People ask me why I write so much about air, when my blog is about water. It certainly might be easier if our world was a more compartmentalized system, where no interactions occurred between air and water. Unfortunately our world is a complex place where air and water interact with each other and the terrestrial environment to bedevil such human endeavors as burning coal in power plants to produce energy. I’ve been writing about mercury in the environment for awhile now. One of the concerns with burning coal is the release of mercury into the atmosphere. Some of the mercury stays in the air and some of it falls into our water and soils when it rains. It’s a complex process and you can read about it in my blog post below.
The Environmental Protection Agency (EPA) wrote regulations to reduce mercury and other air toxins (such as selenium, nickel, cadmium, arsenic and chromium), from coal and oil fired electric utility generation. The rules are named the Mercury and Air Toxics Standards regulations and people refer to them as MATS for short. The EPA has been the recipient of numerous lawsuits because of MATS. A major concern in the lawsuits was the lack of cost benefit analysis in EPA’s determination to regulate mercury and other toxins released by power plants. EPA estimated the pollution controls in MATS would cost $9.5 billion to implement annually, while the regulation only identified $4 to 6 million a year in environmental and health benefits as a result of reducing mercury and other toxins. EPA also noted additional benefits would occur as a result of the pollution controls reducing sulfur dioxide and particulates. Sulfur dioxide and particulates are not considered toxins under MATS. They are regulated elsewhere in the Clean Air Act. Benefits of reducing additional sulfur dioxide and particulates through the implantation of MATS pollution controls were estimated to be $39 to 90 billion a year.
The lawsuits finally ended up in the Supreme Court and a decision was made by the Supreme Court justices last year. In their ruling, the Supreme Court noted the lack of a cost analysis for implementing the regulations and told the Agency it needed to consider cost, including the cost of compliance, before deciding whether regulating mercury and other air toxins is appropriate and necessary. But then the Court said, “it is up to EPA to decide how to account for cost.”
Well the plaintiffs in the lawsuit must have thought they had won big. As I noted in an earlier post a formal cost-benefit analysis would probably take years to conduct during which time industry could seek ways to delay implementation of costly air controls. But EPA was too smart. They looked at the Court’s phrase: “it is up to EPA to decide how to account for cost,” and decided those words did not mean a formal cost-benefit analysis was needed. Instead, EPA decided on a different method to determine if the costs for implementing the regulations were reasonable. The method evaluated the cost of complying with MATS regulations to the historic annual revenues and expenditures by the power industry and its impact on retail electricity prices. EPA used 2000 to 2008 revenue data. The power industry in the U.S. basically had revenues of $277.2 to $356.6 billion annually during those years. When compared with EPA’s $9.6 billion estimate of annual industry cost to comply with the regulations, it works out the costs are only a small fraction of the industry’s yearly revenue, just 2.7 to 3.5 %. The impact on retail prices of electricity are also small, just 0.3 cents per Kilowatt hour. (And frankly we know it is the electric rate payer who will eventually pay the bill for the regulatory controls.)
EPA published the cost analysis on December 1, 2015 in the 40 Code of Federal Register 63 as the “Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal and Oil-fired Electric Utility Generating Units.” This supplement was commented on by the public. Can you guess what a lot of comments were? Commenters said, “EPA’s preferred approach to considering cost didn’t rationally balance the costs of the rule against the public health and environmental harm identified.” In other words, those commenters thought EPA’s method was a bunch of hooey and a formal cost-benefit analysis should be conducted. EPA looked at those comments and replied truthfully to them in the Final Supplement released in April 2016. EPA said the Supreme Court had not required the Agency to perform a formal cost benefit analysis but had instead clearly left it up to the Agency to decide how to account for cost. So EPA has determined in its final supplemental Finding: “a consideration of cost does not cause the Agency to change their determination that regulation of mercury and air toxins is appropriate and necessary under the Clean Air Act.”
Well do you think it’s over? No the first lawsuit over the EPA determination was filed April 25, 2016. In the meantime, the regulations are in effect and power plants are already implementing the new pollution controls or switching fuels from coal to natural gas. Is it worth it? In EPA’s supplement they cite the following statistics from 2005. During that year, electric generating utilities released to the atmosphere 50 % of the U.S.’s total man-made mercury emissions, 62 % of the total arsenic, 39 % of the total cadmium, 22 % of the chrome, 28 % of the nickel and 83 % of the selenium.

