Endangering Our Economic Environment

How EPA plans will implement Cap & Trade, increase federal spending, negatively impact state/municipal budgets, eliminate jobs, and hurt

industry/businesses

Presentation Overview• New EPA regulations

• Impact of new EPA regulations on states

• EPA goals and budgets

• Congressional oversight structure

• What we can do

• Q&A

Cost of Regulation

• 2009: 23 new regulations - $13B

• 2010: 43 new regulations - $28B– 10 EPA $23.2B– 15 Financial– 5 Obamacare

Source: Heritage Foundation – “Red Tape Rising: Obama’s Torrent of New Regulation” Oct 26 2010

Business “..total regulatory costs amount to about $1.75 trillion annually, nearly twice as much as all individual income taxes collected last year. “

”…the White House and the EPA are clearly targeting fossil fuels, and coal in particular, to achieve via rule-making what even the Democratic 111th Congress has rejected as legislation.”

Source: Wall Street Journal – “The Unseen Carbon Agenda” Oct 27 ‘10

• “the white collar crime of the future”-Deloitte Forensic

• “a fraudster’s dream come true”-Kroll, a business risk subsidiary of Marsh & McLennan

The Next Big Scam: Carbon Trading Markets

Source: Financial Post, Jan 13, 2010-10-28

New EPA Regulations

Propose mandates to either invest in new environmental controls or close facility

1. Clean Air Transport Rule (CATR) – minimizing ozone and fine particle distribution geographically

• Includes proposals for “trading” emissions and/or emission caps

2. Cooling water intake structures – recirculating water systems

3. Coal Combustion Residuals (CCR) disposal regulations • Reclassify coal ash as hazardous waste or require investment in lining of disposal sites• Could impact recycling of coal ash in production of cement, concrete, roadbed material,

drywall, etc.

4. Maximum Achievable Control Technology (MACT) – national emission standards for hazardous air pollutants

Source: EPA

MACT• “Maximum achievable” standards = 12% of industry can already achieve

– Today, less than1% can meet the proposed rules

• Emission levels can barely be detected with existing instruments

• Manufacturers of new equipment cannot guarantee compliance

• Affects many manufacturers and segments, including universities, food product processors, furniture makers

• Compliance costs are estimated as high as $50 billion

• Likely to result in the closure of many facilities

• Could kill hundreds of thousands of jobs

• 41 Senators and 106 Representatives and at least 50 industry associations sent letters to the EPA regarding their concern on the negative economic impact

Source: various news publications and impacted industry publications/studies

Impact of EPA’s Pending Electric Utility Regulations

• North American Electric Reliability Corporation (NERC) - highly regarded federal energy advisory body

– Issued a special assessment on EPA’s pending electric utility regulations– Regulations, as proposed, will reduce national power generation by 7.2% by

2015• Mostly coal-fired plants

– Produce about half of all US electricity– Produce 63% of Georgia’s electricity

• Credit Suisse estimates $150 billion in capital investment by 2019 in order to comply with new regulations

Sources: NERC, Credit Suisse

RESPONSES FROM EPA

• “The NERC report offers doomsday speculations from industry lobbyists, and in no way reflects the EPA’s common-sense efforts to reduce harmful pollution.”

- Lisa Jackson, EPA Administrator

• “The sky isn’t falling.”- Jon Wellinghoff, Chairman of Federal Energy Regulatory Commission (FERC)

Tougher Regulations for Heavy-duty Vehicles • New fuel-efficiency regulations for medium and heavy duty vehicles

manufactured from 2014-2018– 10-20% reduction in fuel consumption and emissions, depending on vehicle

size

• Cover big-rig tractor-trailers, garbage trucks, transit buses, school buses, work trucks such as heavy-duty versions of the Ford F-Series, Dodge Ram and Chevrolet Silverado

• Standards drawn from 2010 study issued by the National Academy of Sciences

– Organization accused of distortion of global warming stats, “Climategate”

• EPA and DOT expect the prices of heavy-duty trucks to increase by nearly $6,000

Source: EPA

Tougher Regulations for Heavy-duty Vehicles

“The Environmental Protection Agency proposed emissions regulations for long-haul trucks Monday, the first ever to limit greenhouse gases. It was an early example of sweeping regulations the agency is set to unveil next year.”

“The announcement underscored how much the EPA is acting unilaterally on greenhouse gas emissions. With cap-and-trade stalled in Congress, the agency has moved ahead under a 2007 Supreme Court ruling that gives it authority to enact its own regulations.”

Source: Investors.com – “Acting On Its Own, EPA Sets New Rules On Truck Emissions”, Oct 25, 2010

2007 Supreme Court Ruling on EPAMassachusetts et al vs EPA et al• Massachusetts, 11 other states, and others sued the EPA for not regulating 4

greenhouse gases, including CO2 , from the transportation sector– Claim human-influenced global climate change was causing adverse effects,

such as sea-level rise, on Massachusetts

• EPA (along with 10 states, auto mfgs and utilities) argued – EPA lacks authority under the Clean Air Act to regulate GHG or fuel economy standards

(DOT)– CO2 not ruled a pollutant– No causal relationship between CO2 and climate change

• Supreme Court ruled – CO2 fits the definition of an air pollutant– EPA has the authority to regulate CO2 and other greenhouse gases– Written by Justic Stevens, signed by Kennedy, Souter, Ginsburg, Breyer– Dissents from Roberts, Alito, Scalia, Thomas

Source: US Supreme Court

Source: Environmental Council of the States (ECOS) Note: ECOS is the national non-profit, non-partisan association of state and territorial environmental agency leaders

More Work, Less Funds to Do It: Issuance of EPA Rules with State/Local Impacts

2000-2011

Source: Environmental Council of the States (ECOS)

The EPA has more pending actions that have significant impact on states than any other federal agency

Source: Environmental Council of the States (ECOS)

EPA Organizational Structure

Administrator

Deputy Administrator

Office of Congressional and Intergovernmental Relations(Asso. Admin)

Office of Policy,Economics and Innovation(Asso. Admin)

Office of Public Affairs(Asso. Admin)

Office of Administration and Resources Management Office of Air and Radiation

Office of Enforcement and Compliance Assurance Office of Environmental Information

Office of the Chief Financial Officer Office of General Counsel

Office of Inspector General Office of International and Tribal Affairs(was Office of International Affairs until April 2010)

Office of Chemical Safety and Pollution Prevention(was Prevention, Pesticides, and Toxic Substances until April 2010) Office of Research and Development

Office of Solid Waste and Emergency Response Office of Water

PLUS 10 Regional Administrators

More than 18,000 employees

EPA Regional Offices

Source: EPA

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

“We will carry out our mission by respecting our core values of science, transparency and the rule of law. “

Lisa Jackson’s Seven Priorities for EPA’s FutureFiscal Year Budget 2011: $10.02 billion in discretionary spending

$618mm for enforcement

Source: EPA

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• Continue greenhouse gas reduction initiatives• Ensure compliance with the law

• Finalize mobile source rules (compounds emitted from highway vehicles and non-road equipment which are known or suspected to cause cancer or other serious health and environmental effects)

• Expand cost-saving energy conservation and efficiency programs, i.e, Energy Star

• Develop common-sense solutions for reducing greenhouse gas emissions from large stationary sources like power plants

Source: EPA

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• Stronger standards for ozone

• Cleaner and more efficient power sector• strong but achievable emission reduction goals for SO2, NOx, mercury and other air toxics

• Stronger standards for pollutants such as PM, SO2 and NO2• achieve reductions from a range of industrial facilities

• Improved monitoring, permitting and enforcement

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• Modernizing the Toxic Substances Control Act

• Address high-concern chemicals and filling data gaps on widely produced chemicals in commerce

• First-ever chemical management plans for four groups of substances, and more plans are in the pipeline for 2010

• Rigorous, peer-reviewed health assessments on dioxins, arsenic, formaldehyde, TCE and other substances of concern

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• Accelerating Superfund program • Risk reduction• Stronger partnerships with stakeholders

• Confronting significant local environmental challenges • Asbestos Public Health Emergency in Libby, Montana • Coal ash spill in Kingston, Tennessee

• Maximizing brownfields program to spur environmental cleanup and job creation in disadvantaged communities

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• Address complex challenges, from nutrient loadings and stormwater runoff, to invasive species and drinking water contaminants

• Comprehensive watershed protection programs for the Chesapeake Bay and Great Lakes

• Post-construction runoff, water quality impairment from surface mining, and stronger drinking water protection

• Recovery Act funding will expand construction of water infrastructure

• Work with states to develop nutrient limits and launch an Urban Waters initiative

• Revamp enforcement strategies to achieve greater compliance

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• New era of outreach and protection for communities historically underrepresented in EPA decision-making

• Building relationships with tribes, communities of color, economically distressed cities and towns, young people

• Include environmental justice principles in all of our decisions

• Children’s Health Office is bringing a new energy to safeguarding children through all of our enforcement efforts

Taking Actionon

Climate Change

Building Strong

State and Tribal

Partnerships

Improving Air Quality

Assuring the Safety of

Chemicals

Cleaning Up Our

Communities

Protecting America’s

Waters

Expanding the Conversation on

Environmentalismand

Working for Environmental

Justice:

• States and tribal nations bear important responsibilities for the day-to-day mission

• Declining tax revenues and fiscal challenges are pressuring state agencies and tribal governments to do more with fewer resources

• Strengthened oversight, ensure that programs are consistently delivered nationwide

Source: EPA

NOTE: Does NOT include $7.22 billion from the American Recovery and Investment Act (ARRA) of 2009

Source: EPA

Reductions in Superfund, state

grants, Great Lakes, recycling, nat’l security

Source: EPA

Clean Air & GlobalClimate Change

Clean & SafeWater

Land Preservation& Restoration

Healthy Communities& Ecosystems

Compliance &EnvironmentalStewardship

Source: EPA

State & TribalAssistance Grants

Science & Technology

EnvironmentalPrograms & Mgt

Superfund

OverseesNERC

Self regulatory org to ensure bulk power reliability; Has legal authority to enforce reliability standards

independent gov’t agency that regulates interstate power generation and transmission to provide

consumers with reliable, efficient and sustainable energy at a reasonable cost

OverseesFERC

Chairman: Jon Wellinghoff(apptd by Obama)

Committee onEnergy &

Commerce

National energy policy ; generation of power; reliability, transmission and ratemaking; siting; general mgt of DOE and FERC

Chairman: Henry Waxman (D-CA)Secretary: Dr. Stephen Chu(apptd by Obama)

OverseesDOE

Administrator: Lisa Jackson(apptd by Obama)

National energy policy; energy regulation and utilization; Superfund, Resource Conservation and Recovery Act, Safe Drinking Water Act; The Clean Air Act

Chairman: Edward Markey (D-MA)

Subcommittee on Energy

And Environment

WHAT CAN WE DO?

“Regulatory costs will rise until policymakers appreciate the burdens that regulations are imposing on Americans and the economy, and exercise the political will necessary to limit—and reduce—those burdens. “

Source: Heritage Foundation – “Red Tape Rising: Obama’s Torrent of New Regulation” Oct 26 2010

Promote Action in US Senate• Deny the EPA powers over carbon emissions

– Sen. Jay Rockefeller, D-W.Va., sponsored a bill to put a two- year halt on any EPA rules - six Democratic co-sponsors

– A similar bill by Alaska GOP Sen. Lisa Murkowski got 53 votes this summer

• "Even in the face of the president's veto threat, we must send a clear message that Congress — not an unelected regulatory agency — must set our national energy policy," Rockefeller said in a September statement

Promote Action in US House• Deny EPA funding

– House controls purse strings (now in Republican control)

• Ensure fiscal conservatives are elected to chair important committees– Committee on Energy & Commerce– Subcommittee on Energy & Environment

Revive Georgia Legislation Started in 2010

Title Bill number & summary Bill statusBill sponsor

Georgia Energy Freedom Act of 2010

S. 401: Permits governor to delay implementation of federal greenhouse gas programs until an assessment is made that the implementation will benefit Georgians.

Passed Senate, got thru 2nd House Reading

Seabaugh (R)

Senators Mitch Seabaugh (28th), Chip Rogers (21st), Bill Heath(31st), Bill Cowsert (46th), Jeff Chapman (3rd) and Jeff Mullis (53rd) and others

S.R. 958: Requests that U.S. Congress adopt legislation to postpone EPA's efforts to regulate greenhouse gases using the Clean Air Act.

Got through 2nd Senate reading

Pearson (R)

Senators Chip Pearson (51st), Jack Murphy (27th), Jeff Mullis (53rd), Chip Rogers (21st) Ross Tolleson (20th)

H.R. 1357: Requests that U.S. Congress adopt legislation to postpone EPA's efforts to regulate greenhouse gases using the Clean Air Act.

Got through 2nd House reading

Stephens (R)

164th

Is responsible for programs under four federal laws:• Clean Air Act • Resource Conservation and Recovery Act • Safe Drinking Water Act • Clean Water Act

Commissioner Chris ClarkFY11 Budget: $254.1 million

Participate in Public Comment• Continue debate on scientific proof of global warming

• Continue debate on relationship of greenhouse gases to climate change

• Continue debate on classification of CO2 as hazardous pollutant

• Make comments, testify when public hearings are held

• GET ENGAGED IN GTPI’S FEDERAL AND STATE TASK FORCES

Source: Environmental Council of the States (ECOS)

While the EPA is the worst offender relative to costly new regulation, other agencies are regulating, too

Questions?