Reckoning EPA’s Ozone Proposal

Mark Green
Posted August 13, 2015

It’s expected that EPA will submit its recommendation for new ozone standards to the White House Office of Management and Budget next week, with the final rule due by Oct. 1.

The final outcome will be momentous. EPA could – and should – leave the existing standards in place at 75 parts per billion (ppb). That would be remarkable, given the long rulemaking process and the agency’s current inclination to regulate more, not less.

Conversely, reducing the standards to 65 ppb or possibly lower would make it the costliest regulation ever, with the potential to halt economic expansion and infrastructure development dead in their tracks. Stricter standards could result in a $270 billion reduction in GDP per year on average from 2017 through 2040 and an annual loss of 2.9 million job equivalents, according to a study by NERA Economic Consulting. API’s Howard Feldman, senior director of scientific and regulatory affairs, during a briefing for reporters:

“Our view, very strongly, is that new EPA standards on ozone are not necessary. The current 75 parts per billion standards are protecting public health within an adequate margin of safety. The states are implementing those standards right now … and we think that the states should be allow to proceed with that implementation. There’s been significant progress in reductions of ozone concentrations. That progress will continue.”

Indeed, EPA data shows ozone levels declined 18 percent since 2000:

Feldman said stricter standards under consideration would be “virtually unattainable” in many parts of the country – with EPA acknowledging that half of the measures needed to achieve compliance with 65 ppb standards would come from “unknown controls” – that is, equipment, technologies and processes that don’t yet exist. At 65 ppb, Feldman said, the standards would create non-attainment areas in 45 of the lower 48 states. “As a matter of public policy it doesn’t make sense to set standards that can’t be achieved,” he said.

That’s why 370 business groups have sent a letter to White House Chief of Staff Dennis McDonough urging that the standards stay the same. The signers include agricultural, manufacturing, construction and transportation groups and more – groups that recognize the potential local, state and regional impact of more restrictive standards. The letter:

As associations representing many businesses, both large and small, that employ millions of Americans, and local governments in which those businesses thrive, we are deeply concerned about the harmful impact that the Environmental Protection Agency’s (EPA) recently proposed rule to make ozone standards more stringent could have on the still struggling economy. The EPA’s current regulations are working, air quality continues to improve, and the United States is leading the world in reducing emissions. New ozone standards could significantly damage the economy by imposing unachievable emissions limits and reduction targets on almost every part of our country, including rural and undeveloped areas.

The organizations point out that states currently are committing significant resources to achieving ozone emissions reductions under current standards and warn that stricter standards would directly impact local and state growth. The groups write that more stringent standards could limit business expansion in nearly every populated region of the U.S. and risk the ability of companies to create new jobs. The standards could add red tape to companies trying to grow even in areas that can meet the new standards, the letter says. More:

Against these economic consequences, scientific uncertainties regarding the benefits of more stringent ozone standards are significant. Indeed, stringent ozone standards may have severe unintended consequences for public health. Studies show that by increasing the costs of goods and services such as energy, and decreasing disposable incomes, regulation can inadvertently harm the socio-economic status of individuals and, thereby, contribute to poor health and premature death.

Feldman said EPA’s ozone push is part of a regulatory sweep launched by the agency that could significantly impact economic growth and energy development:

“We call it a regulatory avalanche, a regulatory tidal wave. Clearly we see all of these regulatory rules coming at us at once. We’re very concerned about them.”