On March 29, the U.S. Environmental Protection Agency (EPA) proposed a new rule setting stricter emissions standards for cars and trucks and requiring a reduction in the sulfur content of gasoline beginning in 2017. The proposal addresses health risks posed by breathing hazardous vehicle pollution, such as asthma and other respiratory infections that can cause premature death. Together, the more stringent sulfur limit and new emissions standards will lead to rapid improvements in air quality nationwide.

On Jan. 29, EPA submitted the proposed rule to the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) for review. To the surprise of many, OIRA completed its review in only two months.

EPA's Harmonized Standard Clears OIRA Review in 60 Days

Under the Clean Air Act, EPA is tasked with setting emissions standards for vehicles to address air pollution that might endanger public health. The proposed rule sets a more stringent limit on the amount of sulfur permitted in gasoline, reducing the standard from 30 parts per million (ppm) to 10 ppm. By harmonizing the national standard with California's existing emissions limits, auto manufacturers now only have to follow one standard in all 50 states, a change that the auto industry widely supports.

Under Executive Order 12866, agencies must submit proposed major rules and an analysis of costs and benefits to OIRA for review. OIRA is given 90 days to complete all initial reviews; however, as we reported in an earlier article, OIRA often misses this deadline, delaying crucial standards and safeguards. In this case, however, OIRA completed its review in only 60 days, leading some experts to question why OIRA review was so fast. Since OIRA has now demonstrated that it can complete its review of a complex, controversial rule in 60 days, these experts wonder what really causes the lengthy, sometimes indefinite delays faced by many agency rules.

Some sources have suggested that OIRA's speedy review may have been prompted by the upcoming confirmation hearing on the nomination of Gina McCarthy to head EPA. By releasing the rule, McCarthy is now free to tout it as a widely supported and cost-effective measure that creates jobs and addresses health concerns associated with air pollution.

Benefits of Reducing Sulfur Emissions Outweigh Costs by 7-to-1

EPA's emission standard will result in huge benefits. EPA estimates that by 2030, the total annual health benefits from the new standards will range from $8 billion to $23 billion. Each year, the rule will prevent 820 to 2,400 premature deaths, 3,200 asthma-related hospital admissions and visits to the emergency room, and 22,000 cases of respiratory ailments in children. The rule will also protect approximately 50 million people exposed to air pollution near roadways, such as cyclists, joggers, and other pedestrians.

Source: EPA's Draft Regulatory Impact Analysis, tbl. I-7, Summary of Annual Benefits and Costs Associated with the Proposed Tier 3 Program (billions, 2010 dollars)

EPA estimates that these benefits far exceed the cost of the vehicle emissions standards and limit on sulfur content of gasoline. The total annual cost of EPA's proposed rule is approximately $3.4 billion – only a fraction of the annual benefits. The more stringent sulfur standard is projected to increase the price of gasoline for refineries by less than one cent per gallon; the vehicle emissions standards require new technology that will cost $130 per vehicle per year. These amounts are unlikely to affect demand for either gasoline or new cars.

Oil industry opponents have exaggerated the costs of the standard; The Washington Post editorial board recently explained how the industry ignores the flexibility EPA's proposal provides oil refineries by allowing them to average the sulfur content across the pool of gasoline they produce and to make needed capital improvements over many years.

Moreover, the EPA sulfur standard is identical to standards already in place in California, as well as Japan and Europe, which means many oil refineries already comply with EPA's proposed rule. In fact, of all 111 U.S. oil refineries, EPA found that 29 already meet the new sulfur standard or would require only minor improvements, 66 would require moderate changes, and only 16 refineries would have to make significant upgrades and invest in new equipment capable of meeting the stricter standard.

Industry Opponents Likely to Increase Pressure on Policymakers to Delay Rules

Oil industry lobbyists and industry allies in Congress are already pressing the agency to delay the rule for a full year while EPA recalculates the rule's cost. EPA may grant a request to extend the notice-and-comment period and allow the public more time to review the approximately 900-page rule and the accompanying 500-page regulatory analysis. And OIRA will have another opportunity to delay these public protections when it reviews EPA's final rule.

Take Action on EPA's Proposed Rule

EPA's new standard for reducing sulfur content in gasoline and setting stricter limits on vehicle emissions is an important part of the agency's nationwide program to improve air quality and protect public health and our quality of life. Citizens can make their voices heard by filing comments supporting EPA's effort to reduce auto emissions.