NCPA - National Center for Policy Analysis

All Pain and No Gain

June 18, 2012

The U.S. Environmental Protection Agency's (EPA) Utility MACT Rule establishes the first-ever maximum achievable control technology (MACT) standards for emissions of hazardous air pollutants (HAPs) from coal- and oil-fired power plants.  The principal goal of targeting HAPs is the reduction of mercury, which can settle into water supplies and ostensibly cause birth defects when consumed by pregnant women, say Marlo Lewis, William Yeatman and David Bier of the Competitive Enterprise Institute.

The EPA has justified this regulation on the grounds that, despite enormous compliance costs in the energy sector, the public health benefits will be even larger.  This is far from the truth.

  • The EPA's December 2000 determination that triggered the rule assumed that 7 percent of pregnant women in the United States have blood mercury concentrations exceeding the agency's reference dose.
  • In reality, only 0.4 percent (one in every 250 pregnant women) had blood mercury levels exceeding the reference dose.
  • Furthermore, the EPA's reference dose is overly cautious: the EPA's reference dose is 1/15th the lowest exposure level associated with mild, subclinical effects in epidemiological studies.
  • Finally, the EPA produces no evidence of mercury exposure at these levels having any effect on unborn children.
  • EPA estimates that each year 240,000 pregnant women in subsistence fishing households eat enough self-caught fish to endanger their children's cognitive or neurological health, yet the agency has yet to identify a single woman who fits this description.

Nevertheless, the EPA boasts $80 billion in annual net benefits.  However, this projection relies upon supposed side-benefits of reductions in fine particulate matter in the air (not mercury).  The regulation would seek to reduce this particulate matter below previously regulated levels and far below levels commonly recognized as safe.  The dubiousness of the justification for this rule is especially important because of the harms it will certainly have for consumers.

  • Many potential investors are now wary of new coal-fired power plants for fear that they will be found not to be in compliance with the new rules.
  • Not only will the rule prevent the creation of new electricity-generating facilities, but also will result in the retirement of 10,000 megawatts of electricity production.
  • The Federal Energy Regulatory Commission projects that 81,000 megawatts -- almost eight times the EPA's estimate -- are likely to retire.

Source: Marlo Lewis, William Yeatman and David Bier, "All Pain and No Gain," Competitive Enterprise Institute, June 8, 2012.

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