Friday, October 24, 2014

Just in

Study confirms EPA’s proposed carbon regs will fuel spike in energy costs

Washington—New analysis predicts that compliance with EPA’s proposed greenhouse gas regulations could total upwards of $366 billion. As jarring as the numbers are, they’re of little surprise to farmers and ranchers who have been warning that the regulations would greatly jeopardize the availability of an affordable and reliable supply of energy.     

The analysis, provided by NERA Economic Consulting, also finds that 43 states will have double-digit electricity price surges, with 14 states potentially facing peak-year electricity price increases that exceed 20 percent. Much of NERA’s cost projection is based on consumers having to spend more than $500 billion to reduce their use of electricity.    

Last June, President Barack Obama issued an executive memorandum directing EPA to put in place new rules to limit carbon emissions from both new and existing power plants.  These two regulations set the stage for similar regulations directed at other sectors of the economy like refining, chemicals, natural gas development, iron and steel, livestock operations and pulp and paper.    

In addition to the staggering $41 billion-plus annual price tag, NERA analysis also finds that the proposals could shutter 45,000 megawatts or more of coal-based electricity, which is more than the entire electricity supply of New England.    

The proposed rules , which the administration has dubbed its Clean Power Plan, fail to take into account farmers’ and ranchers’ leadership in producing and using clean, renewable fuels, said Andrew Walmsley, American Farm Bureau Federation energy specialist.  
 “The Clean Power Plan would be punishing one sector – agriculture – that is doing more than its part in supporting energy independence and reducing fossil fuel use,” Walmsley said. “Farmers and ranchers are leading the way to a cleaner renewable energy future through increased and more innovative ethanol and biodiesel production, the installation of methane digesters, support for the greater use of wind energy and many other efforts along these lines.”   

Further, while the administration’s proposals come with significant costs for all consumers, they’ll provide very few, if any, environmental or health benefits.    

“Unfortunately, this plan does little to address the problem it seeks to solve,” Walmsley said.  “Merely reducing fossil fuel emissions without producing a measurable impact on world temperature or climate cannot be regarded as a success.”    

“Instead, EPA’s plan will affect all Americans negatively, and farmers and ranchers will be especially hard hit because of the energy intensive nature of producing food, feed, fuel and fiber,” he added.     

For farmers and ranchers in a large part of the country, coal supplies all or most of their electricity. As coal plants in these areas age and are de-commissioned, these proposed rules will prevent the construction of a reliable and affordable source of electricity to take their place.    

“At a time when our country needs to consider all types of energy, the proposed standard appears to eliminate one of the most widely used and inexpensive sources of energy,” Walmsley cautioned. “Any standard for utilities should be realistic and achievable for all sources of energy.”    

In addition, EPA’s proposals for new and existing power plants have the potential to send energy costs soaring for farmers and ranchers when utility companies pass the costs of compliance on to their customers. While other businesses will have the option of passing those costs down the line, growers can’t do that.     

“Farmers and ranchers are price takers and not price makers, so they lack the ability of many other sectors to recoup their costs by passing them on to customers,” Walmsley said.    
Farmers will face not only higher electricity prices, but the higher input prices that will follow.  Increases in other energy prices, fertilizer and machinery will have a negative effect on the farm level while at the same time making U.S. farmers and ranchers less competitive internationally. 
To let EPA know how its Clean Power Plan and the skyrocketing energy costs that come with it will hurt you, your family and your livelihood, go to AFBF’s FBAct website here:  

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