New CRS Report: Impacts of EPA’s Ozone Proposal in Pennsylvania

By SBE Council at 2 September, 2015, 8:38 am

Federal Controls From Tighter Ozone Caps Threaten Economic Growth

Link to Report

Pittsburgh, Pennsylvania: A plan from the U.S. Environmental Protection Agency (EPA) to dramatically tighten federal ozone limits will impose new and damaging regulatory restrictions across 85 percent of Pennsylvania’s economy and threaten thousands of good-paying jobs across the Commonwealth, 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, “Moving the Goalposts: How Washington’s Ozone Plan Threatens Working Families and Pennsylvania’s Economic Comeback,” also highlights strong and broad-based opposition to overreaching federal policies that ignore the Commonwealth’s history of environmental progress. Through interviews, letters to the Obama Administration and other channels, a bipartisan coalition of state lawmakers, local officials and leaders of the business and labor communities are sending an unmistakable message to Washington: This ozone plan goes too far.

Newly released polling shows that Pennsylvania voters are also wary of unwarranted federal environmental controls over the Commonwealth’s economy and job creators. A statewide public opinion poll commissioned by the National Association of Manufacturers found 65 percent of Pennsylvania 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 (67 percent); increase the price of everyday goods and services (75 percent); and increase the amount they pay in taxes (76 percent). By a wide margin, Pennsylvanians think that less economic growth and fewer job opportunities caused by regulations are a greater problem (68 percent) than low air quality (23 percent).

These concerns in Pennsylvania 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 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.

President Obama withdrew EPA’s plan to dramatically tighten the federal ozone standard in 2011, citing concerns about the regulation’s impact on the economy. Local officials, labor union members, businesses and many others are once again expressing these concerns as economic conditions continue to present challenges for many regions of the county and for many industries. 

“This ozone proposal gives the federal government far too much control over state and local planning decisions that shape the Pennsylvania economy,” said Karen Kerrigan, President of the Small Business & Entrepreneurship Council. “Pennsylvania is one of the biggest success stories in terms of self-regulation and working hard to comply with the federal Clean Air Act. Now, just as the Keystone State is about to reach full compliance, the EPA is dramatically moving the goalposts. The standard is so strict that the vast majority of Pennsylvania’s 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 Pennsylvania’s political spectrum. President Obama should once again listen to the voices coming from Pennsylvania and across the country and 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 cause at least 33 counties in Pennsylvania to be in violation of federal law. These are some of Pennsylvania’s most populated counties, concentrated around the Pittsburgh, Harrisburg, and Philadelphia metropolitan areas, but a number of Pennsylvania’s rural counties may be dragged into nonattainment as well.

• The vast majority of Pennsylvania’s economy, population, and workforce could be caught in the net of ozone nonattainment under the EPA’s proposed range. The 33 impacted counties represent 85 percent of the Commonwealth’s GDP, 83 percent of the Commonwealth’s workforce, and 81 percent of the Commonwealth’s population.

• Pennsylvania’s power plants will face the dual challenge of more expensive inputs (as this rule will confer costs on energy production) and expenses associated with its own compliance (ie. the purchase of selective catalytic reduction to control NOx) – the end result of this “tax” on industry – is higher residential and industrial energy costs.

Pittsburgh & Western Pennsylvania Impacts:

• Under the proposed range for EPA’s new ozone NAAQS, a 10 county region centered on Pittsburgh and stretching up to Erie County would be pushed to nonattainment.
• The 10 counties that surround Pittsburgh account for 21 percent ($139.4 billion) of the Commonwealth’s GDP and 20 percent of its workforce (1.6 million individuals).
• The economic burdens from this regulation will hit the hardest in Erie and Mercer Counties where the manufacturing sector represents the largest sector of their economies (14 percent).
• Four of the 10 counties (Armstrong, Erie, Greene, and Indiana) already suffer from high levels of poverty, ranging from 14.7 to 17.9 percent.
• All of the relatively non-invasive measures have already been undertaken in this area, and in pursuit of attainment, Pennsylvania will have to apply methods that will curtail its economic growth.

Harrisburg & Central Pennsylvania Impacts:

• In the Harrisburg and Central Pennsylvania area, 14 counties would be thrust into nonattainment. This region generates $104.4 billion or 16 percent of Pennsylvania’s GDP and employs almost 20 percent of its workforce.
• The economic pain of these regulations will be felt most by Elk County, where manufacturing accounts for an incredible 34 percent of its economy. Other counties that will be hit hard by these regulations include York, Lebanon, and Adams counties, where manufacturing accounts for 14 percent of their economy and represents the largest sector of the economy. Manufacturing also has a significant presence in Lancaster and Franklin counties, accounting for 13 percent each.
• Four of the 14 counties (Centre, Blair, Cambria, and Clearfield) already suffer from poverty levels above the national rate, ranging from 16.2 to 18.4 percent.
• Three of these counties suffer from high unemployment rates (Cambria – 6.9 percent, Clearfield – 7.1 percent, and Tioga – 6.8 percent). These regulations would put more people out of work and make it harder for the unemployed to secure new employment.

Philadelphia & Eastern Pennsylvania:

• In the Philadelphia and Eastern Pennsylvania area, 9 counties would find themselves in nonattainment. This region is responsible for 49 percent or $322.9 of the Commonwealth’s GDP and employs 3.14 million workers or 43 percent of the Commonwealth’s workforce.
• The regulations will especially hurt Berks and Lackawanna counties, where manufacturing represents large portions of the economies (13 percent and 10 percent, respectively).
• Philadelphia County already has a tremendously high poverty rate (26 percent) and unemployment rate (8 percent) and simply cannot afford to lose out on any economic growth as a result of the regulations. Northampton County would similarly suffer with a poverty rate of 14.8 percent and unemployment sitting at 6.6 percent.

Survey:

• A recent survey commissioned by NAM finds that voters in Pennsylvania overwhelmingly have a high opinion of the quality and cleanliness of their local air. According to the survey, nearly two-thirds (65 percent) of Pennsylvania voters rate their local air quality as “Excellent” or “Good.”
• Two-thirds (67 percent) of Pennsylvania voters believe stricter federal air quality regulations would make it harder for local businesses to start new operations or expand. Three-quarters (75 percent) think stricter federal air quality regulations would increase the price they pay for everyday goods and services, and 76 percent believe tighter federal rules on their local area would increase taxes.
• By a wide margin, Pennsylvanians think the bigger problem for their local area is “less economic growth and job opportunities caused by regulations” (68 percent) rather than “lower air quality caused by pollution” (23 percent).

Bipartisan voices speak out:

Erie, PA Mayor Joseph E. Sinnott (D): “Erie and our surrounding communities have worked hard over the years to lower our ground-level ozone levels…[and] Erie County has attained ozone levels of 74 parts per billion, just under the 2008 goal of 75 ppb. As mayor, my responsibility is to balance the needs of improved air and water quality with the very real economic challenges of building new industries and jobs, as our manufacturing base continues to decline. If the [EPA] were to pursue a plan to lower the required ozone level to 65 ppb, we would not be able to maintain that balance…The people of this community have struggled as heavy manufacturing has declined over the past several decades. They cannot afford additional hardships.” 

State Rep. Pam Snyder (D): “The ever-changing and disputed EPA standards represent a dagger pointed to the heart not only of southwestern Pennsylvania but the entire state … Proven providers of reliable and cleaner energy … are reeling from the punitive regulatory environment being promoted in Washington, D.C…Instead of addressing legitimate concerns with measured, consistent and science-supported regulations, the suspect and far-reaching standards are jeopardizing the livelihoods, futures and energy supplies throughout Pennsylvania.” 

Schuylkill County Commissioner Gary Hess (D): “Effective environmental regulations protect public health in a manner that does not stifle job and economic growth. I believe that the administration has overall, successfully balanced these two goals. An unfortunate exception is the recently released proposed ozone standard, which asks too many businesses to meet unreachable benchmarks…”

State Rep. Parke Wentling (R): “Although perhaps well-intentioned, these regulations do more harm than good, as the consequences of these far reaching regulations will adversely affect local business and industry and our state’s overall economy. In a struggling economy, stricter regulations make it more difficult to obtain necessary permits required for manufacturing and for building the infrastructure critical to further develop our communities.” 

Somerset County Commissioners John P. Vatavuk (D), Joe Betta (R), and Pamela Tokar-Ickes (D): “Like it or not, businesses do make decisions to expand or locate based upon the regulatory burdens in a given area. Obviously we support clean air for our citizens and the record in fact shows that air quality in our region has indeed been improving dramatically under the current rules … Don’t move the goal posts on us now. Please don’t label us arbitrarily and unfairly. Keep the ozone standard at the 2008 level.” 

Washington County Commissioner Harlan Shober (D): “I am concerned with the EPA’s use of a questionable computer model, without empirical data, that assumes Washington County, or any other county, requires tougher standards.” 

Crawford County Commissioner Jack Lynch (R): “Additionally, the mandated auto emissions inspection program has proven to be very costly for vehicle owners/operators, without any real purpose or results, only adding to further public opposition for future federal and state government efforts. In order to expect public compliance with such a regulation, the rules set forth need to be reasonable, sensible, and clearly within the public interest. I do not believe these regulations fit those standards.” 

State Sen. John Wozniak (D): “Now, this new ozone proposal will expand the auto emissions program to our rural counties because where else besides cars and wood burning stoves can they go to control emissions? As I understand it the health benefits of these last few yards of emission reductions are minimal, but I can tell you that the public disdain for government will be maximum if you go forward with a lower standard.” 

State Rep. Jim Christiana (R): “With this massive regulation – coupled with EPA’s overreach that’s shutting down our power plants – the Obama administration is strangling economic growth and opportunity for Beaver County and threatening good-paying jobs…With the potential for a petrochemical plant that could create thousands of jobs and boost our economy, the last thing we can afford is more bureaucratic red tape that’ll slow growth, add costs and unnecessary regulatory delays. We need commonsense from EPA, not the most expensive regulation in American history that will halt Beaver County’s progress.” 

Johnstown Mayor Frank J. Janakovic (D): “As Mayor of a small town in Pennsylvania which has been buffeted by a difficult economy, I am constantly looking for economic development opportunities for our citizens. In discussion with potential business to locate here one issue that always comes up is government regulation and how much it will cost a prospective project … I understand you are proposing to lower [the] ozone standard. That could be disastrous for our economic development efforts.”

About CRS 

The Center for Regulatory Solutions is a project of the Small Business and Entrepreneurship Council, a 501c(4) advocacy, research, education and networking organization dedicated to protecting small business and promoting entrepreneurship. For twenty-three years, SBE Council has worked to educate elected officials, policymakers, business leaders and the public about policies that enable business start-up and growth.