EPA Strengthens Ozone Standards, Upsetting Both Sides

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By Patrick Ambrosio

Oct. 2 — The Environmental Protection Agency tightened the national standards for ground-level ozone to a level of 70 parts per billion, a move that upset both industry groups that had cautioned that revised standards would have damaging effects to the U.S. economy and public health organizations that had pushed for even more stringent standards.

EPA Administrator Gina McCarthy told reporters Oct. 1 that she made her decision on where to set the standards after reviewing more than 1,000 new studies, considering the advice of EPA staff and independent science advisers and weighing more than 400,000 public comments.

The EPA projected that the revised standards will provide billions in public health benefits from reduced premature deaths, asthma attacks and missed work and school days related to adverse health effects.

“This updated standard will substantially increase public health protection; there is absolutely no question about that,” McCarthy said during a teleconference. “A level of 70 will essentially eliminate exposures to the levels that clinical studies clearly show are harmful.”

The final rule (RIN 2060-AP38) updates the 75 ppb ozone standards that were set in 2008 under former President George W. Bush. McCarthy determined that the 2008 primary health-based standard was not requisite to protect public health with an adequate margin of safety. A 70 ppb standard is the least stringent level within the range of 75 ppb to 70 ppb that was proposed by the agency in November.

McCarthy said the benefits that will be achieved under the 70 ppb standards will outweigh the compliance costs by as much as a ratio of four to one.

Ground-level ozone, a main ingredient of smog, is created by reactions between nitrogen oxides and volatile organic compounds in the presence of sunlight. Ozone precursors are emitted from industrial facilities, power plants, motor vehicles and other sources.

Decision Criticized by Health Advocates

While McCarthy touted the revised standards as “another milestone” in the EPA's history of environmental protection, many environmental and public health groups expressed disappointment that the agency didn't go further.

The EPA projected that in 2025 the 70 ppb standards will yield public health benefits of as much as $5.9 billion annually. The agency estimated the new standards would avoid up to 660 premature deaths and 230,000 asthma attacks in children in 2025, even before considering improvements in California, which will get longer to attain the standards due to severe air quality issues in that state.

Paul Billings, senior vice president for advocacy and education at the American Lung Association, told Bloomberg BNA the agency missed an opportunity to follow clear advice from the Clean Air Scientific Advisory Committee, which recommended that the EPA consider a range of 60 ppb to 70 ppb but cautioned that there is “substantial evidence” of adverse health effects at 70 ppb.

“There was an opportunity to do a lot better, based on the overwhelming science that was presented to the agency,” Billings said.

Several other environmental organizations, including the Natural Resources Defense Council, Earthjustice and Clean Air Watch, echoed Billings's sentiments in Oct. 1 statements.

Frank O'Donnell, president of Clean Air Watch, said the decision to set the standards at 70 ppb were a “baby step” toward protecting public health, not the “giant stride” that was needed. “No matter how the EPA tries to spin it, this is truly a blemish on the president’s environmental legacy,” he said.

David Baron, managing attorney of Earthjustice's Washington, D.C., office, described the ozone decision as a “weak-kneed” action and predicted legal action.

“It will allow thousands of deaths, hospitalizations, asthma attacks and missed school and work days that would be prevented by the much stronger standard supported by medical experts,” Baron said. “It’s likely this weak standard will be challenged in court as a betrayal of the Clean Air Act’s promise of healthy air.”

McCarthy: I Followed Advice

Baron previously told Bloomberg BNA that a decision to set the standards at 70 ppb would likely trigger lawsuits from environmental and public health organizations over the agency's failure to follow CASAC's advice on what was necessary to provide the requisite level of health protection as required under the Clean Air Act.

Industry groups also are expected to challenge the 70 ppb standards in court, likely over the issues of attainability and consideration of adverse health effects linked to job loss (187 DEN A-1, 9/28/15).

McCarthy defended her decision to set the standards at 70 ppb, telling reporters she is “comfortable” that she listened to the advice of CASAC, which did include 70 ppb in its recommended range.

The current best available clinical data showed that 72 ppb is the lowest exposure level that causes adverse health effects in healthy, exercising adults, McCarthy said. The standards needed to be stronger than 72 ppb in order to protect vulnerable populations, including children, the elderly and people with asthma, McCarthy said.

“A level of 70 will essentially eliminate exposures to the levels that clinical studies clearly show are harmful,” McCarthy said. “I am convinced that at 70, we are doing what CASAC said.”

McCarthy acknowledged there are studies showing effects in adults at levels down to 60 ppb, but there is still uncertainty over whether those effects are harmful. She noted the Clean Air Act requires the EPA to review the standards every five years, so new research could fill those information gaps in future reviews.

Bill Becker, executive director of the National Association of Clean Air Agencies, told Bloomberg BNA it was “predictable” that the agency would move forward with a number on the higher end of the range proposed by CASAC.

“It clearly was never going to be below 65, and it was doubtful that they would have arrived at 65,” Becker said. “It’s not surprising at all.”

Industry Groups Alarmed by Decision

The EPA's decision to tighten the standards also drew criticism from many industry organizations that had advocated for the Bush-era standards to be left in place.

Jay Timmons, president of the National Association of Manufacturers (NAM), told reporters the 70 ppb standards are “simply overly burdensome” for the U.S. economy, not just manufacturers. Timmons acknowledged that the EPA did not move ahead with its proposal to issue even stronger standards, but he still expressed concerns that the decision to tighten the standards will have a damaging effect on manufacturing.

“This new standard is going to inflect pain on companies that build things in America,” Timmons said during a teleconference.

The NAM has been one of the leading advocates against stronger ozone standards, launching a significant television advertising campaign and commissioning an economic analysis by NERA Economic Consulting that predicted vastly higher costs than EPA had predicted for the proposed 65 ppb ozone standards.

The EPA projected the 70 ppb standards could cost as much as $1.4 billion in 2025, not including compliance costs in California. The agency stressed that those estimates are intended to be illustrative of the potential costs, because states are given flexibility in choosing how to attain the standards.

Timmons strongly criticized the EPA's claims that it gives states flexibility, telling reporters the EPA never gives states enough flexibility to implement national ambient air quality standards in a way that doesn't hurt the economy. The only way that industry will see any relief from the ozone rule is for “Congress to step in and do their job,” Timmons said.

Many Republicans on Capitol Hill expressed concern about the effect of the ozone rule on jobs and the economy, although they recognized the 70 ppb standards were not as damaging as the stronger standards that were part of theEPA's proposal.

Several other industry groups, including the American Petroleum Institute and the American Chemistry Council, issued statements that criticized the EPA's decision and predicted the new standards would hurt the economy.

Lengthy Implementation Time

Becker of NACAA said the “rhetoric and hyperbole” over the economic effects of a stronger ozone standard is “getting tired,” particularly because of the significant amount of time that will pass before industries need to do anything to reduceozone precursor emissions.

“The fact is that industries will have close to a decade before they reduce the first ounce of smog-forming emissions under this standard,” Becker said.

McCarthy also downplayed the economic effects of the EPA's decision, predicting that “all but a few” areas of the country will be able to attain 70 ppb ozone standards by complying with existing regulations. The agency cannot be sure exactly how many areas will fail to attain the standards, since attainment status will likely be based on a three-year average of data collected in 2014, 2015 and 2016, McCarthy said.

Following the data-collection process, there is a designation process that identifies nonattainment areas, then a period of time for states to develop their implementation plans describing how they intend to meet the standards and a compliance period for industry, Becker said.

However, EPA modeling predicts that only 14 counties outside of California are expected to be in nonattainment in 2025, according to McCarthy. A map posted to EPA's website shows those counties include areas around the New York City metropolitan area, Pittsburgh and Houston.

Immediate Effects on Business Planning

Dan Byers, senior director for policy at the U.S. Chamber of Commerce’s Institute for 21st Century Energy, disagreed that industry will not see any immediate effects of this ozone rule. While the 70 ppb standards will result in fewer nonattainment areas than the stronger standards that EPA considered, the rule will still be “very problematic” for business growth, he said.

One of the immediate effects will be to discourage businesses from planning on expanding or building new facilities in potential nonattainment areas, Byers said.

A nonattainment designation triggers both pollution control obligations for local air regulators and more stringent permitting requirements for new and modified power plants, manufacturing facilities and other industrial sources of air pollution covered by the EPA's new source review program. In order to obtain a permit to expand into a nonattainment area, companies need to obtain offsets from existing pollution source in their area to balance the projected increased emissions from their new or modified facility.

While areas won't be designated as nonattainment under the 2015 standards for a few years, businesses can look at an area's current ozone levels and get a sense of how difficult it might be to get permits in the future, Byers said.

“There are definitely immediate impacts, even if the compliance horizon is several years away,” Byers said.

Secondary Standard Also Revised

While most of the EPA's focus was on the benefits associated with the primary, health-based standard, the agency's final rule also revised the secondary, welfare-based ozone standard to 70 ppb. The secondary standard is intended to provide public welfare protection, including protection against damage to vegetation.

The agency said a review of available data showed that an updated secondary standard of 70 ppb will provide requisite protection for public welfare, as required by the Clean Air Act.

Baron of Earthjustice previously told Bloomberg BNA that a decision to set the secondary standard at the same level as the primary standard also would likely trigger a lawsuit from environmental and public health groups.

The U.S. Court of Appeals for the District of Columbia Circuit in 2013 remanded the 2008 secondary standard of 75 ppb back to the EPA after determining the agency had not adequately explained its decision to set the secondary standard at the same level as the primary standard (Mississippi v. EPA, 723 F.3d 246, 2013 BL 194344 (D.C. Cir. 2013); 142 DEN A-1, 7/24/13)142 DER A-36, 7/24/13)15 TEALERT 9, 7/26/13)44 ER 2189, 7/26/13)20 ECB 246, 8/5/13)2013 GLAXO, 8/12/13).

Several other entities, including the National Park Service, urged the EPA to set a more protective secondary standard due to mounting evidence of adverse effects of ozone on plants.

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