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James Heintz: New study shows investment to comply with new EPA regulations will create more jobs than are lost

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. And in Washington, one of the debates that is raging, not so much in mainstream media but certainly on the Hill, is the role of the Environmental Protection Agency. Here’s a quote from one of the witnesses at a recent congressional committee talking about the EPA and its efforts to control pollutants and carbon emission. Here’s what Robert E. Murray from Murray Energy, a coal mining company in Alledonia, Ohio, had to say. He employs about 3,000 people there. He said, “Jobs and lives are being destroyed by Mr. Obama and his out-of-control, radical US EPA and his appointees to it.” Robert Murray went on, “America, our industry and jobs, are under siege by Mr. Obama and his US EPA” and it “must be stopped immediately.” Now joining us from Amherst, Massachusetts, from the PERI institute, is James Heintz. He’s associate research professor at the PERI institute. Thanks for joining us, James.


JAY: So, first of all, what’s at stake? You’ve recently done a study on the jobs implication of this battle, and most of this debate actually seems to be not about whether there is a pollutant problem, whether there’s a clean air problem, or a climate change problem, for that matter, the argument boiling down to that it’s a jobs problem. And you’ve recently done a study on the jobs implication of this. So tell us the area you’ve been studying and what you found.

HEINTZ: So what we looked at in this study, which was a joint study done by PERI but commissioned by a Boston-based organization called Ceres, we looked at two EPA air pollution standards that are expected to come into effect this year, in 2011. And the two standards that we looked at affect utilities, so the electricity sector. One is the Utility MACT, MACT standing for maximum available control technology, which regulates emissions of such toxic substances as mercury, lead, arsenic, and [inaudible] And we also looked at something called the Transport Rule, which looked at cross-border pollution. So when utilities in one state pollute in terms of sulphur dioxide and nitrogen oxide, those pollutants often cross state boundaries and make it difficult for neighboring states to meet their air pollution standard. And so this is an effort to control those types of emissions as well. So what we did was we looked at what investment we could expect out of the utilities sector, focusing on the eastern half of the United States, since that’s where most of the coal-fired plants are and where most of the impact of these new standards are meant to be. We looked at how much investment they would make in new capacity, so new generation capacity, and how much they would make in terms of new pollution-control technologies [inaudible] the standards. We looked at it over the next five years, from 2011 to 2015, which is the time period in which people think that most of the standards, the new EPA standards, will be implemented, and we found that utilities are expected to invest about $196 billion in capital improvements over that time period. That’s around [$102] billion in new generation capacity, around $94 billion in pollution-control technologies. And these–then we went on to estimate how many jobs these would create in terms of the construction and installation of these capital improvements, and also in terms of the long-run operations and maintenance jobs associated with improving capital in these utilities. We found that we would expect about 1.5 million jobs being generated in terms of the pollution control, the installation of pollution-control technologies in the new capacity. And over the longer run, in terms of the operation and maintenance, because you have a very capital-intensive industry, around 4,000 jobs would be created on net. We also took into account the possibility that these new regulations would cause coal-fired plants to have to retire, the older coal-fired plants, where it wasn’t economically feasible to retrofit them so that they could actually reduce their emissions. So we accounted for those job losses as well. And we find that overall, throughout the states that we looked at, the 36 states on the eastern half of the US that we looked at, the states are going to expect a net job gain, not a net job decline, based on the investments that we would expect to happen under these new EPA regulations.

JAY: So Mr. Murray may be correct that his particular coal-fired plant may lose some jobs, but overall, because of the investment in the whole sector, there’s a net gain in jobs. That’s the basic point.

HEINTZ: Yeah, that’s correct. And the job losses from retirements that we estimate over that time period is around 17,000 jobs, so it’s not a trivial number of jobs. But it’s more than offset by up to 22,000 jobs that would be created. And these are the operations and maintenance jobs, not just the construction and installation jobs, so relatively permanent jobs that would be created in terms of new capacity and what it takes to actually operate these pollution-control technologies once they’re in place.

JAY: Now, if I understand this correctly, the kind of pollutants you’re talking about, the regulations that are going to be passed to control these pollutants coming from facilities creating electrical power, this is actually not directly connected to climate change issue. This is other kinds of pollutants that kind of go to the bread and butter of the original Clean Air Act. So whatever you think about climate change isn’t actually involved in this particular set of regulations. Do I have it correct?

HEINTZ: Yeah. Yeah. It’s not–the big concern with these regulations are that these pollutants, especially the ones under Utility MACT, are highly toxic emissions that are coming out of these plants.

JAY: Yeah, for example, James?

HEINTZ: So, again, they’re mercury, arsenic, lead. And these pollutants, these emissions coming out of utilities have been associated with, you know, tens of thousands of premature deaths every year and a lot of real health costs. So we’re really talking about some toxic substances here. And these utilities are not paying the full cost of emitting these substances. So it’s an effort for them to actually realize the cost, the full cost of generating the electricity that they do. And once they do that, it provides an incentive for them to install these types of pollution-control technologies or to change and update their capital investments in their generation facilities themselves.

JAY: Now, when did your report come out?

HEINTZ: It came out on February 8 of this year.

JAY: And has there been any response to it from the fossil fuel industry?

HEINTZ: The response–I mean, the response–we have a number of responses from industry. So there is–there are industries–it’s a fairly large industry now–that actually make these types of pollution-control technologies. So it’s not a trivial industrial sector. And they, obviously, weren’t very confident and supportive of these new standards and new regulation. When you’re the utility, if there’s a large number of utilities that have already made these investments or are actively making these investments to clean up their emissions, these standards, many of the standards [inaudible] air pollution are not new. I mean, these are a new set of standards, but lots of standards were actually set in 1990, when the Clean Air Act amendments were passed under President George H. W. Bush’s administration, so they date back to that time. And so, since that time, you’ve seen utilities actually make a number of investments already. So the utilities that have modernized their plants and made the investments and have made a strong effort to actually cut back on their pollution, they’re actually in a good position, and they’re already going to be largely in compliance with these new standards that are coming on board, so they’re not necessarily opposing to it. But it’s a very divided industry when it comes to these types of standards. I think that’s important to recognize. When we released this report, we had CEOs of utilities at the press conference supporting the findings of the report.

JAY: Thanks very much for joining us, James.

HEINTZ: Okay. Thank you.

JAY: And thank you for joining us on The Real News Network.

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