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MemoMemorandumClinton · D Quiet signal

Presidential Memorandum

Implementation of Revised Air Quality Standards for Ozone and Particulate Matter

Energy & EnvironmentEnergy & EnvironmentEconomy & LaborEconomy & LaborFederal WorkforceFederal Workforce

In simple terms

President Clinton directed the EPA Administrator to implement new ozone and particulate matter air quality standards in a flexible, cost-effective manner. The memorandum establishes specific implementation principles, timelines for rulemaking, and an attached interagency plan for transitioning to stricter 8-hour ozone and new PM2.5 standards while minimizing burdens on states and businesses.

Federal Register Open PDF 62 FR 38421

Record & deadlines

  1. Signed

    Signed by the President

  2. FR published

    Published in the Federal Register · 62 FR 38421

    Federal Register PDF

  3. EPA complete PM criteria review and determine whether to revise or maintain standards

  4. Earliest PM2.5 nonattainment designations based on monitoring data

  5. Three years PM2.5 monitoring data available from earliest monitors

  6. 8-hour ozone nonattainment designations; areas attain 1-hour standard for transitional eligibility

  7. EPA issue unclassifiable designations for PM2.5

  8. Complete all necessary guidance and rulemaking

  9. EPA issue final interstate ozone rule

  10. EPA publish action identifying 1-hour standard attainment areas

  11. EPA develop and provide PM review plan and schedule to CASAC

  12. EPA propose section 172(e) rulemaking for PM10 backsliding prevention

  13. EPA propose rule for interstate ozone pollution (OTAG region)

Market exposure

Policy exposure mapping — not investment advice. Illustrative public companies are incomplete and not recommendations.

Sectors

Oil & gasSteel & aluminumOther industrial

Mechanisms

Subsidy / incentiveProcurementLicensing

Role pressure

  • MixedDownstream manufacturer — Cost cap of $10,000/ton and regional cap-and-trade options provide flexibility, but new 8-hour ozone and PM2.5 standards expand regulated universe
  • ProtectiveProject developer — Transitional classification and streamlined NSR reduce planning burdens for areas in regional strategies; early action rewarded
  • ProtectiveEquipment supplier — EPA funds ~1,500 PM2.5 monitors and speciation analysis, creating direct procurement opportunity
  • UncertainDomestic producer — Clean Air Investment Fund concept allows payments in lieu of controls above $10,000/ton, but final structure unspecified

Geographies

US

Exposure dates

  • — Complete all necessary guidance and rulemaking
  • — EPA complete PM criteria review and determine whether to revise or maintain standards

Illustrative public companies

Curated watchlist matches by sector/role — incomplete; not a recommendation.

MMM3MAAAlcoaAAPLAppleCATCaterpillarCENXCentury AluminumLNGCheniere EnergyCVXChevronCLFCleveland-CliffsCOPConocoPhillipsXOMExxon MobilFCXFreeport-McMoRanGEVGE VernovaHONHoneywellNUENucorSHELShellSLBSLBSPYSPDR S&P 500 ETFTSLATeslaXUnited States Steel

Confidence: medium · Policy alerts

Key directives

  • Maximize common sense, flexibility, and cost effectiveness in implementation
  • Respect existing state and business clean air agreements
  • Reward early action by state and local governments
  • Complete PM periodic review by July 2002 before any nonattainment designations
  • Minimize paperwork and reduce current requirements
  • Complete all guidance and rulemaking by December 31, 1998
  • Establish PM2.5 monitoring network with ~1,500 monitors
  • Encourage regional cap-and-trade approaches for ozone and PM2.5
  • Limit control costs to under $10,000 per ton
  • Work with DOD on military training exemptions for smoke/obscurants
  • Work with USDA on agricultural issues
  • Develop transitional classification for certain 8-hour ozone areas

Who is ordered

What to expect

Immediate

  • Memorandum directs EPA to incorporate attached implementation plan
  • EPA to publish action identifying 1-hour standard attainment areas within 90 days
  • EPA to develop PM review plan for CASAC within 90 days

Near term (90d)

  • EPA to publish 1-hour standard phase-out action
  • EPA to propose rule for interstate ozone pollution (September 1997)
  • EPA to propose section 172(e) rulemaking for PM10 (Fall 1997)
  • EPA to develop and provide PM review plan and schedule to CASAC

Long term

  • All guidance and rulemaking to be completed by December 31, 1998
  • EPA to issue final interstate ozone rule by September 1998
  • PM2.5 unclassifiable designations in 1999
  • 8-hour ozone nonattainment designations by 2000
  • PM2.5 nonattainment designations beginning 2002
  • PM criteria review completion by July 2002
  • PM2.5 SIPs due 3 years after designation
  • Up to 10 years plus extensions for attainment of revised standards

Risks & tensions

  • Tension between health-based standards and cost considerations: Clean Air Act prohibits cost consideration in setting standards, but implementation emphasizes cost-effectiveness
  • Legal uncertainty: EPA initially interpreted Subpart 2 would not apply, then reversed after comments—potential litigation risk
  • Scientific uncertainty acknowledged for PM2.5 health effects may undermine standard durability
  • Regional vs. local control tension: states may resist federal regional cap-and-trade impositions
  • Military exemption for smoke/obscurants may create precedent conflicts with environmental groups
  • Transitional classification creates implementation complexity and potential gaming by states
  • Bump-up provisions suspended for 8-hour standard may delay accountability for persistent nonattainment
Presidential Memorandum: Implementation of Revised Air Quality Standards for Ozone and Particulate Matter · Executive Orders