Forty-five areas across the country got some bad news from the Environmental Protection Agency (EPA) today when it released information about what parts of the country are not meeting the 2008 air quality standards for ground-level ozone (i.e. ozone NAAQS). The map below shows the regions that are considered “non-attainment” areas:

Getting slapped with a non-attainment designation is a big deal for the geographic regions highlighted on the map. Just a few of the economic consequences of being a non-attainment area include:

• Restrictive permitting requirements for new industrial facilities or for existing facilities that make major modifications.
• Greater EPA involvement and oversight in permit decisions and continuing oversight by the Agency in permitting decisions even after the area has met the air quality standards.
• Loss of federal highway and transit funding – beginning one year from the date of the designation, federally-supported highway and transit projects cannot proceed in the area unless the state can demonstrate that the project will cause no increase in ozone emissions.
• Loss of industry and economic development in the area – any company interested in building a facility that emits ozone will probably not build a facility in the area due to the increased costs associated with the restrictive and expensive permit requirements.

Manufacturers continue to be extremely concerned about the EPA’s implementation of the current air quality standards and new standards for particulate matter (i.e. PM2.5) which are scheduled to be proposed in the next few months. As our nations job creators try to get our economy back on track, stringent air quality regulations and standards continually work to derail their progress.

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.

Excerpt:

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…)

This morning’s hearing by the House Oversight and Government Reform Committee, “Regulatory Impediments to Job Creation,” is much anticipated not just for its economic importance but also for its more political dynamic, i.e., House Republicans versus President Obama, the GOP’s drive to rationalize regulations as a strategy, the President reaching out to business, etc. Whichever dynamic produces a better, more commonsensical approach toward regulation (and reins in the expansionistic EPA) is OK by us.

In any case, the previews and other leans toward the political analysis.

• AP, “GOP invites business to vent about regulations” C’mon! Wasn’t there enough room in the headline for “whine” or “bitch?” It’s possible that business will not “vent,” but rather express well-considered, factual arguments to the committee.
• New York Times, resorting to the most hackneyed of all headline constructions, “Republicans Fire First Shots in the War over Regulation.”
• NPR, “Republican Hearing Focuses On Business Complaints“
• Washington Post, “Do regulations kill jobs? House report draws on businesses’ answers.“

And, a good one from National Review Online, The Corner, “The Burden of Regulation“:

Update: To watch streaming video of the hearing please click here.   (continue reading…)

Jay Timmons, president of the National Association of Manufacturers, testifies this morning before the House Oversight and Government Reform Committee at a hearing, “Regulatory Impediments To Job Creation.”

Timmons’ prepared statement has been posted online at the committee website, here. Among the topics he discusses are regulations from the Occupational Safety and Health Administration, the proposal from the Department of Transportation over air shipments of lithium batteries, the DOT’s rulemaking on hours of service, the Consumer Product Safety Commission’s product safety database, and, of course, the major EPA regulations that will retard economic growth.

One expects today’s hearing will include much discussion of the EPA’s power grab in attempting to regulate greenhouse gas emissions without statutory authority, but we hope the horrendous, anti-competitive proposals on ground-level ozone also gets attention. From Timmons’ prepared testimony:

The EPA has been embarked on a decades-long process to implement the Clean Air Act and its amendments. There is no doubt that enormous benefits have been brought to our nation from efforts to improve air quality. But the continued ratcheting down of emission limits produces diminishing returns at far higher marginal costs. This means that each new air rule will have a greater impact on job creation than those in the past.

Costs of pollution abatement are capital intensive. In a time of economic recovery where capital is extremely scarce, every dollar diverted from productive use creates additional pressure to reduce labor costs. And when commodities and other
manufacturing inputs are increasing in costs, even more pressure builds to squeeze labor costs. In this environment, it is very clear that unnecessary or cost-ineffective regulation will dampen economic growth and will continue to hold down job creation. For some firms it will be the final marginal straw that destroys the whole business.

That is why it is so shocking that the EPA decided to take a Bush Administration rule that was enormously costly, the National Ambient Air Quality Standard (NAAQS) for Ozone, and propose making it even more stringent and costly. One study by the Manufacturers Allliance/MAPI estimated the most stringent proposal would result in the loss of 7.3 million jobs by 2020 and add $1 trillion in new regulatory costs per year between 2020 and 2030. We have a short reprieve from this rule because the EPA has delayed its final proposal until July. But Congress must work with the EPA to stop the
agency from making a $1 trillion mistake.

The hearing begins at 9:30 a.m.

The EPA is so aggressive on so many regulatory fronts, otherwise major issues tend to get shortchanged in the media, so kudos to The Wall Street Journal for covering the agency’s proposed ozone regs, being pushed before the new 2008 regulations even had a chance to go into full effect.

Monday’s WSJ reported, “New Smog Proposals From EPA Draw Fire“:

A proposed crackdown on smog by the Environmental Protection Agency is fueling resistance from businesses groups concerned about costs, Republicans who say it’ll be a drag on the economy—and some heartland Democrats engaged in tough election battles this fall.

EPA Administrator Lisa Jackson has dramatically stepped up the pace and scope of regulatory activity since 2009. She has pushed sweeping rules to regulate greenhouse-gas emissions linked to climate change, challenged coal companies over their mining practices, and questioned the methods energy companies are using to drill for natural gas.

Now Ms. Jackson is proposing to redefine what constitutes unsafe levels of ground-level ozone, a primary ingredient in smog.

The Journal cites two letters from elected officials alarmed by the EPA’s excesses. One comes from a bipartisan group of Senators led by Sen. Evan Bayh (D-IN) and Sen. George Voinovich (R-OH). The letter, available here, notes that the EPA normally revises the National Ambient Air Quality Standards on a five-year basis, if not longer. The Senators argue.

However, the Agency has proposed to significantly tighten the standards that were adopted less than two years ago, with no new data prompting EPA’s reconsideration. We believe that changing the rules at this time will have a significant negative impact on our states’ workers and families and will compound the hardship that many are now facing in these difficult economic times. (continue reading…)

Good, basic journalism by The Cleveland Plain Dealer and reporter Michael Scott to survey the reaction of local Ohio officials to the EPA’s proposed new, lower ozone standard, “State, local air quality officials spar with U.S. EPA over proposed tougher smog standards.” Some excerpts:

Bob Hodanbosi, the Ohio EPA chief of the Division of Air Pollution Control: “The U.S. EPA is trying to make us do too much, too quickly.”

Ohio EPA Director Chris Korleski, in a letter to EPA: “”The Ohio EPA is unaware of any new study or piece of scientific evidence that did not exist in 2008 that compels the setting of an even lower standard.”

Lake County Commissioner Dan Troy: “My understanding is that these new targets would be hard to achieve if we were in the Grant Tetons. At what point do you keep trying to reduce a number toward a goal you can’t reach? …Frankly, you’re not going to get to those numbers with the technology we have now — unless you totally do away with gasoline-powered internal combustion engine. I don’t think we’re there yet.”

Also…
Akron Beacon-Journal, “Ohio EPA opposes tighter ozone limit”
Southeast Missourian, “EPA may change air quality rules, regional planner says”
Fremont (Neb.) Tribune, “Dodge County could be impacted by EPA regulations”

You would think there’d be more coverage of the issue.

The National Association of Manufacturers submitted comments to the EPA objecting to the proposed standard. For more Shopfloor coverage, click here.

The long arm of the EPA, which is always overreaching.

Immediately below we note the recent release from the Environmental Protection Agency documenting the continued, dramatic improvements in air quality — an important report in light of the EPA’s proposed regulations to throttle the economy with a new, lower standard for ground-level ozone.

The comment period on the proposed rules closed Monday, March 22, drawing vigorous input from 23 state manufacturing and business associations. The National Association of Manufacturers also submitted comments, which are available here. As the NAM notes, the national air quality standards for ground-level ozone were already lowered in 2008, imposing multibillion costs on industry, other businesses and local governments. Now the EPA wants to change the standard again?

The long arm of the EPA, which gives it leverage to pull the carpet out of under the economy.

The NAM’s submission concludes:

Manufacturers oppose revision of the 2008 ozone standard within the range proposed by EPA. Industry and federal, state and local regulators are working diligently to implement the current ozone standard and other rules pursuant to the CAA, all of which have reduced average ozone concentrations nationwide by more than 20 percent since the 1980s. EPA’s current programs are therefore fulfilling the EPA’s mission to protect environmental quality and public health. The manufacturing sector and its millions of U.S. workers urge the EPA not to lower the standard and reject options that will lead to a more stringent regulation. The NAM urges the EPA to only issue proposals that will capitalize on the manufacturing sector’s demonstrated record of technological innovation that continues to improve the quality of life for all Americans.

For more background on the ozone standard from the NAM, please click here.

Thanks to Ed Morrissey of Hot Air for alerting us to this overlooked bit of news, reported by the Institute for Energy Research:

On Wednesday, March 10, the Environmental Protection Agency (EPA) quietly released their annual report on air quality trends.  You would never know it from picking up a newspaper or reading news websites, but the report contains great news. Air quality in the United States has dramatically improved and, according to all indicators, it will continue to improve. …

Since 1990, nationwide air quality has improved significantly for the six common air pollutants. These six pollutants are ground-level ozone, particle pollution (PM2.5 and PM10), lead, nitrogen dioxide (NO2), carbon monoxide (CO), and sulfur dioxide (SO2). Nationally, air pollution was lower in 2008 than in 1990 for:

• 8-hour ozone, by 14 percent
• annual PM2.5 (since 2000), by 19 percent
• PM10 , by 31 percent
• Lead, by 78 percent
• NO2 , by 35 percent
• 8-hour CO, by 68 percent
• annual SO2 , by 59 percent …

The comment period ended Monday for the EPA’s proposed reduction of the National Ambient Air Quality Standards from ozone below the current level of 75 parts per billion (ppb), established in 2008. Even under the standards in existence in 1990, reduced in 1997 to 84 ppb, and even in a time of growing population and economic activity, America’s air has gotten cleaner. Given the improvements in air quality and the lack of evidence that lower ozone standards will produce any significant health improvements, it makes no sense to hammer a fragile economy with stricter ozone rules.

As for the rhetorical question, how did we miss this, the Institute for Energy Research says it found no major media reports on the EPA’s new report. Then again, the EPA’s news release didn’t cry out for attention:

WASHINGTON – The U.S. Environmental Protection Agency (EPA) is making the most recent data available on the state of the nation’s air quality. Air pollution impacts public health, the environment, and the Earth’s climate, and understanding these impacts are important priorities for the agency. EPA regulatory actions and voluntary efforts have led to cleaner cars, industries and consumer products, that in turn have contributed to improvements in the nation’s air.

That’s what’s known in the journalism business as backing into the story.

Twenty-three state manufacturing and business associations today submitted comments to the Environmental Protection Agency objecting to the EPA’s move to reduce the national standards for ground-level ozone.

In 2008, after a lengthy regulatory process that included public comment and hearings, the EPA lowered the 1997 National Ambient Air Quality Standards (NAAQS) for ozone from 84 parts per billion (ppb) to 75 ppb. The EPA then in January proposed new rules to drop the standard for ozone below 75 ppb, this despite the fact that air quality has been steadily improving under the 1997 standards. Ground-level ozone contributes to smog.

As the associations’ letter states:

EPA’s proposal to lower the ozone NAAQS will unnecessarily cause severe economic harm. Large swathes of the United States will be designated as being non-compliant with the new rule and will be unable to comply with a new rule. Lowering the existing 75 ppb standard to the lower end of the proposed range of 60 ppb would result in almost tripling the number of counties being designated as being in violation of the Clean Air Act (CAA). Designating an area as being in violation (or in “nonattainment’) moreover, leads to new mandates and costs under the CAA, including additional control requirements for manufacturers, the need for new business to undergo nonattainment New Source Review permitting, and the imposition of financial penalties in areas failing to meet the new standards. All these actions will discourage new businesses from locating in nonattainment areas and restrict the growth of existing businesses.

This is not the time to impose these sorts of costs on American business, just as we are recovering from the recent financial downturn in which more than 2.1 million manufacturing jobs have been lost. It makes no sense to hurt local economies already struggling to emerge from the recession. The U.S. is projected to spend approximately $9.6 billion per year on compliance costs with the current standard by 2010. A more stringent ozone standard could impose $22 billion in additional annual compliance costs on industry, costing even more jobs.

The associations also argue that the EPA failed to follow the process required by the Clean Air Act in attempting to justify this new rule.

The EPA issued the proposed rule on Jan. 11, 2010 (Federal Register notice here), and today is the comment deadline. The final rule is expected by September.