EPA Ozone Rule Could Bring Economic Headache

By November 29, 2007Economy

EPA’s current ozone rule is working. The amount of smog that once shrouded many American cities has thinned a lot in the past few decades.

Still EPA is proposing a stricter ozone standard that isn’t based on sound science and is probably unreachable in many parts of the country.

EPA can’t consider the economic impact of its new rule, which will be announced in 2008. But Virginia senator and NAM Board Member Frank Wagner said a new rule could give manufacturers in his state and around the nation a lot of economic pain.

Wagner is co-owner of Davis Boat Works in Newport News, Va. Ozone levels in southeastern Virginia have dropped so much the area is now an EPA ozone “attainment zone.” But if EPA lowers the amount of allowable ozone, southeastern Virginia could lose that designation, said Wagner, who is an expert on energy policy. (2005 EPA map here.)

I traveled to Richmond, Virginia’s capital, this week to visit Wagner and find out how the EPA ruling would affect his boat service company and the southeastern Virginia district he represents.

Wagner doesn’t have to do emissions tests on his company’s 15 trucks. But if the area’s ozone designation changes he will have to pay for tests each year. Plus staff will have to take time off from servicing military and other vessels to wait in testing line at the local motor vehicle department, he said.

But a new ozone designation would be much more than a time and productivity issue for a company like Wagner’s. It could also damage the region’s economy, Wagner said.

Areas that don’t meet ozone standards could be denied federal highway dollars, which would crimp growth and job creation, he said.

Companies in Wagner’s part of Virginia would also be put at a cost disadvantage to competitors in areas that don’t violate EPA ozone rule, he said. That’s because companies in fast-growing southern Virginia would have to shoulder higher regulatory costs than these competitors, he said.

“We always talk about competition overseas,” Wagner remarked. “But competition could come if your competitor is in an attainment area.”

What does Wagner suggest? EPA should put on the brakes and ensure every region complies with the current ozone rule before imposing a new standard on areas that have already done the hard work of reducing smog.

“Why are you punishing those that are doing well?,” he asks.

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