IPAA’s Lee Fuller: EPA’s New Ozone Standard Costly and Burdensome

IPAA’s Lee Fuller: EPA’s New Ozone Standard Costly and Burdensome

WASHINGTON, D.C. – Today, Independent Petroleum Association of America (IPAA) Executive Vice President Lee Fuller delivered the following testimony at a public hearing on the Environmental Protection Agency’s (EPA) Ozone National Ambient Air Quality Standards (NAAQS) proposal. In addition, Steve Everley testified today on behalf of IPAA’s education and outreach campaign, Energy in Depth, before the EPA at a coinciding hearing in Arlington, Texas. Yesterday, Energy in Depth released a new report highlighting flaws in EPA’s health claims, which the agency has used to justify a new ozone rule.

“I am Lee Fuller speaking on behalf of the Independent Petroleum Association of America (IPAA). IPAA represents the thousands of independent oil and natural gas explorers and producers, as well as the service and supply industries supporting their efforts, that will be significantly affected by the predictable consequences of this proposed regulatory action.

EPA is proposing a reduction of the National Ambient Air Quality Standard (NAAQS) for Ozone from its current level of 75 ppb to somewhere in the range of 65 to 70 ppb. IPAA believes that EPA should retain the current standard of 75.

While EPA has a responsibility to set an Ozone NAAQS at a level to protect public health, it should not act in a manner that imposes unnecessary costs on American citizens. EPA’s materials associated with its proposed revision to the current standard demonstrate that a change is neither necessary nor appropriate.

First, the quality of EPA’s determination of potential health benefits from a lower standard is flawed. In 2011, when the EPA proposed a 70 ppb standard, its median “net benefits” estimate for a 65 ppb standard was only $700 million, with a high possibility that the costs could outweigh any benefits. But in 2014, the EPA changed its mind, claiming net benefits of a lower ozone standard are now as high as $23 billion – a 3,100 percent increase in net benefits for the exact same standard. EPA is arguing that new scientific research justifies a lower threshold. But it says nothing of the 2011 Regulatory Impact Analysis (RIA), much less the scientific studies that were used to justify its previous claims about benefits and costs. Nearly 70 percent of the sources it uses were published prior to 2011, meaning they were part of the broader scientific understanding of ozone when EPA determined the net benefits from a 65 ppb standard were essentially zero. However, IPAA believes that EPA’s own materials demonstrate that even these projected health benefits will not result from the revised NAAQS proposals.

Second, set against EPA’s flawed health benefit assessment is EPA’s assessment of the technologies that would be used to reduce emissions of ozone precursors. EPA has stated in its support documents for its proposed standard that:

Existing and proposed federal rules…will help states meet the proposed standards by making significant strides toward reducing ozone-forming pollution. EPA projections show the vast majority of U.S. counties with monitors would meet the proposed standards by 2025 just with the rules and programs now in place or under way.

Consequently, these national federal requirements will essentially protect the overwhelming number of areas which would be placed in Ozone NAAQS nonattainment by a lower standard without any of the local actions that would be required from such categorization.

Third, the areas that EPA has determined will not meet the proposed ambient standards by 2025 are essentially the same areas that have failed to meet every Ozone NAAQS that has been promulgated since the Clean Air Act was passed in 1970. These areas are already subject to extensive regulations under Part D of the Act and would be subjected to the same stringent mobile source requirements and existing and new stationary source regulations under the current 75 ppb NAAQS as they would be under the proposed standard by 2025.

Fourth, while EPA has not provided an assessment of the geographical distribution of health benefits from meeting the Ozone NAAQS, it is logical to conclude that the greatest benefits would occur in the most populous areas. However, the most populous areas are the areas that remain in nonattainment after 2025 and, therefore, the health benefits calculated under the proposed NAAQS would not be achieved.

Fifth, on the other hand, for the remaining areas that EPA projects would reach attainment using only national federal mandates regardless of the NAAQS, promulgating a lower NAAQS would compel them to be subject to the requirements of Part D of the Clean Air Act. These requirements would impose on those areas emissions controls on new sources, including offsets, which would be burdensome, cost ineffective and unnecessary. Similarly, the requirements could impose on numerous communities the implementation of costly, burdensome and unnecessary vehicle inspection and maintenance programs.

Therefore, IPAA believes EPA should retain the current Ozone NAAQS. EPA’s own materials demonstrate that lowering the existing Ozone NAAQS would only result in excessive regulatory costs with no new health benefits. Instead, EPA should devote its attention to developing cost effective control strategies – if any exist – to achieve the current Ozone NAAQS in the enduring nonattainment areas instead of misdirecting important national resources to other areas where EPA states they are unnecessary.”

About the Independent Petroleum Association of America
The Independent Petroleum Association of America (IPAA) is the leading, national upstream trade association representing oil and natural gas producers that drill 95 percent of the nation’s oil and natural gas wells. These companies account for 54 percent of America’s oil production, 85 percent of its natural gas production, and support over 2.1 million American jobs.

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