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Witnesses Detail Dramatic Costs, Minimal Benefits of New EPA Rules and Regulations

Press Release

Location: Washington, DC

The Subcommittee on Energy and Environment today held a hearing to examine the process used by the White House Office of Information and Regulatory Affairs (OIRA) and the Environmental Protection Agency (EPA) in evaluating the costs and benefits of federal environmental regulations, including the recently announced Carbon Pollution Standard for New Power Plants.

"All too often, major EPA regulations have been underpinned by secret science, hidden data, and black box models," said Subcommittee Chairman Andy Harris (R-MD). "The Agency often appears more concerned with crucifying press releases and enforcement actions than meaningful peer review or scientific analysis."

OIRA, first established in 1980 within the White House Office of Management and Budget (OMB), is responsible for reviewing draft regulations and ensuring agency compliance with ever-changing regulatory requirements. Invited to testify at today's hearing, OIRA Administrator Cass Sunstein was unable to attend.

However, with an open invitation sent several months in advance to find a mutually agreeable date for him to testify, Chairman Harris expressed hope that the Administrator would join the Subcommittee for an upcoming hearing, noting that "An unwillingness to discuss recent regulatory developments would be especially disconcerting given Mr. Sunstein is responsible for overseeing the Open Government Initiative for the President's self-proclaimed "most transparent Administration in history.'"

Dr. Michael Honeycutt, Chief Toxicologist at the Texas Commission on Environmental Quality, said that the process by which EPA justifies proposed rules, "illustrate[s] EPA's modus operandi. The concept of "weight-of-evidence' is misused to discount contradictory data. They use worst-case, often unrealistic assumptions, fail to put risks into proper perspective, and fail to disclose how uncertain the data and therefore the conclusions are." During questioning, Honeycutt also described EPA's problematic practice of not releasing key data used to justify regulatory actions.

In light of the onslaught of new EPA rules, the Executive Director of the Energy Council at the Illinois Chamber of Commerce, Mr. Tom Wolf, questioned the connection between rhetoric and reality in the President's energy strategy "The Chamber believes all of the above should mean all of the above -- we believe diversity in our energy portfolio is important," said Mr. Wolf. "It seems these regulations push coal aside instead of forward. Therefore we're going to have to rely on everything but coal in our future baseload generation since it's hard to imagine anyone willing to invest in a power source that will be out of compliance before the first kilowatt is generated."

In late March, EPA announced its proposed Carbon Pollution Standard for New Power Plants, despite concerns that the regulation could effectively prevent the construction of new coal-fired power plants. While agencies are required to "propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs," EPA stated this rule "will result in negligible CO2 emission changes, energy impacts, quantified benefits, costs, and economic impacts."

While the Agency acknowledges the rule would have negligible benefits, Mr. David Hudgins, representing the Old Dominion Electric Cooperative (ODEC), which provides electric power to rural cooperatives in Maryland, Virginia, and Delaware, discussed the dramatic costs of this new rule. "ODEC's decisions on future generation will be directly and negatively impacted by the adoption of the New Source Performance Standards (NSPS) for carbon dioxide."

Hudgins continued, "Additionally, the EPA, in their efforts to justify this standard, relied on two major assumptions. First, EPA believes that implementation of a currently unachievable CO2 standard for coal will drive commercial development of the emerging [Carbon Capture and Sequestration] technology to ensure future compliance. Second, the proposed rule presumes supply of natural gas will be both affordable and readily available to fuel the significant increase of baseload generation in the coming decades. ODEC believes both of these assumptions are erroneous."

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