What’s a Boiler MACT? MACT stands for the Maximum Achievable Control Technology, and is the focus of recently revised rules by the Environmental Protection Agency (EPA). To comply with rules justified by the President’s 2011 Executive Order 13563, industrial operations that generate their own power with boilers must further reduce emissions with questionable benefit through costly retrofitting processes in order to be legally operational. According to the National Association of Manufacturers (NAM), EPA estimates the compliance cost for American Manufacturers will initially be nearly $5 Billion, with $1.5 Billion annually, further hampering wage and job growth.
For industrial users of electricity, Boiler MACT is fast becoming one of their largest obstacles to powering their own factories. Depending on the specific product requirements, industry requires large quantities of electricity to operate. Industries such as the paper industry have long used boilers to meet this demand, and utilized waste products or coal to power steam turbines to generate their electricity. This used to enable them to produce electricity at roughly half the market rate from the power grid.
Because of the costly nature of the rules that would force businesses to purchase new generators or invest large amounts of money to keep existing ones, thousands of jobs would be lost to meet the compliance costs. Why are we continuing to ship jobs overseas? The rules are designed to further reduce exposure to mercury and particulate matter, but it is questionable whether it will achieve the health benefits the EPA projects.
For this reason, U.S. Rep. Bruce Poliquin, (R-Maine), won support for an amendment to H.R. 2822, which would defund and delay enforcement of these rules until late next fiscal year.
Rep. Poliquin said in a statement, “Overregulation and poor government policies have led to higher energy prices for Maine families and businesses. Too many of our paper mills have closed because the high cost of energy in our State has made it hard to compete. With these closures came thousands of jobs lost and several closed businesses. This is simply unacceptable.
“That is why I’ve stood up to the EPA and the Obama Administration and took action to delay the Boiler MACT rule from being implemented to protect jobs. This proposal is devastating to the families, businesses and communities in our State, and it’s critical that Congress acts to stop it.”
In the forest products industry alone, these and other regulations caused three Maine paper mills to close already. Other damage is being felt in similar mills in Wisconsin. “For some plants, the capital requirements (of the EPA rule) will deplete multiple years of discretionary capital and include a continued operating cost that often equates to 5 to 10 percent of payroll,” said Expera spokesperson Addie Teeters in 2014. Expera has four paper facilities in Wisconsin, and one in Maine.
These costs impact wage growth in an industry already feeling the impact of electronic modernization, which is decreasing the demand for paper.
Public outcry against the rules a few years ago prompted the EPA to issue a “clarification”. In a statement recognizing the EPA’s modifications, American Forest & Paper Association (AF&PA) President and CEO Donna Harman damned the EPA with faint praise, saying, “The agency has been responsive to many of our implementation concerns as evidenced in this latest rule. However, policy makers must not lose sight of the fact that this rule is only one of a dozen or more potentially affecting our industry to the tune of $10 billion over the next decade.”
On Nov. 5 EPA concluded it’s “reconsideration” phase, leaving implementation deadline to begin in Jan. 2016. If there are operations that have failed to upgrade to new or retrofitted boilers, fines are sure to follow in the forest products industry, as well as many others across the country. As the House has acted, the Senate Appropriations Subcommittee on Interior, Environment and Governmental and Related Agencies chaired by Sen. Lisa Murkowski(R-Alaska) has reportedly incorporated a delay of implementation into the coming omnibus bill for FY2016.
At the very least, with thirteen long months remaining of the Obama Administration, it is a matter of economic urgency that appropriators the Boiler MACT defund be included in the upcoming omnibus spending bill for the remainder of Fiscal Year 2016. The current Administration may not care about the jobs impacted outside of the beltway, but it is important to buy time for a future administration that might.
If there is to be a renaissance of American manufacturing, Congress must act to run out the clock on this administration, and enable the next president to repair the damage done in its wake.
This is a guest post by Dustin Howard is a contributing editor at Americans for Limited Government.