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.
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.