Is clean-air plan a step back? – NO

by H. Sterling Burnett

The Dallas Morning News

U.S. needed to refine anti-pollution program

Using a coal-fired power plant in Monroe , Mich. , as a backdrop, President Bush recently touted his plan to speed up the modernization of older utilities by replacing decaying and polluting equipment with newer, cleaner and more fuel-efficient technology.

The changes, which affect the Clean Air Act's new source review program, received a predictably chilly reception from environmentalists. From the despairing hue and cry, one would think the president had enacted a law allowing industrial plants to burn nerve gas as a fuel.

Why would Mr. Bush back regulations that would threaten the health and lives of millions of Americans?

He wouldn't.

The truth is that air quality in the United States has improved dramatically during the last 30 years, and the pace of technological change combined with clean air regulations already in place will ensure continued improvements.

Consider a few salient facts:

Under the 1977 Clean Air Act's new source review provisions, older utilities and industrial facilities that weren't required to install state-of-the-art pollution reduction equipment under the original Clean Air Act were required to install the best available pollution reduction devices if they expanded or substantially modified their power plants.

However, they were allowed to perform periodic maintenance, repairs and upgrades without having to file paperwork for or undergo a new source review.

The problem is that the new source review process has proved costly and cumbersome and has produced little environmental improvement.

The National Academy of Public Administration has noted that regulators were given little guidance concerning what counts as routine maintenance as opposed to a substantial modification or expansion. As a result, a review is lengthy and the results are unpredictable, making it nearly impossible for industrial facilities to change operations quickly in order to compete effectively.

Accordingly, while the Environmental Protection Agency lists more than 20,000 facilities potentially subject to new source review, fewer than 250 new source review applications have been filed each year.

As the Pacific Research Institute's Steve Hayward notes, "Plant managers rightly see the new source review process as the environmental equivalent of an IRS audit."

That creates a perverse incentive to keep repairing outdated, dirtier and less efficient units in a plant rather than upgrading them or replacing them with newer, cleaner and more fuel-efficient technologies.

The revisions to new source review, several of which were developed under the Clinton administration, are intended to remove the perverse incentives to keep old equipment running. They do that by providing clear standards by which regulators and plant managers alike can determine whether a particular alteration requires a new source review.

Power plants face an array of clean air regulations in the coming years that will require them to make substantial emission reductions regardless of new source review. The reforms simply give companies the flexibility they need to meet those goals in the most cost-effective and competitive manner possible.

Only environmental lobbyists and their political allies trying to score political points against Mr. Bush could object to such reforms. Their political posturing should be seen for what it is.


H. Sterling Burnett is a senior fellow at the Dallas-based National Center for Policy Analysis.