“National Air Quality Standards for Ozone” Before the U.S.

“National Air Quality Standards for
Before the U.S. Environmental
Protection Agency
Thursday, January 29, 2015
Public Hearing Statement
Paul N. Cicio
Industrial Energy Consumers of America
My name is Paul Cicio, and I am the President of the Industrial Energy Consumers
of America (IECA), a non-profit trade association whose member companies have
over $1.0 trillion in annual sales and with more than 1.4 million employees.
I am here today to express serious concerns about the excessive costs and limited
effectiveness of the Environmental Protection Agency’s proposal to tighten the
National Ambient Air Quality Standard for ozone from 75 parts per billion to
between 70 and 65 parts per billion.
For these companies, relatively small increases in costs can have relatively large
impacts to global competitiveness and their ability to create jobs, make capital
investments, and exports. These industries consume about 73 percent of the
entire manufacturing sector’s use of electricity (26% of U.S.) and 75 percent of the
natural gas (29% of U.S.).
While in fact they do use a lot of energy, EIA data shows that they are extremely
energy efficient and have a consistent track record of reducing energy and GHG
intensity that surpasses any other sector of the economy. Unfortunately, the
proposed ozone standards are projected to substantially increase the cost of
natural gas and electricity directly impacting these companies.
Examples include chemical, plastics, nitrogen fertilizer, iron and steel, aluminum,
glass products, paper, food processing and cement. These products are the raw
materials necessary to produce everything that U.S. consumers require in daily
IECA companies support responsible cost-effective action to address ozone. The
proposed lower ozone standards however, provide a substantial economic and
technical challenge because the proposed ozone levels are so low that they may
not be distinguishable from natural ground level ozone. As you know, ozone is
created by a complex chemical reaction that is impacted by nature, the weather,
and temperature. Due to limited cost-effective ozone reduction options,
manufacturers will be unable to consistently meet these lower ozone levels.
It is important to note that if the cost of operating facilities in the U.S. becomes
too high, and they can no longer compete, companies will move their operations
to other countries. This is called emission leakage and moves both the emissions
and jobs offshore. Imports will also increase, further aggravating the trade deficit.
Approximately a third of the country is in regions that do not meet the current
ground-level ozone standard. We believe that EPA should focus on achieving the
existing standard before it is lowered. The inability for these regions to meet the
current standard speaks loudly to the challenge of meeting lower standards and
should give the EPA pause.
The costs would grow exponentially because each increment of reduction would be
more costly than the last, with diminishing options for companies to reduce either
inside their facility or to buy offsets outside-their-fence line.
As a result, the new standard is likely to be the most costly environmental
regulation ever proposed, slowing job growth and eroding America’s
manufacturing base that is just now beginning to recovery.
According to EPA data, if the current standard were tightened to 65 parts per
billion, an estimated 59 percent of the U.S. population would live in regions of the
country that would not be in compliance. Even a less stringent tightening to 70
parts per billion would mean that 48 percent of Americans would live in areas that
do not meet the standard.
IECA has consistently advocated for cost-effective environmental regulations that
address societal concerns, without imposing undue costs on the economy and job
creation. In this instance, leaving the current ozone standard in place and focusing
on meeting that standard across the entire United States is the appropriate EPA
According to the EPA, the annual costs of the ozone rule would be $3.9 billion for
a standard of 70 parts per billion, and $15 billion for a standard of 65 parts per
billion. And, a study by the National Association of Manufacturers stated that
industrial natural gas costs could increase by an average of 52 percent, and
industrial electricity costs by an average of 23 percent.
Regardless of which study is correct, good jobs and economic growth will be
Thank you for your consideration.