The EPA will take industries at their word when they estimate how much air pollution will result from new or expanding operations, Administrator Scott Pruitt told regional agency officials.

The Environmental Protection Agency will no longer “substitute its judgment for that of the owner or operator by ‘second-guessing’ the owner or operator’s emissions projections,” Pruitt said in a Dec. 7 memo to regional administrators.

Pruitt sent the memo the same day he announced that William Wehrum, recently confirmed to lead the Office of Air and Radiation, will head up a task force on the air pollution permitting program, known as new source review.

“It’s a major shift on how EPA implements and enforces new source review,” Richard Alonso, a partner at Sidley Austin LLP in Washington who works on Clean Air Act issues, told Bloomberg Environment.

New source review requires new and expanding industrial facilities, such as power plants and refineries, to install modern air pollution controls if construction activities will lead to significant increases in emissions.

But industries can disregard higher emissions linked to increased demand in production, and they are not penalized if their projected emissions turn out to be wrong, even though the EPA can question the facility’s projections if it doesn’t agree.

Industry Benefits

In light of Pruitt’s memo, Alonso said he would advise industry to “document what you do, put it in a file, and if you do that, EPA isn’t going take an enforcement against you unless your projection is fraudulent or really far out of the ballpark.”

“It gives a lot of discretion to owners and operators of a facility to decide whether new source review applies to them,” he said.

Environmental advocates worry that this hands-off approach removes safeguards put in place to keep expanding facilities from spewing excess pollution into the air.

The memo was “an invitation for those who are inclined to commit fraud,” Bruce Buckheit, a former Justice Department and EPA official who pursued new source review enforcement cases against coal-fired power plants during the Clinton administration, told Bloomberg Environment.

The environmental benefits of enforcing pollution controls under new source review far outweigh those from enforcing permit violations, as do the costs of installing pollution control upgrades.

“So this is where the money is for companies,” said Buckheit, now an environmental consultant. “These are the violations that are expensive [for companies] to correct.”

When industries do overhaul their facilities to make their units more efficient, the plants run longer and at higher capacity while consuming less fuel.

This means a company could run a more efficient plant more frequently, in lieu of an older, less-efficient plant, increasing the amount of pollution that the newer plant emits beyond its projected estimates.

But instead of triggering new source review requirements, if a company attributes the increased pollution to greater demand for product and then satisfies all its procedural requirements, the EPA won’t second-guess its operations, John Walke, climate and clean air director at the National Resources Defense Council, told Bloomberg Environment.

Defining ‘Clear Error’

The EPA would step in only if there was a “clear error,” according to the memo, which used an incorrect significance threshold as an example of error.

“What if the IRS, the police, or any other official that exercises the law announced, we’re not going to second-guess your compliance with the law? If you tell us it was your intent [to comply], then that’s good enough for us,” Walke said.

The EPA didn’t provide more details on what “clear error” meant at the time of publication.