GOVERNMENT & POLICY NEWS
ANALYSIS
EMISSIONS MUDDLE Federal judge hits utility for violating Clean Air Act, as EPA moves to rewrite rules JEFF JOHNSON, C&EN WASHINGTON
particularly muddled since the Bush Ad N EARLY AUGUST, A U.S. DISTRICT COURT ministration brought the winning suit and judge dealt a sharp blow to the owner also is now rewriting the regulations upon of an Ohio coal-fired electric utility. which the victory is based. Ohio Edison Co., the judge says, had over the years broken the law by up NSR requires companies of all types to grading an old power plant—increasing install modern pollution-control equip output and air pollution—without installing ment when making significant capital modern pollution-control equipment. expenditures to improve a plant's opera tions—if the changes increase air pollu The decision is one of the latest chap tion. The concept was to allow companies ters in a long saga over new source review to couple installation of pollution-abate (NSR), a Clean Air Act provision that was ment equipment with other capital im passed in 1977. NSR, although simple on provements at old plants and thereby give its face, has proven exceedingly difficult them a way to reduce the shutdowns and when it comes to enforcement. cut costs. While the judge blamed the federal It only affects facilities built before government for much of the confusion, 1970; newer plants have to install modern others disagree. Most important among pollution-control equipment, period. them is the Bush Administration, which announced last week it would take the For decades, environmental activists and bite out of a key provision that was the local air pollution officials have charged undeφinning for the judge's decision (see that electric utilities operating old coalpage 7). In his strongly worded opinion, Judge Edmund A. Sargusjr. says the company violated the Clean Air Act at its 40-year-old Sammis facility, the largest coal-fired plant in Ohio. The utility, the judge continues, should have put in new pollution controls when it installed other new equip ment in the 1980s and 1990s to im prove operations. The company spent $ 136 million on 11 construction projects to in crease the plant's life, output, and reliability, but the projects also in creased emissions and were there fore in direct violation of NSR, the judge says. Sargus' decision does not bode well for nearly 50 other power plants that have a cloud of federal litiga tion hanging over them for doing the same thing Ohio Edison did at Sammis. Much is at stake here in terms of air pollution and energy Eventually, several hundred coal-fired power plants could be affected, as could the nation's energy grid, which depends TALL STACKS Ohio Edison's Sammis plant is on coal to produce more than half operating illegally, judge says, in first court of the U.S.'s electricity. The issue is decision on new source review.
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fired power plants were ignoring the law. Although NSR provisions were on the books for a quarter of a century, only in the last years of the Clinton Administration did the Environmental Protection Agency and the Department ofJustice begin to prepare legal filings, and only in the year be fore Clinton left office did they actually file suit to enforce the law They were joined in litigation by northeastern state officials, who have long said their states' citizens have suffered increased incidents of asth ma and other health problems from pol luted air sweeping into their states from dirty coal-fired midwestern power plants, like Sammis. INDUSTRIES that faced litigation—coalfired power plants and oil refiners—cried foul. They claimed their modifications were for "routine maintenance," which is allowed under NSR without installing new pollution-abatement equipment. They ar gued that the Clinton-era prosecutors had misinterpreted the law, and they pointed to the years of federal inaction as proof. They took their case to the Bush Ad ministration, which did a review, agreed with them, and began rewriting the NSR provisions (C&EN,July 1,2002, page 19). Meanwhile, the cases alreadyfiledhave moved through the federal court system. Several refineries settled, telling C&EN the deals they worked out with the gov ernment gave them the operating flex ibility they needed. A few utilities set tled, but others backed off from tentative agreements when the Ad ministration began its NSR review (C&EN, June 25,2001, page 24). While Justice and EPA, prodded by the states, have continued to move ahead with litigation, the Bush Admin istration has issued new final rules and proposed others that would signifi cantly weaken NSRprovisions (C&EN, Dec. 2,2002, page 11). Just last week, EPA officials said they will soon issue a final regulation that will greatly enlarge the routine mainte nance exemption. If applied to the Sam mis plant, for instance, all but one of the 11 projects would not trigger NSR, says David Mcintosh, a spokesman for the Natural Resources Defense Coun cil (NRDC), which released a draft of the final EPA regulation. N R D C says political pressure and campaign contributions are responsi ble for the lack of federal enforcement. According to the Center for Respon sive Politics, the energy sector spent about $20 million in 2 0 0 0 and 2002 HTTP://WWW.CEN-ONLINE.ORG
to support federal political campaigns. The Administration has offered its "Clear Skies Initiative," a proposed air pollution bill, as an alternative to NSR. It would provide a phased air pollution reduction program, putting off final compliance until 2018 or later. The proposal, however, is off to a slow start in Congress. While industry and, apparently, part of the Bush Administration may believe NSR doesn't work, Judge Sargus disagrees. In fact, he blames EPA and past administrations for the problem. First off, the judge notes in his opinion that it is industry'srightto try to influence EPAs conduct—"within legal bounds"— and he adds that, "given the enormous cost of retrofitting an older power plant," such a strategy should not be unexpected in a democratic administrative process. "What should be unexpected and condemned," he continues, "is an agency unwilling to enforce a clear statutory mandate set forth in an act of Congress. "By any standard, the enforcement ofthe Clean Air Act with regard to the Sammis plant has been disastrous," Sargus writes. He notes that the plant emits 145,000 tons of sulfur dioxide each year, and adds that "tens ofthousands ofjobs have been lost" as the company complied with regional and local air-quality standards by switching to low-sulfur, out-of-state coal, rather than installing pollution-control equipment. DESPITE ALL THIS, as well as spending $450 million in pollution-control devices, as the company claims, it still does not meet current pollution standards. "This court takes note of the fact that three decades after passage of the Clean Air Act, the EPAfinallymoved, through this and several other lawsuits, to finally resolve this fundamental issue under the act. While the law has always been clear, the enforcement strategies of EPA have not," the judge writes. However, Sargus notes that "EPAs failures in enforcement do not absolve Ohio Edison from liability under a law that has always been clear." Specifically, he charges that the company's modifications were not "routine." Quoting internal reports by industry research groups, the judge adds that the utility industry had come to realize that it could at least double the expected 30-year economic and technical life of a coal-fired power plant through modifications. The modifications, he said, were treated as capital expenditures, were done by outside contractors, and were intended to extend the life of the plants. HTTP://WWW.CEN-ONLINE.ORG
Most jarring, the judge notes, was the installation at one Sammis unit of a furnace that had never been tried in the U.S. and was "unprecedented in the industry" Ohio Edison, the judge concludes, broke the law. However, the judge must still determine what Ohio Edison must do to remedy the problem, and that requires a second trial, which will begin next year. That remedy, the judge warned in his opinion, may turn on EPAs "less than consistent efforts" to enforce the Clean AirAct. Whether Sargus' opinion will stand and how it will affect other cases is important to U.S. energy policy The stakes are high. The General Accounting Office estimates that 57%, or 1,396 units, of fossil-fuel plants began operation before the 1970s. They are mostly coal-fired units and produce about 30% of U.S. electricity. The Edison Electric Institute, a national trade association, estimates that at least 250 coalfired power plants are affected by NSR provisions. Many of these, like Sammis, are big electricity generators. Sammis' seven coalfired units, which were put in operation between 1959 and 1971, generate 2,220 MW of power. Next in line for federal litigation are five power plants owned by American Electric Power (AEP) of Columbus, Ohio. These plants include 11 units, producing 13,300 MW of electricity Together, the Ohio Edison and AEP units produce nearly 16,000 MW, which equal about one-quarter of the 61,000 MW lost during the August electricity blackout. The AEP trial is not expected until 2005, a company spokesman says. He indicates the company might be interested in a settlement, but he adds, "We haven't done anything wrong."The case will come before the same judge who wrote the Sammis decision. Settlements have been urged by Democratic Attorneys General Eliot Spitzer and Richard Blumenthal, ofNewlferk and Connecticut, respectively, who joined the federal litigation. "If these companies read this opinion, their best reasoned step would be to come to the table to negotiate," Spitzer says. "It is the first judicial determination, and it found the litigation not to be some newfangled interpretation of the law It shows NSR works, and any effort to dismiss the
statute is contrary to public interests and would merely delay what could be accomplished with rigorous enforcement." He calls the federal government's behavior "schizophrenic" byfilinglawsuits and winning while at the same time rewriting regulations that would make the law upon which the victories were based meaningless. While the states celebrated the victory, the Justice Department issued a two-sentence announcement of the decision and EPA was mum on the biggest Clean Air Act litigation success it has had in years. Ohio Edison has not yet determined its next step, says Ralph DiNicola, a spokesman for FirstEnergy, Ohio Edison's owner. He emphasizes that the opinion determined liability and yet to come is selection ofa remedy that could include fines as well as new equipment. The company can appeal now or after the remedy decision is reached, he says. "These plants didn't do anything different than other power plants did," he maintains. The equipment was simply for routine maintenance that was needed to keep the plants running. He saysJustice and EPA were conducting "retroactive enforcement. EPA was fully aware what we were doing when we did it. It had inspectors on-site, but apparently it didn't matter." The decision has put the Sammis plant and other similar coal-fired units "at risk," DiNicola says, warning that US. consumers need base-load units like Sammis. "We don't have to do anything. We can determine the plant is no longer economically viable and just shut it down." DiNicola says one study has estimated that it could cost $500 million in remedies to comply with the opinion. That is more, he says, than the plant cost when it was built, but he estimates the plant to be worth $4 billion today "It is not unreasonable to expect that every 35 years a utility should shut down its boilers and build new ones with better efficiency—and pollution controls," countersJohn A Paul, supervisor of the Dayton, Ohio, Regional Air Pollution Control Agency and an official with the Association of Local Air Pollution Control Officials. A"lost opportunity" is how he terms Ohio Edison's failure to install modern pollution-control equipment at the time of other plant construction.
There really needs to be a national approach to these issues, which the Administration is failing to provide."
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"This is exactly the kind of decision they should have been planning for all along," Paul says. "No one should expect to operate a company that is a source of pollution for 70 years without updating air pollution controls." Blumenthal bristles at the company's threat to shut down. "Ohio Edison has an obligation to obey the law," the attorney general says, "and the pollution-control measures would have been cheaper if they were done as the law required." Arguing that Connecticut receives air pollution from Sammis' tall stacks and none of its energy, Blumenthal says, "There really needs to be a national approach to these issues, which the Administration is failing to provide." Blumenthal, Spitzer, and seven other state attorneys general have sued over the final rules to change NSR, and they say that the soon-to-be released final regulation for routine maintenance would change the whole debate. SPITZER HAS ANNOUNCED that New \brk will sue as soon as the regulation is issued—as have several other states and NRDC. If the regulation stands, none of the 50 power plants will settle andJustice may drop the suits, NRDCs Mcintosh fears, adding the claim that NSR, if applied to these plants, would remove 7 million tons of air pollutants annually. In his judicial opinion, Sargus warns the government about changing the regulations to enlarge the exemption. It would "vitiate" the Clean Air Act, he says, and implies that only Congress can amend the law Sargus, however, is but one federal district court judge, and this issue is much larger than that, utility attorneys say They note that other states support the NSR modifications. Utah, from where Bush's choice for new EPA administrator, Gov Mike Leavitt (R), hails, is on both sides of the issue. The head ofUtah's Air Quality Division hasfiledpapers with EPA saying the Administration's new regulations will only make the current NSR system worse, but Utah's attorney general supports the changes. Meanwhile, senators have promised to quiz Leavitt about NSR during his confirmation hearing, and northeastern state attorneys general have promised more NSR litigation directed at polluting utilities and the Administration's regulatory review. Taken together, the future does not look bright for the emergence of a clear national energy policy that considers health and pollution as well as energy production. • 26
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BURNED The Army's Anniston Chemical Agent Disposal Facility has struggled through its first month of operation as an incineration site for sarin-filled rockets.
DESTROYING WEAPONS Army's problem-plagued program turns out to be more costly than originally planned LOIS R. EMBER, C&EN WASHINGTON
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the nation's arsenal of chemical weapons as mandated by the Chemical Weapons Convention is way over budget and far behind schedule. Persistent, pesky problems at operating disposal sites offer little to encourage hope for better performance. Originally, the Army's price tag for the destruction program was $1.8 billion. That was in 1985. By 2001, the Pentagon's estimate had spiraled to $24 billion. In the 1980s, the Army confidently envisioned eliminating the weapons by 1994. Today, it's likely the U.S. will have to ask the Organization for the Prohibition of Chemical'vveapons—the treaty's oversight agency—for afive-yearextension of the 2007 disposal deadline. Greg Mahall, spokesman for the Army's Chemical Materials Agency, admits that "earlier projections were overly optimistic and maybe not based in reality." But, he continues, "it's a complex and challenging program." In 1982, the Army selected incineration as its destruction technology, which to date has destroyed 26% of the 31,500 tons of chemical agents in the U.S. stockpile. Craig Williams, who directs the Chemical Weapons Working Group opposing in-
cineration, says, "There's no question that the technology selected has, in significant part, been responsible for the cost overruns and the time slippage." He also believes it will be a "challenge" for the U.S. to meet even the 2012 deadline. He may have a point if the experience at the Tooele, Utah, incineration facility is any guide. Tooele—which originally stored 43% of the nation's chemical weapons— has destroyed 44% of its holdings over the past seven years. But not without glitches and delays. Though original projections set 2004 as the date for complete elimination of its weapons, Tooele will probably not meet that goal until the end of 2007, fully 11 years after operations began. Tooele has eliminated all its sarin nerve gas and "has started processing its VX nerve gas but not its mustard gas," Tooele spokeswoman Alaine Southworth says. Disposal of sarin ran into many problems, including the unintended release of very small amounts of the nerve agent in May 2000, closing the facility forfivemonths. Although no VX has been released, VX disposal is now experiencing problems. In recent trial burns to destroy VX-filled rockets, incineration has not been able to meet the federal standard for release of polychlorinated biphenyls. "PCB emissions HTTP://WWW.CEN-ONLINE.ORG
