EPA's Regulatory Train Wreck: Strategies for State Legislators

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1 EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS ALEC’s Energy, Environment and Environment Agriculture Force promotes ALEC’s the Energy, (EEA) Task mutually beneficial link between arobust economy and a healthy environ- Force Task The well-being. and health human of benefit the for resources agricultural and natural our of use and quality the enhance to seeks and ment, works with over 200 public and sector private members to develop model best practices legislationon issues climate change, like environ- agriculture, Wolkins David Representative lands. public and management, waste rights, property regulation, chemical federalism, reform, regulatory health, mental Moskitis Public ofSector Chairman, theand of American Gas Tom Indiana Force’s Association serves andas MartinHyatt the ShultzTask Brownstein of or 202.742.8542. [email protected] at be reached and can Director Force Task is the Woods Clint Co-Chairmen. Sector as Private serve Schreck Farber Legislators State for Strategies Wreck: Train Regulatory EPA’s Council Exchange Legislative © 2011 American All rights as reserved. Except permitted under Copyright the Act of United States 1976, no part ofmay this or be reproduced publication in distributed without the prior permission of the publisher. system or retrieval in a database means, or stored any or by form any Published by Council Exchange Legislative American 11th Floor NW, Ave., 1101 Vermont DC 20005 Washington, Phone: 202.466.3800 202.466.3901 Fax: www.alec.org by ALEC Designed for Joel Sorrell About ALEC’s Energy, Environment and Agriculture Task Force Task and Agriculture Environment Energy, About ALEC’s About the American Legislation Exchange Council Exchange Legislation the American About roughly with legislators state of organization membership individual nonpartisan, largest nation’s the is (ALEC) Council Exchange Legislative American The 2,000 members across the nation. ALEC iscommitted toadvancing theJeffersonian principles freeof markets, limitedgovernment, federalism, and individual liberty. ALEC is classifiedby the InternalRevenue Service as a 501(c)(3) non-profit, public policy and educationalorganization. Individuals, tax-deductible gifts. through work ALEC’s support to are eligible companies, or associations corporations, foundations, philanthropic WWW.REGULATORYTRAINWRECK.COM egulatory Creep ate Sovereignty andResources A’s Inadequate Attention toCosts andFuzzy Numbers onBenefits egulation ofGreenhouse GasEmissions,CleanAirAct Chapter 3 – Off the Rails: Nine Reasons to Oppose EPA’s Overreach estrictions onMining Permits, Clean Water Act egulation ofHazardous Air Polutants from Commercial andIndustrial Boilers, CleanAirAct tional Ambient AirQualityStandards, CleanAirAct egulation ofHazardous Air Pollutants from Power Plants, CleanAirAct egulation ofCoal Combustion Residuals, Resource Conservation and Recovery Act egulation ofCooling Water Intake Structures, Clean Water Act Chapter 2 – Leaving the Station: Elements of a Train Wreck Chapter 1–TheGloriousMessofEPA Regulation Executive Summary R Ener Minimal En The En St Electric R Harm t EP Ener R R R Na Clean AirT R R R gy DependenceandAmerican Supply gy Affordability OF EPA REGULATION THE GLORIOUS MESS vironmentalist War onCoal o PublicHealthandWelfare TABLE OF CONTENTS eliability ransport Rulefor Sulfur Dioxide andNitrogen Oxides, CleanAirAct vironmental Benefits 36 35 34 33 32 32 31 30 27 27 19 19 18 16 15 14 13 12 12 10 vi EXECUTIVESUMMARY

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 39 44 44 45 47 47 49 51 53 egulatory Review Review egulatory R Enhanced R Sovereignty State Reclaiming Heard Voice Your Make to Other Avenues Appendix A – Resolution Opposing EPA’s Regulatory Train Wreck Wreck Train Regulatory EPA’s Opposing Resolution – A Appendix GHG Regulations About EPA Saying Really Are States Appendix B – What Appendix C – Glossary Chapter 5 – All Aboard: State Legislative Responses Legislative State Aboard: All – 5 Chapter esolutions Chapter 4 – Looking Up: America’s Untold Clean Air & Water Success Story Story Success Water & Air Clean Untold America’s Up: Looking – 4 Chapter WWW.REGULATORYTRAINWRECK.COM vi section of this emerging regime—EPA’s assault on the use of fossil fuels, fossil of use the regime—EPA’s on emerging assault this of section realities or democratic accountability. This report highlights one small sub- economic regardto without onslaughtregulatory its in ahead pushed has big government market interventions by voters last November, the Agency Administration’sthe disapprovalfor of expression resounding the Despite of American business,andtrample ontherights ofstates inthe process. competitiveness the damage economy,irreparably the and jobs to pacts negative im- enormous cause costs, energy dramatically increase will that next several years a slew of overreaching and inefficient air and water rules EPAcontinue promulgatingpromulgating will the begun and over also has attention, the of lion’sshare the received has cap-and-trade) of rejection of Congressional (despite Act regulation Air Clean the under pending emissions gas greenhouse While history. nation’s our in reliability electric and affordability on energy assaults regulatory hostile and breathtaking most the of one undertook Agency the occasion, the Tocelebrate 2010. inDecember old 40 years turned Agency Protection Environmental The Introduction OF EPA REGULATION THE GLORIOUS MESS EXECUTIVE SUMMARYEXECUTIVE Cap-and-Trade Through theBackDoor regulatory burden, encourage innovations, and otherwise get out of the way. the reduce to is role government’s needs; country the innovations energy the supply will market The elections. November the in policy vironmental en- to approach Administration’s revolutionary the rejected voters the But the onlyway.” “Cap-and-trade not the cat; it was justelections: one way skinning was of 2010 the after conference press first his reiterated in President the as Or hensive omnibuslegislation.” mayhavingup end tochunks, in toit compre-opposed do of as sort some We fuels. fossil on over-reliance our of facets all address to begins that policy energy an have to is year next priorities top my of “One Congress: with interview an in Obama President of words the In regulation. through agenda trade cap-and- rejected the implementing by revolution” “green a into nation Instead, EPA equation. completelythe from coal the to wants force move re- to EPA wants technologies, green-coal and clean new of introduction the with decline to continue will and decades several last the over clined de- sharply have coal of use the from emissions that fact the Yetdespite and reliable fuel. reflects its low cost, ready availability, and proven effectiveness as a stable dant domestic source of energy. The fact that the nation uses so much coal abun- most our far by is it coal; of Arabia Saudi the is America coal. from produced from fossil fuels; about 50 percent of American electricity comes mind for the American economy. Eighty-five percent of American energy is in has Agency EPA’s the what of example telling a is fuels fossil to hostility EPA’s regulatory train wreck. from resulting issues broader the illustrate processes—to manufacturing and commercial andother generation electric for coal, particularly and last Fall following defeat of cap-and-trade in cap-and-trade of defeatfollowing Fall last RollingStone EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS I. vii omulgation of stringent ozone and particulate matter standards under standards matter particulate and ozone stringent of omulgation estrictions on mining permits in Appalachia in aneffort that will gut Pr EPA with program, (NAAQS) Standards Quality Air Ambient National the revising standards recently adopted during the Bush to; objected groups Administration environmental that R region. in that and kill jobs industry the coal

No Cost Too Much Too No Cost What will all of this regulation cost? EPA of find busi-to out. cross-section a pleas broad doesn’t Despite from care doesn’t know evidently and has a to refused study undertake ness, of EPA the ofeffect its greenhouse gas regulatory initiatives on jobs, theeconomy and business competitiveness. It has similarly failed to conduct a study of the overall, cumulative weighto in forced been have Others together. of all of cost its regulations enormous. is cost that report, the in discussed as be; will cost that what on It is not, though, simply a matter of the scope of theseregulations that constitutes a train wreck. AsKathleen Hartnett White and Mario Loyola felt the has that state a (hailing from Foundation Public Policy of the Texas new note: “The federalism) cooperative to approach revised EPA’s of brunt heavy-handed operates EPA… far more like an activistfor whom nostan- too science no and low too risk no onerous, too impact no high, too is dard speculative.” • • The images contained in Chapter 1 that illustrate there is nothing orderly or reasonable about this this assault approach; overlap- regulatory entails to combine that deadlines,and uncertainties unattainable ping mandates, threaten economic state and recovery, sovereignty, the very basis of our affordablemarket-based energysystem. As anyonefamiliar with the im- the you, tell will years forty last the over Act Air Clean the of plementation low-hanging environmental fruit have been picked, and these additional clean minimal with costs increase exponentially to likely are rules pollution benefits. air and water Wall Wall notes was a period in which “the EPA had notes was a just been period handed in which “the EPA egulation of sulfur dioxide nitrogenand oxides under the Clean Air egulation ofcoal combustion residuals under the Resource Conserva- egulation of cooling water intake structures at fossil fuel (and nuclear) (and fuel fossil at structures intake water cooling of egulation egulation of mercury, acidgases, and other hazardous air pollutants egulation of GHG emissions from industrial, manufacturing andelec- egulation of essentially the same emissionsfrom the same facilities R on January starting with comply must utilities that rule a Rule, Transport expect doesn’t and rule the formulating still is EPA though even 2012, 1, at best; this summer it until finalize to R tion andRecovery Act, with the potential for designating thismaterial for the first timeever as waste, a hazardous a designation which could electric generation; for the use of coal seriously damage R R R electric generating stations under the Clean Water Act without ade- justification; quate from power plants as well as from commercial and industrial boilers (despite the lack of evidence that emissions in these miniscule quan- tities cause health welfare or impacts) using inflexible,the stringent, command-and-control mechanisms set forth in the National Emissions section of the Clean Air Act; Air Pollutants Hazardous for Standards R tric generationfacilities under the enormously inefficient Source New program; Review Per- Source New command-and-control top-down, inflexible, the under program; Standards formance

• • • • • The Regulatory Train Wreck Train The Regulatory and final- developing is EPA attitude, government-knows-best its Reflecting By rules. policy major 170 than more and regulations major 30 nearly izing Agency’s the surpassed already had changes these 2010, of November late regulatory output in the entire first term of BillClinton, which the Street Journal Street of air pollution laws.” under the 1990 revamp powers new broad pipeline in the near term EPA’s just for the use of coal for electric genera- includes: purposes industrial and commercial for tion and • WWW.REGULATORYTRAINWRECK.COM viii es. With time running out in 2010, EPA actually threatened states with states threatened actually EPA 2010, in out running time With es. Agencygavethe states fewa only monthstomake chang- law needed the But requirements. gasEPA’s greenhouse to conformnew to order in ate change to their state laws and regulations states under which these programs oper- ordered Agency the gases, greenhouse regulate to chose EPA which under programs permit V” “Title and “PSD” the administer cases most in states Because unconscionable. of short nothing is 2011 of ning And what EPA did to states to get this program implemented by the begin- Register until thelast two businessdays of2010. Federal the in published get not did and holiday Christmas the of eve the on wereissued pages 500 than totalingmoreDecember, them in of 6 and them of 7 2010, in regulations gas greenhouse 11 than less no mulgated EPA last-minute of unprecedented rulemaking. flurry an pro-saw 2010 of end the result, a As Congress. incoming the for accompli fait a create to order in year this of beginning the by place in regulation gas greenhouse have to determined was EPA purpose. that for intended never was that statute a Act, Air Clean the under gases greenhouse regulate to effort ed EPA’sNowhereis misguid- its regulatoryin overreach apparentmorethan Cramming Down Greenhouse GasRegulation es “It

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EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS I. ix What then can state legislators do to stop the train wreck? The report out- report The wreck? train the stop to do legislators state can then What your at tools legislative issue-specific and comprehensive the of some lines disposal, including expressing strong oppositiontoregulatory train EPA’s sov- state assert to bills review, regulatory enhanced resolutions, via wreck ereignty, and tipsfor getting yourstate on the right side of the nine ongoing around hovers unemployment As struggles. relations public and legal job- these of effects the against in weigh to of states duty it is the percent, crushing regulations. In asparticular, the highest-priority near-term actionitem, we urge you call- 5 Chapter in highlighted resolution the to consideration close give to ing on Congress to stop the train wreck. The resolution has been introduced in a number of states, and has, as of early passed February, out of hear need Our to allies in Congress houses in Indiana and Wyoming. state your support immediately; the Administration needsto understandyour determination. in stands it as wreck train this into glimpse a offers report the while Finally, early 2011, the regulatory environment is obviously dynamic. provide To ongoing updates to this material (including news on additional rulemakings, innovativetools, and linksto newstudies), an accompanyingweb- site is hosted at www.regulatorytrainwreck.com. This website also contains video from an ALEC workshop held at and the Jobs, Fewer Prices, 2010 Higher Assault: Regulatory States and “EPA’s on Nation Summit Policy Less with Energy,” indispensable analysis from Peter Glaser of Troutman Sanders LLP law firm, and Harry Alford of the National Black Chamber of Commerce. We will keep you up-to-speed on the progress of the the Stop Wreck Train resolution in legislatures across theWe country. encourage you to check this site often. Ifyou have any additional questions or Environment model for requests legislation, please Energy, ALEC’s contact and Agriculture Task Force Clint Director, Woods, at [email protected] or 202.742.8542. What Can State Legislators Do? Legislators Can State What Given all of this regulatory EPA activity, now is an essential time for con- to cerned legislators a stand athwart state train wreck, and yell Stop. The first half and indeed the firstfew months of 2011 couldprove decisive, as moves EPA to implement as much of its regulatory agenda as possible before it can be stopped. In the first part of 2011, Congress appears set ve- and legislative oversight EPA extensive both more through consider, to authority. limit EPA to Act, ways Review the Congressional hicles like More and More Regulation and More More the use primarily rulemakings target that on EPA focuses While this report on- regulatory this noting that worth is it study, case particular a as coal of slaught is also underfoot in a variety of other fields. For example, having finalized greenhousegas emissionrestrictions under the Clean Air Act for in April trucks and light vehicles passenger 2016 model-year 2012 through 2010, the Agency has already proposed the first-ever GHGstandards for medium- and vehicles heavy-duty and is also in the process of developing 2017 to 2025.for model-years EPA vehiclestandards additional light-duty also has under consideration greenhousegas rulescovering almost every and from cars trucks to ships, sector boats of and the airplanes, economy, to mining and agriculture, to all types of manufacturing and industrial facilities,to movable equipment ofevery kind (fromfork lifts tolawnmow- buildings. commercial and residential and to ers), taking of process the in is or considered has EPA gases, greenhouse Beyond up additionalregulation of numerousproducts, emissions, and activities, formal- herbicide atrazine; the widely-used fracturing; including: hydraulic dehyde emissions from pressed wood products; lead wheel weights; water nutrients in Florida; lead bullets and tackle; pesticide drift; spray dust; and Bisphenol A. cement; Portland WWW.REGULATORYTRAINWRECK.COM 10 W tee and one of the principal authors of the current version of the Clean Air Commit- Commerce and Energy House the of Chair former long-time The report willshow. the schematic illustrates will be hugely debilitating to the economy, as this that rulemaking EPAtop-down the through outcome that force to Trying solar. and wind with generation that all replace and coal uses that sector but it is foolish to think that we can shut down the 50 percent of the power renewable resources. Renewable resources have an important role to play, reliable less expensive, more use to industry mandate to is sector power EPA’s fuel. the input for an vision as coal using cease tosectors industrial and manufacturing the to force and stations generation electric of fleet purpose: to force the power sector into early retirements of its coal-fueled a common have of which all regulations multiple EPA shows timeline The EPA’s illustrates plan. amply anti-coal report this in described regulations the of all not but some showing schematic following words,the thousand 1 that EPA has unleashed as a train wreck? If a picture is worth a worth is picture a If activity wreck? train regulatorya as of unleashed has EPA blizzard that the to refer now many so do hy OF EPA REGULATION THE GLORIOUS MESS 1 gether from any actionthat willfurtherhamstring ourfragile economy.” time of near double-digita unemployment, the EPA“[a]t should stand down alto- right: it has Michigan, from Republican a Upton, Fred gressman Con- Committee, Commerce and Energy House the of Chairman Incoming economy isleast ableto handlethestaggering regulatory burden. the when a time at it doing is it And schematic. the in shown regulation additional the of all mess that of top on layer to intends it regulation, gas greenhouse of mess glorious a triggering EPAon intentis only Not mind. a “glorious mess.” Mr. Dingell underestimated what the current EPA has in that EPA regulation of greenhouse gases under the Clean Air Act will create said famouslyMichigan, Democratfrom a Dingell, John Congressman Act, http://upton.house.gov/News/DocumentSingle.aspx?DocumentID=217157. Utn omns n P Dly f eattn Ooe euain, Dcme 8,2010, December Regulations,” Ozone Devastating of Delay EPA on Comments “Upton 1 EPA’s Regulatory Train Wreck Ozone SO2/NO2 CAIR/CATR Water Boiler MACT Currently Estimated Regulatory Timeline for 1 Coal-Fueled Power Plants and Commercial Industrial Boilers (as of January 2011) Final Rule for EPA’S REGULATORY TRAIN WRECK: Effluent Guidelines CCRs Mgmt Final rule expected

Final CAIR Replacement SO2/NO2 Beginning CAIR Phase I Proposed CAIR Rule Expected Secondary Seasonal NOx Cap Replacement Rule Expected NAAQS Next Ozone Effluent Guidelines NAAQS Revision Compliance 3-5 Boiler yrs after final rule SO2 MACT Reconsidered Primary Final 316(b) final Ozone NAAQS Boiler MACT Revised CAIR NAAQS regulation rule expected Ozone Vacated Compliance 316(b) Compli- NAAQS ance 3-4 yrs CO PSD Effluent Guide- CAIR NO2 2 after final rule Regulation lines proposed Remanded Primary STRATEGIES FOR STATE LEGISLATORS Step 1 rule expected PM-2.5 SIPs NAAQS due (‘06)

08’ 09’ 10’ 11’ 12’ 13’ 14’ 15’ 16’ 17’

Final

Next NSPS for CO2 Begin PM-2.5 CAIR NAAQS PM-2.5 Phase I Utility MACT Proposed Begin Revision SIPs due Annual final rule ex- Rule for CCRs CAIR (‘97) SO2 Cap pected Management Compliance CO PSD Step 3 Phase I Proposed 2 wth CAIR Utility MACT Regulation Com- Annual NSPS 316(b) proposed Replacement Compliance 3yrs mences CAMR & NOx Cap for CO2 rule expected Rule after final rule Delisting Rule CO2 PSD CO PSD Step 3 Final EPA 2 vacated Regulation Rulemaking Nonattain- Step 2 Completed Proposed Utility MACT ment Desig- Rule for CCRs proposed rule nations Management

11 PM2.5 Ash Utility MACT CO2 WWW.REGULATORYTRAINWRECK.COM 12 legal and economic context at the end of this section. While the Admin- the While section. this of end the at context economic and legal more with discussed is regulation, water and air federalestablished from greatest departure the as Act, Air Clean the under regulation GHG fects). ef- economic overall or lost, jobs costs, compliance include (to regulation each for tag price relative the of citation available, where and, affected, sources the rulemaking, timeline for and background the including wreck, This section provides a very basic introduction to the elements of this train aging theeconomy. maintaining steady progress in reducing emissions over time without dam- most abundant source of domestic energy—no matter the cost rather than keepingin agendajustan of with of nation’s eliminating use coal—the the more seems deadlines compliance unattainable with regulations dundant re- of EPA’s tsunami emissions, reducing continually of path established long- its on continue should country the While facilities. industrial and manufacturing to apply some generation stations; electric same the from emissions same the controlling for mechanisms command-and-control inefficient, duplicative, for provide regulations these of Most jobs. and whole, a as economy consumer,the the to electricity of cost the on fect a dramatic collectively, ef- and have will individually rules, these that firm W 2 dramatic illustration of the scope of of scope EPA’s con- the data hard illustrationdramatic of agenda, regulatoryimpending the imageof the trainhile wreck provides a E L ea lements v ing

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a tation T rain W : re using the“best technology available.” by effects environmental minimize structures intake water cooling these and repeat the process. The Clean Water Act’s Section 316(b) requires that watering naturalfroma watersteam towatertothe condenseback body a steam to turn a turbine and generate electricity, and many then use cool- theironce- replace throughcoolingsystems coolingwith towers. Most to plants heat water into plants power nuclear) (and fuel fossil existing of number significant overbroad regulation a could that force an considering EPA is situations, certain under populations fish protect to attempt an In Clean Water Act Regulation ofCooling Water Intake Structures es to theU.S. energy mixandeconomy. that even a small number of these rules are likely to result in radical chang- trainthe of wreck.ChapterindependentanalysisAs discusses, indicates 3 of these individual proposals, let alone the combined effect of all elements such a statement since it has not itself fully analyzed the costs and benefits doomsday“trumped-up pushing of predictions,” EPA basis no has maketo onslaught environmental this opposes who anyone accused has istration ck

Background EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 2 13 threaten up threaten The NERC study 6 According to a re- 5 nationally.

4 The enormous capital expenditures, com- 7 ) as well as roughly one-third of all installed 3 ). several several hundred million dollars (and, for nuclear Background Sources Affected Sources Estimated Price Tag Price Estimated

bined with reliability issues, could result in substantialrate increasesfor consumers. nuclear capacity (approximately 60 GW). (approximately nuclear capacity The Electric Power Research Institute (EPRI) has found that the total initial total found the that (EPRI) has Institute Research The Electric Power capital costs would be around $64 billion Residues (CCRs) of Coal Combustion Regulation Act Recovery Conservation and Resource In 2008, a dam at a coal ash storage impoundment operated by the Ten- Authority resulting infailed, a spill.nessee significant Valley Although the problem was the integrity of the dam, and although only some coal ash is stored in impoundments (some of it is stored in landfills andcoal mines and much is beneficiallyreused), EPA has seized on this incidentto consider altering the regulatory classification of coal ash and designating it a hazardous waste. This will have highly significantconsequences for the viability of coal-fired electricgeneration, which inevitablyproduces com- bustionresiduals such ascoal ash and muststore it some place or sell it According According to the North American Electric Reliability Corporation (NERC), this rule could impact existing plants with once-throughcooling systems, units generating steam and gas as including oil 1,201 as coal, steam, many (totaling 252 gigawatts (GW) port by New utilityJersey PSEG,to “[a]requirement cooling install towers decision.” power will plants a into force retrofit-or-retire found that, as a result of these decisions, this rule alone could could alone rule this decisions, these of result a as that, found each For country. the throughout reliability electric turn, in and, GW 41 to plant, costs could run plants, as high as $1 billion Section 2 A has never promulgated any Despite Despite an almost comprehen-

son has stated that the deadline for for deadline the that stated has son Jack

1 Many states largely rely on BPJ (best professional judgment) judgment) professional (best BPJ on rely largely states Many

While Administrator Jackson stated in a recent letterto Chairman Upton that she does not favor a federal“one-size-fits-all close mandate,” attention must be paidtoEPA proceeds whether with thepro- regulations that federal for necessity the Moreover, flexibility. necessary with business vide intervention in this area, as opposedto action by thestates, is questionable. As noted by the Nuclear Energy Institute (NEI),a recent Supreme Court decision granted EPA broad flexibility to “allow for protect theboth the statesaquatic environment and to thereliability of the electrical analyses.” grid site-specific andthrough cost-benefit appropriate EPA has indicated, however, that it could require once-through cooling sys- cooling once-through require could it that however, indicated, has EPA tems to which shifttowouldcooling towers, closed-cycle be extremely an and unnecessary retrofit. costly Beyond economic costs associated with the rulemaking, there are several regu- structure intake pause cooling water other broad on for reasons any lation. From barrier netsto fishreturn systems, thereare varietya of al- Sev- effects. aquatic adverse reducing any for towers cooling to ternatives eral studies have indicated that the overall impact for fish populations as cooling Furthermore, minimal. is systems cooling once-through of result a increase emissions could towers ofdecrease matter efficiency, particulate use. water and GHG, and expand sive sive set of federal NPDES regulations, schemes regulatory NPDES their if conditions, permit NPDES crafting when prescriptions. specific have not do ac- final take to scheduled is EPA and 2011, 14, March is rule proposed the tion in July 2012. 316(b) is implemented through the NationalPollutant Discharge Elimina- tionSystem (NPDES)regulatory scheme. meaningful rules implementing Section 316(b), although theyhave tried times. several WWW.REGULATORYTRAINWRECK.COM 14 under RCRA Subtitle C.” regulation warrant CCRs whether determining in follow to EPA required specifically Congress procedures prescribed statutorily the meaningless render would … so do “to that arguing issue, this on course reverse ally unilater- to authority the has Agency the whether about questions raised rightfully has Committee Commerce and Energy the of Upton Chairman ardous designation. haz- a require would that criteria below far are CCRs in levels toxicity the that found have all and decades, several last the over CCRs studied have state of agencies variety Power a ResearchElectric Institute, and the ture, of Energy, the Federal Highway Administration, the Department of Agricul- hearings in the latter half of the year. More than 400,000 comments were public of series a held and 2010 21, June on rule proposed its EPAissued CCRs. of utilization” and disposal any, the environment, if of the and health human “adverse on effects the toCongress on detailed comprehensiveand report” a submit[s] studyand EPA is prohibited from declaring CCRs to be hazardous until it “conduct[s] a designated asahazardous waste? EPAhas that material a containing drywall use will builder what instance, For credit. to hard is reuse beneficial for ash coal sell still can it that try still products. in lawfully used be EPA's But attempt to reassure indus- the could therefore CCRs and impoundments, or landfills in stored is material the if C Subtitle under wastehazardous a as designated be only will CCRs that says Agency The waste.hazardous for reserved is which Act, covery would be regulated under Subtitle C of the Resource Conservation and Re- CCRs considering, EPAis that proposals regulatory two the of one Under that coal combustion residuals (CCRs)donot represent hazardous waste. concluded that 2000 and 1993 in determinations regulatory final issued for beneficial use in products. EPA is considering this action despite having 9 8 Groups including the U.S. Department U.S. the including Groups that would go along with such a requirementsdesignation.” costly the to due coal with plant power a operate to sible the effect of treating coal ash like nuclear waste and make it nearly impos- have “would rule the it, put WesternCaucus Congressional the by report compliance costs and force power plant retirements. As an excellent 2010 enormous create could waste hazardous as ash coal of aspect any lating regu- trade, recycling CCR $2-billion-a-year the threatening to addition In economic activity. CCRs are beneficially recycled, which contributes to more than $2 billion in of year) per tons million 60 than (more percent 44 roughly balls, bowling and cabinets kitchen to products wallboard and cement Portland From of CCRs. uses beneficial numerous the stigmatizing risk would waste ous a non-hazard- from CCRs of classification the changeEPA toby move Any ance beginningthefollowing year. compli- with 2011, in expected is decision final A rule. the on generated lion to $77 billion $77 to lion of conservative range the in be would utilities electric for and drive upthecost ofelectricity.” scenario, extreme an in down , shut be could units coal 350 to “250 that risk a PowerResearch sees Institute, Electric environmental the forsector run up to $20 billion annually billion $20 to up run

Estimated Price Tag Sources Affected 10 . 12 Other estimates have found that the that estimates have found Other . 13 Bryan Hannegan, Vice President of the of President Vice Hannegan, Bryan 14

11 Subtitle C compliance costs at least $55 bil- $55 least at price tag could tag price EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 2 15 resource resource Even without addressing without addressing Even 19 .

20 Of particular concern is the Clean Air Act requirement that exist- that requirement Act Air Clean the is concern particular Of 18 Background Estimated Price Tag Price Estimated

The Bush Administration’s Clean Air Interstate Rule (CAIR)was an ambi- tious program designedto reduce thecontribution of electric generators and of transport that finecause pollutants ozone particle to the interstate pollution in the eastern United States. Although the rulewas largely supported by the utility industry,states and the environmentalcommunity, the rule was overturned in court because it provided for unlimited inter- fired utility in the country. An analysis by the North American Electric Reli- Electric American North the by analysis An country. the in utility fired for to up retrofits that the require rule could estimates ability Corporation 753 units and that up to 15 gigawattscould beforced intoretirement by rule. the foundA that, 2005 analysis by Administration the Energy U.S. Information depending on the availability of commercialized mercury removal technologies capable of reaching the 90 MACT percent requirement, $358 billion as $261 to be as high could costs Clean Air Transport Rule for Sulfur Dioxide and Ni- trogen Oxides Clean Air Act ing plants come into compliance with MACT standards within three years. ing plants come into compliance with within MACT standards three years. Expensive pollutioncontrol equipment will needto be installedto meet be will installations these and plants, of number large a at standards these at the same timerequired to as of meet the many forced industry is being significant a be will which cost, of Regardless requirements. EPA other the neces- the install to plants many for possible be not may simply it concern, within the time compliance limited sary meet the to equipment standards close. them to forcing frame, potential scrubber requirements, a Credit Suisse report predicts capital ex- capital predicts report Suisse Credit a requirements, scrubber potential penditures of $70 to $100 billion for utilities to comply with just the mer- Rule. cury and Clean Air Transport MACT 17 and more than 80 percent of seafood (the 16 Second, the impact of U.S. sources for mercury exposure 15 Wall Street Journal Street Wall recently noted, EPA “started writing the Background Sources Affected Sources

This rule will apply on a plant-by-plant basis to nearly every coal- or oil- EPA is poised to regulate all hazardous air pollutants (HAPs), including mer- including (HAPs), pollutants air hazardous all regulate to poised is EPA cury and acid gases, for coal and oil Control Available power “Maximum of plants. adoption the require will Under EPA Act, Air Title Clean I of the Technology” (MACT) for these HAPs. The rule will include an extremely strict requirement that all existing power plants must equal meet must the plants average New plants. power of percent 12 top the of performance Agency the that decree consent a Under standard. stringent more even an rule a with timeline, expedited incredibly an on act to set is EPA to, agreed 2011. of 2011 and a final rule in November in March proposal While there are obvious and environmental health issues arising from exposure to mercury and other there are pollutants, also hazardous reasons to look impositionskeptically upon of EPA’s stringent command-and-control MACT standards to regulate emissions from domestic power plants. First, as the rule while the data that will supposedly inform its analysis were still being collected.” Regulation of Mercury, Acid Gases, and Other Haz- Gases, and Acid Mercury, of Regulation Plants Power (HAPs) from Air Pollutants ardous Act Clean Air is vastly overstated. is vastly overstated. At least 30 percent of the mercury that is in the U.S. comes from other countries, primary exposure method) eaten in this country is from foreign shores. The Electric Power Research Institute estimates that less than 5 percent of the 2,500 tons of mercury released each year comes from the U.S. As JeffHolmstead, formerfor Assistant Administrator EPA Air and Radiation, explains: “[E]ven if you could eliminate all the mercury emissions in the from U.S. every completely, source of mercury pollution,you would have exposure.” no impact on people’s almost WWW.REGULATORYTRAINWRECK.COM 16 was proposed, the Agency has issued three successive “Notices of Data of “Notices successive three issued has Agency the proposed, was resultthatEPA fly.the revisingon proposednow rule the is rule the Since EPArush, its of regulatoryits issued proposal before wasit ready, the with Moreover, because stage. proposal the in still point this at are that 2012 in standards for to plan required being are Utilities industry. utility the EPA’s rush to implement the rule is alsocausing considerable problems for in Court,itwillremain inplaceuntil EPA adopts anew rule indue course. overturned was CAIR although fact, in rights; states’ foreclose thus and 2012 in effective rule the make to has EPA why reason no is There law. eral requirements on utilities, which seems to be a clear violation of federal stead, EPA is going to skip the SIP process entirely and directly impose fed- In- best. think they way the in rule the with comply to plans their revise to opportunity reasonable a states allow to time no is there 2012, in rule to revise the plan. Here, since EPA wants utilities to become subject to the required to give the state a reasonable amount of time, measured in years, is EPA’sit so, state’sdo toa EPA failsthat if plan thinks requirements,and to meet (SIPs) Plans Implementation State having for sponsible states.EPAStatescausingof re-arerights the trampleon to the rule to be to rule the Although the rule is still in the proposal stage, EPA wants environmental by groups, itisopposedby utilitygroups that use coal. supported is rule proposed the While issue. on this approach consensus istration’s ministration, however, previous Admin- eschewed the stringent emissions reductions than CAIR. The new Ad- more requires that(CATR), TransportRule Air Clean the as known program, new a proposed has EPA remand, On provision. Act Air Clean applicable the under authorized not was said Court the that mechanism program,cap-and-tradea a under allowances stateof trading effective in 2012. This rulemaking rush is rush rulemaking This 2012. in es in the rulemaking methodology,rulemaking the affectcould rule’s in which the es of all final EPAwhich in Availability” askedhas for commentsfundamental on chang- for power plants. lytic reduction equipment (SCRs) to remove nitrogen oxides—are required cata- selective and dioxide sulfur remove equipment—“scrubbers”to trol the number could go as high as 55 GW if the most expensive pollution con- ally, with$2.2billionborneby consumers each year. tive cost estimate indicates that the annu- pricebillion CATR $2.8 be could units could run up to SCR and scrubbers in investing of cost the that found Group Brattle The American 7million retirement. with to roughly households) power (providing gigawatts 7 threaten NERC’sriver.reportfigures that most modesteven rule could the the version of the of side western the on some and River Mississippi the of east plants power fuel fossil of fleet entire the virtually to apply CATRwill The

Estimated Price Tag Sources Affected requirements. As a result, the industry does not even know spe- know even not does industry the result, a As requirements. that power suppliesremain reliable. cifically what rule EPA is actually proposing, much less what term, capital-intensive investments necessary to ensure to necessary investments capital-intensive term, 22 the final requirements will be, even though the industry industry to fashion coherent plans for making the long- will have to comply by the beginning of next year. The $120 billion by 2015. Even EPA’s extremely conserva- transportforimpossible virtually it making rules, the industry does know, however, that significant invest- rnpr. hy ae rmsd he mr such more three promised have They transport. ments inpollution control technology are likely. se wt rls o drs itrtt pollution interstate address to rules with ished Moreover, EPA has told industry that it is not fin- not is it that industry told Moreover,has EPA 21 A report by the Brattle Group found that found Group Brattle the by report A 23

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 2 17

28 31 Analy- 30 by 2020. by between 2020 and $1.013 trillion job losses would be more than 7 million be more job losses would As a result of these non-attainment designations, the 29 Electric generation emits only 6 percent of U.S. ozone precursors. ozone U.S. of emits only 6 percent generation Electric 27 labor job group Unions Jobs “significant for and foresees the Environment losses the during across country a period of high unemployment.” The Congressional Research Service found that, as a result of ozone standard, this the new number of counties in non-attainment would jump from 85 to 650. Particulate Matter Particulate particulate fine both for standards new proposing be also will EPA 2011, In matter thatresults from the chemical transformation in the atmosphere Ozone EPA is about to promulgate its second progressively new, more stringent diminishing smog prob- the nation’s address since to 2008 standard ozone Admin- new the by attempt unilateral a represents revision latest The lem. istrationto change thestandard adoptedby the previous Administration without doing any further studies or analysis and instead relying on the muchsame ofinformation, which is nowstale, that the Adminis- previous the EPA allowed relied served on. if far better Thewould public be tration current standard to be fully implemented and then reviewed additional whether determine to cycle review NAAQS science as a part of the regular is justified. standard of the a tightening Under its new proposal, EPA has proposed to reduce the acceptable primary ozone level as low as 0.060 parts per million (ppm), down from the current level of 0.075 ppm. There is no scientific basis for this change and Roger Dr. Committee, Advisory Scientific EPA’s of Chairman former the even McClellan, to in the referring proposal of the to Bush lower Administration called ppm, 0.075 to ppm 0.0070 of range a to standard ozone previous the - presenta inaccurate and flawed a on based judgment policy “a revision the consid- to 0.080 be up range a that recommended and science,” tion of the ered. sis by Manufacturers Alliance/MAPI estimates that the annualcost ofat- taining a standard of 60 ppb would be U.S. 2030 and total

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Although all of these NAAQS will bear large costs, two specifically areex- amined below. present “the EPA is stiffening the regulations for all six at the same time.” same at the six all for regulations the stiffening is EPA “the present Administrator Lisa Jackson has significant latitude in setting NAAQS, yet EPA yet NAAQS, setting in latitude significant has Jackson Lisa Administrator Supreme pollutants. these of regulation unprecedented toward heading is Court Justice Stephen Breyerexplained in Associations to flexibility sufficient Administrator the grants it and risk; all of elimination industry.” to ruinous standards quality air ambient setting avoid The Clean Air Act requires EPA to set National Ambient Air Quality Stan- dards for carbon monoxide, lead, nitrogen dioxide, ozone, sulfur dioxide, and particulate matter. “No Administration has ever updatedmore than two of these rules in a single notes term,” the Regulation of Ozone, Sulfur Dioxide, Nitrogen Ox- Nitrogen Sulfur Dioxide, Ozone, of Regulation Ambi- National under Matter Particulate ides, and Standards Air Quality ent Act Clean Air EPA will heed this admonition remains to be seen. remains will heed this admonition EPA Under the will many standards EPA promulgate, areas of the country that as “non- clean air will now be designated have to considered currently are attainment” areas, or areas thatfail to meet these newstandards. There are severe consequences for these non-attainment areas. Pledging a full commitment to “conducting vigorousoversight on this matter, including conducts Sena- ensuring an that open, and EPA transparent, fair process,” tor James Inhofe and Chairman Fred Upton pointed out in a can mean December loss of and toindustry Lisa “Non-attainment that: Jackson letter economic development, including plant closures; loss of federal highway and transit funding; increased regulation andEPA control over permitting decisions; toindustrial increased for costs facilities implementstrin- more costs.” and energy fuel and increased controls; gent WWW.REGULATORYTRAINWRECK.COM 18 sued saying the rule as issued would be significantlywouldbe differentissued as sayingrule sued the its than pro- is- was order court the after release press a EPAissued days. 30 for only sided with them. It issued an order delaying issuance of the final standard theCourt and request, EPA’s opposed however, parties, Environmental that theAgency told thecourt was “achievable, butvery aggressive.” decree with a new requirement for a final rule by April 13, 2012, a timetable consent the modify to court the Accordingly,EPAasked comment. public takelegallywasobligatedand it repropose thatrule further to decided the to make extensive changes to the rule. Given the extent of the changes, EPA EPA and needed proposeddata”rule, it “newthe thatat on based decided those comments. In fact, there was an overwhelming outpouring of protest its proposal from the public and to make changes to the rule in response to date, the Agency did not leave itself enough time to consider comments on However, 2011. 21, January by rule that rule by agreeingbyfinal a toissue final a issue to itself obligatedEPA decree, consent a Under rule). MACT (Boiler boilers industrial and commercial for standard Technology(MACT) EPA2010, 29, AchievableApril proposedControlMaximum On releasedits Clean AirAct Commercial andIndustrial Boilers Regulation ofHazardous Air Pollutants from in 2006, is more than $6 billion. 1999 dollars)(in the current of standard,was which justonly promulgated EPA’s areas.rural in cost annualized mostly the (understated)estimate of activity,earth-disturbing other and agricultural, mining, from results that matter particulate coarse and sources of number a from emitted gases of to make thesestandards more stringent. ticle standard, and these concerns will heighten to the extent EPA chooses have expressed concern about their ability to meet the current coarse par- industries agricultural and mining the Both more. even cost this increase

Background 32 A further tightening of this standard will oeos udn o US manufacturers.” U.S. on burdens “onerous create would rule this that concern deep year,expressing last Sep- of in tember Jackson Lisa to letter bipartisan a to on signed Senators U.S. 41 boilers constructed after therulebecomes final. new any on and boilers existing 10,000 over to apply would rules These other HAPs are nearlyimpossible to meet. forpowerRequired plants. reductions in hydrogen mercury, chloride, and requirements MACT mercury forthcoming the as effects technological lar simi- have will and (HAPs) pollutants air hazardous for requirements ing The rule would impose difficult-to-meet emissions standards and monitor- boilers. biomass-fired and fuel-fired fossil affected the upon relying tries final rule until April of 2012, there is little consolation for numerous indus- the issuing delay would it that December in announced Agency the While soliciting the public to asktheagency to change its own rule. rightfirstthe Instead, time. we have spectacle the a of government agency rule MACT Boiler the do to have time takencould the it 2010, regulation in GHG through rushing to resources many so devoted not had it if perhaps and once, at through regulations many so jam to rush a such in been not evidently does not even agree with and therefore Agency will reconsider. the Perhaps if EPA had that rule a comment, public to subject adequately been not has admits that it rule a issuing up ended Agencyresult,has the a havenot did thatit to leave As sufficientto time public comment. consider figured it that approach EPA its regulations, and of sure of so evidently was the agency. The Agency has been in a tremendous rush to issue a multitude EPA’s these standards on actions into basiccompetencycall questionof the agency can take publiccomment ontherule. the so that reconsideration for entertainpetitions would it that and posal

Estimated Price Tag Sources Affected 33 35

h cs, codn t the to according cost, The 34 EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 2 19 - - 41 EPA’s EPA’s The Na- The 40 38 $220 billion per 39 authorities. authorities. Party Democratic a with also Kentucky, of Commonwealth The as well as extending their jurisdictional reach over state and local local and state over reach jurisdictional their extending as well as governor, joined governor, a lawsuit brought by the Kentucky Coal Associa- Background

under these laws for public comment and formal rulemaking procedure rulemaking and public procedure under formal comment these for laws ing Control and Reclamation Act. They have requirements disregarded Water Water Act, the National EnvironmentalPolicy Act and the Surface Min- regional restrictions threaten thousands of additional jobs, as it is estimated estimated is it as jobs, additional of thousands threaten restrictions regional economy. in the elsewhere 3.5 jobs mining job generates each coal that Regulation of Greenhouse Gas Emissions of Greenhouse Gas Regulation Clean Air Act is moving full ahead steam on EPA GHGregulating under the Clean Air Act. West West Virginia, with a DemocraticParty governor, alsorecently sued EPA over its regulations of thecoal-mining industry. One of the firstpress re leases issued by the new - West Virginia revoca governor denounced EPA’s “drastic.” and “devastating” as Mine for the Spruce tion of the permit Through stopping the issuance of and mining the permits, EPA Army Corps of Engineers have violated the AdministrativeProcedures Act, the Clean tion against the Agency’s use of the CleanWater Actto withhold mining permits. Governor Steve Beshear characterized EPA actions, includingre- jection of 11by permits Kentucky the and approved Water Division sub- of “ar as 2010, early in granted permits federally-approved to similar stantially and bitrary and unreasonable” as risking up to 18,000 mining jobs. tentiallystranding investments andcosting jobs” and the permits. Act Water Clean by generated activity economic of year tionalMining Association had already filed suit EPA against and theArmy Corps of Engineers in mid-2010 for unlawfully obstructingWater Act Clean mining. coal for processes permitting - “[e]very “[e]very billion dollars It has been widely re- 37 A study by IHS/Global Insight (and com- (and Insight IHS/Global by study A 36 risk nearly 800,000 jobs and that EPA is at EPA war with coal mining in Appalachia, one of the prin- already permits, 150 halted It region. that in industries cipal con- to region the in officials, federal and state by approved Thisdoes not include theto close duct review. additional a hundred already backlogged permits is EPA sitting on and not subjectingto review. has EPA claimed, based 2008study findingupon tenuous from a a single inside draft connectionbetween water near mines reduced and the under unacceptable populations are mayfly mining of effects the that mayflies), those (yes, Act. In anti-mining subjective April 2010, Clean the Water created Agency guidance. regulatory on Appalachia via new focused standards As part of this Appalachianhostilitytoward coal announced mining, in EPA mid-January that, for the first time in it history, wasrevokingretroactively an existingwater permit. The Agency does not have thestatutory author ity to do this under the Clean Act Water and has all jeopardized effectively Inc.’s Coal Arch of veto EPA’s from waves shock The permits. similarly-issued Spruce beyond the Mine mining No. indus- 1 Virginia reverberated in West try. The EPA actionwas widely seen asraising concerns about “whether permits previously issued for other businesses could also be revoked, po- Restrictions on Mining Permits Mining on Restrictions Act Clean Water United United Steel Workers Union, “will be sufficient to imperil plants.” operating industrial the many of status ported that a Department of Commerce report challenged EPA’s estimates estimates EPA’s challenged report Commerce of Department a that ported of the cost of complying with these regulations, but thereport hasbeen publicly released. not spent on MACT upgrade and compliance costs will put 16,000 jobs at risk at jobs 16,000 put will costs compliance and upgrade MACT on spent and reduce US GDP by as much as $1.2 .” billion missioned missioned by the Council of Industrial Boiler Owners) concluded that this proposal would WWW.REGULATORYTRAINWRECK.COM 20 mowers), and more regulations on manufacturing and industrial facilities, industrial and manufacturing on regulations more and mowers), (from every movable stripe of equipment lawn- to forklifts mining, cilities, everything from ships and boats, to planes, cars and trucks, agricultural fa- of regulation considering EPAis Indeed, economy. the of facet every ally controlvirtu- to unprecedentedability an it gives emissions regulateGHG combusting EPA’sinevitablebyproduct of fuels, fossil to authority of claim the is gas) greenhouse principal (the dioxide carbon because and fuels sil across almost the entire U.S. economy. Because the economy runs on fos- regulation gas greenhouse considering is EPAprograms, these of top On electric generating facilities. of coal-fired fleet existing the at get EPA to for tool key a are regulations NSPS the Thus, upgrade. they not or whether facilities, existing as well as facilities upgraded and new govern will regulations NSPS plant power the V regulations, Title and PSD the unlike Critically, regulations. permit EPA’sto subject simultaneously be will V which Title of and all PSD almost in 2012, facilities of types both for rules final to committed It 2011. 10, petroleumand refineries December 2011 on 26, July on powerplants fuel mentalgroups,performanceagreeingpropose tostandardsGHG forfossil environ- and with states litigation settled year,had it EPAthat announced last of December late In 2011. in refineries and plants power for (NSPS) SourcePerformanceNewEPA Second,GHG Standardsrollout to poised is well asoperating permitsunderTitle V. as Review New Source of portion (PSD) Deterioration Significant of tion Preven- the under permits pre-construction covers This 2010. 2, January upgradedtially sources above GHG that certain emit thresholds, began on substan- and new to applies which program, permitting EPA’sFirst,GHG in 2011: different two from on sources stationary programregulating GHG tracks of a implementing begun has and 2010, May in light-dutytrucks and mobiles The Agency finalized first-ever rules for reducing GHG emissions from auto- the states had “worked closely” to implement the GHG program.GHG the implement to “workedclosely” stateshad the EPA also had the nerve to announce in a press release that the Agency and implementation plan on8 states that didnotactquickly enough. EPAfederal2011, a 2, imposed January of as makeit; statesnot Some did cy authority to meet EPA’s schedule, in order to avoid the construction ban. statesof invokedgallopingmanythroughwhich rulemakings, of emergen- majority large a witnessed 2011 of months final The schedule. expedited did not make the necessary law and regulatory changes on EPA’s incredibly they if sources manufacturing and industrial large for ban construction a ments. require- With time running out in GHG 2010, EPA actually new threatened states Agency’s with the to conform to operate programs these grams, EPA needed states to change their laws and regulationspro- underV which Title and PSD the administer cases most in states because Worse, on theSunday oftheNew Year’s holiday weekend. no time at all to prepare for regulatory requirements that became effective entities regulated and states left This 2010. of days business two last the until RegisterFederal the in published get not did that holiday Christmas December, and six of them totaling more than 500 pages on the eve of the in them of 7 2011, in regulations GHG 11 than less no promulgatedEPA requirements.federallaw and states’rightsover trampled that stampede ning of 2011 under these two permit programs, EPA triggered a regulatory In its rush to commence regulating greenhouse gas emissions by the begin- EPA plans further rulemakings to expand the universe of regulated facilities. generation time, manufacturing largeelectric over and industrial,facilities; is program this of target initial The programs. permit V Title and PSD the EPA’snoted, As program GHG planned under firstwas regulation its in step economy, anditisprepared to actonthat mandate. cleaner,greener a as sees it what into economy American the transform commercialEPAand industrialbuildings. and mandatea believes has it to 42 This is This EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 2 21

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cally nity and when ginning and t c house -EPA, Advanced Notice of Proposed Rulemaking for Regu- for Rulemaking Notice of Proposed Advanced -EPA, Gas Emissions Under the Clean Air Act, Greenhouse lating July 30, 2008 -Congressman John Dingell (D-MI), former House Energy House Energy (D-MI), former John Dingell -Congressman December 7, 2009 Chairman, Committee and Commerce House (D-MN), former Collin Peterson -Congressman February 2, 2010 Chairman, on Agriculture Committee -EPA Administrator Lisa Jackson, October 6, 2010 October Lisa Jackson, Administrator -EPA gases t Does anyone think this is a good idea…? this is a good think Does anyone “The “These “The “I , 2 above the statutory thresh- 2 , and moderately sized buildings (something in the neighborhood the in (something buildings sized moderately and , 2 A very large number and variety of buildings and facilities could therefore become subject to the program—including malls; enclosed buildings; hotels; apartment and office many large retail stores and warehouses; college buildings, hospi- worship; houses of large facilities; assisted-living and large tals agri- heated large facilities; pipelines; product processing food cultural facilities; indoor sports arenas and other large public Sources Affected Sources

emissions are different. Any building that uses natural gas or oil for heating heating for oil or gas natural uses that building Any different. are emissions CO emits olds. As EPA itself has said, more than six million buildings and facilities Troutman of Glaser Peter as And thresholds. statutory the above GHG emit explains: firm LLP law Sanders The Clean Air Act is uniquely unsuited for regulation of greenhouse gases. The Clean Air Act is uniquely ofgases. unsuited regulation for greenhouse The Act is designed to regulate pollutants with a local or regional impact, not pollutants that globally circulate in the atmosphere, making domestic emission reductions unlikelyto materiallyaffect worldwide atmospheric concentrations. In order desired to regulatory squeeze outcomes EPA’s into the Clean Air Act the framework, Agency is straining the Clean Air Act’s PSD and Title V relatively sets statute The point. breaking the beyond programs permitting permits obtain must projects which determine to thresholds emissions low under these programs. Those thresholds are appropriate for traditional types of pollutants because, in only general, large industrial facilities emit traditional pollutants above those levels. But GHG, and particularly CO simply not the case. Appendix B—“What States are Really Saying About GHG Regulation”—onEPA pg 51excerptscontains from astate en- dozen vironmental agencies expressing displeasure with the heavy-handed EPA approach. of a 75,000 square foot building) emits CO WWW.REGULATORYTRAINWRECK.COM 22 the economy. across damage incalculable create will and facilities, numerous for ments require- permit trigger will absurd, is words, own its in that, regime tory a regula- adopted unwittingly have will Agency the then thresholds, tory statu- the change to authority its about wrong EPA is If court. in litigated utory language that Congress has enacted, and these issues are now being There are a variety of legal questions aboutEPA’s authority to change stat- becoming immediately subjectto permitting requirements. and facilities buildings from smaller of multiplicity a “absurdof the result” characterizesAgencyas the preventwhat to “TailoringRule”) its (in gases greenhouse for levels higher much to thresholds to those had raise unilaterally has thereforeEPA permit. a obtain to able be would source no number of sources to obtain permits would so overwhelm the system that ings are de minimis as compared with total global emissions, requiring this prepare a permit application, and before preparation of the applicationcan the regulations that have now gone into effect. It can take a year or moreto for plan understand and to time havelead to business for need the of sion comprehen- no have to seems Agency the that beyond but goal, this plish could do the same, then the nation would be prepared. EPA did not accom- states the if and 2010, of end the by regulations its of all finalize just could it if that be to seemed 2010 EPA’sin view done. been already has wreck train regulatory this into rush headlong Agency’s the of damage the 2011, 2, January on began that regulation GHG the forprepared fully are munity com- the regulated and the states that claim to continues EPA Although Regulation Nation isUnprepared for EPA Greenhouse Gas senseless. Apart from the fact that the CO the that fact the from Apart senseless. be would sources of number this regulating that concede EPAforcedto is breweries andwineries; andmany others. bakers, manufacturers; soda restaurants; buildings; assembly 2 emissions from these build- these from emissions 43

the myriad of legal challenges already in the courts,”the in already challenges legal of myriad the EPA’swhethersurvive and will groupsadvocacy rule fromtailoring lenges chal- BACT,permitting apply will regulatorsstate individual and EPA how of knowledge of specific lack delays, “permitting including factors Citing a substantial price tag. tory revolution. However, estimates from a variety of perspectivessuggest regula- this of costs economic full the assess program precisely to difficult GHG it make its of cost overall the of study a conduct to EPA’s failure more uncertainty. precedented number of businesses and business associations, creating yet un- an by challenges legal in resulted has requirements gas greenhouse for EPA’s basis legal questionable the And gases. greenhouse for ments wouldhaveity toto meetdo “Best Available Control Technology” require- a informationvague, providing to was facil- little what as guidance exactly the important, November.until As issued not was Summer,guidance the by that question on this material informational other and guidance sue is- would it that 2010 of Spring the in indicatedEPA Although permit. a obtain to order in install to required be will facility a controls gas house Moreover, there remains a complete lack of clarity of what types of green- program. statethe among and munity agencies that are required to implement EPA’s com- business the in both uncertainty significant created and investment business retarded has time lead of lack complete the attested, have tions need to obtain a permit. Thus, as a large number of business trade associa- order to decide whether they wish to develop a project that will trigger the even begin, businesses needs to understand the regulatory requirements in regulations will raise the so-called hurdle rate required for new U.S. invest- EPA’s that believes Formation Capitalfor Council American newthe of ing

Estimated Price Tag 44 Dr. Margo Thorn- Dr.Margo EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 2 23 3.6 million Fewer Jobs 50 percent for gasoline 20302050 2.3 million 20302035 2.44 million 2.5 million Year of Year Impact 46 . Legislation Analyzed dropping by about $1,200 annually by 2030. by $1,200 annually about by dropping Increase U.S. energy costs, with increases of and residential electricityprices, 75for percent industrial electricity electric for percent 600 and prices, gas natural residential prices and coal prices. utility • Furthermore, Furthermore, this analysis found that, as a result of the regressive nature of energy costs and disproportionate impacts on minority populations, “nearly 390,000 Black jobs would be lost and nearly 500,000 Hispanic lost” be 2030 would by jobs Based on conservativeestimates and broad the outlines of Advanced Notice 2008 EPA’s of Proposed Rulemaking, the Heritage Centerfor the under Data sources all from emissions GHG of regulation that found Analysis Clean Air is Act and wrong (in it other does if words, not EPA author- have H.R. 2454 H.R. 2454 H.R. 2454 This is 45 . loss of 2.5 million jobs average average household income ; Study depressed depressed investment by between $97 5 to 15 percent reduction in investment , resulting in ; GDP dropping $500 billion by 2030 $500 billion by GDP dropping National Association of Manufacturers/ACCF (study conducted by SAIC)National Association of Manufacturers/ACCF 2454 H.R. National Black Chamber of Commerce (study conducted by Charles River National Black Chamber of Commerce (study Associates) Heritage Foundation Economics)Institute for Energy Research (study by Chamberlain Council (study by SAIC)ACCF/Small Business and Entrepreneurship Kerry/Lieberman American Power Act Kerry/Lieberman American Power Act 2050 2030 5.1 million Up to 1.9 million Energy Information Administration Reduce Reduce Gross Domestic Productevery yearfor the next two decades, with Reduce U.S. employment, culminating in the 2030 by Reduce U.S. household incomes, with nearly as big of an impact in reduced investment as the U.S. economy sus- economy as the U.S. nearly as investment big of an impact in reduced 2007. since late tained Information firm Management of the research economic Bezdek Roger Dr. con- regulation, GHG on analyses recent of variety a compiled Inc. Services, would: approach the EPA cluding that • • • ment. ment. Her analysis predicts a from from 2011 to 2014 and $290 billion in 2011 and as much as $301 billion in 2014 WWW.REGULATORYTRAINWRECK.COM 24 several years. losses exceeding $600 billion; and annual job losses of 800,000 or more for prehensive analyses. com- six from proposals cap-and-trade of effects employment predicted Higher pricespassedonto consumerfeel will like anew gas tax.” prices. fuel jet and diesel gasoline, higher with flier and farmertrucker, driver, American every hurt “will refineries existing for standards mance Kay Bailey Hutchison of Texas argued in a late December letter that perfor- mental and zoning permits from federal, state, and local agencies.” impossible for an operating company to secure all of the required environ- been no havenew refineries built in our there country since 1980 because “it is Abraham, nearly Spencer Energy of Secretary former to According approachto existing refining capacity could create severe harm.economic effectsthe detailon power importantfor generation, this notethat is to it the December 23, 2010 announcement). While this chapter has gone into gas greenhouse requiring begin to set EPA is 2011, of beginning the at effect into went that regulations gas greenhouse of round initial its from Apart ten.”of factor a by costraise non-marketcan policies “using that recentarticle found example,Forone benchmark theharmfrom EPA’s CleanAirActGHGprogram.”to used be can bill Kerry/Lieberman the on performed one the like yses market-basedTherefore,a employed.wereanal- approachif severe than more likely be is to sources stationary of EPA emissions GHG regulation of of impact economic “[t]he that: explains Thorning proposals. and-trade cap- Congressional failed of potential job-killing the estimates of previous from comes GHG regulating of cost total the ballpark to source Another cumulative in: result thresholds)wouldunilaterallyto V ity statutoryTitle increasethe and PSD performance standards for refineries and power plants in 2012 (as of (as 2012 in plants power and refineries forstandards performance 47 50 GDP losses of $7 trillion $7 of losses GDP 49 The chart above offers an overview of the of overview offers an above chart The by 2029; single-year GDP single-year 2029; by 48 52 51 Senator

Street_Briefing_2010.pdf. Work,” February 10,2010,at 7, http://www.eei.org/ourissues/finance/Documents/Wall_ Part111192010.pdf. November 18,2010,at 2,http://www.uswag.org/pdf/2010/CCR%20Comments/EPRI%20 portFinal.pdf. September 2010,at 17, http://robbishop.house.gov/UploadedFiles/WaronWesternJobsRe- 2 1 13 12 11 10 9 8 7 6 5 4 3 policybrief/epa-should-consider-flexible-approaches-to-clean-water-act-revision/. 2010, http://www.nei.org/resourcesandstats/documentlibrary/protectingtheenvironment/ November 2010, http://www.nei.org/filefolder/WaterUseIssuesinFocus.pdf. aspx?DocumentID=215616. sands ofJobs,” November 22,2010, http://www.upton.house.gov/News/DocumentSingle. regulatory-state/. 50SUQ9Mzg3NzQyfENoaWxkSUQ9MzkwMzQ5fFR5cGU9MQ==&t=1. Power’s Position,” June29-30,2010, http://phx.corporate-ir.net/External.File?item=UGFyZW National Environmental Requirements, Impacts to theElectric Power Industry, andPSEG October 2010, http://www.nerc.com/files/EPA_Scenario_Final_v2.pdf. Assessment: Resource AdequacyImpactsofPotential U.S. Environmental Regulations,” 1,000 U.S. homes(and,inturn,agigawatt powers around 1million U.S. homes). additional measure for large scale evaluation. Forperspective, a megawatt powers roughly the U.S. isbetween 600and700MW. Agigawatt (GW), equivalent to 1000MW, provides an usually theproductive capacity for electric generation. An average coal-fired power plant in is equalto onejoulepersecond. Amegawatt (MW)isequal to onemillion watts, andis 18, 2010, h NEI, “EPA ShouldConsiderFlexible Approaches to CleanWater Regulation,” November Nuclear Energy Institute (NEI),“Issuesin Focus: Water UseandElectricityProduction,” “Upton Fights EPA’s MisguidedCoalAshRulethat CouldCost BillionsandEliminate Thou- 42 U.S.C. §6982. Rep. Fred Upton, “Declaringwar ontheregulatory state,” The PSEG, “Navigating theEnvironmental Regulatory Landscape: Overview of Forthcoming NEI, “IssuesinFocus” at 1. North American ElectricReliability Corporation (NERC), “2010Special Scenario Reliability A brief note onunits:Awatt isaunitofmeasure for the rate ofenergy conversion, and Ibid. Thomas R. KuhnThomas R. andDavid K.Owens, “Electricity2010:OpportunityDressed asHard- EPRI, Comments to EPA onDisposalofCoalCombustion Residuals From ElectricUtilities, War onWestern“The Jobs: AReport by theSenate andCongressional Western Caucuses,”

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Stephen Power and Kris Maher, at 4, “EPA Blasted as It Revokes Mine’s Permit,” January 14, Permit,” Mine’s as It Revokes Blasted 4, “EPA at Maher, and Kris Power Stephen http://nma.org/pdf/tmp/072010_NMA_Complaint_ECP_Guidance.pdf. Unions for Jobs and the Environment, Comments on Proposed National Ambient Air Ambient National on Proposed Comments the Environment, and Jobs Unions for MAPI/Manu- Standard,” Ozone Proposed of EPA’s Implications Donald Norman, “Economic Regulatory EPA, U.S. Anti- “EPA’s Minority Staff, Works and Public on Environment Committee Senate U.S. Boil- for Industrial Standards MACT Issues Proposed III, “EPA McGuffey "Mack" W. Carroll http://epw.senate.gov/public/index.cfm?FuseAction=Minority. at available Full letter for Emission Standards rule, National Proposed Union, “Comment: Workers Steel United “The Boiler Owners), the Council of Industrial Impact of (for Economic IHS/Global Insight John Kinsman, “Environmental Issues Update,” November 16, 2010, http://www.eei.org/ 16, 2010, November Issues Update,” “Environmental John Kinsman, January 2010 Revisions,” Proposed EPA’s Standards: Air Quality “Ozone James McCarthy, 38 39 30 31 32 33 34 35 36 37 28 29 2011, http://online.wsj.com/article/SB10001424052748703583404576079792048919286. 2011, html. Quality Standards for Ozone, March 22, 2010, (Docket ID No. EPA–HQ–OAR–2005–0172; ID No. EPA–HQ–OAR–2005–0172; 22, 2010, (Docket March Ozone, for Quality Standards FRL–9102–1). http://www.mapi.net/Filepost/ER-707.pdf. 2010, Alliance, September facturers 28, September Base,’” Manufacturing ‘Threatening and America’s Jobs Policy: Industrial http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_ 4-5, 2010, at id=3ede3e93-813f-4449-97e6-0d6eb54fbc9e. http://www.troutmansanders.com/epa-issues-proposed-mact-standards- 4, 2010, May ers,” for-industrial-boilers-05-04-2010/. Speeches&ContentRecord_id=5d9e1da9-802a-23ad-4b41-98994e366d4c&Region_ id=&Issue_id=. Boilers and Institutional Commercial, Industrial, Major Sources: for Air Pollutants Hazardous ID: EPA Document Heaters,” and Process tions.gov/#!documentDetail;D=EPA-HQ-OAR-2002-0058-2964.1. and Institutional Commercial, Rule on Industrial, MACT Heater Boiler/Process EPA Proposed 5, http://www.cibo.org/pubs/boil- 2010, at August Operators,” Heater Boiler and Process meetings/Meeting%20Documents/2010_11_14_AccountingStandards_John_Kinsman_Envi- ronmental_Issues.pdf. 4, http://www.fas.org/sgp/crs/ 1, 2010, at February Service Report, Research Congressional misc/R41062.pdf. dards ermact_jobsstudy.pdf. - Truck

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eprinted in eprinted “Inhofe, Upton Join in EPA Oversight Efforts,” December 9, 2010, http://upton.house.gov/ December 9, 2010, Efforts,” Oversight Join in EPA Upton “Inhofe, on Clean Air and Nuclear Subcommittee the Senate Before McClellan, Statement Roger http://www.epa.gov/airtransport/pdfs/FactsheetTR7-6-10.pdf. Journal Street Wall Permitorium,” “The EPA Whitman in judgment, part and concurring in concurring J., Breyer, Credit Suisse, “Growth from Subtraction: Impact of EPA Rules on Power Markets,” Septem- Markets,” Power Rules on Impact of EPA Subtraction: from Suisse, “Growth Credit Scenario Assessment.” “2010 Special Reliability NERC, Retire- Coal Plant “Potential Bressan, and Lucas Gunjan Bathla, Graves, Celebi, Frank Metin Assessment.” Scenario “2010 Special Reliability NERC, Strategies,” Control Mercury of Alternative “Analysis Administration, Information Energy Wall Street Journal Street Wall Permitorium,” “The EPA Power Bryce, Robert Missed a Primary Target,” Surge Regulatory EPA's Gabriel Nelson, “How Wall Wall Rules,” Coal-Waste Over Odds at EPA House, Smith, “White and Rebecca Neil King, Jr., 26 27 23 24 25 20 21 22 18 19 15 16 17 14 News/DocumentSingle.aspx?DocumentID=217247. News/DocumentSingle.aspx?DocumentID=217247. Revi- Proposed Hearing on EPA’s Committee, and Public Works Environment Senate Safety, http:// at 3, July 11, 2007, Ozone, for Air Quality Standards Ambient the National sion to epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=57ca4cda-7a2a- 4da7-afba-80a4d2fbbb6d.

http://op.bna.com/env.nsf/id/jstn-8actja/$File/suisse.pdf. ber 23, 2010, http://www.brattle. December 8, 2010, Regulations,” Environmental Under Emerging ments com/_documents/UploadLibrary/Upload898.pdf. scripts/getcase.pl?navby=CASE&court=US&vol=531&page=457. article/SB10001424052748704658204575610924168519824.html. January 2005, http://www.eia.doe.gov/oiaf/servicerpt/mer- No. SR-OIAF/2005-01, Report cury/analysis.html. ing gwire/2010/12/08/08greenwire-how-epas-regulatory-surge-missed-a-primary-tar-47437. html. Journal, Januaryhttp://online.wsj.com/article/SB126300256672322625.html. 9, 2010, Street (R (New York: Public Affairs, 2010), 168. Affairs, Public York: (New WWW.REGULATORYTRAINWRECK.COM 26 of%20Roger%20Bezdek.pdf. uschamber.com/sites/default/files/issues/environment/files/Ex%2013_Declaration%20 States CourtOfAppealsFor TheDistrict OfColumbiaCircuit, September 2010, http://www. Low-Income Persons, theElderly, andThoseLivingonFixed Incomes,” Declaration to United dia_483.pdf. Columbia Circuit, September 14,2010,at 8,http://www.accf.org/media/dynamic/4/me- Under theCleanAirAct,” Declaration to United States CourtOfAppeals For TheDistrict Of at 1-2, http://accf.org/media/dynamic/4/media_498.pdf. tions &Answers,” American Council for Capital Formation Special Report,December2010, upload/GlaserMarkeyTestimony.pdf. pendence andGlobalWarming, March 13,2008, http://www.troutmansanders.com/files/ Supreme Court’s DecisioninMassachusetts v. EPA, House SelectCommittee onEnergy Inde- d212db554919ec8525780200570c1c!OpenDocument. 2010, http://yosemite.epa.gov/opa/admpress.nsf/e77fdd4f5afd88a3852576b3005a604f/ca pdf. mate 46 45 44 43 42 41 40 Roger Bezdek, “Potential HarmofEPA Greenhouse GasControl Regulations toMinorities, Economic ImpactofRegulatingMargo “The Thorning, U.S. Greenhouse GasEmissions Margo “EPA Thorning, Regulation ofGHGs, U.S. Investment and Economic Recovery, Ques- Peter Glaser, Testimony onthe U.S. Environmental Protection Agency’s Response tothe “EPA Completes Framework for Greenhouse GasPermitting Programs,” December23, “Fast Facts AboutCoal,” http://www.nma.org/statistics/fast_facts.asp. K.Chumley,Cheryl “Kentucky Challenges EPA Restrictions onMining,”

News 2011, http://www.heartland.org/custom/semod_policybot/pdf/28985., January Environment

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http://www.hutchison.senate.gov/resources/EPA%20letter%2012-29-10.pdf. Americ accf.org/publications/137/accf-sbe-council-study-on-kerry-lieberman-bill. benefit/; and “ACCF/SBE CouncilStudyon Kerry-Lieberman Bill,” July21,2010, http://www. to-destroy-up-to-5-1-million-jobs-cost-families-1042-per-year-wealthiest-americans-to- 2010, http://www.instituteforenergyresearch.org/2010/06/30/new-study-kerry-lieberman- 4956-90fc-257e375d77cd. Supplemental data from: Institute for Energy Research, June30, October 7,2009, http://rpc.senate.gov/public/?a=Files.Serve&File_id=34f71018-cfba- Models,” “Modeling Economy-wide vs. Sectoral Climate Policies UsingCombined Aggregate-Sectoral

47 52 of-the-epas-anpr-regulations. http://www.heritage.org/research/reports/2008/10/co2-emission-cuts-the-economic-costs- ANPR Regulations,” A Report oftheHeritage Center for Data Analysis, October 29,2008, 48 51 50 49 Thorning, “QuestionsThorning, &Answers,” at 3. David Kreutzer andKaren Campbell,“CO Senator Kay Bailey Hutchison, Letter to EPA Administrator Jackson, December29,2010, Spencer Abraham withWilliamTucker, Lights Initial data from: Senate Republican Policy Committee, “Cap-and-Trade Destroys Jobs,” William Pizer, DallasBurtraw, Winston Harrington, Richard Newell, andJamesSanchirico, a’s The

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s ine ff N EPA’ O century. This century. is clearly the case in the industrialized world; the st 3 list list of the top twenty countries in terms of electricity isgeneration nearly identicalto the list of thetop twentycountries interms of GDP. is also significantevidence that electricityconsumption is also the critical The well. as world the of rest the of dreams and hopes the for determinant figure onfollowing the page,compiled by ofPasternak Alan the Lawrence correlation the near-perfect demonstrates NationalLivermore Laboratory, ter Resource” that serves as the linchpin to all aspects of our modern world world modern our of aspects all to linchpin the as serves that Resource” ter for need obvious the to addition In economy. our of lifeblood the as well as growth, wealth inexpensive economic and in promoting energy affordable power is also paramount for basic development goals, economic justice, and human rights. As Paul Driessen of the CommitteeFor A Constructive put it in Tomorrow a recent ALEC tutionally protected civil rights into rightswe actually enjoy: jobs, homes, healthcare,transportation, livingstandards, opportunities, and other ear- of happiness.” and the pursuit liberty of life, marks More specifically, there is ample evidence from the U.S. and is the other ampleevidence there nations from specifically, More develop- human basic of driver essential an is consumption electricity that competing of capable economies advanced of creation the as well as ment in the 21 Energy Affordability Energy is, Energy in the of words Julianinestimable economist Simon, WWW.REGULATORYTRAINWRECK.COM 28

Human Development Index 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 0 2,0004,0006,0008,00010,000 12,00014,00016,000 Index: ANear-Perfect Correlation Electricity Consumption andtheHumanDevelopment Source: Mexico Ethiopia Congo India work for Analysis,” Lawrence Livermore National Laboratory, October 2000. Pakistan Alan D. Pasteruk, “Global Energy Futures and Human Development: A Frame- A Development: Human and Futures Energy “Global Pasteruk, D. Alan Chile Iraq China Annual percapita electricityuse(kilowatt-hours) Spain Italy UK Russia Saudi Arabia Germany France Japan Australia U.S. Canada increase without an increase in electricity.”in increase an without increase will countries developing of Product mestic Do- Gross the nor Index Development man Hu- the “[n]either that Pasternakconcludes assumptions about retrofitting older coal retrofitting about assumptions differing of result a As coal-fired plants. are studies above the in or retirement fitting for retro- “at risk” as discussed generation the of all nearly that note to important is It porated ineachmodel. incor- rulemakings the noting studies, these ity. The chart to the right summarizes five of electric- coal-fueled in reduction enormous sulting firms, and industry groups suggest an con- companies, investment from models electricity prices will rise. sector,A series of composite impact power the to available de- EPAas mand, shrinksoptionselectric supply and supply of law a is there as surely As plants. power coal-fired from generated is that supply percent electric total nation’s 50 the of roughly the on assault scale afull represents rules of combination The matically raising electricityprices. dra- by industry and citizens tax to is tions regula- wreck EPA’s train of impact overall the Yet supplies. reliable and affordable of existence the is brings it prosperity tendant at- the and use electricity widespread lows al- what that surprise no as come should It 5

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 3 29 Notes water intake structure rule, water intake structure HAPs. Clean Air Transport Rule, and coal combustion residuals rule. & NOx NAAQS and HAPs. Analysis includes SO2, NOx, particulate matter, cooling water and mercury MACT rules. rates Clean Air Transport rates Clean Air Transport It Rule and mercury MACT. only looked at plants with a capacity of 300 MW. 6 million 50 million Analysis only includes SO2 Affected Estimated Estimated Households Households 50 million to 67 Up to 70 million Up to 69 million This analysis only incorpo- n/a Up to 78 million Analysis includes cooling n/a Cost billion Capital $180 billion $100 billion Expenses / Expenses retrofit) Up to 50 GW Up to 70 GW than $80 More Impact on Impact on Generation Generation (retirement or 2015 To 2020To 50 to 67 GW $100 billion to By 2015 Up to 78 GW Impacts 2013-2017 Up to 69 GW to $70 billion Regs through 8 11 10 7 9 Study of Timeline FBR Capital Markets Report (December 2010) NERC 2010 Special Reliability Scenario Assess- ment (October 2010) Credit Suisse (September 2010) ICF International (May 2010) The Brattle Group (December 2010) WWW.REGULATORYTRAINWRECK.COM 30 on theALEC website www.regulatorytrainwreck.com. Commerce of Chamber Black National the Alford of Harry presentation of on minorities and low-income populations can be found in the power point costs of coal-fired electricity, coal-fired of costs cording to Harry Alford of the National Black Chamber of Commerce. ac- energy” disproportionate on percentage spent a averageand incomes of lower “a result as minorities and groups income low affects tionately dispropor- regulation environmental with associated costs energy Higher Minorities andLow Income Groups replacement. of cost the to nificantly sig- add also could which plants, existing coal on service debtoutstanding many that utilities out points have further analysis The fuels. watt shift to mega- per million approximately$1 cost would it that estimates and gas, natural to retrofits plant coal of instances previous no discovered study The fuels). other (or gas natural to shift to plants coal forcing mandates point that there are a number of significant roadblocks to any government the makes Association Power Public American the for Group vironmental En- Aspen the by conducted study However, 2010 generation. a coal lost howmany newnaturalhowquickly and gas tocouldbuilt replacebe units plants, the capital expense projections vary greatly. The studies differ as to stroy large segments ofAmerican smallbusinessandmanufacturing. disproportionately income low it de- and and groups may minorities harm will EPA’scoal from on resulting war costs electricity increased Sadly,the ment-mandated fuelswitching to willalsobe passeddown consumers. percent. African Americans by more than 30 percent and of Hispanics by more bills) than 35 energy residential pay to used is that income household annual gross as (defined burden energy the increase could process this 2030, by that found GHG of EPAregulation of Dr.Bezdek by analysis the example, 15 More information on the effect of the train wreck regulations wreck train the of effect the on information More 13 the capital expenses required by govern- by required expenses capital the 12 In addition to the generally lower generally the to addition In 14 For For rank asoneofthebiggest issuesfacing smallbusinesses. for lives saved or diseases prevented) for individual rules, there has not has there rules, individual for prevented) diseases or saved lives for costs and benefits (benefits include, among other inputs, a monetary value of estimates some developedEPA has While be. will program its of costs regulatory overall the these train what consider to failed has EPA regulations, wreck to promulgating devoted resources significant the Despite mers onBenefits EPA’s Nub- Fuzzy and Costs AttentionInadequate to alone.” years eight to five next the in manufacturers products wood and papermakers on costs capital new in “potentiallyrules Act Air order Clean the of on billion $17 impose of could combination the that estimated has Association Paper & ForestAmerican the industry, one just in fallout economic potential the at look a takeTo industries. American of energy-intensive anumber of the impact competitiveness significantly could wreck train regulatory EPA’s will from that prices result rising the and 2000, since jobs related million 16.2 and States United The Manufacturers 364 percent more in small firms than in large firms.” costs regulations environmental with “[c]ompliance that found Advocacy Administration’s of Business Office Small the by analysis recent A nesses. haveemergingwill and burdenprices busi- small electricity that on higher job growth in the U.S., his Administration has ignored the disproportionate of engine the as business small referringto of fond is President the While Small Business regulatorytrainwreck.com). ALECwebsitethe IndustrialEnergyAmericaon Consumersthe of of regulations on manufacturing can be found in the power point of Paul Cicio intensive manufacturing (more information on the effect of the train wreck at-risk,showsenergy- followingchart The increases. price energy by seas energy-intensive and willbe encouraged to relocate their operations over- already lost 5.4 million direct manufacturing jobs manufacturing direct million 5.4 lost already has 19 Many types of manufacturing are manufacturing of types Many 16 Energy costs already 17 www. 18

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 3 31 23 24 28 Based upon recent studies, 22 25 EPA entirely misses this point. As the U.S. Cham- U.S. the As point. this misses entirely EPA 27 26 een job in Germany is roughly $240,000. is roughly een job in Germany green job has resulted in 2 jobs being lost. in 2 jobs job has resulted green The price per gr In Union. European else in the anywhere In Spain, each

• • than higher are prices electricity Denmark, of mecca energy wind the ber of Commerce points out, “governmental programs intended to protect protect to intended programs “governmental out, points Commerce of ber public health should into take account potential incomeand employment compliance ofrequired By measures. effects increasing thecosts of goods and services such as energy, and decreasing disposable incomes, regula- tioncan inadvertently harm the socioeconomicstatus of individuals and, death.” poor health and premature to contribute thereby, Similarly, the Similarly, Annapolis Center for Science Based Public Policy found that affordable energy has ledto a highstandard of living and Inex- longevity. Harm to Public Health and Welfare Public Health Harm to regulations will Because beEPA’s so anycostly, public health and welfare benefit createdby theregulations willbe far outweighed by the health and welfare damage they will cause. ignores EPA the well known dictum that wealth = health. As one “Whenstudy found, enacted are regulations with the intent of reducing certain life risks, threatening we expect to see benefits in theform of and healthier, safer, longer lives. Butat the same on impacts the – particularly regulations these of costs economic the time, income and employment – tend to individual worsen health or and safety lifetimes.” shorten can A study by Johns Hopkins University Professor M. Harvey Brenner noted that “predicted mortality trends associated with than greater magnitude air of order an trends show quality costs energy increase regulations that benefits.” estimated the the three countries often“green jobs” cited as don’tfor models quite add up either: • Economics, Economics, American studies in favor of so-called green jobs entirely ignore the effects of higher electricityprices.

21 The Administration has 20 Food Production Food Detergents Automobiles Computers Construction Supplies Medical Paint Pharmaceuticals Cosmetics Telecommunication CONVERT TO CONVERT Aluminum Pulp and Paper Cement Processing Food Fertilizer Glass / Ceramics Brick Steel Chemicals Plastics steadfastly steadfastly refused to release a study by the Department of Commerce on the negative economic impacts of itscommercial and industrial boiler to response in Agency, the that news is alarming most Perhaps rule. MACT books the cook effectively to seeking is rules, its of costs the over questions benefits. regulatory estimating for changing the process in early 2011 by been an attempt at comprehensive accounting of the total and cumulative cumulative and total the of accounting comprehensive at attempt an been effect of the entireprogram on jobs, GDP, or the potential for this is unacceptable. business recovery, economic In a time of overseas. relocation economic of analysis comprehensive a consider even to failure the Beyond impacts, there are other troubling signs regarding fuzzy EPA’s numbers. Chairman Fred Upton and Tim Phillips of Americans for Prosperity noted the of 321 Section that fact the despite that, op-ed Journal Street in a Wall Clean Air Act requires it, the Agency has failed to conduct a study of how many jobs might be lost by regulation of GHG. The White House and EPA repeatedly and unreflectively cite the millions of millions the cite unreflectively and repeatedly EPA and House White The jobs “green of the future” their regulations will create, but there are serious Jonathan Lesser issues of with Continental According to this Dr. view. WWW.REGULATORYTRAINWRECK.COM 32 • cite afew examples: manifests itself across the whole of the train wreck regulatory program.disregard Tothe above, discussed standards GHG of context the in notable EPAmostinterestsstates Although the is forof statesover disdain rights. roughshod running is EPA current the that say to overstatement no is It State Sovereignty andResources our electricity-reliant society. economic upheaval, diminished productivity, and reduced quality severe of life risks for grid electrical our in Vulnerabilities events. other and outs, to protect against vulnerabilities from extreme weather, unexpected black- some areas to dip below a 15 percent “reserve margin,” which is necessary electric reliability across the country. The combination of rules could force for danger serious system)sees power bulk the of reliability the ensuring organization for (the responsible Corporation Reliability Electric American North the capacity), U.S. total of percent 7 roughly (or capacity electric of GW 70 than more threatens HAPs for MACT and transport, air clean disposal, ash intake, water coal cooling EPA on of effect regulations bined com- the that finding In grid. electric the of reliability basic the threaten they electricity, of cost the increase only not regulations wreck train The Electric Reliability transportation costs, etc. cooling, and heating domestic exercise)than ratherand care, health diet, (e.g., activities promoting health to resources devote to people allowing individual, the of level the effect at direct more a has also energy pensive

painful budget cuts. As reported by the Environmental Council of the of Council Environmental the by reported As cuts. budget painful of series undertakethereforeforcedtoa and havebeen budgets, their resources. stateUnlike federalthe government, moststates have on tobalance burden enormous an put has states, by implemented be to EP A’s unprecedented onslaught of regulation, most of which have of which most regulation, of onslaught unprecedented A’s 29 • • • Dcme 21 EO rpr age ta svrl e administra- new several that argues report ECOS 2010 December •

mitigated by federal money,stimulus theis about stimulus out. to run state funding shortfalls for environmental programs have partially been while agencies, environmental state of association the (ECOS), States latory system down Texas's throat, and the basic principle of the Clean the of principle Texas'sbasic systemdownlatory the and throat, EPA take the time to get thisright. They feel like they're shoving a regu- iswell- history:“Texas’sthe grounded in Act ratherwouldthey concernis, primary Air Clean the of interpretation state’s the that interview television recent a in argued Martella Roger counsel generalEPA mer Lone Star State’s highly-successful flexible permitting program. permitting flexible highly-successfulState’s Star Lone statefederalthan bureaucrats. Agency’sThe power grab threatens the the in programs environmental administer to able better is it believes EP which have Democratic governors. of both Virginia,West and Kentucky by Agency the against lawsuits to hasled mining that of effects the about occurs mining mountaintop As that manner the states deembest pursuant to aState Implementation Plan. in program the implement to authority state vent As ment environmental programs. constraintslikelywill force EPA grantson back tocut to states toimple- budget federal that word comes now And regulations. EPA more and States simply do not have the resources to continue to implement more tion at the expense of state discretion. the ECOS report, these new processes were adopted to expedite regula- to According well. as requirementsfederal violate may and authority state on infringe Administration Obama the by adopted processes tive A A is engaged in a multi-front war against Texas, which rightfully which Texas, against war multi-front a in engaged is A noted above, EPA’s view that it knows better than the states in which discussed above, EPA’s Clean Air Transport Rule will wholly circum- wholly will TransportRule EPA’sAir above, Clean discussed 31 32

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dirtier Climate Progress, December 1, 2010 Progress, Climate “The What the Other Half Reads A recent issue of issue recent A 39 there is no plausible other way to meet what will be, absent an economic or economic an absent be, will what meet to way other plausible no is there demands.” energy unavoidable world’s the social cataclysm, respondent respondent James that, Fallows in assessing the electricity demands in the coal), by fueled is electricity of percent 70 than more (where China and U.S. for consumption coal of indispensability and inevitability the cites rightfully clean about realities essential two identifies Fallows future. foreseeable the coal that is “One coal: than it is now. The other is that it tion of thisFor power. example, inthe U.S. from 1995to 2008, a banner period for renewable electricity sources, “the absolute increase in total electricity produced by coal was about 5.8 times asgreat as the increase solar.” from as the increase great wind and 823 times as in output from Forcing retirement of American coal plants would be a costly enterprise and enterprise costly a be would plants coal American of retirement Forcing around people billion 3.6 developments. energy global change to unlikely is regions are but many no or only the topartial globe electricity, access have seeking to expand access to inexpensive energy with attendant- improve ments in quality of life. Over the last the demand, decade, Asian expanding coal by primarily has Driven been world. the in the fuel growing fastest- three every demand coal of tons billion 1 add will expansion of pace current years. in late late in Inside EPA 34 “We have essentially ended the 36 35 37 A lation will place heavy administrative burdens onstate environmental quality agencies, will be costly to consumers and could be devastating and jobs.” the economy to Air Act going back to 1970 is the notion of cooperative federalism…Here federalism…Here cooperative of notion the is 1970 to back going Act Air is taking an from that andEPA exception going to saying, imple-‘We're level.’” the state at policies our federal ment

• letter signedby 20 ingovernors March ofyear that laststated “regu- 2010, “[w]e are turning our attention toretiring the existing fleet of dirty plants coal these of all replace or retire to is goal] group’s plants…[the coal decades.” two the next over rush to build new coal plants…Not a single coal plant has broken ground in ground broken has plant coal single a plants…Not coal new build to rush to attorney Club Sierra one bragged months,” 25 past the Since coal is the nation’s most abundant and affordable fuel for generation, generation, for fuel affordable and abundant most nation’s the is coal Since there is a close correlation betweenstates whose power supply is made up of at least 60 percent or more of electricity generated from coal and low electricity prices (with the corollary of previously-discussed economic the of possibility no is there importantly, More development). and growth frac- a than more for in filling environmentalists by favored fuels renewable The Environmentalist War on Coal War The Environmentalist Both inside and outside the Administration, environmentalists havefor em- have they tool effective most the as wreck train regulatory EPA’s braced assault The brunt of EPA’s electricity. their coal-fired declared war against on energy targets coal; the estimates discussed above include scenarios that could force the early retirement of upto one-third of all coal-fired electricity in the next few years. The Sierra Club has deployed significant resources—to the tune of $18 million and 100 employees—for a global expan- coal, like and seeking they are out campaign avenues, against legal crusade to maintenance, plant routine even for Review Source New of sion against existingcoal-fired generation. WWW.REGULATORYTRAINWRECK.COM 34 drop in the global climate bucket. climate global the in drop a emissions, gas greenhouse U.S. in reduction percent 5 a best at achieve First, even EPA officials admit that their Clean Air Act requirements will only be minimal: concentrationsgas will greenhouse on impact EPAthe toaccording plans, go things if even that, suggest that reasons four are there Act, Air Clean significant overall effect. To take the example of GHG regulation under a the have to unlikely is rules these on action unilateral that evidence much is there regulations, environmental of slew this of benefits potential the emphasize to techniques accounting creative more seeking is EPA While Minimal Environmental Benefits “A “Is “Good The New York Times,December24,2010 The New Republic, December7,2010 Gris

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gas emissionshave anegligibleimpactonatmospheric concentrations: EPA’s on based unilateralanalysis,own greenhousereductionAmerican in even that, shows chart The concentrations. GHG atmospheric global on thermometer.” ground-based a by measured be even can’t it miniscule so is amount his “[t] notes, Committee Works Public and Environment Senate the of staff minority the As 2100.” by cm 0.14 – 0.06 approximately by reduced be to projected is rise sea-level and 2100… by C [degrees] 0.015 to 0.006 by trucks found that: “[G]lobal mean temperature is estimated to be reduced light-duty and cars new from emissions GHG regulating rule the panying lation) willwipeout even themodest effect estimated byEPA. costlyenergy-intensive regu- production overseas to avoid shift industries which (in leakage carbon so-called that risk significant a is there Fourth, tion). genera- coal-fired percent 70 than more from comes demand of electricity growth faster China’s that fact the by compounded (further century next the over exponentially grow will emissions country developing while factimportantthe thatU.S.is are emissions likely toremain relatively flat, more even Perhaps week. every operation into plant power coal-fired a putting are Chinese the that and emissions, America’s surpassed already have emissions GHG China’s that noted have commentators Many U.S. severemost unilateraleventhe whelm gasgreenhouse the regulations by over- will countries developing by emissions unmitigated growing, Third, likely U.S. commitments inany globalagreement.” with compatible reductions emission deliver unlikely EPAto “is regulation that out points (OECD) Development and Co-operation Economic for tion U.S.into compliance anywith international climate Organiza- The regime. the bring not will regulation GHG Cancun, and Copenhagen in climate meetings of wake the in environmentalists of hopes the despite Second, 44 The graph below is EPA’s depiction of the effect of cap-and-trade of effect EPA’s the is of below depiction graph The 42 43 46

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 3 35 Reserves-to- production ratio* Percentage of Percentage total world BP Statistical Review of World Energy 2009 World Energy of Review BP Statistical Source: Reserves (million tons) 238,308 28.9% 224 Country US RussiaChina 157,010Australia 114,500 19.0%India 76,200 13.9% 481 9.2% 58,600 41 7.1% 190 114 Top Five Countries with Largest Coal Reserves Largest with Countries Five Top *Indicates the number of years of reserves remaining given current levels of levels current given remaining of reserves the number of years *Indicates production. Energy Dependence and American Supply and American Dependence Energy The cumulativeregulatory impact train of wreck, EPA’s includingreduced domestic energy supplies and competitive less electricity products in eitherend fuelup or finishedimporting more to the U.S. force could prices, from industries moving production. Ascountries noted like China earlier, are moving rapidly to expand coal-based generation, while thecombina- tion of rules EPA could disrupt theexisting domestic electric industry and raise the price of doing business in the U.S. The chart below also demonstrates that, considering the enormous coal reserves held by the U.S. levels current support to enough and reserves global of percent 30 (nearly rules tohostile are theAdminis- of demand than more EPA for 200 years), independence: goals of energy lofty tration’s EPA, http://www.epa.gov/climatechange/economics/pdfs/ EPA, Source: EPA_APA_Analysis_6-14-10.pdf WWW.REGULATORYTRAINWRECK.COM 36 i mlin uiess sal n large.” and small businesses, million six regulation could easily “expand the regulated universe from 15,000 to over into existing statutes, and the U.S. Chamber of Commerce warns that GHG preferences bureaucratic import to EPA of willingness the demonstrates Rule Tailoring The technologies. and sources, sectors, new to regulatory programs various expanding EPA of likelihood high a is there Rule, ing questionably-legal the EPAvia to Tailor-authority limits alleged with Even suggests that theAgency hasnoqualmsaboutmultiplying requirements. ditional model years and a new round for medium- and heavy-duty trucks, and light-duty automobiles trucks,rapidly which gave way to follow-ona forrulemaking fromad- emissions reducing for rule GHG the developed EPAwhich with speed The rules. EPAthese thatexpands risk the is ment threatstatetomajor One privateimplementation and invest- sector plans Regulatory Creep from China.” borrowed money using China, from goods energy renewable expensive, these buys U.S. the then and (3) panels; solar and turbines wind massive like generation, energy renewable energy-intensive build to energy able afford- this uses China (2) China; to energy affordable our export we (1) whereby: afuture to path on the U.S. the putting are policies anti-energy President’s “[T]his scenario: irony this the noted terpriseInstitute of (CEI), CompetitiveEn- the at warmingpolicy global directorenergyand Ebell, of Myron markets. international toward supplies coal western for tunities export oppor- seeking are already companies domestic electricity, fired coal- for demand global expanding and costs shipping low upon Seizing first place.” the in policy change climatemake EPA toauthorized never Congress that temporarily exempts them from certain mandates, they should remember notes that, “[b]efore small businesses applaud EPA’s ‘Tailoring Rule,’ which 49 47 48 al Lws f E mindfully CEI of Lewis Marlo ElectricityGeneration.pdf. Edition, https://appanet.cms-plus.com/files/PDFs/ImplicationsOfGreaterRelianceOnNGfor- Generation,” Prepared for theAmerican Public Power Association, September 2010,Second Fired Electric Generation Analysis,” May 11, 2010, http://www.ingaa.org/File.aspx?id=10371. tions,” 2010%20Presentations/Alford.pdf. islative Exchange Council,December 2010, http://www.alec.org/AM/PDF/Energy/SNPS%20 2 1 14 13 12 11 10 9 8 7 6 5 4 3 13, homes. Analysis,” October LLNL, 2000, https://e-reports-ext.llnl.gov/pdf/239193.pdf. education to infant mortality and water sanitation. pdf. The State Factor, April2010, http://www.alec.org/am/pdf/SF_Affordable%20Energy_final. T The insights. Seehttp://www.masterresource.org/; Bradley andRichard W. Fulmer, Energy: a variety ofexcellent resources that helpto emphasize Simon’s energy andnatural resource Paul Driessen,“Affordable Energy: The foundation ofhumanrights and justice,”economic Robert L.Bradley, Jr. andhiscolleagues at theInstitute for Energy Research have provided Bryce, 67. Scott DiSavino, “EPA regs may shut70,000 MW of U.S. coal plants: FBR,” Reuters, December Credit Suisse,“Growth from Subtraction.” NERC, “2010SpecialReliability ScenarioAssessment.” Household impactestimated basedon1MWproviding electricity to roughly 1,000 U.S. Alan D. Pasternak, “Global Energy Futures andHumanDevelopment: AFramework for The UNHumanDevelopment Index incorporates avariety ofmeasures, from poverty and riumph Harry Alford, “The ImpactonMinorityOwnedBusinesses,” Alford, Harry “The Presentation to American Leg- American Coalition for CleanCoalElectricity, http://www.cleancoalusa.org/affordable. Aspen Environmental Group, “Implication ofGreater Reliance onNatural Gas for Electricity ICF International (CommissionedbtInterstate Natural GasAssociation ofAmerica), “Coal- Celebi, et al.,“Potential CoalPlant Retirements UnderEmerging Environmental Regula-

2010, Master

ttp://www.reuters.com/article/idUSTRE6BC3JN20101213.

Energy Resource (Dubuque,IA:Kendall/Hunt, 2004);andBradley, Julian

Sustainability (Washington, DC:ALEC, 2000).

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The Annapolis Center for Science-Based Public Policy, “Economic Growth and Low-Cost En- and Growth Low-Cost “Economic The Science-Based Annapolis for Public Center Policy, R. Steven Brown and Adam Fishman, “Status of State Environmental Agency Budgets, 2009- Budgets, Agency Environmental State of “Status Fishman, Adam and Brown Steven R. James Fallows, “Dirty Coal, Clean Future,” Bryan Walsh, “Political BattleBrewing over theEPA's New Emissions Regulations,” “FY12 Cuts To EPA Grants May Spur States To Return Delegated Authority,” In- Authority,” Delegated Return To Spur States May Grants EPA “FY12 Cuts To Brown and Sarah Hunt, POSITIONS “RECENT ON U.S. EPA INTERIM GUIDANCE, RULES, AND Kathleen Hartnett White and Mario Loyola,Regulatory “EPA’s Barrage and the Lone Star Roger Martella, Interview with EnergyNow!, December 26, 2010, http://www.energynow. http://thehill.com/images/stories/blogs/govsletter.pdf. at: Available Chris “TheHorner, Sierra Club’s War on Coal,” CRC Green Watch, November 2010, http:// Shift to Legal Force Strategy GHG“Activists Limits at ExistingStuart CoalParker, Plants,” 66. Bryce, The Coal Continues,” Age Revkin,” Andrew M. Harvey Brenner, Ph.D, Environmental Management, Management, Environmental Ph.D, Brenner, Harvey M. York: Little, Brown and Company, 2010), 88-92. and Company, Little, Brown York: 41 40 30 31 32 33 34 35 36 37 38 39 28 29 , December side EPA 2, 2010, http://environmentalnewsstand.com/component/option,com_ ppv/Itemid,308/id,2348384. atlantic.com/magazine/archive/2010/12/dirty-coal-clean-future/8307. ment ber 2005. 26, 2011, http://environmentalnewsstand.com/index.php?option=com_ Jan. sideEPA, ppv&view=article&id=2352434. POLICIES,” ECOS Green Report, December 2010, http://www.ecos.org/files/4316_file_De- cember_2010_Green_Report.pdf?PHPSESSID=70ccd71bec5b496aa2f6fd196a6c7110. State,” and Rick Perry, DF.Nov.Dec10.pdf; com/node/2507#. www.capitalresearch.org/pubs/pubs.html?id=748. arth.blogs.nytimes.com/2010/06/18/the-coal-age-continues. Januaryhttp://www.time.com/time/health/article/0,8599,2040485,00.html. 3, 2011, ergy Drive Improved Public Health,” 2006. Public Health,” Improved Drive ergy 2011,” ECOS Green Report, August 2010, http://www.ecos.org/files/4157_file_August_2010_ 2010, August Report, Green ECOS 2011,” Green_Report.pdf?PHPSESSID=28103b3a3de85644e325a030c4814bf1. - Jour

Wall Street Street Wall Electricity

The t-September 2010, 45-53. t-September , November Inside EPA 26, 2010, https://environmentalnewsstand.com/component/ , December 28, 2010, http://online.wsj.com/article/SB100014240527487039294045 , V23, Issue 7, Augus Daniel E. Klein and Ralph “Mortality L. ReductionsKeeney, From Use of Low-Cost Coal-Fu- Martin Agerup and Hugh Sharman, “Wind Energy: The Case of Denmark,” September 2009, September Denmark,” of Case The Energy: “Wind Sharman, Hugh and Agerup Martin Jonathan A. Lesser, “Renewable Energy and the Fallacy of ‘Green’ Jobs,” Jobs,” ‘Green’ of Fallacy the and Energy “Renewable Lesser, A. Jonathan U.S. U.S. Chamber of Commerce comments to EPA on Docket ID No. EPA-HQ-OAR-2001-0017: Gabriel Calzada Álvarez, et al. “Study of the onEffects Unemployment of Public Aidto Re- Manuel Frondel, Nolan andRitter, ColinVance, “Economic Impact from the Promotion of Maria Hegstad, “Facing Fears Over Rules’ Costs, EPA Moves to Increase Benefits’Esti- American Forest & American Forest Paper Association, the“Reconciling Cumulative Impact of Upcoming Air Fred Upton and Tim Phillips, “How Congress Can Stop Power the Grab,” EPA’s National Federal of Independent Business, “Rising Energy Costs Take Toll on Small Business,” Business,” Small on Toll Take Costs Energy “Rising Business, Independent of Federal National Regulations- HigherPaul Cicio, “EPA Costs and Uncertainty on Manufacturing Competitive- Bezdek. Nicole V. Crain and W. Mark Crain, “The Impact of Regulatory Costs on Small Firms,” - http://www.cepos.dk/fileadmin/user_upload/Arkiv/PDF/Wind_energy_-_the_case_of_Den mark.pdf. nal 27 25 26 23 24 21 22 19 20 17 18 15 16 National Ambient Air Quality Standards for Particulate Matter. Particulate for Air Quality Standards Ambient National newable Energy Sources,” March 2009, http://www.juandemariana.org/pdf/090327-employ- 2009, March Sources,” Energy newable ment-public-aid-renewable.pdf. Renewable Energies: The German Experience,” October 2009, http://www.instituteforenergyresearch.org/germany/Germany_Study_-_FINAL.pdf. mates,” mates,” option,com_ppv/Itemid,299/id,2346472/. Regulations with a Sustainable Forest Products Industry,” February 2010, http://afandpa.org/ 2010, February Industry,” Products Forest Sustainable a with Regulations WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=1701. Journal 76022070069905318.html. http://www.nfib.com/business-resources/business-resources-item?cmsid=46548#. ness and Jobs,” Presentation to American Legislativehttp://www.alec.org/AM/PDF/Energy/SNPS%202010%20Presentations/Cicio.pdf. Exchange Council, December 2010, Small Business Research Summary, No. 371, September cacy/853/2016. 2010, http://www.sba.gov/advo- eled Strategies, McLean,Power: Twenty-First An Virginia, Analytical December Framework,” http://www.coalcandothat.com/images/content/MortalityRed.pdf. 2002, WWW.REGULATORYTRAINWRECK.COM 38 GHG levels predicted withoutthebill.Thesoliddarkbluelineshows concerted action by the end ofthe100-year period1990-2010,thebillwould result inonlyasix-year delay ofthe emissions ascompared withefforts they are already undertaking. As can beseen, at the blue linesassumetherest oftheworld doesnottake action to significantly reduceitsGHG is notenacted; thedotted light bluelineassumesthat thelegislation isenacted. Bothlight loads/s2191_EPA_Analysis.pdf. Thesolidlight bluelineinthegraph assumesthelegislation Congress (March 14,2008)at 192, ,3343,en_2649_34569_46023275_1_1_1_1,00.html. 45 44 43 42 See Fallows. OECD,“Economic SurveyUnitedthe of States 2010,” http://www.oecd.org/document/43/0 Senate EPWMinorityStaff, “EPA’s Anti-Industrial Policy.” EPA Analysis ofTheLieberman-Warner Climate SecurityActOf2008,S.2191In110th available

h ttp://www.epa.gov/climatechange/down- %E2%80%9Cguidance%E2%80%9D-global-warming-energy-restrictions. strictions,” Novermber 10,2010, http://cei.org/news-releases/epa-offers-draconian-

without thetypeofintervention that EPA would like. scenario that atmospheric concentrations ofGHGs will ever achieve thelevels EPA assumes meaningfully reduced. Note that thischartwas produced by EPA. Itishighlyunlikely inany rest of the world must reduce GHG ifoverallemissions atmospheric concentrations are to be but theU.S. doesnot.Ascan beseenby comparing thedarkblueandlight bluelines,the entire international community;thedotted light bluelineassumesthe rest ofthe worldacts 49 48 47 46

Christine Hall,“EPA Offers Draconian ‘Guidance’ forGlobal WarmingEnergy Re- Cited in“War onWestern Jobs.” Myron Ebell,CoolerHeadsDigest, December30,2010. “Questions Thorning, &Answers.”

EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 4 39 emissions fell 1.8 percent in the U.S. 2 CO erm trend will continue for the next twenty-plus years. twenty-plus the next for will continue trend erm y echnological echnological improvement has been the main driver in reducing air

T pollution; This long-t

from 1990 to 2007 (See pg. 41). 2007 (See pg. 1990 to from other Two important measures that show massive carbon improvements: intensity (metric tons of carbon dioxide per $1,000) and energy intensity (amount of energy needed to produce $1 of GDP). Between 1980 and • • The two figures on the broader thecorroborate following pages from EPA point: Emissions of the worst pollutants have dropped dramatically over steadi- have progress economic of measures while decades several last the . ly improved What about energy efficiency and greenhouse gas emissions? Environ- mentalists and the media are always quick to point out that Americans consume more energy per capita than any other over- to country significantly contribute we on economy, Earth, biggest world’s and the with that, steady to point also data the However, concentrations. gas greenhouse all on these improvements (especially fronts in comparison to the of rest the world). For example, per capita tor S Clean ess d cc u : S ntol p U ators and K. Fel- F. Weyerhaeuser U s ter ’ Indic

a a c ing k y B. du Pont, 1952 y B. du Pont, & W nvironmental E

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onsidering the range of regulatory action on EPA’s plate over the next next the over plate EPA’s on action regulatory of range the onsidering environmental- the of mentality crisis-of-the-week the and years five early the entireU.S. has achieved clean airstandards for four of the arts of the country with the highest pollution levels have shown the 4 main pollutants regulated by the Clean Air Act (carbon monoxide, sulfur monoxide, (carbon Act Air Clean the by regulated pollutants main and lead); oxide, nitrogen dioxide, P improvement; biggest N Ther not bring clean air and water… it is invention and develop- most our proved has that regulation, or legislation not ment, of progress.” instrument reliable

ist community and media, one could be forgiven for thinking the sky falling in is terms of air and water quality. The though, reality, is quite the opposite. Over air the years, quality last forty-plus has improved, steadily popula- reduced like trends long-term other of rates success the exceeding of author Hayward, F. Steven rate. crime lowered the and welfare on tions the annual Clean the of opportunity the took Institute, Enterprise American the at low 40 Air Act’s “ e are laws aimed at pollution abatement, but theycan- • • C WWW.REGULATORYTRAINWRECK.COM 40 Comparison ofgrowth measures andemissions,1990-2008 Source: EPA, http://www.epa.gov/airtrends/2010/report/airpollution.pdf Gross Domestic Product Aggregate Emissions Population CO 2 Emissions Vehicle MilesTraveled Energy Consumption EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 4 41 Source: EPA. Source: -46% -40% -25% -49% -92% -96% Ambient Emissions -79% -58% -71% -56% 1985 - 2008 -21% -36% , , ) ) 2 2.5 1985 - 2008 -31% -46% ) , , 2 ) 10 ) 3 Sulfer Dioxide (SO Dioxide Sulfer Particulates (PM Particulates Lead (Pb) (NO Dioxide Nitrogen Carbon Monoxide (CO) Carbon Monoxide (O Ozone** Fine Particulates (PM Fine Particulates Change in National Average Ambient Ambient Average in National Change 1980 - 2008* and Emissions Levels *Except for PM10 and PM2.5. for *Except precursor a principal ozone VOCs, is here **Emissions measure

China

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strong strong non-governmental trend toward a Pakistan Pakistan

Brazil Brazil

U.S. U.S. International Energy Agency, “CO Agency, Energy International Source: Percentage Change in CO Change Percentage Per Capita in the Six Most Populous Populous in the Six Most Capita Per 2007 to 1990 Countries, 2009,” http//wwwiea.org/co2highlights/co2highlights.pdf, 90-91 http//wwwiea.org/co2highlights/co2highlights.pdf, 2009,” -1.8% 0 30% 60% 90% 120% these improvements happened over a period (1980 to 2006) in which 2006, U.S. carbon intensity fell 43.6 percent and energy intensity plum- 42 percent. meted These numbers compare very favorably with efficiency in the rest of the developed world and indicate reduced emissions. As Robert Bryce of the Manhattan Institute noted, WWW.REGULATORYTRAINWRECK.COM 42 carbon intensity in theAEO2010 Referece case, 2008-2035 Projected changes inindexes ofenergy efficiency, energy intensity, and otheranalysis/aeo_2010analysispapers/intensity_trends.html Source: U.S. Energy Administration, http://www.eia.doe.gov/oiaf/aeo/ Energy efficiency (declineindicates improvement) Carbon intensity Energy intensity EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 4 43

Global

About

You

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Won’t

, September 17, 2010, 17, 2010, , September American

Politicians

and

Scientists

What

Fix:

Climate

(New York: Basic Books, 2010), 74. Basic Books, York: arming (New ttp://www.american.com/archive/2010/september/two-cheers-for-the-clean-air-act. Roger Pielke, Jr. The Jr. Pielke, Roger Steven F. Hayward, “Two Cheers for the Clean Air Act,” The the Clean Air Act,” for Cheers “Two Hayward, F. Steven http://www.epa.gov/airtrends/2010/graphics/Figure3.gif. 140-141. Bryce, h W 4 1 2 3

the first Clean Air Act passed.” In thecase of electric generation, and are projected to continue through 2035: through continue to projected and are these successes in of for most air the quality credit Hayward, to According goes to “market forces and economic growth, as can be seen by the fact that air pollution began dropping in the United States in the mid-1960s- before the newest technology represents marked improvement in efficiency and all major pollutants. An environmental regulatory regime that is hostile to major modifications or the building ofnew power plantsprevents the leaps and bounds in environmental quality that can result from market- technology diffusion. and based innovation U.S. U.S. GDP more than doubled and Global population trends indicate increased similar “decarbonization” 31.5 over the percent. last years 100 WWW.REGULATORYTRAINWRECK.COM 44 (Senate Joint Resolution 6 Resolution Joint (Senate Wyoming by adopted As 49). page EPA’s(see TrainWrecking Regulatory A model resolution has been developed for this purpose: Resolution Oppos- consequences willfollow across thecountry ifthey refuse to pullback. that Administration the and EPA show to and Congress in allies our ster bol- to needed is resolution The wreck.regulatorytrain this stopto gress tobe highestThe getshould priority statethe recordon callingCon- as on Highest Priorityfor Early 2011 available from www.alec.org. is below discussed legislation model below. listed The is options of menu full a EPA’sand stoppinggrab, forpower bullet silver no is There States. some innovativeadditional, strategies being tested throughout the United utilizedbeen that last,has the as as legislaturesand well by session this in language approaches and the of lication introduction provides some an to heard in early 2011 in opposition to EPA’s regulatory train wreck. This pub- A variety of tools are at the disposal of state legislators to make their voices step for efforts to rethink and potentially replace existing federal environ - federal existing replace potentially and rethink to efforts for step EPA’sstop and firstslow critical to Congressa on is wrecktrain Calling sue. is- this on resolution comprehensive and up-to-datemost the is this 2011, 5 S A tate ll Ab 1 ) and Indiana (House Resolution 13 Resolution (House Indiana and ) L oar egislati d: v e R 2 ) in early early in ) esponses eral government and that the model of cooperative federalism upon which resolutionsThese highlight that states are merely not branches the of fed- EPA’s edicts. out carry to required regulators state and delegation sional Congres- state’s your for both guidance offer can and dissatisfaction tive collec- express to vehicle excellent an provide wreck train EPAregulatory pending to the opposition in states coordinatedfrom resolutions Specific, Other Resolutions mental institutions and statutes. 3. 2. 1. on Congress to: calls resolution this rulemakings, their of impacts environmental or ment, employ economic, the study to Agency the by failure the and onslaught

omy, jobs, andAmerican competitiveness. fying all EPA regulatory activity and the cumulative effect on the econ- R gency); environmentalemer- or health imminent an address to (unless years Impose lating GHG; Adop equire the Administration to undertake a multi-agency study identi- study multi-agency undertake a Administration to the equire t legislation prohibiting EPA by any means necessary from regu- from necessary means any prohibiting by legislation EPA t a moratorium on any new air quality regulation for at least two 3 Highlighting the scope of EPA’s regulatory - EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 5 45 A. It op- EP

. v

Massachusetts recently Inside EPA argued that poses the EPA endangerment finding and subsequent regulation of mobile of regulation subsequent and finding endangerment EPA the poses emissions. source (www.alec.org) Standards in Opposition of Carbon Dioxide Resolution emission dioxide carbon mandatory and voluntary opposes resolution This en- growth, economic to obstacles as regimes cap-and-trade and standards reliability. and electric affordability, ergy Enhanced Regulatory Review Regulatory Enhanced An additional approach for legislatures is establishto more pro- robust cedures for reviewing environmental regulatory enforcement, including development of State Implementation Plansto comply withrequire- EPA ments. In the context of GHG regulation, This resolution, approvedby ALEC in September 2008, en- opposes EPA’s dangerment finding and any regulationof greenhouse gases, citing the massive economic burden that would result and the global nature of cli- emissions. mate (www.alec.org) Regulations Review Source of New Reform on Resolution Source New reform to efforts administration Bush supports resolution This Review regulations, whichwould allow necessary power plant upgrades to reduce emissions and improve efficiency without triggering costly and new sources. to entirely apply to designed regulations unmanageable Resolution in Opposition to RegulationEPA’s Greenhouseof Gases from (www.alec.org) Mobile Sources sci- ofreview climate issue with Court’s the Supreme takes This resolution ence and Congressional intent in ruling has that authority EPA to regulate greenhouse gases under the Clean Air Act in “[p]ermits issued Jan.after 2 forground will the become litany thetesting EPA’s of merits the on litigation as industry, by predicted harms economic of resolution encourages accommodation of accommodation high- resolution encourages The

(www.alec.org) (www.alec.org) ly efficientpower technologies, like super-critical and ultra super-critical coal-fired electricgenerating units, to serve the dual purpose of reducing provid- while unit generation electricity the of profile emissions overall the ing efficient, affordable, availableand power today and future. into the Considering as the to vague byextremely guidance what con- EPA offered stitutes “BestAvailable legislaturesTechnology,” Control should consider weighing in to prevent overly restrictive that interpretations coulddevas- and certainty. investment tate Resolution to Retain State Authority Over Waste Coal Ash Non-Hazardous as deter- EPA 2000 the supports resolution this 2010, early in ALEC by Passed regulation federal residuals warrant do not combustion coal that mination topositioned serve best are states and that concludes waste as hazardous waste. CCRs as non-hazardous authority for as the principal regulatory PlanResolution to RegulateGreenhouse in EPA’s Gases Opposition to Un- der the Clean Air Act (www.alec.org) the Clean Air Act is based is a thing of the past. The best resolutions clearly resolutions best The past. the of thing a is based is Act Air Clean the lay out the objectionsto agenda EPA’s and offer comprehensiverecom- mendationsto rectify thistrain wreck. In 2010,two dozen states consid- a in emissions gas greenhouse of regulation EPA opposing resolutions ered resolutions include: rulemaking Individual ways. number of different Resolution onBest AvailableControl Technology for Coal-Based Electric (www.alec.org) Generation This resolution offers guidance tostate regulatoryagencies onhow to in- terpret “Best Available Control Technology” when issuing Prevention of Technology Control Available Best the for permits Deterioration Significant requirements for greenhouse gases from coal-based electric generation (as mandated by EPA under the Clean Air Act beginning in 2011) to fully consider the need for new electric generation that efficientis nomically practicable. and eco- WWW.REGULATORYTRAINWRECK.COM 46 currently on the books. the on currently tools legislative the of some into glimpse a provide does methodology,it overallranking its with problems some has monograph this While states. 50 all for processes reviewregulatory the of grading and analysis hensive acompre- released Integrity Policy for Institute the 2010, November In EPA regulations as andduplicativewell asunnecessary state policies. tory review can enable greater legislative input on state implementation of related to the reduction of greenhouse gases” (available atwww.alec.org). “anyenforceablefederallegallycommitmentsagencyEPA other any to or state regulators, in the absence of an act of the legislature, from submitting sponses to Kyoto Climate Change Protocol contains language that prevents Re- State model ALEC’s programs. regulatory gas greenhouse in ipation partic- state for authorization legislative requiring consider should States Legislative Authorization the greatest return possibleonenvironmental investments. receivestates that ensure to designed is bill This policy. the by achieved dioxide-equivalent be carbon to of ton overall per the cost tation, provide beforemust, implemen- emissions gasgreenhouse reduceexpenditure to government any that requires bill model this 2010, in ALEC by Endorsed Climate Accountability Act(www.alec.org) tive review of your state’s regulatory structure: legisla- improving and enhancing for options model ALEC some are Below wellintorun 2011.”will GHGs tolimit authority regulatory billofrights. to a regulations of approval legislative from innovations, regulatory sary Michigan Department of Environmental Quality, the report outlines neces- the Mackinac Center's Property Rights Network and former director of the form,”states.for directorall providesWritten of Harding, lessons Russ by Re- for A Blueprint Michigan: in “Environmental Regulation entitled study 6 5 In addition to the tools discussed below, a new below, a discussed tools the to addition In 4 Improvements regula-in the state could not participate in GHG regulation. GHG in participate statenot couldthe that case that make to Act Quality EnvironmentalWyoming the in guage lan- similar upon seized Wyoming of Freudenthal Dave Governor Former feasible andsuperiorto alternatives. is regulation the if and price; or availability energy on impact significant a authority is necessary to protect public health or welfare; whether there is that demonstration reasonable include: to disclosure know” to right“regulatory a includes This Act. Air Clean the under “pollutant” a as listed explicitly not emission an of regulation implementing to prior assessment This legislation requires a state environmental administrator to perform an alec.org) Act Science Non-Pollutant on of Emissions Regulation Conditioning effects of regulation andlegislative review of regulators. bill include: detailed short-term and long-term projections of the economic the of components environmentalregulations. Key new of analysis nomic eco- an requiring by growth compromising without protection ronmental ALEC'sEconomicmodel StatementImpact todesigned provideis Act envi- Economic ImpactStatements Act(www.alec.org) mission” to theU.S. EPA. sub- the to daysprior 60 than less enforceablelegallynot commitments… or other Plan Implementation State any of copies “with committee lative appropriatelegis- administratorthe provideagency must an requiresthat (www.alec.org) Act Plan Implementation State Attainment Ozone For example, ALEC’s EPA requirements. out carrying for Plan Implementation a State submitting before committees relevant and legislature the to tion notifica- necessary provide to agencies environmentalrequire can States Notification Requirements state regulation ofGHG. any to prior authorization legislative express required also 2010, in acted 7 Arizona H.B. 2442, en- 2442, H.B. Arizona ( www. EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS 5 47 13 TX, MI, LA, HA, NE, IN, ND, OK, KY, MI, SC, SD, UT,

Other Avenues to Make Your Voice Heard Voice Your Make to Other Avenues regulation, EPA opposing for means legal available all pursue should States including rulesfiling or appeals filing ofinterventions EPA of amicus briefs in the appropriate proceedings. As of late December 2010, 18 states are party to a case before the D.C. Circuit appeal on the EPA endangerment finding and GHG rules: tool tool that can be used to protect private property rights, productive uses regulations.” government burdensome from economies and local of land, Act (www.alec.org) Responsibility Regulatory State agency This when Act clearly the environmental establishes of role a state and actions intrusive fed- by unauthorized with the attempted confronted eral government. The purpose of the Act is to ensure the division of gov- states the and government federal the between responsibilities ernmental under the principles of so federalism, those agencies state are free to implement their powers without interference. Toward unauthorized federal policies: three establishes end, the legislation that First, the Act prevents a state agency from complying with a federal requirement that is inconsistent with state law unless the requirement is clearly expressed in a federal statute or rule, and is adopted pursuant to Act. Procedures Administrative the Federal pre- to law federal allowing from agency a state precludes Act the Second, empt law state unless the General findsAttorney state that suchpreemp- required. tion is Lastly, the Act prohibits state agencies from complying with any federal regulatory mandate or requirement unless adequate funds are provided, the state agency has express state statutory authority to implement the and provisions Thesethe program, actiondoes notlaw. conflictstate with au- the has and mandates unfunded accept not does state the that ensure law. with state consistent program a delegated implement thority to 12 From interstate compacts to 8 should States consider legislation specific to 11 and “Shields of Compacts Federalism: Interstate in Our Constitu- 9 (both by Ted Cruz and Mario Loyola of the Texas Public Policy Foun- Policy Public Texas the of Loyola Mario and Cruz Ted by (both 10 the so-called Madison Amendment, available tools have been thoroughly discussed in “Reclaiming the Constitution:Towards AnAgenda for State Action” dation), and “The Federalism Toolkit: Ten Tactics for Citizens andStates to Ten dation),Toolkit: and “TheFederalism by protect the Individual Goldwa- Liberty by State Sovereignty,” Restoring Nick Dranias. ter Institute’s tion” Below are two targeted Below pieces are two of targeted model legislationto helprectify federal- EPA: to imbalances as it relates state ) Act (www.alec.org Coordination Local through Sovereignty State This model legislation grants city andtown governments the authorityto demand that the or federal its government coordinate state law or - regula tion with that of the localgovernment when thefederal orstate - govern ment imposes thana lawrestrictive local regula- or law or more regulation mandated is coordination Liberty, for Stewards American to According tion. - pro plans, their coordinate to agencies federal “requires and law federal by grams and management activities with localgovernments. It is powerful a Reclaiming State Sovereignty State Reclaiming areas, several a in authority federal overbearing of threat growing the With Leviathan the against back push to strategies new to looking are legislators Bal- the “Restore recent ALEC’s authority. Amendment Tenth reassert and ance” initiativeoffers a series of model bills and proposed constitutional amendments to emphasize state powers. Opportunity to Correct Act (www.alec.org) Act Correct to Opportunity The Opportunity to Correct Act improves state oversight of compliance laws. community an It oppor- the allows and regulated federal with state of a Notice of Violation. to the issuance prior a violation correct tunity to the EPA the threat EPA posed in their state. For example, West Virginia Delegate Gary Howell has Coal introduced the and Intrastate Use Act, which would state. within the staying coal for permitting authority EPA remove WWW.REGULATORYTRAINWRECK.COM 48 2 1 Woods can becontacted at 202.742.8542or [email protected]. gy,TaskEnvironmentAgriculture and Clint Force resources. foradditional highlight to opportunities press other pursuing and op-eds writing by lic ALEC members should also look to bring their case against EPA to the pub- as state administrators. latory train wreck, including both regional and national EPA officials as well Legislators should also consider holding oversight hearings over EPA’s regulate carbon dioxide andothergreenhouse gases inthestate ofWyoming.” United States Environmental Protection Agency (EPA) as they seek to regu- the of efforts the against one as “stand to them asking delegation, sional and Congres- Governors and outgoing incoming their to letter a thored coau- recently Committee Interim Development Economic and Business Minerals, Joint Wyoming’s example, For delegations. Congressional their to limit EPA’s agenda, state legislators writeshould focused, joint letters to action about fence the on are representatives federal your if Particularly tect their constituents’ interests by filing comments atwww.regulations.gov latory train wreck, there should be an opportunity for state legislators to pro- While the Agency has proceeded on an unnecessarily rapid pathEPA rules. to the regu- individual on comments filing consider should legislators State going lawsuits over EPA regulation. on- join Attorney Generals to incomingrequire would 2011, in Hampshire AK, FL, VA, AL, and GA. Finally, legislators should feel free to get in touch with ALEC and the Ener-the and ALEC with Finally,touch in gettofeel freelegislators should the damage that thistrain wreck willcause to thelocal economy. Introduced text available at: http://legisweb.state.wy.us/2011/Introduced/SJ0006.pdf. Text available at: http://www.in.gov/legislative/bills/2011/PDF/HRESP/HR0013.pdf.

One approach to this litigation, as proposed in New . ml.pdf. tion,” November 2010, http://www.texaspolicy.com/pdf/2010-11-RR11-TenthAmendment- el_Legislation. state-mine-legislation/print. 7, 2011, http://www.register-herald.com/todaysfrontpage/x1919696049/EPA-responds-to- com/cgi/viewcontent.cgi?article=1000&context=nicholas_dranias. vidual Libertyby Restoring State Sovereignty,” December20,2010, http://works.bepress. http://www.texaspolicy.com/pdf/2010-12-PP21-InterstateCompacts-tcruz-mloyola.pdf. 3 13 12 11 10 9 8 7 6 5 4 option,com_ppv/Itemid,298/id,2348533/. Rules,” InsideEPA, December15,2010, http://environmentalnewsstand.com/component/ (New Have, CT: Yale University Press, 2010). and Katrina M.Wyman, States_with_Environmental_Protection.html; andDavid Schoenbrod, Richard B, Stewart, heartland.org/environmentandclimate-news.org/article/28889/It_Is_Time_to_Trust_the_ with Environmental Protection,” Environment gytax/2011/01/why-we-must-replace-the-epa.php; Jay Lehr, “ItIsTimeto Trust theStates We Must Replace theEPA,” 27,2011,http://www.americansolutions.com/ener- January article_4752f527-8e95-51e7-85c2-57310621ed2d.html. September 11,2010, http://www.mackinac.org/archives/2010/s2010-04.pdf. tions/52_Experiments_With_Regulatory_Review.pdf. Inputs into State Rulemaking,” November 2010, http://policyintegrity.org/files/publica- Examples ofsomethesecomprehensive ideascan befound at: Steve Everley, “Why Ted CruzandMarioLoyola, “Reclaiming theConstitution: Towards An Agenda for State Ac- ALEC, “Restore theBalance,” http://www.alec.org/AM/Template.cfm?Section=ALEC_Mod- Cited in:Dustin Bleizeffer, “Governor: Wyoming can’t control its greenhouse gases,” Russ Harding, “Environmental Regulation inMichigan: ABlueprint for Reform,” 2010, Schwartz,Jason A. “52Experiments withRegulatory Review: ThePolitical and Economic Victoria Stay Finkle,“With Denied,State Permits Emerge asNew Test for EPA Climate More information at: http://americanstewards.us/coordination/coordination-main-page. Taylor Kuykendall, “EPA responds to state minelegislation,” The FederalismNick Dranias, Toolkit: “The Ten Tactics for Citizens and States to protect Indi- Ibid., “ShieldsofFederalism: Interstate CompactsinOurConstitution,” December 2010, Casper Breaking

Star

Tribune, http://trib.com/news/state-and-regional/ the

Logjam:

& Environmental

Climate

News 2011,http://www., January

Protection

That

Herald

Will , Januar

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y EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS A 49 EPA WHEREAS: has not EPA performed any comprehensive study of what the im- of terms in be will regulation greenhouse its of benefits environmental pacts on global climate; WHEREAS: State agencies are routinelyrequired to identify the costs of benefits; of the in light costs those to justify and their regulations WHEREAS: has Since identified“takingEPA action on climate change and period, time 2011-15 the for goal strategic first its quality”as air improving EPA should be required to identify the specific actions intends it take to to achieve these goals and to assess the total cost of all these actionsto- gether; qual- the in improvements continuing supports Legislature The WHEREAS: ity of the nation’s air and believes that there thatas long so such economy the improvements damaging without can fashion sensible a be in made at issue; of the regulations of the cost is a full understanding WHEREAS: The primary goal of government at the present time must be busi- predictable and stable a foster to and recovery economic promote to of jobs; the creation will lead to that ness environment k rec W

rain T y egulator R

s EPA’

pposing O Appendix A Appendix EPA’s Opposing Resolution Train Wreck Regulatory

Neither EPA Neither nor EPA the Administration has undertaken anycom- EPA’s regulatory activityto asgases air qualityregulatory and greenhouse EPA’s A esolution R WHEREAS: The United States Environmental Protectionhas Agency proposed (EPA) or is proposing numerous new regulations, particularly in the area of air quality and regulation of greenhousegases, that are likely to have major effects on the economy, jobs andU.S. competitiveness in markets; worldwide WHEREAS: has become known as the “train wreck,” because of the numerous and con- and because of the requirements overlapping devastating potentially on the economy; have activity may sequences this regulatory having legislation with that, cap-and-trade Concern WHEREAS: is growing the through results same the obtain to attempting is EPA Congress, in failed regulations; of adoption America; of out industry and jobs driving is over-regulation EPA WHEREAS: WHEREAS: regulatory new this of all of effect cumulative the what of study prehensive competitiveness; and jobs on the economy, activity will have WWW.REGULATORYTRAINWRECK.COM 50 quality regulation by EPA by any means necessary, except to directly ad- directly to except necessary, means any by EPA by regulation quality defunding EPA greenhouse gas regulatory activities. necessary if including emissions, gas greenhouse regulating from essary THEREFORE BEITRESOLVED, that thelegislature calls onCongress: society that generates wealth. a in possible only is improvementenvironmental because and employed un- the than families their and themselves of care take to able better are jobs good with people because improvement, economic and creation job new significant without suffer will welfare and health Public WHEREAS: a new trend in2011andisconsistent withexisting ALEC policy. Note: Thisresolution ispendingapproval asALEC modellegislation, butit represents 2. 1.

Imposing T o adopt legislation prohibiting EPA by any means nec- means any by EPA prohibiting legislation adopt o a moratorium on promulgation of any new air new any promulgation of on moratorium a

sis ofallEPA’s current andplannedregulation together. and the electric system and should provide an objective cost-benefit analy- economy the for responsibility and in expertise having departments and a multi-agency study drawing on the expertise both of EPA and of agencies omy,Americaneconomiccompetitiveness.and be jobs, should This study and specifying the cumulative effect of all of these regulations on the econ- quality” air improving and change climate on action “taking of goal its of furtherance undertake in to that intends activity EPA regulatory all tifying least two years, includingdefunding EPA airqualityregulatory activities. at of environmentalperiod emergency,or a forhealth imminent an dress 3.

R equiring the Administration to undertake a study iden- undertakestudy Administration a to the equiring EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS B 51 “[G]lobal climate change is an issue that is best addressed

“The pretense of the need to complete the SIP Call by the tucky: en linois: “The cumulativeefforts of IllinoisEPA to address the Tailor- Il Louisiana: through comprehensive federal legislation, agency regulation, rather and [Louisiana] than emphasizes that unilateral greenhouse regulate itto chosen has EPA which doesthrough manner the port not sup- under the Clean Air Act.” gases ing Rule is placing an enormous drain on resource our already stressed resources and the involves pulling of personnel from their normal day- to-day activities to assist in planning and Tailor- implementation of the ing Rule.” implementation date of January 2, 2011 is necessitated solelyby EPA’s circumvention of the normal SIP Call process, whichwould otherwise allow for a reasonable time frameto comply with the SIP Call process of … thisconsequences the rule quick implementation without adverse criti- many when time a at agency our on burden heavy very a place will budgetary under unprecedented us straining issues cal and are face we shortages.” and staffing

k • • • Appendix B Appendix SAYING ARE REALLY STATES WHAT REGULATION GHG EPA ABOUT “Arkansas does “Arkansas ‘not object’ to the earlier [SIP revision sub- “[W]e have major concerns with EPA’s strategy for regulating strategy “[W]e have major concerns with EPA’s has “EPA now put Arizona, and other permitting authorities, gia: ansas: B Geor GHGGHGs guidance and sources at document. stationary with the EPA disruptions major and adequate not is provided has EPA that timing The to projects that have already been permitted, or have permit applica- tions pending, likely.” are Ark mittal] deadline, but only out of not necessity, out ofreasonableness. Rationalizingreasonableness on the basis of astate ‘not objecting’ in this instance is hollow ratio- pretense. [Arkansas] disagrees with EPA’s nale of ‘not objecting’ asconferring reasonableness on this deadline, and viewing urges against strongly shortened stringent, deadlines such in the future.” as this as ‘reasonable’ Ariz in a difficult position by giving veryus little timeto evaluateincor- and porate the ‘tailoring’ regulations intostate law…. Completing the rulemaking and SIP approval process in timeto avoid January EPA’s 2011 construction ban deadlinewould be nearly impossible. Furthermore, the lawsuits that have been filed challenging the PSD and Title V GHG any time on the rule.” expending to justify it difficult Rule make

• • ona: • WWW.REGULATORYTRAINWRECK.COM 52 • • • •

ficult insuchashortperiodoftime.” dif- requirements new the about staff Department and legislators,ers, stakehold- our educating informingand requirementsof taskmake the nature of regulating GHGscontroversial coupled with probable changesThe to permitting aggressive. is 2011 January in beginning GHGs ing under the [Clean Air Act] and are a further attempt to alter the literalattempt alterthe further areto a and Act] Air [Clean the under T guidance onpermittingGHGemissions.” imperative that the EPA itis provides straightforward, defensible and timely 2011), (January implementation for timeframe the Given sion…. more confu- add not authorities, permitting the to clarity provide to South on every indirect emissionofGHGsassociated withasource.” analysis an attempt to expertise technical the have not EPAdoes Ohio usual’… as ‘business hardly is This source. a of detail small every ine an willobligationhave toexam- authorities permitting process, mitting Ohio: Missouri: exas:“EPA inappropriateness the magnify actions of regulating GHG

Carolina: “U.S.EPA haveauthority,the will only not per-the of part as but

“EPA’s timeline requiring Missouri to issue permits address- permits issue to “EPA’s Missouri requiring timeline “The GHG Permitting Guidance needs to be modified be to needs Guidance Permitting GHG “The • •

juncture ispremature.” atthis the states on imposed strategy permitting any that likelihood high a is there rule, that for foundation the also but TailoringRule the Giventimelines. that there are dozens ofpetitions concerningnotonly has written.” Congress that laws execute administrativeto the exceed authority its EPA’s Congress. contemplatedby actions be should that attempt to policy write are an by EPA The proposals Act. the of interpretation W policy whilethepermitprograms remain opento litigation.” can, many will be compromising their own principles and ideals of good cess. If states adopt EPA’s approach through whatever mechanism they pro- permit effectively the permits, stopping needed of number the by EPA's ‘tailoring’ approach, the states would be completely overwhelmed mitting programs deficient. If states acknowledge GHG but fail to adopt entirely, states GHG If ignore position. untenable the per- find will EPA a completely in authority, permitting primary the generally are which W est Virginia: “EPA has adamantly pursued a course that places states, yoming: yoming: “[We] have serious concerns about EPA’simplementation about concerns serious have “[We] EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS C 53 Major Stationary Sources Major Stationary Dete- Significant of Prevention of applicability the determine to used Term station- any area, a nonattainment In regulations. source new and rioration Federal Implementation Plan (FIP) Implementation Federal plan implemented a to of federally achieve attainment Under law, current air quality used standards, when is a unable state to develop an adequate plan. Fuels Fossil Fuel derived from ancient organic remains; e.g. peat, coal, crude oil, and gas. natural (HAP) Air Pollutant Hazardous Air pollutants which are not by covered ambient air quality standards but which, as defined in the Clean Air Act, may present a threat ofhuman adverse health effects or adverse environmentaleffects. Such pollutants radio- emissions, oven coke benzene, mercury, beryllium, asbestos, include chloride. nuclides, and vinyl the characteristics and potential health and welfareeffects of these pol- revised. or set are standards that criteria these basis of the on is It lutants. Appendix C Appendix GLOSSARY All definitions from: U.S. EPA, “Terms of Environment: Environment: “Terms of EPA, U.S. from: All definitions updated last and Acronyms,” Abbreviations Glossary, June 18, 2009, http://www.epa.gov/OCEPATERMS/. C Criteria Air Pollutant Criteria The 1970 amendments to the Clean Air Act required EPA to set National Ambient Air Quality Standards for certain pollutants known to be hazardous to human health. has EPA identified andset standards toprotect human health and welfare for six pollutants: ozone, carbon monoxide, total term, The oxide. nitrogen and lead, dioxide, sulfur particulates, suspended "criteria must pollutants" derives describe from the that requirement EPA Best Available Control Technology (BACT) Technology Control Available Best An emission limitation based on the maximum degree of emissionreduc- tion (considering energy,environmental, and economic impacts) achievable through application of productionprocesses and available methods, systems, and techniques. BACT does not permit emissions in those excess allowed of under any applicable Clean Air Act provisions. Use of the BACT concept is allowable on a case by case basis for major new or modified emissions sources inattainment areas and applies to each regulated pollutant. Area Attainment An area considered to have air quality as good as or better thanarea An the Act. Air Clean na- the in defined as standards quality air ambient tional may be an attainment areafor one pollutant and a non-attainmentarea others. for WWW.REGULATORYTRAINWRECK.COM 54 ing sources. the amount of pollution allowed from new sources or from modified exist- Uniform national EPA air emission and water effluent standards which limit New Source Performance Standards (NSPS) ibility, crops, anddomestic animals). vis- facades, building (e.g. welfare public protect to standards secondary pacitating illness. Primary standards are designed to protect human health, inca- or irreversible, serious, in or fatalities in increase an cause may that EPAcoveredstandardsNAAQSby pollutantnot bysetEmissions air foran Pollutants National EmissionStandards for Hazardous Air country. the throughout air outdoor for apply that EPA by established Standards National Ambient AirQualityStandards (NAAQS) cles, buses,airplanes,andlocomotives. motorcy- trucks, cars, as such pollution air of source non-stationary Any Mobile Source andutility ofindustrial sources. by category sources, existing of percent 12 ing than the average levelemission achieved by controls onthe best perform- less mustbe MACT not the 1990, AmendmentsAct of Air Clean the Under account. into and feasibility cost taking hazardous emissions, of reduction maximum the requiring pollution air standardof foremission sources The Maximum Achievable Control Technology (MACT) either 100or250tons, dependinguponthesource. consideredstationarymajor a source. areas PSD In cutoff the level may be is per year 100 tons more than pollutantpotential emit source with ary to of national ambient air quality standards. attainmentto ensure nonattainment areas in sources stationary modified a permit review that applies to the construction and operation of new and A Clean Air Act requirement that State Implementation Plans must include New Source Review (NSR) using industrial combustion processes. other facilities and plants power mainly fixed-site pollution, A producer of Stationary Source ment ofairpollution standards. enforce- and regulation, establishment, the for plans stateEPAapproved State Implementation Plan (SIP) cess to trap pollutants inemissions. pro- dry spray a waterreactant a or or of uses that device pollution air An Scrubber standards. quality air ambient secondary and primary exceeds or meets already ity qual- air where places in sources modified or new from emissions restrict EPA program in which state and/or federal permits are required in order to Prevention ofSignificant Deterioration (PSD) or to operate afacility that may generate harmful emissions. wastewater operate plant treatment a to permit a e.g. regulation; mental environ- an of requirements the implement to agency stateapproved an An authorization, license, or equivalent control document issued by EPA or Permit Standards for thecriteria pollutants designated intheCleanAirAct. Quality Air Ambient National the of more or one meet not does thatArea Nonattainment Area 1 EPA’S REGULATORY TRAIN WRECK: STRATEGIES FOR STATE LEGISLATORS

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