On Friday, September 2, 2011, the White House directed the Environmental Protection Agency (“EPA”) to withdraw and reconsider a proposal to strengthen National Ambient Air Quality Standards (“NAAQS”) for ground-level ozone, the primary ingredient in smog. The announcement marked the first time that the Obama Administration formally returned one of its own agencies’ proposals, and it could indicate heightened executive scrutiny of forthcoming rules’ economic impacts.
The “heart of the Clean Air Act,” NAAQS set maximum levels for six “criteria” pollutants at levels necessary to protect public health and welfare, implemented through State Implementation Plans covering a broad range of sources. The ozone NAAQS were last revised in 2008, when the Bush Administration set a primary standard of .075 parts-per-million (“ppm”) – more lenient than the .06-.07 ppm range recommended by EPA’s Clean Air Scientific Advisory Committee.
In response to a lawsuit filed against the 2008 standards, the Obama administration agreed to reconsider the ozone NAAQS in September 2009 and proposed adopting a standard with the .06-.07 ppm range shortly thereafter. EPA held three public hearings on its proposal, and as recently as July 26, 2011, EPA stated that it “look[ed] forward to finalizing this standard shortly.”
As the last step before finalization, EPA submitted the rule to the White House Office of Information and Regulatory Affairs (“OIRA”) for review. Last week, in a surprising turn of events, OIRA returned the rule to EPA, explaining, “The President … has made it clear that he does not support finalizing the rule at this time.” The return letter, OIRA’s first since January 6, 2009, stated that, in the interest of regulatory consistency, EPA should hold any proposed ozone revisions until 2013 – when the standards are once again due to be revisited under the Clean Air Act.
While the letter did not mention economic considerations, and the Supreme Court has held that EPA cannot consider compliance costs in setting NAAQS, the ozone proposal had attracted substantial attention due to its projected compliance costs exceeding $19 billion. According to EPA’s Regulatory Impact Analysis, the benefits of the standards were projected to outweigh the costs. Nonetheless, the NAAQS proposal topped a list of the most expensive proposed regulations that the White House released on August 30, 2011.
The second, third, and fourth rules of that list are also pending EPA proposals, including forthcoming rules governing hazardous air pollution from commercial and industrial boilers and coal ash disposal. While the White House plans to move forward with those rules, they too must ultimately pass through OIRA – opening the door to potential revisions or delay.