The numbers are mind-boggling. The Environmental Protection Agency's (EPA) proposal to tighten ozone standards could result in the loss of 7.3 million U.S. jobs by 2020, add $1 trillion in new regulatory costs per year between 2020 and 2030, and sharply reduce the nation's productivity. Gross Domestic Product (GDP) would be reduced by $676.8 billion in 2020, accounting for 3.6 percent of U.S. productivity.
Those are the findings of a new study conducted by the Manufacturers Alliance/MAPI, which also found that states with significant manufacturing and refining activity would receive the brunt of the new regulations. The states with the largest job losses would include Texas, Louisiana, California, Illinois and Pennsylvania, some of which already are feeling the negative impact of the de facto offshore drilling moratorium in the Gulf of Mexico.
Why would EPA propose stricter ozone standards now when the U.S. economy is still suffering from the worst recession since The Great Depression? According to the MAPI study, EPA has a long history of overestimating the benefits of its rulemakings while minimizing the costs. And as Rich Trzupek said in an EnergyTomorrow podcast, EPA also doesn't have any incentive to admit that the environment is cleaner. Instead it continues to tighten controls.
"Based on the EPA's own assessment, there is no basis for EPA to propose changing the ozone standards. There has been significant and continuing progress in cleaning the nation's air," said Kyle Isakower, vice president of regulatory and economic policy at API. "The proposed ozone rule is an example of EPA overregulation that will cost jobs without evidence of a commensurate health benefit at a time when too many Americans are already out of work."
EPA is proposing to tighten the ozone from 75 parts per billion to a range between 60 and 70 parts per billion. For the first time, it also wants to impose a "biologically relevant" standard to protect crops and forests.
Observers say it's unlikely that the standards will be issued before the election, although EPA has indicated it would finalize the standards in October.