New Report Details Economic Impact of EPA’s Ozone Proposal on Colorado

By SBE Council at 12 August, 2015, 11:36 am

The EPA’s proposed ozone standards (moving from 75 parts per billion into the 65 to 70 ppb range) would place at least 15 Colorado counties in “non-attainment.” These are some of Colorado’s most populated counties, responsible for 89 percent of the state’s economy and 85 percent of state employment.

Federal Controls From Tighter Ozone Caps Threaten Economic Growth and Will Make Traffic Worse, Study Finds 

Link to Report 

Denver, Colo.: A plan from the U.S. Environmental Protection Agency (EPA) to dramatically tighten federal ozone limits will impose new and damaging regulatory restrictions across nearly 90 percent of Colorado’s economy, and also threatens to make traffic congestion even worse in the Denver metropolitan area, according to a new economic study commissioned by the Center for Regulatory Solutions (CRS), a project of the Small Business Entrepreneurship Council (SBE Council).

The report, “Slamming the Brakes: How Washington’s Ozone Plan Will Hurt the Colorado Economy and Make Traffic Worse” also highlights strong and broad-based opposition to overreaching federal policies that ignore the state’s proud history of environmental stewardship. Through interviews, letters to the Obama Administration and other channels, a bipartisan coalition of state lawmakers, local officials and leaders of the business community are sending an unmistakable message to Washington: This ozone plan goes too far.

Newly released polling shows that Colorado voters are also wary of unwarranted federal environmental controls over the state’s economy and job creators. A statewide public opinion poll, commissioned by the Colorado Association of Commerce & Industry and the National Association of Manufacturers, found 76 percent of Colorado voters rate their local air quality as “Excellent” or “Good.” Strong majorities believe stricter federal air quality regulations will make it harder for local businesses to start or expand (62 percent), increase the price of everyday goods and services (76 percent) and increase the amount they pay in taxes (77 percent). Most Coloradans surveyed (77 percent) said state and local officials should have more say over air quality regulations in their area than the federal government.

By a nearly two-to-one margin, Coloradans believe the bigger problem for their local area is “less economic growth and job opportunities caused by regulations” (57 percent) rather than “lower air quality caused by pollution” (30 percent). Furthermore, wide majorities (i.e. more than 55 percent) are unwilling to tolerate more traffic delays and longer commute times, or accept less economic growth and job opportunities, because of stricter federal air quality regulations.

These concerns in Colorado reflect widespread opposition across the country to the EPA’s plan to tighten the current ozone standard of 75 parts per billion (ppb) into the range of 65 to 70 ppb. As detailed in today’s CRS report, local and national groups representing cities, counties, transportation departments, agricultural agencies, state-level environmental regulators, labor unions, construction companies, energy producers, manufacturers and many other stakeholders have all sounded the alarm. These diverse stakeholders are pleading with the EPA to stick with existing 75 ppb standard, which was set less than a decade ago and has yet to be fully implemented.

Ironically, the Obama administration already rejected EPA’s plan to dramatically tighten the federal ozone standard in 2011 due to overwhelming state and local opposition. But at the urging of the environmental lobby, the Obama EPA is trying again. 

“This ozone proposal gives the federal government far too much control over state and local planning decisions that shape the Colorado economy,” said Karen Kerrigan, President of the Small Business and Entrepreneurship Council. “Colorado is one of the biggest success stories of the federal Clean Air Act, but now the EPA is moving the goalposts. The standard is so strict – approaching background levels in some areas – that the vast majority of the state economy will be found in violation immediately. Violation of the ozone standard gives EPA the authority to effectively rewrite state and local environmental laws the way Washington wants.” 

“No wonder this EPA proposal has been met with such strong and diverse opposition from across Colorado’s political spectrum. Washington officials, all the way up to President Obama himself, should listen to the voices coming from Colorado and across the country and once again give the current standard a chance to work.” 

Excerpts From of the Report:

• By lowering the National Ambient Air Quality Standard from 75 parts per billion (ppb) into the 65 to 70 ppb range, EPA would force, with a single action, at least 15 counties in Colorado to be in violation of federal law. These happen to be some of Colorado’s most populated counties, concentrated in the Denver metropolitan area, but a number of counties on the Western Slope may be dragged into non-attainment as well. Together, these 15 counties are responsible for 89 percent of Colorado’s economy and 85 percent of state employment. (Page 3)

• Under the Clean Air Act, cities and counties that do not meet the NAAQS for ozone are placed into “non-attainment,” or violation of federal environmental standards. Once in non-attainment, local and state officials must answer to the federal government for permitting and planning decisions that could impact ozone levels. State officials are required to develop an “implementation plan” that imposes new restrictions across the economy, especially the transportation, construction and energy industries. The EPA has veto power over these implementation plans. States that refuse to comply, or have their implementation plans rejected, face regulatory and financial sanctions imposed on them directly from the federal government. (Page 19)

• The “already confusing” approval process for transportation projects – including roads, bridges, highways and public transit – will only get worse if the EPA tightens the ozone NAAQS any further, according to a joint warning from the U.S. Conference of Mayors, National Association of Counties, National League of Cities, and National Association of Regional Councils. These four groups, representing more than 20,000 local governments, also fear that “federal approval or funding” will be withheld while projects are analyzed for “conformity” with ozone standards. Delays and denials will only add to traffic congestion, which is itself a major contributor to air pollution. “Withholding these funds can negatively affect job creation and critical economic development projects for impacted regions, even when these projects and plans could have a measurable positive effect on congestion relief,” the local governments conclude. (Page 20)

• By 2025, somewhere between 330 and 660 lane miles of capacity projects [in the Denver metro area] could be blocked. This would generate system-wide delays of 4.5 million hours per year to nine million hours per year above the Reference Case. By 2040, the three scenarios show at least 1,170 lane miles of road capacity projects blocked, triggering somewhere between 15.9 million hours and 31.8 million hours of additional delays annually. These additional delays will come at a cost to the regional economy in terms of lost time and wasted energy. (Page 41)

• These costs accumulate every year. Therefore, the congestion penalty imposed by the EPA’s ozone proposal between 2019 and 2025 lies in the range of $378 million to $756 million. By 2040, the range of cumulative costs rises to between $4.2 billion and $8.5 billion. (Pages 42)

• For El Paso County and Colorado Springs – the state’s second largest city after Denver – the EPA’s proposal could plunge the region into non-attainment for the first time ever. (Page 30)

• On Colorado’s Western Slope, even more counties with little, if any, experience dealing with ozone non-attainment could suddenly find themselves held in violation of federal air quality standards. All told, five counties from the state’s western edge – Rio Blanco, Mesa, Gunnison, Montezuma and La Plata – are threatened with non-attainment based on the EPA’s proposal to tighten the federal ozone NAAQS into the range of 65 to 70 ppb. In terms of land mass, these counties cover 13,500 square miles, or roughly 35 percent of the entire Western Slope. (Page 31)

• WESTAR, a Seattle-based group representing 15 air quality regulatory agencies from Western states, has sounded the alarm over background ozone levels that are beyond the control of local officials. Some of this background ozone originates from natural sources, such as wildfires; some is blown in from other states or from international sources, such as “Mexico, Canada, or Asia,” according to WESTAR. The group of regulators is worried that rural areas caught in the non-attainment net for the first time, have “very few, if any” local emission sources that can be managed or reduced to meet EPA mandates. Making the “right choices” about reducing ozone levels below their current levels “will depend on how well we understand the science, and our understanding of the science needs to improve,” according to WESTAR. (Page 24)
  

Bipartisan voices speak out

State Senator Cheri Jahn (D): “Coloradans care deeply about the environment. After the great progress we have made on air quality, our state should be praised, not punished. This ozone proposal out of Washington, D.C. scares my constituents, because it could hamstring our regional economy and cost jobs. We have worked so hard to bring manufacturing jobs to Colorado, and by moving the goal posts on ozone, the EPA is going to chase manufacturing jobs away from our state. This plan could also gum up the approval process for badly needed road and transportation investments, which will make our traffic worse, and make it much harder to attract new industries, grow existing businesses, and strengthen Colorado’s middle class.”

State Senator Ellen Roberts (R): “If the EPA carries out this ozone plan, Western Colorado will be placed at a terrible economic disadvantage. We have worked hard to responsibly care for our environment even as we grow and diversify our economy. Tightening the ozone standard any further just does not make sense when the existing standard, which is less than 10 years old, is working. I urge the EPA to reconsider this plan and leave the 2008 standard in place.”

State Senator Mary Hodge (D): “The EPA may have good intentions, but this ozone proposal goes too far. In Colorado, we have a strong record of growing the economy and cleaning the air using commonsense environmental regulations. Unrealistic mandates from Washington, D.C. will only hurt the Front Range economy and working families.”

State Senator Jerry Sonnenberg (R): “The EPA’s proposed new standards would drive small family farms such as mine out of business. We have never been able to afford new equipment and if the only way to comply with this new standard is with new equipment, my family would have to leave agriculture. Even if we could meet the standards with expensive upgrades to our machinery, the increased costs to finance those upgrades, as well as the fuel and the fertilizer, takes a marginally profitable farm and turns it into one that can’t make its payments. Unless you want to see the family farm only as a memory, one must make the EPA understand that their new standards will have a devastating effect on rural America and the agriculture economy.”

Jefferson County Commissioner Don Rosier (R): “The ozone standards being considered by the EPA simply go too far. The Denver metro area has made great improvements in air quality since the days of the Brown Cloud. And in doing so we have reached a balance that works for our region. But these proposed limits would put that balance at risk, along with our ability to foster the economic opportunity that our area has become known for.”

Jefferson County Commissioner Libby Szabo (R): “It’s undeniable that the negative impact of the proposed ozone standard will be felt in people’s day-to-day lives. Coloradans are certain to face longer commutes and even worse traffic as a result of increased red tape from the federal EPA. These rigid ozone standards could slow down the approval of new road projects, cause long delays on important infrastructure improvements, and in some cases stop projects completely because of onerous emission caps.”

Routt County Commissioners Douglas Monger (D), Cari Hermacinski (R), Timothy Corrigan (D):“We set and meet high standards because we know it is good for our people and our state. So you might expect us to support the Environmental Protection Agency’s proposed standards for ground-level ozone. Those standards, however, are too overbearing and are meeting with a lot of resistance even in places where air quality regulations are welcome…These standards must not be implemented. If they go forward as proposed, they will do more than put good people out of work and cause hardships for communities that have done so much to protect the land, air and water around them. They will turn away a lot of people who have been receptive to the idea that government can be trusted to do environmental regulation the right way.”

The Center for Regulatory Solutions is a project of the Small Business & Entrepreneurship Council (SBE Council), a nonprofit, nonpartisan advocacy, research and education organization that works to protect small business and promote entrepreneurship. For 22 years, SBE Council has influenced policy and private-sector initiatives that have strengthened the ecosystem for startups and small business growth. For more information, please visit www.sbecouncil.org.

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