September 2, 2014

EPA Ozone Rule Could Halt U.S.’s Energy Revolution.

Last month Connecting the Dots reported the National Association of Manufacturers (NAM) found a pending U.S. Environmental Protection Agency (EPA) rule setting stricter ground-level ozone standards could cost the economy as much as $3.4 trillion in lost output over the next 25 years. (NAM’s study, which includes a state-by-state analysis and a potential “nonattainment zones” map, is available here.) Connecting the Dots also noted the rule is likely to require manufacturers and all other businesses within “nonattainment zones” to reduce their ground-level ozone levels to help meet the new standard. In a new post at the Center for RegulatorySolutions, business advocate Karen Kerrigan discusses what these zones will mean for industry and the U.S. economy. Citing the NAM study, Kerrigan explains the zones will place additional, costly burdens on “any economic entity that wishes to obtain a permit to establish a new facility that will emit the pollutant(s) of concern” and will require these entities to “find an offsetting reduction of those same emissions from another facility that is exiting the area” or “voluntarily reduced its own emissions below its permitted level.” (The NAM study concluded these offsets are difficult—and therefore very costly—to find.) Kerrigan also argues the zones will have serious implications for the economy broadly. Because even rural areas are likely to fall into these zones, Kerrigan says the rule has “potentially grave consequences for America’s oil and gas renaissance, which is largely taking place outside city limits.” She concludes, “The American economy simply cannot afford another costly federal rulemaking, especially one that will undermine the energy industry, one of the few bright spots of growth and job creation over the last several years.”