Maureen Lorenzetti
Washington Editor
WASHINGTON, DC, Nov. 25 -- Industry officials praised new action by the US Environmental Protection Agency designed to update air pollution control guidelines for power plants and refineries.
Trade groups said Friday the updated clean air rules should now encourage the kind of large investments US refiners will need to make to comply with tighter clean motor fuel standards.
"These (New Source Review) reforms represent an important and well-considered step, which will help maintain a healthy and diverse US refining and petrochemical industry," said Bob Slaughter, president of the National Petrochemical and Refiners Association. He added, "These common-sense, environmentally friendly changes will update the NSR program and help eliminate widespread confusion about what it requires. The administration's action will also increase national energy security and protect the environment."
EPA last June proposed revisions to the 1977 NSR provision of the Clean Air Act. NSR regulations require industrial facilities to upgrade pollution-control equipment when major modifications are made to their operations.
EPA recommended changes to the NSR program in two parts: a final and a proposed rule. The proposed rule issued last week seeks to clarify definitions for "routine repair and replacement." Plant repairs are generally not supposed to trigger a permit review under NSR. But in recent years regulators and companies routinely disagreed over what was maintenance and what was an expansion requiring a new permit application.
Over the past decade, oil and gas trade associations have told Congress and EPA that when there are "significant" changes at refineries and power plants, clean air quality should be considered but regulations should not be so onerous that normal operations are disrupted or new capacity unnecessarily stalled (OGJ, Aug. 19, 2002, p38).
"NSR originally was intended as a preconstruction permitting program for major new projects, however, earlier EPA decisions reinterpreted its regulations to require permits for routine repair projects," said David Parker, president of the American Gas Association.
On the proposed rule, trade groups such as NPRA and AGA urged EPA to make sure that its final regulation leaves no doubt as to what constitutes the "routine maintenance, repair and replacement" activities referenced in existing NSR rules.
"Clarification of 'routine maintenance' activities is very important to our members' efforts to maintain production of petroleum and petrochemical products while they schedule and perform necessary maintenance procedures. NPRA urges EPA and the administration to complete action on this aspect of the NSR issue as expeditiously as possible," Slaughter said.
Final rule
EPA also finalized a separate rule that will change the way the agency measures actual emissions. It provides incentives that industry says will encourage manufacturers to undertake pollution control and prevention projects. These include:
-- Plantwide applicability limits (PALs). Refiners may have more flexibility to modernize their operations, if they agree to operate within strict site-wide emissions caps called PALs. Refiners may modify operations without undergoing NSR, as long as modifications do not cause emissions to violate a plant-wide cap.
-- Pollution control and prevention projects. Companies may make certain upgrades of their facilities by notifying regulators instead of going through a permitting process, provided it is sanctioned as "environmentally beneficial activities."
-- Clean unit provisions. To encourage installation of state-of-the-art air pollution controls, EPA will give plants that attain "clean unit" status flexibility if they continue to operate within permitted limits. EPA officials say this flexibility "is an incentive for plants to voluntarily install the best available pollution controls." Clean units must have an NSR permit or other regulatory limit that requires the use of the best air pollution control technologies.
-- Emissions calculation test methodology. EPA said it improved how plant managers calculate the effects of new projects on emissions; certain expansions may still trigger NSR permitting requirements. Refiners now may use any consecutive 24-month period in the previous decade as a baseline to determine an emissions profile, as long as all current emission limitations are taken into account. This "baseline emissions" provision does not apply to power plants.
Government, stakeholder responses
"EPA is taking actions now to improve NSR and thereby encourage emissions reductions," said EPA Administrator Christie Whitman. "NSR is a valuable program in many respects, but the need for reform is clear and has broad-based support. The steps we are taking today recognize that some aspects of the NSR program have deterred companies from implementing projects that would increase energy efficiency and decrease air pollution."
Environmental groups and state regulators say the rule will mean more overall air pollution because state and local agencies will be prevented from retaining or adopting programs more stringent than federal guidelines that in some areas have failed to control harmful emissions.
"The revised requirement go beyond even what industry requested during an earlier stakeholder process and will be less protective of the environmental than current regulations. Moreover, because the reforms are mandatory, they will impede or even preclude the ability of states and localities all across the country to retain or adopt programs that are more productive than the federal requirements," said the State and Territorial Air Pollution Program Administrators and the Association of Local Air Pollution Control Officials.
Other reactions
Local air pollution officials may have serious reservations about NSR utilities, but local gas utilities embraced the idea. The AGA praised EPA's NSR announcement, saying reforms will help to expedite implementation of new pipe safety provisions, new infrastructure security measures, routine repairs, and maintenance.
"The changes to NSR are especially timely now as natural gas pipelines and local gas utilities gear up for pipe integrity projects called for in the Pipeline Safety Improvement Act that Congress enacted last week," said AGA's Parker. AGA officials said updating NSR would provide other benefits as well. According to Pam Lacey, AGA's environmental counsel, NSR changes will expedite projects designed to enhance security along the natural gas delivery system; remove impediments to upgrades and modernization of facilities by local gas utilities; and permit gas utilities to make improvements more efficiently and effectively while still protecting and improving air quality.
Congress
Republican leaders from oil and gas producing states endorsed the EPA action. But most Democrats and former Clinton administration officials denounced the move.
"The Bush administration's announcement retreats from the promise of the Clean Air Act—fresh and healthy air for all Americans," said former EPA administrator Carol Browner, who ran the agency from 1993-2001. "This rollback in the law will permit thousands of the oldest, dirtiest smokestacks to continue spewing out pollution, rather than installing state-of-the-art pollution controls. It is nothing but a special deal for the special interests. It comes at the expense of all who breathe and most particularly our children."
Environmental groups are expected to sue EPA in federal court and hope to overturn the final rule. In other legal action concerning NSR, EPA officials insist that pending Department of Justice enforcement actions will not be stopped or discouraged because of the new "reform" measures.
Contact Maureen Lorenzetti at [email protected]
