Expert: Proposed NAAQS Rule Would Hit U.S. Industry Hard

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Later this month, the public comment period is scheduled to close on a proposal to tighten ground-level ozone concentrations under the National Ambient Air Quality Standard (NAAQS). The proposed rule, drafted by the U.S. Environmental Protection Agency (EPA) (Washington, D.C.), could result in new set of ozone standards that are "draconian and unachievable," Garry Kaufman, of counsel to law firm Holland & Hart LLP (Denver, Colorado), told Industrial Info. The EPA is considering several potential ground-level ozone standards, and the final rule could affect a variety of industries, including Power, Chemical Processing, Petroleum Refining, Oil & Gas Production and Industrial Manufacturing, Kaufman said.

"Historically, the Clean Air Act has been successful because there have been technically feasible, cost-acceptable control strategies to reduce emissions," Kaufman told the annual meeting of the Colorado Mining Association (CMA) (Denver) last month. "But increasingly stringent ambient air quality and equipment emission standards may make compliance difficult, if not impossible, particularly in the Mountain West. For the Clean Air Act to continue to be successful there must be an appropriate balance between desired emission reductions and the feasibility of achieving these reductions."

Ground-level ozone (O3), a precursor of smog, is produced when oxides of nitrogen (NOx) and volatile organic compounds (VOCs) interact in the presence of sunlight. Emissions from industrial facilities, electric utilities, motor vehicles, gasoline vapors and chemical solvents are the major man-made sources of NOx and VOCs, according to the EPA. To protect public health, the agency is required to review ozone standards every five years. The NAAQS regulates ozone levels by setting allowable emission standards for a variety of pollutants, including particulate matter (PM), sulfur dioxide (SO2), nitrogen dioxide (NO2) and carbon monoxide (CO). A court ruling prohibits the EPA from considering technological or economic feasibility when setting ozone standards, Kaufman told his CMA audience.

The NAAQS was last updated in 2008, when the ozone standard was set at 75 parts per billion (ppb). In 2010, the EPA tried to tighten ozone levels to between 60 ppb and 70 ppb, causing an outcry from industrial interests. In 2011, as the EPA was set to finalize the new NAAQS rule, President Barack Obama ordered the agency to withdraw the proposed rule. For more on that, see September 8, 2011, article - Business Groups Cheer EPA's Withdrawal of Draft Rule on Ground-Level Ozone.

When the EPA sought to tighten NAAQS back in 2010, Kaufman said the agency estimated compliance costs at between $15 billion to $25 billion per year. But in its revised proposal, released last November, the agency estimated compliance with a new standard would cost between $3.9 billion and $15 billion per year. A study from the National Association of Manufacturers (NAM) (Washington, D.C.), put annual compliance costs for the proposed rule at about $270 billion per year, he noted.

Last November, the EPA released a proposal finding that the current ozone level of 75 ppb did not adequately protect public health. The agency proposed a new ozone range from 65 ppb to 70 ppb. It also requested comments on a 60-ppb standard, as well as leaving the current standard of 75 ppb in place. Public comments will be taken until March 17. So far, nearly 40,000 comments have been filed, Kaufman said.

If the EPA proposes to adopt the most stringent standard for ozone, 60 ppb, "a good part of the country will be in violation of NAAQS, including all of the Mountain West," Kaufman said in an interview after his CMA talk. A 60-ppb standard "would trigger a whole host of implementation issues. Larger stationary facilities would face much more stringent permitting requirements and would have to find offsets to keep operating."

Some industrial facilities would have to be closed to generate emissions offsets that would allow other plants to continue operating. He added that large urban areas in warmer states where there's lots of sunshine would be hit particularly hard. But rural areas in the West also would be hard hit because they have relatively high levels of naturally occurring "background" ozone.

"It would be very difficult, if not impossible, for states in the Mountain West to comply with an ozone level of 60 ppb because it the region's background' ozone," Kaufman said. "I can't see a strategy for compliance" in the Mountain West if the agency adopts the 60 ppb ozone standard.

Non-attainment areas are not permitted to consider the costs of bringing the area back into compliance with NAAQS, Kaufman said: "You quickly run out of big (emission) reduction options and quickly get to extremely expensive measures. All the big emissions options--20 to 50 tons per year--are gone, and in a 60 ppb scenario, you will be forced to go after lawn mowers and weed whackers."

Kaufman predicted the chances that the EPA would decide to keep the current ozone standard at 75 ppb as "slim to none. The agency was poised to enact a standard of 70 ppb in 2011" until the president halted that rulemaking. "EPA is under a lot of pressure to adopt a standard under 70 ppb." He said the law firm's industrial clients are "worried they will be stuck with a standard that can't be met, forcing them to adopt crazy strategies that are very expensive and ineffective."

The EPA is scheduled to release the final NAAQS rule this October. Kaufman predicted the agency will most likely to adopt an ozone standard of between 65 ppb and 70 ppb. He added that a 10 ppb reduction (from the current level of 75 ppb to 65 ppb) would be "a pretty tall order."

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