Draft of Air Rule Is Said to Exempt Many Old Plants
By KATHARINE Q. SEELYE
WASHINGTON, Aug. 21 After more than two years of internal deliberation and
intense pressure from industry, the Bush administration has settled on a
regulation that would allow thousands of older power plants, oil refineries
and industrial units to make extensive upgrades without having to install
new anti-pollution devices, according to those involved in the deliberations.
The new rule, a draft of which was made available to The New York Times by
the Natural Resources Defense Council, an environmental group, would
constitute a sweeping and cost-saving victory for industries, exempting
thousands of indus trial plants and refineries from part of the Clean Air
Act. The acting administrator of the Environmental Protection Agency could
sign the new rule as soon as next week, administration officials have told
utility representatives.
The exemption would let industrial plants continue to emit hundreds of
thousands of tons of pollutants into the atmosphere and could save the
companies millions, if not billions, of dollars in pollution equipment
costs, even if they increase the amounts of pollutants they emit.
The action could also spare Gov. Michael O. Leavitt of Utah, if he is
confirmed as the new E.P.A. administrator, from having to make a decision
on a highly contentious issue.
The current rule requires plant owners to install pollution-control devices
if they undertake anything more than "routine maintenance" on their plants.
Industries have long argued that the standard is too vague and hinders
substantial investment in cleaner, more efficient equipment.
The new rule says that as much as 20 percent of the cost of replacing a
plant's essential production equipment a boiler, generator or turbine could
be spent and the owner would still be exempt from installing any pollution
controls, according to people involved in the deliberations.
Together, such equipment can cost hundreds of millions of dollars,
sometimes more than $1 billion, to replace. A utility or factory could thus
make tens of millions of dollars worth of improvements without being
required to install pollution controls.
At the end of last year, the administration proposed that the current
standards be eased, saying that the threshhold for requiring pollution
control devices could be anywhere from nothing to 50 percent of the cost of
replacing major equipment. Members of Congress protested that the public
could not meaningfully comment on such a range, and 225,000 people objected
to the rule before the comment period ended on May 31, according to John
Walke of the Natural Resources Defense Council.
Only in the last few weeks have officials settled on the 20 percent figure,
which had been a closely held secret within the administration. The draft
of the new rule, in fact, describes the point at which pollution-control
devices must be installed only as "X percent," but officials and several
others in contact with those who wrote the rule said that the level was 20
percent, though they warned that the percentage could change before being
made final.
Officials said that Marianne Horinko, the acting administrator of the
Environmental Protection Agency, would probably sign the rule before Labor
Day. It would go into effect shortly thereafter, without further review or
public comment.
The only way to stop it would be through court action, which critics of the
new rule are threatening.
Eliot Spitzer, the attorney general of New York, said he would file a
challenge to the new rule as soon as it was signed.
"A rule that creates a 20 percent threshold eviscerates the statute," he
said of the Clean Air Act. "This makes it patently clear that the Bush
administration has meant all along to repeal the Clean Air Act by
administrative fiat."
Administration officials, including Ms. Horinko, declined to comment.
Jarrod Agen, a spokesman for the E.P.A., said that officials could not
comment because the matter was still under review. "But I can say that we
are working on this final rule," he said, adding that it would "encourage
facilities to improve their efficiency, reliability and safety."
Spokesmen for industry groups reacted positively to the new rule. Scott
Segal, executive director of the Electric Reliability Coordinating Council,
representing utilities, said that industries would appreciate having a
"bright line." He said that the 20 percent, though he did not know
precisely how it would be calculated, "is not an unreasonable number."
Mr. Walke of the Natural Resources Defense Council called the 20 percent
standard "a grotesque accounting gimmick" that would "let companies
completely overhaul their plants over time and spew even more pollution
than now."
Clarifying the rule and making it more lenient has been a central goal of
industry for more than a decade, and the administration has been reviewing
it since President Bush came into office more than two years ago.
While industry and many of Mr. Bush's political and financial backers have
supported a broad exemption like 20 percent, many state and local
officials, including Governor Leavitt's director of air quality in Utah,
have strongly opposed the concept.
Governor Leavitt is still likely to encounter harsh criticism on the matter
during his confirmation hearings, which are expected to begin shortly after
Congress returns from its summer recess on Sept. 2. Democrats have
indicated they plan to challenge him to defend the rule, which would put
him in opposition to his own state's air experts.
Determining when a plant must install pollution-control devices has been
one of the thorniest and most controversial environmental decisions facing
the Bush administration.
The new rule also appears to run counter to the stance the administration
has taken in several lawsuits against polluters across the country, trying
to enforce more rigorous standards under the Clean Air Act.
The Justice Department during the Clinton administration initiated lawsuits
against dozens of oil refineries and about 50 coal-fired power plants for
their failures to install pollution controls under the requirement of
routine maintenance.
The Justice Department during the Bush administration has continued to
prosecute those cases, but only after an internal dispute.
Oil, coal and electric companies had lobbied the administration to drop the
suits; Christie Whitman, the former E.P.A. administrator, resisted. As a
result, Vice President Dick Cheney's energy task force directed the Justice
Department to analyze whether to continue the suits. In January 2002, the
department decided to do so.
And in a striking counterpoint to the administration's new rule, the
department won a landmark victory two weeks ago in federal court against an
Ohio Edison plant in Jefferson County, Ohio.
That decision, which found that Ohio Edison violated the Clean Air Act when
it failed to install pollution controls, could set a precedent for the
other cases and puts the administration on a collision course with itself
because of its new rule.
Senator James M. Jeffords, the Vermont independent who is the ranking
minority member of the Environment and Public Works Committee, called the
new rule "just one more flagrant violation of the Clean Air Act and every
court's opinion on this matter." He added: "Its publication will amount to
malfeasance."
Mr. Cheney's energy task force also directed the E.P.A. to review the
regulations regarding routine maintenance and report to Mr. Bush within 90
days. That deadline slipped repeatedly as the administration mulled how to
respond.
The current trigger point of "routine maintenance" was set by Congress in a
1977 amendment to the Clean Air Act. The idea was to avoid shutting at once
all plants that might be in violation of the Clean Air Act.
Instead, Congress said, when old plants were refurbished, they had to add
the best available air-pollution control equipment. The amendment became
known as "new source review" because it required review when a plant added
new power sources that could raise emissions.
During the preparation of its report on energy policy, Mr. Cheney's task
force was visited often by officials from several industry groups and
companies seeking to alter the new source provisions.
According to documents obtained through the Freedom of Information Act by
the Natural Resources Defense Council, those visitors included officials
from the Edison Electric Institute, the North American Electric Reliability
Council, the National Mining Association, the American Petroleum Institute
and the Southern Company.
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<h2><b>Draft of Air Rule Is Said to Exempt Many Old
Plants</b></h2><font size=2><b>By KATHARINE Q. SEELYE<br><br>
</b></font>WASHINGTON, Aug. 21 After more than two years of internal
deliberation and intense pressure from industry, the Bush administration
has settled on a regulation that would allow thousands of older power
plants, oil refineries and industrial units to make extensive upgrades
without having to install new anti-pollution devices, according to those
involved in the deliberations.<br><br>
The new rule, a draft of which was made available to The New York Times
by the Natural Resources Defense Council, an environmental group, would
constitute a sweeping and cost-saving victory for industries, exempting
thousands of indus trial plants and refineries from part of the Clean Air
Act. The acting administrator of the Environmental Protection Agency
could sign the new rule as soon as next week, administration officials
have told utility representatives.<br><br>
The exemption would let industrial plants continue to emit hundreds of
thousands of tons of pollutants into the atmosphere and could save the
companies millions, if not billions, of dollars in pollution equipment
costs, even if they increase the amounts of pollutants they
emit.<br><br>
The action could also spare Gov. Michael O. Leavitt of Utah, if he is
confirmed as the new E.P.A. administrator, from having to make a decision
on a highly contentious issue.<br><br>
The current rule requires plant owners to install pollution-control
devices if they undertake anything more than "routine
maintenance" on their plants. Industries have long argued that the
standard is too vague and hinders substantial investment in cleaner, more
efficient equipment.<br><br>
The new rule says that as much as 20 percent of the cost of replacing a
plant's essential production equipment a boiler, generator or turbine
could be spent and the owner would still be exempt from installing any
pollution controls, according to people involved in the
deliberations.<br><br>
Together, such equipment can cost hundreds of millions of dollars,
sometimes more than $1 billion, to replace. A utility or factory could
thus make tens of millions of dollars worth of improvements without being
required to install pollution controls.<br><br>
At the end of last year, the administration proposed that the current
standards be eased, saying that the threshhold for requiring pollution
control devices could be anywhere from nothing to 50 percent of the cost
of replacing major equipment. Members of Congress protested that the
public could not meaningfully comment on such a range, and 225,000 people
objected to the rule before the comment period ended on May 31, according
to John Walke of the Natural Resources Defense Council. <br><br>
Only in the last few weeks have officials settled on the 20 percent
figure, which had been a closely held secret within the administration.
The draft of the new rule, in fact, describes the point at which
pollution-control devices must be installed only as "X
percent," but officials and several others in contact with those who
wrote the rule said that the level was 20 percent, though they warned
that the percentage could change before being made final.<br><br>
Officials said that Marianne Horinko, the acting administrator of the
Environmental Protection Agency, would probably sign the rule before
Labor Day. It would go into effect shortly thereafter, without further
review or public comment.<br><br>
The only way to stop it would be through court action, which critics of
the new rule are threatening.<br><br>
Eliot Spitzer, the attorney general of New York, said he would file a
challenge to the new rule as soon as it was signed.<br><br>
"A rule that creates a 20 percent threshold eviscerates the
statute," he said of the Clean Air Act. "This makes it patently
clear that the Bush administration has meant all along to repeal the
Clean Air Act by administrative fiat."<br><br>
Administration officials, including Ms. Horinko, declined to comment.
Jarrod Agen, a spokesman for the E.P.A., said that officials could not
comment because the matter was still under review. "But I can say
that we are working on this final rule," he said, adding that it
would "encourage facilities to improve their efficiency, reliability
and safety."<br>
Spokesmen for industry groups reacted positively to the new rule. Scott
Segal, executive director of the Electric Reliability Coordinating
Council, representing utilities, said that industries would appreciate
having a "bright line." He said that the 20 percent, though he
did not know precisely how it would be calculated, "is not an
unreasonable number."<br>
Mr. Walke of the Natural Resources Defense Council called the 20 percent
standard "a grotesque accounting gimmick" that would "let
companies completely overhaul their plants over time and spew even more
pollution than now."<br><br>
Clarifying the rule and making it more lenient has been a central goal of
industry for more than a decade, and the administration has been
reviewing it since President Bush came into office more than two years
ago.<br><br>
While industry and many of Mr. Bush's political and financial backers
have supported a broad exemption like 20 percent, many state and local
officials, including Governor Leavitt's director of air quality in Utah,
have strongly opposed the concept.<br><br>
Governor Leavitt is still likely to encounter harsh criticism on the
matter during his confirmation hearings, which are expected to begin
shortly after Congress returns from its summer recess on Sept. 2.
Democrats have indicated they plan to challenge him to defend the rule,
which would put him in opposition to his own state's air
experts.<br><br>
Determining when a plant must install pollution-control devices has been
one of the thorniest and most controversial environmental decisions
facing the Bush administration.<br><br>
The new rule also appears to run counter to the stance the administration
has taken in several lawsuits against polluters across the country,
trying to enforce more rigorous standards under the Clean Air
Act.<br><br>
The Justice Department during the Clinton administration initiated
lawsuits against dozens of oil refineries and about 50 coal-fired power
plants for their failures to install pollution controls under the
requirement of routine maintenance.<br><br>
The Justice Department during the Bush administration has continued to
prosecute those cases, but only after an internal dispute.<br><br>
Oil, coal and electric companies had lobbied the administration to drop
the suits; Christie Whitman, the former E.P.A. administrator, resisted.
As a result, Vice President Dick Cheney's energy task force directed the
Justice Department to analyze whether to continue the suits. In January
2002, the department decided to do so.<br><br>
And in a striking counterpoint to the administration's new rule, the
department won a landmark victory two weeks ago in federal court against
an Ohio Edison plant in Jefferson County, Ohio.<br><br>
That decision, which found that Ohio Edison violated the Clean Air Act
when it failed to install pollution controls, could set a precedent for
the other cases and puts the administration on a collision course with
itself because of its new rule.<br><br>
Senator James M. Jeffords, the Vermont independent who is the ranking
minority member of the Environment and Public Works Committee, called the
new rule "just one more flagrant violation of the Clean Air Act and
every court's opinion on this matter." He added: "Its
publication will amount to malfeasance."<br><br>
Mr. Cheney's energy task force also directed the E.P.A. to review the
regulations regarding routine maintenance and report to Mr. Bush within
90 days. That deadline slipped repeatedly as the administration mulled
how to respond.<br><br>
The current trigger point of "routine maintenance" was set by
Congress in a 1977 amendment to the Clean Air Act. The idea was to avoid
shutting at once all plants that might be in violation of the Clean Air
Act.<br><br>
Instead, Congress said, when old plants were refurbished, they had to add
the best available air-pollution control equipment. The amendment became
known as "new source review" because it required review when a
plant added new power sources that could raise emissions.<br><br>
During the preparation of its report on energy policy, Mr. Cheney's task
force was visited often by officials from several industry groups and
companies seeking to alter the new source provisions.<br><br>
According to documents obtained through the Freedom of Information Act by
the Natural Resources Defense Council, those visitors included officials
from the Edison Electric Institute, the North American Electric
Reliability Council, the National Mining Association, the American
Petroleum Institute and the Southern Company.</body>
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