EPA Proposes Easing Rules on Air Pollution for Industry

In an overhaul of the Clean Air Act, the Bush administration proposed Thursday to relax rules that require a host of industries to strengthen pollution controls whenever they build new plants or expand old ones.

The changes, announced by EPA Administrator Christie Whitman, have been long sought by power companies, chemical firms, paper mill operators and other major industries.

In Congress, reaction from Democrats was swift and angry. Sen. James M. Jeffords (I-Vt.), chairman of the Environment and Public Works Committee, said he plans to hold joint hearings with the Judiciary Committee this year to examine how the EPA reached its conclusions.

“This appears to be the biggest rollback of the Clean Air Act in history. Instead of taking us forward on environmental initiatives the Bush administration continues to move us backward,” Jeffords said.

Sen. Barbara Boxer (D-Calif.) accused the EPA of reneging on a pledge to ensure strict air quality. “Last month the EPA made a commitment to me that refineries in California would not get off the hook when it comes to meeting environmental standards,” she said. “This decision goes back on this promise.”

In May, however, 26 members of Congress, mostly Republicans, called for a revamping of new source review in a letter to the EPA in May.

Health officials and environmentalists oppose the proposal as a serious blow to Clean Air Act enforcement, particularly in the Northeast and Midwest.

The EPA’s proposed revision of the so-called new source review program reflects concerns by businesses that the program is often difficult to interpret and creates uncertainty and costly delays. Those drawbacks sometimes impede plant upgrades, including use of energy efficient equipment, Whitman said.

New source review is a “valuable program in many respects, but the need for reform is clear and has broad-based support,” Whitman said. “Our review clearly established that some aspects of the program have deterred companies from implementing projects that would increase energy efficiency and decrease air pollution.”

Critics charge that the EPA proposals give polluters too many breaks and are a product of intense political lobbying by industry representatives who worked last year with Vice President Dick Cheney to draft the administration’s national energy plan.

“Most of these changes represent weakening from the status quo. These are a step back from what we currently require from industry. We will have less environmental protection and air pollution will suffer accordingly,” said S. William Becker, executive director of the Assn. of Local Air Pollution Control Officials, which also represents air quality officers in the states.

New York Atty. Gen. Eliot Spitzer said that the EPA’s revisions violate the Clean Air Act and that he intends to challenge them in court.

“[President] Bush is seeking an opportunity to keep the dirtiest power plants on line without an obligation to increase their emissions control technology,” Spitzer said.

“What we are seeing today is a direct outgrowth of Cheney’s energy plan, which was a product of the lobbying of the energy industry, not solid thought and analysis,” Spitzer said.

Northeastern states, which are downwind of coal-fired power plants in the Midwest that lack advanced pollution controls, have spent the last three years suing utilities to force compliance with new source review requirements. Some of those cases have been settled, but state prosecutors say the proposed changes could hamper their ability to pursue new cases.

The EPA is pursuing seven major regulatory changes, three of which will become final after a review by the White House Office of Management and Budget later this year.

Four of the proposed rule changes require public comment over the next year.

New source review is an arcane, but pivotal, component of the Clean Air Act. The Bush administration’s proposed changes would be among the most ambitious attempts to alter the law in a generation. For more than 25 years, the reviews have been the principal tool regulators used to ensure that business growth does not lead to dirtier air. Since new source review went into effect in 1970, pollution levels have fallen dramatically at the same time the economy has grown substantially.

“It has generally worked very well. It has pushed companies to find new and better technologies and it cleans the air,” said Mike Scheible, deputy director of the California Air Resources Board.

Businesses, however, have long considered the program a major headache. It requires new or expanding plants to install the best available controls, which can knock out smokestack pollution by 95%, but cost millions of dollars, as well as offset any new pollution they cause by paying for greater emission reductions from nearby businesses.

Yet exactly when and where those provisions apply at a complex industrial facility is frequently a source of contention. Disputes sometimes drag on, and the EPA says businesses lose precious time and advantage in the marketplace.

The EPA says its proposed changes will make the process less opaque and more streamlined and will provide flexibility for business.

One change calls for putting a limit on all of a factory’s polluting equipment and allowing the company to choose the most cost-effective reductions, rather than requiring specific reductions on each individual piece of equipment. Other proposals call for rewriting rules governing how emission reductions are to be measured when clusters of polluting equipment are added to a facility at once. Another change would ease the way pollution is to be reduced when one small change in a plant affects the whole operation.

“Business planners need the certainty these new rules help provide,” said Michael Baroody, vice president of the National Assn. of Manufacturers.

The reforms “will help remove regulatory roadblocks that have kept us from pursuing those goals,” he said.

But critics say the EPA plan is too sweet a deal for industry.

For example, one change the EPA advocates would allow a polluter to avoid requirements to use state-of-the-art controls by claiming credit for an antipollution device installed up to 10 years ago at a plant.

Critics also fault the way the EPA proposes to define “routine maintenance” at a plant. Repairs and maintenance are exempt from new source review requirements, but the EPA is considering broadening the exemption by waiving the regulation if annual upgrades total less than 15% of the replacement cost of the facility, Becker said. That would allow a $1-billion refinery, for example, to upgrade its plant by as much as $150 million per year without triggering new controls.

The controversy over new source review is the latest flash point between clean-air advocates and the Bush administration. The two camps have been at odds over global warming, diesel pollution controls and enforcement of clean-air laws.

The lobbying effort by manufacturing and power industries over new source review has been prolonged and intense. Influential Republicans working on industry’s side include Haley Barbour, the former Republican National Committee chairman; former Montana Gov. Marc Racicot; and former White House Counsel C. Boyden Gray.

In March, the EPA’s chief enforcement officer, Eric Schaeffer, resigned, in part because of what he charged were attempts by administration officials to stall new source review requirements. He charged that the Bush administration was intent on weakening air pollution controls.