Federal carbon cutting policy could be costly

SALEM, Ohio — Farm and energy groups have about a year’s time to weigh in on President Barack Obama’s Clean Power Plan proposal, which would require power plants to reduce carbon emissions by 30 percent before 2030.

The plan, released June 2 by the U.S. Environmental Protection Agency, provides for a 120-day public comment period once published in the Federal Register, in addition to four public hearings to be held the last week of July.

Weighing in

Many farm and energy groups, however, are already voicing opinions on how the new mandate might affect future costs for energy and energy-sector employment.

The American Farm Bureau Federation, which rallied against cap and trade policies in 2008 and 2009 when the issue was before Congress, warned about similar consequences.

“U.S. agriculture will pay more for energy and fertilizer under this plan, but the harm won’t stop there,” American Farm Bureau Federation President Bob Stallman said in a statement. “Effects will especially hit home in rural America.”

Perceived benefits

The plan would require a 30 percent reduction in carbon emissions in the power sector, below 2005 levels. It also would cut particle pollution, nitrogen oxides and sulfur dioxide by more than 25 percent, according to the U.S. EPA.

The EPA also predicts a major health benefit — avoiding up to 6,600 premature deaths, up to 150,000 asthma attacks in children, and eliminating up to 490,000 missed work or school days.

The EPA says its plan would also shrink electricity bills roughly 8 percent by increasing energy efficiency and reducing demand.

Energy sector

But the energy industry isn’t so sure — especially as they face the possibility of being forced to shut down existing plants.
The National Rural Electric Cooperative Association said it’s disappointed by the EPA’s “outside the fence approach” to settling emission reductions for the states.

“America’s electric cooperatives are naturally concerned that these regulations will increase electricity prices and force power plant shutdowns, thereby harming the economy and jobs of hard-working Americans,” said National Rural Electric Cooperative CEO Jo Ann Emerson, in a statement.

However, Emerson said there are still many details to work through — and additional details that will be outlined in yet-to-be-developed state plans.

Emerson said co-ops need independence and flexibility to make decisions that work for the communities they serve, taking into account a “balanced consideration” of affordability, reliability and environmental responsibility.

The Ohio Coal Association criticized the administration for “going around the House and Senate” on policies that Congress already failed.

“The EPA’s policies have resulted in the elimination of low-cost and reliable sources of electricity, while passing the cost of their radical policies on to hard-working middle income families, both in Ohio and across the nation,” said Christian R. Palich, government affairs manager for the Ohio Coal Association.

Supporters

The president’s action drew support from some environmental organizations.

The Sierra Club, which bills itself as the nation’s largest and most influential grassroots environmental organization, said the proposal “will help clean up the industry that creates the lion’s share of carbon pollution in our country.”

Executive Director Michael Brune said “climate disruption is the greatest challenge facing our generation. Until now, power plants have been allowed to dump unlimited amounts of carbon pollution into our air, driving dangerous climate disruption, and fueling severe drought, wildfires, heat waves and superstorms.”

Political response

House Speaker John Boehner, R-Ohio, called the proposals a tax on energy, and a job killer.

“The president’s plan is nuts; there’s really no more succinct way to describe it,” he said in a statement.

Compared to earlier versions of cap and trade, Boehner said the current proposal “is actually worse than the scheme

Americans rejected four years ago,” partly because it’s being done outside of Congressional approval.

National Farmers Union President Roger Johnson commended the administration for its “leadership on climate change mitigation.”

However, Johnson also encouraged the administration to seek out “voluntary incentives for sequestering carbon.”

Co-ops, he said, provide power to 42 million Americans and account for 12 percent of total U.S. electricity sales.

He urged the EPA to “recognize that rural electric cooperatives serve our nation’s farmers and ranchers and are a significant source of rural employment,” and that “any regulatory action must consider the impact on rural electric and the communities they serve.”

Economic outcome

The economic effect of the new mandates remains a contentious issue.

The U.S. Chamber of Commerce produced a report that finds Obama’s plan will result in a $51 billion reduction in U.S.

GDP every year through 2030. The report also predicts 224,000 fewer U.S. jobs every year.

The chamber says consumers will pay $289 billion more for electricity through 2030, and the total disposable income for U.S. households will go down $586 billion through 2030.

Other coal states

West Virginia Gov. Earl Tomblin, a Democrat, said if the rules are put into place, his state’s manufacturers may be forced to look overseas for more reasonable energy costs, “taking good paying jobs with them and leaving hard-working West Virginians without jobs to support their families.”

Tomblin said the new rules also fail to account for the good work power companies are already doing to cut emissions.

“Based on our initial review of these rules, not a single West Virginia power plant would be in compliance if the rules were in effect today – despite the billions of dollars companies have already spent to modernize their facilities and comply with current rules and regulations to make our environment cleaner,” he said in a released statement.

“The rules fail to allow for technologies, like carbon capture, to become commercially viable and fail to offer assistance and incentives to further develop what could be a critical component of future power generation,” he continued, predicting electricity rates will skyrocket.