Obama administration slows environmental rules as it weighs political cost

February 12, 2012

After pushing through some of the most sweeping and contentious environmental measures in years, the Obama administration has slowed action on several policies as it calculates what it should undertake before the end of the term.

Rules aimed at curbing emissions from cars and light trucks are on hold because the White House has yet to give the Office of Management and Budget the go-ahead to review them. And a proposal to regulate soot, ready last fall, will not be issued before June.

Several of the regulations hanging in the balance have broad support among not just environmentalists but key industries as well as hunters and anglers. But they could impose new costs on consumers and certain sectors of the economy, which has sparked opposition and complicated the administration’s political calculus.

“Behind the scenes [the Environmental Protection Agency] is pressing to get rules out before the administration pulls up the drawbridge and goes into campaign mode,” said Joe Stanko, who heads government relations at the law firm Hunton & Williams. “It will be a battle to see how far down EPA’s shopping list they get.”

White House spokesman Clark Stevens wrote in an e-mail that the administration would seek to balance economic and environmental considerations when deciding what regulations to issue in the coming year.

“The administration has a strong record of implementing smart, sensible steps that protect consumers, public health, and the environment, informed by feedback from the public and industry and guided by the president’s goal of supporting economic growth while protecting the air we breathe and the water we drink,” Stevens wrote. “This includes historic fuel economy standards that will dramatically reduce oil consumption, slash vehicle emissions, all while saving American families thousands of dollars at the pump, as well as the first national standard for mercury emissions.”

The fight over whether to propose a new federal fuel and vehicle program — known as “Tier 3,” because it’s the third iteration of rules aimed at curbing emissions from cars and light trucks — epitomizes the dilemma the administration faces. In late December, the EPA completed the package of proposed rules, which would slash the amount of sulfur in U.S. gasoline by two-thirds while imposing fleetwide pollution limits on new vehicles.

But because the rules must undergo a review by the Office of Management and Budget before being issued and the White House has yet to grant the agency clearance to send the package over, it remains in regulatory limbo.

A broad group of auto companies, environmentalists, equipment manufacturers and state regulators support it because it would curb air pollution and help cars run more efficiently at a modest cost. The National Association of Clean Air Agencies commissioned a study that estimated the cleanup would cost less than a penny a gallon.

Automakers say the rule, which would lower the sulfur content of gas from 30 to 10 parts per million, will give them greater regulatory certainty by bringing federal standards in line with those of California.

But the American Petroleum Institute said it could force up to seven U.S. refineries to close and boost gas prices 25 cents a gallon, a point that presidential candidate and former House speaker Newt Gingrich (R-Ga.) made during an appearance on NBC’s “Meet the Press” a week ago.

Obama, Gingrich said, “has an Environmental Protection Agency proposal that would raise the price of gasoline by 25 cents a gallon. There are very few Americans who want to see the price of gasoline raised by government [by] 25 cents a gallon.”

On Jan. 12 a bipartisan group of six senators, led by James M. Inhofe (R-Okla.), urged EPA Administrator Lisa P. Jackson to “reconsider the timing” for issuing the new rules because “experts suggest it will be expensive to remove additional and de minimus amounts of sulfur from fuel.”

Patrick Kelly, the American Petroleum Institute’s senior policy adviser for downstream and industry operations, said the program’s supporters underestimate the number of refineries that could close as a result of the rule and fail to factor in that it will require refineries to increase their carbon emissions because cutting sulfur consumes energy.

But Margo Oge, who directs the EPA’s Office of Transportation and Air Quality, said at last month’s Washington Auto Show that API has analyzed a plan “EPA is not planning to propose.”  

Many state and local regulators say that without the program, they will have to regulate small businesses to meet upcoming air quality standards. Christophe Tulou, who directs the District’s Department of the Environment, said the rule is essential to cutting nitrogen oxide emissions that help form smog.

“In D.C., we have nowhere else to go to get the air quality improvements we need,” Tulou said, “no major sources to regulate, and the ones we have are already under much more rigid requirements than power plants outside our region.”

Many environmentalists are even more frustrated about the delay in rules that would regulate fine particulate matter, which measures less than 2.5 micrometers, or about 1 / 30 the width of an average human hair. The soot rules have been a source of litigation for years: In 2009 a federal court invalidated regulations proposed under President George W. Bush, and although EPA staff members finalized a new package by last fall, EPA officials have said they will not issue a proposal before June, which could be finalized a year later.

Earthjustice attorney Paul Cort, whose group successfully fought the Bush proposal and may sue again, said he could not understand why the agency would delay rules that by its own estimates could prevent at least 10,500 premature deaths each year. Attorneys general from 11 states, led by New York, sued the EPA on Friday in an effort to compel it to update the standard.

“We are trying to get EPA off the dime here to do something,” Cort said in an interview.

EPA spokeswoman Betsaida Alcantara wrote in an e-mail that the agency had received considerable feedback on several unfinished regulations, whether it was new vehicle and fuel standards or a proposal to classify the waste from coal combustion, known as coal ash, as a hazardous pollutant. The EPA, she wrote “is engaged in a deliberative and extensive process, reviewing hundreds of thousands of comments and engaging all stakeholders to ensure that any standards are both effective and scientifically and legally sound.”

In the meantime, the administration’s critics and allies are left wondering what might make it into law. Rep. Ed Whitfield (R-Ky.), chairman of the House Energy and Commerce subcommittee on energy and power, said the EPA should examine the economic impact of all its pending regulations — including one limiting greenhouse gas emissions from newly permitted utilities, which it plans to propose by the end of the month — before issuing any of them.

“The effect of all these rules taken together should be evaluated for overall additional costs to consumers and to business before EPA moves forward,” Whitfield said.

Paul Schmidt, chief conservation officer for Ducks Unlimited, was one of several conservation leaders who pressed senior administration officials at a White House meeting Jan. 30 to finalize guidance that would impose stricter pollution controls on millions of acres of wetlands and tens of thousands of miles of streams.

“They were sensitive to and supportive of our request, but they were non-committal,” Schmidt said. “EPA has just been a political target. It’s almost that they’re weary of these attacks, and they don’t want to issue a regulation that causes another headline.”

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