EPA

em • feature

by John Bachmann

On September 2, 2011, President Obama requested that U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson withdraw draft rule revisions that would have tightened the

John D. Bachmann is principal of Vision Air Consulting, Chapel Hill, NC. He is formerly the Associate Director for Science/Policy and New Programs, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, NC. E-mail: johnbachmann @bellsouth.net.

National Ambient Air Quality Standards (NAAQS) for ozone. Business groups, some Congressional Republicans, and state and local officials who had opposed the rules praised the action, while several environmental and public health groups and some states, which had called for revisions, strongly criticized it. The accompanying statements and reactions to them were widely reported in the media, and the president’s action was the topic of a number of opinion pieces and blogs at the time. A more recent New York Times article1 framed this “shift on smog” as tied to the president’s re-election strategy and provided insider perspectives on the final stages of the decision-making process over the summer.

Editor’s Note: This article is a follow up to the 37th Annual A&WMA Critical Review, “Will the Circle Be Unbroken: A History of the U.S. National Ambient Air Quality Standards” (J. Air & Waste Manage. Assoc. 2007, 57 (6), 652-697), written and presented by John D. Bachmann. A summary of the review appeared in the June 2007 issue of EM.

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EPA Reconsiders Ozone NAAQS Reconsideration How did things arrive at this unusually dramatic conclusion? This article provides a brief summary of the origin and conduct of the reconsideration process, placing it context of past ozone NAAQS reviews,2 and highlighting some of the key issues as the process moves forward. As described elsewhere,2 the first phase of the NAAQS process has evolved into an intensive scientific and technical review involving multiple components. These components include an integrated science assessment (formerly “criteria document”), risk assessment, policy assessment (formerly “staff paper”), as well as associated documents (regulatory impact assessments) that must accompany the internal EPA, interagency, and Office of Management and Budget (OMB) reviews. Next, EPA formally proposes NAAQS decisions for public review, and after considering often-extensive public comments, goes through the final decision-making stages within EPA and the administration before issuing any final rules. After that, the standards can face lawsuits prompting judicial review, which for ozone and particulate matter (PM) once reached the U.S. Supreme Court. As summarized in the timeline presented in Table 1, the current process began with the end of the 2008 ozone review, in which the Bush Administration reduced the level of the 1997 8-hr standards from an effective 84 parts per billion (ppb), or 0.08 parts per million (ppm), to 75 ppb (0.075 ppm). Shortly thereafter, several industry, environmental, public health, and state groups petitioned the D.C. Circuit Court of Appeals for a review of the standards, which they argued were either too strict or too lenient depending on the petitioner. In the meantime, EPA formally began the next full review of the ozone criteria and standards, scheduled for completion in 2014. And then there was an election.

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New EPA Administrator Lisa Jackson faced a decision shortly after she was confirmed in January 2009. EPA needed to address the petitions challenging the 2008 ozone standards or the litigation would proceed. EPA could (1) choose to respond to the petitions and defend the standards, or (2) attempt to forestall litigation by reconsidering them on an accelerated schedule. Past NAAQS reviews provided some precedents. Faced with a deadline suit on the long-delayed ozone standard review in 1992, then-Administrator Riley proposed to reaffirm the 1978 standards based on the 1989 criteria document. Upon taking office in 1993, then-Administrator Browner quickly promulgated the reaffirmation, but committed to an accelerated review of the scientific criteria and the NAAQS. That review culminated in the tighter and then-controversial 1997 ozone (and PM) standards. At the time, Browner opined that EPA would not set more stringent standards in our lifetime.2 The key basis for the 1993 reaffirmation was that the aging record did not clearly support revised standards, while a number of post-criteria review studies suggested effects at lower levels. The record for the 2008 ozone standards presented a somewhat different picture, as the Bush Administration’s science advisors (Clean Air Scientific Advisory Committee, CASAC) had recommended ranges and forms that were more stringent than those adopted in the final rule. While the EPA Administrator is not bound by these recommendations, the courts have ruled that EPA must provide a clear basis for departing from them. The only previous straightforward

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Table 1. Timeline for reconsideration/review of the 2008 ozone NAAQS.a,b

March 2008 EPA (Administrator Johnson) reduced the level of the primary (health) and secondary (welfare) 8-hr ozone standard levels from 0.08 ppm (1997 standards) to 0.075 ppm.

March 2009 EPA requested and the court granted a motion to hold the petitions for legal review while “EPA officials appointed by the new administration” decide whether to reconsider or take other actions on the 2008 standards.

October 2009 EPA filed a joint motion with state, environmental, and public health groups to continue holding action on the petitions for legal review in abeyance while EPA reconsidered the standards.

September 2008 EPA begins next periodic review of ozone standards.

2008

2009

May 2008 States, environmental, industry groups filed petitions for legal review of the standards.

Notes: a See “Statutory and Procedural Background” in EPA’s Revised Motion Requesting a Continued Abeyance and Response to the State Petitioners’ Cross Motion; U.S. Department of Justice (filed December 8, 2010); available at www.epa.gov/glo/pdfs/201012 08motion.pdf (accessed December 9, 2011). b See Ground Level Ozone: Regulatory Actions; U.S. Environmental protection Agency; available at www.epa.gov/glo/actions.html.

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2010 September 2009 EPA announced it would reconsider the 2008 standards decision, citing that they not as protective as those recommended by the CASAC. EPA committed to proposing any new standards by December 2009 and issue final decisions by August 2010. The basis for the decision would be the same scientific criteria and related materials developed for the 2008 standards. During the reconsideration, EPA said it would stay designation of areas (nonattainment and attainment) for the 2008 standards, while implementing new source permitting (PSD) under them and continuing to implement the 1997 standards.

example of such a departure was in the PM2.5 standards promulgated by EPA Administrator Johnson in 2006. In subsequent litigation, against vigorous counter-argument by EPA and industry interveners, the court remanded both the annual primary PM2.5 standard and the secondary standards essentially because the administrator had not adequately justified going outside of the CASAC recommendations. Administrator Jackson was in a difficult situation. She was new to this process and there was as yet no Assistant Administrator for Air and Radiation or General Counsel. In her confirmation hearings, she

January 2010 The court granted EPA’s amended October motion. EPA proposed revising the standards to be consistent with CASAC recommendations with a range of levels for the primary standard (0.060– 0.070 ppm) and an alternative form, averaging time, and level for the secondary standards. EPA later accepted public comment and held several public hearings.

had pledged to uphold two core values established for EPA by the president: “scientific integrity and the rule of law.” Given the advice provided by CASAC based on the 2008 review and the court’s rulings on the PM NAAQS, it would be very difficult either to avoid litigation by a quick reaffirmation of those standards based on the existing record (as Browner had done in 1993) or to mount a vigorous defense of them in litigation (a la Johnson for PM in 2007–2008). While she might have accelerated the ongoing full review, resource constraints would limit the time saved. With no EPA defense against those petitioners who argued for standards in the CASAC range, EPA would lose,

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November 2010 EPA requested a further delay for final rules to December 2010.

July–August 2011 EPA again delays final decisions.

2011 August 2010 EPA notified the court reaching final decisions would require more time, expects to issue around the end of October 2010.

December 2010 EPA advised the court that the administrator determined additional consultation with CASAC would be beneficial, which would delay final decisions to July 2011. EPA requested the abeyance of judicial review continue, over the objection of state and environmental petitioners.

forcing a reconsideration well before the full review could be completed. In the end, she decided to explore a self-directed reconsideration of the 2008 standards based on the older record. She notified the court of her intent and asked them to hold actions on the petitions in abeyance while she and other appointees decided on a course of action. On September 16, 2009, EPA notified the court that it would reconsider the 2008 ozone standards. To avoid unnecessary duplication of efforts by the states, EPA also announced it would delay the first step in implementing those standards (i.e., designating which areas attain or do not attain them). awma.org

September 22, 2011 Assistant Administrator for Air and Radiation Gina McCarthy issued a memorandum that includes schedules for implementing and reviewing the 2008 ozone standards.9 EPA plans to designate attainment/nonattainment areas for the 2008 standards by mid 2012, but subject to change related to ongoing litigation. The current review of the science and standards would culminate in proposed decisions (to revise or not) in 2013 and issue final decisions in 2014.

September 2, 2011 President Obama requested that the EPA Administrator withdraw the proposal, noting the standards would be reconsidered again in 2013 as part of the ongoing review of the science and standards. President Obama cited regulatory uncertainty for state and local governments of issuing new standards that would be reconsidered so quickly on the most recent science. A more detailed rationale was provided in a letter from Office of Management and Budget Administrator Cass Sunstein. The EPA Administrator complied with the request.

At the time, it was clear EPA believed it could move quickly to propose and promulgate any reconsideration, and then catch up on implementation with accelerated designations in 2011. The schedule called for a proposed rule within three months and publication of final NAAQS decisions by August 21, 2010. Given that Jackson’s decision-making on reconsideration had already included briefings on the science and policy issues regarding the standard, EPA was able to develop updated regulatory packages and obtain interagency and administration approval in time to issue a proposal on January 19, 2010, only weeks later than originally planned. As had been done in some earlier NAAQS proposals,

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October 11, 2011 Five public health and environmental groups petition the court for relief as a result of the withdrawal of the final rule.c

Notes continued: c See Baron, D.; Johnson, S. Counsel for American Lung Association, Environmental Defense Fund, Natural Resources Defense Council, and Appalachian Mountain Club. Petition for Review, October 11, 2011; available at http://earthjustice.org/sites/default/files/ OzonelawsuitEPA.pdf (accessed December 9, 2011).

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D E Y A DEL The repeated delays not only hurt EPA’s credibility, they pushed the key decision point where it became politically untenable to move forward.

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EPA proposed ranges of primary and secondary standards. Proposing a range rather than a specific value can help speed interagency review and stimulate public comment. The ranges were consistent with those suggested by CASAC.

would benefit from additional consultation with CASAC. In addition, EPA would solicit and accept additional public comments following the consultation, with the entire process to be completed by July 31, 2011.

In retrospect, perhaps the period most critical to the ultimate fate of the reconsideration occurred in the six months after proposal. In February, EPA heard from some 210 stakeholders at three public hearings and later received approximately 5,200 written discrete comments on the proposed standards. While the number is hardly a record for NAAQS reviews, it can be a substantial task to sort through and respond to them, requiring time and staff resources. Preparing final packages containing specific, final decisions reflecting comments also takes time. Interagency review generally is more difficult when selecting final standards than it is for proposing ranges. Whether because of interagency resistance, the workload, or other factors, EPA did not meet the August deadline and told the court it would issue the rules near the end of October 2010. This self-imposed deadline for a major and controversial rule was ill considered, given the midterm elections on November 2. Not surprisingly, on November 1, EPA advised the court that the process was taking longer than expected and that it planned to issue the final rule by the end of the year. None of the litigants objected to this extension, but states motioned that if EPA did not meet the new deadline, the court should lift the abeyance on judicial review.

While the court again granted the extension, the additional CASAC step was problematic. Since the supporting scientific information was limited to the record supporting the 2008 standards, it seems unlikely that CASAC would add anything materially new to the discussion. In a letter following its public meeting on the reconsideration, the committee wrote:

The mid-term elections were not favorable for the president, and Democrats lost full control of Congress. The end-of-term post-election environment was not optimal for pushing final decisions on the ozone reconsideration through the administration. Yet EPA had already twice argued for and received short extensions based on the need to deal with issues raised in public comments and the deliberative process. As revealed in its December 8 motion to the court, EPA’s response was to add a new step in the reconsideration process, buying additional time. The motion stated that the administrator had determined that consideration of the issues and strengths and weakness in the scientific information

“While we are concerned that EPA’s most recent request for additional CASAC advice is redundant with our past reviews, we nonetheless are pleased for the opportunity to reaffirm our previous advice …. Here we reaffirm that the evidence from controlled human and epidemiological studies strongly supports the selection of a new primary ozone standard within the 60–70 ppb range for an 8-hour averaging time. As enumerated in the 2006 Criteria Document and other companion assessments, the evidence provides firm and sufficiently certain support for this recommended range for the standard.”3 Having learned little new information from the CASAC process, serious discussions about the standards continued within the administration during the spring and summer. The administrator apparently wanted to set the primary standard at 65 ppb,1 a level that was strongly opposed by many in the administration based on costs and disruption to an already weakened economy. The New York Times account1 noted above suggests that as of June, the administrator believed she reached a compromise with then White House chief of staff William Daley on a standard at the upper end of the CASAC range. In early July, EPA sent a draft final rule and accompanying documentation supporting a primary standard level at the upper end of the CASAC range.4 During this period, stakeholders mounted a major new effort to lobby against the reconsideration, including letter writing campaigns, advertisements,

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and meetings with EPA and White House officials. Environmentalists also lobbied and held at least one meeting with the White House. In an op-ed piece, the Business Roundtable’s John Engler wrote that the rule was “the single most expensive environmental regulation in U.S. history, a job-killing rule it is under no obligation to impose on the struggling economy.”5 He found it inconsistent with administration’s efforts to examine unnecessary regulatory burdens in a struggling economy and noted air quality had been steadily improving. Some governors expressed concerns about the impacts of the rule on their economies and the resultant impacts on the health of their populations. Environmentalists pointed out that the costs are not a consideration in setting NAAQS and stressed there would be substantial impacts on public health including up to an additional annual 12,000 premature deaths, 58,000 asthma attacks, and 21,000 hospital and emergency room visits, under the 2008 standards. Both groups generally used the largest estimates awma.org

of costs and benefits associated with the most stringent standard being considered based on EPA’s regulatory analysis (60 ppb).6 Opponents cited the $90-billion annualized cost and environmental/ public health groups highlighted the lost health benefits, including the $100-billion monetary benefit estimate. For the 70-ppb standard in the draft final rule, EPA estimated annualized costs in 2020 at $19–25 billion and benefits between $11 billion and $30 billion. The combined estimates encompass net benefits that range from negative to positive. Such estimates are highly uncertain, but the negative portion of the range would certainly have been of concern to OMB regulatory Administrator Cass Sunstein, who in his academic career had called attention to the issue with respect to the 1997 standards. The timing of the end game could not have been worse for EPA. Embroiled in a major fight over budget cuts and the debt ceiling with continuing high unemployment, industry and political opponents’ arguments about jobs and the economy

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posed an obvious political dilemma for moving forward. When President Obama returned to Washington, he was planning to promote his new jobs initiative. In formally asking the administrator to withdraw her draft reconsideration on September 2, the president7 and Sunstein8 made several points: 1. The administration has supported strong actions from EPA to reduce emissions from power plants and increase mobile source fuel efficiency. 2. Nevertheless, it is important to reduce regulatory burdens and regulatory uncertainties, particularly as the economy is recovering. 3. Under the Clean Air Act, finalizing standards now is not mandatory. The ongoing mandatory review of the standards would result in revisiting the standards in 2013; we cannot support asking states to implement a new standard that will soon be reconsidered using the most recent available scientific information. The EPA Administrator issued a statement complying with the president’s request on the same day. EPA took the step of posting the draft final rule and associated documents online, along with her statement. Later in September, EPA at last took steps to implement the 2008 standards, with a scheduled deadline of mid-2012 to finalize area designations.9 Litigation will proceed, however, and that might result in court directives that could alter that schedule. Given the record, it is not unreasonable to anticipate that the court may remand the standards back to EPA. But this might not occur until late 2012. EPA will likely argue, as they did

successfully after the 2008 remand of the PM standards, that their response to any remand will be folded in the full review process. Ironically, the net effect of the litigation and the decision to reconsider was to delay implementations of the tightened 2008 standards, whatever their flaws. The two critical points were (1) the 2009 decision to reconsider, and (2) the failure to complete the action by mid-2010, when the conditions were more favorable. The repeated delays not only hurt EPA’s credibility, they pushed the key decision point where it became politically untenable to move forward. In hindsight, it might have been better to let the litigation proceed with a weak defense, and see if EPA could fold a remand response into the ongoing review that was then several years to completion. In the meantime, EPA and the states could have begun the lengthy process of actually implementing tougher standards. Alternatively, the original plan for reconsideration had the right idea in terms of moving quickly. The chances for final action would have been increased by pushing harder both at proposal and after public comment that the process needed to be completed according to schedule. The next decision on the ozone standard will be made under the aegis of the winner of the 2012 presidential election. Whether the current administration or not, the final rule is likely to be litigated based on current law and legal precedent. The outcome of that review may eventually have implications for the underlying legislation. em

References 1. Broder, J. Policy and Politics Collide as Obama Enters Campaign Mode; The New York Times, November 16, 2011; available at www.nytimes.com/2011/11/17/science/earth/policy-and-politics-collide-as-obama-enters-campaign-mode.html (accessed November 20, 2011). 2. Bachmann, J.D. Will the Circle Be Unbroken: A history of the U.S. National Ambient Air Quality Standards; J. Air & Waste Manage. Assoc. 2007, 57 (6); 652-697; DOI:10.3155/1047-3289.57.6.652. 3. Samet, J. Clean Air Scientific Advisory Committee (CASAC) Response to Charge Questions on the Reconsideration of the 2008 Ozone National Ambient Air Quality Standards. Letter to Lisa P. Jackson, March 30, 2011; available at http://yosemite.epa.gov/sab/sabproduct.nsf/ F08BEB48C1139E2A8525785E006909AC/$File/EPA-CASAC-11-004-unsigned+.pdf (accessed December 9, 2011). 4. Draft National Ambient Air Quality Standards for Ozone Preamble; U.S. Environmental Protection Agency, July 2011; available at www.epa.gov/glo/pdfs/201107_OMBdraft-OzoneNAAQSpreamble.pdf. 5. Engler, J. The Latest Job Killer From the EPA; The Wall Street Journal, July 21, 2011; available at http://online.wsj.com/article/ SB10001424053111903554904576464573229847858.html (accessed December 9, 2011). 6. Regulatory Impact Analysis Draft Final National Ambient Air Quality Standard for Ozone; U.S. Environmental Protection Agency, July 2011; available at www.epa.gov/glo/pdfs/201107_OMBdraft-OzoneRIA.pdf (accessed December 9, 2011). 7. Statement by the President on the Ozone National Ambient Air Quality Standards, September 2, 20100; available at www.whitehouse.gov/ the-press-office/2011/09/02/statement-president-ozone-national-ambient-air-quality-standards (accessed December 9, 2011). 8. Letter from Cass Sunstein, Administrator Office of Information and Regulatory Affairs to Lisa Jackson, EPA Administrator, September 2, 2011; available at www.whitehouse.gov/sites/default/files/ozone_national_ambient_air_quality_standards_letter.pdf (accessed December 9, 2011). 9. McCarthy, G. Implementation of the Ozone National Ambient Air Quality Standards. Memorandum to Air Division Directors, Regions 1-X, September 22, 2011; available at www.epa.gov/glo/pdfs/OzoneMemo9-22-11.pdf (accessed December 9, 2011). 24 em february 2012

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