January 13, 2010
On Jan. 7, 2010, EPA issued a proposal to reduce the National Ambient Air
Quality Standard (NAAQS) for ozone. EPA proposed a more stringent primary air
quality standard to protect human health, as well as a more stringent secondary
standard to protect the environment. Both proposals are offered as a range. If
adopted, the proposed rule will increase the number of non-attainment areas that
will require reductions in emission standards, require offsets in order to
develop new sources, and require continued focus on reducing auto emissions.
Notably, if EPA adopts final regulations at the lower end of the proposed
range, states will have a very difficult time achieving sufficient reductions of
pollutants, primarily NOx, to meet the requirements. Many expect EPA will have
to issue significant new national rules addressing stationary and mobile sources
to help states comply. Although it will be several years before states and EPA
begin to assess new rules to generate reductions, the proposed new standards
will introduce even greater uncertainty and potential costs for industrial and
EPA’s proposal reconsiders and revises the ozone rule issued by the previous
administration in March 2008. The environmental community criticized EPA’s 2008
action for failing to follow the advice of an EPA science advisory board, and
for adopting identical primary and secondary standards.
The D.C. Circuit validated these criticisms when it remanded EPA’s
particulate NAAQS for these exact reasons in February 2009 (American Farm
Bureau v. EPA, 559 F3d. 512; see
McGuireWoods Alert for 3/3/2009). As a result, EPA advised the court that
was hearing a challenge to the 2008 ozone rule that it essentially agreed with
the concerns and intended to revise the rule accordingly.
In issuing this proposal, EPA stressed its decisions were based solely on the
science regarding the health impacts of ozone, and that it intended to set a
standard as stringent as necessary to protect public health. The preamble
reviews numerous studies regarding health impacts and sought to synthesize the
results in order to develop the new standard. Even with this intense review, EPA
issued the proposal based on a potential range of standards from .060 ppm to
0.070 ppm based on an eight-hour average. EPA took a similar approach to
evaluating numerous studies regarding vegetative impacts of ozone levels in
proposing a standard based on cumulative seasonal average expressed in a
concentrated weighted form expected to be within a range from 7 – 15 ppm-hours.
While the impact of this rule is potentially enormous, the rule will not
result in localized regulations for a number of years. Once it establishes the
ozone NAAQS, EPA will identify counties not in attainment with the standards and
issues guidance for states to establish State Implementation Plans (SIPs) to
bring those areas into attainment. SIPs are likely to include a mix of controls
on NOx and VOCs from industrial sources, as well as controls on uses of consumer
VOC sources such as paints.
States will have to rely upon EPA to control mobile source emissions for cars
and off road engines. In addition, in non-attainment areas, businesses will be
unable to build new facilities without obtaining offsetting reductions for any
VOC or NOx planned to be emitted by the new source. The new rule will also
rekindle the debate surrounding the interstate transport of ozone and ozone
precursors, and will likely require further reductions in upstream states to
allow downstream states to achieve attainment, again placing a premium on EPA
Finally, many counties have already achieved EPA’s prior ozone standard at
the cost of extensive reductions and establishment of stringent controls. Within
current technologies, states will be hard pressed to find the additional
reductions needed to meet the more stringent standards. EPA predicts nationwide
compliance costs in the range from $50 million to $90 million. These changes and
costs will be in addition to the current uncertainty regarding carbon controls.
As a result, planning for large combustion sources such as power plants will
continue to be challenging.
Once published in the Federal Register, the proposal initiates a 60-day
comment period. EPA also scheduled three hearings in early February to take
further comments. EPA states that it will issue the final rule by Aug. 31, 2010.
Companies concerned regarding the potential impact of the rule should plan to
participate in the rulemaking either by testifying at the public hearings or by
submitting formal comments.
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