The US Environmental Protection Agency is setting booby traps for the economy as the last half term of the Obama presidency lumbers into view.
Three regulations in various stages of development will make energy costs explode.
Under one of them, the Tier 3 gasoline regulation finalized in March, refiners must cut sulfur content to 10 ppm from 30 ppm. American Fuel & Petrochemical Manufacturers says the move will impose costs comparable to those of the Tier 2 program begun in 2006, which cut sulfur 15 times as much, but have far less environmental benefit.
The new sulfur limits and accompanying tailpipe and evaporative emission standards will be phased in during 2017-25.
Related to Tier 3 is an imminent proposal by EPA to lower the allowed concentration of ground-level ozone to 60-70 ppb from 75 ppb, the standard in place since 2008. When the agency proposed a 70-ppb standard 3 years ago, the White House Office of Management and Budget quashed it in response to opposition from business groups.
In an indication that a reproposal is imminent, EPA recently sent the regulation back to OMB for review.
EPA justifies its Tier 3 initiative partly on the program’s role in ozone mitigation.
The agency further proposes to require electric power plants to cut emissions of greenhouse gas by a national average of 25% from 2005 levels by 2020 and by 30% by 2025. Required cuts vary by state.
The power industry thinks costs of the Clean Power Plan would be much higher than EPA’s estimate of $8.8 billion/year.
Estimates of regulatory costs by the regulated industries routinely exceed those by EPA, of course. And EPA routinely adduces estimates for the value of associated health benefits that are, just as routinely, questionable.
Except for the power plant initiative, which would become effective in mid- 2015, the costs of these moves won’t be evident before a successor administration is in place.
Voters, though, should know about them when they elect senators and representatives next month.
