EPA’s goalposts-moving strategy is a direct threat to Louisiana’s booming economy

Stephen Waguespack is president of the Louisiana Association of Business and Industry.

View from Business

By STEPHEN WAGUESPACK
LABI President
The feds sure do know how to snatch defeat from the jaws of victory.
Louisiana is on the verge of a manufacturing renaissance not seen around here in a generation. The robust economic growth we anxiously await has the potential to dramatically improve the opportunities for countless working Louisiana people. Our citizens have been told ad nauseam over the last few years of the big boom coming to Louisiana and they are ready to start reaping the benefits.
State officials have announced more than $60 billion in new projects, promising over 250,000 new jobs. Rankings and statistics from numerous credible sources confirm that Louisiana is a national leader in per capita income, export and manufacturing growth. If these projections hold true, we will look back on this boom era as a time that elevated Louisiana’s role in the national economy from a state simply hanging on for dear life to one that is leading the way.
Then, in the blink of an eye, the Obama Administration and an army of Environmental Protection Agency (EPA) bureaucrats have swooped in and said (in their best Lee Corso impersonation), “Not so fast, my friend.”
These party poopers have come to Louisiana with guns a blazin’ and they have our manufacturing renaissance set firmly in their sights. Their latest push to issue a new rule governing ground-level ozone standards could undo the economic gains that have been made in recent years nationwide — and would hit Louisiana particularly hard.
A new study released by the National Association of Manufacturers (NAM), and in coordination with the Louisiana Association of Business and Industry (LABI), shows the impact these new ozone standards will have on both the U.S. economy and Louisiana. In short, it is a punch to the gut. More specifically, these findings show that these new standards could be the most expensive rule ever issued, carrying a price tag of over $3.4 trillion and millions of jobs.
As astonishing as the national numbers are, what’s most worrisome is what these new standards will do here in Louisiana. Our state is on course to be one of the hardest hit by the new regulation. The state economy would lose nearly $53 billion in Gross State Product and shed around 117,000 job-equivalents per year. Louisiana businesses would face huge compliance costs totaling nearly $200 billion from 2017 to 2040, and Louisiana households will have almost $2,400 less to spend every year.
Despite the regulation’s massive economic toll, EPA fails to provide any clear guidance as to how their desired reductions could be accomplished. Remarkably, the EPA admits that only one-third of the controls needed to comply with the regulation are even available — costly upgrades and formula changes that can help to find needed emission reductions. The other two-thirds, it concedes, do not yet exist or are unavailable. The EPA calls these “unknown controls,” and it banks nearly all of the needed reductions on this vague concept.
The current standard, 75 parts per billion, which was set in 2008, is still being implemented in numerous states like ours. Earlier this year, EPA officials visited Louisiana to congratulate the state and industry for the hard work we’ve put in place to comply with the existing regulations. Now, only a few months later, they are pulling their own version of “Lucy and the football” and moving the goalposts on us yet again. This trend will not stop until Congress steps in to drag them back to the world of reality.
The latest regulations that EPA is proposing may reduce the standard to 60 parts per billion, an ambitious reduction that directly threatens the billions of dollars of announcements driving our manufacturing boom. Additionally, it will restrict the development of energy resources and drive up the cost of nearly every manufactured good.
We have made great progress in recent years in reducing concentrations of ground-level ozone nationwide. Levels have dropped nearly 25 percent since 1980 despite the growth of the U.S. economy, thanks to a commitment on the part of American manufacturers to deploy and utilize best practices and state-of-the-art emissions reduction technologies. American manufacturers excel at finding solutions, but these new mandates from EPA may create a problem that even they cannot solve. EPA bureaucrats yawn at the prospects of the millions of American jobs at stake, while their federal jobs are secure as long as their regulations stay ever changing and compliance remains unattainably complex.
As onerous as the new standard may seem, the penalty for noncompliance is downright debilitating — especially for a state like Louisiana. Being deemed in “nonattainment,” the term used by EPA for those areas failing to comply, would mean our state would be unable to attract new investment or even expand existing businesses until employers in the region find emissions reductions sufficient to bring the region back into attainment. Given EPA’s inability to provide insight into what those reduction practices would entail, the only option remaining would be the shutdown or retirement of facilities.
Left unchecked, EPA’s new ozone standards would be unsustainable and unachievable in Louisiana. Our state simply cannot afford to bear the brunt of the costs of every new regulation that comes out of Washington. Manufacturers and business are dedicated to improving business practices that protect the environment and improve the quality of life — all while ensuring economic prosperity for the communities we work and live in.
The timing of this type of job-killing regulation is never ideal, but it is especially concerning at this moment in Louisiana’s history. We are on the verge of a great run, one that could redefine our economy for generations. That prosperity is on our doorstep, unfortunately, EPA is now kicking down our door.
Stephen Waguespack served as Special Counsel for Jones Walker, a Louisiana law firm, where he directed their multistate Government Relations practice. He formerly served as a member of the state Board of Elementary and Secondary Education. Waguespack also served as Chief of Staff, Deputy Chief of Staff, Executive Counsel, and Policy Director for Louisiana Gov. Bobby Jindal. Prior to his work with Jindal, he worked for The Alpine Group in Washington, D.C., and as an energy policy advisor to Texas Congressman Joe Barton. Waguespack holds a bachelor’s degree in mass communication from Louisiana State University and a law degree from The Catholic University of America in Washington, D.C. He is a member of the Louisiana State Bar. He and his wife Colleen have three sons and live in Baton Rouge.

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