A study released by the National Association of Manufacturers (NAM) on Thursday said the Environmental Protection Agency’s (EPA) new ozone standards could cause Arkansas to lose more than 10,000 jobs, pay more than $240 million in environmental compliance costs, and shut down most of the state’s coal-fired electric generation.
“Manufacturing in the United States is making a comeback, and we’re reducing emissions at the same time, but tightening the current ozone standard to near unachievable levels would serve as a self-inflicted wound to the U.S. economy at the worst possible time,” NAM President and CEO Jay Timmons said. “This rule would undermine our work to expand manufacturing in the United States, making it almost impossible to increase operations, create new jobs or keep pace internationally.”
Altogether, according to the study conducted by NERA Economics Consulting, NAM said the EPA’s controversial plan to cut carbon dioxide emissions could reduce the nation’s GDP by $270 billion per year and carry a compliance price tag of $2.2 trillion from 2017 to 2040, increasing energy costs and placing millions of jobs at risk.
At this price, the NAM study estimates that it would be the most expensive regulation the U.S. government has ever issued, Timmons said. “Ozone standards set at this level could break us,” he said.
At the direction of President Obama, the EPA released its Clean Power Plan on June 2, cutting so-called “dirty air” emissions 30% by 2030 from 2005 levels. At the time, critics said it would essentially end Arkansas’ and the nation’s reliance on coal-fired electricity generation.
Under the new guidelines, Arkansas regulators and stakeholders will also have an option to develop and submit a workable plan beyond the earlier announced June 2016 deadline. On June 25, nearly 20 stakeholder groups and state regulators from the Arkansas Department of Environmental Quality and the Arkansas Public Service Commission met to discuss how to implement the new greenhouse gas standards in Arkansas.
DOING THE IMPOSSIBLE
At that meeting, Chuck Barlow, vice president of environmental policy and strategy for New Orleans-based Entergy Corp., called the new EPA rules “another level of hell.”
NAM officials said their 144-page study was “the most rigorous examination” of EPA ozone regulations to date. The nation’s largest manufacturing association called on the Obama Administration to delay implementation of the more stringent ozone standards, or keep today’s carbon emission rules at the current level of 75 parts per billion.
“We are rapidly approaching a point where we are requiring manufacturers to do the impossible. The new EPA (rules) should be entirely off the table,” said NAM Vice President of Energy and Resources Policy Ross Eisenberg. “We hope the EPA takes us up on this offer. They need to take the time to get this right.”
Here are some additional highlights of the study finding that ozone standard from 75 parts per billion (ppb) to 60 ppb could:
• Reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040;
• Result in 2.9 million fewer job equivalents per year on average through 2040;
• Cost the average U.S. household $1,570 per year in the form of lost consumption; and
• Increase natural gas and electricity costs for manufacturers and households across the country.
CONSUMER PRICE HIKES
In Arkansas, NAM officials said that new ozone regulations could cost Arkansas hundreds of millions of dollars to reduce emissions to federally required levels. For example, the new EPA rules would push up residential electricity prices by 15% and natural gas prices by 32%, the report said.
NAM officials said the EPA has identified only 38% of the controls needed to meet the standard. The remaining 62% of reductions would have to be met with unknown controls that the EPA has not yet identified but which would likely have to include early shutdowns of existing facilities, equipment and vehicles.
Eisenberg said NAM has sent the study to EPA officials and asked for a meeting to discuss the details and methodization of the new report. The new NAM report is another high-profile study that critics of the new EPA standards can use to put political pressure on the EPA to delay implementing the new stricter greenhouse gas rules.
The U.S. Chamber of Commerce has issued a 71-page report saying the EPA’s plans to regulate carbon dioxide emissions from power plants will cost America’s economy more than $50 billion a year between now and 2030.
Randy Zook, President and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, said he hopes his membership forcefully voices its opposition to the EPA rules.
“Today’s study should serve as a wake-up call to job creators in Arkansas and across the nation,” Zook said. “The report clearly demonstrates the exorbitant costs that come with a more rigid ozone standard, and the severe impact that such a revision would have on our state economic outlook. These costs will make it almost impossible for Arkansas manufacturers and businesses of all stripes to create new jobs, or even keep pace with international competitors.”
ARKANSAS RULE DEVELOPMENT
In Arkansas, The PSC and ADEQ have been tasked by Gov. Mike Beebe to oversee the process of developing new rules to meet the EPA mandate in Arkansas. ADEQ is in the process of preparing the necessary paperwork to seek the assistance of a meeting facilitator for future stakeholder meetings. Also, the public comment period on the EPA docket began June 18 and must be received by federal regulators on or before Oct. 16, 2014.
Meanwhile, EPA Administrator Gina McCarthy has been criss-crossing the nation to get public input on the prosed Clean Power Plan. This week, the EPA held four public hearings in Washington D.C., Atlanta, Denver and Pittsburgh, to give interested parties an opportunity to comment on the proposed rule.
EPA predicts that when the proposed plan is fully implemented in 2030, carbon emissions from these sources will be 30% below 2005 levels. Obama administration officials say the proposal will protect public health, move the United States toward a cleaner environment and fight climate change while supplying Americans with reliable and affordable power.
To date, the EPA has received around 300,000 comments on the proposal, and anticipates hearing oral comments from about 1,600 people.