EPA unveils draft interstate clean air rule

The Environmental Protection Agency Tuesday proposed new clean-air regulations that would significantly reduce emissions that cross state lines and, it says, save tens of thousands of lives and billions of dollars in health costs.

The proposed Clean Air Transport Rule replaces – and strengthens – a Bush-era rule in cutting soot-forming sulfur dioxide and smog-forming nitrogen oxide emissions from electric utilities that cross state lines, mainly in the eastern United States.

The new version was needed after a federal appeals court in December 2008 struck down the earlier standard. The court ordered EPA to revise the so-called Clean Air Interstate Rule (CAIR) after the state of North Carolina and several utilities successfully argued that parts of the program were illegal under the Clean Air Act.

It would affect coal-fired and all other fossil fuel powered electric utilities, and the EPA says it would cut sulfur dioxide emissions by 71 percent and nitrogen oxide by 52 percent over 2005 levels.

The regulation’s price tag is an estimated $2.8 billion in 2014. But EPA officials say it would save between $120 and $290 billion in annual health and welfare benefits the same year and help prevent up to 36,000 deaths.

It would affect coal-fired and all other fossil fuel powered electric utilities, and the EPA says it would cut sulfur dioxide emissions by 71 percent and nitrogen oxide by 52 percent over 2005 levels.

The regulation’s price tag is an estimated $2.8 billion in 2014. But EPA officials say it would save between $120 and $290 billion in annual health and welfare benefits the same year and help prevent up to 36,000 deaths.

EPA is pushing forward with new national ozone limits by the end of August. That new standard would, in turn, be used as a baseline for developing a longer-term strategy for addressing interstate pollution than the one proposed Tuesday.  

EPA air chief Gina McCarthy Tuesday argued the Bush administration established its 2005 rule predominantly based on cost-benefit analyses, while the current administration is proposing to shape this and future rules based first on air-quality modeling.

The new draft, she said, should address the problems the appeals court found. They include ensuring that “downwind” states whose air quality is affected by pollution from “upwind” states are able to more easily determine their own local emissions while not affecting emission trading credits established for states under EPA’s existing acid rain program.

But McCarthy said EPA is still expecting a lawsuit once the draft rule is finalized – commonplace whenever the agency issues a major rule.

Jeff Holmstead, former EPA air chief and lead author of the 2005 Bush plan, said the agency’s draft preserves a cap-and-trade program as its central feature and “substantially increased” the stringency of the 2005 rule.

“Hopefully, the rule won’t set up an unfortunate choice between environmental compliance and keeping the lights on,” he said.

Dan Riedinger, a spokesman for the Edison Electric Institute, which represents investor-owned utilities, said the draft EPA plan would "require dramatic reductions in power sector emissions, on top of major reductions to date, on a very short timeline." EPA's approach would appear at first to be "the most reasonable option on the table," but not combined with future and more stringent regulations that leave "the power sector exposed to a great deal of regulatory uncertainty," he said.

Clean air advocates had mixed reaction to the draft.

“This is a big step in a positive direction but this is only a first step,” said Frank O’Donnell, president of Clean Air Watch.