The EPA’s Regulatory Avalanche

NOTE: This article originally appeared in The Dallas Morning News on February 6, 2012.

The nation’s most powerful regulatory agency, the U.S. Environmental Protection Agency (EPA), is on a collision course with America’s still fragile economic recovery. As I outlined in a report published Monday by the Texas Public Policy Foundation, 10 to 25 major EPA rules are scheduled to take effect over the next few years, each with a multi-billion dollar price tag and highly debatable benefits for public health.

In 2010, EPA regulations accounted for $23 billion of the estimated $26 billion total cost of new federal regulation. Expect a far higher tab from this new batch.

Consider the mercury rule restricting emissions from power plants, finalized last December 21. At $11 billion, the rule is the EPA’s most expensive ever.

An independent analysis by the National Economic Research Association found that the rule could increase average retail electric rates between 12 and 24 percent and lead to 180,000 annual job losses through 2020. The National Electricity Reliability Council concluded that the rule, in conjunction with other EPA rules, could force the closure of 8 percent of the nation’s total electric generation.

For such a costly rule to be justified, common sense begs for commensurate benefits. Although EPA claims huge benefits from the rule, only $6 million, or 0.004 percent of the $140 billion of alleged health benefits, come from reducing mercury. The rest supposedly derive from coincidental reductions in fine particulate matter (i.e. dust) long regulated by EPA at a level fully protective of human health.

Even total elimination of mercury emissions from U.S. power plants would not decrease the risk of mercury exposure at harmful levels. Deposition of mercury is a global phenomenon to which U.S power plants contribute less than 0.5 percent. Natural sources such as volcanoes and fires dwarf all man-made releases.

Nevertheless, EPA devised a safe mercury limit two to three times stricter than the World Health Organization and the federal Food and Drug Administration.

The mercury rule is just the beginning. Using the same faulty analysis, the EPA has cranked out new restrictions on everything from cement kilns to industrial boilers and new federal ozone standards approaching or below natural levels that would exist without human activity.

The EPA has also asserted authority to regulate carbon emissions. EPA is now treading lightly on greenhouse gases, but federal courts may force EPA to regulate as the law requires. This means, by EPA’s own estimate, regulation of more than 6 million facilities – including hotels and schools – and the need for 230,000 additional EPA employees.

The sheer volume, stringency, and speed of EPA’s new regulations might suggest that America has an air quality crisis. Indeed, this is exactly the impression that the agency’s top brass conveys. On HBO’s “Real Time with Bill Maher,” Administrator Lisa Jackson said, “We are actually at the point in many areas of this country where on a hot summer day, the best advice you can give is don’t go outside. Don’t breathe the air. It may kill you.”

The reality is quite different. As EPA’s own data indicates, the last several decades have seen remarkable improvements in air quality in the United States. Since 1970, aggregate emissions of the six criteria pollutants regulated under the Clean Air Act have decreased 53 percent. EPA’s Toxics Release Inventory documents a 65 percent reduction since 1988. And mercury emissions have declined by 58 percent between 1990 and 2008.

EPA’s actions over the past three years represent a disturbing departure from the relatively balanced incremental, scientifically justified regulations evolving over the 40-year history of the Clean Air Act. The Act, however, no longer furthers cost-efficient regulation based on rigorous science. And its broad delegation of authority to EPA is easily manipulated by activist regulators determined to impose energy policies repeatedly rejected by the U.S. Congress.

Absent decisive congressional action, it may be many years before our economy digs out from the crushing cost of the EPA’s regulatory avalanche.

Kathleen Hartnett White is director of the Armstrong Center for Energy and Environment at the Texas Public Policy Foundation. She was commissioner and chairman of the Texas Commission on Environmental Quality from 2001 to 2007.