“Just last week the Chamber of Commerce’s Institute for 21st Century Energy estimated it would cost the economy 224,000 jobs and $289 billion in higher electricity costs through 2030.”
– news release issued by House Energy and Commerce Committee, quoting Rep. Ed Whitfield (R-Ky.), June 2, 2014
“Last week, the U.S. Chamber of Commerce released a report showing how a rule such as the one released today would decrease a family’s disposable income by $3,400 per year and increase their electricity bills by $200. The report also estimates a loss of 224,000 jobs per year between 2014 and 2030.”
– Sen. David Vitter (R-La.), ranking member on the Senate Environment and Public Works Committee, statement issued June 2
“The U.S. Chamber of Commerce has found that each year this regulation will kill 224,000 jobs and force energy rates to skyrocket, so it’s no wonder President Obama is circumventing Congress to implement his latest job-killing regulation.”
– Republican National Committee Chairman Reince Priebus, statement issued June 2
“The president’s plan would indeed cause a surge in electricity bills — costs stand to go up $17 billion every year. But it would also shut down plants and potentially put an average of 224,000 more people out of work every year.”
– blog post by the office of House Speaker John Boehner (R-Ohio), June 2
The Obama administration on Monday proposed to cut carbon dioxide emissions from existing power plants by up to 30 percent by 2030, compared to 2005 levels. The move was long expected, and Republican foes of the proposal were armed with talking points that were issued as soon as the proposed rule came out.
A selection of the statements appears above. Note that they all cite a Chamber of Commerce study that was released on May 28, allowing them to appear authoritative about the job losses, higher electric bills and so forth that they claimed will result from the administration’s action.
We have often warned readers to be wary of studies from groups with a vested interest in the outcome of a policy debate. But there’s an extra reason why lawmakers should have double-checked before pressing the “send” button on their e-mails.
Note that the EPA rule said that the agency would seek a reduction of 30 percent. But on page 15 of the Chamber report, the Chamber says it assumed the rule would impose a 42 percent reduction: “The 42% emissions reduction figure was chosen because, to date, it remains the only publicly announced Administration GHG [Greenhouse Gas protocol] reduction goal for 2030. The Administration has not said whether or how this goal might be modified.”
Oops. That’s a rather large gap between assumption and reality, as the Chamber of Commerce conceded to The Fact Checker. “It’s a big difference,” said Matt Letourneau, senior director for communications and media at the U.S. Chamber’s Institute for 21st Century Energy, which produced the study. “We are going to have to see where the numbers fall.”
Letourneau said the Chamber had cited the 42 percent figure because that was a goal set by the administration in 2009. But our colleague Steven Mufson reported back in late 2012 that the Natural Resources Defense Council had kicked off the effort that resulted in this week’s rule. That article noted that the proposal would curb carbon dioxide emissions by 26 percent from existing power plants by 2020, compared to 2005 levels — which is similar to the rule announced this week.
The assumption that EPA would seek to cut emissions by 42 percent led to other false notes in the Chamber study. For instance, the study assumed that the EPA would require new natural gas facilities to have carbon-capture technology (known in the trade as CCS, for carbon capture and sequestration). But here’s what the rule actually says, on page 243:
“The EPA did not identify full or partial CCS as the BSER [best system of emission reduction] for new natural gas-fired stationary combustion turbines, noting technical challenges to implementation of CCS at NGCC [natural gas combined cycle] units as compared to implementation at new solid fossil fuel-fired sources. The EPA also noted that, because virtually all new fossil fuel-fired power projects are projected to use NGCC technology, requiring full or partial CCS would have a greater impact on the price of electricity than requiring CCS at the few projected coal plants, and the larger number of NGCC projects would make a CCS requirement difficult to implement in the short term.”
Why is this important? The Chamber assumed that $339 billion of an estimated $478 billion in compliance costs would result from having to build new power plants. But that in turn depended on the assumption that more expensive carbon-capture plants would need to be built.
Letourneau noted that the EPA could toughen the rules after the initial comment period has passed. The same point was made by Michael Steel, a spokesman for Boehner. “It has been widely reported that the final rule could have even more strict targets,” he said. “It is clearly too early to judge the actual impact of the policy. Our blog post was appropriately caveated and cited the then-current estimate.”
Sean Spicer, a spokesman for the RNC, said that while the numbers may decrease, “the basic point is the same,” that there would be negative impacts from the proposed rule.
We did not hear back from the Energy and Commerce Committee or Vitter’s office.
The Pinocchio Test
Given the significant difference between the emissions targets in the proposed rule and the assumptions in the Chamber report, Republicans should have avoided using the Chamber’s numbers in the first place. We understand that they believe the negative impact will outweigh any positive impact, but even by the Chamber’s admission, these numbers do not apply at all to the EPA rule as written.
Some might argue this was only an innocent mistake, but the EPA last week in a blog post on the Chamber’s study noted that it would not require carbon-capture technology for new natural gas plants. (The Fact Checker made the same point in a May 23 column on a misleading radio ad.)
That should have been a tip-off that some of the Chamber’s assumptions were shaky — and that it would have been a good idea to double-check what the rule actually said before firing off a statement. These early warnings tipped the GOP citation of the Chamber study into the Four-Pinocchio range.
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