Mother of all battles over new smog rule

The Environmental Protection Agency announced Wednesday that it wants to tighten restrictions on smog-forming ozone, to limit the legal level to a range of 65-70 parts per billion, down from the current 75.

Opponents say this stringent new restriction will add to the cost of permitting and slash manufacturing investment. But environmental and public health pressure groups say the new rule doesn’t go far enough. They argue that ozone has been linked to heart and breathing ailments such as asthma, and they demand a strict upper limit of 60 parts per billion level rather than a range. The EPA said it would consider this.

The regulation works like this: States must monitor the amount of ozone pollution within their borders. If ozone pollution breaches the permissible federal level, states must submit plans to reduce pollution in that area or face penalties, such as losing highway funds. Often, the burden falls on factories, fuel refineries and other big emitters to restrain emissions, either through installing pollution-control technology or by purchasing credits to offset pollution. Industry says this is costly, and can end plans to build or expand facilities.

Ozone regulation has sparked one of the most fiercely fought lobbying battles of the Obama presidency, even though it is not central to the president’s climate change agenda. Ozone is more about air quality than than about greenhouse gas reduction, to which Obama has devoted much of his political energy.

This prompts some to suggest that Obama will prove open to compromise, or that the EPA might choose the high end of the allowable ozone level it proposed. The EPA is obliged by court order to tender a proposed rule by December and finalize it by October 2015.

“I’d think they’d settle on the 70 [parts per billion] as an attempt to allay in part concerns that have been expressed by most of industry and by some states. And they could then still claim correctly that they have settled on a number that has generally been recommended by their independent scientists,” Bill Becker, executive director of the National Association of Clean Air Agencies, told the Washington Examiner.

Becker said that while the independent panel’s finding gives the EPA some wiggle room, he expects Obama to defend the rule “as part of his legacy.” And despite years of delay, the rule is a big one for the EPA in terms of health impacts, as the agency says it would yield up to $38 billion in benefits in 2025 at a cost of $17 billion. California, due to topographical and geographical constraints, was considered separately and given more time to comply.

Republicans want their say. They say the EPA’s math is fuzzy, and want to investigate how it arrived at its numbers. The GOP-led House has consistently slammed the ozone rule, and an aide for the House Energy and Commerce Committee told the Examiner that the panel is planning a hearing on the proposal.

Senate Republicans will also get their chance when they take over from Democrats in running the upper chamber in January.

“As Senate committees return to regular order in the new Congress, this rule will face rigorous oversight so we can gain a better understanding of the health and economic impacts of the proposed standard, and we will solicit the thoughtful input of state and local leaders across the country,” said Sen. Jim Inhofe, R-Okla., the incoming Environment and Public Works Committee chairman.

Democrats, however, hope to smooth the landing for the proposal. There’s still some time for Environment and Public Works Chairwoman Barbara Boxer to hold a hearing on a topic that significantly affects air quality in her home state of California, and she would have an interest getting helpfully green testimony from friendly witnesses before Inhofe can bring in witnesses that put the opposite case.

An aide of Boxer’s would not confirm or deny whether a hearing was in the works.

Still, Jeff Holmstead, who ran the EPA’s office of air and radiation under President George W. Bush when the ozone standard was last updated, said he thinks Obama could accept a bill that delays implementation.

“It’s just not the same priority” as climate change, said Holmstead, who now lobbies for energy industry clients at Bracewell & Giuliani. “You haven’t seen the president or even the White House get involved in the ozone standard.”

Industry and many Midwest and Southeast states with heavy manufacturing bases have weighed in against the proposal. They note some states haven’t even come into compliance with the current ozone rule, accounting for territory that includes 123 million inhabitants. Tightening the standard could put even more counties into “non-attainment” areas, they say, adding permitting red tape and costs for manufacturers that want to expand.

“Let’s take a time out before we reduce it, to allow this economy to get its feet back on the ground,” American Chemistry Council CEO Cal Dooley told the Examiner. He said his industry is planning $135 billion in new investment, but that a stronger standard might strand some of it because firms would need to purchase pollution offsets or install emissions reduction technology.

The EPA contends the costs for the proposal have dropped significantly since 2011, when it estimated a hit of up to $44 billion by 2020 for the 65 parts per billion limit. They also contend just 68 counties outside of California would fall into non-attainment at the lower bound of the proposed range, and just nine would at the higher end.

That’s largely due to environmental regulations such as gasoline regulations that lower sulfur content and power plant rules that crimp mercury and other toxic air emissions.

“There are some pretty straightforward reasons why the costs are a lot lower,” EPA Administrator Gina McCarthy told reporters Wednesday. “We’ve had a lot of improvement in air quality in general, so the amount of lift will be less.”

As such, public health and environmental groups contend that ozone is indeed part of Obama’s legacy. Frank O’Donnell, president of Clean Air Watch, said that he thinks Obama will want to make amends for “sandbagging” the EPA in 2011 when he pulled a proposal amidst political pressure during his re-election bid.

“Here’s his chance to make good,” O’Donnell said.

And while the EPA proposal follows its independent panel’s suggestion, those scientists also noted that the high end of that range did not offer an adequate margin of safety for public health. That could invite legal action from outside groups if the EPA zeroes in on the upper-bound figure.

“They were pretty clear that 70 [parts per billion] was not adequate to protect public health. They included it in their range to maybe give the administrator some latitude, but they were actually pretty disparaging,” Lyndsay Moseley, assistant vice president and director of the healthy air campaign with the American Lung Association, told the Examiner.