EPA Rule Change Aids Polluters

A regulatory change made by EPA a year ago is hampering federal enforcement efforts at some 97 coal-fired power stations, says a recent report from the agency's Office of Inspector General (OIG). The report estimates that 1.75 million tons of sulfur dioxide and 629,000 tons of nitrogen oxides emitted by these plants annually could be cut if EPA vigorously enforced--instead of relaxed--Clean Air Act provisions.

The OIG examined changes that EPA under the Bush Administration made to the act's new source review (NSR) provision. The provision was enacted in 1977 but not vigorously enforced until the last months of the Clinton Administration. NSR requires older plants to upgrade pollution control equipment when making process equipment changes beyond what is needed for "routine maintenance." It affects some 17,000 U.S. plants, including chemical companies, but coal-fired utilities most strongly opposed NSR and lobbied hard for its alteration. Taken together, coal-fired plants produce nearly 60% of SO₂ and 20% of NO_x pollution in the U.S. (C&EN, Sept. 1, 2003, page 7).

Most important among the changes made by the Bush EPA, OIG says, was to raise the standard for plant modifications that would require the installation of new pollution control equipment. The new rule set the trigger at 20% of the cost of replacing the entire plant. That standard would allow company spending of about $160 million, on average, for a modification before NSR could be triggered, the OIG says. Previously, according to the report, plant process spending of $6 million would trigger NSR.

Although the change was not retroactive, the OIG warns that its impact is likely to be. Several utilities have federal NSR enforcement actions pending against them and were negotiating settlement agreements with the Department of Justice. The report says these companies are now asserting that they should no longer be considered violators. It also says EPA and Justice are no longer taking these companies and other past violators to court.

Meanwhile, the new regulation is in limbo. Several states have sued to block its implementation, and EPA has announced it will reconsider some parts of the rule, the OIG notes. The report urges EPA to use this opportunity to reconsider the change, particularly the spending trigger.

EPA, however, calls the report misleading and says it will continue to pursue old cases and bring new ones. EPA has seven cases in active litigation now, the agency says in a statement, and has settled one this year.

EPA adds that the OIG report dismisses the impact of other regulations that have been proposed but not finalized. In particular, EPA singles out its Clean Air Interstate Rule. However, that rule is not finalized, is opposed by the same states that are suing over the NSR rule, and will take a decade to go into effect.