The Week That Was
December 21, 2002

1. ALL ABOUT THE CLEAN AIR ACT AND NEW SOURCE REVIEW: EPA wants to rectify the irrational demands by the Clinton EPA for imposing New Performance Standards on old power plants and refineries. The Bush EPA makes it cheaper to run cleaner factories. So why are the Greens so mad?

2. CLEAN AIR RULES CLOUDED WITH CONTROVERSY - Ken Silverstein (of UtilitiPoint IssueAlert) presents both sides but without deeper analysis. (See SEPP comments below)

3. SEPP COMMENTS ON THE NSR CONTROVERSY: (1) The changes now implemented were developed under Clinton. (2) Cost-benefit analysis does not support the Green demands. (3) At the basis is a regional conflict: Northeast vs. Midwest

4. THE POLITICAL BASIS OF THE NSR CONTROVERSY - presented by CongressAction newsletter

5. EPA CORRECTS NSR BLUNDER -- a sane appraisal by Citizen News
(by GN Sirkin, 12-11-02)





2. The NSR Controversy

The fog has not yet cleared from the Bush administration's decision to change the rules that govern the Clear Air Act. In the meantime, both industry and environmentalists are expressing real concerns. One side says that the ambiguity could lead to more lawsuits and the other says that human health and the environment will suffer dramatically.

At issue is the Clean Air Act's New Source Review (NSR) provision. When older power facilities make "major modifications," the law says that they must also install modern technologies-something required of all newer plants. The difference between "routine maintenance'' and "upgrades" is vague, which has led environmentalists and the Clinton Administration to accuse industry of sidestepping the law to add capacity.

The U.S. Environmental Protection Agency and the Department of Justice therefore in 1999 cracked down and filed lawsuits against 51 companies in 13 states that it considered to be violation of the Clean Air Act. Tampa Electric reached an early settlement while Cinergy Corp. and Virginia Power had come to terms with authorities in principle but have since backtracked. In the case of Tampa Electric, two of its power plants-Big Bend and Gannon-have committed to major pollution reductions as a result of its settlement.

Those plants that were targeted said that the Clinton administration had a restrictive interpretation of the New Source Review that ultimately discouraged any renovations, including those that would necessitate new pollution controls. The Bush administration agreed and has now formally outlined ways that make it easier for utilities to perform "routine maintenance" without triggering legal assaults.

The thrust of the Bush plan, which takes place almost immediately, is to reduce those emissions without heavy government interference. Toward that end, it calculates total emissions on a plant-wide basis-not for specific pieces of equipment. Equipment can therefore be modified as long as the plant's overall emissions don't increase. And companies that voluntarily install new technologies to cut emissions will be given greater flexibility to make revisions "if they continue to operate within permitted limits."

The administration also has proposed rules that would make improvements to the "routine maintenance, repair and replacement" exclusion contained in EPA's regulations. Specifically, it would give a facility-wide annual allowance for maintenance activities, although that is not yet defined. It would also provide that most projects involving the replacement of existing equipment with newer versions constitute routine maintenance. EPA says that these specific proposals should be finalized after a lengthy comment period but no later than year-end 2003.

Industry is displeased with the wording of the new policy, saying it's not clear as to what can be modified without triggering expensive new investments in scrubbers and other cleaning technologies. The confusion, says the Edison Electric Institute, will ultimately create another wave of lawsuits.

"We're frustrated that the agency has stopped short of advancing a specific proposal that would remove the perpetual threat of litigation hanging over the heads of power plant operators facing difficult decisions about whether to proceed with critical maintenance activities," says Quin Shea, EEI executive director, environment. "We have long urged EPA to draw a distinction between routine activities and those that clearly are major modifications that would require power plants to install additional emission controls."

The National Coal Council, meanwhile, supports the revised interpretation. It says that about 40,000 megawatts of increased electrical production is now possible in the next three years from existing coal-fired generators. Such increased supply can occur, it adds, without increasing emissions per megawatt hour-all because of new clean coal technologies.

By contrast, the alterations met with fervent opposition that came from not just environmentalists and their Democratic supporters but also from nine attorneys-general in the Northeast, who will fight to have them reversed in federal appeals court in Washington. That will presumably keep alive all lawsuits related to the New Source Review. The Northeast has long complained about poor air quality and acid rain associated with power plants in the Midwest, South and Mid Atlantic states.

Specifically, New York's Elliot Spitzer labeled the plan "a presidential pardon against polluters" while Sen. Joe Lieberman, D-Conn., called on EPA Administrator Christine Whitman to resign. "Gov. Whitman has a good record and good intentions, but on her watch this administration has undertaken the biggest rollback in Clean Air history and scaled back countless other environmental protections," says Lieberman. "All this rule change will do is extend the life of the dirtiest industrial plants and worsen the lives of citizens…"

Lieberman had pressed the administration to perform studies on what the potential health effects might be of rolling back the New Source Review, all before making any final rulings. The administration countered that its plan will encourage plants to install pollution controls without government interference.

Perhaps, but full implementation and active enforcement of the laws already on the books would likely lead to cleaner air than the White House plan, says the National Public Interest Group and the Clean Air Task Force. The predicted results achieved under Bush are minimal compared to those mandated by the New Source Review, which require state-of-the-art technologies with each modification. The President's policy, they say, will allow at least 36 percent more nitrogen oxide, 50 percent more sulfur dioxide, and more than double the amount of mercury to be legally emitted by power plants.

The country, undoubtedly, will need new capacity. It becomes a policy question as to whether older power plants that are exempted from key provisions of the Clean Air Act are a reasonable way to get more productivity. They are not as efficient as new plants but they are a lot cleaner than in the past, and provide new capacity at favorable rates. Is that a sensible compromise? For many, it is not. By providing an exemption to clean air rules, they say that government is preserving dirty plants while modern facilities are kept at bay.

While the decision to revamp parts of the New Source Review is unsurprising, the timing may speak volumes. The announcement came a few weeks after the congressional elections-a strong indication that the administration did not want it to become fresh fodder for the Democrats. By extension, however, Democrats and environmentalists will certainly bring the subject to the fore during the 2004 elections.

By all accounts, the issue presents a clear distinction between the administration and key Democrats. It will no doubt become a factor in the next presidential election, although at this point it appears that it will remain clouded by matters of foreign policy and job creation.


3. SEPP comments on the NSR controversy

For conflicting views, see the lead editorials in the NY Times (Nov 27, 2002) and the Wash Times (Dec 3). For a detailed exposition, see "Why the NSR Program needs Reform" by DJ Gattuso (Heritage Fondation Backgrounder, No 1518)

(1) NSR changes were developed in the Clinton EPA

Discussion of EPA's changes to the New Source Review (NSR) process should make it clear that the changes being implemented now were developed and written during the Clinton Administration. They are intended to correct the NSR program's unintended effect of discouraging pollution-prevention or efficiency-improvement projects, not to make it easier to pollute. Generally these rule changes, especially implementation of Plant Applicability Limits (PALs), will impact the refining industry more than power plants.

The difference between 'routine maintenance' and 'upgrades' is still vague since the EPA has not promulgated any regulations specifying what type of project should be considered routine, and therefore exempt from the NSR process. The environmentalists' claims that EPA's proposed clarification of the "routine maintenance and repair" exemption could be considered a weakening of the current Clean Air Act would carry weight if the U.S. Department of Justice (DOJ) were successful in litigating EPA's current NSR enforcement actions against electric utilities. There have been no decisions in this matter, and the DOJ faces a number of challenges in successfully litigating these NSR enforcement actions. In the event that EPA/DOJ are not successful in litigating these actions, then the Bush Administration's proposed clarifications would represent a strengthening, not a weakening, of the current Clean Air Act and its regulations.

(2) No Cost -Benefit analysis

One looks in vain for any C-B justification of reduced emissions. The old question: How clean is clean? Now that the NAPAP study has downgraded acid rain to a minor problem that in any case cannot be much improved by further emission reductions from fixed sources, how do the benefits stack up against costs?

Add to this the recent revelation that EPA has never validated a significant portion of its scientific models. This means that the federal government, states, and the business community may have been spending unnecessary capital to comply with invalid models. [At the October meeting of the EPA Science Advisory Board Executive Committee, Chairman Dr. William Glaze stated that an unnamed high-ranking EPA official informed him that a significant fraction, perhaps most, of the models used by the agency have never been validated.]

(3) Regional conflict

Finally, we have the real underlying problem: The economic competition between New England and the Northeast where electric rates are high and the Midwest where power plants use cheap coal. The key has always been sulfur dioxide, the putative cause of lake acidification and forest damage. The first step was to require scrubbers for low-cost, low-sulfur Western coal; this forced Midwestern power plants into local high-sulfur coal that also required costly pre-combustion cleaning. The second step, NSR, would have forced the closing of older coal-burning plants (that had been grandfathered by the Clean Air Act), which were fully depreciated and burning the cheap low-sulfur coal.

One can see this conflict being played out in the Senate. Here it would be useful to look at the facts:
Since 1980, electric power generation has increased by 66%, with coal use up by 74%. At the same time, emissions from coal-burning power plants have decreased: SO2 by 26%, NOx by 19%, and particulates (PM-10) by 76%.



While whining about the shrill tone of conservatives, leftists have revived their old canard that Republican environmental policies will kill people. This time their rant involves a recent change to part of the Clean Air Act called the New Source Review (NSR). A Heritage Foundation analysis of NSR details its perverse incentives, and its effect of actually making the air dirtier as a result of new rules instigated by the Bill Clinton-Carol Browner Environmental Protection Agency. The Clinton-Browner rules stifled innovation and induced industrial facilities to forego even minor improvements that would reduce pollution, because to install those changes would have, under the Clinton-Browner rules, triggered a NSR that could last up to three years and require that the plant install the most modern pollution control devices throughout the facility. So the managers of the facilities would rightly conclude that it was better to just leave things as they were, and by abandoning plans for those improvements, avoid the New Source Review entirely.

Imagine you're driving around in an old clunker of a car, a gas-guzzling, smoke-belching monster. You plan to buy a nice new car, one that spews 50% less fumes than your old clunker. You worked hard and saved up the $20,000 cost of the new car, and you are just getting ready to make the purchase. Then the government mandates that all new cars sold from that day forward must include a brand new pollution control device that was just developed. The new device would make your clean new car run only slightly cleaner, but cutting emissions by 90% below your old car. The only problem is that the new pollution control device will now boost the cost of your new car to $60,000. Well, you don't have $60,000 for a new car; and anyway, $60,000 seems like an awful lot to pay for basic transportation. And so you would make the logical decision that your gas-guzzling, smoke-belching old monster of a car would have to do for a few years longer. And so instead of cutting emissions by 85% by buying the $20,000 new car as you intended, you're not cutting emissions at all, because the new mandate forced you to keep your old clunker.

Of course when you refused to shell out $60,000 for that new eco-mobile, your local neighborhood greenies driving their $60,000 golf carts would lambaste you as a sub-human fiend in thrall to "big pollution" (as though you don't breathe the same air as they do). But they never understood free market decisions anyway. Actually, activity under the Clinton-Browner NSR rules would be even more onerous than this rather simplistic example because, to continue the smoke-belching auto analogy, after you bought your new $60,000 eco-mobile and after you junked your old gas-guzzling, smoke-belching monster, you would not be permitted to actually drive your new eco-mobile until the EPA completed a detailed analysis to make sure that your new car's new pollution-control device was operating properly, and that detailed EPA analysis could take up to three years. During which time you would, naturally, have to walk.

Or take a gas-guzzling, smoke-belching bus. And if you just went out and bought a new set of tires for your old monster, the Clinton-Browner NSR rules would still require that you retrofit your old car with the new pollution control device anyway, which would cost even more than $60,000.

Scrapping the Clinton-Browner NSR rules, as the Bush administration announced it would do last week, would allow industrial facilities to reduce pollution, but that, of course, is not how it's being portrayed by the shrill voices on the left. Richard Blumenthal, Connecticut's Attorney General, was quoted by the New York Times to the effect that the Bush administration was saying, "the Northeast can drop dead, and the rest of the country can go with it." The New York Times went on to quote Congressman Henry Waxman alleging that this was campaign contribution payback for industry, and Congressman Edward Markey saying that the Republicans' new motto was to regulate softly and carry a big inhaler. How clever.

The San Francisco Chronicle quoted Senator Barbara Boxer charging that the new rules "will lead to dirtier air and more deaths from lung diseases among children and seniors". The Chronicle then quoted an official of the National Resources Defense Council charging that "This is payback for polluters who supported the Bush administration." An editorial in the Chronicle concluded that Bush is telling Californians, "let them eat smog", and Senator Joe Lieberman called for EPA administrator Whitman's resignation. The Environmental Defense Fund warned that the action "puts Americans in communities across the country at serious health risk…". As a result of the "attack on air rules", warned the Los Angeles Times, "…hope for the 30,000 Americans who die prematurely each year of causes related to industrial air pollution…rests largely in the hands of moderate Republicans who were elected on pro-environment platforms… Now is the time for these legislators…to overturn the new EPA rules."

Would Tom Daschle consider any of this fearmongering to be just a bit shrill? Of course not - leftists are allowed to be shrill. It's their stock in trade. Given the one-sided enviro-wacko and media firestorm, does anyone want to guess how that usual batch of "moderate Republicans" will vote when the Democrat's predictable business-bashing legislation to overrule the EPA hits the floor of the Congress next year? Is there any possibility whatsoever that the full facts of the issues involved will make it out to the public through the blanket of the media's leftist censorship? Any chance that the New York Times/ Los Angeles Times/ San Francisco Chronicle will actually interview anyone other than mouthpieces for Environmental Defense Fund and the National Resources Defense Council, and actually publish opposing analysis?


5. EPA corrects NSR mistakes of previous Administration

The Bush Administration is in process of making an important discovery, that it need not be so frightened of the environmentalist industry that it cannot correct a bad policy.

EPA announced a correction on November 22. The enviros, media, and Northeast attorneys-general, envisioning the air poisoned by old coal-fired power plants, factories, and refineries, are in a tizzy. Politicians hoping to benefit from the tizzy are pretending to be in a tizzy.

The Clean Air Act of 1977 has a provision called "New Source Review" to modernize plants. NSR requires--and this has not changed under the new rule--that new plants and major modifications of existing plants must install pollution-control equipment of the best available technology.

Under the new final rule, a cap will be put on emissions of a plant as a whole. This change will give a firm flexibility to modify operations as long as the modification does not exceed the plant's emissions-cap. Thus a firm can modernize its operations, increasing its efficiency and, at the same time, can offer assurance that there will be no increase in emissions.

A major defect, long recognized, concerns the difficulty of distinguishing "major modification" from "routine maintenance, repair, and replacement." Major modification requires new pollution-control equipment. Routine maintenance, repair, and replacement do not. To deal with the existing inadequate definition, EPA proposes a clear definition, on which it now seeks public comment..

The Clinton EPA brought lawsuits against utilities that it decided had violated existing rules. The Bush EPA says it will continue those lawsuits even if, under its proposed rule, there would have been no violation.

An example is a factory that wanted to replace dryer-nozzles with Teflon-coated nozzles to improve energy-efficiency. Unable to persuade the Clinton EPA that the change was just routine maintenance, the owner dropped the idea, and a potential improvement in energy-efficiency did not happen.

As that case suggests, firms have been inhibited from improving the efficiency of old plants because the NSR would require installing new pollution controls.

The new final NSR rule is important in opening the way to increased production of electric power at lower costs. At present, the U.S.'s outlook is for insufficient power to meet its growing needs.

Governors and state environment commissioners welcome the rules, but the environmental industry hates them. Its loud wail of complaint recalls the parody headline, "END OF THE WORLD IMMINENT, WOMEN AND MINORITIES HARDEST HIT."

Senator Dodd says the revision is an "outrage." Senator Lieberman says EPA Administrator Christie Todd Whitman should resign. Representative Markey says NSR will aggravate asthma. Representative Waxman says it will benefit big industrial contributors to Republican candidates. Connecticut Attorney General Blumenthal says it's a matter of life and death and he will sue. Especially annoyed are the opponents who have been at war with old power plants, old refineries, and old factories, some of whom won't be happy till we reverse the Industrial Revolution.

Spokesmen for the Northeastern states argue that the rules will increase emissions from dirty coal-fired Midwest power plants that drift over the Northeast. State officials fear the loss of Federal highway funds if they should fail to meet EPA's air quality standards.

These complaints are hokum on all counts. The rules will not increase emissions and most likely will reduce them. Even increased emissions would not cause asthma. No credible evidence links asthma to air pollutants.

While asthma has been increasing, air pollutants have been falling since the 1920s. In the past 30 years, particulate matter has fallen by 62%, ozone by 30%, sulfur dioxide by 80%, nitrogen oxides by 38%, carbon monoxide by 75%, and lead by 97%. Whatever causes asthma, it isn't air pollutants.

Nor is there any basis for the concern that emissions of Midwestern power plants will pollute the Northeast. EPA formed the Ozone Transport Assessment Group of experts to study the situation. It reported in 1997 that it had not found evidence of an effect on the Northeast. Beyond 100 to 200 miles, air pollutants become so dispersed that they produce no measurable effect.

Much environmental regulation wastefully pursues false alarms. DDT, asbestos, radon, Alar, dioxin, and PCBs are examples. But NSR is unique because it has been impeding environmental improvement.

While air pollution is not a serious health problem in the U.S., contrary to the allegations of the environmental industry, it is senseless for EPA to stand in the way of processes that make air cleaner. Perhaps it is the sheer perversity of NSR that explains why we are witnessing a singular event, a correction of an EPA blunder.

6. GLOBAL WARMING IS GOOD FOR YOU: So why are we concerned?

by Duncan Steel , in The Guardian, 5 December 2002,3604,854050,00.html

There can be little doubt that global warming is real. When scientists argue about the subject, it is usually in the context of how large a temperature rise they have calculated for the next decade or century, not whether any heating at all will occur. The heat is on, then. At least I hope so: because the greenhouse effect is a good thing.

Consider historical records, and other tracers showing how our climate has varied over the past few millennia. Stepping back just a decade, we find that injections of dust or smoke into the atmosphere, such as from the Mount Pinatubo volcanic eruption, led to slight cooling (airborne particles reflect sunlight away). Going back to the 17th century, one notes the "Little Ice Age" when the River Thames froze over and frost fairs were held in London on its icy surface. This occurred during an era when there was a dip in sunspot numbers, and so was presumably caused by lessened solar output. Why, we don't know. But it happened.

Starting around AD540, pestilence spread across Europe. This is usually termed the Plague of Justinian (emperor of the eastern Roman Empire), and it was provoked by a climatic downturn. Similarly, several coincidental crashes of disparate, well-separated civilisations are recognised in archaeological records, for example around 1650BC and also 2350BC, with no apparent link other than widespread worsening climate.

So, relatively small perturbations in the amount of sunlight reaching the ground can lead to temperature falls sufficient to provoke the downfall of previously effective agricultural systems and economies.

Looking at the climate over an extended timescale, longer than the Holocene (the relatively warm past 12,000 years), one sees that the usual condition of Earth is far colder than that enjoyed now. The norm is Ice Age. Cool the climate just a little, and a feedback effect drops the temperature further: the Arctic snowfields creep further south and, because snow reflects away more sunlight than bare ground, the temperature drops lower, more snow falls, and on it goes.

Metaphorically, the global climate is similar to a cliff edge, next to which a drunk is staggering. One step in the wrong direction and over he goes. Although we'd all like things to remain the same, the reality is that nothing, most especially the weather, is constant. Coolings seem to be rapid, and cause disastrous downfalls of civilisation. But we can cope with slow upward trends in temperature. Our mantra should be slow change good, fast change bad.

Given that we cannot stop the occurrence of random steps toward the precipice, what we need to do is arrange for our drunkard to be a safe distance from the cliff edge. That is why global warming is a good thing. In fact, life on Earth owes its existence to the greenhouse effect. This became clear from investigations of other planets. It was by trying to understand why Venus has such a high surface-temperature (close to 500 C) that we learned how the terrestrial atmosphere keeps us warm, and realised that elevated levels of carbon dioxide from the burning of fossil fuels must surely push Earth's temperature up.

That our planet is subject to the greenhouse effect is not in doubt. The natural action of the atmosphere elevates the global temperature by almost 40 degrees. The moon is at the same distance from the sun as us, but much colder because it is airless.

When scientists debate the possibility of life on planets orbiting distant stars, they may ruminate on the "Goldilocks problem". The global temperature, like the porridge, must be "just right". But what is the "right" terrestrial temperature from the perspective of the development of civilisation?

Global warming, then, is great because it protects us from the unpredictable big freeze that would be far, far worse.

Duncan Steel is reader in space technology at the Joule Physics Laboratory, University of Salford. Source: CCNet, a scholarly electronic network. To subscribe/unsubscribe, please contact the moderator Benny J Peiser < >.


7. CO2 decline questions need for Kyoto"
By Chris de Freitas

It's official and the news is startling: global carbon dioxide emissions continue to fall, despite universal predictions to the contrary.

The job of calculating carbon dioxide emissions from combustion of fossil fuels is carried out by the Carbon Dioxide Information & Advisory Center (CDIAC) at Oakridge, Tennessee. CDIAC relies on energy statistics supplied by the UN. Each UN member compiles national energy statistics and sends them to the UN for the United Nations Energy Yearbook. The published figures are dependent on the time it takes to gather and publish the statistics. The most recent figure is for 1999. For individual countries the last available year is 1998.

Global carbon dioxide emissions went from 6.633 billion tonnes (Gt) in 1997 to 6.619Gt in 1998 and 6.459Gt in 1999. The unofficial estimate for 2000 is 6.2Gt.

The Kyoto Protocol and all the discussions of governments on climate change are concerned with emissions of carbon dioxide, yet in the latest report of the official UN body set up to advise governments on climate change issues, the Intergovernmental Panel on Climate Change (IPCC), has only a short paragraph on global emissions. Data are not thoroughly analysed, nor are trends discussed in any detail. It is simply assumed emissions will increase, as they did in the 1970s and 1980s. Worst-case scenarios are the most popular. All this reflects, among other things, a lack of understanding of what is going on.

Humans are relatively small players in the global carbon cycle. The 6.5Gt of carbon we put into the air each year is puny compared with the 750Gt of carbon already in the atmosphere. Emissions from fossil fuels are only about 3% of the natural carbon cycle.

Many natural events dwarf human actions. For example, a single volcano, Mt Etna, has emitted well over 25 million tonnes of carbon dioxide into the atmosphere in a single year. This equals the output of four 1000MW coal-fired power stations. The Pacific mid-ocean ridge volcanic system emits 65 million tonnes of carbon dioxide annually. Geothermal activity at Yellowstone National Park emits 10 times the carbon dioxide of a typical mid-sized coal-fired power plant.

The equatorial oceans are the dominant oceanic source of atmospheric carbon dioxide. The net flow amounts to 0.7-1.5Gt of carbon about what is emitted in the US of which up to 72% emanates from the equatorial Pacific Ocean. Owing to changes in sea surface temperature during the 1991-94 El Niño, the annual flow of carbon dioxide was 30-80% of normal. This sort of thing has a significant effect on global atmospheric concentrations.

The effect of an increased concentration of carbon dioxide in the air is to increase the growth rates of plants, especially trees. There is now good evidence of a substantial net absorption of the fossil fuel emissions of carbon dioxide by plants globally and that this absorption is increasing each year as emissions increase.

The IPCC itself has recently reported the startling fact that carbon dioxide is being removed from the atmosphere at an increasing rate. From 1980-89, 61% of carbon emissions ended up in the atmosphere, whereas from 1990-99 only 51% ended up in the atmosphere.

The capacity of plants to absorb increasing amounts of carbon dioxide leads to an overall increase in the net productivity of agriculture and forestry, which is clearly a beneficial effect. This has been ignored by the media and has gone unnoticed by the general public.

Meanwhile, the Kyoto Protocol aims to reduce the current production of carbon dioxide of Annex B (essentially OECD) countries to less than 1990 levels. Yet total 1998 emissions by these countries are well below those of 1990. The figure for 1990 is 3.929Gt of carbon compared with 3.790Gt in 1998, 4% less.

In light of the information now available, one might ask is Kyoto really necessary?

Chris de Freitas is an associate professor in the school of geography and environmental science at the University of Auckland (New Zealand) and an editor of the international science journal Climate Research


8. Cicero had it right - except he forgot to ask for tax reductions

"The national budget must be brought into balance. Public debt must be reduced. The arrogance of the bureaucracy must be moderated and controlled. Payments to foreign governments must be reduced to keep the nation from bankruptcy. People should again learn how to work instead of living on the public dole."




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