Economy

EPA Regulations Blocked by Supreme Court

June 30, 2015

The Supreme Court blocked new EPA regulation on pollutants from coal-fired power plants in a 5-4 vote on Monday.

The ruling will prevent the EPA from imposing new rules designed to reduce mercury and other toxic pollutants from power plants without first undertaking a cost-benefit analysis. Industries and 20 states complained that the EPA disregarded rules in the Clean Air Act requiring regulation to be “appropriate and necessary,” by setting standards in which benefits failed to outweigh costs.

Justice Antonin Scalia, in his comments for the majority, wrote: “It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. Statutory context supports this reading.” He added, “No regulation is ‘appropriate’ if it does significantly more harm than good.”

MetalMiner wrote that the Michigan et al. v. Environmental Protection Agency et al. decision “looks to set a major precedent for agencies to consider compliance costs before laying down rules and regulations.”

“That adds fuel to future courtroom fire for the EPA, as news came down late last week that the House voted for a measure to block EPA’s Clean Power Plan, for which the final rule is intended to be released this coming August,” wrote MetalMiner. “They ‘approved HR 2042, a bill designed [to] block implementation of President Obama’s Clean Power Plan and protect ratepayers from what backers say would be steep price increases under the proposed emissions rules.’”

The decision is a welcome move for the steel industry which purchased 36.9 billion kWh in 2012, according to latest AISI data. In a video by MetalMiner, Brett Smith, Senior Director, Government Relations at AISI made the following comments:

“Any regulations that impact the electric generating sector, often those costs are passed along to their large industrial customers like the steel industry. Also to point out, the risks to reliability on the supply of electricity are often passed along to their large industrial customers as well. So it doesn’t directly regulate the industry, but certainly will have a substantial impact.”

Nucor Steel Director of Public Affairs, Jennifer Diggins, said in the interview, “For us in many cases it is the highest cost, the highest input cost for making steel. Twenty percent of costs of making a ton of steel in the U.S. is directly related to energy costs. So we are talking about raising energy costs for what is already an energy intensive process and expecting our producers here to compete globally against energy producers, who many times get their energy free or at a greatly reduced rate. There is absolutely no way to remain globally competitive when you are having your hands tied behind your back.”

SMU Note: Lisa Reisman, Founder and Executive Editor of MetalMiner, a sourcing and trading intelligence website for the global metal markets, will be a speaker at the 5th Steel Summit Conference in Atlanta on Sept. 1 & 2.