The American Battle Over Environmental Regulations Rages On

by Bill Chameides | December 1st, 2011
posted by Erica Rowell (Editor)

Permalink | Comments Off on The American Battle Over Environmental Regulations Rages On

Upcoming regulations governing mercury and other air toxics have sparked a debate about the reliability of the country’s power grid, particularly in two areas. But does that debate reflect realistic, science-based scenarios, or something else?

Dueling statements from U.S. regulatory bodies. Who’s right?

The latest sturm and drang over environmental regulations kicked up at this week’s two-day conference held by the Federal Energy Regulatory Commission (FERC) to address concerns over power grid reliability in advance of new environmental standards to be finalized this month.

Before getting into the back and forth, some backstory.

As reported here previously (see here, here and here) and elsewhere (see here, here and here), there is a growing chorus of critics of the Environmental Protection Agency. Their cry: over-regulation of the environment is responsible for the country’s economic woes. Common refrains from these detractors: a freeze on new regulations, a roll-back of existing regulations, and even a disbanding of EPA.

From the other side come arguments that environmental regulations have made America stronger and should not be abandoned. A good example: an op-ed in Monday’s New York Times about the importance of clean water regulations by Bill Reilly, EPA administrator under George H. W. Bush.

Flashpoint – New Air Pollution Regulations

The context for the latest exchange in this battle are four pending EPA rules, including the standards for power plant emissions of mercury and other air toxics, slated to be finalized December 16th. The rules would have their greatest impact on coal-fired plants and especially older plants that have not yet been updated with emission-control devices.

Pretty much everyone on both sides of the regulation divide agrees that the new regulations will have some effect on the supply and cost of electricity in the United States. Some energy companies will spend capital installing new emission controls. Others, especially those managing older, less efficient plants, will likely decide it’s better to simply shutter the plant rather than invest in upgrades.

The disagreement is over the size of the effect.

Bleak Prediction of Possible Blackouts

On one side of the debate comes an analysis from the North American Electric Reliability Corporation (NERC), an independent corporation that oversees the reliability of the nation’s power grid and enforces reliability standards with oversight in the United States by FERC.

And what does NERC think about EPA’s new regs? For the most part they’re not so bad: “a majority of areas appear to have adequate resource plans to meet projected peak demands over the next ten years” even with the new emission requirements. That’s from the lead sentence to a press release announcing NERC’s new report, “2011 Long-Term Reliability Assessment,” which is an update of last year’s report (covered on TheGreenGrok here).

Peruse the news release further and you’ll find this quote from NERC’s president and CEO, Gerry Cauley: “Though sufficient conceptual resource plans are in progress, for the [Electric Reliability Council of Texas] ERCOT portion of Texas and for New England, more certainty is needed to address resource adequacy in the coming years. … We will monitor these two areas in the upcoming year for progress in firming these resource projections.”

OK, a bit wonky and dry, but essentially he’s saying the grid looks to be okay except for two potential trouble spots — Texas and the Northeast — where grid reliability could be undermined. That seemingly mild caveat in the press release gets more play in the report’s 500-plus pages I skimmed. For example, the report avers that in Texas EPA’s new rules could lead to year-round “emergency actions including rotating outages.” This conclusion — as captured in the headline “Will the Lights Stay On in Texas and New England?” — has been seized upon by some media outlets (also here and here) and some politicians as evidence of an incipient regulation-induced catastrophe.

So how realistic is NERC’s worst-case scenario? Not very, according to EPA.

EPA Takes Issue With NERC’s Issue

In a letter [pdf] to NERC President Cauley, EPA Deputy Administrator Bob Perciasepe claims that NERC’s analysis “describes an extreme outcome that arises from a scenario where the most stringent and costly rules imaginable took effect” — a scenario based on “significantly stricter” regulations with expedited timelines than what EPA has proposed.

EPA stressed that the conclusions from its own analyses, as well as those from independent studies (see here [pdf] and here [pdf]), do not mesh with NERC’s findings, and offered the reassurance that ‘if isolated, local reliability challenges were to emerge due to individual plant retirements,” both the Clean Air Act and Clean Water Act have sufficient flexibility “to maintain reliability.”

In other words, NERC’s take is a whole lot worse than any realistic “worst case” likely to materialize.

The American Public: Caught in the Middle?

Do you find this confusing? Here you have two entities established to manage key American interests — our electric grid and our environment — in a public food fight over the impacts of proposed new rules, something that should be a technical issue addressed through objective analysis.

How does this happen? Simple: Working off different assumptions about the regulations’ details, timing and responses, NERC and EPA arrived at different conclusions. And why were different assumptions adopted? It’s hard not to point to the possibility that politics influenced one or both of the groups’ choices. And therein lies the rub.

In fact, where you happen to fall in the debate probably depends on your political persuasion (and pre-conceived notions): folks focusing on warnings of potential risks will likely rail against regulations that could turn America’s lights out; folks long-awaiting health-based air-quality standards will likely applaud EPA for moving forward on a cost-effective modernization and cleanup of America’s power-generation infrastructure.

For an airing of such divisions, all you need to do is review the debate on display at this week’s conference on reliability. In general FERC’s Democrats supported EPA’s planned standards, while the Republicans highlighted the risks to reliability. (For details see here [$sub req’ed].)

Without a common baseline to start from, the dueling analyses become asymptotic. When discussing them, each side voices concerns not evident in the others’ analysis so the debate starts to look like a play by Ionesco. Comparing the analyses and the arguments based on them becomes an apples-to-oranges exercise — and voila! objective technical issues are made subjective … and political.

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