The Iron & Steel MACT rule being developed by the U.S. Environmental Protection Agency (EPA) will have an estimated annual cost to the foundry industry of over $300 million. This regulation threatens the viability of U.S. foundries, and in turn undermines our nation's manufacturing base.

Under the Clean Air Act, EPA is required to regulate emissions of hazardous air pollutants through technology-based emission limits, called "Maximum Achievable Control Technology" (MACT) standards. The Iron & Steel Foundry MACT rule is due to be finalized by August 2003.

The American Foundry Society (AFS) supports our nation's environmental goals and has worked side-by-side with EPA to develop appropriate and achievable regulations. For the Iron & Steel MACT, AFS worked for more than 10 years to assist EPA in understanding the foundry industry and the technical aspects of foundry processes. AFS has assisted with data collection efforts, provided foundry tours, conducted technical seminars and interacted with EPA staff on a regular basis.

The proposed Iron & Steel MACT standards are overly burdensome, too expensive, inappropriate and provide only minimal environmental benefits. EPA must undertake the required analyses and revise the Iron & Steel MACT to reduce small business impact, justify compliance costs and ensure that the standards are feasible.

Unfortunately, the proposed Iron & Steel MACT rule serves as prime example of what is wrong with our federal regulatory process. The following are the most egregious problems with this rulemaking:

• Misrepresented Small Business Impact: EPA declared that this rule would not have a significant impact on a substantial number of small entities. AFS disagrees, since nearly half of the foundries impacted by this rule are small businesses. EPA should have undertaken the appropriate small business analysis as required by the Regulatory Flexibility Act.
• Underestimated Costs: EPA estimated that the rule would have an annual cost of approximately $27 million. AFS numbers are closer to $300 million! This rule is a "significant regulatory action," and EPA should have undertaken the regulatory alternatives analysis as required under Executive Order 12866.
• Economically Unjustified Requirements: Many of the provisions in this rule impose significant costs for minimal environmental gain and cannot be justified by the agency. For example, one plant, which is also a small business, will incur $8-9 million to convert a single piece of equipment as required by this rule for an increase of only two percent control efficiency.
• Technically Infeasible Standards: Many of the requirements included in this rule are inappropriate for the foundry industry and/or unattainable. In some cases, the standards could even be potentially dangerous for foundry workers. Such standards should not be allowed.
• EPA Staff Retirements: The two principle EPA staff for this rule retired within a year of proposal. Understanding the foundry industry and institutional knowledge of the rulemaking were lost at a critical juncture on the process, resulting in a considerably flawed and inappropriate rule.

For more information, contact Amy Blankenbiller at the AFS Washington Office at 202/842-4864.