Pollution Too High or are Standards Too Low?

The recent news that parts of five Indiana counties have been pushed out of attainment for ambient air quality and exceed a new U.S. Environmental Protection Agency (EPA) standard for sulfur dioxide comes as no shock.

Indeed, the U.S. EPA continues to lower the standards, making it increasingly difficult for communities to meet the new requirements.

U.S. EPA officials point to coal-fired power plants as the main contributors to the release of more sulfur dioxide than is permitted in the new standards. Sulfur dioxide is a colorless gas that contributes to acid rain that damages the environment and can worsen breathing problems.

Parts of Marion, Morgan, Daviess, Pike and Vigo counties are the ones that have now been pushed out of attainment. For a number of years, all 92 counties have met the necessary levels for ambient air quality standards. But the U.S. EPA has continued to tighten the belt on standards that measure carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter and sulfur dioxide.

Hoosier regulators now have 18 months to draft a plan telling how the counties will come back into compliance within five years.

So it sounds like Indiana’s air is just dirtier than ever, right?

Nope. In fact – it’s much cleaner than it’s ever been in our lifetimes. This 2011 BizVoice® story on the state of Indiana’s environment points to significant improvement in Hoosier air, water and land quality. But that’s hardly the story everyone hears.

For the story, I spoke with Dr. William Beranek Jr., president of the Indiana Environmental Institute, a third-party forum for analysis and understanding of Indiana’s environmental protection laws, rules and policies.

This is what he told me at the time: “We have been steadily and significantly improving across this timeframe (past 20 to 30 years), by sulfur dioxides, by nitrogen dioxide, by ozone, by lead and by particulates,” he explains.

“One of the challenges we’ve had across this time is that the technical community – for better or worse – has been steadily determining that some of those parameters are actually more harmful to human health than we had thought. Therefore, while we had been steadily improving the quality of the air, the indicator of whether we have good air has been steadily tightening. We’re at a point where we’re just as far from the finish line as we were when we started.”

Another expert on the matter: Bernie Paul, president of B Paul Consulting and former air quality expert for Eli Lilly & Company, also pointed to the federal process used for evaluating and changing air quality standards – starting with the Clean Air Act of 1970. That legislation was written so that all standards are re-evaluated every five years, and that cost implications cannot be taken into consideration when creating air quality standards.

“For a public agency to have to re-evaluate technical information every five years, when it takes 10 years to execute the plans to bring the air quality level down to where they set it, that’s a broken process,” he insists.

“A 10-year or even a 20-year review cycle would make more sense, because it takes so long for all of the implementation to be executed. We really can’t have a system where you’re constantly churning the standard.”

How does this relate to you? If coal-fired power plants are pointed to as the problem with these new regulations and the only way to match the requirements is to add more emission controls (or phase out coal altogether, as some would suggest), that means your electricity rates will go up.

Organizations including the U.S. Energy Information Association (EIA) and the Natural Resources Defense Council (NRDC) provide estimates between 83% and 95% of Indiana’s electricity coming from coal-fired power plants. It affects jobs here too: the EIA ranks Indiana as eighth in coal production in the country.

These are just some things to keep in mind the next time you read a story about Indiana’s “dirty” air.

EPA Actions a ‘Disgrace’

Kudos to the Wall Street Journal for this well-timed and well-written reaction to yesterday’s EPA announcement:

At an unusual gala ceremony on the release of a major new Environmental Protection Agency rule yesterday, chief Lisa Jackson called it "historic" and "a great victory." And she’s right: The rule may be the most expensive the agency has ever issued, and it represents the triumph of the Obama Administration’s green agenda over economic growth and job creation. Congratulations.

The so-called utility rule requires power plants to install "maximum achievable control technology" to reduce mercury emissions and other trace gases. But the true goal of the rule’s 1,117 pages is to harm coal-fired power plants and force large parts of the fleet—the U.S. power system workhorse—to shut down in the name of climate change. The EPA figures the rule will cost $9.6 billion, which is a gross, deliberate underestimate.

In return Ms. Jackson says the public will get billions of dollars of health benefits like less asthma if not a cure for cancer. Those credulous enough to believe her should understand that the total benefits of mercury reduction amount to all of $6 million. That’s total present value, not benefits per year—oh, and that’s an -illion with an "m," which is not normally how things work out in President Obama’s Washington.

The rest of the purported benefits—to be precise, 99.99%—come by double-counting pollution reductions like soot that the EPA regulates through separate programs and therefore most will happen anyway. Using such "co-benefits" is an abuse of the cost-benefit process and shows that Cass Sunstein’s team at the White House regulatory office—many of whom opposed the rule—got steamrolled.

As baseload coal power is retired or idled, the reliability of the electrical grid will be compromised, as every neutral analyst expects. Some utilities like Calpine Corp. and PSEG have claimed in these pages that the reliability concerns are overblown, but the Alfred E. Newman crowd has a vested interest in profiting from the higher wholesale electricity clearing prices that the EPA wants to cause.

Meanwhile, the Federal Energy Regulatory Commission, which is charged with protecting reliability, abnegated its statutory responsibilities as the rule was being written.

One FERC economist wrote in a March email that "I don’t think there is any value in continuing to engage EPA on the issues. EPA has indicated that these are their assumptions and have made it clear that are not changed [sic] anything on reliability . . . [EPA] does not directly answer anything associated with local reliability." The EPA repeatedly told Congress that it had "very frequent substantive contact and consultation with FERC."

The EPA also took the extraordinary step of issuing a pre-emptive "enforcement memorandum," which is typically issued only after the EPA determines its rules are being broken. The memo tells utilities that they must admit to violating clean air laws if they can’t retrofit their plants within the EPA’s timeframe at any cost or if shutting down a plant will lead to regional blackouts. Such legal admissions force companies into a de facto EPA receivership and expose them to lawsuits and other liabilities.

The economic harm here is vast, and the utility rule saga—from the EPA’s reckless endangerment to the White House’s failure to temper Ms. Jackson—has been a disgrace. 

EPA Proposes Coal Ash Regulation

This is a pretty niche-oriented post, but probably valuable for those in the world of environmental regulations. Andy Bowman of Bingham McHale LLP explains a potential new law, which could impact many Indiana manufacturers. Granted, this information is… I won’t use the phrase "inside baseball" because I can’t stand it, but yes, that’s what it is. Bowman explains what you should know:

On May 4, 2010, the U.S. EPA proposed first-time national rules to regulate the disposal and management of coal ash from coal-fired power plants under the Resource Conservation and Recovery Act (RCRA). Coal ash is also referred to as coal combustion residuals (CCR) and includes fly ash, bottom ash, flue gas desulfurization materials, synthetic gypsum and boiler slag. The proposed rules are largely in response to the 2008 failure of a Tennessee Valley Authority coal ash impoundment which resulted in a massive release of more than a billion gallons of water and coal ash onto nearby land and into streams and rivers, requiring hundreds of millions of dollars in cleanup costs. U.S. EPA is seeking comments on two options for the regulation of coal ash: (1) as a hazardous waste under Subtitle C of RCRA; or (2) as a nonhazardous waste under Subtitle D of RCRA.

Under the Subtitle C option, coal ash would be listed as a “special waste.” As a special waste coal ash would be regulated as a hazardous waste under the cradle-to-grave requirements of Subtitle C of RCRA, except that coal ash would be unregulated if it is reused for certain beneficial purposes, such as encapsulation in building materials or road construction. Under the Subtitle C approach, U.S. EPA will effectively phase out the wet handling of coal ash and existing surface impoundments. Existing surface impoundments must meet land disposal restrictions and would be required to be retrofitted with liners within five years of the effective date of the rule to remain in operation. New surface impoundments must meet land disposal restrictions and liner requirements. New landfills must install liners. Existing and new landfills would be subject to groundwater monitoring requirements. Surface impoundments operated after the effective date of the rule would be required to meet structural stability standards set by the federal Mining Safety and Health Administration (MSHA). The Subtitle C option would require permits for the treatment, storage or disposal of coal ash…

According to U.S. EPA, Indiana ranks third highest among the 45 states which generate CCR. Nationally 56% of CCR is disposed in landfills or surface impoundments. About 37% of CCR is beneficially reused and the remaining 7% is used as minefill. The proposed rule does not address minefilling. U.S. EPA estimates annual compliance costs of $1.4 billion for the Subtitle C option and $587 million for the Subtitle D option. Utility customers can expect to bear the costs of the new regulations.

Bowman and his colleagues from Bingham McHale also author the Chamber’s Environmental Compliance Handbook, which is used by many Indiana companies.

Asia Continues Greenhouse Gas Emissions Growth, Not Concerned About U.S. Policy

Critics of cap and trade remain unconvinced that tightening the reins on CO2 emissions in America would have much impact on global pollution — and thus would hinder American businesses with little benefit. That’s a sentiment echoed by the Heartland Institute:

Already responsible for one-third of the world’s greenhouse gas emissions, China, India, and other Asian nations are on pace to generate more than 40 percent of the world’s emissions by 2030, according to data released at a climate change conference in Manila, Philippines…

Following a recent visit to Beijing by U.S. climate change envoy Todd Stern, Chinese foreign ministry spokesman Qin Gang indicated his country has no plans to curb emissions in the near future, regardless of whether the United States does so.

“China is still a developing country, and the present task confronting China is to develop its economy and alleviate poverty, as well as raise the living standard of its people,” Gang told reporters. “Given that, it is natural for China to have some increase in its emissions, so it is not possible for China in that context to accept a binding or compulsory target.”

Max Schulz, a senior fellow at the Manhattan Institute, observes China and India have both publicly stated they have no plans to slow their growth.

“The steep growth in emissions by developing Asian countries, combined with clear statements that these nations have no plans to curtail their emissions, further highlights the futility of the United States’ plans to make drastic cuts in emissions,” said Schulz.

What do you think? Would cap and trade be futile due to the impact of Asian polluters et al.?

Knock Out Pollution, Give Ozone the TKO (and Other Relevant Sports Metaphors)

A few years ago, I was living in Wyoming and occasionally had to make the 1.5 hour drive to nearby Salt Lake City — and yes, 1.5 hours away warrants the label "nearby" in Wyoming. I would make this drive whenever I had the urge to use an airport, take in a Major League Soccer match, pay homage to the Osmonds, or just enjoy some nightlife. You know, what with Salt Lake’s glowing reputation as a party town.

But during the summer months, I could always count on being greeted by Salt Lake City’s infamous, gray inversion. If you’re unfamiliar with this concept, inversion occurs in cities near mountainous areas where dirty air hovers over the valley due to atmospheric circumstances; it’s better left articulated by Wikipedia than the likes of me. Basically, the pollution becomes trapped near the ground instead of rising into the atmosphere. Not only can it impact your breathing, but it begets a pretty high ick factor that instills a strong desire to shower several times a day or bathe oneself in hand sanitizer.

Segue time: Even though we don’t have that pesky mountain issue to deal with, pollution is still a concern here in our beloved Hoosier state. This is likely why the Indiana Dept. of Environmental Management is sponsoring the 2008 Ozone Knockout June 16-30. Check out this link, which is a letter addressed to our members, for info about how your company can help improve our air quality through voluntary action and maybe even garner some recognition in the process.

Just please remember: Ick factor bad, clear skies good.

After all, what would Donny and Marie do?