Shelved ozone standard would have had modest impact on business, politics

Introduction

President Barack Obama’s recent spiking of a new ozone rule has been widely viewed as a political act. But the proposed standard likely wouldn’t have been severely detrimental to business or Obama’s reelection, according to an analysis of the draft rule obtained by iWatch News.

With a dismal jobs report and a long weekend approaching, Obama abruptly decided to withdraw the rule on Sept. 2. He cited “the importance of reducing regulatory burdens” and an ongoing review of the health effects of ozone due out in 2013 – but many questioned that explanation. The decision followed on the heels of an Aug. 16th meeting between high-ranking officials from the White House and Environmental Protection Agency and industry representatives, who warned the new standard could have repercussions in key electoral states.

But that the final rulemaking draft, not previously revealed, paints a more nuanced picture. The ozone standard EPA actually submitted for interagency review in July, following months of haggling with the White House’s Office of Management and Budget, was the weakest – and cheapest – option approved by the agency’s independent scientific advisors.

The proposed new limit, which would have lowered the allowable concentration of ozone in the air from 84 parts per billion to 70 parts per billion, could have cost $19 billion to $25 billion to implement, according to the EPA’s analysis. But the costs of the proposed 70 parts per billion standard would have been offset, the analysis said, by financial benefits ranging from $11 billion to $31 billion and health benefits that include 4,300 deaths avoided annually.

Opponents of the ozone rule regularly cited a $90 billion price tag, but that figure was only for the most stringent option raised by an EPA advisory board, a standard of 60 parts per billion. That limit was never seriously considered within the agency, said David McKee, a former project manager in the Office of Air Quality Planning and Standards, who retired in December.

The political implications of the proposed standard may also have been less than widely assumed. An iWatch News’ analysis of likely 2012 swing districts and EPA ozone non-attainment data at the proposed 70 parts per billion level found no clear pattern linking the two. There were some districts in the swing state of Florida that could have run afoul of the tighter standards. But the proposed standard also would have forced changes in many Massachusetts congressional districts where Obama has strong political support.

Of course, most states do not deliver their electoral votes on a district-by-district basis. Still, many of the states that would have been hardest hit are not traditional swing states, but instead Democratic strongholds like California and Connecticut, which have generally been considered safe for the president.

The iWatch News analysis contrasts with the tenor of that Aug. 16 meeting, at which representatives of energy and manufacturing interests displayed a series of maps. The business representatives told Chief of Staff Bill Daley that states with heavy industry could drive the nation’s economic recovery – if they were not encumbered by new air pollution rules like that pending ozone standard.

“We pointed out Ohio. We pointed out Pennsylvania. We pointed out Michigan. We pointed out Illinois,” said Khary Cauthen, the American Petroleum Institute’s director of federal relations, in an interview with business newsletter Energy & Environment Daily. Although none of the attendees mentioned the rule’s electoral implications, Cauthen said, “when White House staff looked at the maps, it was not lost on them what the industrial landscape looked like” in areas with heavy ozone levels.

While ozone in the stratosphere protects humans from harmful ultraviolent radiation, at ground level it can worsen bronchitis, emphysema, and asthma. Because of ozone’s adverse impacts on plants and animals, the EPA limits it under the Clean Air Act. Ground-level ozone, commonly known as smog, is expensive to reduce because it comes from a wide variety of sources. Compounds in the emissions from power plants, factories, and automobiles react with sunlight to form ozone.

The same day Obama rejected the 70 parts per billion standard, a White House official assured reporters in an off-the-record briefing that “this had nothing to do with politics, nothing at all.”

“A quick look at the electoral map, the 2010 election results and the President [sic] poll numbers in those states tells a different story,” said Frank Maisano, an energy industry consultant at the law firm Bracewell & Giuliani, in a celebratory email to clients and reporters after Labor Day weekend.

Even some EPA insiders agreed to a point. “I think it just got to be too hot an issue for industry,” said McKee.

But sacrificing the ozone regulations may have been a strategic decision to protect other clean air rules the EPA is working on, according to Henry Waxman, a California Democrat who is the ranking member of the House Energy and Commerce Committee. “I was told by people in the White House that they felt this would give them stronger grounds to stop Republicans” from attacking other, less costly regulations, he said Sunday on the C-SPAN show “Newsmakers.”

The Obama administration did not respond directly to questions about ozone politics in a statement to iWatch News. Instead, White House spokesman Clark Stevens pointed to the implementation of a cross-border air pollution rule and pending air toxics rules, which could save tens of thousands of lives per year. “As the President has made clear, and our record shows, the administration will continue to take steps to defend the authority of the Clean Air Act, and the important progress we have made to protect the air we breathe,” he said.

Administrator Jackson has vowed to stay on to see various anti-pollution regulations through, despite reportedly having considered resigning after the ozone decision. Her son has asthma, so she fought especially hard for the ozone rule.

The president seems more likely to back Jackson up this time. On Wednesday, the administration threatened to veto House Republicans’ latest attack on the Clean Air Act: The TRAIN Act, which stands for Transparency in Regulatory Analysis of Impacts on the Nation. Bill supporters say the measure would give a better picture of costs of EPA regulations. But opponents warn it would delay needed rules and permanently block the cross-state air pollution and air toxics rules the White House spokesman cited.

The TRAIN Act will likely be voted on by the full House on Friday or early next week.

Chris Hamby contributed additional reporting.