Air Pollution: Emission Sources Regulated by Multiple Clean Air Act
Provisions (Letter Report, 05/31/2000, GAO/RCED-00-155).

Pursuant to a congressional request, GAO reviewed the regulatory
programs that target specific pollutants or sources of pollution under
the 1990 Clean Air Act Amendments, focusing on: (1) examples of emission
sources subject to regulation under more than one program authorized by
the act; and (2) the status of the Environmental Protection Agency's
(EPA) efforts to facilitate compliance for such sources.

GAO noted that: (1) the large industrial complexes operated by the
petrochemical and refinery, chemical manufacturing, and electric power
industries are prime examples of sources that are regulated under
multiple programs of the act; (2) for example, emissions of nitrogen
oxide from electric power plants are controlled under six programs,
including those for controlling acid rain, ground-level ozone, and fine
particles and for improving visibility; (3) in addition, petrochemical
refineries are regulated under five different titles of the act; (4)
similarly, individual chemical plants could be regulated by as many as
seven different statutorily authorized programs; (5) specifically,
emissions are controlled under programs for reducing ozone (e.g.,
through control of volatile organic compounds) and under one or more
programs for limiting emissions of toxic air pollutants (those known or
suspected of causing cancer or other serious health effects); (6)
additional state and local regulatory requirements can also apply to the
same industrial emission sources; (7) EPA has embarked on a number of
initiatives to reduce the regulatory workload and facilitate compliance
for such facilities; (8) these include two industry-specific efforts and
several other generic approaches, such as establishing total plant-wide
emission limits, that are intended to introduce more flexibility in the
overall regulatory rulemaking and permitting processes; (9) 2 of EPA's
industry-specific efforts are the Consolidated Air Rule and a dialogue
with utilities about an integrated strategy for reducing emissions of
multiple pollutants; (10) the proposed Consolidated Air Rule is intended
to incorporate all federal air regulations that affect the synthetic
organic chemical manufacturing industry into a single set of
regulations; (11) this proposed rule, pending approval by the Office of
Management and Budget, would reduce the regulatory burden and make
compliance easier by having one set of emission controls and monitoring,
recordkeeping, and reporting requirements; (12) the utility dialogue
began in 1995 when EPA initiated the Clean Air Power Initiative to
discuss with utilities an integrated strategy for reducing air
pollution; (13) according to EPA and industry officials, efforts on this
initiative were suspended in 1996 because of disagreement within the
industry as well as with EPA over the appropriate level for proposed
sulfur dioxide and nitrogen oxide reductions; and (14) however,
additional dialogue about an integrated approach for utilities took
place in 1998 and 1999.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-155
     TITLE:  Air Pollution: Emission Sources Regulated by Multiple
	     Clean Air Act Provisions
      DATE:  05/31/2000
   SUBJECT:  Air pollution control
	     Industrial pollution
	     Pollution monitoring
	     Environmental policies
	     Environmental law
	     Voluntary compliance
	     Reporting requirements
	     Health hazards
IDENTIFIER:  EPA Clean Air Power Initiative
	     EPA Common Sense Initiative

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GAO/RCED-00-155

Resources, Community, and
Economic Development Division

B-285320

May 31, 2000

The Honorable James M. Inhofe
Chairman, Subcommittee on Clean Air, Wetlands,
Private Property, and Nuclear Safety
Committee on Environment and Public Works
United States Senate

Dear Mr. Chairman:

Each year industrial operations emit nearly 100 million tons of pollutants
into the nation's air. These pollutants can make breathing difficult, form
urban smog, impair visibility and can, in some situations, cause cancer or
other serious health effects. To address these problems, the Clean Air Act
Amendments of 19901 authorized a number of regulatory programs targeted at
specific pollutants and/or specific sources of pollution. Large industrial
facilities such as petroleum refineries, chemical production plants, and
electric power plants release multiple pollutants with a variety of health
and environmental effects, and some facilities have hundreds of emission
points. Consequently, the facilities may be subject to multiple
pollutant-specific and/or source-specific programs. Each regulation under
these statutory programs may have its own emission control requirements as
well as monitoring, recordkeeping, and reporting requirements.

Against this backdrop and with reauthorization of the Clean Air Act pending,
you asked us to provide (1) examples of emission sources subject to
regulation under more than one program authorized by the act and (2)
information on the status of the Environmental Protection Agency's (EPA)
efforts to facilitate compliance for such sources.

The large industrial complexes operated by the petrochemical and refinery,
chemical manufacturing, and electric power industries are prime examples of
sources that are regulated under multiple programs of the act. For example,
emissions of nitrogen oxide from electric power plants are controlled under
six programs, including those for controlling acid rain, ground-level ozone,
and fine particles and for improving visibility. In addition, petrochemical
refineries are regulated under five different titles of the act. Similarly,
individual chemical plants could be regulated by as many as seven different
statutorily authorized programs. Specifically, emissions are controlled
under programs for reducing ozone (e. g., through control of volatile
organic compounds) and under one or more programs for limiting emissions of
toxic air pollutants (those known or suspected of causing cancer or other
serious health effects). Additional state and local regulatory requirements
can also apply to the same industrial emission sources.

EPA has embarked on a number of initiatives to reduce the regulatory
workload and facilitate compliance for such facilities. These include two
industry-specific efforts and several other generic approaches, such as
establishing total plant-wide emission limits, that are intended to
introduce more flexibility in the overall regulatory rulemaking and
permitting processes. Two of EPA's industry-specific efforts are the
Consolidated Air Rule and a dialogue with utilities about an integrated
strategy for reducing emissions of multiple pollutants. The proposed
Consolidated Air Rule is intended to incorporate all federal air regulations
that affect the synthetic organic chemical manufacturing industry into a
single set of regulations. This proposed rule, currently pending approval by
the Office of Management and Budget, would reduce the regulatory burden and
make compliance easier by having one set of emission controls and
monitoring, recordkeeping, and reporting requirements. The utility dialogue
began in 1995 when EPA initiated the Clean Air Power Initiative to discuss
with utilities an integrated strategy for reducing air pollution. According
to EPA and industry officials, efforts on this initiative were suspended in
1996 because of disagreement within the industry as well as with EPA over
the appropriate level for proposed sulfur dioxide and nitrogen oxide
reductions. However, additional dialogue about an integrated approach for
utilities took place in 1998 and 1999.

The Clean Air Act is a lengthy and complex statute that addresses emissions
of air pollutants from both mobile sources (such as automobiles and trucks)
and stationary sources (such as commercial and industrial facilities,
factories, and powerplants). The 11 titles of the Clean Air Act address
different aspects of the nation's challenging and complicated air pollution
problems. The 1990 amendments established new programs and made major
changes in how industrial sources of air pollution are controlled.2 Among
the specific problems addressed by individual titles of the act are ground
level ozone, particulate matter, acid rain, toxic air pollution,
stratospheric ozone depletion, and visibility impairment. The titles of the
1990 amendments most applicable to large industrial facilities are:

ï¿½ Title I authorizes EPA to set national ambient air quality standards to
protect human health and requires states and EPA to implement programs to
meet the standards.

ï¿½ Title II contains provisions for controlling air pollution from mobile
sources, including requirements for reformulated and oxygenated fuels that
impact the operation of petroleum refineries.

ï¿½ Title III establishes a new regulatory program to reduce the emissions of
hazardous air pollutants (toxic air pollutants). The statute requires EPA to
promulgate emission standards, called maximum achievable control technology
standards, which affected sources must meet.

ï¿½ Title IV creates the acid deposition program to reduce the adverse effects
of acid rain by reducing emissions of sulfur dioxide and nitrogen oxides.

ï¿½ Title V establishes a national operating permit program, intended to
consolidate all air pollution control requirements into a single,
comprehensive permit that covers all aspects of a source's air pollution
activities.

EPA has promulgated a series of regulations to implement these requirements.
Because the act is structured to address different aspects of the nation's
air pollution problems, some sources are regulated by more than one
statutorily required program.

To comply with air quality regulations, affected industrial sources of
pollution have made changes to their processes, deployed new pollution
control technology, and upgraded old equipment. These measures have been
successful in reducing emissions and improving the nation's air quality. For
example, from 1970 to 1998, carbon monoxide emissions dropped 31 percent,
sulfur dioxide emissions 37 percent, and lead emissions 98 percent.
Emissions of toxic air pollution are expected to decrease by more than 1.5
million tons a year. Although changes in the economy and other factors can
affect emission trends, according to EPA air pollution levels would be much
higher without the act.

Programs

Industrial emission sources such as petroleum refineries, chemical
manufacturing facilities, and electric power plants are regulated under
multiple provisions of the act and numerous federal air regulations. Each
regulation has its own emission control requirements as well as monitoring,
recordkeeping, and reporting requirements. Although the regulations were
developed for different purposes and under different titles of the act, they
may impose the same or similar requirements on industrial emission sources.

Petrochemical and refinery facilities are regulated under five titles of the
1990 amendments and a multitude of EPA regulations designed to implement the
legislative provisions. In addition to the large number of existing air
regulations, the industry is faced with planning and implementing measures
to comply with a host of new and expected requirements beginning in the year
2000.

Tier II Gasoline Sulfur − In December 1999, EPA announced a final
regulation to provide new Tier II motor vehicle emission and gasoline sulfur
standards. The Tier II national gasoline sulfur standard is set at 30 parts
per million, beginning in 2004 with full compliance by 2007. Some smaller
refiners will be given an additional 1 to 3 years to comply.

Regional Haze − In July 1999, EPA published a final regulation
requiring states to establish goals for improving visibility in 156 national
parks and wilderness areas. States must develop strategies and plans for
reducing emissions of particle matter and other air pollutants that
contribute to poor visibility in these areas.

Off-Road and On-Road Diesel Fuel − In May 1999, EPA announced plans to
propose a rulemaking to establish new national standards to further reduce
the sulfur content of diesel fuel used by these vehicles. EPA has revised
its schedule and now plans to issue the proposal in 2001.

Gasoline Air Toxics − As required by the Clean Air Act, EPA will
consider regulatory action to control mobile source toxic emissions,
including at a minimum emissions of benzene and formaldehyde. Under terms of
a court-ordered settlement, EPA will complete this rulemaking by December
29, 2000.

Refinery Maximum Achievable Control Technology II − In September 1998,
EPA proposed National Emission Standards for Hazardous Air Pollutants from
Petroleum Refinery Vents. The regulation is expected to be finalized by
September 2000.

Section 126 Petitions −The act gives a state the authority to petition
EPA to set emission limits for specific sources of pollution in other states
that contribute to its ozone nonattainment problems. In January 2000, EPA
took final action on the petitions filed by the states of Connecticut,
Massachusetts, New York, and Pennsylvania. This action will require 392
facilities, including refineries and petrochemical plants, to reduce
nitrogen oxide emissions.

Urban Air Toxics Strategy − In July 1999, EPA released its Integrated
Urban Air Toxics Strategy for reducing air emissions and health risks from
toxic air pollution in urban areas. EPA identified 33 toxic air pollutants
as posing the highest risks and targeted 13 new smaller industrial and
commercial sources, including gasoline distribution and oil and natural gas
production facilities, for new national standards.

Residual Risk −The act requires EPA to assess the residual risk posed
to public health and environment after implementing technology-based Maximum
Achievable Control Technology standards for major industrial sources,
including refineries and petrochemical plants, that emit toxic air
pollutants. After this assessment, EPA may promulgate additional regulations
and require additional emission reductions for these sources.

In addition to the potential difficulty of complying with multiple
regulations, efforts to comply with one program by controlling emissions of
a pollutant from a single facility can have the unintended effect of
increasing emissions of other pollutants from elsewhere in the same
facility. For example, EPA regulations issued under the authority of title
II of the act require the petroleum industry to reduce sulfur levels in
gasoline to help produce cleaner fuels for motor vehicles. Producing these
cleaner fuels, however, requires changes in the refining process that may
potentially increase emissions of volatile organic compounds, including such
hazardous air pollutants as benzene and formaldehyde.

EPA officials told us that while they expect most refineries to work to
avoid net emissions increases through pollution prevention or other means,
increases could occur at some of them. However, agency officials said that
the overall effect on toxic emissions will be beneficial--even in virtually
all the counties where the refineries are located--in light of the larger
reductions in toxic emissions from vehicles using low sulfur gasoline.
According to EPA officials, this case illustrates how separate sets of act
requirements can serve different, but equally important purposes. The
low-sulfur gasoline requirements (title II) will help to improve air quality
nationwide. On the other hand, stationary source controls on an individual
facility's emissions reduce local air quality problems.

The chemical manufacturing industry is regulated under multiple provisions
of the act and EPA regulations. Individual emission sources may be subject
to four or five different regulatory programs. At any given facility, all or
part of the following may apply: (1) meeting requirements for new source
construction permitting, (2) reducing emissions of hazardous air pollutants,
(3) meeting new source performance standards, and (4) complying with
visibility protection requirements.

According to industry officials, the act's regulatory process is an
especially complex system that has overlaid a multitude of new requirements
on top of existing ones, and it is not always clear which emission reduction
requirements are applicable to a specific source. For example, some
pollutants known as volatile organic compounds (VOCs), emissions of which
are subject to regulation under title I , are also considered to be
hazardous air pollutants, which are regulated under title III.3 The same
facility thus may be subject to meeting regulatory requirements associated
with each title. According to industry officials, in some cases EPA has
recognized the title III requirement (under which the source must meet
emission levels associated with maximum achievable control technology
standards) as the most stringent, and so the VOC emission control
requirements are considered to be satisfied through compliance with the
technology standards. According to an industry official, however, EPA has,
in some situations, required that facilities report or demonstrate
compliance with both emission-reduction requirements. EPA officials said
that while facilities are subject to both requirements, they have allowed
some facilities to consolidate their monitoring, recordkeeping, and
reporting requirements.

The electric power industry is also subject to multiple provisions of the
act and its associated regulations. Electric power generating facilities may
be subject to more than a dozen federal air regulations and initiatives that
have different objectives, timeframes, and compliance requirements. For
example, emissions of nitrogen oxides from power plants are subject to
regulation under several title I programs, including: the national ambient
air quality standards program, both as a criteria pollutant and as a
precursor to ground-level ozone, another criteria pollutant;4 the new source
review program for minimizing air pollution from large new stationary
sources; and the visibility improvement program. Nitrogen oxide emissions
are also controlled under the title IV acid deposition program, which is
targeted at specific electric utility plants. Programs for controlling
emissions from electric generating facilities (including emissions of
nitrogen oxides, sulfur dioxide, and particulates) all of which can affect
specific power plants are listed below.

Permitting Requirements:

ï¿½ Title V Operating Permits − Consolidate all of the air pollution
control requirements into a single, comprehensive operating permit that
covers all aspects of a source's year-to-year air pollution activities.

ï¿½ Prevention of Significant Deterioration and New Source Review Permits
− Case by case reviews for major new or modified sources. These
permits are required to ensure that large new emissions do not cause
significant health or environmental threats and that new pollution sources
are well controlled.

Acid Deposition Requirements:

ï¿½ Continuous Emissions Monitors − Measures pollutants released by
power plants sources under the acid rain program through 24-hour monitoring.

ï¿½ Phase I and II Sulfur Dioxide and Nitrogen Oxide Control − Reduce
the annual emission of sulfur dioxide by 10 million tons from the 1980
levels by the year 2010 and reduce nitrogen oxides by 2 million tons.

New Source Performance Standards − Sets minimum control requirements
for new sources nationwide.

Ozone National Ambient Air Quality Standards Implementation:

ï¿½ Nitrogen Oxide Reasonable Available Control Technology − Equipment,
process, or actions that are reasonably available for controlling or
reducing nitrogen oxide emissions.

ï¿½ Northeast Ozone Transport Commission − Memorandum of understanding
developed by the Commission and rules adopted by 11 northeastern states and
the District of Columbia to achieve regionwide reductions in nitrogen oxide
emissions in 1999 and further reductions in 2003.

ï¿½ Nitrogen Oxide State Implementation Plan Call − A requirement set by
EPA for a state to submit a revised plan for controlling nitrogen oxide
emissions.

ï¿½ Section 126 Petitions − A section of the act that gives states the
authority to petition EPA to set emission limits on pollutants in other
states that contribute to the petitioning state's ozone nonattainment
problems.

ï¿½ Ozone Attainment Plans − States must submit control plans to attain
the ozone national ambient air quality standards.

Sulfur Dioxide National Ambient Air Quality Standards Implementation −
Establishes policies and procedures for states and industry control of
sulfur dioxide emissions.

Particulate Matter National Ambient Air Quality Standards Implementation:

ï¿½ New Fine Particle Standards -- States must meet the standards by
regulating emissions of fine air borne particles that are smaller than 2.5
microns and gaseous precursors to those particles.

Visibility Protection:

Regional Haze/Best Available Retrofit Technology Limits -- States must
develop long-term strategies to achieve reasonable progress towards natural
background visibility protection for local visibility problems (1980 EPA
rules) and regional haze (1999 EPA rules). States must require Best
Available Retrofit Technology for certain sources' (including utility
boilers built between 1962 and 1977) contribution to visibility impairment,
taking into account the availability of control technologies, compliance
costs, energy impact of compliance, existing control equipment being used,
and the improvement in visibility anticipated.

According to industry officials, some of the above programs affect the same
emission sources and can make it difficult for the industry to accurately
determine the applicability of each of the requirements and to develop
effective emission control strategies.

Requirements

Recognizing that individual facilities are regulated under multiple
programs, EPA has undertaken initiatives to reduce the regulatory workload
and facilitate compliance for such facilities. These include two
industry-specific efforts--the Consolidated Air Rule and the Clean Air Power
Initiative and several crosscutting initiatives to introduce more
flexibility and stakeholder involvement in rulemaking and permitting
processes.

EPA selected the synthetic organic chemicals manufacturing industry for its
pilot study of the feasibility of consolidating and streamlining all federal
air quality requirements for an industry into a single set of regulations.
The resulting rule, which incorporates all of the applicable requirements
for 16 different federal air regulations that apply to the synthetic organic
chemicals manufacturing industry, is referred to as the Consolidated Air
Rule .5 Participation in the consolidated rule by synthetic organic
chemistry manufacturing industry facilities will be voluntary; facilities
may choose to continue being regulated under the 16 regulations or the
consolidated rule. EPA's objectives are to (1) reduce the regulatory burden,
(2) facilitate implementation and compliance, and (3) ensure continued
environmental protection and enforceability of the regulations. Proposed by
EPA in October 1998, the Consolidated Air Rule is currently being reviewed
by the Office of Management and Budget.

The synthetic organic chemical manufacturing industry was selected for the
pilot because of the large number of federal air regulations that apply to
the industry's facilities and the similarity in many of the requirements in
the existing regulations. The industry is subject to air quality standards
that are mandated by the act for both criteria and toxic air pollutants.
According to chemical industry representatives, some requirements for
controlling or reducing emissions, monitoring, keeping records, and
reporting under the 16 existing regulations are duplicative, overlapping,
unclear, or inconsistent.

EPA officials said that consolidating requirements into one set of
regulations would benefit the industry and governmental enforcement agencies
by improving compliance and enforceability and also reducing resource needs.
EPA contends that the consolidated regulations are intended to (1) provide
clear guidance on the specific requirements that have been consolidated into
the new regulation; (2) provide consistent requirements for similar and
identical facilities; (3) reorganize requirements to be more consistent with
facilities' operating processes; (4) lessen the costs of monitoring,
recordkeeping, and reporting; and (5) eliminate differences among the
regulatory requirements. EPA intends that facilities that elect to use the
Consolidated Air Rule will incur no net costs (greater than current
compliance costs) and expects that the reduced compliance burden may
actually result in less cost for some facilities. Furthermore, the
consolidated rule is expected to facilitate the implementation of and
compliance with the act by making the requirements easier to understand and
also incorporating compliance approaches that are easier to meet.

The Consolidated Air Rule is intended to maintain the current levels of
health and environmental protection benefits currently afforded by the 16
existing regulations and also ensure the same or greater degree of emission
control as the existing regulations do. However, the level of human health
and environmental protection may be greater, in some instances, because the
rule will require some facilities (that choose the consolidated rule to meet
more stringent emission reductions or requirements. For example:

ï¿½ The consolidated rule will require upgraded fittings for certain storage
tanks.

ï¿½ Some of the older, separate regulations have standards that permit leakage
concentrations up to 10,000 parts per million per valve, but under the
consolidated rule, all participating facilities will have to meet more
stringent standards that permit leakage concentrations of only 500 parts per
million per valve.

Because of the potential for reducing monitoring, reporting, and other
regulatory requirements, some facilities are expected to elect to comply
with the consolidated rule despite the more stringent requirements. However,
according to EPA officials, some of the synthetic organic chemical
manufacturing facilities may decline to participate because the consolidated
rule will require them to achieve larger emission reductions than they
currently have to achieve. EPA officials acknowledge that progress towards
implementing the program has been slower than expected because of
difficulties in identifying a workable approach and the unanticipated amount
of work necessary to consolidate 16 regulations.

EPA's and the electric power industry's concerns about the costs to control
multiple pollutants under several provisions of the 1990 amendments prompted
EPA to initiate the Clean Air Power Initiative. In consultation with the
electric power industry, EPA developed an integrated regulatory strategy for
sulfur dioxide and nitrogen oxides emitted from power plants. The purpose of
this collaborative effort was to seek new approaches to pollution control
that would improve public health and the environment, cost less, rely on
market mechanisms, and reduce the number and complexity of current and
expected requirements. EPA began the Clean Air Power Initiative in 1995 by
meeting with interested stakeholders to discuss more cost-effective
alternatives to pollution control and developing a model that could analyze
the costs and emissions implications of different reduction scenarios for
sulfur dioxide and nitrogen oxides.

The lack of complete support among the electric power industry ended the
initial program effort in late 1996 without agreement, according to EPA
officials. Although EPA believed that the best time to discuss integrated
multipollutant reduction strategies was prior to issuing new requirements,
some stakeholders believed that it would be premature or inappropriate to
discuss strategies for achieving reductions not yet in proposed or final
regulatory requirements, according to an EPA official. According to
officials at Edison Electric Institute,6 the initiative ended because (1)
there was substantial disagreement over the science underlying EPA's
proposed new controls for sulfur dioxide and nitrogen oxides and (2) EPA
could not provide the industry any regulatory certainty without the act
being amended, which neither industry nor EPA wanted to pursue.

In late 1998 and throughout 1999, EPA staff participated in the Edison
Electric Institute Air Quality Integration Dialogue at which EPA and
industry staff explored an integrated approach for controlling pollution
from the electric power industry. The dialogue had broad industry
participation as well as EPA staff participation. The White House Climate
Change Task Force also attended these meetings. The dialogue was intended to
promote a free exchange of ideas and analysis at a staff level concerning
new or potentially upcoming regulatory actions to address air emissions of
sulfur dioxide, nitrogen oxides, carbon dioxide, and mercury. At one
dialogue meeting, EPA presented the results of a study that it had recently
completed on hypothetical options for controlling the four pollutants. EPA's
analysis showed that having advanced knowledge of potential requirements for
all four pollutants could allow industry to pursue different and less costly
compliance strategies than they would if the pollutants were addressed one
by one.

EPA continues to believe that over the next several years it will be
necessary for the power industry to achieve large reductions of sulfur
dioxide and nitrogen oxides. According to agency officials, there continues
to be considerable interest by EPA and the industry in developing an
integrated approach to address cost-effective strategies for implementing
multiple air regulations. EPA has had a number of follow up discussions and
expects to continue interactions with industry representatives on this
topic.

In addition to the Consolidated Air Rule and Clean Air Power Initiative, EPA
has developed other regulatory approaches to provide industry more
flexibility to achieve the necessary reductions in air pollution, while
still providing accountability for the results. For example, in implementing
air quality standards, EPA guidance for state programs allows facilities to
average the emissions from multiple emission points and to use trading
programs in order to provide more flexibility in how and where an industrial
facility chooses to reduce its air emissions. Also, based on the results of
the acid rain emission trading program and the Northeast Ozone Transport
Commission's nitrogen oxide emissions allowance trading program, EPA has
recently developed a model trading program to assist states in achieving
regional nitrogen oxide emissions reductions.7 In some cases, EPA has worked
with states to set plant-wide limits that control total emissions that are
allowed to be released from an individual plant, but allows the plant
flexibility in choosing how and where to reduce emissions.

Since 1990, EPA has increased stakeholders' involvement, including affected
industries, in developing regulatory requirements and establishing
implementation strategies. According to EPA, this involvement has resulted
in better-coordinated programs and requirements. EPA cited its development
of integrated strategies for implementing the ozone and particulate matter
national air quality standards and the regional haze program as examples of
increased stakeholder involvement. EPA has also worked with individual
industries to eliminate duplicating or overlapping regulatory requirements.
For example, EPA has worked with industry organizations--such as the those
for the aerospace and shipbuilding industries--to set equivalent emission
limits for VOCs and toxic air pollutants and with the pharmaceutical
industry to ensure that storage tank provisions in the toxic air pollutant
standard are equivalent to similar provisions in the new source performance
standard.

Furthermore, EPA and various stakeholders began, in 1993, to identify
opportunities for developing "cleaner, cheaper, smarter" environmental
protection strategies that would consider the unique circumstances of
different industries. EPA, along with states, environmental and public
interest groups, worked with six industries--petroleum refining, printing,
iron and steel, computer and electronics, metal finishing, and auto
manufacturing--to find better ways to manage environmental responsibilities.
With the completion of the Common Sense Initiative -- one of EPA's efforts
to "reinvent" environmental regulation--EPA is applying the lessons learned
in new sector work.8

According to EPA, the title V operating permit program was designed to make
it easier for industry sources to understand and comply with emission
control requirements of the 1990 amendments. The program allows facilities
to consolidate all of the air pollution control requirements of the act into
a single document called an operating permit. EPA has helped facilitate the
issuance of permits in California and Oklahoma that cover the regulatory
requirements of the act, such as air toxic emission standards, new source
performance standards, and state implementation plans. According to EPA,
these streamlined permits result in reduced compliance costs associated with
monitoring, record keeping, and reporting for industries.

We provided EPA with a draft of this report for review and comment. EPA
commented that the report (1) correctly points out that industries such as
utilities and petroleum refiners must comply with emission reduction
requirements under more than one Clean Air Act program and (2) notes the
agency's efforts to explore ways to consolidate or coordinate multiple
requirements with a variety of industry sectors.

However, EPA said that our report's focus on two industry-specific
initiatives does not give a full picture of other ways in which EPA is
working closely with industries that are affected by multiple regulatory
requirements. According to EPA, the agency has helped industries impacted by
the multiple regulatory requirements by (1) providing increased flexibility
in meeting regulatory requirements, (2) involving stakeholders in developing
integrated strategies and new rules, and (3) conducting other
industry-specific initiatives. For example, EPA cited its efforts to develop
integrated strategies for implementing the ozone and particulate matter
national air quality standards and the regional haze program as examples of
increased stakeholder involvement. We emphasized industry-specific efforts
because specific industries were the focus of our objectives. However, we
agree that other EPA efforts can help address compliance issues faced by
industries with facilities that emit pollutants regulated by multiple Clean
Air Act provisions. Accordingly, we have incorporated additional details in
the report on EPA's efforts to increase flexibility and stakeholder
involvement.

The agency suggested a number of editorial and technical changes and
provided additional information clarifying why industries are subject to
multiple regulatory programs and detailing EPA's efforts to help reduce the
regulatory burden for these industries. We incorporated these changes and
additional information in the report where appropriate. Appendix I contains
EPA's written comments.

To obtain information on examples of emission sources subject to regulation
under more than one program authorized by the Clean Air Act Amendments of
1990, we interviewed and received information from representatives of
selected industrial associations, including the Chemical Manufacturers
Association, the Council of Industrial Boiler Owners, the American Forest &
Paper Association, the National Petrochemical and Refiners Association, and
the Edison Electric Institute. EPA agreed that these associations
represented a good cross section of large industrial groups that are
regulated under multiple provisions of the act. We asked representatives
from the industry groups to provide examples of industrial facilities being
regulated under multiple provisions of the act, and the difficulties or
challenges associated with them. In some cases, the industry representatives
provided examples.

To obtain information on the status of EPA's efforts to reduce the
regulatory workload and facilitate compliance for such sources, we held
discussions with EPA officials responsible for preparing and implementing
many of the regulations affecting large industrial emission sources and for
developing initiatives to increase flexibility and industry involvement in
the regulatory process. We also asked EPA officials to comment on some of
the issues raised by the industry representatives. We also interviewed
industry officials to get their perspective on EPA's efforts to address the
problems caused by multiple regulations through pilot projects or
initiatives such as the Consolidated Air Regulation and the Clean Air Power
Initiative. We focused on these two efforts because they are the agency's
only industry-specific efforts to address issues associated with multiple
regulations.

We performed our work from September 1999 through May 2000 in accordance
with generally accepted government auditing standards.

As arranged with your office, unless you announce its contents earlier, we
plan no further distribution of this report until 30 days from the date of
this report. At that time, we will send copies of this report to the
Honorable Carol M. Browner, Administrator, Environmental Protection Agency,
and other interested parties. We will make copies available to others on
request.

If you have any questions about this report, please contact me at (202)
512-6111 or William F. McGee at (919) 899-3781. Key contributors to this
report were Harry C. Everett; Joseph L. Turlington, James B. Hayward; and
DeAndrea Michelle Leach.

Sincerely yours,
David G. Wood
Associate Director,
Environmental Protection Issues

Comments From the Environmental Protection Agency

(160501)

  

1. 42 U.S.C. 7401-7626. Unless otherwise stated in this report, "the act"
refers to the Clean Air Act Amendments of 1990.

2. We recently reported on the implementation of requirements added by the
amendments. See Air Pollution: Status of Implementation and Issues of the
Clean Air Act Amendments of 1990 (GAO/RCED-00-72 , Apr. 17, 2000).

3. Volatile organic compounds are precursors to the formation of ozone, a
criteria pollutant.

4. The six criteria pollutants are ozone, carbon monoxide, particulate
matter, sulfur dioxide, nitrogen dioxide, and lead. They are called criteria
pollutants because the agency set permissible levels for them on the basis
of "criteria" or information on the effects on public health or welfare that
may be expected from the presence of such pollutants.

5. The synthetic organic chemical manufacturing industry is involved in
refinery processes and agricultural, pharmaceutical, and specialty chemical
production.

6. Edison Electric Institute is the association of U. S. shareholder-owned
electric companies, international affiliates, and industry associates
worldwide.

7. For a discussion of the acid rain program, see Acid Rain: Emissions
Trends and Effects in the Eastern United States (GAO/RCED-00-47 , Mar. 9,
2000)

8. We have reported on EPA's efforts to provide more flexibility and
"reinvent" environmental regulation; for example, Environmental Protection:
Challenges Facing EPA's Efforts to Reinvent Environmental Regulation
(GAO/RCED-97-155 , July 2, 1997) and Environmental Protection: EPA's and
States' Efforts to Focus State Enforcement Programs on Results
(GAO/RCED-98-113 , May 27, 1998).
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