Smog Rules May Be Eased

U.S. Environmental Protection Agency Administrator Christie Whitman proposed sweeping changes Thursday in the regulation of power plant pollution that would replace five of the government’s toughest programs with a single, flexible approach favored by utilities.

Whitman outlined a plan for cleaning up major components of power plant smog that represents a significant departure from the EPA’s traditional regulatory dictums. She called for a major expansion of pollution credit trading, which, up to now, has had varying success.

Under the new plan, the EPA would scrap some of the most stringent measures devised by the agency to deal with power plant emissions. One provision to be set aside aims to cut harmful mercury emissions; another is meant to reduce emissions from Midwestern power plants by 85%; another is designed to restore visibility at national parks.

Especially unpopular with industry, one measure, known as new source review, requires the installation of advanced pollution controls whenever power plants are expanded or modified. It too would be phased out.

“New source review is certainly one of those regulatory aspects that would no longer be necessary,” Whitman told Sen. Bob Smith (R-N.H.) at the hearing by the Environment and Public Works Committee. “All of those [programs] could be aligned into one regulatory process” that she said would work better than existing rules.

Whitman’s comments offer the first peek into the administration’s plans for cleaning some of the dirtiest polluters left in the nation. Debate over the administration’s clean-air approach has shifted to Congress as it considers whether to revise the national Clean Air Act.

The magnitude of the proposed revisions caught environmentalists by surprise but buoyed industry representatives who say existing controls are costly and inefficient.

“She has raised an appalling prospect of junking virtually every rule and strategy to deal with emissions of electric companies in return for some vague industry-sought plan for an emissions trading scheme,” said Frank O’Donnell, executive director of the Clean Air Trust, an environmental advocacy group. “If they go forward with this, it means a wholesale fight over the Clean Air Act in Congress.”

After the hearing, Whitman stressed that the overall goal is to clean the air more efficiently than current rules do. Although the administration has not yet released a so-called multipollutant cleanup strategy, Whitman contended that collapsing several regulations into one far-reaching approach would be easier for regulators and industry to manage.

“What we’re looking for is targets under this legislation that significantly clean up the air beyond what our current regulatory, statutory requirements would do,” Whitman said. She added that new source review, for example, “could potentially be no longer necessary if you have the right kind of targets set in a multi-emissions bill. We have to wait and see where the targets are set.”

Utilities have lobbied Vice President Dick Cheney’s energy task force to prevent the EPA from aggressively enforcing the new source review regulation. Industry and administration officials say the provision is onerous and prevents plant upgrades, although EPA officials say it is a key tool for forcing dirty, old plants to cut emissions by up to 95%.

During the Clinton administration, federal officials charged that 32 coal-fired power plants in several Southern and Midwestern states ignored a requirement that companies install advanced emission controls when their plants were upgraded. The government reached settlement with three utilities, but a provision in the Bush administration’s energy plan stalled those enforcement actions pending a review of power plant controls.

C. Boyden Gray, attorney for the Electric Reliability Coordinating Council and former White House counsel for the first President Bush in the 1980s, praised the administration’s proposal. He said major utility companies he represents, including Southern Co., Duke Energy Co. and the Tennessee Valley Authority, could clean up with greater flexibility and less cost under the plan outlined by Whitman.

“To put everything in a market-incentives basis is a great step. It would be a real breakthrough and a plus for the business community,” Gray said.

For example, Gray said EPA has four separate measures to control nitrogen oxides from power plant combustion, including programs to cut acid rain, ozone and haze. Another program scheduled to take effect in May 2004 requires power plants in 19 states to cut summer emissions by 1 million tons annually. He said those programs can be confusing and costly and could easily be replaced by a credit-trading program run largely by power companies.

Under the program being considered by the Bush administration, an emission limit could be established at hundreds of power plants followed by annual reductions in mercury, a toxic metal, as well as smog-forming nitrogen and sulfur oxides.

However, a provision to reduce carbon dioxide, a gas implicated in global warming, was dropped under industry pressure.

Power companies that reduce beyond their limits could sell emission credits, which represent a pound of pollution, to companies that exceed their limits.

Although industry and free-market advocates favor such programs, they are not without controversy. The record of market-driven programs is mixed. On the one hand, the nation’s acid rain program uses marketable permits and is widely credited with cutting sulfur oxides at less cost. On the other hand, the world’s first market-driven program to tackle urban smog has not worked in Los Angeles, where nearly 400 power companies and manufacturers failed to achieve significant cleanup for the nearly eight years the program has been in effect.

Further, many environmental groups are wary of market-driven programs because by design they preclude active government intervention. Critics say such programs could potentially limit public review of power plant operations, allow emissions to concentrate in poor communities and slow efforts to cut haze in national parks downwind from plants that elect to buy pollution credits instead of cleaning up.

The Bush administration’s power plant strategy was aired before the Senate Environment and Public Works Committee, which is chaired by Sen. James M. Jeffords (I-Vt.), whose dramatic departure from the GOP threw control of the Senate to the Democrats. Jeffords is proposing legislation, different from the administration’s approach, that would control four power plant pollutants, including the greenhouse gas carbon dioxide, an approach rejected by the Bush administration.

Prospects appear to be increasing that Congress will pass one or more measures designed to reduce carbon dioxide emissions, a belated response to this week’s decision by more than 180 countries to deal with the problem without the involvement of the United States.

Indeed, in recent weeks several members in the GOP-led House and Democratic Senate have voted on bills with the intention of disassociating themselves from President Bush’s environmental policies before the next election.

Among the votes, the House struck down a provision supported by the Bush administration that could hinder progress on global climate change policy.

The Senate banned new coal mining and oil and gas drilling in national monuments. Other recent rebuffs included rejections of administration initiatives on such issues as the Endangered Species Act, hard-rock mining regulations and offshore drilling for oil and gas.

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