The Ripon Forum

Volume 48, No. 3

September 2014

The Red Tape Factory

By on September 19, 2014

How EPA overregulation is driving up the cost of energy

by FRED UPTON

Fred UptonSince President Obama moved into the White House in 2009, his administration has been churning out spools of red tape. The Environmental Protection Agency is the administration’s biggest red tape factory, issuing more economically significant rules than any other agency and contributing to making energy prices more expensive.

EPA is now regulating at an unprecedented pace and at extraordinary levels. The Chamber of Commerce notes, “EPA has been writing more billion-dollar rules, each with greater costs, than ever before.” According to the Mercatus Center, the agency now has 135,921 regulatory restrictions in the Code of Federal Regulations.

While some regulations are necessary to protect the safety and well-being of our citizens, many regulations have unintended consequences and can impose new hardships on those the government is trying to protect. New research from the American Action Forum suggests new Obama administration regulations will raise the cost of everything from food to health care to everyday consumer products. Just a handful of EPA’s new rules could cost consumers over $135 annually in additional energy costs alone. And a recent study from the National Association of Manufacturers estimates EPA’s potential new ozone standards could “cost the average U.S. household $1,570 per year in the form of lost consumption.”

While some regulations are necessary to protect the safety and well-being of our citizens, many regulations have unintended consequences and can impose new hardships on those the government is trying to protect.

Regulations have real consequences for real families, and it is the nation’s poorest and most vulnerable who are hit the hardest by cost increases. This is why it is so important that we fully understand all of the costs, benefits, and potential consequences of new regulations before they are forced upon the American people and our economy. Unfortunately, this necessary evaluation has fallen by the wayside during this administration. And Congress has been written out of the process almost entirely as rules are pushed through with little transparency or public debate.

The House Energy and Commerce Committee has been on the frontlines in the effort to protect jobs and keep energy affordable. To ensure greater transparency and accountability in EPA’s rulemaking process — and to protect Americans from higher energy costs — the House of Representatives approved legislation last year to provide for additional oversight and review of the agency’s most expensive proposed rules. The Energy Consumers Relief Act, authored by committee member Rep. Bill Cassidy (R-LA), would prevent EPA from finalizing new energy-related rules estimated to cost more than $1 billion until the agency submits a report to Congress detailing certain cost, energy price, and job impacts. EPA would be  prohibited from finalizing certain rules if the Secretary of Energy, consulting with other relevant agencies, determines the rule would cause significant adverse effects to the economy. This bill promotes a commonsense “look before you leap” approach to regulation, but the Senate has refused to take it up.

To understand the need for this checks-and-balances legislation, look no further than EPA’s new power plant rules. Since the passage of Rep. Cassidy’s bill, EPA has proposed expensive carbon dioxide rules for new and existing power plants that will fundamentally change our nation’s energy sector. The rules are estimated to cost the economy billions of dollars, and even EPA admits they will make electricity more expensive for consumers and businesses.

Look no further than EPA’s new power plant rules … The rules are estimated to cost the economy billions of dollars, and even EPA admits they will make electricity more expensive for consumers and businesses.

EPA’s proposed carbon dioxide standards for new power plants are so stringent they would essentially impose a de facto ban on the construction of new coal-fired power plants in America. The rule requires coal plants to be built using costly carbon capture and sequestration technologies that have not yet been proven to be commercially viable, and notwithstanding express statutory prohibitions under the Energy Policy Act of 2005. EPA’s proposed rule for existing coal-fired power plants has even more immediate impacts for states and consumers. It requires states to submit for approval state or regional energy plans to meet federally mandated emissions targets. Asserting unprecedented regulatory authority, EPA is telling states how they can generate and use electricity. Implementing this new rule will force even more of the nation’s power plants to shut down and put thousands of workers out of a job, all the while raising electricity prices and diminishing America’s global competitiveness.

The committee has been conducting hearings and exercising oversight relating to the development of these destructive power plant regulations, and the House passed legislation authored by Rep. Ed Whitfield (R-KY) to stave off their harmful consequences. The bipartisan Electricity Security and Affordability Act would require that any greenhouse gas standards set by EPA for new coal-fired plants be achievable by commercial power plants operating in the real world. The bill also provides that Congress would set the effective date for EPA’s existing plants rule to ensure that a rule is not pushed through without the economic impacts being fully understood and debated.

The bottom line: EPA is regulating too much too fast – and the results could be disastrous for consumers and our broader economy. There is simply too much at stake to let these rules slip by. The House will continue to put forward commonsense solutions that make energy more affordable, and conduct aggressive oversight to hold EPA accountable and bring greater transparency to the agency’s regulatory process.

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Fred Upton represents the 6th District of Michigan in the U.S. House of Representatives.  He serves as Chairman of the Energy & Commerce Committee.

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