EPA RULE CHANGE
August 27, 2003

The Environmental Protection Agency revised an emissions rule today to benefit older power plants. An EPA official and an environmentalist debate the rule's merits. Background Discussion

 

Aug. 12, 2003: Experts assess the likely impact of Pres. Bush's nomination of Gov. Leavitt to head the Environmental Protection Agency. May 21, 2003: Christine Todd Whitman announced her resignation as the director of the EPA. Jan. 21, 2002: A report on the continuing debate over air pollution and its effects. Browse the NewsHour's coverage of the Environment   Environmental Protection Agency The White House The Natural Resources Defense Council	GWEN IFILL: We begin with today's revision of the EPA's clean air rules for industrial plants. Betty Ann Bowser provides some background. BETTY ANN BOWSER: The new rule would allow many of the nations' coal-burning power plants and other industrial facilities to modernize without adding expensive new pollution controls. That's a change in the federal Clean Air Act that had been in effect since 1977. It made anti-pollution devices mandatory any time a plant upgraded. Now a facility can spend up to 20 percent of total replacement costs without triggering new pollution controls. The new rule would still require plants to reduce levels of sulfur dioxide, nitrogen oxide and fine particles that pose public health problems. The EPA has been considering these rules for more than two years to address industry concerns over the confusion of what is considered routine maintenance and what is considered an upgrade. Scott Segal, a lawyer for the power companies, says what was once considered routine maintenance in the 1990s was being viewed as an upgrade. SCOTT SEGAL: We were able to tell, for example, that changing a section of pipe, putting on a new belt, putting on new propellers on a compressor unit, all were within the definition of routine maintenance. It's kind of like if your car starts losing gasoline mileage and you bring it in for a tune- up, you can tell the difference between doing a tune-up and, say, for example, replacing the engine. This is the distinction that the regulators need to adhere to. BETTY ANN BOWSER: Environmental critics claim the rule change is a gift to utilities and industry, allowing many of the nations' dirtiest coal-burning power plants and other facilities to release millions of tons of additional pollution into the air. Richard Blumenthal, Connecticut attorney general, says that would aggravate a continuing public health hazard. He cites an EPA study of Midwestern plants. RICHARD BLUMENTHAL: This study draws direct links between the air pollution in the Midwest that is blown by the prevailing winds to Connecticut -- nitrogen oxides, sulfur dioxide-causing acid rain, smog -- that not only damages our lakes and rivers and trees, but also causes severe respiratory problems in our citizens and very grave health problems. BETTY ANN BOWSER: Environmentalists and many state attorneys general are expected to sue the EPA before this rule could take effect. GWEN IFILL: Ray Suarez takes it from there.
	Analyzing the revised emissions rule
	RAY SUAREZ: Now, a closer look at the EPA's decision and its potential impact, economically and environmentally. Jeff Holmstead is the EPA's assistant administrator of the Office of Air and Radiation. And John Walke is the director of clean air for the Natural Resources Defense Council, an environmental advocacy group. Jeff Holmstead, the old rules required that pollution control equipment be installed when modifications were made to the plant. Was that judged not to be working, that rule? JEFF HOLMSTEAD: A part of that rule wasn't working well. Over the years, a part of that rule had become so cumbersome and difficult that we found -- and a number of outside analysts found -- that it actually discouraged plants from doing projects that would make them more efficient, that would make them more reliable, just because of concern and uncertainty about how this process worked. And so what we've done today is a change that says that if a facility wants to replace a component or a piece of equipment with the same piece of equipment so that the plant remains essentially the same and if it doesn't -- if that change doesn't cause an increase in pollution above its permitted levels, then that's allowable without going through this permitting process. RAY SUAREZ: And what signal, what behavior do you hope to encourage among people who operate these plants with this new set of rules? JEFF HOLMSTEAD: We hope and expect that it will allow them to undertake projects that they've been putting off that will allow them to become more efficient, that will allow them to become more reliable, and, in some cases, to actually just allow them to become safer places to work. And I should say that we've spent an enormous amount of time looking at this change and can say quite clearly that it won't really have an impact one way or another on emissions. It will just streamline a permitting process that had really become unduly burdensome for many people. RAY SUAREZ: John Walke, will the new rules do what the EPA says it will? JOHN WALKE: EPA says that the new rules will provide certainty to industry. And I agree that the rules will provide certainty that industry will never have to clean up when they increase their pollution. These rules will allow more air pollution that harms Americans, their children and our lakes and countrysides from over 17,000 plants nationwide. They have put forward the argument of efficiency. But what they've tried to avoid talking about is the greater pollution increases that will result. There's a very simple solution. If they say that no more pollution will result, they can simply write into the rule that no more pollution should be allowed to result from their rule changes. The truth is that pollution will go up as a result of these rule changes and the entire purpose of the rule changes are to create an exemption so that industry can pollute more without installing pollution controls.
	Did the old rule deter facility upgrades?
	RAY SUAREZ: How do you respond to industry people who had said that the old rules were a disincentive to change anything? That, in fact, plants were able to run inefficiently and dirtily because doing something to address that would trigger that requirement to reduce emissions? JOHN WALKE: Here's the most important thing to know about the old rules and the Clean Air Act: If a change at a plant causes pollution to go down, industry doesn't have to adopt control measures. If a change at a plant causes pollution to go up, industry has to adopt control measures. What this exemption does is ensure industry that they do not have to put on controls. If industry was maintaining their facilities in ways that causes pollution to go down, then they are home free and nothing further has to be done. But if they want to overhaul their plants and make changes at those plants that cause pollution to go up, the public expects that that pollution will be controlled. RAY SUAREZ: How do you respond to that notion, that by changing the rule in the way it has, the EPA has removed pressure from the plant operators to reduce emissions? JEFF HOLMSTEAD: Again, it's simply not accurate, and it doesn't really fairly characterize the way our regulations work. This rule change will not really affect emissions in one way or the other. And we've done a fairly extensive study that's been commented on by many people that's available in the public record. But what we also say is that we have all of these facilities that are subject to this rule, that are subject to many other rules. And those rules will continue to reduce pollution throughout the United States, so I can tell you -- I can guarantee your listeners that pollution will continue to go down in the country. Air quality will continue to improve, not because of what we're doing today, but because of many other programs that cover these same facilities. RAY SUAREZ: But wasn't part of the old rule-making meant to prod industry into taking old equipment off-line and replacing it rather than carrying it along and being able to make these repairs that are now possible to keep it online in a way, the same kind of measures that were taken in the '70s and '80s to try to get old cars off the road because they were very polluted? JEFF HOLMSTEAD: You know, it's interesting -- a number of academic groups and think tanks have looked at this program, and they've said it has precisely the opposite effect. What it says to an old plant is as long as you continue to operate, even if you become less efficient over time, as long as you don't do anything, you can continue to operate indefinitely. If you want to have a new plant, it's subject to very, very stringent controls. So the result of that is many of these plants have a strong incentive to operate longer than they otherwise would have. We've actually proposed legislation to address this problem and to put all of the power industry on a level playing field so that there's no longer any perverse incentive to maintain older plants because they're cheaper to operate, but instead it would put new plants and old plants on a level playing field. We think eventually that's the right result but that requires a legislative change. But what we've done today is to address really a fairly minor part of this program, but to do it in a way that will make plants more efficient, will make them more reliable, but will not increase pollution.
	When do pollution controls kick in?
	RAY SUAREZ: Let's talk a little bit about the 20 percent threshold, this new rule based on replacement costs. In the case of some plants, we're talking about fairly sizable expenditures that are now allowed without triggering those rules. Don't they make it possible now to keep plants running in a modern world-standard way that perhaps wasn't possible before this new rule? JOHN WALKE: Well, EPA has adopted a loophole that is so extreme that a company could spend hundreds of millions of dollars rebuilding buildings that are ten to 15 stories high and not put on any pollution controls for the resulting thousands of tons of higher pollution levels. The truth is that despite EPA's efforts to change the subject to talk about other programs under the Clean Air Act that will rectify the dirtier air that will result from repealing this, it reminds me of someone who has just shot a victim arguing that the paramedics will come on the scene. We want EPA not to shoot the victim, but they've done so. They have eliminated this clean air protection as a practical matter and pollution will go up as a result of it. We shouldn't look to other programs. We shouldn't look to a legislative proposal that is not going to be adopted by Congress. The EPA simply should not weaken rules that are working to protect the public against harmful air pollution. RAY SUAREZ: What in the current ruling pushes these plants toward being cleaner? Is there anything in there? JEFF HOLMSTEAD: Well, that's not what this program was designed to do, and in fact, it can't do that. What it has done is discouraged people from making efficiency improvements. So again all of our studies -- John and I talk fairly often and he makes these claims about pollution increasing, and we keep asking for studies and analysis, and we've never seen it. What we've shown is that by making this change, there will be marginal improvements in efficiency over time as plants modernize and upgrade. And we have other tools that Congress has given us to reduce power plant emissions in particular and to make them cleaner. So for instance, I can tell anybody who lives on the East Coast will have substantially cleaner air beginning next year because of another program we have in place that will actually require these plants to reduce their emissions. But the idea somehow that we give them a disincentive to modernize because we say you can't modernize unless you spend a lot of money, what it means is plants haven't modernized over time and they've become less efficient. And so we're trying to rectify that problem and recognizing that we have other tools that have shown themselves to be more effective in reducing pollution. So that's what we'vene today.
	Will air pollution go up?
	RAY SUAREZ: Well, you've just heard Jeff Holmstead say that they've removed a burden from industry. He says he believes that it will bring some marginal improvements. What would you have wanted to see? What would the NRDC have wanted to see instead? If you were to work with EPA in designing a new set of regs, a successor set of regulations to the ones that have now been surpassed, what would you have wanted to see? JOHN WALKE: All it took was a simple statement from EPA that industry can undertake these efficiency improvements and reliability changes and whatever they want to so long as pollution does not go up. They will not do that. I will wager $1,000 here tonight on this show that they will not do that. I will also wager $1,000 that this rule will allow more pollution increases. Everything that EPA is talking about cannot get away from the reality that this is a new exemption that will allow more air pollution to result from over 17,000 facilities across the country and to allow industry not to put on pollution controls while pollution goes up by tens of thousands and even millions of tons of pollution from these 17,000 facilities. RAY SUAREZ: The NewsHour, for the record, doesn't encourage games of chance. But if he's looking for wanting to maintain the status quo saying, "yes, make whatever improvements you want but no new higher levels of pollution," isn't that a reasonable standard? JEFF HOLMSTEAD: That's effectively what this rule does. John... RAY SUAREZ: Then why not require it? JEFF HOLMSTEAD: We have. The rule actually says that you can only make these replacements as long as you stay within your permitted limits. What John says is, "well, sometimes plants emit below their permitted limits," and what that has done over time is create a number of perverse incentives. As long as John is in the wagering business, I'm happy to, you know, see his bet and up him and wager a great deal of money that this will not result in emissions increases and in fact air pollution will continue to decrease substantially over the coming years, not because of this change but because this change really is a process change that just makes this one part of the Clean Air Act work better. We have many other parts of the Clean Air Act that are designed to and that, in fact, reduce pollution. And that will continue to happen throughout the country. RAY SUAREZ: Now, you raised your eyebrows when he said "within permitted limits." Why is that an important phrase? JOHN WALKE: Well, it's very interesting what Jeff just did. Jeff in a former career was a very sophisticated industry lawyer, and he just resorted to legalese. "Permitted levels" doesn't mean anything to most Americans. This rule will allow more air pollution than we have today. It will allow plants to pollute more than we have today. Jeff didn't deny that. What he said is it will not allow more than permitted levels. Well, permitted levels is just legalese for levels that are far, far higher than plants are emitting at today. So in that explanation, he essentially acknowledged that plants will be able to emit far more than they are today without cleaning up. That's the purpose.... RAY SUAREZ: Is that right? Is permitted levels more than these plants are currently polluting... JEFF HOLMSTEAD: In some cases, it is. In some cases it is, but for a number of reasons that we've gone over in great detail and some analysis that we've done, all this does is allow plants to stay essentially the same as they are today but with upgraded and modernized parts, so this doesn't allow anybody to make a change to the plant. It just says, you know, a part wears out, you can replace it with a part that may be better, that gives you a little bit of additional efficiency. That may allow you to produce more widgets or to produce more power. But you still have to live within your permitted limits. And, again that's a level that a state environmental agency has determined is appropriate but as we look across -- it's certainly true that in some individual plants we expect that you will see modest increases. I don't know where John's hundreds of thousands and millions and tons number comes from, but at individual plants you may see very small emissions increases. But on an overall basis, pollution will continue to come down and this rule isn't going to change that one way or the other. RAY SUAREZ: Gentlemen, thank you both.

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