Bush Administration Softens EPA Smog Rules

March 10, 2008 | Roger McEowen

 

During the week of March 9, the Environmental Protection Agency (EPA), pursuant to the Clean Air Act (CAA), announced it was adopting regulations designed to reduce the amount of ozone, commonly known as smog, allowed in the air.  While the lower standard still falls short of what most health experts say is needed to significantly reduce heart and asthma attacks from breathing smog-clogged air, EPA Administrator Stephen Johnson called the new smog requirements "the most stringent standards ever," and he said they will require 345 counties — out of more than 700 that are monitored — to make air quality improvements because they now have dirtier air than is healthy.  There is a long implementation period, so impacted areas won’t have to satisfy the new rules for a long time - as much as 20 years for some that have the most serious pollution problems. EPA estimates that by 2020 the number of counties failing to meet the new health standard will drop to about 28.  Currently, about 85 counties fall short of the old standard enacted a decade ago.  The new EPA standard will lower the allowable concentration of ozone in the air to no more than 75 parts per billion (ppb), compared with the prior standard of 80.  It is believed that approximately 60-70 ppb is necessary to ensure adequate protection.  According to EPA, cutting smog from 80 to 75 parts per billion would prevent between 900 and 1,100 premature deaths annually and mean 1,400 fewer nonfatal heart attacks and 5,600 fewer hospital or emergency room visits. A separate study suggests that tightening the standard to 70 parts per billion could avoid as many as 3,800 premature deaths nationwide.

An interesting twist that preceded the EPA’s announcement of the tighter rules was that the EPA agreed to weaken a key section of the new rules after being told at the last minute that President Bush preferred a less stringent approach.  Changes directed by the White House were inserted into the smog regulation only hours before it was issued with the late flurry of activity forcing the EPA to delay the announcement for five hours.  The disagreement revolved around the amount of protection from ozone, or smog, should be afforded wildlife, farmlands, parks and other open spaces.  This so-called "public welfare" or "secondary" smog standard is separate from the EPA’s decision to tighten the smog requirements for human health.  Senior EPA officials had wanted to make the public welfare standard more stringent than the health standard, although still not as protective as some scientists had recommended.  But the White House Office of Management and Budget insisted that both standards be identical, according to the documents. When EPA officials balked, the issue was taken to Bush, who sided with the Office of Management and Budget.

The "public welfare" (secondary) standard is fashioned in a way to protect against long-term harm to the environment. The limits on ozone under this standard are likely to have more impact on rural areas than urban centers.  For some time, environmentalists and ecologists have argued that the standard should be more stringent than the human health ozone standard.  In 2007, the EPA staff as well as a science advisory panel on clean air also concluded that protection of forests, agricultural lands and the nation's ecosystem requires a "substantially different" ozone standard than the one for protection of human health.  Recently, however, the USDA In recent weeks argued against making the public welfare ozone standard tougher.  USDA expressed concerns about the impact additional pollution controls might have on agriculture and development of biofuels, especially ethanol.  Ethanol, which has replaced MTBE as an oxygenate in fuel, is a contributor to smog.

Reformulated Gasoline and Ethanol

A bit of background surrounding the current controversy over the EPA’s smog standards may be helpful. 
In the mid-'90s the Clean Air Act of 1990 kicked in, mandating that a reformulated gasoline (RFG) be sold in the nation's smoggiest cities.  The RFG program requires oxygenates to be added to gasoline so that it burns “cleaner.”  As a result, the Clinton Administration tried to create an ethanol industry in America, by having the EPA mandate that fully 30% of the oxygenates to be used in gasoline under that program come from a “renewable” source.  The EPA then proceeded to promulgate an oxygenate requirement utilizing ethanol as part of the RFG program.  See 42 U.S.C. §7401, et seq.    The problem was, however, that members of the American Petroleum Institute (API) had already geared up for the production of Methyl Tertiary Butyl Ether (MTBE), their oxygenate of choice.  There was also another problem – MTBE doesn’t contribute to smog and ethanol does.  Indeed, during the comment period for the current RFG program, supporters of ethanol had argued that the volatile organic compound (VOC) emission standards in the program -- 42 U. S. C. 7545 (k) (3) (B) (i) -- would preclude the use of ethanol in RFG because adding ethanol to gasoline increases its volatility and raises VOC emissions (which contribute to smog), especially in the summertime.  The API sued EPA over the ethanol mandate, claiming it was promoting a program that contributed to smog.    

During the litigation, the EPA took the position that it had been given a mandate to find ways to conserve the nation's fossil-fuel reserves, so it needed a renewable fuel -- and ethanol neatly fit that bill. But there were problems with that argument, not least of which was the fact that the judges could find no charter or mandate from Congress that gave the EPA the statutory right to do anything about fossil fuel, reserves or otherwise.  Expectedly, the plaintiffs challenged the EPA’s action as beyond its statutory authority.

Particularly damaging to the EPA's position was that its own attorney admitted to the judges that because of its higher volatility, putting ethanol into the nation's fuel supply would likely increase smog where it was used.  The court ruled against the EPA, finding that 42 U.S.C. §7545(k)(1) precluded the adoption of RFG rules that were not directed toward the reduction of volatile oxygenated compounds (VOC) and toxic emissions.  The court determined that the statute did not give the EPA the authority to require the use of oxygenates that will not reduce, and may increase VOCs and toxic emissions.  Instead, EPA was required to promulgate regulations that complied with the goals of the statute – promote the improvement of air quality, not reverse the nation’s advances in smog reduction.  American Petroleum Institute, et al. v. United States Environmental Protection Agency, 52 F.3d 1113 (D.C. Cir. 1995).

But, the Congress proceeded to ignore the Court’s opinion.  In the summer of 2000, ethanol as an additive was mandated for the upper Midwest, including the city of Chicago and parts of the state of Wisconsin.  The 2002 Farm Bill also included mandates for biofuel and ethanol production.  The Energy Policy Act of 2005 ended the requirement that gasoline sold in areas prone to air pollution include an “oxygenate.”  But, by that time, refiners covering most of the country’s major gasoline markets had already stopped blending gasoline with MTBE because of fear over potential liability exposure.  The replacement was ethanol.  The result has been dramatic.  The government mandates and taxpayer subsidization has spurred investment in ethanol production.  Economically, the same time-frame has seen a skyrocketing of the pump price of gasoline (nearly quadrupling), agricultural commodity prices have risen to all-time highs, and agricultural land values are up as are food prices.

So that brings us back to last week’s development.  The use of ethanol as an oxygenate creates a smog problem, but it’s politically popular.  That’s why the Administration and the USDA jumped in to make sure the clean air standards wouldn’t impact ethanol production.  Seems bizarre that the nation has gotten to this point, but that’s what happens when politics and a slick marketing program overtake sound science.  On a finer point, the oxygenate requirement has been obsolete for many years.  It was intended to make the fuel mix leaner, thereby reducing air pollution.  But that is only applicable to older cars with carburetors.  Newer vehicles have oxygen sensors and fuel injectors. 

The big problem for agriculture is that the economic issues created by ethanol – higher food prices being the major one – could spur a reaction by the non-farm public against agriculture.  Such a reaction may already have started.   Stay tuned…