by James A. Bacon
There is a principled conservative-libertarian argument to be made against the Obama administration’s Clean Power Plan (CPP), which would compel Virginia’s electric utilities to cut CO2 emissions by 32% from 2005 levels by 2030. Unfortunately, Doug Domenech, Secretary of Conservation and Natural Resources during the McDonnell administration, didn’t make it in a Sunday column in the Richmond Times-Dispatch. Indeed, by building his argument around at least three propositions that are either unsubstantiated or just plain wrong, he may have damaged the credibility of Clean Power Plan critics.
In the spirit of charity, let’s start with what Domenech gets right. He argues that the Clean Power Plan might be unconstitutional. I agree. A serious argument can be made that the Environmental Protection Agency (EPA) usurped Congressional authority by classifying carbon-dioxide, a chemical essential to life, as a pollutant that can be regulated under the Clean Air Act. Twenty-seven states are suing the EPA on those grounds in a case that will be decided by the U.S. Supreme Court. Until the high court rules, the constitutionality remains in limbo.
Domenech also argues that the Clean Power Plan will do little to effect climate change. Implementation of the plan will reduce projected global temperature increases by 0.018 degrees Celsius by the year 2100 and slow the rise in sea levels by the thickness of two sheets of paper. That’s for the entire U.S. The impact of Virginia’s adherence to the plan will be too small to measure. Even the EPA has conceded this reality, but argues that the U.S. cannot persuade other countries to restructure their energy economies unless the U.S. moves aggressively to decarbonize its own.
Domenech also raises a legitimate question: How much will the Clean Power Plan cost rate payers? Given that the plan calls for phasing out coal-fired power plants, the cost of which is already built into the rate base, and replacing them with gas, nuclear, wind or solar, which must be paid for anew, there are reasonable grounds to believe that the plan will drive up electricity costs here in Virginia.
However, he cites (without naming the source) a study by the American Coalition for Clean Coal Electricity which concludes that electricity rates will increase annually by 14% annually, or roughly 150% over 11 years. That forecast is an extreme outlier. The State Corporation Commission has estimated that Dominion Virginia Power electric rates could increase 20%, while environmentalists have argued, on the implausibly low side, that electric rate increases will be so negligible that, when combined with energy-conservation measures, Virginians will actually pay lower electric bills. Perhaps the most disinterested and credible source, PJM Interconnection, says that the final cost will depend on the particular regulatory regime Virginia chooses and, thus, is impossible to determine at this time.
But that’s nothing compared to two claims that are utterly unsupportable. As Virginia’s chief environmental regulator, Domenech should know better.
First, he gives DEQ and the private sector credit for reducing Virginia’s emissions of sulfur dioxide by 66%, nitrogen dioxide by 43% and carbon dioxide by 27% during the McDonnell administration between 2010 and 2014. “This was largely due to the efforts of the professionals at the Department of Environmental Quality and the actions of Virginia’s corporate citizens. … We were able to reduce CO2 27% without the heavy hand of the EPA.”
In truth, the hand of the EPA was very heavy indeed. In December 2011, about halfway through the McDonnell administration, the EPA finalized its Mercury and Air Toxics Standards, which regulated mercury and other toxic chemicals released into the air by coal combustion. The EPA rules cracked down on dirty coal emissions, forcing electric utilities to switch to other power sources, particularly natural gas, which emits roughly half the CO2 per unit of energy as coal. Much of the pollution reductions cited by Domenech came about as the power industry either anticipated and/or responded to the new standards by installing scrubbers or converting from coal to gas. For instance, Dominion converted two units at its Possum Point from coal to gas in 2013, and its entire Bremo plant from coal to gas in June 2014.
I was not covering the electric power industry back then, so I acknowledge the limitations of my knowledge. But if the EPA’s air toxic standards were not the driving force behind the decline in pollutants, what DEQ initiative was? Domenech provides no alternative explanation.
Secondly, Virginia’s former environmental chief blames the woes of Virginia’s coal industry on the Clean Power Plan: “With this EPA rule, we see the impacts on Virginia’s coal communities. Coal mines are being shut down, miners are losing their jobs, the dreams of coal families are being shattered, coal companies are filing for bankruptcy.” Even CSX and Norfolk Southern railroad profits are plummeting due to drops in coal volume.
That is stupefyingly, breath-takingly wrong. If he wants to blame government regulation, Domenech could plausibly cite the impact of the Mercury and Air Toxics Standards, which with the fracking revolution and low price of natural gas pushed electric utilities to scrap dozens of coal-fired power plants around the country or convert them to gas. No question, that wave of regulation sharply reduced demand for steam coal. On top of that, export markets for steam and metallurgical coal (used in steel making) also have collapsed. But to blame the Clean Power Plan, which hasn’t resulted yet in the shut-down of a single coal-fired plant, for the current condition of the coal industry just isn’t credible. If Domenech wants to make a connection between the Clean Power Plan and the coal industry, he could plausibly argue that the plan will demolish future demand for coal, that it will destroy any hope of a coal industry recovery, and that the economic woes we see in the coalfields today will become even more widespread. But that’s not the argument he makes.
Over and above questions about its constitutionality, the Clean Power Plan raises important issues for Virginians. The plan will engender complex trade-offs between costs to rate payers, the reliability of the electric grid and the environmental benefit of shifting to low-carbon or zero-carbon power sources. To what extent should we diversify our fuel sources? How rapidly will demand for electric power increase, how much new capacity should we build, and who will pay for that capacity if we build too much? To what extent should we purchase electricity in wholesale energy markets, and can we build enough electric transmission lines (which nobody likes) to accommodate the large-scale wheeling of power across state lines? What kind of grid is more resilient in the face of cyber-sabotage, terrorist attacks or natural calamities — the Big Grid vision of large power plants and large transmission lines, or a small-is-beautiful vision in which householders and businesses generate much of their own roof-top power?
These are the kinds of questions I’m asking at Bacon’s Rebellion. Conservatives and Republicans can either be part of a serious discussion or they can throw dust in the air to distract the electorate. Sadly, the misinformation in Domenech’s op-ed is so easily debunked that it’s hard to take him seriously. Republican legislators would be well advised not to fall into the same trap.
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