EPA Guilty of Assault on Affordable Energy

June 20, 2012

In a recent press interview, EPA Administrator Jackson tried to blame the decline of coal electricity generation on the low price of natural gas, stating, "The problem for coal right now is entirely economic." Jackson is attempting to deflect blame for plant closures, job losses, and electricity price increases, but her explanation ignores the fact that over the past three years EPA has issued a suite of new regulations designed to bring an end coal-fired generation in America. At this week’s Energy and Power Subcommittee hearing, witnesses and members presented a compelling case that EPA regulations take one of our most abundant, affordable energy resources off the table for American consumers. In reality, the economic problems for coal referenced by Jackson are a result in large part from a slew of recent EPA regulations that together are estimated to cost more than $100 billion.

One of EPA’s most concerning new rules is its recently proposed New Source Performance Standards for coal plants. The emissions standards are so strict they require coal-fired utilities to install costly carbon and storage technologies that are not even commercially available.

On Tuesday during an Energy and Power Subcommittee hearing, Steven Winberg, Vice President of Research & Development for CONSOL Energy Inc., explained how EPA’s new standards will prevent new coal plant construction, stating, “In effect, what EPA’s rule does is eliminate any new coal for years to come because EPA is requiring new coal-fueled power plants to meet a natural gas equivalent CO2 standard, before CCS technology is commercially available. Without commercial guarantees and warrantees from CCS suppliers, power producers cannot get financing. Without financing, power producers cannot build.”

In response to questioning from Rep. David McKinley (R-WV), Winberg expressed his belief that, “There is a very deliberate effort by EPA to reduce the amount of coal burned in the United States.” Watch here.

Barbara Walz, testifying on behalf of the Tri-State Generation and Transmission Association, described coal’s doomed fate under this new regulation. “If this rule stands, it will effectively ban the construction of new coal-fired power plants in the U.S. and almost certainly will make electricity more expensive. This statement is not hyperbole or exaggeration,” said Walz. “EPA seems to have adopted an unrealistic ‘Field of Dreams’ philosophy that if the agency mandates a standard, the equipment vendors will be able to build it. This perspective confuses fantasy with reality by ignoring the status of existing technology and instead recklessly assuming that the industry will be able to comply with unprecedented emissions standards in a very limited time frame.”

Walz testified that her company has faced a number of regulatory hurdles in trying to build a new coal plant in Kansas, and has not been able to find vendors that can meet all of EPA’s new regulations. Watch her exchange with Rep. Mike Pompeo (R-KS) here.

David Wright, Vice Chairman of the South Carolina Public Service Commission, explained the devastating impact of EPA’s actions on American families. “As a public utility commissioner, I am ultimately accountable to the electric ratepayer. When electric bills go up, I get the calls from irate consumers, so naturally I am concerned about the impact these rules will likely have on electric rates,” said Wright. “For example, EPA’s own assessment of the MATS rule, estimates costs of $9.6 billion per year. When added to assessments of the other EPA rules, these costs will be even higher.” In an exchange with Rep. Morgan Griffith (R-VA), Wright explained EPA’s regulations would hit poor and elderly customers the hardest. Watch here.

After Congress and the American people rejected cap-and-trade legislation, President Obama suggested there are others ways to “skin the cat.” EPA is abusing the Clean Air Act to push through the Obama administration’s destructive cap-and-tax agenda without any regard to the higher bills that American families will be forced to pay to keep the lights on. If EPA is allowed to continue its assault on affordable, American-made energy, we could see massive electricity price increases and the end of coal electricity generation in America.