Businesses Warn: Higher Prices For Everything To Follow New EPA Mandates

The EPA’s latest effort to reduce carbon dioxide emissions could devastate the American economy and US businesses by phasing out major sources of energy, a number of industry and business groups are warning.

One of those major sources of energy includes coal, which provides 40 percent of the nation’s power.

“Congress never intended for the Clean Air Act to authorize EPA’s extraordinary policy decisions to phase out entire sources of energy in this proposed rulemaking,” the American Fuel & Petrochemical Manufacturers (AFPM) and the American Petroleum Institute alleged in comments to the EPA. The organizations were commenting on proposed new rules for power plants, oil refineries and other industrial facilities.

“Mandating the use of specific energy sources will only serve to drive up U.S. manufacturers’ costs,” Charles T. Drevna of the AFPM said. “Our nation is on the verge of a manufacturing renaissance, but this and other all-cost, little-to-no-benefit rules will threaten our tremendous opportunity, erode our competitive advantage and drive business overseas.”

Shortages of Electricity Possible

The proposed rules could drive coal-fired power plants and many oil refineries out of business, the two groups alleged. This could lead to energy shortages and higher energy costs, particularly for electricity.

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“If adopted, the proposed NSPS (New Source Performance Standards) for Solid Fuel-Fired EGU (Electric Generating Units) will effectively prohibit any new development of coal-fired electric generating capacity,” the comments stated.

Essentially banning coal could lead to electricity shortages because there is no generating capacity to replace it, the groups say.

The proposed standards could raise the cost of gasoline and diesel fuel by greatly increasing electricity costs for refiners. Electricity is the second biggest business expense for refiners, according to the AFPM.

The EPA has no legal authority to propose such regulations, Drevna and others alleged. They contend that only Congress and not the Environmental Protection Agency has the authority to set such standards.

Higher Prices For Everything?

“Dramatic increases in electricity costs threaten the ability of AFPM members to produce affordable transportation fuels and chemicals that are the basis for everything from cell phones to seat belts and medicine,” an AFPM press release stated.

The EPA is trying to force electricity producers to use an unproven technology called Carbon Dioxide Capture and Sequestration or CSS. Critics contend that there is no evidence that this technology actually works.

“No pulverized coal boiler operates with a commercial scale CCS unit anywhere on earth,” the comments noted.

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Assistant Secretary of Energy Julio Friedmann told a congressional committee earlier this year that CCS or coal gasification could increase electricity costs by up to 70 percent.

“EPA must not mandate what technology cannot deliver,” Ross Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers, said of the proposed rules.

By forcing coal plants to close the EPA is effectively forcing electricity producers to turn to other potentially more expensive sources of power such as natural gas, the groups say.

The rules could increase transportation costs and the prices of many consumer goods including food.

Public comment on the proposed rules ended on May 12.

Congressional action and a legal challenge are likely if the EPA tries to implement the proposed standards. Several organizations, including the US Chamber of Commerce, are organizing opposition.

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