.

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EPA Official Backtracks from “Crucify” Remarks, But Agency Continues Aggressive Agenda

It’s an uneasy feeling when your worst suspicisions are confirmed. That’s exactly what happen when a video of EPA Administrator Al Armendariz in the Region 6 Dallas office surfaced. Alarmingly, EPA’s Armendariz uses a rather crude analogy of how his staff should approach enforcement on energy producers by comparing it to Romans crucifying Turkish villagers.

“It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean,” he said. “They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw, and they’d crucify them.” 

Manufacturers and energy producers are already facing a litany of overreaching regulations from the EPA which are making it tougher to create jobs and grow. It’s concerning that an EPA official in charge of enforcement would make such a comment about the treatment of job creators. An adversarial approach to enforcement is not going to help our energy security. The aggressive targeting to specific energy producers does not get us closer to a true “all of the above” approach to energy.

Sen. Inhofe has already stated that he is going to begin an investigation into the EPA. Armendariz issued a statement apologizing for his poor choice of words. However, the EPA continues to move forward with harmful regulations which will increase energy prices for manufacturers.

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Wall Street Journal: So Much for an ‘All of the Above’ Energy Strategy

Today the Wall Street Journal editorial board ran an editorial about the harm of the recently announced Environmental Protection Agency’s (EPA) proposed regulation on new coal power plants called the New Source Performance Standard. The piece is titled “Killing Coal” which is exactly what the EPA is doing with this proposed regulation.

The WSJ appropriately points out that according to the EPA this regulation will have zero cost so they have not done an economic analysis of the potential impact of the regulation. From the piece: 

But great news: The EPA estimates that the total cost of this rule will be $0. It will have no major effect on the economy. Not a single job will be lost.

How can that be? In its cost estimates, the EPA assumes the U.S. will never complete another coal-fired project. Ever. The agency is conceding that coal development has been shut down as a result of its many new regulations, such as the recent mercury rule and the illegal permitting delays that a federal appeals court slapped down last week.

If President Obama and his Administration are serious about an “all of the above” energy strategy then it must also include clean coal. To take this important source of energy off the table at a time when we need to be lowering energy costs is detrimental to our competitiveness.

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EPA Shows Regulatory Restraint – But Will It Last?

The Environmental Protection Agency (EPA) today announced that it would retain the current secondary National Ambient Air Quality Standards (NAAQS) for nitrogen oxides (NOx) and sulfur oxides (SOx). Under the Clean Air Act, secondary standards are established to protect the environment from certain emissions where primary standards are established to protect human health. The EPA noted in its fact sheet on the final rule that the independent Clean Air Scientific Advisory Committee (CASAC) had recommended preserving the current standard based on its review of the available science.

NOx and SOx emissions come from a variety of natural and man-made sources including cars, trucks, buses, power plants, industrial facilities, waste incineration and agricultural sources. The fact sheet also stated that, “since 1980, levels of NOx and SOx in the air have fallen by more than 50 percent and more than 80 percent, respectively.” The resulting decrease has helped mitigate the impact of acid rain or acid deposition on the environment.

We are pleased that the EPA decided to maintain the current standards, but we urge caution as the Agency works to develop a new ”multipollutant standard” for NOx and SOx that will also address acid rain deposition. Manufacturers have made great strides to reduce air emissions, and the last thing we need in this tough economy is another overly stringent standard that will do little to improve the environment.

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Senate Panel Investigates the EPA’s Utility MACT Rule

The Senate Environment and Public Works Committee has not been very active on examining Environmental Protection Agency (EPA) regulations that impact manufacturers, but today the Committee’s Clean Air and Nuclear Safety Subcommittee held a hearing on the Agency’s recently-finalized Utility MACT rule.

This rule is of particular concern for manufacturers because it is expected to increase electricity costs and may jeopardize grid reliability as coal-fueled power plants are taken off-line. We’ve already begun to see plant closures resulting from this overreaching rule (see our post on the GenOn Energy plant closures).

Despite concerns from utility companies that more time is needed to comply with the rule, Gina McCarthy, EPA Assistant Administrator for the Office of Air and Radiation, stated that the three-year time frame (plus the possibility of an additional year from the state permitting authority) was sufficient. The NAM has been a strong supporter of increasing the compliance time frame, so coal-fueled power plants are able to install new emission control technology without compromising grid reliability. You can read our comments on the proposed rule here.

Rob James, a City Council member from Avon Lake, Ohio, noted that his community is already feeling the effects of this rule. Avon Lake will lose 80 jobs from the GenOn Energy plant closure, and the local economy will also feel the pinch from lost tax revenue and the increase in electricity prices.

We are pleased that this Senate panel is examining the economic impacts of this rule, but more needs to be done. We strongly urge Senators to support Sen. Inhofe’s (R-OK) Resolution of Disapproval (S. J. Res. 37) that would repeal the rule, sending the EPA back to the drawing board to develop a more achievable regulation (read out letter to the subcommittee here). We expect a vote on this resolution in June or July – yet another opportunity for the Senate to show its support for manufacturing jobs.

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New Study Shows Proposed Regulations Could Slow Oil, Natural Gas Production

Environmental Protection Agency (EPA) regulations could sharply reduce drilling for natural gas and oil production, according to a new study from the American Petroleum Institute (API). The proposed New Source Performance Standards (NSPS) for oil and natural gas production will impact new hydraulically fractured gas wells and existing gas wells that are “re-fractured.”

According to the API press release, the study found that the proposed regulations would:

  • Reduce drilling for natural gas using hydraulic fracturing by up to 52 percent;
  • Reduce natural gas production by up to 11 percent; and,
  • Reduce oil production by up to 37 percent.

These dramatic reductions in domestic production would result in the federal government losing up to $8.5 billion in royalties and state governments losing up to $2.3 billion in severance taxes.

There is no doubt that the shale gas boom has provided manufacturing operations with a reliable and affordable supply of energy. These proposed EPA regulations, however, threaten to slow fossil fuel production and potentially increase prices as manufacturers are trying to create jobs and boost the nation’s economy. The NAM urges the EPA to ensure these rules allow oil and natural gas producers the appropriate flexibility they need to comply with the regulations in a cost-effective manner.

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

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