The EPA currently has 98 environmental regulations it’s preparing for implementation. Five of these rules were projected to be finalized by the end of 2012, and at least another five are set for 2013. What should manufacturers expect from this flurry of activity? More regulations, increased expenditures and the potential for lost jobs – a real joy to the manufacturing world.
Even using the EPA’s conservative estimates, six of the largest-impact regulations set for finalization within the next year could cost roughly $100 billion annually and more than 2 million lost jobs. Industry estimates are even bleaker, with these six regulations costing an estimated $630 billion (4.2% of GDP) and more than 9 million jobs.
What exactly is in the EPA’s gift bag for manufacturers?
Boiler and Utility MACT Regulations
The EPA has been pursuing strong industrial and utility emission regulations since 2004. MACT (Maximum Achievable Control Technology) rules require affected utilities and manufacturers to install essentially the “best available technologies” to limit emissions of dioxin, mercury and carbon monoxide. Utility MACT applies to all coal- and oil-fired power plants, and the rule has been finalized. The EPA is currently reconsidering limits for new units only. Boiler MACT applies to emissions from industrial boilers.
In addition to the more widely known Boiler and Utility MACT regulations, the EPA is in some process of rulemaking and/or updating standards for at least 12 other “National Emission Standards for Hazardous Air Pollutants” (NESHAPs) that will impact manufacturers. These include rules pertaining to phosphates, bricks and clay, petroleum refinery heat exchangers, polymers and resins, pesticides, secondary aluminum production, flexible polyurethane foam, wool and wool fiberglass, radon emissions, and off-site waste.
Ozone Air-Quality Standards
The EPA reviews ozone air-quality standards every five years, and they are set for review again in 2013. These “Ozone NAAQS (National Ambient Air Quality Standards)” limit emissions from cars, power plants, industrial facilities and others. The EPA tried to tighten the standards early in 2011, but it backed down because of fears of political fallout during the election. This is arguably one of the most costly environmental regulatory proposals. Following the EPA’s proposed revision in 2008, MAPI published an analysis in September 2010 estimating the rule would cost the U.S. 7.3 million jobs and cost the economy $677.8 billion (3.6% of GDP) by 2020.
Greenhouse Gas (GHG) Emissions
The EPA imposed mandatory GHG reporting regulations in 2009. In June 2012, the EPA won a major court decision that upheld the agency’s rules limiting emissions of six greenhouse gases. Most watchful observers believe the EPA will move ahead to impose similar emission restrictions on other entities, including power plants and petroleum refineries.
Alternative and Clean Energy
The Obama administration made commitments in recent international climate talks to reduce U.S. GHG emissions by 4% below 1990 levels by 2020 and to craft a global agreement to combat climate change by 2015. President Obama has also pledged to cut U.S. oil imports in half by 2020. How the administration plans to achieve these lofty goals is not well defined, but it has vowed to increase support for alternative- and clean-energy sources. President Obama remains steadfast in continuing tax breaks for solar and wind technology, but he lost broader support when solar power company Solyndra collapsed after receiving $535 million in federal loan guarantees. Nonetheless, the administration wants the U.S. to be a world leader in clean energy, so expect continuing proposals for tax credits and loan guarantees for big alternative-energy projects, including solar, wind, and nuclear.
Solid and Hazardous Waste
The EPA remains committed to addressing both solid and hazardous waste. This includes defining solid waste, regulating hazardous waste-management systems and establishing new requirements for underground waste storage tanks. These three waste rules are projected to be finalized by the end of 2013. The EPA is also working on six other waste-related rules but has not projected a completion for them.
More (or less?) Access to Federal Lands
Perhaps one ray of hope for manufacturing is the apparent willingness of the administration to open up access to more federal land for oil and gas exploration. A post-election headline in Scientific American proclaimed, “Climate Change Action and More Drilling Likely in Obama’s Second Term.” Reuters, however, reported that “more restrictions are expected for companies drilling on federal lands.” Despite the language, it appears the two propositions are not mutually exclusive. On Nov. 28, 2012, the Bureau of Ocean Energy Management held the first oil and gas lease sale under the administration’s five-year plan. The sale included more than 20 million acres in the Western Gulf of Mexico, and could yield 116-200 million barrels of oil and 538-938 billion cubic feet of natural gas, according to bureau estimates.
The EPA, bolstered by the re-election of President Obama, will forge ahead with many more environmental regulations that will impact the manufacturing sector. While only seven of those areas have been highlighted here, rest assured there are more.
This article was provided through MTI’s research membership with the Manufacturers Alliance for Productivity and Innovation (MAPI). The footnotes referenced in this article can be found at www.mapi.net.
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