Subcommittee Examines Impacts of EPA Greenhouse Gas Regulations on Jobs, Consumers

June 19, 2012

WASHINGTON, DC - The House Energy and Commerce Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today continued its hearing on the American Energy initiative with a focus on EPA’s greenhouse gas regulations. Members heard from witnesses who expressed concerns about rules that have already been issued by EPA, as well as additional regulatory burdens that could be forthcoming, and warned against the harmful impacts on jobs and the economy associated with regulating greenhouse gases under the Clean Air Act.  Because the Clean Air Act did not envision the regulation of carbon dioxide and other greenhouse gases, EPA’s current and potential future regulations threaten unintended and potentially economically devastating consequences. 

"EPA’s outright assault on our economy must stop,” said Whitfield. “At a time of chronically high unemployment, the last thing job creating industries need is more red tape and outrageously expensive regulations that cost jobs instead of create jobs. But that is precisely what EPA is imposing on the economy with its greenhouse gas regulations. EPA’s greenhouse gas regulations range from rules setting new emissions standards for cars and trucks, to complex permitting requirements for donut factories and farmers, to rules affecting power plants. These GHG rules are a regulatory overreach and serve as a backdoor cap and tax policy that Congress has already rejected."

"It’s a sad irony that the very job creating activities this struggling economy screams out for - things like building a new factory or expanding an existing one, or boosting electric generating capacity to meet demand - are precisely what is being targeted by EPA with these burdensome GHG permit requirements," said Energy and Commerce Committee Chairman Fred Upton (R-MI). "It is not only the largest employers who are at risk - we are seeing signs of EPA’s GHG regulatory actions reverberating throughout the economy. Even smaller businesses and farmers that are not directly regulated - at least not yet - are going to have to deal with the higher energy costs that will be passed on to them by those who are."

Robb MacKie, President & CEO of the American Bakers Association, explained the circumstances facing the baking industry. "The baking industry will surely feel the heavy downstream cost impacts of a climate change regulatory program on the different sectors of the American Economy,” said MacKie. “With a 250-ton threshold, even a small increase in market demand for baked products could trigger a ‘major modification’ under the PSD program, with expensive consequences. Would our baker tell a retail grocer to ‘wait’ on filling a hot dog bun order while he applied for a permit modification?”

”The regulation of greenhouse gasses under the Clean Air Act will ultimately result in a number of unintended consequences that EPA may not be able to mitigate through regulation,” said Carl Shaffer, President of the Pennsylvania Farm Bureau, testifying on behalf of the American Farm Bureau Federation. “Even with the tailoring rule, farmers and ranchers are paying higher fuel and energy costs resulting from the regulation of utilities, refineries, manufacturers, and other upstream input providers. The costs that those upstream entities incur to comply with greenhouse gas regulations are passed down to farmers and ranchers.” When asked by Rep. Lee Terry (R-NE) about the impacts of EPA’s potential regulation on ranching, Shaffer suggested Americans could be eating “imported food” under EPA’s regulatory regime. Watch here:

Charles Smith, President and CEO of CountryMark Cooperative LLP, an American owned oil refining and marketing company, explained the issues facing the small refiners as a result of the proposed and pending rules. He said, “Regulations and mandates increase capital requirements, operating costs and product costs, which in turn make refiners, especially those SBRs like CountryMark, less competitive. When refiners cannot pass on these costs to the consumer, or absorb these costs, they go out of business. The result is reduced domestic refining capacity and consequentially higher gasoline and diesel costs for the consumer. If domestic refining capacity is reduced, EPA regulations will actually increase U.S. demand for imported fuels and consumer prices will increase.”

"Our experience is that regulations - while well meaning can be conflicting in purpose, reduce competitiveness and result in less than optimal environmental benefit. We believe this will be the result when EPA promulgates regulation of greenhouse gasses under the Clean Air Act," said Gerry Sweeney, President and CEO of Rain CII Carbon LLC, an American manufacturer employing over 250 people. "There is no question that Clean Air Act regulation of greenhouse gas emissions will deter production, investment and job creation in the US in favor of other countries."

David Wright, President of the National Association of Regulatory Utility Commissioners, called for increased study and understanding before the adoption of any new rules relating to greenhouse gases.  He said, “EPA must pause in its regulatory processes until the impact of its regulations, both as to cost to ratepayers and the reliability of the electric system, are better understood. There has to be a better way to harmonize the need for the country to continue to improve the environmental performance of the electric utility industry with the need to keep electric rates stable and low. In these difficult economic times, the people of my home State, and I’m sure other States as well, cannot afford significant rate increases.” During questioning, Wright assured members that rates “are going to go up.” Watch here.

While EPA was unable to send a witness for today's hearing, Chairman Whitfield announced that the subcommittee will meet on Friday, June 29, 2012, to hear from Assistant Administrator for EPA's Office of Air and Radiation Gina McCarthy on EPA’s current, pending, and potential greenhouse gas regulations under the Clean Air Act.

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