Fallout from chamber study on power plant rule previews pitched battle to come

Source: Jean Chemnick, E&E reporter • Posted: Friday, May 30, 2014

The furor yesterday over a U.S. Chamber of Commerce study on U.S. EPA’s upcoming proposal for existing power plant greenhouse gases has set the stage for what is likely to be a bitter struggle over the rule.

The business group’s Center for 21st Century Energy — which has joined with the National Association of Manufacturers and others to oppose regulations they deem burdensome to industry — released a report yesterday arguing that the rule EPA will propose Monday would be an economic disaster, driving up power costs and slashing employment in all regions of the country, but falling hardest on the regions most dependent on coal (Greenwire, May 28).The report is not based on EPA’s proposal, which few people have seen. Instead, U.S. Chamber officials said yesterday that it extrapolates from a proposal released in 2012 by the Natural Resources Defense Council, which suggested that EPA set tough emissions limits for carbon dioxide based on a formula that considers reliance on fossil fuels. States could then write implementation plans that would allow utilities to draw from a host of demand- and supply-side emissions reduction options.

But the chamber analysis, prepared by independent analysis firm IHS Energy, relied on many assumptions not found in the NRDC draft to reach its conclusion that the coming rule could cost the U.S. economy $50 billion and 224,000 jobs a year through 2030.

Among other things, the chamber assumed that all new fossil fuels power plants would be required to retrofit with carbon capture and storage technology. EPA’s proposal for new power plants, unveiled last September, would require CCS for new coal units — though it estimates that this would have no cost because no new coal plants are planned. It does not include a mandate for natural gas units, and EPA Administrator Gina McCarthy and others have said repeatedly that Monday’s proposal for today’s fleet would not require CCS for either technology.

EPA Assistant Administrator for External Affairs Tom Reynolds blasted the chamber on the agency’s blog yesterday for “using the same tired play from the same special interest playbook that is engineered to continue polluting and stall progress.”

“Given that three-fourths of the chamber’s alleged cost estimates come from power plant construction — namely, natural gas with CCS plants — this assumption drives up the topline cost associated with this study,” he wrote.

Much of the rest of the cost estimate derives from assumptions about increasing power demand that do not track with estimates from the Energy Information Administration.

White House adviser John Podesta, who has directed the administration’s communications effort on climate change in recent months, added via Twitter that the chamber appeared to be using the same tactics it has in the past.

“I’m old enough to know what a broken record actually sounds like,” he tweeted.

Environmentalists, too, piled on the study in statements and blog posts.

Elgie Holstein, who works on the issue for the Environmental Defense Fund, said the chamber was trying to protect fossil fuels industries by painting “a doomsday scenario.”

“These claims are part of a well-orchestrated attempt to maintain the status quo of unlimited carbon pollution from power plants,” he said in a statement. “The status quo is unacceptable. We need the carbon pollution standards.”

But fossil fuels advocates on Capitol Hill and elsewhere came to the chamber’s defense, arguing that the administration was hiding the true cost of its regulatory agenda by seeking to discredit the chamber.

Rep. Ed Whitfield (D-Ky.), who heads an important Energy and Commerce Subcommittee, said today that the chamber’s study sheds light on the true cost of EPA’s coming regulations. And he expressed doubt that the “steep price tag” of the rules would be offset by real environmental benefits.

“I am deeply concerned the upcoming regulations could have devastating effects on Americans’ ability to secure affordable electricity and the Chamber’s report confirmed what’s to come if these regulations are finalized,” said Whitfield in a statement. The new power plant rule, he said, would effectively bankrupt the economy.

House Speaker John Boehner (R-Ohio) at a news conference this morning also warned that the EPA rule would kill jobs and harm the economy (see related story).

And the American Coalition for Clean Coal Electricity blasted EPA for its “blind disregard for reality” in questioning the chamber report, which it called “compelling and urgent.”

“While EPA claims to rely on science as justification for its radical climate change agenda, the agency, quite to the contrary, blatantly ignores the facts and unabashedly lies to the American people — time and time again,” said Laura Sheehan, senior vice president for communications at ACCCE. The chamber’s report, she said, “mirrors what industry has been saying all along.”

“Shuttered businesses, fractured family budgets, widespread job losses and dire threats to electric reliability are undeniable consequences of EPA’s rulemaking, and we await the day when EPA will finally get its story straight and come clean about the reality of its ideological crusade,” Sheehan said.

The crossfire gives a preview of what can be expected the rest of this week and well after Obama rolls out the proposal Monday. Environmentalists are preparing a push in support of the rule, which has already begun with numerous press events and reports touting the potential benefits of curbing carbon emissions. And the chamber’s report highlights some of the arguments fossil fuel groups will make and have made in campaigns like the National Mining Association’s recent ads panning carbon regulations.

The Natural Resources Defense Council and allies are planning a “climate summer,” to include more than 300 events in 36 states aimed at boosting support for the rule. The proposal, which is the cornerstone of Obama’s Climate Action Plan, will curb emissions from a sector responsible for 40 percent of U.S. CO2 output and is the environmental community’s top priority for the remainder of Obama’s second term.