The Indiana Association of Manufacturers said Tuesday that Indiana companies will have to spend $7.3 billion on upfront capital expenditures and $1.2 billion annually to comply with three proposed federal environmental rules impacting air emissions, water use and the disposal of coal ash.
The group, which is an affiliate of the National Association of Manufacturers, received the data from a study the national group commissioned to analyze the cumulative costs and benefits of potential Environmental Protection Agency rules on the U.S. economy.
Despite the criticisms, public health advocates and the Environmental Protection Agency said the rules are designed to prevent illnesses and save billions of dollars in health-related costs.
Trade group officials said the EPA underestimated the costs of compliance with six proposals, which the group said will cost hundreds of billions of dollars and would cause the loss of several million jobs. The group also said prices for manufactured goods and services would also rise with higher costs.
“The regulations coming out of Washington continue to dampen growth and job creation in Indiana,” said Patrick Bennett, vice president of environment, energy and infrastructure for the Indiana Manufacturers Association, in a news release.
Industry groups have been among the chief critics of EPA proposals that impact a range of businesses including utilities and operators of boilers and coal-fired power plants. The study said it analyzed rules for emissions standards for boilers and power plants and several other regulations. Rules for power producers in handling coal ash and operators of cooling water intake structures are still pending and the manufacturers group expects the implementation of the Cross-State Air Pollution Rule and a revision to a national air standard for ozone.
The Washington-based firm ndp|consulting completed the study and the National Association of Manufacturers released the results of it last week.
EPA's rulemaking authority is derived from federal regulations such as the Clean Air Act to protect human health and the environment. One rule that drew the ire of several groups and companies was the finalization of standards in February to reduce mercury and toxic air pollution from coal and oil-fired power plants. Through Dec. 31, EPA is accepting public comment on reconsidered rules regarding the maximum available control technology standard and new source performance standards for utilities.
Northern Indiana Public Service Co. spokesman Nick Meyer said construction work is ongoing at the R.M. Schahfer Generating Station in Wheatfield to help meet environmental rules and the company is working to finalize engineering plans for work to reduce harmful air pollutants at the Michigan City Generating Station in 2013. NIPSCO is planning to spend $5 billion dollars over the next decade to comply with expected federal environmental proposals and other organizational priorities, he said.
"Ultimately, the goal is to have efficient fleets of generating stations that are environmentally compliant while trying to balance competitive electric rates," Meyer said.
Kevin Doyle, manager of environmental affairs for ArcelorMittal Indiana Harbor, said his firm does long-range planning to analyze environmental proposals and the impact on operations from economic and competitive perspectives.
A representative from EPA's press office said via email the safeguards proposed in regulations "are sensible, achievable, and cost-effective" and reflect input gathered from citizens, private industry and public health advocates.
"For example, EPA estimates that for every dollar spent to cut air pollution from power plants to meet the Mercury and Air Toxics Standards, Americans will receive $3 to $9 in health benefits," an EPA spokeswoman said in a statement. "In the same way, every dollar spent to comply with proposed standards to curb toxic emissions from industrial boilers is estimated to provide $12 to $30 in public health benefits."
Brian Urbaszewski, director of environmental health programs at the Respiratory Health Association of Metropolitan Chicago, said business groups have made similar arguments about environmental rules in the last few decades, but companies eventually find cheaper options to comply with the regulations "and life goes on." He said the automobile industry was worried about cars becoming too expensive after catalytic converters were required to be installed on vehicles, but the industry adapted.
Urbaszewski said EPA completes a cost-benefit analysis of the rules it makes and works to ensure that pollution costs related to various manufacturing processes are borne by the companies.
"These rules are being put into place to ensure that the costs from burning coal are internalized by the companies using that fuel ... not the public," Urbaszewski said.
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