Critics of President Barack Obama’s landmark regulation to reduce carbon dioxide emissions almost always highlight a series of flawed studies (which are often paid for by utility or fossil fuel interests) to attack the Clean Power Plan.
Many of these flawed, industry-backed reports analyzed the EPA’s draft rules or a broad idea of regulating existing emissions, instead of the EPA’s final (and official) draft regulations. Some studies admit they did not study the actual EPA regulations, other studies inflate the costs of regulation, and some ignore the health and/or the economic benefits associated with reducing the level of pollution emissions. Furthermore, these error-filled reports are already outdated since the final version of the Clean Power Plan changes how state targets are calculated, eliminates assumptions related to energy efficiency, pushes back the interim compliance date to 2022, provides incentives for renewable energy deployment, just to name a few of the changes from the draft.
This Energy & Policy Institute briefing outlines the studies frequently used by pundits and special interests to attack the Clean Power Plan, details who has been paid or consulted in the production of these reports, and exposes the front groups involved in circulating the following reports:
- NERA Economic Consulting, “Potential Energy Impacts of the EPA Proposed Clean Power Plan”
- Beacon Hill Institute, “The Economic Effects of the New EPA Rules on the United States”
- Energy Ventures Analysis for Peabody Energy, “Energy Market Impacts of Recent Federal Regulations on the Electric Power Sector.”
- Institute for Energy Research, “Impact of EPA’s Regulatory Assault on Power Plants.”
- Energy Ventures Analysis & North American Electric Reliability Corporation, “Potential Reliability Impacts of EPA’s Proposed Clean Power Plan.”
- Management Information Services, Inc. & National Black Chamber of Commerce, “Potential Impact of Proposed EPA Regulations on Low Income Groups and Minorities.”
- Laurence Tribe, “March 17, 2015 testimony presented to the U.S. House of Representatives Committee on Energy and Commerce Subcommittee on Energy and Power.”
- Peter Glaser, “EPA’s Section 111(d) Carbon Rule: What if States Just Said No?”
The Reports, the Flaws and the Funders
Over the past few weeks, organizations and reporters have cited the following studies or testimonies to either attack the Clean Power Plan or “balance-out” an article.
NERA Economic Consulting, “Potential Energy Impacts of the EPA Proposed Clean Power Plan” [Link]
- The benefits of the Clean Power Plan are still nearly twice NERA’s estimated costs, despite inflating the cost assumptions.
- Ignores the avoided health and climate change benefits from reducing carbon pollution.
- Removes two key compliance options in one case (clean energy and energy efficiency), and inflates the cost of energy efficiency solutions.
Funded by [Source]:
- American Coalition for Clean Coal Electricity
- American Fuel & Petrochemical Manufacturers
- Association of American Railroads
- American Farm Bureau Federation
- Electric Reliability Coordinating Council
- Consumer Energy Alliance
- National Mining Association
Note: See below for the companies in these trade associations
Beacon Hill Institute, “The Economic Effects of the New EPA Rules on the United States” [Link]
- Beacon Hill Institute’s economic analysis of the EPA Clean Power Plan does not actually examine EPA’s draft plan; and did not deny that they fail to address the draft CPP itself.
- Inflates the cost of the new rules for existing power plants by a factor of two, and minimizes the regulation’s benefits by 20 times when compared with the EPA’s Regulatory Impact Analysis.
- BHI artificially inflates the costs of the Clean Power Plan by excluding from their analysis cost-effective low carbon technologies such as renewable energy and energy efficiency that are allowed for compliance
- A grant passed through a corporate-linked front group run by Richard Berman of Berman & Associates.
- Berman is a PR executive who recently boasted at an oil and gas conference that his front groups are intentionally set up to provide “total anonymity” to corporate funders.
- BHI’s reports mirror ALEC’s model legislation attacking the Clean Power Plan, which was discussed at fossil fuel-funded events attended by Berman’s partners and representatives from coal, oil, gas, and utility companies with a financial interest in blocking the EPA’s new regulations.
- As a result, we don’t know what corporations or corporate trade associations are ultimately behind this concerted attack on the Clean Power Plan.
Energy Ventures Analysis for Peabody Energy, “Energy Market Impacts of Recent Federal Regulations on the Electric Power Sector.” [Link]
- EVA’s did not consider a business-as-usual case, so results did not account for a base case of shifting energy costs and other economic factors.
- EVA expects large shifts from coal to natural gas and expects natural gas to be expensive, resulting in larger costs for compliance.
- Report funded by Peabody Energy
- The principals of Energy Ventures Analysis, the firm hired by Peabody to perform the study, have ownership interest in another company, Clearstack, LLC, which is involved in the coal and natural gas industries.
Institute for Energy Research, “Impact of EPA’s Regulatory Assault on Power Plants.” [Link]
- The Institute for Energy Research concludes that more than 72 gigawatts (GW) of electricity generating capacity will come offline and because of the coal plants closing, consumers will be forced to pay for the “construction of higher-cost renewable generating technologies and/or natural gas units that will need massive infrastructure improvements to meet the higher demand.”
- Synapse Energy Economics, however, finds that when compared to a scenario where no renewable energy or efficiency policies are adopted in states (continuing coal plants online), a “clean energy future” saves households $35 per month. The clean energy future scenario Synapse uses is one that obtains a 58% emission reduction compared to the 30% in the proposed Clean Power Plan (now a 32% in the final version).
- Institute for Energy Research is a fossil fuel-funded front group, which has received money from ExxonMobil, Koch Industries, and the Koch-backed DonorsTrust and Claude R. Lambe Charitable Foundation.
- IER is run by Thomas Pyle, a former lobbyist for Koch Industries. Pyle joined a press call with six governors who “threaten to defy” the Clean Power Plan, and has urged other governors to do the same.
- IER was founded from a nonprofit registered by Charles Koch and Robert Bradley.
Energy Ventures Analysis & North American Electric Reliability Corporation, “Potential Reliability Impacts of EPA’s Proposed Clean Power Plan.” [Link]
- The NERC report exaggerated any reliability risks to the grid, leading a critique to conclude “the Clean Power Plan is unlikely to materially affect reliability.”
- The NERC report ignores additional tools that could counteract issues raised about reliability by partially or fully mitigating those potential problems.
- Energy Ventures Analysis conducted NERC’s modeled scenarios.
- Energy Ventures Analysis was hired by Peabody Energy to critique the Clean Power Plan and have ownership interest in another company, Clearstack, LLC, which is involved in the coal and natural gas industries.
Management Information Services, Inc. & National Black Chamber of Commerce, “Potential Impact of Proposed EPA Regulations on Low Income Groups and Minorities.” [Link]
- The NBCC study relied on studies either written before the EPA published the final draft of the Clean Power Plan or backed by fossil fuel interests opposed to the regulations.
- Politifact studied one of the reports cited by NBCC and labeled it “false.” Another report cited was studied by the Washington Post, which labeled it “Misleading.”
- Roger Bezdek, president of Management Information Services, Inc, prepared the report. Bezdek prepared a 2014 report titled, “The Social Costs of Carbon? No, The Social Benefits of Carbon.” That report was prepared for the American Coalition for Clean Coal Electricity.
- Bezdek also presented at the American Legislative Exchange Council at the end of 2014 at a session titled, “The Greening of Planet Earth.”
- Bezdek published a 2010 report for the U.S. Chamber of Commerce entitled, “Potential Harm of EPA Greenhouse Gas Control Regulations to Minorities, Low-Income Persons, the Elderly, and Those Living on Fixed Incomes,” which was used by the American Legislative Exchange Council for the organization’s GHG Talking Points document and their “EPA’s Regulatory Train Wreck: Strategies for State Legislators” report.
Laurence Tribe’s March 17, 2015 testimony presented to the U.S. House of Representatives Committee on Energy and Commerce Subcommittee on Energy and Power. [Link]
- Laurence Tribe’s testimony criticizing the Clean Power Plan rests on two platforms: EPA exceeds statutory and legal authority; the Clean Power Plan will raise costs and prove to be “deeply unpopular.”
- First, Tribe’s legal analysis of the Clean Power Plan has yet to be determined correct or incorrect. The regulations will be litigated for years and likely get decided by the Supreme Court. However, many lawyers with equal expertise have countered Tribe’s assessment. Jody Freeman and Richard Lazarus write, “The constitutional arguments are wholly without merit… The Supreme Court has repeatedly made clear that the Fifth Amendment’s Takings Clause does not shield business investments from future regulation, even when that regulation cuts sharply into their profits… We believe EPA has a strong legal basis for its power plant rule, and a good chance of winning the argument in court.”
- Second, Tribe’s statement that electricity prices and energy bills will increase under the plan echoes the industry-funded reports discussed as flawed in this briefing.
- Bonus: Tribe testifies that the final Clean Power Plan will be “deeply unpopular.” A Morning Consultant poll conducted between August 7 and 9 finds 63% of registered voters say they support the Clean Power Plan. And while less than half of Republicans, 46%, say they back the rule, an overwhelming majority of Democrats, 78%, are in favor of it. A majority of independents, 61%, also support the rule.
- Tribe was retained by Peabody Energy to provide analysis of EPA’s Clean Power Plan.
Peter Glaser, “EPA’s Section 111(d) Carbon Rule: What if States Just Said No?” [Link]
- Peter Glaser seems to have originated the strategy for conservative and coal-dependent states to ignore the Clean Power Plan and not submit a State Implementation Plan (SIP).
- Senator Mitch McConnell furthered this strategy in a March 3 op-ed. He writes, “So what are governors and state officials who value the middle class to do? Here’s my advice: Don’t be complicit in the administration’s attack on the middle class. Think twice before submitting a state plan… Refusing to go along at this time with such an extreme proposed regulation would give the courts time to figure out if it is even legal, and it would give Congress more time to fight back.”
- A history of the Clean Air Act shows that when states fail to implement an adequate plan, the EPA proposes a federal implementation plan as a default, which it will finalize by summer 2016. The agency will go through a comment period for its two proposed strategies: either assign a cap on emissions and allow for the trading of pollution credits or require a state to meet an average emissions rate across its electricity fleet. Legal experts have said aiming the rule’s requirements at generators is more legally defensible, because the power units themselves are regulated under the Clean Air Act.
- Glaser is a partner at Troutman Sanders and recently represented the National Mining Association in Michigan, et al., v. EPA (2015).