31 March 2003

U.S. Environmental Protection Agency

EPA West (Air Docket)

1200 Pennsylvania Ave., N.W.

Room B108, Mail Code: 6102T

Washington, D.C. 20460

Re: Docket ID No. A-2002-04

Ladies and Gentlemen:

We direct our comments to the proposed rule redefining Routine Maintenance, Repair, and Replacement (RMRR). All of us have experience in studying air pollution regulations and/or the health effects caused by air pollution. Robert R.M. Verchick is Ruby M. Hulen Professor of Law and Urban Affairs at the University of Missouri at Kansas City (UMKC), where he teaches and writes about environmental regulation and environmental justice. The other contributors are J.D. candidates at UMKC, where they are studying environmental issues; in addition some of these students have previous educational or professional experience in the areas chemistry, public health, and industrial chemical manufacturing. We offer these comments on behalf of ourselves individually and on behalf the Black Law Students Association at UMKC, the Environmental Law Society at UMKC, the Health Law Society at UMKC, the Hispanic Law Students Association at UMKC, and the Public Interest Law Association at UMKC. Our comments are not intended to reflect the views of UMKC School of Law, UMKC, or the University of Missouri system.

The New Source Review (NSR) program applies to the construction of new major emitting industrial facilities and to existing facilities that make major modifications that significantly increase pollution emissions. The program requires that new plants and major modifications of existing plants obtain a permit before construction. Such a permit will only be issued if the new plant or major modification includes pollution control measures that reflect the Best Available Control Technology for sources in attainment areas and the Lowest Achievable Emissions Rate in nonattainment areas.[1] The Clean Air Act (the “Act”) defines “new source” to include existing sources that later undergo “modifications.”[2] A “modification” is “any physical change” or “change in method of operation . . . which increases the amount of any air pollutant emitted by such source.”[3] Courts have consistently read this definition to mean exactly what it says: any change is a “modification” so long as the change is physical and increases air pollution.[4] The only exemption involves truly trivial changes representing “routine maintenance, repair, and replacement.” EPA created the exception to relieve itself of the impossible burden of having to enforce new source requirements for even minimal repairs.[5] The Court of Appeals for the D.C. Circuit validated the routine maintenance exemption on the grounds that its effects were de minimus.[6] Thus, so long as EPA construes this exemption narrowly, the rule is legal.

The new proposed rule abandons EPA’s narrow, case-by-case determinations of de minimus maintenance exemptions in favor of a much more liberal program that automatically exempts certain categories of modification by defining them as RMRR per se. These per se categories eschew any reference to trivial or de minimus effects and instead appear designed only to relieve regulators of case-by-case analyses. One per se category would exclude from new regulation all projects that fall within an as yet undetermined “annual allowance” to be defined by total expenditures as a percentage of capital cost. A second per se category would exclude from new regulation all projects involving the replacement of existing equipment with functionally equivalent new equipment.

Because it abandons the required de minimus standard, the proposed rule stretches EPA’s original maintenance exemption beyond the breaking point. In addition the proposed rule will increase pollution, intensifying damaging health and environmental effects. The possibility of increased air pollution also creates the possibility of increased environmental justice concerns. Finally, the proposed rule also hamstrings state and local governments in protecting their local airsheds, a result at odds with this Administration’s own preference for federalism and local autonomy. We take each objection in turn.

A. The Proposed Rule Is Inconsistent with the Clean Air Act.

The proposed rule undercuts both the plain meaning of the Clean Air Act and Congress’s underlying intent. It breaches the plain meaning because “modification” is literally defined as “any physical change” that “increases the amount of any air pollutant.”[7] Courts take this language literally, permitting exceptions only in de minimus situations.[8] The proposed exemptions require no limits on new pollutants, as both the text and the courts require. Instead, the EPA focuses on expenditure/capital cost ratios and functional equivalency of added equipment, elements which appear nowhere in section 7411’s definition of “modification.”

The proposed exemptions breach Congress’s intent because the proposed rule will increase air pollution and significantly delay any future application of modern pollution-control technology to existing plants. It is already widely acknowledged that the Administration’s “Clear Skies” initiative, taken as a whole, would allow 36% more nitrogen, 50% more sulfur dioxide and 190% more mercury into the air by 2018 than would existing regulations.[9] The proposed maintenance rule, which would applies to roughly 17,000 plants nation-wide, would contribute to this problem.[10]

Specifically, the proposed rule’s “annual allowance” would lead to increases in criteria pollutants in some attainment and non-attainment areas. The proposed rule’s “functional equivalency” exemption would allow indefinite upgrading of existing equipment without ever requiring new pollution controls.

1. The “Annual Allowance” Increases Pollution.

The “annual allowance” exemption threatens to increase criteria pollutants by encouraging newer plants to augment their facilities in ways that increase production and pollution. The reason lies in EPA’s preference for across-the-board capital-cost formulae. To see why, consider the exemption’s effect on two competing plants, an older existing plant and a newer existing plant. The older source will have a lower replacement cost and therefore a lower RMRR allowance. The newer source will have a higher replacement cost and therefore a higher RMRR allowance. The older source will have relatively higher maintenance costs than the newer one with similar production levels, since its equipment is older and requires more frequent repair.

If the older source has greater maintenance requirements but a smaller RMRR allowance, it may use its entire allowance for necessary retrofits. Indeed, the most likely scenario is that it will “max-out” its allowance and be required to submit to case-by-case review by the EPA. Meanwhile, the newer existing source, which has a much lower maintenance requirement, will enjoy a surplus in its RMRR allowance. This surplus creates an incentive for the newer source to use its surplus allowance to augment its production capacity and increase its air emissions, knowing that such an increase—however—significant will not be subject to the most recent new source standards. Some in the EPA have insisted the “annual allowance” exemption is not intended to increase pollution and, in practice, will not. If this is so, we urge EPA to honor this understanding by inserting an explicit de minimus cap on new emissions that occur in conjunction with RMRR.[11]

As the new source provisions make clear, Congress never intended to permit non-de minimus increases in pollution in non-attainment areas. Similarly, it did not intend significant increases of pollutants in attainment areas. (And neither per se category prohibits even significant increases.)

Even if the “annual allowance” exemption did not up-end Congressional intent, it would still not relieve EPA of its enforcement challenges—one of the touted advantages of the “annual allowance” exemption. As pointed out, the older existing plants (which make up the majority) will still require case-by-case review by the EPA because the annual allowances, if calculated in relation to capital cost, will seldom be enough to cover necessary repairs. Thus, case-by-case review will continue to represent a significant proportion of EPA’s investigative and enforcement work. This is appropriate; indeed, we would like to see more case-by-case review. EPA’s real challenge is not that it has too much work, but that the current Administration has not provided the Agency enough workers. Thus, according to government records obtained through the Freedom of Information Act, the number of EPA inspectors and enforcement officials was cut more than 12 percent last year.[12] Indeed, the current staffing at EPA’s Office of Enforcement of Compliance Assurance is now the lowest since the government began keeping records in 1996. The “annual allowance” exemption cannot make up for this deficit.

2. The “Functional Equivalence”Exemption Would Lead to Indefinite Upgrading and More Pollution.

The “functional equivalence” exemption would allow indefinite upgrading of existing equipment without new controls by allowing facilities to replace different parts of a system incrementally over a series of years without ever triggering new source review. This effect would undercut the intent of Congress. Congress specifically adopted new source standards with the understanding that they would lead to an incremental “dying off” of older plants (retrofitted or not) and their later replacement with more tightly regulated new facilities. By allowing operators to indefinitely prolong the lives of older plants, the proposed rule would make it harder for new plants to enter the market and compete, thus reversing the very effects (new plants replacing old plants) Congress intended to pursue. The preservation of older plants in this regulatory scheme virtually insures that airsheds will be more polluted than would have been the case otherwise.

3. The Courts Will Not Defer to EPA’s Judgment Where Such Legislative Opposition Exists.

Without an explicit cap on emissions resulting from RMRR, the proposed rule would surely meet stiff resistance in the federal courts. The proposed rule’s inconsistency with the Act is so fundamental that the courts’ traditional deference to agency rulemaking would not save it. In Chevron, USA, Inc. v. Natural Resources Defense Council, Inc.,[13] the U.S. Supreme Court made clear that where an agency rule violates a statute’s unambiguous meaning, it is invalid.

The Supreme Court decision, Chicago v. Environmental Defense Fund,[14] indicates three points to be considered that are relevant here: (1) the statute’s “plain meaning,” (2) the neighboring sections of the statute (3) and the stated goals of the statute.[15] As discussed earlier, the statute’s plain meaning could not be clearer: the proscription of an increase of “any” pollutant means just that. The Act’s neighboring provisions, which require state implementation plans to reduce pollutants in non-attainment areas and to prevent increases in attainment areas corroborates the plain meaning of section 7411. As for the Act’s purpose, Congress declared its objective was to “protect public health and welfare . . . preserve protect and enhance air quality . . . [and] preservation of existing air resources.”[16] The proposed rule is inconsistent with these objectives.

B. Because the Proposed Rule Will Increase Pollution, It Will Intensify Damaging Health and Environmental Effects

Thirty thousand Americans already die early deaths because of air pollution in todays’s skies.[17] The EPA bears a legal and ethical responsibility to prevent further such damage tomorrow. Exposure to pollution is damaging to the human body. Studies show that multiple or consecutive exposures to pollution lead to serious health concerns, and even disease. The proposed changes to the Clean Air Act will likely increase pollution, especially in the form of particulate emissions from coal-fired plants. Among the most harmful to humans are nitrogen oxides (NOx) and sulfur dioxides (SO₂). Power plants that emit these particulates are adding to an ozone layer that lies close to the ground, commonly referred to as smog. The combination of smog and particulate matter causes detrimental health effects.

The list of medical problems associated with airborne pollution is exhaustive. The respiratory system is the most commonly attacked area of the body, but pollution effects are not limited to the lungs. Complaints associated with pollution exposure include: asthma, bronchitis, eye irritation, colds, stomach irritation, suffocation, claustrophobia, allergies, decrease in body energy and efficiency, and decreased lung capacity and function.[18]

Exposure to particulate pollution in great enough amounts or over an extended period of time can turn complaints into serious medical problems and diseases. The most common diseases are heart and lung disease, but stomach cancer, emphysema, and heart attacks have also been linked to pollution inhalation.

Statistical data collected from patients exposed to pollution are frightening. Chronic exposure to particulate pollution can shorten life by up to three years, lower lung capacity by 15 to 20 percent, and damage the lungs roughly equal to smoking half a pack of cigarettes a day.[19] Risk of early death increases 15 to 17 percent where particulate matter pollution creates smog.[20] Lung disease alone kills 335,000 Americans yearly, and deaths from asthma related attacks have doubled between 1980 and 1993.[21] Lung, heart, and other bodily diseases associated with inhaled pollution result in deterioration of the total body system, and possibly death.

The effect that smog based pollution has on children is of primary importance. Ground level ozone is responsible for 15,000 premature deaths and one million lung function problems in children annually.[22] Children have different oxygen and blood requirements than adults so the effects of pollution on their bodies are even more devastating. Since children are still growing and generally more active than adults, their body systems require more blood and oxygen than that of an adult.[23] Children breathe on average 50 percent more air per pound of body weight than adults.[24] Asthma has become the leading chronic illness in children, as well as the leading cause for hospital admissions among the nation’s youth. The world is not ours; we are merely borrowing it from our kids. The proposed changes to the Act will likely increase pollution levels and result in our leaving a dirtier planet with air that is harder to breathe for our children.

Smog is generally viewed as an urban city haze and is common in areas of industrialization. Common effects on the planet include decreases in crop production, increases in acid rain, and devastating effects on plants and wildlife. Acid rain is responsible for rendering lakes and streams too acidic to support plant and fish life, aids in the destruction of monuments and buildings, impairs visibility, and kills many of the large canopy trees in the North Eastern states.[25]

Killing the large canopy trees creates special concerns in the Northeast, as they are responsible for producing the oxygen that we breathe. High concentrations of ground level ozone make it harder for trees to produce the oxygen people need and makes it harder for humans to inhale what oxygen they do produce. Ground level ozone is responsible for increased radiation exposure from the sun. Smog, under certain conditions, has the effect of intensifying the amount of radiation that hits the earth and trapping it there, creating perilous effects on plants, animals, and humans.

C. The Possibility of Increased Air Pollution and Health Problems Creates the Possiblity of Increased Environmental Justice Concerns.

Under the Executive Order on Environmental Justice, the EPA is required to “make achieving environmental justice part of its mission” and to consider the effects of its policies and decisions on the health and environment of low-income or minority neighborhoods.[26] Over the last twenty years, ample evidence throughout the United States suggests that the brunt of environmental burdens—including air pollution and geographic proximity to industrial facilities—are borne by the poor and people of color.[27]

Given market forces (which direct polluting facilities to poorer areas), current housing patterns (in which people of color are more likely to live near many kinds of polluting facility), and the realities of political power (in which the poor and people of color often have less ability to successfully lobby their local governments for protection), one can expect that any environmental fallout from the proposed rule will be visited to a disproportionate degree on the poor and on people of color—individuals who, incidentally, are the least likely to have knowledge about the risks they face and the medical resources to address them.

Empirical data support this view. Consider the states of New York, Pennsylvania, and New Jersey, which, in addition to seven other states, have challenged EPA’s proposed rule in federal court.

In New York’s Albany County, the ratio of air-polluting facilities (e.g., facilities that emit criteria pollutants) located near minority residents as compared to those located near white residents is 2.45 to 1.[28] The ratio of such facilities near “low income” and “high income” residents is 2.46 to 1.[29]

In Pennsylvania’s Allegheny County, the ratio of air-polluting facilities located near minority residents as compared to those located near white residents is 2.44 to 1.[30] The ratio of such facilities between “low income” and “high income” residents is 2.05 to 1.[31]

In New Jersey’s Camden County, the ratio of air-polluting facilities located near minority residents as compared to those located near white residents is 5.38 to 1.[32] The ratio of such facilities between “low income” and “high income” residents is 1.18 to 1.[33]

Given this clear knowledge of air pollution inequalities based on race and class, the EPA should avoid any rule that would impose additional health risks on members of these vulnerable groups.

D. The Proposed Rule Hamstrings State and Local Governments in Protecting their Local Airsheds, a Result at Odds with this Administration’s Own Preference for Federalism and Local Autonomy.

The proposed rule is particularly damaging to state and local autonomy, a principle the Bush Administration purports to hold in high esteem. This is because as the per se exemptions work to increase air pollution, states (and their local governments) will have fewer options in meeting the federally-mandated National Ambient Air Quality Standards (NAAQS) and will be even more threatened by spill-over pollution coming from neighboring states.

1. States Will Have Fewer Options in Meeting the NAAQS.

In general, it is the states not the federal government that bears the responsibility of insuring compliance with the NAAQS.[34] The imposition of this burden is justified on the grounds that states know best how to achieve an maintain air quality in the local airshed. Thus Congress and the EPA have traditionally given states broad flexibility in their regulations as long as the states meet the air standards. The proposed per se exemptions deprive states one of the strongest tools they have in controlling emissions: federally uniform restrictions on modifications to existing sources. Without such restrictions, states will then be pushed to allow maintenance modifications that increase pollution and to offset those increases by imposing tighter restrictions on some other emission sources. This will be exceedingly difficult, given that existing stationary sources are responsible for so much of states’ air pollution problem. The result, we fear, is that the number of non-attainment areas will simply increase, exposing states to even more federal reprisals for air pollution problems that the federal government helped to make worse.

2. States Will Be Even More Threatened by Spill-Over Pollution Coming from Neighboring States.

Many downwind states are unable to meet their NAAQS because upwind power plants disregard their pollution’s transboundary effects. This lack of respect for state boundaries limits the ability of downwind states to maintain clean air and thus intrudes upon their political autonomy. The course of action provided to the states, either through section 126 petitions or individual state litigation, has led to governmental and judicial backlog, ineffective results in reducing air pollution, and a decrease in state resources. Because the proposed rule would increase pollution and weaken state’s ability to comply with the NAAQS, one should expect transboundary air-pollution disputes to grow even uglier, an event that would further erode state and local autonomy.

Transboundary pollution involves the deposition of particulate matter in a state other than where it was emitted. It is more difficult for Northeast states to meet their NAAQS requirements because wind patterns carry particulates eastward.

a. Section 126 Petitions.

Section 126 of the Clean Air Act provides downwind states a measure of recourse against upwind states that are responsible for their failure to meet the requirements of NAAQS. A state that does not meet its emission cap can file a section 126 petition with the EPA. Section 126 petitions are often met with frustration and unsatisfactory results.

The EPA and U.S. Department of Justice (“DOJ”) have limited time and resources to handle the continually growing Section 126 petitions that have been filed by various Northeastern states. These section 126 petitions require the EPA to test power plants in upwind states for higher than allowed emissions or require plants to submit emissions data. This is a long and complicated process that potentially involves multiple states and over 300 power plants.[35]

In the past, the EPA has been reluctant to intervene in transboundary pollution issues between states, preferring states to work issues out on their own.[36] Often negotiations between states break down because of the high standards in the Northeast and low standards the Midwest and South want to adopt.[37] The proposed regulations would allow power plants in the Midwest and South to have greater emissions, making it even harder for the Northeastern states to meet their NAAQS caps. This intrudes upon the autonomy of Northeastern states and limits their ability to negotiate.

The number of section 126 petitions has increased over the last couple of years and has resulted in litigation to address ever-growing problems between states. Several suits, brought by the EPA and enforced by the DOJ, have ended in awards or settlements against power plants in upwind states that cause nonattainment in downwind states. Unfortunately, the new revisions proposed by the EPA impede litigation, and the rollback the revisions allow cause current settlements to be nullified.

The new regulations will result in a greater number of section 126 petitions being filed and bury the EPA further in litigation. This would be a considerable draw on resources and does not deter violating power companies and upwind states from emitting too much pollution.

b. Lawsuits Brought by States.

Frustrated by the section 126 process, some states have pooled resources to sue violating power plants. Northeastern states, such as New York, began suing individual plants. Some of these cases have been settled, but with the potential new regulations, the current litigation is on hold. Industry lawyers have urged EPA to make its proposed rule retroactive so that power companies can avoid liability under these suits. Allowing retroactive regulations would be disastrous for the downwind states and would further erode their ability to protect the health and welfare of their citizens.

E. Conclusion.

For these reasons, we urge the EPA to reconsider its proposed rule on RMRR in its entirety. At the very least, we urge that the EPA add a de minimus cap on increases of air pollution permitted for RMRR modifications and that the rule’s effects not be made retroactive.

Thank you for considering our comments.

Sincerely,

Robert R.M. Verchick

Ruby M. Hulen Professor of Law and Urban Affairs

University of Missouri at Kansas City (UMKC)

5100 Rockhill Road

Kansas City, MO 64113-2499

tel: 816.235.2381

verchickr@umkc.edu

Jessica M. Agnelly

J.D. Candidate, UMKC

Kristine Freeman

J.D. Candidate

UMKC

Michael Hundley

J.D. Candidate

UMKC

Cathy L. Legan

J.D. Candidate

UMKC

Andrew S. Leroy

J.D. Candidate

UMKC

Liu, Jin

J.D. Candidate

UMKC

Christopher S. Moberg

J.D. Candidate

UMKC

and

Lauren Syler

J.D. Candidate

UMKC

on behalf of themselves and the following organizations:

The Black Law Students Association, UMKC

The Environmental Law Society, UMKC

The Health Law Society, UMKC

The Hispanic Law Students Association, UMKC

The Public Interest Law Association, UMKC

[4] See Alabama Power Co. v. Costle, 636 F.2d 323, 400 (D.C. Cir. 1979) (“’modification’ is nowhere limited to physical changes exceeding a certain magnitude”); Wisconsin Electric Power Plant Co. v. Reilly, 893 F.2d 901, 905 (7^th Cir. 1990) (“the potential reach of these modifications is apparent: the most trivial activities—the replacement of leaky pipes, for example—may trigger the modification provisions if the change results in an increase in the emissions of a facility”).

[9] See, e.g., Jim O’Neil, Bush Misleads on Air Pollution, The Oregonian, Feb. 1, 2003.

[10] See Editorial, Clean Politics, Philadelphia Inquirer, Feb. 3, 2003; National Resources Defense Council,, Clean Air & Energy: Bush Record available at <http://www.nrdc.org/bushrecord/airenergy_powerplants.asp#1196.>NRDC, Record”)

[11] One might respond by saying that such a cap would reduce the regulatory efficiency of the per se categories by again requiring attention to individual context. This response ignores two points. First, case-by-case review of older facilities will still be necessary even with the “annual allowance,” as we discuss later. Second, efficiency, while an appropriate goal, does not trump the plain meaning and intent of the Act.

[17] National Resources Defense Council,, Clean Air & Energy: Air pollution: In Brief available at <http://www.nrdc.org/air/pollution/fnsr.asp#1>.

[18] W. David Slawson, The Right to Protection from Air Pollution, 59 S. Cal. L. Rev. 672, 684-87, 695 (1986).

[22] Vickie Patton, Court Affirms Historic Clean Air Standards, available at <www.enviromentaldefense.org/article.cfm?contentid=1868> .

[25] Attorney General Sorrell Joins AGs from Northeast States to Press Bush Administration For Clean Air, <www.state.vt.us/atg/press01082002.htm>(Jan. 8, 2002).

[26] Executive Order No. 12898, 3 C.F.R. 859 (1995); see generally, Denis Binder, Robert R.M. Verchick, et al., A Survey of Federal Agency Response to President Clinton’s Executive Order No. 12898 on Environmental Justice, 31 Environmental Law Reporter 11133 (2001).

[27] See Robert R.M. Verchick, The Commerce Clause, Environmental Justice, and the Interstate Garbage Wars, 70 S. Cal. L. Rev. 1239, 1289-90nn.277-70 (citing multiple sources).

[28] Environmental Defense Fund (“EDF”), Scorecard, available at <http://www.scorecard.org/community/ej-summary.tcl?fips_county_code=36001#dist >(using data from the 1990 U.S. Census).

[32] EDF, Scorecard, available at <http://www.scorecard.org/community/ej-summary.tcl?fips_county_code=34007#dist >(using data from the 1990 U.S. Census).

[35] Appalachian Power Co. v. EPA, 249 F.3d 1032, * (2001).

[36] Christina C. Caplan, The Failure of Current Legal and Regulatory Mechanism to Control Interstate Ozone Transport: The Need for New National Legislation, 28 Ecology L.Q. 169, 187 (2001).