Anti-Coal Regulation on Fire

Rule that would cost up to $10 billion to solve $6 million in health problems faces lawsuit

November 2, 2012

Nearly half of state governments are suing the Environmental Protection Agency (EPA) to block an anti-coal energy regulation that will increase energy costs by $10 billion per year while saving a couple of million dollars in health costs annually.

In a suit filed in the U.S. Court of Appeals for the District of Columbia Circuit on Oct. 23, the states, along with about 30 energy companies, unions, and associations, contend that the EPA ignored the heavy costs posed by the Utility MACT rule, an emissions regulation that would "effectively ban the construction of new plants by setting standards below measurable levels," according to William Yeatman, an environmental regulations expert at the Competitive Enterprise Institute.

"Perhaps EPA could demonstrate it is appropriate to spend $9.6 billion every year to achieve an annual health benefit of $4 to $6 million from reducing [pollution] emissions," the suit states, with emphasis in the original. "EPA’s failure to take costs into account, as Congress intended, requires vacatur of the [Mercury Air Toxics Standards] rule."

The EPA announced the Utility MACT rule in December, seeking to cut down on mercury levels in waters and air pollutants emitted from coal and oil-fired power plants. The agency claimed the rule "will save thousands of lives and prevent more than 100,000 heart and asthma attacks each year" and would save $37 to $90 billion per year.

Those savings are vastly overstated, according to the suit. Nearly 99 percent of the estimated benefits are classified as "climate-related co-benefits," rather than the demonstrable health benefits attributed to the mercury standards as mandated by the Clean Air Act.

"Put another way, it would cost at least $1,500 for $1 of benefit in [pollution] emission reductions," the suit states.

The savings may be substantially smaller than the $4 to $6 million estimate, since only a very small percentage of mercury emitted from coal plants ever settles on the continental United States, let alone its water sources, Yeatman said.

"They deemed the mercury levels dangerous by measuring the impact of mercury on a pregnant woman who consumes more than 220 pounds of fish that she, being a voracious angler, fishes from America’s most polluted rivers," he said. "The EPA never identified whether any such woman exists, but they used it as the basis of these onerous regulations."

The EPA did not respond to Washington Free Beacon questions about the baselines for the mercury standards.

The EPA has taken direct aim at the coal industry through its air and water quality standards. The Utility MACT rule would drive up costs for more than 1,400 coal and oil burners in 600 power plants across the country, but its most significant change will be the elimination of existing coal-fired plants and the prevention of new construction.

"The imposition of significant new compliance costs on the use of coal-fired electric generating units under a non-climate related program could result in the reduced use or early retirement of these units, an outcome that EPA seems to view as a welcome benefit of additional regulation," Jones Day environmental lawyer, Casey Bradford wrote when the rule was released in December.

The EPA received more than 700,000 public comments from affected industries and states as it considered the rule and insisted upon its finalization that outside input helped shape the mercury standards.

Dale Vitale, chief of the environmental enforcement section in the Ohio attorney general’s office, said the EPA did little to address the numerous concerns raised by energy companies and other states that have now joined the suit includingMichigan, Pennsylvania, Florida, and Virginia.

"We felt that the rule could be better written and had submitted comments with regard to the rule," he said. "We’ve challenged it on the basis that the EPA did not consider the concerns that we and a lot of other states raised [through public comments]."

The complaint outlines one particular instance in the rulemaking process that demonstrated the EPA’s resolve to eliminate coal-fired plants regardless of the economic consequences. Energy companies spent $100 million complying with the mercury tests conducted by the EPA. The agency then broke down mercury levels in its calculations far below standard rulemaking, which allowed it to set limits that are impossible for coal and oil-fired burners to meet.

"[The] proposed rule [is] based on mercury emissions that were calculated to be1,000 times lower than the actual data, which in turn led to miscalculation of the average level of mercury control achieved by the best units and misidentification of the "best performing" units," the suit states.

The EPA will respond to the suit in January, according to spokeswoman Enesta Jones.

Published under: Coal , EPA , Lawsuit