Executive Summary

1. The Environmental Protection Agency (EPA) is pushing a wave of regulations on air pollutants to advance the Biden Administration’s goal to zero out greenhouse emissions.

2. The EPA’s agenda to regulate the power industry aims to force coal plants to close or to switch to renewable energy.

3. A 19-state coalition pushes back on the EPA’s regulations and questions its authority. 

Introduction

Recently the Environmental Protection Agency (EPA) has released a series of updates to rules on power plants and industrial emissions. These actions fulfill EPA’s responsibility under the Clean Air Act to periodically review emission standards. The EPA is taking clear action toward achieving the Biden Administrations’ goal to zero out greenhouse emissions by issuing pollution controls to target one pollutant which often leads to cuts in greenhouse gases as a co-benefit.

On March 15, 2023, the EPA issued the Good Neighbor rule which will restrict smokestack emissions from power plants and other industrial sources that burden downwind states with smog-causing pollution they can’t control. Coal and natural gas plants in 23 states are among those affected by the finalized rule. The rule plans to significantly cut smog-forming nitrogen oxide pollution from power plants and other industrial facilities to improve air quality for millions of people living in downwind communities. This rule will reduce ozone season pollution by approximately 70,000 tons from power plants and industrial facilities in 2026. In addition, the rule is anticipated to deliver important emissions reductions for environmental justice communities fighting for protections for neighboring communities to power plants. 

On April 5, 2023, The EPA followed up regulations on air pollutants with the proposed rule to strengthen and update the Mercury and Air Toxics Standards (MATS) for coal-fired power plants. The update to MATS is the first since originally issued in February 2012. The update aims to achieve significant hazardous air pollutant emissions reductions and ensure standards reflect the latest advancements in pollution control technologies. The EPA proposes to reduce the emissions limit for filterable particulate matter which includes mercury and other toxic metals for existing coal-fired power plants by 67%. Plants that burn lower-grade lignite coal would be required to cut mercury emissions by 70%.

Benefits

Reducing smog-forming and other air pollutants has a clear health benefit. “EPA’s ‘Good Neighbor’ plan will lock in significant pollution reductions to ensure cleaner air and deliver public health protections for those who’ve suffered far too long from air-quality related impacts and illness. We know air pollution doesn’t stop at the state line. Today’s action will help our state partners meet stronger air quality health standards beyond borders, saving lives and improving public health in impacted communities across the United States”, said EPA Administrator Michael S. Regan. According to the EPA, the final rule is expected to:

• prevent approximately 1,300 premature deaths,
• avoid more than 2,300 hospital and emergency room visits,
• cut asthma symptoms by 1.3 million cases,
• avoid 430,000 school absence days,
• avoid 25,000 lost workdays.

The update to MATS is expected to result in reductions of 82 pounds of mercury, 800 tons of soot and 5 million tons of carbon dioxide in the year 2025. The MATS proposed rule update would result in between $2.4 billion to $3 billion in benefits over a 10-year period beginning in 2028, including up to $1.9 billion in health benefits and $1.4 billion in climate benefits. Benefits are set to outweigh compliance costs of $230 million to $330 million.

Cost

The EPA estimates new limits would cost the power industry millions of dollars to comply with new regulations and would increase the cost of electricity production by slightly more than 1 percent once implemented.

The National Mining Association slammed the EPA’s efforts to force the closure of coal-fired power plants across the country. Vice President of the mining group, Conor Bernstein stated, “With each rule that targets well-operating coal plants – the very same plants that are called on to keep the lights on when renewables or natural gas are unavailable and consumer demand soars – our electricity grid becomes increasingly vulnerable to crippling supply shortfalls. Americans and American businesses will continue to pay increasingly more for electricity that is less and less reliable”.

The EPA’s Agenda

Overall, the EPA is releasing a wave of new regulatory actions to control power plants. It has two broad policy aims:

1.  Reducing dangerous toxins in the environment.
2.  Encouraging the transition away from coal-burning power plants and toward cleaner energy sources.

According to Regan, the EPA is “leveraging proven, emissions-reduction measures available at reasonable costs and encouraging new, advanced control technologies, [that can] reduce hazardous pollution from coal-fired power plants, protecting our planet and improving public health for all”. It just happens to be a convenient benefit that coal power plants are now facing closures by making it too costly to operate. The EPA, under the Biden Administration, is intentionally presenting these rules at the same time so the power industry must consider whether it is beneficial to invest in new technologies in their current facilities or pivot to renewable energy. The administration’s climate strategy, by cracking down on pollutants, is to encourage operators of coal plants to shut them down or make a transition to renewable energy.

States Push Back

Coal and natural gas plants in 23 states are among those affected by the new regulations. 19 states have banded together in a coalition to oppose the EPA’s sweeping regulations. They are the attorneys general from Alabama, Arkansas, Florida, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia, and West Virginia.

The attorneys general explain that adopting the EPA’s burdensome regulations would inflict real harm on state economies. In a letter they write that this new policy may “require closing existing manufacturing and industrial facilities” and “such closures will affect not only those individual businesses but also the communities that are built around them.” The goal of the coalition is to ensure the federal government can’t declare a rule without utilizing the proper channels. National Mining Association VP even said, “The EPA is unilaterally making these decisions for the states.”

Conclusion

The EPA’s regulations come under their periodical review of standards under the Clean Air Act, but it now is using its authority to advance its climate strategy. The federal government is now using the bureaucracy to bypass states into compliance with the Biden Administration’s climate goals. No doubt, regulatory limits on air pollutants are a clear benefit to neighboring communities around power plants but the sudden wave of regulatory changes will cause a shockwave in energy production.

The EPA’s regulations come under their periodical review of standards under the Clean Air Act, but it now is using its authority to advance its climate strategy. After a 2022 Supreme Court ruling stating that the EPA cannot put state-level caps on carbon emissions under the 1970 Clean Air Act, it allowed only narrower policies to regulate how individual power plants operate. The EPA is strategically using its authority to limit air pollutants and produce the co-benefit of lower emissions. The federal government is now using the federal administrative state to force states into compliance with the Biden Administration’s climate goals. No doubt, regulatory limits on air pollutants are a clear benefit to neighboring communities around power plants but the sudden wave of regulatory changes will cause a shockwave in energy production.  

The EPA is using rapid change in regulatory standards to twist the arm of power plants into submission. Naturally, states have rightfully taken action to stand up against the EPA’s agenda. Although it is questionable whether the states will be able to stop eminent changes in air pollutant standards.