Decision Near on Air Rule Review

As part of its sweeping effort to stimulate more energy supply, the Bush administration is scheduled to release by Friday its reassessment of a key tool aimed at reducing air pollution from power plants, factories and other major polluters.

In its potential ramifications for public health, the outcome could dwarf the environmental issues, such as Arctic oil drilling and global warming, that have made headlines in the administration’s first seven months.

At issue is a provision of the 1970 Clean Air Act called “new source review.” When a company proposes to put a new source of pollution on line by building a new plant or retooling an old one in a way that significantly increases its pollution output, it is required to use state-of-the-art technology to reduce pollution to a minimum.

Environmentalists warn that the quality of the nation’s air hangs in the balance of the administration’s reassessment. If the administration lets down the nation’s guard, they argue, the air over many of America’s cities will be dirtier and thousands of people will die prematurely from the noxious chemicals that will be allowed into the air.

Utility companies respond that the reliability of the nation’s electricity supply is at stake. If the nation wants dependable electricity, they argue, the government must not burden power plants with excessive and costly regulatory demands. Strict enforcement of existing law, said Scott Segal, spokesman for a coalition of power companies, “has a profound, chilling effect” on the addition of energy-efficient generating capacity.

Under Presidents Reagan and George Bush, the Environmental Protection Agency did not enforce the law vigorously, according to EPA officials and outside observers. Although companies generally installed up-to-date pollution-control equipment on new plants, they did not always do so when modifying old ones.

Only in the final years of Bill Clinton’s presidency did the EPA and Justice Department crack down on some longtime violators, chief among them the older coal-fired power plants that are responsible for much of the nation’s air pollution. They pressed legal action against companies that they singled out as the most recalcitrant.

Three of the cases have been settled. If the remaining eight are settled on the same terms, emissions of sulfur dioxide would be reduced by at least one-quarter nationwide, said Eric Schaeffer, EPA director of regulatory enforcement. Sulfur dioxide is one of the chief pollutants from coal-fired plants.

If the 51 power plants operated by the companies named in the suits installed modern pollution controls, between 4,300 and 7,000 premature deaths from respiratory and cardiac problems and tens of thousands of asthma attacks would be prevented annually, according to a study by the Clean Air Task Force, an environmental group.

“As an issue that affects the health of Americans, this is bigger” even than President Bush’s rejection of the Kyoto accords on global warming, said John Coequyt of the Washington-based Environmental Working Group.

When the EPA opened its 90-day study of new source review, its administrator, Christie Whitman, said she believed the procedure for reviewing new pollution sources should be revamped.

“I have heard too many instances where we interpreted it so literally in the field that we, in fact, are hindering environmental progress,” Whitman told the National Assn. of Manufacturers in June. Industry officials have said the provision is so onerous that it has become a deterrent to plant upgrades.

Whitman announced at a Senate hearing late last month that she hoped to win passage of a new strategy for fighting air pollution from power plants that could eliminate the need for new source review and several other pollution-control programs, at least for the power industry.

In the meantime, one option under active consideration by the EPA would allow companies that agreed to reduce pollution plant-wide to avoid having to install state-of-the-art pollution controls with each major modification of a piece of equipment, said Bill Harnett, a division director in EPA’s office of air and radiation.

Another, he said, would give companies that install modern pollution controls a waiver for a certain number of years, during which time they would be free to make modifications without triggering the requirement to install still more pollution-control devices.

Environmentalists flatly oppose both options.

“The bottom line is we believe industry would be required to clean up less than they would under current law,” said John Walker of the Natural Resources Defense Council.

The law applies to all major air polluters, but the environmentalists’ chief villain is the utility industry. In addition to the federal cases, several Eastern states have sued four power companies--Dominion Resources of Richmond, Va., Cinergy Corp. of Cincinnati, Ohio Edison of Akron and American Electric Power of Columbus, Ohio--to force them to install more effective pollution-control equipment.

“These companies are brazen, blatant environmental outlaws,” said Connecticut Atty. Gen. Richard Blumenthal, whose state is part of all four suits. “As technical as it sounds, new source review is a matter of life and death.”

Blumenthal said the companies became much less willing to move toward settlements since the Bush administration announced its review of the new source provision. One of the companies, Dominion Resources, rejected the charge, saying it met this month with the Justice Department, EPA and interested states.

The lobbying effort by the manufacturing and power industries to try to take the teeth out of source review enforcement has been aggressive. Republican heavyweights working on industry’s side include Haley Barbour, former Republican National Committee chairman; former Montana Gov. Marc Racicot and former White House Counsel C. Boyden Gray.

State officials and environmentalists worry that the Bush administration will bow to industry pressure and ease the rules.

“An energy crisis and thirst for more energy should not be an invitation to open up this program and damage its effectiveness,” said S. William Becker, executive director of the State and Territorial Air Pollution Program Administrators.

State and federal officials and environmentalists argue that the government is merely enforcing a long-existing rule that had not been enforced for years, the equivalent of sending traffic police to patrol an area where motorists had been accustomed to speeding at will.

Representatives of some power companies concede the point.

“By not having a traffic cop out there, it created a sense of comfort and the assumption that the cop isn’t going to be around any more, but that changed,” said Michael Bradley, director of the Clean Energy Group, which represents nine large generating companies.

But other regulated utility companies and manufacturing firms say the rules have changed, and the result is that companies are deferring changes that would make their operations more efficient.

“From my experience as a real-world operator of a major electric utility, I can tell you that EPA’s current interpretation of [new source review] is causing havoc at electric generating stations across the country,” said Paul King, executive vice president of Cinergy Power Generation. “Formerly straightforward maintenance decisions are now hardly so, the direct result of EPA’s revised [new source review] interpretations.”

Just by reviewing the practice, the Bush administration has had an effect on pollution control at factories and utility plants. The sale of pollution control devices has declined sharply, especially in the second quarter of this year.

“Decision makers in regulated industries are postponing control technology purchasing decisions in the hopes of getting regulatory relief from the Bush administration, from new source review and other rules as well,” said Jim Smith, executive director of the Institute of Clean Air Companies, the trade group for manufacturers of pollution control devices.

Becker, whose group of state and local pollution-control officials has worked for decades with state and local agencies that implement new source review, said that it has been a key tool for cleaning up the air. “While not perfect, it is working,” Becker said.

When asked by Bradley for examples of how new source review prevented them from making modifications to their plants, the nine companies he works with were unable to cite any.

“Our companies have been able to get by and manage with new source review in place,” he said. “Some of them don’t like delays. But, in the end, they work it out.”

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