Climate:

NAM's Eisenberg discusses economics of pending new source emissions rule

How could U.S. EPA's reproposal of its new source performance standards for greenhouse gas emissions from new power plants affect jobs and the economy? During today's OnPoint, Ross Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers, explains why he believes, despite job growth in other energy sectors, the decline of coal could have net negative impacts on the economy.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Ross Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers. Ross, thank you for joining me.

Ross Eisenberg: Thank you so much for having me.

Monica Trauzzi: Ross, EPA is expected to release its re-proposal of greenhouse gas emissions rules for new sources this week. There are strong suggestions that the rule will still require new coal plants to use CCS. Ahead of this industry really seems to be making sort of a pre-emptive strike on what these expectations are. These rules have been debated. They've been in the works for years. But is sort of panic setting in for industry? What's going on?

Ross Eisenberg: I think you're seeing the realization from industry, from manufacturers, from my members, that the certainty we're getting on this regulation isn't necessarily certainty that we're going to be comfortable with. It poses a significant risk on manufacturers. Really a double dip on manufacturers when you think about it. We're downstream energy users. So the change that they're going to be making to fuel choices in the electric utility sector will obviously affect us in terms of reliability and cost and things like that. And then at the same time we're up next. Many of our industries will have an NSPS that is based off of this, the decisions that EPA's making here, the things like requiring CCS when it's really not commercially available and not deployable, certainly not achievable by any metric, will affect manufacturers down the line. We're very, very concerned.

Monica Trauzzi: Your point on CCS is debatable. I mean, Energy Secretary Moniz recently testified in the house that components of CCS are ready and in use. EPA Administrator McCarthy in the same hearing said CCS is available and feasible. What is the issue, then, in terms of implementation?

Ross Eisenberg: It's a legitimate debate about whether or not it's available and feasible. At this point it is not. We do not have a commercial scale electric utility particularly the size we're gonna need for a new coal-fired power plant or a new anything-fired power plant to deploy this. It's just not out there right now. Kemper is a great plant. It's a project that needs to happen. We strongly support it. But there are unique circumstances to Kemper that may not be replicable elsewhere. Again, we're very concerned that essentially the agency is picking a technology based on what at this point is hope.

Monica Trauzzi: But the agency has a responsibility, and the authority to regulate these emissions. And by many estimates, coal emissions account for about 30 percent of the US's overall emissions. So shouldn't these emissions be regulated in as stringent as a way as possible as the technology allows?

Ross Eisenberg: Well, certainly for manufacturers we care about regulating. We care about doing something about climate change. We care about greenhouse gas emissions reductions. We are committed to that. There are a lot of ways to do that. And using the Clean Air Act to get there isn't necessarily something that we view as completely necessary. It is where we are. We recognize that, that EPA is doing this. We still feel that the Clean Air Act isn't the right mechanism for it. John Dingell said that when he wrote it, he wasn't considering this. We're seeing now why it doesn't really work.

Monica Trauzzi: So something that we hear a lot about are job losses that may come as a result of these regulations. In your own report the National Association of Manufacturers projected 1 million more manufacturing jobs in the US by 2025 as a result of ramped up natural gas production. As coal plants go off line, aren't we going more towards natural gas? So will we actually even see a net negative impact on the economy as a result of these regulations?

Ross Eisenberg: Well that, you make a very, very good point in the natural gas boom. And I think it's illustrative of a different story here. Where we are going with this is down a path, with this regulation, is down a path where essentially EPA is on its way to phasing fossil fuels out of the economy, because the technologies aren't there. So that million manufacturing jobs that we're predicting, well, they could go up in smoke if we wind up going down the path that we're going.

Monica Trauzzi: Is it clear to you whether there is a plan in place, whether the government has a plan in place to deal with the job losses that may occur as a result of coal declining?

Ross Eisenberg: We have seen very little if anything out of the EPA to take that into consideration. And again, in this regulation they are supposed to consider costs. So we didn't see it a year ago. We really hope we'll see it now.

Monica Trauzzi: So how are you advising your member companies? What are you advising them to do once this rule is actually re-proposed on Friday?

Ross Eisenberg: We're telling them to get engaged. I mean, you know, at the end of the day, like I said, this regulation is on the table, and it is time for us to engage both with the agency and to their credit, the agency has had an open door with us on this issue. They are willing to listen to us. They are continually willing to talk with the NAM and our members, and we're very pleased with that. But at the end of the day, we need to make our point, and we need to help the agency understand, educate them as to what in these rules will work, what in these rules won't work. And get some of that fixed. At the same time we are at the point where congress really needs to step in here. We need our legislators to take control of the situation. The Clean Air Act is at a place, it's being used in a way that it's really not supposed to be used. Congress needs to draw some lines around what EPA can and cannot do within the scope of this regulation.

Monica Trauzzi: So if the suggestions are true and coal plants will require CCS technology under this rule, will the NAM then pursue litigation?

Ross Eisenberg: It's really too early to say. Until we see that rule, and until we really fully evaluate the different components of it, then we really don't know. Certainly if we wound up with something that looked a lot like the proposal from 2012, I think we would've been moved at some point to get to litigation, yes.

Monica Trauzzi: How do the details of this rule sort of foreshadow what we might see in the existing rule standard?

Ross Eisenberg: Well, that's an excellent question. Certainly there are components that the Clean Air Act requires that we're very worried about applied to manufacturers later. Using CCS as a good example, this in and of itself is a technology that is a stretch technology. It's something that EPA has to assume will exist commercially sometime in the future. If that's the precedent that we're using, then it may not be CCS, but everybody has a technology like that for their sector, something that really probably doesn't make a lot of economic sense maybe isn't there technologically yet. Is EPA going to require that? Decisions like that will cascade to other manufacturers. Are we going to have to start worrying about fuel choices? EPA is now regulating the fuel choices that we make, the design choices that we make. It's a much different story than anything EPA has ever really done on any other type of emission that they've controlled here.

Monica Trauzzi: Well, it's also an unprecedented issue that they're facing, as well.

Ross Eisenberg: Without a doubt, without a doubt. Completely unprecedented.

Monica Trauzzi: All right. We're going to end it right there. Thank you for coming on the show.

Ross Eisenberg: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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