New EPA Ruling Slams Texas Power Plants, Threatens TX Electricity Market

Don’t Mess With Texas:

What amounts to ‘common sense’ clean air standards in Washington may not seem so sensible to millions of Texans that will be adversely affected by the Environmental Protection Agency’s latest ruling aimed at reducing air pollution.

The EPA has cast quite a large stone in a very big pond, and the ripples are still reverberating, but we have the breakdown on the ruling and the effects it has already caused, although the full impact has yet to be realized. Texas is arguably the hardest-hit state, and could very well face an array of problems, the least of which involves an unpredictable energy crisis and an uncontrollable volatility in the Texas electricity market.

The New EPA Ruling in a Nutshell:

It’s called the “Cross-State Air Pollution Rule”, developed to resolve out-of-control air pollution that not only affects the states who are producing the pollution, but unfairly harms other communities as it travels across the country.

“No community should have to bear the burden of another community’s polluters…”

–EPA Administrator Lisa P. Jackson

Power plants in compliance with the ruling will need to reduce harmful emissions comprised of Sulfur Dioxide (SO2) and various Nitrogen oxides (NOx) that have myriad detrimental health effects, and billow out of smokestacks at coal burning power plants and similar electric generation facilities. Enforcement begins January, 2012.

The notion that these pollutants drift for hundreds, if not thousands of miles (all the while mixing and swirling with other horrible chemicals to produce an inescapable fog of doom) across states which are otherwise completely innocent of such air-slaying ills is a key concern of the EPA and the solution is touted as ‘long overdue’.

Just because this map is utterly confusing and looks like a toddler was unleashed on it with map pencils (a toddler who was VERY enamored with Indiana), it doesn’t mean we can ignore the obvious effect Texas is having on our neighboring states, and pretty much the rest of the eastern states and vice versa (according to the EPA).

The lines represent the routes by which air pollution travels across the country. So in effect, you can now consider yourself either “Upwind” or “Downwind” in terms of geographic location relative to the pollution sources.

The simplest way to determine whether you’re upwind or downwind using this map is to either untangle those hundreds of colored arrows, or ask yourself the following question: Do you live in Texas? If you answered “Yes” , then you are Upwind.  If you answered “No”, then you are Downwind. (This method is unofficial and unconfirmed)

A Quick ‘Cost vs Benefit’ Analysis:

Here’s what the new ruling looks like in terms of a cost/benefit analysis, in the eyes of the EPA:

The Cost:  $800 million annually (for power plants maintaining compliance standards)

The Return:  $280 billion annually (from improved health standards nationwide)

Note that the $800 million price tag doesn’t include all the initial costs and investments required for Texas electricity generation facilities to even start a project that will satisfy the compliance goals  (not to mention the impact on the entire energy market, job stability and power grid / power plant infrastructures).

Since everyone loves easy-to-read pie charts instead of boring numbers, I’ve composed this nifty graphic that indicates what the EPA predicts will be a reduction in the number of adverse health issues that previously stemmed from too much air pollution:

Again, as Washington’s ‘common sense’ approach gets lost in translation in the eyes of Texans, we have a different view of the costs vs benefits, especially considering Texas is one of the largest producers and consumers of electricity in the country and home to about 325 power plants employing hundreds of thousands of hard-working people producing over 100 Gigawatts combined (that’s 100 MILLION Kilowatts, kids).

So for our breakdown on the cost / benefit analysis from the Texas point of view:

The Cost: Way more than $800 Million, probably more like in the billions

The Return: Unstable economy, energy crisis, unemployment, market volatility, and possibly cleaner air

“Today’s EPA announcement is another example of heavy-handed and misguided action from Washington, D.C., that threatens Texas jobs and families and puts at risk the reliable and affordable electricity our state needs to succeed.”

-Texas Governor Rick Perry

The EPA also claims that an astounding 1.8 million sick days annually will be averted starting in 2014, as a result of the air getting cleaned up. They did not, however, mention the fact that unemployed energy industry workers who will lose jobs as a result of the new measure don’t really need sick days.

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