EPA Proposes Industry-backed Changes to Clean Air Program

EPA Proposes Industry-backed Changes to Clean Air Program

WASHINGTON, DC, (ENS)

8th September 2006

The Bush administration has proposed industry-friendly revisions to air regulations that force power plants, oil refineries and other industrial facilities to install modern air pollution controls when they expand operations. The administration said the proposal would accelerate investments in cleaner, energy-saving technologies, but environmentalists contend it would lead to more pollution.

The proposal targets three specific areas of the Clean Air Act's New Source Review program, which was enacted in 1977 to require owners of older industrial facilities to modernize pollution controls when they make modifications that result in increased emissions.

One revision addresses a type of modification known as a "debottlenecking" project. The U.S. Environmental Protection Agency (EPA) said the term applies when a plant operator modifies a portion of a facility in a way that increases production elsewhere in the facility. The proposal would allow the unchanged portions of the facility to ignore the requirements of the New Source Review program.

The second change involves a clarification to how the program applies when multiple projects are implemented at a facility - known as "aggregation." The proposal would allow related projects to be treated as one if they are dependent on each other.

According to the EPA, both aggregation and debottlenecking have been implemented through agency guidance on a case-by-case basis in the past.

The third change would revise the formula used by industry to determine if its actions require the installation of modern pollution controls under the New Source Review program. This calculation is known as "project netting" - the primary change would allow industry to avoid a complex analysis if it finds the net effect of a project does not cause a significant increase in emissions. Agency officials did not comment on the proposal, but the announcement by EPA said the changes would not cause any increase in pollution and would help reduce energy costs.

"Existing permit limits on emissions would not be affected, and the proposed changes would encourage investments in refining capacity, improve industries' efficiency and reduce demand for natural gas," EPA said. "The improvements would also lower energy costs to households and consumers." The agency plans to finalize the regulations by May 2007.

Bob Slaughter, president of the National Petrochemicals and Refiners Association said the proposed rules would "provide additional certainty to oil refiners, petrochemical manufacturers and many other key industries as they modify facilities to meet increased demand for their products in a growing American economy."

Furthermore, the proposals will help the industry respond to calls for increased refining capacity, Slaughter said.

Environmentalists are unconvinced and say the revisions are the continuation of a broad effort by the Bush administration to weaken the New Source Review program.

"All of these are different ways to enable companies to avoid going through the New Source Review program and installing modern pollution controls," said Frank O'Donnell, president of Clean Air Watch. "And it is very telling that the agency would slip this thing out on a Friday to minimize media scrutiny."

According to EPA, the proposed changes are the final set of revisions the agency recommended in 2002 to clarify the New Source Review program, which has long been a thorn in industry's side.

Even environmentalists acknowledge that the program can be cumbersome, but the Bush administration's revisions have been widely criticized by a variety of stakeholders bar industry and most of its efforts have been rejected in court.

Last month EPA sent a proposed rule to the Office of Management and Budget for review that would change how it measures emissions from coal-fired power plants under the New Source Review program. The proposal, which is strongly supported by industry, would shift emissions measurements that are used to determine compliance with the program from the current annual basis to an hourly basis.

The proposal is, however, at odds with the position the EPA has taken in a Supreme Court case involving the New Source Review program. A case brought against Duke Energy by EPA in 2000 alleged the utility had modified operations and increased yearly emissions without adding new pollution controls.

Duke Energy argued that its hourly emissions had not increased and therefore new controls were not needed - the U.S. Circuit Court of Appeals for the 4th Circuit upheld a lower court ruling that sided with the utility. Environmental groups, who had joined EPA in the case, Defense appealed the decision. The Supreme Court will consider the case this fall.