William Reilly : Rebuilding the EPA From the Ashes Into a Political Force to Reckon With

Environmental Protection Agency Administrator William K. Reilly is, like President George Bush, a Yale man. Like Bush, he is well-connected with the Ivy League social Establishment, comfortable with the foundation set and big business. Like Bush, he can seem patrician and down-to-earth at the same time. Unlike Bush, he has a lifelong record of concern for the environment.

Taking over the EPA after Ronald Reagan’s attempts to destroy it, Reilly, 51, had nowhere to go but up. Most Washington observers now agree that he has, in fact, accomplished much. A comprehensive new Clean Air Act has been passed; Superfund cleanups and environmental prosecutions have increased; wetlands protection has been strengthened; a ban on CFCs has been announced, and many lower-profile ecological rules enacted.

In 1970, Reilly joined the Council on Environmental Quality, forerunner to the EPA, as a staff aide. Since then, he has worked exclusively in conservation issues. When Bush picked him to run the EPA in 1989, Reilly was director of the Conservation Foundation and president of the World Wildlife Fund.

Reilly has brains and good looks--an unusual combination in everyday life and exceptionally rare in politics. Because of his photogenic features, right-wing opponents in the White House call him the “rock star.” Like many Ivy League types in the Bush orbit, Reilly sometimes exhibits a slightly superior air, yet is concerned with being seen as a regular guy. In congressional testimony, he seems knowledgeable but stiff; even in casual circumstances, he does not relax easily. His jokes, like Bush’s, often fall flat--inability to deliver a joke is a key indicator of patrician-white-male disease. Not many prominent environmentalists have “Who’s Who” entries that read: “Clubs: Washington (Washington), Cosmos (Washington), University (N.Y.C.).”

Reilly has two daughters with his wife of 25 years, Elizabeth, known as Libbie. Through mutual friends and family connections, Bill and Libbie Reilly became close to George and Barbara Bush--the four often step out together. The Reillys are also regular guests at White House state dinners, Washington’s most coveted invite. The administrator has infuriated opponents by his ability to get the President on the phone--end-running the formal chain of command.

Question: The major environmental product of the first two Bush years is the new Clean Air Act. Now that the dust has settled, are you happy with it?

Answer: It’s a very sophisticated law that, in addition to imposing tougher air- pollution standards, introduces several important new ideas. For instance, we have never before had an absolute cap on a category of pollutants. Under the bill, all future electric power generation will have to increase without adding to the total output of sulfur dioxide (main cause of acid rain). In fact, sulfur-dioxide emissions must come down 50%. The idea of a permanent limit on a type of emission is a milestone. It says Americans will have to learn to fashion a different kind of economic growth.

Another innovation is emissions trading. This means that a company that overcontrols emissions using new technology (cutting pollution more than the law requires) will be able to gain some economic advantage--which, I promise you, will inspire lots of overcontrol. Pollution controls that incorporate free-market incentives are one of the most promising new areas of ecological protection.

Q: Both those ideas are innovations, but comparatively easy for industry to swallow.

A: Then consider the provisions for mandatory development of alternative fuels. They were strongly resisted by virtually all present economic interest groups, especially the oil industry. Alternative fuels (non-petroleum products such as methanol) will reduce air pollution, with the side benefit of forcing our energy economy to diversify.

Q: When will people see tangible benefits in cleaner air?

A: If you live in the Northeast, you should notice visible improvements by the late 1990s, since the bill calls for 5 million tons of sulfur dioxide (emissions per year) to be eliminated by 1995. Within five years, we will also achieve the first 16% of ozone reductions, which is probably a level that people who live in large cities will notice. (Emission of) airborne toxic chemicals should be cut by a third by the end of next year, and 50% by 1995. That will translate into an immediate reduction in the stuff that’s getting into surface waters . . . . We will not have to wait until our children are grown for clean air to be a reality.

Q: When should Southern California notice tangible clean-air benefits?

A: Southern California is doing more in terms of commitment and sacrifice than any other area of the country. But the problem is so much worse there. If Southern California can bring on alternative-fuel cars faster than other places (the current Air Quality Management District plan), residents should see some improvements toward the end of the decade. I would remind Los Angelenos they have already seen significant improvements in air quality over the last 20 years, even as population and the number of cars have skyrocketed.

Q: Because of George Bush’s campaign promises, there was enormous pressure on him to deliver a major piece of environmental legislation. With the Clean Air Act, he has. So can the President now ignore environmental issues?

A: The President has continued to propose significant environmental reforms, mainly in the foreign-policy arena. Last summer he proposed a worldwide agreement to arrest the loss of tropical forests. Negotiations have gone well on that idea with the Brazilians and others, and we hope to sign that treaty next summer, in Rio, at the United Nations Conference on Environment and Development.

President Bush has also proposed one of the two or three things I think he will be remembered for in environmental affairs, his Enterprise for the Americas program. It is expected to generate $400 million a year in money for forest preservation, parks development and similar projects in Latin America. This is the consequence of President Bush offering to renegotiate some $7 billion in debt owed to the United States if the gain is used for environmental preservation. This approach integrates trade, investment, environmental protection and the large burden of debt that has been hanging over those countries, distracting them from social spending. People have not previously thought of economic development and environmental protection in the same compartment of their heads. If this is successful, many other countries may copy our approach.

Q: Now that you’ve been running the EPA for two years, what has changed about your perspective?

A: One thing you learn about Washington is how many power centers have to be consulted and mollified to get policy made. And that the system can become paralyzed when confronting issues that require sacrifice or changed habits.

Q: Like what?

A: Take improved auto-fuel efficiency. Polls indicate the public supports the idea, but the record of cars purchased tells a different story. Exerting leadership in the face of such conflicting desires is much trickier than I would have guessed.

Q: Energy use and environmental damage are linked. Last year, when pushing the Clean Air Act, you worked closely with the Department of Energy--cited by insiders as one reason the bill succeeded. This year, when the DOE and White House were compiling the National Energy Strategy, the EPA is said to have been frozen out--cited by insiders as one reason the strategy is so disappointing.

A: The EPA was involved with developing the energy strategy. We were consulted and took positions.

Q: Then what do you think of the strategy--which does not advocate higher auto gas-mileage standards?

A: You have to remember we had two strikes against us. One is the economic circumstances of the auto industry. It’s a distressed industry. Right now, auto makers already have many federally imposed challenges in improving emission-control equipment, developing alternative-fuel vehicles, eliminating CFCs from auto air conditioners. There was a reluctance to add to their burdens.

Q: Nor does the strategy advocate higher energy taxes, which environmentalists and many economists favor for ecological and national-security reasons.

A: Most developed countries tax energy more highly than we do, and it does not appear to harm the competitiveness of nations like Germany and Japan. But after the political firestorm that attended the proposal of a 25-cent-per-gallon gasoline tax last fall (during the budget summits), that option effectively disappeared from the realm of possibility.

Q: Historically, presidents, even Jimmy Carter, rarely meet with EPA officialdom. One aspect of your effectiveness at EPA has been your personal closeness to the President. What has your access been like lately?

A: Very good. I was with him the day before yesterday, talking with environmental groups about free trade with Mexico. We agree that any free-trade agreement must have significant environmental constraints. It should not only insure there is no falloff in our own standards regarding toxic wastes and endangered species and other factors, but give the Mexicans some tools to ratchet up their own environmental protection for their 85 million people. Ten years ago, the environment would not have featured in negotiations over the great world issues like war, peace and trade.

Q: Much as you get on with the President, you’ve been described as at odds with Chief of Staff John Sununu. One comment now heard is the Clean Air Act showed that last year Bill Reilly was ascendant, whereas this year’s National Energy Strategy shows Sununu is ascendant and can block environmental initiatives.

A: I talk to John Sununu three or four times a week. Incidentally, my predecessor (EPA Administrator Lee Thomas) could not get his phone calls returned by (Ronald Reagan’s Chief of Staff) Don Regan. Sometimes Gov. Sununu has a tougher job than I do, because he has to reconcile various competing interests. I only have to advocate for the environment.

Q: What is your relationship with environmentalists like?

A: Having come from that community, I think environmental advocates have not played the Administration in as sophisticated a way as I had hoped. But they’ve been very constructive on free trade with Mexico, and after the Clean Air Act was finally signed, in crediting the President with making it possible. The Environmental Defense Fund played a central role in formulating the Administration’s program for sulfur-dioxide emissions trading.

Q: Roughly a year ago, when public debate began to focus on cutting greenhouse-gas emissions, Sununu is said to have told President Bush the price of global-warming control would be a catastrophic $100 billion a year. Studies now emerging suggest that when you factor in the energy saved by global-warming reductions, greenhouse gases could be controlled fairly cheaply--perhaps even at a profit. Do you agree?

A: The National Academy of Sciences has said that 10% to 40% of greenhouse gases could be reduced without serious economic disruption, possibly with net savings. I accept that estimate. I tell you why I believe that, and why economists sometimes miss it: I once served on the board of an electric-power company. When the company had great trouble winning permission to locate plants for new generating capacity, it turned to conservation, and found the opportunities were enormous. Through insulation, installing boilers, financing new conservation equipment, it was surprisingly easy to cut fuel use, and thus also greenhouse-gas emissions, in a way that enhanced the bottom line.

Q: But most companies use energy.

A: There are similar opportunities . . . . A program here at EPA, called Green Lights, demonstrates to companies they can get substantial reductions in their electric bills at no loss in lighting quality and at a profit . . . . If companies took advantage of all profitable energy conservation opportunities in the lighting sector alone, you could get the equivalent carbon-dioxide reduction of the removal of 42 million cars from the road--a third of the automobile fleet . . . .