Regulatory uncertainty weakens Kansas’ economy

In this article, Karl Peterjohn states that the professional staff at the Kansas Department of Health and Environment approved the permit for a new coal-burning electricity plant in Kansas, but the agency’s Secretary, Rod Bremby, overruled that staff. It seems as though he and Governor Kathleen Sebelius were trying to stake new political ground in America. Why they would want to do this is not clear to me and many other Kansans. China builds a new plant like the one proposed for Kansas every seven to ten days. India builds many, and so do some other countries. Since it’s not called global warming for nothing, it doesn’t matter where these plants are built. They all affect the global atmosphere, as far as carbon dioxide is concerned, in precisely the same way. So two Kansas politicians, cheered on by a few newspaper editorial writers, place the Kansas economy at great risk for what benefit? Perhaps in a few years, on a hot summer day when little wind is blowing, the chillers at the Wichita Eagle building on East Douglas will slow to a crawl, the editorialists’ computers switch to battery back up power with only a few minutes left to finish the day’s work, and no electricity is available to run the printing presses or the servers hosting the Eagle’s web site. But at least we in Kansas spewed only 0.01% as much carbon into the atmosphere as did the new Chinese coal plants.

Regulatory Uncertainty Weakens Kansas’ Economy
By Karl Peterjohn, Kansas Taxpayers Network, www.kansastaxpayers.com

The regulatory uncertainty created by Kansas Department of Health and Environment (KDHE) Secretary Ron Bremby’s decision to deny a permit to Sunflower Electric’s proposed power plant places the Kansas economy at risk and should be obvious to everyone. Sadly, this everyone does not include the Wichita Eagle’s editorial board’s February 27th editorial.

Electric utilities are already highly regulated by the state as well as federal rules and edicts. Sunflower Electric’s proposed coal fired electrical power plant expansion had been through numerous permits and regulatory requirements. The professional staff at KDHE had recommended approval based upon the criteria elected officials had placed in Kansas law.

Secretary Bremby decided that he would add new criteria that no federal or state elected officials had approved. Kansas became the first state to declare that carbon dioxide emissions are pollutants. That became his basis for denying a construction permit.

The Wichita Eagle was correct in pointing out that Bremby’s ruling was a first. Bremby’s edict was not only a first in Kansas, it was a first for the entire nation. Bremby’s decision became national news as Kansas became the only state where carbon dioxide emissions became a pollutant. Elected officials did not make this decision but a single bureaucrat, who last year filed for bankruptcy, and who ignored his professional staff in making his ruling. The rule of law has been replaced in Kansas in this important case by the rule of a bureaucrat.

Carbon dioxide is emitted by people, our cars, our machines, and even in our fireplaces. Since Mr. Bremby decided to make carbon dioxide a pollutant by regulatory edict, any and all other firms that emit carbon dioxide are now at regulatory risk. If carbon dioxide is a “pollutant,” let’s have our elected officials be the ones who change the law.

Will the Sunflower precedent be extended to non-utilities, like new or existing ethanol plants, that also emit CO2? Will this edict be placed on existing coal-fired power plants? Will this occur quickly or slowly? To large and small firms equally, or not? This is regulatory uncertainty. This is obvious to everyone who has run a business and met a payroll.

This also demonstrates how far we have moved in Kansas away from a free market system to one where the state controls the economy. When Mr. Bremby’s boss, Governor Sebelius, outlined her support for a smaller expansion of Sunflower, the state control of this economic decision making process was clear. This is state control that economists have warned against.

Nobel Laureate economist Milton Friedman warned over a quarter century ago, “Wherever the state undertakes to control in detail the economic activities of its citizens, wherever, that is, detailed central economic planning reigns, there ordinary citizens are in political fetters, have a low standard of living, and have little power to control their own destiny.” This type of government control is an excellent reason why the average income of Kansans lags well below the national average as well as our state’s overall economic growth.

This is a reason why the risk, uncertainty, and the probability of a lack of profits drives business expansions and entrepreneurs away from locating in a state where the rule of law has been replaced by unpredictable and delayed edicts from arbitrary bureaucrats.