Rick Perry lied……..again
Central to Gov. Rick Perry’s presidential campaign message is attacking federal regulations as job killers.
But one of Perry’s most detailed and specific job-loss predictions turns out to be wrong.
Perry warned last year that “tens of thousands” of Texas jobs would vanish because the Environmental Protection Agency , under President Barack Obama, was demanding changes in dozens of Texas industrial plants’ state air permits.
“Washington’s latest attempt to intrude on the state’s authority not only undermines Texas’ successful clean-air programs, but it will cost the state tens of thousands of jobs,” Perry said in a news release on June 15, 2010.
Perry repeated the “tens of thousands” figure in speeches, statements and news releases.
The actual number of jobs lost, however, was zero.
No plants shut down, cut production or left Texas, permit records and interviews with Texas and federal officials, company representatives and business advocates show. All the plants have made or are making what a consultant called a fairly smooth transition to a different type of permit.
‘Running as normal’
“We’re running as normal,” said Elizabeth Kimbrough, a spokeswoman for Garland Power & Light.
Perry singled out the city-owned utility last year as a Texas venture that was in danger of a shutdown when the EPA demanded that it change one plant’s permit. The new permit is not finished, but GP&L has not curtailed operations, she said.
Perry’s aides say his warnings were justified at the time based on what was known about the EPA policy’s potential impact. EPA officials say they had no intention of penalizing any plant that had been operating in good faith, a point they made publicly when they announced their Texas permit orders.
The failure of Perry’s prediction demonstrates the risk of forecasting the effect of any government policy. It also highlights a debate over economics and philosophy that has become a main point in the run up to next year’s presidential election.
Republican candidates have attacked federal regulations in general and EPA air-pollution rules in particular as attempts to cripple the economy and extend government control without scientific justification.
Environmental advocates say a cleaner environment yields economic benefits far beyond the costs of compliance. Annual regulatory reports to Congress, submitted by both Democratic and Republican presidents since 1997, have reached the same conclusion.
Economists, environmental groups and industry organizations routinely produce studies pronouncing every conceivable verdict upon the costs of regulation and the benefits of public health. Most predictions fade from memory, with little after-the-fact verification, when the debate over a new law or rule is finished.
Rarely does the public get as swift and certain a look at the outcome of an economic forecast as it has with Texas’ “flexible” permits.
Under the federal Clean Air Act, Congress sets policy, the EPA writes overall rules and, in most cases, states enforce them. States can adopt their own permit procedures within federal requirements.
In summer 2010, the EPA’s regional administrator in Dallas, Obama appointee Al Armendariz, rejected Texas’ flexible-permit program, saying the state’s way of regulating big industrial plants since 1994 violated the Clean Air Act.
The EPA said the flexible permits Texas issued were unclear and confusing and obscured the true nature and amount of plants’ emissions. Texas assigned a single big number to a plant, some covering more than a square mile; the EPA demanded a separate number for each emission source in the plant in order to boost clarity and make enforcement easier. The EPA disputed other technical aspects as well.
Armendariz ordered the affected plants, eventually numbering about 140, to respond with plans to seek permits in line with federal law. If Texas refused to change its permit system, the EPA would take the permits over and issue them itself.
For Perry, the EPA’s effort epitomized an overreaching, command-and-control approach that put a target on the back of a state where he maintained business-friendly ways had created jobs and cut pollution while the national economy suffered.
His supporters said federal censure of Texas’ air-pollution policies also masked Democratic payback to a solidly Republican state.
That’s when Perry issued his warning that the EPA’s rejection of Texas’ flexible permits would kill tens of thousands of Texas jobs. He cited the number repeatedly, at one point even blasting the EPA in a news release datelined Shanghai while on a trade visit there.
A year later, no Texas industrial calamity materialized. By this summer, all the companies had received new state permits acceptable to the EPA or were in the process of doing so. None ever stopped operating.
Lucy Nashed, deputy press secretary in the governor’s office, said Perry’s point was that a weak economy does not need more fetters on business.
“Now is not the time for government to be placing costly and burdensome mandates on job creators, especially given the success of Texas’ flex-permit program,” she said.
The Texas approach helped reduce emissions of nitrogen oxides by nearly 58 percent and emissions of smog-causing pollution in general by 27 percent since 2000 — “more than any other state in the nation,” Nashed said.
Environmental advocates, who contend the pollution cuts came mostly from federal mandates, said the collapse of Perry’s doomsday scenario was expected. They said the governor and other Texas officials were trying to scare people for political purposes.
“We’ve heard the same statements many, many times out of the governor’s office,” said Craft, a Ph.D. toxicologist. “We hear this cry of ‘wolf’ every single time, and it never comes to fruition.”
As the public political fighting continued, officials from the EPA and the Texas Commission on Environmental Quality worked quietly on procedures to “deflex” the disputed permits. Some of those actually affected — the managers of oil and chemical plants, power plants and factories — wondered whether to defy the EPA, and a number of business groups joined the state in a federal lawsuit that is still pending.
Most companies, however, seemed less interested in making legal or political points than in getting whatever permits the agencies decided they needed. Some, such as British chemicals maker Ineos, decided to cooperate quickly and aggressively and later were pleased they did.
“We worked really closely with the EPA,” spokesman Charles Saunders said. “We felt it was within the best interests of the company to get out ahead of this thing so as not to interrupt things operationally.”
After some back and forth with the federal agency, “in the end we both came out with an outcome that we could live with,” Saunders said. “So everybody moved on.”
Not much difference
A company analysis found that the permit system really didn’t make much difference. “The data that we were able to demonstrate to the EPA showed that we could really exist quite well under either permitting regime,” Saunders said.
“And so for us, it was academic just to move forward.”
Professionals helping companies with deflexing their permits said the process was occasionally complex but not particularly difficult. Robert Liles, a principal consultant with Dallas-based Trinity Consultants, is walking clients through the process now.
“It was about as expected, I would say, just going back and reversing past permit actions and re-permitting them under the EPA’s preferred, non-flexed approach,” Liles said. Texas environmental officials gave invaluable help, he said.
Liles, like others involved in the process, said he has heard of no shutdowns or relocations because of the EPA’s demands.
“Their regulations are definitely getting tougher, not just in Texas but just everywhere,” he said. “There’s no doubt about that. But no results like that that I have heard of yet.” The EPA action, he said, turned out to be “more of a nuisance.”
Some companies that Perry singled out as being at risk from the EPA also said the transitions have proved smoother than the governor’s warning implied. In the June news release, Perry held up Garland Power & Light, a Chevron Phillips Chemical plant and a Flint Hills Resources refinery as endangered.
GP&L’s Kimbrough said that as the utility awaits a deflexed state permit for its Ray Olinger plant, the EPA has extended each deadline so the plant didn’t stop operating or slip into noncompliance.
“I guess it sounded scarier than what it turned out to be,” she said. “We were taking their lead — whatever we needed to do for them.”
New deal completed quickly
Flint Hills Resources, owned by Koch Industries, completed a new deal with the EPA and the state within three months of Perry’s statement. In a news release in October, president and CEO Brad Razook cited “the agencies’ cooperation and hard work in developing a process for Flint Hills to move forward with transitioning our permits in the state.”
The company declined to comment for this story, as did Chevron Phillips, whose permit change is pending.
With the charge that a permit dispute would lead to an economic Armageddon for Texas now disproved, the EPA’s critics still complain that the federal agency made Texas companies jump through hoops without reason.
“It is both troubling and telling that the EPA’s demand to deflex these permits essentially resulted in nothing more than a bureaucratic paper shuffle to reclassify the permits, a costly and time-consuming action that produced no environmental benefit,” said Nashed, the governor’s spokeswoman.
The EPA says public accountability for industries and compliance with federal law were ample justification. The agency also believes improved permits will result in less pollution.
Bill Hammond, president and CEO of the Texas Association of Business, the state’s biggest business lobby, said he wasn’t aware of any job losses from the EPA’s rejection of flexible permits. Such predictions are always based on assumptions that can turn out wrong, he said.
Failure to comply with EPA orders would have cost too much, he said, while lawsuits might not succeed. His group was among those that sued to block the EPA policy.
“I think it’s a bad idea, but basically, the companies have agreed to play by their [EPA officials’] rules,” Hammond said.
“They didn’t have much choice. They just sucked it up.”
Do EPA rules cost money or save it?
Do environmental regulations cost money or save it?
They save it, the White House Office of Budget and Management has said under Democratic and Republican presidents.
Since 1997, the OMB has reported to Congress on costs and benefits of federal regulations. The estimates are ranges, frequently large ones.
In all but two years since 1997, the OMB has said economic benefits — through avoided illnesses or deaths and avoided work and school absences — exceeded compliance costs.
In 2011, the Obama administration said regulations cost between $23.3 billion and $28.5 billion a year. Health benefits ran between $81.8 billion and $550 billion. That meant at least $2.87 in benefits for each $1 spent on compliance.
The OMB under President George W. Bush reported possible net costs in 2001 and 2002, Bush’s first two years. But each of those years might also have produced net benefits, the OMB said then. From 2003-2008, Bush’s White House said each year that environmental rules helped the economy, producing an average of at least $2.48 in benefits for each $1 in compliance costs.
Economists have refined the estimates over the years. Early reports from the Clinton administration contained sky-high estimates of clean-air benefits. Those estimates returned to earth in later years.