Based on the experience of the past three years, it is a safe, Romney-like wager that this proposed regulation over states the benefits and understates the cost and difficulty of meeting the compliance schedule. EPA under Lisa Jackson has lost credibility on issuing regulations that strike a balance between legitimate environmental challenges and our technological and economic ability to resolve them. If Jackson’s real objective is to shutter old coal fired power generation units, there is a better way to achieve that goal without causing undue economic harm.
It is an established fact that mercury is a neurotoxin. Over 500 years ago, Swiss doctor Philippus Aureolus Theophrastus Bombastus von Hohenheim (commonly called Paracelsus) pointed out that All substances are poisons; there is none which is not a poison. The right dose differentiates a poison from a remedy. Based on this bed rock principle, the question should be are Americans exposed to levels of mercury that represent a serious health risk? If the answer is yes, which is doubtful, will reducing mercury emissions for coal fired power generation significantly reduce that risk?
EPA traditionally uses a linear dose response model with an “adequate margin of safety” to make its health benefits calculation. Linear dose response is a hypothesis, not an established fact. As exposure levels get lower, the use of linear dose response produces a very conservative risk estimate that almost certainly overstates the real risk. And as exposures get lower, the cost of incremental reductions gets larger.
According to a U.N. study, mercury emissions in the U.S. represent 3% of global emissions, roughly the same as the amount of annual mercury emissions from our country’s forest fires. Between 1990 and 2005, industry reduced mercury emissions by 58%, according to EPA’s own data. Other analyses indicate that our economy is already reducing pollutants like mercury by 1-3% annually based on existing regulations. So by now, they are about two-thirds lower.
Looking at all of the data, it seems obvious that exposures from power plant emissions are low and therefore the benefits of further reductions will at best will be minimal. Once again, EPA is overstating its case by using statistical gimmicks to produce hypothetical lives saved. At some point, the agency should answer the question, how low is low enough?
The cost of the rule is anything but minimal. As in the case of the boiler MACT, EPA has low balled the cost. Rather than $10.9 billion annually, independent studies put the cost between $70 and almost $200 billion annually. That cost imposed on the electric power generation system will unnecessarily lead to double digit electricity rate increases and to a substantial loss of jobs. This rule clearly ignores Executive Order 13563, issued this past January, which directed agencies to promote economic growth, job creation while reducing regulatory uncertainty. (Mrs. Jackson must not have received her copy.)
The rule would give utilities up to 4 years to meet the emission reduction targets. The time required for permitting, planning, contracting, retrofitting, and upgrading make it doubtful that many companies will be able to comply with this regulation while maintaining service to customers. Last month, testimony at a FERC reliability conference made clear that this rule risks widespread blackouts and power outages because of the loss of base-load power.
The bottom line is that once again EPA zealotry is taking priority over common sense actions to spur economic recovery and job creation. The continued long term improvement in environmental quality is dependent on a strong and growing economy. EPA seems oblivious to this fact which is clearly demonstrated by economic history. What is even worse is that the EPA approach to reducing mercury emissions is clearly inferior to one which would remove barriers and create economically rational incentives for utilities to replace coal fired power with natural gas over a realistic period of time.
EPA will of course dispute that this regulation is excessive and that it has over stated the health benefits and understated the economic impacts. The best way of proving which conclusion is correct is by subjecting this rule to an independent assessment by a panel of experts who are not beholden to EPA for grants. The field of environmental risk assessment is filled with many qualified experts in health effects, systems analysis, and economics who could be drawn on for such an assessment. If EPA is confident in the basis for the proposed regulation, it should welcome such an independent review. But no one should hold their breadth waiting for EPA to accept the challenge.
EPA’s record of extremism and overstated risks is making a strong case for a top to bottom restructuring and refocusing of its mission. The sun cannot set too soon.
This article appeared in the National Journal’s Energy & Environment weblog at http://energy.nationaljournal.com/2011/12/sizing-up-epas-mercury-rules.php#2137815