Considering the big reaction to these looming EPA regulations on how much sway they’ve already had on coal related investments, I thought I make a short list of my initial thoughts, after reading through this:
1) The real impact from these things is always grossly less than the exaggerated fear – take a look at the automotive companies being forced to raise fleet emissions. They hit those targets easy; it turns out, they already knew how to make more efficient cars, but were being lazy, not wanting to force implementation and get hazed by shareholders worried about cost. The automotive companies still seem pretty profitable right now. I’m guessing a 30% reduction from 2005 levels within three years means they probably already have some technological game plans in place to make it happen with minimal impact.
2) The EPA’s power here really relies on outcomes – if I’m wrong about (1), it will mark the beginning of a complete overhaul of the agency, leading to many many political hacks being dragged out by their hair to the gallows. The ability of the EPA to be the mini-crime syndicate it is, cutting backroom deals with Greenpeace, rests on their victims being small, disenfranchised minorities. If they mess this up and regular Americans feel the burn, it won’t matter who’s president.
3) Speaking of political power, this is basically the “GOP reelection act of 2014″ – since there are three years to go before we even see impact from this, that gives three years of conservatives being able the ram propaganda down the throats of already terrified Red state Democrats (and a few Blue ones). As if they needed the extra firepower…
4) The EPA’s rules seem to possibly interfere with State commerce rights – if you force a small state like Rhode Island to stay within a certain limit of carbon emissions and then let a New York keep a much higher output level, aren’t you basically extending competition restrictions against the small state to preserve the economy of the bigger? While I’m sure Illinois is just ecstatic with another layer of monopoly power, if I were a neighboring state looking to grow my own manufacturing sector to help ease the unemployment level, I’d probably come out swinging. I’m not about to sit down and read a 600 plus page load of trash like an EPA reg., but my guess is there are either loopholes in place to just dance around this, or else this thing is on thin ice. An executive branch agency isn’t going to withstand 46 out of 50 state governors directing state resources to put said agency on ice.
5) The Legislature is coming – after the GOP sweeps November, they will proceed to start ramming countermeasures down the Executive Branches throat. This is obvious and looming. Obama is not going to withstand that for two whole years. This and a dozen other of his measures will visit the dentist, for tooth extraction. The man is just not popular enough to construe a mandate.
6) Modern regulations are federal guarantees of record profits – no new coal companies are forming in this environment. At some point, isn’t that just a monopoly for coal companies already operating? Sure the small fries will all fold, but anybody with a billion dollar budget is going to love that. It’s basically a federal mandate to acquire more assets at fire sale prices through what I can only describe as state sponsored theft. Let’s look at other industries that were “harmed” by government regulations over the past five years. Banks were subjected to new regulations following the recession – they made record profits. The automotive companies were subject to new regulations following the fuel economy standards – they made record profits. Health insurance companies were subjected to the ACA regulations – they made record profits. Can anyone point me to an industry where entrenched interests didn’t make a boatload of money following being gifted what is basically a non-compete agreement in exchange for some regulations? I can’t think of any lately. There’s probably a good reason for this too; the federal government can’t be seen intentionally shuttering industries for what are clearly political reasons. So if they want to make changes to these industries, the cost is…record profits.
The main takeaway is, the government can’t just destroy the power supply for 40% of the grid. They don’t have anything up their sleeve here. I’m not scared of environmentalists at all…even when they worm their way into powerful agency positions way above their competencies. Check out the last 50 years of environmentalist history, then tell me one major success they’ve had at curbing emissions or conservation or rolling back human activity.
When I think of emissions reduction, I think of natural gas. The US energy sector has reduced US emissions more in 5 years than environmentalists have done in 50…which I guess isn’t hard when environmentalists have never demonstrated an ability to reduce emissions at all.
When I think of conservation, I think of presidencies like the end of George W Bush’s, setting aside huge swaths of land as part of legacy building, or state conservation mostly at the local level. There’s no indication that the Sierra Club has had any influence in those choices at all.
Most of recorded history is industry smacking down doomspitters and terrorsayers warning of humanities looming demise. Every time population hits a new modulo 1,000,000 milestone, new generations of fear mongers feel compelled to give us the good word, casually ignoring the endless masses of false warnings and pontifications issued before them (because you know, they’re so much smarter than their countless predecessors).
At this moment, I have no reason to believe that the EPA regulations will be anything less.