Issues: Air

The National Academy of Public Administration report on the Clean Air Act's new source review ("NSR") program, entitled "A Breath of Fresh Air: Reviving the New Source Review Program," represents a broad and serious rebuke to numerous features of the Bush administration's air pollution agenda for the nation's largest polluting facilities.

NSR is the main public health safeguard that requires power plants and other industrial polluters that are "grandfathered" from existing emissions limits to meet modern pollution standards whenever facilities are overhauled or upgraded in a way that would increase pollution.

NAPA calls for an end to the practice of grandfathering, tougher enforcement of pollution safeguards, and adoption of a comprehensive "multi-pollutant" strategy that includes pollution responsible for global warming. The complete NAPA report is online at www.napawash.org.

• Inadequate manner in which EPA is carrying out the NSR protections;



• Weakening changes to the NSR regulations adopted by EPA on December 31, 2002;



• Weakening NSR rule changes proposed by EPA on the same date to greatly expand the loophole for so-called "routine maintenance" activities;



• Key elements of the Bush administration's air pollution legislation for power plants.

1. Significant Panel Criticisms of Bush Administration Air Pollution Policies

Panel Criticizes Bush Administration's Proposed Expansion of Widely-Abused "Routine Maintenance" Loophole:

The Panel strongly criticizes the recent Bush administration proposed rulemaking to greatly expand one of the most harmful -- and abused -- NSR loopholes. EPA issued its so-called "routine maintenance" proposed rulemaking on December 31; public comments on this proposal are due May 2, 2003. Speaking to this proposal, the Panel observes that "creating wider loopholes will further thwart the intent of Congress for NSR to promote replacing or upgrading old polluting equipment." Most significantly, the report calls for EPA to limit, not expand, the existing routine maintenance loophole.¹

Panel Criticizes Weakening Rule Changes Allowing Industry to Misrepresent CURRENT Pollution Levels so as to Avoid Pollution Cleanup:

The report specifically criticizes a recent Bush administration weakening of the NSR protections by allowing industry to misrepresent current pollution emissions in order to be able to increase pollution without cleaning up those increases.² EPA weakened the NSR safeguards by allowing polluting companies to cherry-pick the highest baseline emissions in the past 10 years, rather than the pollution levels that industry is actually emitting today. The Panel notes that "lengthening to ten years the time period for the pre-change emission baseline...will only broaden the loopholes and aggravate the administrative problems identified by the Panel that have allowed many older high-emitting facilities to avoid the NSR requirements for installing modern equipment."³

Panel Criticizes Weakening Rule Changes Allowing Industry to Misrepresent FUTURE Pollution Levels so as to Avoid Pollution Cleanup:

Polluting facilities are subject to NSR whenever a facility change takes place that increases pollution. The law applies no matter why the pollution grows as a result of a change. NAPA criticizes another Bush administration weakening of the NSR safeguards that would let polluting companies elude this requirement by exempting pollution increases that emitters attribute to growth in demand for their product or service. NAPA condemns this "demand growth" rule change, noting that "[a] source should not be allowed to make deductions from actual emissions for growth in market demand with no effective oversight to assure accuracy, as EPA's final 2002 rule has allowed despite the concerns expressed by EPA in 1998 over this issue."⁴ The Panel notes the EPA plan "would seem to exacerbate further the public policy and administrative problems that have resulted from [industry] self-policing and inadequate reporting of information under EPA's past NSR regulations."⁵

Panel Criticizes Bush Administration Policies Allowing Industry Self-Policing:

The Panel repeatedly criticizes EPA's reliance on industry self-policing, noting serious enforcement problems that have resulted. The authors say EPA made the problems worse by relying even more heavily on industry self-policing with EPA's weakening final changes to the NSR rules, and EPA's recent proposals to weaken NSR even further with its routine maintenance rulemaking.⁶

Panel Criticizes Bush Administration Policies Allowing Industry to Hide Important Pollution Information From the Public:

The report criticizes yet another EPA weakening of the NSR safeguards, whereby EPA allows industry to keep important air pollution data on-site at facilities and shielded from the public. The Panel strongly criticizes the lack of basic air pollution data available to the public, and notes disapprovingly that EPA is making a bad situation worse and allowing industry to self-police and maintain inadequate records.⁷

Panel Criticizes Broad Loophole Allowing Companies to Claim Credit For Past Cleanup so as to Avoid Future Cleanup Requirements:

The Panel criticizes a loophole in the NSR regulations allowing industry to avoid modern pollution control standards by pointing back to pollution reductions that occurred up to 5 years earlier. The report concludes the practice as carried out by EPA (called "netting") conflicts with Congress' intent that modernization and expansion be linked to pollution prevention or upgrades to cleaner equipment so that air quality will continue to improve."⁸ The Bush administration's recent weakening changes to NSR actually exacerbate this problem even further by extending netting to a 10 year period, thereby worsening the problems criticized by the report.

Panel Challenges Bush Administration Testimony on Basic Purpose of NSR Rules:

"The Panel believes that [NSR requirements for existing sources] are, without question, designed to lead to an overall reduction in emissions from existing sources."⁹ This unequivocal statement stands in stark contrast to this astonishing testimony from the political head of the Bush administration's EPA air program before the Senate Environment & Public Works committee: "[NSR] does not really do anything to reduce emissions from existing sources...."¹⁰ This disparaging view from a top EPA official, echoing industry views, was soundly rejected by the NAPA panel.

2. Significant NAPA Report Recommendations

End Grandfathering:

Congress should end grandfathering of major sources with high emission levels as soon as possible, but no later than within the next ten years. Facilities that have not obtained an NSR permit since 1977 should upgrade equipment and lower pollution to levels achievable by modern pollution control measures.¹¹

Vigorously Enforce Clean Air Protections:

The Panel urges EPA and the Department of Justice to investigate and enforce violations of NSR, especially at existing facilities such as power plants and oil refineries that have widely broken the law. The Bush administration has filed no new enforcement case against a power plant or oil refinery for NSR violations since taking office.¹² Public records reveal dozens of potential NSR violations investigated by the prior administration that the Bush administration has not yet prosecuted.

Goal of Any NSR Reform Should Be Achievement of Protective Pollution Levels Corresponding to Adoption of Modern Pollution Controls by All Facilities and Equipment:

The Panel reaches the important conclusion that any discussions about reforming NSR to become more of a "performance-based system" must first ensure that pollution limits are based on performance levels achievable by fully protective, modern pollution control measures. The Panel states that any regulatory alternatives should deliver performance levels achieved by "Best Available Control Technology" (BACT) and "Lowest Achievable Emission Rates" (LAER), and further that those performance levels should improve over time -- in order to protect public health and air quality.¹³ The report makes clear that any reforms to NSR for existing sources must be part of a package that achieves BACT and LAER performance levels as a condition of movement to a different type of performance-based system.

Multi-Pollutant Legislation to Clean Up Power Plants Should Control Carbon Pollution:

In stark contrast with the Bush administration's air pollution legislation for power plants, which ignores carbon pollution and worsens the problem of global warming, the report declares that any multi-pollutant cap-and-trade system should cover emissions of CO2, the main cause of global warming. The Panel notes that power plants account for one-third of the nation's CO2 pollution; that plants built before 1972 account for about 40 percent of nationwide carbon pollution; and that CO2 pollution continues to increase each year. Echoing arguments of the opponents of the Bush administration's so-called "Clear Skies" legislation, and proponents of 4-pollutant legislation such as Senator Jeffords' Clean Power Act, the Panel notes that regulating CO2 is more cost-effective, prevents the stranding of investments made to meet other air pollution objectives, provides certainty and a predictable planning horizon for industry, and combats the serious problem of global warming.¹⁴

Notes

1. Id. at 38-39.

2. National Academy of Public Administration, "A Breath of Fresh Air: Reviving the New Source Review Program," April 2003, at 37 ("NAPA Summary Report").

3. NAPA Summary Report, at 37.

4. Id.

5. Id.

6. NAPA Summary Report at 37-39.

7. See e.g., id. at 37.

8. Id. at 38.

9. Id. at 12 (emphasis in original).

10. Testimony of Jeffrey Holmstead, Assistant Administrator for Air and Radiation, U.S. EPA, Joint Hearing on New Source Review by U.S. Senate Committee on Environment and Public Works and Committee on the Judiciary, July 16, 2002.

11. NAPA Summary Report, at 32-33.

12. The Dominion Power NSR settlement announced today by EPA, New York and four other states was a case initiated and settled under the Clinton administration in 2000, only to be delayed by the Bush administration's concerted efforts to undermine NSR protections and NSR enforcement.

13. NAPA Summary Report at 33-34.

14. Id. at 31-32.