The Biden administration’s Environmental Protection Agency is nothing if not ambitious, striving as only a bureaucracy politicized and single-minded can to save the world from the purported ravages of the climate “crisis.” Indeed, the central focus of EPA regulatory efforts is the promulgation of requirements for reductions in greenhouse gas emissions that can survive judicial review.

A charitable assumption is that the EPA has no idea whether its various regulatory initiatives will work as asserted, but the dismal record of central planning by government does not offer grounds for optimism. Yet central planning is precisely what the EPA is doing: By 2040, the EPA intends that coal-fired electricity generation will fall virtually to zero, and gas-fired generation by over 40%, as a result of a newly proposed set of GHG emissions standards for fossil-fired power plants.

The proposed standards are an effort to force ever more wind and solar power onto the grid. The EPA claims that it is the massive subsidies authorized in the Inflation Reduction Act that will yield 98% of the decline in gas use, but that is sophistry in that the deployment of ever-more wind and solar capacity is proving vastly more difficult than government planners have anticipated. Ignore the ubiquitous propaganda about the cost competitiveness of wind and solar power and about how “clean” they are; both sets of assertions are a lot of hooey regardless of how often and how loudly they are repeated.

Unlike the EPA, the Energy Information Administration has actual expertise in such matters; it estimates that the cost of onshore wind power plus needed backup is almost four times higher than the cost of combined-cycle gas generation, and the analogous cost disadvantage for solar power is greater still. That is why wind and solar power cannot survive market competition without huge subsidies and guaranteed market shares.

In the EPA analysis of the proposed rule, much of the remaining gas use for power generation is backup intended to compensate for the intermittency of wind flows and sunlight and for the reality that wind and solar technologies cannot perform the crucial synchronization functions needed to avert blackouts caused by disequilibria in the grid. Accordingly, the EPA implicitly concedes the supreme unreliability of wind and solar power. The higher costs will be exacerbated by the need for a vast expansion in long-distance transmission capacity and by the staggering land requirements for wind and solar facilities. 

Put aside the issue of whether the EPA has the legal authority to force so massive a shift in resource allocation. The narrower reality is that the EPA’s intended shift in the national electricity system represents, in economic terms, a large reduction in the supply of power.

On the demand side, the EPA is also proposing a new set of emissions standards for light- and medium-duty vehicles beginning in model year 2027. Ignore again the EPA propaganda about the “multi-pollutant” goals of the proposed regulation. The obvious objective is a massive shift toward electric vehicles, which, by the way, cannot satisfy consumer needs and which the United States's current electric grid does not have the capacity to support. Manhattan Institute senior fellow Mark Mills noted that “electrifying all of America’s [cars] would require about 50% more generation than exists or is planned.” The Lawrence Berkeley National Laboratory found that for proposed investments in the U.S. power system, “completion rates are generally low; wait times are increasing.” That is, the national backlog of intended power capacity and transmission projects is already growing rapidly, even before the effects of a national EV mandate are included.

The North American Electric Reliability Corporation in its 2023 Summer Reliability Assessment estimates that all of the U.S., except for parts of the Southeast, middle Atlantic, and Northeast, already face the “potential for insufficient operating reserves in above-normal conditions.” This is before implementation of the EPA proposals for a massive supply decrease for the power supply system and a massive power demand increase for the transportation sector. Both EPA proposals would exacerbate reliability challenges for the electric grid.

In a recent letter to Environmental Protection Agency Administrator Michael Regan, 27 Republican senators urged the agency to withdraw its two recent proposed GHG emissions rules, arguing that they “are legally flawed [and] divorced from reality with regard to the associated costs and domestic capacity to implement them.”

The senators are understating matters. Whether the myriad regulatory machinations can be made to fit together represents a can that the EPA is all too happy to kick down the road for future regulators to confront. But it is not only future regulators who will bear the burdens of the EPA’s current obsessions. Because massive regulatory undertakings intended to effect huge economic transformations are not a mere game, notwithstanding the game-playing ubiquitous in the Beltway, the U.S. economy writ large will have to confront them, and sooner rather than later.

Benjamin Zycher is a senior fellow at the American Enterprise Institute.