NCPA - National Center for Policy Analysis

Regulations on Industrial Boilers Would Cost Billions

April 23, 2012

In early 2011, President Obama signed an executive order requiring federal agencies to take a pragmatic approach when creating new, costly regulations.  Yet the Environmental Protection Agency's (EPA) set of proposed regulations on industrial boilers (known as Boiler MACT) do not adhere to this requirement, says Adam Peshek of the Reason Foundation.

The proposed regulation would seek to control the emissions of boilers across the country in a number of different sectors.  The goal, according to regulators, would be to reduce Hazardous Air Pollutants (HAPs) of all kinds -- a broad goal established by the Clean Air Act.

  • The regulation separates boilers into two categories: major sources and area sources.
  • Major sources are facilities that emit 10 tons per year or more of any single HAP, or 25 tons per year or more of any combination of HAPs.
  • Area sources, on the other hand, are simply facilities that emit less than this.
  • According to EPA, there are approximately 13,840 major sources and 187,000 area sources in the United States.

The regulation distinguishes between boilers that are already in use and new boilers, allowing for some degree of grandfathering.

  • Previously existing sources would be required to have standards "at least as stringent" as the average emission limitation achieved by the best performing 12 percent of other existing sources.
  • New sources would have to meet the emission limitation achieved by the source with the greatest emission controls.

Nevertheless, the size of the public outcry at the regulation should be an immediate sign that the regulation might cause more harm than good.  When it was posted for comment online, there began a flood of criticism from industrialists and politicians alike, decrying the enormous costs of the rule.

  • In April 2010, EPA received nearly 5,000 comments, including comments of concern from hundreds of United States representatives, 56 senators and over 20 current governors.
  • An EPA cost-benefit analysis found that the major source regulations would impose an upfront cost of $9.5 billion and an annual cost of $2.9 billion.
  • Industry estimates, meanwhile, pegged compliance costs to be as high as $20 billion.

Source: Adam Peshek, "The Boiler MACT Project: Regulation for the Real World," Reason Foundation, April 2012.

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