Environmental Rules Should Be Based on More Than Ability to Pay

Jack Bean
Executive Director of the Industrial Association of Contra Costa County

When it comes to environmental regulations, California has been on a roll for a long time, undisputedly leading the nation and the world in climate change policy and air quality rules.

It wouldn’t be unreasonable for policymakers to step back and take stock of where we are in terms of our successful pollution reduction efforts, carefully analyzing future phases of existing rules and evaluating the necessity and cost-effectiveness of proposed new regulations.

Unfortunately, all too often the desire to get even farther ahead of the emissions curve seems to outweigh objective consideration of the consequences of those new rules. Refinery regulations about to come before the Bay Area Air Quality Management District are a case in point.

For example, one action would amend existing rule language to eliminate the ability of refiners to repair equipment leaks while the unit in question is operating, which would result in either a violation or shutdown of the unit. A forced shutdown would not decrease emissions but would be very likely to increase fuel costs, and could lead to supply disruptions as well.

Another item under consideration would require significantly increased monitoring of certain emissions at a potential cost to refiners of millions of dollars. The targeted emissions comprise only a small percentage of the total in the Bay Area, and it’s important to note that the proposed monitoring schedule far exceeds that required by the US Environmental Protection Agency for those very same emissions. Again, the cost-benefit ratio is questionable at best.

It should be noted that all of the Bay Area refineries have conducted monitoring to determine the extent of so-called “fugitive leaks” and provided the results to Bay Area AQMD staff, who rejected the information because they did not personally witness the monitoring. Further study was contemplated by AQMD but fell by the wayside.

There has been considerable public discussion about these rules, with some in the community arguing that refiners can afford the extra costs, so what’s the big deal? The big deal is that in any business, additional regulatory costs are passed on to the end user – and everyone from students to grocery trucks to ambulances to fire engines are the ultimate users of gasoline and diesel fuel. Regulatory decisions should not be based on the regulated parties’ ability to pay, but on the rules’ necessity and cost-effectiveness.

We are not opposed to necessary and reasonable regulations that deliver tangible benefits commensurate with their price tags. But the simple fact is that these rules will not reduce emissions. With the costs of California’s transportation fuels already among the highest in the country, the Air District should carefully weigh the fiscal impact of these regulations before imposing even higher energy costs on the Bay Area. Given objective scrutiny, the only logical decision will be to re-evaluate the proposed rules based upon a consensus of facts.

Jack Bean is the Executive Director of the Industrial Association of Contra Costa County.

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