Slow EPA ozone permitting could delay up to $10 billion of manufacturing investment

“EPA finished the requirements for the 2008 ozone standards just this past March” – American Chemistry Council

The American Chemistry Council says as much as $10 billion of business investment may be sidelined waiting for the EPA’s sluggish process – which sometimes takes years – to issue ozone permits.

The Obama administration on Thursday established stricter limits on the smog-causing pollution linked to asthma and respiratory illness, drawing swift condemnation from business leaders who warned of damage to the economy.

The Environmental Protection Agency said the new standard of 70 parts per billion will reduce exposure to dangerous ozone pollution and prevent thousands of asthma attacks and emergency room visits and hundreds of premature deaths each year.

Environmental and health groups argued that the rules fall short. The new standard is below the current standard of 75 parts per billion but at the high end of a range announced by the EPA last fall.

The move fulfills a long-delayed campaign promise by President Barack Obama as he works to cement a legacy on climate change and other environmental policies before leaving office in January 2017. After pledging during his first presidential campaign to tighten ozonelimits, Obama backtracked in 2011 by yanking the EPA’s proposed ozone limits amid intense pressure from industry and the GOP.

White House spokesman Josh Earnest said Thursday the new ozone rule fits into Obama’s strategy to cut pollution while promoting economic growth.

Business groups said a new ozone standard is unnecessary and could jeopardize jobs. The National Association of Manufacturers and other groups had lobbied the White House in recent months and spent millions on a TV ad campaign decrying the pending ozone rule as an overreach and a job killer.

“We know that this regulation could have been worse, but it still feels like a punch in the gut,” said Tom Riordan, president and CEO of the Wisconsin-based Neenah Enterprises Inc. and task force leader for the manufacturers group.

Riordan said the EPA rule put “politics above job creation” and said manufacturers across the country, especially smaller ones, “will be forced to choose between navigating this rule and hiring new workers, between complying with Washington’s mandates and giving raises to their employees.”

The American Chemistry Council cited the EPA’s ponderous permitting process as a significant challenge for American manufacturers. It claims the new rule puts $10 billion in chemical industry investment at risk and says it members are very concerned that some projects—new facilities, plant expansions and factory restarts—will remain in limbo until the EPA explains how to obtain a permit under the new standards.

“When ozone standards are lowered, they take effect immediately. Manufacturers who want to build or expand must apply for permits showing that their project will comply. It’s up to EPA to provide the rules and guidance, but it has often taken years for the Agency to do so. For example, EPA finished the requirements for the 2008 ozone standards just this past March,” the Council said in a statement.

The Council says it has discussed the permitting paradox with the EPA, and hopes that guidance for the new standards will be provided soon, adding that before facilities can even apply for a permit, they need some degree of certainty about the process.

“We are also troubled by EPA’s lack of transparency with the underlying scientific data, and that the methodology the Agency used to assess impacts ignored indirect societal and economic costs. These and other systemic issues underscore the need for broader regulatory reform,” the Council added.

The rule issued Thursday meets a court-ordered deadline set after public health groups sued in the wake of the administration’s 2011 withdrawal of ozone rules.

At least one environmental group vowed to challenge the new standard in court, and business groups said they also were considering a legal challenge.

Cutting ozone emissions to 70 parts per billion would cost industry about $1.4 billion in 2025, the EPA said, far below benefits estimated at $2.9 billion to $5.9 billion annually.

Aiming to smooth the transition, the EPA plans to give states that have the most ozone up to 2037 to come into compliance. But McCarthy said most of the U.S. won’t have to take any action, thanks to existing pollution programs and previous EPA limits on pollutants such as mercury and carbon dioxide that have the side benefit of reducing ozone.

The EPA said only 14 U.S. counties would likely fail to meet a standard of 70 parts per billion in 2025, a figure challenged by business groups and Republicans.

The new rules could affect job growth in nearly one-third of the nation’s 3,000 counties, said Jack Gerard, president of the American Petroleum Institute, the oil industry’s top lobbying group. That’s up from 217 counties affected at the current ozone standard, he said.