President Obama on Friday requested that the Environmental Protection Agency (EPA) withdraw its controversial draft Ozone National Ambient Air Quality Standards, saying he did not support asking state and local governments to begin implementing a new standard that is due to be reconsidered again in less than two years.

The EPA on July 11 submitted a draft final rule, “Reconsideration of the 2008 Ozone Primary and Secondary National Ambient Air Quality Standards,” to the Office of Information and Regulatory Affairs (OIRA) for review. But scientific work related to a Clean Air Act-mandated 2013 review of national ambient air quality standards has already begun, and therefore “issuing a final rule in late 2011 would be problematic,” OIRA Administrator Cass Sunstein said in a letter to EPA Friday.

Obama’s decision was welcomed by business groups, including the American Petroleum Institute (API), which said the proposed rules could have cost jobs.

“The President’s decision is good news for the economy and Americans looking for work,” said API. “EPA’s proposal would have prevented the very job creation that President Obama has identified as his top priority. Ozone levels and air quality continue to improve under current regulations, and our industry is committed to making the air we all breathe cleaner while creating new jobs.”

EPA’s proposed rule would have placed “almost all of the country” in non attainment areas not meeting air quality standards, according to API spokesman Howard Feldman. Such designations would have threatened oil and gas exploration activities, inhibited the modification and expansion of existing refineries, and required stringent reformulation of fuels to make them cleaner, he said.

The current standard protects the environment and human health “and there was no compelling reason to revise that standard,” said the Texas Commission on Environmental Quality (TCEQ). While TCEQ welcomed Obama’s decision, it questioned “how states can move forward with the existing standards, including designations for existing attainment areas and requirements for state planning purposes. The EPA needs to act quickly to clarify these issues and questions in order to bring certainty to the public and states as well as the regulated community.

“We would hope that this signals that the EPA is beginning to consider science and common sense in their decisions, and we would hope that they would apply this to other regulations, such as the proposed Cross-State Air Pollution Rule [see NGI, Aug. 29], which will result in rolling blackouts and job losses here in Texas as well as in other states.”

The American Coalition for Clean Coal Electricity (ACCCE) called on the administration to reconsider other EPA regulations for power plants, including the Cross-State Air Pollution Rule and the Utility Maximum Achievable Control (MACT) rule, which ACCCE CEO Steve Miller said “will cause power plants to be shuttered, energy cost to increase and jobs to be lost.”

Other business organizations saying they supported Obama’s decision included the American Chemistry Council, the National Association of Manufacturers and the U.S. Chamber of Commerce, which called it “a big first step in what needs to be a broader regulatory reform effort.”

House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) said they too hoped the administration’s reversal on EPA ozone rules was the first of “similar steps to prevent EPA from shipping our jobs overseas.”

But Obama’s decision might not be an indication of the regulatory tide turning in the energy industry’s favor, according to energy analyst Christine Tezak of Robert W. Baird & Co.

“While it is one of the rare defeats the EPA has suffered in its ambitious regulatory agenda, we’re not yet convinced that this represents a read-through that the upcoming final rule on utility air toxics (Utility MACT) will be substantially weaker than proposed,” Tezak wrote.

EPA’s recently announced list of proposed standards to reduce air pollution from oil and natural gas drilling operations, with particular attention paid to shale development operations, are still on the table (see NGI, Aug. 1). EPA recently announced that hearings on those proposed standards will be held Sept. 27, 28 and 29 in Pittsburgh, Denver and Arlington, TX.

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