Last week, I wrote an editorial on Inside Sources highlighting the EPA’s chronic underestimation of the economic costs of its largest regulations. The largest of these by far has been the EPA’s proposal to tighten the National Ambient Air Quality Standards (NAAQS) for ozone from the current level of 75 parts per billion (ppb) to a point somewhere between 65 and 70 ppb. Over the past year, the NAM modeled the costs of a potential standard at 65 ppb and 60 ppb, each time concluding that the regulation would be the “most expensive regulation ever.” Recently, EPA Administrator Gina McCarthy testified before Congress that only eight counties would fail to meet a new ozone standard of 70 ppb in 2025 in a business as usual scenario—in other words, if EPA simply let states and businesses comply with the 75 ppb standard set in 2008 and the dozens of other regulations on the books that will drive ozone levels lower. (continue reading…)
Tag: ground-level ozone
The close of the EPA’s public comment period on its proposed revision to ground-level ozone standards has brought with it a flurry of activity, as lawmakers and leaders across party lines and at all levels of government voice their frustration with the rule.
And with the most expensive rule in American history waiting in the wings, it’s no surprise that elected officials are eager to urge the EPA to show restraint as they consider a shift from the current standard of 75 parts per billion to 65 – 70 parts per billion. (continue reading…)
Twenty Republican governors have signed a letter to President Obama detailing how the Environmental Protection Agency’s aggressive overrearch runs contrary to the President’s stated goals on common-sense regulation, energy and job creation. It’s a good, tough letter.
The President’s Executive Order on January 18, 2011, emphasized the need for predictability and certainty when it comes to federal regulations. However, the EPA is simultaneously developing and implementing a number of regulatory and policy initiatives with extremely short and converging compliance deadlines within the next five years which will significantly impact the energy industry, increase burdensome costs to consumers, and hurt the competitiveness of U.S. manufacturers. An abbreviated list of these new regulations and policy uncertainties includes:
1. Federal regulation of greenhouse gas emissions from industrial, manufacturing and electric generation facilities;
2. Promulgation of new Maximum Achievable Control Technology (MACT) standards for industrial boilers.
3. Promulgation of stringent National Ambient Air Quality Standards for ozone, SO2, NO2, and particulates.
4. Proposed new MACT and cooling water intake structures requirements for power plants.
5. Multiple policy interpretations by the Agency related to American coal mining have resulted in the withdrawal of over 50% of pending applications, a 9% approval rate for those remaining, and an unprecedented revocation of an existing permit.
6. Continued uncertainty over whether Coal Combustion Residue will be regulated as a hazardous waste even though it does not meet any of the characteristics of a hazardous waste.
7. The impending EPA study which threatens to usurp state regulation of hydraulic fracturing.
The governors have identified issues that the National Association of Manufacturers also regard as priorities. Right now the EPA is working against common-sense rulemaking and the development of America’s abundant energy reserves.
Washington Post, “EPA chief Lisa Jackson perpetually on Capitol Hill hot seat“:
Republicans say that studies such as one by two manufacturers’ groups projected that 7 million jobs would be lost in the decade beginning in 2020 if their client organizations are forced to pay up to $1 trillion to meet the EPA’s ozone standards, said Alicia Meads, director of energy and resource policy for the National Association of Manufacturers. Meads also cited a study by the Council for Industrial Boiler Owners that said 16,000 jobs would be lost for every $1 billion spent to comply with EPA boiler regulations.
“We consider it an overreach,” Meads said. “This administration has been extremely aggressive in environmental regulations, and it’s very hard for our members to keep up with them.”
Wall Street Journal, “EPA Tangles with New Critic: Labor“:
WASHINGTON—The Obama administration’s environmental agenda, long a target of American business, is beginning to take fire from some of the Democratic Party’s most reliable supporters: Labor unions.
Several unions with strong influence in key states are demanding that the Environmental Protection Agency soften new regulations aimed at pollution associated with coal-fired power plants. Their contention: Roughly half a dozen rules expected to roll out within the next two years could put thousands of jobs in jeopardy and damage the party’s 2012 election prospects.
House Energy and Commerce news release, March 8, “Upton, Inhofe Question Process for Reconsidering EPA’s Ozone Standards“: (continue reading…)
Just two years after the Environmental Protection Agency last imposed new, more costly regulations to limit economic activities that might contribute to ground-level ozone, the EPA is at it again. We can understand the political impetus: The Bush Administration was weak on the environment, and the Obama Administration is strong, so we’re going to double down.
But in the case of new ground-level ozone limits, the Bush Administration was neither weak nor strong, it was just wrong. The scientific basis for new National Ambient Air Quality Standards (NAAQS) was thin and the economic consequences serious.
So the current EPA is making doubly bad policy at a time when President Obama is elevating obs and reasonable regulation Administration priorities.
Unfortunately, the proposed NAAQS is slipping below the radar amid all the other regulating the agency is forcing onto the economy. Therefore, the National Association of Manufacturers has developed a website with the message, “Tell the EPA to Stop Putting Jobs at Stake.” It features an online petition and a sample letter to express one’s views to the agency. As the website explains:
The Agency has issued a proposal that would change the current ozone standard from 75 parts per billion (ppb) to a range from 70 ppb to 60 ppb. According to a recent study by the Manufacturers Alliance (MAPI), setting the standard at 60 ppb would cost 7.3 million jobs by 2020 and add $1 trillion in new regulatory burdens between 2020 and 2030. Furthermore, the EPA is setting this new standard just two years after announcing the 75 ppb standard in 2008.
This is another example of the Agency’s overregulation and will put high-paying manufacturing jobs at stake.
The EPA’s Clean Air Scientific Advisory Committee (CASAC) Panel will meet twice in the next few weeks to discuss its technical recommendations to the Agency on the new standard. This is a great opportunity for manufacturers to make their voices heard on another regulation that will cost jobs. Please sign your name to the petition below to tell the EPA not to adopt a new, more stringent ozone standard and to give the current standard time to work.
The deadline for the petition is NOON EST on Monday, February 7.
New jobs figures are due out this Friday, with the unemployment rate anticipated to be 9.5 or 9.6 percent. Are jobs really important? If so, the EPA can stand strong and abandon its plans to impose economy-harming ozone regs.
Roll Call has published an op-ed by Gov. Bob McDonnell (R-VA) and Jay Timmons, president of the National Association of Manufacturers, citing the EPA’s pending limits on ground-level ozone and industrial boiler emissions (the Boiler MACT rule) as an example of excessive regulation that slows economic growth and damages jobs creation.
Manufacturers have also been alarmed by two proposals that have generated less public attention but could still wreak economic damage: lower limits on ground-level ozone and emissions controls on industrial boilers.
New rules for ozone would supersede lower emission limits adopted just two years ago, with compliance costs that EPA acknowledges could near $90 billion annually by 2020. Democratic and Republican senators and governors from industrial states have criticized this rulemaking as a “financial and regulatory burden” that would “create additional barriers to job creation and industry growth.”
Industrial boilers play a critical role in our economy, generating power for companies large and small, as well as municipalities and universities. The EPA has proposed dramatic new rules that skirt cost-benefit analysis and would be impossible for many existing facilities even to meet. The forest products industry, which makes extensive use of boiler-generated energy, would be hit especially hard, facing estimated costs of $7 billion.
None of our international competitors confronts standards such as these, which will only drive more jobs offshore. Industry studies demonstrate that hundreds of thousands of jobs may be at risk if this rule is adopted. The Administration’s own Commerce Department has produced a study that concludes the draft rule could cost the United States 40,000 to 60,000 jobs a year.
Since the column was written, the U.S. District Court for the District of Columbia granted the EPA a one-month extension to issue the final Boiler MACT rule (deadline is now February 21, 2011). The EPA had requested a 15-month extension to re-propose the rule to consider new information about the achievability of the regulations.
NAM’s policy perspicatators are quoted in the news today about goings on at the White House and Congrss.
[Polls] show the overall tax-cut deal is popular. It extends Bush-era tax cuts for everyone, including the wealthy, and provides a one-year reduction in the payroll tax that workers contribute to Social Security. That payroll tax cut, along with an extension of unemployment benefits, will put an extra $160 billion into people’s pockets over the next year. Assuming that money doesn’t all stay in their pockets, more consumer spending could result.
That would be welcome news to Dorothy Coleman, vice president of the National Association of Manufacturers.
“Everyone would like demand to increase,” she said. “That would be a sign of economic growth. So some of the provisions in there, the lower tax rates, are going to help consumer demand.”
Portfolio.com, “Tax-Cut Deal Headed for a Vote”
Changing the estate tax provision could jeopardize Republican support for the bill, however, since the lower estate tax rate was part of the deal they negotiated with Obama. Most business groups contend that high estate rates and low exemptions hurt family-owned businesses.
The estate tax is “a huge issue” for many manufacturers, said Dorothy Coleman, vice president of tax policy for the National Association of Manufacturers.
Within the past week, the administration announced delays in new rules to regulate industrial boilers and ozone. That showed a willingness to listen to business complaints that new regulations could impose unnecessary costs, according to the National Association of Manufacturers.
“We’re hopeful these are signs that there is going to be a newly invigorated growth agenda,” said Aric Newhouse, senior vice president for government relations at the Washington-based group.
Might the President reinforce that point about regulatory restraint today? Might he?
The National Association of Manufacturers is mentioned in all these stories.
Bloomberg, “Mine-Safety Measure Giving US Regulator More Powers Fails to Pass House.” The vote on H.R. 6495 was 214-193, failing to get the two-thirds vote required under suspension.
Bloomberg, “EPA Delays US Clean-Air Regulation Until July to Seek Scientific Review” The story reports on the EPA’s decision to ask the court for a delay in the effective date for new rules governing ground-level ozone. See EPA information here.
The Hill (blog), “EPA delays tougher air pollution rules”
Bloomberg, “Obama Tax Deal Wins Praise From Business-Lobby Critics “
The Environmental Protection Agency in October postponed its announcement of new federal ozone limits, avoiding the politically damaging reports before Election Day. Yet another report about the EPA’s plans to crack down on economic activity would not have helped the Administration’s prospects.
The EPA’s proposed rule could drop the National Ambient Air Quality Standards for ozone from the 75 parts per billion limit established by the Bush Administration in March 2008 to as low as 60 ppb.
The economic impact of the EPA’s proposal is one of the most under-reported stories in the United States today. Thankfully, at least one newspaper, The Sarasota Herald-Tribune, has taken advantage of the EPA’s delay to examine what the rules could mean to the local economy.
We could quibble with the article, but at least the paper is trying to explain the impact of the EPA’s threat. From “Air rules could force changes here“:
New federal air quality rules, expected in the coming weeks, will likely trigger a wave of emission controls on industries in Southwest Florida, and the possibility of motor vehicle inspections….[snip]
Southwest Florida’s air quality barely meets current U.S. Environmental Protection Agency standards, and with those thresholds set to rise, the region will be forced to put better curbs on air pollution.
Or businesses could relocate to a region that doesn’t face the additional limits. Or move to another country all together.
The Herald-Tribune cites the joint National Association of Manufacturers and American Petroleum Industry’s study conducted by the Manufacturers/Alliance MAPI, “Economic Implications of EPA’s Proposed Ozone Standard (ER-707).” The study reported that reducing the ozone standard to 60 parts-per-billion could destroy 7.3 million U.S. jobs and reduce the Gross Domestic Product (GDP) by $687 billion in 2020. (More from API.)
And even more than the Bush Administration’s limits, the EPA’s latest proposal has thin scientific justification and could even be counterproductive when it comes improving the health of the U.S. populace.
The EPA’s jobs-killing plan is likely to be announced in January, perhaps during one of the slow news periods to avoid a sharp political backlash. In the meantime, other papers could follow the Herald-Tribune’s example and try to inform their readers about the impact of the ozone rules. The NAM stands ready to help with those explanations.
The Small Business Administration’s Office of Advocacy report we cited below , “The Impact of Regulatory Costs on Small Firms,” did not take into account the Bush Administration’s 2008 ozone regulations (reducing the ambient air quality standard to 75 parts per billion), nor the Obama Administration’s proposed regulations, which could lower the standard to 60 ppb.
It’s safe to say those regulations will be expensive. Bet small business gets hit the hardest.
From The Oil and Gas Journal, “Proposed ozone standard would devastate US economy, API warns“:
WASHINGTON, DC, Sept. 21 — A US Environmental Protection Agency proposal to reduce the national primary ozone standard to 60 ppb from 75 ppb would devastate the US economy by forcing most of the country to meet stringent standards which now are imposed of its most heavily populated areas, the American Petroleum Institute warned.
“We all know that EPA cannot consider economics in considering standards,” Howard Feldman, API’s director of regulatory and scientific affairs, said in a Sept. 21 teleconference with reporters. “But it cannot ignore them. There’s a real cost and real significance to this.”
The story builds on the NAM-API co-sponsored report, “Economic Implications of EPA’s Proposed Ozone Standard (ER-707. The analysis by Donald A. Norman, Ph.D., Manufacturers Alliance/MAPI economist, concluded:
- GDP would be reduced by $676.8 billion in 2020 (in 2010 dollars), an amount that represents 3.6 percent of projected 2020 GDP in the baseline case (2.5 percent annual GDP growth);
- Total U.S. job losses attributable to a 60 ppb ozone standard are estimated to rise to 7.3 million by 2020, a figure equal to 4.3 percent of the projected 2020 labor force;
- Together, annual attainment costs and reduced GDP in 2020 would total $1.7 trillion.
API’s Feldman raises another an angle we hadn’t considered: Unreasonably stringent ozone rules represent yet another move again U.S. energy security, including the tremendous promise shown by natural gas development of such areas as the Marcellus Shale: “Clearly, natural gas drilling is increasing across the country, and we expect that to continue…As more of it moves into areas such as Pennsylvania which would not meet these new standards, it would require extra costs and controls. The states also would have to offset these emissions.”
Earlier posts: (continue reading…)