Monthly Archives: August 2014

Coal Related News from Around the Nation

EPA Guidelines are a Calamity in the Making

For months, we heard the resounding warnings about how new Environmental Protection Agency regulations aimed at power generation could affect Arizona consumers and businesses. Now that the agency’s proposal has officially been released, it is clear that these warnings were not in vain, for the guidelines EPA put forth will leave our state and our country on the brink of economic calamity.
Arizona has had a front-row seat to EPA’s ongoing assault on affordable energy. Yet again, we find our state facing more overreaching and punitive regulations from the Obama administration and Washington, D.C., which yield no benefit but will cause energy costs to skyrocket and the reliability of our power grid to suffer. The EPA has already forced the shutdown of a number of coal-fueled power plant units in Arizona, and now it appears the agency is coming after the rest.
Arizona relies on a balanced mix of sources for our electricity. Last year, base load generation sources like coal, nuclear and natural gas made up more than 90 percent of our electricity supply, with intermittent sources like solar comprising the remainder. Under EPA’s most recent proposal, Arizona would be required to reduce carbon dioxide (CO2) emissions by 52 percent, the second most stringent reduction requirement of any state.
It is unclear how EPA set these standards, and even experts are puzzled by the more than 1,600-page proposal and its nebulous justifications. What is clear is that Arizona will have to cut coal use significantly, which will fundamentally alter the energy makeup of our state and leave Arizona ratepayers paying the price for EPA’s costly, politically driven plan.
How and why does EPA expect Arizona to reduce CO2 emissions by 52 percent? Through increasing electricity from intermittent, higher-cost renewable energy by 100 percent, increasing electricity from natural gas – which Arizona would have to import from other states – by 95 percent, and eliminating the use of coal to generate electricity. Again, why? With a plan like that, even EPA admits that energy prices will increase and jobs will be lost because of its proposal. Analyses of carbon reduction proposals similar to that of EPA’s predict that electricity prices for Arizona ratepayers could increase by as much as 31 percent, and that as many as 9,000 jobs per year could be lost in Arizona and throughout the Southwest.
My colleagues and I passed Senate Concurrent Resolution 1022 earlier this year to declare state primacy over the federal government on this issue. Knowing that these regulations would soon be upon us, we wanted to ensure that we made it clear to the Obama administration that we would not stand for the same costly policymaking we have witnessed from this White House and its team of unelected agency bureaucrats.
We believe Arizona is best positioned to make decisions about what Arizona needs, and it is important that we lead, not be led, in crafting energy policy that stands to have such an enormous impact on our residents and businesses. EPA’s proposal is unworkable in every way. There is nothing to fix, nothing to “work out;” it is simply the wrong approach with little consideration for the cost and reliability impacts.
Now, I urge my colleagues, including the Department of Environmental Quality and the Arizona Corporation Commission, to represent the people of Arizona and do their part in getting EPA to withdrawal this senseless proposal. I trust the resolution adopted by the state Legislature will be used as a springboard to protect our state’s families and businesses from EPA’s overreaching regulations—before it’s too late.
— Steve Pierce is chairman of the state Senate’s Natural Resources and Rural Affairs Committee.

See article here.


Obama Hits the Gas on Regs

Groups that closely follow regulations are expecting the Obama administration to continue issuing controversial rules through the midterm elections, despite the political risk it could pose for Democrats.

With time running out on President Obama’s second term, federal agencies are hitting the gas on a number of regulatory initiatives that are central to the White House’s “go-it-alone” agenda.

The pace of rulemaking is a stark contrast from the months leading up to the 2012 presidential election, when the flow of rules came screeching to a near halt.

The expectation that the gears of the regulatory process will keep moving highlights how the president’s desire for a second-term legacy sometimes conflicts with the short-term political considerations of congressional Democrats.

“We can’t underestimate the role politics plays in regulatory decisions,” said Stuart Shapiro, a former staffer at the White House’s Office of Information and Regulatory Affairs, who is now an associate professor at Rutgers University. “It’s important to remember that at the heart of regulations are political decisions.”

Obama’s regulatory push is having a notable impact on Kentucky’s Senate race, where Senate Minority Leader Mitch McConnell (R) is using the Environmental Protection Agency’s controversial climate rule against his opponent Alison Grimes, a Democrat.

Critics say Kentuckians stand to lose thousands of coal jobs under the EPA’s climate rule, making it very unpopular in the state. McConnell has promised to fight back against the EPA’s climate rule, and has not been shy about pointing out Grimes’ Democratic ties to President Obama.

But Obama isn’t “backing away” from the EPA’s climate rule, said Ronald White, regulatory policy director at the left-leaning Center for Effective Government — or for that matter, from the EPA’s waters rule, which is just as controversial.

The EPA says the water regulation is needed to clarify ambiguity in the law, while critics say it would give federal regulators expansive powers over the small bodies of water such as those found on many farms.

“Obviously, there are still some sensitivities, but if President Obama were really worried about negatively influencing the midterm elections, would he have been this aggressive on climate? Would he have been as supportive on the waters rule?” White asked. “I suspect not.”

The opposite was true leading up to the 2012 presidential election, when critics say Obama twisted then-EPA Administrator Lisa Jackson’s arm into dropping a controversial ozone rule that would have established stronger air quality standards.

The ozone rule was unpopular with the business community, so the White House pushed it to the backburner to deprive Republicans of a campaign attack, White said.

“That was clearly politically motivated,” White said. “They made some lame attempt to say it was ongoing, but it was clearly politically influenced by the White House’s policy folks, who didn’t want to take on a major controversial rule in the year before a presidential election.”

The ozone rule wasn’t the only regulation that stalled in the runup to the 2012 presidential elections.

The number of economically-significant regulations that OIRA approved dropped to 83 in 2012, about a 35 percent decline from an average of about 127 rules during each of Obama’s first three years in office.

“The results of the election made people in the Obama administration realize that excessive regulation was a talking point Republicans could use,” said Susan Dudley, a former OIRA administrator during the George W. Bush administration.

The assertion from critics that the Obama administration may have been playing election-year politics during his 2012 campaign was given credence by a government report that came out late last year.

The analysis by the Administrative Conference of the United States (ACUS), an independent federal agency that monitors the government’s rule-making process, found that regulatory delays at OIRA spiked in 2012 as the administration put controversial rules on hold until after the election.

But the same can’t be said this time around with the congressional midterms approaching in November, observers say.

“I don’t think the Obama administration is willfully delaying regulations right now — at least not for the benefit of members of Congress running in November,” said Sam Batkins, regulatory director at the conservative American Action Forum.

OIRA is currently reviewing 24 rules and has already completed reviews of another 70 rules, putting the agency on pace to cycle through close to 125 rules by the end of the year.

Some say the tempo of regulations points to a schism between President Obama, who is focused on carving his legacy in Washington before his term expires in two years, and congressional Democrats, who are consumed with keeping control of the Senate.

“There is certainly a cost from President Obama’s point of view to slowing down the amount of regulations,” said James Gattuso, who studies regulations at the conservative Heritage Foundation. “I don’t see any reason why he would want to do that.”

Shapiro, the former OIRA official, suggested President Obama has “less incentive” to protect Senate Democrats this time around than he had to protect himself during the 2012 campaign.

“The president has some reason to put his priorities first, because generally speaking, an individual regulation won’t play as big of a role in a congressional election,” Shapiro said. “It’s hard to see a Senate race turning on that.”

That said, it’s not as if President Obama can accomplish all of his policy goals while completely disconnecting from his Democratic colleagues in the Senate, said Cal Jillson, a political science professor at Southern Methodist University.

“The last two years of his presidency will be determined, in large part, by whether Democrats maintain control of the Senate,” Jillson explained. “So he does have a stake in the midterms, but it’s not as immediate of an issue for him.”

See the article here.


Picking Losers: EPA’s Costly Admissions

The legislation creating the Environmental Protection Agency does not contain any language bestowing responsibility for creating a new “investment plan” for America. Yet the EPA, empowered “to protect human health and the environment,” now admits its carbon regulations are less about pollution and more about investments in renewable energy.

In a surprising moment of candor before the Senate Environment and Public Works Committee on July 25, EPA Administrator Gina McCarthy said the agency’s Clean Power Plan designed to reduce carbon emissions from power plants “really is an investment opportunity. This is not about pollution control. It’s about increased efficiency at our plants. … It’s about investments in renewables and clean energy.”

McCarthy’s stunning admission seemed to confirm the view of skeptics who insist climate change science is a Trojan horse hiding a power grab allowing environmental zealots to retool America’s economy. The real goal, some skeptics believe, is to reform U.S. energy use habits, reducing our overall standard of living by making energy consumption and mobility prohibitively expensive.

And McCarthy seemed to give credence to this view when she said carbon regulations would get “the waste out of the system.” In her parlance, that’s code for making electricity more expensive so less will be consumed.
What’s more, McCarthy explained that the Clean Power Plan’s state-specific carbon-reduction requirements will encourage “a more efficient and cleaner energy supply system” while creating “more jobs in clean energy, which are the jobs of the future.” Translation: The Obama administration’s regulations will reduce power consumption (increase efficiency), put the coal industry out of business and eliminate mining jobs (make energy cleaner) while making so-called green technologies more attractive by helping them compete against traditional energy resources.

In other words, the U.S. will travel the same disastrous “green” road as the EU, where electricity prices in countries like Germany and Denmark are two to three times higher than ours.
Of course, the United States has been down this road before, with the billions of taxpayers’ dollars wasted on green-energy companies under the 2009 stimulus package. Those efforts didn’t work, but forcing changes through environmental regulations is the Obama administration’s hope-and-change approach to energy.

As evidence, just consider two examples. First, it was reported that average U.S. electricity rates climbed above 14 cents per kilowatt hour in June for the first time ever, making electricity more expensive for American families. Second, Alpha Natural Resources announced it would lay off 1,100 West Virginia coal miners due to lower coal demand and federal regulations.
While these are the results that green ideologues have been hoping for — and certainly are in keeping with President Obama’s 2008 promise to make electricity prices “necessarily skyrocket” — some are objecting to the EPA being in the investment business. As Sen. Jeff Sessions (R-Ala.) stated during the Senate hearing, the EPA lacks the “explicit statutory power” to use regulations to force new and more costly forms of energy into the marketplace.

This is hardly the time to put people out of work and raise electricity costs for American consumers. According to the Bureau of Labor Statistics (BLS), more than 92 million Americans over the age of 16 were not “in the labor force” in July. The BLS data also show the number of people not participating in the work force has grown by more than 11 million since January 2009, putting the real unemployment rate at about 12 percent.
Furthermore, wages and salaries have not kept pace with inflation. Pay in private industry grew by a paltry 1.9 percent during the 12 months ending in June 2014, while at the same time inflation increased 2.1 percent. These are hardly hopeful figures for the American middle class.

Yet the administration is willing to inflict more pain rather than address the economic issues that are leading many families to accept the “new normal.” With bills mounting and good-paying jobs hard to find, the American Dream of owning a house, a car and trusting that our children will have a brighter future has become a nightmare. These feelings of defeat are being ignored by an administration determined to fundamentally alter the economy through regulations and executive orders.

As long as ideology and social engineering trump America’s economic interests, and the EPA’s so-called investment plan masquerades as pollution regulations, American consumers will play second fiddle to the administration’s ideology and industrial policy.

And Washington, which is steeped in politics like never before, will continue to pick losers.

See the article here.

Coal Still Is Top Source of Electricity in U.S.; Where Does Your State Stand?

Since the first quarter of 2001, overall electricity generation from all fuel sources has risen 13% in the U.S. The main sources of that electricity have changed slightly.

In 2014 more states use natural gas as their main fuel for electricity generation compared to 2001, while several fewer states use coal than at the start of the millennium. Hawaii and Massachusetts were the only states in 2001 to get the majority of their electricity from petroleum. While Q1 data for petroleum usage is Hawaii says it is “not meaningful due to large relative standard error,” previous data shows that petroleum is still the most used fuel for electricity there.

In total, 26 states use coal, 11 natural gas, seven nuclear, and four hydroelectricity as their main source of electricity creation in 2014. Maine uses other renewable sources — predominantly biomass — as its main source of electricity generation, followed closely by natural gas. (See how all fuels factor in to U.S. electricity.) All these numbers are first quarter data, meaning that they may not be representative of an entire year’s energy production but rather the first three months.

Toggle the bar charts below to see how much electricity was generated the first quarters of 2001 and 2014 by fuel: coal, natural gas, nuclear, hydroelectricity, petroleum and other renewables.

Texas leads the way in most electricity generation, including coal, natural gas and other renewables. New York uses the most petroleum.

Here’s how electricity generation has changed over time:

UPDATE: Petroleum still was the top fuel source in Hawaii in 2014. An earlier version of this post showed coal as the top source. The EIA data for Q1 2014 on petroleum was missing due to problems with January data, but petroleum generation in February and March alone outstripped coal for the whole quarter.

See the article here.

EPA Must Explain the Costs of its Rules Better, Federal Watchdog Says

The Environmental Protection Agency needs to do a better job explaining and disclosing the data it uses to determine the costs of proposed regulations, particularly those regarding climate change, according to a Government Accountability Office report released Monday.

While the agency adhered to many of the guidelines outlined by the White House Office of Management and Budget when describing the economic effects of proposed rules and potential alternatives, the report said the information EPA used was “not always clear.”

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“As a result, EPA cannot ensure that its [regulatory impact analyses] adhere to OMB’s guidance to provide the public with a clear understanding of its decision making,” the report said.

The report could have implications for the EPA proposal to reduce carbon emissions from power plants, which won’t be finalized until June 2015. The report suggested that “OMB clarify the application of guidance for estimating the benefits of reducing greenhouse gas emissions,” a topic of much debate between supporters and detractors of the proposed rule.

The EPA pushed back against some of the report’s characterization, saying that some of the issues raised were not unique to the agency.

“The EPA stands behind the quality of [regulatory impact analyses] that we conduct and believes the GAO findings do not point to systematic deficiencies with respect to the accuracy of our analytical work,” Joel Beauvais, assistant administrator for the EPA’s office of policy, said in response. “That said, the agency supports GAO’s emphasis on the importance of transparency and clarity and will continue to strive to enhance these qualities in our [regulatory impact analyses].”

Still, the report will likely be a launching pad for GOP attacks on the EPA, as Republicans have slammed the agency for inflating the benefits of its regulations and withholding data used to arrive at its conclusions.

“The independent study released today demonstrates that the Obama administration failed to provide thorough, transparent cost-benefit analyses for major environmental rules that cost American jobs,” said House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., who requested the study in 2011. “Rather than using a fair and open rulemaking process, EPA pushed through regulations using sloppy analysis without sufficiently informing Congress or the public of the economic impact.”

The GAO reviewed seven analyses of recent rulemakings and determined that the EPA did not adequately monetize the costs and benefits of their effects, such as improving water quality and reducing hazardous air pollutants. It also questioned how the EPA arrived at the employment effects of its regulations, suggesting the agency relied on an old and potentially ill-suited study, saying it “was based on data that were more than 20 years old and may not have represented the regulated entities addressed in the [regulatory impact analyses].”

The EPA said its practices were “up-to-date and consistent with sound science and economics.”

The report noted inconsistencies between OMB’s guidance for calculating cost-benefit analyses and future benefits from the “social cost of carbon” — a measurement that monetizes the damages of incremental carbon emissions increases — used by the EPA “places greater weight on carbon dioxide emission reductions when calculating the overall net benefits of a rule.”

Industry groups and conservatives are making a similar case about EPA rules, particularly the power plant proposal that aims to cut power-sector emissions 30 percent below 2005 levels by 2030. Using the social cost of carbon calculation, the EPA estimates up to $93 billion in benefits by 2030 at a cost of up to $8.8 billion.

But the EPA said OMB guidelines allow it to include the social cost of carbon. OMB also backed up the EPA, saying the calculation was unavoidable because waiting to reduce carbon emissions would compound costs over time as the effects of climate change become more deeply entrenched.

“In GAO’s examination of a very small subset of the rules which the EPA has issued in recent years, it found that the EPA generally adhered to OMB guidance for regulatory analysis. GAO acknowledges that the results of its review “cannot be generalized” to the EPA’s economic analysis overall because it looked at only a small sample,” the EPA said in a statement.

See the article here.

Arizona Looks for Breathing Room in EPA’s Carbon-emission Goals (KTAR)

WASHINGTON — Arizona will ask federal regulators next week to rethink their June proposal that calls for the state to cut carbon emissions from power plants in half over the next 15 years.

Officials with the Arizona Department of Environmental Quality have scheduled a conference call with their counterparts in the Environmental Protection Agency in which they hope to show that EPA did not take the state’s unique energy demands into account when coming up with the reduction goal.

“The good news for us is that the EPA has expressed a willingness to listen to our concerns,” said Eric Massey, director of the air quality division at ADEQ.

The EPA in June unveiled its Clean Power Plan, which set different carbon-emission reduction goals for states based on individual states’ abilities to shift away from coal and toward natural gas for power generation, among other changes.

Arizona was given one of the most ambitious goals in the country, with a target of a 52 percent reduction in carbon intensity by 2030, compared with 2012 levels.

Oklahoma Attorney General, 11 Others Sue EPA over Proposed Carbon Rules (The Oklahoman)

Oklahoma Attorney General Scott Pruitt isn’t wasting any time when it comes to challenging proposed rules to cut carbon dioxide emissions from coal-fired electric power plants.
Pruitt joined attorneys general from 11 other states to file a lawsuit against the Environmental Protection Agency on the proposed rules, which were released in early June.

The attorneys general — 11 Republicans and one Democrat — contend the agency doesn’t have the legal authority to issue the proposed rules under Section 111(d) of the Clean Air Act. They said the proposed rules are in conflict with a 2011 settlement the EPA signed with some states after a lawsuit brought by several environmental groups.

“It’s obviously something that needed to be litigated, and it needed to be litigated now to address this tension that exists,” Pruitt said.

Pruitt said the 2011 settlement said the EPA would use another section of the Clean Air Act to regulate emissions from power plants and other stationary sources.

Authority questioned

“I believe the EPA does not possess authority under Section 111(d) to take the action they took (in June),” Pruitt said.

Pruitt said Congress would have to change the Clean Air Act for the EPA to regulate carbon dioxide emissions from power plants in the way the agency proposed.

Dueling Rallies Pit Jobs Against Air (Pittsburgh Post-Gazette)

They met at the intersection of Liberty Avenue and 10th Street, a sea of thousands of mine workers in camouflage and hundreds of environmental protesters, chanting competing slogans.

“Hey, hey, EPA, don’t take our jobs away,” the miners cried.

“No planet, no jobs,” the environmentalists shouted back.

Standing between the two camps was Pittsburgh resident Charles McCollester, a labor supporter and lifelong environmentalist, holding a sign: “As long as blue union jobs are pitted against green earth health, we are all doomed.”

In the William S. Moorhead Federal Building just a block away, the Environmental Protection Agency was in the first few hours of public testimony in Pittsburgh over its proposed carbon-emission regulations.

The union miners, electrical workers and boilermakers attending the rally on Thursday came in 70 buses from a half-dozen states, united under this theme: Job and the U.S. economy are in grave danger if EPA’s rules are enacted.

“Our message today is not for the EPA,” said Donald Siegel, international vice president of the International Brotherhood of Electric Workers, Third District. “Our message today is to the American people. It’s a simple message: pay attention.”

A Dozen States File Suit Against New Coal Rules (The New York Times)

WASHINGTON — Twelve states filed a lawsuit against the Obama administration on Friday seeking to block an Environmental Protection Agency proposal to regulate coal-fired power plants in an effort to stem climate change.

The plaintiffs are led by West Virginia and include states that are home to some of the largest producers of coal and consumers of coal-fired electricity.

Republicans have attacked the E.P.A. proposal as a “war on coal,” saying that it will shut down plants and eliminate jobs in states that depend on mining. But the rule is also opposed by the Democratic governors of West Virginia and Kentucky.

“This lawsuit represents another effort by our office to invalidate the E.P.A.’s proposed rule that will have devastating effects on West Virginia’s jobs and its economy,” the state’s attorney general, Patrick Morrisey, said in a statement.