News | August 1, 2011

New API Study Critiques EPA's Calculation Of Ozone Standard Benefits

EPA has exaggerated the benefits of its proposed new ozone standards, according to a new study conducted by NERA Economic Consulting for API. EPA's calculation of the health benefits of the standards in its regulatory impact analysis in 2010 are based on faulty assumptions, according to API Director of Regulatory and Scientific Affairs Howard Feldman.

The study – Summary and Critique of the Benefits Estimates in the RIA for the Ozone NAAQS Reconsideration – concluded that "not one of EPA's estimates of the benefits of reducing ozone to a tighter alternative ozone standard is as large as the costs of attaining that respective ozone standard."

"EPA's claim that the ozone health benefits of the proposed standards are commensurate with the costs doesn't meet the straight-face test," said Feldman. "The ozone benefits are illusory, greatly inflated and would be dwarfed by the costs. The standards may not be achievable and, worse, could destroy millions of American jobs. They are certainly not a recipe for economic recovery.

"When businesses can't be started or can't expand, jobs are lost," Feldman continued. "It's hard to imagine something that would harm our economy more than these standards. And yet there's nothing forcing the administration to issue them. They're entirely discretionary. This is the President's decision. The proposed rule flies in the face of his regulatory reform initiative to rein in unnecessary regulations that are costing jobs and interfering with our economy's recovery."

Feldman said the rules, which could result in most of the United States being in violation of the Clean Air Act, may be unachievable even in a place like Yellowstone National Park that has background levels of naturally occurring ozone that sometimes exceed the proposed new standards.

Air quality has steadily improved in America and will continue to do so under the existing ozone standards, Feldman added. He called on EPA to withdraw its proposal and reconsider adjustments to the standards in the normal review cycle in 2013. Though EPA may not directly consider costs when setting the level of the standards, the policy decision of whether to set these standards must be informed by the cost to society, especially at this time in our economic recovery, he said.

About API
API represents more than 470 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86M a day in revenue to our government, and, since 2000, has invested more than $2T in U.S. capital projects to advance all forms of energy, including alternatives.