Implementing EPA’s Final Boiler MACT Regulations Puts More Than 20,000 Primary Pulp and Paper Jobs At Risk, and Billions in Wages and Taxes

Sept. 8, 2011 - As many as 36 mills across the country and more than 20,000 primary pulp and paper industry jobs would be at risk of elimination due to the costs of implementing the Environmental Protection Agency’s (EPA) pending Boiler MACT and other air regulations, according to a new study by Fisher International, a market leader in pulp and paper mill data. These job losses would amount to 18 percent of the primary pulp and paper industry workforce, says the American Forest & Paper Association.

The job losses rise to more than 87,000 if supplier and downstream industries are figured into the equation, and those losses would result in about $4 billion in reduced wages and $1.3 billion in lost state, local and federal taxes (including FICA taxes), AF&PA said in a written statement.

"The Boiler MACT regulations can and must be developed in a way that protects both jobs and the public health." — Donna Harman, President and CEO, AF&PA.

“This study reinforces not just the harmful job impacts of the Boiler MACT rules issued, but also the need to get the rules right,” said AF&PA President and CEO Donna Harman. “The Boiler MACT regulations can and must be developed in a way that protects both jobs and the public health. Legislation has been introduced in both chambers of Congress with bi-partisan leadership, and that legislation is the only path of certainty to allow EPA the time it needs to achieve public health as well as a rule that allows economic competitiveness and job growth.”

The new jobs study shows the Boiler MACT rules issued earlier this year by EPA, when imposed on top of the expected costs of implementing other pending air regulations, would likely cause 36 mill closures and result in the loss of 20,541, jobs — an 18 percent reduction in the primary pulp and paper sector alone. The number of jobs lost increases to 87,299 when supplier and downstream industries as well as jobs associated with the re-spending of wages are included, AF&PA noted.

While this study focuses on the impact to the pulp and paper industry, the EPA’s proposed Boiler MACT rules also set emission limits for boilers and process heaters located at universities, in small municipalities, food product processors, furniture makers, federal facilities, and a wide range of manufacturers. The rule is so stringent that it could create serious disincentives for the use of renewable energy. The rule is currently being reconsidered by EPA, AF&PA said.

“EPA may still make some important changes to Boiler MACT as part of its reconsideration process, but the time has come for Congress to act to protect these jobs,” concluded Harman. “Our companies, employees and the communities in which they reside need the certainty only Congress can provide, protecting them from a process that has forced a rush to regulate.”

The study also looked beyond the possible effect of the proposed Boiler MACT rule to include the entire suite of EPA air regulations. It found 38,060 potential jobs lost in the pulp and paper sector from those cumulative air regulations. Looking again at the additional impact felt along the supply chain and surrounding community, job losses from these regulations could reach as high as 161,755.

The jobs study, commissioned by AF&PA, was conducted by Fisher International, a market leader in data on U.S. paper mills, which includes each mill’s product line, production process, type and age of boilers, estimated cost structure, and number of employees. The compliance costs data used by Fisher was prepared by URS, a well-known engineering consulting firm with expertise in pollution control costs and operation as well as the pulp and paper industry.