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Washington Bureau Business Journal

What could be the most expensive government regulation ever is getting closer to being issued.

On Friday, the Environmental Protection Agency sent its proposal to reduce ozone emissions to the Office of Management and Budget for final review. That gives OMB only one month to consider the proposed regulation’s costs and benefits before a court-ordered Oct. 1 deadline for the EPA to release it.

Ozone, which is a key component of smog, is caused by emissions from vehicles, industrial facilities and power plants. The EPA says the current ground-level ozone emissions standard of 75 parts per billion over eight hours needs to be reduced in order to protect the public, particularly children, people with asthma and other respiratory diseases and senior citizens. It’s considering a range of 65 to 70 parts per billion, but is also seeking comments on whether it should lower it to 60 parts per billion.

Reducing the standard to 60 parts per billion would cost the U.S. economy $270 billion a year and raise the cost of natural gas and electricity, according to a study conducted for the National Association of Manufacturers by NERA Economic Consulting. New oil and natural gas production could be curtailed in areas of country that don’t meet this standard, and manufacturers would find it hard to expand operations.

Critics contend one month isn’t enough time for OMB to consider the proposed rule’s impact.

“We are surprised the administration is limiting interagency review of what could be the most expensive regulation ever,” said Howard Feldman, senior director of regulatory and scientific affairs the American Petroleum Institute.

The OMB review process normally takes 60 to 90 days.

Ground-level ozone has decreased by 18 percent between 2000 and 2013, API noted.

“EPA’s proposal to tighten the ozone standards would fall on top of current limits that are already improving air quality,” Feldman said. “The nation’s air is getting cleaner, and air quality will continue to improve as we implement the existing standards. We urge the administration to allow the current standards to continue working.”

Labor unions have joined businesses and state and local officials in lobbying against a stricter ozone emissions standard, notes Karen Kerrigan, president of the Center for Regulatory Solutions, a project of the Small Business and Entrepreneurship Council.

“Sending the rule to OMB on a Friday night clearly indicates that EPA is quite aware of just how unpopular it is,” Kerrigan. “People across the country have warned the Obama administration about the impact of tightening the standard. Hopefully, President Obama will listen again to these voices and reject a proposal that will hamstring American job creators and the economic recovery, and dramatically increase the role of the federal government in state and local planning decisions.”
In 2011, President Barack Obama directed the EPA to withdraw its ozone rule, contending the economy was too weak at the time to handle additional regulatory burdens.

Obama should move forward with a strong ozone regulation now, contends the Sierra Club.

“For far too long, American families have paid the price for an outdated smog standard that is much to weak to protect our health,” said Mary Anne Hitt, director of the Sierra Club’s Beyond Coal Campaign.

“We urge the president to ignore the pressure from polluters who want to weaken these protections.”