AGs to Congress: EPA Rules Would Hurt Economy, Threaten States' 'Sovereignty'

The Environmental Protection Agency’s plan to tighten rules governing the nation’s water and air quality would have a crippling effect on state and local economies and send consumer energy prices soaring, the attorneys general of two rural states told a House panel last week.

The hearing held by the House Committee on Oversight and Government Reform focused on the EPA’s proposals to amend three of its regulations. The first would mandate reductions in emissions at coal-fired power plants and similar facilities; the second would require reductions in ozone, or smog, levels; and the third would clarify the types of waterways controlled by the EPA under the Clean Water Act.

Montana Attorney General Tim Fox told the committee he resents what he says are the EPA’s growing efforts to meddle in matters best left to the states.

“The people of Montana have taken steps to fully protect [the state’s waterways] for ourselves, our downstream neighbors and all of our progeny,” Fox said.

Those protections, he explained, begin with the state’s constitution, which asserts Montana’s right to make decisions regarding its water use — and requires the state legislature to “provide adequate remedies for the protection” of its waters.

The EPA, he said, has no right to expand its authority under the Clean Water Act.

“I believe it is my duty to stand up and push back when I perceive an agency of the federal government overreaching the authority given to it by Congress and proposing actions that infringe on our sovereignty,” Fox said.

EPA officials say its proposed changes to the Clean Water Act do nothing of the sort. They amount to a simple clarification of the kinds of waterways that fall under the agency’s purview.

“We are not seeking to expand the Clean Water Act at all,” EPA administrator Gina McCarthy told a congressional panel two weeks ago. “We are simply trying to define it better for everyone, so everyone is on the same page.”

Arkansas Attorney General Leslie Rutledge doesn’t buy that argument. She said the EPA’s actions are nothing more than a power grab.

“The EPA’s attempt to ‘clarify’ the definition of waters [is] so expansive that it could likely control land use activities over most of the United States,” Rutledge told the committee. “At best, the proposed definition simply creates more confusion and litigation.”

At worst, she said, the EPA’s actions will give it “unfettered regulatory jurisdiction” over most of the water in her state.

Rutledge said she is especially concerned about the effects the rule change would have on Arkansas farmers — and the trickle-down effect that could have on consumers. She noted that agriculture makes up about one-fourth of her state’s economy.

But ranking committee member, Rep. Brenda Lawrence (D-Mich.), insisted the rule change would do nothing but streamline the process used to determine who has authority over certain waterways.

“It will not result in an expansion of federal authority,” Lawrence said.

Clean Air

Rutledge also has concerns about the EPA’s so-called “Clean Power Plan,” which seeks to reduce emissions from electric-generating power plants, and how it would affect her state’s economy.

“The rule as proposed will require Arkansas to meet an almost 45 percent reduction in carbon emissions [from such plants] by 2030,” she said. “This is the 6th highest rate of reduction in the nation, imposed upon a state that currently ranks 46th in per capita income. There can be no question that the proposed rule will have a huge impact on our state’s utility rates, and these rate increases will disproportionally harm low-income Arkansans.”

Indeed, Rep. Cynthia Lummis (R-Wyo.) noted that the rule would not only force power plants to reduce emissions, but would, in effect, also give the federal agency the right to tell homeowners how much energy they can use to heat and cool their homes.

“These [measures] would regulate more than just power plants,” Lummis said. “They would mandate energy efficiency requirements on individual households.”

Under the proposed plan, she added, 43 states would face “double-digit electric rate increases” by 2030.

But Susan Tierney of the Boston-based consulting firm Analysis Group said opponents of the rule aren’t taking into account the many tools states have to counter such costs. She stopped short of saying Republicans were fear-mongering, but she said opponents of the EPA’s plans are painting an unrealistically grim picture.

“Many comments [submitted to the EPA by various stakeholders] are based on worst-case scenarios, and assume that policy makers, regulators, and market participants will stand on the sidelines without doing their jobs to ensure lowest-cost and reliable outcomes,” Tierney said. “There is no historical basis for these assumptions."

Rep. Matt Cartwright (D-Pa.) tried to discredit a study referenced by Republicans that is highly critical of the EPA’s proposed rules. Two witnesses at the hearing are employed by the firm that conducted the study, NERA Economic Consulting.

Cartwright noted that the report in question was paid for by several coal, petrochemical and mining trade groups and suppliers — companies that would have to spend millions to comply with the more stringent clean air regulations.

“Is it a matter of complete indifference to you whether those organizations continue to fund studies like this?” Cartwright asked NERA senior vice president David Harrison Jr.

Harrison was not fazed by the congressman’s implication, though, and said simply that his firm “did what they asked us to do — an independent study on the effects of the Clean Power Plan on the U.S. energy markets.”

Not to be outdone, Rep. Steve Russell (R-Okla.) went after Tierney, asking if she had ever navigated a water-filled depression in a farmer’s field. Russell’s question referred to a long list of “waterways” — including everything from a wetland to a puddle — that Republicans say could be controlled by the EPA under the agency’s proposed revisions to the Clean Water Act. The proposal would more clearly define the term “navigable waterways,” and the kinds of tributaries and other sources that flow into them. In some cases, such definitions would determine whether the EPA or state agencies have authority over such waters.

“Have you ever navigated a puddle on a farmer’s field in Oklahoma?” Russell asked the witness.

Tierney, however, wouldn’t bite.

“I think that’s a facetious question,” she said, adding that the EPA’s proposed changes are based on “scientific evidence.”

“Scientific evidence, eh?” Russell responded. “Well, I will try to scientifically navigate a puddle after a rainstorm.”

Ozone Levels

Anne Smith, who, like Harrison, is a senior vice president with NERA, addressed the EPA’s plan to boost air quality standards by reducing ozone levels.

Opponents to the proposal have complained that lowering levels of detectable ozone from the current 75 parts per billion to the proposed 65 ppb will cost taxpayers and businesses billions of dollars per year, while minimally reducing the risk to Americans’ health.

What’s more, Smith said, the EPA has grossly underestimated the cost of its proposal.

“The agency is suggesting that a tighter ozone standard may cost tens of billions of dollars per year,” she said. “NERA’s more evidence-based cost estimates are hundreds of billions of dollars per year.”

But Lawrence noted that past EPA mandates on air and water standards rarely, if ever, resulted in the economic chaos predicted by the agency’s critics.

“History tells us,” she said, “that environmental regulations don’t cause an economic calamity.”