Administration's Ozone Rule Sucks the Air Out of Jobs and the Economy

Thomas Pyle

8/29/2011 12:01:00 AM - Thomas Pyle

As the economy fails to gain traction, the Obama administration is proposing an additional burden—new, tougher ozone (air quality) regulations. This is not only curious; it’s simply bad public policy. The air we breathe today is as clean as it has been since the Environmental Protection Agency starting collecting information, but new strict regulations could cost 7.3 million Americans their jobs.

EPA is signaling that it is finalizing rules reducing the National Ambient Air Quality Standards program’s currently mandated 75 parts per billion (ppb) ozone standard to a level between 60 ppb and 70 ppb. By almost any given analysis, the impact on the nation’s economy will be nothing short of devastating.

Every state affected by this new regulation could lose tens of thousands of jobs, according to a bipartisan letter signed by a group of 34 U.S. Senators led by Senators Mary Landrieu (D-La.) and Jeff Sessions (R-Ala.). According to some estimates, the new rule could mean the loss of 7.3 million jobs, or 4.3 percent of the workforce in 2020.

By its own admission, the EPA’s turn of the screw would cost business and industry dearly. Yet it could only identify known controls for 5 percent of the emission reductions required to come into compliance and had to guess, estimating costs at a paltry $90 billion annually by 2020. In two independent analyses, the Manufacturers Alliance and the American Petroleum Institute both place the price tag at $1 trillion on an annual basis from 2020 to 2030. In Pennsylvania alone, individuals and businesses could incur up to $3.2 billion while gross regional production could decline more than $31 billion by 2020, according to the Pennsylvania Chamber of Business and Industry.

Cash-strapped states and municipalities would likewise face heavy burdens. As it is, “state and local air agencies … in the current budgetary climate, can hardly cope with existing obligations,” according to the Sessions-Landrieu letter. A Congressional Research Service report issued in December 2010 concludes that “virtually every county with a monitor [will] exceed the proposed standard.” At great cost, they must then devise their own compliance plans. Companies located in a “non-attainment community” applying for state pollution emission permits can have their expansion plans denied.

The administration’s fevered push appears even more bizarre considering the proposed standards may not even be attainable. There is evidence that increasing amounts of ozone in our air originate outside the United States and are blown into our country. Stranger still, high-ozone “background” levels at rural monitors in pristine areas such as Yellowstone National Park could exceed the proposed standards, implying that locations across the nation will be unable to meet the more stringent standards, even with the most costly investments in emission controls. In some areas, the EPA has projected more reductions are required to comply than are even emitted locally.

The science behind the EPA plan has also been called into question. According to a NERA Consulting report issued in July, 93 to 100 percent of the EPA’s projected Ozone Health Benefits disappear if its “Policy-Relevant Background” ozone values are correlated to actual monitoring data instead of to the agency’s flawed assumptions. Further, the causal relationship EPA assumes to exist between ozone and death is not supported by the agency’s own science advisors. The EPA itself has noted that at exposure levels below 80 parts for billion there is “only a very limited amount of evidence” of ozone-related lung or respiratory problems.

EPA must review its air quality regulations every five years, but these ozone regulations were most recently ratcheted down in 2008, meaning that EPA has no need to review the regulations for another two years. In fact, the administrations dramatic haste preempts the mandatory scientific review not yet completed by an EPA-appointed panel.

Evidently, the administration is prepared to take the air out of an economy that is struggling to pump itself back up, and to destroy American jobs. In light of the dubious benefits and the certain economic harm, the administration’s reasoning for making this regulation such a high priority is a mystery. And why the administration shifted the new rules in advance of its expected review date is also mystifying.

It’s not too late for the Obama administration to hold off on these new, onerous regulations. Going ahead would be irresponsible and would show the American people that the administration has a complete disregard for domestic job creation.