Will the EPA carbon rule destroy jobs or create them? Probably both. | Arkansas Blog

Thursday, August 28, 2014

Will the EPA carbon rule destroy jobs or create them? Probably both.

Posted By on Thu, Aug 28, 2014 at 5:20 PM

click to enlarge DIRTY POWER: The location of the five coal-burning power plants in Arkansas, juxtaposed with unemployment rates. - ARKANSAS ELECTRIC COOPERATIVES
  • Arkansas Electric Cooperatives
  • DIRTY POWER: The location of the five coal-burning power plants in Arkansas, juxtaposed with unemployment rates.
On Thursday, the Arkansas Department of Environmental Quality (ADEQ) and the Public Service Commission (PSC) held a stakeholder meeting to discuss the economic impact of the EPA's Clean Power Plan, the major new proposed rule that aims to curtail carbon dioxide emissions by imposing higher standards on existing power plants over the next 15 years. The first in the series of stakeholder meetings —  which bring together regulators, power industry executives and environmental groups — was held in June; the public comment period on the proposed rule ends on October 16th.

Today, power companies and the Chamber of Commerce made the case that the EPA carbon rule is a job killer. Cutting back on carbon emissions means burning less coal in lieu of cleaner fuels (ie, natural gas and renewables), which translates to higher electric rates and therefore a hit to the potential hit to the manufacturing sector. Dan Byers, from the US Chamber of Commerce's Institute for 21st Century Energy, said that higher power costs will encourage manufacturers to move overseas.

"Because U.S. businesses compete on a global scale, the electricity and related price increases resulting from EPA’s rule will severely disadvantage energy intensive, trade-exposed industries such as chemicals, manufacturing, steel, and pulp and paper," said Byers in his presentation. (That powerpoint, along with the other presentations both pro and con, are available on the ADEQ website.)

When asked a pointed question from Glen Hooks of the Sierra Club about opposition to the rule, Byers responded that "it's not necessarily so much a binary thing of support or oppose" but a matter of making it more amenable to business. Indeed — the rule is still malleable and the point of stakeholder meetings like these is to solicit input about how to shape it. But Byers' statement in pretty stark contrast to Randy Zook, head of the state chamber, who earlier this summer told a legislative committee that the flexibility afforded by EPA is akin to "giving you four knives to choose from to slit your wrists." He told me today that he stood by such sentiments.

"I'm not going to be polite about stating its effects on the economy of Arkansas," he said. "It's an incredible disruption, a historic disruption."

Such bomb-throwing from Zook — and from elected officials of both parties eager to lambaste the EPA, however impotently — is standard issue rhetoric. But it's at odds with the more reasoned and nuanced perspective of energy industry experts who are now focused more on negotiating the details of the carbon reduction plan rather than stonewalling it entirely.

Duane Highley of Arkansas Electric Cooperatives said that EPA's implementation timeline was way too fast. "It's not a glide path, but a crash landing," said Highley.

Highley also warned that the carbon reduction targets EPA sets for Arkansas would mean shuttering coal-burning power plants. "Given these [projected] reductions, it is very likely we would have to close something," he said in his presentation, "and White Bluff and Independence are prime targets." Those are the oldest and dirtiest two of Arkansas' five coal-burning plants. Closing White Bluff alone would lose 1,237 jobs. Highley also warned that rates would shoot up for customers, residential and industrial alike. 

Those rate hikes could be offset, suggested Ken Smith of the Arkansas Advanced Energy Association (AAEA). Arkansas Electric Cooperatives and others already provide assistance (some public, some not) to low-income ratepayers struggling to keep their lights on. There's no reason why assistance couldn't be adjusted to help the poor cope with this change.

Contra the power industry, the AAEA also said the carbon rule would create jobs on net by increasing investment in energy efficiency, which is now a $1.5 billion industry in Arkansas. It results in more than 12,500 jobs, said the AAEA presentation. A major component of the proposed EPA rule is upping efficiency significantly — which includes everything from insulating homes to improving industrial electricity consumption — and AAEA says that increase would create thousands more jobs, more than offsetting power plant closures. 

There's no doubt that closure of the White Bluff and Independence coal plants would be economically devastating for the communities they're located in. But then, there's also no doubt among the vast majority of scientists that cutting back carbon emissions is a necessity; the proposed EPA rule doesn't go far enough, but it makes a good start. Also, said Hooks of the Sierra Club, those plants are nearing the end of their lifespan anyway in the coming years — this rule will merely hasten their demise. 

Finally, aside from climate change, there are other good public health arguments for shutting down the dirtiest of coal plants. Dr. James Phillips of the Arkansas Department of Health described the multiple threats posed by fine particulate matter released into the atmosphere from burning coal, including asthma, COPD and cognitive decline. Health risks are especially great in a 30 mile radius of the plants. Burning coal also sends mercury into the air, a health risk whose gravity is only now being fully understood.

"Mercury is the new lead," said Phillips. Aside from its well-known toxicity, it's also been linked to lower cognitive ability in children at alarmingly low concentrations. Recent water testing has demonstrated mercury is present in potentially unsafe concentrations in a number of Arkansas rivers and lakes. In 20 counties, he said, public advisories have been issued to limit the consumption of some fish caught wild, especially for pregnant women.

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