Environmental Update - October 2001

Environmental Update - October 2001

October 01, 2001
The environmental agenda is yet another casualty of the terrorist attacks on the United States on September 11.

Both Congress and the Bush administration are expected to set aside work on major environmental initiatives for at least the rest of this year. The Senate Environment and Public Works Committee will continue making inquiries and holding “stakeholder meetings” about how to write a bill that will limit air emissions further from power plants. However, the bill is not expected to advance this year. The Environmental Protection Agency will continue working on a multipollutant legislative strategy for power plants, but any internal deadlines for formulating a plan will almost certainly be extended.

Air Permitting

The Senate Environment and Public Works Committee had scheduled “stakeholder meetings” with persons interested in air emissions from power plants for September 11 and 12. The meetings were abruptly cancelled when the Capitol was quickly evacuated after a United Airlines jet crashed into the Pentagon. The meetings have been rescheduled for October 4 and 5. The focus is to find common ground for a bill that would tighten existing limits on power plant emissions of nitrogen oxides, or NOx, and sulfur dioxide, or SO2, and impose new limits for mercury and carbon dioxide, or CO2.

Multipollutant legislation is controversial. It is expected to impose huge new costs on power companies that would have to retrofit existing power plants. There is also serious disagreement about whether mandatory reductions in CO2 emissions — a greenhouse gas — should be required, particularly since pollution control technologies to reduce CO2 are not yet proven and remain in the developmental phase.

Senator James Jeffords (I.-Vermont), chairman of the Senate committee, has already introduced a bill called the “Clean Power Act” that calls for significant reductions in all four pollutants — NOx, SO2, mercury, and CO2. The Bush administration is working on a multipollutant proposal of its own to present Congress that would leave out mandatory reductions for CO2. The administration was also in the process of completing a cabinet-level review of measures to address global warming when the terrorists attacked on September 11. The results of that review may now not be announced until next year.

A draft proposal circulated earlier within the Environmental Protection Agency had called for power plants to reduce NOx emissions by approximately 75% by 2012, reduce SO2 emissions by about 80% by 2010, and cap mercury emissions at 7.5 tons a year (approximately an 80% reduction from current levels). By comparison, the Jeffords bill would order approximately a 75% reduction in NOx and SO2 emissions and a 90% reduction in mercury emissions from power plants. The Edison Electric Institute — the trade association for regulated utilities — has warned that the EPA proposal would cost twice as much to implement as utility industry proposals seeking a 50% reduction in all three pollutants. The US Department of Energy has also criticized the internal EPA proposal as being too costly and lacking in scientific and human health data to support such steep cuts.

Twenty-four organizations have been invited to participate in the Senate stakeholder meetings, including 13 environmental and public interest groups, six industry groups and five state organizations. During the discussions, there will be approximately 29 seats at the table with the power sector having at least nine. Numerous other interested parties have been invited to observe the meetings, but will not have an opportunity to participate in the discussions.

The prospects for the Senate Environment and Public Works Committee reaching an agreement on a multipollutant bill this year are dim. Given the controversy surrounding the issue and more pressing national priorities, it is questionable whether multipollutant legislation will advance beyond the discussion phase before the end of the 107th Congress at the end of next year.

Mercury and CO2

The Conference of New England Governors and Eastern Canadian Premiers adopted resolutions at the end of August pledging to cut mercury emissions and greenhouse gas emissions, including CO2, from sources in the region. The cross-border agreements to reduce mercury and greenhouse gas emissions are intended to build on past successes by the US and Canada in taking regional action to address the acid rain problem.

The new resolution calls for a 75% reduction in mercury emissions from all sources, including power plants, using a 1998 emissions baseline. It calls for the reductions to be achieved by 2010. The resolution does not have the force of law and allows each state and province to determine how the mercury reductions will be achieved. For example, Massachusetts enacted legislation earlier this year that will require the state’s six oldest power plants to reduce mercury emissions to an as-yet undetermined limit by October 1, 2006.

The Conference of New England Governors and Eastern Canadian Premiers also adopted a “climate change action plan” that advocates reducing regional greenhouse gas emissions to 1990 levels by 2010. The conference also called for regional greenhouse gas emissions to be further reduced by 10% below 1990 levels by 2020. The climate change action plan also sets a goal of promoting a uniform and coordinated regional banking and trading system for greenhouse gas emissions.

The conference consists of the six New England governors and premiers from the provinces of Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.

Global Warming

The Edison Electric Institute and a number of utilities individually submitted recommendations to the Bush administration’s climate change policy task force in August on how to address the problem of global warming. The utilities want voluntary reductions in greenhouse gas emissions and a package of tax incentives and research and development funding.

The utilities recommended creating a national registry with mandatory reporting of greenhouse gas emissions. Companies would have the option to enter into voluntary commitments to reduce greenhouse gas emissions and would be eligible, as a result, for greenhouse gas emissions offsets and credits. The utilities proposed two alternatives to structure a climate change technology research, development, and deployment program. The first option focuses on forming an industry-federal government partnership that would include additional federal funding of research and development projects and tax credits for certain industry research and development efforts. Alternatively, they proposed creation of a private, for-profit climate change efficiency corporation — called the “CEC”— that would act as an investment vehicle for research and development into new climate change technologies. The CEC would be funded by industry contributions, and participating companies would share in any technology patents, profits and greenhouse gas emission credits generated.

The utility proposal appears to build on the administration’s pledge earlier this year to devote additional federal funds for research into the causes of global warming and into technological innovations to reduce greenhouse gases. However, with agencies now being asked to give back unspent money so that the federal government can divert resources to the war against terrorism, research into global warming will probably take a back seat.

In light of the Bush administration’s other pressing priorities, any new US climate change proposal is unlikely to be unveiled before the upcoming international meeting on climate change in Marrakesh, Morocco scheduled for October 29 to November 9 at the earliest and, even then, more likely not before next year.

NOx Emissions

A federal appeals court for the DC circuit granted a utility request in late August to delay implementation of a “section 126 rule” by the US Environmental Protection Agency. This is a rule that requires reductions in NOx from specific power plants and factories in 12 states in the eastern half of the United States. The court largely upheld key provisions of the rule earlier this year. The section 126 rule is an effort by the federal government to prevent migration of NOx from power plants and factories in the 12 states to neighboring states.

The appeals court’s decision essentially gives power plants and factories four years rather than three years to comply with the section 126 rule. The deadline had been May 1, 2003. The additional delay results from the court ordering the Environmental Protection Agency to clarify how it calculated the “growth factors” for electricity demand that were used to develop the emission limits in the rule.

The delay will probably push back the start date for compliance from the 2003 ozone season (May to September) to the 2004 ozone season. It will also align the section 126 rule requirements with the so-called NOx SIP call provisions. The same appeals court has already extended the NOx SIP call compliance deadline to May 31, 2004. The NOx SIP call requires similar NOx reductions from a broader range of emissions sources, but also applies to power plants. The federal government is expected to try to coordinate implementation of the section 126 rule with the NOx SIP call rule requirements.

In its decision in late August, the federal appeals court also remanded — or sent back — the section 126 rule provisions that apply to cogenerators to the agency for further rulemaking to determine how cogeneration plants will be classified under the rule. The court also set aside a portion of the rule that classified certain cogenerators for the first time as “electric generating units. ” The cogeneration facilities in question are not treated as electric generating units for purposes of other EPA rules, like the acid rain program.

The section 126 rule and the NOx SIP call rule will eventually force owners of many existing power plants and factories to install costly new pollution control devices — like selective catalytic reduction systems — to reduce NOx emissions.

— contributed by Roy Belden in Washington.