Oct 23, 2015 - 5:15pm

EPA Has Created a Massive Regulatory Fiasco


Senior Editor, Digital Content

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The EPA is overreaching...again.

Within a few months, one agency—EPA—will have dropped three regulatory bombs on the U.S. economy.

The agency published new carbon regulations--so-called “Clean Power Plan”--that will force states to dramatically reconfigure their power grids and abandon reliable coal power, and it will publish a stricter ozone standard that will block economic development in many parts of the country. Both these come in the wake of the recently issued Waters of the U.S. (WOTUS) rule.

Separately any one of these regulations would have costly effects for questionable benefits, but combined, these rules are the regulatory equivalent of the Keystone Kops and are sure to hamper economic development and job creation. 

And it’s all because EPA refuses to seriously analyze how its regulations will affect people and businesses.

“By ignoring these congressional mandates for developing effective regulations,” said U.S. Chamber Senior Vice President for Environment, Technology & Regulatory Affairs William Kovacs at a Senate Environment and Public Works Committee hearing, “the EPA fails to secure an understanding of the real world impacts of its rules.” He explained how these regulations will work at cross-purposes:

The massive new infrastructure requirements that are at the heart of the Clean Power Plan will be complicated and delayed by the expanded number of Clean Water Act permits required by the WOTUS rule. In addition to the cost of applying for federal permits, infrastructure developers will have to pay mitigation costs for wetlands restoration, which often approach or exceed all other project costs.

When the EPA was estimating the attainment area impact of Ozone NAAQS, it completely ignored the probable shifts in criteria pollutant levels resulting from the Clean Power Plan. Because the CPP requires such a massive reorganization of the nation’s electric generation infrastructure, reshuffling of the deck will dramatically shift the current map of criteria pollutant concentrations as power companies site new generation facilities away from existing sites. In particular, this could undermine the ability of many air districts to meet the current standards, let alone the tightened Ozone NAAQS standards the EPA finalized around the same time as the CPP.

This reshuffling will make it extremely difficult for states to properly model their ozone reduction efforts. The Ozone NAAQS will also make the job of obtaining preconstruction permits for new power plants under Section 165 of the Clean Air Act much more difficult and costly, because more areas will either be classified in non-attainment—thus requiring costly offsets (if they are available)—or the area will be much closer to non-attainment. More extensive modeling and air monitoring will be required to show that a new project made necessary by the CPP can be built, adding significantly to the cost and delays for each project.

If EPA had followed congressional edicts, businesses might not be in this regulatory conundrum.

Congress can take an important step in fixing the rulemaking process and avoiding fiascos like this. The Regulatory Accountability Act would require EPA and other regulatory agencies to take additional steps to “ensure a better rulemaking product” for the biggest, most-expensive regulations. This bill passed the House and has been introduced in the Senate.

We all want quality regulations that rely on sound science and economics. As seen by EPA’s actions, our regulatory process is broken. Congress must fix it.

Support the Regulatory Accountability Act

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.