By John Engler
President Obama won praise from businesses in January when he promised to bring “reason and balance” to a “21st-century regulatory system.” Yet now, fewer than six months later, his administration is preparing to issue the single most expensive environmental regulation in U.S. history, a job-killing rule it is under no obligation to impose on the struggling economy.
There’s nothing reasonable or balanced about the Environmental Protection Agency’s proposal to tighten national air-quality standards for ozone emissions at this time. For one thing, it’s premature, coming a full two years before the EPA is scheduled to complete its own scientific study of ozone emissions in 2013.
The EPA’s new standards are currently under review by the Office of Management and Budget but could end up on the president’s desk in the next few days. If implemented, they would reduce the existing 0.075 parts per million (ppm) ozone standard under the National Ambient Air Quality Standards program to 0.070 ppm or even 0.60 ppm.
This will mean that up to 85% of the counties currently monitored by the EPA would fall into “nonattainment” status, exceeding the air-quality ozone standards and triggering a cascade of federal and state controls.
The EPA estimates these new standards could cost business anywhere from $20 billion to $90 billion annually. New or expanding companies would be required to obtain emission offsets and install controls. Existing businesses would face expensive new retrofit requirements just to keep operating as they have for years.
On behalf of the Business Roundtable, Dow Chemical CEO Andrew Liveris recently wrote to White House Chief of Staff William Daley, noting that the EPA’s new ozone rule threatens “to seriously impede economic expansion” and “discourage capital investment” in the counties affected. “Instead of creating jobs,” Mr. Liveris wrote, “these counties risk losing jobs when businesses respond to the higher costs and uncertainty by closing marginal facilities and siting new facilities elsewhere, including outside the U.S.”
As president of the Business Roundtable, I joined leaders of other national industry and business associations to raise these points in a July 15 meeting with EPA Administrator Lisa Jackson. While Ms. Jackson acknowledged our concerns, we left the meeting concerned that her priorities differed from the president’s.
Writing in these pages on Jan. 18, Mr. Obama acknowledged the legitimacy of the private sector’s objections to the multibillion-dollar mandates pouring forth from the federal government’s regulatory agencies. “Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business–burdens that have stifled innovation and have had a chilling effect on growth and jobs.”
The Business Roundtable welcomes the administration’s desire to engage in a retrospective analysis of regulatory burdens that could aid U.S. competitiveness. But the EPA’s onerous new ozone regulations would wipe out any progress that’s been made. The case for restraint remains strong. Not only is the economic recovery stumbling (witness the dismal 9.2% June unemployment rate), air quality has been steadily improving without additional mandates. According to the EPA’s own data, between 1990, when the Clean Air Act underwent it last major revision, and 2008, emissions of six common pollutants, including ozone, were down 41%.
Most important, the current rulemaking pre-empts the scientific review now under way by an EPA-appointed panel. There is no reason to rush through new standards before it is even clear they are necessary or desirable.
Regulatory actions speak louder than words. Mr. Obama could demonstrate his dedication to “reason and balance” by sending the new ozone rules back to the EPA until its scientific review is completed. The nation can certainly wait for new standards until 2013, when, as we all hope, the economic recovery will be on firmer ground.
Otherwise, the president’s “21st-century regulatory system” will become known not for its balance but for its excesses.
Mr. Engler is president of the Business Roundtable, a trade association representing CEOs of major U.S. companies.
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