U.S. business group challenges EPA mercury rule

Reuters News
Posted: Aug 06, 2012 5:25 PM
U.S. business group challenges EPA mercury rule

WASHINGTON (Reuters) - The biggest U.S. business lobby group said Monday it has petitioned a federal appeals court to invalidate environmental regulations it claims will lead to sweeping electricity blackouts by forcing coal-fired power plants to close.

The U.S. Chamber of Commerce said it filed a friend-of-the-court brief with a broader business coalition in the U.S. Court of Appeals for the D.C. Circuit on Friday to challenge the Environmental Protection Agency‘s "Utility MACT" rule, which aims to reduce emissions of mercury and other hazardous air pollutants from coal-fired power plants.

The federal agency's Mercury Air Toxics Standards are scheduled to take effect in 2015.

The EPA's opponents said the rule will result in the shutdown, modification and replacement of numerous power plants and will require new gas pipeline and electric transmission infrastructure to be built.

"At a price tag of at least $10 billion, EPA's Utility MACT rule is one of the most expensive regulations ever for power plants, and has already resulted in the announced shutdown of numerous coal-fired power plants in Maryland, Pennsylvania, Ohio and West Virginia, with more sure to come," the chamber's lawyers said.

The chamber said the EPA has ignored requests by utilities to give them more time to comply with the mercury emission curbs.

It also said the EPA violated the Clean Air Act by using a flawed methodology to set emissions standards that are unachievable for coal plants because the necessary pollution control technologies don't exist.

"EPA's current floor-setting approach has led to circumstances in which virtually all existing facilities in certain source categories will have to shut down, and new sources will likely never be built because of the inability to achieve the standards," the chamber said in its brief.

The utility MACT rule is one of several EPA rules being challenged in courts by utilities.

The power industry is awaiting a ruling in the coming days by the appeals court on the EPA's proposed cross-state air pollution act, which targets sulfur dioxide and nitrogen oxide emissions in the power sector.

Energy analysts at Eurasia Group, an independent political risk consultancy, said in a research note that while the utility MACT will continue to face legal challenges, its largest challenge would come if presumptive Republican presidential nominee Mitt Romney wins the November elections.

"Republican contender Mitt Romney has pointed to the utility MACT rule as one of his main objectives once in office, and is expected to work with Congress repeal the rule," the research note said.

The analysts estimated that as much as 34 gigawatts of coal-fired capacity would close if the utility MACT moves forward. That would be nearly 10 percent of current coal generating capacity.

Vickie Patton, general counsel to the Environmental Defense Fund, said the chamber was resorting to scare tactics and blocking progress on a law she said would create new jobs and protect public health.

"While many of the nation's power companies are charting a path to clean air for our families and our communities, the U.S. Chamber of Commerce is using the same old scare tactics to delay, deny and obstruct," she told Reuters.

"Americans know better. We know that removing toxic mercury, arsenic and acid gases from our children's lives will mean a stronger America."

(Reporting By Valerie Volcovici; Editing by Kenneth Barry)