On Tuesday, new EPA head Gina McCarthy speaks at the Harvard Law School about the challenges EPA faces.
The House Appropriations Committee this week released a fiscal year 2014 Interior and Environment Appropriations bill with $24.3 billion in base funding, which is a cut of $5.5 billion below the fiscal year 2013 enacted level (-19%) and a cut of $4 billion below the current level caused by sequestration cuts. The legislation includes funding for the Department of the Interior, the Environmental Protection Agency (EPA), the Forest Service, and various independent and related agencies.
Not surprisingly since the chairman is Hal Rogers, a Republican from Kentucky, the legislation reflects significant efforts to cripple the EPA – an agency he thinks, “has been rife with governmental overreach, overspending on ineffective and unnecessary programs, and costly and questionable regulations.” The bill funds the EPA at $5.5 billion, a reduction of $2.8 billion – or -34% – below the fiscal year 2013 enacted level.
The bill continues a cap on EPA’s personnel at the 1992 level, cuts operational accounts by $921 million (-20%), cuts the office of the EPA Administrator by more than -30%, cuts the EPA Congressional Affairs office by -50%, and makes other cuts and reductions to programs within the agency.
The legislation also includes provisions to rein in regulations, including language related to the “stream buffer rule”; changes to the definition of “navigable waters” under the Clean Water Act; “new source” performance standards; “silviculture” regulations (managing forest land); changes to the definition of “fill material;” and new financial assurance requirements for hard rock mining, all outside the purview of AutoInformed. (Rogers receives major support from the mining industry.)
One potentially troublesome result could be the stopping of so-called Tier 3 emissions rules and fuel standards by blocking EPA from spending funds to finalize and enforce rules to control pollution. (EPA Proposes Stricter Emissions Standards, Lower Sulfur Fuel. Stage Set Big for Battle between Oil and Auto Industries over Tier 3)
Last March, The U.S. EPA proposed new standards for vehicles and fuels that are the strictest in the history of the agency. The EPA said the regulations would reduce both tailpipe and evaporative emissions from passenger cars, light-duty trucks, medium-duty passenger vehicles, and some heavy-duty vehicles.
The rulemaking, now well underway, is designed to reduce smog-forming volatile organic compounds and nitrogen oxides by 80%, establish a 70% stricter particulate matter standard, and reduce fuel vapor emissions to almost zero. Motor vehicles are the second largest source of nitrogen oxide emissions and volatile organic compounds in the U.S. The proposal would also reduce vehicle emissions of toxic air pollutants, such as benzene and butadiene by as much as 40%.
The proposed standards mean that California’s Clean Cars and Fuels Program finalized in 2012 will become a nationwide vehicle emissions program, which means the same vehicles will finally be sold in all 50 states. The proposal is designed to be implemented at the same time as the next phase of EPA’s program to reduce greenhouse gas emissions from cars and light trucks, which begins in model year 2017. Automakers would face regulatory certainty because of the coordinated approach, if – big if – the proposal is implemented as written.
Not surprisingly, the Biotechnology Industry Organization (BIO) opposes the EPA provisions in the budget legislation, since it would create unnecessary regulatory uncertainty for advanced biofuel companies and negatively affect human health. (2013 – Make Money or Go Broke for Alternative Fuels Industry?)
Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section, said, “In its Tier 3 proposal, the EPA is pursuing an effective, broad-based approach to addressing the impacts of motor vehicles on air quality, public health, and the quality of American’s lives. The rule would harmonize EPA’s regulation of emissions from transportation with other regulations, such as CAFE standards and the Renewable Fuel Standard, which would reduce regulatory uncertainty and the costs of compliance with these rules.”
However, the American Petroleum Institute fiercely opposes Tier 3, issuing a statement against them claiming once again that it would raise the price of fuel. “EPA’s proposed Tier 3 fuel regulations could raise refiners’ costs, provide little or no environmental benefit, and actually increase carbon emissions,” according to API Downstream Group Director Bob Greco. The behind the scenes lobbying is intense.
The new proposed fuel sulfur standards include an averaging, banking, and trading program that would allow refiners and importers to spread out their investments through an early credit program and rely on ongoing nationwide averaging to meet the sulfur standard. EPA is also proposing flexibilities such as hardship provisions for extenuating circumstances, as well as flexibility provisions for small manufacturers of Tier 3 vehicles and small refiners and small volume refineries.
API claimed EPA’s Tier 3 proposal would increase the cost of gasoline production by up to nine cents per gallon. If EPA adds a vapor pressure reduction requirement in a separate regulation, it would push the cost increase up to 25 cents a gallon. Separately, API also noted that gasoline costs would also rise 30% by 2015 unless changes are made to federal ethanol mandates.
The same tactics, along with lawsuits and intense lobbying in Washington, were used by the oil industry to oppose EPA’s Tier 2 standards more than a decade ago, but the dire predictions on drastic changes in fuel prices never came true.
“Oil companies and their allies in Congress have worked hard to stall the proposal of these standards, and they continue to rely on misleading and discredited data that overestimates the standards’ costs,” said the Union of Concerned Scientists.
“With 15 million new vehicle sales a year, automakers need predictable national fuel quality at the retail pump. Ultra-low sulfur gasoline is already available in California, Europe, and Japan and will enable automakers to use a broader range of technologies to meet the significant environmental challenges facing the industry,” said Michael Stanton, President of Global Automakers.
EPA’s proposal is estimated to provide up to seven dollars in health benefits for every dollar spent to meet the standards. The proposed sulfur standards will cost refineries less than a penny per gallon of gasoline on average once the standards are fully in place. The proposed vehicle standards will have an average cost of about $130 per vehicle in 2025.
Once fully in place, EPA claimed the standards will help avoid up to 2,400 premature deaths per year and 23,000 cases of respiratory ailments in children.
The proposed standards will reduce gasoline sulfur levels by more than 60% – down to 10 parts per million (ppm) in 2017, which allows vehicle emission control technologies to become more effective.
Cars and trucks built prior to the proposed standards will run cleaner on the new low-sulfur gas, providing immediate benefits by reducing emissions from every gas-powered vehicle on the road.
The proposed standards mean that California’s Clean Cars and Fuels program will become a nationwide vehicle emissions program. This means the same vehicles would be sold in all 50 states. The regulations would be implemented over the same period as the next phase of EPA’s national program to reduce greenhouse gas (GHG) emissions from cars and light trucks beginning in model year 2017. Together, the federal and California standards will maximize reductions in GHGs, air pollutants and air toxics from cars and light trucks while providing automakers regulatory certainty
“Today’s proposed standards – which will save thousands of lives and protect the most vulnerable — are the next step in our work to protect public health and will provide the automotive industry with the certainty they need to offer the same car models in all 50 states,” said then EPA Acting Administrator Bob Perciasepe in March.
By 2030, EPA said that the proposed cleaner fuels and cars program will prevent up to 2,400 premature deaths annually, 23,000 cases of respiratory ailments in children, 3,200 hospital admissions and asthma-related emergency room visits, and 1.8 million lost school days, work days and days when activities would be restricted due to air pollution.
Total health-related benefits in 2030 are claimed to be between $8 and $23 billion annually. The program would also reduce exposure to pollution near roads. More than 50 million people live, work, or go to school in close proximity to high-traffic roadways, and the average American spends more than one hour traveling along roads each day.
So, the House EPA budget bill is another attack on the Clean Air Act that could hurt the auto and alternative fuel industries while increasing pollution levels. This is as dumb as its gets in Washington; at least until the fall Congressional session begins.
