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While an estimated 180 area facilities move closer to paying millions in ozone penalty fees, the Louisiana Department of Environmental Quality is strategizing on how to comply with the national air-quality crackdown.

Facilities in the Environmental Protection Agency’s designated “severe” nonattainment area [East Baton Rouge, West Baton Rouge, Livingston, Ascension and Iberville parishes] face the fees, which DEQ Assistant Secretary Louis Buatt estimates could range from $63.2 million to $80 million.

Affected facilities will include those determined as major contributors of two ozone-causing pollutants [volatile organic compounds and nitrogen oxide] during the time the nonattainment area failed to meet the EPA’s old one-hour standard at 125 parts per billion under the federal Clean Air Act.

DEQ is developing an assessment and collection plan for the federal agency. If it’s approved early next year as anticipated, Buatt says the fees could be collected by mid- to late 2009.

In a March 21 letter, the EPA provided the “baseline amount” needed to calculate the fees that he says has been provided to facilities. The fees apply to areas designated as “severe” or “extreme” that failed to meet the one-hour standard and will be assessed on emissions in excess of 80% of each facility’s baseline amount. The letter states the fee must be adjusted for inflation, which was calculated at $8,040 per ton of ozone-causing pollutants.

For the Baton Rouge area, the penalty period will be November 2005 [the area’s compliance deadline] to November 2006 [when the standard was met]. EPA officials say the Baton Rouge area will be among the first in the nation, joining other major metropolitan areas like Baltimore and Sacramento, Calif., to be assessed penalties under Section 185 of the Clean Air Act.

Earlier this year, the U.S. Supreme Court refused to hear arguments on the air-quality case, Baton Rouge Area of Commerce versus South Coast Air Quality, which opened the floodgate on the penalties. The decision let stand a 2006 ruling by the U.S. Court of Appeals District of Columbia Circuit to require the EPA to reinstate requirements associated with its old standard.

Under an anti-backsliding provision in the regulation, the court ruled the EPA incorrectly stopped assessing penalty fees in 2005 against facilities in areas designated as “severe” that missed their compliance deadline. The EPA had stopped assessing fees that year as it transitioned to a stricter standard of 85 ppb over an eight-hour period.

“The impacts are going to be significant,” Buatt says. DEQ has started working with facilities or “major sources” emitting ozone-causing chemicals, including nitrogen and volatile organic compounds. Initial estimates put potentially impacted facilities at around 180. Of those affected, he estimates as many as 17 facilities could owe $1 million or more in penalties and another 13 face $500,000 to $1 million in fees.

According to Richard Metcalf, environmental manager at Louisiana Mid-Continent Oil & Gas Association, “It’s convoluted because of the three standards and different timelines and different requirements.” The state and facilities are dealing with the old, current and new tougher eight-hour standard at 75 ppb at the same time. The area met the one-hour standard and was working on meeting the current standard when the EPA imposed an even tougher standard.

Also, Metcalf says the fees are only a part of the economic impact. The area’s “severe” designation has meant stricter permitting, resulting in added cost and delays as well as costly measures to lower emissions. While he says industry knows the fees are coming, he hopes DEQ will use them to improve air quality.

Buatt says DEQ will use all fees collected to do just that, possibly funding measures like adding staff and equipment for permitting and assessment programs, additional monitoring and enforcement. DEQ also has launched a statewide Ozone Steering Committee to address the tougher standard adopted on March 12. Although the EPA will take several years to phase it in, the state is taking this seriously because it could trigger a problem with ozone compliance in areas unaccustomed to it or long been away from it. Without intervention, the state’s only nonattainment area in the Baton Rouge region would balloon statewide to 26 parishes.

“This committee will be the beginning of a grassroots effort to provide information to local and business communities statewide,” Buatt says. “Information that lets people know what the stakes are and what impacts the new standard will have on communities is vital in early planning. There are steps that can be taken to lessen the impacts and the committee will offer support and encourage communities to be proactive.”

The committee will promote communities starting their own clean-air coalitions and proactively implementing measures to help meet the new standard, he says. They also will work with the Congressional delegation and other states to reform the Clean Air Act.

Meg Mahoney, senior vice president of product development with the Baton Rouge Area Chamber, welcomes the statewide effort to address the ozone standards.

“The good news is we have all parties working together to figure out how to be in compliance in the ways that make the most sense,” Mahoney says. “The new eight-hour standard will be phased in over several years so that will take time and, in the meantime, we’re still under the previous eight-hour standard so we’re working down both paths simultaneously.”

But she questions whether there’s enough science to verify if controls are effective, particularly with other factors like wind and naturally occurring compounds. Mahoney adds, “I don’t think there’s a clear solution that has been verified as the fix based upon science.”

EPA spokesman David Bary says the agency’s Clean Air Scientific Advisory Committee recommends the standards to the federal agency. The committee recommended the old standard in 1977 and the current standard in 1997. In the past 10 years, when research pointed to worsening effects from ozone, Bary says the committee again proposed lowering the eight-hour level to 70 ppb or 75 ppb. After holding public hearings last year, the EPA chose 75 ppb and two months ago started dual enforcement of the current and new standards.

Nationwide, Bary says governors have until March 12, 2009 to advise the EPA on areas that won’t meet the new standard. In 2010, the federal agency will make its final determination on classifying nonattainment areas and then each state will have to submit a compliance plan by 2013.

The Baton Rouge area’s ozone litigation resulted from the EPA’s dual enforcement of its old and current standards.

Photo by Brian Baiamonte

MONITORS: DEQ’s air monitoring station is located on Leesville Avenue behind the governor’s mansion and Department of Transportation and Development Building.

“It’s extremely complicated because the Clean Air Act is one of the most complicated pieces of environmental legislation ever adopted by Congress,” says attorney Frank Craig, who has worked with BRAC on ozone nearly four years. “The act is one of the few environmental statutes lacking a requirement to balance cost and benefits, but are instead strictly health-based at any cost. And that’s where they’re getting to now, where the cost will be enormous in many areas and may be unattainable.”

Craig says Baton Rouge’s problem is trying “to catch a moving target … because the current standard is just now being implemented and already the EPA is implementing a more stringent one.” More is coming, he says, adding, “Environmentalism is a religion, not scientifically-based, so more regulation is coming whether or not it’s cost effective.”

Vehicles will be the next battleground, which Craig says are equivalent to industry in terms of emissions.

The EPA mandating use of reformulated gasoline because of the area’s ozone designation has become a moot point since Congress mandated nationwide use of ethanol, but Craig maintains ethanol use could impede compliance because it creates nitrous oxide, which contributes to ozone pollution. E10 [conventional gasoline with 10% ethanol for typical vehicles] and E85 [85% ethanol for flex fuel or dual fuel vehicles] are beginning to be offered at stations in the area. Some of them are labeling the fuel at the pumps.

Also, Mahoney says the new standard changed the Air Quality Index in March, which increased the area’s unhealthy days from 19 to 28 a month. She says DEQ has been talking to meteorologists so they’ll explain an increase of “ozone action days” to the public.

“It’s the new effect the public will see from the new standard,” she says of the color-coded index. “The air quality isn’t getting worse, but the standard is getting more stringent.”