Introduction
The National Ambient Air Quality Standard (NAAQS) for ground-level ozone is an outdoor air regulation established by the U.S. Environmental Protection Agency (EPA) under the Clean Air Act. Ground-level ozone is a gas that occurs both naturally and forms due to chemical reactions between nitrogen oxides and volatile organic compounds, which are emitted from industrial facilities, power plants, vehicle exhaust, and chemical solvents.
In November 2014, the EPA proposed lowering the ozone standard from 75 parts per billion (ppb) to a range between 65 to 70. During the public comment period for the proposed rule, the Chamber, along with a wide range of industry groups, state and local chambers, state governments, and members of Congress, urged the EPA to retain the current 75 ppb standard. On October 1, 2015, under a court-ordered deadline, the EPA finalized the ozone NAAQS standard at 70 ppb.
Litigation Developments
On December 23, 2015, the U.S. Chamber of Commerce, joined by eight other business groups, filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit challenging the EPA's rule lowering the ozone standard. On October 26, 2015, five states filed a lawsuit challenging EPA's new 70 ppb ozone standard. Lead by Arizona, the other states include Arkansas, North Dakota, New Mexico, and Oklahoma. Additional states subsequently filed challenges to the standard, including Utah, Wisconsin, Kentucky, and Texas. Murray Energy Co. also filed suit against the revised standard.
On April 11, 2017, the D.C. Circuit Court of Appeals granted EPA’s motion to indefinitely stay a lawsuit over the 2015 ozone standard in order to provide the agency more time to review the rule. The EPA is required to file 90-day interval status reports to the court on the progress of its review.
Problems with the 2015 Standard
1. Affects Significant Portion of the Country
The revised 70 ppb standard will cause significant portions of the country to fall into nonattainment to the previous 75 ppb standard, which had 28 areas classified as nonattainment, according to EPA data 241 counties violate the 70 ppb standard. Industry analysis projects a significantly higher number, with an estimated 958 counties falling into nonattainment under the 70 ppb standard. Counties and areas classified as nonattainment can suffer stringent penalties including (1) EPA overriding states on permitting decisions; (2) new facilities and major modifications having to install the most effective emission reduction technologies without consideration of cost; and (3) federally supported highway and transportation projects being suspended.
Projected 8-Hour Ozone Nonattainment Areas in the U.S. under 70 ppb Standard
2. Issues with Implementation of Revised Standard
On November 17, 2016, EPA published a proposed rule regarding implementation requirements and nonattainment area classification thresholds for the 2015 ozone standard. However, states are faced with implementing both the previous 2008 ozone standard (75 ppb) and the new 2015 standard (70 ppb) simultaneously. Other major factors also remain including as final rulemakings and guidance have not been completed for establishing nonattainment classifications, evaluation of naturally occurring background ozone, the Exceptional Events rule for wildfires and other events that can influence ozone levels, and failure to address interstate drift or international transport of ozone.
3. Potentially Skewed Cost Estimates of the Rule
In the Regulatory Impact Analysis released with the final rule, EPA estimated a cost of $1.4 billion for the revised 70 ppb standard. However, a year prior in 2014, EPA estimated that the 70 ppb standard would cost $3.9 billion. Going back to 2010, EPA projected that a 70 ppb standard would cost $19 to 25 billion annually. Industry cost estimates have also differed drastically from Agency projections in previous cost estimations for ozone; EPA's cost estimates for a 60 ppb standard had a high of $90 billion but industry projections placed the real cost at closer to $1 trillion.
Legislative Solutions
Besides legal action, there are also avenues for progress through Congress. The Chamber has been supportive of legislation (such as the H.R. 806 and S. 263, the Ozone Standards Implementation Act) in both the House and Senate chambers suspending implementation of the new 70 ppb ozone standard, reforming the review period for NAAQS, and improving the rulemaking process to include consideration of feasibility, cost, and additional information. The Chamber will be active in supporting legislative solutions to ease problems in the implementation of the ozone standards in the 115th Congress.
