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WASHINGTON — When writing environmental rules, one of the most important calculations involves weighing the financial costs against any gains in human life and health. The formulas are complex, but the bottom line is that reducing the emphasis on health makes it tougher to justify a rule.
Last week the Trump administration took a crucial step toward de-emphasizing the life and health benefits in this calculus when the Environmental Protection Agency said it would rethink a major regulation that restricts mercury emissions by coal-burning power plants.
The 2011 mercury rule — based on decades of research showing that mercury damages the brain, lungs and fetal health — is among the costliest but most effective clean-air policies put forth by the Environmental Protection Agency. Utilities estimate they have spent $18 billion installing clean-air technology, and mercury pollution has fallen by nearly 70 percent.
Modifying the rule could have an impact far beyond any immediate concerns about the release of toxic mercury into the air and water. In fact, the re-evaluation fits into a far-reaching administration strategy to loosen environmental rules affecting countless other industries for years to come by adjusting the factors used to judge the benefits to human health that the rule has brought.
“This goes way beyond just weakening the mercury rule,” said Alan Krupnick, an economist at Resources for the Future, a nonpartisan Washington research organization. “This is part of a change that would give the Trump administration a way to more easily justify loosening many other pollution regulations, such as rules on smog, and rules on climate-change pollution.”
For example, Mr. Krupnick and other experts said, tweaking the formulas could also make it easier for the E.P.A. to justify its separate proposal last month to replace the Clean Power Plan, an Obama-era rule that was designed to cut global-warming emissions from power plants.
The electric utilities that operate the nation’s coal-fired plants, and thus are heavily affected by the mercury rule, are urging the administration to leave the rule alone. They have already spent billions of dollars to become compliant, the utilities say, so changes are of little benefit to them.
“It’s in our rearview mirror, so we want to stick with what we’ve done,” said Shannon Brushe, a spokeswoman for Duke Energy, one of the nation’s largest utilities. “We want to be able to plan our investments for the future, but if they change the rules, that becomes difficult.”
The E.P.A. has said it is reviewing whether the rule is “appropriate and necessary.” That’s legal shorthand, based on a 2015 Supreme Court decision, for assessing whether the costs of compliance outweigh the benefits: The court found that the agency must assess industry’s compliance costs in determining whether a regulation is appropriate and necessary, but kept the rule in place. The. E.P.A. under the Trump administration asked a federal appeals court to delay the rule while it decides whether to continue to defend it in court.
Because of that, according to conservative groups that have welcomed the review, a loosening of the mercury rule would fit into a broader effort to fundamentally change the agency’s formulas for its cost-benefit reviews.
This past June, Scott Pruitt, who was the E.P.A.’s administrator at the time, called for a new way of calculating the costs and benefits of environmental regulations. “Many have complained that the previous administration inflated the benefits and underestimated the costs of its regulations through questionable cost-benefit analysis,” he said at the time. Under Andrew L. Wheeler, who became the E.P.A.’s acting administrator when Mr. Pruitt stepped down in July amid scandals, the agency is still considering an overhaul.
Nicolas Loris, an economist with the Heritage Foundation, a conservative think tank that has championed President Trump’s environmental deregulatory agenda, said that rewriting the mercury rule by placing different values on the health costs of mercury pollution could help end what he called the E.P.A.’s “egregious abuse” of the way it measures winners and losers. “This could be part of a broader approach,” he said.
Public health advocates say that the reformulation of the mercury rule, along with efforts to limit the type of scientific studies the E.P.A. will allow to inform its understanding of how pollution affects human health, will weaken the agency’s ability to write new pollution standards in the future. “All of this is leading up to a real sea change in the way this agency, which is supposed to be a public health and environment agency, thinks about the value of reducing air pollution from coal plants,” said Ann Weeks, senior counsel for the Clean Air Task Force, an environmental group.
The mercury rule, she said, “is where the rubber hits the road.”
John Konkus, a spokesman for the E.P.A., said that the agency “knows these issues are of importance to the regulated community and the public at large and is committed to a thoughtful and transparent regulatory process in addressing them.”
The calculations that the E.P.A. conducts for every major new air or water regulation lie at the philosophical heart of the agency’s work. And its process for that analysis has long been in industry’s cross hairs.
That’s because the agency has long counted not just the direct health benefits of pulling a certain pollutant out of the atmosphere, but also what are called the “co-benefits” that occur when, as a result, other toxins are also reduced.
For example, in the case of the mercury rule, the Obama administration found between $4 million to $6 million in health benefits directly from curbing mercury. But it further justified the regulation by citing an additional $80 billion in health benefits a year by, among other things, preventing as many as 11,000 premature deaths. Those savings come from a reduction in particulate matter linked to heart and lung disease that also occurs when cutting mercury emissions.
Mr. Konkus, the E.P.A. spokesman, said last week, “One of a number of issues E.P.A. is assessing in the context of the appropriate and necessary analysis is whether and how to account for co-benefits.”
A powerful array of business groups including the United States Chamber of Commerce, the National Association of Home Builders and leaders in the coal industry say the E.P.A. has for too long ignored or downplayed in its formulas the costs of regulations to their businesses.
One of the fiercest critics is Robert E. Murray, the C.E.O. of Murray Energy Corp., who has donated to Mr. Trump’s inauguration fund, and has served as a chief counselor to the president on his efforts to revive the nation’s flagging coal industry. Mr. Murray helped underwrite lawsuits that Republican attorneys general and industry groups brought against the mercury rule. He cited its repeal as one of his top priorities in letters last year to cabinet heads.
Mr. Murray is also a former lobbying client of Mr. Wheeler, the current acting administrator of the E.P.A. who joined the agency after spending nearly a decade as the coal executive’s top attorney.
Mr. Konkus said that Mr. Wheeler did not work on the mercury issue when he served a lobbyist for Mr. Murray, and said Mr. Wheeler did not lobby the agency at all in the two years before joining in April. Mr. Wheeler signed a statement in which he recused himself from working with former clients, including Murray Energy, until April 2020.
“For years E.P.A. has inconsistently analyzed the costs and benefits of its regulations, adding speculative and ill-defined benefits while ignoring important costs,” Mr. Murray’s company argued this year to the agency, asking for the E.P.A. to “avoid overstating the benefits of its regulations and understating their costs.”
For Phil Smith, a spokesman for the United Mine Workers, reworking the E.P.A.’s formula is far from academic. He blames the mercury rule’s high costs for the loss of about 2,000 jobs in the coal industry and criticized the cost-benefit metrics used by the E.P.A. for not giving enough weight to the real-world costs of miners losing jobs.
“People have lost their health care benefits, people have lost their dental benefits and there’s a cost to that too,” Mr. Smith said.
But in Evansville, Ind., where President Trump campaigned Thursday and relayed that he ran into nine coal miners “crying out of happiness” over his aid to the industry, there is also deep fear that E.P.A.’s changes will make health consequences worse. Evansville is within 30 miles of four particularly large plants that produce millions of tons of toxic air pollution annually.
“Everywhere you look it’s just coal-fired power plants,” said Mary Lyn Stoll, an environmental activist and philosophy professor at University of Southern Indiana. “They want to stop doing something the government was doing to protect people.”
Utilities, meanwhile, are expressing concern that they spent millions of dollars unnecessarily, hurting their bottom lines and costing customers higher electric bills.
“The lion’s share of the cost was one-time investments to technology to capture mercury pollution,” said Dallas Burtraw, an expert in the electric utility industry at Resources for the Future, a nonpartisan Washington research organization. “Now the money has been spent. Companies aren’t going to get it back.”
While Duke Energy initially opposed the mercury regulation before it was put into effect in 2011, the company has since complied with it at plants like the Cayuga station, a coal-fired power generator in west Indiana that lights up about one million homes. In 2013, Duke spent about $400 million and hired about 300 construction workers to install a 200-foot tall unit made of chemical-coated steel plates, which captures mercury and converts it into a different substance, which is then removed by chemical “scrubbers” already present in the plant.
American Electric Power, an Ohio-based electric utility that generates power in 11 states, spent $388.4 million to install similar technology at a plant in Cason, Tex. Mercury pollution at the plant has since gone down 90 percent, said Melissa McHenry, a spokeswoman for the company, in an email.
“Although we disagreed with provisions of the rule when it was being promulgated, our controls are in place and compliance is being achieved,” Ms. McHenry wrote. “We have worked with our state regulatory commissions to recover costs for the investments made for compliance. We believe a disruption in the mercury program at this point is not needed.”
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