MacIver News Service | Jan. 2, 2018
By M.D. Kittle
MADISON, Wis. – “Zombie Obama” EPA regulations continue to pose a threat to manufacturing growth in southeast Wisconsin – and there are fears they could hinder the Foxconn Technology Group plan to build a massive, high-tech factory creating 13,000 jobs near Racine.
Late last month, the Environmental Protection Agency informed Gov. Scott Walker that it plans to designate five southeast Wisconsin counties as ozone non-attainment zones under the stricter Clean Air Act standards issued in 2015 by the Obama administration.
“It makes it a lot more difficult to grow or to site a new facility or expand an existing facility” in a non-attainment zone, Lucas Vebber, general counsel and director of Environmental and Energy Policy for Wisconsin Manufacturers & Commerce, told MacIver News Service last week on the Vicki McKenna Show. “We call it a ‘no-growth zone.’ It’s really a hindrance for any kind of manufacturing activity in Wisconsin.”
The Obama-era air quality standards, based on controversial monitoring practices, could also be a hindrance for the Foxconn project, slated to get underway about the time the EPA is set to make its final determination in the spring.
“Until the EPA makes a final promulgation, we don’t know exactly for sure what it will be. Suffice to say, it doesn’t make life easier,” Vebber said.
A Walker spokesman did not return MacIver News Service’s request for comment.
In 2015, the Obama administration rolled out its National Ambient Air Quality Standards for ozone, a gas created by pollutants, considered harmful to the public and environment. Ground level or “bad” ozone is not emitted directly into the air, but is created by chemical reactions between oxides of nitrogen and volatile organic compounds in the presence of sunlight, according to the EPA.
Obama’s Environmental Protection Agency lowered the ozone standard from 75 parts per billion to 70 parts per billion. It originally planned to cut it to as low as 60 parts per billion. State and local governments must be in complete compliance by 2025, or they could lose highway cash and other federal funding.
In 2016, Walker submitted a letter to EPA recommending the entire state of Wisconsin be classified as in attainment with the standard, based on Department of Natural Resources findings showing that ozone monitors well within heavy manufacturing zones found the state within attainment levels.
Wisconsin, experts say, is subject to the whims of the ozone lake blanket. Monitors situated in Ozaukee County and in suburban Milwaukee have been picking up higher readings thanks to other major manufacturing centers outside of southeast Wisconsin, from other states, even other countries, Vebber said.
“DNR is documenting that Lake Michigan essentially acts as an oven producing ozone from those precursor pollutants that come from places like Gary, Ind., and Chicago, right up the coast and settling down the coast,” Vebber said. “It has also been documented that once you get about two miles inland, that ozone dissipates completely.”
The EPA’s letter last month politely disagrees with the Walker administration’s assessment, asserting that the federal regulator intends to designate all of Milwaukee, Ozaukee, Racine, Washington and Waukesha counties as non-attainment zones. Portions of Dane, Manitowoc, Kenosha and Sheboygan would also be designated as non-attainment.
“Working closely with the states and tribes, the EPA is implementing the standards using a common sense approach that improves air quality and minimizes the burden on state and local governments,” Robert A. Kaplan, the EPA’s acting administrator for the Chicago-based region, wrote in his letter last month to the governor.
But business groups and manufacturing advocates say the new standards are burdensome, and promise to be detrimental to job creation and the economy at large.
Manufacturers in non-attainment zones must secure a Title 5 permit, or a major source permit from the EPA.
“If you are in a non-attainment zone and you go to get that permit, a whole host of new restrictions apply to you – probably the most impactful of which is called an offset requirement,” WMC’s Vebber said. For every unit of a pollutant, in this case ozone pollution, that a manufacturer expects to put into the air, the company has to find an offset greater than the pollutant to take out of the air, Vebber added.
Portions of southeast Wisconsin have been down the onerous, non-attainment road before. A decade ago, then-President George W. Bush eased the ozone parts-per-billion standard.
The U.S. Chamber of Commerce and the American Petroleum Association, among others, warn that compliance costs could climb into the billions.
Environmentalists insist pushing harder on ozone limits will extend lifespans.
“While previous research suggested this, the especially novel finding here is that pollution reductions lead to significant reductions in the purchase of medications that protect people from becoming sick or even dying prematurely,” Michael Greenstone, co-author of a report issued by the University of Chicago’s Energy Policy Institute, told Forbes. “…The implications for air pollution policy are potentially enormous.”
Or potentially costly to manufacturers, good-paying jobs, and the U.S. economy – for little return on investment. Ozone pollution levels already have declined 33 percent over the past 38 years, without the stricter Obama-era standards over the last decade.
President Trump’s administration had considered delaying implementation of the rules, but its EPA – which has rolled back or stalled several Obama-era EPA standards – opted to maintain the ozone changes.
Trump was key in landing the Foxconn deal in Wisconsin. But could the more rigid ozone regulations imperil a project that truly would bring thousands of manufacturing jobs back to the United States, to the Badger State? It’s not clear at this point what it will all mean for Foxconn in Racine.
The Walker administration will have until the end of February to appeal the EPA’s decision, according to the agency’s letter. With so much at stake, it’s hard to imagine the “open-for-business” Walker administration wouldn’t appeal.
And perhaps the Trump administration will change course.
“A lot of what we’re seeing right now is really kind of a domino effect that was put in place by the previous administration and the current administration is kind of being pushed along,” Vebber said. “The ‘Zombie Obama’ EPA is still alive and still attacking business owners here, especially in southeast Wisconsin.”