Issues: Air

On December 31, 2002, the Bush administration announced its intention to weaken a key Clean Air Act safeguard to the point where it will be meaningless. The Environmental Protection Agency proposed two new gaping loopholes to the Clean Air Act's "new source review" rules that would allow owners of the country's oldest and dirtiest power plants, oil refineries and factories to significantly increase air pollution without having to clean up. State governments would lose vital tools to control smog, soot and toxic pollution. National park managers would lose their ability to protect our most prized natural treasures from haze and acid rain. The public would lose its right to ensure that industrial polluters in their communities protect local air quality.

Together, the proposed rule changes represent the most dramatic rollback of our clean air laws since Congress enacted them more than 30 years ago. The administration is pursuing these changes at the behest of corporate polluters that made lavish campaign contributions while lobbying for a rollback of health protections they have been violating.

The Clean Air Protections Under Attack

The new source review program protects the public from air pollution generated by approximately 17,000 large industrial facilities across the country, including coal-fired power plants, oil refineries, chemical factories, cement kilns, paper mills and copper smelters. These sources emit the majority of the air pollution that causes smog, soot, haze and acid rain. The new source review protections of the Clean Air Act require the owners of these facilities to adopt effective pollution cleanup measures when air pollution increases significantly as a result of new construction or other facility changes. A facility owner also must show that any increased pollution would not harm air quality at any national park or any area where pollution levels already render the air unhealthy to breathe. Finally, the program requires even stronger health protections if the plant is located in an area where the air is unhealthy, which includes most large U.S. cities.

According to EPA, the new source review program requirements that apply to plants located in areas that meet federal air standards have "kept more than 300 million tons of pollution out of the air over the life of the program." The agency notes that "this calculation does not include many direct and indirect environmental benefits that the ... program provides that are difficult to quantify,"¹ nor does it include the many millions of tons of pollution prevented in the dirtiest areas of the country that do not meet national health standards.

The Bush Administration's Plan to Weaken Clean Air Protections

If allowed to take effect, the administration's proposed rule changes would allow industrial facilities to significantly increase air pollution without meeting any of the pollution control requirements described above as long as the facility modifications qualify for either of two new broad exemptions.

The first exemption covers facility modifications that cost less than a certain percentage (as high as 20 percent, depending on the industry) of the cost of the entire facility -- as much as billions of dollars -- or the cost of specific "units," such as boilers, which cost tens of millions to hundreds of millions of dollars.

Even if a pollution-increasing modification costs more than 20 percent of the cost of the entire facility or unit, the plant still would not have to clean up their pollution if it met the criteria of the second proposed exemption. This one would allow unlimited pollution increases from replacing pieces of equipment -- no matter the size or cost -- with other pieces that serve the same function.

Major plant changes that cost tens or even hundreds of millions of dollars and increase pollution by hundreds or thousands or tens of thousands of tons would be falsely labeled "routine maintenance," and thereby exempted from the standards and protections that the Clean Air Act requires for changes that increase pollution.

These proposed loopholes violate plain Clean Air Act language that subjects any pollution-increasing change to the statute's clean-up standards. The Bush administration has not identified a single provision or word in the Clean Air Act that authorizes these exemptions. Even EPA's assistant administrator for air, Jeffrey Holmstead, has conceded that the first, cost-based exemption is "legally and practically somewhat problematic."² These exemptions are a radical departure from the Clean Air Act as well as EPA rules, policies and enforcement practices over the past three decades.

Legalizing Pollution that is Illegal Today

In the 1990s, EPA discovered that electric utility and oil companies had been carrying out massive, pollution-increasing construction projects to extend the operational lifetimes of the oldest, dirtiest power plants and oil refineries in the country.³ The power and oil companies had carried out these projects without adopting modern pollution controls or examining the impact of the increased pollution on downwind communities and parks, emitting hundreds of thousands of tons of illegal pollution.

EPA, the Justice Department, states and public health groups have sued the companies for widespread new source review violations. If the Bush administration's proposed rule changes take effect, however, the same types and magnitude of violations that these groups are prosecuting today would be rendered legal and acceptable in the future -- without regard for public health or air quality. For example, an NRDC analysis of Clean Air Act violations at the Tennessee Valley Authority power plants found that all of them would have been acceptable and exempt from cleanup standards under the Bush administration's two proposed exemptions even though the violations were responsible for tens of thousands of tons of pollution.⁴

The Motive for the Rollbacks

It is no coincidence that the new exemptions would legalize the types of activities that underlie EPA's enforcement cases. The published notice of the administration's rulemaking states that "[t]hese proposed changes reflect the EPA's consideration of the President's National Energy Policy."⁵ After contributing millions of dollars to the Bush campaign in the 2000 election cycle, the companies subject to EPA's violation notices enjoyed extraordinary access to Vice President Cheney and the other White House officials charged with writing the energy plan.⁶ In their communications with these officials, the new source review violators and other companies urged the administration to weaken the rules to exempt the activities that polluters had been undertaking without regard for the Clean Air Act's pollution control requirements.⁷ Not surprisingly, the resulting White House policy directed EPA to begin the "reform" process that resulted in the proposed exemptions described above.⁸

In a draft study funded by EPA, the National Academy of Public Administration has suggested that if EPA really wanted to streamline new source review requirements without sacrificing air quality, it should simply require that all large pollution sources adopt modern pollution controls within five years.⁹ EPA's rejection of that approach exposes the fact that the proposed rules have nothing to do with cutting red tape and everything to do with letting polluters off the hook. Far from providing greater clarity and reducing complexity, the new exemptions actually multiply complexity significantly. They also provide no clarification of the existing "routine maintenance" exemption, which remains unchanged and available as a third exemption for polluters to escape cleanup.

The Impact of the Rollbacks

The proposed rules would have a profoundly negative impact on public health and air quality. The failure to control pollution increases at the 51 power plants originally subject to the enforcement cases alone causes 4,300 to 7,000 premature deaths -- and 107,000 to 170,000 asthma attacks -- each year.¹⁰ Virtually every pollution-increasing change at issue in those lawsuits would be exempt from control under the administration's proposed rules, and those exemptions would apply to the approximately 17,000 major sources of air pollution across the country.

Notes

1. Memorandum from Karen L. Blanchard to William T. Harnett, "Benefits of the Prevention of Significant Deterioration Program" (October 17, 2001), at 1 (emphasis in original).

2. Remarks by Jeffrey Holmstead before House of Representatives staff on December 16, 2002. Statement recorded in contemporaneous notes by a staff member of the Natural Resources Defense Council.

3. One such project at a Tennessee Valley Authority coal-fired power plant involved cutting a 25-foot hole in the boiler wall at a location 10 stories off the ground and constructing a monorail line and trolley system to transport old components out of a boiler. The undertaking employed more than 70 workers and cost over $10 million.

4. Even the huge TVA construction project involving the monorail would be exempt from clean-up measures as "routine maintenance." The replacement cost of the unit in question is $430 million. The replacement cost of the entire TVA plant would be nearly $1.3 billion. The cost of the project, while astronomical, amounts to only 2.5 percent of the replacement cost of the unit, and 0.83 percent of the replacement cost of the entire plant -- a testament to the outlandish approach of the first proposed exemption. EPA has proposed to exempt projects that cost as much as 20 percent of the entire unit -- or even the entire plant -- in question. 67 Fed. Reg. at 80298/3.

5. 67 Fed. Reg. at 80290.

6. See NRDC press release, 5/21/02.

7. See http://www.nrdc.org/air/energy/taskforce/doc150.html; http://www.nrdc.org/air/energy/taskforce/doc6368.html.

8. Report of the National Energy Policy Development Group, ch. 7, at 14 (May 16, 2001).

9. "EPA Presses Group to Revise Agency-Funded Report on NSR Reforms," InsideEPA (March 25, 2003).

10. Clean Air Task Force, Power to Kill (July 2001). See also Abt Associates, Inc., The Particulate-Related Health Benefits of Reducing Power Plant Emissions (October 2000); Clean Air Task Force, Death, Disease, and Dirty Power: Mortality and Health Damage Due to Air Pollution from Power Plants (October 2000) (posted at www.cleartheair.org).