This article was downloaded by: [Portland State University] On: 18 October 2014, At: 17:39 Publisher: Taylor & Francis Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of the Air Pollution Control Association Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/uawm16

“The Clean Air Act - What’s Happening?” Williamina T. Beery

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Air Pollution Control Association Published online: 13 Mar 2012.

To cite this article: Williamina T. Beery (1979) “The Clean Air Act - What’s Happening?”, Journal of the Air Pollution Control Association, 29:6, 601-609, DOI: 10.1080/00022470.1979.10470830 To link to this article: http://dx.doi.org/10.1080/00022470.1979.10470830

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REPORT ON THE SEVENTH APCA GOVERNMENT AFFAIRS SEMINAR fifi

The Gflean A5r Act - What' Williamina T. Beery

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Air Pollution Control Association The Seventh Government Affairs Seminar conducted by the Air Pollution Control Association was held in Washington D.C. on March 21-22,1979. The APCA Government Affairs Committee of which Samuel Booras is Chairman conducted this meeting. Terrence A. LiPuma was General Chairman of the Seminar Committee. The Steering Committee for the meeting included: William H. Axtman, D. Kent Berry, William C. Chapman, Roy S. Denham, Raymond W. Durante, Richard Grundy, W. G. Hamlin, Gale Hoffnagle, Phil Marinovich, W. B. Marx, William H. Megonnel, Joseph Mullan, Sidney R. Orem, and Roger Strelow. The Chairman of the Facilities Committee was Jerry Pell. The seminar was conducted in four sessions. The first session, entitled "Energy, Economics and the Environment," was opened by the Keynote Speaker, Dr. Alfred Kahn, Chairman of the President's Council on Wage and Price Stability. (Dr. Kahn's remarks were summarized in the May JAPCA.) Richard W. Boubel, President of APCA, served as Moderator for this session. The three panel speakers addressed the solutions to potential conflicts among the nation's energy, economic and environmental goals. Dave Stockman (R, Mich.), U.S. House of Representatives, was the luncheon speaker for this seminar. He took as his subject the Seminar theme—"The Clean Air Act—What's Happening?" Helen A. Kahn, Reporter for Automotive News, Washington, D.C, was the Moderator for Session IIA—"Impact of the 1977 Amendments on Mobile Sources." The subject was discussed by an EPA official, an industry executive, and a state official. Session IIB, "Impact of the 1977 Amendments on New Sources," was moderated by John J. O'Connor, Editor in Chief, Power, New York. Revised NSPS for power plants, PSD, and nonattainment/emissions offset provisions were considered by representatives from EPA, a utility, and an environmentalist. Harry H. Hovey, Jr., NYS Department of Environmental Conservation, was the moderator of Session III—"State Implementation Plans." The progress being made by the states in preparing SIPs which must be approved by June 30,1979 was discussed. In this report condensed versions of the prepared remarks of the participants are presented. A more extensive summary of the meeting which includes the Moderators' remarks and the floor discussion is available in the Proceedings of the Seventh APCA Government Affairs Seminar which can be obtained from APCA headquarters.

Copyright 1979-Air Pollution Control Association

June 1979

Volume 29, No. 6

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Session I: Energy, Economics and the Environment

William Drayton, Jr., Assistant Administrator for Planning and Management, U.S. Environmental Protection Agency The environmental control industry is in many ways an infant and as such fits a normal curve of development for a new industry. In the early stage they have been running as fast as possible to open up the new market, now they are in a period where it is necessary to rationalize what has been done. National policy on inflation is focused chiefly on controlling demand for goods and services. How does this relate to the environment inflation issue? Environment accounts for two-tenths or three-tenths of one percent of the increased inflation. Because of an obsolete series of national accounts the benefits derived from environmental regulation-—which are not inflationary—are built into indexing and some inflation. As for costs, about 1% of the GNP is going into pollution abatement. The benefits can be measured in many terms—life, health, property deterioration, and simple economic benefits. A study in the Los Angeles basin area shows that a 30% reduction in air pollution would accomplish an increase in value in that area of between $650 and $950 million measured in two different ways independently. A factor to be considered in the analysis of environmental problems is that they are worse today than they were five years ago as much because our recognition of them has changed as because they have increased. However, some problems are getting precipitously worse and we should therefore project that into our cost/benefit thinking. The Los Angeles study was part of a larger study which should be out soon and which shows that against a roughly $19 billion of incremental expenditure for all federal pollution regulations affecting mortality and morbidity, the benefits run in the order of $41 to $52 billion. This is a macro-measure of cost/benefits. Micro-studies are done for particular industries and regulation-by-regulation. A characteristic of a new industry is that the easiest markets open up first and air pollution control has followed that pattern. We have gone after the large sources where there are relatively easy technological procedures available. Now we are faced with the need to control larger numbers of smaller industries. We are clearly at a point where we need a higher rate of innovation and control technology. We have already begun to discuss some innovative methods such as the bubble concept, the offsets, marketable rights, banking and brokerage to support the quasi-market innovations. EPA is putting in place the legal mechanisms that will allow the state and local governments and industry to work out the best use of these tools. This is designed as a local decision-making system that calls for innovation and efficiency at the primary level. The result will be a cleaner and safer environment and that is in everyone's interest. Lewis J. Perl, Vice President, National Economic Research Associates The general reasons for doing cost/benefit analyses have been well presented by our economist and our EPA representative. Now I should like to discuss a specific cost/benefit analysis—that is the Clean Air Act as it affects the electric utility industry. While I believe that the specific numbers cited in this analysis are essentially the best numbers one can put together on this legislation, they should not be construed as determinative or accurate to the last decimal place. Rather, they are intended to give some sense of how a cost/benefit analysis 602

might be done, what the implications are for a particular piece of regulation, and what the analysis suggests for legislative policy in this area. A linear programming model of the electric utility industry has for its purpose the prediction of an optimal generation expansion plan for the industry by regions. It determines the patterns of capacity additions the industry ought to add and how it should use those to generate electricity based on the following input: (1) the demand for electricity by regions; (2) the cost of various technologies that are available; (3) the capital costs; (4) the cost of fuel; and (5) the emissions constraints for sulfur dioxide and particulates. The model was then run under a variety of environmental scenarios, first with no constraints, then with emission constraints for SO2 and particulates as they were reflected in the Clean Air Act before its most recent revisions, and finally a series of revisions to new source performance standards as reflected in proposals for those revisions by the EPA staff and industry. In this modeling effort we looked at what we term the EPA staff proposal requiring 85% removal of SO2. At the other end of the range, what we characterize as the industry proposal, we looked at a sliding scale for removal which would have allowed lower percent removal where the interim sulfur content was lower. With respect to the benefits of SO2 regulations, we relied on a study done several years ago by the National Academy of Sciences which employed a diffusion model for SO2. It translated the emissions of SO2 from individual power plants into the ambient levels of SO2 and SO4= various distances from the power plants. The physical damages estimated in this model included a variety of alleged health effects from sulfates including mortality, chronic bronchitis, aggravation of cardiovascular disease, and aggravation of asthma. Associated with sulfates, the model also added values for materials damage, values for adverse effects of acid rain, and for visibility diminution. Values were also assigned to health effects based on the cost of health maintenance. There are several ways to determine costs: in total cost, in cost per household, or in cost per ton of SO2 removed. The most effective way of evaluating this regulation is by using the cost per ton. The existing regulation reduced the emissions of SO2 by the electric utility industry by 1990 by approximately 17 million tons which would cost between $160 and $180 per ton. The EPA staff proposal would add another 2 million tons, the industry proposal would add another 1-1/4 million tons at costs which range from $800 to $1000 per ton. Thus, while achieving an additional 5-6% in emissions removal, the incremental cost would be between 50 and 100%. The average benefits of the original regulation, if we use the NAS methodology, range from $140 to $270 per ton with a mean of around $195 per ton, or a ratio of $0.80 to $1.70 benefits per $1.00 costs. For the EPA staff proposal the benefits range from $0.09 to $0.20 of benefits per $1.00 of expenditure with a mean of about $0.12. The industry proposal range was $0.11 to $0.30 per $1.00 with a mean of $0.17. The benefits vary widely regionally depending upon the population, i.e. benefits are high when the northeastern sections of the country are affected, low when the western states are affected. As Mr. Kahn suggested, one thing to be careful about is the difference between comparing the total benefits and the total costs of environmental regulation and comparing the marginal benefits and the marginal costs. There is no question that the existing Clean Air Act may have a favorable cost/benefit ratio but it seems to me that it is at the margin that we should be evaluating the environmental regulations. EPA has said that their hands are tied in the use of cost/ benefit analysis, at least in some areas, by Congressional restraints. Congress mandated technology-based regulations Journal of the Air Pollution Control Association

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with specific degrees of emissions controls. By insisting on carrying technology-based regulations to their limits, an absurd situation is created in which we double the expenditures to get essentially no increase in benefits. Daniel B. Badger, Jr., Policy Analyst, Division of Coal and Electric Utilities, U.S. Department of Energy The debate over the revision of new source performance standards for SO2 has focused attention on the language in the 1977 Clean Air Act amendments which instructs the EPA Administrator to take costs into consideration. The cost consideration language in the NSPS provisions originated in the 1970 Act. The most obvious interpretation of what Congress had in mind is as follows: pollution control technology can achieve arbitrarily high levels of effectiveness if cost is disregarded, but it is well known that beyond some point marginal costs begin to rise while marginal benefits begin to decline. Congress wanted the Administrator to recognize that at some point the marginal cost effectiveness of the next increment of control cannot be justified. Scrubbers illustrate how the cost effectiveness of a control technology first rises and then declines as it is pushed to higher levels of control. The cost per ton removed by a scrubber is greater in the 30% removal range than it is at the 80 to 90% range. At the removal level where the full capability of the design is being utilized, the cost effectiveness is optimal. Beyond that point expensive modifications are necessary to increase removal and cost effectiveness begins to drop. Thus far I have been considering the measurement of cost effectiveness at the individual plant where the comparison is only between different levels of control, holding constant the sulfur content of the coal. EPA and DOE have embarked on an elaborate computer modeling exercise to simulate the behavior of integrated electric utility systems all over the country under alternative NSPS standards. The difference between individual plant and utility systems measurements of cost effectiveness results from interaction effects at the systems level which individual plant analysis cannot capture. The two most important of these effects are the freedom at the systems level to choose among different qualities of coal and the freedom to choose not to build the plant at all. This is likely to be one of the central issues of NSPS litigation. Should the Administrator consider only the cost effectiveness of individual power plant control systems or should he adopt a perspective which includes the full set of choices which face the real world utility systems? It may be that the individual plant perspective is closer to the thinking of Congress while the system view may be better public policy. Luncheon: The Clean Air Act

Dave Stockman, U.S. House of Representatives (R, Mich.), Member of the House Subcommittee on Public Health and the Environment As a layman who serves on one of the two subcommittees in Congress which make the ultimate policy decisions in regard to the Clean Air Act, I'd like to make some general observations. First, the Act has become so procedurally complex, so riddled with concepts and definitions, so punctured with exceptions, variances, exemptions and delays, and so elaborated with a baroque overlay of rulemaking, interpretative guidelines, and administrative and court case law that it is difficult to understand it. By understand it, I mean just in terms of the structure—how it works, what it requires, what the effect of this or that provision is likely to be. The effect of this proceJune 1979

Volume 29, No. 6

dural complexity is to obfuscate the real policy choices which must be made at the Congressional level. There are probably some air quality specialists who greet this admission with a great sigh of relief. They probably conclude that with Congress out of the way they can get on with the business of cleaning up the air without harassment and amateurish meddling and interference from the Congressional committees. However, that is a dangerous illusion and I want to focus on some of the consequences. We are now moving into the real implementation stages of our national clean air program. The easy cleanup has been done, the statute and implementation structure has been fixed, now as the revised SIP's go into effect we're going to feel the moderate to very costly emissions from our economic system that we must control if we are to reach the goals of the Act. In the next three or four years plants are going to close, others are not going to be built, and still others are going to be bogged down in a long contentious series of reviews and hearings and permitting procedures. Many people in this country are going to be seriously inconvenienced if we move to things like mandatory I/M or driving restrictions for mobile sources. Many communities are going to be seriously dislocated as occurred in one of the communities in my district when a major secondary aluminum

Stockman

smelter shut down because it couldn't work its way out of the crossfire between the state agency and EPA. That was in a community that already has a 15% unemployment rate and a very fragile, very weak economic base. Although that is not a reason for not having a clean air program, these unavoidable impacts and burdens, which will become increasingly serious in the next few years, are going to generate substantial political pressure on the Congress to relieve or resolve some of these situations. If you have a Congress which cannot see the policy forest because its vision has been totally obfuscated by the procedural trees, then it will respond to these inevitable political pressures by randomly hacking away at the nearest trees whether that makes policy sense or not. We have already seen the effects of political pressure in the development of the ozone standard in the CAAA of 1977. The squeaky wheels got greased primarily on the virtue that they had political clout. Rather than debating the ozone standard on its merit, we wound up fighting the regulations and the control strategies at the implementation level. I fear that unless we begin to eliminate some of the excessive legalistic and purist baggage that now encumbers the Act this greasy wheel syndrome will be reinforced. As an example of the complexity of the Act, examine the structure that calls for new source performance standards as a general matter for all new permit applications, then on top of that requires the best available control technology for the 603

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PSD areas, and finally lowest attainable emission standards for the non-attainment areas. When you try to examine the body of rules and regulations and interpretations in those three areas, you recognize how difficult it is to penetrate to the real policy issues. To achieve the revised ozone standard in the 75 or more noncomplying areas that we have today, obviously such things as mandatory I/M, parking fees, or no drive days make a lot of sense as efficient control mechanisms. However, we will be no more successful at imposing such draconian measures on the American people's freedom of mobility than the IRS has been in closing the door to exemptions, deductions, shelters that reduce the 70% tax rate by half or more. Rather than protracted political warfare over control strategies, it might be more prudent to look at the standards themselves and at the no risk, no health effects, no economic considerations philosophy which they embody, we ought to consider the basic adjustments that can be made on a rational rather than on a reactive-case-by-case relief basis.

Certification vs. End of Line vs. Field Testing Approach for the Compliance Agency

It is recognized that any compliance agency must have some program to assure that the regulatee is doing his job. However, it is important that EPA decide which route should be taken so that the administrative costs can be controlled. The Diesel Emission Problem

The diesel engine presents a fuel saving alternative to the gasoline engine. At the same time it is important that EPA has agreed that health studies which are ongoing in EPA and industry laboratories should be completed before any judgments are made on the health consequences of a large proportion of diesel automobiles in our total vehicular population. Heavy Duty Standards

This was a case where a program for defining a new test cycle for heavy duty engines appeared to be on an appropriate schedule. That development program was aborted in midstream and the present test cycle hasn't had the development it ought to have for its importance. The result, because of the peculiar lead time requirements of this industry, may be a substantial cost increase. Inspection/Maintenance

There is concern in the industry about the type of testing program that is used. We believe that a parameter testing approach is the only way to do the job. Anything else based on today's technology is going to be outdated with the technology of the future. Bowditch, Walsh

Non-FTP Testing Session HA: Impact of the 1977 Amendments on Mobile Sources

Fred W. Bowditch, Executive Assistant to the Vice President of the Environmental Activities Staff, General Motors Both EPA and the automobile manufacturers are faced with an ever increasing problem of making certain that the public is getting what they are paying for. The cost to an average consumer of a General Motors product for administration of the mobile source air pollution requirements and the hardware added to the car comes to a little over $200/car. While it's true that the cost is less than the cost of an air conditioner or a fancy stereo radio with a tape player, it is an imposed cost, not an optional cost. As we look into the future to the kind of system that will be needed to meet the more stringent 1981 requirements, it is apparent that the costs will approach $525/car. No attempt is made here to judge whether or not these costs are justified. It is however obvious that EPA and the automobile manufacturers must view these costs as a problem to be faced together to be sure that we are getting what we pay for. Altitude Regulations

In the 1977 amendments, Congress decided to remove any specific requirements for cars run at altitudes until 19.81. Nevertheless, the automobile industry has offered the popular models with altitude options. What disturbs the industry is the lack of understanding of the problem, specifically of Denver's brown cloud. Therefore, the industry has instituted a research program in conjunction with local authorities to find the answers. Unfortunately, EPA priorities would not allow them to become involved in that program. 604

Systems that work outside of the "Federal Test Procedure" should be considered where it can be demonstrated that the control levels achieved are roughly proportional to the percentage reductions in the standards themselves. Nonregulated Pollutants

General Motors as a manufacturer has carefully gathered information about nonregulated pollutants ever since they started in business. A primary reason for this was to protect themselves in case of any legal problems later on. The biggest problem in this area is developing the necessary medical information. What are the threshold levels of the hundreds of varieties of pollutants that can be found in the exhaust of a gasoline engine? This is an area where we could use help from the research arm of EPA. The NO X Research Program

Under the provisions of the Clean Air Act, the EPA is monitoring the various industrial research programs in this area. While each industry, and indeed EPA itself, conducts its program differently the idea of monitoring is to be sure that each program is adequate. The Parameter Adjustment

The principle involved in parameter adjustment is to remove the adjustments that give trouble in the field. With this model year GM is eliminating all or most of the idle adjustment capability on our products. By the end of next year those items that are usually changed or adjusted in the field will no longer be available for adjustment. To have an I/M program based on those same items would seem to lead to an antiquated program before it ever gets off the ground. Journal of the Air Pollution Control Association

Test Procedure Changes

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The decision by Congress to put specific standards into the Act and with those standards to specify test procedures has led to a situation where one cannot be changed without changing the other. Yet there must be some accommodation that permits test procedures to change because they'll be more accurate or for other variables without rewriting the law. Finally, the most important problem that we seek answers to is the need for EPA and the manufacturers to find a coopperative route to the solution of these problems. Both must drop the antagonistic approach that has been used and that has resulted in higher costs to the public. Michael P. Walsh, Deputy Assistant Administrator for Mobile Source Control, U.S. Environmental Protection Agency One of the major difficulties in providing for attainment of the health based ambient air quality standards, particularly in our urban areas, is the inability of vehicles manufactured in compliance with standards to continue to meet those standards in actual use. Therefore, it is of particular importance to evaluate the Inspection/Maintenance program. On average, by the time cars are three or four years old they are well over emission standards. Even in the first year more than half of the cars may exceed emission standards for one or another pollutant. The primary reason for this is that they don't get proper maintenance. This situation, if it is allowed to continue, will prevent most of the urban areas in the U.S. from attaining the air quality standards. To help correct this situation, one of the clear directives of the CAAA of 1977 was toward Inspection/Maintenance programs in these nonattainment areas. State and local areas are now seriously considering the I/M as a critical part of the 1979 SIPs. Approximately 30 states or 50 urban areas would probably need to go forward with these programs. Legislation is already pending in many state legislatures. While the key reason for this is the Clean Air Act legislation, there has been a response from people who are looking more closely at the program. They conclude that even if it were not mandated in the Act it would be a good program to go ahead with. I/M is almost always the most cost effective of the measures that state and local governments explore as they look at ways to attain the ambient air quality standards. Recently EPA has been conducting a study of the Portland, Oregon I/M program. This is a state run, centralized idle test inspection program which became mandatory in 1976. The results from the program have been very encouraging. In this study information is being collected on vehicles before they pass or fail the Oregon inspection program. On the cars that fail additional federal test procedure (FTP) results are collected after the normal repair procedures. They are then tested periodically. How well does the idle test identify the cars that need maintenance? It does an excellent job even with the catalyst equipped 1975-1977 models that are being inspected. The FTP exhaust emission levels are over two and almost three times higher for HC and CO, respectively, for the cars that failed the Portland program than for the cars that passed. The repair of the cars provides substantial emission reductions. HC and CO emissions are reduced by 47% and 53% for the 1975-1977 vehicles and by 34% and 33% for the 1972-1974 vehicles. The emission reductions are maintained over a reasonable time. Finally, the average cost of repairs, for those cars which need repairs, has been $29.47. More than 60% of the cars pass inspection in the Portland experience. The I/M cost estimates for average repairs in other programs support these findings. Therefore, EPA and many of its state counterparts are convinced of the I/M program potential. June 1979

Volume 29, No. 6

John A. Waddington, Director, New Jersey Division of Motor Vehicles New Jersey has the greatest experience in Inspection/ Maintenance programs of any state since our program was initiated in the mid '60's. The premise behind I/M for emissions is that the equipment from the automobile manufacturers will deteriorate with time and may or may not be corrected automatically by the owner. In 1968 when it was recognized that excess carbon monoxide levels constituted the main air quality problem in the northeast corner of New Jersey and excess ozone levels in other parts of the state, research centered on these CO and HC emissions from automobiles. Infrared analyzers were used to study tailpipe emissions of vehicles which were going through the existing safety inspection lanes. It was determined that 20% of the cars had emissions substantially higher than their new car levels. A statewide system of inspection, repair, and testing was developed. The nonloaded idle testing mode was selected as being accurate enough, a judgment EPA has since confirmed. It had the advantages of speed, simplicity, and low cost. The disadvantages are the lack of correlation with the federal loaded mode 24 hr test and the inability to measure NO* emissions. Another factor considered in selecting the system was its cost and availability to independent garages which would be involved in the repair and testing program. State approved analyzers were purchased for $2-3000 by garage men who have found them useful also in their service problems. An interesting concept has been the sociological notion that the percentage of cars rejected in various categories (i.e. 1969 or earlier, 1970-1974,1975-1978 etc.) should be approximately the same. As politicians we feel that if you reject 50% of the 1969 or older cars, while rejecting only 5% of the 1975 cars, you are penalizing the older, poorer people who generally still own older cars. Our current level of rejection is 18 to 19% of the cars inspected. In an untreated population in another state, the level of rejection might be as high as 25 to 30%. However, this should level off after a short period. If the emission standards are too tight there will be a large increase in rejections without a corresponding decrease in ambient pollution levels. In our view, under the hood inspection for tampering is not cost effective. Our study has found that overtampering designed to defeat the purpose of the tailpipe emissions inspection was at a minimum. New Jersey's Department of Environmental Protection established a network of 18 air quality monitoring stations some time prior to the start of the emissions testing program. In a study of data it was determined that the reduction in CO from February 1974 to June 1977 was about 26%. They attribute much of this change to improved new car emissions control. A later report from the Department has shown a reduction in CO since 1974 of 40%. They say that this is about double the average in those states that have no emissions inspection. The study commission's report also stated that the effect on ambient oxidant levels is not as clear. Vehicles are only one of the many sources of ambient hydrocarbons which lead to the formation of the oxidants. Transport from other states as well as other sources within the state contribute to the oxidant level. Regional control of hydrocarbons is therefore now under study by EPA. Session IIB: Impact of the 1977 Amendments on New Sources

Bruce Terris, Esq., Attorney, Washington, DC The skepticism about the offset policy of EPA, both under the 1976 interpretative ruling and under the 1977 amendments, is extremely serious. Although on the surface that policy suggested a method for both allowing growth and in605

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dustrial development and at the same time achieving progress toward the attainment of the national air quality standards, in practice it does exactly the opposite. What it was intended in fact to allow and what it will in practice allow is the continuing impossibility of meeting those standards. What occurs through the offset policy is that the easiest pollution control methods are found and used as offsets, then the economically or politically unfeasible methods are left and statutory deadlines are not met. There is every reason to believe that we will ignore the 1982 and 1987 deadlines as we ignored the 1975 and 1977 deadlines. It is important to remember that the people who enforce the air quality laws in this country violated important federal statutes when they failed to bring the country into compliance in the mid 1970's with the air quality standards which they themselves had promulgated. A specific example of how the offset policy is a method for undermining the national standards rather than achieving them is found in the State of Virginia. Essentially, Virginia has ignored the problem of hydrocarbons and oxidants. They failed to set forth an SIP which would have achieved the standards by 1975 or 1977. They have recited to EPA the litany of problems associated with hydrocarbons and oxidants—problems with modeling, problems with interstate transport, problems of cost, problems of control. Further, the state has said that the pollution is not its own—it comes from nature, or from other states. EPA purports to have rejected all those arguments, yet it has never required the state to do anything.

Hovey, Rhoads

Now, however, there is a proposal for a large new refinery at Hampton Roads, Virginia. Even using the best of modern technology a refinery will produce major amounts of hydrocarbon and therefore of oxidants. EPA documents show that in this state which has done nothing to control its oxidant problem, EPA sat down with the state and the company to find an offset which would allow the refinery to be built. The offset that they found was a change in the asphalt used on the state highways. In making this choice, EPA was working with a state which had failed to meet the law. Further, they did not relate the offsets allowed to the specific AQCR where the refinery was to be built. No calculations were made to show that there will be improvement in the region. It seems obvious that this is not a method for reducing pollution in the region where the new source is to be built. It is a method to allow industrial development and postpone confrontation with the particulate/oxidant problem. This failure on the part of EPA to enforce the statute has a debilitating effect on the states and on industries which do want to comply with the air pollution control laws. The lesson of the 70's is that anybody who spends the money to bring themselves into compliance with federal law is essentially a fool. The states which have tried to put in tough control strategies for oxidants have not benefitted from it but have hurt their economic attractiveness versus other states. 606

There are similar examples in both the PSD and NSPS fields. Section 165 of the Act, which is the section which imposes most of the new requirements for PSD, states that it will become immediately effective. Yet EPA has backed away from enforcing this and has set in motion postponements for compliance. Every time that the time approaches when there will be some cutting edge to the statute, EPA looks around for new methods to extend the deadlines. Most people believe that these delays and failures to act promptly by EPA will only mean a shift in the timetable for meeting the national standards. In fact the issue really is whether we're going to have massive increases in air pollution in this country over the next 20 years. Analysis which has been made of the President's energy program shows that even with substantial energy conservation and the use of the best technologies we now know, there will be by 2000 a 10% increase in SO* emissions and a 70% increase inNO x . Public opinion polls have shown that the public supports measures to protect the air quality of this country and the present statutory authority is adequate to accomplish this. What we need is for those who run the air pollution control agencies to have the courage to enforce the law. Paul C. Bailey, Jr., Environmental Licensing Engineer, Southern Company Services, Inc. Recent events in Iran have once again brought this nation's attention to focus on the U.S. energy situation. In light of our energy problems, the desirability of achieving the Carter administration's goal to double U.S. coal production by the middle of the next decade becomes compelling indeed. Much of this increased coal production will be used to generate electric power. As the electric utility industry increases its consumption of coal which is projected to be over one billion ton/year by the year 1990, the impact of the revised new source performance standards on the nation's economic, energy, and environmental resources assume very large proportions. The Utility Air Regulatory Group (UARG) is a group of 87 electric utility systems which was formed to facilitate industry participation in the EPA rulemaking procedure under the CAAA of 1977. Along with many other groups we have recommended changes to EPA's proposed standards to insure that the standards finally promulgated reflect adequately demonstrated technology and that they maximize environmental benefits while minimizing cost and energy requirements. The 1977 Amendment to the Clean Air Act expanded the concept of new source performance standards to include not only allowable emission limitations for SO2 particulate matter, and NO* which the 1970 amendments also required, but also a percentage reduction in emissions which had not been required. Thus, the 1977 amendments embody a very strict emission policy for new coal-fired electric generating plants. Significantly however, Congress did not specify the amounts by which these pollutants should be reduced. Instead, Congress delegated to EPA the responsibility to prescribe the requisite emission limitations and percentage reductions. Congress imposed three important statutory requirements to guide EPA in setting NSPS. First, the revisions must be based on adequately demonstrated technology. Second, in setting the NSPS, EPA must consider cost, non-air quality health and environmental impacts, and energy requirements. Third, EPA must review the NSPS and if appropriate revise them every four years. On September 19th of last year, EPA proposed revisions to its NSPS for steam electric generating units. While the current NSPS for SO2 impose only an emission limitation of 1.2 lb/million Btu, EPA's proposed standard would impose the same emission limitation, 1.2 lb/million Btu for plants Journal of the Air Pollution Control Association

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emitting more than 0.2 lb/million Btu, with an added requirement to reduce potential SO2 emissions by 85%. In addition, EPA has proposed a limited exemption which would allow the SO2 percentage reduction to drop as low as 75% for up to three days per month. Compliance with the SO2 standard would be on a 24 hr basis. The proposed standard for particulate matter would limit particulate emissions to 0.03 lb/million Btu. Nitrogen oxide emissions would be limited to 0.6 lb/million Btu for bituminous coal and 0.5/million Btu for sub-bituminous coal and coal-derived fuels. The SO2 standard proposed by EPA would require the control of SO2 emissions either by the use of gas scrubbers or other technologies under development such as solvent refining of coal and fluidized bed combustion. The recommendations of UARG also would require the use of scrubbers. However, the utility industry and others have urged EPA to adopt a sliding scale under which a higher percentage reduction in SO2 emissions would be required for high sulfur coals than for low sulfur coals. This sliding scale would require a reduction in SO2 emissions ranging between 85% for high sulfur coals, which is the same as the EPA proposal, and 20% for the lower sulfur coals. Electric utility companies will incur higher pollution control costs as a result of the CAAA of 1977. However, the way in which EPA chooses to regulate emissions, especially SO2, will determine the magnitude of the resulting economic and energy costs. In order to evaluate the impacts of the EPA proposal and of the UARG proposal, UARG engaged National Economic Research Associates (NERA) to perform macro-economic projections. NERA's electric supply optimization model examined the impacts of the alternative NSPS proposals on emission levels, costs, fuel consumption, sludge and ash disposal, coal production, and electricity prices. Unless otherwise stated, the results summarized here are projected for the year 1990. First, neither the EPA nor the UARG proposal achieves a very significant decrease in SO2 or particulate emissions when compared to emissions reductions that would otherwise occur as a result of the 1971 NSPS and the SIP emission limitations. The UARG proposal would reduce annual SO2 emissions to slightly more than 23 million tons; the EPA proposal would reduce annual SO2 emissions to slightly more than 22 million tons. Particulates would be reduced under the UARG proposal to slightly over 1 million tpy and under the EPA proposal to 370,000 tpy. Second, without revision of the 1971 NSPS, the cost of complying with NSPS would be $4.5 billion/yr in 1990. Costs rise to $6.1 billion/yr, an increase of 38%, under the UARG proposal. Under the EPA proposal, these costs rise substantially more to $7.7 billion/yr, an increase of 73%. The economic consequences of the alternative NSPS proposals are most clearly revealed by their impact on marginal costs. The UARG proposal will increase the marginal cost of electric generation by 7.5%; EPA's proposal will result in an increase of slightly more than 15%. Third, the UARG proposal costs less per ton of SO2 or particulate removal than the EPA proposal. Under the current NSPS the cost per ton of SO2 removed is $158; under the UARG proposal it is $900/ton; under the EPA proposal it is almost $l,100/ton. Prior to revision, particulate removal under NSPS costs $19/ton. The incremental cost of the UARG proposal is $74/ton and of the EPA proposal is slightly more than $280/ton. Fourth, both the EPA and UARG proposals increase consumption of oil and gas by electric utilities and decrease consumption of coal. Utility coal consumption is projected to be 1.23 billion tpy in 1990 under the unrevised NSPS. Coal consumption declines by almost 150 million tpy under the EPA proposal and by about 80 million tpy under the UARG proposal. June 1979

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Utility oil and gas consumption is over 1 billion bbl/day of oil equivalent under present NSPS. This would increase by almost 1.5 million bbl/day under the EPA proposal and by 780,000 bbl/day under the UARG proposal. Finally, the utility industry's solid waste disposal problems will be increased by both proposals. The EPA proposal would increase scrubber sludge by almost 13 million tpy and fly ash by over 10 million tpy. The UARG proposal would result in an increase in scrubber sludge of 1.8 million tpy and in fly ash of 6.5 million tpy. UARG feels that the data in the record do not support EPA's proposed standard. They recommend a longer more realistic averaging time and a use of the utility industry sliding scale.

Stewart

Kent Berry, Director of the Policy Analysis Staff, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency Under the original Prevention of Significant Deterioration (PSD) regulations which have been in effect since the middle of 1975, the effects of new sources have not been particularly disastrous. Up until the requirements of the CAAA of 1977 came into effect, over 200 permits had been issued. Most permit applications were processed in less than six months. Under that program only two disapprovals were registered. Since the new requirements under CAAA of 1977, the picture has probably changed somewhat. One of the effects of the CAAA was to bring substantially more sources under the PSD review requirements thus clogging the system. Our efforts to improve the review procedure will follow several lines. First, an effort is being made to develop policies and procedures to standardize and expedite the review process as much as possible. Additional guidelines are being developed on the minimum data that would be acceptable for processing of a complete permit. Another area for standardization is the issue of coal sulfur variability and variability in scrubber performance. Here an effort is being made to develop a statistical test which would be compatible with the once per year violation that's permitted under the increment specified in the legislation. Another area which may expedite PSD permit processing is the setting of NSPS which provide the floor for any BACT determination and provide data that states and regions can use in making BACT determinations. Finally, among the highest priorities is to transfer the PSD permitting process into the hands of the states. The objective would be to have states handle the PSD permits in the course of their normal new source review procedures. PSD monitoring requirements have caused a great deal of concern. Since there are many circumstances under which monitoring may not be required in the PSD process, it is important that applicants discuss the specific case with the permit granting authority before they commit to any monitoring. Mr. Terris commented about EPA's actions involving offsets. Anyone who was familiar with EPA's initial 1976 ruling 607

will remember that the baseline for determining emission offset credit was to be reasonably available control technology (RACT). That meant that you only got credit for offset purposes for controlling an existing source beyond RACT. However, Congress changed the baseline from RACT to whatever the SIP required at the time. Since in some areas such as volatile organic sources, many SIP's had no regulations thus the baseline was lax and offsets were available. One of the results is that states which have done the least are benefitted while those which have done the most are penalized. Under EPA's original policy this would hot have been true since everybody would have had the same baseline—RACT.

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Session III: State Implementation Plans

Bill Stewart, Executive Director, Texas Air Control Board When Congress amended the Clean Air Act in 1977 to give the states time to bring nonattainment areas into compliance with the standards, they obviously intended that the states get busy and do something. In general most of the states are moving forward. Basically the CAAA said to the states, designate areas, get together your planning and coordination, determine baseline air quality, and determine ways to approach a reduction in emissions and develop a plan for compliance by 1982. In Texas when we started looking at the nonattainment areas we found that for particulates, CO, SO2, and NO* we had no problems which could not be brought into compliance by 1982. However, we found that photochemical oxidants exceed the standard in many parts of Texas. Fifteen counties in Texas were designated as nonattainment for photochemical oxidants. In these counties monitoring had demonstrated that the 0.08 ppm standard was exceeded. Seven of those counties were classified as urban and eight as rural. Texas has chosen to approach the demonstration of attainment with a determination of current and future transport, 0.10 and 0.06, respectively, and has proceeded to put together the necessary plan for compliance determination. A county by county analysis of the urban counties shows that Harris County with Houston as its urban center is the worst case. It is evident that Harris County will not be able to show attainment by 1982. We decided to look at what can be gained by application of the RACT documents. We have considered VOC reduction, the federal motor vehicle control program, emission reduction from the 1977 baseline, area source growth. On the strength of all of these we were able to demonstrate enough emission reduction to have compliance by the end of 1982 except in Harris County where we will have less than 50% of what is needed. We have looked at I/M schedules, at site analysis, and at comprehensive transportation planning. Our state statute does not contain authorization for an I/M program. In early 1978 our legislature set up an interim study committee which through 1978 held hearings across the state on various questions of source growth, emission offset, PSD, and I/M. There has been introduced in the 1979 session of the legislature a bill to authorize establishment of a pilot I/M program in the Houston area with a report back to the legislature in 1981 for consideration of a mandatory program. Additionally a bill has been introduced which would provide our board the authority to assess a permit fee. We have looked at the question of sanctions and what that would mean if we are not able to submit an approvable plan. If we look at Houston, the potential for sanctions is there. The question is whether the legislature will adopt the necessary legislation for I/M. In Houston or in the state in general, sanctions would result in a loss of $500 million for federal highway funds and somewhere around $2.5 million for grant funds to our agency and to local programs. Then certainly the 608

more serious question would be the prohibition on new source growth which could be many billions of dollars per year. A significant factor in an appropriate plan for demonstrating attainment in relation to the photochemical oxidant standard is the use of energy. Using 1976 data, we find that 74 quadrillion Btu were used in the U.S. with Texas using about 10% of that. Nationally, natural gas made up about 27% of the fuel while in Texas it was 55%. Nationally the distribution of energy use is: 25% industrial and 29% electric utility. In Texas the distribution is: 51% industrial and 21% electric utility. We believe that we have the nonattainment issue under control and the next issue with which we must come to grips is the question of prevention of significant deterioration. Texas is not currently issuing PSD permits, that is being handled by EPA. We have developed a draft regulation which would amend our plan to put that action into the state. In a state which has been among the heaviest users of natural gas and which has only recently developed plans for coal and lignite stations for electric utility boilers, PSD may pose the greatest problem. The tertiary standard which is required under PSD will work against the state in making those fuel conversions. Richard G. Rhoads, Director, Control Programs Development Division, U.S. Environmental Protection Agency The success of the state implementation plan program is of importance to all of us. A planning program is very important to industry, to environmentalists, to the consumer, and to the taxpayer. We have heard that the Clean Air Act is going to be a disaster. On the one hand some people say we are going to suffocate in dirty air. Others say that the regulations are so stringent that we're all going to starve to death because our economics are going to be stifled. Neither extreme has been achieved. Here is a factual presentation of where the SIP program stands today. Approximately one-third of the states have submitted SIP's for EPA review. The review has not been completed yet, although on a preliminary examination most of them appear to be satisfactory. By July 1, we expect to receive all of the SIPs except perhaps two or three. Most of them will be approvable within the intent of the CAAA of 1977. There are some problems, however, and while they may not result in an unapprovable SIP they are problems which are being wrestled with by the states, industry, environmental groups, and EPA. These problems pose a challenge which will confront us for the next few years. Photochemical oxidant, or ozone, is our most pervasive air pollution problem in this country. The O3 standard has recently been revised from 0.08 to 0.12 ppm. The 100 largest cities (urban areas with >200,000 population) all failed to attain the 0.08 standard. Approximately 10 attained the standard when it was changed to 0.12. Many smaller urban areas are still failing to attain the ambient standard. There are probably 30 to 40 major metropolitan areas which will not be able to demonstrate attainment of the O3 standard by 1982. This means that there must be a firm commitment to a motor vehicle inspection program and to a program to improve the transportation system. In the rural areas, particularly in the east, there are widespread ozone problems. Some of these problems result from transport of O3, or hydrocarbons which are transformed into O3, from the major urban areas. However, there are also a few large sources, (potential to emit>7100 tpy) located in rural areas which contribute to the O3 problem. Generally the northeastern states are imposing controls which are essentially state-wide. Elsewhere in the country where the O3 problem is not quite so severe, many states are choosing to ignore the rural problem. This essentially places the burden upon new sources Journal of the Air Pollution Control Association

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which will want to enter those rural areas. Before a new source will be able to enter a rural area where air quality is not known, that source will have to monitor the air. If the results of the monitoring show that it is a nonattainment area then the state must impose controls on the large existing sources before the new source can be admitted. Probably the next most severe problem nationally is total suspended particulate. There are still major nonattainment problems in most of the major cities and industrialized areas of the country. This is true in spite of the long period during which efforts have been made to control particulates. The easy jobs of control have been done, the remaining sources are difficult to control. They are many small sources. They are urban dust, the dirt that deposits on city streets and then is constantly reentrained into the atmosphere as traffic moves over them. Most of the states are moving aggressively to study the means of reducing the number of sources of urban fugitive dust. Most of the SIPs make a commitment to embark upon a comprehensive program to attain the particulate standard by 1982. Carbon monoxide, the next pollutant on the list, is almost exclusively a motor vehicle problem. The Federal Motor Vehicle Control Program, that is the controls that are put on in Detroit, are extremely effective in reducing CO levels. They can be even more effective with an I/M program as follow up. Most of the CO problems we are experiencing now tend to be localized and need transportation measures to reduce the traffic congestion. Unless these measures are adequate to demonstrate attainment by 1982 an I/M program is required under the statute. Sulfur dioxide is the fourth criteria pollutant. SO2 is truly the success story of the air pollution control community. Massive reductions in SO2 emissions and massive improvements in ambient levels of SO2 have been achieved. Where nonattainment of the SO2 standard continues it is because one, two, or three large sources are out of compliance with the existing regulations. So the SO2 problem is generally coming into compliance with the existing regulations. The last of the criteria pollutants is nitrogen dioxide. Nationally there is not a severe problem with NO2. There have not been very aggressive controls for NO2 because the ambient problems are not severe. There are only three designated nonattainment areas in the U.S. at this time—a small area in downtown Chicago and in downtown Denver and the Los Angeles basin. Where do we stand then on SIPs? Our progress is very good but not all of our problems have been solved. It is important that all of you assist your control agencies in formulating control plans. With responsible, logical, consistent regulations, which is what the SIPs should accomplish, the trauma of regulation should be minimized. Karl R. Braithwaite, Staff Director of the Subcommittee on Environmental Pollution, Senate Committee on Environment and Public Works The general topic for this conference has been "The Clean Air Act—What's Happening?" In terms of the Clean Air Act in Congress, not a lot. The action is out now in the states and the EPA regional offices where there is a great deal of action in preparing plans. The answer that not a lot is happening in Congress is based on looking at the front door and most burglars, I believe, go through the back door. So let's talk about the back doors to the CAA and what may be happening. The biggest back door to the CAA right now is through the economic intervention of analysis by the White House economic shop. Our subcommittee held hearings on that subject a few weeks ago. There was a heavy entrance into the revision of the oxidant standard—a standard that is to be based on health effects data not on economic analysis. The White House comment document was written by an economist and June 1979

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not by a health scientist. That has led to many questions in our minds. One way to assess what has happened is to project backwards in a specific city. A study of 1976 ozone data for Washington, DC shows that under the old standard there were 83 bad days. Using EPA's new standard the same data resulted in only 35 bad days. Under the proposal by the White House economic group in the Regulatory Analysis Review Group document there would have been only 10 bad days. That I think is a striking demonstration of the effect of that kind of intervention. The question in terms of process is at what point do public comments stop and the agency analyze the information and make a decision? If the economic news continues to be bad the economists may slash away at anything that they can impact. I'm sure that tinkering with CAA is going to do virtually nothing for the inflation rate and I don't want to see environmental progress turned into a sacrificial lamb which has no impact. Another back door is the arena where the Department of Energy is operating. DOE has apparently turned its back on the whole question of the price of gas and its effect on catalytic converters and fuel switching. The impact on SIPs will be great if a high percentage of catalytic converters are poisoned by unleaded gas because the price differential is permitted to rise. The increased cost of unleaded versus leaded gas is somewhere in the range of 1 to 2.5 cents, so the question arises of what happens to the much greater retail differential. DOE has the authority to control that price differential and EPA has the authority under Section 211 of the CAA to control the differential as well. EPA has deferred to DOE rulemaking authority on that issue. The outcome of that and the new tilt regulation will be an important one for pollution control. A third back door is the problem in Iran. The energy response based on the restriction of fuel from Iran has the potential of raising many of the same kinds of issues that surface in any energy crunch. There are rumors of that package eliminating EPA's lead phasedown program, reinserting new administration policy or legislative initiatives on coal conversion, an attempt to get MMT back into gasoline and other changes in strategy. Many of these may end up being ghosts that don't need to be slain because they don't get into the package. Others like the MMT in gasoline, EPA should be able to head off in interagency discussions. Now a look at the sanctions issue and what Congress may do if the deadline comes in July and some plans aren't in and some construction permits have been held up in states. Congress knew what was in the CAAA of 1977 on this provision. When the bill came out of the Senate it not only had a firm construction prohibition in terms of not issuing permits to new sources, but it also had an immediate cutoff of highway funds, and had a 15%/yr reduction in funds if implementation in local jurisdictions or states didn't occur after the plan had been adopted. It was a calculated device to get people's attention to the fact that if they didn't get SIPs in and if they weren't committed to implementing them that there were some blunt instruments that Congress could use. The provision was modified on the Senate floor to make it a more reasonable approach. In terms of denial of permits to new sources, that's firm, that's in the statute. The agency however can continue to process permits and get them ready for issuance so that once the SIP has been approved and the ban is off, the permit can be processed promptly. In terms of the cutoff of funds, there is more flexibility. If a good faith effort is going ahead, the funds don't have to be cut off. If a medium bad faith effort is going on, the agency may come up with some kind of escrow account where the funds are not totally lost to the state but are held in abeyance until the plan comes in. 609