This week, the Environmental Protection Agency released one of the strictest water rules ever issued, part of what could be the most expansive regulatory binge in the agency’s history. The EPA’s slew of new rules could collectively lead to an erosion of private property rights, higher electricity rates, job losses, stranded assets and a less reliable electric grid.
The three new regulations are Waters of the United States (WOTUS), the Clean Power Plan and National Ambient Air Quality Standards (NAAQS) for Ozone.
The water rule took shape in early 2014, when the EPA and the Army Corps of Engineers proposed a new definition of “waters of the United States.” They sought to expand their federal regulatory jurisdiction to include isolated waters they deem to have a “significant nexus” to navigable waters.
What constitutes a “significant nexus” is ambiguous, but ditches, vernal pools, dry lakes and irrigation from agricultural operations could easily fall under these agencies’ jurisdiction.
Furthermore, the proposed rule expands federal regulatory authority over waters within a “confined surface or shallow subsurface hydrologic connection to such jurisdiction water.” The expansion is significant because Congress likely never intended for the Clean Water Act to apply to management of groundwater in the states.
The EPA estimates that its new definition of jurisdictional waters will increase mitigation costs by approximately $222 million per year, not including millions in permitting costs, increased delays associated with expanded federal jurisdiction and the cost of new land use restrictions.
The EPA’s 2014 “Clean Power Plan” is a proposal to reduce carbon emissions from existing power plants. In the proposal, the EPA assigned each state a different carbon emissions reduction target that must be fully achieved by 2030.
The cost for this proposed regulation will be enormous. According to NERA Economic Consulting, the annual compliance costs could reach $73 billion, causing electricity rates to rise more than 10 percent in 43 states.
But the worst part is the expected impact on electric grid reliability. More than 45 gigawatts of installed baseload capacity – representing roughly the amount of electricity to power 25 million homes during normal conditions – is expected to retire directly as a result of the Clean Power Plan. That loss in electric capacity does not include 70 gigawatts of installed capacity already expected to retire as a result of other EPA regulations.
Considering these hefty costs, in neither the 654-page proposal nor the 376-page regulatory impact analysis does the EPA detail any climactic benefits of the rule. EPA officials even refused to estimate the impact on global temperatures or rising sea levels before congressional committees.
Finally, there is the EPA’s revision to the existing national ambient air quality standards for ozone — from 75 parts per billion to a level somewhere between 60-70 ppb. Roughly one-third of the nation’s counties that monitor air quality are currently in nonattainment status with the existing 75 ppb standard. Ratcheting this standard down to 65 ppb would immediately plunge roughly 80 percent of counties into nonattainment.
Most states are on track to eventually achieve full attainment with the current 75 ppb standard, and dozens of other EPA regulations, such as the Clean Power Plan, will further drive emissions reductions. It would make a lot more sense for the EPA to give states enough time to comply with the existing standard before moving further, but this isn’t how it has chosen to operate.
The compliance costs associated with this revision make it the most expensive regulation ever imposed on the U.S. NERA anticipates that a new standard of 65 ppb would reduce U.S. gross domestic product by $140 billion per year, resulting in 1.4 million fewer job equivalents through 2040. It would cost the average U.S. household $830 per year in lost consumption.
By imposing overlapping mandates on the states, setting unattainable deadlines and creating other uncertainties, the EPA is slowing the economic recovery and violating state sovereignty. It is also threatening our market-based energy system that ensures ready access to affordable, reliable and safe energy.
John Eick is the director of the American Legislative Exchange Council Task Force on Energy, Environment and Agriculture. To learn more about ALEC, visit www.alec.org. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
