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House Republicans fight carbon regs as bad for business

Image has not been found. URL: http://images.americanindependent.com/2010/08/MahurinEnviro_Thumb5.jpgThe first of several promised clashes over U.S. Environmental Protection Agency regulatory powers came this week at a hearing over a Republican bill that would block the agency from regulating greenhouse gases out of concern for climate change.

At a heated Wednesday hearing by the House Energy and Commerce Subcommittee on Energy and Power EPA Director Lisa Jackson was questioned for hours about the impact of new Clean Air Act regulations on business.

Since the beginning of the year, EPA has required industry to report their CO2 emissions, and major new sources of pollution are required to conduct an analysis of the “Best Available Control Technology” for reducing CO2 emissions. EPA has also announced that it will propose greenhouse gas standards for utilities and refineries this year and finalize them next year.

“Let’s face it,” said House Energy and Power Subcommittee Chairman Rep. Ed Whitfield (R-Ky.), “these regulations and others from EPA amount to a war on domestic coal. Coal is the energy source America possesses in the greatest abundance. It provides half the nation’s electricity and 92 percent in my home state of Kentucky, and it does so because it is affordable.”

Whitfield, together with House Energy and Commerce Committee Chair Fred Upton (R-Mich.) and Sen. James M. Inhofe (R-Okla.) ranking member of the Senate Committee On Environment and Public Works, are the sponsors of the Energy Tax Prevention Act of 2011.

The bill states:

The Administrator may not, under [the Clean Air Act], promulgate any regulation concerning, take action relating to, or take into consideration the emission of a greenhouse gas due to concerns regarding possible climate change.

In her testimony, Jackson called the Clean Air Act a public health measure that has prevented 205,000 deaths since 1990, and she said that the agency move to regulate greenhouse gas emissions was a necessary science-based decision aimed at protecting the country from the public health threat that is climate change.

Jackson also pointed out that EPA’s responsibility to regulate carbon emissions was acknowledged (PDF) by her predecessor in the Bush administration.

“Chairman Upton’s bill would, in its own words, ‘repeal’ the scientific finding regarding greenhouse gas emissions, she said. “Politicians overruling scientists on a scientific question — that would become part of this committee’s legacy.”

But many lawmakers and witnesses at the hearing seemed comfortable with such a legacy.

Any EPA regulation of greenhouse gases will be “all pain and no gain” said Rep. Inhofe. “[I]t is unfair and unacceptable to ask the steel worker in Ohio, the chemical plant worker in Michigan, and the coal miner in West Virginia to sacrifice their jobs so we can reduce temperature by a barely detectable amount in 100 years.”

Nucor Steel environmental manager Steve Rowlan told the committee that uncertainly about greenhouse gas rules caused his company to scale down a new iron facility in Louisiana.

The impact of these new regulations on capital projects is real. We recently received a permit, under the new GHG rules, for a direct reduced iron facility in Louisiana. This is a $750 million project that will create 500 construction jobs and 150 permanent ones. It is a great job-creating investment, particularly in this economy. But this project is not as large as the $2 billion investment we initially intended. Due to the uncertainty created by these regulations, we made the difficult decision to delay the $2 billion investment, also delaying the creation of 2,000 construction jobs and 500 permanent ones.

Rowlan said that his biggest concern is that future EPA carbon regulations could increase the cost of electricity.

“Cheap energy is lifeblood of industry,” he said in an interview with The American Independent. “You always hear people say, ‘We need clean green power’ well we need ‘Clean, green, affordable and reliable power.’”

Steve Cousins, vice president of Lion Oil of El Dorado, Ark., told the committee that he is troubled by the EPA requirement that any expansion of refinery operations involve implementation of best available control technology for greenhouse gas emissions.

“It is unclear what technology constitutes BACT,“ he said. “EPA’s federal guidance on what defines BACT is far too broad and confusing regarding what measures our refinery would be able to employ to control emissions, and whether permits would actually be approved and issued in certain circumstances.”

U.S. Steel Corporation environmental manager Fred Harnack said that EPA carbon rules will not reduce global greenhouse gas emissions.

Since greenhouse gas emissions are a complex global issue, a simplistic regulatory approach may reduce greenhouse gas emissions locally (in United States) while increasing emissions outside the United States by encouraging companies to move or expand operations to another country. As demonstrated by the United Kingdom’s example, energy-intensive manufacturing activity will decline, but consumer demand for energy-intensive goods will still grow. The net environmental effect of such is actually worse for the environment as goods are sourced from less efficient producers and additional long-distance transportation is required.

In a memo (PDF) to Democratic members of the Energy and Power Subcommittee, Rep. Henry Waxman (D-Calif.), ranking member of the Energy and Commerce Committee, and Rep. Bobby Rush (D-Ill.), ranking member of the Energy and Power Subcommittee, said that the Upton bill would threaten implementation of renewable fuel standards and create legal uncertainty about the status of the recent motor vehicle standards adopted by EPA.

An ORC International poll conducted earlier this month found the 63 percent of people — including most Republicans — believe the EPA needs to do more to hold polluters accountable and protect the air and water.

That survey found that only 18 percent of Americans believe that Congress should block the EPA from updating pollution safeguards.

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