EPA’s Ozone Proposals May Test Opposition’s Solidarity

Posted December 7, 2014 at 2:11pm

The EPA’s proposed ozone restrictions would affect about a dozen states if the agency adopts the most modest end of the range it’s considering and extend to more than 30 states if it opts for the more stringent requirements.

The proposal’s varying impact would matter not only to businesses in the states affected, but could play out in Washington as members of Congress and lobbyists formulate a response to the EPA’s approach. One test will be whether opponents of tighter ozone restrictions will remain unified against any change or whether some accept a modest change that lands primarily on others.

The EPA proposed last month to reduce ambient ozone limits from 75 parts per billion to between 65 and 70 ppb, rejecting industry and Republican calls to keep the standard as it is and also stopping short of the 60 ppb level favored by environmentalists. States that fail to meet the new level by 2025 would have to come up with a plan to reduce emissions that satisfies the EPA.

Republicans have made much of the proposal’s cost to business, while industry groups have objected to any change.

But the agency’s underlying analysis shows just how much is at play within the 5 ppb range the EPA is considering. The 70 ppb limit would cost about $3.9 billion per year and fall mainly on Texas, Louisiana, Arkansas, Oklahoma, Virginia, Maryland, Pennsylvania, Delaware, New York, Connecticut, New Jersey, Rhode Island and Massachusetts.

If the EPA decides to put the restriction as low as 65 ppb, it expects the action will encompass more than 30 states and cost $15.2 billion, almost four times as much as the 70 ppb limit. (See the map above.)

The proposal is open for comment for 90 days after publication in the Federal Register and is expected to be finalized by October.

“There’s a significant difference between 65 and 70,” said Jeffrey Holmstead, a former assistant administrator for air and radiation at the EPA who heads the Environmental Strategies Group at Bracewell & Giuliani. “Every part per billion that you go down, you get more people in non-attainment.”

Holmstead’s group lobbies for energy companies including those in the coal and oil industries. He said EPA’s strategy of proposing a range while asking for comment on an even lower standard — 60 ppb — could blunt opposition to the rule.

Ozone, a molecule with three oxygen atoms, is created when sunlight strikes and breaks down nitrogen oxides and volatile organic compounds, or VOCs, from power plants, oil and gas production, cement kilns, manufacturing facilities, engine exhaust, home heaters as well as natural emissions from vegetation.

To estimate the cost of reducing emissions, the EPA evaluated maximum reductions possible using known technologies like catalytic reducers, chemical reformulations and back yard burn bans.

Known measures don’t deliver enough reductions to meet the proposed restrictions and the agency stipulated that unknown technology would account for 59 percent of the cost of meeting the 70 ppb limit and about three quarters of the expense to meet the 65 ppb limit. The reliance on a majority of unknown measures adds uncertainty to the cost estimates, as opponents to the restrictions are quick to point out.

More than half the known costs to meet the 70 ppb limit outside of California would be borne by reformulating and reducing incineration of paint and other coatings. Other costs would be accrued by upgrades to industrial boilers and rebuilding off-road engines such as those on construction equipment.

The agency expects 38 percent of the known nitrogen oxide cuts would come from adding catalytic reduction to rich burning four-stroke engines like those used to run machinery, which would account for 2 percent of the total cost of all known measures. Power plant upgrades would account for 19 percent of the known costs for the 70 ppb limit.

But power plants become much more important in a cut to 65 ppb. They would rack up 41 percent of the cost to achieve 65 ppb outside of California. EPA calculated that 16 percent of the known expense of the lower limit would be from reformulating and reducing incineration of paint, which would account for more than half the reduction in VOCs.

These total costs from tighter ozone restrictions would be in addition to expenses that power plants, factories and car makers face from other existing and proposed regulations, including the existing ozone standard and EPA’s Clean Power Plan.

 

 

A Decade Extra

California is a special case. The EPA doesn’t expect the state to meet the current restrictions and analyzed it separately. California will likely get about a decade extra to comply with lower levels. The EPA estimated the cost of compliance in California would be $800 million, or 17 percent of the national cost, to meet 70 ppb limit and up to $1.6 billion for 65 ppb.

The EPA is prohibited from considering cost when setting standards, but the agency compared anticipated expenditures to reduce ozone against the benefit of lower healthcare spending that it expects from fewer hospital trips and lives lost from asthma, heart attacks and other problems to which ozone contributes.

The EPA quantified health benefits from $6.4 billion to as much as $38 billion over the range of considered limits outside California. About two thirds of those health savings would be indirect benefits of control measures reducing other pollutants like particulate matter and carbon monoxide.