Rushing to Regulate

Mark Green
Posted May 21, 2014

Eye-catching headline this week in The Hill: “EPA races to finish Obama rules.” First reaction: Haste makes waste – and when talking about regulation that could affect America’s dynamic, game-changing energy revolution, the goal should be sound policy, not speed. The Hill:

Officials at the Environmental Protection Agency (EPA) are racing to churn out new regulations before the clock runs out on President Obama’s term. … Lawmakers from both sides of the aisle say they are concerned by the broad sweep of the EPA’s regulatory agenda, even though the agency says it is merely enacting the laws that Congress has passed. “I recognize that EPA has to do this, but I think EPA is sometimes stretching the limit too far in how aggressive they’ve been moving,” said Sen. Mark Begich (D-Alaska), who has distanced himself from the president’s environmental and energy policies as he runs for reelection in his energy-rich state.

The Hill reports that among a number of issues EPA is looking at proposals on hydraulic fracturing, which even former Administrator Lisa Jackson said was being well-regulated by the states that have “key capacity and regulatory authority relevant to unconventional oil and natural gas extraction,” according to current Administrator Gina McCarthy.

Last week EPA unveiled a proposed new rule on refinery air emissions. Under the rule EPA would require additional emission controls for storage tanks, flaring and coking units at refineries, while necessitating the monitoring of air concentrations at refinery fencelines. Charles Drevna of the American Fuel & Petrochemicals Manufacturers:

“The risk concerns of this rule do not justify additional controls that EPA is proposing. … We continue to be supportive of rules that are cost-effective and provide substantial health benefits; unfortunately this rule does not accomplish either of these goals.”

Howard Feldman, API’s director of science and regulatory affairs, says the latest rule proposal adds to a list of new regulations affecting refineries that come with enormous costs while offering dubious environmental benefit. Feldman:

"This rule is intended to evaluate what risk, if any, is posed to the public from refinery emissions. But EPA has already concluded the risks associated with refinery emissions are low, and the public is protected with an ample margin of safety. America's refineries have been reducing emissions for decades and will continue reducing emissions under existing regulations while making the cleanest fuels and helping to improve air quality."

The objective should be developing regulation based on sound science and that passes common-sense analysis measuring the cost of a regulation to an industry or business against the actual public benefit. EPA’s new Tier 3 fuel standard is a good example of a regulation that could hit consumers and the economy while bringing, at best, negligible health benefit.

As noted in this post, the new refinery rule proposal also comes just as the U.S. Energy Information Administration reports that America’s energy revolution is making refiners here more competitive with refineries around the world. Rising domestic oil and natural gas production is lowering costs for powering refineries (mostly natural gas), as well as the cost of the crude oil used to make finished products. As a result, those finished products are more market competitive – boosting exports and lowering the U.S. trade deficit while supporting good-paying jobs and creating momentum for business expansion and job creation.

The last thing policymakers should do is to put self-imposed hurdles in the way of that kind of positive economic momentum – which is what EPA’s refinery proposal threatens to do.