Regulation
As hard as people try, regulation is not an issue that can be wrapped up in a nice, tidy bow.
When speaking on this topic, people – mainly those leaning to the conservative side of things – often ask, “Are you for more regulation or less?” They seem to be waiting for a one-word answer, but it’s way more complicated than that. In truth, the only responsible answer to that question is, “Are we for or against regulation for what?” Are we speaking about Wall Street or small businesses? Or social media, food safety, environmental protection, or the oil and gas industry? Or, considering the devastating wildfires in California, insurance companies?
One of the most careless policies the Trump/Vance administration has is the “ten in, one out” regulation requirement (in Trump’s first term, this was “one in, two out”). This means that, whenever a federal agency issues one regulation, it is required to identify at least ten existing regulations for repeal.
We get the appeal of this approach, especially since the Federal Register ended 2024 with a historic high 107,262 pages and federal agencies issued 3,248 rules in that one year alone – but this approach is ridiculous. And, quite frankly, more than a little lazy. Without question, there are outdated and burdensome regulations, but they should be dealt with precisely, not as part of some big monolithic exorcism. Besides, their strategy didn’t work the first time around. The Penn Program on Regulation (PPR) is located at the University of Pennsylvania – which is, incidentally, Donald Trump’s alma mater – and conducts balanced analysis on regulatory policy.
In an analysis called Deregulatory Deceptions: Reviewing the Trump Administration’s Claims About Regulatory Reform, PPR said this: “Deregulation has been celebrated as one of the (first) Trump Administration’s most important economic accomplishments. The Administration suggested both that the magnitude of its deregulatory efforts far outpaced those of prior years and that the economic gains from these efforts were drivers of historic economic and jobs growth, delivering an increase in real income of over $3,000 to each American household. This report investigates these claims in turn. We find that they are a mix of exaggerated, cherry-picked, and indefensible. Stated simply, the Administration did not roll back regulations at anything close to the rates it has claimed, and households have not gained thousands of dollars annually from these efforts. Overall, we find that every claim we examine about the Trump Administration’s deregulatory efforts is either wrong or exaggerated. The reality is that the Trump Administration has done less deregulating than regulating, and its deregulatory actions have not achieved any demonstrable boost to the economy.”
In our minds, there is a different level of acceptable regulation for almost everything. For example, some state and local governments create onerous barriers to upward mobility by making occupational licenses ridiculously difficult to obtain. On the other hand, large corporations, banks and financial institutions could use a little more regulation.
Let’s look closer at two more examples. An excellent one is the electricity fiasco that transpired in Texas in February 2021. After a massive ice storm hit Texas, it wasn't long before social media posts started blaming the Texas power outages on windmills (never mind that, at the time, two-thirds of the winter electricity demand in Texas was generated by natural gas and wind power made up less than 10 percent of the state’s generation mix). Then, Texas Governor Greg Abbott went on The Sean Hannity Show and said, “This shows how the Green New Deal would be a deadly deal for the United States of America,” while the Fox News scroll at the bottom of the screen declared “Green Energy Failure.” Tucker Carlson chimed in on his own show: “The windmills froze so the power grid failed.” WTF? These statements are just laughable.
Politicians and conservative media trying to gaslight people into believing this massive failure was the fault of windmills is beyond the pale. Yes, non-winterized wind turbines froze. But because they were not properly winterized, so did power plants, oil and gas wells, gas pipelines, oil rigs, piles of coal, and even a nuclear reactor water pump. This means that one of the main culprits in the Great Texas Blackout of 2021 was the interruption of natural gas getting to power plants… and no amount of spin on Fox News is going to change that fact.
The truth is this. The 2021 catastrophe in Texas was caused by two things and two things only: Texas pride and energy deregulation.
First up, Texas pride. Never has a state loathed regulation or government intervention as Texas. During the crisis, former Texas governor and former Secretary of Energy Rick Perry said that “Texans would be without electricity for longer than three days to keep the federal government out of their business.” Texas Republicans hate federal government intervention so much (or we should say, they hate federal government intervention until they happily take $11.24 billion from the CARES Act and $43.6 million in federal funding for “storm recovery” after the 2021 Ice Armageddon) that 90 percent of Texas’ electric grid is not connected to interstate grids. This means that Texas can largely avoid any oversight by the Federal Energy Regulatory Commission (FERC). But is also means that Texas can’t rely on other states to help when its electric grid fails.
Second up, deregulation. Passed in 1996, Federal Energy Regulatory Commission (FERC) Order 888 promoted wholesale electricity competition through open access, non-discriminatory transmission services. In simple terms, companies could now “rent” electric transmission lines and move electricity through them, regardless of who owned the lines. Unsurprisingly, Texas went all in! The state embraced this new opportunity and shifted a great deal of control over the state’s electric delivery system to the private sector. Meanwhile, electric generation entities were given permission to do pretty much whatever they wanted in terms of reserve margins for backup power and generation planning – which was another major culprit in the February of 2021. Want to take your power plant offline for maintenance in the middle of February? Great idea! Go for it!
In the beginning– and probably even still today – Texas leadership naïvely believed that market forces would correct for just about anything, making energy shortages and service disruptions virtually impossible in their minds. But here’s the inevitable problem: Although competition has kept Texas energy prices low through the years, smaller profit margins and practically no regulation and/or oversight also tempted energy companies to cut corners on necessary capital investments… like say, oh we don’t know, WINTERIZATION PROTECTIONS THAT INCLUDE PROPER INSULATION, HEATERS AND DE-ICING MACHINES.
What happened in February 2021 is even more frustrating because it had all already happened before. In 2011, Texas experienced a very similar winter blackout that affected over four million people. In the aftermath, the Texas Public Utility Commission demanded that Texas power generators submit annual winterization plans but, looking at what happened in 2021, that doesn’t seem to have worked out that well. Thad Hill, the chief executive of Calpine Corporation, admitted that during the 2021 freeze “two of [Calpine’s] power plants failed because of winterization…That’s my fault.” Yep, it sure is Thad, because you knew full well what could happen. After all, two of Calpine’s plants also failed during the 2011 freeze. NRG, another generation company, experienced power failures at its coal-fired plant in Limestone County and another at Greens Bayou, the same exact two plants of theirs that failed in 2011.
At the end of the day, Texas Republicans chose ideology over reliability. Then, blamed everyone else when the price of electricity skyrocketed during the crisis. When we say skyrocketed, we're not exaggerating. Some consumer electric bills reached well over $16,000.
Another regulation example that sticks in our minds, maybe more than any other, is attorney Rob Bilott’s courageous fight to regulate polyfluoroalkyl substances (PFAS) in American drinking water.
It all started when a farmer noticed bubbling green water in his creek and blood running out of the noses of his cattle not long after DuPont, the chemical company, began operating a waste landfill near his property. Rob Bilott watched a video the farmer provided, where he “saw cows with stringy tails, malformed hooves, giant lesions protruding from their hides and red, receded eyes; cows suffering constant diarrhea, slobbering white slime the consistency of toothpaste, staggering bowlegged like drunks.” In a study funded by DuPont (lest you think they were acting responsibly, they were pretty much forced to conduct one thanks to the lawsuit Bilott filed), scientists discovered there was a “probable link’” between PFOA and kidney cancer, testicular cancer, thyroid disease, high cholesterol, pre-eclampsia and ulcerative colitis.
According to the Congressional Research Service, “PFAS include thousands of diverse chemicals, some of which have been used for decades in an array of industrial, commercial, and U.S. military applications. The chemical characteristics of PFAS have led to the use of various PFAS for an array of purposes such as fighting fuel-based fires and for processing and manufacturing numerous commercial products (e.g., stain-resistant and waterproof fabrics, nonstick cookware, and food containers).”
As late as 2016, the U.S. Environmental Protection Agency (EPA) revealed that “PFOA and/or PFOS were detected in at least one public water system in 24 states. Four other PFAS were also detected in some systems.”
Rob Bilott started his fight in 1999. On February 20, 2020, the EPA announced preliminary decisions to develop Safe Drinking Water Act (SDWA) regulations for the two most frequently detected PFAS, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) – TWENTY-ONE YEARS after Bilott filed his first federal suit against DuPont chemical company. Finally, on April 10, 2024, the EPA announced the final regulations for six PFAS.
Now, we have a question for the people who ask, “are you for more regulation or less?” Are you cool with this poison in your drinking water? Because we are most certainly not.