1717 Rhode Island Avenue, NW Telephone 202.872.1260

Suite 800 Facsimile 202.466.3509

Washington, DC 20036 Website brt.org

July 15, 2011

The Honorable William Daley

Chief of Staff to the President

The White House

1600 Pennsylvania Avenue, NW

Washington, DC 20500

Dear Bill:

On July 11, the Executive Office of the President received from the

Environmental Protection Agency (EPA) a final rule that promises to be the

single most expensive environmental regulation ever imposed on the U.S.

economy. This rule, which would tighten existing National Ambient Air

Quality Standards (NAAQS) for ozone, has been estimated by EPA to cost

anywhere between $20 and $90 billion annually

, depending on what level of

the standard EPA has selected. Importantly, EPA’s regulatory impact analysis

acknowledges that this figure may understate compliance costs because it

relies heavily on technology that has yet to be developed.

If finalized, EPA’s ozone rule, which is a reconsideration of a final rule

adopted in 2008, threatens to seriously impede economic expansion by

classifying literally hundreds of counties across the United States as non

‐

attainment for ozone for the first time. The impact will be felt immediately.

States must submit to EPA a list of potential non

‐ attainment counties within

one year. This will trigger a controversial public state

‐ by

‐ state debate next

summer over which counties must be designated non

‐ attainment. Once a

county is designated as non

‐ attainment, a cascade of federal and state

control measures are triggered. New and expanding businesses will be

required to obtain emission offsets and install controls to avoid any emission

increases. According to EPA, in many counties across the country existing

businesses will have to install “all known control measures,” assuming

adequate capital can be secured for no/low

‐ return investments. This

uncertainty and the difficulty of obtaining emission offsets and permits will

discourage capital investment and make these counties less competitive.

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. Ivan G. Seidenberg

Verizon Communications

Chairman

Kenneth I. Chenault

American Express Company

Vice Chairman

Edward B. Rust, Jr.

State Farm Insurance

Companies

Vice Chairman

John Engler

President

Larry D. Burton

Executive Director

Johanna I. Schneider

Executive Director,

External Relations

LeAnne Redick Wilson

Executive Director,

MembershipJuly 15, 2011

Page 2

These adverse outcomes are not necessary to obtain cleaner air. Ozone levels in the U.S.

continue to drop based on regulations adopted pursuant to the 1997 ozone standard.

EPA’s air quality data for 2008 to 2010 confirms this significant progress

– all accomplished

without even implementing the 2008 standard that EPA is now reconsidering. Most of the

hundred or more marginal areas swept into nonattainment under EPA’s reconsideration

proposal would find themselves in attainment of a lower standard if EPA waits until the

next scheduled ozone standard review in 2013. Furthermore, EPA is currently finalizing a

number of major regulatory actions that will assure even greater progress in the years

ahead. History has shown that once an area is designated non

‐ attainment, it takes years to

reclassify it to attainment status. Forcing the designation of these counties as non

‐

attainment will result in lasting economic damage for these communities; damage that is

completely unnecessary.

No one disputes the significant improvements made in air quality over the past 30 years.

However, as standards continuously get more stringent and the air cleaner, it becomes more

difficult and expensive to make further progress. In particular, large portions of the U.S.

manufacturing base that are exposed to international competition have been negatively

impacted by investments required by the Clean Air Act. It is not unreasonable to expect

these negative trends will accelerate with increasingly higher marginal cost regulatory

programs that are now being proposed by EPA.

It is vitally important that the science behind EPA’s decisions be as sound as possible.

Unfortunately, it appears that some of EPA’s scientific processes recently criticized by the

National Academy of Sciences, including issues of study selection and evaluation and how

evidence is weighed to make an informed risk

‐ based decision, are also at issue in the

scientific assessments for ozone. The ozone rule should therefore not be finalized until

issues raised regarding EPA’s scientific processes are resolved and incorporated into the

2013 ozone review efforts.

Finally, EPA has acknowledged that the ozone reconsideration “is discretionary” and is not

required by statute or court order. Although certain stakeholders have suggested the

reconsideration is mandated by law, in fact nothing compels EPA to revise the standard

outside the regular five year review. EPA sought reconsideration on its own initiative, not

under court order or even in response to any formal request. Further, EPA is not bound by

the recommendations of the Clean Air Scientific Advisory Committee (CASAC), as some have

argued. Instead, the Clean Air Act clearly entrusts the EPA Administrator ultimately with the

authority

‐ not an advisory panel

‐ to set the standard at a level she determines is requisite to

protect the public health with an adequate margin of safety, based on a wide range of

considerations.

The next scheduled statutory review of the ozone standard is in 2013, and the scientific

panel convened by EPA to review the latest scientific evidence is already half way through its

work. The government’s limited resources are better spent toward finalizing a strong recordJuly 15, 2011

Page 3

for the upcoming 2013 standard review rather than litigating an interim standard in the

meantime. We respectfully urge the Administration to let this panel complete its work and

recommend in 2013 whether the ozone standard should be changed.

Sincerely,

Andrew N. Liveris

Chairman & CEO, The Dow Chemical Company

Chair, Business Roundtable, Regulatory Reform Working Group

AL/rr

C: The Honorable Timothy Geithner, Secretary of the Treasury

The Honorable Lisa Jackson, Administrator, U.S. Environmental Protection Agency

The Honorable Gary Locke, Secretary of Commerce

United States Senate

United States House of Representatives