New Economic Report Shows Chicago Area Will Be Hit Hard By Obama Ozone Standard

By SBE Council at 9 July, 2015, 10:34 am

Report Confirms Concerns of State/Local Leaders

Washington D.C. – A new report released today by the Center for Regulatory Solutions (CRS), a project of the Small Business Entrepreneurship Council (SBE Council), provides new economic data revealing the economic pain the Chicago region will suffer if President Obama allows the Environmental Protection Agency (EPA) to tighten the current ozone standard of 75 parts per billion (ppb) into the range of 65-70 ppb.

The report, “EPA’s Proposed Ozone Regulation Puts Chicago Area Jobs at Risk” shows that six counties surrounding Chicago – Cook, DuPage, Kane, Lake, McHenry and Will – would be ground zero for the most onerous reduction obligations. These six counties are home to 65 percent of the state’s population, 73 percent of the state’s GDP and 70 percent of the state’s employment. Under a National Ambient Air Quality Standard (NAAQS) of 65 ppb for ozone, five of the six counties would be in non-attainment, which would impose hefty financial burdens on the economy at large. As documented by the National Association of Manufacturers, dramatically tightening the ozone NAAQS will be the most expensive federal regulation in history, with an estimated cost of $140 billion a year.

“This report confirms the concerns raised by local leaders of both parties about the devastating economic impact President Obama’s ozone regulation will have on the city of Chicago and the entire state,” said Karen Kerrigan, President of SBE Council and CRS. “No wonder local officials and small business owners are raising the alarm about the impact of this rule. 

“Let’s keep in mind that by working collaboratively at the local level, significant improvements are being made. In fact, over the past thirty years, we have made significant progress cleaning up our air. But if federal bureaucrats in Washington get in the way and impose a costly regulation that will significantly undermine local efforts, then this progress may be lost.  

“In 2011, President Obama appeared to heed the concerns of state and local leaders when he pulled back on tightening the ozone standard. We hope he will do so again.”

The CRS report comes just one week after the National Black Chamber of Commerce (NBCC) joined the Illinois Black Chamber of Commerce and the U.S. Chamber of Commerce for an important public discussion on the economic consequences of the EPA’s proposed ground level ozone rule on the state’s economy and jobs.

Also last month, the National Association of Manufacturers held a panel discussion at the U.S. Conference of Mayors. The panel featured Democrats and Republicans from cities in Arkansas, Arizona, Louisiana and California who oppose tightening the standard. In fact, the U.S. Conference of Mayors, National Association of Counties, National League of Cities and National Association of Regional Councils called on the EPA in March to retain the existing NAAQS for ozone, set in 2008, which still has not been fully implemented. 

Furthermore, state regulators have also issued warnings about tightening the ozone NAAQS. In a report released last month by the Association of Air Pollution Control Agencies, a majority of states raised concerns about their ability to meet the new standard, due in large part to background levels of ozone.  While EPA claims it can deal with this issue, many states believe the federal government’s regulatory tools are limited and inadequate. These concerns are spread throughout the U.S. and are not limited to a specific geographic region.

Also last month, NAM released poll results showing 67 percent of the public rates local air quality as excellent or good and more than half oppose stricter federal environmental regulations on local businesses.

What Illinois Leaders Are Saying About Impacts of Ozone Regulation  

• Mark Denzler, Vice President and COO of the Illinois Manufacturer’s Association: “The IMA believes the air quality levels required by this proposal would put at risk a key sector of this region’s economy, stifle economic growth and investment, and cause significant job losses throughout our state. Economic recovery has not advanced at the same pace in all states, and Illinois has experienced comparatively slow growth since the end of the recession five years ago.”

• Mark Biel, Executive Director, Chemical Industry Council of Illinois:  “Due to the energy rebirth taking place in America, Illinois’ chemical industry is experiencing some remarkable growth. The USEPA’s proposed ozone standard effectively puts the brakes on this new development as the lower limits will make it very difficult for facilities to expand. The impact on jobs can’t be overstated – reduced development translates into fewer construction jobs; operators at facilities; truckers moving products along with a dramatic slowdown in America’s industrial renaissance.”

• Jim Watson, Executive Director of the Illinois Petroleum Council: “This seems like bureaucracy at its best, limited returns at the expense of a lot of jobs.”

Highlights from the Report

• The EPA ozone rule presents potential economic hardships for the diverse county economies surrounding Chicago. Service-driven counties like Cook County and DuPage County will struggle to find ways to reduce their emissions, and manufacturing-intensive counties like Lake County, McHenry County, and Kane County will be in jeopardy of losing high paying manufacturing jobs due to expensive “known and unknown” compliance costs.

• Several of these counties already face double-digit poverty rates and can ill-afford the job cuts, energy price spikes, and uncertainty that will result from the EPA’s rule. Furthermore, both Moody’s and Fitch Investors Service consider Illinois the most financially troubled state in the country.

• Simply put, EPA’s proposed ozone regulation would impose a severe penalty on manufacturers in the state, which would in turn hobble an already fragile state economy, making it harder for Illinois residents to find quality job opportunities and for those living in poverty to climb out of it.

SBE Council is a national, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For more than twenty years, SBE Council has worked to strengthen the ecosystem for startups and small business success. The Center for Regulatory Solutions is a project of SBE Council. For more information, please visit: www.sbecouncil.org.

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