Jon Huntsmans resorts to fear mongering on EPA, coal fired power plants

By Eugene Kiely and Lalita Clozel, FactCheck.org

Jon Huntsman falsely claimed that the Obama administration’s proposed regulations to cut pollution from coal-fired electric plants will “likely” cause blackouts “this summer.” That’s not true. Huntsman’s claim is contradicted by a Federal Energy Regulatory Commission letter cited by his own campaign, and by independent assessments as well.

No Blackouts ‘This Summer’

The Environmental Protection Agency has issued or is in the process of finalizing several regulations that would significantly affect coal-fired power plants. The new regulations include, for example, the Clear Air Mercury Rule, which will regulate mercury emissions from coal-fired plants for the first time, and the Cross State Air Pollution Rule, which will reduce the release of sulfur dioxide and nitrogen oxides from power plants in the eastern United States. In both cases, the EPA was acting under court order to comply with the Clean Air Act.

Huntsman, the former Utah governor who is running for the Republican presidential nomination, spoke of the cumulative impact of these and other EPA regulations on coal-powered generation plants during a Nov. 1 speech at the University of New Hampshire, where he unveiled his energy plan:

Huntsman, Nov. 1: Today coal is under siege from government regulations and litigation. There are even efforts to halt the export of our coal, which would destroy American jobs when we now need them most. This summer, in fact, we will likely see blackouts as a result of the administration’s assault on coal, which will take 8 percent of U.S. generating capacity offline.

We asked the Huntsman campaign to support the candidate’s claim that EPA regulations would reduce U.S. electricity capacity by 8 percent and cause blackouts “this summer.” We were referred to an Aug. 1, 2011, letter that was sent to Sen. Lisa Murkowski by FERC Chairman Jon Wellinghoff and two of its commissioners, John Norris and Cheryl LaFleur. The FERC was responding to Murkowski’s request for its assessment of “EPA rules affecting generation of electric power.”

But the agency’s letter does not support Huntsman’s claim. Quite the opposite.

The letter says “the retirement of coal units is expected to begin between 2015 and 2018,” and even then FERC expects to work with the industry to avoid disruptions in service. “As it has in the past, the commission would seek to find ways to require or allow utilities to operate when needed for reliability or other purposes while being compensated adequately and without violating other federal laws,” the letter says.

Wellinghoff, who was appointed to FERC by President George W. Bush and elevated to chairman by President Barack Obama, also addressed the reliability issue before a subcommittee of the House Energy and Commerce Committee on Sept. 14. In his prepared remarks, Wellinghoff said the industry “can plan to meet its reliability and environmental obligations.” He cited historical data to show the industry has done exactly that “when circumstances warranted.”

Wellinghoff, Sept. 14: As I have said before, available data indicates that the electric industry has added significant amounts of generating capacity when circumstances warranted. As a point of reference, EIA data shows that between 2000 and 2004, an annual average of 38.74 GW of capacity was added nationally, with a peak addition of 58.06 GW in 2002. Similarly, the electric industry has the ability to plan for the EPA regulations, which will affect the operation of some electric generation units.

To be sure, there are some who remain concerned about future reliability. FERC Commissioner Philip Moeller, who was appointed by Bush and reappointed by Obama, told the committee that “older, fossil-based generation” plants eventually should be replaced. “However,” he warned, “such retirements need to be handled in an orderly way to avoid regulatory, economic, and reliability chaos.”

But most experts do not predict chaos — and certainly not as early as this summer.

PJM Interconnection, a regional grid operator that serves 58 million customers in 13 states and the District of Columbia, issued a report in late August on the impact of two EPA rules — both of which have compliance deadlines of Jan. 1, 2015. The report concluded that “resource adequacy does not appear to be threatened” in delivery year 2014/2015.

Separately, the Bipartisan Policy Center — which was founded by four former Democratic and Republican Senate leaders — issued a report that said the impacts of the EPA regulations on the nation’s power sector are “manageable.” The potential for blackouts? The report, which was drafted by staff members of the center’s Energy Project, said “scenarios in which electric system reliability is broadly affected are unlikely to occur.”

‘Back-of-the-Envelope’ Assessment

Now, let’s look at Huntsman’s claim that the EPA regulations will reduce the nation’s electric generation by 8 percent. That figure also comes from the FERC letter to Murkowski and a press release the senator released in response to it.

Murkowski, Aug. 3: The commission’s staff has preliminarily estimated that up to 81 gigawatts of existing generation are ‘likely’ or ‘very likely’ to be retired as a consequence of new EPA rules. That’s nearly 8 percent of our installed capacity for electric generation and a retirement at that scale could have drastic consequences for many parts of our country.

But FERC’s letter also warned not to put too much stock in its estimate of coal-fired plants likely to be retired. The letter called it an “informal, preliminary assessment,” adding that “an in-depth analysis could not be conducted because complete information was not available.” In his Sept. 14 testimony, Wellinghoff pulled the plug entirely on his staff’s informal analysis. He told Congress it was an “adequate back-of-the envelope first assessment of the amount and location of potential generator retirements,” but he warned that such an informal analysis “is inadequate to use as a basis for decision making.” For one thing, Wellinghoff said, FERC “did not evaluate any alternatives that might be available to the regions to offset any generator loss such as new or planned generation or transmission, retrofits of coal-to-gas burners, demand-side resources, or energy efficiency strategies.”

There is no doubt that the EPA’s regulations and proposed regulations will have a significant impact on coal-fired power plants. American Electric Power of Columbus, Ohio, announced in June that complying with EPA regulations would cost between $6 billion and $8 billion and force the company to “retire nearly 6,000 megawatts (MW) of coal-fueled power generation; upgrade or install new advanced emissions reduction equipment on another 10,100 MW; refuel 1,070 MW of coal generation as 932 MW of natural gas capacity; and build 1,220 MW of natural gas-fueled generation.” Nearly all of the plant closings will occur by Dec. 31, 2014, or later.

Huntsman can offer his opinion that the EPA is moving too fast or that the regulations are too costly, or both. And, of course, there are those who will disagree with him. In his Nov. 1 testimony before a House oversight committee, Deputy EPA Administrator Bob Perciasepe cited both the health and economic benefits of retiring or upgrading aging power plants.

But Huntsman resorts to fear-mongering when he raises the specter of blackouts “this summer.”

Jon Huntsman Jobs Plan: Energy and environment

Republican presidential candidate Jon Huntsman released a new jobs plan on August 31, 2011. In it, the former Utah Governor and U.S. Ambassador to China pledged to “oppose a new ozone rule the that would effectively halt new construction.” Just two days later, President Barack Obama announced his own decision to ask EPA Administrator Lisa Jackson to “withdraw the draft Ozone National Ambient Air Quality Standards.”

Huntsman also pledged to roll back EPA authority while moving the nation towards energy independence.

Video of Jon Huntsman announcing his new jobs plan at Gilchrist Metal Fabricating in Hudson, NH: 

Text of Jon Huntsman’s jobs plan that deals with energy and the environment:

Regulatory Reform

Dramatically Rein In The EPA: While the nation struggles to recover from economic turmoil, EPA has imposed vast new rules on the nation’s energy producers, crippling one of the most critically important components of economic recovery: energy supply. Among the rules Gov. Huntsman will oppose is a new ozone rule that would effectively halt new construction.

End the Environmental Protection Agency’s (EPA) Gross Regulatory Overreach:

The EPA has overplayed its hand. While the nation struggles to recover from economic turmoil, the EPA has imposed vast new rules on the nation’s energy producers, crippling one of the most critically important components of economic recovery: energy supply. The following are examples of the many rules Gov. Huntsman will oppose and/or roll-back:

Ozone Standard Revision – This rule promises no clear benefits yet threatens to hinder job growth in the form of what is effectively a nationwide construction ban that benefits no one more than China.

Joint Fuel-Efficiency Rules – This rule, approved by the EPA and Department of Transportation, will bar heavy-duty vehicles from converting to natural gas, which America has an abundance of. Astonishingly, this was enacted even after the agencies concluded that “more alternative-fueled vehicles on the road would arguably displace petroleum-fueled vehicles, and thereby increase both U.S. energy and national security by reducing the nation’s dependence on foreign oil.”

Expedite the Environmental Permitting Process: Gov. Huntsman is committed to streamlining the process for developing new energy supplies and bringing them to market.

Energy Independence

“To free ourselves from OPEC’s grasp, we must end our heroin-like addiction to foreign oil. And the money earned by American energy suppliers can be spent in American stores, saved in American banks and invested in American communities to create American jobs.” -Gov. Huntsman, 8/31/11

End OPEC’s Pricing And Supply Power, Promote Jobs, And Increase Overall Domestic Supply: The United States must expedite the process for reviewing and approving safe, environmentally sound energy projects, including the development of North American oil and gas reserves; oil and gas in the Gulf of Mexico and Alaska; shale gas and oil in the U.S.; and Canadian oil sands.

Level The Playing Field And Create A Fully Competitive Market For Cleaner Domestic Alternative Transportation Fuels: The United States must eliminate the subsidies and regulations that support foreign oil and inhibit domestic alternatives such as compressed natural gas (CNG), electricity, biofuels, and coal-to-liquids, which are not price-controlled by OPEC.

50 years ago, President Eisenhower warned we should import no more than 20 percent of our oil; today we import 60 percent. Every year America sends more than $300 billion overseas for oil – much of it to unstable and unfriendly regimes. This threatens our national and economic security. 10 of the last 11 recessions were preceded by sharp spikes in the price of oil.

Governor Huntsman is proposing an “all of the above” policy, with two main elements:

First, we must expedite the review and approval of safe and environmentally-sound energy projects, including the development of North American oil and gas reserves; oil and gas in the Gulf of Mexico and Alaska; shale gas and oil in the U.S.; and Canadian oil sands.

Second, we must eliminate subsidies and regulations that support foreign oil and inhibit clean, domestic alternatives such as natural gas, biofuels and coal-to-liquid fuel. America is drowning in competitive energy supplies from domestic sources. We must employ those resources, or risk allowing foreign nations to control our energy future.

ENERGY INDEPENDENCE PROPOSALS

Producing Our Own Energy Future

Streamline Approval for New Energy Production

America can and should produce more oil right here at home. There is no reason drilling cannot be safely conducted in the Gulf, across the states and in Alaska.

The current Administration is pursuing regulations that will hinder domestic energy development and cost thousands of jobs. Regulations and approvals for new wells and pipelines need to be streamlined and directed to “move at the speed of business.”

The federal government’s commitment to safety and the environment must no longer be distorted into a prohibition against American energy security. President Reagan created a mechanism for the swift resolution of regulatory delays without sacrificing safety concerns. The same must be duplicated again.

Break Down Barriers Blocking the Full and Safe Deployment of Fracking

A new technique for recovering previously inaccessible gas – combining hydraulic fracturing (“fracking”) with high-technology horizontal drilling – has the potential to increase America’s domestic production by 25 percent.

Critics are attacking fracking, but the practice has been used on more than one million currently producing wells – more than 35,000 per year – using a technology that has been perfected over 60 years. Because of fracking, the United States surpassed Russia as the world’s leading producer of natural gas.

Federal guidelines regulating its application need to recognize the economic benefits and value of enhancing America’s energy independence, while also weighing environmental concerns.

Embrace Emerging Technologies Like Coal-to-Liquid Fuel

Coal is one of America’s most abundant energy resources and the mainstay of many communities. America has enough coal reserves to supply us for 300 years at current consumption. Yet in recent years, government regulations and litigation have attacked coal from every possible angle, destroying critical jobs and closing access to this critical domestic energy source.

Converting coal into a liquid fuel will alleviate our dependence on foreign oil while maintaining jobs and local economies, but this technology is not yet deployed. We must eliminate barriers to its full deployment.

Look North

Our dependence on foreign oil didn’t develop overnight, and it won’t end overnight. As a bridge, we must look north to Canada.

America imports twice as much oil from Canada as we do from Saudi Arabia, and our northern neighbor is increasing production every day. There are 170 billion barrels of recoverable oil in Alberta’s oil sands deposits – more reserves than in all of Iraq.

However, lawsuits and legislation in the United States are attempting to block access to this resource from our neighbor and friend.

Others see the potential in these fields. China wants to invest in Canada’s oil infrastructure. Meanwhile, the United States government is dithering over a pipeline’s proposal to ship Canadian oil to the United States.

The federal government needs to assure Canada that American consumers are ready and willing to purchase the production of Alberta’s oil sands. Every barrel from a friend is one less from a foe.

Eliminate Subsidies to Level The Playing Field for Domestic Fuels

Much attention has been paid, rightly, to the federal government’s improper role in using subsidies to favor one energy resource over others. America’s energy future must be based on a level playing field. But the playing field cannot be level so long as federal regulation erects or reinforces barriers to entry, which prevent a competitive market for competing fuels.

Ensure That Our Transportation Fuel Markets are Competitive

The current system of transportation fuels is essentially closed to newer competition because of (1) gasoline’s near-monopoly in the distribution network for light-duty vehicles, and diesel’s near monopoly for heavy-duty vehicles; and (2) numerous regulatory barriers to entry.

Accordingly, to create a truly competitive energy market, the federal government must:

Commence expedited review of the transportation fuel distribution network by both the Federal Trade Commission and Senate Judiciary Committee (the concentration of distribution ownership is similar to the broadcast network domination in the early 1970s, which triggered market-opening FCC rules and an antitrust consent decree

Eliminate all regulatory barriers to entry for competing fuels, and create a level playing field that allows competing fuels full access to the distribution grid.

Ensure open markets for natural gas and other alternative fuels in order to stabilize prices and provide a predictable investment environment.

Eliminate Regulations Preventing Energy Innovations and Competitive Transportation Fuels From Reaching Market

End the Regulatory Roadblocks Against Competitive Fuels Like Natural Gas

America has more natural gas than Saudi Arabia has oil. Yet on August 9th, the Department of Transportation and Environmental Protection Agency issued fuel efficiency rules that effectively bar heavy-duty vehicles – which consume 20% of our oil imports – from converting to natural gas.

The agencies did this even after conceding that “more alternative-fueled vehicles on the road would arguably displace petroleum-fueled vehicles, and thereby increase both U.S. energy and national security by reducing the nation’s dependence on foreign oil.”

Gov. Huntsman supports the repeal of these rules and others, which increase our reliance on foreign oil and discourage domestic job growth.

Spur Investment in Modernizing Our Power Grid

Federal regulations are hindering America’s conversion to a fully modern “smart grid” system –something badly needed if the next generation, for example, chooses to charge electric vehicles in their garages at night.

Encourage State-Based Solutions

Methods of energy production vary greatly across the fifty states. The Northwest has world-class hydropower facilities, California leads the nation in geothermal, and more than 15 percent of Iowa’s energy generation comes from wind. Despite this diversity, EPA rules prohibit states from coming up with their own ways to reduce pollution at the lowest cost to local businesses.

For example, EPA should revive state authority to allow centrally-fueled fleets to convert to cleaner alternative fuels to help meet our air quality standards at much lower cost to consumers.

Force Washington To Face Facts

The federal government is responsible for reducing obstacles to competitive markets that ensure a level playing field. Washington must base its energy policy on sound science, transparent government, and thorough public debate.

Click here to read the full version of Time to Compete: An American Jobs Plan