Environment & Energy Report

EPA New Source Review Plan Gives Companies Air Permitting Relief

Aug. 1, 2019, 9:31 PM

Power plants, refineries, and other industrial factories may obtain some relief from the cost of obtaining air pollution permits as the EPA calls for changing the way it calculates emissions.

The Environmental Protection Agency on Aug. 1 proposed changes to the Clean Air Act’s New Source Review permitting program, which currently requires industrial facilities to install new pollution controls each time a company adds a new facility or expands existing operations.

Under this new proposal, facilities would only have to obtain New Source Review permits for “net” increases of pollution.

The agency has made a priority of changing the New Source Review program because companies have long complained that the existing permitting program is a barrier to expansion.

The proposal (RIN: 2060-AT89) aims to change federal rules that “regularly discouraged facilities from upgrading and deploying the latest energy efficient technologies,” EPA Administrator Andrew Wheeler said in a statement.

Boon for Companies

This proposal, if it comes to fruition, would be a boon for companies, according to Eric Boyd, a partner in the Chicago office of Thompson Coburn LLP that represents industries.

It would allow them to get credit for replacing aging inefficient boilers that caused increased emissions with newer, more efficient equipment that may cause some emissions to increase, but not to the extent as the equipment it replaced, Boyd said.

“We appreciate the EPA’s recognition of the need for sensible NSR accounting procedures that will provide a clear and concise approach to air permitting under the Clean Air Act,” Donna Harman, president and CEO of the American Forest & Paper Association, said in a statement.

But Jonathan Levenshus, the Sierra Club’s director of federal campaigns, blasted the proposal.

“Today’s announcement to weaken the vitally important New Source Review program perfectly illustrates that former coal lobbyist Andrew Wheeler is working for his former clients to undercut the EPA’s clean air protections,” Levenshus said in a statement. “By attacking the New Source Review program, he’s allowing some of the wealthiest industries in our country to avoid cleaning up their air emissions instead of installing modern pollution controls on their dirty facilities.”

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Environment is operated by entities controlled by Michael Bloomberg.

Builds on Pruitt Memo

The agency’s proposal would build on a March 2018 memo by then-EPA Administrator Scott Pruitt explaining how to calculate any new emissions of certain criteria air pollutants such as sulfur dioxide and nitrogen oxides from a company’s actions, while also measuring pollution decreases that may occur.

That memo said current New Source Review regulations “provide that emissions decreases as well as increases are to be considered” in deciding whether there is a significant uptick in emissions from a project that needs a permit.

John Walke, clean air director with the Natural Resources Defense Council, said this policy change would inflate the credit companies receive from installing new equipment without looking at the harms. For example, he said, a company could get credit for installing a more efficient boiler, but the EPA would overlook the fact that this new boiler allows its factory to operate twice as much—and emit twice as much pollution as before.

This regulatory approach “is not legal, it has never even been attempted before,” Walke said. He said the NRDC would challenge this in court after it becomes final.

The EPA will now accept comments on the proposal for 60 days after it is officially published in the Federal Register. It will then analyze those comments and respond to them before the proposal becomes final.

To contact the reporters on this story: Amena H. Saiyid in Washington at asaiyid@bloombergenvironment.com; David Schultz in Washington at dschultz@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com

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