EPA Proposes Tighter, Costlier Smog Limits

Agency Argues Changes Will Improve Health; Business Groups Warn of Pending 'Punch in the Nose' for Struggling Economy
By MARK W. PETERS and STEPHEN POWER
Reuters
Smog covers downtown Los Angeles in April 2009.
The Obama administration on Thursday proposed tougher standards for reducing smog in a move it said would save lives and reduce respiratory illness, but businesses said the change would inflict new costs on employers and consumers in a weak economy.
The proposal is the latest shift toward stricter standards promised by the White House, which environmentalists have applauded but industry groups dislike.
The new smog standards, proposed by the Environmental Protection Agency, could compel power plants, refineries, gas stations and other businesses to take steps to reduce emissions of chemicals that help form smog. The EPA estimated that the costs of complying with the new standards could range between $19 billion and $90 billion annually, depending on the final standard. Much of the cost will be in the form of new technologies.
The standards could also lead to new restrictions on construction, farming and other activities that generate what is known as ground-level ozone, a primary cause of smog.
The proposal would lower the permitted level for ground-level ozone, which has been linked to respiratory illnesses. By reducing smog, the EPA hopes to reduce the incidence of asthma, particularly in children, whose developing lungs are more sensitive to smog.
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Under the proposal, the EPA would set the acceptable ozone level in the air between 0.06 and 0.07 parts per million, stricter than the current 0.075 ppm. EPA officials and public-health groups claim the new standards would mean fewer visits to the emergency room for children with asthma, and longer lives for people with chronic lung disease -- saving the U.S. $13 billion to $100 billion annually. "Using the best science to strengthen these standards is a long-overdue action that will help millions of Americans breathe easier," EPA Administrator Lisa Jackson said.
According to the agency, more than twice the 322 counties that violate current federal ozone standards would fail to comply if the new standard were set at 0.06 ppm. For areas thrown into noncompliance for the first time, the standards could result in new pollution controls on large factories, or requirements for retail gasoline outlets to sell cleaner-burning fuel. Under federal law, states are required to submit plans to the EPA that detail how they will comply with the government's ozone standards. Those that don't submit such plans or fail to implement them risk losing highway funds.
Business groups were quick to challenge the EPA proposal and said it could lead to unnecessary energy-cost increases and job losses at large facilities such as refineries and factories, as well as small businesses. "States will have to cast a very wide net when targeting sources for emissions cuts, in part because utilities already have made substantial reductions in ozone-related emissions," said John Kinsman, senior director for the environment at the Edison Electric

The National Association of Manufacturers, citing EPA data that show a 25% fall in smog concentrations nationwide from 1980 to 2008, said the announcement shows that "with EPA, no good deed goes unpunished."
Chemical makers complain the standards are too tough to be met with existing technology. They fear this will make the process of obtaining permits to expand or modify their facilities virtually impossible. "This will absolutely present a permitting challenge," said Christina Wisdom, general counsel for the Texas Chemical Council, a trade group.
Charles Drevna, president of the National Petrochemical & Refiners Association in Washington, called the new rules "a stop sign on the road to economic recovery." He said the added costs associated with the tighter ozone standards will limit the ability of refineries and petrochemical plants -- which make plastics and materials for a variety of manufactured goods -- to expand their output when the economy revives.
"When you start getting down to these levels, it is going to be an across-the-board punch in the nose to everybody -- big business and small business -- and all of it will impact the everyday consumer," he said.
Supporters of the new standards argue the EPA is more likely to overstate the costs of compliance, partly because of the difficulty of projecting how quickly the costs of pollution controls will fall. They note that when Congress debated the Clean Air Act Amendments of 1990 -- legislation establishing a system to curb sulfur-dioxide emissions that cause acid rain -- studies from the EPA estimated the legislation's annual costs at between $2.7 and $4 billion a year. A decade later, an EPA analysis determined reaching the sulfur-dioxide goals set by the 1990 law cost an estimated $1 billion to $2 billion a year.
"Agencies tend to use worst-case scenarios," said William Becker, executive director of the National Association of Clean Air Agencies. "When it's time for the industry to comply, they find the cheapest way possible."
Ground-level ozone is created by a reaction between nitrogen oxides and volatile organic compounds, which come from a variety of sources including unburned fuels emitted by vehicles. Leading emitters of ozone-creating pollutants are industrial facilities, coal-fired power plants and motor vehicles. The power sector, for example, accounts for around 20% of nitrogen-oxide emissions in the U.S.
The EPA plans to issue final standards by the end of August. Then, the federal and state governments will spend the next three-and-a-half years putting in place plans to meet the new standards.—Ann Davis and Ana Campoy contributed to this article.
Write to Stephen Power at stephen.power@wsj.com