Industry Market Trends
Tougher Soot Standards to Affect Manufacturers
June 21, 2012
The EPA's new proposal for stricter regulations of soot-based pollution may improve public health, but costly compliance upgrades required to meet the new standard are causing concerns within the industrial sector. Under pressure from a federal court ruling, the United States Environmental Protection Agency (EPA) last week introduced a new proposal to tighten national air quality standards for fine-particle soot. The stricter regulations may reduce pollution and improve public health, but costly upgrades needed to meet compliance requirements have caused concern among industry groups. The proposed change would lower the annual permitted standard for particulate matter in the air to between 12 and 13 micrograms per cubic meter. Since 1997, the standard has been 15 micrograms per cubic meter. The lowered range reflects conclusions drawn from a broad range of scientific data tracing the health effects of airborne pollutants. "These microscopic particles can penetrate deep into the lungs and have been linked to a wide range of serious health effects, including premature death, heart attacks and strokes, as well as acute bronchitis and aggravated asthma among children," the EPA explained in an announcement of the proposal. High soot levels are also considered especially dangerous to the elderly and those with heart problems. "Particulate matter forms in the atmosphere as a result of smokestack and tailpipe emissions. The standard by itself doesn't force any polluter to shut down, but the EPA and state regulators use it as the basis for other rules that target pollution from specific sources," the Wall Street Journal notes. "The EPA enforces regulations on particulate matter, part of the Clean Air Act, on a county-by-county basis. States and the EPA work together to determine which counties don't meet the standard - referred to as 'nonattainment.' The label makes it difficult for counties to obtain permits from the EPA for certain industries to operate there." The EPA claims that the new regulations will provide a net economic gain for the country, with lowered health care costs offsetting the potential expenses of meeting compliance standards. According to the agency's estimates, the lowest cost of implementation would be $2.9 million and yield $88 million per year in benefits, while the highest compliance cost of $69 million could yield up to $5.9 billion in benefits, "a return ranging from $30 to $86 for every dollar invested in pollution control." The EPA argues that roughly 99 percent of U.S. counties are projected to meet the proposed standard by 2020 without taking any further action, but that figure is dependent on whether numerous additional EPA rules planned for the future are enacted within the next decade. "At the moment only six U.S. counties, including ones in California, Arizona, Alabama, Michigan and Montana are out of compliance with the standard, the EPA said. Diesel exhaust from trains and ships, as well as construction operations, have made soot a problem in those places," Reuters reports. "But industry groups fear far more counties that contain oil and gas plants and other heavy industry could eventually violate the standard and be forced to add pollution control." The regulation is likely to have the strongest impact on refineries and other energy production facilities. Critics of the new standard argue that many heavily industrial counties will be penalized by the soot provision, lowering the rate of new investment and impeding growth. Depending on the company and the type of emissions, the proposal may also require new equipment or technology purchases to meet the tougher standard. "EPA's proposal could substantially increase costs to states, municipalities, businesses and ultimately consumers without justified benefits," Howard Feldman, director of regulatory and scientific affairs at the American Petroleum Institute, said in a statement. "We are concerned that it could come at a significant economic cost and lost investments and limit our ability to produce the energy our nation needs." "Simply put, new facilities won't be built unless others are shut down to meet the EPA's standard. The end result will have a devastating impact on our economy and job creation when we already face 8.2 percent unemployment," the National Association of Manufacturers said in response to the EPA proposal. "Manufacturers want to see the EPA include the existing standard in its range of options. Manufacturers simply can't afford this new standard at a time when we are being asked to create jobs and grow the economy. With an economy that is stalling, more rigorous regulations are not the answer." The EPA plans to finalize the proposal by December 14, following a 63-day public comment period.