PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

HUGE CHALLENGES AHEAD FOR MANUFACTURING UNDER EPA OZONE RULE

By at 29 May, 2014, 2:30 pm

Hearing on EPA Permitting Bill Highlights Problems

By Karen Kerrigan-

As I noted in my last blog post, I had the privilege of testifying last week before the House Energy and Commerce Committee’s Subcommittee on Energy and Power about the subcommittee’s draft bill to streamline Clean Air Act permitting for new manufacturing facilities. The subcommittee heard various viewpoints on the bill. I testified in favor of the bill on behalf of the Center for Regulatory Solutions and the Small Business and Entrepreneurship Council.Center for Regulatory Studies

SBE Council members stand in favor of efforts to remove regulatory barriers to new business expansion. Frankly, it was frustrating, though not surprising, to hear a representative of the environmental community denounce the subcommittee’s modest bill as an “amnesty” from clean air laws. In fact, the bill, among other things, requires EPA to do a simple job, which is this: If and when the agency issues a new national ambient air quality standard (NAAQS), it must simultaneously issue new guidance to state permitting agencies about the requirements governing the Clean Air Act’s New Source Review (NSR) preconstruction permitting program for major new manufacturing facilities.

NSR has long delayed and even stifled new plant construction, according to testimony by Ross Eisenberg of the National Association of Manufacturers. Eisenberg’s testimony also included the rather eye-opening charts below. The first chart highlights a fundamental fact about the U.S. economy: there is a connection between increased energy production, now occurring in shale plays across the country, and the renaissance of American manufacturing.

In other words, low cost energy means more manufacturing in the U.S.—but not, of course, if EPA stands in the way. The first chart shows the overlay of current shale plays, new manufacturing facilities, and, ominously, new non-attainment areas for a more stringent ozone NAAQS. If EPA decides to lower the current ozone standard of 75 parts per billion (ppb) to 60 ppb—which is within the realm of possibility—then nearly the entire country will be in non-attainment with the new standard, putting a stranglehold on energy production and manufacturing.

Photo-1

What does “non-attainment” mean? It’s a statutory term from the Clean Air Act that in practice means more restrictions, more regulations and more impediments to permitting new manufacturing facilities. Hence chart #2. As an example of what “non-attainment” or NSR permitting means, consider a cement manufacturer trying to build a new facility in a non-attainment area. Here’s what that manufacturer could be required to do to obtain an NSR permit:

  • Change energy sources to alternative fuels and sources, such as hybrid solar plants.
  • Substitute the raw materials used.
  • Blend cement with other materials.
  • Change the way the facility operates, including everything from motors to fans to compressed air systems to lighting.

 

Photo-2

Unless Congress or the Administration, or both, takes the necessary steps to fix permitting and other regulatory burdens, then the prospect of new energy production spawning new manufacturing, along with more jobs and greater investment in America’s small businesses, will be needlessly frittered away. With the economy stagnating, and new business investment on hold, this is a choice the nation can ill-afford to make.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council (SBE Council). The Center for Regulatory Solutions is a project of SBE Council.

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