On June 6, 2017, EPA Administrator Scott Pruitt notified states that U.S. EPA was extending by one year the deadline for designating those areas in non-compliance with the 2015 ozone standard.  The 2015 ozone standard is 70 parts per billion (ppb), which is lower than the prior ozone standard of 75 ppb established in 2008.

Once U.S. EPA  adopts a new ozone standard it must go through the formal process of designating areas in non-compliance with the standard based upon monitoring data maintained by the states (i.e. "Non-Attainment Areas").  Once Non-Attainment Areas are designated, those areas of the country face tougher permitting requirements and additional regulations to reduce emissions.  

Under the Clean Air Act, EPA had two years to finalize the designations.  Administrator Pruitt’s action moved the deadline for designations from October 1, 2017 to October 1, 2018.  

While a one year extension may not seem long, it has dramatic ramifications for states.  As previously discussed on this blog, there are a host of federal regulations targeting power plant and vehicle emissions that are phased in over time.  The more time states are given before designations take effect, the more states can take advantage of the existing federal regulations with are phased in over time.

Meanwhile, Murray Energy Corp v. EPA, Case No. 15-1385, the litigation challenging the 2015 ozone standard, is still pending in the U.S. Court of Appeals for the D.C. Circuit.  The standard was challenged by some companies and states.  

After the change in Administrations, Administrator Pruitt filed a request to stay the litigation while it reviewed the 2015 ozone standard.  On April 11, 2017, the Court granted EPA’s request. It is unclear whether EPA’s decision to delay the implementation of the standard means it is not actually reconsidering the standard, but from the public comments released by EPA it appears likely it will revoke the 75 ppb standard.

EPA did not provide any clear guidance in its press release announcing its decision to delay implementation of the rule.  However, the public statements in the press release and Administrator Pruitt’s letter were interesting as they show a dramatic shift in how EPA views air quality standards since the Administration change.  Here ares some examples of the statements that show the change in priorities:

  • Areas designated as being in “nonattainment” of the standard face consequences, including: increased regulatory burdens, restrictions on infrastructure investment, and increased costs to businesses (It is unusual to see EPA discussing the burden on business rather than the public health benefits from lowering the standard)
  • EPA is giving states more time to develop air quality plans and EPA is looking at providing greater flexibility to states as they develop their plans. 
  • Since 1980, total emissions of the six principal air pollutants have dropped by 63 percent and ozone levels have declined by 33 percent. Despite the continued improvement of air quality, costs associated with compliance of the ozone NAAQS have significantly increased.(Another unusual statement to be found in an EPA press release related to ozone.  Historically, EPA discusses the improvements in air quality, associated health benefits while the U.S. economy has continued to grow)

Based on the statements communicated in the press release and in EPA Administrator’s letter to the states it seems very likely EPA will take the controversial step of moving the ozone standard from 70 ppb to 75 ppb which was put in place in 2008.  It is clear the Administration is focused on increased compliance costs to business rather than citing to the public health benefits attributable to a lower standard.

 

There is a lot of hyperbole regarding President-Elect Trump’s potential environmental agenda. During the campaign there was also a lot made about issues of employment and opportunity in the "Rust Belt" (a term I personally do no like).  Here are two suggestions of how the incoming Trump Administration could bring greater opportunity to the Rust Belt without controversial roll backs of environmental standards.   

  1. Bring Logic to Air Quality Standards and Regulations
  2. Moonshot on Brownfield Redevelopment

Bring Logic to Air Quality Standards and Regulations 

Midwestern states with large populations and a heavy manufacturing base are hit particularly hard by tightening air quality standards for ozone and small particulate matter (p.m. 2.5).  On October 1, 2015, EPA strengthened the National Ambient Air Quality Standards (NAAQS) for ground-level ozone to 70 parts per billion (ppb).  EPA will designate areas in late 2017 based on monitoring data as to whether they meet the ozone standard ("Attainment Areas") or do not meet the standard ("Non-Attainment Areas"). States will have until at least 2020 to achieve compliance with the revised standards. 

As the adjacent map demonstrates, Wisconsin, Michigan, Ohio and Pennsylvania (all key states to Trump’s victory) will have significant portions of the state designated as non-attainment areas.  The designations will result in more regulation and restrictions on economic growth.

The good news is that U.S. EPA projects that most areas will be able to reach attainment of the new standards as a result of already promulgated federal regulations for gasoline, autos, power plants, and other sources of emissions. U.S. EPA projects that these already promulgated regulations will bring all but 14 of the 241 counties that currently don’t meet the 70 ppb ozone standard into attainment.  However, the bad news is that these reductions will not be achieved until 2025, five years past the ozone deadline.  Furthermore, some Members of Congress are trying to block the federal regulations.

As discussed in a recent Congressional Research Service report on the new ozone standard, some while Members in Congress have objected to the federal standards for motor vehicles, fuels, power plants, and other sources.  However, the net effect of repealing them would be to shift the burden of attaining the ozone NAAQS more squarely in the direction of state and local governments. As detailed in prior posts (here and here), the states have very little ability to improve air quality through state specific regulations under required emission reduction plans (State Implementation Plans- SIPs) to meet the NAAQS.  The federal regulations are far more cost effective.

It’s not just new regulations that will hamper economic growth in non-attainment areas, it is also mandated restrictions on economic growth.  Under the Clear Air Act, businesses looking to expand or relocate must pay for more costly emission controls in non-attainment areas.  Also, in non-attainment areas any increase in air emissions associated with a business expansion must be offset by reductions from existing businesses before a permit can be issued that allows the expansion to go forward (i.e. "Offsets").  These requirements push businesses to avoid non-attainment areas reducing opportunities for economic expansion.  

A Trump Administration could bring more logic to this regulatory mish mash by resisting calls to roll back the more cost effective federal regulations and by adjusting attainment deadlines to give states more time to take full advantage of federal regulations already on the books. Such actions would also avoid promulgation of costly new local air regulations that will largely do very little to improve air quality.  

Moonshot on Brownfield Redevelopment

A major focus during the campaign was how to improve our urban centers- finding ways to attract development and jobs to our neglected cities.  A highly effective means of giving a boost to our inner cities would be to energize U.S. EPA’s brownfield program as well as other brownfield incentives. 

As detailed in a four part series on this blog, brownfields lead to significant decay, social injustice and loss of opportunity (i.e. jobs).  The cost for businesses to expand in our urban centers is often complicated by the cost to cleanup pre-existing contamination.  Those costs are avoided by moving out of the City and developing on greenfields instead.

While brownfield programs have been successful, they have been wholly inadequate to make a significant difference.  If part of the Trump Administration’s massive infrastructure program was directed toward brownfield redevelopment, this could be a major shot in the arm promoting capital investment, cleaning up sites that pose public health issues and creating more jobs for those living in the inner city.  

As predicted last year in a prior blog post, EPA announced today that it would revise the current ozone standard of 75 ppb downward to 70 ppb. EPA had been contemplating a revised standard between 70 ppb and as low as 60 ppb.  

Under the Clean Air Act, EPA is required to review the ozone standard every five years.  The current 75 ppb standard was established in 2008.  The EPA was required to review the 2008 ozone standard by March 12, 2013.

President Obama had sharply criticized the 75 ppb standard established by President Bush as not following science.  After six years, the Obama Administration finally revised the standard.  In April 2014, after multiple delays by EPA, the U.S. District Court of the Northern District of California ordered the EPA to issue a final ozone standard by October 1, 2015.   

As previously discussed in a prior post (EPA’s Decision to Deny Ozone Petition Based on Reality), the delays in establishing the ozone standard have been very beneficial to the states and industry. There are significant federal regulations that mandate cuts in emissions that are being phased in over time.  These federal regulations are much more effective in reducing ozone levels than local controls that can be imposed by the states.  The delays have allowed more time for the federal regulations to take effect.

As noted in an article on POWER, the 70 ppb will likely be relief to many in the power sector who thought the standard could be lower.   As quoted in the Wall Street Journal, the American Lung Association was somewhat critical of the final standard:

“The level chosen, of 70 parts per billion, simply does not reflect what the science shows is necessary to truly protect public health,” said Harold Wimmer, president and CEO of the American Lung Association, one of the public-health groups that sued the EPA to issue the standard by Oct. 1. “Nonetheless, the standard announced today offers significantly greater protection than the previous, outdated standard.”

Ozone Standard in Ohio

Back in March of this year, Ohio EPA provided comments on U.S. EPA proposed ozone standard and asserted there was no scientific basis to lower the standard below 75 ppb.  

"Ohio EPA is unaware of any new study or scientific evidence that compels a change to the existing standard.  When setting the 2008 standard, U.S. EPA had before it a largely similar set of studies as are before U.S. EPA now.  In 2008, U.S. EPA considered all available information, examining the potential for setting the standard as low as .060 ppm, but nevertheless chose .075 ppm.  Just as in 2008, Ohio EPA does not see a clear-cut basis for arriving at the conclusion of setting a significantly lower standard."

Based on air quality data from 2012 through 2014, two of the three areas in Ohio designated as nonattaintment are now achieving the 75 ppb standard.  The last area that remains in nonattainment is entitled to a one year extension.

As Ohio has nearly achieved compliance with the 2008 standard, it will now need to submit new plans to reduce ozone levels further. 

On November 25th, U.S. EPA finally issued the long anticipated proposal to reduce the ozone standard.  The EPA is proposing to revise both the primary and secondary standards to a level within the range of 65 parts per billion (ppb) to 70 ppb.  The current (2008) ozone standard is 75 ppb.  Under the Clean Air Act, EPA is required to re-evaluate the ozone standard every five years.

EPA will also accept public comment on retaining the current standard or lowering the standard to 60 ppb.  Industry will strongly support retention of the current standard while environmental groups will argue for a reduction as low as possible. 

EPA will take comment on the proposal for 90 days after it is published in the Federal Register and will hold three public hearings. It plans to issue a final decision by Oct. 1, 2015.  

EPA has delayed issuance of a revised standard on multiple occasions, must recently in September of 2011 (see prior post).  Those delays have been beneficial because they have allowed for existing emission reduction regulations to take effect.  The longer EPA waits to finalize the new standard, the more time existing regulations have to take full effect.

Given the delays and controversy around lowering the standard, it appears very likely EPA will settle on a new standard of 70 ppb.  Maintaining the current standard would be very difficult given the EPA’s science board has recommended further reductions.  However, going any lower than 70 ppb would result is too severe of emission reductions. 

Impact on Ohio

Ohio’s major metropolitan areas have always faced challenges in meeting federal ozone standards. It will be no different this time around (EPA’s national chart shows a long of red and orange dots in Ohio).  

The challenge facing the states is that federal regulations have been far more effective in reducing ozone compared with state or local regulations.  Each time EPA tightens the standard, the more difficult it becomes to find new reductions to lower ozone levels further. 

While reductions are hard to come by, the switch from coal to natural gas will have a huge impact on ozone levels.  The closure of multiple coal-fired power plants will lead to large reductions in ozone precursors (NOx).  While the switch to natural gas should help in achieving new ozone standards, it will still be very difficult for Ohio to achieve the necessary reductions.

In an article in the Cleveland Plain Dealer, Ohio GOP members expressed concern as to the impact of a lowered ozone standard on the economy:

House Speaker John Boehner and other GOP lawmakers from Ohio were unhappy with the EPA proposal.

Ohio Sen. Rob Portman fears the rule "will have a negative impact on job creation in the state of Ohio," his spokeswoman said, while Boehner predicted it could "slash family budgets by more than $1,500 per year, reduce GDP by trillions and cost our economy millions of jobs."

Wadsworth Republican Rep. Jim Renacci predicted it would lead to higher utility costs. He pledged "to rein in the EPA to ensure that its overreaching regulations do not crush job creation and increase costs for Ohioans."

"Significant portions of the country, including Ohio, are still struggling to meet the EPA’s 2008 guidelines, so moving the goalposts now will only lead to more uncertainty and higher compliance costs, which will ultimately be passed onto the consumer," said a statement from Renacci.

Once again, Ohio finds itself at the center of the challenge to balance air quality improvements with economic welfare.
 

 

Combating ozone pollution is really about time.  When I was back at Ohio EPA, we had countless meeting discussing how Ohio could (or whether it could) accelerate progress dramatically in reducing ozone pollution.  During that time we would discuss "on-the-books controls" versus new state initiatives.  

"On-the-book controls" referred to a suite of federal air pollution regulations that were put in place to help combat air pollution, including ozone.  The regulations target the two largest contributors to ozone pollution-vehicles and power plants.  The "on-the-books controls" include:

All of these federal air regulations will continue to be phased in over time greatly reducing the precursors that lead to the creation of ozone (smog). The full benefit of some of these major regulations won’t be seen for another 15 years as the vehicle fleet turns over. In addition, CSAPR has just emerged from litigation and the full reductions have not taken place.

What we learned in our discussions eight years ago was that the state’s had almost no ability to significantly reduce ozone pollution beyond what would be attributable to these federal regulations. At the time, the deadlines for compliance simply didn’t match up with the process for phasing in the federal regulations.  The states needed time.  

Flash forward almost 8 years later and it appears those federal regulations are having a dramatic effect on reducing ozone.  The picture above is taken from a story on Gizmodo regarding improvements to air quality in the last decade.  (Click here to see the very cool video showing reductions).

EPA Denies Request for Redesignation of Attainment Areas for Ozone Standard

On August 14, 2014, EPA Administrator Gina McCarthy denied the 2013 Sierra Club petition that requested U.S. EPA to redesignate as nonattainment 57 areas for violations the 2008 national ambient air quality standards (NAAQS) of ozone.  

Under EPA regulations, ozone levels are based on a three year average of the 8-hour ozone concentration.  The concentrations are averaged because weather plays an important role in the creation of ozone (i.e. hot summers = more ozone).  The averaging is intended to smooth out the variations that may occur due to weather.  

In the Administrator’s McCarthy’s letter denying the petition, she says one of the reason for the denial is to give the states more time.  She specifically cites forthcoming reductions due to federal regulations already in place.  

EPA states that emissions of the ozone precursors are expected to decline significantly:

  • NOx is expected to decline by 29 percent from 2011 through 2018; and
  • VOCs are expected to decline by 10 percent from 2011 through 2018

(Click here for EPA’s extended response setting forth the reasons for denying the petition)

EPA’s decision to deny the petition was sharply criticized by environmental groups.  However, redesignation to nonattainment would force the states to adopt additional reductions beyond these federal "on-the-books" controls.  Those state regulations are no where near as cost effective at reducing ozone pollution and would likely not significantly improve air quality.

EPA decision to give time to the states to allow federal regulations to take hold is based upon practical reality.  The last decade has shown dramatic improvements.  More reductions are locked in and the states would have little ability to accelerate those improvements.

 

The Obama Administrative continues to be heavily criticized by industry for its aggressive development of greenhouse gas regulations.  In contrast to the dizzying pace of new greenhouse gas regulations stands finalization of a new ozone standard…something the President promised to do after being elected to his first term. 

Under the Clean Air Act, EPA is required to review the ozone standard every five years. In 2008, the Bush Administration set the new ozone limit at 75 parts per billion (ppb). That was tighter than the existing regulations, but considerably weaker than the 60 to 70 ppb recommended by the Clean Air Science Advisory Committee (CASAC- a science advisory panel which advises EPA in settings National Ambient Air Quality Standards).

Litigation ensued over the Bush standard. However, a cease fire was called when the Obama Administration took office and called the 75 ppb indefensible. The EPA promised to revisit the standard and set it somewhere between the 60 to 70 ppb recommended by CASAC.

After two prior deadlines passed without a new standard, the Administration identified August of 2012 as the final date.  That date came and the Administration again said they would delay final standards until 2013.  Yet nothing happened last year.  Now, it appears the Administration may be making progress toward finalizing the standard.

On February 3rd, EPA release two reports-  its draft risk and exposure assessment and the Second External Review Policy Assessment for the New Ozone Standard.  Both of these reports confirm what was known five years ago-  the recommendation is to lower the standard to somewhere between 60 to 70 ppb.  

Clearly the Administration still has cold feet about finalizing a revised standard.  In fact, we have now gone more than five years since a review of the old standard.  

This is all good news to State’s like Ohio with a heavy manufacturing base, larger populations and fossil fuel reliant power base.  As discussed in my last post on this topic, the longer the delay the more time existing federal regulations have to take effect to reduce ozone precursors.  In reality, the States have very little ability to significantly reduce ozone pollution through state specific regulation.

The lengthy delay may mean that ozone levels will be reduced down to where a 70 ppb standard would be realistically attainable, something that seemed impossible even five years ago. 

Under increasing pressure from the Courts, EPA announced on June 14th its proposed revision to the federal air quality standard for fine particles (microns less than 2.5).  The last standard was 15 ug/m3 which was established in 1997.  EPA is now proposing to lower the standard somewhere between 12 and 13 ug/m3. 

Back in 2009, the Court overturned EPA’s proposal to keep the standard at 15 ug/m3.  Since that time various groups have been trying to force EPA to promulgate a new standard.

In May, the District Court of Columbia had granted a motion for preliminary injunction sought by the American Lung Association, other environmental groups and the States.  The case is American Lung Association et al. v. EPA, No. 1:12-cv-00243-RLW (D.D.C.).  The order resulted in EPA accelerating release of its proposed standard.

Background on Federal Air Quality Standards (National Ambient Air Qulity Standards- NAAQS)

Counties that fail to meet the federal air quality standard are designated "non-attainment."  Under the Clean Air Act, non-attainment areas face more difficult air permitting requirements for larger air sources which can deter economic development. 

In addition, each state must develop a plan (called a "State Implementation Plan" – SIP) to meet the federal standards.  The SIP must demonstrate that a mix of federal and state air pollution regulations will allow each of the counties in the state to meet the standard.  The SIP process often results in state’s implementing new pollution control requirements which increase compliance costs.

States that fail to meet the deadline for attaining the standards face sanctions from EPA. 

Ohio’s Progress in Meeting the PM 2.5 Standard

Due to its relatively high population and manufacturing base, Ohio has always faced challenges in meeting air quality standards.  Ohio still has areas that have failed to properly demonstrate compliance with the 1997 fine partcle standard. 

Below a is chart from a presenation by Ohio EPA from March which shows current monitoring of air quality in the major cities in Ohio:

It is worth noting that an improvement of 1 ug/m3 is quite significant. 

The Chart shows Ohio’s air quality is improving.  However, even if EPA picks the high end of the range and sets the new standard at 13 ug/m3, the State will  have a number of counties designated as non-attainment areas. 

U.S. EPA says they will make designations of counties in December 2014 with non-attainment designations will become legally effective in early 2015.  States will be given until 2020 to comply with the standard.

National Progress in Meeting the Standard Hinges on Proposed EPA Rules

U.S. EPA projects that only a couple of counties will be out of attainment by 2020. 

However, this projection is based upon a major assumption- all currently proposed federal air pollution rules remain effective.  Many of these rules are highly controversial and face legal as well as political challenges. The federal rules EPA considered in place for purpose of the modeling  include: the Cross State Air Pollution Rule (power plans), the Mercury and AIr Toxics Standard (power plants) and various emissions standards for vehicles, aircraft, locomotives and ships.

 

The Obama Administration had already delayed issuance of a revised ozone standard three times.  EPA had said repeatedly that it would it would finally promulgate the new standard by this  August.  Then last week, President Obama shocked many by announcing that EPA would not issue a new ozone standard until 2013.

A Little History on Ozone

Under the Clean Air Act, EPA is required to review the ozone standard every five years.   In 2008, the Bush Administration set the new ozone limit at 75 parts per billion (ppb). That was tighter than the existing regulations, but considerably weaker than the 60 to 70 ppb recommended  by the Clean Air Science Advisory Committee (CASAC- a science advisory panel which advises EPA in settings National Ambient Air Quality Standards).

Litigation ensued over the Bush standard.  However, a cease fire was called when the Obama Administration took office and called the 75 ppb indefensible.  The EPA promised to revisit the standard and set it somewhere between the 60 to 70 ppb recommended by CASAC.

Since EPA made its early pronouncements, the economy has not improved causing the EPA to delay issuance of a new standard on three different occasions.  The final arbitrary deadline was set for this August to finally announce the new standard.  But on the eve of the announcement, the Obama Administration issued a statement that it would wait until 2013 to review the standard.

Internet Blisters with Commentary

The media and internet has been awash in debate regarding the delay in the ozone standard.   Time wrote a piece titled "Is President Obama Bad for the Environment."  The backlash from environmental groups and clean air advocates has been dramatic. Industry has heralded the decision.  Here is a sampling from the various perspectives:

  • MoveOn.org said they don’t know how they can support the President’s re-election after such an announcement. 
  • Sierra Club- "Had the EPA smog pollution regulations come into effect as anticipated, it would have prevented 12,000 deaths, 5,300 heart attacks, and tens of thousands of asthma attacks.  Its time we stop pitting the false promise of jobs from a desperate-albeit wealthy and powerful-industry against the best interests of the American People."
  • National Petrochemical & Refiners Association– "President Obama acted in the best interests of the American people last Friday when he blocked the Environmental Protection Agency from imposing unrealistic, unjustified and unneeded new ozone standards on our nation. The president should now follow up by stopping EPA from imposing other extreme regulations that will cost our economy billions of dollars and wipe out millions of American jobs, without providing any significant environmental benefits."
  • Business Roundtable–  Calls the ozone standard the single most expensive environmental regulation in U.S. History.  In an op-ed piece, Governor Engler says that 85% of U.S. counties would be in "nonattainment" with the new standard triggering a cascade of federal and state controls.  EPA estimates the new standards could cost between $20 to $90 billion annually.

For some additional perspectives on both sides of the debate I would recommend reviewing the National Law Journal’s Energy & Environment Blog- "Sizing Up Obama’s Ozone Standard Delay"

Implications for Ohio

In my former role as Director of Ohio EPA, I got to see first hand how the state’s dealt with meeting new federal air quality standards, including the ozone standard.  From that experience I concur with the business groups who were concerned with the new standard’s impacts on a struggling economy.  This is particularly true for states like Ohio with high population, heavy reliance on manufacturing and where coal is the main source of power generation.

A "nonattainment" designation for a metropolitan area is a massive impediment to economic development.  Particularly metropolitan areas that rely on a growing manufacturing base to attract new jobs.   Air permitting requirements under nonattainment New Source Review places these areas at a competitive disadvantage to areas that meet the standard. 

Even more importantly, I learned that the states, in reality, have far less ability to institute regulations that reduce smog then the federal EPA.  This is because much of the nonattainment problem is attributable to interstate pollution.  Also, much of it comes from vehicles for which there is very little ability to reduce emissions through state regulation. The last decade has demonstrated that federal regulations directed at vehicles and interstate pollution are much more effective in reducing ozone levels than negligible benefits achieved through state regulation.

Existing Federal Regulations Will Continue to Reap Clean Air Benefits

While new state air pollution regulations have little impact in improving air quality, federal regulations have resulted in dramatic improvements.  Areas that five years ago were thought never to reach attainment with the old 1997 ozone standard (like Cleveland) have been able to reach attainment.

Here is a chart of exceedences of the ozone standard in Ohio going back to 2000.  Recently, there are no exceedences of the old 1-hr standard (.0125 ppm) and very few of the 1997 8-hr standard. Over the last five years the major benefits of the federal air regulations discussed above have been realized.

However, what is not shown is the number of exceedences that would occur under a 8-hr standard within the CASAC range of .070 to .060 ppm.  It would be pretty dramatic.

These existing federal regulations will continue to improve air quality because they are phased in over time.  These regulations include:

All of these federal air regulations will continue to be phased in greatly reducing the precursors that lead to the creation of ozone (smog). The full benefit of some of these major regulations won’t be seen for another 20 years as the vehicle fleet turns over.  In addition,  CSAPR is just on the books and will dramatically reduce power plant pollution.

Bottomline- Air Quality Improves While States Get Some Breathing Room

Even though the ozone standard will not be revised until 2013, air quality will continue to  improve as a result of these major federal air quality regulations.  Meanwhile, the states will not be saddled with non-attainment designations under a new standard during a tough economic period. 

When the ozone standard is revised, the States will have benefited from the greater reductions achieved from these federal regulations. These air quality benefits will make it much more realistic that the states can achieve the new standard. 

 

The Obama Administration, after stopping the implementation of the Bush-era ozone standard, has delayed choosing a revised standard three times.  These delays had given hope that EPA may wait to choose a revised standard until after the election. 

In conversations with representatives for industry most impacted by the revised ozone standards, they told me they thought the Administration was positioning itself to delay implementation for an extended period of time.  Now, it appears EPA is completing the final steps toward selection of a revised standard.  On July 26th, EPA released the following statement:

Administrator Jackson is fully committed to finalizing EPA’s reconsideration of the Clean Air Act health standard for ground level ozone. That reconsideration is currently going through interagency review led by OMB. Following completion of this final step, EPA will finalize its reconsideration, but will not issue the final rule on July 29th, the date the agency had intended. We look forward to finalizing this standard shortly. A new ozone standard will be based on the best science and meet the obligation established under the Clean Air Act to protect the health of the American people. In implementing this new standard, EPA will use the long-standing flexibility in the Clean Air Act to consider costs, jobs and the economy.

Background on EPA’s Selection of a Revised Ozone Standard

The last time the ozone standard was revised was in 1997.  The 1997 standard was 84 parts per billion (ppb).  The Clean Air Act mandates review of federal air quality standards every five years. 

Back in 2006, the Clean Air Science Advisory Committee (CASAC)- EPA’s science advisory panel- recommended an ozone standard between 60 and 70 ppb after reviewing the latest studies.  In a very controversial move, Bush’s EPA Administrator- Stephen Johnson- chose to set it at 75 ppb instead of a standard in the range recommended by CASAC.

Soon after the election, Obama’s EPA Administrator, Lisa Jackson, announced the Agency was delaying implementation of the 75 ppb standard and revisiting the standard itself.  Since its initial announcement, EPA has delay taking action three separate times.

Costs Cannot Be Considered

The ozone standard is seen by many as the most costly regulatory decision EPA implements.  Total  cost of compliance with the Bush-era standard was estimated at roughly $8 billion.  A revised standard between 60 ppb-70 ppb will be much higher.  Its important to remember the the Supreme Court has already ruled that EPA cannot consider cost in selecting a standard (ATA v. Whitman).

Delays Already Have Avoided Implementation During Economic Downturn

 We probably have already forgotten the schedule for implementation of the proposed 2008 ozone standard (75 ppb).  Final designations were supposed to occur in March 2010.

Final designations would have immediately implemented tough new restrictions for growth in areas that didn’t meet the standard.

Using EPA’s 2008 proposed schedule as a guide, if EPA acts in August 2011 it is likely that final designations won’t be effective until August 2013 or perhaps even longer.  Attainment deadlines pushing out to 2018-2035.

All Signs Point to a 70 ppb Ozone Standard

EPA’s own statements point to a standard lower than 75 ppb.  Let’s look at two of the sentences in EPA’s recent announcement. I have bolded the key language:

  1. A new ozone standard will be based on the best science; and
  2. In implementing this new standard, EPA will use the long-standing flexibility in the Clean Air Act to consider costs, jobs and the economy;

First, EPA states it will select a standard based on the "best science."  As soon as EPA stopped the implementation of the Bush-era 75 ppb standard, it blasted the standard as not based on science.  EPA has boxed itself in a corner and must select a standard in the range recommended by CASAC of between 60 ppb – 70 ppb.

Second, EPA comments show it is already bracing for the backlash that will ensue by selecting a lower standard.  EPA will certainly take heat for imposing a very costly new regulation during a tough economy.  Therefore, it already sending a signal that will will try to ease the pain by "considering costs" when "implementing this new standard."  This could mean a longer implementation or extended compliance deadlines.

On July 13th, Administrator Jackson sent a letter to Senator Carper regarding the 2008 Bush era ozone standard.  This letter is yet another indication EPA will select a standard between 60 ppb to 70 ppb.  In her letter the Administrator basically states the 75 ppb standard was not legally defensible because of CASAC’s recommendation. 

Based on its actions stopping the implementation of the 2008 proposed ozone standard, EPA has no choice but to select a standard within the rage recommended by CASAC.  Given the state of the economy, EPA also has no choice but to select a standard within that range that will have least economic impact- 70 ppb.   

 

On Monday, EPA announced it was delaying its proposed rules that would apply greenhouse gas emission standards to power plants. EPA said it would push the proposal back from July to September to allow more time to consider comments. EPA still expects to finalize the rule by May 2012.  

Its no secret that EPA regulations have been the focus of intense scrutiny due to the costs and the potential impacts on the country’s struggling economic recovery.  Over the last several months EPA has delayed rule after rule.  The delays include:

  • Greenhouse gas rules for power plants (NSPS)
  • Industrial/Commercial boiler rule (MACT)
  • Ozone Federal Air Quality Standards (NAAQS)
  • Fine Particle Air Quality Standards (NAAQS)

Each time EPA delays one of the major rules, it claims the delay is to consider more information or to allow for more public comment.  Yet the frequency of the announced delays coupled with the timing suggests the Obama Administration is concerned with protecting the fragile economic recovery or it is simply responding to intense political pressure.

Debate Pitting Economy Versus the Environment Intensifies

EPA’s regulatory actions are under intense pressure on Capitol Hill.  Republicans and some conservative Democrats have targeted the EPA rules, in particular those that impact power plants due to their potential to raise energy prices or de-rail the recovery. 

While the announced delays may temporarily reduce the pressure on the Agency, in reality the delays have done nothing to cool down the rhetoric used on both sides.  For example, Lisa Jackson testified before the Senate and disparaged lobbyists who had advocated against the new EPA rules:

“While Americans across the country suffer from this pollution, special interests who are trying to gut long-standing public health protections are now going so far as to claim that these pollutants aren’t even harmful. These myths are being perpetrated by some of the same lobbyists who have in the past testified before Congress about the importance of reducing mercury and particulate matter. Now on behalf of their clients, they’re saying the exact opposite.”

On the other side, AEP highlighted potential impacts to the economy last week by announcing the potential closure of a number of power plants and huge new compliance costs if the EPA rules moved forward.  AEP said it would retire nearly 6,000 megawatts (MW) of coal-fueled power generation and switch to natural gas at many of its plants at an estimated cost of $6 billion to $8 billion by the end of the decade.This from a Press Release issued by AEP:

"We have worked for months to develop a compliance plan that will mitigate the impact of these rules for our customers and preserve jobs, but because of the unrealistic compliance timelines in the EPA proposals, we will have to prematurely shut down nearly 25 percent of our current coal-fueled generating capacity, cut hundreds of good power plant jobs, and invest billions of dollars in capital to retire, retrofit and replace coal-fueled power plants. The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling,” said Michael G. Morris, AEP chairman and chief executive officer.

EPA Delays Are Simply a Pyrrhic Victory

Each time EPA announces a delay, the Agency claims it will take a second look at its proposals.  Yet, EPA seems very unlikely to make any fundamental changes.  While some may view the announced delays as victories, it is only so long before either the rules will be released by EPA or  EPA will be compelled by the courts to act. 

A popular political strategy has been to attack the science behind EPA’s proposals in hopes of deflecting the proposal entirely.  This "all or nothing" approach is unlikely to ultimately succeed given the 60 votes needed in the Senate to make changes to the statutes that shape the rules. 

Rather than challenge the science in hopes of avoiding regulations altogether, it would be good to see meaningful policy discussion around the regulatory approach behind these major proposals:

  1. Ozone and Fine Particle-  Time frames for compliance need to be reasonable and should be properly coordinated with existing federal rules that will drive down emissions.  Also, as our air gets cleaner, improvements become more difficult.  Do we cross a threshold where costs should be part of the equation in setting standards? 
  2. Greenhouse gas–  Application of the New Source Review program to greenhouse gas emissions is a recipe for disaster.  While Cap and Trade became a dirty word, it offered a far more flexible approach than command and control regulations.
  3. Commercial/Industrial Boilers-  EPA’s method for establishing the standards was based upon cherry picking the best emission rates for each individual pollutant from units across the country.  A real effort needs to be made at looking at what is realistically achievable.

Unfortunately, meaningful discussion seems unlikely in today’s political environment.