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Storm Water Exemptions for Oil and Gas Exploration Should Also Apply to Construction

In September, EPA will propose a rulemaking to determine whether small oil and gas exploration sites of one to five acres should be permanently exempted from Phase II permitting rules and regulated in alternative ways. EPA will weigh the economic impacts of the regulations against the risks that oil and gas exploration activities pose to water quality.

In the meantime, the agency has extended the Phase II rule deadline for oil and gas exploration sites for another six months.

When a similar cost-benefit analysis is applied to residential construction sites, “the burden of compliance is very high, especially on small businesses, while the risk to the environment is very low,” NAHB said in its comments. Home buyers shoulder the burden, too, since costs associated with the regulations can raise the price of housing by thousands of dollars per home. For every $1,000 increase in price, 400,000 people are priced out of the housing market.

EPA’s original analysis of the economic impact of Phase II storm water regulation on home builders contained several inaccuracies, resulting in a significant underestimate of compliance costs for the residential construction industry. Incorrect assumptions include:

• Underestimating the number of inspections required by Phase II operators by at least one-half
• Incorrectly assuming that 15% of all small construction sites would be waived from the storm water regulations. In reality, few states have waivers available. Despite estimating that more than 19,000 waivers would be granted, EPA has received less than 200 waiver applications since 2003.
• By incorrectly defining a construction “site,” the Phase II economic analysis omits an entire class of construction site operators, resulting in an additional $544 million in administrative costs.

Reconsidering whether Phase II rules should apply to small construction sites is timely and warranted, and NAHB will continue to push for needed change. When builders converge on Capitol Hill on April 13 for this year’s Legislative Conference, they will tell their members of Congress to direct EPA to reform the federal storm water permit program.

For more information on NAHB’s storm water comments, contact Amy Ericksen at 800-368-5242, x8662.

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