June 23, 2014
Last week I discussed the EPA new emissions rules and how NADCA is playing a role representing the die cast industry along with other industries in the United States. NADCA has engaged the Franklin Group as the voice of die casting in Washington, DC and have developed this summary paper of what is happening with these new EPA rules and how it will affect us in the manufacturing industry in the United States.
We are not opposed to improving air quality but we want the EPA to do so with science in mind and not impose arbitrary limits that will come with increased costs of electric production for both the industry and the consumer in America.
Remember, China is a huge polluter of the global air and they have no limits on their electric producers at this time.
Costs and Impact of Emissions Regulations
As is always the case in Washington, all sides for and against a proposal have their own studies determining what impact the rules will have on jobs, business, the environment, and public health. As the existing facilities proposed rule is only a few weeks old, many have not updated their previous analysis.
Few question that the proposed regulation will increase energy costs in the U.S. The EPA’s own analysis expects a 6.2% increase, while others supported by industry range much higher. An analysis from the National Economic Research Associates (NERA) estimated that a Natural Resources Defense Council proposal, which most had expected the EPA to closely follow, “could cost 2.85 million jobs and consumers $13 billion to $17 billion per year in higher electricity and natural gas prices.” However, critics of the NERA analysis say it used a 40% reduction target, not the 30% proposed by EPA, and included the costs of implementing CCS technologies on existing plants, which the rule does not require.
Assessing Cost Increases
The challenges with assessing the cost increases on an industry or individual are significant. There are several factors to consider, most importantly is one’s location. Some states face higher emissions reduction goals based on EPA’s formula. The goals are determined by dividing CO2 emissions from fossil fuel-fired power plants in pounds (lbs) by state electricity generation from fossil-fuel fired power plants and certain low- or zero-emitting power sources in megawatt hours (MWh). Accordingly, states with more fossil-fuel, mainly coal, fired plants, will face different reduction levels and cost increases than a state with a higher usage of renewable fuel power generation.
We do not endorse the validity of any analysis but provide these links to allow people to review various interpretations of the impact of the rules. As always, keep in mind that studies typically reflect the point of view of those who sponsor them and many groups conducted their analysis prior to the EPA releasing its proposed rule on June 2, 2014.
What the Public Can Do
The public has until September 30, 2014 to comment on the proposed regulation of emissions from existing power plants. Meanwhile, the EPA will resume its listening sessions that the agency began in 2013, with several slated to take place around the country in late July. Per the President’s 2013 Executive Memorandum, the EPA is likely to issue a final regulation of existing plants by June 1, 2015. States will have until June 1, 2016 to demonstrate to the federal government how they will achieve the goals; they may also ask for a one year extension (multiple states creating a regional plan may have a two year extension).
The EPA will hold four additional hearings where the public may testify on emissions regulations:
- July 29, 2014 Atlanta, Georgia 9:00 a.m. – 8:00 p.m. (EST)
- July 29, 2014 Denver, Colorado 9:00 a.m. – 8:00 p.m. (MDT)
- July 30, 2014 Washington, DC 9:00 a.m. – 8:00 p.m. (EST)
- July 31, 2014 Pittsburgh, Pennsylvania 9:00 a.m. – 8:00 p.m. (EST)
This may be a great opportunity for those of you who are active in Washington activities to go and make your voice heard.
Premier Die Casting Company has been in business 69 years and has been active in NADCA and its Government Affairs Committee in Washington DC affairs for nearly 40 years now.