Environment, Energy and Transportation Program
Clean Air Newsletter
A Quarterly Review of Mobile and Stationary Source Issues
PDF version
March 2002
Vol. 5, No. 4
IN THIS ISSUE
FEDERAL ACTIONS
Bush Administration Releases "Clear Skies" Policy
EPA Harmonizes Compliance Dates for Ozone Rules
Justice Department Upholds EPA Enforcement Actions
New Modifications for Reformulated Gasoline
STATE ACTIONS
N.J., Power Plant Reach NSR Settlement
N.H. Considers Multi-Pollutant Legislation
Calif. Bill Would Regulate CO2 Emissions from Motor Vehicles
Md. Bill Could Reinstate Authority to Issue Pollution Permits
STATE LEGISLATION
Summaries of Selected 2002 State Air Quality Bills
President George W. Bush released his administration's Clear Skies and Global Climate Change Initiatives on February 14. The plans call for cuts in emissions of:
- Sulfur dioxide (SO2), 73 percent-from 11 million tons to 4.5 million tons in 2010, to 3 million tons in 2018.
- Nitrogen oxides (NOx), 67 percent-from 5 million tons to 2.1 million tons in 2008, to 1.7 million tons in 2018.
- Mercury, 69 percent-from 48 million tons to 26 tons in 2010, to 15 tons in 2018.
The administration proposes a cap-and-trade program to achieve the reductions.
In addition, the president's proposal calls for a cut in greenhouse gas "intensity" by 18 percent over the next 10 years, which the administration contends is "comparable to the average progress that nations participating in the Kyoto Protocol are required to achieve." As described in the administration's press release, intensity "is the ratio of greenhouse gas emissions to economic output." "When the annual decline in intensity equals the economic growth rate (currently about 3 percent per year), emission growth will have stopped," goes the argument. "When the annual decline in intensity exceeds the economic growth rate, emission growth will reverse."
The proposed 18 percent reduction would lower emissions-primarily of carbon dioxide (CO2)-from 183 metric tons per million dollars of gross domestic product this year to 151 million metric tons in 2012. To help progress toward that objective, the president's fiscal year 2003 budget proposes an increase in spending on global climate change activities of $700 million to $4.5 billion, including the first year's installment of proposed tax credits for renewable energy, amounting to $4.6 billion over five years. In addition, the proposed budget includes $3 billion in tax credits over 11 years to encourage consumers to purchase fuel cell and hybrid electric vehicles.
In a January letter to Congress, U.S. Environmental Protection Agency Administrator Christine Todd Whitman announced that EPA would move back the compliance date for sources contributing to ozone transport under the Section 126 rule by one year to coincide with the compliance date of May 31, 2004, contained in the NOx State Implementation Plan (SIP) Call. The administrator indicated that a court-ordered delay in implementing the Section 126 rule made harmonizing the two regulatory actions the most reasonable option.
EPA's action stems from a federal circuit court decision on Aug. 24, 2001, that suspended the compliance date for electric power plants under the Section 126 rule. Section 126 of the Clean Air Act allows states to petition EPA to enforce emission reductions from upwind sources that contribute to transboundary pollution in downwind states. The federal agency had approved a petition filed by eight northeastern states against sources emitting smog-causing nitrogen oxide (NOx) in the Midwest and Ohio River Valley. The court ordered EPA to resolve some technical issues involved in the case which, according to the federal agency, would set back compliance beyond the 2003 smog season.
In a memorandum to the affected EPA regional air division directors, John Seitz, director of EPA's Office of Air Quality Planning and Standards, noted that, " ... from the beginning it has been our intention that the Section 126 rule serve as a backstop to the NOx SIP Call. Both rules originally had the same compliance date. We believe it makes sense to continue this approach because it helps states, affected industry, and the public with a better coordinated and simpler program for achieving these emissions reductions."
Seitz also noted that, although the court's ruling applied only to electric power plants, it made sense for the federal agency to extend the compliance date for other sources to May 31, 2004, " ... to establish the most cost-effective emission control program possible, which means that we want to allow trading among all sources." He continued, " ... if the non-EGU [electrical generating units] controls were implemented a year earlier than the EGU controls, non-EGUs would have less compliance flexibility because they would be unable to trade with all EGUs throughout the NOx SIP Call region." Since non-EGUs account for only 5 percent of NOx emissions reductions in the region, EPA does "... not believe it makes sense for this small portion of affected sources to have to comply at an earlier date."
On January 15, the Department of Justice concluded that the Environmental Protection Agency's new source review (NSR) enforcement actions against electric power plants and oil refineries complied with provisions of the Clean Air Act. The effect of the department's announcement is to let the enforcement actions proceed. The department conducted its review pursuant to a directive from Vice President Cheney's National Energy Policy Development Group, which had previously requested EPA " ... to determine the impact of the [NSR] program on investment in new utility and refinery generation capacity, energy efficiency, and environmental protection."
The NSR program requires facilities that construct new or make major modifications to existing emission sources to obtain a permit and install pollution control devices. The intent of the program as it relates to existing sources is to ensure that older, high polluting facilities-that were "grandfathered" by the Clean Air Act with the expectation that they would soon be replaced by facilities employing the best available emissions control technology-do not increase their emissions as a result of the modification.
Controversy had emerged over what constitutes a "modification" triggering the permit requirement. Regulated industries argued that the enforcement actions taken against the facilities in question were routine maintenance operations and, therefore, not subject to the NSR provisions. The justice department concluded that " ... EPA's belief that the defendants have 'modified' their facilities, and thus are subject to NSR is reasonable...because the courts generally defer to agency interpretations of ambiguous statutory terms, such as 'modification.'"
The U.S. Environmental Protection Agency (EPA) has issued final modifications regarding the standards for reformulated and conventional gasoline. Initiated during the late 1990s, the modifications will affect gasoline refiners and those who service gasoline storage tanks.
The use of reformulated gasoline reduces vehicle emissions that could harm the public and the environment. The modifications allow new ways for conventional gasoline to be converted to reformulated gasoline. In particular, previously certified gasoline (PCG) can be used with greater flexibility to manufacture new blends of gasoline that still possess the benefit of reduced emissions.
To obtain more information about the new modifications, contact EPA's Marilyn Bennett at (202) 564-8989.
On January 24, the State of New Jersey, the U.S. Environmental Protection Agency and the Department of Justice announced a settlement with PSEG Fossil LLC, a large electric utility, to make significant reductions in sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions. The company agreed to spend $337 million to install pollution controls employing the latest technology no later than 2012. The pollution controls will reduce annual SO2 emissions by 90 percent (36,000 tons) and NOx emissions by 80 percent (18,000 tons) from its Mercer and Hudson coal-fired power plants.
The SO2 reductions will account for nearly one-third of all sulfur dioxide emissions from stationary sources in the state and one-fifth of all NOx emissions. The settlement agreement was reached pursuant to the new source review (NSR) provisions of the Clean Air Act, whereby the state and federal governments had alleged that modifications were made to the two plants without obtaining the necessary permits [see related story in this newsletter].
In addition to installing the best available technology to reduce emissions, PSEG Fossil LLC has agreed to retire pollution emission credits that it could have used to emit additional pollution. The company also will make efforts to cut carbon dioxide emissions-a greenhouse gas that contributes to climate change-by 15 percent. A Department of Justice attorney noted in a January 24 press release that " ... PSEG negotiated in good faith and demonstrated a willingness to put litigation considerations aside and to act quickly to improve the health of New Jersey's citizens and the quality of air they breathe. We hope other utilities follow PSEG's lead."
In an effort to control emissions from the state's three fossil-fuel power plants, the New Hampshire legislature is considering a bill that would provide market incentives to significantly reduce sulfur dioxide (SO2), nitrogen oxide (NOx), mercury and carbon dioxide (CO2). House Bill 284 passed the House of Representatives earlier this year and now is in the Senate [see summaries of state legislation in this newsletter]. The legislation has bipartisan support, including that of Democratic Governor Jeanne Shaheen.
The legislation uses a multi-pollutant approach, as stated in its findings and purpose section, " ... due to the collateral benefits and economies of scale associated with reducing multiple pollutants at the same time." It further emphasizes a market-based approach-although the power plants would have the option to install pollution control devices-
" ... such as trading and banking of emission reductions within a cap-and-trade program, [to] allow sources to choose the most cost-effective ways to comply with established emission reduction requirements." House Bill 284 authorizes the Department of Environmental Sciences (DES) to allocate emission allowances to the three fossil-fuel power plants under a trading and banking program up to the following statewide annual emissions caps:
- SO2-7,289 tons.
- NOx-3,644 tons.
- Mercury-a level to be determined by DES based on the U.S. Environmental Protection Agency's proposed regulation establishing a maximum achievable control technology standard.
- CO2-5,425,866 tons.
The affected facilities must comply with the emission's caps by Dec. 31, 2006. If the legislation is enacted, New Hampshire would become the first state to employ a multi-pollutant strategy for SO2, NOx, mercury and CO2 through legislation.
Legislation that moved through the California Assembly in late January would target carbon dioxide (CO2) emissions from the state's largest source-the transportation sector. Assembly Bill 1058 notes that
" ... the control and reduction of emissions of greenhouse gases, of which carbon dioxide is the most significant, are critical to slow the effects of global warming" and that " ... the transportation sector produces over one-half of the carbon dioxide emitted in the state."
The bill would require the Air Resources Board to adopt regulations to achieve the maximum feasible reduction of CO2 emissions from passenger vehicles and light-duty trucks no later than Jan. 1, 2004 [see summaries of state legislation in this newsletter]. The regulations could not go into effect, however, until Jan. 1, 2005. The state board would also have to report the contents of the proposed regulations to the Legislature by Jan. 1, 2004. If the legislation is enacted, California would become the first state to require CO2 emission reductions from motor vehicles.
A bill introduced in the Maryland legislature may allow the state environmental department to reinstate its power to issue air pollution permits to industries.
In late 2001, the U. S. Environmental Protection Agency took control of Maryland's air quality operating permit program, citing that the state did not comply with Title V of the Clean Air Act. The violation stemmed from an existing Maryland law that did not allow for adequate public input regarding the issuance of industrial pollution permits. The law stated that only property owners adjoining an industrial site could object to a permit application.
Now, recently introduced legislation-House Bill 5 and Senate Bill 248-would increase the public's right to provide input into permit applications, regardless of where they are in location to the industrial site [see summaries of state legislation in this newsletter]. The Maryland Department of Environment supports the bill and believes that its passage will protect the public and businesses. Also in the bill's favor is first-time support by both environmental groups such as the Sierra Club and several industries.
The 2002 state legislative sessions have seen significant activity in air quality legislation. Unlike last year, however, concern about energy supply and the air quality effects of accelerated electricity generation are not dominating legislative deliberations. Bills that would provide incentives for alternative fuel vehicles are capturing the most legislative attention, with at least 16 bills in eight states addressing that issue. Legislation that would phase out the use of methyl tertiary butyl ether-MTBE-is a close second, with at least 10 bills in five states under consideration.
Two new categories of legislation are more pronounced than last year. Multi-pollutant strategies-which attempt to package emissions reductions for certain traditional criteria pollutants (sulfur dioxide, nitrogen oxides and mercury) and carbon dioxide as part of an emissions trading program-are being considered in New Hampshire and New York. Although some states are taking the lead in developing multi-pollutant strategies, the Bush administration's recently released "Clear Skies" policy [see related story in this newsletter] may provide a broader national policy context for dealing with multiple pollutants if enacted by Congress.
The second issue that appears to be garnering more legislative attention relates to greenhouse gas emissions, primarily carbon dioxide. At least five bills in four states address greenhouse gas emissions in some way-either in a regulatory, market-based or monitoring manner. If enacted, legislation being considered in California would make that state the first to regulate CO2 emissions from motor vehicles [see related story in this newsletter].
Technical Assistance
NCSL's Clean Air Project offers technical assistance that may include testimony at legislative committee meetings by NCSL staff or non-NCSL resource people, state-specific research and policy analysis, or bill review and drafting assistance. Contact the NCSL staff listed below at (303) 364-7700 for details on how to request technical assistance or help with other clean air questions.
Staff Contact: Larry Morandi |
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CLEAN AIR NEWSLETTER
Published quarterly by the National Conference of State Legislatures, Suite 700, 1560 Broadway, Denver, Colorado 80202, (303) 364-7700.
William T. Pound, Executive Director
Funding support for this publication is provided by the U.S. Environmental Protection Agency. Any opinions, findings or conclusions in this publication are those of NCSL staff and do not necessarily reflect the views and policies of the U.S. Environmental Protection Agency.
Contributors to this issue:
Larry Morandi, Melissa Savage, Sia Davis, Linda Sikkema
Layout and design: Scott Liddell
Printed on recycled paper. |
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