Bacon's Rebellion

Democracy Thrives in Sunlight

New EPA Regs and the Virginia Economy

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by

James A. Bacon
in , ,

First in line for shut-down: the aging Clinch River power plant. Photo credit: ILoveMountains.org.

Six coal-fired power plants in Virginia accounting for 35% of the state’s coal-generated electricity could be forced to shut down prematurely by new and proposed Environmental Protection Agency regulations, according to a report, “Economy Derailed,” published recently by the American Legislative Exchange Council (ALEC).

In a state-by-state breakdown, the ALEC report stated that Virginians could see electricity rates rise by 10% to 15% and lose nearly 11,500 jobs (direct and indirect) accounting for $6.1 million in wages. The Old Dominion would suffer less from the regulations than many other states, however. It did not rank among the 10 states determined to be “worst hit.”

The EPA justifies the regulations on the grounds that they will reduce emissions of mercury, carbon-dioxide, sulfur dioxide, particulates and other pollutants. ALEC, which promotes conservative causes, contends that the cost far outweighs the benefits. Who should we believe? I don’t know. Regardless, even under the best case scenario, there will be short-term pain for long-term gain.

— JAB

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  1. Hydra Avatar
    Hydra

    Study: Pollution Credits Can Boost Virginia Farm Profits
    Going Beyond Bay Cleanup Goals Can Add Revenue To Farm Bottom Line

    (RICHMOND, VA) – A new economic cost-benefit analysis of pollution credits proposed in pending federal legislation shows that a typical Virginia crop farm could realize more than $8,000 in new profits each year by exceeding Chesapeake Bay cleanup goals and selling its extra clean water credits.
    ………………………………………………..

    “Nutrient trading is a very effective, market-based approach to reducing pollution, often creating a win-win benefit for participants,” said L. Preston Bryant Jr., senior vice president for infrastructure and economic development at McGuireWoods Consulting and former Virginia Secretary of Natural Resources.

    WRI performed an earlier study late last year that determined a pollution credit program could earn Virginia farmers as a group as much as $50 million annually, in a fully mature regional trading program. The latest study focuses on the economic costs and benefits to a typical Virginia farm.

    Because reducing nitrogen and phosphorus pollution from farms is much less expensive than reducing pollution from sewage treatment plants or urban and suburban areas, Bay region farmers are in an optimal position to sell credits in a nutrient credit program. WRI conservatively estimates that, depending on the type of farm, its location, and the variety of clean water practices used, credits could bring in from $300 to $8,000 in additional annual profit for a representative 200-acre farm in Virginia.
    …………………………………………………………..

    Practices used by farmers to reduce runoff pollution to achieve or exceed baseline Bay goals might include planting streamside buffers of grasses and trees, fencing livestock from creeks, using no-till techniques, planting winter cover crops, and following nutrient (fertilizer) management plans………
    Generally speaking, pasture land has fewer options for generating pollution credits, fewer pollution reduction factors, and more limited revenue potential than cropland. The amount of nitrogen pollution reduced by a practice also will vary by farm location due to differences in proximity to the Bay, hydrology, and other factors.

    ================================================

    I have long suggested that such a plan for pollution credits sould help erase farm losses. $8000 a year ought to do it for most farms of average size. but, since I already do all those things, I won’t get any credit, unless I, quick, go get some cows and put them in the streambeds.

  2. larryg Avatar
    larryg

    it’s a non-issue except to the right wing…

    Natural Gas is replacing coal… and power companies are switching to it in droves.

    http://www.bloomberg.com/news/2012-05-06/record-gas-use-by-u-s-utilities-fails-to-drive-up-price-energy.html

    ALEC is fronting for the Coal industry…

    more and more organizations like ALEC are little more than industry proxies…

    when did ALEC tell you about the Natural Gas revolution and all the jobs it has created?

  3. Hydra Avatar
    Hydra

    The EPA justifies the regulations on the grounds that they will reduce emissions of mercury, carbon-dioxide, sulfur dioxide, particulates and other pollutants. ALEC, which promotes conservative causes, contends that the cost far outweighs the benefits. Who should we believe? I don’t know.

    ================================================

    That is a problem, isn’t it? there is almost no data available which is not either agenda based, or attacked with an agenda in mind.

    But, considering the generalized attack on science conducted by the right (and by some members of the extreme sustainability-oriented left), I would be disinclined to take much that ALEC says about science very seriously.

  4. Hydra Avatar
    Hydra

    Natural Gas is replacing coal… and power companies are switching to it in droves.

    ==========================================
    Right, and if pollution trading credits were in place (as described above) the direction of trades would tell us if ALEC is correct or not (almost certainly not).

  5. DJRippert Avatar
    DJRippert

    Coal is another one of those “Richmond-centric” industries that pretty much calls its own shots in the General Assembly. Unlimited campaign contributions, a “Richmond-based electricity monopoly” and the least competitive state legislature in the country come together to provide a warm and nurturing place for coal in the Commonwealth. Unfortunately, since air pollution crosses state boundaries with impunity, the federal government reasonably takes a role in the matter. There has been plenty of warning about coal fired electricity – at least since Obama was elected. The key question is whether Virginia is doing anything noteworthy to move from coal to alternate sources of electrical generation. Or, will this be another case of the “frozen gas tax syndrome” as our elected officials simply bury their heads in the ground and hope the problem will go away?

  6. larryg Avatar
    larryg

    we have a confluence of events in that the EPA has been trying for DECADES to get rid of the dirtiest of the coal plants that emit 5-10 times the pollution of newer plants and now we have a bonanza of Natural Gas that is said to be a couple hundred years supply.

    so now there is no good excuse to not dump coal because nat gas is not only cleaner but cheaper.

    that’s not going to help Va coal mines though.

    I think they call this “creative destruction” eh?

  7. larryg Avatar
    larryg

    re: nutrient trading

    there is a knock-down drag out donnybrook between environmental groups over this approach.

    Fundamentally, the problem is determining the “benefit” of various nutrient reduction activities.

    there are no actual measurements to determine, for instance, the before and after nutrient numbers for a pasture land or a forest.

    this is a “model” that uses assumptions but apparently no one has seen fit to actually measure upstream and downstream of a farm (or a sewage treatment plant or a storm water facility, etc) to actually calibrate actual values.

    So the policy is based on what is in the model and the model itself has never been actually validated so that, for instance, when you use the model for determining the nutrient levels for a cattle farm… the model spits out a number but that number has never actually been verified for a given real farm.

    So you have this cleanup going on and the amount that is “cleaned up” is basically what the model says it is.

    you can see why there are some concerns. we don’t know if the upstream farmer should be getting 50 cents or 5000 dollars… but the model will tell us. Obviously when you have this much money at stake and you’re using the environmental equivalent of voodoo economics… there is some justifiable angst.

    I’m not sure I have ever understood why the enviros are opposed to actually measurements but there is a EPA concept known as UAA – Use Attainability Analysis and if invoked.. it will encourage actual measurement.

  8. Gil EngAmer Avatar
    Gil EngAmer

    EPA Regulations continue to be a nuisance. The protection for which they are designed is completely overshadowed by the fact that they are time consuming, not cost effective and they never seen to be able to stay stable. All of which are things that are too great to bear for a number of businesses as regulatory policies never seem to have any kind of knowledge of business practices (http://bit.ly/zgsTLu_. In the case of Virginia, the shutting down of coal power plants is costing jobs, which have never been needed more at this time. We need a reality check on what regulations are necessary and where they are going, or else no one stands a chance under its ever tightening grip.

    1. DJRippert Avatar
      DJRippert

      Gil:

      Everything you say makes sense. However, it seems clear that coal is going to be an environmental problem as time goes on. As LarryG points out, natural gas seems a lot cleaner. If the issues with hydro-fracking can be solved then I think most people would rather see gas fired electricity rather than coal fired electricity.

      Despite the vagueness of the EPA regulations it seems clear that moving away from coal should be on the agenda of our state government. In fact, this has seemed clear for quite some time. Yet, Virginia continues to propose new coal fired electricity plants. How does this make sense? Over the last 10 – 15 years there have been a number of times when the economy was strong. These would have been good times to start making the move away from coal. But these moves never get made. Now, in tough times, people say that the times are too tough for changes that will cost jobs. That certainly seems like a reasonable position. The question is whether Virginia will ever address the issue of coal fired electrical generation plants. My guess is that Virginia will never address the matter until forced to do so by the feds – which is a sad testament to our state legislature.

      At some point we have to stop blaming the feds for enforcing environmental laws and regulations. The laws were passed in correct democratic fashion. They represented the will of the people even if not the will of all the people. Air pollution crosses state lines and is not a legitimate “state’s rights” issue.

      Virginia has had decades to act but has not steadily acted. While Virginia is not the worst state it does now face something of a crisis with these regulations. Where were our state legislators over the past 15 years? Where will they be over the next 15 years?

      It seems to me that progress will only happen if the fed forces it to happen.

  9. larryg Avatar
    larryg

    we lose jobs on coal but we gain jobs on natural gas. We lose jobs on coal plants, but we gain jobs on nat gas plants.

    creative destruction.

    ” It seems to me that progress will only happen if the fed forces it to happen.”

    well the EPA will be gone in a heartbeat if the right had their way.

  10. Richard Avatar
    Richard

    Note the latest press release from the “nonpatisan” ALEC about Common Cause (“partisan front group masquerading as an ethics watchdog.”) Hilarious “pot calling the kettle black” complaint.

    Please please stop presenting these bogus economic and scientific statistics as meaningful!!
    ++++++++++++++++++
    Statement by Alan P. Dye on Latest Harassment Tactic Against ALEC by Liberal Front Groups

    WASHINGTON – Alan P. Dye, legal counsel to the American Legislative Exchange Council (ALEC), issued the following statement in response to the frivolous IRS complaint by Common Cause against ALEC:

    “The attacks on the American Legislative Exchange Council are based on patently false claims being made by liberal front groups that differ with ALEC on philosophical terms.

    “The current complaint mostly ignores applicable law and distorts what it does not ignore. After three decades of counseling clients on nonprofit and federal disclosure requirements, it’s clear to me that this is a tired campaign to abuse the legal system, distort the facts and tarnish the reputation of ideological foes.

    “Without question, Common Cause is a partisan front group masquerading as an ethics watchdog.”

  11. Richard Avatar
    Richard

    Sorry for the excess formatting (bold).

  12. larryg Avatar
    larryg

    Who funds ALEC?

  13. Peter Galuszka Avatar
    Peter Galuszka

    How old are these coal plants? Are we supposed to keep them running forever? Older plants make for a large portion of carbon dioxide and pollutants
    Likewise there is an unexpecred flood of natural gas that is very cheap. Utilities are forced by regulators to pursue the cheapest energy and power firms improve bottom lines by doing so.
    One would think alec would pursue the magic of the market

    1. DJRippert Avatar
      DJRippert

      But Peter …

      The Clown Show in Richmond gets campaign contributions from coal companies, not natural gas companies.

      Why is this hard to understand?

  14. larryg Avatar
    larryg

    You’d think that ALEC was in favor of the free market … rather than being a lobby for coal companies, eh?

    but given a choice between praising the natural gas revolution and it’s benefits to clean air and cheaper electricity or hammering EPA… their duty is clear.

    we’re getting a clearer and clearer idea of who the Republican Party really is and it aint about clean air or cheaper electricity, more jobs, or even the free market and creative destruction, but money, money, money – mostly for the status-quo old boy club.

  15. bosun Avatar
    bosun

    For perhaps the first time, I agree with Larry G. How long has the industry known that these coal plants would be shut down? DECADES. Instead of doing what they need to do, taking small steps to reduce the cost of retrofit/conversion they have spent millions in political contributions, lawsuits, regulatory tie-ups rather than addressing the problem. Now they are crying crocodile tears about the cost. The same thing about the whining about the Chesapeake Bay regulations. To hear Virginia government officials talk, the new regs were just unveiled yesterday. Our state has dragged their collective feet for DECADES and relied on ‘voluntary’ compliance rather than taking the pain in small doses. But who wants to upset the homebuilder or farmers? Bosun

    1. DJRippert Avatar
      DJRippert

      Bosun has it right.

  16. larryg Avatar
    larryg

    Geeze, Bosun… I’m at a loss for words!

  17. larryg Avatar
    larryg

    ALEC should be for the free market and supportive of natural gas electricity generation.

    the fact that they choose to continue to hammer the EPA over supporting things that benefit everyone except perhaps coal interests is in my view indicative of who they are and what they are really about.

    Many of these these so-called “think tanks” are basically organizations with high-sounding names but they have been infiltrated by ideologues who are using the organization’s name to advance their philosophical agendas.

    they seem to also specialize in promoting propaganda and anything but straight-shooters of non-partisan policies.

    1. DJRippert Avatar
      DJRippert

      LarryG:

      Don’t tell me that you are finally starting to see the deep rot in Richmond. If there were natural gas companies headquartered in Richmond this would not be an issue. But it’s the coal companies that are headquartered in Richmond.

      Jim Bacon likes to pretend that there is no embedded pack of special interest devotees in Richmond. He pretends that the state government is just a nice group of fair and honest “politician – citizens”. Nothing could be further from the truth. Richmond is a rat’s nest of special interest and corruption. The entire state revolves around decisions made over gin and tonic at the Country Club of Virginia or the Henrico County Chamber of Commerce.

      Pound for pound, Richmond is a bigger cesspool than DC wil ever be. At least in Washington there is an active press corps watching the nit wits. Richmond is a black box run by and for the Descendants of Pocahontas.

      The only answer is to void Dillon’s Rule and bring the power back to the localities where it has always belonged.

      Isn’t it interesting that the “freedom fighters” of Virginia came almost exclusively from outside the colonial stronghold of Richmond? Washington and Mason from the wilderness of Northern Virginia. Jefferson from Charlottesville. Madison from Orange.

      The simple fact is that Richmond was then (and is now) a hotbed of Tory sympathy. The landed gentry of Richmond has always liked the idea of monarchy and has tried to perpetuate that idea in modern times. Only now the “lords and ladies” of Colonial England have been replaced by the “fops and dandies” of Richmond’s political elite.

      One must wonder if the fallen monarch on Virginia’s flag really represents the ruling class in Richmond more than some faint memory of European power.

      Sic semper tyrannis indeed.

  18. Hydra Avatar
    Hydra

    “Unlike Europe, where governments of all stripes compensate private property owners when regulation acts as de facto expropriation, governments in Canada can wholly or partly freeze your property through regulation and not offer a dime in compensation,” said Mark Milke, Fraser Institute director of Alberta policy research and author of Stealth Confiscation: How Governments Regulate, Freeze, and Devalue Private Property-Without Compensation.
    “That’s a major policy failure and a black eye on Canada’s reputation for fairness.”

    http://www.marketwatch.com/story/the-fraser-institute-canadian-property-rights-weakest-among-western-countries-allowing-governments-to-freeze-use-of-property-without-compensating-landowners-2012-05-10-632580

    =================================

    Weakest among Wesern Countries except the US.

  19. Hydra Avatar
    Hydra

    The only answer is to void Dillon’s Rule and bring the power back to the localities where it has always belonged.

    =====================================

    Are you freaking crazy? It has ALWAYS been the locals whao are the biggest tyrants, right down to the local protection racket.

  20. Hydra Avatar
    Hydra

    Consider the situation with alternative septic systems, used in places where a conventional perc system won;t work.

    These have been around for decades, and are will proven, but local codes efer to them as experimental systems and they are banned. It was the locals who used these rules to control land use and the locals who howled bloody murder when the state banned such regulation.

  21. bosun Avatar
    bosun

    Now, Hydra. You have stopped preaching and gone to meddling. Alternative sewer systems [AOSS] are basically minature sewage treatment plants that can have many parts and when OPERATED and MAINTAINED correctly are safer than septic. As Hydra said, they are used where septic cannot go: wetlands, steep slopes, karst topography, next to ground water & surface water sources, shellfish beds, etc. The problem counties had was that even though the systems had been installed for over 20 years, the state had NO comprehensive regulations for them until 2010! In fact, the state agency responsibile had been dragging their feet for years to adopt them despite a state law to do so. As one person put it, anyone with a pickup truck and a shovel could install an AOSS until the new regulations were adopted.
    Locals were rightly concerned because of that and the fact that owners did not operate and/or maintain them in accordance with manufacturer’s instructions. So instead of waiting for one of these complex systems to fail and pollute your drinking water or the lake where you swim/fish, some localities adopted their own regulations. Yes, it made it harder for homeowners to have them installed in some areas, but elected officials have to balance protection of the public health and the environment with the unregulated wild west that existed without meaningful state regulations.
    I have a hard time understanding how local regulations can be said to control land use when 10K of the 60K systems exist in Loudoun County which was once the fastest growing county in the US of A. Yes, 1 of 134 cities and counties banned AOSS, but as the homebuilders’ lobbyists once said to the general assembly about a troublesome member of their association, “You shouldn’t punish the entire group because of one bad actor.” Bosun

  22. larryg Avatar
    larryg

    Hydra worries much about the property owner who wants the system but cares not near as much for the property owner than ends up with the other guys’s “oops”.

    He forgets. The regs are to PROTECT the OTHER PRoperty owner!

  23. larryg Avatar
    larryg

    re: Dillion Rule

    Cities have a lot more latitude in how they operate. I do not know how much freedom cities in Va have compared to cities in Home Rule states but they have more than Va counties.

    What would be very useful in BR would be a little seminar on this issue.

    I tend to think the State actually does protect taxpayers from local malfeasance at times but to be equally honest – if local voters are not paying attention to their local officials and doing something about it – when they should, maybe they deserve it.

    One of the bigger problems is the length of term for BOS without any real recourse of removal for not acting on behalf of taxpayers (which I realize is a real shocker to some!).

    I’d be fine with home rule or home rule lite as long as us voters could gather a recall petition when needed.

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