AUSTIN, TX— The Texas Association of Business has joined with 74 other state and local business associations from 33 different states in filing an amicus brief in the U.S. Supreme Court outlining the devastating economic effects of the Environmental Protection Agency’s (EPA) greenhouse gas regulations. In issuing these regulations, the EPA purports to have the authority to regulate over 6 million new facilities including factories, power plants, bakeries, office buildings, hospitals, multifamily residential buildings, and other “small sources” of greenhouse gases.
“These proposed regulations could be devastating to our Texas economy and to employers across the state,” said TAB President and CEO Bill Hammond. “We believe this brief effectively points out a number of ways these regulations will threaten our economy in Texas and the rest of the country.”
TAB argued in its amicus brief that the threat of these invasive and intrusive regulations produce a “chilling effect” that impacts plans for expanding operations, entering into new markets, and developing new products. TAB explained that both large and small enterprises will understandably hesitate if growth entails the complexities and costs of regulatory compliance. And, those that do decide to grow will necessarily pass those costs onto their customers. The businesses that cannot do so will suffer decreased profits in the midst of the current economic crisis – a setback that can ultimately threaten their survival.
Amicus Brief Excerpts
· “To America’s small enterprises, the question is not whether the [administrative] nightmare will affect them – but when. As prudent businesses, they rightly foresee risks for which they must prepare and burdens for which they must account. Although EPA may disregard those risks and burdens, America’s small enterprises do not share that luxury.” Pp. 7-8.
· “The Triggering Rule is economically remarkable not only because of the scope of expanded regulatory authority – in terms of the over 6 million facilities potentially subject to regulation by the programs for the first time – but also because of the type of regulation (PSD and Title V permitting) that those entities would face. extremely burdensome on the applicant. In 2004, EPA calculated that a PSD permit costs an applicant an average of $125,120 and requires 866 hours for the applicant to omplete. Moreover, in the Tailoring Rule, EPA admitted that “a literal application of the title V applicability provisions to all GHG sourceswould result in permitting delays of some 10 years,” even though the statute requires resolution in 18 months.” Pp. 12-13.
· “Examining the largest GHG sources in the nation, the American Action Forum (AAF) recently determined that the current proposals for regulating GHGs under the Clean Air Act will affect tens of thousands of jobs and a variety of industries. Natural gas generation, steel mills, refineries, and plastics manufacturing will all have to adjust to the new regulations. According to the researchers, “any limitations on carbon output will inevitably pull coal-based facilities off the grid.” P.14
· “There are serious questions regarding whether industry is prepared to absorb the additional costs associated with these mandates – particularly in light of a $290 billion wave of energy-related regulations over the last four years from EPA and the Department of Energy combined.” P. 15
· “The EPA’s asserted ability to time its regulatory expansions gives the Agency significant leverage over the regulated community – perhaps to exact concessions from the businesses in unrelated areas in exchange for further delaying GHG regulations. This threat is not insignificant in its potential power. For example, suppose that the EPA next ratcheted down the coverage thresholds to sweep in 1% of the 6 million facilities it has claimed regulatory authority over in the Triggering Rule. Based on an average permit cost of $125,120 and an application burden of 866 hours, such a “modest” expansion of the EPA’s regulatory agenda would cost at least an additional $7.5 billion and 60,000,000 employee hours, or approximately 25,000 full-time-employees. The incentives to avoid a modest $7.5 billion regulatory expansion would be great.” Pp. 22-23.
Statement from Attorney Richard Faulk, author of the brief:
“Our brief speaks for the economic 'grass roots' of America -- 75 state and local Chambers of Commerce and other business organizations. It's an extraordinarily diverse group in terms of geography, industries and their members' urban and rural operations, but today they speak with one voice. They urge the Supreme Court to consider the economic errors and fallacies in EPA's proposed regulations
The brief unmasks EPA's conclusion that all sources of greenhouse gases are within its regulatory reach and grasp -- no matter how inconsequential they may be. It reveals EPA's intent to ultimately regulate all American businesses, even small sources, by requiring expensive permits, enabling lawsuits by agencies and private citizens, or by imposing vague 'requirements' that EPA has yet to specify. Although the Agency claims that small sources obtained ‘relief’ when EPA delayed their regulations until 2016, small businesses are neither relieved nor comforted by the deferral. The eventual regulations produce a ‘chilling effect’ that inhibits expanding operations, entering into new markets, and developing new products.
Most importantly, the brief demonstrates the extraordinary economic burdens the Agency’s scheme will impose on American businesses, large and small alike. These include higher energy costs and higher prices for essential goods and services. Although EPA claimed that America's large businesses will not sustain “direct” economic burdens, the Agency failed to consider the indirect burden of higher prices caused by, among other things, the shutdown of many existing power plants fired by coal. EPA also failed to consider how these and other increased costs for essential goods and services will burden the small businesses and consumers who must ultimately absorb them. This economic reality undermines the Agency’s claim that its regulations are ‘not expected to result in any increases in expenditures by any small entity.’
In our free enterprise system, law and economics are inextricably intertwined. This is especially true when regulatory policy is concerned. Here, EPA has promulgated new laws without adequately considering their economic effects. EPA's legal decisions should not be evaluated in an economic vacuum. The Supreme Court should return the Agency’s exercises ‘back to the drawing board’ -- with instructions to consider the practical economic effect of its policies before endangering the nation's economic health and welfare.”
CLICK HERE to read the full brief.
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Founded in 1922, the Texas Association of Business is a broad-based, bipartisan organization representing more than 3,000 small and large Texas employers and 200 local chambers of commerce.1209 Nueces • Austin, Texas 78701