Four major industrial projects, expected to bring in 2,000 jobs and more than $7 billion in capital improvements to the Baton Rouge area, have decided to go elsewhere since the U.S. Environmental Protection Agency announced plans in December to consider tougher ozone standards, the Baton Rouge Area Chamber reported Monday.
The decision not to locate in Baton Rouge can be directly tied to the uncertainty over whether the ozone standard will be lowered below its current 75 parts per billion, a public policy commentary the chamber released Monday says.
The chamber’s policy report makes a case to the EPA to keep the national standard at its current 75 ppb or risk slowing down economic recovery across the nation.
“It’s going to be a dampening effect on places that haven’t been in non-attainment (not meeting the ozone standard),” said Adam Knapp, president and chief executive officer of the chamber. On the four companies that decided to go elsewhere, Knapp added the names are being withheld.
“As with other active economic development projects, the companies prefer not to be named, as most are ongoing projects that have not announced a final location decision,” he said.
The policy report shows that many of the top economically performing metropolitan areas, as ranked by the Brookings Institution, are even now not meeting the current federal ozone standard. In fact, four of the top five performing areas don’t meet the 75 ppb standard.
“They would have had a much more robust economy,” Knapp replied, without the stigma of not meeting the federal ozone standard.
Environmentalists were skeptical of this critique.
“ ‘It will hurt the economy’ is a mythical nightmare that sends fear into the hearts of wealthy businessmen and is frequently used as a scare tactic intended to fight environmental improvements that might cost businesses a little money,” said Marylee Orr, executive director of the Louisiana Environmental Action Network. “In reality, every study that looks at the big picture, improving the environment and strengthening regulations, improves the economy.”
Knapp said the main point of the report is to show how many areas in the country that are doing well economically right now would come under the tougher and more expensive restrictions brought by not meeting the ozone standard. Most at risk, he said, are those areas that currently meet the standard and haven’t considered what not meeting the standard could mean to their economic growth.
“These are places that are paying less attention to this,” Knapp said. “The broader story here is how broad-based this effect is going to be across the country.”
Although on paper, the five-parish Baton Rouge area currently meets this federal ozone standard, the EPA hasn’t made it official yet so all of the restrictions on industry are still in place. These restrictions include the need for any new or expanding industry to reduce more air pollution than will be produced, many times done through the buying of emission reduction “credits” for volatile organic compounds or nitrogen oxides — the two ingredients that form the air pollution in the ozone.
The Baton Rouge area had been out of attainment for so long that these credits are hard to come by. Still, Baton Rouge ranks 20th on the list of best performing economies, according to the Brookings Institution.
Those rankings look at the 100 largest metro areas in the U.S. and ranks them on jobs, unemployment, gross product and house prices, according to the Baton Rouge Area Chamber. These criteria are then examined during the recession, the recovery and then a combination of the two. It’s this combination the chamber used to compare top performing areas with their ozone measurements from 2011 to 2013.
If the EPA decided to keep the ozone standard at the current level, things would change in Baton Rouge, Knapp said.
“If that were true, we would have an opportunity to go after some of these companies that bypassed us because of the nonattainment issue,” Knapp said.
Knapp said very little has been done to get areas across the country aware of the possible impacts that not meeting a tougher ozone standard could bring to their area. The EPA has promoted an Ozone Advance program that attempts to get communities aware of ozone issues and help areas meet a lower standard before one is announced. Yet, Knapp said that while talking to economic development groups around the country, there isn’t much awareness.
The state Department of Environmental Quality, working with the EPA on the Ozone Advance program for years, has struggled to get some areas of the state to realize the importance through numerous meetings and presentation. Other areas, such as Lafayette, are making changes now to help reduce vehicle pollution — one of the main contributors to that area’s ozone — to try to lower their ozone levels before a new rule goes into place.
In areas that currently meet the standard, being put out of attainment will bring additional business costs of purchasing credits and more stringent rules on the type of pollution control equipment a facility has to install, Knapp said.
“It will be a drag on their economy,” Knapp said. “This is going to start affecting places that don’t have this on their radar.”