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Commentary

Congress Should Rein in EPA


     
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The U.S. Environmental Protection Agency, created during the presidency of Richard M. Nixon, blew out 40 candles on its birthday cake recently.

While EPA administrators and employees were congratulating themselves on some jobs well done—the amount of particulate matter being inhaled by Americans has fallen dramatically under the agency’s enforcement of the Clean Air Act, for example—after being reenergized by President Obama’s support for an activist “green” policy agenda, it also has proposed or already approved new regulations that promise to hobble economic growth and add to the nation’s unemployment problem.

Consider the following:

Despite the Obama administration’s recent decision to delay new rules regarding smog and emissions from industrial boilers, EPA is preparing to regulate carbon dioxide and other greenhouse-gas emissions from power plants and industrial users that consume oil, natural gas and coal beginning in January. The potential cost: cutting back on carbon emissions will force many smaller, coal-fired power-generating plants to shut down, almost certainly raise electricity rates around the country, undermine the international competitiveness of U.S. businesses and send more American jobs overseas.

It is proposing a reduction in the national ambient-air-quality standard for ground-level ozone, a precursor of smog, which would require industries and many small businesses to adopt new, costly emission controls. (Public opposition has prompted the EPA to delay the rule’s issue until July.) The potential fallout: according the Manufacturers Alliance, an organization that for 75 years has conducted economic research, estimates 7.3 million jobs lost beginning in 2020.

It just raised the amount of corn-based ethanol that must be blended with gasoline from 10 percent to 15 percent for 2007 and newer vehicles. Projected cost: around $5 billion a year in federal subsidies.

It is reviewing federal legislation proposing to regulate so-called hydraulic fracturing in natural-gas production, a drilling technique that state agencies already oversee and which has been used in more than one million wells in the United States since 1950. The potential cost: in Appalachia’s Marcellus Shale zone alone, EPA regulation would destroy 280,000 potential jobs and reduce tax revenues by $6 billion over the next decade, according to a study by Natural Resource Economics.

It is preparing to mandate the use of expensive cooling towers at new and existing power plants to protect fish and other aquatic species from hot water discharges into lakes, rivers and coastal waters. The potential cost: $300 million per coal plant (413 plants impacted) to $1 billion for nuclear plants (59 units impacted). Because it likely would be prohibitively expensive to install cooling towers at most power plants, utilities are likely to shut down their plants, requiring them to import and resell higher cost power from other regions.

It is proposing regulations to classify coal ash as hazardous to human health. Projected cost: more than $20 billion and tens of thousands of jobs, while boosting electricity costs for businesses that rely on recycled coal to manufacture cement, wallboard and roofing materials.

It is preparing to mandate air pollution limits in January for industrial and commercial boilers that power the operation of paper mills, chemical plants and other facilities. Projected cost: based on an analysis by the Council of Industrial Boiler Owners, $20 billion.

It tightened air quality standards for sulfur dioxide, mercury and nitrogen oxide, negatively affecting many industries, particularly utilities that rely heavily on coal. Projected cost: $70 billion over the next decade to replace or retrofit coal plants.

These are just a handful of the costly, job-killing regulations EPA has imposed or is preparing to impose. Many of the initiatives are aimed directly at the oil and natural gas sector, which is an important driver of job growth and nowadays accounts for 85 percent of our nation’s energy supplies.

The dreams of federal bureaucrats and their environmental-activist supporters notwithstanding, windmills and other “green” sources of power are unlikely to replace fossil fuels anytime soon. In the meantime, when the U.S. economy is anemic and nearly 10 percent of the labor force is unemployed, EPA has done (and can do) much harm. The new Congress should rein it in.


William F. Shughart II is a Research Director and Senior Fellow at The Independent Institute, J. Fish Smith Professor in Public Choice in the Jon M. Huntsman School of Business at Utah State University, and editor of the Independent Institute book, Taxing Choice: The Predatory Politics of Fiscal Discrimination.

Taxing ChoiceFrom William F. Shughart II
TAXING CHOICE: The Predatory Politics of Fiscal Discrimination
So-called “sin taxes”—the taxing of certain products, like alcohol and tobacco, that are deemed to be “politically incorrect”—have long been a favorite way for politicians to fund programs benefiting special interest groups. But this concept has been applied to such “sinful” products as soft drinks, margarine, telephone calls, airline tickets, and even fishing gear. What is the true record of this selective, often punitive, approach to taxation? Learn More »»






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