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  • Regulatory Costs Are Boiling Over

    The Environmental Protection Agency (EPA) has been ordered to issue job-killing regulations that the agency and industry both agree are faulty and unfeasible. The EPA’s blunder is an object lesson on the costly consequences of reckless rulemaking and regulatory excess.

    The impending regulations address emissions from industrial boilers and incinerators.

    Agency officials have projected that the new standards will kill (yes, kill!) between 5,000 and 10,000 jobs—and cost nearly $10 billion to implement. In contrast, an independent study by IHS Global Insight, an economic forecasting firm, determined that 16,000 jobs would be at risk for every $1 billion spent on compliance.

    Proposed last year, the rules provoked an outpouring of protest from commercial and institutional facilities. The EPA evidently agreed and sought to revise the rules and delay implementation. According to the EPA, the 4,800 comments filed by industry “shed new light on a number of key areas, including the scope and coverage of the rules and the way to categorize the various boiler types.”

    In other words, the agency screwed up. Consequently, EPA officials in December 2010 sought court approval to delay issuing the rules in order to revise them. However, the Sierra Club opposed the request, and Judge Paul Friedman of the U.S. District Court for the District of Columbia ordered the agency to implement the regulations by February 21, 2011.

    All of which means the economy is about to take another unnecessary regulatory hit. As it is, the EPA alone last year added some $10 billion to the $1.75 trillion in annual regulatory costs. Officials say they intend to revise the boiler rules, but a meaningful overhaul is unlikely in light of the looming deadline. Had the agency exercised reasonable, fact-based rulemaking from the start, thousands of jobs would not now be in jeopardy.

    Posted in Energy [slideshow_deploy]

    20 Responses to Regulatory Costs Are Boiling Over

    1. Bob, Glen Allen, VA says:

      What else is new? The boiler MACT is a disaster. EPA's 1-hour NO2 NAAQ is costing thousands for additional modeling and delaying a large number of permits for reciprocating engines, most used as emergency and peaking generators. There are three modeling options generally available for looking at short term contaminant levels. EPA is defaulting to the most stringent and no one will make the first decision. I have a project that has been delayed a year based on modeled emissions that assume operations by an adjacent facility that cannot be done under that facility's permit. Anyone have any evidence that NO2 above 100 ppbv for an hour is causing any real (not virtual, modeled) harm?

      Then there are the GHG rules. If you think they just affect the big boys, think again. Permit applications for generators in landfills are being redone to limit hours or amount of landfill gas used to keep below the requirements of the tailoring rule.

      That's just air. This group of activists in the government are on a mission to destroy about every US industry.

    2. R Holland, Chandler, says:

      We will soon be over regulated to a third world status.

    3. Jon Howard says:

      Why is no one pointing to the 159 agencies created by the health care disaster?

      Seems that each agency will have managers, supervisors and workers, plus benefits and pensions. Did the group that looks at cost, look at this?

    4. Lloyd Scallan (New O says:

      Does anyone really think that the EPA is acting on it own without approval from Obama? Like so many other "regulations" implemented by Obama, he is using every government bureaucratic agency as a shield to deflect liability in the same manner he uses "commissions".

    5. MJF, CT says:

      So we will all breath better but people will starve or rob & kill others to survive. Nice trade-off. It's time for the government to go back to taking care of the business it was designed to handle, not the public's business.

    6. Mike, Wichita Falls says:

      Texas has been in the "crosshairs" of the EPA as they continue to jump the gun on our energy industry on many fronts.

      For example, EPA Region 6 Director Al Armendariz issued an emergency order on December 7, 2010 against Range Resources for their gas wells' alleged (remember that innocent before proven guilty thing and due process?) contamination of municipal water wells west of Ft. Worth.

      While evidence and testimony are being gathered and the investigation continues between state agencies, affected landowners and Range, the EPA order requires Range to "develop a plan to remediate areas of the aquifer that have been contaminated". This is no small cost. While Range's wells may ultimately be found to be the source, although evidence so far indicates otherwise, the EPA did not wait for a complete study upon which state agencies would be sufficiently ready to act.

      Could this be the cost of Governor Perry's "Don't mess with Texas" rhetoric?

      Obama says he wants to base his decisions on sound science. Why not wait for the evidence here, Mr. President? He says he is focused like a laser on job-creation. Is this the kind of regulatory environment that fosters growth, innovation, risk-taking and job creation, Mr. President?

    7. Tim AZ says:

      They are just like children changing the rules of the game in play to suite their own desires. And just like children they haven't thought it through as to how they are going to finance their whims when the grown ups terminate their allowance.

    8. WHICH WAY says:

      THESE ARE NOT LAWS,THEY ARE REGULATIONS PUT INTO EFFECT BY EXECUTIVE ORDER AND DEPARTMENTAL ORDER NOT SUBJECT TO VOTER APPROVAL OR EVEN NOTICE AS THEY SPEND TAX MONEY AND CAUSE BUSINESS TO RAISE COSTS AND PRICES TO COSTOMERS.

    9. Bill Lee, ArkLaTex a says:

      I have been told, by some Environmental Engineers, that last year in Jan the EPA met with most of the refineries and chemical plants in this Region in Dallas, They were told George Bush is not President anymore, so we are going to start permitting you for CO2 and N2O and other Green Gas gases. They said we dont care that Congress has not come up with a Cap and Trade bill. We don't care, we are moving ahead. You will come into compliance or we will shut you down.

      Later I went to a meeting of Industry Managers and I was told if these regulations on the so called green house gases are forced on us we will have to shutdown. The expenses to comply with the new permitting regs will be more than the profits of most refineries and chemical plants.

      The news media and others such as Hertiage Foundation have not reported how bad this will be for the country. It will cause a shortage of gasoline and other fuels. If they are going to do this to the oil industry I am sure the same would apply to coal power electrical facilities.

      I hope I am wrong but I see food not being transported across the country due to diesel shortages. Unemployment in the 20-30% range.

      We may be out of time to stop this now as this will come to pass the end of this year.

      I am hopeful the resignation of Carol Browner is a signal that the EPA has been made to back off on enforcement of these damaging regulations?

    10. Terry-Wichita,KS says:

      After multi-millions of dollars of Investors get the approval to build the new modern coal fired plant in Kansas,the good ole Sierra Club steps in with an injunction to stop it's building! This is after all permits and regulations have been cleared. There goes another 500 jobs down the drain,and millions wasted!

    11. Bobbie says:

      Just a way for the EPA and Obama to make sure their favorites aren't effected. The EPA has befitted no one or anything. The EPA is removing liberties quickly. The EPA is more harm then good. Get rid of this joke of authority. We need reputable, credible, honest science from people of good will. We want EPA to pay for their crimes.

    12. cjfarls, arlington says:

      Take a deep breath folks… EPA has said they are changing it. While the first iteration was horrible because it was a strict reading of the law and didn't take into account practical realities, there is no reason to freak out until we actually see what they propose.

      Rather than complain about the EPA not being responsive (when in fact they have indicated they will be), why not look at Congress's poorly worded legislative language, the court's unreasonable interpretation of such language, and our litigation-happy society that have forced this ridiculous mess in the first place.

    13. cjfarls, arlington says:

      WHICH WAY – your assertion is just plain false. They are implementing regulations of the Clean Air Act, as required by lawsuit rulings of the courts. The Clean Air Act itself was passed with bipartisan support under a Republican presidecy(s) – Nixon and the 1st Bush. The Courts were rightlfully appointed by lawfully elected Presidents… the law may suck, but it is completely valid.

      Plus, YELLING doesn't make your point any better.

    14. Tim AZ says:

      Sure they can implement all kinds of regulations but how will these govt. agencies be able to enforce them when they won't have enough funding to supply themselves with toilet paper. If by chance they are sitting on fat bank rolls saved from the previous two years of this regimes existence, that can be purged by forcing them to defend themselves in never ending lawsuits that begin with injunctions. The Sierra Club as well as many other socialist entities have perfected this strategy all that is left is to use their tactics against them. They can also be financially broken through never ending congressional hearings requiring them to retain lawyers for never ending Congressional investigations in which they will eventually perjure themselves and be found guilty and removed from their perch. This tactic was also developed by the left and has been used by them quite successfully in years past. If you want to stop this madness then you have to battle them using their rules of engagement. It's a dirty job but I think our freedom is worth the effort. Legislation can also introduced into bills that are near and dear to the socialist cause that would severely limit or remove these agencies ability to regulate. Reducing them to an enforcement only entities placing the power to regulate back into the hands of elected officials where it belongs.

    15. cinders2 says:

      Please get the Republican party to take notice to how the EPA is quietly regulating us into a disasterous collaspe of our system . They need to be defunded immediately. Congress do something !!!!!

    16. Bobbie says:

      implementing ANY regulations regarding the environment isn't based on reality. It's based on someone's love of corruption. I don't care when it started. It's based on false claims today. Sure a "law" is valid, that doesn't make the context of that "law" valid.We don't deserve incompetence on issues beyond our control.

      ZERO TOLERANCE!

    17. cjfarls, arlington says:

      Bobbie- Are you saying pollution is a myth? There is no such thing as valid environmental regulations? This regulations exist so I can't dump my pollution and waste onto you… Basically if I create a cost (pollution, etc.), I have to deal with it.

      Do you believe in economic externalities?

      I disagree with a lot that EPA does, but that doesn't mean I want lead or dioxins in my drinking water, black skies, acid rain, etc. The environment is in infinitely better shape now than it was 40 years ago, BECAUSE of environmental regulations. This has been good both for public health, and the economy.

      What we need is SMARTER, market-based regulations. Things like cap-and-trade, carbon-taxes etc. were originally Republican ideas because they are not the government telling us what we can and can not do… anyone can do anything they want… they just have to pay the full cost to society of doing that action.

      Valid arguments can be made about what the appropriate performance level or what the price for those market-based controls should be, but to say the cost of pollution is "zero" and that govt has no role in regulating those societal costs is as intellectually bankrupt as the crazy tree-huggers who want to stop everything and go back to living in the forest.

    18. Bobbie says:

      Who said the cost of pollution is zero? Oh you did.

      Of course not, cjfarls. There is no way to be 100% pollution free no matter how much regulation. What you mentioned is already regulated and what they are proposing or regulating is based on falsity & exaggeration. Valid arguments should be made before mandatory regulations are enforced.

    19. Bobbie says:

      sorry about my previous comment. I meant ANY regulations reflecting the man-made global warming deception.

    20. cjfarls, arlington says:

      Bobbie – The boiler rule is about conventional pollutants, not GHGs.

      For the Boiler Rule, the court said EPA was not enforcing the law as written and gave them a court-order to fix it. Therefore Constitutionally, the EPA has to issue new boiler regs. They don't have a choice, unless you want them to subvert the Constitution. While their initial attempt at standards was unrealistic given existign technology, they seem to be responsive to the comments that were received and are revising the rule. The process seems to working. We should be celebrating this, not complaining.

      On GHG regs –

      I'm not a climate scientist, and thus, I defer to the National Academy of Science about whether climate change is real or not. Their report in 2006, and the latest IPCC report (which was reviewed and approved by the Bush Administration) definitively said that it is real… I defer to the experts, and they say carbon pollution has costs (there may be disagreements here, and I think the latest studies showed it is somewhere between $2 to $65 per ton, with a "best guess" of ~$22) which we currently do not regulate.

      Science is a process, and the consensus or those estimates could change in the future, but calling it a hoax or "deception" simply doesn't reflect what the experts tell us. I'm not arrogant enough to say I know better than the National Academies. Other complaints, like the "climate-gate" hullabaloo also don't hold water. I've read some of the "climate-gate" emails, and while some the scientists seem to be jerks (there are a lot of those in every community), there is nothing in there I saw that calls into question the larger scientific consenus. Every independent review of those emails has reached the same conclusion.

      Therefore, I support market-based regulations that remove the costs GHG polluters are imposing on me and my children, A $5 to $10 carbon tax coupled with exemptions from the less-efficient Clean Air Act rules would be great, and I think should be whole heartedly supported by conservatives. The fact that such a carbon price also has side-benefits like helping decrease the federal deficit (or even better, the need for other taxes), encourages energy efficiency, and moves us off foreign oil, etc. is simply gravy.

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