In June, the Environmental Protection Agency (EPA) announced it would solicit public input on whether and how to change the way it considers costs and benefits in making regulatory decisions. As was first reported in Politico on Tuesday, the National Association of Manufacturers (NAM) filed comments outlining manufacturers’ priorities for reform and listed numerous examples of flawed and costly rulemaking.
The NAM’s comments included the following recommendations:
- If costs and benefits will accrue over a 30-year time horizon, the agency should provide cost and benefit estimates for the whole time horizon, not simply a snapshot of what costs and benefits would look like in a given year within the range.
- When compliance with a rule is based on unknown controls, the EPA must base its calculation of those unknown controls on realistic assumptions.
- When costs and benefits will accrue to the whole economy, the EPA should model the impact on the whole economy, not just a part of it.
- The agency should avoid relying on outdated data, studies and methodologies, and it should similarly avoid being overly speculative.
- The agency can achieve the consistency and specificity it seeks through statute-specific rulemakings that allow for more tailored approaches reflecting the unique statutory requirements.
As I wrote in our filing:
Manufacturers strongly support the EPA’s mission. Moreover, the benefits of appropriate regulations are clear and supported by the public. The issue is how to enable the regulatory system to address legitimate concerns without unreasonably impeding innovation, research, development and product deployment. Too often in the regulatory process, the vital national public policy objectives of international competitiveness and technological innovation are given short shrift due to other competing mandates. To protect public health and the environment, the NAM supports a regulatory process designed to adhere to sound principles of science, risk assessment and robust benefit-cost analysis.…In our view, there are three pillars of effective regulatory cost considerations: transparency, scientific integrity and accountability. In other words, the rule-making process should be conducted out in the open and backed up by objective, unimpeachable science, while being overseen by officials who are held accountable.
The NAM’s full comments can be viewed here.
This week saw the introduction of the Market Choice Act, offered by Reps. Carlos Curbelo (R-FL) and Brian Fitzpatrick (R-PA), which would curb greenhouse gas (GHG) emissions through a $24/ton tax on carbon levied at the point of fossil fuel production (for energy emissions) and at the manufacturing facility (for process emissions). The bill also repeals the federal gas tax and uses 70 percent of the revenues from the new carbon tax to replenish the Highway Trust Fund. Finally, it imposes a border tax adjustment on imported goods to compensate for increased domestic production costs resulting from the carbon tax, and it places a moratorium through at least 2025 on Clean Air Act GHG regulations from stationary sources covered by the tax.
Reps. Curbelo and Fitzpatrick are to be applauded for their willingness to start a meaningful conversation on climate policy. The reality that the last time a comprehensive climate bill was debated in earnest was 2009 tells a tale. A lot has happened since then in terms of how we produce and use energy and how we can reduce our carbon footprint. The manufacturing sector, for instance, has reduced our GHG emissions 10 percent over the past decade while increasing our value to the economy by 19 percent.
Given the enormous complexity of the issues involved and their potential impact on manufacturing families, Congress would do well to take a measured, comprehensive approach to this proposal. Bold ideas to drive positive change are always welcome. However, bold action can sometimes have unintended consequences. Now is not the time to act without thinking—the stakes for manufacturers and their employees are simply too high.
Individually, these proposals are game-changing. Collectively, we need to make sure they are not game-ending.
The Environmental Protection Agency’s (EPA) Scientific Advisory Board (SAB) recently announced it will take a hard look at the EPA’s planned repeal of emission requirements for glider vehicles, glider engines and glider kits. We’re pleased the SAB is looking into the emission impacts of gliders, which are older, used engines dropped into a new truck body. We have been concerned with the glider rule repeal, which we fear could create a loophole allowing the ability for glider vehicles to be sold as functional equivalents to new motor vehicles without complying with current safety or environmental standards. That creates emissions issues, given that some of the older, pre-2000 glider engines lack the controls for air pollutants that are mandatory in new vehicles.
The SAB, we hope, will evaluate how much gliders emit relative to new trucks. When the EPA proposed emissions rules on gliders in 2016, its modeling concluded that gliders emit 20 to 40 times as much nitrogen oxide (NOx) and soot as new trucks. The EPA’s proposed repeal in 2017 cited a study from Tennessee Tech University that found that glider emissions were on par with new trucks; however, Tennessee Tech then pulled the study and disavowed it, citing “knowledgeable experts within the University” who have “questioned the methodology and accuracy of the report.”
We really need some answers here before the EPA makes a decision whether to repeal the glider rule. If the EPA’s original emissions estimate is correct, then the glider rule repeal means trucks without modern pollution controls will be entering the fleet and emitting 20 to 40 times as much NOx and soot as their new counterparts. That puts a squeeze on manufacturers, who face limitations on their NOx and PM emissions due to strict EPA regulations on ozone and particulate matter and will be forced to compensate for higher-than-usual emissions from the transportation sector. We also encourage the EPA to take a hard look at the economy-wide jobs and economic impact of the glider repeal, to determine whether the costs outweigh the benefits as required by Executive Orders 12866, 13563 and 13771.
This morning, Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a guidance memorandum fixing ambiguities in the air permitting process that have thwarted manufacturers from installing cleaner equipment. Today’s action clarifies how to properly account for project emissions under step 1 of New Source Review (NSR), a federal air permitting program under the Clean Air Act that applies to new facilities or major modifications to facilities. Until today, the EPA would allow only consideration of emissions increases when determining whether NSR applies, even for projects that had a net emissions decrease because old equipment was being upgraded to new equipment.
As the National Association of Manufacturers (NAM) told the Senate in testimony last fall:
An NAM member company manufactures gas turbine upgrade technology that could improve the vast majority of in-service gas turbines by 2.6 percent and reduce their total CO2 emissions per MWh by 6.5 percent; however, many manufacturers are choosing not to install this equipment simply because it triggers NSR. The same can be said for steam turbine upgrades, which would ensure higher grid efficiency, lower emissions and reduced wear and tear that is occurring from a rapidly changing electric grid.
There is no good reason for the permitting process to create unnecessary obstacles for a manufacturer that wants to make efficiency upgrades or install modern pollution control equipment. In fact, manufacturers have been leaders in this space, working to successfully reduce emissions while adding to the overall economy. The NAM has made NSR a priority in its regulatory reform filings with the EPA and the White House. It’s clear that Administrator Pruitt agrees and is committed to fixing the permitting process for manufacturers.