EPA Proposed Ozone Standard is Costly & Absurd

By Hector L. Rivero, President & CEO, Texas Chemical Council and Association of Chemical Industry of Texas.

The U.S. Environmental Protection Agency recently announced that it would pursue stricter federal standards for ground-level ozone. Today, the standard for compliance is 75 parts per billion (ppb). If EPA has its way, the new standard will be set between 65 ppb and 70 ppb, but the agency has said it will consider and take comments on a standard as low as 60 ppb.  EPA published its proposal in the Federal Register on December 17, and will be taking comments on the proposed standard for 90 days: through March 17, 2015. While the Clean Air Act requires the EPA to revisit the ozone standard every 5 years, a change is not mandated; and why would the EPA push the goal line further away when so many non-attainment areas have not yet met the current standard.
Meeting a new EPA ozone standard has broad implications for local communities and will impact economic development. At best, a new “non-attainment” designation for a community will result in costly planning and new burdensome regulatory requirements. Of greater concern, a new standard could stymie new investment opportunities and result in lost jobs and lost tax base.

There are currently 18 Texas counties in non-attainment that are above the 75 ppb standard.  These counties have seen costly regulatory requirements that impact our everyday lives, including speed limit reductions, restrictions on outdoor barbeque pits, restricted use of lawn-care equipment, and restrictions on recreational watercraft and other off-road vehicles.   Under a lower ozone standard of even 70 ppb, every major city in Texas would be in non-attainment. This classification would significantly limit new sources of emissions in the affected region, essentially hitting the pause button on our economy.

Consider for a moment a new report that highlights the sheer absurdity of what EPA is proposing. An investigation by the American Action Forum found that at least one hundred national and state parks would not meet a lower EPA ozone standard. Death Valley National Park, Sequoia National Park and Cape Cod National Seashore all have ozone readings between 71 and 87 ppb. Even an air monitor in the Wyoming portion of Yellowstone National Park yielded an ozone reading of 63 ppb. If carefully preserved national parks – with no industry and very few vehicles – can’t manage to meet EPA’s new ozone standard, what hope does a community have for any economic growth?

Enormous Cost
The EPA’s new ozone regulation could be the most expensive ever issued on the American public, costing the nation $270 - $360 billion annually. This regulation would not only impact the chemical industry, but could increase costs for households in Texas and result in 182,347 lost jobs, according to a new study by NERA Economic Consulting and commissioned by the National Association of Manufacturers.

Cities, towns and rural areas across the United States would see reduced economic growth as unachievable permitting requirements prevent businesses from expanding or considering new operations. Local and state governments would have to impose costly new vehicle inspection programs that include an annual tailpipe emission test. Manufacturers would need to make technical and formula changes to their products and pay for replacement equipment.
These regulations could cost Texas hundreds of billions of dollars to reduce emissions to federally required levels. The EPA has identified only 52 percent of the controls needed to meet the standard. The remaining 48 percent of reductions would have to be met with unknown controls that the EPA has not yet identified but which would likely have to include early shutdowns and scrapping of existing manufacturing facilities, equipment and vehicles.

Moving Target
Across Texas and our nation, air quality continues to improve, and NOx emissions are already down nearly 60 percent nationwide since 1980, which, after adjusting for economic growth, implies a 90 percent reduction in emission rates since 1990 for NOx-emitting sources. Meanwhile, the existing 2008 ozone standard has not been achieved by the state’s non-attainment areas. It’s as if the referees are moving the goal line in the middle of the football game. With all the progress we’ve made and the recent economic recovery being seen in Texas and across the U.S., now is not the time to move the regulatory target— not at these costs.

The danger that Texas faces only underscores what is becoming more and more clear: that the EPA is not only setting U.S. environmental policy, but the agency is in fact impacting American economic policy.

By issuing standards that are impossible to meet and that have no measurable impact to human health and air quality, the EPA is over-reaching and jeopardizing our nation’s economic recovery.

By the numbers…
What Could New Ozone Regulations Cost Texas?
- $48 Billion Loss in Gross State Product from 2017 to 2040
- 182,347 Lost Jobs or Job Equivalents annually
- $113 Billion in Compliance Costs
- $970 Reduction in Average Household Consumption per Year
- $10 Billion increase for Residents to Own/Operate a personal Vehicle (2017 to 2040)
- 15 Percent increase in Residential Electricity Prices (National Average)
- 32 Percent increase in Residential Natural Gas Prices (National Average)
- Shutdown of 28 Percent of Texas’s Coal-Fired Electric Generating Capacity

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Texas Legislature Studying Water Desalination

By Hector L. Rivero, President & CEO, Texas Chemical Council and Association of Chemical Industry of Texas

The Texas Legislature’s Joint Interim Committee to Study Water Desalination recently held a series of hearings across the state, and the Texas Chemical Council was invited to provide testimony.

The joint interim committee, co-chaired by Sen. Craig Estes (R-Wichita Falls) and Rep. Todd Hunter (R-Corpus Christi), held public hearings in Austin, Corpus Christi (with a special focus on ocean water desalination) and Wichita Falls (with special focus on brackish groundwater desalination). 

I testified before the committee in Austin and emphasized the chemical manufacturing industry’s dependence on water, and the importance of a sustainable source of water to protect our industry’s current and future investments and the economic benefits to the state. The current drought has wreaked havoc across our state and threatens the viability of billions in economic investment opportunities within our industry, as well as our state’s public water supply for the foreseeable future.

The chemical industry needs a sustainable supply of process water and has made significant strides in conservation, reuse and recycling. However, there have already been instances where member company facilities have been challenged in securing the water they are legally entitled to. As a result, our industry is very supportive of the state’s interest in looking across the spectrum of water technologies that might help ensure a sustainable water supply for our state’s growing population and thriving manufacturing sector.

Desalination involves the removal of salts and dissolved solids from saline water (brackish or seawater). In addition to the removal of minerals, the process removes most biological or organic chemical compounds. Most desalination processes are based either on thermal distillation or membrane separation technologies. A desalination plant essentially separates saline water into a stream with a low concentration of dissolved salts (the fresh water stream) and a stream containing the remaining dissolved salts (the concentrate or brine stream).

Desalination is a viable technology that is already in use within our industry, and there are numerous process technologies developed and used by our member companies for desalination and in their water treatment processes.

When considering industry as a water customer, it is important to note the vast majority of our water use is for cooling and heating purposes and does not require the same drinking water quality standards that exist for municipal drinking water supplies.

Therefore, stakeholders must understand industries may be looking for a cheaper alternative to that which may be needed for a municipal water supply. As the shale economy has created a manufacturing renaissance within our industry, an assured water supply is the common goal for all, and the chemical industry looks forward to working with the Texas Legislature to examine how desalination and other water strategies — like conservation, reuse, recycling and reducing evaporation — may be viable for both the state and industry. 

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