Background on Regulations

The Administration has embarked on a regulatory agenda that threatens to be among the most costly ever imposed on the U.S. economy. What has begun with GHG regulations for power plants will eventually reach nearly every segment of the industrial economy. This regulatory agenda portends to dictate which fuels can power our economy, and in turn, threatens our energy security and increases energy costs for nearly every business and household in the country.

Executive Memorandum

In June of 2013, President Obama issued an executive memorandum directing the EPA to promulgate regulations to limit carbon emissions from both new and existing power plants. The memorandum called for the EPA to propose two regulations: a regulation for new power plants by September 20, 2013, and a similar regulation for existing power plants by June 2014.

These two regulations for power plants have set the stage for similar regulations of other sectors like refining, chemicals, natural gas development, iron and steel, pulp and paper, food production, aluminum, glass, brick, cement and other manufacturing.

Regulation for New Power Plants

The EPA closed the comment period on its proposed regulation  for new power plants on May, 9, 2014, and is unlikely to issue a final regulation until late-2014 or early-2015. The proposed regulation bans the construction of new coal-fired power plants unless they are equipped with a technology known as carbon capture and sequestration (CCS). CCS is a promising system that would capture, transport and then store carbon underground. However, CCS is prohibitively expensive and not in use at a single commercial-scale power plant in the country. In addition, even though the Clean Air Act prohibits the EPA from mandating technologies that have not been adequately demonstrated, the agency is aggressively attempting to require the use of CCS. Given this restriction, the practical impact of the EPA’s proposed regulation for new power plants will be to block construction of coal-fired power plants in this country.

Regulation for Existing Power Plants

In response to the President’s June 2013 directive, the EPA released a similar GHG regulation for existing power plants in June 2014. The EPA plans to issue a final regulation in 2015 and will require states to issue implementation plans to meet the EPA’s requirements by 2016.

Unlike the new power plants regulation, the existing power plants regulation will impact plants that are already supplying electricity to homes and businesses throughout the country. The United States relies on fossil fuels for about 68 percent of the electricity that keeps the lights on in our homes and businesses and powers the economy. Quite simply, our country cannot operate without electricity from fossil fuels. Yet, this regulation threatens to shut down many of the plants that produce this low-cost, reliable electricity.

Losing these plants will have two direct and disturbing impacts. First, electricity costs will increase for nearly everyone. Household energy bills will go up as will the costs for most goods and services that we buy and use. Second, the steady stream of electricity that we depend on will be threatened. Businesses, hospitals, schools and households that rely on a constant supply of electricity will have to face the realities of increasing blackouts as there will not be enough sources of electricity to meet demands. These negative impacts on electricity affordability and reliability will inevitably extend to the overall economy, costing jobs and harming America’s competitive position in key global markets.

Concerns with the Administration’s Regulatory Agenda

Coal Today, Gas Tomorrow: It is clear based on the proposed regulations for power plants that the EPA is intent on removing coal from our electricity mix. However, the Administration cannot reach its stated objectives without targeting natural gas plants as well.

Future Regulation of Other Sectors: The EPA has asserted that it has the authority to regulate GHGs across the entire economy. As a result, the ultimate impacts of these regulations could extend to the rest of the industrial economy, from refining to manufacturing, agriculture and mining.

Energy Costs: These GHG regulations have great potential to be devastating economically, increasing energy costs for every sector of the economy, driving up the costs of goods and services and reducing household income.

Electricity Reliability: Existing regulations are expected to force the closure of nearly 300 power plant units in 33 states, leading to reliability concerns in many parts of the country. The January 2014 “polar vortex” demonstrated just how strained electricity supplies can become when temperatures plummet. The EPA’s GHG regulations further threaten to disrupt the steady flow of electricity that we depend on so heavily.

Ceding the Next Generation of Energy Technologies: As the rest of the world’s demand for energy increases, other countries will lead in developing the next generation of power plant technologies if U.S. companies are banned from deploying them here.

Regional Disparities: The EPA’s initial round of regulations will focus on electric power plants and be most harmful to regions most dependent on coal for electricity. These regions also happen to be home to some of the biggest manufacturing centers in the country, where low-cost electricity is a critical component to remaining globally competitive.

Lack of Outreach: Even though these regulations could be among the most costly and harmful in EPA history, the agency has resisted repeated requests to expand the public input process associated with development of the rules. Excluded from the conversation are stakeholders from many states that rely most heavily on coal-fueled power to their homes and businesses.

Lack of State Flexibility: The Clean Air Act limits the EPA to providing “guidance” that states are then tasked with implementing. However, in recent years, the EPA has sought to increase its role in this process, raising concerns that the unique circumstances of distinct regions of the country will not be adequately considered. Recently, attorneys general from 17 different states detailed these concerns in a letter to the EPA.

The United States Cannot Act Alone: If the United States acts alone in addressing GHG emissions without similar action from all industrial economies, increases in the rest of the world will rapidly offset reductions here.

Resources

Resource Documents

NERA Analysis of Final Clean Power Plan

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Partnership Supports ARENA Legislation

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Partnership Poll Finds EPA Out of Touch With Rest of America on GHG Regulations

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Partnership Statement on NERA Economic Consulting Report

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Carbon Reductions With and Without EPA Regulation – Graphic Representation

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53 Senators ask EPA to extend Power Plant Rule Comment period

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15 Governor’s Urge President Obama to Reconsider EPA Regulations

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PACE - Former Energy Official Speaks Out On EPA Carbon Rul

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PACE's Official Statement to EPA

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Partnership Requests EPA Response to Concerns

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EPA’s Clean Power Play: Who Needs Congress?

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Why EPA’s “Clean Power Plan” Is Legally Invalid

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NMA Urges FERC to Consider Grid Reliability

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The Oklahoma Attorney General’s Plan

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Partnership for a Better Energy Future releases statement on House E&C Investigation into the EPA

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Markets Matter: Expect a Bumpy Ride on the Road to Reduced CO2 Emissions

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Energy Cost Impacts on American Families Summary

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Energy Cost Impacts on American Families Full Study

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Partnership Sends Letter of Support for H.R. 3826

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DOE Official Testifies on Costs of CCS

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Virginia State Legislatures Send Letter to President Obama Opposing EPA’s Power Plant Rule

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North Carolina Department of Environment and Natural Resources Offers Principles for GHG regulation

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U.S. Chamber letter of support on Whitfield-Manchin legislation

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Texas Commission on Environmental Quality Letter to EPA on GHG Regulations

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NAM’s Eisenberg Testifies at House Committee Hearing on Greenhouse Gas Regulations

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Why EPAct 2005 May Invalidate EPA’s GHG Regulations

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Chamber’s Harbert tells EPA to Limit the Economic Damage of Power Plant Rules

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Recent Electricity Price Increases and Reliability Issues

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ACCCE Clean Air Task Force Proposal

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News Articles

Proposed EPA rules threaten Pennsylvania manufacturing

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Daily Caller: Inhofe: EPA Admits It Currently Can’t Fully Enforce Its CO2 Rule

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States’ Carbon Plans ‘Need More Time’

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Sold Out Hearings for EPA Climate Plan

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EPA's rule on carbon emissions will hurt Colorado

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ACCCE’s Mike Duncan in The Hill today addressing EPA claims on emissions rules:

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NAM’s Jay Timmons on Bloomberg TV on the Obama Administration’s energy policy:

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NMA’s Hal Quinn with a letter to the editor in the LA Times:

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NAM’s Jay Timmons in Roll Call on EPA rules’ impact on manufacturing:

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Former MT Congressman Rick Hill on the impact EPA regs could have in the state’s elections

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GOP Governors Want Climate Rule Nixed

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GOP Governors Promote Energy Strategy In Houston

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Perry, Jindal Take Swipe At EPA Carbon Rules

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Jindal: Legal Action ‘On The Table’ To Combat EPA Rules

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Gov. Jindal: ‘Good Chance’ Of Legal Action Against EPA

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Gov. Jindal Speaks Out Against Obama Climate Plan

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Bryant, Other GOP Govs Oppose Obama Energy Regs

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Tom Corbett, Other GOP Governors Say New Federal Power Plant Rules Will Kill Jobs

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U.S. electricity prices may be going up for good

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Citizens Urged to Challenge EPA Regulations

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Pennsylvania DEP Urges EPA to Consider State Differences When Developing Framework for Emissions Guidelines

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Op-ed: The EPA Doesn’t Have The Legal Authority To Adopt Its New Power Plant Rules

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Op-ed: W.Va., EPA, and Coal Depression

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Renewables Aren’t Enough. Clean Coal Is the Future

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EPA’s Rush threatens Georgia manufacturers competitiveness

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Why EPAct 2005 May Invalidate EPA’s GHG Regulations

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NAM’s Eisenberg Testifies at House Committee Hearing on Greenhouse Gas Regulations

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A Common Sense Bipartisan Proposal to Address Greenhouse Gases

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EPA To Hold Listening Sessions on GHG Rule

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