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Monday, April 02, 2012

Going Rogue, Part VII: the EPA has just doomed an entire industry


Back in 2008, when Barack Obama was pursuing the presidency, he said, “If someone wants to build a new coal-fired power plant they can, but it will bankrupt them because they will be charged a huge sum for all the greenhouse gas that’s being emitted.” That was then; this is now, and one campaign promise Mr. Obama made is coming true.

“Power developers have scrapped plans for more than 100 coal-fired electricity plants over the past decade,” according to Reuters, “due to difficulty obtaining construction and pollution permits or because they were simply too expensive,” thanks to the Environmental Protection Agency and other federal agencies, even though new plants are much more efficient and produce far less pollution than older plants. And last week’s unveiling of the EPA’s proposed emission rules for new coal-fired electric generation plants reveal standards so strict that they are impossible to meet using present technology.

The new standard for carbon dioxide per megawatt hour of electricity is a little more than half of the previous threshold, guaranteeing no new coal plants will ever be built, as confirmed by the American Coalition for Clean Coal Electricity, which reports that the most recent regulations announced by the EPA will likely increase the number of closures of existing plants in 19 states.

This prediction comes despite the assurances of Gina McCarthy, the EPA assistant administrator for air and radiation, that the impossibly stringent new requirements are only for new plants. She told the House Energy and Commerce Committee the agency has “no plans” to curb greenhouse gas emissions for existing plants. But no one familiar with the EPA’s history of over-zealous regulation believes that.

There is an option, however, as the EPA allows coal-burners to continue using America’s most dependable fuel. All they have to do is employ the new carbon capture and storage (CCS) technology. But the EPA knows full well that CCS at this stage is just theory; it has not been proven to work. And – surprise, surprise, surprise – it is prohibitively expensive.

Once again Americans, including our elected representatives, have sat on their hands and allowed the unelected, unaccountable, ideologically obsessed regulators at the EPA to punish them. The EPA has sounded the death knell for an industry that has been the backbone of U.S. power production for decades, and which is a substantial part of the economy of several states, providing tens of thousands of jobs and hundreds of millions in annual tax revenue. The EPA has not yet won its war on this dependable and important American industry that today accounts for 40 percent of electricity production. But victory is in sight.

In West Virginia, where coal is a major economic engine, the coal industry pays approximately $70 million in property taxes annually, and the industry payroll is nearly $2 billion per year paid to thousands of employees. Coal is responsible for more than $3.5 billion annually in the gross state product, and all 55 West Virginia counties, even the non-coal producing counties, receive Coal Severance Tax funds, according to data furnished by the West Virginia Office of Miners' Health, Safety and Training. And coal is a major economic component in states where it is not necessarily the primary economic factor, like Virginia, Wyoming, Kentucky and Pennsylvania. Coal is mined in 26 states, and 36 states produce at least some of their power with coal.

The EPA successfully developed a brilliant three-prong strategy to impose on the country during a pitifully weak economic recovery: a) put thousands more Americans out of work, b) damage the economies of a dozen states, and c) make continuing to use the most abundant fuel impossibly expensive, all at the same time!

English philosopher John Locke is regarded as one of the most influential figures in The Enlightenment. His contributions to social contract theory had a great impact upon the American revolutionaries, like Alexander Hamilton, James Madison, and particularly Thomas Jefferson, so great an influence that his ideas are reflected in the Declaration of Independence. He believed that legitimate government existed only with the consent of the governed.

Presented with a situation like the out-of-control, unelected bureaucrats of the EPA who issue rules and regulations with the force of law, Mr. Locke might respond thusly: “When anyone, or more, shall take upon them to make laws, who the people have not appointed so to do, they make laws without authority, which the people are not therefore bound to obey,” because such actions return the people once again to being subjects of their government.

Some will argue that EPA bureaucrats are “indirectly” appointed by the people through elected representative, and while that may be technically correct, I’m betting John Locke would rise up in protest of many of the current actions of the federal government.

Recent administrations and – more curiously – Congresses seem unconcerned that the servants of the people working in federal agencies have co-opted Congress’ authority as the sole maker of law in our government. One wonders just how much longer the American people will accept being made government subjects by unelected bureaucrats before they follow Locke’s advice to not obey these illegal edicts.

Comments are invited. Click here to comment.

8 comments:

CK said...

I cant say I completely understand the regulations and how it relates to technology and cost, but I will say I like a lot of the things the EPA does and I would like to think their heart is in the right place, although the road to hell can be paved with good intentions...

I'm sure there was a similar backlash regarding sewage standards and the regulation to no longer dump waste directly into streams and rivers... you know, infringing upon personal freedoms and liberties by making people discard of sewage in a better fashion...

for every one of the overzealous regulations, I'm sure there are a few you actually agree with and support...

and it is an interesting conversation about the power of unelected policy makers... although the EPA was established by legislators... but sometimes the tail wags the dog...

James Shott said...

Imagine your job, the thing that earns you the money for food, shelter, clothing, furniture, transportation, etc., is to make regulations. What would you do all day? And what will you do once all the necessary rules have been created? Look for another job? No, you would find more things to regulate.

That is basically what the EPA does. The air in the U.S. is cleaner today than it has been in more than 100 years. To the extent that the EPA is responsible for that, congratulations to the EPA, although some, perhaps most, of that would have occurred naturally through improved technology and systems.

However, at some point the air, while not perfectly clean, is clean enough. But then what will the regulators of air quality do? As science and technology improve, smaller and smaller levels of “pollutants” become measurable. Ten years ago we could only measure “macros of air gunk,” but now we can measure “micros of air gunk.” We thought we had cleaned up the air by regulating air quality to less than 1 macro, but now we see that there is still a teensy, tiny, miniscule amount of air gunk in the air, 10 micros (10/1000ths of a macro). New regulations are required to save humanity!!

And on it goes, with little or no concern for the effects of all these regulations, the costs to businesses, thus consumers; the loss of jobs; the increase in government, requiring higher taxes, etc. The only concern is for continually striving to eliminate all “air gunk” (or whatever) from the air (or whatever). The EPA now tells farmers, who work in dirt, they produce too much dust. Really? What a surprise that one would encounter dust on a farm.

Is the solution to ban farming? Well, not initially. They’ll just pass more regulations about dust, making farming too expensive, and driving food prices up or driving farmers out of business, and it will be the small farmer that goes down, leaving mainly the corporate mega-farms producing of our food.

Regarding unelected policy-makers, Congress might be able to justify creating the EPA or other government agencies, but it cannot justify abdicating its constitutional obligation to be THE law-maker by allowing these agencies to make “law” through the regulatory process.

Lord Nazh said...

Obama told everyone in the country that his goal was to bankrupt the coal industry and 'sky-rocket' energy prices.

At least he's kept one campaign promise.

James Shott said...

I'd rather he kept the one where if at the end of the third year the economy hadn't straightened out, it would be the end of his presidency.

Okay, that's not exactly what he said, but we can dream.

CK said...

I still dont see The Mormon beating The Muslim this November...

James Shott said...

The future of the free world and the U.S. depend upon it.

CK said...

Romney is in the wrong tax bracket to sway too many folks I think... unless they are some hardcore bible thumpers voting against abortion and birth control but those votes are already locked up too...

as has been the trend with the past few elections... only a few states will decide who wins and most are red or blue, through and through...

Ohio, Florida, Pennsylvania, Virginia and North Carolina...

these will depend on the number of women and minorities who show up at the polls... unlike Primaries or Mid-Terms elections in which just a fraction of the voters show up...

James Shott said...

It's way too early to predict anything yet. A month is an eternity in politics, and there are six of them before the election.

The good news for Romney is that Obama has nothing positive to run on. All he can do is attack Romney (assuming he is the nominee, which is likely), and Romney has a long list of Obama failures and bad decisions to choose from.

Romney also has some practical successes in his portfolio, and already has more practical executive experience than Obama is likely to ever amass.

I think Romney's most serious problem is that a lot of people who want a more conservative candidate will stay home or go third party.