Tuesday, February 21, 2012

A Deep Dive Inside EPA Regulation: "Tangled up in green tape"

From the Economist:

The EPA, Congress, activists, the courts and power companies themselves all share the blame for the chaotic nature of environmental regulation in America

PITY the engineers responsible for keeping America’s coal-fired power plants up to standard. Late last year a court halted the adoption of new regulations on interstate air pollution that would have affected lots of them—just two days before they were due to go into force. The suspended regulations, in turn, were themselves a replacement for an earlier set of rules which had been thrown out by the courts in 2008. The older lot have now been temporarily reinstated, while the court hears various challenges to the new ones. What the outcome will be is anyone’s guess.

Similar chaos surrounds another set of rules, these ones governing ozone, which will also affect lots of power plants. In 2010 the Environmental Protection Agency (EPA) proposed tightening restrictions on ozone—a surprise in itself, since the rules were not due for review until 2013. Late last year the White House overruled the EPA, and junked the new rules. Since the previous set, dating to 2008, had never been implemented, a standard first adopted in 1997 still applies. But environmentalists have sued to put a fiercer one into force. Whatever happens, the Clean Air Act obliges the EPA to reopen the whole subject again next year.

Last year the EPA also issued rules on mercury and soot from power plants. In theory that marked the culmination of a decades-long, on-again-off-again process first initiated by amendments to the Clean Air Act in 1990—although further lawsuits seem inevitable. Also in the pipeline are restrictions on emissions of greenhouse gases, new rules regarding cooling water and the possible declaration of coal ash as hazardous waste, from which a stream of new requirements would flow.

Confused? So are the power generators. Conforming to these rules often involves installing new kit or changing the way plants are run, and on occasion shutting them down altogether. That is expensive, utilities complain. The EPA itself estimates that meeting the new mercury standards will cost businesses $10 billion a year. Electricity prices, it reckons, will initially rise by 3% a year as a result. It puts the cost of the interstate air pollution rule at $2.4 billion a year, and of the ozone rule (if it is ever implemented) at $20 billion a year at least. Industry groups, naturally, have far higher estimates of the costs....MORE