Clean Air Act Regulatory Focus

The US EPA has over the past few years placed a major focus on Clean Air Act regulations.  Some of the new rules proposed carry an extraordinarily high cost burden.  Although these regulations impact  manufacturing facilities operated by Council member companies, the majority of the burden is or will be on the electric generating facilities supplying power to member companies, their suppliers and their customers.  The greatest burden to manufacturers is the increased cost of electricity to power their facilities. 

Examples of the regulations being tracked include the following:

  • The “Boiler MACT”.  This rule would curb emissions from industrial boilers and process heaters.  The rule was finalized in May of 2011 but was struck down by the courts in 2012.  The EPA is now revising the rule, which as originally proposed was estimated to cost over $14 billion in capital expenditures.
  • The “Cross-State Air Pollution Rule,” or CSAPR, is intended to address emissions of sulfur dioxide and nitrogen oxides from fossil fuel power plants in the eastern US.  The rule was finalized in July 2011 but was vacated by the courts in August 2012.  It is projected to cost the power industry, and its customers, $1.4 billion.
  • “Utility MACT,” or the Mercury and Air Toxics Standards.  This rule, finalized in December 2011 and aimed primarily at coal-fired power plants, would restrict emissions of mercury, non-mercury toxic metals, and acid gases.  It is widely expected that coal-fired plants will not be able to meet the rule, forcing many to shut down.  The cost estimate is $9.6 billion.  The rule is currently under court challenge.
  • “Ozone NAAQS.”  The EPA proposed lowering the Ozone National Ambient Air Quality Standard (NAAQS) in 2010, but the proposed rule was withdrawn due to concerns over its impact on the frail economy.  It is now expected that the EPA will issue a revised Ozone NAAQS in 2013, to be finalized in 2014.  The rule is estimated to cost $90 billion if the agency decides to lower the standard to 0.06 ppm.
  • “PM2.5 NAAQS.”  In June 2012, the EPA proposed revising the annual primary fine particulate standard to 12-13 ug/m3 from the current 15.  The agency believes that meeting other new regulations will result in most states meeting the new PM2.5 standard without additional major expenditures by the regulated community.  Therefore, they estimate the cost to be only $69 million.