Dirty Little Secrets Behind Industry's Dirty Air Campaign

August 9, 2002

Contact: John Walke (202) 289-2406

This week a coalition of 28 industry trade associations representing the largest polluting sectors in America sent a letter to United States Senators as part of a massive lobbying campaign to weaken a bedrock program of the Clean Air Act called New Source Review (NSR). The industry letter came in response to a letter signed by 44 Senators to U.S. EPA Administrator Whitman, a letter that represented a powerful and necessary indictment of the Bush administration's announced plans to roll back air quality protections afforded by the NSR program. While the industry letter is intended to be a defense of the administration's NSR rollbacks, it instead serves to reveal dirty little secrets behind the dirty air campaign waged by industry and the administration.

Dodging the Dirtier Air Question: In the most revealing sentence of the industry letter, the lobbyists slickly try to dodge and obscure the fundamental concern in the Senate letter ­ that the administration's rule changes would allow more air pollution. The Senate letter urged Administrator Whitman to agree that "EPA should not finalize a rule that allows increased air pollution or undercuts the health of any of America's children or seniors." Industry knows that the administration's rule changes do not and cannot meet these most basic of tests, so they re-frame the pollution consequences of the changes in a way that is designed to reassure; but the letter's sleight of hand ends up being a coded yet highly revealing indication that the rule changes will allow industry to pollute more without cleaning up with controls.

The industry letter states: "Under no circumstance do the proposed changes allow emissions from a facility to exceed the levels set forth in their clean air permits." First and foremost, it is important to note what this sentence does not (and cannot) say. It does not say that under no circumstance do the proposed changes allow emissions from a facility to exceed the levels allowed by today's NSR rules, or to exceed today's actual pollution levels. The letter authors understand perfectly well that the proposed changes allow both of those dirtier outcomes, in part because the changes adopt new loopholes and exemptions from control requirements.

Instead, the letter says emissions may not "exceed the levels set forth in their clean air permits." This is a highly revealing admission for two reasons. First, these sophisticated industry associations understand all too well that many of the polluting units from which they want to increase pollution without control do not have clean air permits setting forth pollution limits. That's the whole point of applying NSR to modifications at grandfathered facilities ­ many pollution units at existing facilities have escaped control to date and don¹t have clean air permits. Second, new pollution units that increase pollution significantly when added to existing facilities do not have permits yet either, and therefore pollution increases from these units are not constrained by "levels set forth in their clean air permits." Indeed, NSR would be the program that requires these new units to get clean air permits and limits based on pollution controls ­ were the administration not overriding this requirement. The test that the letter poses ­ whether emissions may exceed levels set forth in clean air permits ­ is designed to divert attention away from what really matters: the fact that the rule changes allow increased air pollution.

Finally, of course, the industry letter does not even bother attempting a response to another central criticism (and fact) in the Senate letter ­ that EPA plans to adopt the NSR rule changes without having conducted a full analysis of their impact on air quality and public health.

Industry's Big NSR Lies: The second most revealing sentence in the industry letter is their argument that the administration's NSR changes will "[allow] facilities to install more energy/cost efficient and less polluting technology." This is the rhetoric that industry (and the administration) frequently invoke to justify the NSR rollbacks. First, it is important to understand that today's NSR rules allow industry to "install more energy/cost efficient and less polluting technology" so long as they do not increase pollution levels above generous pollution significance thresholds. The only time the NSR provisions require a facility to install pollution control equipment is when a facility change causes pollution to increase significantly. Moreover, industry has the additional flexibility under today's rules to ensure that there are no such net increases by undertaking offsetting emissions decreases elsewhere at their facilities and avoiding NSR. Industry can pursue these same activities even if they do cause significant pollution increases, so long as they control those increases.

The industry letter's argument that "more energy/cost efficient and less polluting technology" will be promoted by the administration's NSR changes does not highlight, of course, that the changes will instead allow industry to increase pollution by unlimited amounts without control in the name of these activities. So industry gets to install more "energy efficient" technology but the air gets dirtier and public health suffers; industry gets to save money with more "cost efficient" technology but the air gets dirtier and public health suffers.

And what about the claim that industry will be allowed to install "less polluting technology" under the administration's changes? Note first how carefully the letter avoids saying technology that decreases total pollution. Under today's NSR rules, if industry installs less polluting technology and all air pollutants decrease, the rules do not require controls ­ since controls are required only when pollution increases significantly. The administration's rule changes would allow significant and sweeping increases in pollution without control, so long as one pollutant decreases in the process. So toxic pollution, for example, can increase without control, so long as some other pollutant decreases. Today's NSR rules require those toxic pollution increases to be controlled. Second, the administration has even suggested that the rate ­ but not total amount ­ of one pollutant can decrease and qualify for the exemption from control, with increases in any other pollutants going uncontrolled.

Industry and the administration are consistently hiding behind misleading rhetoric of energy efficiency and less polluting technology ­ without disclosing that the administration's NSR rule changes will allow significant pollution increases from such activities to escape control, when today's rules require that pollution to be cleaned up. Industrial energy efficiency improvements or other projects that decrease pollution, or that simply do not increase pollution above generous pollution thresholds, do not require controls under NSR provisions today. And the authors of the industry letter know this. But industry's true agenda ­ to be allowed to increase pollution significantly without control, whether from activities that they label energy efficiency projects or something else ­ is not saleable to the public. So they don¹t discuss it, and they cover it up with environmentally benign but deceptive rhetoric.

Replacing Mandatory Clean Up with Voluntary "Encouragement": Today's NSR rules require significant pollution increases to be managed with modern pollution controls. The administration's NSR changes eliminate these obligations in many different ways, through new loopholes and accounting gimmicks designed to pretend that significant pollution increases are not increases ­ even though the air gets dirtier. The industry letter, of course, fails even to mention that the rule changes will grant industry numerous new opportunities to avoid controlling significant pollution increases. Instead, the letter's authors argue that these new loopholes and regulatory relief will be an incentive that "encourages" voluntary pollution reductions. The industry letter, again, illuminates another dirty little secret behind the administration's announced NSR changes: at a fundamental level, the changes supplant the Clean Air Act's mandatory pollution control system with a voluntary approach that relies upon the hope that regulatory relief will encourage industry to control pollution increases. But the administration's rule changes will not require pollution reductions at levels equal to or greater than today's rules. And the changes will allow pollution increases at levels where today's rules require control. Deregulating to allow dirtier air with the hope that this will "encourage" cleaner air makes no sense and runs afoul of the Clean Air Act.

Delaying More Protective Rules, Rushing out Unprotective Rollbacks: The industry letter complains that legitimate concerns about relaxed air quality protections in the administration proposal are nothing more than "an effort to stall the NSR reform process." The letter also attempts to equate past responsible calls for improvements to the NSR rules (which NRDC and state regulators have joined) with the specific irresponsible relaxations announced by the administration.

Many of the very same trade associations signing this letter conducted a secret, well-funded lobbying campaign in 2000 near the end of the previous administration to delay final NSR rules, because it was widely understood that EPA was going to adopt more protective changes to the NSR rules and close some existing loopholes in the program. This industry campaign came to light when an August 2000 email from an automobile industry lobbyist was inadvertently released, revealing "a strategy to delay the NSR rule and to seek to reopen the Clean Air Act during 2001." See http://www.cleanairtrust.org/memo.080200.html. The email recommended that automakers join the "full-throttle effort to stop the final NSR rule," noting that it "wouldn't hurt our relations with the other trade associations if we were to contribute a nominal ($5,000) amount" to the campaign.

Feigned Ignorance of the Harms of the Announced NSR Proposals: The industry letter dryly describes the administration's announced intentions to propose future NSR rule changes that would create exemptions virtually enabling industry to avoid clean-up altogether, all the while pretending not to understand what current damage that announcement has already caused. The industry signatories understand all too well that the administration's announcement aligns EPA with radical rollbacks that would render the NSR provisions meaningless. Industry fully appreciates the negative impacts the announcement may have ­ and already have had ­ on the pending NSR enforcement cases against power plants: attorneys for the utility defendants quickly seized upon EPA's intentions and presented them to courts as evidence that the enforcement actions were illegitimate, as proof that EPA was changing its interpretations; one court has already questioned the administration about the impact of its announcement on the enforcement cases, and the defendants in that case have sought dismissal on that basis. See "Utilities Seize on EPA's NSR Plans in Legal Defenses, SEC Disclosures," Inside EPA Clean Air Report (July 18, 2002). It is disingenuous to ignore the fact that the timing of the administration's announcement, as well as its radical content, have already made all too clear the administration's anti-environmental intentions.

Justifying EPA's Refusal to Disclose and Discuss the Rule Changes: The industry letter complains about critics¹ insistence that the administration disclose and take comment on the specific, detailed ways in which they plan to overhaul the NSR rules. Industry, of course, routinely makes this request of EPA since sophisticated parties understand that the details matter -- specific rule language and EPA's interpretations make all the difference in the world. The bi-partisan association of state air regulators (STAPPA-ALAPCO) answers industry's disingenuous complaint best, having noted in two letters to Administrator Whitman how deeply troubled they are over the closed process conducted by this administration, which "represents such a departure from EPA's traditional practice of consulting with state and local agencies on NSR reform." (Letters available from NRDC.) These state regulators have requested that EPA convene a broad stakeholder meeting to allow for an open dialogue on the reforms under consideration. Finally, these state regulators alerted Administrator Whitman that her "reforms will allow most source modifications to avoid NSR, resulting in unchecked emission increases that will degrade our air quality and endanger public health." All to no avail: EPA has not altered their intention to cause these harms, and the administration has rejected requests for comment opportunity or even a stakeholder meeting.

August 6, 2002

Dear Senator:

Last week a letter signed by members of the Senate was sent to Environmental Protection Agency (EPA) Administrator Whitman expressing concern about the Administration's proposals to modify the Clean Air Act's New Source Review (NSR) program. We disagree with the letter's characterization of the environmental impact of the NSR reform package. We believe that the proposed changes to the NSR program, in fact, will result in cleaner air and in increased energy efficiency.

EPA has recommended changes to the NSR program in two parts. The first is a proposed rule, which is expected to clarify definitions for "routine repair and replacement" among other things. This process will go through the formal rulemaking process, including full public notice and comment and, by its very nature, will allow for substantial analysis and a full debate of the issues before the rule takes effect.

The second set of changes will be issued in a final rule. This rule focuses on the "emissions measurement" policy raised in the letter. This rule would also provide incentives for industry to undertake pollution control and prevention projects. These proposed changes have been under consideration by EPA since 1996 and have already been subject to the full public comment and review procedures.

The expected changes on emissions measurement will actually encourage reductions in pollution from manufacturing and other industrial facilities. The rule modifies cumbersome regulations, thereby allowing facilities to install more energy/cost efficient and less polluting technology. Without this rule change, facilities will continue to operate within their permitted levels, but in a less efficient manner. Under no circumstance do the proposed changes allow emissions from a facility to exceed the levels set forth in their clean air permits.

We are concerned that there appears to be an effort to stall the NSR reform process despite wide agreement that the current program is seriously flawed. A delay at this point in the process would be counterproductive because it would continue to discourage facilities from making modifications and undertaking projects that would reduce emissions and improve energy efficiency. Moreover, these capital-intensive projects would be further delayed at a time when every investment decision is critical to the nation's economic recovery.

We look forward to discussing this matter with you and your staff in the near future.

Sincerely,

Adhesive and Sealant Council
Alliance of Automobile Manufacturers
American Boiler Manufacturers Association
American Chemistry Council
American Coke and Coal Chemicals Institute
American Forest & Paper Association
American Gas Association
American Iron and Steel Institute
American Petroleum Institute
BIFMA International
Carpet and Rug Institute
Cookware Manufacturers Association
Copper and Brass Fabricators Council, Inc.
Council of Industrial Boiler Owners
Forging Industry Association
Independent Lubricant Manufacturers Association
Industrial Energy Consumers of America
IPC -- The Association Connecting Electronic Industries
National Association of Manufacturers
National Lime Association
National Mining Association
National Oilseed Processors Association
National Petrochemical and Refiners Association
National Stone, Sand and Gravel Association
Portland Cement Association
Precision Machined Products Association
Pressure Sensitive Tape Council
Printing Industries of America, Inc.