Kansas Faces Economic Impact from Proposed EPA Ozone Rule

February 27, 2015

New Study Finds Ozone Rule will Place Over 45,000 Kansas Jobs
at Risk; Cost to U.S. Economy $140 Billion Per Year

TOPEKA, KAN. (February 26, 2015)  - Kansas manufacturers and households could face significant economic consequences if the Environmental Protection Agency (EPA) moves to tighten its ground-level ozone standard later this year, according to an update of a landmark study conducted by National Economic Research Associates (NERA) Economic Consulting for the National Association of Manufacturers (NAM) and the Kansas Chamber of Commerce & Industry. The study found that a new EPA proposal to lower the ozone standard from 75 to 65 parts per billion (ppb) could cost Americans trillions of dollars, confirming that a revised ozone standard is poised to become the most costly regulation ever issued by the U.S. government.

In Kansas, the study found that a new federal ozone standard could cost the state $32 billion in lost economic activity and impose $16 billion in compliance costs. The tightened standard could also reduce U.S. Gross Domestic Product by as much as $1.7 trillion through 2040, place 1.4 million jobs in jeopardy and increase energy costs for all consumers. The average Kansas household will have $1,990 less to spend per year as a result of these regulations; across the state, consumers will spend $979 million more to own and operate their vehicles.

"Manufacturers in the United States are in the midst of a resurgence that's fueling job growth and economic recovery nationwide, but the proposed tightening of the ozone standard puts our momentum at great risk," NAM President and CEO Jay Timmons said. "This data confirms our long-held concern that revisions to the ozone standard represent one of the most significant threats not just to our manufacturing sector, but to our economy at large."

"According to the analysis of this proposed rule, more than 60% of the controls and technologies needed to meet the rule's requirements are what the EPA calls 'unknown controls'. Because controls are not known, the new regulation could result in closure of some of our plants and the early scrappage of valuable equipment used for manufacturing, construction and agriculture. This is unacceptable and borders on insanity", said Mike O'Neal, President & CEO of the Kansas Chamber and its affiliate, the Kansas Manufacturing Council.

The EPA unveiled its latest proposal to tighten the ozone standard to between 65 and 70 ppb in November of 2014. President Barack Obama halted the EPA's prior effort to reduce the standard in 2011, citing the "regulatory burdens and uncertainty" created by the rule. The Administration is accepting public comments on the proposed rule through March 17.

To read the executive summary of the study, click here. For more information, visit www.nam.org/ozone.


About NAM: The National Association of Manufacturers (NAM) is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12 million men and women, contributes $2.08 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for two-thirds of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

About the Kansas Chamber: 

The Kansas Chamber, with headquarters in Topeka, is the leading statewide pro-business advocacy group moving Kansas towards becoming the best state in America to live and work. The Chamber represents small, medium and large employers all across Kansas. The mission of the Kansas Chamber of Commerce is to continually strive to improve the economic climate for the benefit of every business and citizen and to safeguard our system of free, competitive enterprise. For more information on the Kansas Chamber of Commerce, visit www.kansaschamber.org.

About NERA: National Economic Research Associates (NERA) Economic Consulting is a global firm of experts dedicated to applying economic, finance and quantitative principles to complex business and legal challenges. For more than half a century, NERA's economists have been creating strategies, studies, reports, expert testimony and policy recommendations for government authorities and the world's leading law firms and corporations. NERA brings academic rigor, objectivity and real-world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance and litigation.