Lost in most of the policy discussions about greenhouse gases (GHG) in Washington, is the fact that the U.S. manufacturers are already leading the world in reducing emissions. Through manufacturing ingenuity and a commitment to environmental stewardship, manufacturers have reduced their annual carbon dioxide emissions by over 10 percent from 2005 levels. Manufacturers have also been integral in helping lower the United States’ total annual carbon emissions by nearly 700 million tons over the same time period–more than any other country in the world. Read More
The Administration’s submission of its Climate Change Plan to the United Nations today is a reminder of the complex nature of global greenhouse gas (GHG) politics, economics and realities, and what is at stake for the competitiveness of U.S. manufacturing. Manufacturers want a strong international agreement that includes binding commitments from all major emitting nations.
First, as is graphically represented on Page One of the Plan, the United States is already leading the world in reducing GHG emissions. Since 2005, no country has reduced its carbon dioxide (CO2) emissions by more than the United States—nearly 700 million tons of C02 or a reduction of close to 12 percent. U.S. manufacturers are leading the way, producing more efficient and lower emitting cars, trucks and machines; creating new and innovative products to increase the energy efficiency of houses, buildings and factors; and unlocking new technologies to generate more power with fewer emissions. Since 2005, carbon emissions from manufacturers and other industrial facilities have fallen by more than 10 percent. This progress will continue, as manufacturers are driven by a commitment to environmental sustainability and recognition that reducing emissions is good for the bottom line—more efficient factories have fewer emissions and lower costs. Read More
Today the Supreme Court hears arguments in Michigan v. EPA, to resolve whether the Environmental Protection Agency (EPA) must consider costs when deciding whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.
It’s surprising that an agency would not consider costs when deciding how to regulate. We could make cars safer by requiring that they be made like tanks. We could reduce hospital infections by requiring hazmat-style protective equipment. But alternatives like these are usually not appropriate. It is more reasonable to approach every regulation by weighing its unique costs and benefits. Read More
The outcry over the EPA’s proposed ground-level ozone standards continues with representatives of the nation’s mayors, counties, cities and regions adding their voices to the debate in a letter to EPA Administrator Gina McCarthy this week.
In the letter dated March 17, the U.S. Conference of Mayors, National Association of Counties, National League of Cities, and National Association of Regional Councils, detail the impact the most expensive rule in U.S. history will have on local governments. These four organizations collectively represent 19,000 cites and mayors, 3,069 counties and over 500 regional councils. Read More
Today, Senate Minority Leader Mitch McConnell (R-KY )introduced a Congressional Review Act (CRA) resolution disapproving of the Environmental Protection Agency’s (EPA) greenhouse gas (GHG) regulations for new power plants. It has now been almost two years since the Administration first proposed requiring carbon capture and sequestration at all new coal-fired power plants. And for two years the manufacturers of CCS systems and the utilities that will ultimately be responsible for installing the systems have consistently articulated that the technology is not ready.
Through official comments in rulemaking, congressional testimony and meetings with regulators the messages have been consistent: 1. we need more time to develop the technology; and 2. establishing these regulations as they are written will halt the development of the next generation of power plant technologies in the United States, ceding these technologies to our international competitors.
It is unfortunate that it has come to this, but manufacturers are glad to see that Senator McConnell is not backing down. With the right policies in place, U.S. manufacturers will develop the technologies that lead to a sustainable energy future.
Last week, Bloomberg BNA obtained a leaked copy of the EPA/Army Corp of Engineers’ cost-benefit analysis on the draft Waters of the United States rule. The draft analysis looks at the costs of implementing new rules that expand federal jurisdiction and the benefits to be gained. Manufacturers are more than a little skeptical of this analysis and believe the EPA/Corps have underestimated the costs and over valued the benefits. For example, nowhere in the study does the EPA or the Corps discuss the costs of delays in projects and the inevitable cost of citizen suits as a result of the expanded jurisdiction.
On the other hand, the analysis acknowledges that the costs will rest squarely on the shoulders of landowners, natural resource extraction companies, developers, states, local governments and tribes investing in infrastructure, and manufacturers. These costs will come in the form of higher permit fees, additional permits and additional mitigation costs.
The EPA and the Corp continue to seek to expand their jurisdiction over waters that have typically not been under their purview. Upon hearing the words “navigable waters” one conjures up the image of ships, barges, tankers, sail boats, canoes, rowboats, perhaps even a raft, but the EPA has long ago moved past traditional navigable waters in terms of their jurisdiction. They are looking at such things as tributary streams both natural and artificial, farm ponds, ephemeral streams, and water flow of all kinds. They want to regulate all ponds, lakes and wetlands regardless of how tenuous their proximity might be to navigable waters.
If finalized, this rule will give the EPA and the Corps the ability to regulate virtually any body of water and claim there is a nexus to navigable waters. Manufacturers strongly opposed the rule in this form.
On Friday November 15 Congressmen Upton, Scalise, Whitfield and Barton sent a letter to EPA Administrator Gina McCarthy identifying a section of the Energy Policy Act of 2005 (EPAct 2005) that could invalidate EPA’s September GHG proposed regulation for new power plants. At issue is the agency’s identification of three U.S. projects participating in the Clean Coal Power Initiative (CCPI) to make the determination that CCS is an “adequately demonstrated” technology.
The CCPI is intended to help bring advanced coal technologies, like carbon capture and sequestration (CCS), to the point that they are commercially viable. The Department of Energy (DOE), the agency that administers CCPI, described the intention of the program in its 2009 Funding Announcement after passage of the American Recovery and Reinvestment Act of 2009:
“By overcoming technical risks associated with bringing advanced technology to the point of commercial readiness, the CCPI accelerates the development of new coal technologies for power and hydrogen production, contributes to proving the feasibility of integrating carbon dioxide (CO2) management and power production and facilitates the movement of technologies into the marketplace that are emerging from the core research and development activities.” U.S. Department of Energy, Financial Assistance Funding Opportunity Announcement, Clean Coal Power Initiative – Round 3 (June 9, 2009).
CCPI is starting to pay dividends as several U.S. projects are utilizing the program to help advance promising technologies, like CCS. Three projects of particular note include:
- Southern Company’s Kemper County Energy Facility in Kemper County, Mississippi
- Texas Clean Energy Project in Odessa, Texas
- Hydrogen Energy California Project in western Kern County, California
These three projects could be the first utility scale power plant projects in the United States to deploy CCS. They also happen to be the three U.S. projects that EPA pointed to in their proposed GHG rule for new power plants to conclude that CCS is an adequately demonstrated technology – a necessary finding before it can require the use of the technology in these regulations.
Here is the hitch: EPAct 2005 contains explicit language stating that projects receiving assistance through CCPI cannot be the sole factor in determining that a technology is adequately demonstrated for the purposes of these particular regulations.
Some have argued that the EPAct language only bars the use of CCPI projects if they are the only basis for the adequately demonstrated determination. They point out that EPA relied on others factors like industry experience capturing CO2 and technical studies in proclaiming CCS commercially viable. While examples of similar albeit different industrial processes and technical studies have played a role in advancing CCS technologies for power plants to where they are today, the best and most logical basis for determining commercial readiness would be actual deployment the technology. In EPA’s GHG rule for new power plants, the agency relies on still-in-development projects that are participating in a DOE program specifically intended for technologies that are not yet commercially viable, and certainly not adequately demonstrated.
At some point simple logic has to win the day. In this case, neither logic nor law supports EPA’s determination that CCS has been adequately demonstrated. If this interpretation is correct, the September 20, 2013 proposed GHG regulation for new power plants, the first major component of the President’s Climate Action Plan, would be void.
It is time for the Administration to reevaluate the path it is pursuing under this regulatory regime. There is limited environmental benefit and considerable societal costs to the perpetual regulatory uncertainty caused by trying to expand the limits of regulatory authority.
While the Environmental Protection Agency (EPA) is developing regulations for greenhouse gas (GHG) emissions for existing power plants, the Agency is holding 11 listening sessions in cities across the country. The scheduled date, time and location for each listening session are included below. Additional information can be found on the EPA’s website, which can be accessed by clicking here.
Manufacturers consume one-third of the nation’s energy and are directly impacted by any regulation that increases the cost or reliability of electricity. Additionally, manufacturers stand “next in line” for GHG regulations and the precedents set by the GHG rules for power plants could serve as a model for similar regulations of other sectors. The NAM encourages the EPA to consider the following as they develop GHG rules for existing power plants:
- We Need An All Of The Above Energy Strategy: Energy markets are ever changing. The world of energy five years ago looked considerably different than it does today; and the world in five years from now will be different as well. The best way to adjust to changing energy markets while keeping American manufacturing competitive is by having a diverse energy mix, which gives us a wide-variety of options to choose from.
- Energy Can Be Our Competitive Advantage: Energy has increasingly become a bright spot for U.S. manufacturing. Regulations that cause the premature retirement of plants in our existing power fleet will increase energy prices for manufacturers and turn a potential competitive advantage to a disadvantage.
- Reliability Matters: We already know that because of regulations already on the books, a significant portion of our existing power fleet will retire in the next several years. Manufacturers depend on reliable sources of electricity to operate. Any interruption in the supply of electricity, even if for a very short duration, disrupts the manufacturing process and is incredibly costly. It is critical that the EPA take adequate time to consider the impact GHG regulations will have on grid reliability.
- We Cannot Address Climate Change On Our Own: GHGs are global by nature, and any effort to materially reduce emissions will require global commitment and participation. Led by manufacturers’ innovations in energy development and efficiency, U.S. GHG emissions are as low today as they were in the mid-1990s, this while manufacturing gross output increased 29% during that period. Even more remarkable is that these emissions reductions have taken place while China, the world’s largest emitter, has seen emissions more than double over that same time period. EPA regulations to limit GHG emissions will have little or no impact on climate change if the rest of the world operates without similar restrictions.
EPA Listening Sessions:
October 23, 1013
Session 1 – 2:00-5:00 pm EST
Session 2 – 6:00-9:00 pm EST
Sam Nunn Atlanta Federal Center
Bridge Conference Rooms
61 Forsyth St. SW
Atlanta, GA 30303
Point of contact: Dorothy Riddell – (404) 562-8080
November 8, 2013
9:00 am-4:00 pm CST
U.S. EPA Region 5 Offices
Metcalfe Federal Building
Lake Michigan Room
77 W. Jackson Blvd.
Chicago, IL 60604
Point of contact: Megan Gavin – (312) 353-5282
October 30, 2013
9:00 am-5:00 pm MST (last 2 hours for call ins)
U.S. EPA Region 8 Offices
1595 Wynkoop St.
Denver, CO 80202
Point of contact: Environmental Information Center – (303) 312-6312
New York City, NY
October 23, 2013
Session 1 – 9:00 am-12:00 pm EST
Session 2 – 2:00-5:00 pm EST
U.S. EPA Region 2 Offices
New York, NY 10007
Point of contact: Jennifer May-Reddy – (212) 637-3658
San Francisco, CA
November 7, 2013
9:00 am-8:00 pm EST
U.S. EPA Headquarters
William Jefferson Clinton East
Room 1153 (Map Room)
1201 Constitution Ave. NW
Washington, DC 20460
Point of contact: Angela Hackel – (919) 541-5262
The Environmental Protection Agency (EPA) quietly announced today that they are abandoning efforts to finalize “waters of the United States” guidance, which they have spent the last several years working on in conjunction with Office of Management and Budget (OMB).
Under the now defunct rule, the EPA asserted their authority to regulate water wherever it may fall, whether it be a ditch, an ephemeral stream, a farm pond or snow melt. The NAM believed this expansion is overly broad and goes far beyond the original intent of the Clean Water Act.
In the end, the EPA acquiesced to manufacturers, other stake holders, the Army Corps of Engineers, and the White House announced late yesterday that they are dropping their efforts to publish guidance to define “waters of the United States.”
Oddly enough, after numerous meetings and years of debate, the EPA made the announcement in the seventh paragraph of a blog, stating that “the final version of this report will serve as a basis for a joint EPA and Army Corps of Engineers rulemaking aimed at clarifying the jurisdiction of the Clean Water Act. A draft of this rule was sent today to the Office of Management and Budget for interagency review. The proposed joint rule will provide greater consistency, certainty, and predictability nationwide by providing clarity for determining where the Clean Water Act applies and where it does not.”
While the EPA doesn’t seem to give much weight to this announcement, it could not be more important to manufacturers. The NAM will continue to work with our partners and the EPA/Corps on this rule to ensure the EPA does not pursue what we consider to be another drastic regulatory overreach by the federal government.
Today, the Senate confirmed Gina McCarthy to be the next Administrator of the Environmental Protection Agency (EPA). Administrator McCarthy will almost immediately have the opportunity to show how she intends to run the Agency for, perhaps, the remainder of President Obama’s second term. Will she pursue a reasonable approach to regulations, ensuring they are designed with care, input from stakeholders and without unnecessarily harming the economy? Or, will we have more of the same partisan-driven regulations, unattainable standards and astronomical compliance costs that so often occurred during the President’s first term?
One of the very first tests will be the Agency’s “re-proposal” of the carbon standards for new power plants pursuant to the President’s Climate Action Plan. In their first crack, the Agency proposed a rule that would have required all power plants irrespective of fuel to meet the same standard, effectively mandating plant design and fuel-type for all new plants. Strongly opposed by this organization and many others, the one-size-fits-all approach would have been an unprecedented attempt at using an environmental statute to set U.S. energy policy. After substantial input from several entities (and direction from the President), it is now widely believed that the Agency will try again and reissue the proposed power plant rule in September, setting separate standards for different fuels. A step in the right direction? Maybe. The answer will lie in the details.
EPA can set a separate emission standard for every fuel-type, unit design, and plant size, but if those standards cannot be achieved through existing, commercially viable technologies, the result will be the same as the last proposal: energy policy, not environmental regulation; one-size-fits-all, not all of the above. We stand ready to work with Administrator McCarthy in her new role, one that we hope will lead to a reasonable and balanced approach to environmental regulations.