Representing the Interests of America’s Industrial Energy Users since 1978

January 11, 2011

The Honorable Darrell Issa

Chairman
Committee on Oversight & Government Reform
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Issa,

CIBO would like to thank you for the opportunity to help identify existing and proposed
regulations that could negatively impact jobs and job growth at our members’ facilities.

The Council of Industrial Boiler Owners (CIBO) is a national trade association of over
110 members including industrial boiler owners, architect engineers, related equipment
manufacturers, and universities representing 20 major industrial and institutional sectors.
CIBO has been working to (1) promote the exchange of information between industry
and government relating to energy and environmental policies, laws, and regulations
affecting industrial boilers and the manufacturing and institutional energy base of our
country; (2) promote technically sound, cost-effective laws and regulations; and (3)
improve energy and environmental performance, reliability and cost-effectiveness of
members' operations through technical interchange. CIBO's membership represents
industries as diverse as chemicals, paper, cogeneration, metals, automotive, refining,
brewing, combustion engineering, and food products. CIBO members also include
operators of boiler facilities at over a dozen major universities. For 32 years, CIBO has
been promoting better integration of our nation's policies and regulations to achieve
energy and environmental benefits.

EPA regulations for Greenhouse Gas Emissions, Boiler MACT, Fossil Fuel Ash
Classification, Clean Air Transport Rule revisions, Short Term SO2 and NO2 NAAQS,
Water Effluent rules, Cooling Water Intake rules, NAAQS for Particulate Matter, Ozone
and SO2, and other rules, can all have negative impacts on existing and potential new
jobs within the United States. While it is difficult to project the cost of any regulation
prior to its actual implementation, it is possible to identify reasonable costs when
equipment suppliers, owners and operators and consultants work together. With the
current EPA industrial, commercial and institutional (ICI) energy system databases and
state inventories, it should be possible to develop more realistic representations of costs.
EPA should be working with the actual people having to make modifications and install

CIBO, 6035 Burke Centre Parkway, Suite 360, Burke, VA 22015 – 703-250-9042
technology to develop better environmental compliance costing models for
industrial/commercial/institutional energy facilities and not only the equipment suppliers,
regulators and environmental community who have never designed or operated the
equipment.

However, even with the best cost data, it is impossible to assess the true economic impact
of any rule or regulation using the cost benefit analysis currently conducted at EPA. At
some point a true economic impact evaluation should be completed to consider jobs put
at risk of being lost, potential federal and state tax revenue and GDP losses, to be
compared with the direct health benefits and potential new jobs that could be gained from
compliance versus product line or facility closure. At this point there is disagreement
regarding how this should be done. It could be worthwhile for a National Academy of
Sciences panel to be developed to consider or develop a protocol for this type of activity.

CIBO has been very active over the last 15 years with Boiler MACT Rule development.
As such, we developed an estimated installed capital cost based on use of best available
compliance technology application on a unit-by-unit basis using the EPA database. This
generated a conservative compliance capital cost of $20.7 billion compared to EPA’s
$9.6 billion. Interested in identifying what this meant in negative impacts to the
boiler/process heater industrial/commercial/institutional owner sectors and country
overall, we contracted IHS Global Insight to do an Economic Impact Analysis over the
range of industry and institutional sectors we represent. The results were a staggering
potential 338,000 US jobs put at risk of being lost, and $5.7 billion in lost tax revenues if
all units were equipped to attempt to meet the rule as proposed. While we believe the
cost of any regulation that in effect raises the cost of energy to the
industrial/commercial/institutional sector could have the same relative effect, more
research and real cost information on an industry-by-industry, unit-by-unit basis would
also be helpful in better understanding the rule's impacts. Attached is a copy of the CIBO
IHS Global Insight Report and CIBO statement regarding its release. The approach of
this Report could provide a template for impact analysis for other EPA rules.

We appreciate your request for information and would be happy to answer any questions
you may have.

Again, thank you for this opportunity.

Robert D Bessette

President
Council of Industrial Boiler Owners

CIBO, 6035 Burke Centre Parkway, Suite 360, Burke, VA 22015 – 703-250-9042