Baton Rouge, LA
Today's witnesses are here to speak on the challenges EPA's Clean Air Science Advisory Committee (CASAC) is presenting our state with the recommended compliance range on ozone. We are fortunate today to have an especially credible panel that can speak competently on the job loss, opportunity loss and infrastructure challenges a new standard will present. Let me thank Michael Vince, a senior scientist with the Air Permits Division, Louisiana Department of Environmental Quality (LDEQ); Secretary Sherri H. LeBas, Louisiana Department of Transportation and Development (LADOTD), and Dr. Joseph Mason, Hermann Moyse, Jr./Louisiana Bankers Association Endowed Professor of Banking, Louisiana State University, for your willingness to participate today. I'd also like to recognize LDEQ Secretary, Peggy M. Hatch, who is joining us today, though not as a witness. I'd like to thank the Secretary for her ensuring Louisiana is engaged on a number of critical issues pertaining to the federal government's, and in particular, the EPA's, efforts to expand federal control over Louisiana. Let me also thank my colleague, and a real leader on these issues in the House Energy and Commerce Committee, Congressman Bill Cassidy.
The Obama Administration continues building its excessive regulatory regime across all sectors of the American economy, from healthcare to energy production, which ultimately hurt our economy and competitiveness, job growth, and small business. Central to this effort is the Environmental Protection Agency. As I'm sure most of us here today know, EPA is currently in the process of reviewing the ozone National Ambient Air Quality Standard, which was last set at 75 parts per billion in 2008. EPA will most likely propose the revised standard in December, reducing the current standard to within a range of 70 to 60 parts per billion. Setting the standard at 60 changes the map considerably, placing almost the entire country in violation. This range, especially the lower end, presents a variety of problems for Louisiana. As of this summer, the greater Baton Rouge area has come into compliance with the 2008 standard, which means there will be a slight reprieve of the many economic restrictions that have been in place for years until EPA lowers the standard again.
Lowering the standard would put, if not the entire, practically the entire state of Louisiana in violation. Not just most of Louisiana, but even pristine national parks like the Grand Canyon and Yellowstone would be in non-compliance. There is obviously something very wrong with this picture if Yellowstone National Park is unable comply with EPA's lowered standard.
EPA's Clean Air Science Advisory Committee, or CASAC, reviews EPA's underlying science and advises the Administrator on the ozone standard. In this case, CASAC recommended that EPA take action and lower the standard to below 68 parts per billion - a significant decrease from the current 75. I am actively following the ozone review process to ensure its transparency and accuracy, and I have frequently voiced my numerous concerns to CASAC and the EPA about how they have been conducting this review. I also asked multiple Association of Air Pollution Control Agencies member states for their opinions on the current review and upcoming rulemaking. In response, Louisiana Department of Environmental Quality pointed out that being out of attainment could keep companies from locating in Louisiana and could even result in some industries electing to shut down their facilities and move out of state where there are fewer restrictions.
Along with my concerns, the local Baton Rouge Area Chamber expressed its serious opposition to lowering the standard because that extreme level of reduction will significantly damage the business economy of not only Baton Rouge, but also our entire state.
If lowered to 60 parts per billion, the consequences of nonattainment will include economic penalties, and since the main economic driver of the state and the largest industry presence is manufacturing, our local manufacturing renaissance will likely grind to a halt. According to the Greater Baton Rouge Industry Alliance, the area has $23.7 billion in industrial projects, and the Baton Rouge Area Chamber projects that 16,400 jobs will be created locally through 2015. These numbers represent huge successes for this area, but also significant challenges for maintaining attainment - particularly under a lower ozone standard.
Last week the National Association of Manufacturers released a study on the costs and economic impacts of a 60 parts per billion ozone standard, finding that it would be the single most expensive regulation in history. It would reduce GDP by $270 billion each year and as much as $3.4 trillion by 2040. The average U.S. household would lose $1,570 per year, while job impacts in the form of fewer hours worked, lower pay, and lost jobs averaged 2.9 million per year. The study also examined the potential impact of new oil and gas production being significantly restricted in areas of the country designated nonattainment, potentially driving up energy costs for families and manufacturers by 15 and 23 percent, respectively. Louisiana would be hit by such a standard with the potential for 116,000 lost jobs per year, $53 billion in gross state product loss from 2017 to 2040, a $2,360 drop in average household consumption per year and the shuttering of 80% of Louisiana's coal fired power plant capacity. Approximately 12,000 manufacturing, 600 natural resources and mining, and 30,000 construction jobs in Baton Rouge alone would be at risk.
One of the many problems with EPA's review of the ozone standard is that the current standard of 75 parts per billion hasn't even been fully implemented across the nation, so the full measure of its benefit has yet to be experienced. But for some reason, EPA is insisting on jumping the gun on further tightening the standard. How can CASAC and EPA say with any certainty that the current standard is insufficient and needs to be lowered?