On October 1, 2015, the Environmental Protection Agency (EPA) released a final rule to reduce the level of the national ambient air quality standard (NAAQS) for ozone. Ozone is formed through chemical reactions involving a range of ozone precursors, including volatile organic compounds (VOCs), nitrogen oxides (NOx), methane and carbon monoxide. At sufficiently high concentrations, ozone can contribute to a number of human health concerns, including respiratory and cardiovascular effects. NAAQS must be established at levels that are requisite to protect public health and welfare with an adequate margin of safety. The Clean Air Act requires EPA to review, and if necessary revise, NAAQS every five years. EPA last revised the ozone NAAQS in 2008 when it lowered the primary standard to 75 parts per billion (ppb). EPA had proposed to revise the standard late last year and was operating under a court order that required it to finalize this rulemaking by October 1, 2015.
Below are five key highlights from EPA’s final rule:
- Reduction in primary and secondary ozone standards. EPA’s final rule reduced the primary (health-based) ozone NAAQS from its current level of 75 ppb as an eight-hour average to a level of 70 ppb. This is at the upper end of the 65 to 70 ppb range that EPA proposed last year. (EPA had also solicited comment on a level as low as 60 ppb, as well as maintaining the existing 75 ppb standard.) In the preamble to the final rule, EPA explained that the 70 ppb level is well below ozone concentrations shown to cause the widest range of respiratory effects (80 ppb and above), and below the lowest ozone concentration shown to cause both decreased lung function and increased respiratory symptoms (72 ppb). EPA expressed less confidence in studies showing adverse effects at ozone concentrations below 70 ppb.
EPA’s final rule also reduced the secondary ozone standard, which is intended to protect public welfare, to 70 ppb (also as an eight-hour average). In the proposed rule, EPA solicited comment on adopting an alternative standard based on cumulative seasonal exposure based on a W126 index. In the preamble to the final rule, EPA explained that control of cumulative seasonal exposure can be achieved using the existing indicator, standard and form. This decision is significant because a uniform standard for the primary and secondary ozone NAAQS avoids the need to adopt a separate monitoring and reporting system for the secondary ozone standard.
Although EPA cannot consider costs when setting the NAAQS, it did conduct a cost-benefit analysis of the revised standard, concluding that the total health benefits of that standard would outweigh its total costs. However, other analyses that were conducted of the proposed rule concluded that EPA significantly underestimated the cost of reducing the ozone NAAQS.
- Effect on other Clean Air Act requirements. The proposed revisions to the ozone NAAQS will have significant effects on the Clean Air Act New Source Review program. Reducing the primary standard from 75 to 70 ppb is expected to significantly increase the number of areas designated as nonattainment for ozone. If an area is in attainment for a given NAAQS, a major source that commences construction or undergoes a major modification must obtain a Prevention of Significant Deterioration (PSD) permit based on Best Available Control Technology and must demonstrate that its emissions will not cause any area to exceed the NAAQS. In contrast, if an area is in nonattainment, a major source must obtain a Nonattainment New Source Review permit based on a more stringent Lowest Achievable Emission Rate. In addition, a source in a nonattainment area must obtain emissions reductions from other sources to offset its own emissions.
- PSD permit grandfathering. In an effort to ease the transition to the new standard, EPA included in the final rule a grandfathering provision that will allow sources to rely on the 75 ppb standard under limited circumstances. Under the grandfathering provision, pending PSD permit applications are eligible for grandfathering if (1) the application was determined by the permitting agency to be complete before the signature date of the revised NAAQS or (2) the permitting agency published notice of a draft permit before the effective date of the revised NAAQS. Despite multiple comments urging EPA to broaden the scope of the grandfathering provisions, no changes were made to the proposal.
- Risk of nonattainment due to background ozone. By lowering the ozone NAAQS to 70 ppb, EPA has increased the risk that an area may exceed the NAAQS as a result of background ozone concentrations—i.e., those resulting from naturally occurring stratospheric ozone, forest fires and other natural events and international sources. EPA explained in the final rule that “there can be infrequent events where daily maximum 8-hour [ozone] concentrations approach or exceed 70 ppm due to the influence of [background] sources.” However, it concluded that “[u]ncontrollable background concentrations of [ozone] are not expected to preclude attainment of a revised [ozone] standard with a level of 70 ppb.” EPA also offered a number of options that it claims will minimize the adverse effects associated with background ozone. First, EPA permits states to exclude monitoring data if it can establish that the data exceeded 70 ppb as a result of an “exceptional event” caused by background ozone. In a change from the proposed rule, EPA extended the deadline for asserting exceptional events to ensure that states can exclude exceptional events from all data used to make attainment designations. Second, under the rural transport provisions, certain rural areas can obtain reduced obligations under Section 182(h) of the Clean Air Act if they do not contain emissions sources that contribute significantly to ozone nonattainment. Third, under international transport provisions, states that cannot attain the NAAQS due to international transport of ozone can avoid potential sanctions and the imposition of a federal implementation plan that would otherwise occur when a state fails to attain the NAAQS within an allotted time period. However, these provisions have rarely been invoked in the past, and their ability of these provisions to address concerns over background ozone remains uncertain.
- Next steps for implementing the revised NAAQS. EPA’s revision to the ozone NAAQS sets into motion a number of important deadlines that states and the federal government must meet to implement the revised standard. First, states must submit proposed attainment designations based on the revised standard by October 1, 2016—one year after issuance of the revised ozone NAAQS. Second, EPA must make final designations one year later, by October 1, 2017. Third, all states must review and, if necessary, submit revised “infrastructure state implementation plans (SIPs)” to EPA by October 1, 2018. The infrastructure SIPs must describe how each state will implement, maintain and enforce the revised NAAQS. Fourth, upwind states that contribute significantly to downwind nonattainment areas in other states must also submit “transport SIPs” by October 2018 under the Clean Air Act’s Good Neighbor provisions. Finally, states with nonattainment areas must submit nonattainment SIPs within three or four years after the nonattainment designations take effect. In the final rule, EPA committed to issuing additional rules and guidance that will aid states in the implementation process.
The final rule will be published shortly in the Federal Register. Lawsuits challenging the final rule are expected, and must be filed within 60 days after the rule is published.