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High Costs Don’t Justify New Power Plant Mercury Cuts, EPA Says (2)

Dec. 28, 2018, 3:37 PMUpdated: Dec. 28, 2018, 8:30 PM

The cost of forcing power plants to further reduce mercury and other toxic air pollutants they emit would far outweigh any additional health benefits, the EPA said as part of a proposal released Dec. 28.

The Environmental Protection Agency’s proposal would leave in place the mercury and air toxics standards, or MATS, set by the Obama administration in 2012. Along with the agency’s re-examined cost and benefit analysis, required by the U.S. Supreme Court in 2016, the EPA also completed the periodic review of the toxic pollution standards.

Using that re-examined economic analysis—which slashes the health benefits of reducing pollutants such as airborne particles that aren’t regulated by the toxic pollution rule—the EPA found no justification for further reducing mercury and other toxic pollutants.

The latest EPA proposal estimates the power industry spent between $7.4 billion and $9.6 billion to comply, but the direct benefits of reducing mercury only amounted to between $4 million and $6 million.

The EPA said its analysis found that no new advances in pollution controls justify the cost of further reducing mercury and other toxic pollutants.

‘Ample Margin of Safety’

The agency said residual risks due to emissions of air toxics were acceptable “and that the current standards provide an ample margin of safety to protect public health.”

Based on this review and related analyses, the EPA said Dec. 28: “We are proposing that no revisions to MATS are warranted.”

The agency’s own estimates show that mercury pollution from power plants fell 81.7 percent between 2011 and 2017 to 10,517 pounds, mainly due to the limits imposed in 2012.

Power plants’ mercury emissions end up back on land and water where they are converted to methylmercury, the most toxic form of mercury. It reaches concentrations in fish that are 10 times to 100 million times greater than concentrations in water, scientists say.

People are exposed to the neurotoxic metal by eating fish and shellfish.

The EPA plans to seek comment on its finding that the electric utility sector shouldn’t be required to make further cuts to mercury emissions. It also plans to seek comment on whether to establish a subcategory of separate limits for toxic acid gases given off by existing power plants that burn coal slag from eastern coal mines.

Revoke the Rule?

Even the power industry, which claims it has reduced mercury emissions by 90 percent since the standards took effect, urged the agency in a July letter to leave the rules in place since it already has spent billions to comply.

Though the agency is proposing to leave the rule in place, it is taking comment on the option of repealing it, claiming that the direct benefits of reducing mercury aren’t justified by the high costs of meeting the 2012 limits. That is an option that has the power industry—as represented by the Edison Electric Institute—and public health scientists, Obama EPA officials, and environmental engineers crying foul.

The scientific evidence is overwhelming that the direct benefits of reducing mercury far outweigh the costs of making cuts in this neurotoxic metal, Charles Driscoll, a professor in Syracuse University’s Department of Civil and Environmental Engineering, told Bloomberg Environment.

And a medical group opposes watering down the standards as well.

“Coal-fired and oil-fired power plants are among the biggest sources of mercury and other toxic air pollutants posing a grave risk to human health. Physicians for Social Responsibility joins other trusted and respected public health voices in urging the EPA to strengthen, not weaken, these lifesaving standards for the sake of the health and safety of American families around the country,” the group said.

Sunk Costs

“The utility industry by and large sees no value in this exercise because they already spent the money to install the technology and are recovering the cost of that installation through rates,” Crowell & Moring LLP partner Thomas Lorenzen, told Bloomberg Environment.

Engaging in this analysis raises additional risk and prolongs uncertainty for the power industry, said Lorenzen. He said the EPA was “speaking from both sides of its mouth” by proposing to retain and repeal the standards.

“From the perspective of my clients here, the question is: Why undertake this exercise when it puts at risk the standards the power industry has successfully implemented?” Lorenzen, who is based in Washington, said.

The option to repeal the 2012 standards was pushed by Murray Energy Corp., the nation’s largest underground coal mining company, that claimed the stringent limits hurt the domestic coal market.

“Given that the damage done to the United States coal and coal-fired electric power generation industries has largely already occurred, and that the utilities have already complied with those standards, we believe that retaining the illegally implemented 2012 standards is troubling, but less important than the fact that the MATS rule has once again been exposed for what it was: an illegal action by the Obama-era EPA,” Jason Witt, Murray Energy’s assistant general counsel, told Bloomberg Environment in a Dec. 28 email.

A subset of power companies that generate energy from decades-old coal waste piles—especially in Pennsylvania—also had urged the EPA to reconsider the 2012 limits, saying they had trouble meeting the limits for acid gases, which the EPA says it is now prepared to reconsider.

Cost-Benefit Revisions

Former EPA Administrator Scott Pruitt, as well as his successor, acting Administrator Andrew Wheeler, objected to the Obama administration’s cost-benefit analysis.

They said it unnecessarily justified the 2012 limits by relying heavily on “co-benefits” gleaned from reducing fine airborne particle pollution, which MATS didn’t directly target but would be reduced by the controls power plants were required to install.

The agency has the U.S. Court of Appeals for the District of Columbia Circuit’s 2008 decision in New Jersey v. EPA to back its preferred option to maintain the 2012 limits, even as it alters the legal underpinning, Jeff Holmstead, who was EPA’s air chief under Bush and now is a partner with Bracewell LLP’s Washington office, told Bloomberg Environment.

That decision scuttled the George W. Bush administration’s attempt to replace toxic air pollution standards for power plants with an emissions trading program.

Janet McCabe, who headed the EPA air and radiation office under President Barack Obama, said the proposal sets “a very troubling precedent for how the EPA evaluates the impact of policy on public health,” claiming the agency is going against its own decades-old practice by deciding which public benefits should matter.

Legal Exposure

The EPA is opening itself up to litigation by merely relying on cost-benefit analysis to justify its decision to retain 2012 limits, Joe Goffman, executive director of Harvard Law School’s environmental and energy program, told Bloomberg Environment.

Cost is simply one factor that agencies consider in determining whether it is appropriate and necessary to regulate mercury and other toxic air pollutants, said Lorenzen, who at the Justice Department supervised the defense of the Bush-era Clean Air Mercury Rule. “I think that creates legal vulnerability for EPA’s proposed reversal of the appropriate and necessary finding that is based on cost above all else.”

Once challenges are filed, federal judges will be asked to resolve what role, if any, cost-benefit analysis plays in regulating power plant hazardous air pollutant emissions under the Clean Air Act, said Goffman, a former EPA counsel who was involved in defending the 2012 limits before the Supreme Court.

He said the judges also will be asked to address the appropriate role of co-benefits in this particular analysis.

“I believe [the Trump administration] misstated what the Supreme Court directed the EPA to do,” said Goffman. “They state that the court directed the EPA to compare costs and benefits. It did not.”

—With assistance from Jennifer A. Dlouhy (Bloomberg).

(Updated with comment from Murray Energy Corp.)

To contact the reporter on this story: Amena H. Saiyid in Washington at

To contact the editors responsible for this story: Gregory Henderson at; Chuck McCutcheon at; Steven Gibb at