Business Day Energy & Environment

How EPA's Regulatory Surge Missed a Primary Target

It was 20 years ago, just days before the election of 1990, when Democrats and Republicans banded together in an effort to solve a problem that people on both sides of the aisle saw as a stark failure of the Clean Air Act.

In the first few years after the law hit the books in 1970, U.S. EPA cracked down on airborne lead, soot and smog. Congress had also ordered EPA to figure out the risks posed by toxic contaminants, but the agency did little to stop mercury and other rare but dangerous chemicals from being released into the air.

In two decades, the agency had applied that section of the Clean Air Act to just eight substances.

Lawmakers who wrote the pollution law were fed up; so was President George H.W. Bush. After consultations with environmentalists and industry groups, they prepared a package of amendments that changed the rules for toxic air pollution. It listed mercury and nearly 200 other substances by name and told EPA to regulate them, sparing the agency the challenge of proving that the substances posed a risk.

The amendments sailed through the House, 401-25, supported by many Republicans who are now among EPA's most vocal critics. Bush signed the amendments into law the week before Thanksgiving, saying it was time to "break the logjam that hindered progress on clean air."

"Every American expects and deserves to breathe clean air," Bush said at a White House signing ceremony. "And as president, it is my mission to guarantee it for this generation and for the generations to come."

Fast forward to today. Toxic pollution limits have been set for many industries, but a generation after the last major change to the nation's air pollution laws, EPA still doesn't have standards for coal-fired power plants and other facilities that release most of the nation's mercury.

Meanwhile, the number of warnings about mercury in fish has multiplied. Fish-consumption advisories have been issued in all 50 states, aimed at recreational fishermen and people who rely on local catches as a staple of their diets. Seafood from the supermarket is also risky; the Food and Drug Administration has advised pregnant women to eat canned light tuna rather than pricier albacore, which contains, on average, about three times as much mercury.

Scientists know that coal-burning power plants, industrial boilers, cement kilns and other facilities produce much of the mercury in the environment. There's no question that eating mercury-tainted fish can cause brain damage and other health problems, especially in children.

But there's still a major unanswered question: What can EPA do about it?

EPA's PR problem

It's well established that most of the mercury in the environment comes from the air, but because the pollution follows a complicated path from smokestack to dinner plate, scientists and economists still aren't sure how much better off Americans would be if every facility had to scrub its emissions clean.

Such uncertainties have presented a public relations dilemma for the Obama administration, which is moving forward with an effort to establish limits on mercury emissions from coal-fired power plants, industrial boilers and cement plants. Under legal deadlines from court battles with states and environmentalists, EPA is required to issue standards during President Obama's first term for several sectors that produce 80 percent or so of U.S. mercury emissions.

In a reversal from the George W. Bush years, when the agency analyzed its rules and found that the costs were far greater than the benefits, the Obama administration has decided that it can't yet estimate the value of reducing toxic emissions, including mercury.

EPA has quietly tossed out the modeling tools used during the previous administration, concluding that they were "outdated," the agency said in response to an inquiry from Greenwire.

From a legal perspective, it makes no difference whether EPA knows the benefits of reducing mercury, dioxins, furans or any other type of toxic pollution. The Clean Air Act requires plants to install the "maximum achievable control technology," or MACT, for every source of toxic pollution; costs and benefits can't be considered unless EPA wants to set stricter limits than the law requires.

But the projections of costs and benefits have substantial influence, especially at a time when the country is trying to emerge from the worst recession since the Great Depression. With businesses and Republicans accusing the Obama administration of putting the environment ahead of the economy, the decision to rework the modeling methods has made it harder for EPA to show the reason for its regulations.

Critics of EPA point to the toxic pollution rules as evidence that most of the low-hanging fruit in the Clean Air Act has already been picked. The agency has historically achieved huge benefits from addressing soot and smog, but toxic pollutants like mercury don't pose the same health risks, said Steven Hayward, an environmental policy fellow at the conservative American Enterprise Institute.

"They're all emitted in very small quantities," said Hayward, who produces the group's annual Index of Leading Environmental Indicators. "Although no one doubts that they're dangerous if you're exposed to them, the actual levels of exposure are very, very low."

In a critical report earlier this year, EPA's inspector general slammed the toxic pollution program's failure to gather baseline risk data that would indicate whether the agency is making progress.

The report also criticized EPA for running eight years late on a report to Congress about the health risks of toxic pollution in urban areas. EPA agreed that the report was late; the agency blamed a shortfall of funding (Greenwire, June 28).

That situation frustrates environmentalists, who see EPA's decision not to estimate the benefits of mercury reductions as a sign of a systemic problem. Though it has been decades since Congress demanded that Americans be shielded from toxic air pollution, said Jane Williams, chairwoman of the Sierra Club's toxics committee, the agency is still unable to demonstrate what it would achieve by doing it.

"The way that we regulate chemicals in this country, the absence of information is the absence of risk," Williams said. "If you don't have information, it's as if the risk doesn't exist."

Costs and benefits

The campaign to limit mercury pollution has been overshadowed by the Obama administration's new regulations on greenhouse gases, but to some industries that would have to comply with both sets of rules, the toxic pollution standards are more worrisome.

Right now, the mercury debate is centered on EPA's draft standards for industrial boilers, which are used to power everything from paper mills to hospitals to universities. The proposed regulations were released in April to little fanfare, and they took on a nickname -- "Boiler MACT" -- that seemed guaranteed to bore anyone without an engineering degree or a legal practice.

But over the past six months, more than 100 House members and 40 senators, including a slew of Democrats who are considered allies of environmentalists, have urged the agency to scale back the standards. They are asking the agency to make the rules less costly to industry.

"While we support efforts to address serious health threats from air emissions, we also believe that regulations can be crafted in a balanced way that sustains both the environment and jobs," the lawmakers wrote in letters to EPA Administrator Lisa Jackson.

According to EPA estimates, the standards that were proposed in April would cost about $11.5 billion up front, though industry analyses have put the figure at about $20 billion. Either way, they are the most costly toxic pollution standards ever proposed -- at least until the draft standards for coal-fired power plants are unveiled next year.

EPA is facing opposition from top Republicans, who have vowed to examine the agency's proposed standards for industrial boilers once they take control of the House next year. One of those Republicans -- Michigan's Fred Upton, whom Republican leaders have picked as the next chairman of the Energy and Commerce Committee -- called the boiler rules part of a "regulatory train wreck" stifling the nation's economic recovery.

In response, the Obama administration has argued that the predicted cost of complying with regulations has been overstated in the past because the estimates don't reflect industry's ability to adapt. EPA's Jackson has touted the benefits that are expected from the boiler standards, which would cut mercury emissions in half to about 15,000 pounds per year.

"Strong cuts to mercury and other harmful emissions will have real benefits for our health and our environment, spur clean technology innovations and save American communities billions of dollars in avoided health costs," she said when the agency released the draft rule in April. "This is a cost-effective, common-sense way to protect our health and the health of our children."

Jackson promised that the boiler standards would yield between $18 billion and $44 billion in annual benefits at an annual cost of around $4 billion. But she was only counting the benefits of reducing particulate matter -- essentially, dust and soot. Those pollution cuts are a side benefit that happens to occur when controls are added to boilers.

The benefits of cutting mercury are harder to quantify. Same goes for most of the 188 dangerous substances EPA must control with its toxic pollution standards. Officials "do not have sufficient information or modeling available" to produce an estimate of those benefits, the draft boiler rule says.

Businesses affected by the boiler standards have criticized the agency for resting its estimates on reductions in particulates, which is regulated under a separate section of the Clean Air Act. Though the rule is intended to address mercury and other types of toxic air pollution, the agency hasn't tried to show whether the rule would improve conditions more directly linked to mercury, such as the condition of impaired waters where there are warnings about eating fish.

EPA doesn't have to prove those benefits, since the amendments ordered the agency to act on mercury one way or the other. But that has made the standards an easy target for criticism.

It's likely that little would change once emissions controls are installed, said one industry source familiar with the boiler standards.

"Without those benefits, this rule looks really, really poor," the source said. "EPA has always struggled in the air toxics programs to come up with the type of cancer benefits that the whole program is oriented towards. They end up having to come up with some rationale, and the agency is always going back to these PM benefits."

The rules for boilers were originally due in 2000, under the Clean Air Act amendments that had been put in place a decade earlier.

EPA didn't meet that deadline, and ever since, the rules have faced a series of delays. The agency agreed to rework the rules by January 2011 after a federal court rejected the way the George W. Bush administration had handled boilers. But yesterday, the Obama administration asked a federal judge for another 15 months to rework the standards that were proposed earlier this year.

The request frustrated environmentalists, who have spent more than a decade filing lawsuits to make EPA issue the standards.

Advocacy groups say the limits on toxic pollution are required by the Clean Air Act and justified by the benefits from particulates alone. But as long as EPA is projecting the costs and benefits of its rules, the agency is giving more ammunition to its critics by leaving mercury off the ledger, said John Walke, clean air director at the Natural Resources Defense Council.

"Those benefits are not zero," Walke said, referring to EPA's analysis of the boiler rule. "The case has been abundantly established that this rule would deliver vastly more benefits to the public than it would cost, and that case would be made to a higher degree if the agency did the obvious and assigned monetized benefits to the real-world benefits that come from reducing carcinogens and brain poisons."

Complex poison

If there is any type of toxic pollution that would seem likely to be understood, it's mercury.

Cases of mercury poisoning have been documented for millenia, though the cause of the ailments has only became clear within the past century. One prominent example is evidenced by the saying "mad as a hatter," which refers to the once-common practice of using mercury to shape hats. Many times, the craftsmen who handled the mercury-soaked materials ended up with brain damage.

The risk of mercury pollution was thrust into the spotlight several decades ago, after a Japanese chemical factory killed thousands of people and poisoned thousands more by allowing mercury to drain into Japan's Minamata Bay from 1932 to 1968. The victims, who mostly lived in nearby fishing villages, were exposed through the primary staple of their diet: local seafood.

These days, fish are still the main source of the mercury that affects human health, but most of the mercury released into the environment starts as a minor ingredient in coal. When the coal is burned by a coal plant, industrial boiler or cement kiln, trace amounts of mercury leave the smokestack in different forms: sometimes as a gas, and sometimes in small particles that can be brought to earth by rain.

"Exposure to most air pollutants is through direct inhalation impacts," said Charles Driscoll, an engineering professor at Syracuse University who studies mercury's path through the environment. "We're all breathing one atmosphere, though there is some variation depending on where you live. In the case of mercury, you're dealing with the atmosphere, the land, the water and then the food chain. It's really a multimedia issue."

No matter how it enters the air, some mercury ends up on land and some of it in water. Once it gets into oceans, lakes and wetlands, mercury is transformed into a substance called methylmercury that can accumulate in wildlife.

Because the concentrations of methylmercury increase as the chemical climbs the food chain, they are highest in predators such as sharks, tuna and loons. That's why mercury can present a risk to people, who are also at the top of the food chain.

In the United States, there are more consumption warnings for mercury than for all other contaminants combined. Experts aren't expecting new regulations to keep all mercury out of the water, but if the agency doesn't act, nothing will change, Driscoll said.

"It's a very widespread problem, and if we want to move forward with a solution to this problem, we just have to do something," he said. "You learn by doing. That's just life in the fast lane."

Debating U.S. role, response

The sectors subjected to new rules -- coal plants, industrial boilers, cement plants, hazardous waste incinerators, gold mines and chlor-alkali plants -- together produce about 80 of the 100 tons of mercury that American facilities release into the air each year.

That doesn't sound like much, considering the United States produces 6 billion tons of carbon dioxide per year, but mercury is extremely potent. Scientists estimate that 1 pound in the environment is enough to make about 2 million pounds of fish unsafe to eat.

The challenge has been tracing the mercury from the start of that process to the finish, and some critics of mercury regulations contend that there would be little benefit from a crackdown on U.S. emissions. They point to international pollution -- namely, emissions from China and India, some of which are carried by air currents across the Pacific Ocean.

U.S. sources produce less than 5 percent of the roughly 2,500 tons of mercury released by humans each year, according to the Electric Power Research Institute, a utility industry group. That doesn't include natural sources of mercury like wildfires and volcanoes, which are thought to release about 2,500 tons more.

EPA has concluded that domestic sources produce about half of the mercury that gets into U.S. waters, but even so, those aren't the fish that most Americans are eating. More than 80 percent of the seafood eaten in the United States comes from foreign shores, which would scarcely be affected by EPA's mercury reductions.

Jeff Holmstead, an industry attorney at Bracewell & Giuliani who was EPA's air chief under George W. Bush, said mercury has become an emotionally charged issue, but the federal government has little power to address the problem.

"If you were just going to ask, 'Does mercury in the environment pose a risk?' then yes, it certainly poses some risk," said Holmstead, whose clients include coal-fired utilities. "But even if you could eliminate all the mercury emissions in the U.S. completely, from every source of mercury pollution, you would have almost no impact on people's exposure."

The arguments go on and on. Do children and pregnant women have enough mercury in their blood to see serious consequences? Even if domestic waters are being contaminated by U.S. facilities, would cleaning them up have benefits for public health? What about the damage to the environment, and to the species that people aren't fond of eating?

Two fractious factions have been debating these questions for decades, said David Krabbenhoft, head of the U.S. Geological Survey's mercury research team. His research findings have been cherry-picked by both sides, he said.

"The truth is, it's complicated," Krabbenhoft said when asked to explain the impact that U.S. emissions have on the overall problem of mercury contamination. "Anybody who paints the picture otherwise just isn't being honest."

Krabbenhoft said he expects mixed results from the push to reduce the amount of mercury released by U.S. power plants and other major emitters. Some bodies of water would probably see dramatic decreases in methylmercury, he said, but others might not change much, perhaps because of other mercury sources, including air pollution from abroad.

"Ultimately, the best experiment we could ever do would be to have the U.S. out in front of regulating mercury and to demonstrate, once and for all, who was right in that argument," he said. "Believe me, if large foreign emitters want to jump on board with us in 2011, that's great. We just won't have our experiment."

New models

The Obama administration is getting ready for its most wide-reaching action on mercury: an effort to replace the Clean Air Mercury Rule (CAMR), a George W. Bush-era program that would have imposed the first limits on mercury from the utility sector.

The regulations were thrown out when a federal court ruled that it was illegal for EPA to remove mercury from the list of toxic pollutants that had been created by the 1990 revisions to the Clean Air Act. The substances on that list have to be controlled by every pollution source, but the agency wanted to use a cap-and-trade program to lower the cost of the rule.

When it came to mercury, the Bush administration had suggested that the controls weren't worth the cost. In its 566-page analysis of the regulations, which were issued in 2005, EPA concluded that the mercury reductions would produce between $400,000 and $3 million in benefits each year, compared to $848 million in annual costs to utilities.

At the time, many environmentalists attacked the agency's assessment, saying it vastly underestimated the true benefits of reduced mercury pollution. Among the most vocal critics was Lisa Heinzerling, an environmental law professor at Georgetown University who has led EPA's policy office under President Obama and plans to step down by year's end.

The Bush-era analysis was a quixotic undertaking, said Catherine O'Neill, an environmental law professor at Seattle University. Pricing the rule's costs and benefits "had EPA piecing together data on everything from the number of fishing licenses issued to the number of miles people are presumed willing to travel from their homes to go fishing," she wrote in a 2009 critique.

If the Obama administration wants to analyze the benefits of mercury reductions, it must answer those same questions. EPA wants to have new modeling methods for mercury ready by March of next year, when the agency is scheduled to release the draft rules for coal-fired power plants.

"As we update our models, we are putting additional focus on the impact of reducing mercury on populations that are more at risk because of high fish consumption, including tribes and subsistence fishers and their families," the agency said in a statement.

When the Obama administration issues rules for the utility sector, it is expected to require power plants to reduce their mercury emissions by at least 90 percent. According to recent studies by the Government Accountability Office and Northeast States for Coordinated Air Use Management (NESCAUM), the technology is available to accomplish those emissions reductions in a cost-effective way.

Many utilities are more concerned about complying with the standards for hazardous air pollutants (HAPs) than the agency's new rules for greenhouse gases, said Christi Tezak, an energy analyst at Robert W. Baird & Co. According to a recent report by the North American Electric Reliability Corp., the rules could force the retirement of coal plants that are capable of producing as much as 15 gigawatts -- about 4 percent of the nation's total coal-fired capacity.

Some utilities are so concerned that they are pushing Congress to pass legislation that would impose stricter emissions limits than the Clean Air Act requires. Avoiding the piecemeal approach and strict deadlines that are imposed by EPA regulations would allow companies to invest in their power plants with a measure of certainty, Tezak said.

"The biggest ask is more time," she said. "Frankly, I haven't heard anybody in the utility industry saying we shouldn't be regulating HAPs the way we've heard some people say we don't need to be regulating carbon."

'Double-edged sword'

Environmentalists, who had pushed for the 1990 amendments in the first place, now say the changes to the Clean Air Act didn't work out as well as they had hoped.

The standards have proved to be a "double-edged sword," said James Pew, an attorney at Earthjustice who has spent about 15 years suing EPA to make the agency issue limits on toxic air pollution. Because the agency hasn't had to worry about costs and benefits, he said, it has had little incentive to figure out what risk is presented by toxic pollution, he said.

There have been advances in the scientific understanding of mercury since 1997, when EPA issued a 2,500-page report to Congress that concluded there were too many unknowns to estimate its risk to the public. But the agency hasn't kept pace with its ability to trace the impacts of mercury and dioxins, Pew said.

"It's a problem that's only cropped up recently because this is the first administration that's really tried to implement the Clean Air Act as written," he said. "These rules have much more value than EPA has the ability to talk about."

The agency's understanding of mercury has lagged behind its knowledge of soot and smog, which are regulated under sections of the Clean Air Act that require the agency to issue standards based on health risks.

But just a few decades ago, particulates were just as poorly understood as mercury, said Praveen Amar, the director of science and policy at Northeast States for Coordinated Air Use Management.

If scientists were able to figure out particulates, Amar said, there's no reason EPA can't estimate the benefits of reducing mercury based on the number of IQ points that aren't lost, as well as avoided developmental disorders and other health problems.

People are only comfortable with the emissions model for particulates because it has been used for about 20 years, he said.

"It's full of problems," he said, but "everybody's tired of arguing, so we just accept it now."

Michael Livermore, a law professor at New York University and a leading proponent of cost-benefit analysis in environmental regulation, said estimating the value of mercury reductions would help inform the public about the new rules. But because EPA isn't allowed to consider costs when it sets the toxic pollution standards, he said, "it doesn't make sense for the agency to pull its hair out estimating the benefits of a rule that's already cost-benefit justified" by the particulate matter reductions.

Doing an analysis takes time and money. And the agency wouldn't be able to do anything differently, even if it determined that the benefits of controlling toxic pollution were outweighed by the costs.

"Congress made that decision. EPA's just carrying out its obligations under the law," Livermore said. "We can argue about whether Congress made a good decision, but that's not a question for the agency to answer."

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