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New CRS Report Details Job-Destroying Impacts of EPA’s New Ozone Standard on Arizona’s Economy

02/25/2016

A Natural Disadvantage_Page_01

Link to Report

Phoenix, Arizona (February 25, 2016) – As the U.S. Environmental Protection Agency conducts a workshop on background ozone in Phoenix this week, the Center for Regulatory Solutions (CRS), a project of the Small Business Entrepreneurship Council (SBE Council) is releasing a new report detailing the economic impact of EPA’s new lower federal ozone standard.

The report, “A Natural Disadvantage: Punishing Arizona for Ozone Levels Beyond its Control,” details how EPA’s lowering of the National Ambient Air Quality Standards (NAAQS) from 75 parts per billion (ppb) to 70 ppb could force as many as nine counties in Arizona into violation, or non-attainment, of federal law. Violation of the 70 ppb standard would trigger a process that effectively transfers authority for permitting and planning programs from local and state officials to the EPA. This could allow the EPA to control decisions regarding new manufacturing facilities, expanding existing businesses, and upgrading the state’s road network.

Making matters worse for Arizona is the fact that elevated amounts of background ozone could make complying with the EPA’s stringent new ozone standard nearly impossible. That is because a large share of Arizona’s ozone is generated by factors outside the state’s control, such as pollution originating overseas or outside the state, the region’s high elevation and topography, or natural occurrences like wildfires. In fact, the EPA recently admitted it did not have a clear plan for addressing background ozone in a white paper it released months after its decision to impose the more stringent ozone standard.

The Phoenix workshop has drawn criticism from stakeholders for being partially closed to the public. U.S. Senator Jeff Flake (Ariz.) expressed his concern Wednesday that “some of the most important discussions are set to take place behind closed doors.” Senator Flake’s concerns were shared by Roger McClellan, past chair of EPA’s Clean Air Scientific Advisory Committee, who advocated earlier this week for EPA to open the entire workshop to the public. “These are tough issues concerning background ozone, especially in the west, that must be addressed in an equitable manner to avoid punishing westerners who treasure both the environment and jobs,” McClellan said in his statement.

Given that background ozone complicates Arizona’s ability to lower ozone levels further, a bipartisan group of business leaders, local and statewide politicians, and trade group representatives are speaking out against the EPA’s new federal ozone standard, sounding the alarm about how imposing new regulations could have a devastating impact on an economy still recovering from the Great Recession.

Arizona has worked hard to reduce ozone levels and meet the 75 parts per billion ozone standard set in 2008. But now EPA has moved the goalpost, imposing stringent new standards that will plunge the majority of the state back into non-attainment status,” said Karen Kerrigan, President of the Small Business and Entrepreneurship Council. “Even more alarming, Arizona businesses will be unfairly punished for air pollution that is beyond their control. Economic growth, job creation and vital infrastructure projects are all at risk in Arizona under this new standard – and there is little that can be done by the state. EPA should not implement the lower standard until they are able to fully account for and address the issues associated with background ozone.”

Excerpts from the Report:

Maricopa County Impacts

Pima County Impacts

Yuma County Impacts

Cochise County Impacts

Gila County Impacts

La Paz County Impacts

Coconino County Impacts

Report Highlights Bipartisan Voices Speak Out:

Glenn Hamer, President and CEO, Arizona Chamber of Commerce and Industry: “There’s only so much a state can do. There are no fences that keep out ozone blowing over from California, there are factors beyond our control. We’re doing everything as a state right to improve our economy, the problem is that, on the federal side, the actions by the federal government and specifically the EPA are making it more difficult for our economy to reach full speed.”

Congressman Paul Gosar (R) (AZ-4): “In late October, EPA once again moved the goal posts by unilaterally publishing a fundamentally-flawed new regulation that dramatically lowered the ozone standard for communities throughout the nation. This blatant overreach, not based on the best available science, will kill tens of thousands of jobs annually and cause more harm to our economy than any regulation in the history of this great country. Senator Jeff Flake (R-AZ) and I are leading the charge at the national level and have introduced companion legislation that utilizes the Congressional Review Act to reject this overreaching new mandate. We expect this legislation to pass the House and Senate in coming weeks.” (Interview with CRS)

State Representative Mark Cardenas (D) (AZ-19): “I feel that it’s crucial to consider the financial impact of these systems on our communities. Many businesses will struggle and local communities will suffer if resources have to be used to meet new standards so quickly. New businesses may be reluctant to locate here, which could be detrimental to the economy, and particularly, the job market.”

Senator Jeff Flake (R) (AZ): “Unfortunately, EPA’s proposed tightening of the ozone standard will represent an unnecessary and costly burden our economy.”

Arizona Attorney General Mark Brnovich (R): “We all want clean air. However, reducing the ozone standards to 70 parts per billion will be nearly impossible for Arizona to attain. The new Rule completely ignores Congress’ intent that the EPA set ozone levels for the states that are actually attainable. The financial stakes for this state are enormous if we are unable to comply and I am going to do everything within my power as attorney general to protect Arizona.”

Arizona Gov. Douglas A. Ducey (R): “If the proposed ozone standard is adopted, the vast majority of Arizona, including such pristine locations as Grand Canyon National Park, would be designated as ‘nonattainment’ areas. This means more regulation and higher operating costs for businesses and fewer job opportunities for Arizonans. In fact, the proposed standard is so aggressive that even the EPA acknowledges that existing technology can only account for 60% of the ozone reductions that they demand. In the absence of technological advances that facilitate further emissions reductions, businesses will be forced to consider scrapping existing plants and equipment in order to comply.”

State Representative Jonathan A. Larkin (D) (AZ-30): “You are aware that the economy has grown at a very slow pace and many businesses have struggled to meet the 2008 standards. For many it has been an expensive and stifling effort. Some businesses found expansion was out of the question because resources were expended in meeting the ozone standards. Of course, when businesses can’t expand it means jobs are not created. Every business wants to reach attainment, but doing so can be out of reach for some. New businesses may be reluctant to take on even more stringent regulation.”

Eric C. Massey, Director of Air Quality, Arizona Department of Environmental Quality (ADEQ): “The CAA does not require the Administrator to establish the NAAQS at a zero-risk level or at background concentration levels. However, for many jurisdictions, setting a standard at 60 or 65 ppb would be similar to setting a standard at or just above zero, because background and other emissions are uncontrollable by states. ADEQ urges the EPA to set the standards’ ranges at the highest levels supported by the most defensible science that provide either an adequate margin of safety (primary) or protect against anticipated effects (secondary). Any standard lower than that supported by the most recent and reliable scientific evidence must be contemplated in future reviews, as future reviews may yet produce the requisite defensible evidence to support further lowering the standard.”

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.

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