The Environmental Protection Agency used incomplete or inaccurate modeling in an analysis of how new standards for sulfur content in gasoline would affect the energy industry, but didn’t do so maliciously, according to a government watchdog.
An EPA Inspector General’s report released Tuesday responded to complaints that the agency purposely underestimated the costs to refineries and misrepresented how it came up with the cost of the new regulations. The watchdog reported EPA did not purposefully mislead the industry but did have inaccuracies in a regulatory impact analysis on the sulfur standards.
“We found no evidence to substantiate the hotline allegations that EPA staff or managers purposefully underestimated costs to refineries or intentionally misrepresented information about its modeling analyses in public rulemaking documents related to the [sulfur standards],” the report stated.
The rule issued on April 28, 2014, required new emissions limits for motor vehicles and a reduced limit for the amount of sulfur allowed in gasoline. The standards are set to take effect on Jan. 1, 2017.
The report found the EPA had inaccurate or incomplete descriptions of the modeling process it used to come up with its regulatory impact analysis.
Some examples included saying 23 refineries would need more treatment capacity, when the reality was only 10 would. The analysis also did not respond to some questions posed during peer review and had inaccurate information about its modeling for the cost analysis.
However, that did not lead to more costs for the industry, the report said.
“We identified several instances in public documents for the rulemaking where the EPA did not accurately or fully describe its cost estimation methodology in the [analysis], and one instance where the EPA did not respond to a peer reviewer comment,” the report stated. “These issues dealt primarily with documentation of the modeling work and did not directly impact the EPA’s cost estimate.”
Instead of purposeful misdirection, the report attributed the inaccuracies and incomplete descriptions of the modeling process to mistakes by EPA staff and limited staffing at the agency.
“Based on our assessment, some of these instances occurred because EPA staff did not update information about their analyses in the final [analysis] from the earlier version that was developed for the proposed rule,” the report stated. “In addition, staffing and time constraints hampered the quality assurance review of the final [analysis].”
The EPA agreed with the watchdog’s assessment of its work and acknowledged there was room for improvement.
The agency said big regulatory impact analyses must be clear for the public to understand. While the agency aims to do that with each analysis, it fell short on the sulfur limits, the agency said.
“Given the inherent challenges of documenting and reviewing large and technically complex rulemakings, we strive for continuous improvement in the clarity and completeness of our regulatory impact analyses,” the agency said in response to the watchdog’s report.
“The [Office on the Inspector General] has identified some errors in the documentation of the … fuel cost analysis that highlight some opportunities for us to further improve our quality assurance process.”
