Up in the Air

In the very public fight between Texas and the federal government, no organization has been as vilified as the EPA and its “job-killing” regulations. That may be good politics, but is it good policy?
Perry, along with Attorney General Greg Abbott and agriculture commissioner Todd Staples, announces the state’s decision to sue the EPA over the regulation of greenhouse gases in February 2010. 
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On September 12, one month after Governor Rick Perry declared his intention to run for president, Luminant, the largest electricity generator in the state, announced that it would partially shut down a huge coal-fired power plant in northeast Texas, close the associated lignite coal mines, and lay off five hundred workers. Not a great headline for the governor to see, since the state’s already overburdened power grid barely kept up with demand during this past summer’s record heat wave. But as an illustration of one of his nascent campaign’s key themes, the news could not have been timelier. Luminant blamed a familiar enemy—the overreaching federal government—for the layoffs. The culprit this time, the company said, was the Environmental Protection Agency and its new Cross-State Air Pollution Rule ( CSAPR), which is aimed mainly at limiting sulfur dioxide emissions from coal plants, which provide 40 percent of the electricity in Texas. “The Obama administration continues to put up roadblocks for our nation’s job creators by imposing burdensome regulations based on assumptions, not facts, that will result in job losses and increased energy costs with no definite environmental benefit,” Perry said that same day. “Yet again, this administration is ignoring Texas’s proven track record of cleaning our air while creating jobs, opting instead for more stifling red tape.”

Almost immediately, state senator Troy Fraser, the chair of the Committee on Natural Resources, convened a hearing at the Capitol to get to the bottom of things. In a packed room, Luminant’s CEO, David Campbell, made his case to the panel. He claimed that his company simply did not have enough time to retrofit the plant, known as Monticello, with expensive pollution controls to meet the EPA’s aggressive deadline of January 2012. Shutting two of the plant’s three boilers—representing 1,200 megawatts of power—and switching

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