US manufacturers raise new alarm over coming EPA ozone rule

31 July 2014 19:02 Source:ICIS News

WASHINGTON (ICIS)--US manufacturers warned on Thursday that an expected new federal mandate to lower atmospheric ozone levels could reverse the nation’s manufacturing renaissance, undermine the broader economy and cost millions of jobs.

The National Association of Manufacturers (NAM) said it is “extremely concerned” that an anticipated Environmental Protection Agency (EPA) new standard for ozone levels “could break the US”.

Before the end of this year, EPA is expected to issue a new National Ambient Air Quality Standard (NAAQS) for ozone that could lower the allowed level of ozone to 60 parts per billion (ppb) from the current mandate of 75 ppb.

In an earlier proposed rulemaking, the agency indicated in 2010 that it wanted to set the ozone standard at between 60-70 ppb, but there was such an uproar from a broad range of US industries, businesses and general commerce that in 2011 the White House ordered a delay in the EPA’s ozone proposal.

But that new EPA ozone level mandate is again expected shortly.

NAM president Jay Timmons told a press conference that if EPA presses ahead with an ozone level at or near 60 ppb, “the Obama administration will unleash the most expensive regulation in history”.

Timmons said a study commissioned by NAM indicates that an ozone mandate as low as 60 ppb “would reduce US GDP by $270bn per year on average over the period from 2017 through 2040 and by more than $3,000bn over that period in present value terms”.

In addition, said Timmons, a low ozone requirement of that level would have a knock-on effect of barring new energy development in many areas of the country.

In that case, constraints on new natural gas production in the US would considerably raise the mandate’s cost, cutting as much as $350bn annually from the nation’s GDP and more than $4,000bn over the same 25-year period, with job losses estimated at around 4.3m annually, according to NAM.

The ozone standard is part of the Clean Air Act (CAA), and under that statute state, city and other local governments are required to take action to ensure that ozone levels in their jurisdictions do not exceed the EPA’s standard. 

To ensure compliance with the ozone standard, state or local governments might order production facilities in their jurisdiction to install emissions scrubbers on furnaces or take other mandatory steps to reduce ozone levels.

But energy and chemicals producers and other manufacturers have argued that many areas of the US have yet to meet the current 75 ppb standard that was set in 2008, and a further reduction of the NAAQS criteria for ozone would be far too costly and unattainable.

Timmons said that a new, lower ozone mandate “couldn’t come at a worse time, just as US manufacturing is making a comeback with our new energy resources”.

He charged that many manufacturing facilities would have to shut down, a third of coal-fired power stations would have to close, a lot of farm equipment would have to be idled and many cars and trucks now on the road would have to be junked.

“This would be a self-inflicted wound that could halt the manufacturing comeback,” Timmons said.  He said the NAM study, done by NERA Economic Consulting, indicates that US households would be burdened with an average of $1,600 annually under the lower ozone standard and consumers would face higher prices for virtually every manufactured item.

Timmons also noted that the EPA itself has been able to identify only one-third of the sort of production and emissions controls that would be needed to meet a 60 ppb ozone mandate, with the remaining two-thirds of reduction systems or equipment was simply identified by the EPA as “unknown controls”.

The American Fuel & Petrochemical Manufacturers (AFPM) on Thursday joined NAM in warning that the expected EPA ozone mandate would be “a potential death blow to the American economy”.

“This is just another example of an all-cost, little-to-no benefit regulation that will have a disproportionately adverse impact on the poor and middle class,” said AFPM president Charles Drevna.

The problem with the EPA’s anticipated ozone revision, say industry officials, is that it could set a standard that would be below the background level of ozone in many parts of the country.

Ozone is a naturally occurring substance that is present in the upper atmosphere and at ground level.  In the upper atmosphere, it serves to shield Earth and its inhabitants from what otherwise would be lethal levels of ultraviolet rays. 

Those upper atmosphere ozone concentrations sometimes are plunged to the surface.

Background ozone refers to the level of ozone that would exist in a given region if there were no human activities at all in that area.  By their nature, those ground level background ozone levels cannot be influenced or affected by regulatory action.

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

By Joe Kamalick