PMA Comments - Environmental Regulation



 The proposed regulations we discussed today seem to be a part of an attack by the United States Department of Environmental Protection on the productive sector in our Commonwealth and across America. The new power plan rules, when fully implemented, will cost Pennsylvania 29,000 manufacturing jobs according to a July Heritage Foundation report. The recently proposed and outrageously unattainable ozone level reductions would drastically impact Pennsylvania’s industrial sector. We will lose: $98 billion in gross state product; 101,182 job or job equivalent losses; $109 billion in private sector compliance costs; $1,420 decrease in average household consumption per year according to the National Association of Manufacturers.

When the power plan and ozone reductions proposals are combined with new over-reaching mercury rules, the Waters of the United States power-grab, and recent methane standards then we as consumers, job creators, and drivers of the productive sector will pay much, much more. This is money that cannot then be reinvested in hiring, increased wages, benefits, or plant expansions. Even government will pay more, in compliance and energy costs, on the backs of the taxpayers – the same people who will already have to do more with less.

Keep in mind that manufacturing is an industry that supports 567,000 jobs on the plant floor and sustains millions of additional jobs through supply chains and distribution networks in our Commonwealth. Manufacturing in Pennsylvania also accounts for $77.37 billion in gross state product, more than twelve percent of our Commonwealths total gross state product. Manufacturing exports are on the rise here in Pennsylvania, up more than 50 percent in the past decade at $36.59 billion in 2014. This is an industry that ought to be uplifted, not disproportionally thwarted by unnecessary bureaucracy.

According to a recent poll commissioned by the National Association of Manufacturers, Pennsylvanian’s are satisfied with their air quality. This poll included calls to 600 registered voters in Pennsylvania – all voters, not just those in the industry. According to the poll, nearly two-in-three rate their local air quality as “excellent” or “good”, while majorities in every region of the state rate their local air quality positively. By a three-to-one margin, Pennsylvanians think that the biggest problem for their local area is “less economic growth and job opportunities caused by regulations.” When asked about the effects of implementing stricter federal air quality regulations on their local area, the majority are concerned about the negative economic effects given that 76 percent believe stricter federal air quality regulations would result in higher taxes; 67 percent believe local businesses would have a harder time starting new or growing existing operations; and most importantly, 75 percent believe stricter regulations would increase the price they pay for everyday goods and services.

Our business tax policies do not make Pennsylvania a competitive business location. However our affordable energy and reliable infrastructure has put Pennsylvania back on the map of business selection surveys. Maintaining diverse sources of energy is vital, as any spike in prices or depression in reliability can literally cease production. In June 2015, commercial electric rates in Pennsylvania were 9.65 cents per kilowatt-hour with neighboring states averaging 13.8 cents per kilowatt-hour. Forecasting electric rates is vital in determining a company’s overhead costs and therefore product pricing. By forcing fossil fuels of the equation we are removing that certainty and putting these industry’s bottom lines at risk. Volatile energy prices fail manufacturers and this will directly threaten Pennsylvania’s business competitiveness.

Wind and solar sources are simply not a viable option for replacing the current electric make-up while maintaining our status as a competitive, exporting state. Not only are these sources unstable and more expensive, they cannot compete with other sources without heavy incentives and taxpayer funded subsidies. Taxpayers will then be negatively impacted three times in this scenario. The taxpayer is funding the artificial inclusion of renewable energy sources into the electric market through taxes, increasing their electric bills, and paying more for goods and services from Pennsylvania’s businesses as all costs will be inflated.

Our global competitors are just waiting for us to foul this up. While President Obama foolishly hopes that countries will follow him off the economic cliff that is the EPA’s power plan, China is investing in their coal fleet. Our manufacturing base will be forced to relocate overseas where the production and generation of electricity is far less environmentally friendly, but much more inexpensive. Adding insult to injury, we will then be forced to buy goods produced with higher carbon emitting practices and made with jobs that should have remained on our shores. 

The fact is that the air today is cleaner than it’s been in measurable history. According to the EPA’s own publications, in using current standards air quality continues to improve as emissions have continuously declined in all major measurable categories since they were catalogued in the 1980’s. Manufacturers are committed to being responsible stewards of our environment, doing more with less and always discovering best practices. The manufacturing sector takes pride in continuing to advance technological limits to produce goods in a safer, cleaner, and more environmentally friendly manner.

But the goalposts continue to move yet again. we are disappointed that the Obama Administration has chosen this path and we urge the President to abandon the empty promises and do the right thing for the American economy and American workers.