Climate 411

It’s Just Business (but FirstEnergy Blames Its Decisions on Clean Air Rules)

By Mark MacLeod / Published: February 10, 2012

Twice in the last two weeks, FirstEnergy has announced it will shut down old coal-fired power plants – then tried to blame those business decisions on the clean air rules that protect us all from toxic pollution.

First, at the end of January, First Energy announced it would retire six coal-fired power plants in Ohio, Pennsylvania and Maryland.

The company blamed those closures on new EPA regulations that will protect us from mercury, acid gases and other toxic air pollution – but FirstEnergy is going to retire the plants by September 1 of this year.

The compliance deadline for the new EPA rules isn’t for at least three years (2015 — with possible extensions to 2017). 

What’s more, FirstEnergy announced a decision to switch some of those six units from full-time to seasonal operation, and to temporarily mothball others, more than 16 months ago — before EPA even issued its proposal for the new rule.

Clearly, there’s more to the story than just EPA regulations.

Then, this week, First Energy announced it will close three more old coal plants in West Virginia. The company once again tried to pin the blame on EPA.

But the three plants in question were built between 1943 and 1960. They were built while Presidents Roosevelt, Truman and Eisenhower were in office. The oldest was built while we were still fighting World War II.

The plants are not closing just because of clean air regulations. They’re closing because they’re aging and inefficient, and because they are facing competition from natural gas.

Many factors contribute to the new utility investment cycle. They include:

  • Age – 59% of America’s coal fired power plants are over 40 years old, with many over 60 years old.

According to former Senate Majority Leader George Mitchell:

In 1970, the [Clean Air Act] required that new sources meet tight emissions standards. At that time, it was assumed that electrical utility units had an average lifetime of 30 years.

  • Competition from Natural Gas – with increasing natural gas supplies and lower prices, the market is shifting to more efficient combined cycle natural gas generators over old, inefficient coal plants.

One industry analyst told the Wall Street Journal:

Inexpensive natural gas is the biggest threat to coal. Nothing else even comes close.

  • Low utilization –the older units are often small, inefficient, and operated only part-time. From a business perspective, it is not cost effective to keep paying the fixed costs needed to maintain them for limited operation. Energy efficiency and demand response programs are far more efficient ways of meeting these energy needs.

In its press release announcing the closings of the three West Virginia plants, First Energy itself points out:

[T]hese plants served mostly as peaking facilities, generating, on average, less than 1 percent of the electricity produced by FirstEnergy over the past three years.

  • Health and the Environment – it is not surprising that these old, inefficient power plants are also disproportionately higher emitters of pollutants, and often have not had modern pollution control equipment installed.

We have information and graphics to illustrate this issue on our new fact sheet.

Business decisions in the utility sector are complex. Don’t let plant owners use our health protections as a scapegoat for their choice to retire old coal-fired power plants.

Also posted in Clean Air Act, Energy, News / Comments are closed

Clean Air Act Rules Will Save U.S. $82 Billion on Health Care

By Kusai Merchant / Published: November 17, 2011

The Clean Air Act was originally designed to save lives, protect public health and safeguard the environment – and it has been a clear success story on those fronts.

The Environmental Protection Agency’s (EPA) own analyses show that Clean Air Act rules yield hundreds of billions of dollars in economic benefits. These include the value of avoided premature mortality, negative health impacts, lost worker productivity due to illness, and environmental improvements such as increased visibility and agricultural productivity.

Now EDF and Trust for America’s Health (TFAH) have released a new report that takes a closer look at one segment of those benefits.

Our new analysis [PDF] finds that four major rules of the Clean Air Act will yield more than $82 billion in Medicare, Medicaid and other health care savings for America through 2021.

The report is called Saving Lives and Reducing Health Care Costs: How Clean Air Rules Benefit the Nation [PDF].

It looks at four new rules recently proposed or finalized by EPA:

Those four rules are expected to lower emissions rates of a number of air pollutants, including mercury, arsenic, dioxins, acid gases, smog, and soot.

Reducing levels of those dangerous substances will, in turn, reduce rates of premature mortality, chronic bronchitis, heart attacks, respiratory hospital admissions, and emergency room visits related to asthma.

That, in turn, will result in health care savings of $82 billion, including;

  • $44.6 billion in Medicare and federal-level health care savings
  • $2.8 billion in state-level Medicaid and other state and local savings
  • $8.3 billion in out-of-pocket individual savings
  • $24.7 billion in private insurance savings

Our report is one more piece of evidence that clean air rules are a good investment for America. We can save lives, protect public health, and save billions of taxpayer dollars that are currently being spent by programs like Medicare to treat pollution-related illnesses.

Our report also shows that the polluter-led attempts to roll back clean air rules would not reduce costs, but rather shift costs from polluters onto the American people.

Our new report also includes a second analysis of health care savings expected from the 1990 Clean Air Act Amendments, which finds implementation of these programs could yield over $612 billion between 2000 and 2020 in reduced Medicare, Medicaid, out-of-pocket and private insurance spending.

You can read the full report here [PDF].

Also posted in Clean Air Act, Health, News / Tagged | Comments are closed

More Evidence That the Benefits of EPA Rules Vastly Outweigh the Costs

By Susanne Brooks / Published: November 11, 2011

Yet another study is confirming what we’ve known for quite some time — the benefits of EPA’s clean air rules vastly outweigh the costs.

An analysis from the Economic Policy Institute (EPI) reinforces what other studies have told us time and time again: clean air is a great economic investment.

Unfortunately, that fact is often lost in the unfounded attacks on EPA that have gotten so much attention lately, in the media and even in Congress.

EPI’s analysis examines the combined effect of EPA rules that have already been finalized under the Obama Administration, as well as those currently in the proposal stage. It finds that:

The dollar value of the benefits of the major rules finalized or proposed by the EPA so far during the Obama administration exceeds the rules’ costs by an exceptionally wide margin. Health benefits in terms of lives saved and illnesses avoided will be enormous.

Of course, the most important benefits of clean air are those related to human health. Just three of these rules (Cross-State Air Pollution (CSAPR), Mercury and Air Toxics, and Boiler MACT) are estimated to save up to 57,500 lives a year.

Those lives saved, plus illnesses avoided and other environmental improvements translate to enormous economic benefits:

  • Setting aside CSAPR, the combined annual benefits from all final major rules exceed their costs by $10 billion to $95 billion a year. The estimated benefit-to-cost ratios for those final rules range from 2-to-1 to 20-to-1.
  • The net benefits from CSAPR range from $112 billion to $289 billion a year.
  • The combined annual benefits from three major proposed rules exceed their costs by $62 billion to $188 billion a year. The estimated benefit-to-cost ratios for those proposed rules range from 6-to-1 to 15-to-1

The results are even more striking in chart form:

Benefits and costs of EPA rules

(For more details on EPI’s analysis, see our new fact sheet.)

EPI has also shown, in a previous analysis, that EPA clean air rules can also have a positive impact on overall employment – including 28,000 to 158,000 jobs from the Mercury and Air Toxics rule for power plants alone.   

In fact, Josh Bivens of EPI recently testified before the U.S. House of Representatives on the Mercury and Air Toxics rule for power plants. He said:

Calls to delay implementation of the rule based on vague appeals to wider economic weakness have the case entirely backward – there is no better time than now, from a job-creation perspective, to move forward with these rules. 

It’s time for everyone – and especially Congress — to recognize that EPA rules are not only good for our health, but also our economy.

(For more on how cleaner air can save lives, improve health, and help our economy, see the following previous EDF blog posts:  “Thank You, EPA,” “The Clean Air Act Amendments: Good for Our Health AND Our Economy,” and “Newsflash: Clean Air Act saves lives, boosts GDP.”)

Also posted in Clean Air Act, News, Policy / Comments are closed

Broad Support for Cleaner Cars — Except from Some in Congress

By Peter Zalzal / Published: October 17, 2011

At a Congressional hearing last week, some members of Congress sought to undermine historic fuel economy and greenhouse gas standards that will save Americans money at the gas pump, help break our addiction to foreign oil, strengthen our economy, and reduce harmful pollution.   

 The shrill attacks on those historic standards were in sharp contrast to the broad support for cleaner cars, including support from the U.S. auto industry.

Automobile manufacturers have intervened to support the standards in the Federal Court of Appeals in Washington, D.C.  In recent filings in federal court, the Alliance of Automobile Manufacturers and the Association of Global Automakers have characterized these standards as:

valid, mandated by law, and non-controversial

(That’s from a D.C. Circuit Court filing from September 30, 2011 — Brief for Intervenors Alliance of Automobile Manufacturers and Association of Global Automakers, Coalition for Responsible Regulation v. EPA, Docket Number 10-1092) 

The State of Texas and its allies, along with an industry group representing coal mining interests, have sought to topple the landmark clean car standards.  The automakers — those directly regulated by the new standards –have forcefully countered that, if legal challenges are successful in overturning EPA’s clean car standards, it “would result in tremendous hardship to their companies” and that the associated costs would be “substantial.”

(Those two quotes above are both from court documents: the first is from the same brief I already cited, and the second is from a November 1, 2010 filing with the same D.C. Circuit Court: Intervenor Alliance for Automobile Manufacturers’ and Association of International Automobile Manufacturers’ Opposition to Motions for Stay, Coalition for Responsible Regulation v. EPA, Docket Number 10-1092).

The Environmental Protection Agency’s (EPA) standards govern greenhouse gas emissions, and not just fuel economy. That means EPA’s measures will create business opportunities throughout the vehicle supply chain.

Honeywell, a leading global manufacturer of air condition systems, filed an amicus brief in support of EPA’s standards, noting that :

technologies for reducing the United States’ carbon footprint have the potential to create the kind of ‘green jobs’ that are a priority for America in the 21st century

(That’s another quote from a D.C. Circuit court filing, this time from September 8,2011: Amicus Brief of Honeywell International, Inc., Coalition for Responsible Regulation v. EPA, Docket Number 10-1092). 

Honeywell recognized the possibility that innovative technologies spurred by these emission standards have the potential to spread throughout the global economy, creating business opportunities for companies at the forefront of this technological innovation.  The automobile industry developed the catalytic converter in response to clean air measures, and, through commonsense regulations like these vehicle fuel economy and greenhouse gas standards, the United States can remain at the forefront of technological innovation in the global automotive market.   

These benefits are echoed by members of the small business community — eventual purchasers of the new, more fuel efficient vehicles. 

In a press release, Small Business Majority founder and CEO John Arensmeyer emphasized the importance of strong emissions standards, stating that:

 [s]mall businesses understand that to survive in this tough economy they need to innovate, and that strong fuel efficiency standards will assist them in doing so by helping them save money in their own business and creating new market opportunities

In fact, in a recent survey, small business owners overwhelmingly supported stronger fuel-efficiency standards for cars and light trucks, with 87 percent stating that it was critical for the U.S. to take action now to increase fuel efficiency.

 The benefits to covered business are, of course, just a portion of the environmental and economic benefits associated with EPA’s clean vehicle rule:

  • More fuel efficient vehicles will save consumers money.  American families will save more than $3,000 on fuel costs over the lifetime of a model year 2016 vehicle, and, for families financing a vehicle, the savings will be immediate. 
  • The standards are projected to cut gasoline consumption by 75 billion gallons. 
  • The standards are also projected to cut harmful global warming pollution by over 20 percent, avoiding 960 million metric tons of CO2-equivalent

As a result of these myriad benefits, EPA’s vehicle standards have strong support from a diverse coalition, including auto manufacturers, states, environmental organizations, and veterans organizations.  Members of the veterans’ organization Operation Free testified at public hearings across the country about the vital importance of EPA’s clean vehicle rules in breaking our addiction to foreign oil. 

Despite these significant benefits and the strong, broad-based support for vehicle greenhouse gas emission standards, some in Congress are attempting to topple these common-sense rules on the theory that doing so would ease burdensome regulation.  Ironically, overturning these regulations would have precisely the opposite effect – constraining business innovation, burdening cash-strapped consumers, and harming the environment. That’s a result that would benefit no one.

 

Also posted in Cars and Pollution, Clean Air Act, Energy, Greenhouse Gas Emissions, Policy / Comments are closed

Let’s Clear the Air: EPA Pollution Standards Will Create New Jobs While Protecting Public Health

By Jackie Roberts / Published: September 30, 2011

Opponents of the Clean Air Act have been yelling that this law’s life-saving health protections are “job killers.”

Just for a moment, let’s ignore the fact that these regulations improve public health and safety and save our lives. It is untrue that these regulations kill jobs.

In fact, just two small parts of the Clean Air Act — EPA’s Cross-state Air Pollution and Mercury and Air Toxics rules — would together create nearly 1.5 million jobs over the next five years driven by new investments.

EPA’s new air pollution standards would limit sulfur dioxide, nitrogen oxide, mercury and other unhealthy pollutants that are in the air we breathe. Meeting the new standards, and lowering our air pollution levels, will result in investments in new pollution control equipment and power plants. It will also result in jobs for skilled professionals to do the work of installing and operating that equipment. That means jobs for electricians, plumbers, pipefitters, boilermakers, millwrights, iron workers and engineers – among others.

Among the economic beneficiaries would be the American companies that make pollution control equipment like scrubbers, dry sorbent injectors, and selective catalytic reducers. Take a look at this map:

Pollution Abatement Materials Companies

 

Click to view full-size map

The map is  by no means comprehensive, but it shows some of the companies in the eastern half of the U.S. that are poised to benefit under EPA’s rules.

A Case Study in Job Creation from Installing Pollution Control Equipment

Alstom Power’s James Yann testified before the U.S. Senate’s Subcommittee on Clean Air and Jobs in March of this year.

He described some of the jobs created from just one example of a pollution control technology – a wet flue gas desulfurization “scrubber” that is commonly used to remove sulfur and other air pollutants.

Dependent on the number of scrubbers ultimately installed, Alstom estimates that these clean air regulations will create a total of more than 150,000 jobs over the next five to six years of compliance work. That’s just for direct jobs. In addition, tens of thousands of additional jobs would be created along the supply chain.

Here’s more details to show how it works: 

  • Scrubbers consist of a large number of components including pumps, electrical equipment and wiring, controls, and emission monitors (among many others). Almost all of this equipment can be procured from sources in the United States.
  • Erecting a typical scrubber requires more than 2,000 tons of fabricated steel delivered to the site. This steel represents more than 40,000 man-hours of production.
  • Assembly of the scrubber requires the most man power and a wide variety of trade crafts, typically lasting up to 30 months and employing an average of 700 craft people during that period.
  • In total, a typical wet flue gas desulfurization project will provide the equivalent of about 775 full time jobs over the life of the installation project, not including jobs provided for all the equipment suppliers and delivery services involved in delivering materials and equipment to the site.
  • Scrubber systems require ongoing supplies to operate including ammonia, lime, limestone and activated carbon. Companies making these supplies will need to create additional jobs to meet the increased demand as a result of EPA’s clean air rules.
Also posted in Clean Air Act, Energy, Jobs / Comments are closed

For Business, It’s Not Necessary to Delay the Clean Air Act

By Jackie Roberts / Published: March 8, 2011

The Environmental Protection Agency’s (EPA) efforts to enforce the Clean Air Act are vital for our health, our children’s health, and the avoidance of the most dangerous and expensive consequences of climate change.

In spite of that urgency, some businesses are arguing for delay. They claim that new regulations will hurt jobs and the economic recovery. Extensive data refutes these claims, but perhaps the most credible counter-arguments are those made by businesses that disagree.

In a March 1 article in Politico Pro, reporter Darren Samuelsohn interviewed business leaders who “didn’t sound so thrilled” about legislation to pre-empt EPA authority:

“The leaders — from American Electric Power, NextEra Energy, Southern Co. and Dominion Resources — said to varying degrees that they support allowing the EPA to proceed on a ‘reasonable’ time frame on greenhouse gas rules for power plants, petroleum refiners and other major stationary sources.” 

The business community is not monolithic, of course. And it’s no surprise that companies that are innovative are often rewarded with long-term growth.

Recently, the ArcelorMittal steel mill in East Chicago, Indiana, built on-site energy plants to capture heat and gases. The mill reduced its carbon dioxide emissions by about 916,000 metric tons. That’s about the same amount as 166,000 cars and all of the grid-connected solar panels in the world. At the same time, the mill cut as much as $100 million a year in energy costs — and that allowed ArcelorMittal to allocate more money to jobs and investment. 

West Virginia Alloys, a silicon manufacturer, used a similar project to capture waste heat and generate enough electricity on-site to power one-third of its furnaces. The project reduced carbon dioxide emissions by almost 300,000 tons – and at the same time, enabled the plant to increase its workforce by 20 percent.

Companies that fear change typically spend their time and energy fighting change – not on finding the most strategic responses to changing business conditions.

McKinsey and Company and the Department of Energy (DOE) are among those who have collected data showing the plethora of untapped efficiency opportunities being ignored by American industry today. (See some of that data, and helpful case studies, at LessCarbonMoreInnovation.org)

Here are some highlights:

  • McKinsey found that the U.S. industrial sector can reduce annual energy consumption 18 percent by 2020 and save more than $442 billion in energy costs billion in major sectors such as refineries, chemicals, cement, iron and steel, pulp and paper, for an upfront investment of barely more than a quarter of that amount.
  • If the pulp and paper sector, alone, seized the economically attractive opportunities identified by McKinsey and Company, they could reduce energy use by 26 percent and save an estimated $2.6 billion per year.
  • Until recently, U.S. industrial plants didn’t know how energy efficient they were (or weren’t) compared to their competitors So the Energy Star for Industry program created a benchmarking tool to allow companies get that information. The results show that many plants have significant room for improvement. For example, the gap between the average plant’s performance and the best in class plant’s performance is 198 kilowatts per hour more electricity used per assembled vehicle. (That figure takes into account the differences in product, as well as plant capacity, utilization, and location). That’s about as much as what the average U.S. household  uses in electricity each week.
  • The University of Massachusetts’ Political Economy Research Institute looked at the impact on new EPA pollution control rules on the utility sector. They found that the new rules will drive an estimated 1.46 million jobs, or about 290,000 on average in each of the next five years. Other University of Massachusetts studies found that clean energy and energy efficiency are more labor intensive than spending on conventional fossil fuels.

Given over-capacity and capital on the sidelines, now is actually the perfect time to invest in making the current infrastructure cleaner, more efficient, more globally competitive, and ready for the recovery. Investing will be good for the workforce and for customers, and while shareholders may see a little less profit this year, they will see more in the long-run.

Businesses that insist they have to pollute do not represent all businesses. Lots of American businesses are already taking advantage of the opportunities in clean energy and energy efficiency.  If we support them, instead of the businesses that can only handle the status quo, we can create an economic recovery for the long-haul.

Also posted in Clean Air Act / Comments are closed