INSIGHT: US industry fears new onslaught of enviro regulations

20 December 2012 16:39  [Source: ICIS news]

New wave of regulations may threaten industryBy Joe Kamalick

WASHINGTON (ICIS)--The US Environmental Protection Agency (EPA) has ordered further cuts in industrial emissions in a move that some see as the first shot in a new regulatory “onslaught” that could jeopardise a manufacturing renaissance.

In its new rulemaking, the EPA mandated that by 2020, US nationwide emissions of fine-particle pollution must be reduced to 12 micrograms per cubic metre, compared with the existing level of 15 micrograms.

Fine particle pollution includes soot and other substances emitted in all types of combustion, especially from power plants, chemical and other manufacturing, furnaces, and diesel trucks – basically anything that burns fossil fuels.

Part of the National Ambient Air Quality Standards (NAAQS) under the Clean Air Act (CAA), the fine particle pollution rule is known as PM 2.5 because it covers emissions of less than 2.5 micrometres in diameter.

EPA said the new lower standard for PM 2.5 is necessary because the microscopic particles can be inhaled into deep lung tissue and accumulate in the respiratory system, contributing to various lung and heart diseases or conditions and often causing premature deaths.

US industries were quick to criticise the new fine particle mandate, arguing that it is not necessary and that EPA’s underlying science basis for the rule is flawed.

But business leaders and some in Congress also saw the fine particle rule as the opening salvo in what they fear will be a new flood of environmental rules and regulations.

They fear that EPA will be even more aggressive in its regulatory rulemaking, now that President Barack Obama has won a second four-year term in the White House and need not worry about possible negative voter reaction to his administration’s environmental agenda.

Howard Feldman, director of regulatory and scientific affairs at the American Petroleum Institute (API), said the new EPA rule “is unnecessary and could drive up costs for new and expanding businesses trying to hire employees”.

Feldman also challenged EPA’s scientific basis for the tougher standard, arguing that there is no compelling evidence for the tougher policy.

In addition, he said, “We fear this new rule may be just the beginning of a ‘regulatory cliff’ that includes forthcoming ozone rules, the refinery sector rules, pending greenhouse gas regulations for refineries” and other pending rulemaking by the agency.

He said that API is asking the Obama administration to disclose all of the scientific data that EPA used in making the rule change.

“The collective impacts of these and other potential new regulations at a time when 12m Americans are still unemployed would be a blow to our economy as it struggles to recover,” Feldman said.

“It makes no sense to risk economic harm when the public health necessity of these regulations is ambiguous at best,” he added.

Charles Drevna, president of the American Fuel & Petrochemical Manufacturers (AFPM), also questioned the need for a new fine particle standard and warned that this EPA action and others could threaten the developing US manufacturing renaissance.

“EPA’s own data show that air quality in the US has improved dramatically since the 1970s,” Drevna said, showing that “the existing standards are clearly working”.

“Under the current PM 2.5 standards, emissions have dropped 1.1m tonnes per year since 2000, signifying a 50% reduction,” he said.

Against that record of progress, he said, “AFPM questions whether EPA has sufficient evidence to support a reduction in the PM 2.5 standards” and he charged that the agency did not conduct the appropriate scientific assessment required by law.

Drevna suggested that a new rash of EPA rulemaking could undermine new growth in the US manufacturing sector that has been triggered by recent advances in shale gas development and production, reducing energy costs across industry.

“For the first time in more than 30 years, we have the opportunity to regain global manufacturing superiority,” Drevna said.  But he said that EPA rulemaking, such as the new PM 2.5 standard and others yet to come “could result in the loss of 680,000 jobs, inhibiting progress and sending the nation into an economic tail spin”.

Jay Timmons, president of the National Association of Manufacturers (NAM), charged that EPA is displaying “a staggering level of short-sightedness by dropping another harsh regulation on America’s job creators”.

“This new standard will crush manufacturers’ plans for growth by restricting counties’ ability to issue permits for new facilities, which makes them less attractive for new business,” Timmons said.

“EPA’s actions will only further dampen manufacturers’ already dismal outlook for 2013,” he added.

For Senator James Inhofe (Republican-Oklahoma), a long-time and vociferous critic of the EPA, the agency’s new fine particle ruling is just the start.

“And so it begins,” he said, charging that the new PM 2.5 standard “is the first in an onslaught of post-election rulemakings that will place considerable burdens on our struggling economy and eventually push us over the ‘regulatory cliff’.”

Inhofe said that despite questions raised about EPA’s scientific processes by the agency’s own inspector general and his request that administrator Jackson delay the rule, “EPA pushed ahead, sacrificing sound science and transparency for its agenda of killing oil, gas and coal”.

Inhofe, the senior Republican on the Senate Committee on Environment and Public Works, said he would pursue “aggressive oversight of the Obama-EPA’s barrage of forthcoming rules and do everything in my power to prevent President Obama from pushing us over the regulatory cliff”.

Inhofe may have his hands full.

In an interview in the current issue of TIME magazine, Obama says that climate change is one of his three top priorities for the next four years. (The other two are the economy and immigration reform, he said.)

With the House of Representatives still firmly in Republican hands, it is not likely that Obama and his allies in the Democrat-majority Senate will be able to get any significant legislation through Congress related to global warming concerns.

Indeed, even when Obama enjoyed solid Democrat majorities in both the House and Senate during his first two years in office, he was unable to get his cap-and-trade legislation through Congress.

As a result, the White House is seen as likely to ramp up regulatory action and rulemaking through the EPA in an effort to achieve the administration's global warming agenda.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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