Today, the House Energy and Power Subcommittee held a hearing on a discussion draft legislation from Representative Ed Whitfield (R-KY) that would require increased transparency regarding the economic impacts of EPA regulations. Since 2009, EPA has issued or proposed an unprecedented number of regulations which increase the cost of energy, limit fuel diversity and place tremendous economic burdens on manufacturers. In a 2012 study released by NAM, it was estimated that, by conservative estimates, the cost of just six EPA rules would cost roughly $100 billion annually and more than 2 million jobs. In a worst-case scenario, the regulations could mean the loss of $630 billion, 4.2 percent of GDP and more than 9 million jobs.

The Energy Consumers Relief Act of 2013 would require EPA to submit a report to Congress projecting energy cost increases and employment effects on any EPA rule estimated to cost more than $1 billion. In addition, the discussion draft would prohibit EPA from finalizing any of these billion dollar rules if DOE, in consultation with FERC and EIA, determine that they would cause significant adverse economic effects.

As manufacturers await rules regulating everything from water used for cooling systems to greenhouse gas emissions, we need more transparency in rulemakings, and checks and balances to ensure we are not regulating the economy back into recession.

Greg Bertelsen is director of energy and resources policy, National Association of Manufacturers.

Today the Senate Committee on Environment and Public Works held a confirmation hearing for the EPA’s Assistant Administrator for the Office of Air and Radiation Gina McCarthy, President Obama’s nominee for EPA administrator.

Several senators had questions about the EPA’s proposed regulations and their impact on the economy as well as the continued act of what is known as “sue and settle” by the agency. Senator Vitter (R-LA) asked McCarthy if the EPA would change its process regarding “sue and settle” and alert other stakeholders when legal action is taken.

The NAM sent a letter yesterday to Acting EPA Administrator Bob Perciasepe asking the agency to please provide some sort of alert system for each time a lawsuit is filed against the agency or if they receive a notice of legal action.

Senator Inhofe (R-OK) asked McCarthy if the EPA planned to make any changes to the proposed greenhouse gas rule on for new power plants and she did not provide any information on the agency’s plan for the rule. This rule would essentially prevent the construction of any new coal burning power plants and several types of new gas-fired power plants. Manufacturers believe we should continue to take advantage of all sources of energy, including but not limited to coal, natural gas, oil, nuclear, renewables, and energy efficiency. Lower energy prices help manufacturers better compete and taking some sources off the table  will only hurt our long term competitiveness.

Moving forward we would like the EPA to take into careful consideration the cost and economic impact of all regulations proposed by the agency.

Yesterday, NAM Executive Committee Member Drew Greenblatt, president and owner of Marlin Steel Wire Products in Baltimore, testified before the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. The focus of the hearing was on the impact of regulations. In his testimony Mr. Greenblatt examined the negative impact of regulations on jobs and the global competitiveness of U.S. businesses.

Manufacturers are facing a growing number of burdensome regulations from various government agencies making it harder to compete today’s global marketplace. Mr. Greenblatt stated:

“To compete on a global stage, manufacturing in the United States needs policies that enable companies to thrive and create jobs. Growing manufacturing jobs will strengthen the U.S. middle class and continue to fuel America’s economic recovery.”

We need to find ways to reduce the cumulative burden of regulations on manufacturers so they can focus on getting Americans back to work.

Over the past week, EPA announced that it would reconsider parts of the “Utility MACT” air toxics regulation on power plants and that it needs even more time to finish it’s reconsidered “Boiler MACT” regulation to get it right. In doing so, EPA implicitly admitted that it moved too fast and underestimated the challenges present in crafting each regulation.

There is a very unsettling common thread in both the Utility MACT and Boiler MACT rules: both regulations were born from litigation, and the deadlines for issuing the regulations came from judicial settlements EPA entered into.

In both cases, EPA agreed to a schedule providing little time to review and respond to comments before entering a final rule. In both cases, the judicially-enforced consent decree EPA entered into prevented the agency from issuing a final rule that was free from errors. And in both cases, EPA now finds itself in the midst of a messy reconsideration process to correct those errors.

These are not isolated events. In fact, EPA recently entered into a consent decree for its PM2.5 National Ambient Air Quality Standards (NAAQS) that gives the agency barely 100 days to review comments, a dramatically shorter time frame than EPA has given for any new or revised PM or Ozone NAAQS since 1971. If the Agency receives 100,000 public comments on the rule—a conservative estimate—EPA staff would have to review over 1,000 comments and draft 4-5 pages of responses per day, every day, including weekends. (continue reading…)

The Environmental Protection Agency (EPA) continues to pile on complex  regulations that impact manufacturers. Just last month, the Agency proposed more stringent air quality standards for fine particulate matter (i.e. PM2.5 NAAQS). Business groups are already starting to speak out. At an EPA public hearing yesterday in Sacramento, CA, the California Manufacturers & Technology Association (CMTA) urged the EPA to maintain the current PM2.5 standards.

“This proposal will unnecessarily burden the economy at a time when the country and California, in particular, are struggling to overcome the recession,” stated Mike Rogge, Policy Director at the CMTA. Rogge’s testimony highlighted the serious and immediate consequences for areas that do not attain the air quality standards established by the EPA. For example, companies building new facilities or performing major modifications to certain existing facilities in, or near, a non-attainment area will be required to install the most effective emission reduction technology regardless of cost. The EPA’s actions will cause many manufacturers around the country to think twice before expanding their operations.

We encourage all manufacturers to urge the EPA to retain the existing PM2.5 standards during the comment period which ends on August 31, 2012. You can learn more about the EPA’s proposal here.

API and ANGA released a study today calling into serious question the methane emissions data EPA has been using for unconventional gas wells.  According to the API/ANGA survey, methane emissions from hydraulic fracturing of unconventional gas wells are, in fact, 50 percent lower than EPA’s estimates.

When is EPA going to correct this flaw?  Today’s study is not even the first time EPA’s hydraulic fracturing emissions data has been contradicted by real-world evidence.  The agency has been sitting on an open Request for Correction under the Information Quality Act (IQA) since December 19, 2011. 

That request (filed by the U.S. Chamber of Commerce, available here) included a survey by URS Corp. of approximately 1200 wells, showing that actual gas emissions from the completion of unconventional shale gas wells were more than 1200% lower than EPA’s gas emission estimate.

A coalition of environmental groups filed a detailed opposition to the IQA correction request, complaining that URS had relied on too small a sample.  Well, today’s API/ANGA survey (also conducted by URS) is of 91,000 wells.  That should be more than enough.

Here’s why this matters: researchers, financial analysts and other governmental bodies are relying on EPA’s flawed estimates of natural gas emissions from unconventional shale gas well completions in a number of research reports and policy consideration. And policymakers are ultimately taking into account these potentially flawed numbers when designing regulations.

Read the API/ANGA study here.

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

Today President Obama signed an Executive Order requiring agencies to ask the public for “regulations in need of retrospective review” and semi-annually report to the public and to the Office of Information and Regulatory Affairs (OIRA) on the status of retrospective review efforts. The order also directs agencies, when conducting retrospective reviews, to give priority to initiatives that will significantly reduce costs and burdens imposed on the public. Agencies are also directed to consider the cumulative effects of their regulations and give priority to those reforms that “would make significant progress in reducing those burdens….”

The Executive Order, a follow-up to an earlier order on retrospective review, is aimed at actually reducing the public burden imposed by existing regulations. Manufacturers are encouraged by the requirements placed upon agencies for public participation and for prioritizing review initiatives.

Involving OIRA, the federal government’s regulatory gatekeeper, in the retrospective review process is important. OIRA can hold agencies accountable and help ensure agency efforts result in real reductions of costs and burdens imposed on regulated entities.

The Executive Order’s issuance coincides with the release of a new report on retrospective review by the Council of Economic Advisers. The Council asserts that, with the Executive Order, “the process of retrospective review should become a standard part of the assessment of federal regulations.” (continue reading…)

Today the National Association of Manufacturers joined 153 other organizations in a letter supporting H.R. 2008, the “Keeping Politics Out of Federal Contracting Act of 2011.”  The legislation would preclude the White House from forcing federal agencies to require entities to disclose their political spending – as well as that of their officers and directors – as a condition of participating in the federal procurement process.

The letter was sent to Chairman Darrell Issa (R-CA) and Ranking Member Elijah Cummings (D-MD) of the House Committee on Oversight and Government Reform, which is scheduled to consider H.R. 2008 tomorrow.

The bill is in response to an April 2011 draft Executive Order that would require disclosures of political contributions by select parties as a condition for bidding on federal contracts. The draft order is an attack on the First Amendment and suffers from severe legal and policy defects that would, if signed, immediately damage the federal contracting process.

From the letter:

The legislation reaffirms the principle, currently embodied in federal procurement laws, that the Executive Branch has an obligation to procure goods and services based on the best value for the American taxpayer, and not on political considerations. It also reaffirms the principle that the Administration cannot enact through executive fiat legislation that Congress has considered and explicitly rejected.

The NAM thanks Rep. Issa for his leadership on this issue and urges members of the Committee on Oversight and Government to approve H.R. 2008.

Erik Glavich is director of legal and regulatory policy, National Association of Manufacturers.

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.

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.