Clearing the Air

Senate panel vote this week will determine fate of President Bush's Clear Skies initiative

A key senate committee is preparing to vote on a major air pollution bill this week. If the panel approves the bill on Feb. 16, the legislation likely will rapidly clear the Senate and the House. But if the panel deadlocks, as some observers think it might, President George W. Bush's Clear Skies initiative for coal-fired utilities could be dead.

Opponents say killing the bill would actually lead to the reduction of emissions from coal-fired utilities faster through current Clean Air Act authorities. They also point out that the Clear Skies initiative, while marketed as a bill aimed at power plants, would also make major changes to the Clean Air Act that they say would significantly weaken that environmental law.

But proponents contend that the measure, S. 131, would be the largest emissions reduction program ever for power plants. They say the bill would ensure reliable electricity supplies from coal and would help stabilize the price of natural gas.

Following the President's plan, S. 131 would cut emissions of sulfur dioxide from coal-fired power plants by 73% from the current 11 million tons per year. It also would lower releases of nitrogen oxides from these facilities by 67% from today's level of about 5 million tons annually. Finally, it would curb mercury emissions by 69% from the current level of 48 tons per year. The cuts would take place in two phases to be completed by 2018.

The program would be instituted through a cap-and-trade program that works as follows: The government distributes emission allowances to facilities in the program. Any company that cuts its releases below the amount permitted by its allowances can sell its excess reductions to utilities that are producing more pollution than they have allowances for.

Both proponents and opponents of S. 131 generally agree that a cap-and-trade program, at least for SO₂ and NO_x, is the best way to address pollution from utilities. What they disagree on are details and timetables, and whether the program should control emissions of the greenhouse gas carbon dioxide, with Democrats generally favoring CO₂ caps and most Republicans opposing them. Opponents of the bill are particularly concerned about emission trading for neurotoxic mercury, fearing the creation of pollution hot spots. Opponents are also concerned that the bill would eliminate some existing emission controls and take away some of the rights of states under the Clean Air Act.

Those lobbying for S. 131 include utilities; manufacturers; and unions that represent workers who make, install, and maintain pollution control equipment. Those moving against the bill include state air pollution regulators, several environmental groups, and the American Lung Association.

THE ISSUE THAT the legislation is designed to address is the aging U.S. fleet of coal-fired utility boilers, explains John A. Paul, supervisor of the Regional Air Pollution Control Agency in Dayton, Ohio. These boilers are expected to last, on average, for 30 years and lack modern pollution controls, he says. And 70% of existing boilers are at least 30 years old, Paul says, speaking on behalf of the State & Territorial Air Pollution Program Administrators and the Association of Local Air Pollution Control Officials. The two groups of regulators support the concept of multipollutant legislation aimed at power plants but oppose S. 131 because of some provisions in the bill.

Under the current Clean Air Act, replacements for these boilers would have to include modern emission controls, Paul continues. Utilities can also renovate old boilers to last another 30 years, but they might trigger Clean Air Act requirements for tighter emission controls under a program called new source review, he says.

Sen. James M. Inhofe, chairman of the Senate Environment & Public Works Committee and sponsor of S. 131, says current Clean Air Act controls on utilities, including new source review, are "outdated." He says his bill, which would lift new source review for facilities participating in the cap-and-trade program, would lead to emissions cuts that are "faster, cheaper, and more efficient" than the current program.

Several members of the Environment & Public Works Committee who hail from the U.S.'s industrialized heartland support S. 131 because it will ensure expanded use of coal, as it does not include controls on carbon dioxide. Including curbs on CO₂, they argue, would encourage utilities to switch away from coal to natural gas, an important feedstock for chemical and fertilizer manufacturing. Fuel switching by utilities now burning coal would further drive up the cost of natural gas, they say.

James L. Connaughton, chairman of the White House Council on Environmental Quality, stresses the importance of the Clear Skies plan for the use of coal as a domestic energy source. The plan would foster use of clean-coal technologies, he says.

Meanwhile, Sen. James M. Jeffords (I-Vt.), ranking minority member of the Environment & Public Works Committee, calls S. 131 "the biggest rollback of the Clean Air Act in history" because it rewrites portions of that environmental law.

Jeffords says: "The Bush/Inhofe proposal allows old, dirty power plants and thousands of other major sources [of air emissions] to produce more pollution for longer than current law allows. Their bill is not just a step backward; it is a hop, skip, and a jump backward on clean air policy." Jeffords has introduced a bill, S. 150, that would make deeper, faster cuts in utility emissions than S. 131 and would control CO₂.

Bruce Buckheit, former director of the Environmental Protection Agency's Air Enforcement Division, says the Inhofe bill would allow utilities about 15 years to cut their emissions while removing current Clean Air Act requirements immediately.

Paul, speaking on behalf of state and local air regulators, says this would shift the burden of cleaning up the air. Because coal-fired power plants are the nation's largest source of air pollution, forestalling cuts to their emissions will force regulators to tighten controls on smaller sources of pollution, including transportation, to meet air quality standards in the near term, Paul adds.

S. 131 would not apply solely to coal-fired utilities. The bill would allow companies beyond the utility sector to opt into the emissions cap-and-trade program for SO₂, NO_x, and mercury. In return, the legislation would lift existing industry-specific, technology-based emissions requirements affecting these companies. Chemical plants that use coal or oil to heat boilers and process heaters, for example, would be eligible to opt into the program under S. 131.

Although this opt-in plan wasn't part of the President's proposal, the Bush Administration strongly supports the provision, Connaughton says, "as long as it does not dilute" cuts in power-plant emissions.

The opt-in provision makes S. 131 a major rewrite of the Clean Air Act rather than a bill targeted at power-plant emissions, says A. Blakeman Early, an environmental consultant for the American Lung Association. He says the provision significantly weakens the Clean Air Act and was probably added to generate support for the legislation in industries besides the power sector.

Under the Inhofe measure, companies opting into the Clear Skies emission-trading program would be exempt from a current Clean Air Act program, Early explains. The law requires technology-based standards for controlling hazardous air pollutants from specific industries. For instance, the current standards for industrial boilers and process heaters specify the type of controls that companies must install to curb emissions of hydrogen chloride, manganese, lead, arsenic, and mercury.

S. 131 would exempt companies that opt into the Clear Skies trading program from controlling all air pollutants, except mercury, that are classified as hazardous, Early says.

Yet companies opting into the Clear Skies program--and some utilities as well--could even wind up exempt from mercury controls in some circumstances, says Jonathan M. Banks, policy director for Clear the Air, a coalition of environmental groups. The Inhofe bill would exempt any unit--for instance, a single boiler at a facility with several boilers--from the cap-and-trade program for mercury if it emits less than 50 lb of the metal per year. Early calls this provision "a big loophole" in the legislation.

In 1999, the only year for which there are estimates of mercury emissions from utilities, 582 of the 1,121 units at coal-fired power plants emitted less than 50 lb of mercury, Banks says. Those 582 units together released 10,412 lb of mercury in 1999, he adds.

This means S. 131 would allow more than 5 tons of mercury emissions per year to go unabated in the utility sector and could allow even more releases from other industries that opt into the plan, Banks adds.

The bill also affects states that have done all they can to control air emissions yet still cannot meet federal air quality standards because of pollution that blows in from identifiable sources--including older power plants--in other states. Currently, a downwind state can petition EPA to force upwind states to control the transported air pollution. S. 131 would prohibit EPA from acting on these petitions until 2012, forbid the agency from ordering emissions cuts in response to state petitions until 2014, and make criteria for granting petitions significantly more stringent.

Connaughton says state petitions would become unnecessary under the legislation because the bill would require such deep cuts in utility emissions during its first phase.

The bill also would eliminate rules on regional haze and visibility in national parks, Paul says.

ARGUMENTS OVER S. 131 will come to a head on Feb. 16, when the Senate Environment & Public Works Committee is scheduled to vote on the measure, says Andrew Wheeler, majority staff director for the panel. Inhofe's goal, Wheeler says, is to get the bill to the Senate floor for debate and a vote sometime between late February and late April.

A quick-and-dirty vote count by observers shows that committee members could deadlock in a 9 to 9 vote. This assumes that Republican Sen. Lincoln D. Chafee of Rhode Island, who says he won't vote for the bill unless it contains controls on carbon dioxide, would join the seven Democrats and one Independent on the panel in opposing S. 131. Inhofe has made it clear that he will not move any legislation controlling CO₂.

But Republicans on the panel, who, save Chafee, are united behind the bill, are hoping to muster at least one vote from the Democratic side, Wheeler indicated.

The Republicans' hope may rest on a freshman Democrat.

At a Jan. 26 hearing on S. 131, Sen. Barack Obama (D-Ill.) presented himself as undecided on the bill, noting that passage of the measure could help the Illinois coal industry. At a Feb. 2 hearing, Obama said he would study S. 131 to determine if it would lead to air quality improvements over existing Clean Air Act provisions.

Sen. Max S. Baucus (D-Mont.) is also seen as a possible swing vote.

Meanwhile, Sen. Thomas R. Carper (D-Del.) is working with Republican and Democratic senators on a multipollutant bill aimed at power plants. Carper says he is trying to carve out a middle ground between Jeffords' bill and the approach taken in the Inhofe legislation.

"I urge a bipartisan effort," Carper says. "If we don't do that, we're not going to get much done" on power-plant legislation.