california air resources board

EPA Ozone Standard Would Destroy 7.3 Million Jobs, Study Estimates

by Marlo Lewis on October 18, 2010 · 1 comment

in Environment, Global Warming, Precaution & Risk

A recent study by the Manufacturer’s Alliance/MAPI finds that EPA’s proposed revision of the “primary” (health-based) national ambient air quality standard (NAAQS) for ozone (O3) would have devastating economic impacts.

NAAQS Basics

NAAQS are emission concentration standards expressing EPA’s judgment of how low air pollution levels must fall to “protect public health” with an “adequate margin of safety” and to “protect public welfare” from harmful effects on agriculture, animal life, and buildings. The Clean Air Act obligates States to come into attainment with NAAQS via EPA-approved emission control measures known as State Implementation Plans (SIPs). The Act requires States to attain primary NAAQS within five or at most 10 years. There is no statutory deadline for attaining “secondary” (welfare) NAAQS. Failure to attain NAAQS results in sanctions, such as loss of federal highway grants.

Staggering Job and GDP Losses

In January, EPA proposed lowering the primary ozone NAAQS from 75 parts per billion (ppb) to between 60 and 70 ppb. MAPI estimates that a primary ozone NAAQS set at 60 ppb would:

  • Impose annual compliance costs of $1.013 trillion between 2020 and 2030 (equivalent to 5.4% of projected GDP in 2020).
  • Reduce GDP by $687 billion in 2020 (3.5% below the baseline projection).
  • Reduce employment by 7.3 million in 2020, a figure equal to 4.3% of  the projected 2020 labor force.

In a companion report, the Senate Republican Policy Committee (SRPC) shows the MAPI-estimated job losses and “energy tax” burden (compliance cost + GDP reduction) each State would incur if EPA implements a 60 ppb ozone standard. The biggest losers are California, Pennsylvania, and Texas, although nearly all States face multi-billion dollar energy taxes and thousands to tens of thousands of lost jobs:

  • California, with a 12.4% unemployment rate and 2.2 million unemployed job seekers, would incur a total State energy tax of $210 billion and lose 846,000 jobs, during 2020-2030.
  • Texas, with 8.3% unemployment and one million unemployed job seekers, would pay a $452 billion energy tax and lose 1.6 million jobs.
  • Pennsylvania, with 9.2% unemployment and almost 585,000 unemployed jobs seekers, would pay an $85 billion energy tax and lose 351,000 new jobs.

Costs Increase as Intensity and Scale of Effort Increase

How can the impacts be so punitive? One reason, says MAPI, is that “the marginal cost of incremental reductions increases very rapidly as the standard is tightened.” As is often said, picking the low-hanging fruit is easier and cheaper than harvesting from the top of the tree. As MAPI puts it:

Initial reductions in ozone are relatively less expensive because the reductions can be achieved by using existing technologies (“known controls”) to reduce ozone precursors. As standards are tightened, more expensive technologies are required and at some point new technolgies (“unknown,” yet-to-be-developed controls) are presumed [by EPA] to emerge and then be implemented.

Another reason is that ever-larger reductions in ozone-precusor emissions are required to achieve the same incremental decline in O3 concentrations. On this point, MAPI sites EPA’s July 2007 Regulatory Impact Analysis (p. 4-12):

  • Reducing O3 from 84 ppb to 79 ppb requires 102,000 tons of additional nitrogen oxide (NOx) reductions.
  • Reducing O3 from 79 ppb to 75 ppb requires 321,000 tons of additional NOx reductions.
  • Reducing O3 from 75 ppb to 70 ppb requires 1,004,000 tons of additional NOx reductions.
  • Reducing O3 from 70 ppb to 65 ppb requires 2,239,000 tons of additional NOx reductions.

The implication of those numbers is startling. To reduce O3 from 84 ppb to 79 ppb, States must reduce NOx emissions by 20,400 tons for each 1 ppb decline. However, to reduce O3 from 75 ppb to 70 ppb, States must reduce NOx emissions by 136,600 tons for each 1 ppb decline. To reduce O3 from 70 ppb to 65 ppb, States must reduce NOx emissions by 247,000 tons of NOx emission reductions for each 1 ppb decline. In other words, achieving a 5 ppb decline in O3 from 70 ppb to 65 ppb takes 12 times the NOx reductions required to achieve a 5 ppb decline from 84 ppb to 79 ppb. The effort is greater by more than an order of magnitude. Presumably, an even greater effort would be required to reduce O3 from 65 ppb to 60 ppb.

The dramatic increase in the scale of effort is evident from the sharp increase in the number of counties that fall out of attainment as the standard is tightened from 84 ppb down to 60 ppb.

85 Counties with Monitors Violate the 1997 (84 ppb) Ozone Standard

counties-with-monitors-violating-the-8-hour-1997-80-ppb-ozone-standard

322 Counties with Monitors Violate the 2008 (75 ppb) Ozone Standard

counties-with-monitors-violating-the-2008-8-hour-75-pbb-ozone-standard

Up to 650 Counties with Monitors Violate Proposed (60-70 ppb) Ozone Standards

counties-with-monitors-violating-proposed-8-hour-ozone-standards-60-70-ppb

Source: EPA, http://www.epa.gov/glo/pdfs/20100104maps.pdf; Congressional Research Service: http://www.fas.org/sgp/crs/misc/R41062.pdf

Of the 675 counties nationwide that have ozone monitoring stations, 85 counties violate the 84 ppb (1997) ozone standard, 322 violate the 75 ppb (2008) standard, and 515 to 650 counties violate proposed standards ranging from 70 to 60 ppb. More than 96% of all counties with monitoring stations violate the most stringent standard EPA is considering. Most of the nation’s 3,140 counties do not have monitoring stations. Many more than 650 would likely have to deploy both new technologies and “unknown” technologies to come into attainment with a 60 ppb standard.

How Dangerous Are Current Ozone Levels?

A predictable response to the MAPI and SRPC reports is that ozone kills and we should do everything possible to protect “the children.”

Joel Schwartz and Steven Hayward of the American Enterprise Institute analyze the literature on ozone and health in their book, Air Quality in America: A Dose of Reality on Air Pollution Levels, Trends, and Health Risks.  They present substantial evidence that ozone at current levels is a relatively minor health risk:

  • In about one third of the cities examined in a Johns Hopkins air pollution study, ”higher levels of particular matter and ozone were associated with lower risks of premature death.”
  • After adjusting for “publication bias” (the tendency of researchers to submit for publication only those studies that confirm their initial hypothesis), a World Health Organization (WHO) analysis “concluded that higher ozone was associated with lower respiratory mortality.”
  • When properly analyzed, a much-touted California Air Resources Board (CARB) study on ozone and childhood asthma actually shows that no areas in California have ozone levels high enough to affect childhood asthma risk.
  • The same CARB children’s health study found no association between ozone standard violations and growth in children’s lung function.
  • Large increases in asthma prevalence have coincided with large declines in air pollution indicating that “asthma incidence and air pollution are unrelated.”
  • EPA’s proposal to revise the standard down to between 60 and 70 ppb is based on a study that found a small (1-1.5%) average reduction  in lung function in 30 healthy young adults who breathed laboratory air averaging 60 ppb for 6.6 hours. To get this result, the subjects alternately exercised on stationary bicycles and tread mills for six 50-minute periods. This is equivalent to several gym workouts in a row, well beyond the exertions that people in  ”sensitive populations” (infants, people with respiratory disease, the elderly) typically undertake.
  • Moreover, the ozone concentrations measured by outdoor monitors may exceed the actual levels people breath by as much as 65%, because surfaces near the ground (streets, buildings, even clothing) destroy ozone. A laboratory study of the effect of 60 ppb ozone is more likely monitoring the effects of outdoor ozone of at least 100 ppb – well above the current standard.

EPA and CARB characterize ozone as a deadly peril, which is hardly surprising. Regulatory agencies exist to regulate. The scarier the assessment, the greater the apparent rationale for expanding the scale and scope of regulation. On the flip side, as my colleague Ben Lieberman observes, the “non-attainment industry” would take a huge hit if the Nation finally did come into attainment with all applicable air quality standards. To stay in business, the regulatory establishment must continually campaign for tougher standards as U.S. air quality improves.

Schwartz and Hayward ask: If current ozone levels are so deadly, then how come EPA and CARB project such tiny health benefits from reductions in those levels? For example, EPA estimated that switching from the pre-1997 ozone standard of 120 ppb averaged over 1 hour to the tougher standard of 84 ppb averaged over 8 hours would reduce hospitalizations for asthma attacks by only 0.6%. CARB estimated that adopting its even tougher 70 ppb standard would reduce emergency room visits for asthma by 0.35%. Even these small benefits are likely to be overestimates since the projections are “based on a selective reading of the health effects literature that ignores contrary evidence,” Schwartz and Hayward argue. And I’ve got to wonder, given the multitude of factors that influence hospitalization rates, how would EPA and CARB ever know whether a tiny reduction in hospitalization rates were due to their regulations rather than to a host of other unrelated causes?

Wealthier Is Healthier, Poorer Is Sicker

The irony is that adopting costly new air quality standards may actually impede improvements in public health. The resources available to protect public health, safety, and the environment are finite. Consequently, policymakers should set priorities to target limited resources on the most serious risks. Forcing the private sector to spend trillions of dollars to achieve miniscule or non-existent health benefits hinders rather than advances public welfare. Moreover, because people use income to enhance their health and safety, regulations that destroy jobs, lower wages, and increase the cost of consumer products can literally be lethal. Spare-no-expense, health-at-any-cost regulation ignores the obvious connection between livelihoods, living standards, and life expectancy.

A prosperous economy supports the development of improvements in health care and makes those improvements more widely available. In contrast, a faltering economy diminishes investment in R&D and curbs spending on life- and health-enhancing goods and services. Unemployment is stressful and is associated with unhealthy habits such as smoking and excessive drinking. Several studies (here, here, here, here, and here) confirm what common sense tells us — that poverty and unemployment increase the risk of sickness and death. As the late Aaron Wildavsky observed long ago, wealthier is healthier. An ozone NAAQS that imposes trillion-dollar energy taxes on our struggling economy and destroys over 7 million jobs is likely to do much more harm than good.

California’s Insane Global Warming Initiative

by Michael Fumento on September 16, 2010

in Global Warming

What state ranks third in unemployment, second in foreclosures, has the nation’s worst credit rating, is running a $19 billion deficit — yet insists on spending billions on a greenhouse gas emissions reduction plan that can’t possibly impact global warming?

Yes, it’s California, land of the Governator, who four years ago signed a bill that will shortly begin saying “Hasta la vista, baby!” to perhaps a million jobs. Yet there’s hope the prosperity terminator can be stopped, with Prop 23 to be voted on in November.

Read about how incredibly bad the legislation is and how the state foisted it on an ignorant (not stupid) public in my new article, “California’s Jobs Terminator” at Forbes.com.

Blowout Prevention Act – Will Rs Get Buyer’s Remorse? (Modified July 18, 2010)

by Marlo Lewis on July 16, 2010

in Ethanol, Global Warming

Last week, the House Energy and Commerce Committee unanimously approved H.R. 5626, Chairman Henry Waxman’s Blowout Prevention Act. Here’s the version of the bill as marked up and approved by the Committee. Here’s the earlier discussion draft on which the Energy and Environment Subcommittee held a hearing on June 30.

Like the discussion draft, the marked-up version of the bill is a Trojan Horse for restricting and, ultimately, shutting down deepwater oil production.

The most mischievous language is in the first substantive provision, Sec. (2).

Sec. (2)(a)(3) requires each applicant for a drilling permit to have an oil spill response plan ensuring “the applicant has the capacity to promptly control and stop a blowout in the event the blowout preventer and other well control measures fail” (p. 2). If the ongoing disaster in the Gulf has taught us anything, it is that once the blowout preventer and other well control measures fail, there may be no way “to promptly control and stop a blowout.” H.R. 5626 would establish a test no oil company can pass, a standard none can meet.

Nobody had the capacity to “promptly control and stop” the Macondo well blowout after the preventer and other well control measures failed — not BP, not the oil industry working as a team, not the federal and state governments working with the oil industry.

The sponsors had to know they were demanding the impossible when they drafted the bill. Consider these excerpts from a colloquy between Oversight and Investigation Subcommittee Chairman Bart Stupak (D-Mich.) and ExxonMobil CEO Rex Tillerson at the June 15 Energy and Environment Subcommittee hearing:

Stupak: “So when these things happen, these worst-case scenarios, we can’t handle them, correct?”
Tillerson: “We are not well equipped to handle them. There will be impacts as we are seeing. . . .That’s why the emphasis is always on preventing these things from occurring, because when they happen, we’re not very well equipped to deal with them.”
Stupak: “. . . so no matter which one of the oil companies here before us had the blowout, the resources are not enough to prevent what we’re seeing day after day in the gulf, not only the loss of 11 people, but we’re on, what, day 56 or 57 of oil washing up on shores. There is no other plan. There is no way to stop what’s happening until we finally cap this well, correct?”
Tillerson: “That is correct. . . . There is no response capability that will guarantee you will never have an impact. It does not exist and it will probably never exist.”

The discussion draft’s permitting requirements apply to all “high risk” wells, defined expansively as any offshore well plus any onshore well having the potential to cause serious environmental harm in the event of a blowout. The marked-up version targets “covered wells” rather than “high risk” wells, but this is largely a distinction without a difference. Covered wells include all wells located on the Outer Continental Shelf (OCS), plus any other well that, “based on criteria established by rule … could, in the event of a blowout, lead to extensive and widespread harm to public health, safety, and the environment” (pp. 41-42).

The OCS is defined (by reference to Sec. 1301 of the Submerged Lands Act) as waters lying seaward of three geographic miles from the coastline (p. 43). So H.R. 5626 would cover any deepwater well plus any shallow-water and onshore well where a blowout could lead to widespread environmental harm. Very few large wells would be exempt.

Presumably, operators could “promptly control and stop” a blowout at any onshore well and most shallow-water wells. Nonetheless, H.R. 5626 could effectively ban new wells in deep water, and deep water is the future of offshore oil and gas production. As the Department of Interior notes in its May 27 report, Increased Safety Measures for Energy Development on the Outer Continental Shelf, U.S. deepwater offshore oil production surpassed shallow water oil production in 2001, and in 2009, 80% of offshore oil production and 45% of offshore gas production “occurred in water depths in excess of 1,000 feet.” 

The bill does not clearly state how its requirements would apply to existing wells. Would an operator’s permit be revoked if he cannot demonstrate the capacity to “promptly control and stop” a blowout after the preventer and other well-control measures fail? If so, then the bill would not only block new deepwater drilling, it would also create a vehicle for shutting down existing wells. 

Sec. (2)(c) requires the operator to obtain a revised permit if he makes a “material modification” in well design, the blowout preventer, his plan to promptly stop a blowout, or his capability to begin or compete drilling of a relief well for a covered well. Apparently, then, an existing well would be subject to the new permitting requirements if it undertakes a “material modification.” In that case, however, the bill could discourage operators from making material improvements in well safety. Some might avoid or delay making safety improvements in order to avoid or delay becoming subject to an impossible standard. If I am reading these provisions correctly, H.R. 5626 could actually make offshore drilling less safe!  

Federal officials may not be able to finesse Sec. (2)(a)(3), even if they want to, because H.R. 5626 would empower “citizens” to enforce its provisions and associated regulations via litigation:

Any person having a valid legal interest which is or may be adversely affected may commence a civil action in Federal district court of appropriate jurisdiction on such person’s own behalf to compel compliance with this Act, or any regulation or order issued under this Act, or any regulation or order issued under this Act, against any person, including the United States, and any other government instrumentality or agency (to the extent permitted by the eleventh amendment to the Constitution) for any alleged violation of any provision of this Act or any regulation or order issued under this Act. [p. 28]

The discussion draft did not include the qualifier “valid legal interest.” But how difficult is it for an environmental group to demonstrate a “valid legal interest” in enforcing environmental laws and regulations? Enact the Blowout Prevention Act, and environmental groups will be able to sue any agency that fails to hold an oil company to an unattainable standard.

A few concluding thoughts. The security risks of dependence on petroleum imports are often hugely exaggerated, as the Cato Institute’s Jerry Taylor and Peter van Doren explain. Nonetheless, the sponsors of H.R. 5626 view petroleum imports with alarm. If the bill kills the future of U.S. offshore production, our dependence on Saudi Arabia and OPEC will increase. Is that what the sponsors want?

Perhaps their core premise is that oil is so evil that any restriction on oil production is good, because it will hasten the arrival of a “beyond petroleum” future. Such thinking is dangerous folly.

Although oil spills are bad, oil is good. Without oil, there would be no modern commerce and no mechanized agriculture. Life for most of humanity, including most Americans, would be poor, nasty, and short. Indeed, many of us would not even be alive.

Killing the future of offshore production would increase consumers’ pain at the pump, destroy tens of thousands of high-paying jobs, and undermine the economy of the Gulf Coast region. A “beyond petroleum” future would likely be just as distant — or even more so, because a poorer America would have fewer resources to invest in technological innovation.

Petrophobes overestimate their ability to predict and control the future. Consider these examples. 

  • In 1990, the California Air Resources Board (CARB) adopted a zero emission vehicle (ZEV) mandate requiring 10% of all new cars sold in California be electric vehicles by 2003. Ten percent of the California new-car market is about 150,000 vehicles. CARB had to backpeddle several times as it became apparent that consumers were not buying these costly, limited-range vehicles. In 2008, CARB reduced the mandate to 2,500 all-electric vehicles – a rollback of about 98%.
  • Congress in 2007 enacted a Renewable Fuel Standard (RFS) requiring refiners to sell 250 million gallons of cellulosic ethanol in 2011. Earlier this week, EPA announced it would reduce the 2011 target to 5 – 17 million gallons per year –  a 94-98% rollback.

It is not surprising that veteran petrophobes like Reps. Waxman and Markey (D-Mass.) drafted H.R. 5626. It is surprising that every Republican member voted for it too. Do any of them have buyer’s remorse? If not now, when?

Be Careful What You Wish For…

by Iain Murray on March 16, 2010

in Agriculture, Energy, Environment, Ethanol, Global Warming, Politics as Usual

For many years, the climate alarmist movement pushed the development of corn ethanol as the “fuel of the future” on the grounds that it would decrease fossil fuel emissions. As I detail in my book, The Really Inconvenient Truths, massive efforts were devoted to promoting this technology, with a textbook baptist-bootlegger alliance between green groups and Big Corn (most notably Archer Daniels Midland).  Politicians joined in happily, with Al Gore stumping for Minnesota Senator Amy Klobuchar because of her support for ethanol and countless Presidential candidates in Iowa talking up the fuel.

The result of that push has, it seems, been an increase in fossil fuels.  For the latest on this, see Corned grief: biofuels may increase CO2 at Watts Up With That?

The indirect effects of increasing production of maize ethanol were first addressed in 2008 by Timothy Searchinger and his coauthors, who presented a simpler calculation in Science. Searchinger concluded that burning maize ethanol led to greenhouse gas emissions twice as large as if gasoline had been burned instead. The question assumed global importance because the 2007 Energy Independence and Security Act mandates a steep increase in US production of biofuels over the next dozen years, and certifications about life-cycle greenhouse gas emissions are needed for some of this increase. In addition, the California Air Resources Board’s Low Carbon Fuel Standard requires including estimates of the effects of indirect land-use change on greenhouse gas emissions. The board’s approach is based on the work reported in BioScience.

Hertel and colleagues’ analysis incorporates some effects that could lessen the impact of land-use conversion, but their bottom line, though only one-quarter as large as the earlier estimate of Searchinger and his coauthors, still indicates that the maize ethanol now being produced in the United States will not significantly reduce total greenhouse gas emissions, compared with burning gasoline. The authors acknowledge that some game-changing technical or economic development could render their estimates moot, but sensitivity analyses undertaken in their study suggest that the findings are quite robust.

Promotion of technologies based on theory rather than practice has been a hallmark of the green movement. Every indication seems to be that their foolish promotion of ethanol has been written out of their history, rather than being treated as a cautionary tale to learn from.