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EPA regulatory spree undermines the US economy

It should surprise no one that equity markets withered after Congress and the White House finally enacted a budget deal allowing the US to keep paying its bills. Cessation of the budget drama brought attention back to an economic problem equally severe: Lisa Jackson remains on the job.

The Environmental Protection Agency administrator seems not to care about economic consequences of her strafes on American business. The oil and gas industry knows this. Just since the end of July, Jackson’s agency has proposed to tighten limits on air emissions from drilling and production and to impose burdensome reporting requirements on chemical makers.

But the oil and gas industry isn’t Jackson’s only regulatory target. Members of the National Association of Manufacturers face what an official calls “an avalanche of additional rules and regulations from the EPA.”

The initiatives, wrote Paul A. Yost, NMA vice-president, energy and resources policy, in a letter to EPA, include “the reconsideration of the 2008 ozone national ambient air quality standards (NAAQS), new SO2 and NOx NAAQS, the proposal to regulate coal ash, boiler [maximum achievable control technology] regulations, and the imposition of first-time federal regulation on greenhouse gas emissions.”

Yost noted special concern about the utility MACT proposal and a cross-state pollution air pollution rule awaiting implementation. The measures require the installation of emission-control equipment, such as scrubbers, by coal-fueled power plants. The rules will raise electricity costs for manufacturers. And their deadlines might be impossible to meet.

Yost cited an estimate by National Economic Research Associates that compliance will cost the power industry $18 billion/year. NERA estimates average retail electricity prices nationwide will rise by 11.5% and in heavy manufacturing states by about 23%.

Manufacturers will have to close plants, cut production, or abandon expansion plans. Implementation of both regulations would make the US lose 1.44 million job-years (one job for one year) by 2020.

So a budget impasse wasn’t the US economy’s only problem. EPA, a bureaucracy gone wild, is stifling investment and work.

(Online Aug. 5; author’s e-mail: bobt@ogjonline.com)


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