On June 15, 2012, US EPA issued its long-awaiting proposed rule to address the primary annual fine particulate matter national ambient air quality standard, otherwise known as the PM2.5 NAAQS. As fine particulate matter can be generated from sources as varied as roads and raw material storage piles to the stacks of heavy industry, US EPA’s rulemaking will impact a wide range of industries large and small.

The proposed rule calls for a reduction of the annual health standard for fine particulate from the current standard of 15 µg/m3to 12-13 µg/m3. However, US EPA is also considering whether an even tighter reduction to 11 µg/m3 should be adopted. The proposed rule comes as a response to years of litigation by states, environmental groups and industry, culminating in a court order by the U.S. Court of Appeals for the District of Columbia Circuit that required US EPA to explain by June 14, 2012 why the current standard of 15 µg/m3 was protective of public health.1

Rather than justify its original position, US EPA reversed course and proposed the additional reductions on the basis of the claimed health benefits, which US EPA estimates to be between $2.3 billion to $5.9 billion annually under a 12 µg/m3 standard, and $88 million to $220 million under a 13 µg/m3 standard. To rationalize the proposed reductions, US EPA claims that the regulatory burden will be minimal (EPA estimates that a 13 µg/m3 standard will only cost $2.9 million to implement and $69 million under a 12 µg/m3 standard) and that 99 percent of U.S. counties will meet and attain the proposed standard without any additional action. However, these attainment projections are based upon flawed modeling that takes into account overly optimistic reductions from other US EPA rules, including the heavily criticized and currently litigated Cross State Air Pollution Rule, the Mercury and Air Toxics Standard, as well as other emissions standards for vehicles, aircraft, locomotives and ships. Based upon 2011 data, if a new standard of 13 µg/m3 were in place today, 40 reporting areas across the country would be in nonattainment. The number jumps to 113 if the standard were 12µg/m3. And if the standard were 11 µg/m3, the number increases to 263 areas with an additional 20 reporting areas in danger of exceeding the standard. Areas in nonattainment can be subject to increased regulation, permitting requirements, control measures and even federal preemption, all of which result in increased regulatory burdens and costs.

Thus, despite US EPA’s overly optimistic cost projections, there is little question that the new standard will be expensive for the regulated community. Indeed, the existing standard is already an expensive challenge. Compliance costs increase exponentially with attempts to achieve ever finer pollution reductions. For example, many industries have already installed costly controls to meet the current standard. As the standard is ratcheted down, further reductions at such facilities may only be possible from either reduced production or additional capital controls—both of which result in significant costs. Smaller industries and operations may now also be subject to control requirements putting additional financial burdens on the resources of such vulnerable businesses during uncertain economic times.

On June 29, 2012, EPA published the proposed rule in the Federal Register (77 Fed. Reg. 38890). The agency will accept comments through August 31, 2012, and also plans to hold public hearings in Sacramento, CA, and Philadelphia, PA during July. Per the court’s order, US EPA must adopt final rules by December 14. Following final adoption, EPA anticipates designating attainment/nonattainment areas in 2014 that will become effective in 2015. States will then have until 2020 to meet the reduced limit. Therefore, the time to comment on these proposed reductions is now.

1 Am. Farm Bureau Fed v. EPA, 559 F.3d 512, 515 (D.C. Cir. 2009).