White House Interferes with Smog Rule

The U.S. Environmental Protection Agency (EPA) announced March 12 its revision to the national air quality standard for ozone, or smog. While the new standard is an improvement, EPA did not go as far as its own scientists had recommended. Last-minute changes orchestrated by the White House have also mired the rule change in controversy. In addition to the new standard, EPA proposed legislative changes to the Clean Air Act, which environmentalists and lawmakers immediately criticized.

The Primary Standard

EPA regulates ozone under the Clean Air Act. Exposure to ground-level ozone is associated with a variety of adverse health effects including asthma attacks and premature death.

EPA announced its decision to tighten the primary standard for ozone to 0.075 parts per million (ppm) from the current level of 0.084 ppm. In July, EPA had announced its intent to tighten the standard and had proposed a range of 0.070-0.075 ppm. The Clean Air Act requires EPA to reevaluate the standard for ozone every five years, although the agency had not revised the standard since 1997. The current revision comes as a result of a lawsuit filed by environmentalists concerned about public health (American Lung Association v. Whitman).

EPA's primary standard for ozone is intended for the benefit of public health. EPA must base its decision on the latest scientific evidence and may not consider compliance costs. When EPA sets out the implementation plans for meeting ozone standards (the next phase in this process), it is allowed, and indeed required, to consider costs in order to create a situation in which communities and polluters can meet the standard but bear the lowest compliance costs possible.

EPA's decision has drawn criticism from many environmentalists and public health advocates who complain EPA did not go far enough in tightening the standard. The American Lung Association called the decision a "missed opportunity" and said, "Thousands will suffer more and die sooner than they should."

According to an EPA analysis, tightening the primary standard to 0.075 ppm will prevent at least 260 premature deaths, 890 heart attacks, and 200,000 missed school days every year starting in 2020. Had EPA adopted a standard of 0.070 ppm, the analysis shows the more protective standard could have prevented an additional 300 premature deaths, 610 heart attacks, and 440,000 missed school days each year.

The American Lung Association and others point out that EPA did not heed the advice of its own scientists. EPA's Clean Air Scientific Advisory Committee — an independent body of scientists charged with making recommendations on air pollution standards — recommended EPA adopt a primary standard of 0.060-0.070 ppm. EPA's staff scientists recommended a standard of 0.060 ppm — "somewhat below" the current standard. EPA's Children's Health Protection Advisory Committee called on EPA to adopt a standard of 0.060 ppm and cited the vulnerability of children to ozone's harmful effects.

Industry groups and anti-regulatory lobbyists are unhappy with EPA's decision to tighten the standard at all. Groups like the National Association of Manufacturers (NAM) claim a tighter standard will cause economic hardship.

EPA and the White House Office of Management and Budget (OMB) frequently heard the complaints of industry as the agency prepared to announce its decision. In three closed-door meetings, representatives from EPA and OMB met with lobbyists from NAM, the Edison Electric Institute, the National Paint and Coatings Association, the American Petroleum Institute, and the National Taxpayers Union, among others. On one occasion, OMB and EPA met with representatives from the public interest community, including groups such as the American Lung Association, the American Academy of Pediatrics, and the Natural Resources Defense Council (NRDC).

The Secondary Standard

EPA also announced a new secondary standard for ozone. As it has in the past, EPA will set a secondary standard identical to the primary standard, in this case, 0.075 ppm.

Under the Clean Air Act, EPA may set a secondary standard for the protection of public welfare. This provision allows EPA to tailor a standard to meet special considerations, such as seasonal variance, with the goal of protecting things that do not directly impact public health but may impact our way of life, such as ecological health.

When EPA first proposed the revised standard for ozone in July 2007, it laid out two options for the secondary standard: 1) tighten the standard to the same level as the primary standard; or 2) set a separate seasonal standard that would afford additional protection to sensitive plant life harmed by ozone's deleterious effects during times of intense ozone exposure.

EPA intended to adopt the second option. However, last-minute pressure from the White House forced EPA into adopting a secondary standard identical to the primary standard.

On March 6, Susan Dudley, administrator of OMB's Office of Information and Regulatory Affairs (OIRA), wrote to EPA Administrator Stephen Johnson complaining about the agency's plans to set a seasonally adjusted secondary standard different from the primary standard. Dudley urged EPA to consider the potential economic impact of the separate secondary standard and questioned the agency's scientific justification.

Dudley has a history of opposing regulation. Before heading OIRA — the clearinghouse for executive branch regulations — Dudley worked at the Mercatus Center, an anti-regulatory, industry-funded think tank at George Mason University. Her nomination to head OIRA stalled in Congress, partially in response to public opposition organized by a coalition of good government, environmental, and labor groups, including OMB Watch. As a result, President Bush installed her by recess appointment in April 2007.

On March 7, Marcus Peacock, EPA's Deputy Administrator and Regulatory Policy Officer, replied to Dudley. Peacock said the Clean Air Act prohibits EPA from considering costs in setting the secondary standard and that the agency had provided ample scientific rationale for its decision.

EPA appeared ready to dismiss the White House's concerns. On March 11, just a day before announcing the ozone standards, the agency prepared a talking points memo indicating EPA Administrator Stephen Johnson intended to adopt the second option — the seasonally adjusted standard: "The seasonal form is the most scientifically defensible. Ozone decreases the ability of plants to produce and store food. The impact of repeated ozone exposure accumulates over the course of the growing season." According to NRDC, Johnson used these talking points in a meeting with Bush. (The talking points memo was marked confidential but is now available in the rulemaking record.)

In defense of Johnson's decision, the memo cited studies and comments by the National Academy of Sciences, the National Park Service, the U.S. Department of Agriculture, and EPA's own staff and independent science advisors. Johnson's decision to choose the "scientifically defensible" option is consistent with the Clean Air Act's requirements that the agency base its decision on the latest and best available science.

However, at the last minute, President Bush was brought in to settle the dispute between EPA and OIRA. Under Executive Order 12866, Regulatory Planning and Review, the director of OMB or an agency head may ask the president to resolve disputes that occur during the OIRA review process. It is unclear who asked Bush to settle the dispute over the secondary standard. Bush sided with OIRA and forced EPA to cancel its plans to adopt a separate secondary standard and instead keep the two standards identical. (A letter identifying Bush's involvement, as well as Dudley's March 6 letter and Peacock's March 7 letter, are collectively available in this document. Public disclosure in the rulemaking record of this type of divisive internal policy debate is unusual.)

An initial draft of the Federal Register notice EPA planned to publish to formally announce its decision also demonstrates the agency was preparing to adopt a new, seasonally adjusted secondary standard. A comparison of the initial draft with the draft now available reveals a host of edits that delete mentions of a seasonally adjusted secondary standard and erase evidence of the scientific justification in support of it.

In the initial draft, EPA discussed the available science in support of setting a new secondary standard and sided with public commenters, such as Environmental Defense and the National Park Service, who urged the agency to adopt a standard more protective of sensitive plant life. In the current iteration, EPA claims scientific uncertainty and sides with commenters such as Exxon-Mobil and the American Petroleum Institute.

EPA deletes a number of notable passages from the initial draft in the revised version. In the earlier draft, EPA stated a seasonally adjusted secondary standard "is clearly supported by the basic biological understanding of how most plants in the U.S. are most biologically active during the warm season and are exposed to ambient [ozone] throughout this biologically active period." In addressing industry's complaints that not enough new science had emerged in support of a secondary standard since EPA's last revision, the agency stated, "EPA disagrees that these uncertainties have not been materially reduced."

In the current draft, EPA reverses course and legitimizes the industry groups' objections. For example, EPA states, "As reflected in the public comments, the Administrator also recognizes that there remain significant uncertainties in determining or quantifying the degree of risk attributable to varying levels of [ozone] exposure [and] the degree of protection that any specific cumulative, seasonal standard would produce."

Process Changes

In a surprise move, Johnson also announced his intent to seek legislative changes to the Clean Air Act. As discussed above, currently, EPA must base its standard-setting decisions for air pollution on the latest scientific evidence and can only consider compliance costs when developing implementation plans.

Johnson wants Congress to consider changes to the Clean Air Act that would allow EPA to consider costs in the standard-setting process. Legislative changes would be necessary because the Act is explicit in prohibiting the consideration of costs, a notion the U.S. Supreme Court upheld in 2001 (Whitman v. American Trucking Association).

A recent OMB Watch report found that economic analyses in environmental rulemaking often overstate compliance costs. Cost assessments do not, and cannot, account for technological improvements that may be developed to control pollution more efficiently, the report found.

Environmentalists and public health advocates immediately assailed Johnson's proposal. Frank O'Donnell, president of the nonprofit Clean Air Watch, said the changes "would be a radical attack on the Clean Air Act" and said Johnson's proposal "is taking a page directly from the playbook of polluters and their most ardent supporters in Congress."

In a statement, Sen. Barbara Boxer (D-CA), chair of the Senate Environment and Public Works Committee, also criticized the proposal: "It is outrageous that the Bush Administration would call for changes that would gut the Clean Air Act, which has saved countless lives and protected the health of millions of Americans for more than 35 years."

A March 17 New York Times editorial predicted Congress would dismiss the proposal: "Since this would permanently devalue the role of science while strengthening the hand of industry, the proposal has no chance of success in a Democratic Congress."

The House Oversight and Government Reform Committee has scheduled an oversight hearing for April 10 about the revised ozone standards. The Committee has not yet announced a witness list.

EPA will now begin considering implementation policy for the revised standards. EPA determines compliance at the county level. Counties will have to come into compliance with the new standards sometime between 2013 and 2020.