March 15, 2004 | Volume 1, Issue 1
Against Clean Air Rollbacks
Consider
A study conducted by Abt Associates for the Clean Air Task Force1 measured the health effects of 51 power plants that defied the original NSR guidelines. Using methods developed by the EPA‘s Science Advisory Board (and accepted by the Office of Management and Budget), Abt Associates reports that these 51 offending power plants caused major health problems:
- Meeting NSR guidelines would have prevented between 4,300 and 7,000 early deaths
- Pollution from these plants caused between 107,000 and 170,000 asthma attacks
- Of these statistics, 1,200 to 1,700 early deaths and 30,000 to 39,000 asthma attacks occurred in Northeast “downwind” states
- Requiring these 51 plants to meet NSR guidelines would have yielded between $27 and $45 Billion in monetary benefits
The State Environmental Resource Center also studied the benefits of enforcing the original NSR guidelines. They find that adherence to these standards would result in the following environmental gains:2
- 90% decrease in mercury pollution
- Reduced acid rain via 75% decrease in sulfur dioxide emissions
- Slowing global warming via reductions in carbon dioxide to 1990 levels
- Reduced ozone smog via 75% reduction in nitrogen emissions
Solution
I recognize the concern of utility owners who feel they cannot meet NSR guidelines and still stay in business, much less make a profit. But the health and environmental damage done by these outdated, inefficient plants cannot be ignored. The NSR guidelines must be aggressively enforced to prevent a regression to poorer health and environmental standards. Conforming to NSR rules does not have to mean death to utilities that own these aging facilities. In fact, I recommend a policy that redirects the resources of these experienced companies to a profitable, clean energy source – wind power.
To encourage affected companies to upgrade their pollution control systems to NSR standards, an economic subsidy plan should be put in place. However, instead of tax incentives and low-interest loans for coal-fired plant capital expenditures, subsidies should be established to help these companies expand their operations into the production of wind power. The profit gained from subsidized wind power production will enable the power companies to shrink debt accumulated in the modernization process of their coal-fired plant.
There are a number of other practical reasons for traditional utilities to adopt wind power technologies:3
- Less dependence on fossil fuels and their variable costs.
- Payback period for the manufacture and construction cost of a wind turbine is 3–8 months; much quicker than other capital investments.
- Wind operations financed by electric utilities allow production at approximately 3.5 cents/kWh versus 5 cents/kWh for other developers.4 The national average price paid by consumers for electricity in April 2003, regardless of source, was 6.97 cents/kWh.5
- As state and federal governments add future subsidy mechanisms, stability in the wind market will reduce finance costs even further.
Conclusion
This policy should appeal to all interested parties. Environmentalists uphold goals for emission reductions. Citizens enjoy a longer, better quality of life. Ranchers and farmers enjoy long-term income on their land by leasing “wind farm” space. Utility owners receive subsidized access to a growing and profitable energy source.
Lastly, this is an affordable program for the US government with a potentially large payoff as traditional energy sources become scarce worldwide. The federal government will grant the oil and gas industries $11 Billion of tax relief between 1999 and 2003.6 Only $50.5 Million was allocated to the Department of Energy’s wind program in 2001.7 It is time to get our priorities straight and protect America’s health, environment and energy supply. To do this we must maintain the standards put forth by the Clean Air Act and develop sustainable energy sources for the future.
1 www.catf.us/publications/reports/PowerToKill.pdf, “Power to Kill”, July 2001, page 4.
2 http://www.serconline.org/clean/pkg_frameset.html, Talking Points.
3 www.awea.org/faq/cost.html, Wind Power Costs.
4 Electric utilities have access to lower cost debt, longer debt payment periods and federal “Renewable Energy Production Incentives” only available to utilities.
5 http://sanjose.bizjournals.com/wichita/stories/2003/08/25/daily37.html, David Dinell, Wichita Business Journal “Kansas’ electricity costs less than nationwide average.”
6 www.awea.org/faq/subsidi.html, Congressional Joint Committee on Taxation, “Estimates of Federal Tax Expenditures for Fiscal Years 1999–2003,” December 15, 1998.
7 Testimony of the American Wind Energy Association before the House Appropriations Committee Subcommittee on Energy and Water Development on the U.S. Department of Energy Fiscal Year 2001 Budget Request, March 31, 2000.