The PJ Tatler

One Down, 4,256 to Go

On Friday, as the dismal jobs report hit the streets, President Obama overruled the EPA and halted its ground-level ozone rule.

President Barack Obama on Friday scrapped his administration’s controversial plans to tighten smog rules, bowing to the demands of congressional Republicans and some business leaders.

Obama overruled the Environmental Protection Agency — and the unanimous opinion of its independent panel of scientific advisers — and directed administrator Lisa Jackson to withdraw the proposed regulation to reduce concentrations of ground-level ozone, smog’s main ingredient. The decision rests in part on reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy.

The announcement came shortly after a new government report on private sector employment showed that businesses essentially added no new jobs last month — and that the jobless rate remained stuck at a historically high 9.1 percent.

The ground-level ozone rule was among the more costly that the Obama administration had on the table, estimated to cost anywhere between $19 billion and $90 billion. It was a job killer in the making.

The new ozone rule “promises to be the single most expensive environmental regulation ever imposed on the U.S. economy,” contends a letter to White House Chief of Staff William Daley from Andrew Liveris, chairman and CEO of the Dow Chemical Co. and chairman of the Business Roundtable’s Regulatory Reform Working Group.

It could “seriously impede economic expansion by classifying literally hundreds of counties across the United States as non-attainment for ozone for the first time,” the letter stated.

Failure to meet the new ozone standards could have significant economic impacts on these counties.

“New and expanding businesses will be required to obtain emission offsets and install controls to avoid any emission increases,” Liveris wrote.

Existing businesses in many of these counties also may have to install ozone control measures, according to the letter.

“This uncertainty and the difficulty of obtaining emission offsets and permits will discourage capital investment and make these counties less competitive,” Liveris wrote. “Instead of creating jobs, these counties risk losing jobs when businesses respond to the higher costs and uncertainty by closing marginal facilities and siting new facilities elsewhere, including outside the U.S.”

Killing this rule was the right thing to do; its impending implementation was among the government actions keeping businesses from investing and hiring.

Now that the president has proven me right about how he can handle the regulatory state if he so chooses, let’s see him tackle the other six new regulations that will cost over $1 billion apiece, and then get to work on the more than 4,200 others that are set to come down hard on the economy. The next one to go should be the EPA’s cross-state pollution rule.

The Electric Reliability Council of Texas, operator of the state’s power grid, said in a report today that a new federal environmental regulation would reduce generating capacity and put the grid “at increasing risk of emergency events,” including rotating power outages.

The Jan. 1 implementation date for the Cross-State Air Pollution Rule, designed to curb air pollution from power plants, leaves ERCOT with “an extremely truncated period” in which to assess the impact of the rule and “no realistic opportunity to take steps that could even partially offset the substantial losses of available operating capacity,” it said.

The report outlined three scenarios, with even the “best-case scenario” expected to result in the loss of an estimated 1,200 to 1,400 megawatts of generating capacity during peak consumption periods, ERCOT said.

“Had this incremental reduction been in place in 2011, ERCOT would have experienced rotating outages during days in August,” the report said.