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Clean Air Act - General - Cont'd. [1]
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Records of the White House Office of Counsel to the President (George H. W. Bush Administration)
Jeffrey Holmstead Environmental Subject Files
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2001-1865-F; 2001-1978-F
2001-1978-F
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This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin: Counsels Office, White House
Series:
Holmstead, Jeffrey, Files
Subseries:
Environmental Subject Files
OA/ID Number:
45125
Folder ID Number:
45125-021
Folder Title:
Clean Air Act - General - Cont'd. [1]
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12
7
7
3
10/23/1991 13:48 DOJ OLC
202 514 0563
P.01
U.S. Department of Justice
CAME
Office of Legal Counsel
Washington. D.C 20530
DATE: 10/23/91
FACSIMILE TRANSMISSION SHEET
FROM: RICHARD NATAREDA
OFFICE
PHONE:
514-3694
TO: JEFF HOLMSTEAD
OFFICE
PHONE:
NUMBER OF PAGES: 3 + cover
FACS NUMBER: 456-7929
REMARKS:
Signing Statement - I have underlined the relevant
discussion.
ANY QUESTIONS, PLEASE CONTACT KATHLEEN MURPHY ON 514-2057 OR
KEVIN SMITH ON 514-2067
OFFICE OF LEGAL COUNSEL FACS NUMBER - 514-0563
FTS - 368-0563
10/23/1991
13:49
DOJ
OLC
202 514 0563
P.02
Nov. 15 / Administration of George Bush, 1990
great victory for the environment, a day
ral Resources, Energy and Science at the
when we have strengthened our clean air
Office of Management and Budget. S. 1630,
statutes, already the world's toughest. This
approved November 15, was assigned
legislation is not only in America's interest;
Public Law No. 101-549.
like so many of the environmental issues
that we are working on, this bill is in the
interest of people all over the world.
And the new environmental ethos is
Statement on Signing the Bill
growing. We sec it in community efforts
Amending the Clean Air Act
and in school involvement across America,
and we're seeing It in the innovative re-
November 15, 1990
sponse of private industry-in alternative
fuel service stations, electric vehicles. These
Today I am signing S. 1630, a bill to
amend the Clean Air Act. I take great
companies understand we must pioneer
new technology, find new solutions, envi-
pleasure in signing S. 1630 as a demonstra-
sion new horizons if we're to build a bright
tion to the American people of my determi-
future and a better America for our chil-
nation that each and every American shall
breathe clean air.
dren.
There's an old saying: "We don't inherit
In July of 1989, I sent to the Congress a
the Earth from our parents. We borrow It
proposal to amend the Clean Air Act of
from our children." We have succeeded
1970. My proposal was designed to improve
today because of a common sense of global
our ability to control urban smog and
stewardship, a sense that it is the Earth that
reduce automobile and air toxic emissions,
endures and that all of us are simply hold-
and to provide the enforcement authority
o
ing a sacred trust left for future genera-
necessary to make the law work. It also pro-
tions. For the sake of future generations, I
posed new initiatives to cut acid rain in half
again thank each and every one of you for
and to promote cleaner automotive fuels.
your commitment to our precious environ-
E
As a result of that proposal, the 13-year
ment. 1 am now honored to sign this clean
legislative logjam has now been broken. S.
È
air bill into law.
1630 contains all of the essential features of
Thank you all who have worked so hard
my original proposal and will lead to the
for this day to become possible. Thank you,
achievement of the goals I originally set
and God bless all of you.
out. The bill I am signing today will perma-
[At this point, the President signed the bill.]
nently reduce sulfur dioxide emissions by
10 million tons below 1980 levels. It will cut
Maybe we could have the symbolism-I
don't think there's any protocol, but if I
NO, emissions by two million tons from
B
projected year 2000 levels and reduce air
could just invite the front row here to come
up with Members of Congress, we'd at least
toxic emissions by over 75 percent.
show that this is an across-the-board-{ap-
The bill will allow the Nation finally to
plause}-
meet air quality standards in every city;
Please, go in peace. This symbolism-
and, in total, almost 30 million tons per
we've omitted some real fine movers and
year of dangerous chemicals and noxious
shakers there, but again, my thanks to all of
pollutants will be prevented from fouling
p'
you. Thank you all for being with us.
the air.
a)
The result of this new Clean Air Act will
Note: The President spoke at 2:32 p.m. in
be that cancer risk, respiratory disease,
the East Room at the White House. In his
heart ailments, and reproductive disorders
remarks, he referred to Susan S. Engeleiter,
will be reduced; damage to lakes, streams,
P
Administrator of the Small Business Ad-
parks, crops, and forests will greatly be less-
W
ened; and visibility will be notably im-
11
ministration; Representative John D. Din-
gell; Roger B. Porter, Assistant to the Prest-
proved. As an added benefit, energy securi-
ty will on balance be enhanced as utilities
1)
dent for Economic and Domestic Policy; C.
and automobiles switch to cleaner burning
of
Boyden Gray, Counsel to the President; and
alternative fuels.
si
Robert Grady, Associate Director for Natu-
1824
10/23/1991
13:50
DOJ
OLC
202 514 0563
P.03
Administration of George Bush, 1990 / Nov. 15
ice at the
The innovative use of market incentives
Unfortunately, I must note several provi-
et. S. 1630,
in the bill represents the turning of a new
sions of the bill that raise serious constitu-
assigned
page in our approach to environmental
tional concerns. I strongly object to the
problems in this country. The acid rain al-
bill's restrictions on removal or review of
lowance trading program will be the first
the Chemical Safety Investigation Board.
large-scale regulatory use of market incen-
Although the Board's principal functions
tives and is already being seen as a model
are investigatory and advisory, it has also
for regulatory reform efforts here and
been given regulatory and enforcement au-
abroad. The acid rain program is based on
thorities clearly assigned by the Constitu-
some simple concepts-that we should set
tion to the executive branch. As such, the
tough standards, allow freedom of choice in
provisions purporting to limit my authority
how to meet them, and let the power of
to remove Board members and provide
a bill to
markets help us allocate the costs most effi-
them with policy guidance raise serious
take great
ciently.
constitutional questions. Accordingly, AT-
demonstra-
By employing a system that generates the
though I believe that these provisions are
y determi-
most environmental protection for every
severable, 1 am directing the Administrator
rican shall
dollar spent, the trading system lays the
of the Environmental Protection Agency to
groundwork for a new era of smarter gov-
submit curative legislation in the next ses-
Congress a
ernment regulation; one that is more com-
sion of Congress insuring that the Board's
Air Act of
patible with economic growth than using
activities are consistent with the Constitu-
to improve
only the command and control approaches
tion. This legislation will also address the
smog and
of the past. Other provisions to increase
serious constitutional concerns created by
emissions,
flexibility include increased opportunities
those provisions relating to the Board that
t authority
for emissions trading and performance
invade the deliberative processes of the ex-
It also pro-
standards for fuel refiners to encourage al.
ocutive branch. Similarly, because the
rain in half
ternative fuel reformulations. In all, these
Urban Air Toxics Research Center created
tive fuels.
path-breaking features allow us to imple-
by the bill exercises executive grant-making
he 13-year
ment the legislation in 8 way that achieves
authorities, the provision of the bill vesting
broken. S.
my environmental goals at an acceptable
appointment of part of its Board in Mem-
features of
cost. The result will be the dawning of a
bers of Congress violates this principle. This
ead to the
new era in regulatory policy, one that relies
defect must also be rectified by curative
ginally set
on the market to reconcile the environment
legislation.
vill perma-
and the economy.
In addition, there are certain aspects of
hissions by
To address the serious concerns raised by
the bill's enforcement provisions that raise
It will cut
the cost of this legislation, I am directing
constitutional questions. I note that in pro-
tons from
Bill Reilly, Administrator of the Environ-
viding for citizen suits for civil penalties,
reduce air
mental Protection Agency, to implement
the Congress has codified the Supreme
t.
this bill in the most cost-effective manner
Court's interpretation of such provisions in
finally to
possible. This means ensuring that plants
the Gwaltney case. As the Constitution re-
every city;
can continue to use emission trading and
quires, litigants must show, at a minimum,
1 tons per
netting to the maximum extent allowed by
intermittent, rather than purely past, viola-
id noxious
law; that the Administration's proposed
tions of the statute in order to bring suit.
om fouling
policy on WEPCO is implemented to the
This requirement respects the constitutional
extent allowed by law as quickly as possible;
limitations on the judicial power and avoids
ir Act will
and that the permit program is phased in
an intrusion into the law-enforcement re-
over time in an orderly, nondisruptive
sponsibilities of the executive branch. I
y disease,
disorders
manner. This Administration will also
should also note my interpretation of the
s, streams,
pursue the use of more realistic assumptions
provision permitting courts to order that
tly be less-
when estimating risk. These implementa-
civil penalties be used in beneficial mitiga-
otably im-
tion strategies will help keep unnecessary
tion projects consistent with the Act and
rgy securi-
costs and job losses down, while ensuring
enhancing public health or the environ-
as utilities
the achievement of the environmental goals
ment. Because the Congress may not
or burning
of this bill in the most efficient manner pos-
impose on courts responsibilities inconsist-
sible.
ent with their judicial function, I do not
1825
10/23/1991 13:50 DOJ OLC
202 514 0563
P.04
Nov. 15 / Administration of George Bush, 1990
interpret this provision as imposing admin-
Mrs. Kent has been involved with muse-
istrative responsibilities on the courts.
ums throughout her life. Her managerial,
Even before the signing of this bill, the
volunteer, and research experience includes
American public has begun to respond to
work with history, natural history, and art
the environmental leadership it embodies.
museums, and also with nature centers and
it
In response to the direction we have sig-
other environmental conservation organiza-
nalled in this legislation:
tions.
to
-Cleaner reformulated gasolines are
Mrs. Kent graduated from Smith College
in 1957 with a B.A. in English. She pursued
a
being produced by our leading refiners
and are eagerly being sought out by
the study of economics at New York Uni-
versity before receiving her master of arts
in
consumers.
degree in American history from Yale Uni-
o
-Cleaner natural-gas-fueled trucks, elec-
versity, where she also engaged in East
di
tric vehicles, and flexible-fueled vehi-
Asian studies. Mrs. Kent is currently a mas-
a
cles are or will soon be manufactured
ter's degree candidate in museum studies at
C
by domestic auto producers.
the George Washington University in Wash-
-Commitments have been made by the
ington, DC. She is married, has two chil-
chief executives of leading chemical in-
dren, and resides in Washington, DC.
so
dustries to reduce voluntarily their Hir
toxic emissions by as much as 90 per-
P
cent.
a
The speed with which companies and the
e
public are voluntarily getting a head start is
a
testimony to the need and timeliness of the
Proclamation 6232-National
measures I proposed and the Congress has
Federation of the Blind Day, 1990
now passed.
01
Passage of this bill is an indication that
November 15, 1990
the Congress shares my commitment to a
By the President of the United States
0
strong Clean Air Act, to a clean environ-
of America
ment, and to the achievement of the goals I
VI
originally set forth.
A Proclamation
0
George Bush
Since its founding half a century ago, the
National Federation of the Blind has been a
The White House,
leading advocate for Americans affected by
November 15, 1990.
severe visual loss. Its administrators, staff,
and supporters know that persons who are
Note: S. 1630, approved November 15, was
blind possess not only the desire but also
assigned Public Law No. 101-549.
the ability to lead full, independent, and
productive lives, and they have encouraged
all Americans to recognize this fact as well.
Through an effective community out-
reach program, the Federation has been
working to enhance the public image of
Nomination of Susannah Simpson Kent
blind Americans and to promote real equal-
To Be Director of the Institute of
ity of opportunity for these members of our
Museum Services
society. This outreach program includes tel-
November 15, 1990
evision and radio appearances by Federa-
tion members, public presentations, and the
and
The President today announced his inten-
distribution of educational materials. In ad-
tion to nominate Susannah Simpson Kent,
dition, the Federation produces monthly
of Pennsylvania, to be Director of the Insti-
and quarterly publications that serve as a
tute of Museum Services, National Founda-
valuable source of news and information on
tion on the Arts and the Humanities. She
issues affecting Americans with impaired
would succeed Daphne Wood Murray.
eyesight.
1826
Indianapilis 11/22
Star
Local official in middle
of clean-air controversy
By MARCY MERMEL
months ago after an Inquiry
The Indianapolis News
from EPA. he said.
The head of the Indianapolis
"It seemed to be under the
air pollution control division has
context of some regulations they
found himself doing double duty
were working on and World
on the clean-air front:
Wide Chemicals was comment-
David R. Jordan leads a na-
ing on." Jordan said. "They
tional group fighting Vice Prest-
(World Wide) Just wanted to see
dent Dan Quayle's Council on
how it would affect them."
Competitiveness over clean air
regulations.
The Indianapolis agency
As administrator of the In.
found only a 12-year-old ques.
dianapolis Air Pollution Control
tionnaire on the company, 1910
division, he recently ordered an
S. State Ave., which had no per-
Inspection that found a company
mits.
owned by the council's executive
After an Inspection of the fa-
director requires an air pollution
cility, staff members agreed the
permit.
company probably would need a
The Boston Clobe and the
permit for releasing hydrocar-
Washington Post reported
bons. The plant emits more than
Wednesday on the permit Jor.
15 pounds per day of hydrocar-
dan expects to order for World
bons. which contribute to the
Wide Chemicals Inc 1910 S.
city's ozone problem.
State Ave. The newspapers sug.
Hubbard has obtained a walv-
gested the company could pose a
er from Quayle excusing him
potential conflict-of-intercst for
from conflict-of-interest laws so
Allan Hubbard. co-owner of
he could work on the clean air
World Wide Chemicals and exce.
provisions despite the activities
utive director of the compelitive-
of his company.
ness council.
Hubbard docs not oversee dai-
"We had no Idea who owned
ly operations of the firm.
the company." said Jordan. who
Jordan said the Clean Air Act
called his position "awkward."
regulations at Issue between the
Jordan Is president of the As-
association and the competitive-
sociation of Local Air Pollution
ness council do not deal with
Control Officials.
hydrocarbons. The rules being
Jordan started looking Into
debated govern emissions of var-
World Wide Chemicals a few
lous chemicals from Industrics.
pricles
THE new YORK TIMES EDITORIALS/LETTERS
SDAY AUGUST 27. 1991
ARTHUR OCHS SULZBERGER. Publisher
ARTHUR OCHS SULZBERGER JR Deputy Publisher
MAX FRANKEL Executive Editor
JOSEPH LELYVELD. Managing Editor
WARREN HOGE. Assistant Managing Editor
DAVID R JONES. Assistant Managing Editor
CAROLYN LEE. Assistant Managing Editor
The New York Times
JOHN M. LEE. Assistant Managing Editor
ALLAN M SIEGAL. Assistant Managing Editor
Founded in 1851
JACK ROSENTHAL. Editorial Page Editor
PHILIP M BOFFEY. Deputy Editorial Page Editor
ADOLPH S. OCHS. Publisher 1896-1935
ARTHUR HAYS SULZBERGER. Publisher 1935-1961
LANCE R. PRIMIS, President and General Manager
ORVIL E DRYFOOS. Publisher 1961-1963
RUSSELL T. LEWIS. Sr VP. Deputy General Manager
JOHN M O'BRIEN, Sr VP. Deputy General Manager
ERICH C. LINKER JR. Sr VP. Advertising
WILLIAM L POLLAK Sr VP. Circulation
ELISE J. ROSS. Sr VP. Systems
JAMES A. CUTIE. VP. Marketing
CAA-gent
Cleaner Air, by Consensus
The biggest question left by the Clean Air Act of
cleaner-burning gasoline to reduce smog in the
1990 - President Bush's grandest legislative
nation's nine dirtiest cities, including Los Angeles
achievement so far - was whether its promise
and New York. The act was far from clear or how
would be thwarted by bureaucratic infighting, regu-
that goal was to be reached, so the E.P.A. sum.
latory paralysis and endless litigation. That's been
moned representatives from 30 different interest
the sad fate of other ambitious laws, including the
groups, including environmentalists and oil compa-
original Clean Air Act of 1970.
my executives, for two months of negotiations
Although the jury is still out on the new act,
The result was a compromise under which
legislators already complain that the President's
gasoline sold in 1995 will be 15 percent cleaner than
Council on Competitiveness, headed by Vice Presi-
it is now. Industry will be allowed to average the 15
sient Quayle. is becoming a haven for businesses
percent reduction in ozone-forming hydrocarbons
secking is avoid costly investment in anti-pollution
so that some gallons come in higher, some lower
equipment. In one case, the council pressured the
That gives the companies flexibility to accommo-
Environments: Protection Agency to ease regula-
date differences among refineries. But it's wholly
tions on old coal-fired power plants.
consistent with the intent of the act.
But there's promising news as well. In the last
The second set of negotiations involved the
two weeks the E.P.A. has announced two major
haze that fouls the Grand Canyon. The haze comes
agreements aimed at cleaning the air in America's
from sulfur dioxide emissions from the Navajo
dirtiest cities and above the Grand Canyon. In both
Generating Station, a giant coal-burning plant 15
cases, agreement was reached only after the agen-
miles northeast of the canyon. Environmentalists
cy gathered traditionally hostile interests in one
and the E.P.A. wanted a 90 percent reduction. the
room and invited a consensus - using a process
plant's owners, though clearly in violation of the
called regulatory negotiation or, in Washington-
law, wanted none. Mr. Quayle's council recom-
speak, "reg-neg."
mended a 70 percent cut.
By whatever name, it's an immensely valuable
The owners eventually agreed to the original 90
procedure that ought to be used far more often than
percent target - but only after the environmental-
it is. For one thing, the parties to a consensus are
ists proved to the company that, by using a complex
less likely to challenge government regulations at
averaging scheme, the company could meet the
some later date, not least because they helped write
target at lower cost than it thought possible.
them. That means fewer lawsuits and fewer at-
Nobody said that carrying out the act would be
tempts to subvert the purposes of the act through
easy. And regulations have yet to be written for
backdoor intervention with the Office of Manage-
controversial sections of the law covering 10x10
ment and Budget - or Mr. Quayle.
chemicals and acid rain. Yet the odds of success
One agreement involved a crucial provision of
went up when the E.P.A. established a simple
the 1990 act requiring oil refiners to produce a
principle: Negotiation now beats litigation later
A20 SATURDAY, AUGUST 17, 1991
The Washington Post
AN INDEPENDENT NEWSPAPER
'On a Clear Day
HANCES ARE you've never heard of "Ray-
River Project and the Interior Department's
C
leigh conditions." And if you happen to be
Bureau of Reclamation, disputed the EPA's re-
stuck in Washington during the summer
search and said that their facility had, at most, a
months, it's a sure bet you've never seen them.
minimal impact on the canyon. Mr. Reilly's pro-
Just imagine a crystal clear sky swept free of that
posal pleased neither environmentalists-who
dull gray haze. That's a Rayleigh condition
felt it did not go far enough-nor the utility
(named for the physicist who identified this
industry, which decried its costs.
phenomenon). Until recently, such conditions
But a reasonable compromise has been
have been quite common along the rim of the
reached. It's one that is more stringent than Mr.
Grand Canyon. More and more often, however,
Reilly's proposal, and at least grudgingly accept-
the canyon air has begun to look like the gray
able to both environmentalists and even the
aerial carpet of the East Coast in the summer.
plant's owners. Under the agreement, which is
There has been considerable dispute as to
subject to EPA approval, the plant's owners have
what causes the layer of haze in the canyon.
agreed to install scrubbers that will reduce sulfur
During much of the year, it blows in from sites as
dioxide emissions at the plant by 90 percent.
distant as the Los Angeles basin and northern
The price of building, installing and operating
Mexico. However, the Environmental Protection
the scrubbers has been put at $89.6 million
Agency and the U.S. Interior Department's Na-
annually. For customers of the plant, the result-
tional Park Service say that in winter the main
ing rate increases will amount to a 2 percent to 4
culprit is the Navajo Generating Station, which
percent rise on their monthly bills, according to
sits 80 miles northeast of the canyon.
the Salt River Project and the EPA. For custom-
In February, in what was to to be the first use
ers of the Los Angeles Department of Water and
of federal law to protect the scenic vista of a
Power, which is also a part owner of the plant,
national park, EPA Administrator William K.
the average additional cost will be 20 cents per
Reilly proposed to force the Navajo plant to
month. That sounds like a reasonable price to pay
reduce sulfur dioxide emissions by 70 percent.
to protect one of the nation's most spectacular
But the plant's owners, who include the Salt
natural wonders.
THE ARIZONA REPUBLICS
Thursday, August 8. 1991
GRAND CANYON COMPROMISE
Clearing the air
T
HAT a tentative accord has been reached
smog is a negligible factor, but they agreed to
in the effort to clean up the air in the
resolve the dispute because the EPA. respond-
Grand Canyon is welcome news indeed. The
ing to public opinion, appears determined to
Salt River Project, operator of the coal-fired
impose something drastic. The utility appar-
Navajo Generating Station at Page, has agreed
ently decided that even at a cost of $2 billion
to install scrubbers on the power plant's three
over 20 years, it would be less expensive to
huge smokestacks, thus reducing emissions by
install the scrubbers than fight the issue
90 percent.
through the courts.
Visibility in the canyon has been the object of
This compromise (SRP's partners could still
debate since a conservation group filed a
scuttle it) would make considerable sense.
lawsuit against the U.S. Environmental Protec-
Though scientists will continue to squabble over
tion Agency in 1982. Since then the controversy
how large a share Navajo contributes to the
has revolved around a battle of scientific
area's air pollution, it is hard to deny that the
studies.
plant's ochre-colored emissions negatively affect
A 1987 National Park Service test concluded
the vistas in the Four Corners region and its
that the Navajo plant contributed significantly
unique concentration of national parks and
(40 percent to 70 percent) to reduced visibility
monuments.
in the canyon over winter months. SRP, which
The proposed deal appears reasonable. SRP
operates the plant for a consortium of Western
would install scrubbers beginning in 1997,
utilities, responded with its own study allegedly
instead of 1995, as the EPA proposed. Also, the
establishing that Navajo made no contribution
90 percent emission reduction would be
to the canyon's air pollution fully 93 percent of
measured annually instead of monthly. This
the time.
would preclude the need to install backup
Reasonable people figured that the truth
scrubbers to take over when the primary units
probably lay somewhere between the allegation
are down, thus saving the utility $1 billion.
that Navajo was the chief culprit and the view
The cleanup would result in somewhat
that all of the canyon's smog originated on the
higher electric bills for SRP customers and
freeways of Los Angeles. Anyone who has
others who use Navajo power, but that cannot
visited Page and seen the yellow haze from the
be avoided. It is only reasonable for the people
plant settling over Lake Powell would reason-
who benefit from the power plant's electricity
ably conclude that Navajo was at least partially
to help pay for its cleanup so that all might
responsible.
continue to enjoy the singular natural wonders
SRP officials remain convinced that Navajo
of the region.
A14
Priday, July 12 1991
THE ARIZONA REPUBLIC
Postated in 1000
Published - 1944 -
Phone: Nowepapers, - 130 & Van Phone# Arts 83004
EUGENE a PULLIAM
WILLIAM P. CHESHIRE
CONRAD KLOH
1889-1975
Laster of - Belorial Pages
Public 18461878
Director of - and Marketing
EUGENS & PULLIAM
JOHN F. OPPEDAHL
BILL SHOVER
Proved
Managing -
Director of PUBLIC Affeirs
Where The Spint or The Lore - There w Uberty- B Cortint/Were ±17
EDITORIALS
GRAND CANYON HAZE
Compromise in the works
F
OR the past several weeks the various
take the matter to court, and that would further
factions in the effort to clean up the
delay emission controls at Navajo.
winter hare at Grand Canyon National Park
have been negotisting a plan to reduce sulfur
This point should not be lost in the
dioxide emissions from the Navajo Generating
wrangling over the technical arcans on reaching
Station at Page. Lately the signs are that 1
an agreement on emission limits. To be sure,
the issue of the canyon's have has been studied
compromise is in the works.
to death. It remains only to apportion the
The clearest indication of 2 pending accord
power plant's contribution to the problem. Ls
was the decision to prolons the talks beyond
Navajo I "major contributor" (as the National
the July 4 deadline set by William Rosemberg.
Park Service insists), has It "contributed
assistant administrator of the Environmental
significantly" (as the National Research Coun-
Protection Agency. A recent EPA statement
cil concludes), or is the plant's contribution less
suggested that enough progress was being made
than alleges)? 10 percent (as SRP, the plant's operator,
on the issue of anti-pollution controls at the
Page power plant to justify more negotiations.
The Interior Department has been conspicu-
Moreover, the agency's optimism under-
onsly absent from the talks and appears content
to sit on the fence It has refused to back either
scores the importance that the Bush administra-
the NPS call for a 90 percent emission
tion has attached to resolving this dispute. The
reduction or the Bureau of Reclamation's desire
Bureau of Reclamation owns the largest share
to do nothing at all Nevertheless, Secretary
of the power plant. Given Mr. Bush's desire to
Manuel Lujan is obliged to protect the national
be known as "the environmental president," the
parks and he should take 8 position. Further.
idea of the feds contributing to canyon air
more, the power plant's operators agreed in
pollution would hardly be welcome.
their original environmental impact statement
Should the talks between the EPA, the Salt
to install anti-pollation equipment, a promise
that remains unfulfilled
River Project and the non-profit Grand Canyon
Trust collapse, it would be up to the EPA to
At least Interior's wishy.washiness has not
impose a cleanup plan 8 the coal-fired power
deterred the EPA from pushing hard for a
plant. Depending on what action the EPA took,
satisfactory resolution of the issue. All the
SRP and the other utilities that own the power
parties to the dispute should keep working to
plant or the environmental community could
achieve the best possible reduction of emissions
from the Navajo plant.
A26 SATURDAY. AUGUST 24, 1991
The Washington Post
AN INDEPENDENT NEWSPAPER
Creeping Reg-Neg
O
NE OF the places where government tends
tuned or not as the agency and Office of Management
to break down is at the busy intersection of
and Budget, representing the president. see St. and
politics and science. Congress is simply not
made final. That's when one side or the other and
equipped to make the technical judgments that many
sometimes both will take it to court, and while the
of the laws It passes require, particularly in the
courts can only overtum regulatory decisions on
health and safety and environmental fields. The
rather limited grounds, the litigation tends to eat up a
technical issues are hotly contested besides; the
lot of money and time.
typical legislative response is to take reiuge in a
The negotiating process is in part an effort to do
fuzzy formulation and toss the matter to the regula-
the fighting up front. A committee IS formed-the
tors who have become the modern government's
law requires that it be broadly representative of the
fourth branch. Too often the regulators' handiwork
parties at interest-and tries to work out a compro-
will then be taken to the courts by the very parties
mise acceptable to the parties and the agency in
who were fighting over the wording in Congress in
advance. The compromise will often include a prom-
the first place. The business of giving effect to the
ise to refrain from future litigation. The negotiating
laws tends to te more circular than quick.
sessions are required to be public: in that sense the
Now comes a new process intended as a kind of
process is even more open than normal rule writing.
shortcut through this iaborious older pattern. It is
C. agreement is reached, the proposed rule is sull
called reg-neg, which stands not for negation but for
F. shed in the Federal Register for comment as
regulatory negotiation. The negotiations process
L er normal procedures. Thus no group forfeits
may already have helped to crack two of the harder
in right, including the right to go to court, that It
issues from last year's copious amendments to the
E. :dy has.
Clean Air Act. including an almost impenetrable set
The process has been tried about 20 times.
of questions relating to alternative fuels on which
mostly though not always with success. Federal
tentative agreement was announced last week.
officials note that not all disputes are amenabie to it;
The Administrative Conference of the United
sometimes the span of disagreement IS SO great that
States, having commissioned a study, approved regu-
the agency can only cut through on its own as in the
latory negotiation for use by federal agencies in 1982.
past. But where it works, as apparently with alterna-
Last year Congress gave its official blessing as well.
tive fuels, it's plainly a good idea. Regulatory
Normally an agency with a regulatory task assembles
government on the present scale is recent enough
what information it can and writes the rule on its
that the country is still feeling its way. This seems to
own The rule is published for comment, then fine-
be a sensible step along the path.
AUG :4 '91 10:40PM AT&T FAX 9015PF
Post 8-14-9
THE DENVER POST
f. OILMAN SPENCER
Editor
, SINGLETON, Chairman
CHUCK GREEN
Post-It brand fax transmitte mamo 7671
F. HUNT, Publisher
Extiter or the Editorial Page
Edporsonetal
From
Kruftle of pages
N MoKIBBEN
NEW WESTERGAARD
Co
Co
TWS
sident and General Manager
Executive Eduor
ARD LACORS
Dept.
Phone #
GAT COOK
Administration and Operations
Managers Educar
Fex
Fax
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Have
STEVE HESSE. VP Circulation
WILLIAM H. HORNBY
of
KEN CALHOUN ip Marketing
Server Editor
Cleaning up the canyon
D
AYBREAK AT the Grand
fully arranged by the U.S. Envi-
Canyon is an excursion into
ronmental Protection Agency,
spiritual silence. On a clear
which previously had proposed a
morning, a visitor can peer over
cleanup plan that neither the en-
the precipice and seemingly see
vironmentalists nor the power
into infinity. Every rock ridge,
company found tolerable.
every color-splashed stone, every
The marriage appears to have
rugged wave on the Colorado Riv-
produced 8 healthy baby - a new
er far, far below is etched per-
plan that will create cleaner air
fectly in the crystalline light of a
for fewer dollars than the EPA's
southwestern dawn.
initial proposal.
But on certain days the gray
The EPA's original plan would
tentacles of civilization seep into
have reduced air pollution by on.
this cherished national treasure
ly 70 percent and would have re-
RJ
in the form of X terrible smog.
quired the power plant to spend
There are times that the air pol-
$106 million annually to install
lution at the Grand Canyon is so
redundant pollution-control
bad that it's impossible to see the
equipment. Under the new plan,
opposite rim. What's more, the
which the EPA still must ap-
Co
same pollution appears to have
prove, the power plant will have
crat,
fouled the air in Mesa Verde Na-
to cut its emissions by 90 percent,
have
to dc
tional Park in Colorado and sev-
but won't have to install as many
pass
eΓa! national playgrounds in
back-up "scrubbers," so the total
Rep
Utah, such as Capitol Reef and
cost of the cleanup will be only
Wirt
Bryce Canyon. Americans who
$89 million a year.
of R
have witnessed this deterioration
The agreement won't clean the
of P
have been outraged.
skies over the Grand Canyon and
nate
surrounding national playgrounds
tion.
Yet they now ought to be
B
cheered by an agreement an-
until the turn of the 21st century.
Club
nounced last week between a co-
But that's a quicker improvement
gro
alition of environmental groups
than would have been accom-
der
and the operators of the giant Na.
plished if the environmentalists
Wir
and the power company contin-
Car
vajo power plant near Page,
Ariz, that has created most of the
ued with their endless lawsuits.
bet
air pollution fouling the Grand
The EPA still must find solu-
4.
Canyon and surrounding national
tions to regional haze and visibili-
give
lands. The pact ends two decades
ty problems affecting national
pe
of bickering and represents a
parks in other parts of the coun-
lar
complete change in how industry
try. where once-great vistas have
will
and environmentalists solve prob-
vanished in the smog. But the re-
Cc
cent agreement is so reasonable
St
lems: instead of litigating, they
to
negotiated.
that it ought to serve as a model
pc
The two sides didn't dream up
for future cleanup proposals.
VI
this plan on their own, however.
It is, in effect. a grand plan for
St
It was a shotgun marriage force-
the Grand Canyon.
San Francisco Chronicle
8-12-91
THE VOICE OF THE WEST
RICHARD TOBIN THIERIOT
failor and Publisher
WILLIAM GERMAN
Esecutive Editor
MATTHEW F. WILSON
DANIEL ROSENMEIM
Managing Eaher
City Editor
JACK BREIBART
THOMAS C. BENET
Assistons Managing Eane:/Nown
Chief Editonal Wither
ROSALIE MULLER WRIGHT
ANTHONY NEWHALL
Assistant Managing d tor/Fectures
Assistant 10 Publisher Administration
Founded 1865 by Charles and M.H. deYoung
George T. Comeron, Puolisher 1923.53
Charles deYoung Thieriot, Publisher 1935.77
marketing and Operations conducted by the Sen Francisco Newspoper Agency
ROBERT M. McCORMICK THOMAS G. CLANCY LAWRENCE INGRAM
Presederr / Chief Lice Officer Lik VP/Salet s Markenng 5. VP/Operations
EDITORIALS
Clean Skies
At Grand Canyon
A
NATIONALLY significant agreement
reached by environmentalists and the
owners of a power plant in northern Arizona
promises to control the air pollution that envel-
ops the Grand Canyon and sometimes blocks
the world-famous view from rim to rim.
Industrial pollution from the huge coal-
burning Navajo Generating Station 12 miles
from the canyon has also raised concern about
haze that could threaten seven other national
parks and monu-
ments in Utah. Arizo-
Bright white
na and Colorado.
haze can
The plan an-
nounced last week is
block views
the culmination of
one of the most bitter
from rim
environmental bat-
to rim
tles in the West and it
marks the first time
that a 1977 federal
law will be used solely
to improve visibility at a national park. Hence.
the agreement can be used as an effective
precedent for other national parks with prob.
lems stemming from haze.
ACCORDING TO the deal, the owners of
the Navajo utility will install $430 million of
control devices on their smokestacks and hope.
fully achieve a 90 percent reduction in sulfur
dioxide emissions by the end of the decade.
Cleaning the skies over the Grand Canyon,
a national landmark and a worldwide symbol
of the American West, is of such political im-
portance that the agreement could be the cata-
La Quinta Inns
S
c
E
T
Y
Over 200 Locations Coast-to-Coast
ALABAMA
Farmington
Birmingham
Las Cruces
Huntsville (2)
Santa Fe
Mobile
NORTH CAROLINA
Montgomery
Charlone (2)
Tuscaloosa
OHIO
ARIZONA
Cincinnati-Sharonville
Phoenix (2)
Columbus
Tucson (2)
Davton
ARKANSAS
OKLAHOMA
Little Rock (4)
Oklahoma Cin (2)
CALIFORNIA
Tulsa (3)
Bakerstield
PENNSYLVANIA
Fresno
Pinsburgh
Orange County (2)
SOUTH CAROLINA
Sacramento
Charleston
San Bernardino
Columbia
San Diego (3)
Greenville
San Francisco
TENNESSEE
Stockton
Knoxville
Ventura
Memphis (3)
COLORADO
Nashville (2)
Colorado Springs
TEXAS
Denver (7)
Abilene
JOH\ M.DERMOTI
FLORIDA
Amarillo (2)
Surging current: Water from the Glen Canyon Dam has damaged the Grand Canyon
Deerfield Beach
Austin (4)
For Myers
Beaumont
ENVIRONMENT
Gainesville
Brow
Jacksonville (3)
Brvan College Station
Miami
Clute
Lifting the Canyon's Veil
Orlando (3)
Corpus Christi (2)
Pensacola
Dallas (14)
Tallahassee (2)
Denton
Tampa Bay Area (5)
n a clear day at the Grand Canyon,
Eagle Pass
$90 million-$18 million less than EPA's
GEORGLA
you can see scratch that. There
El Paso (3)
proposed 70 percent cut would have The
Arlanta (8)
For Worth (2)
have been so few clear days that many
owners were convinced. President Bush
Augusta
Galveston
of the 4 million tourists flocking to the rim
called the accord "a milestone in our imple-
Columbus
Harlingen
each year can't pick out the bas-relief of
mentation of the Clean Air Act and in our
Savannah
Houston (17)
rock formations. or the brick and ocher
efforts to protect one of America's crown-
ILLINOIS
Killeen
veins marbling the canyon walls. "They
jewel national parks He will visit the can-
Champaign
Laredo
just don't see the beauty of the place." says
yon next month to celebrate the accord
Chicago (5)
Longview
superintendent Jack Davis. Since 1976.
The canyon faces one more threat For
Moline
Lubbock
much of the haze. especially in winter. has
years the Glen Canyon Dam has released
INDIANA
Lutkin
come from coal burned in the Navajo Gen-
wildly fluctuating amounts of water into
Indianapolis (2)
McAllen
erating Station, 15 miles to the northeast,
the Colorado River to meet peak power
Merrillville
Midland
whose owners never made good on a 1973
demands The surging current-which
KANSAS
Nacogdoches
promise to install scrubbers The pall vio-
Kansas Cin Lenexa
sometimes raises the river by 13 feet-has
Odessa
lates the Clean Air Act, so in 1982 environ-
Wichita
eroded the Grand Canyon's beaches. de-
San Angelo
mental groups sued. The case bogged
KENTUCKY
stroyed habitats of its fauna and flora. and
San Antonio (11)
down-until last week. when the Environ-
Lexington
Temple
begun to eat away at about 300 of the 400
LOUISLANA
mental Protection Agency's new resolve to
Texarkana
Indian archeological sites and sacred
Baton Rouge
encourage opponents to negotiate, not liti-
Tyler
places. Last week Interior Secretary Ma.
Bossier Cin
gate. broke the logjam.
Victoria
nuel Lujan announced that he would order
Lalavene
Led by the Grand Canyon Trust, environ-
Haco
the flow stabilized. That should have little
Monroe
Wichita Falls
mentalists had pushed for a 90 percent
impact on electricity supply-utilities can
New Orieans (5)
UTAH
reduction in sulfur emissions. The plant's
buy power from the grid-but will limit
Sulphur Lake Charles
Lavton
owners, including the federal Bureau of
destruction downstream To make the poli-
MICHIGAN
Salt Lake City-Midvale
Reclamation. thought zero percent sound-
cy stick, the Senate is weighing a bill that
Kalamazon
VIRGINIA
ed about right. EPA was about to side with
requires Glen Canyon to be operated in a
MISSISSIPPI
Hampton Newport
the environmentalists but, under pressure
way that protects downstream sites. The
Jackson
News
from the White House, recommended a 70
House passed the measure in June. and
MISSOURI
Richmond
percent cut this February. But neither side
Sen. Bill Bradley of New Jersey, a sponsor
St Louis
Virginia Beach
was happy. That's when EPA Assistant
of the bill, thinks its chances are excellent
NEBRASKA
WASHINGTON
Administrator William Rosenberg got
Omaha
"When it passes." says Ed Norton of the
Seartle (2)
both parties together The trust proposed
NEVADA
Grand Canyon Trust. "the idea that power
Tacoma
allowing the Navajo's owners to average
Las Vegas
has primacy will be dead meat forever
WYOMING
sulfur emissions over a year. rather than
Reno
And the water that carved the Grand Can-
Casper
NEW MEXICO
monthly This strategy would let the plant
Cheyenne
yon eons ago will no longer destroy it
Albuquerque (3)
get by without costly backup scrubbers but
Rock Springs
still cut emissions more than 90 percent for
SHARON BECLEYU MARY H. LF
the Grand C.
NEWSWEEK AUGUST:- 1991 63
A8 FRIDAY, AUGUST 9, 1991
THE WASHINGTON PUST
AROUND THE NATION
Canyon Clear-Air Plan
PHOENIX-Enviromental-
ists and utility officials an-
nounced a plan designed to clear
the air over the Grand Canyon
by cutting pollution from a near-
by coal-burning power plant.
The agreement calls for a 90
percent cut in sulfur dioxide
emissions from the Navajo Gen-
erating Station, which environ-
mentalists blame for smog that
on some winter days obscures
views across the canyon.
Smokestack scrubbing equip-
ment is to be installed beginning
in 1997 at a cost of $1.8 billion.
The accord, which will be
submitted to the Environmental
Protection Agency, was reached
after months of negotiations
between the Grand Canyon
Trust and the Salt River Pro-
ject, the Phoenix-based operator
of the plant that produces power
for six western utility firms.
THE WALL STREET JOURNAL THURSDAY. AUGUST 8. 1991 A5
Accord Is Reached
To Clean the Air
Of Grand Canyon
By BARBARA ROSEWICZ
Staff Reporter of THE WALL STREET
WASHINGTON- Ending years of oppo-
sition. owners of a huge Western power
plant struck a deal with environmentalists
to slash air pollution blamed for obscuring
views of the Grand Canyon.
The accord is to be announced today in
Arizona. But a spokesman for the Phoe-
nix-based Salt River Project. operator and
part-owner of the Navajo Generating Sta.
tion, confirmed the agreement. which has
been secretly negotiated for months.
Under the agreement. owners of the
though at a reduced overall cost than un-
ber be installed for each boiler
Navajo power plant in Page. Ariz., would
der the federal plan.
Still. the costs represent a significant
install $430 million of air-pollution-control
The federal government IS expected to
expense for a plant that already burns low.
devices on its three giant smokestacks to
approve the deal and write it into a new
polluting. low-sulfur coal and already is
clean the air and improve visibility at the
regulation. The White House already IS
cleaner than the scores of power plants
canyon. a national landmark 12 miles
embracing the accord as an example of
targeted by new acid-rain requirements.
away.
how cost-effective solutions can be found
Taxpayers will share in the costs because
The agreement marks the first time
for environmental problems. and the
the U.S. Bureau of Reclamation. in the In-
that a 1977 federal law would be enforced
agreement could spur a trip by President
terior Department. owns the largest share
to improve visibility at national parks. a
Bush to the Grand Canyon later this year.
of the plant. 24.3% Other owners are: the
growing concern around the country and
an administration official said.
Salt River Project, 21.7%: Los Angeles De.
the subject of lawsuits by environmental
According to people close to the negoti-
partment of Water and Power. 21.2% Ari-
groups. The plume of sulfur dioxide from
zona Public Service Co. unit of Pinnacle
the coal-fired Navajo plant is blamed for
ations. environmental groups led by the
contributing. particularly in winter. to a
Grand Canyon Trust won a 90% cutback in
West Capital Corp., 14% Nevada Power
bright white haze that on the worst days
sulfur-dioxide emissions by 1999. more
Co., 3rd and Tucson Electric Power Co.,
7.5%
can keep visitors from seeing across the
than the 700% proposed by the Environmen:
tal Protection Agency earlier this year.
Ed Norton, head of Grand Canyon Trust
canyon.
Pushed by environmental lawsuits. the
The incentive for the plant's owners. who
in Washington. which negotiated for envi-
federal government had begun taking steps
originally had contested even the 70% cut
ronmental groups, called the deal a very
to force cutbacks in pollution by the plant.
back. was that they could adjust some of
good agreement" that will benefit not only
the technical requirements to lower their
the canyon but a circle of nearby national
But utility owners were contesting such
costs.
parks. However, he said it won't eliminate
steps. The deal is unusual because it volun-
haze in the canyon because it's also caused
tarily brings together factions that have
The agreement lowers the costs of com-
by smog from Los Angeles and other
been warring over pollution in the Grand
pliance to an estimated $89 million a year.
nearby urban areas.
Canyon for more than a decade. Plus. un-
from S106 million annually as proposed un-
The Navajo plant is one of the largest
der the agreement. owners of the power
der the EPAS plan. The cost savings
coal-fired plants in the Western U.S. Its
plant - five utility companies and the U.S.
would result from giving the plant addi-
owners entered negotiations. which were
Interior Department-would make even
tional years to begin installing its first
informally initiated by the EPA. after con
steeper cuts in sulfur-dioxide emissions
"scrubbing" devices. and from removing a
testing for years studies linking the plant
than proposed by federal regulators.
requirement that a costly back-up scrub-
to haze in the canyon.
EPA in the News
LOS ANGELES TIMES THURSDAY. AUGUST 8, 1991 A13
Power Plant Agrees to Stiffer Smog Curbs
Pollution: Accord calls
historic." said Ed Norton, president
of the Grand Canyon Trust. which
for 90% reduction in
was one of the principal environ-
sulfur dioxide emissions at
mental negotiators of the pact.
"
Grand Canyon by 1999.
I
f the EPA adopts the
recommendation, it will be
EPA had sought a 70% cut.
the first time that the agency has
acted solely to protect visibility
By LARRY B. STAMMER
and the paramount aesthetic val-
TIMES ENVIRONMENTAL WRITER
ues of a national park." Norton
said.
T
he Los Angeles Department of
Water and Power and other
Barring unforeseen develop-
owners of a huge Arizona power
ments, the EPA regulations en-
plant whose emissions obscure sce-
forcing the agreement will become
nic vistas at the Grand Canyon
final sometime after a 30-day pub-
have agreed to tougher smog con-
lic comment period.
trols than proposed by the U.S.
Despite the agreement. opera-
Environmental Protection Agency.
tors of the plant remained at odds
The agreement. to be announced
with environmentalists over how
today in Phoenix in Gov. Fife
much cleaner the Grand Canyon's
Symington's office, follows months
air would be with the tougher
of intensive negotiations with en-
controls.
vironmentalists.
Whatever the improvement,
The accord calls for a 90%
both sides agreed that it would be
reduction in visibility-impairing
substantial. One study said that
sulfur dioxide emissions by August.
40% of the man-made haze over
1999. at a cost of $89.6 million.
the park could be blamed on the
In February. the EPA-report-
plant, which is said to be the
edly under pressure from the
largest source of sulfur dioxide
White House to hold down costs-
emissions in the Southwest.
said it would insist on no more than
Under terms of the agreement.
a 70% cut in emissions from the
owners of the plant will be given
Navajo Generating Station. situal-
ed 80 miles northeast of the Grand
until August. 1999. to complete the
Canyon's South Rim.
installation of pollution controls-
But environmentalists. led by
two months earlier than the EPA
the Grand Canyon Trust. and oper-
proposed last February.
ators of the 2.250-megawatt plant
However. plant owners will be
in Page. Ariz., said that the EPA
given two additional years to start
has backed the compromise.
fitting the controls on the power
Owners of the plant agreed be.
plant. Moreover. by averaging pol-
cause the new controls. although
lution on a yearly basis instead of a
stricter in the long run, will have a
monthly basis, as first proposed.
lower cost because of less restric-
operators will have more flexibility
live interim compliance deadlines
in meeting the goal. It will also
The agreement was haited
save them money.
Wednesday as a forerunner of
Under the old proposal. opera-
future efforts to protect the pris-
tors estimated that it would cost
tine air of the nation's national
them $106 million to comply. Un-
parks and wilderness areas. many
der the new approach. the costs
of which are under a growing smog
were placed at $89.6 million.
siege.
The DWP said that the controls
If the controls are accepted by
will cost the average homeowner.
the EPA. as expected. It will mark
who pays $40 a month for power.
the first time since Congress en-
another 20 cents.
acted the Clean Air Act in 1977
The plant is operated jointly by
that the law has been invoked to
the DWP. Salt River Project. Ari-
specifically protect air quality in
zona Public Service Co., Tucson
national parks and wilderness ar-
Electric Power. Nevada Power Co.
cas.
and the U.S. Bureau of Reclama-
"I do not think that Il abuses the
tion.
EPA in the New
THE NEW YORK TIMES FRIDAY. AUGUST 9. 1941
A1
have had to install three pollution con
ment works properly. 11 will reduce the
trol systems on each boiler instead of
UTILITIES TO TAKE
amount of sulfur dioxide pouring from
two because if one system failed, a
the plant's smokestacks 10 6,000 10
backup was necessary to meet the reg
7,000 tons a year. a 90 percent reduc-
ulation The owners and the E A
STEPS TO CUT HAZE
tion from the 65,000 to 70,000 tons now
estimated the cost of installing the
produced each year
systems under the February proposal
The plant generates power for four
at $510 million
million people and businesses in Ari-
The agreement reached today calls
AT GRAND CANYON
zona. Nevada and California and 10 the
for the plant to cut emissions 90 per.
Central Arızona Project. a manmade
cent on an annual average, thus allow
canal and pump system that provides
ing It more flexibility The effect of the
water from the Colorado River for
longer time frame IS that the plant will
need to install two pollution control
BIG POWER UNIT AFFECTED
Phoenix and Tucson
systems on each boiler instead of three
The Grand Canyon IS to the United
If one fails, the plant. has more time to
States what the grand cathederals are
repair It and still make the 90 percent
Companies and Environmental
to Europe.' said William K Reilly. the
limit. The estimated cost of the new
Administrator of the Environmental
strategy IS $430 million
Groups Reach Agreement-
Protection Agency "It's part of our
The E.P.A. played a pivotal part in
heritage. a symbol worldwide of the
providing technical specialists and
data to help the negoliators, a role that
Impact Is Years Away
American landscape
was discouraged by the White House
when the talks opened in April, accord.
Suit Brought in 1984
ing to EPA officials who asked 10
By keith SCHNEIDER
remain unidentified The White House
The pact reached today after months
later relented after the Bush Adminis-
Speciality 100 Yor.
of negotiations settles a Federal law.
tration recognized the symbolic politi
WASHINGTON Aug S - After 140
suit brought in 1984 against the power
cal importance of a deal to scrub the
decades of court nattles and regulatory
plant's owners by the Environmental
skies in the Grand Canyon
skirmishes. the uwners of is giant coal-
Defense Fund, a national environmen-
Costs to Be Apportioned
burning power plant in northern Ari-
tal group and the National Parks and
zona agreed today 10 a series of expen-
Conservation Association. a Washing
The owners will share the cost of the
sive measures to control air pollution
ton-based group
pollution control equipment in percent
and reduce haze in the Grand Canvon
ages equal to their share of ownership.
It also ends a ticklish internal battle
with the Bureau of Reclamation re.
by the end of the decade
between two units at the Department of
sponsible for roughly $103 million of
The agreement. between the owners
the Interior The National Park Serv.
the total Other owners are the Salt
and :40 environmental groups, IS al-
ice. which owns and operates Grand
River Project, a Phoenix-based utility
most certain 10 end one of the angriest
Canyon National Park. has fought for
that also operates the plant the Los
and most visible environmental strug
the controls for years. The Bureau of
Angeles Department of Water and.
gles in the American West In recent
Reclamation. which owns 24 percent of
Power. the Arizona Public Service
years thick haze had turned the Grand
the power plant, the largest share, has
Company. Tucson Electric. and Neva.
Canyon from a breath-taking natural
fought the controls, saying that the
da Power
The Navajo Generating Station. com-
wonder to a sad tableau 01 spreading
cause of haze had not been proven and
that controlling sulfur dioxide would
pleted in 1976 and located 15 miles
industrial pollution and Government
north of the Grand Canyon in Page.
inaction On many days. particularly in
cost too much.
Ar!2. has raised concern about its po.
the winter the haze IS so thick that
And the agreement represents a
tential to pollute the skies of the South
visiors standing on one rim can barely
small victory for the Environmental
west from the day 11 was first proposed
see the other side
Protection Agency
in 1970 by the Bureau of Reclamation
The power plant blamed for much of
After reviewing studies of the haze
The bureau. the Government's power.
the haze had aiso become a symbol for
and its causes, Mr. Reilly was pre-
ful western dam-building agency had
environmentalists of industrial excess
pared late last year to require the
wanted 10 build two dams in the Grand
every oil as visible as the towering
plant, the Navajo Generating Station
Canvon to provide hvdroelectric Dower
brownish-veliow plume of suot and
10 reduce sulfur dioxide emissions 90
for the pumps that would divert Colora
smoke that poured from its 770-foot
percent But in February, the E.P A
do River water into a canal to slake the
smokestack across the fragile desert
proposed a reduction of just 70 percent
thirst of Phoenix and Tucson hundreds
after the Office of Management and
landscape
of miles south
Budget and the White House objected.
The Sierra Club fought the dams. and
saving that the costs of a 90 percent
Open to Public Comment
when the Bureau of Reclamation re
reduction were 100 high
lented in the 1960's 11 was the first time
Under the agreement. which will be
An E.P.A. Eye on Costs
an environmental group had stopped a
open for public comment and IS likeiv
major Government dam in the West
10 be adopted as law this fall by the
Within the February proposal,
The alternative. though. proved just
Environmental Protection Agency
though. was a provision that the E P A
as troublesome 10 environmental
knew would make a 70 percent reduc
which assisted in negotiations. SIX own.
groups. said Robert E Yuhnke. a se.
tion so expensive that the owners of the
ers would spend roughly $430 million 10
nior lawyer at the Environnmental De
power station were likely to negotiate a
insta!! pollution control equipment on
fense Fund in Boulder. Colo The bu
less costly solution The proposed rule
the power plant's three boilers. with
reau proposed the Navajo Generating
in February would have required the
Station a 2,250 megawalt power plant
the first boiler-scrubbing system 10 be
Navajo power plant to be able to cut
fueled by 24,000 tons of coal a day a
installed by 1997 and the last by 1999
sulfur dioxide emissions 70 percent
plant so big - 11 covers 1,800 acres
The equipment will be designed 10
sulfur dioxide a gas produced
over each month, allowing the plant
and so polluting its trail of uncontrolled
less flexibility than if the emissions
smoke could be seen miles away
from burning of coal that is chemi
were measured over a year. allowing
Other Parks Affected
EPA in the News
cont't
groups warned that the soot would
cause haze in the Grand Canyon, and
they worried about the seven other
national parks and monuments on the
Colorado Plateau in Utah, Arizona and
Colorado. A study completed this year
by the Environmental Defense Fund
Navajo
showed that the plant's soot was a
Generating
factor in the haze that obscured those
Station
parks as well.
In 1973, the Department of Interior
signed an agreement with the other
owners that said that as soon as tech-
nology was available to control sulfur
The New York Times
dioxide, it would be bought and in-
stalled at the plant. Mr. Yuhnke said
The Navajo Generating Station is
such equipment was ready in 1976
blamed for haze at eight parks.
when the $659 million plant was fin-
ished, but never installed.
end
A FRIDAY. AUGUST 9. 1991 USA TODAY
Grand Canyon
bility at national parks.
It will cost $2 billion to install
pollution equipment on the
to get clearer
plant's three smokestacks.
The plant is 12 miles from
By Rae Tyson
the northern end of the Grand
USA TODAY
Canyon. Environmentalists
have considered it a big reason
The skies over Arizona's
for the area's poor visibility.
haze-shrouded Grand Canyon
"I do not think it abuses the
could be clearer by decade's
word to call this agreement tru-
end under a landmark agree-
ly historic," says Ed Norton of
ment disclosed Thursday.
Grand Canyon Trust, an envi-
Sulfur-dioxide emissions
ronmental group.
from the coal-fired Navajo
The agreement won't com-
Generating Station will be cut
pletely eliminate haze there.
90% before August 1999.
Another major source: drifting
The settlement is the first
Los Angeles smog
under a Clean Air Act provi-
sion designed to improve visi-
Cleaner Air, by Consensus
Ny oper
The biggest question left by the Clean Air Act of
cleaner-burning gasoline to reduce smog in the
1990 - President Bush's grandest legislative
nation's nine dirtiest cities, including Los Angeles
achievement so far - was whether its promise
and New York. The act was far from clear on how
would be thwarted by bureaucratic infighting, regu-
that goal was to be reached, so the E.P.A. sum-
latory paralysis and endless litigation. That's been
moned representatives from 30 different interest
the sad fate of other ambitious laws, including the
groups, including environmentalists and oil compa-
original Clean Air Act of 1970.
ny executives, for two months of negotiations.
Although the jury is still out on the new act,
The result was a compromise under which
legislators already complain that the President's
gasoline sold in 1995 will be 15 percent cleaner than
Council on Competitiveness, headed by Vice Presi-
it is now. Industry will be allowed to average the 15
dent Quayle, is becoming a haven for businesses
percent reduction in ozone-forming hydrocarbons
seeking to avoid costly investment in anti-pollution
so that some gallons come in higher, some lower.
equipment. In one case, the council pressured the
That gives the companies flexibility to accommo-
Environmental Protection Agency to ease regula-
date differences among refineries. But it's wholly
tions on old coal-fired power plants.
consistent with the intent of the act.
But there's promising news as well. In the last
The second set of negotiations involved the
two weeks the E.P.A. has announced two major
haze that fouls the Grand Canyon. The haze comes
agreements aimed at cleaning the air in America's
from sulfur dioxide emissions from the Navajo
dirtiest cities and above the Grand Canyon. In both
Generating Station, a giant coal-burning plant 15
cases, agreement was reached only after the agen-
miles northeast of the canyon. Environmentalists
cy gathered traditionally hostile interests in one
and the E.P.A. wanted a 90 percent reduction; the
room and invited a consensus - using a process
plant's owners, though clearly in violation of the
called regulatory negotiation or, in Washington-
law, wanted none. Mr. Quayle's council recom-
speak, "reg-neg."
mended a 70 percent cut.
By whatever name, it's an immensely valuable
The owners eventually agreed to the original 90
procedure that ought to be used far more often than
percent target - but only after the environmental-
it is. For one thing, the parties to a consensus are
ists proved to the company that, by using a complex
less likely to challenge government regulations at
averaging scheme, the company could meet the
some later date, not least because they helped write
target at lower cost than it thought possible.
them. That means fewer lawsuits and fewer at-
Nobody said that carrying out the act would be
tempts to subvert the purposes of the act through
easy. And regulations have yet to be written for
backdoor intervention with the Office of Manage-
controversial sections of the law covering toxic
ment and Budget - or Mr. Quayle.
chemicals and acid rain. Yet the odds of success
One agreement involved a crucial provision of
went up when the E.P.A. established a simple
the 1990 act requiring oil refiners to produce a
principle: Negotiation now beats litigation later.
Top
W nen It Comes to Helping the Disableu,
the Administration Is All PR Hype
Employment: Federal rules
to himself." is how the rules put it).
People who are deal, blind or who can't
That's one of the very things advocates
use their hands can flourish in the
on hiring the disabled have key
thought the year-old-law was enacted to
white-collar-job world provided their
loopholes that mean business as
prevent: allowing employers' fears and
employer accommodates their work style.
misconceptions about safety to keep dis-
Computer-veice interfaces, faxes, teler
usual for those who need help
abled people out of the work force. The
communications devices for the deaf.
Supreme Court earlier this year told
phone headsets and other technologies
in the workplace.
Johnson Controls that it was illegalito pull
that are practically routine in today's
a similar version of that trick on women.
larger offices can enable even totally
By Mary Johnson
The Administration, which says it sup-
paralyzed people to be anything from
HORTONVILLE. N.Y.
ports disability rights, says it's OK to tell
attorneys and advertising representatives
isability-rights advocates sus-
disabled workers that they're a danger to
to soologists and sipper designers. To-
D
pected that the Bush Administra-
themselves or others and to refuse to put
day's technology gives disabled people
tion was being less than honest in
them in any job in which a company
with equivalent educational backgrounds
claiming that it was on their side. when
doesn't want them.
equal ability to compete with non-die-
the President signed the Americans With
The EEOC's rules also do not require an
abled people; the reason more than two-
Disabilities Act this time last year amid
employer to provide assistançe for se-
thirds of working-age disabled people are
much public-relations hype. Equal Em-
verely disabled workers in using rest-
still unemployed is, therefore, mostly
ployment Opportunity Commission rules
rooms or eating lunch. Without mandat-
because of discrimination.
announced on the anniversary of the act's
ing such assistance, the rules will let
Holding down jobs was supposed to be a
signing last month confirmed those advo-
companies ignore these fundamental
key reason disabled people were given
cates' suspicions.
needs of severely disabled, would-be
the protections of the Americans with
These rules-which are final-will let
workers. For a worker who needs help
Disabilities Act. President George Bush
companies avoid hiring a disabled person
eating or using the toilet, a, company's
himself praised this goal of the law when
if the company thinks that particular
refusal to provide such assistance is no
he signed it. But by refusing to include
worker might hurt himself (be "a danger
different than failing to provide a lunch
"personal assistance" requirements in the
break or a restroom on the job, period.
rules, the Administration is in effect
Mary Johnson is editor of the Disability
These sweatshop conditions were out-
saying that disabled people simply
BDCummmgs
Rag, which covers the disability-rights
lawed years ago in this country for
shouldn't need help with going to the
BARBARA CUMMINGS / for The Times
movement in the United States.
non-disabled workers.
Please ⑉ DISABLED, Me
it TIMES
r125
Disabled
needing IL. IS there! 11 the Administi
believes that, then the Americans with
Disabilities Act that it helped devise-
which says disabled people's problems are
Continued from -
not their physical conditions, but rather
restroom if they're gooding to work.
segregation and exclusion-is nothing
There needs to be an acknowledgment
more than an empty promise.
that the work environment is all-encom-
EEOC staff members are referring to
passing. Women learned, for example,
using the restroom as "medical" help.
that the road into formerly all-male
This is absurd and cruel. Just because you
management bestions often had as much
need someone to help you, using the
to do with being able to talk over Issues
restroom is no more "medical" when
informally by the coffeemaker or over a
you're disabled than it's "medical" for any
beer after work as with more formal work
of us when we take a break to run to the
situations; so, too, people who need per-
restroom.
sonal assistance know that they need to
If the Bush Administration had put its
have the option to participate in all levels
rules where its PR on disability rights has
of work life-and if you have to use the
been-by insisting that these basic needs
bathroom so desperately you can't stay on
be met on the job-we'd all be a lot
the job eight or more hours, you can't
further along the road toward integrating
participate very well.
people with disabilities into our job mar-
But help using the restroom is seen as
ket. With rules like these, however,
something private-something dirty. By
there's little question that the Americans
saying it doesn't have to be provided, the
with Disabilities Act's central promise-
Administration is tacitly saying there's
to open the doors of business to severely
something wrong with disabled people
disabled people-will remain unfulfilled.
TAKE US ALONG
Transfer home delivery to your
unamel
Southern California vacation address.
Times
Just
1-090-LA
8/27/91 Dues-Payers' Revolt
WSJ
I also propose to strengthen the
went to political causes, even he was
Süpreme Court's Beck decision, which
told to buzz off. When Mr. Heston per-
held that union members can't be
sisted, he was told the union didn't
forced to have their dues go to politi-
want him as a member and that he
caL causes or organizations they do
should stop sending in his dues. He's
not support. No American-no Ameri-
since become a champion of Beck
can-not one, should be compelled to
rights.
give money to a candidate against his
Mr. Heston says former Labor Sec-
or her will.' President Bush, June
retary Elizabeth Dole pledged last
19, 1989.
year to implement the rules. That
In 1988, the Supreme Court struck
means posting workplace notices in-
a blow for working men and women
forming workers of their rights, and
by ruling that workers can't be forced
forcing unions to improve their anti-
to pay any union dues unless they are
quated records so workers can easily
spent on bettering wages and working
see how much money they spend on
conditions. The opinion by former Jus-
politics. Mrs. Dole left office without
tice William Brennan said workers
doing either, and her successor, Lynn
are not obliged to pay for a union's po-
Martin, has also punted.
litical activities or non-collective bar-
There are political reasons for the
gaining activity. The 15.4 million
delay. Some White House aides hope
Americans who work under compul-
that a few unions, such as the Team-
sory union contracts now have the
sters, will endorse Mr. Bush in 1992.
right to reduce their union dues by
Nothing would more infuriate unions
half or more.
than telling their members they no
The Beck decision was a long time
longer have to fork over hundreds of
coming. Harry Beck sued his union,
dollars a year to political causes.
the Communication Workers of Amer-
ica, in 1976. After years of delaying
This political solicitude is harder to
tactics, the CWA finally admitted that
understand, though, now that the
only 21% of Mr. Beck's dues were
AFL-CIO helped strong-arm the
spent on collective bargaining. In a
NAACP into opposing Clarence
case involving another union, the fig-
Thomas, the administration's Su-
ure was only 10%. Much of the rest
preme Court nominee. Teamster dele-
was spent on political activity-union-
gates booed Mr. Bush during his vide-
staffed phone banks, printing and get-
otaped speech to their convention. The
out-the-vote efforts. Estimates of the
CWA disinvited Secretary Martin
value of these services exceed $200
while she was enroute cross-country
million in election years. Almost all of
to speak to its convention.
it is spent on liberal candidates and
Hispanic workers are furious that
causes, even though 42% of union
the AFL-CIO led the fight to kill the
members voted for George Bush.
U.S.-Mexican free-trade pact. Union
President Bush is on record in sup-
leaders and delegates are increas-
port of the workers' rights in Beck,
ingly out of touch with their member-
but since he took office almost nothing
ship, allied with the most negative el-
has been done to implement them.
ements of the Democratic Party.
The National Labor Relations Board
Beck is the law of the land, but it is
says union officials are largely re-
meaningless unless the Bush adminis-
sponsible for notifying union members
tration enforces it. The longer Presi-
how much of their dues goes to poli-
dent Bush delays in implementing
tics. Not surprisingly, the unions are
Justice Brennan's rules, the more
uninterested in conveying that infor-
likely that the right of workers not to
mation to their members.
be compelled to fund causes they
When Charlton Heston asked Ac-
don't support will gradually become a
tors Equity how much of his dues
legal footnote.
Asides
Wrong Flock
says it declined to join in, and points
Last week we said the National Au-
to its expressed conditional support
dubon Society had signed on to an
for a North American treaty. The la-
anti-free trade statement in Seattle.
bor council that issued the release in-
Though Audubon did meet with union
cluding Audubon does not contest the
officials who issued the statement, it
disavowal, so neither will we.
THE WALL STREET JOURNAL THURSDAY, AUGUST 29, 1991
A13
An Issue this Paper Can't Sidestep
With more than 40,000 arrests at block-
Wichitans strongly endorse a campaign of
According to an extensive poll published
tion becomes inexorable. If the unborn
ades outside abortion clinics, Operation
civil disobedience, public authorities-not
by the Boston Globe before Webster, 82%
child deserves protection after 12 weeks of
Rescue has become the biggest civil dis-
just in Kansas, but all across the U.S.-
of all Americans believe it should be illegal
development, why not after 10, or eight? If
obedience campaign in American history.
must take notice. Since the Supreme Court
to seek abortion simply because the preg-
it is wrong to destroy a human life in order
Some might find the comparison uncom-
re-opened the abortion debate with the
nancy is inconvenient. Yet according to
to save the mother's pocketbook, can it be
fortable, but Operation Rescue's pro-life
Webster decision in 1989, abortion ques-
statistics provided by the Guttmacher In-
justified to save her from some unspecified
campaign shares many similarities with
tions have received extensive attention
stitute (an affiliate of Planned Parenthood,
emotional distress?
the civil rights movement of the 1960s. No
from politicians, reporters, and editorial
and certainly no foe of legal abortion the
Ultimately, the American abortion de-
matter what it resembles, though. this
pages everywhere in America.
great majority of abortions are motivated
bate cannot be settled without answering
summer's month-long confrontation in
Everywhere, that is, except at The Wall
by the woman's problems with her family
the fundamental question: At what point-
Wichita does reveal that pro-life activism
Street Journal. In the months filled with
budget, her career, or her personal rela-
before, at, or after birth-does human life
is reaching a critical mass.
arguments for and against legal abortion,
tionships. Only about 5% of all abortions
qualify for legal protection? Medical sci-
To achieve political results, civil disobe-
the Journal has daintily sidestepped the is-
involve the so-called "hard cases" of rape,
ence can establish that human life begins
dience does not require majority support.
sue. The last strong note was sounded in
incest, or a serious threat to the woman's
at conception, but even that fact does not
Rather, the practitioners of non-violent
April 1990, when a Journal editorial criti-
health.
settle the issue. Does the Constitutional
cized Belgian journalists for their timidity
The "right to choose" provides a power-
protection of life extend to all forms of
Counterpoint
in reporting an abortion controversy that
ful slogan. But the public also knows that
human life? If not, who has the authority
provoked temporary abdication by that na-
some women will make irresponsible
to determine which human lives qualify for
By Philip F. Lawler
tion's King Baudouin. Acknowledging that
choices. Americans overwhelmingly disap-
protection?
"abortion is a sensitive issue everywhere,
prove of abortion as a form of birth con-
In days past, jurists settled such apodic-
including the U.S.," the editorial neverthe-
trol. Yet today some 40% of all abortions
tic questions by appeal to the principles of
less observed that "newspapers in democ-
are repeat procedures, and thousands of
natural law, which undergird the language
protest hope to rouse the nation's con-
racies have a public trust to responsibly
women have undergone four or five abor-
of our Constitution. But today the natu-
science, and stimulate public debate. If
further such debates." Yet since that plous
tions. At least a few parents use abortion
ral-law tradition is itself under attack. So
they succeed, more conventional politi-
call for a lively public discussion, the Jour-
as a means of ensuring a child of the "ap-
the debate on abortion points toward an
cians can reap the rewards. In the after-
nal has lapsed into near editorial silence.
propriate" sex. And 16,000 abortions each
even more profound struggle for control of
math of the 1963 protest marches in Bir-
year roughly 45 every day per-
the American Constitutional tradition. On
The word "abortion" has not appeared in a
mingham, a Gallup poll found a solid 60%
Journal editorial once this year.
formed after the 20th week of pregnancy.
the one hand, critics of Judge Clarence
majority of citizens complaining that such
Immediately after the Webster decision,
A political compromise, prohibiting abor-
Thomas point with alarm to his embrace of
demonstrations hurt the cause of the civil
tion under those circumstances, could eas-
natural-law reasoning. On the other, lead-
rights movement. Yet within months, the
a Journal editorial sought the middle
ily generate majority support.
ers of Operation Rescue invoke the natural
marchers had attained their main objec-
ground in the emerging public debate. "We
law to justify their defiance of a judicial
tive: the passage of the Civil Rights Act.
agree that early abortion decisions are
Such a compromise is impossible today,
injunction.
Like the protest marchers of a genera-
best left to women themselves, but at some
for two reasons. First, the Supreme Court
One influential group of Americans sees
tion ago, the pro-life militants of Operation
point in the pregnancy the state has a right
has disallowed it. In effect, the Roe v.
the natural law as a last defense against
Rescue have encountered widespread pub-
to protect the unborn." And what should
Wade decision (and the companion case
judicial tyranny. Another pictures the
lic hostility. Earlier this month, a poll con-
that point be? The editorial settled on the
Doe v. Bolton prohibited all public restric-
threat of tyranny looming behind any invo-
ducted by the Wichita Eagle and KAKE-
age-old standard of "quickening": "This is
tions on abortion, so that in most states
cation of the natural law. Those two view-
TV found 78% of the area's residents disap-
more-or-less good enough for us, and our
today, a woman can have the legal author-
points cannot be reconciled quickly or eas-
proving of Operation Rescue. But the mes-
sense is that despite the militants on each
ity to procure an abortion at any stage in
ily, but the issue must be settled. The
sage of that overwhelming majority should
side, society generally agrees."
her pregnancy, for any reason she finds
American public debate over legalized
not obscure the fact that 22% of the Wich-
Society does agree that women should
compelling. Second, the "pro choice"
abortion may be painful, but It cannot be
ita sample approved of the Rescue move-
have the right to choose; that fact is con-
movement has obdurately resisted any re-
avoided. A kingdom divided against Itself
ment, and half that number felt they could
firmed by poll after poll. But the public is
striction, however symbolic, on legalized
cannot stand.
"strongly approve" of militant tactics.
also ready to restrict that choice, just as
abortion. But in the end, even a compro-
Admittedly, 11% constitutes only a
American law places restrictions on a host
mise solution may not prove adequate.
Mr. Lawler, a Boston-based journalist,
small minority. But in a city of 300,000, it
of other activities ranging from automobile
Once the law recognizes the demand to
is currently working on a book about Oper-
still represents a large number. If 33,000
driving to dentistry to stock manipulation.
protect human life, the logic of that posi-
ation Rescue.
THE WALL STREET JOURNAL FRIDAY. AUGUST 30, 1991
member. Robert Watkins. is a leader of
the Washington, D.C., branch of Ms. Hall's
Lawyers' Committee. He won't comment
ABA Panel Hides
on his vote. or even his resume.
Ronald Olson, the current committee
Behind Screen
chairman and a partner in the Los Angeles
firm of Munger Tolles, served as finance
chairman for Alan Cranston's 1980 Senate
Of Anonymity
race and is a former general counsel for
the California Democratic Party. Federal
records show he's a generous campaign
Which elite outfit conducts private in-
donor to such liberals as Sens. Bill Bradley
vestigations. maintains secret files and is-
and Carl Levin, Rep. Mel Levine, and the
sues anonymous public judgments that can
Democratic Congressional Campaign Com-
damage careers? The KGB Is going out of
mittee. There's nothing wrong with being
business. So that leaves the American Bar
political. but why not let the public in on
Association.
these allegiances? Mr. Olson won't even
return phone calls.
America's legal nomenklatura judged
The ABA's political bias has miffed con-
Supreme Court nominee Clarence Thomas
servatives since the Bork fight, but liberals
worthy, sort of, this week. An ABA state-
should be wary too. In the 1950s, Dwight
ment said a "substantial majority" of its
Eisenhower brought the ABA into judicial
15-member screening committee gave him
screening precisely because it was white-
a "qualified" rating, its middle ranking.
shoe and Republican. but ostensibly apolit-
Even hermetic David Souter got a "well
ical.
qualified." Two panel members judged
Richard Nixon also used the ABA as po-
Mr. Thomas "not qualified."
litical cover: it even gave a ringing en-
The ABA provided no reasons for these
dorsement to G. Harrold Carswell. Re-
judgments. No elaboration. No names,
member him? He's the man about whom
even. Just a pronouncement from Mount
then Nebraska Sen. Roman Hruska said,
Olympus that made headlines, and was im-
"Even if he is mediocre there are a lot of
mediately exploited by Mr. Thomas's
mediocre judges and people and lawyers.
critics. Judge Thomas will survive: consid-
They are entitled to a little representation.
ering the makeup of the ABA panel (more
aren't they?"
below), it's amazing that this 43-year-old
Liberals should also understand that
jurist was judged qualified. (The ABA de-
more important to lawyers even than ideol-
fines qualified as "at the top of the legal
ogy is their self-interest. They are like any
profession" with "outstanding legal ability
other special interest-the bankers, the
and wide experience.")
pipe fitters, or the tuna fishermen. Federal
The better question is whether the
Judge Laurence Silberman, who has seen
ABA's judicial screening should survive.
the ABA's judicial work both as consumer
Who elected these people anyway? And
(deputy attorney general) and target, said
why in the name of Brandeis ("sunlight is
in a 1990 speech that the screening com-
mittee is dominated by litigators.
Potomac Watch
And litigators love judges who create le-
gal uncertainty. "After all, the more un-
certain the law, the more litigation will
By Paul A. Gigot
take place." Mr. Silberman said. "And the
more judges can be induced to be recep-
tive to new and ingenious arguments. the
the most powerful of all disinfectants" is
more uncertainty can be introduced. So
a secretive special-interest group allowed
the screening committee tends to "look as-
to play such a prominent role in a democ-
kance" at the ability of mere corporate
racy?
attorneys or public servants.
The ABA won't even disclose the names
Judge Thomas believes in judicial re-
of the two dissenters. Everyone's leading
straint and has limited litigation experi-
suspect is Joan Hall. a Chicago lawyer at
ence: it's easy to see why some ABA litiga-
the firm of Jenner & Block who has op-
tors might want to sabotage his nomina-
posed nominees who disagree with her
tion. Especially since 14 of this commit-
views on affirmative action. She's also
tee's 15 members are trial lawyers. The re-
widely believed to have judged Robert
sume of Jorge Rangel, of Corpus Christi,
Bork "not qualified. though she wouldn't
Texas. says he specializes in "personal in-
admit or deny it at the time.
jury and general civil litigation." Kathlyn
Ms. Hall is once again hiding behind the
Graves of Little Rock has a practice lim-
ABA's skirts. You declare yourself in
ited to "employment law and civil
committee." not in public. she says
rights."
bravely. So Ms. Hall could play j'accuse
Mr. Olson has contributed money to
without accountability. Perhaps she fears
South Carolina's Ernest Hollings. the Sen-
people might doubt her credibility if they
ate's most important protector of the plain-
knew she is a leader of such left-wing ac-
tiff's bar. It's also safe to say that every
tivist groups as the Lawyers' Alliance for
one of these trial lawyers is far, far
Nuclear Arms Control and the Lawyers
wealthier than Mr. Thomas. who has de-
Committee for Civil Rights Under Law. Or
voted his life to public service.
perhaps she fears her firm's clients might
The Bush administration had its
not like it if they knew she attacks federal
chance. after the Bork fiasco, to drop the
judges who rule on their cases.
ABA from judicial screening. But then-At-
The other dissenter's identity is more
torney General Richard Thornburgh
speculative, though there are plenty of
blinked, partly because then-committee
panel members who don't share Mr.
chairman Ralph Lancaster promised no
Thomas's politics. The panel's only black
more split decisions. He couldn't deliver:
the ABA deserves to follow the KGB out of
the screening business.
ngton Times
MONDAY, SEPTEMBER 2, 1991 / PAGE F3
EVAN KEMP JR.
Opportunity for the disabled
T
his Labor Day will,
groups being affected; approval for
Finally, none of these develop-
thankfully, be the last one
the ADA rests on other grounds,
ments would have been possible if
that will not be just another
which should be examined by those
the ADA had not drawn its strength
day for millions of Amer-
who want another civil rights bill.
from this nation's belief in the fun-
icans who are kept out of work by.
artificial barriers.
First of all. the whole premise of
damental principle of equal opportu-
the ADA is to bring individuals into
nity. At long last, this ideal will em-
The Americans With Disabilities
brace those with disabilities. A
Act (ADA), a revolutionary law
the mainstream of American soci-
ety; to end job, housing and public
moral consensus, which is surely
signed by President Bush on July 26
a year ago, not only brings persons
accommodations segregation. Rath-
built on the civil rights movement,
underlies the ADA.
with disabilities into the workforce
er than emphasizing the differences
The lessons to be drawn seem
but also serves às a model for future
very plain. Proponents of civil rights
civil rights legislation.
bills of the future should look to the
For all the rancor this year over a
Rather than
ADA. They must ask themselves: Is
civil rights bill, we should take some
lessons from the ADA, a civil rights
emphasizing the
this civil rights bill going to bring
Americans closer together? Will it
bill that Congress passed with lop-
sided margins.
differences of persons
reduce workplace frictions and
those throughout society? Or will it
This long overdue legislation pro-
with disabilities, our
foster resentment?
claims that "the nation's proper
Does the bill encourage people to
goals regarding individuals with dis-
abilities are to assure equality of
newest civil rights law
get the most out of their education?
opportunity, full participation, inde-
seeks common ground
Does it reward those who have the
pendent living and economic self-
incentive to complete training pro-
sufficiency for such individuals"
between them and
grams? Can employers feel they can
with disabilities. The ADA thus
hire the most qualified - without
guarantees that places of public ac-
those who are fully
fear of lawsuit?
commodation, transportation, tele-
able-bodied.
Are the remedies the civil rights
communications and, above all, em-
bill offers appropriate to the viola-
ployment will be accessible to those
tion? Can employees believe they are
with disabilities, such as people who
being treated fairly in hiring and
are blind, wheelchair users, those
of persons with disabilities, our new-
promotions and have adequate re-
with hearing and speech impedi-
est civil rights law seeks common
course when they must sue for their
ments and others who have a major
ground between them and those who
rights? Are we really compensating
life activity that is substantially im-
are fully able-bodied. The disability
the victim adequately if we require
paired.
rights movement is one of those rare
quotas or their euphemisms, goals
groups whose logic requires it to dis-
and timetables? (I look forward to
This legislation, which will take
effect for most businesses on July
appear.
seeing a damages provision.) What
26, 1992, will obviously require fun-
Second, the ADA does not require
good does it do a victim of discrimi-
businesses to hire just any person
nation to hire others of his or her
damental changes in the way we re-
gard the workplace and its employ-
with disabilities; they must be qual-
particular class? A desirable civil
ees. Though opponents wildly
ified. The ADA requires only that
rights bill would allow tough rem-
exaggerated the costs of reasonable
employers offer the opportunity to
edies that at the same time aid spe-
accommodation of qualified indi-
work, and if the accommodation (for
cific victims of discrimination.
viduals with disabilities, this law
example, a reader for a blind at-
Finally, proponents of civil rights
will make a world of difference to
torney) required for the business is
must ask themselves how their legis-
those individuals seeking work and
too expensive. then it cannot be
lation addresses the moral consen-
all its benefits.
forced upon them. The ADA is not an
sus on civil rights that goes back to
Why the contrasting reception
entitlement program.
the Declaration of Independence.
with the other civil rights bills cur-
Thus, the ADA does not require,
We must take civil rights back from
rently being debated? Let me focus
encourage or permit preferences or
the domain of interest groups and
on the employment provisions of the
quotas for those with disabilities.
lawyers and restore it in the lan-
ADA, since these are the parts of the
Accommodation of people who use
guage and tone of the family dinner
civil rights bill that are currently
wheelchairs (widening an aisle) is
table. We need to revive the connec-
most in dispute. The difference is far
different from acommodation for
tion between civil rights and funda-
more than a matter of the specific
someone who is hearing-impaired
mental moral principles.
(providing a telephone relay sys-
The ADA passed these tests. Any
tem). The action an employer takes
civil rights bill that does so will be-
Evan Kemp Jr. is chairman of the
must be individual and not just ad-
come law. Like our holidays, such a
U.S. Equal Employment Opportunity
dressed to a mass labeled as "the
law will be another occasion for all
Commission, which enforces federal
disabled." Remedies are thus tai-
Americans to rejoice in their com-
employment discrimination laws.
lored to the individual.
mon heritage.
THE WALL STREET JOURNAL TUESDAY, SEPTEMBER 3, 1991
On Discrimination
By HERBERT STRIN
means that It discriminates against the
produce as much as they want, which
the miserable condition in which blacks
The nomination of Clarence Thomas for
people who thrived in the pre-government
would Increase the national output, and
were seen to live. Longstanding discrimi-
membership on the Supreme Court is the
situation. I can hear the physically strong
then to compensate them in cash for the ef-
nation against Jews, for example, did not
occasion for some ruminations on discrimi-
and violent men driven out by the first vil-
fect of low prices on their incomes.
evoke similar sympathy from the Gentile
nation, equal treatment, the level playing
lage government complaining that the
Although efficiency provides some guid-
community part, I think, because Jews
field and all that. These ruminations prop-
playing field is no longer level.
ance as to the way in which government
on the average by then were not poor. And
erly have nothing to do with Judge
Government discrimination is perva-
should discriminate, there is no similar
policies to give preference to minorities, or
Thomas's qualifications for the Supreme
sive. Free public education is discrimina-
guidance about the purposes or classes of
make avoidance of such preference hard,
Court. which are a matter of his personal
tory in favor of poor people with many
persons for which it should discriminate.
are still supported and sold on the ground
characteristics rather than of general prin-
children against rich people with few. The
At this point we must rely on the demo-
that the minorities are especially poor.
ciples. But they have something to do with
income tax is a big fat book of discrimina-
cratic process and, one may hope, on the
On the other hand, opposition in some
the quality of the current discussion of his
tions. Agricultural and tariff policies are
good sense and morals of the American
quarters to anti-poverty programs is influ-
nomination and of related civil rights mat-
by nature discriminatory. Social Security
people. Americans want to discriminate in
enced by the feeling that most benefi-
ters, which I believe is low.
discriminates in favor of people born in
favor of old folks for no other reason than
ciaries would be black. And there are peo-
An Illusion
1915 and against those born in 1965.
that they are old. I disagree but I cannot
ple for whom opposition to racial prefer-
ence seems to be at least a cover for oppo-
Many people are Impressed that Mr.
Thomas "made it on his own" from a poor,
Board of Contributors
sition to aid to the poor of all races. Those
most indignant about preferences for mi-
uneducated, black background. They take
norities are not leading supporters of color-
this as evidence that public assistance to
those who are poor, or to those who are
Basically, the fact that government discriminates is ac-
blind anti-poverty programs.
black, is unnecessary If not positively
Inefficient Means
harmful. They Interpret his life story as a
cepted. Demands for a level playing field are almost always
Advocates of racial preferences should
rebuke to those, pejoratively called "lib-
demands that government do more for me.
recognize that they are not efficient ways
eral," who favor such assistance.
of dealing with the real problems of pov-
The idea that anyone "makes it" en-
Basically, the fact that government dis-
prove the preference wrong.
erty, high dropout rates, female-headed
tirely on his own, or even mainly on his
criminates is accepted. Demands for a
Public policy about two kinds of dis-
families, unemployment and violence that
own, is, of course, an Illusion. Everyone
level playing field are almost always de-
crimination is now settled, although not ev-
affect minorities disproportionately but not
starts with an endowment, more or less, of
mands that government do more for me.
eryone is happy with the settlement. Dis-
only minorities. They do not reach those
human talent and material assets that he
Even the word "quota," such a hot politi-
crimination on the basis of race is im-
who are most disadvantaged; if they take
did not make. And how he fares with this
cal button, does not stir any reaction when
proper, whereas discrimination on the
the form of preferences in hiring and col-
endowment depends on conditions, includ-
It refers to a quota on textile imports or to-
basis of economic condition is proper.
lege admissions, they reduce productivity;
ing Institutions, laws and markets, that he
bacco production. We have longstanding
We have decided that the government
and they impose burdens randomly among
did not make either. I doubt that many of
"affirmative action" programs for tobacco
must not discriminate on the basis of race
members of the majority who are not par-
the people who have made it In America in
farmers and textile producers.
and that racial discrimination is not per-
ticularly affluent, which naturally pro-
the last quarter of the 20th century would
missible in some private activities that are
vokes resentment.
The question is not whether government
have made it on Robinson Crusoe's island
heavily affected by public policy-such as
The advocates for minorities should rec-
should discriminate but for what purpose
or in Stalin's Russia or in most of the other
and by what means. Asfar as the means is
employment. housing and education. Ra-
ognize their interest in respecting the prin-
times and places of human history. One
concerned, the test is efficiency-achieving
cial discrimination remains, but it no
ciple that discrimination by race is illegiti-
doesn't have to imagine extreme cases. I
the desired purpose with the least cost.
longer has the moral sanction it once did.
mate, a principle that is vital for the pro-
suppose Michael Jordan made It on his
Many government discriminations are
The idea that the govèrnment should dis-
tection of racial minorities. At the same
own. But even with his exceptional talents
highly inefficient. Programs to raise farm
criminate on the basis of economic condi-
time, those who are most insistent on the
he would not have made it in a world with-
incomes by restricting agricultural produc-
tion- favor of poor people-is repre-
impropriety of reverse discrimination, af-
out pro basketball and television-or at
sented in welfare, food stamps, Medicaid,
firmative action and racial quotas should
tion are an example. These programs are
least would not have made It so big.
intended, at least nominally, to raise the
the progressive income tax and much else.
see that they are not exempt from respon-
All of that is quite obvious, although of-
incomes of poor farmers and are justified
In both cases-racial and economic dis-
sibility to face the real problems of the dis-
ten neglected. We get closer to current is-
by sympathy for poor people in general.
crimination-many questions of definition,
advantaged in America, regardless of
sues when we recognize that these condi-
But many of the farmers who gain the
degree and implemențation remain, but
race. If this happens on both sides we may
tions that affect which people prosper most
most are not poor, and consumers, the
the principle of what is a permissible basis
be able to get away from largely irrelevant
are heavily Influenced by government.
poor included, bear the cost.
of discrimination remains clear.
and outdated arguments and confront
Government discriminates in favor of
If the purpose of the program Is to raise
Confusion and problems arise because
some of these real problems.
some people or some kinds of people and
the income of farmers in general, and just
racial minorities in America are dispropor-
against others. That is inevitable. Govern-
because they are farmers, production limi-
tionately poor. The sympathy of the white
A former chairman of the president's
ment doesn't exist to keep things the way
tation is still inefficient. A more efficient
community for the civil. rights movement
Council of Economic Advisers, Mr. Stein is
they were without government, which
method would be to allow the farmers to
in the 1960s was, I believe, partly due to
an American Enterprise Institute fellow.
D4
Beel
THE NEW YORK TIMES, TUESDAY, SEPTEMBER 3, 1991
They Bought Stock
With Insider Loans
Millions Made at Washington Bank
Stock Transactions of Clark Clifford and Robert Altman
And Made Millions
Continued From First Business Page
Mr. Richter was the first president
NYT
Little in direct
of First American of New York. He
Purchases and sales of shares in Credit and Commerce American Holdings by Clark M. Cifford and Robert
By STEVE LOHR
9/3/91
was suggested for the job, the Fed
A. Altman. The men borrowed money from B.C.C.I. to buy the stock; the profitability of their transactions
B.C.C.I. to buy shares in the holding
compensation, but
states, by Aga Hassan Abedi, the
depends on what costs are included.
company, Credit and Commerce
founder and former president of
Clark M Clifford and Robert A. Alt-
American Holdings, that owned First
B.C.C.I. When Mr. Richter wanted to
CLARK M. CLIFFORD
man resigned from their executive
American Bankshares. They profited
substantial sums
hire an executive, the person had to
posts at First American Bankshares
Transaction
"bandsomely when they sold those
go through two sets of interviews:
Shares
Shares
Price
Amount
Amount
last month with their reputations tar-
chares.
from legal fees.
one with Mr. Elley and Mr. Altman,
date
bought
sold
per share
spent
received
nished. their pockets full, and some
The law firm of Clifford & Warnke
and another in London with a few
July 25, 1986
4,495
$2,216
important questions unanswered,
$9,960,920
represented the investors since 1978
B.C.C.I. executives, including Mr.
Aug. 14, 1987
951
Government investigators say.
2,430
their effort to buy Financial Gen-
The role of the two prominent
two men knew B.C.C.I. was the actual
Abedi and Mr. Naqvi.
2,310,930
March 1, 1988
Robert Fiske, a partner at Davis
3,200
6,800
eral Bankshares Inc., which was later
$21,760,000
Washington lawyers Is part of the in-
owner of First American.
Polk & Wardwell in Washington, one
July 18, 1989
149
renamed First American, and since
2,774
413,326
vestigations in New York and Wash-
Representatives for the two men
1982, Clifford & Warnke has been the
say that while some of their arrange-
of the firms representing Mr. Clifford
Gross profit on the March 1, 1988, sale
ington of the Bank of Credit and Com-
general counsel to First American.
and Mr. Altman, said Mr. Altman did
merce International, which con-
ments with B.C.C.I. may raise ques-
The legal fees collected by the firm
attend a couple of B.C.C.I. confer-
3,200 shares sold at $6,800 each minus 3,200 shares bought for $2,216 each
14,668,800
trolled First American.
tions, there are innocent answers for
over that period amounted to "sev-
those questions.
ences, but not because First Amer-
Amount received In March 1, 1988, stock sale
Neither Mr. Clifford nor Mr. Alt.
eral million dollars," a former First
ican was part of B.C.C.I. "He was
21,760,000
man has been accused of any wrong-
A guest list for the 1984 B.C.C.I. an-
American official said.
nual conference in Vienna on Feb. 26
trying to get business from B.C.C.I.,"
Less costs and expenses: B.C.C.I. loans to buy shares on July 25, 1986
doing The main legal issue is
Mr. Altman, the protégé of Mr. Clif-
and 27 shows that under a category
Mr. Fiske said.
and Aug. 14, 1987; interest on loans, and commission on stock sale
15,183,681
whether they misled banking regula-
ford, attended B.C.C.I. conferences in
marked "Special Invitees" were a
Clifford & Warnke earned sizable
tors when they repeatedly assured
them that B.C.C.I. was not behind the
handful of First American executives
legal fees from its relationship first
The gain reported by Mr. Clifford
Europe during the mid-1980's, where
6,576,319
virtually all the guests were from
acquisition in 1982 of First American
including Mr. Altman, Khusro Elley
with the front men who bought First
B.C.C.I. affiliates, charities and the
American and later as counsel to the
ROBERT A. ALTMAN
by a group of investors. In fact, the in-
and Bruno Richter. (Mr. Altman's
National Bank of Georgia, another
name was spelled with two "n's" on
bank. "The stock deal was lucrative
vestors were front men for B.C.C.I.
American bank that B.C.C.I. secretly
for Clifford and Altman, but they took
Transaction
the guest list, but a person who at.
Shares
Shares
Price
Amount
Amount
Mr. Clifford and Mr. Altman have
controlled.
tended the conference confirmed that
even more out of the bank in legal
date
bought
sold
Robert A. Altman was there.)
fees." one investigator said
per share
spent
The Federal Reserve Board says
received
maintained that like most everyone
July 25, 1986
2,247
else. they were deceived for years by
Mr. Altman hired a former B.C.C.I.
It is not unusual for a lawyer to be-
$2,216
$4,979,352
In the Federal Reserve enforce.
executive for a senior position in
Aug. 14, 1987
475
C.I. But unlike the banking super.
come an executive of a corporation or
2,430
ment proceeding against B.C.C.I., Mr.
1,154,250
visers from several countries who
First American's New York bank
bank and then funnel some legal work
March 1, 1988
Elley is one of nine people banned
1,600
6,800
$10,880,000
eventually seized B.C.C.I. in a global
after discussing the candidate with
from any future involvement with
back to his old firm. But typically, the
July 18, 1989
75
2,774
206,050
sweep on July 5. Mr. Clifford and Mr.
Swaleh Naqvi, the former chief exec-
banking in the United States. In 1983,
lawyer will have left his law firm
Aliman were. in a sense, insiders.
utive of B.C.C.I.
when he becomes a corporate execu
Gross profit on the March 1, 1988, sale
according to the Fed report, Mr.
The two men borrowed from
Elley, "a long-time B.C.C.I. employ.
tive. In the case of Mr. Clifford and
1,600 shares sold at $6,800 each minus 1,600 shares bought for $2,216 each
7,334,400
rongdoing Is Denied
ee, was hired as a senior vice presi-
Mr. Altman, however, it was a bit like
Lawyers and public-relations spe-
giving the work to themselves. Still
Amount received In March 1, 1988, stock sale
dent of First American in New York,
10,880,000
Continued on Page D4
claimsts representing Mr. Clifford and
after Mr. Naqvi suggested him to Mr.
the First American board apparently
Less costs and expenses: B.C.C.I. loans to buy shares on July 25, 1966
Mr. Altman say the two men did noth-
Altman. "Elley continued to receive a
did not object to the arrangement.
and Aug. 14, 1987; interest on loans, and commission on stock sale
7,608,891
ing wrong. Meeting B.C.C.I. execu-
financial benefit from B.C.C.I. while
Carl Rauh of Skadden, Arps, Slate,
employed at F.A.B.N.Y. (First Amer.
Meagher & Flom, which is also repre-
The gain reported by Mr. Altman
tives, borrowing money from B.C.C.I
3,271,109
or handling legal work for the bank,
ican Bank of New York)," the Fed re-
senting Mr. Clifford and Mr. Altman,
port said
said legal fees to a firm should not be
they point out, does not show that the
Note: The loan repayments used in the calculation of costs Include loans to purchase shares not involved in the March 1.
confused with compensation to indi-
1988, transaction. Mr. Clifford says he paid about $3.8 million in taxes on the sale; Mr. Altman says he paid about $1.9
viduals. "A lot of legal fees go toward
million in taxes.
expenses,' he said.
Questions rom a Director
Sources Federal Reserve Board enforcement proceeding against B. C.C.I., July 29, 1901 (stock transactions of Alleage - and Altran):
memorandum from Frank Marklewicz of Hill a Knowllon, representing Measers. Callord and Altman (paloulations of costs and experies)
The hefty profits the two men made
from transactions in the shares of
Credit and Commerce American
Holdings, the holding company for
less than two years, the gross profit
compensation in stock and profit only
First American, have attracted the
on the sale of those 4,800 shares the
most attention. The effort to oust Mr.
difference between the buying and
Investing in shares
if the bank did well. They purchased
Clifford and Mr. Altman began when
the stock In rights offerings at book
the selling price - was $22 million.
value and sold when the bank seemed
Charles McC. Mathias, a former
On July 25, 1986, Mr. Clifford
United States Senator from Maryland
whose price tripled
to be prospering. By 1986, "the
bought 4,495 shares for $2,216 a share
project was thriving under Messis
and a First American director, ques-
and Mr. Altman bought 2,247 at the
in only two years.
Clifford and Altman, and successful
tioned those gains earlier this year.
same price, with both purchases fi-
years lay ahead," Hill & Knowlton
nanced by B.C.C.I. loans. On Aug. 14,
said.
The profits the two men made on
the shares were huge, though the
1987, Mr. Clifford bought an addi-
Last year, hurt by bad real estate
tional 951 shares at $2,430 a share and
exact amount can be subject to differ.
B.C.C.I.
loans in Washington, Maryland and
Mr. Altman bought 475 shares at the
ent Interpretations. The most widely
"The price of those shares was
Virginia and the poor performance of
used figure is that Mr. Clifford and
same price. Then, on March 1, 1988,
what B.C.C.I. said It was, period," one
its "strategic acquisition" in New
Mr. Clifford sold 3,200 shares for
Mr. Altman made just under $10 mil-
investigator said.
York, the bank recorded a net loss of
$6,800 a share and Mr. Altman sold
lion before taxes, after paying off
A memorandum from Frank
$158 million.
their loans from B.C.C.I., interest on
1,600 shares at the same price
Mankiewicz, a vice chairman of Hill
the borrowings and commissions.
& Knowlton, notes that Mr. Clifford
This year, the Federal Reserve
That calculation was provided this
No Public Market
took a salary of only $50,000 a year as
worked to get Mr. Clifford and Mr.
Altman to resign so the scandal sur.
spring by the public relations firm of
The selling price the two men re-
chairman of First American. Mr. Alt-
ceived was more than triple the price
man, as a director of First American
rounding B.C.C.I. would not push an
Hill & Knowlton, which represents the
two men.
they paid less than two years earlier
and president of the First American
already weakened First American to
and more than twice the price five
Corporation, the bank's parent com-
ward failure.
But that calculation understates
the profits somewhat because It fig.
and a half months earlier. Because
pany, did not receive any salary. The
The two men are scheduled to ap-
Agence
rance
ures as an expense the repaying of
the holding company was a private
amount the two were paid in direc-
pear before the House Committee on
Presse
company, there was no free market
tors' fees has not been disclosed.
Banking, Finance and Urban Affairs
Aga Hassan Abedi, the founder and former president of B.C.C.I., during
loans used to buy virtually all the
8,392 shares the two men bought, even
on Sept. 11. "That's when they'll
an interview at his home in Karachi, Pakistan, in February.
for the shares, nearly all of which
The two men, according to Hill &
though they sold only 4,800 shares. In
present their side of the story," said
were held by the front men for
Knowlton, were in effect to take their
Mr. Rauh of Skadden, Arps.
A Friendship, a Washington Bank and a Trail of Money Leading to B.C.C.I.
10/13/91
Clifford and Altman,
Mentor and Protégé,
At Center of Inquiry
By NEIL A. LEWIS
Special to The New York Times
WASHINGTON, Sept. 2 - Some-
where near the center of the tangled
financial story of First American
Bankshares Inc., Washington's larg-
est bank holding company, is the
mentor and protégé relationship of
Clark M. Clifford and his junior law
partner, Robert A. Altman.
At 85 years old, Mr. Clifford. a for-
mer poker-playing partner of Presi-
dent Truman and Winston Churchill,
was the Secretary of Defense who
helped persuade President Johnson
to wind down the Vietnam War, the
man who counseled President Ken-
nedy about his private life, and the
diplomat sent on special missions by
President Carter.
Agence
A Well-Known Wife
Press
Mr. Altman, at 44 years old, has
Clark M. Clifford, left, the former Secretary of Defense and adviser to Democratic Presidents, and Robert A. Altman, with his wife, the actress
done little in his adult life but practice
corporate law and prosper under
Lynda Carter. Mr. Clifford is shown last month as he announced his resignation as chairman of First American Bankshares; Mr. Altman, in 1988. the junior
Clark Clifford at their small Wash-
law partner of Mr. Clifford who resigned as the bank's president, and Ms. Carter are seen at the Democratic National Convention
ington law firm. Until he became em-
broiled in the widening problems sur-
terest is the role of the two men in
to do with B.C.C.I. a largely unregu-
But this year, facts became known
rounding First American, Mr. Alt-
of how First American came to be se-
helping a group of Middle Eastern in-
lated international bank that was
that strongly suggested to investiga-
man was best known as the husband
cretly controlled by the Luxembourg-
trying to expand its reach into the
tors that Mr. Clifford and Mr. Altman
of Lynda Carter, the actress and
based Bank of Credit and Commerce
vestors take over First American in
1982. Federal regulators approved
United States.
played a far different role than what
model who starred in the television
International, Mr. Clifford and Mr.
the takeover after assurances from
Mr. Clifford became First Amer-
Altman stand at the center of the
series "Wonder Woman."
prosecutorial bull's-eye.
Mr. Clifford and Mr. Altman that
ican's chairman, and Mr. Altman its
As Federal and New York State of-
First American would have nothing.
president.
Continued on Page D4
ficials intensify their investigations
The focus of the investigators' in-
Clittord and Altman, Mentor and Protégé, at Center of Inquiry Into B.C.C.I.
Continued From First Business Page
through Mr. Clifford. He described
Mr. Clifford as "practically the god.
man, friends said, was repaid by a
Clifford, and I practice law in Wash-
Men of different
growing respect from the older.
such a split would be unthinkable
they had described.
father of the Democratic Party" and
Ington," confident the other person
Mr. Altman as the man "married to
"There is obviously a strong bond
will certainly know who he is. Mr. Alt.
Over the years, Mr. Clifford, who has
In January, an audit disclosed that
Wonder Woman."
several original investors in First
generations joined
there," said one lawyer who spoke on
three daughters, has often called Mr
man, several lawyers said, seems
Mr. Clifford and Mr. Altman re-
the condition that he not to be identi-
Altman the "son he never had Mr
more sensitive to the need to show
American had been merely fronting
fied. "Clark has great respect for his
Altman named his first child Clark
signed their First American posts on
by a personal and
that he is person of standing.
legal skills and a personal affection
Prosecutors, who acknowledge that
for B.C.C.I.; that Mr. Clifford and Mr.
Aug. 14, insisting that It was for the
Mr. Altman's 1984 marriage to Ms.
for him."
Mr. Altman is a more palatable tax
Altman were given loans by B.C.C.I.
good of the bank. But it was clear that
they had been forced out by Federal
professional bond.
Carter gave him a glittering social
on unusually favorable terms to buy
Over the years, Mr. Altman picked
get than Mr. Clifford, note an aica in
stature in Washington The couple
First American stock, and that in III-
regulators and the bank's board.
up some of Mr. Clifford's trademark
which Mr. Altman was more actively
met in Nashville, where Ms. Carter
the more than a year they sold that
The personal Clifford-Altman story
habits. Frequently dressed in the
involved with B.C.C.I. One thing that
was a spokeswoman for Maybelline
dark double-breasted suits associated
made Investigators skeptical about
stock for a profit of $9.8 million. The
begins in the early 1970's, when Mr.
him a medical deferment.
cosmetics. They were married in Bel
Clifford rejoined a small Washington
with Mr. Clifford, Mr. Altman will
Mr. Clifford's and Mr. Altman's PO
nominal buyer of the stock was a
He enrolled in George Washington
Air, Calif., in 1984 in a ceremony that
often,put his hands together at the fin-
fessed ignorance of the B.C.C.I. rol
small money-lender whose purchase
law firm that specialized in helping
University Law school after graduat-
Mr. Altman boasted brought together
in running First American was the
was bankrolled by a shadowy B.C.C.I.
blue-chip corporate clients navigate
gertips, a gesture so identified with
ing from the University of Wisconsin.
the Rlitz of Hollywood and the impor-
his mentor that " is known in Wash-
fact that the two had said they
affiliate.
the capital.
The Clifford firm asked the law
tance of Washington.
ington as the "Clifford tent" or "Clif-
B.C.C.I. as a liaison with First Any
One of the first Indications that
During his term as Secretary of De-
school to recommend a summer clerk
B.C.C.I. had a secret interest in the
ford steeple."
Mr. Clifford was the best man. Aga
ican shareholders. Mr. Clifford said =
fense, which ended in 1969, he was
in 1971 and Prof. David Seidelson,
Clifford and Altman bank was in Sep-
greatly Impressed with Mr. Altman
Some Traits Not Shared
Hassan Abedi, the founder of C.C.I.,
was a matter of convenience, sing
transformed from a hawk on Viet-
was a guest and offered to give Ms.
the shareholders were spr 1.1
tember 1988, when a B.C.C.I. official
nam to someone convinced it was a
even as a first-year student, sent him.
Some gestures that Mr. Clifford has
Carter a car of her choice as a gift.
throughout the Middle East and "
was heard on a tape recording brag.
grave mistake to continue the war.
After graduation, at the age of 25,
brought off with great panache over
She chose a black Jaguar, she re-
Abedi saw them often.
Ring to an undercover Customs Bu-
The Issue of Vietnam meant some-
Mr. Altman joined the lobbying firm
the years Mr. Altman does not try to
But records show, in the words of
reau agent on the trail of the Pana-
cently told People magazine
thing different to Mr. Altman's gener-
and began a relationship with Mr.
duplicate. Mr. Clifford likes to tele-
one investigator, that 90 percent of
manian leader Manuel A. Noriega.
ation, a choice of whether to serve or
Clifford that deepened as Mr. Clifford
phone lawyers and officials and intro-
The official said that his company
Tennis and a Waterfall
the telephone calls and visits to
resist. Mr. Altman was spared that
grew to depend on his younger col-
duce himself with an exaggerated
B.C.C.I. officials were made by M,
controlled a bank in Washington
decision because asthma assured
league. The adulation of the younger
modesty, saying, "My name is Clark
In recent years, the Altmans have
been Olympic-class socializers in the
Altman. According to a report by 11,
Federal Reserve, C.C.I. official: dul
capital, often entertaining at their
not act as a liaison but appeared
huge suburban home that is typically
control the decisions at First Am
referred to in newspapers here as a
icanon things like hiring
16-bathroom residence The house
also has lighted tennis courts, an arti-
ficial waterfall and what one regular
guest called "a Hollywood grandi-
osity but a nice lived-i feeling.'
Ms. Carter counts among her
friends Mary (Honey) Skinner, the
B.C.C.I Unit
wife of the Transportation Secretary,
Samuel K. Skinner, and Dorothy Bush
LeBlond, President Bush's daughter.
She has been active in the kinds of
Sale Is Set
charity drives that thrive on celebrity
associations.
But Mr. Altman's legal difficulties
HONG KONG, Sept. 2 (Reuicis)
have put strains on some relation-
Hong Kong's High Court today "P
ships. When The Wall Street Journal
proved the sale, with certain condi-
tions, of the local arm of the Bank of
called Michael J. Boskin, the chair-
Credit and Commerce International
man of the President's Council of
Economic Advisers, to ask about his
to the Lippo Group of Indonesia, a
court official said.
friendship with the Altmans and a re-
cent ski trip to Aspen, Colo., a Boskin
Noel Gleeson, the provisional liqui
spokesman emphasized that the Alt.
dator, said the agreement with Hong
mans and Boskins had "skiied on
kong Chinese Bank, a Lippo subsidi
ary, was not legally binding. If the
separate mountains."
deal falls through, he said, Bank of
Credit and Commerce Hong Kong
Common Line of Defense
would be liquidated
As the legal drama has been played
The Hong Kong Government clos
out, lawyers, bankers and friends of
the bank in July, after reports of
both men have waited to see how Mr.
widespread fraud at B.C.C.I. opeΓa-
Clifford and Mr. Altman would treat
tions around the world and only three
each other. So far, they have a com-
days after assuring depositors that
mon set of lawyers and a common
the Hong Kong unit was sound The
line of defense: they were both de-
bank's closing shook depositors, lead
ceived by Aga Hassan Abedi, the
ing to runs on local branches of four
founder of B.C.C.I.
banks, including Citibank and Stand
"I have a choice of seeming either
ard Chartered of Britain.
venal or stupid," Mr. Clifford told The
In a statement, Mr. Gleeson said
New York Times this year. Mr. Alt-
the agreement was legally binding on
man has declined to be interviewed,
only two points: that the acquirer
but through lawyers has similarly in-
would have eight weeks to study the
sisted he was taken in by Mr. Abedi.
B.C.C.I. affiliate's books, and that Jr.
tails of the conditional deal would be
Many of Mr. Clifford's friends
secret.
yearn to believe in a sequence of
The Government had sought to
events in which he was led astray in
liquidate the Bank of Credit and Com
his twilight years by a younger and
merce Hong Kong, but large demon-
more hustling colleague. To many
strations and a hunger strike by de
people watching for any indication
positors put pressure on the Govern-
that the common front will crack,
ment to change its plan.
ID #
317741 CU
WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
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Subject:
copy of letter to Sec Card $ Sec. Reilly
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re: Tank Car Specifications Elevated Temp Materials
re: Negligible Risk Provision for Clean Air Act MACT Reg.,
Marinevapor Recovery, Oxygenated Fuels, Reform. Gas,
etc
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5/81
Clean
Act AiR
Jeneral
Chevron Corporation
3/7/4/04
225 Bush Street, San Francisco, California 94104-4289
MAR 2 4 1992
James N. Sullivan
Vice-Chairman of the Board
March 23, 1992
The Honorable Andrew H. Card, Jr.
Secretary of Transportation
Nassif Building
400 7th Street, S.W.
Washington, D.C. 20590
Dear Secretary Card:
In response to the Request for Comments that was published in the Federal Register on
February 7, 1992 concerning Departmental regulations that substantially impede economic
growth, may no longer be necessary, are unnecessarily burdensome, or impose needless
costs or red tape, the following is submitted for your consideration:
HM-175A Tank Car Specifications
Issue
HM-175A is a DOT Research and Special Programs Administration rulemaking concerning
specifications of rail car tanks. These rules would require the modification and/or
replacement of many of our 3,500 owned and leased fleet of rail cars.
The rules would require thermal protection on rail cars transporting non-flammable gas
(Anhydrous Ammonia). While it is true that this protection could reduce the volume (if
any) escaping from the safety valve in a crash-caused fire, this vapor is not flammable. We
question the need for this thermal protection on cars transporting non-flammable gas.
Our fleet of owned and leased cars transporting Styrene Monomer are insulated but do not
have thermal protection or head shields. We question the benefits to be gained by adding
head shields and thermal protection. These cars have 4" insulation and a steel outer
jacket. These features provide some of the benefits DOT is seeking. Any further
enhancement should be product specific as there is no history of significant problems with
styrene cars that we are aware of.
The benefit of full shields is very questionable. Historically, statistics show that only a
small percentage of punctures could have been prevented with full head shields.
The most objectionable of all the proposals is the change of construction steel
specifications. If the steel used to construct the cargo tank is included, this proposal would
ban all cars not made of the latest steel specification. The benefits are questionable.
Existing cars have stood up very well in many derailments/accidents, and in most cases, no
product was lost.
2 -
Status
Advanced notice of proposed rulemaking. The closing date for comments was 1/4/91.
Impact on Industry
The addition of thermal protection on cars transporting non-flammable gas will cost
$2,303,000. The addition of thermal protection on cars transporting Styrene Monomer will
cost $1,100,000 for owned cars and $500,000 for leased cars.
The full head shield rules apply to our LPG, Anhydrous Ammonia and Styrene Monomer
cars, plus two transporting Titanium Tetrachloride. If we are required to replace half
shields with full shields, or install full shields, it will cost us $5,200,000 for owned cars and
$3,000,000 for leased cars.
The proposed change in steel specifications would cost Chevron approximately
$125,000,000 for replacement of owned cars and $100,000,000 for leased cars.
The tremendous cost of complying with these rules of questionable benefit, would inhibit
the ability of some companies to remain profitable and certainly drive up consumer costs.
Action Needed
We recommend that HM-175A proposed rulemaking be dropped from the rulemaking
docket.
HM-198A Elevated Temperature Materials
Issue
The Department of Transportation (DOT) Regulation number HM-198A requires that
materials at elevated temperatures meet new classification, Hazardous communication and
placarding regulations. The main impact on Chevron is that previously unregulated
products such as paving and industrial asphalts (and possibly Altamont gas oil/log wax) will
be subject to the DOT Hazardous Materials Regulations.
The stated goal of the regulation is to alert the public and emergency responders and to
specify minimum levels of packaging to minimize the possibility of unintentional releases.
However, HM-198A came about in response to National Transportation Safety Board
(NTSB) recommendations relating to investigations of two serious incidents involving
molten sulfur and molten aluminum.
Status
Final rules published 10/2/91 with a 3/30/92 effective date.
- 3 -
Impact on Industry
It is not clear that the benefits of the regulation outweigh the costs for materials such as
asphalts. Chevron U.S.A. Asphalt estimated costs of $500,000 to cover initial HazMat
training for up to 250 employees. In addition, there would be ongoing costs for recurrent
training and increased truck freight expense. Rates are likely to increase as carriers pass
on the costs of training drivers and upgrading cargo tanks to meet the new requirements.
In reviewing our files, we found that nine incidents involving asphalt loads were reported
to Chevron Supply, Planning and Transportation between 1987 and 1991. This represents
an estimated average incident rate of less than .02 incidents per thousand shipments.
Based on these incident reports, there is no evidence that lack of awareness concerning
the hazards of hot materials may have injured emergency responders or members of the
general public.
Action Needed
We recommend that HM-198A be proposed for regulatory relief by deregulating paving
and industrial asphalts and waxes shipped at temperatures above 212 degrees F, but below
flash point.
Very truly yours,
Jim Selivan
cc:
Mr. Neil R. Eisner
Assistant General Counsel for Regulation and Enforcement,
Review Coordinator
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council of Economic Advisers
Mr. David M. McIntosh
Assistant to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs (OIRA), OMB
Chevron Corporation
225 Bush Street, San Francisco, California 94104-4289
James N. Sullivan
Vice-Chairman of the Board
March 23, 1992
(Supersedes March 19, 1992 Letter)
Mr. William K. Reilly
Administrator
Environmental Protection Agency
WW, Waterside West Building
401 M Street, S.W., Room 1200
Washington, D.C. 20460
Dear Mr. Reilly:
In response to the Request for Comments that was published in the Federal Register on
February 7, 1992, concerning Departmental regulations that substantially impede economic
growth, may no longer be necessary, are unnecessarily burdensome, or impose needless
costs or red tape, the following is submitted for your consideration:
Negligible Risk Provision for Clean Air Act MACT Regulations
Issue
Title III of the Clean Air Act requires EPA to establish technology-based standards,
referred to as Maximum Achievable Control Technology (MACT), to control the emissions
of hazardous air pollutants. EPA has written the first of the MACT rules, the Hazardous
Organic NESHAPS rule, which sets these standards for the synthetic organic chemical
manufacturing industry. EPA has written these rules to require facilities to install MACT
controls regardless of the risk imposed by the facilities.
Status
The Hazardous Organic NESHAPS rule is currently at OMB for review.
Impact on Industry
There are facilities in the refinery and exploration and production source categories that
already have controls such that the risk to the most exposed actual person (MEAP) from
the pollutant emitted is less than 1x10⁻⁶. Requiring these facilities to install controls is not
cost effective and will result in over control.
- 2 -
Action
All air toxic regulations including the HON should contain a provision to allow a facility
to opt out of MACT controls if the facility can demonstrate, by modeling, that the risk to
the MEAP is less than 1x10⁻⁶.
Marine Vapor Recovery
Issue
Title I of the Clean Air Act requires EPA to promulgate marine vapor recovery (MVR)
standards to control emissions from facilities loading and unloading tank vessels. EPA is
proposing to require MVR nationally, even though the statutory provisions calling for it
refer only to ozone non-attainment areas.
Status
EPA is currently preparing the draft rule. They have reviewed marine facility data for
those states which do not already have marine vapor control laws, and have estimated that
about 1800 U.S. facilities load gasoline and crude oil into marine tank vessels.
Impact on Industry
The capital cost of installing MVR control systems will normally range between $5 million
and $30 million each, depending on the complexity. Some very complex systems are
estimated to cost between $75 million and $150 million each. For the 1800 facilities that
could be impacted by this rule, MVR systems would cost about $30 billion. However, EPA
has looked at several thruput options which would exempt smaller transfer facilities and
thereby significantly reduce the financial impact on industry. Currently EPA is favoring a
thruput option referred to as 'Option D', which would control only facilities that load
over 5 million barrels per year of gasoline or 100 million barrels per year of crude oil.
EPA should be encouraged to proceed with this option.
EPA should not apply MVR regulations to facilities that are in areas which are in
attainment for ozone. Such a requirement goes beyond the statutory mandate, and would
cost industry hundreds of millions of dollars.
Action Needed
Marine Vapor Recovery regulations should apply only to facilities that are in ozone non-
attainment areas. EPA should proceed with writing MVR regulations to apply only to
facilities that load over 5 million barrels per year of gasoline or 100 million barrels per year
of crude oil.
- 3 - -
Oxygenated Fuels: Attest Engagements by Independent CPA's
Issue
EPA has proposed to require an independent CPA attestation of compliance with the
oxygenated fuels program. This proposal to establish an independent CPA attestation
compliance program raises two fundamental issues, the significance of which rise far
beyond the oxygenated fuels regulatory program.
This first issue is a basic policy question as to whether the fiscal burden for enforcing laws
should be borne by government or the regulated community. The second issue is a
statutory construction question, calling into issue EPA's authority to make such a dramatic
policy move without the supporting statutory authorization.
Status
EPA is currently reviewing comments on their supplemental notice of proposed guidelines
for the oxygenated fuels program.
Impact on Industry
The proposal to require hiring of expensive, independent CPA's for attest engagements
is an unprecedented and unnecessary cost to impose on the private sector.
Government regulation of the public, both industry and individuals, has been founded on
the premise that government bears the fiscal burden of enforcing the various laws that
govern society's conduct. Congress and the various state legislative bodies carefully
evaluate the manner in which it will allow the executive function of government to police
compliance with these laws and the fiscal resources that should be devoted to such
enforcement. There are many good reasons as to why the government should bear the
fiscal burden of enforcing legal standards.
The program proposed by EPA in the oxygenated fuels area can be equally applied to any
one of thousands of regulatory programs that EPA has promulgated. This dramatic change
in policy need not be limited to EPA; other regulatory agencies, such as the Internal
Revenue Service, could adopt similar enforcement programs. American business could not
effectively compete in international markets with such a significant handicap.
EPA's proposed requirement of an independent CPA attestation of compliance cannot
be viewed in the narrow context of the oxygenated fuels program. The program must be
evaluated in terms of its potentially broader impact. It is questionable whether such a
policy decision should be made without careful consultation with the President and
Congress.
- 4 - -
Action Needed
Eliminate from the proposed guidelines the requirement for an independent CPA
attestation of compliance with the oxygenated fuels program.
Compliance Survey - Reformulated Gasolines (RFG)
Background
Beginning January 1, 1995 refiners are required to supply reformulated gasoline with
reduced emissions of volatile organic compounds (VOC) to certain ozone non-attainment
areas. Through a regulatory negotiation (Reg-Neg) involving EPA and all other interested
parties, compliance with the requirement for 15% reduction in VOC's is to be monitored
through "VOC surveys" which sample service stations in each of those areas. All
refineries supplying an area which fails to comply with the "VOC standard" during a single
survey are ratcheted to a higher VOC reduction requirement in subsequent years.
EPA is violating the Reg-Neg agreement, which it signed, by proposing to ratchet refineries
if the survey shows that gasoline in an area either contains less than 2% oxygen on average
or is above certain Reid Vapor Pressure (RVP) levels. This dual oxygen and RVP
requirement imposes a more stringent VOC reduction requirement than contained in the
Clean Air Act and the Reg-Neg agreement.
Issue
In the gasoline Reg-Neg agreement, all parties--including EPA--agreed to surveys to
monitor compliance with the RFG Program for refineries which comply with RFG
requirements by averaging over the summer. The ratchets EPA will impose if the surveys
uncover a problem are onerous and beyond the scope of the original reg-neg agreement.
Furthermore, EPA's use of separate RVP and oxygen triggers for a VOC ratchet (under
the simple model) removes the limited flexibility remaining for refiners. API instead
supports a VOC equation with an RVP and an oxygen term as the trigger for the VOC
ratchet.
Status
EPA is expected to issue a supplemental notice of proposed rulemaking with this proposal
by March 23, 1992.
Impact on Industry
EPA's proposal could create disincentives to supply areas where a ratchet is in effect,
constrain supply to those areas, and drive up consumer costs.
- 5 -
Action Needed
The survey should be for compliance with VOC reduction requirements based on a
technically-valid equation which relates vehicle emissions to gasoline RVP and oxygen
content.
Drilling Fluid Toxicity Testing
Issue
EPA requires all offshore exploration and production operations to take drilling fluid
samples once a month and at the "End of Well" on every drilling job, and analyze the
samples for toxicity. This requirement is fixed regardless of toxicity of the materials used
to create the drilling fluids, or the knowledge and judgement of the drilling job's
operators. The result of this rigid requirement is the testing for toxicity of drilling fluids
known to be non-toxic.
Drilling fluid toxicity is determined in large part by the materials used to create the fluid.
The toxicity of these materials is well known, and most of these products are in the toxicity
range of no measurable toxicity to relatively non-toxic. Some are less toxic than many
products sold for human consumption.
Status
The drilling fluid testing is required by EPA policy as outlined in the general Gulf of
Mexico OCS Permit (51 FR 24897). A proposed rule making now in progress titled
"Offshore Effluent Limitation Guidelines" would set this policy into regulations (40 CFR
435).
Impact on Industry
Toxicity testing of drilling fluids known to be non-toxic is a waste of time and money. Each
toxicity test costs approximately $1250. Based on Chevron's current level of operations,
the cost of testing fluids known to be non-toxic is about $150,000 per year. This
unnecessary testing costs the oil industry several million dollars annually.
Action Needed
The EPA should delay the proposed rule making to allow the collection of additional
information. The final rule making should include the following points:
Delete required toxicity testing for offshore exploration and production discharges
where only relatively non-toxic to non-toxic drilling fluid materials are used.
6 -
Limit toxicity testing to those discharges containing substances known to be or
expected to produce significant toxicity.
Delete any toxicity testing for drilling fluids not discharged.
Require the EPA to create a list of relatively non-toxic to non-toxic drilling fluid
materials.
Stormwater Regulation: Improve Oil and Gas Exploration and Production Stormwater
Permit Exemption
Issue
The Federal Clean Water Act has a stormwater permit exemption for active oil and gas
facilities (Sec. 402 (1)). However, construction of these sites requires a permit if the site
is larger than five acres including access roads (40 Fed. Reg. 122.26 (b)(14)(x)). We
believe that construction of these sites should be included in the exemption.
Stormwater regulations also eliminate the above exemption if the discharge of stormwater
contains a reportable quantity (RQ) of oil which is defined as a "sheen" and can be as
little as one drop of oil (40 CFR110.3). In order to ensure that we do not discharge
stormwater of this tiny RQ, we may need to add containment systems to our oil handling
facilities to collect all storm water at a considerable expense and with no environmental
benefit. The RQ of a "sheen" needs to be changed to a quantity which realistically and
scientifically harms the environment.
Status
The stormwater regulations which require modification are existing regulations (40 CFR
110.3 and 122.26 (b)(14)).
Impact on Industry
Requiring stormwater permits for construction of our oil and gas exploration facilities and
not including this in the existing exemption is an onerous requirement without an
environmental benefit. It could cost us tens of thousands of dollars to monitor and permit
these sites.
The RQ of a "sheen" of oil which eliminates the oil and gas exploration and production
exemption for stormwater permitting purposes is overkill, and will cost our oil and gas
facilities $5,500,000 by upgrading 300 facilities so that stormwater will be contained. There
- 7 -
will be little environmental benefit provided as a result of this expenditure. It would only
result in capture of an occasional sheen which would otherwise quickly disperse and not
harm the environment.
Action
Regulations should include construction of oil and gas facilities under the oil and
gas facility stormwater permit exemption.
Increase the reportable quantity (RQ) for oil from a sheen to an amount which
realistically poses an environmental risk.
Stormwater Regulations: Prioritize Facilities Requiring Permits Instead of Using Broad
Sic Codes
Issue
The Federal Clean Water Act mandates that "stormwater discharges associated with
industrial activity" apply for a National Pollutant Discharge Elimination System (NPDES)
permit for discharges to storm sewers or waters of the United States by October 1, 1992.
Industrial discharges are described in SEC. 40 CFR 122.26 (b)(14) and include discharges
from facilities in various SIC codes. This regulation does not take into account whether
or not there is a need for a permit. For example, a facility that manufacturers plastic
sewer pipe (for stormwater) under roof but stores the pipe outside is required to obtain
an NPDES permit for stormwater discharge because it is identified by a SIC code in these
regulations. Stormwater runoff from this facility does not pose an environmental danger.
The permitting process is not cost effective.
Status
The Federal Register which describes industrial discharges and requires modification is an
existing regulation (40 Fed. Reg. 122.26 (b)(14)).
Impact on Industry
The stormwater discharge NPDES permitting process is not cost effective in many areas
because it is unnecessary and will not positively impact the environment. The cost of
containing storm water runoff from "unnecessary" areas only because they are included
in the list of SEC. 40 CFR 122.26 (b)(14) could potentially cost our company millions of
dollars without an environmental benefit.
- 8 -
Action Needed
Prioritize sources of stormwater runoff which pose real threats to the environment instead
of using broad classifications and SIC codes. Stormwater permitting and monitoring
programs in many areas are not cost effective, not necessary and will not help the
environment.
Notification of Proposal to List the Coastal California Gnatcatcher as an Endangered
Species
Issue
The Coastal California Gnatcatcher is proposed for protection as an endangered species
under the Endangered Species Act of 1973, as amended. We believe that this proposed
rule is unwarranted and not cost effective. Its rejection or delay will not harm the
environment or the future of the Coastal California Gnatcatcher since there is no
immediate threat to the United States population. The rule should not be promulgated
until there is a conclusive demonstration that the subspecies is genetically distinct.
Delaying the listing process would allow an unbiased reanalysis of data used to define the
subspecies.
This petition is not cost effective for the following reasons:
1.
Protecting the Gnatcatcher is not warranted. The California Game Commission
rejected the same petition since there is no data demonstrating a rapid decline in
its population and the threat to the animal is overstated. Data available from the
Auduban Society bird counts actually show a population increase in the last ten
years. Also, only a small fraction of the bird's habitat is slated for development
over the next twenty years.
2.
There are over three million Gnatcatchers estimated to thrive in Baja California.
Efforts by the petitioners to divide the Gnatcatcher into subspecies have been
accepted by the U.S. Fish and Wildlife staff even though we believe that the
subspecies analysis is flawed and requires further analysis. Accepting the subspecies
theory effectively separates less that one percent (1%) of the 3 million
Gnatcatchers for regulatory protection in the United States.
Status
The proposed rule describing this action was published in the Federal Register on
September 17, 1991. The 180-day public comment period ended on March 16, 1992.
- 9 -
Impact on Industry
This unwarranted listing could cost our Company $75 million dollars in land values and
$95 million dollars in land development profit due to land which cannot be developed
because of a "supposedly endangered species" existing on the property.
Action Needed
Stop or delay the listing of the California Gnatcatcher as an endangered species, (currently
a proposed rule published in the Federal Register on September 17, 1991) until data can
be collected and evaluated which validates the listing.
Our Company has extensive background information on this subject including written
testimony and comments to the State of California and the U.S. Fish and Wildlife Service
and reviews of the literature and studies we are funding. Please contact us if you are
interested in this additional information.
Very truly yours,
Jim Sellivan
cc:
Mr. Richard Morgenstern
Assistant Administrator for Policy, Planning and Evaluation
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council on Economic Advisors
Mr. David M. McIntosh
Assistant to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs (OIRA), OMB
ID # 317277 CU
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5/81
CLEAN AIR
Act-
\
Genera
Chevron Corporation
317277cu
225 Bush Street, San Francisco, California 94104-4289
James N. Sullivan
Vice-Chairman of the Board
March 19, 1992
Mr. William K. Reilly
Administrator
Environmental Protection Agency
WW, Waterside West Building
401 M Street, S.W., Room 1200
Washington, D.C. 20460
Dear Mr. Reilly:
In response to the Request for Comments that was published in the Federal Register on
February 7, 1992, concerning Departmental regulations that substantially impede economic
growth, may no longer be necessary, are unnecessarily burdensome, or impose needless
costs or red tape, the following is submitted for your consideration:
Negligible Risk Provision for Clean Air Act MACT Regulations
Issue
Title III of the Clean Air Act requires EPA to establish technology-based standards,
referred to as Maximum Achievable Control Technology (MACT), to control the emissions
of hazardous air pollutants. EPA has written the first of the MACT rules, the Hazardous
Organic NESHAPS rule, which sets these standards for the synthetic organic chemical
manufacturing industry. EPA has written these rules to require facilities to install MACT
controls regardless of the risk imposed by the facilities.
Status
The Hazardous Organic NESHAPS rule is currently at OMB for review.
Impact on Industry
There are facilities in the refinery and exploration and production source categories that
already have controls such that the risk to the most exposed actual person (MEAP) from
the pollutant emitted is less than 1x10⁻⁶. Requiring these facilities to install controls is not
cost effective and will result in over control.
- 2 -
Action
All air toxic regulations including the HON should contain a provision to allow a facility
to opt out of MACT controls if the facility can demonstrate, by modeling, that the risk to
the MEAP is less than 1x10⁻⁶.
Marine Vapor Recovery
Issue
Title I of the Clean Air Act requires EPA to promulgate marine vapor recovery (MVR)
standards to control emissions from facilities loading and unloading tank vessels. EPA is
proposing to require MVR nationally, even though the statutory provisions calling for it
refer only to ozone non-attainment areas.
Status
EPA is currently preparing the draft rule. They have reviewed marine facility data for
those states which do not already have marine vapor control laws, and have estimated that
about 1800 U.S. facilities load gasoline and crude oil into marine tank vessels.
Impact on Industry
The capital cost of installing MVR control systems will normally range between $5 million
and $30 million each, depending on the complexity. Some very complex systems are
estimated to cost between $75 million and $150 million each. For the 1800 facilities that
could be impacted by this rule, MVR systems would cost about $30 billion. However, EPA
has looked at several thruput options which would exempt smaller transfer facilities and
thereby significantly reduce the financial impact on industry. Currently EPA is favoring a
thruput option referred to as 'Option D', which would control only facilities that load
over 5 million barrels per year of gasoline or 100 million barrels per year of crude oil.
EPA should be encouraged to proceed with this option.
EPA should not apply MVR regulations to facilities that are in areas which are in
attainment for ozone. Such a requirement goes beyond the statutory mandate, and would
cost industry hundreds of millions of dollars.
Action Needed
Marine Vapor Recovery regulations should apply only to facilities that are in ozone non-
attainment areas. EPA should proceed with writing MVR regulations to apply only to
facilities that load over 5 million barrels per year of gasoline or 100 million barrels per year
of crude oil.
- 3 -
Oxygenated Fuels: Attest Engagements by Independent CPA's
Issue
EPA has proposed to require an independent CPA attestation of compliance with the
oxygenated fuels program. This proposal to establish an independent CPA attestation
compliance program raises two fundamental issues, the significance of which rise far
beyond the oxygenated fuels regulatory program.
This first issue is a basic policy question as to whether the fiscal burden for enforcing laws
should be borne by government or the regulated community. The second issue is a
statutory construction question, calling into issue EPA's authority to make such a dramatic
policy move without the supporting statutory authorization.
Status
EPA is currently reviewing comments on their supplemental notice of proposed guidelines
for the oxygenated fuels program.
Impact on Industry
The proposal to require hiring of expensive, independent CPA's for attest engagements
is an unprecedented and unnecessary cost to impose on the private sector.
Government regulation of the public, both industry and individuals, has been founded on
the premise that government bears the fiscal burden of enforcing the various laws that
govern society's conduct. Congress and the various state legislative bodies carefully
evaluate the manner in which it will allow the executive function of government to police
compliance with these laws and the fiscal resources that should be devoted to such
enforcement. There are many good reasons as to why the government should bear the
fiscal burden of enforcing legal standards.
The program proposed by EPA in the oxygenated fuels area can be equally applied to any
one of thousands of regulatory programs that EPA has promulgated. This dramatic change
in policy need not be limited to EPA; other regulatory agencies, such as the Internal
Revenue Service, could adopt similar enforcement programs. American business could not
effectively compete in international markets with such a significant handicap.
EPA's proposed requirement of an independent CPA attestation of compliance cannot
be viewed in the narrow context of the oxygenated fuels program. The program must be
evaluated in terms of its potentially broader impact. It is questionable whether such a
policy decision should be made without careful consultation with the President and
Congress.
- 4 -
Action Needed
Eliminate from the proposed guidelines the requirement for an independent CPA
attestation of compliance with the oxygenated fuels program.
Compliance Survey - Reformulated Gasolines (RFG)
Background
Beginning January 1, 1995 refiners are required to supply reformulated gasoline with
reduced emissions of volatile organic compounds (VOC) to certain ozone non-attainment
areas. Through a regulatory negotiation (Reg-Neg) involving EPA and all other interested
parties, compliance with the requirement for 15% reduction in VOC's is to be monitored
through "VOC surveys" which sample service stations in each of those areas. All
refineries supplying an area which fails to comply with the "VOC standard" during a single
survey are ratcheted to a higher VOC reduction requirement in subsequent years.
EPA is violating the Reg-Neg agreement, which it signed, by proposing to ratchet refineries
if the survey shows that gasoline in an area either contains less than 2% oxygen on average
or is above certain Reid Vapor Pressure (RVP) levels. This dual oxygen and RVP
requirement imposes a more stringent VOC reduction requirement than contained in the
Clean Air Act and the Reg-Neg agreement.
Issue
In the gasoline Reg-Neg agreement, all parties--including EPA--agreed to surveys to
monitor compliance with the RFG Program for refineries which comply with RFG
requirements by averaging over the summer. The ratchets EPA will impose if the surveys
uncover a problem are onerous and beyond the scope of the original reg-neg agreement.
Furthermore, EPA's use of separate RVP and oxygen triggers for a VOC ratchet (under
the simple model) removes the limited flexibility remaining for refiners. API instead
supports a VOC equation with an RVP and an oxygen term as the trigger for the VOC
ratchet.
Status
EPA is expected to issue a supplemental notice of proposed rulemaking with this proposal
by March 23, 1992.
Impact on Industry
EPA's proposal could create disincentives to supply areas where a ratchet is in effect,
constrain supply to those areas, and drive up consumer costs.
- 5 -
Action Needed
The survey should be for compliance with VOC reduction requirements based on a
technically-valid equation which relates vehicle emissions to gasoline RVP and oxygen
content.
Marine Vapor Recovery
Issue
Title I of the Clean Air Act requires EPA to promulgate marine vapor recovery (MVR)
standards to control emissions from facilities loading and unloading tank vessels. EPA is
proposing to require MVR nationally, even though the statutory provisions calling for it
refer only to ozone non-attainment areas.
Status
EPA is currently preparing the draft rule. They have reviewed marine facility data for
those states which do not already have marine vapor control laws, and have estimated that
about 1800 U.S. facilities load gasoline and crude oil into marine tank vessels.
Impact on Industry
The capital cost of installing MVR control systems will normally range between $5 million
and $30 million each, depending on the complexity. Some very complex systems are
estimated to cost between $75 million and $150 million each. For the 1800 facilities that
could be impacted by this rule, MVR systems would cost about $30 billion. However, EPA
has looked at several thruput options which would exempt smaller transfer facilities and
thereby significantly reduce the financial impact on industry. Currently EPA is favoring a
thruput option referred to as 'Option D', which would control only facilities that load
over 5 million barrels per year of gasoline or 100 million barrels per year of crude oil.
EPA should be encouraged to proceed with this option.
EPA should not apply MVR regulations to facilities that are in areas which are in
attainment for ozone. Such a requirement goes beyond the statutory mandate, and would
cost industry hundreds of millions of dollars.
Action Needed
Marine Vapor Recovery regulations should apply only to facilities that are in ozone non-
attainment areas. EPA should proceed with writing MVR regulations to apply only to
facilities that load over 5 million barrels per year of gasoline or 100 million barrels per year
of crude oil.
- 6 -
Drilling Fluid Toxicity Testing
Issue
EPA requires all offshore exploration and production operations to take drilling fluid
samples once a month and at the "End of Well" on every drilling job, and analyze the
samples for toxicity. This requirement is fixed regardless of toxicity of the materials used
to create the drilling fluids, or the knowledge and judgement of the drilling job's
operators. The result of this rigid requirement is the testing for toxicity of drilling fluids
known to be non-toxic.
Drilling fluid toxicity is determined in large part by the materials used to create the fluid.
The toxicity of these materials is well known, and most of these products are in the toxicity
range of no measurable toxicity to relatively non-toxic. Some are less toxic than many
products sold for human consumption.
Status
The drilling fluid testing is required by EPA policy as outlined in the general Gulf of
Mexico OCS Permit (51 FR 24897). A proposed rule making now in progress titled
"Offshore Effluent Limitation Guidelines" would set this policy into regulations (40 CFR
435).
Impact on Industry
Toxicity testing of drilling fluids known to be non-toxic is a waste of time and money. Each
toxicity test costs approximately $1250. Based on Chevron's current level of operations,
the cost of testing fluids known to be non-toxic is about $150,000 per year. This
unnecessary testing costs the oil industry several million dollars annually.
Action Needed
The EPA should delay the proposed rule making to allow the collection of additional
information. The final rule making should include the following points:
Delete required toxicity testing for offshore exploration and production discharges
where only relatively non-toxic to non-toxic drilling fluid materials are used.
Limit toxicity testing to those discharges containing substances known to be or
expected to produce significant toxicity.
- 7 -
Delete any toxicity testing for drilling fluids not discharged.
Require the EPA to create a list of relatively non-toxic to non-toxic drilling fluid
materials.
Stormwater Regulation: Improve Oil and Gas Exploration and Production Stormwater
Permit Exemption
Issue
The Federal Clean Water Act has a stormwater permit exemption for active oil and gas
facilities (Sec. 402 (1)). However, construction of these sites requires a permit if the site
is larger than five acres including access roads (40 Fed. Reg. 122.26 (b)(14)(x)). We
believe that construction of these sites should be included in the exemption.
Stormwater regulations also eliminate the above exemption if the discharge of stormwater
contains a reportable quantity (RQ) of oil which is defined as a "sheen" and can be as
little as one drop of oil (40 CFR110.3). In order to ensure that we do not discharge
stormwater of this tiny RQ, we may need to add containment systems to our oil handling
facilities to collect all storm water at a considerable expense and with no environmental
benefit. The RQ of a "sheen" needs to be changed to a quantity which realistically and
scientifically harms the environment.
Status
The stormwater regulations which require modification are existing regulations (40 CFR
110.3 and 122.26 (b)(14)).
Impact on Industry
Requiring stormwater permits for construction of our oil and gas exploration facilities and
not including this in the existing exemption is an onerous requirement without an
environmental benefit. It could cost us tens of thousands of dollars to monitor and permit
these sites.
The RQ of a "sheen" of oil which eliminates the oil and gas exploration and production
exemption for stormwater permitting purposes is overkill, and will cost our oil and gas
facilities $5,500,000 by upgrading 300 facilities so that stormwater will be contained. There
will be little environmental benefit provided as a result of this expenditure. It would only
result in capture of an occasional sheen which would otherwise quickly disperse and not
harm the environment.
- 8-
Action
Regulations should include construction of oil and gas facilities under the oil and
gas facility stormwater permit exemption.
Increase the reportable quantity (RQ) for oil from a sheen to an amount which
realistically poses an environmental risk.
Stormwater Regulations: Prioritize Facilities Requiring Permits Instead of Using Broad
Sic Codes
Issue
The Federal Clean Water Act mandates that "stormwater discharges associated with
industrial activity" apply for a National Pollutant Discharge Elimination System (NPDES)
permit for discharges to storm sewers or waters of the United States by October 1, 1992.
Industrial discharges are described in SEC. 40 CFR 122.26 (b)(14) and include discharges
from facilities in various SIC codes. This regulation does not take into account whether
or not there is a need for a permit. For example, a facility that manufacturers plastic
sewer pipe (for stormwater) under roof but stores the pipe outside is required to obtain
an NPDES permit for stormwater discharge because it is identified by a SIC code in these
regulations. Stormwater runoff from this facility does not pose an environmental danger.
The permitting process is not cost effective.
Status
The Federal Register which describes industrial discharges and requires modification is an
existing regulation (40 Fed. Reg. 122.26 (b)(14)).
Impact on Industry
The stormwater discharge NPDES permitting process is not cost effective in many areas
because it is unnecessary and will not positively impact the environment. The cost of
containing storm water runoff from "unnecessary" areas only because they are included
in the list of SEC. 40 CFR 122.26 (b)(14) could potentially cost our company millions of
dollars without an environmental benefit.
Action Needed
Prioritize sources of stormwater runoff which pose real threats to the environment instead
of using broad classifications and SIC codes. Stormwater permitting and monitoring
programs in many areas are not cost effective, not necessary and will not help the
environment.
- 9 -
Notification of Proposal to List the Coastal California Gnatcatcher as an Endangered
Species
Issue
The Coastal California Gnatcatcher is proposed for protection as an endangered species
under the Endangered Species Act of 1973, as amended. We believe that this proposed
rule is unwarranted and not cost effective. Its rejection or delay will not harm the
environment or the future of the Coastal California Gnatcatcher since there is no
immediate threat to the United States population. The rule should not be promulgated
until there is a conclusive demonstration that the subspecies is genetically distinct.
Delaying the listing process would allow an unbiased reanalysis of data used to define the
subspecies.
This petition is not cost effective for the following reasons:
1.
Protecting the Gnatcatcher is not warranted. The California Game Commission
rejected the same petition since there is no data demonstrating a rapid decline in
its population and the threat to the animal is overstated. Data available from the
Auduban Society bird counts actually show a population increase in the last ten
years. Also, only a small fraction of the bird's habitat is slated for development
over the next twenty years.
2.
There are over three million Gnatcatchers estimated to thrive in Baja California.
Efforts by the petitioners to divide the Gnatcatcher into subspecies have been
accepted by the U.S. Fish and Wildlife staff even though we believe that the
subspecies analysis is flawed and requires further analysis. Accepting the subspecies
theory effectively separates less that one percent (1%) of the 3 million
Gnatcatchers for regulatory protection in the United States.
Status
The proposed rule describing this action was published in the Federal Register on
September 17, 1991. The 180-day public comment period ended on March 16, 1992.
Impact on Industry
This unwarranted listing could cost our Company $75 million dollars in land values and
$95 million dollars in land development profit due to land which cannot be developed
because of a "supposedly endangered species" existing on the property.
- 10 -
Action Needed
Stop or delay the listing of the California Gnatcatcher as an endangered species, (currently
a proposed rule published in the Federal Register on September 17, 1991) until data can
be collected and evaluated which validates the listing.
Our Company has extensive background information on this subject including written
testimony and comments to the State of California and the U.S. Fish and Wildlife Service
and reviews of the literature and studies we are funding. Please contact us if you are
interested in this additional information.
Very truly yours,
Jim Sellivan
cc:
Mr. Richard Morgenstern
Assistant Administrator for Policy, Planning and Evaluation
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council on Economic Advisors
Mr. David M. McIntosh
Assistant to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs (OIRA), OMB
Chevron Corporation
225 Bush Street, San Francisco, California 94104-4289
James N. Sullivan
Vice-Chairman of the Board
March 19, 1992
The Honorable Manuel Lujan, Jr.
Secretary of the Interior
Interior Building
1849 C Street, NW
Washington, DC 20240
Dear Secretary Lujan:
In response to the Request for Comments that was published in the Federal Register on
February 7, 1992, concerning Departmental regulations that substantially impede economic
growth, may no longer be necessary, are unnecessarily burdensome, or impose needless costs or
red tape, the following is submitted for your consideration:
Royalty Valuation. Documentation and Reporting of Allowances. 30 CFR 206.
Annual Estimates: The requirement contained in 30 CFR 206, to annually file an
estimated allowance for every combination of product and selling arrangement on each
lease prior to taking the deduction, is acknowledged as an administrative burden by both
industry and the MMS. Further, the MMS admits it does not use this information except
for one purpose, which is to place timing restrictions on industry in order to disallow an
allowance in its entirety if a form was not timely sent to the MMS. If the requirement
to file annual estimates is eliminated, it would also eliminate the corollary restriction that
a company can only deduct allowances starting three months before the estimated
allowance paperwork is filed.
Chevron filed 1300 estimated allowance forms in 1991. Estimated total hours = 200.
Annual Actuals: The MMS requires excessive paperwork to document the adjustment
of estimated allowances (which are calculated as part of the monthly royalty payment) to
reflect actual expense. The paperwork is designed to allow the MMS to monitor
allowance deductions, but this is duplicative of the MMS's audit effort.
Chevron filed 1900 actual allowance forms in 1991. Estimated total hours = 1200.
"Excessive" Allowance Petitions: The MMS requires a petition to be filed before a payor
can deduct allowances exceeding 50% of gross proceeds. We believe that the MMS does
little analysis of the data provided in the petition.
Chevron filed 70 petitions in 1991. Estimated total hours = 10.
2
Estimated Allowances: These estimates are used in calculating the monthly royalty
payment. After year-end close, actual costs are calculated. Instead of paying the
difference, or recouping the overpayment as a lump sum on a lease-by-lease basis, the
MMS requires the difference to be allocated to every combination of product and selling
arrangement on the lease for each sales month. We see little value in this level of detail,
and significant manpower is devoted to this allocation effort.
We estimate saving 300 hours of work per year by eliminating this requirement.
Transportation Allocation: The MMS requires that the cost of transporting wet gas and
oil be allocated to products when calculating royalty. This is an administrative burden
with little known benefit to the MMS, and it complicates further the generally tricky issue
of calculating royalties on NGLs and residue.
We estimate saving 100 hours of work per year by eliminating this requirement.
In total, the elimination of the filing and allocation requirements related to the reporting of
allowances noted above would save approximately $100,000 a year in manpower and computer
costs.
Recommendation: Modify 30 CRF 206.105, 206.157, and 206.159 to eliminate the unnecessary
filings and adjustments noted above.
Valuation of Gas Sold Under a Non-Arms Length Contract
The MMS has proposed amendments to 30 CFR 206 to provide greater certainty in valuing gas
sold under non-arms length contract. This MMS proposal accepts gross proceeds from a non-
arms length contract as long as they are not less than the lowest priced available arms length
contract. Chevron believes that this proposal reflects existing MMS policy which has been
effective since March 1, 1988.
Recommendation: We support the adoption of this MMS rule to clarify the valuation of gas sold
under non-arms length contract, subject to the comments submitted by Chevron in its February
12, 1992 letter to the MMS. We recommend that the adoption of this rule not be impeded by
the regulatory moratorium.
3
Section 10 of the Outer Continental Shelf Lands Act
The three onerous parts of Section 10 of OCS are as follows:
(1)
Requests to recoup excess royalty on an OCS lease must be filed within two years of
making the overpayment. The two-year statue of limitations (S/L) is too brief given the
uncertainty surrounding measurement and valuation issues. The MMS rigidly enforces
this Section S/L. We believe that the S/L for recouping excess royalties should be the
same as the MMS' S/L which we argue is six years from the date a payment is made.
Had a longer S/L been available in 1990, Chevron would have been able to recoup
$665,000 in royalties paid on FERC93 proceeds when the courts ruled after the two-year
S/L that royalties were not owed. This is not an isolated instance of the two-year S/L
barring recoupment of an overpayment.
(2)
The government does not pay interest on excess royalty payments on offshore leases.
This is in contrast to the IRS practice of paying interest on overpaid tax collections. This
practice gives the MMS little incentive to expedite refund requests or to expedite
resolution of issues. We believe the MMS should follow the IRS practice of paying
interest on overpaid amounts, both on- and offshore.
(3)
Section 10 provides that refund requests must be submitted to Congress for review. As
a matter of policy, the MMS reviews all refund requests before submitting them to
Congress. All of this causes up to 12-month delays in receiving refunds, resulting in the
lost time value of money. (Chevron submitted 700 requests totalling $12MM in 1991.)
Overpayments on offshore royalties should be handled expeditiously the same as
overpayments on onshore royalties, where industry recoups the money in the course of
its monthly payment process. This would eliminate the manpower devoted to the
burdensome process of documenting the refund requests estimated to cost $200,000
annually, and hasten the return of our overpayments. The MMS would still be able to
maintain appropriate control of this process through the audit program.
Prior to a December 20, 1991, letter from the MMS, industry had been advised that
allowances on offshore production were not subject to Section 10. This allowed Chevron
to recoup royalty overpayments resulting from understated transportation and
manufacturing allowances by reducing current royalty payments, thus saving manpower
in documenting formal refund requests and avoiding the delay in receiving our funds.
Now, however, via a revised "interpretation" of Section 10, MMS has announced that
certain allowance adjustments are subject to Section 10 refund procedures. For reasons
outlined above, this is a big setback to industry, and we believe the new interpretation is
incorrect. We would like to see the December 20 advice retracted.
4
Recommendations:
Legislative Action - We recommend amendment of Section 10 of the OCSLA(1) to increase the
S/L to 6 years from the date payment is made; (2) to require the MMS to pay interest on the
refunded excess royalty payments; and (3) to eliminate the requirement that refund requests
must be reviewed by Congress.
Regulatory Action - We recommend that the MMS retract its December 20, 1991, interpretation
that allowances on OCS production are subject to Section 10. We also support the MMS
undertaking whatever regulatory solution is permitted by statute to address the problems noted
above, including allowing "cross-lease netting" to permit industry to correct errors in allocating
production between two or more OCS leases, thus avoiding interest assessments where the MMS
is not out of pocket for money.
MMS Offshore Operating Orders.
Normal Blow Out Preventor testing generally requires 12 hours to complete a full equipment
evaluation. These tests are conducted every 7 days to satisfy MMS requirements. Along with
each test is a 2-hour minimum time for an individual to properly complete the associated
paperwork. In approximately 95% of the subsequent testing done after the initial test, no
problems have been encountered with faulty or damaged equipment. Also, evidence indicates
that operation. frequent testing may cause premature failure of elements necessary for a safe and prudent
The average offshore rig operating cost is $1725/hour for any given day. With an average of 17
workover or drilling rigs per month operating for Chevron across the Gulf of Mexico in one year,
the cost of BOP testing is over $18,300,000. This cost does not include any extra testing
equipment sometimes required for high pressure testing or the occasional operations which are
interrupted to pull the drill string out of the hole to meet required deadlines.
Recommendation: We recommend the MMS revise its requirements to allow for testing of
BOP's every 14 days instead of every 7, and also provide for a 48-hour grace period. This would
allow for proper periodic testing of equipment and for testing to be accomplished without
interruption of expensive operations. Allowing for a 3-minute test cycle, instead of 5 minutes,
on low pressure and high pressure tests would also reduce the amount of testing time required.
Instead of 12 hours, tests could properly be conducted in an average of 6 hours. With these
minor adjustments to testing, the same 17-rig average per month would cost slightly less than
$5,000,000 for a total savings of $13,000,000.
5
Thank you for the opportunity to comment and to participate in the regulatory review process.
Very truly yours,
Jim Selivan
cc:
The Honorable John E. Schrote
Assistant Secretary for Policy,
Management and Budget
The Honorable Edward T. Cassidy
Deputy Assistant Secretary, Policy
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council of Economic Advisors
Mr. David M. McIntosh
Assistant to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs
(OIRA), OMB
Chevron Corporation
225 Bush Street, San Francisco, California 94104-4289
James N. Sullivan
Vice-Chairman of the Board
March 19, 1992
The Honorable Lynn M. Martin
Secretary of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210
Dear Secretary Martin:
In response to the Request for Comments that was published in the Federal Register on
February 7, 1992, concerning Departmental regulations that substantially impede economic
growth, may no longer be necessary, are unnecessarily burdensome, or impose needless costs or
red tape, the following is submitted for your consideration:
Regulation
Labor Regulation section 2510.3-101.
Purpose of
Regulation
Describes what constitutes assets of a plan with respect to the plan's
investment in another entity.
Recommended
Action
Amend to make less restrictive.
Under these regulations, when an employee benefit plan invests in an entity that is not a
publicly-offered security or a security issued by a registered investment company, the plan's assets
are generally treated as including the underlying assets of the investment entity. Thus, if a plan
invests in a partnership that owns real estate, the plan's assets are generally treated as including
an undivided interest in the real estate. If the sponsor of the plan or any others who have
fiduciary relationships to the plan also have relationships to the underlying assets (e.g., investor,
owner, lessor, lessee), then the plan's investment may be treated as a "prohibited transaction"
under the ERISA and the Internal Revenue Code. The "look-through" rule effectively restricts
the range of pension plan investments to a very narrow band because the risk of an inadvertent
prohibited transaction is very high.
Employer-sponsored pension plans in this country hold enormous sums of money for investment.
Broadening the range of permitted investment by amending these regulations could be a
powerful spur to economic growth.
2
Thank you for the opportunity to comment and to participate in the regulatory review process.
Very truly yours,
Jim Selivan
cc:
The Honorable Nancy Rohrbach
Assistant Secretary for Policy
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council of Economic Advisors
Mr. David M. McIntosh
Assistant to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs
(OIRA), OMB
Chevron Corporation
225 Bush Street, San Francisco, California 94104-4289
James N. Sullivan
Vice-Chairman of the Board
March 19, 1992
The Honorable Nicholas F. Brady
Secretary of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20220
Dear Mr. Brady:
In response to the Request for Comments that was published in the Federal Register on
February 7, 1992, concerning Departmental regulations that substantially impede economic
growth, may no longer be necessary, are unnecessarily burdensome, or impose needless
costs or red tape, the following is submitted for your consideration:
Regulation
Treasury Regulation section 1.401(a)(4)-(0) through (13).
Purpose of
Provides quantitative rules to implement the requirement of Internal
Regulation
Revenue Code section 401(a)(4) that contributions or benefits under
a tax-qualified pension, profit-sharing or stock bonus plan not
discriminate in favor of highly compensated employees.
Recommended
Amend significantly to broaden safe harbors and to eliminate the
Action
"general" test.
For decades, the Internal Revenue Code has required that benefits under a tax-qualified
retirement plan not discriminate in favor of highly compensated employees. More than 30
years ago, the Treasury issued regulations providing that all facts and circumstances would
be taken into account in determining nondiscrimination in benefits. Employers could
request an IRS ruling that the form of its plan met the rules for tax qualification, while
discrimination in a plan's operation could be policed by way of IRS audit. If a plan
discriminated in form of operation, the IRS could disqualify it, resulting in the loss of tax
deductions for employer contributions, loss of tax deferral for the plan trust and loss of
favorable tax treatment for distributions to employees. The IRS had a liberal policy,
however, of permitting employers to correct discrimination and avoid disqualification.
Treasury regulations issued in 1991 under Code section 401(a)(4) take a completely
different approach to determining nondiscrimination in benefits. First, the regulations
prescribe "safe harbor" plan designs that automatically qualify as nondiscriminatory.
Unfortunately, the Treasury has so narrowly drawn the safe harbors that they can be met
by very few plans. If a plan is not a safe-harbor plan, it must demonstrate
- 2 - -
nondiscrimination every single year by passing a "general" test that compares the annual
benefits of highly and nonhighly compensated employees. The general test imposes new
and onerous requirements on employers to gather, analyze and report data concerning
every employee, the employer itself and all of its benefit plans, at a cost of many, perhaps
hundreds, of thousands of dollars each year. The regulations do not permit sampling,
estimating or averaging of data in the application of the general test, which unnecessarily
increases the cost of applying the test and which means that the test can be failed because
of de minimis "violations."
At the same time Treasury issued these regulations, it also announced a new policy with
respect to plans that violate tax-qualification rules. Under the "closing agreement pilot
program" (or "CAPP"), the IRS agrees not to disqualify a plan in exchange for the
employer's agreement to correct the disqualifying defect and its payment of a
nondeductible settlement payment of an amount representing a negotiated portion of the
total tax liability that would have resulted to the employer, the plan trust and to employees
if the plan had been disqualified. In informal discussions, representatives of the IRS have
stated that their objective is that this negotiated portion will be 100 percent. In light of
the CAPP, it is particularly inappropriate for the Treasury to prescribe complex, rigid and
burdensome regulations, like the 401(a)(4) regulations, under which inadvertent violations
are likely to occur. The confluence and the CAPP and these regulations present employers
with two choices: to incur huge compliance-related expenses that are not borne by their
employees. foreign competitors or to terminate plans and shift the burden of retirement savings to
At the urging of Senators Bentsen and Pryor, who threatened to delay the regulations by
legislation, the Treasury acted in February, 1992 to announce a one-year delay in the
effective date of the 401(a)(4) regulations and expressed some willingness to address
employers' concerns. Before making any 401(a)(4) regulations effective, Treasury should
significantly liberalize the regulations' safe harbors to accommodate common plan design
features. The general test should be entirely eliminated, because even with the addition
of sampling, estimating and averaging features, the cost of a quantitative general test would
be unduly burdensome. Moreover, this type of test can never anticipate and accommodate
the myriad of plan designs, employers and employee demographics. Instead, the employer
sponsoring a nonsafe-harbor plan should be permitted to request an IRS ruling that its plan
is nondiscriminatory, based on relevant facts and circumstances, and should be given an
opportunity to correct unintentional discrimination without incurring punitive penalties.
Regulation
Treasury Regulation section 1.414(r)-(0) through (11).
Purpose of
Regulation
Provides rules to permit a controlled group of corporations to
separate its operations into separate lines of business and to apply
the nondiscrimination tests of the Internal Revenue Code to each
line as if it were a separate employer.
- 3 -
Recommended
Amend significantly to simplify and make less restrictive.
Action
As a general rule, all employees of a controlled group of corporations or other businesses
(where control is generally defined at an 80-percent level) are aggregated and treated as
if employed by a single employer for purposes of certain retirement plan qualification rules,
most significantly the rule under Internal Revenue Code section 410(b) requiring that the
plan cover a nondiscriminatory group of highly compensated and nonhighly compensated
employees. Congress was concerned that an employer operating separate lines of business
in fundamentally different markets may find it difficult to comply with Code section 410(b)
on a controlled-group basis and be forced to increase benefits in some lines substantially
above its competitors or reduce benefits in other lines. As part of the Tax Reform Act of
1986, Congress added separate-line-of-business (or "SLOB") rules to section 414(r) of the
Internal Revenue Code to permit a controlled group to treat its bona fide SLOBs as
separate employers when applying plan qualification rules. Each SLOB can then offer an
employee benefit package comparable to its direct competitors.
The 30 pages (in small type, single-spaced on 8.5 X 11 paper) of final regulations issued by
the Treasury under Code section 414(r) are far more complex and restrictive than either
the Internal Revenue Code or the legislative history of section 414(r) contemplate. Even
the Treasury acknowledges that it expects only a few hundred employers to try to qualify
for SLOB treatment. Employers are required to gather and analyze extremely detailed
data about their business operations and all employees in order to satisfy the regulations.
Much of this information is not readily available and will be extremely expensive to
produce. In addition, the substantive requirements of the regulations are so narrowly
defined that most employers operating in what are clearly very different markets will not
be able to avail themselves of SLOB treatment. To meet Congress' goals in enacting the
SLOB rules, significant changes should be made to simplify and liberalize these regulations.
Regulation
Treasury Regulation section 1.125-(1) and (2) (Proposed)
Purpose of
Provides rules concerning so-called "cafeteria" plans.
Regulation
Recommended
Repeal. Alternatively, amend significantly to make less restrictive.
Action
Internal Revenue Code section 125 provides that an employer may provide a "cafeteria"
plan under which employees choose between cash and employee benefits that are
excludable from income under the Code (such as health care coverage or dependent care
assistance benefits). Cafeteria plan benefits are excludable from the employee's income
to the extend the employee chooses excludable benefits rather than cash. From 1984
through 1989, the Treasury has issued a series of proposed regulations on cafeteria plans.
- 4 -
These regulations contain several extremely restrictive rules that have no statutory basis.
In speaking engagements, representatives of the IRS have acknowledged that they intend
these rules to discourage cafeteria plans.
Cafeteria plans are popular because they permit employees to tailor their benefits packages
to meet their individual needs and they enable employers to respond to the varied needs
of a diverse workforce in a cost-effective way. The Treasury's position increases employer
costs unnecessarily. Moreover, it is inappropriate for the Treasury to promulgate
regulations whose spirit is antithetical to the purpose of the statute. The proposed
regulations should be revoked or amended to reflect the purpose of the statute.
Income 1.861-8(g). Tax Regulation Section 1.861-8(e)(6) and Examples 25 through 32 of Section
These existing regulations require a substantial apportionment to foreign source income
of the deduction for state income taxes. The regulations result in a significant added cost
of doing business for multinational companies who are active in California and other states
utilizing worldwide unitary taxation methods. The regulations are a substantial cost and
compliance burden to a relatively small number of multinational companies.
Recommendation: Provide, either through regulations or legislation, that the deduction for
state and local income and franchise taxes is a U.S. source deduction. This would
eliminate a significant compliance burden for affected taxpayers and an audit burden for
the government, and it would improve the competitiveness of those affected taxpayers by
removing a cost of doing business from them that is not borne by their competitors.
Income Tax Regulation Section 1.861-8(e)(3).
These existing regulations require a substantial apportionment to foreign source income
of the deduction for U.S. incurred research and development costs. Since these regulations
were first issued in 1977, they have been the subject of a series of eight Congressional
suspensions and temporary modifications. These regulations result in a substantial added
cost for U.S. multinational companies doing research and development as compared to
their foreign competitors.
Recommendation: Provide in permanent regulations or legislation for the application of
the sourcing rule that is currently in effect under the most recent Congressional
intervention. That rule automatically allocates 64 percent of U.S. performed R&D costs
to U.S. source income, and apportions the remainder.
- 5 -
Income Tax Proposed Regulation Section 1.861-8 (e)(12) and Example 34 of Section 1.861-
8(g).
These proposed regulations require multinational U.S. taxpayers to apportion to foreign
source income some portion of their charitable contributions. The portion is determined
by looking at where the charitable contributions are to be used. These regulations, while
some improvement over prior IRS positions, are difficult to comply with since the taxpayer
must gather information on the use of its charitable contributions. In addition, they are
a disincentive to charitable gifts to entities that may use the gifts overseas.
Recommendation: Provide either through regulations or legislation that all charitable
contributions that are deductible under current law are sourced to domestic income. This
is consistent with the proposal in President Bush's 1993 budget proposal and could be done
through regulations.
Proposed Uniform Capitalization Regulations.
The Uniform Capitalization Regulations which were issued in proposed form in August of
1991 are representative of regulatory overload. These regulations which deal with interest
capitalization cover sixty-eight pages and are extremely complex. The regulations are
inconsistent with the balance of the code in that they change the tax definition of real and
personal property for purposes of capitalization. Such inconsistencies raise the cost of
compliance. The lack of a meaningful de minimis rule will force taxpayers to compute and
record capitalized interest which will result in minimal increase in governmental revenue
(less than $1). In many cases, the cost of compliance will exceed the tax involved.
Thank you for the opportunity to comment and to participate in the regulatory review
process.
Very truly yours,
Jim Selivan
- 6 -
GJK:mh
cc:
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council on Economic Advisors
Mr. David M. McIntosh
Asst. to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs
(OIRA), OMB
à
Chevron Corporation
225 Bush Street, San Francisco, California 94104-4289
James N. Sullivan
March 19, 1992
Vice-Chairman of the Board
The Honorable Barbara Hackman Franklin
Secretary of Commerce
Herbert C. Hoover Building
14th Street & Constitution Avenue, N.W.
Washington, D.C. 20230
Dear Secretary Franklin:
In response to the Request for Comments that was published in the Federal Register on February 7,
1992, concerning Departmental regulations that substantially impede economic growth, may no longer
be necessary, are unnecessarily burdensome, or impose needless costs or red tape, the following is
submitted for your consideration:
15 CFR 930.120 through 930.134
The regulations applicable to appeals to the Secretary of Commerce from consistency rulings on Outer
Continental Shelf oil and gas exploration, development, and production activities provide in Section
930.127 (a) that the Secretary shall provide timely public notice of the appeal within 15 days of
receipt of the notice and in 930.130 (b) that the Secretary shall make all reasonable efforts to complete
consideration of an appeal within 90 days from the date of public notice. Nevertheless, the appeal
process to Commerce has taken an inordinate amount of time. For example: (1) Chevron's
consistency appeal on its Destin Dome exploratory well has been pending with Commerce since March
1991, was not noticed to the public under October 1991 and, presently, there is no certainty when a
decision will be issued by Commerce; (2) Mobil's consistency appeal on its Pulley Ridge Plan of
Exploration is still pending and 37 months have elapsed since the notice of appeal; (3) Chevron's
earlier appeal affecting an exploratory plan on lease OCS P-0525 languished in the Department of
Commerce for more than two years before Commerce issued a decision.
As you can appreciate, considerable investments have been made in these oil and gas ventures. Delays
increase the economic burden thereby making the return on investment less attractive--perhaps
uneconomic. Future projects will be viewed as risky, or even cancelled. The result is less capital
available for much needed domestic oil and gas activities and an increasing flight of investment
capability. dollars to overseas locations--a further drain on the nation's balance of payments and job creating
The solution is easy. No changes in regulations are necessary. We simply request that the Department
of Commerce adhere to the time limitations provided in its regulations.
Thank you for the opportunity to comment and to participate in the regulatory review process.
Very truly yours,
Jim Selivan
- 2 -
cc:
Mr. Wendell L. Willkie II
General Counsel, Department of Commerce
Ms. Margaret Hayes
Assistant General Counsel for Fisheries
National Oceanic and Atmospheric Administration
Department of Commerce
Mr. C. Boyden Gray
Special Counsel to the President
Mr. Michael J. Boskin
Chairman, Council on Economic Advisors
Mr. David M. McIntosh
Asst. to the Vice President for Domestic Policy
Mr. James McRae
Director of the Office of Information and Regulatory Affairs
(OIRA), OMB
ID #
CU
rec'd 2/21
WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
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Subject: the Cost of the Onboard Resueling Vapor
Control System
ROUTE TO:
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A 90,02,26
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Referral Note:
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I
/
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Referral Note:
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I
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-
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ACTION CODES:
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FOR OUTGOING CORRESPONDENCE:
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Comments:
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Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
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5/81
Subject :
CAA - Gen
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
STATES
WASHINGTON. D.C. 20503
FEB 23 1990
NOTE TO JOHN SCHMITZ
FROM:
Nicolas Garcia Net
REASON:
The Cost of the Onboard Refueling Vapor
Control System
EPA's most recent (January 1989) estimate of the cost of the
onboard System is $9.65 per car. This estimate may be too low
for several reasons.
1.
EPA's simplified onboard system does not have some fuel
system modifications and components that likely will be
necessary. For example, we estimate that a vapor/liquid
separator and fuel tank modifications will add about $2.00
to the cost of each onboard system.
2.
EPA's simplified onboard system locates the carbon canister
at the rear of the vehicles. Carbon canisters associated
with current evaporative control systems are typically
located in the front. We estimate that it will cost about
$0.50 per vehicle for automobile companies to re-engineer
the canisters to the rear. In addition there will be some
cost resulting from lost trunk space.
3.
NHTSA has raised concerns that EPA's simplified onboard
system may result in additional vehicle fires and
driveability problems. The automobile companies will likely
have to expend considerable funds to alleviate these
concerns. We do not have an estimate of the cost of this
effort.
We also question EPA's assumption that all vapors trapped by the
canister will be efficiently burned in the vehicle engine. EPA
has no data to support this contention. The vapor purged from
the onboard canister will be more highly variable than vapor from
current evaporative canisters. This variability will make it
difficult to maintain the precise air/fuel ratios, under various
driving conditions, necessary for efficient combustion.
Therefore, we believe that some portion of these vapors will not
add to vehicle mileage and some may even exit the vehicle
uncombusted.
ID #
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Subject: Clean air Veto Letter
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-
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FOR OUTGOING CORRESPONDENCE:
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Comments: No action required. Jest 1/90
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
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5/81
Subject:
Clean Air Act - General
same letter to mitchell
THE WHITE HOUSE
WASHINGTON
January 19, 1990
Dear Senator Dole:
Last July I submitted to the Congress a comprehensive proposal
for reauthorizing and strengthening the Clean Air Act. That
proposal was the result of a long and careful debate within
the Administration, and reflected extensive consultation with
Members of the House and Senate, representatives of affected
industries, state and local governments, and environmental and
public health groups.
Consistent with my belief that environmental protection and
economic growth can be compatible, the Administration's Clean
Air bill seeks to achieve public health and environmental
protection in an economically efficient way by making exten-
sive use of market principles. My comprehensive proposal
carefully balanced our mutual desire for enhanced public
health, a cleaner environment, and sustained economic growth.
Even so, the cost estimate of the Administration's bill to the
American economy is approximately $19 billion annually when
fully phased-in.
As the Senate moves toward floor consideration of the Clean
Air Act, I am convinced that we must maintain the balance
reflected in the Administration's bill. Initial cost
estimates of the Clean Air bill reported by the Senate
Environment and Public Works Committee exceed $40 billion
annually -- more than double the cost of the Administration's
bill. Yet the Committee bill provides little incremental
environmental benefit above that proposed by the Adminis-
tration. And the additional costs of some of the Committee
bill's far-reaching provisions have yet to be incorporated in
these estimates.
I want to sign a Clean Air bill this year -- so that the 1990s
can indeed be known as the "Clean Air decade. But I will
only sign legislation that balances environmental and economic
progress.
2
Specifically, I will only approve legislation which meets the
following minimum tests of balance and reasonableness:
1.) The important environmental protections afforded by the
Administration's bill must be maintained in the final legis-
lation and preserved over time. The Administration proposes
to: reduce sulfur dioxide emissions permanently by 10 million
tons; achieve attainment of ozone, carbon monoxide and
particulate matters standards; and sharply curtail the hazards
posed by air toxics emissions. These represent critically
important steps in achieving clean and healthy air for all
Americans. In view of the environmental and health risks
posed by acid rain; the fact that 100 million Americans now
live in cities which are out of attainment with public health
standards for ozone; and the estimate that current excessive
levels of air toxics emissions may result in premature cancer
deaths and other serious adverse health effects; it is vital
that we move quickly and decisively to reduce these pollu-
tants. The Administration's proposed bill would do just that.
2.) The bill should not impose aggregate costs on the economy
that exceed the already considerable costs embodied in the
Administration's bill -- with an adjustment of no more than
ten percent to reflect certain mobile source provisions added
in the House Energy and Commerce Subcommittee on Health and
the Environment. The House subcommittee added certain provi-
sions affecting mobile sources to the titles of the bill which
relate to non-attainment that will modestly increase the cost
of these titles. Unfortunately, several provisions currently
contained in the Senate Environment and Public Works
Committee's bill -- such as mandatory nationwide second phase
tailpipe standards for automobiles, an inflexible second phase
of air toxics control, and carbon dioxide emissions standards
for mobile sources -- cause the Senate bill to exceed substan-
tially the cost of the Administration bill. The result of an
excessively costly bill will be a less competitive American
economy with fewer jobs for American workers.
The Administration has received letters from around the
country, for example, indicating that a considerable.number of
plant closings could result from adoption of the Senate's air
toxics provisions. The Administration has set up a task force
under the chairmanship of the Council of Economic Advisers,
and including the Environmental Protection Agency, the Office
of Management and Budget, the Department of Energy, and the
White House Office of Policy Development, to monitor and
estimate the economic cost of various clean air proposals as
the debate proceeds.
3
3.) Controls in the bill should be designed to achieve
reductions in the most cost-efficient way -- that is, for the
least cost per ton of reduced pollutant. By incorporating
flexibility and innovation in its recommended control
strategies, the Administration's bill would allow environ-
mental and health standards to be met in a way that creates
maximum choice for both states and regulated industries and
places fewer burdens on consumers. For example, the
Administration's alternative fuels proposal will challenge the
automobile and oil industries to produce cleaner vehicles and
cleaner fuels at the lowest cost to the consumer.
The "command and control" approach embodied in several
provisions of the Environment and Public Works Committee's
bill -- such as that which disallows "netting" for factories
and commercial facilities seeking to meet ozone non-attainment
standards in the most cost-effective way -- results in the
same environmental benefit, but at greatly increased cost
and with sharply increased impediments to economic growth.
Similarly, the provisions in the Environment and Public Works
Committee's bill which move up emissions reduction deadlines
while failing to provide incentives for clean coal technology
needlessly inflate the cost of acid rain control.
4.) The system of emissions trading, which allows acid rain
reductions to be achieved in the least costly and most
equitable fashion, must be allowed to work. The Adminis-
tration's proposed acid rain emissions trading program
inherently reduces the cost of any given level of sulfur
dioxide or nitrogen oxide reduction, and provides an efficient
mechanism for balancing the burdens imposed on any given
region of the country. The Administration has provided
information to several Senators which indicates that this
trading system can dramatically reduce the impact of acid rain
controls on electric utility rates in any given state, while
at the same time reducing the cost of the overall bill by up
to billions of dollars per year. In the first phase, the
initial allocation of required reductions to 107 plants is
essential to ensuring that effective trading opportunities
exist. The trading system must survive in a form that
achieves environmental benefits comparable to those in the
Administration's bill and involves a sufficient number of
plants in the first phase to ensure its workability.
5.) The legislation must not include a national electricity
tax to pay for controls, which would penalize consumers in
those states which have already undertaken reductions by
making them in effect "pay twice" for clean air. Supporters
of such "cost sharing" argue that it is needed to address
regional inequities. Any imbalance in control costs can be
addressed far more effectively, efficiently, and equitably
through the operation of a robust emissions trading
system -- which would not require new taxes.
4
The Administration took substantial time and effort to craft a
balanced proposal. My staff and I stand ready to assist you
and the other Members of both the House and Senate as you work
to develop legislation which maintains this vitally important
balance, and which does not violate one or more of the above
mentioned "tests."
I look forward to signing legislation that will accelerate
progress toward cleaner air for a growing America at the
earliest possible opportunity.
Sincerely,
The Honorable Robert Dole
CyBe
Republican Leader
United States Senate
Washington, D.C. 20510
FEB 08 '90 08:49 EPA
CAA- ben
P.2
1977 AMENDMENTS -- BALANCE OF INFLUENCE BETWEEN HOUSES
In the process leading up to the 1977 amendments to the
Clean Air Act, both houses of Congress contributed substantially
to the shape of the final bill. However, many of the crucial
decisions were driven by the Senate's version of the bill. A few
examples are listed below:
-- Nonattainment. The permit requirement for new sources in
nonattainment areas derived from the House Bill, as did the
program for allowing states with approved attainment plans to
adopt motor vehicle standards equivalent to California's.
However, the principal requirements for SIPs under the bill, such
as inspection and maintenance programs, RACT (reasonably
available control technology for all sources), and the sanctions
(such as highway funding cutoffs) came from the Senate bill.
-- Stack heights. Both bills contained provisions limiting
the credit that could be allowed in SIPs for dispersion from tall
stacks. However, the "good engineering practice" limit on such
stacks that is the heart of Section 123 of the existing Act came
from the House. The Senate's provision was far less detailed.
-- New source review. Both houses had PSD programs. The
final PSD program is an amalgam of both versions, but
incorporates somewhat more of the elements of the Senate than the
House bills.
-- Motor vehicle standards. Both houses would have extended
the statutory standards applicable to 1977 vehicles for two
years. However, the Senate sought greater reductions thereafter
for CO than did the House (to 3.4 grams/mile rather than 9), and
it sought to tighten the NOₓ standard more rapidly than did the
House. These and other differences were compromised.
Although these summaries may not adequately reflect the
process, the final 1977 Amendments result from the confluence of
powerful legislators and particularly knowledgeable staff members
in both Houses. In the House, Representative Rogers relied on
Jeff Schwartz. In the Senate, Senator Muskie relied on Leon
Billings. Both staffers were adroit and versed in great detail
on the bills. Senator Muskie, in particular, developed a command
of the detail of the legislation that gave him even more control
over its content than would be expected from his position as
Chairman of the Committee.
Schwartz and Billings both had strong ties to the national
environmental groups, and guided their patrons wherever possible
to accommodate the concerns of those groups in the legislation.
The Carter Administration's largely reactive posture gave it less
influence, and industry's voice was little heeded.
Today, circumstances have changed. Although Senate staff
generally are sympathetic to the concerns of environmental
FEB 08 '90 08:50 EPA
P.3
groups, and unsympathetic to those of industry, no Senate staffer
wields influence comparable to Billings in 1977. Similarly,
while several Senators have displayed great interest in the
legislation, the Committee chairman, Senator Burdick, has not
immersed himself in detail in the same way that Senator Muskie
did. There is no other comparable commanding figure, including
even Senator Mitchell, whose principal interest is in seeing
strong acid deposition controls.
On the House side, circumstances more closely resemble 1977,
in that a powerful Member -- Committee Chairman Dingell -- is
allied with a powerful staffer with encyclopedic command of the
detail -- Dave Finnegan. Dingell and Finnegan, however, are not
aligned with the environmental groups (though not blind to their
concerns). They have been highly receptive to industry views.
As a result, the Administration has wielded far more
influence in the current debate than in 1977, and it is no longer
a foregone conclusion that the views of environmental groups will
prevail. On the Senate side, environmental groups have publicly
complained of alleged secret deals, and about their own exclusion
from the process. They have little expectation of a more
favorable reception in the House than in the Senate. Because of
these changes, it seems likely that no group -- environmental
groups, industry, states, or the Administration -- will be
disproportionately influential in the forthcoming conference.
ID #.
CU
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act of 1989
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5/81
Subject:
CAG. Gen
Attached
Originally to
Following Page
EXECUTIVE OFFICE OF THE PRESIDENT
STETUTIVE UNITED OFFICE
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
January 22, 1989
LEGISLATIVE REFERRAL MEMORANDUM
TO:
Legislative Liaison Officer -
Environmental Protection Agency (Schilling 382-5414) 326
Department of Commerce (Levitt 377-3151)
324
Department of the Treasury (Carro 566-8523)
228
Department of Justice (Reinhardt 633-2113)
217
Department of Energy (Rabben 586-6718)
209
Department of Transportation (Herlihy 366-4687)
226
Office of Science and Technology Policy
Council of Economic Advisers (Obermiller 395-5046)
242
Department of Defense (Brick 697-1305)
325
Department of State (Rappaport 647-4463)
225
Department of the Interior (Somers 343-4547)
329
Council on Environmental Quality (D. Bear x5754)
256
Department of Agriculture (Shapiro 382-1516)
312
Department of Health & Human Svcs. (White 245-7750)
328
Department of Housing & Urban Development
(Murphy 755-7093)
215
Nuclear Regulatory Commission (Rothschild 492-1607)
227
Department of Labor (Zinman 523-8201)
330
General Services Administration (Brady 523-3956)
237
Small Business Administration (Forbes 653-7581)
315
SUBJECT: FYI - Statement of Administration Policy on S. 1630,
Clean Air Restoration and Standards Attainment act of
1989.
The Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship
to the program of the President, in accordance with OMB Circular
A-19.
Questions should be referred to HOLLY FITTER (395-6194), the
legislative analyst in this office.
RonaldK.Peterson
RONALD K. PETERSON FOR
Assistant Director for
Legislative Reference
Enclosures
CC: LC.B. Gray
K. Glozer
N. Maloley
A. Frass
R. Adkins
G. Bennethum
EXECUTIVE OFFICE OF THE PRESIDENT
THE UNITED
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
January 22, 1990
(Senate)
STATEMENT OF ADMINISTRATION POLICY
(THIS STATEMENT HAS BEEN COORDINATED BY OMB WITH THE CONCERNED AGENCIES.)
S. 1630 - Clean Air Restoration and Standards
Attainment Act of 1989
(Baucus (D) Montana and 12 others)
The President, in a letter to Senate Minority Leader Dole dated
January 19, 1990, reaffirmed his support for reauthorizing and
strengthening the Clean Air Act.
Text of the President's Letter
Last July I submitted to the Congress a comprehensive proposal
for reauthorizing and strengthening the Clean Air Act. That
proposal was the result of a long and careful debate within the
Administration, and reflected extensive consultation with Members
of the House and Senate, representatives of affected industries,
state and local governments, and environmental and public health
groups.
Consistent with my belief that environmental protection and
economic growth can be compatible, the Administration's Clean Air
bill seeks to achieve public health and environmental protection
in an economically efficient way by making extensive use of
market principles. My comprehensive proposal carefully balanced
our mutual desire for enhanced public health, a cleaner
environment, and sustained economic growth. Even so, the cost
estimate of the Administration's bill to the American economy is
approximately $19 billion annually when fully phased-in.
As the Senate moves toward floor consideration of the Clean Air
Act, I am convinced that we must maintain the balance reflected
in the Administration's bill. Initial cost estimates of the
Clean Air bill reported by the Senate Environment and Public
Works Committee exceed $40 billion annually -- more than double
the cost of the Administration's bill. Yet the Committee bill
provides little incremental environmental benefit above that
proposed by the Administration. And the additional costs of some
of the Committee bill's far-reaching provisions have yet to be
incorporated in these estimates.
I want to sign a Clean Air bill this year -- so that the 1990s
can indeed be known as the "Clean Air decade." But I will only
sign legislation that balances environmental and economic
progress.
2
Specifically, I will only approve legislation which meets the
following minimum tests of balance and reasonableness:
1.) The important environmental protections afforded by the
Administration's bill must be maintained in the final legislation
and preserved over time. The Administration proposes to: reduce
sulfur dioxide emissions permanently by 10 million tons; achieve
attainment of ozone, carbon monoxide and particulate matters
standards; and sharply curtail the hazards posed by air toxics
emissions. These represent critically important steps in
achieving clean and healthy air for all Americans. In view of
the environmental and health risks posed by acid rain; the fact
that 100 million Americans now live in cities which are out of
attainment with public health standards for ozone; and the
estimate that current excessive levels of air toxics emissions
may result in premature cancer deaths and other serious adverse
health effects; it is vital that we move quickly and decisively
to reduce these pollutants. The Administration's proposed bill
would do just that.
2.) The bill should not impose aggregate costs on the economy
that exceed the already considerable costs embodied in the
Administration's bill -- with an adjustment of no more than ten
percent to reflect certain mobile source provisions added in the
House Energy and Commerce Subcommittee on Health and the
Environment. The House subcommittee added certain provisions
affecting mobile sources to the titles of the bill which relate
to non-attainment that will modestly increase the cost of these
titles. Unfortunately, several provisions currently contained in
the Senate Environment and Public Works Committee's bill -- such
as mandatory nationwide second phase tailpipe standards for
automobiles, an inflexible second phase of air toxics control,
and carbon dioxide emissions standards for mobile sources --
cause the Senate bill to exceed substantially the cost of the
Administration bill. The result of an excessively costly bill
will be a less competitive American economy with fewer jobs for
American workers.
The Administration has received letters from around the country,
for example, indicating that a considerable number of plant
closings could result from adoption of the Senate's air toxics
provisions. The Administration has set up a task force under the
chairmanship of the Council of Economic Advisers, and including
the Environmental Protection Agency, the Office of Management and
Budget, the Department of Energy, and the White House Office of
Policy Development, to monitor and estimate the economic cost of
various clean air proposals as the debate proceeds.
3
3.) Controls in the bill should be designed to achieve
reductions in the most cost-efficient way -- that is, for the
least cost per ton of reduced pollutant. By incorporating
flexibility and innovation in its recommended control strategies,
the Administration's bill would allow environmental and health
standards to be met in a way that creates maximum choice for both
states and regulated industries and places fewer burdens on
consumers. For example, the Administration's alternative fuels
proposal will challenge the automobile and oil industries to
produce cleaner vehicles and cleaner fuels at the lowest cost to
the consumer.
The "command and control" approach embodied in several provisions
of the Environment and Public Works Committee's bill -- such as
that which disallows "netting" for factories and commercial
facilities seeking to meet ozone non-attainment standards in the
most cost-effective way -- results in the same environmental
benefit, but at greatly increased cost and with sharply increased
impediments to economic growth. Similarly, the provisions in the
Environment and Public Works Committee's bill which move up
emissions reduction deadlines while failing to provide incentives
for clean coal technology needlessly inflate the cost of acid
rain control.
4.) The system of emissions trading, which allows acid rain
reductions to be achieved in the least costly and most equitable
fashion, must be allowed to work. The Administration's proposed
acid rain emissions trading program inherently reduces the cost
of any given level of sulfur dioxide or nitrogen oxide reduction,
and provides an efficient mechanism for balancing the burdens
imposed on any given region of the country. The Administration
has provided information to several Senators which indicates that
this trading system can dramatically reduce the impact of acid
rain controls on electric utility rates in any given state, while
at the same time reducing the cost of the overall bill by up to
billions of dollars per year. In the first phase, the initial
allocation of required reductions to 107 plants is essential to
ensuring that effective trading opportunities exist. The trading
system must survive in a form that achieves environmental
benefits comparable to those in the Administration's bill and
involves a sufficient number of plants in the first phase to
ensure its workability.
5.) The legislation must not include a national electricity tax
to pay for controls, which would penalize consumers in those
states which have already undertaken reductions by making them in
effect "pay twice" for clean air. Supporters of such "cost
sharing" argue that it is needed to address regional inequities.
Any imbalance in control costs can be addressed far more
effectively, efficiently, and equitably through the operation of
a robust emissions trading system -- which would not require new
taxes.
4
The Administration took substantial time and effort to craft a
balanced proposal. My staff and I stand ready to assist you and
the other Members of both the House and Senate as you work to
develop legislation which maintains this vitally important
balance, and which does not violate one or more of the above
mentioned "tests."
I look forward to signing legislation that will accelerate
progress toward cleaner air for a growing America at the earliest
possible opportunity.
*****
(Not to be Distributed Outside Executive Office of the President)
The above floor position was prepared by LR (Fitter). An
information copy has been provided to WHGC, NR, NRES/SS, OIRA, ES,
EPA, CEA, Commerce, Treasury, Justice, Energy, Transportation, OSTP,
DOD, State, Interior, CEQ, USDA, HHS, HUD, NRC, Labor, GSA, and SBA.
A description and critique of S. 1630 has been prepared by EPA in
its "Administration Report on S. 1630," and "Administration and
Senate Clean Air Act Cost Comparison."
ID #
CU
rec'd 2/21
WHITE HOUSE
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590102126
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5/81
Subject
can - Gen.
Document
Page
WILLIAM K. REILLY
TALKING POINTS
Su page 5
NATIONAL WILDLIFE FEDERATION SYNERGY CONFERENCE
January 30, 1990
***AS DELIVERED***
O
THANK YOU VERY MUCH, JAY (HAIR)
--
IF THE FIRST EARTH DAY AND THE EARLY 1970S WERE THE
SALAD DAYS OF THE ENVIRONMENTAL MOVEMENT, THEN
THE 1990S ARE RAPIDLY SHAPING UP AS THE MAIN COURSE
--
AS WE APPROACH THE 20TH ANNIVERSARY OF EARTH DAY
AND AS WE ENTER THE THIRD ENVIRONMENTAL DECADE, I
APPRECIATE THIS OPPORTUNITY TO SHARE A FEW
OBSERVATIONS WITH THE CORPORATE CONSERVATION
COUNCIL
--
I BELIEVE STRONGLY IN EFFORTS OF THIS KIND, ENGAGING
IN EXTENSIVE PROCESSES OF CONSULTATION, EXPLORING
OUR COMMON INTERESTS
--
WE IN THE ENVIRONMENTAL COMMUNITY CANNOT
ACCOMPLISH ANYTHING ENDURING WITHOUT THE CLOSE
COLLABORATION OF THE ECONOMIC SECTOR
--
WE LEARNED IN THE 1970S THAT IT'S POSSIBLE TO PASS
LEGISLATION WITHOUT BUSINESS SUPPORT -- BUT IT'S NOT
POSSIBLE TO MAKE LAWS AND REGULATIONS WORK
EFFECTIVELY WITHOUT CLOSE CONSULTATION,
PARTICIPATION AND A GENUINE EXCHANGE OF VIEWS
--
WE HAVE A VERY FULL PLATE IN FRONT OF US, PILED HIGH
WITH ENTICING -- INDEED IRRESISTIBLE -- CHALLENGES, AND
I DON'T SEE IT GETTING ANYTHING BUT FULLER IN THE
COMING MONTHS AND YEARS
--
BECAUSE THERE IS SO MUCH TO DO, THIS COUNCIL'S WORK
IS OF VITAL IMPORTANCE
--
THE COOPERATION BETWEEN INDUSTRY AND
ENVIRONMENTALISTS THAT YOU HAVE FOSTERED OVER THE
LAST EIGHT YEARS HAS HELPED TO KEEP THE COUNTRY
MOVING TOWARD ITS ENVIRONMENTAL GOALS
AND THAT SAME KIND OF COOPERATION IS GOING TO BE
EVEN MORE INDISPENSABLE IN THE 1990S
--
NOT ONLY FOR THE HEALTH OF THE ENVIRONMENT, BUT
FOR THE HEALTH OF THE ECONOMY AS WELL
- 2 -
--
YOUR WORK WILL HELP POINT THE WAY TOWARD THE
ACCOMPLISHMENT OF TWO VITALLY IMPORTANT GOALS:
THE PROTECTION AND RESTORATION OF THE
ENVIRONMENT; AND SUSTAINABLE, LONG-TERM ECONOMIC
GROWTH
O
THE GREAT DEBATES OF THE 1970S AND EARLY 1980S WERE
CAST TYPICALLY AS ENVIRONMENT-VS-DEVELOPMENT
CONFLICTS; AS CHOICES BETWEEN HIGH LEVELS OF
PROTECTION OF HEALTH AND THE ENVIRONMENT, AND
MAINTENANCE OF JOBS AND U.S. COMPETITIVE
PERFORMANCE
--
ENVIRONMENTAL ISSUES WILL CONTINUE TO POSE HARD
CHOICES AND INVOLVE SERIOUS TRADEOFFS; BUT
INCREASINGLY, THEY ARE TAKING PLACE IN A NEW
CONTEXT: NO LONGER WHETHER, BUT HOW
--
THAT POSES NEW RESPONSIBILITIES ON ALL OF US, AND
PARTICULARLY ON ADVOCATES OF ENVIRONMENTAL
PROGRESS, TO APPROACH PUBLIC ISSUES WITH A
HEIGHTENED REGARD FOR PURSUING ENVIRONMENTAL
GOALS IN THE MOST ECONOMICALLY EFFICIENT MANNER
--
ALL OF US ACKNOWLEDGE THAT A HEALTHY ENVIRONMENT
IS THE UNDERPINNING FOR A SUSTAINABLE ECONOMY; LET
US, THEN, IN THE NEW CLIMATE OF OPINION, RESOLVE
GENUINELY TO WORK TO INTEGRATE THE NATION'S
ENVIRONMENTAL GOALS WITH OUR ECONOMIC ASPIRATIONS
O
LET ME TURN NOW TO A SPECIFIC PRIORITY - THE CLEAN
AIR ACT
--
THE PRESIDENT HAS MADE REAUTHORIZING AND
STRENGTHENING THAT LAW HIS TOP LEGISLATIVE PRIORITY
--
THANKS TO THE ORIGINAL CLEAN AIR ACT, WE'VE MADE
SIGNIFICANT PROGRESS IN REDUCING AIR POLLUTION IN
THE LAST TWENTY YEARS
- 3 -
--
BUT HIGH LEVELS OF SMOG, ACID RAIN, AND AIR TOXICS
REMAIN, AND THEY CONTINUE TO ENDANGER THE HEALTH
OF THE AMERICAN PEOPLE AND THE WELL-BEING OF OUR
ENVIRONMENT
--
THE PRESIDENT HAS PROPOSED A CREATIVE, INNOVATIVE
APPROACH, BASED LARGELY ON MARKET PRINCIPLES, TO
ACCOMPLISH THE INTERTWINED GOALS OF CLEANING UP
THE NATION'S AIR AND INSURING SUSTAINED ECONOMIC
GROWTH
--
THE PRESIDENT'S PROPOSAL WOULD PUT THE UNITED
STATES ON THE PATH TOWARD DRAMATICALLY CLEANER
AIR BY THE END OF THE CENTURY:
--
ACID RAIN POLLUTANTS WOULD BE CUT BY NEARLY HALF;
--
MOST URBAN AREAS IN THE COUNTRY WOULD FINALLY
ATTAIN NATIONAL CLEAN AIR STANDARDS;
--
AND TOXIC AIR POLLUTANTS WOULD BE SLASHED BY TENS
OF MILLIONS OF POUNDS A YEAR
O
THE PRESIDENT'S PROPOSAL AIMS HIGH
ENVIRONMENTALLY - AND IT ALSO MEETS THE ECONOMIC
CHALLENGE
---
IT REDUCES EMISSIONS BY THE MOST COST-EFFECTIVE
MEANS AVAILABLE, USING MARKET-BASED PRINCIPLES
WHENEVER POSSIBLE
--
NOW, IF YOU'VE BEEN FOLLOWING THE CLEAN AIR DEBATE
SO FAR, YOU'RE PROBABLY WONDERING WHAT TO BELIEVE
ABOUT THE COSTS AND BENEFITS OF THE VARIOUS
PROPOSALS NOW BEFORE THE CONGRESS
- 4 -
--
THE ESTIMATES ARE ALL OVER THE LOT:
--
INDUSTRY GROUPS ARE SAYING THAT SOME PROPOSALS
WILL COST MORE THAN $100 BILLION AND WILL LEAD TO
WIDESPREAD INDUSTRIAL SHUT-DOWNS AND LOSS OF
PRODUCTIVITY
--
THE AMERICAN LUNG ASSOCIATION, ON THE OTHER HAND,
HAS ESTIMATED THE HEALTH COSTS FROM MOTOR VEHICLE
POLLUTION ALONE AT AS MUCH AS $50 BILLION A YEAR
--
AND ONE REPORT, BY TWO INDUSTRY CONSULTANTS
WRITING IN REGULATION MAGAZINE, PEGGED THE COST OF
THE PRESIDENT'S PROPOSALS FOR CONTROLLING TOXIC AIR
POLLUTION FROM INDUSTRIAL SOURCES AT BETWEEN $4
BILLION AND $9 BILLION TO AVOID JUST ONE CASE OF
CANCER!
--
I MUST SAY THIS BATTLE OF NUMBERS REMINDS ME OF THE
TIME PRESIDENT LINCOLN AND HIS ADVISORS WERE
DISCUSSING CIVIL WAR MANPOWER AND RESOURCES
--
SOMEONE ASKED LINCOLN HOW MANY MEN THE
CONFEDERATES HAD IN THE FIELD
--
AND TO THE ASTONISHMENT OF EVERYONE PRESENT, HE
PROMPTLY ANSWERED, "TWELVE HUNDRED THOUSAND" - --
FULLY THREE TIMES THE NUMBER OF UNION TROOPS
--
"YOU SEE," LINCOLN EXPLAINED, "ALL OUR GENERALS,
EVERY TIME THEY GET WHIPPED, THEY TELL ME THAT THE
ENEMY OUTNUMBERED THEM AT LEAST THREE TO ONE,
AND I MUST BELIEVE THEM
--
"WE HAVE FOUR HUNDRED THOUSAND MEN IN THE FIELD.
AND THREE TIMES FOUR EQUALS TWELVE. SO THE
CONFEDERATES HAVE TWELVE HUNDRED THOUSAND MEN.
NO DOUBT ABOUT IT!"
--
WELL, I THINK WE'D BE WISE TO TAKE A SIMILARLY
SKEPTICAL VIEW OF SOME OF THE NUMBERS NOW BEING
BANDIED ABOUT WITH RESPECT TO CLEAN AIR
- 5 -
O
WE AT EPA HAVE OUR OWN NUMBERS; AND THEY FALL
BETWEEN THE TWO EXTREMES
--
THE BEAUTY OF THE PRESIDENT'S PROPOSAL IS THAT
BY ALLOWING FLEXIBILITY AND INCORPORATING
INNOVATIVE MARKET INCENTIVES, IT WILL ACHIEVE
THE POLLUTION REDUCTIONS WE NEED IN THE MOST
COST-EFFECTIVE WAY POSSIBLE
O
UNFORTUNATELY, THE SAME CANNOT BE SAID OF SOME OF
THE AIR TOXICS PROVISIONS IN THE BILL REPORTED OUT BY
THE SENATE ENVIRONMENT AND PUBLIC WORKS
COMMITTEE
--
OUR COST ANALYSES SHOW THAT THE ADMINISTRATION'S
AIR TOXICS PROVISION WILL COST ABOUT $4.6 BILLION PER
YEAR IN ITS SECOND PHASE
--
THE AIR TOXICS PROVISIONS IN THE SENATE BILL WILL COST
ABOUT $10 BILLION -- MORE THAN DOUBLE THE COST OF
THE ADMINISTRATION'S PROPOSAL
--
BOTH THE PRESIDENT'S PROPOSAL AND THE SENATE BILL
USE A SIMILAR TECHNOLOGY-BASED APPROACH FOR THE
FIRST PHASE OF REQUIRED AIR TOXICS REDUCTIONS
--
THIS IS CLEARLY THE MOST EFFECTIVE WAY TO DEAL WITH
THIS COMPLEX PROBLEM
--
BUT THE SENATE BILL ALSO INCLUDES A SECOND PHASE
EMISSIONS REDUCTION REQUIREMENT -- A "RESIDUAL RISK"
PROVISION -- WHICH SERIOUSLY THREATENS THE EXISTENCE
OF KEY PLANTS AND INDUSTRIES
--
THIS PROVISION WOULD REQUIRE FACILITIES TO REDUCE
THEIR EMISSIONS TO A SO-CALLED "BRIGHT LINE"
INDIVIDUAL RISK LEVEL
- 6 -
--
RATHER THAN GIVING EPA THE FLEXIBILITY TO ADDRESS
ON A CASE-BY-CASE BASIS THE RISK THAT REMAINS AFTER
CONTROLS ARE APPLIED, AS THE ADMINISTRATION'S
PROVISION FOR THE SECOND PHASE OF AIR TOXICS
REDUCTIONS ENVISIONS
--
UNDER THE SENATE BILL, ANY SOURCE THAT POSES A
LIFETIME CANCER RISK GREATER THAN ONE IN 10,000 TO
THE "MAXIMUM EXPOSED INDIVIDUAL" IN ITS VICINITY
WOULD HAVE TO CONTROL ITS EMISSIONS BELOW THAT
LEVEL OR SHUT DOWN
--
THIS "BRIGHT LINE" REQUIREMENT WOULD RELY ON THE
MISUSE OF THE RESULTS OF RISK ASSESSMENTS WHICH
WERE NEVER INTENDED FOR THAT PURPOSE
--
A "BRIGHT LINE" APPROACH TAKES ONE WORST-CASE
NUMBER OUT OF A RISK ASSESSMENT AND MISUSES IT IN
TWO WAYS:
--
FIRST, IT TREATS THAT NUMBER AS A TRUE RISK, WHEN IT
IS IN FACT A WORST-CASE ESTIMATE THAT IS ONLY AS
RELIABLE AS THE UNDERLYING DATA
--
AND SECOND, IT TREATS THE NUMBER AS THE SOLE
CORRECT MEASURE OF PUBLIC HEALTH, WHEN IT IS ONLY
ONE PIECE OF INFORMATION IN AN EXAMINATION THAT
SHOULD COVER ALL ASPECTS OF PUBLIC HEALTH
--
SO THE "BRIGHT LINE" NUMBER IGNORES MANY "REAL-
WORLD" CONSIDERATIONS, SUCH AS THE NUMBER OF
PEOPLE WHO ARE ACTUALLY AT RISK, AND IT FAILS TO
TAKE INTO ACCOUNT MANY OTHER FACTORS AND
UNCERTAINTIES THAT EPA MUST CONSIDER
--
SUCH A STANDARD COULD LEAD TO UNACCEPTABLE
ECONOMIC AND SOCIAL COSTS, INCLUDING THE CLOSING OF
FACILITIES AND THE LOSS OF HUNDREDS OR THOUSANDS OF
JOBS, WITHOUT COMPARABLE ENVIRONMENTAL BENEFITS
-7-
--
THE ADMINISTRATION'S BILL WOULD ELIMINATE
APPROXIMATELY 80 PERCENT OF THE TOXIC SUBSTANCES
EMITTED FROM STATIONARY SOURCES IN ITS FIRST PHASE
--
THE SENATE BILL PURPORTS TO ELIMINATE ALL REMAINING
RESIDUAL RISKS IN PLANTS THAT HAVE ALREADY
INSTALLED THE BEST TECHNOLOGY
--
THE PRESIDENT'S BILL, TOO, WOULD ADDRESS WHATEVER
RISKS REMAIN
--
BILL ROSENBERG, EPA'S ASSISTANT ADMINISTRATOR FOR AIR
AND RADIATION, RECENTLY DESCRIBED TO ME HIS VISIT TO
A NATIONAL STEEL PLANT IN DETROIT
--
THAT 30-YEAR-OLD PLANT WAS RECENTLY RENOVATED,
INCLUDING AN INVESTMENT OF MILLIONS OF DOLLARS FOR
POLLUTION CONTROL
--
IT NOW EMPLOYS 5,000 PEOPLE, INCLUDING MANY WOMEN
AND MINORITIES, WHO EARN $25 AN HOUR IN A REGION
THAT IS OTHERWISE ECONOMICALLY DISTRESSED
--
NOW, I THINK DECISIONS ABOUT THE FUTURE CONTROL OF
SUCH A PLANT, WHEN ITS VERY SURVIVAL IS AT STAKE,
SHOULD BE BASED ON A FULL CONSIDERATION OF REAL,
NOT THEORETICAL WORST CASE, PUBLIC HEALTH FACTORS
--
THE COMMUNITY'S, AND THE NATION'S, INTEREST IN THAT
PLANT, AND OTHERS LIKE IT, IS LARGE ENOUGH THAT WE
DARE NOT DESTROY IT ON PURE SURMISE
--
YET AS IT NOW READS, THE SENATE BILL COULD CAUSE
THAT PLANT TO SHUT DOWN
- 8-
--
IS THIS GOOD PUBLIC POLICY? TO MAKE DECISIONS
PUTTING PEOPLE OUT OF WORK WITHOUT CONSIDERING
THE PUBLIC HEALTH AS A WHOLE, WITHOUT CONSIDERING
THE RISK ASSESSMENT UNCERTAINTIES, THE POTENTIAL FOR
FUTURE DEVELOPMENT OF CONTROL TECHNOLOGIES, WITH
ALL THE DISTRESS OF AN ECONOMIC CALAMITY FOR
THOUSANDS OF PEOPLE, FOR AN ENTIRE COMMUNITY,
POSSIBLY A WHOLE INDUSTRY?
--
I THINK IT'S IMPORTANT FOR THE EPA ADMINISTRATOR TO
WEIGH ALL OF THESE FACTORS; TO MAKE SURE THAT WE
CONSIDER EVERYTHING THAT'S IMPORTANT TO PEOPLE'S
WELL-BEING, AND TO BE ALLOWED TO INCLUDE ECONOMIC
AND HEALTH FACTORS IN THE FINAL SHUTDOWN CALCULUS
O
BY THE YEAR 2010, THE ADMINISTRATION'S AUTO CONTROLS
(BOTH FUELS AND TAILPIPE EMISSIONS) WILL PROVIDE A 26.2
PERCENT REDUCTION IN VOLATILE ORGANIC COMPOUNDS,
OR VOCS
--
THE SENATE BILL WOULD PRODUCE A 28.7 PERCENT
REDUCTION -- AND THE DIFFERENCE IS EVEN SMALLER IN
20005
--
THIS ADDITIONAL 2.5 PERCENT REDUCTION WILL COST MORE
THAN $8 BILLION A YEAR
--
MOREOVER, THE ADMINISTRATIONS ALTERNATIVE FUELS
PROPOSAL WOULD CLOSE MOST OF THE GAP IN
REDUCTIONS, REDUCING EMISSIONS AN ADDITIONAL 1.6
PERCENT
--
SO MY MESSAGE TO INDUSTRY IS, WORK WITH US TO BRING
RISKS TO HEALTH DOWN, AND DOWN SHARPLY
--
HELP US SOLVE THIS PROBLEM PROMPTLY AND FINALLY
--
AND MY MESSAGE TO ENVIRONMENTALISTS IS, RECOGNIZE
THAT WE WILL WANT TO DO MANY THINGS IN THE YEARS
AHEAD -- SOME OF WHICH WILL INVOLVE NEW LEGISLATION
AND MORE MONEY
- 9 -
--
LET'S DON'T SPEND IT ALL ON CLEAN AIR, WITHOUT
GETTING THE COMMENSURATE GAINS
O
THE PRESIDENT'S CLEAN AIR PROPOSALS, BY CAPTURING
MARKET FORCES AND PUTTING THEM TO WORK ON BEHALF
OF CLEAN AIR, WILL BRING ABOUT BOTH ENVIRONMENTAL
IMPROVEMENTS AND HEALTHY ECONOMIC GROWTH OVER
THE LONG TERM
--
THESE ARE GOALS I THINK WE ALL SHARE, AND I HOPE YOU
WILL WORK WITH US TO SECURE A NEW CLEAN AIR ACT
THAT ACHIEVES BOTH ENVIRONMENTAL PROTECTION AND
ENVIRONMENTALLY SOUND, SUSTAINABLE ECONOMIC
GROWTH
--
AND LET'S DO IT BY EARTH DAY!
--
THANK YOU, AND MY BEST WISHES FOR A VERY
SUCCESSFUL CONFERENCE
- 10 - -
--
THE ACID RAIN PROVISIONS, FOR EXAMPLE, COUPLE A
MARKET-BASED TRADING SYSTEM WITH A CAP ON EMISSIONS
THAT CAUSE ACID RAIN; THIS APPROACH HAS STRONG
SUPPORT IN BOTH THE HOUSE AND THE SENATE, AND ITS
ENACTMENT WILL BE A REAL BREAKTHROUGH IN
MARRYING ENVIRONMENTAL REGULATION AND MARKET
EFFICIENCIES
--
THE MARKET-BASED APPROACH, BY THE WAY, WILL ALSO
HELP REDUCE EMISSIONS OF CARBON DIOXIDE AND OTHER
GREENHOUSE GASES, BECAUSE IT WILL GET INDUSTRY
THINKING IN TERMS OF GREATER EFFICIENCY IN THE USE
OF FOSSIL FUELS
--
WE ALSO THINK IT'S IMPORTANT TO CREATE INCENTIVES
FOR THE DEVELOPMENT OF CLEAN COAL TECHNOLOGY,
AND WE HOPE THE SENATE WILL ADD THIS ASPECT OF THE
PRESIDENT'S PROPOSAL TO ITS BILL
O
WITH RESPECT TO SMOG, THE ADMINISTRATION'S PROPOSAL
WOULD REQUIRE A THREE PERCENT PER YEAR REDUCTION
IN EMISSIONS THAT CONTRIBUTE TO OZONE FORMATION
--
THIS IS COUPLED WITH AN INNOVATIVE ALTERNATIVE FUELS
PROGRAM THAT CHALLENGES OIL AND AUTO
MANUFACTURERS TO PRODUCE CLEANER CARS THAT
OPERATE ON CLEANER FUELS
--
THE SENATE BILL USES THE SAME BASIC APPROACH, BUT
ADDS A VERY EXPENSIVE SECOND ROUND OF AUTOMOBILE
TAILPIPE EMISSION CONTROLS - AT A COST OF MORE THAN
$500 PER CAR -- AND SUBJECTS TOO MANY SMALL FACILITIES
TO EXPENSIVE COMMAND-AND-CONTROL REQUIREMENTS
--
THOSE REQUIREMENTS PROVIDE LITTLE OR NO ADDITIONAL
ENVIRONMENTAL BENEFIT, BUT SUBSTANTIALLY INCREASE
THE COSTS OF THE LEGISLATION -- AND FOR THAT REASON,
THE ADMINISTRATION OPPOSES THEM
SEE THE FOLLOWING PAGES
3
7-9
24-25
34-35
38-41
8.
ANSCRIPT OF PROCEEDINGS
ON
1220 LS
PRESS AVAILABILITY
FEBRUARY 12, 1990
ASSOCIATED PRESS
JOE HEBERT
UNITED PRESS INTERNATIONAL
GEORGE LOBSENZ
REUTERS
BOB KEARNS
WASHINGTON POST
MIKE WEISSKOPF
WALL STREET JOURNAL
BARBARA ROSECWICZ
LOS ANGELES TIMES
RUDY ABRAMSON
USA TODAY GANNETT NEWS
RAE TYSON
ABC NEWS
BETTINA GREGORY
NBC NEWS
LES KRETMAN
CBS NEWS
DEBORAH POTTER
CABLE NEWS NETWORK (CNN)
PATRICIA OCHS
INSIDE EPA
JULIE EDELSON
BALTIMORE SUN
LIZ BOWIE
NATIONAL JOURNAL
MARGIE KRIZ
SCIENCE MAGAZINE
MARJORIE SUN
STATES NEWS SERVICE
CHUCK WILKINS/DANIELLE HERUBIN
REM RIEDER
SCRIPPS-HOWARD
ROBERT ENGELMAN
GANNETT NEWS SERVICE
ELLEN HALE
NEWHOUSE NEWS SERVICE
MAX GATES/HUGH VICKORY
KNIGHT-RIDDER NEWSPAPER
MATT PURDY
COX NEWSPAPERS
JEFF NESMITH
HEARST NEWSPAPERS
DAVID CRAWSON
OTTOWAY NEWS SERVICE
WINSTON WOOD
CHRISTIAN SCIENCE MONITOR
MARSHALL INGUERSON
WASHINGTON TIMES
RON TAYLOR
ED FLATTAU
(COLUMNIST)
1
1
2
3
4
5
6
7
8
ENVIRONMENTAL PROTECTION AGENCY
9
10
REILLY PRESS AVAILABILITY - MAJORS
11
12
FEBRUARY 12, 1990
13
14
15
16
This transcript was taken from a live tape
17
provided by the United State Environmental Protection
18
Agency.
19
20
21
22
23
24
25
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PROCEEDINGS
2
MR.
: Well, it was a week like any
3
other last week here, filled with those events that alter
4
and illuminate our time, but are increasingly just par for
5
the course. I think it's a measure of the degree to which
6
the environment has risen on the radar scope of everyone,
7
both within and without the Administration, that we found
8
ourself in the center of global warming, wetlands, clean
9
air, oil spills, a little bit of food safety. What have I
10
missed?
11
Cabinet status, that's right. Legislation.
12
I don't have an opening statements, and I am sure
13
you will supply all the energy I need to muster up some
14
information on each of those issues, or others. So, the
15
floor is open.
16
MR.
: Perhaps we could begin with
17
the global warming issues and the IPCC. I would sort of
18
like to just invite you to comment on the alleged spat
19
between you and the White House, and Sununu in particular.
20
And also, address the concerns expressed to me by a number
21
of environmental groups after the President's speech and at
22
the conclusion of the IPCC gathering, in which his sense was
23
conveyed that the organization was left in somewhat
24
disarray.
25
MR.
: IPCC?
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MR.
: That there were a lot of
2
divisions at the conclusion of the gathering, and the sense,
3
again, conveyed that somehow the United States hadn't taken
4
the kind of leadership role that might have prevented that.
5
MR. Reilly
: I hadn't heard that,
6
actually, that that had come from the delegates there.
7
Let me say that I think the President did what we
8
needed to have done at this point in the IPCC deliberations.
9
First of all, he dignified those proceedings and made clear
10
by his unprecedented appearance there, no other head of
11
state has spoken to the IPCC, that this is the forum, that
12
is the process that we believe should lead to the
13
negotiations for a treaty.
14
He made clear by the specific initiatives that are
15
in his budget this year, that we take the climate change
16
problem itself very seriously. The decision to support the
17
planting of a billion trees a year; to go forward with clean
18
air legislation that the Environmental Defense Fund has said
19
will remove CO2 at an equivalent basis of getting a fifth of
20
our car fleet off the road for 10 years; the 50 percent
21
increase in funding for research and monitoring of climate
22
change; and the invitation to host to other countries to
23
come to the United States, where we would host a framework
24
convention -- I think makes it clear that we are on a course
25
that we expect will lead to a treaty. We understand what a
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treaty will involve.
2
It will involve a set of agreements on equivalency
3
of greenhouse gases, on a schedule for protocols, and,
4
finally, protocols themselves.
5
What a number of people are upset about, I think,
6
has to do with the unwillingness thus far of the
7
Administration to commit to specific reductions of CO2 by a
8
date certain. Quite frankly, we don't know what
9
implementation strategies or what the cost would be as, of
10
this point, of electing those reductions, and we are
11
beginning to go into a phase when it's quite clear there
12
will be serious negotiations that have potentially
13
significant economic consequences with other countries about
14
all of that.
15
We, the Council of Economic Advisors, others, are
16
looking at cost information. We are trying to get a sense
17
of what's realistic, what our own base is as of this point,
18
and that of other countries, and we will be prepared for
19
those negotiations. In fact, sooner rather than later.
20
One of the discussions I had was about the
21
possibility of our entering negotiations in August or
22
September, rather than waiting for the conclusion of the
23
World Meteorological Conference, World Climate Conference,
24
in Geneva in November. People don't think that's a good
25
idea, I gather, in close to the process. And so, we will
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wait a little longer.
2
But we very much hope that a framework convention
3
will be agreed to in the first term of the Bush
4
Administration, and we're committed to it.
5
Where you have the kinds of uncertainties about
6
the data that we have in the climate field, the distrust of
7
the models as of this point, the sense that they are
8
relatively primitive, the oscillations in the indications of
9
severity of the warming -- we've seen it go up and down in
10
the last several months even, and the potential economic
11
effects -- I think it is only reasonable that you are going
12
to have significant divisions on some issues within the
13
Government. We have in this Government and every other
14
government I'm aware of has them.
15
They, as of this point, do not cause us to deflect
16
us from the course that would lead to a treaty. But they do
17
have an impact on the language that's used, the sense of
18
urgency that's expressed, and obviously have led to some of
19
the criticisms that we have received.
20
The long course that's been set, though, in the
21
first year, we are adhering to. And the President has --
22
when the moment has come to make key decisions, such as will
23
we support a phase out of CFC; will we commit to a treaty;
24
will we commit, in fact, to host it; will we increase our
25
resources for climate change research; will we support the
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IPCC; will we share the response strategies working group
2
and lead in that effort -- in every case, we have been
3
constructive, I think, and positive, and done what the
4
urgency of that problem, the seriousness of it, will or do
5
require.
6
MS.
: The President didn't
7
reiterate a position that came out of (inaudible) to
8
stabilize as soon as possible?
9
MR. Reilly
: That's right, and that is one
10
of those nuances that I think people have identified as
11
missing from the speech that has been criticized.
12
MS.
: And do you think that's a
13
fair criticism?
14
MR.
: Well, I think that --
15
MS.
: Can it be interpreted as
16
backpedaling, that we are not committed to stabilize
17
(inaudible) ?
18
MR. Reilly
: I hope it's not. I hope it's
19
not. I believe very much that, as a matter of principle, we
20
have to acknowledge what virtually all atmospheric
21
scientists have made clear to me, and that is, that
22
ultimately a continuation of CO2 build-up in the atmosphere
23
will lead to warming, and a doubling of CO2 may well lead to
24
significant warming. We're talking about a matter of time,
25
insofar as I, a nonscientist, am aware, based on contact
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with scientists.
2
Mike.
3
MR.
: Well, increasingly your
4
position is that losing out in the debates over
5
environmental policy of alternative fuels, there is a clash
6
with Sununu during the House hearing, looks more and more
7
like it wasn't just a faulty breakdown in communication, but
8
a real kind of clash in principle.
9
On wetlands and global warming issue, and you only
10
know how many other issues, the issues come --
11
MR.
: I suspect you know as well as
12
I do.
13
(Laughter.)
14
MR.
:
I think I have learned from
15
you all. And probably a little more.
16
MR.
: The question comes up around
17
environmentalists' board meetings, and even in Congress,
18
about who is in charge of environmental policy.
19
What's your answer?
20
MR. Reilly
:
The President's clearly in
21
charge of environmental policy. On all of the issues that
22
we have addressed of any significance, he has been very
23
aware, and certainly on the global climate issue, himself
24
elected to make the speech that he made.
25
I think that the reality is that we are advocates
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for the environment. I see my own role as that. And as an
2
advocate, it's only realistic that we will get out from time
3
to time beyond others and perhaps occasionally get yanked
4
back.
5
My sense is that WB have won far more than we have
6
lost in this Administration. And when I look down the list,
7
I don't think we have lost on clean fuels at all. The
8
position the Administration has in the Senate and in the
9
House is not Hallfields. It's something that goes far
10
beyond Hallfields, which was the issue last summer.
11
I've got a list of 13 items on which the President
12
has stood behind me: clean air options, Two Forks, the
13
asbestos bank, the ivory ban, 500 new full-time equivalence
14
staff positions for Super Fund, our food safety package,
15
banning EDBC's, hosting the IPCC framework convention,
16
committing to a treaty, a global climate treaty, phasing out
17
CFC's, tightening cafe standards, reviewing offshore
18
drilling leases, and a reaffirmation of the no-net-loss of
19
wetlands policy. And there is one that I see as the
20
banning, or proposing to ban, shipments of hazardous wastes
21
abroad. These are all issues that generated some concern
22
and discussion, a certain amount of debate and
23
contentiousness.
24
And, he took what I regarded as the -- well, he
25
supported us.
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MR.
: In a lot of these cases --
2
the follow-up question is these are not -- a lot of these
3
are not issues which impinge on industry.
4
MR. Reilly
: Clean air sure does. And
5
asbestos did.
6
MR.
: But clean air, you've been
7
backpedaling in so fas as acid rain, especially on
8
alternative fuels, and you're taking a position that's not
9
really as far out as what members of Congress. And --
10
MR.
: Wait, wait a minute. There
11
is nothing about clean fuels in the Environment Public Works
12
Committee in the Senate.
13
What we have been doing in the Senate, at least on
14
clean fuels, has been trying to bring a committee that
15
didn't see fit even to include anything in the bill, to do
16
so, and have been trying to craft a procedure that would
17
cause them to want to do that. I mean, the reality is,
18
clean fuels have not had much support either on the
19
committee or in the broader Senate. And we are trying to
20
encourage a much clearer sense of the contribution we think
21
clean fuels can make. And, in fact, we think it's an
22
essential contribution in about nine cities, and maybe a few
23
more. So, on that, I don't think that would be a fair
24
characterization.
25
On the clean air issue, generally, my view of it
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is that, and you all, I think, have seen the letter that the
2
President sent to Senator Dole, where he set out a couple of
3
markers. He said, I want the legislation to pass, and I
4
want it to achieve two things. I want it to achieve the
5
environmental results based on performance that my bill
6
would achieve. But, I want it to be equally cost effective.
7
I don't want it to cost twice as much to get about 1.5
8
percent more pollution reduction.
9
I think that we ought to understand that the
10
debate that is now underway in the Senate is a debate about
11
whether. It's not a debate about how. And I would very
12
much hope that we don't end up with a situation that causes
13
folks to conclude, who are particularly sensitive about our
14
economic situation right now, as a lot of people are, that
15
we spend it all on clean air, and that we haven't anything
16
left to spend on a lot of the other things the
17
Administration is going to want to do in the environment.
18
From my point of view, the past week of
19
negotiations with Senator Mitchell and others has been
20
directed to maintaining the pollution reduction objectives,
21
but to finding a more cost effective way to get to them.
22
Julie?
23
MS.
: You had mentioned food
24
safety, and that seems like another area where (inaudible) a
25
lot of concern (inaudible), and others have supposedly
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invested their time towards the Administration coming up
2
with a bill, and now we've heard that the Administration is
3
merely going to (inaudible).
4
What is your feeling on this whole idea? Winning
5
and losing in battles, and if you think that's significant,
6
or how would you respond to some of the concerns that people
7
have about that?
8
MR.
: We agreed, really because of
9
some of the concerns of the House members, that they had
10
food safety legislation that already was moving forward, and
11
that an effort by us to develop a bill and propose it would
12
possibly derail the forward motion. And I believe there are
13
43 sponsors out of a 44-member committee for the food safety
14
initiative that's up there.
15
I want to be very clear, however, that what the
16
Administration did on food safety was very like what it did
17
on clean air, was to submit a package that we in the
18
Agriculture Department and the Food and Drug Administration
19
considered quite well balanced. It did, in fact, support
20
uniformity and negligible risk and a fixed for the Delaney
21
Clause. It also supported some significant changes in the
22
FIFRA amendments, in the FIFRA Act, to wit, a streamlining
23
of the cancellation process and interim suspension.
24
We will hear certainly at EPA argue very
25
vigorously for both parts of that package, and would
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consider anything that focuses on merely the first part as
2
insufficient and unworthy of the effort that we expended.
3
We stand behind what we propose, and we'll expect to
4
advocate it very vigorously in the Congress.
5
MS.
..
(inaudible) alternative
6
fuels. Can you maybe give us some kind of a sense of where
7
we're standing in negotiations with the Senate? There was a
8
report last week in the Journal of Commerce, a report that
9
was saying that we're now willing to go with a new
10
formulated gasoline approach, and this report describes a
11
change in position (inaudible).
12
Is that true? And what, in practice, is the
13
status of the (inaudible) ?
14
MR.
:
We have been willing for some
15
months to recraft, to redraft some language on alternative
16
fuels, to try to reassure people that we are serious about
17
performance. But we do not prefer one fuel over another.
18
When I briefed at the White House after the
19
President announced his support for clean air, I used
20
methanol as a measure, really, because we know more about
21
methanol and have some sense of its likely cost, that we
22
didn't have for other fuels.
23
Unfortunately, that led a lot of people to believe
24
that we had drafted a bill that was a methanol bill. It's
25
not, and we since have seen Arco, particularly, testify that
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they believe that reformulated gasoline can achieve the same
2
kinds of pollution reductions: get out the toxics and get
3
out the VOC's.
4
If that is the case, that's fine with us. We want
5
the industries to develop the technology and the fuel that,
6
together, achieve very significant reductions in both VOC's
7
and toxics. I mean, in a range of 80 - 90 percent over
8
time. If that can be achieved with reformulated gasoline,
9
we're entirely open and supportive.
10
MS.
: So, how does that work,
11
then, in the nine cities that are involved here? I mean,
12
are you talking about setting a pollution reduction
13
standard, or would you stick with sales of cars, or how
14
would you --
15
MR.
: Well, the other objection
16
that's been raised about the proposal to require that 30
17
percent of the new cars in each of the nine cities run on
18
clean fuels is that it will lead to funny cars on the road,
19
to some cars that are different from other cars, and
20
possibly create a sales problem for those cars. To which I
21
have said that I would be just as happy to see us, or see
22
the automotive manufacturers, offer 100 percent of the
23
vehicles in those cities achieving a third of the VOC and
24
toxic reductions that we had anticipated the 30 percent
25
would achieve, so that the aggregate impact on pollution
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will be just the same, only everybody will be offered the
2
same cars.
3
MR.
: What would be the standard?
4
MS.
: (Inaudible)
5
MR.
:
I don't want to go into too
6
much detail on this right now because --
7
MS.
: Are you sticking to the
8
MA5, the equivalent of a MA5 standard (inaudible) ?
9
MR.
: I don't want to say that
10
right now, because we have agreed with Senator Mitchell and
11
Senator Dole that they will remain the spokespeople for the
12
process of negotiation that's going on.
13
But let me say that we are --
14
MS.
:
Is there a change in the
15
Administration's -- ?
16
MR.
: There is no change in the
17
goals or the performance objectives that we want to achieve,
18
but we have tried to indicate more flexibility about methods
19
of getting there.
20
There has been a great deal of concern also on
21
the -- what's it called? Mandated Sales Requirement. I
22
must say that's a marvelously successful public relations
23
way to characterize all of this. I suppose one could say
24
that catalytic converters were part of the Mandated Sales
25
Requirement, as well, and lead-free gasoline, and the rest.
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But that has caused an erosion of support that might
2
otherwise have been there from some Senators we've heard a
3
lot about, and we want to reassure people that our
4
objective, really, throughout the Clean Air Act, in acid
5
rain and sulfur dioxides, reductions as in mobile sources,
6
is oriented toward performance.
7
And if someone knows a better way to achieve
8
pollution reductions than, perhaps, our air staff thought
9
of, we're open to it. We're interested in results.
10
MR.
: We can assume, though, that
11
whatever reformulated gas we come up with, it will be lower
12
than M100, otherwise --
13
MR.
: I would not assume that
14
for -- I would not make that assumption.
15
MR.
: You're talking about taking
16
VOC's out of gasoline, though.
17
MR.
:
I don't want to go further
18
into it right now, because none of these issues has been
19
resolved. We don't have an agreement.
20
I should say this to make it clear. We don't have
21
an agreement on anything yet in the Senate. The
22
understanding is that until we have agreed on everything, we
23
have not agreed on anything. There is a meeting of minds on
24
some points, but it's dependent really on people seeing the
25
language and making sure that we did, in fact, achieve what
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we thought we achieved, and we'll see about that.
2
MS.
: But what's you're
3
envisioning, then, would be as an alternative to the
4
existing proposal. All of the cars sold in the nine cities
5
would have to be equipped or adapted in some way so that
6
they would produce less pollution, than say a car sold in
7
another city.
8
MR.
: Depending on whether
9
reformulated gasoline will operate with current technology.
10
That may or may not be correct.
11
I don't want to leave the impression with you that
12
this is the only thing that we would accept either. We
13
would be perfectly happy to see the requirement of a 30
14
percent of the new cars meet the two-stage objectives that
15
we previously set. A flexible fuel vehicle followed by an
16
exclusive clean fuels vehicle later on. That, however, has
17
a good deal of opposition, and that's what has caused us to
18
revisit some of these questions.
19
MS.
: So, your 100 percent, if
20
you went with that, how much, again, would it have to reduce
21
pollution (inaudible) ?
22
MR.
: In the first phase, 100
23
percent, would be what? It would be about nine, I guess,
24
nine or 10.
25
MS.
: And if I could just follow
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up on this same issue. Where did you see on the House side,
2
when the Sharp Subcommittee marks up, do you anticipate that
3
the Administration will attempt to change back the
4
Hallfields Proposal, or are you going to try to make any
5
changes in the proposal?
6
MR.
: Whether we do it in the Sharp
7
Subcommittee or in full committee, we haven't really
8
decided.
9
MR.
: If you have to implement this
10
agreement, assuming it's finally passed, last week, I guess,
11
the Senate in that negotiation agreed to take the FIP hammer
12
away. What is your sense of some of the revisions
13
of --
14
MR.
: That's not really correct.
15
We have had a concern here about FIP's that, in fact, are
16
never required, and that practically, realistically,
17
politically, are often impossible to impose due to a want of
18
resources here, due to threatened withdrawals of resources,
19
if we do attempt to take the actions required, due to the
20
very extreme nature of the pollution reductions you have to
21
get. At Chicago, it was a 68 percent reduction of VOC's
22
that would be have been required.
23
That being the case, we proposed a menu that would
24
be available, including a partial FIP, which, frankly, would
25
be a lot more easy to impose, and, I should think, would be
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a much stronger incentive, because it's more realistic of
2
use of application. That would also include the possibility
3
of cutting off hook-ups for new drinking water, not a tool
4
that we've had in the arsenal before, but a potentially very
5
useful one, staunching new growth, which is associated with
6
pollution.
7
The highway fund reductions and other elements
8
that have been part of a FIP, presumably, will stay in the
9
law. But we simply would not be required, as we have been
10
since when, 1970, to take these very extreme actions to, in
11
effect, to drop a nuclear bomb on a city when, in fact, most
12
of the politically savvy folks in such places fully
13
understand that we are not capable of doing it.
14
You had a question?
15
MR.
: Yes. The National Acid
16
Precipitation Assessment Plan is coming out now, and the
17
NAPAP study. And someone suggested that it's a strong sign
18
of consensus against radical action, that the situation
19
isn't as been as has been portrayed, and that it's possible
20
that the Bush Adminstration actually jumped the gun by
21
agreeing to a fairly strong proposal on acid rain
22
limitations.
23
MR.
:.
And according to that view,
24
what do we need, one more study?
25
MR.
:
No. Apparently we need fewer
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reductions and we don't need to worry so bad about the
2
problems, it's largely a natural problems.
3
MR.
:
That's not the way I read it.
4
MR.
:
That's what I want to know.
5
How do you read it and is it the final word on acid
6
precipitation?
7
MR.
: As I read it, and as I
8
believe Dr. Mahoney testified, we do expect that ultimately,
9
and there is some argument about how soon, the consequence
10
of reducing, by about 50 percent, the S02 loading on
11
ecological systems would have an effect; will have an effect
12
on aquatics, on upper elevation forests, and on visibility.
13
I might mention that we would expect that the
14
visibility improvements would come earliest among those, and
15
they are significant. Something in the range of 40 percent
16
visibility impairment in the Northeastern United States is
17
associated with sulfates, and sulfur dioxides. That's not
18
insignificant. That will benefit everybody, and it will be
19
of benefit that they will see early.
20
I would also expect that we will see health, to
21
the extent there are health effects associated with
22
sulfates, and aerosols, we will begin to see the results of
23
fewer of them around, earlier as well.
24
We are fully committed to the acid rain measures
25
that we proposed. We recognize they are ambitious, and we
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don't expect in some areas that they will lead to overnight
2
improvement. But we fully expect, as the National Academy
3
said back in 1985, that everything that goes up does come
4
down, and there will ultimately be causality here and we
5
will see the benefits.
6
MR.
: At the press conference the
7
other day, somebody asked about the plan for cost sharing
8
with acid rain. I think Senator Mul (inaudible) said it's
9
dead. It didn't exactly die right off. Senator Glenn and
10
some others were saying, well, we would have tax credits or
11
something, and that could be a way we could finance this.
12
Do you know if the Administration, if the
13
President's opposition to special tax for this extends to a
14
tax credit, too?
15
MR.
: We are, obviously,
16
sympathetic to the special burdens that Midwestern utilities
17
and their ratepayers will bear as a result of acid rain
18
legislation. We also have committed to polluter pays as a
19
principle here. And find that whenever any measure is
20
proposed that would reduce the burden on the major
21
generators of S02, we are reminded by those areas of the
22
country that have already either accommodated new source
23
performance standards or built nuclear power plants that
24
they would be asked to give twice in such a proposal.
25
I won't comment specifically at this time on any
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measures to alleviate impact in the Middle West, other than
2
to just leave out there what I just said.
3
MR.
: The World Watch that just
4
came out with its latest state of the world, in which they
5
said we've got about 40 years to turn things around and
6
reach a sustainable society or we're in a lot of trouble, do
7
you agree with that assessment, that time frame?
8
MR.
: With respect to some really
9
critically important ecosystems, we have far less than 40
10
years. With respect to tropical forests, I think it's a
11
matter of about 15 years before we have lost most of the
12
major integral tropical forest systems in South America,
13
Central America, West Africa, and in Asia, Indonesia.
14
I think the rate at which resources of that sort
15
are being degraded, and there are others as well, critical
16
groundwater resources, soils in areas that are affected by
17
the spread of deserts, and also in some of the mountainous
18
areas, particularly those subjected to the fastest
19
population growth, such as Central America, are extreme, and
20
I have no sense about -- I haven't read the World Watch
21
report. I have read those reports about whether 40 years is
22
the measure, but at present rates of loss, we will not have
23
some of those systems well before the 40 years have run out.
24
The situation for any number of environmental
25
resources is dire, and there is nothing near on the horizon
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that's going to change that.
2
MR.
: One of the things they were
3
saying that had to happen in this 40-year time frame was a
4
large-scale abandonment of fossil fuels.
5
MR.
:
Well, either, certainly
6
conversion to a renewable fuel base or very significant
7
order-of-magnitudes improvements in fuel efficiency are
8
going to be needed in many parts of the world. We see that
9
particularly in some of the highly urbanized parts of the
10
developing world, that the fuel choices that have been made
11
are having severe consequences for both ecology and for
12
public health.
13
MR.
: Could I return for a minute
14
to the Clean Air Bill? Your opposition to the Tier 2 in the
15
Senate bill is based, as I understand it, almost exclusively
16
on cost. And yet, there seems to be an awful difference in
17
opinion on that cost. And you all have adopted $500.00 per
18
car, that you came up with the auto industry.
19
What makes you think that that is a correct
20
figure, instead of 130 or 125 or whatever is being thrown
21
out by other people supporting the Senate bill?
22
MR.
: Well, essentially the
23
criticism of the number that we have used on that says that,
24
look, this is 12 - 13 years away, maybe more, and it's very
25
difficult to estimate now what technology will be at that
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time. And I would agree. Based on our present
2
understanding of technology, which is about all we could use
3
to make these estimates, the costs are as we have cited
4
them.
5
But more to the point, the reductions in pollution
6
that you get from a second phase of the tailpipe, as has
7
been proposed, are significantly less than you get from
8
clean fuels, and it's much more difficult to target them to
9
where they are most needed.
10
If you go with a clean fuels program, you can
11
require its use in the very places that will not attain
12
without it. And a second tier of tailpipe will not cause
13
those places to attain, whereas clean fuels conceivably
14
will.
So, the argument is, in my
15
view, not between a dirty air and a clean air bill but,
16
rather, between two environmentally significant and
17
progressive pieces of legislation, one of which happens to
18
cost about twice as much as the other, and achieve less than
19
2 percent more pollution reduction.
20
MS.
: You mentioned your view of
21
offshore oil leases as one area where the President
22
(inaudible). I would like to ask you about an argument
23
that's come up in the last couple of days what with the oil
24
spill off the coast of California. And the oil industry and
25
offshore industry are putting out statements saying that
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spill is actually an argument for offshore drilling because
2
offshore drilling would prevent more oil from being imported
3
and brought by tankers to the U.S. coast.
4
I was just wondering if you could comment on that
5
on the environmental --
6
MR. Reilly
:
The sad reality of this
7
country's heavy dependency on petroleum is that we have had
8
to look for it everywhere. We are committed to energy use
9
levels that will require us for some time to come to import
10
a large amount of oil from other countries. That does, in
11
fact, pose a large number of hazards, particularly as it
12
comes in in tankers, many of which present problems.
13
I don't see a near-term alternative to that, nor
14
do I see a near-term alternative to continued offshore
15
leasing in a lot of places. California is, in some
16
respects, a very special place.
17
MR.
:
Do you see offshore drilling
18
as a more benign alternative environmentally than importing
19
oil?
20
MR.
:
Not necessarily. It depends
21
where we're talking about. I think my answer suggests that
22
I think we're going to have some of both. It's not clear to
23
me that we can fold up our OCS activity, and we certainly
24
can't cease importing foreign oil at this time with all of
25
the risks that that presents.
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It is true, as a matter of experience, that OCS
2
activities since 1969, after Santa Barbara, has caused far
3
less in the way of spills and pollution impacts in the coast
4
than tanker accidents.
5
MS.
:
If the wetlands agreement
6
that went into effect last week is just a reaffirmation of
7
the existing policy, do you have anything in mind for
8
special states like Louisiana to prevent the erosion going
9
on there? I mean, they're losing 80 square miles to
10
erosion.
11
MR.
: Yes. It was a Louisiana
12
Congressman who made the remark that he might be the first
13
congressman ever eroded out of his district. Guess who that
14
was?
15
MS.
: (Inaudible). .
16
MR.
: Was it?
17
No, I don't have any clear sense of how we would
18
prevent that scale of erosion. It's occurring -- you know,
19
the argument is always made that it's occurring largely as a
20
consequence of natural processes. And I guess to some
21
degree that is true. The Mississippi is delivering its
22
sediment now straight off the edge rather than spreading it
23
out in the delta. But one reason for that is all of the
24
diking.
25
MS.
: The levies.
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MR.
:
The levies that have been
2
built and the canals that have been built into those
3
wetlands.
4
I would very much like to see some work done to
5
see if we can't get the grasses to grow again in some of
6
those canals, and shore them up that way. I don't know
7
whether that's possible on any scale, and I wouldn't hold
8
out the expectation that that's something that will quickly
9
be done.
10
MS.
: There are some areas that
11
at the current rate will be under water in our lifetime.
12
MR.
: I know.
13
MS.
: Is this something that is
14
going to have to happen from the delegation or?
15
MR.
:
Our no net loss policy we
16
have assumed cannot attempt to make up for all of the losses
17
that occur naturally, which I think we would have to take
18
the view in southern Louisiana is predominately the case, at
19
least. We will want to make sure that as a result of human
20
interventions losses are compensated by gains somewhere
21
else, by restoration or under some circumstances, once we
22
acquire the technology to do it, creation of wetlands in
23
some places.
24
MS.
: How could you create in the
25
Mississippi where it's all silt and headed straight out in
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the ocean?
2
MR.
: Isn't clear that we could.
3
We might have to do it somewhere else. We have a
4
significant amount of money in the conservation reserve
5
program in the Farm Bill to actually restore wetlands,
6
particularly in the pothole region where we've lost so many,
7
and their loss has been associated with the crash of the
8
duck population and other water fowl.
9
We may have something in the range of -- what did
10
I hear -- I forgot. I'd better not quote the number. But
11
it's a significant number that could be created. We're
12
moving to 40 million acres, from 34, I believe, in the CRP.
13
Some reasonably significant proportion of that will be
14
wetlands on which we will hope to acquire easements.
15
We very much need, and having just gone through
16
this exercise we went through here, we very much need a
17
nonregulatory supplement to our regulatory programs if we
18
are to achieve no net loss. No net loss cannot be achieved
19
through 404 regulation.
20
Well, 404 doesn't touch what have been four-fifths
21
of the losses that have been agricultural draining and
22
clearing anyway. But that should make it all easier, I
23
think, over time.
24
MS.
: So, right now you just
25
don't know?
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MR.
:
On the natural losses?
2
MS.
: Yes.
3
MR.
:
We don't have any --
4
MS.
: Natural cause by the
5
Mississippi or levies.
6
MR.
:
We don't have any realistic
7
answer to that at this time, no.
8
MR.
:
Could I ask you to outline
9
the Administration's sewer grant policy and to explain what
10
advice you have for small communities such as Massachusetts
11
and elsewhere having trouble financially to face huge sewer
12
projects without Federal assistance?
13
MR.
: Well, we have ourselves done
14
studies of the continuing need of communities for waste
15
water treatment construction, and it's a significant number.
16
The Federal Government has spent $52 billion now on
17
construction grants, and we're phasing them down as a result
18
of an agreement reached in the previous Administration and
19
the Congress.
20
This year we're proposing $1.6 billion. That's
21
significantly more. I think, $400 million more than the
22
President proposed last year. It's less than the Congress,
23
however, appropriated last year, and we're proposing that it
24
all go to the revolving funds, state revolving funds, with
25
the object being to capitalize those funds and create a
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1
permanent fund that will be there long after the federal
2
government is no longer there.
3
I regret that it's necessary for us to phase this
4
program out when there is so much work that remains to be
5
done. But there are a lot of other things that we need to
6
do as well.
7
As far as the Massachusetts situation is
8
concerned, it's by no means unique. I think some of the
9
largest costs have been associated with Boston Harbor. But
10
really, because the effort has been put off for so long, and
11
there is no way that we can make a significant dent in those
12
costs. We could send the entire $1.6 billion this year on
13
Boston Harbor and we still wouldn't solve their problem.
14
They would still have billions to spend.
15
MR.
: (Inaudible).
16
MR.
:
In this budget, we are
17
expecting, I think, that the commitment to the Commonwealth
18
of Massachusetts will be $54 million. Last year, it was
19
about in the same range. And, in addition to that, the
20
Congress appropriated an additional $20 million. So, I
21
would guess $50 - $60 million is it.
22
MR.
: I remember last year's
23
budget, and there was no money proposed for the Boston
24
Harbor in your budget.
25
MR.
: That is correct.
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MR.
: And I think -- so, you just
2
recited 20 million?
3
MR.
: Congress added it. Congress
4
has -- the specific Boston Harbor fund, appropriation, was
5
added by Congress, and they've done that for each of the
6
last three years. They've spent $60 million separately
7
appropriated, thereabouts.
8
MR.
: Have you proposed any money
9
this year?
MR.
: For Boston Harbor, we have
10
11
not. For Massachusetts, we do.
MR.
: But not for the Boston
12
13
Harbor?
14
MR.
: Nor for San Francisco Harbor,
15
or New York Harbor, or many of the others.
16
MS.
: Along the lines of these
17
budgets, the local budgets, in a lot of cases they --
18
MR.
: Except for Tijuana, San
19
Diego. $15 million there.
20
MS.
:
-- either remain the same,
21
or in some cases, dropped a little bit. And together with
22
the increasing focus on our global sense that the EPA is
23
showing, what do you see as the state's role in working with
24
EPA on an environmental basis? Is EPA going to be pulling
25
out more, doing less active?
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MR.
: No.
2
MS.
: I mean, budget-wise,
3
enforcement is getting to be a problem.
4
MR.
: Our enforcement budget is up
5
22 percent this year. It's the highest single increase
6
percentage-wise, I think, in the entire budget, to 600 and
7
some million, I think.
8
We will continue to expect that states will carry
9
the largest burden of implementing our programs. We
10
function to work very closely with states; make grants,
11
contracts with states, and very often enforce against them.
12
That will continue to be the structure of the law. We will
13
work very closely with states. I hope more effectively than
14
ever before, recognizing that more and more we depend on
15
them to achieve environmental objectives that are in Federal
16
Law.
17
And, to the extent that resources permit, we will
18
make more grants to them. The grants are up reasonably
19
significantly this year. I had those numbers at the press
20
briefing and can get them for you again.
21
MS.
: I've got them.
22
MR.
: But it's in the $400 million
23
range, I think.
24
Well, depending on how you put it, calculate it,
25
it's well over, I think, 600 million, excluding Super Fund
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and waste water treatment. So, it's a large fraction of
2
what we do.
3
MR.
: Back to oil for just a
4
second. Do you have real up-to-date assessment on the
5
damage from this last spill in California?
6
MR.
: Well, I have what the Coast
7
Guard has as of this moment, but it's not conclusive in a
8
number of areas.
9
One of the principal questions I've had is, would
10
this or would this not have been averted if we had a double
11
bottom or a double hull? And the answer I've gotten thus
12
far has been that they don't know. I heard yesterday that
13
the Commandant of the Coast Guard was quoted as having said
14
a double hull would have averted this spill, but I haven't
15
gotten that from him yet. That's one of the question we've,
16
obviously, got here.
17
MR.
: Is it true that if these
18
California leases are opened up, of course, it's his
19
decision, that there is going to be more rather than less
20
tanker traffic? That most other --
21
MR.
: Which leases?
22
MR.
:
The three in California.
23
MR.
: That if he opens it up, there
24
will be less tanker traffic?
25
MR.
: There will be more tanker
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traffic rather than less.
2
MR.
:
Or more? Why would there be
3
more?
4
MR.
: Presumably because the
5
Interior Department's five-year OCS plan envisions bringing
6
the oil ashore by tankers rather than pipeline.
7
MR.
: I see. I see. I haven't
8
focused on that, and don't know whether that's true.
9
Honestly, I suspect that whether the leases go forward or
10
not there is going to be a lot more tanker traffic coming
11
into the country, because our own rate of production is
12
decreasing as our rate of usage is going up. That would be
13
my guess, but that's not informed really.
14
Deborah?
15
MS.
: Do you have a new recycling
16
proposal to put forward any time soon? There was a trial
17
balloon quoted before, that --
18
MR.
: Yes, I hope so. Yes, I think
19
within 90 days.
20
MS.
: Can you give us any inkling
21
of which direction it's going?
22
MR.
:
No. No, not yet. Not yet.
23
We're working on it within the agency and with OMB at the
24
moment, but I would hope that we will have a fairly
25
interesting set of proposals on pollution prevention that do
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include some reasonably significant incentives to recycling.
2
MS.
: Would they include some
3
kind of cost imposed on these (inaudible) materials?
4
MR.
: Oh, I'm -- stay tuned. You
5
didn't use the bad word "tax", the three-letter word.
6
MS.
: No, I tried to avoid that.
7
MR.
: Yes, you did, and rightfully
8
so.
9
So, possibly, but I don't -- well, I shouldn't say
10
that. Let's leave it open. It's a little premature at this
11
point. I don't want to signal anything one way or the
12
other.
13
MR.
: There's no secret that you
14
don't see eye to eye with Congress Sununu and Dick
15
(inaudible) on several of these issues. Given the
16
President's rhetorical emphasis on environmental protection,
17
are those two guys out of step with the President?
18
MR. Reilly
:
The President has a very
19
clear sense, I think, of the need both to achieve
20
environmental gains and to protect the economy. I think
21
that you see arguments about where the proper balance should
22
come with respect to any number of environmental issues, and
23
you will continue to see them. And certainly, I sometimes
24
advocate that that line be in a different place than some of
25
my colleagues.
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The President does, in fact, decide. I think he's
2
consistently decided in ways that have advanced the
3
environmental cause, and have given us some of the
4
achievements that I listed there earlier. He, obviously,
5
will not always resolve those questions in ways that fully
6
satisfy EPA's advocacy.
7
One consequence of being out there is you
8
occasionally get yanked back. I think that, as someone said
9
the other evening, it was Governor Sununu, that from where
10
he sits we do batting about 980.
11
Well, whether we've been batting 980, I think
12
we've been batting very well, and certainly in this
13
Administration we're very near the top of the lineup whereas
14
in the previous one, we often weren't even in the game.
15
My sense is that if you're going to engage, as we
16
are, some of the most divisive and difficult issues of the
17
day, you have to be prepared for vigorous debates and
18
differences of opinion. You have to be prepared also
19
sometimes to get less than you might like.
20
MS.
: (Inaudible). Are you
21
entirely happy with environmental positions that the White
22
House has (inaudible) ? (inaudible), is there a chance to
23
hear (inaudible) ?
24
MR. Reilly : Well, what we're doing in
25
those negotiations is trying to bring the Senate Environment
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Public Works Committee, and some of the other senators who
2
are sitting in, to support the President's bill or something
3
as close to the clean air initiative that we propose as
4
possible.
5
In no case are we advocating anything less than
6
what the President proposed. And I'm completely comfortable
7
with what went forward. I think it was a very ambitious,
8
very complex, in many ways very sophisticated and innovative
9
piece of legislation. It will achieve attainment for
10
virtually all American cities within 10 years. It will
11
address the acid rain problem. It will get 80 percent of
12
the toxics out of the air, and it will do it for about $19
13
billion.
14
The Senate bill will do all the same things. It
15
won't do much more. I mean, it will do it for, our
16
estimate, somewhere in the range of $40 billion.
17
So, the answer is yes.
18
MS.
: (Inaudible.)
19
MR.
: You know what we want to do?
20
I'll tell you what we want to do.
21
We want to have a policy that does not involve EPA
22
having to make independent judgments of the effectiveness of
23
the waste management of every damn country that we export it
24
to. We are worried here about the drain on resources and
25
about the intrusiveness that that would entail. And the
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simplest way to protect ourselves against having, in effect,
2
to apply RICRA abroad is simply to ban the shipments,
3
subject to very narrow exceptions for recycling.
4
Virtually all of the hazardous waste that's
5
shipped out of the United States goes to Canada. What
6
little doesn't goes to Mexico, and we'd like to leave it at
7
that.
8
Now, there is an argument about whether that's an
9
excessive restriction on free trade, and I feel quite
10
strongly that we ought not to get ourselves in the business
11
of trying to make some kind of extra-territorial application
12
of our laws. I don't think we're equipped to do that. And
13
I think when people reflect on that and think it through,
14
they will come to agree with us. But thus far that's an
15
issue in contention.
16
MR.
: What realistically do you
17
think is likely to happen in the next couple of years that
18
will break the impasse on global warming?
19
I mean, the President said basically he wants to
20
do something that -- he wants to take actions that are
21
consistent with economic growth. And yet, you've got a
22
situation where nations' actions impinge upon both the
23
global problem and a problem that really may relate to
24
future generations way down the line.
25
Isn't it pretty difficult to do cost benefit
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1
analyses on a problem like that?
2
MR.
: It's very difficult.
3
MR.
: And is the science going to
4
become suddenly more clear in two years than --
5
MR. Reilly
: It's very difficult. You
6
know, I have wondered whether there is an issue around that
7
has as much conceptual complexity and arguments about
8
equivalency as climate change. I'm told by the people in
9
the disarmament area that it may be one.
10
When you look at what we're trying to do on
11
climate change, now we're trying to get some sense of basis,
12
and I notice the base estimates coming in from various
13
countries are quite high. Clearly preparatory to going
14
forward and negotiating. They want to have the base curve
15
go up sharply, so that they can get credit for the
16
reductions they make.
17
The kinds of things that we hear from other
18
countries and the kinds of public positions that are often
19
attributed to them are sometimes very different. We are
20
hearing expressions of great concern on the part of the
21
developing countries. I heard them in Nordvague, and I
22
heard them this past week, that, in effect, say there is no
23
way that, consistent with our economic aspirations, we can
24
engage in any serious effort to reduce CO2. All of our
25
curves go up.
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And one answer to that in the international IPCC
2
process is to get them a pass for any number of years.
3
Simply excuse them from reductions.
4
Another is to provide significant help with
5
funding, technology transfer. Commonly we hear we should do
6
both. Well, if you give them a pass, you look at a scenario
7
that has very significantly increasing emissions from
8
certain of those countries. India and China, particularly.
9
We've heard from the Soviet minister just three
10
weeks ago that they see no near-term prospect of being able
11
to reduce CO2 and strongly hope that they won't be asked to,
12
and the regime will not impose that on them.
13
From most of the European countries, including
14
many members of the European Community that I talked to in
15
Nordvague, the prospect is for in the range of 20 percent
16
increases in CO2 in 10 years, which causes me to wonder
17
about some of the public positions that some of them have
18
taken.
19
The most helpful thing in all of this would be an
20
improvement in certainty, and we won't get to conclusive
21
certainty in the near term, I gather, from the scientific
22
community. We seem to be on a track that maybe five to 10
23
years out will give us the date that people consider more
24
reliable.
25
But when we've got solid science in the CFC area,
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consensus began to form around it. Even so, we haven't seen
2
any ratified protocol, or China or --
3
MR.
: What you've got is an ozone.
4
MR.
: Pardon me?
5
MR.
:
The ozone all concentrated
6
minds considerably.
7
MR. Reilly
:
It did, indeed. It did,
8
indeed. And the very high summers we experienced in the
9
United States certainly had some impact on public opinion,
10
and I think on political opinion as well.
11
I would hope, frankly, that fundamentally there
12
will be a shift of opinion that will acknowledge that the
13
kinds of efficiency improvements that we need to address
14
climate change do, in fact, offer significant near-term
15
advantages economically as well. That's what I would hope.
16
And that the major reforestation, particularly in the
17
tropics, is feasible and that the trees can be protected
18
once they are planted in these areas, and that they will
19
have all sorts of other benefits as some countries already
20
see: Costa Rica, Mexico, and Thailand, among them, China.
21
MR.
E
: Well, wouldn't a case -- just
22
break in -- a case in point be that reducing the CO2 output
23
of automobiles like Senator Chaffey wants to do, wouldn't
24
that do what you're talking about and solved some of these
25
tanker problems we were referring earlier to?
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MR. Reilly : The CO2 initiative in the
2
Clean Air Act is a very controversial one. And, as you
3
know, the clean air has not been the place where that debate
4
has been fought out. It originally was proposed as an
5
energy efficiency measure. And I don't think that
6
politically it's possible to do that in the Clean Air Act.
7
I think it would layer too much on an already
8
difficult and controversial piece of legislation.
9
MR.
: Excuse me for interrupting.
10
MR.
: If I could (inaudible) one
11
more. Governor Sununu last week talked about faceless
12
bureaucrats who wanted America to give up its oil and coal.
13
Presumably those faceless bureaucrats was within EPA.
14
Do you think he accurately characterized the
15
advice that EPA's bureaucracy is giving about the choices
16
the nation faces on global warming?
17
MR.
:
I think he was referring at
18
the time to the source of the leak, wasn't he? Which I do
19
not believe is EPA's --
20
MR.
: I don't think he directly
21
said (inaudible). He was talking about faceless bureaucrats
22
within the government. He suggested we're going to have to
23
give up driving. We're going to have to give up coal and
24
oil.
25
MR.
: I have been very public about
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1
the things that I've advocated, and EPA has not been shy.
2
I'm sure he didn't have us in mind. We are rarely accused
3
here of being faceless. Other things, yes, but not
4
faceless.
5
MS.
: Just to follow up on that
6
line of questioning. I mean what you're talking about is
7
economic advantages (inaudible) global warming measures, and
8
talking about the rain forests.
9
But what are the prospects you could have the same
10
sort of phenomenon happen again where it seems to be -- it
11
seems there is a tremendous reluctance to do anything that
12
might begin to wean us off of some of the --
13
MR.
: Let's be realistic. We have
14
got both the highest per capita emissions in the -- possibly
15
not in the world. Canada is in our league, perhaps, but
16
there are very few other countries that are. We have
17
something in the range of 22 tons per capita, emissions of
18
C032. Germany has in the range of 12 or 13, and the Germans
19
don't understand how they can get reductions, which they
20
think they can get, and we cannot.
21
I think we can get reductions. And I think that
22
over time we can get them in ways that will advantage our
23
economy. We are dealing in a real world, however, in which
24
our automobile industry has lost market share to the
25
Japanese and to other imports, and in which something like
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1
two-thirds or three-quarters of auto assembly plants are now
2
laying people off. That creates resistance to taking some
3
of the measures that the EPA study on stabilization
4
concluded would probably have to be part of a comprehensive
5
response to climate change for it to be successful. So,
6
that's what we're working to put together.
7
There is a tendency on the part of some economists
8
to -- well, the story has been told of the economist walking
9
down the street with another person who points out that
10
there is a $50 bill on the street. You know, and the people
11
are walking by. And the economist's reaction to that is to
12
say, well, couldn't be a $50 bill, because with all these
13
people around, somebody would have picked it up.
14
That imputes the current practice, the maximum
15
cost effectiveness, and rationality. It strikes me that
16
that kind of economic thinking will not get us to an
17
analysis that concludes that many of the things that I
18
believe will prove to be in our economic interest are.
19
That's an argument that's going to go on for some time to
20
come.
21
All the way down.
22
MR.
: The Super Fund --
23
MR.
:
Anybody hear from Tom?
24
(Laughter.)
25
MR.
:
The OTA Super Fund --
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MR.
: I'm sorry?
2
MR.
: The OTA Super Fund assessment
3
program has found significant problems with the enforcement
4
first strategy of the Super Fund. And this week is a
5
significant moment in assessing that.
6
Do you have any comment?
7
MR.
: I would refer anybody who has
8
a problem with that strategy to look at the numbers for last
9
year. They are the best numbers we've ever seen. In most
10
settlements, in most civil referrals, the most
11
contributions, more than a billion dollars from industry.
12
We've never had as good a year as we've had this past year
13
in Super Fund, and I think it's a consequence of our
14
enforcement first strategy.
15
Someone asked at a meeting, I think, in one of
16
these meetings a couple months ago, whether I would claim
17
that the new management reforms and the management study
18
were responsible for some of these numbers. And at that
19
time I said, no, I didn't dare do that. I wasn't sure
20
enough.
21
And our staff the next day took me to task and
22
said that's absolutely the reason that we got these
23
settlements up. We have a specific negotiating period now,
24
and it's well understood that at the end of a stated period
25
of time, 120 days, the curtain drops. That's the end of it.
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We don't negotiate anymore. We enforce. And that's what
2
makes those negotiations lead to settlements, and they are
3
leading to more settlements.
4
MR.
: And that's also how it
5
differs from the fox guarding the chickens?
6
MR.
: From the what?
7
MR.
:
The fox guarding the chicken
8
coop.
9
MR.
: What's the argument there?
10
MR.
: Well, that if you've got that
11
that 120-day curtain, then you come in and guard.
12
MR.
: Right.
13
MS.
: On enforcement, the South
14
is often called the dumping ground of the nation, and there
15
has been a lot of talk, especially in Washington and even in
16
the South, that EPA in the southern region is not enforcing
17
as strongly as they should, especially when compared to
18
other regions.
19
Do you think that is the case? And if so, what is
20
being done to counter that?
21
MR.
:
I don't know that that's the
22
case with respect to the South, or any particular area. I
23
have heard arguments made that we do not have uniformity
24
across the board with respect to any number of our programs,
25
and the Super Fund is one that's mentioned.
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One principal of good management, I think, in this
2
Agency must be a continuing respect for the values of
3
decentralization and of allowing a lot of decisions to be
4
made in the field. When you do that, you necessarily
5
acknowledge the possibility of some divergence in approach.
6
Different RA's have different opinions, and there are
7
different philosophies out there.
8
It's our job to bring those within a permissible
9
sphere, I think, of divergence, and I want to do that. I
10
think probably there is something to the concern that one
11
hears both from environmentalists and also industry, that we
12
take a different approach in different parts of the country.
13
But we will never have perfect uniformity across the
14
regions, because the country is so different, and the people
15
will inevitably be as well.
16
MS.
: So you accept that, and
17
there is nothing specific that would happen, for instance,
18
in Region IV?
19
MR.
: Not at this time.
20
I'll take one more.
21
MR.
: Are you now or have you ever
22
been Perrier drinker?
23
MR.
: I remember drinking, I used
24
to drink stuff -- bottled water, flying back and forth
25
across the ocean, and I got in a habit of just drinking
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constantly. And an airline stewardess about 10 years ago
2
told me that I ought to drink club soda, I think it was, or
3
regular water, rather than bottled water, because of the
4
sodium. And so I stopped at that time. I do occasionally
5
drink it, however, but not as a regular matter.
6
MR.
: Are you comfortable with
7
their finding? Apparently, they have concluded it was the
8
bottling company handling it?
9
MR.
: I have seen that, but no know
10
more about it, I think, than any of you who have read the
11
stories in the paper.
12
MS.
: (Inaudible) pass up those
13
commercials (inaudible)
14
MR.
: That's right. It's led to
15
some terrific one liners, that you probably all have heard
16
by now.
17
MS.
: No, no.
18
MR.
: I don't dare. A year and a
19
half ago -- the one thing that is clearly different from
20
being an insider than an outsider, and --
21
MS.
: Can't tell jokes.
22
MR.
:
You can't tell those kinds of
23
jokes.
I learned early on.
24
Thank you very much.
25
(Whereupon, the meeting was concluded.)
Heritage Reporting Corporation
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REMARKS BY
WILLIAM K. REILLY
Administrator
U.S. Environmental Protection Agency
su page 2/
BUSINESS-GOVERNMENT RELATIONS COUNCIL
Washington, DC
January 31, 1990
O
I VERY MUCH APPRECIATE THIS OPPORTUNITY
TO REVIEW SOME OF THE ADMINISTRATION'S
ENVIRONMENTAL PRIORITIES WITH THE
BUSINESS-GOVERNMENT RELATIONS COUNCIL
--
I RECOGNIZE A FEW FACES AS I LOOK
AROUND; I EXPECT I'VE RUN INTO SOME OF
YOU IN THE HALLWAYS AND HEARING
ROOMS OF CAPITOL HILL
--
I SEEM TO SPEND A GOOD DEAL OF MY
TIME ON THE HILL THESE DAYS -- I'VE BEEN
UP THERE TO TESTIFY 21 TIMES AT LAST
COUNT, IN LESS THAN A YEAR IN OFFICE
- 2 -
--
NOW, TESTIFYING ON THE HILL CAN BE
EITHER A VERY PLEASANT OR A VERY
PAINFUL EXPERIENCE
--
CONGRESSMAN MO UDALL, ONE OF THE
BEST FRIENDS THE ENVIRONMENT EVER
HAD ON CAPITOL HILL, TELLS A PERTINENT
STORY ABOUT BEING CHAIRMAN OF A
CONGRESSIONAL COMMITTEE
--
MO SAID THAT NOT LONG AFTER HE ROSE
TO THE CHAIRMANSHIP OF THE HOUSE
INTERIOR COMMITTEE, AN IRISH
COLLEAGUE COME UP TO HIM IN THE
CLOAKROOM
- 3 -
--
AND THE COLLEAGUE SAID, "THERE'S AN
OLD IRISH LEGEND THAT WHEN AN INFANT
IS PLACED IN HIS CRADLE IMMEDIATELY
AFTER BIRTH, AN ANGEL OF THE LORD
HOVERS OVER HIM AND KISSES HIM
--
"IF THE ANGEL KISSES HIM ON THE
FOREHEAD, THE CHILD WILL GROW UP TO
BE A GREAT THINKER OR PHILOSOPHER; IF
THE KISS IS ON THE THROAT, A GREAT
SINGER OR ORATOR; IF ON THE HEART, A
GREAT HUMANITARIAN
--
"THE ANGEL HAS KISSED YOU IN SEVERAL
PLACES," MO'S FRIEND CONCLUDED,
"INCLUDING ONE WHICH WILL MAKE YOU A
GREAT CHAIRMAN!"
- 4 -
--
SOME MIGHT SAY YOU HAVE TO BE KISSED
IN THE SAME PLACE TO BE THE EPA
ADMINISTRATOR.
--
AT ANY RATE, THE DAYS WHEN MO UDALL
AND A HANDFUL OF OTHER MEMBERS OF
CONGRESS WERE LONELY VOICES CRYING
OUT FOR CONSERVATION AND
ENVIRONMENTAL PROTECTION ON CAPITOL
HILL ARE LONG GONE
--
NOW IT SEEMS THAT EVERY COMMITTEE
AND SUBCOMMITTEE IS SCRAMBLING FOR A
PIECE OF THE ACTION
--
AND THE GROWING INTEREST IN
ENVIRONMENTAL ISSUES ON THE HILL IS
SYMPTOMATIC OF WHAT'S HAPPENING
THROUGHOUT THE COUNTRY - AND
THROUGHOUT THE WORLD
- 5 -
--
CONCERN FOR THE ENVIRONMENT - -- FOR
THE FUTURE OF THE PLANET - -- IS
PROBABLY AT ITS HIGHEST LEVEL IN
HISTORY, AMONG THE PUBLIC, IN THE NEWS
MEDIA, AND AT ALL LEVELS OF
GOVERNMENT
--
THE PRESENT SITUATION REMINDS ME OF
THE MAN WHO WAS DRIVING THROUGH A
RURAL PART OF THE COUNTRY AND
SPOTTED A FARMER IN AN APPLE
ORCHARD, DOING SOMETHING THE MAN
THOUGHT WAS RATHER STRANGE
:
THE FARMER WAS HOLDING A GOOD-SIZED
PIG UP TO AN APPLE TREE, SO THE PIG
COULD EAT THE APPLES OFF THE
BRANCHES
- 6 -
--
THE DRIVER STOPPED HIS CAR AND
WATCHED FOR A WHILE AS THE FARMER
STRAINED TO KEEP THE PIG UP IN THE
BRANCHES, ENJOYING HIS FEAST
--
FINALLY THE MAN GOT OUT OF HIS CAR
AND WENT UP TO THE FARMER
--
"I KNOW THIS IS NONE OF MY BUSINESS," HE
SAID, "BUT YOU COULD SAVE A LOT OF
TIME IF YOU JUST SHOOK THAT TREE AND
LET THE APPLES FALL, SO THE PIG COULD
EAT THEM OFF THE GROUND"
--
THE FARMER LOOKED AT THE MAN,
SHRUGGED HIS SHOULDERS, AND SAID,
"WHAT'S TIME TO A PIG?"
- 7 -
O
WELL, TIME MAY NOT MEAN MUCH TO A
PIG, BUT FOR THOSE OF US CONCERNED
ABOUT THE PROTECTION OF THE
ENVIRONMENT -- AND I INCLUDE
EVERYBODY IN THIS ROOM IN THAT
CATEGORY - TIME, AND TIMING, IS
EVERYTHING
--
I THINK THAT RIGHT NOW, AT THIS
MOMENT IN TIME, WE HAVE A UNIQUE
OPPORTUNITY TO SET THE DIRECTION AND
PACE OF ENVIRONMENTAL PROTECTION
AND RENEWAL, NOT ONLY FOR THE NEXT
DECADE BUT INTO THE 21ST CENTURY
--
THE OPPORTUNITY TO MAKE REAL AND
LASTING PROGRESS IS SURELY AS NEAR AS
IT HAS BEEN FOR MANY YEARS -- WITHIN
REACH, IT SEEMS, OF OUR HANDS
- 8 -
--
PRESIDENT BUSH HAS MADE IT CLEAR,
BOTH IN PUBLIC AND IN PRIVATE, THAT HE
WANTS TO MOVE FORWARD TO ADDRESS
ENVIRONMENTAL ISSUES -- AND QUICKLY
--
PRESIDENT BUSH WAS THE FIRST
PRESIDENT IN MORE THAN A DECADE TO
PROPOSE MAJOR REVISIONS TO THE CLEAN
AIR ACT -- AND THE FIRST EVER TO
PROPOSE CONTROLS ON ACID RAIN
--
THE PRESIDENT HAS MADE IT CLEAR THAT
HE REGARDS PROTECTION AND
RESTORATION OF THE ENVIRONMENT, AND
SUSTAINABLE, LONG-TERM ECONOMIC
GROWTH, AS INTERDEPENDENT AND
MUTUALLY REINFORCING GOALS
--
AND THAT WE SIMPLY CAN'T ACHIEVE ONE
WITHOUT THE OTHER
- 9 -
--
YOU MAY RECALL THAT THE GREAT
ENVIRONMENTAL DEBATES OF THE 1970S
AND EARLY 1980S WERE CAST TYPICALLY AS
ENVIRONMENT-VS-DEVELOPMENT
CONFLICTS; AS CHOICES BEWTWEEN HIGH
LEVELS OF PROTECTION OF HEALTH AND
THE ENVIRONMENT, AND MAINTENANCE OF
JOBS AND U.S. COMPETITIVE PERFORMANCE
--
ENVIRONMENTAL ISSUES WILL CONTINUE
TO POSE HARD CHOICES AND INVOLVE
SERIOUS TRADEOFFS; BUT INCREASINGLY,
THEY ARE TAKING PLACE IN A NEW
CONTEXT: NO LONGER WHETHER, BUT HOW
- 10 -
--
THAT PLACES NEW RESPONSIBILITIES ON
ALL OF US, AND PARTICULARLY ON
ADVOCATES OF ENVIRONMENTAL
PROGRESS, TO APPROACH PUBLIC ISSUES
WITH A HEIGHTENED REGARD FOR
PURSUING ENVIRONMENTAL GOALS IN THE
MOST ECONOMICALLY EFFICIENT MANNER
--
ALL OF US ACKNOWLEDGE THAT A
HEALTHY ENVIRONMENT IS THE
UNDERPINNING FOR A SUSTAINABLE
ECONOMY; LET US, THEN, IN THE NEW
CLIMATE OF OPINION, RESOLVE GENUINELY
TO WORK TO INTEGRATE THE NATION'S
ENVIRONMENTAL GOALS WITH OUR
ECONOMIC ASPIRATIONS
- 11 -
O
LET ME TURN NOW TO A SPECIFIC PRIORITY
-- THE CLEAN AIR ACT
--
THE PRESIDENT HAS MADE
REAUTHORIZING AND STRENGTHENING
THAT LAW HIS TOP LEGISLATIVE PRIORITY
--
THANKS TO THE ORIGINAL CLEAN AIR ACT,
WE'VE MADE SIGNIFICANT PROGRESS IN
REDUCING AIR POLLUTION IN THE LAST
TWENTY YEARS
--
BUT HIGH LEVELS OF SMOG, ACID RAIN,
AND AIR TOXICS REMAIN, AND THEY
CONTINUE TO ENDANGER THE HEALTH OF
THE AMERICAN PEOPLE AND THE WELL-
BEING OF OUR ENVIRONMENT
- 12 -
--
THE PRESIDENT HAS PROPOSED A
CREATIVE, INNOVATIVE APPROACH, BASED
LARGELY ON MARKET PRINCIPLES, TO
ACCOMPLISH THE INTERTWINED GOALS OF
CLEANING UP THE NATION'S AIR AND
INSURING SUSTAINED ECONOMIC GROWTH
--
THE PRESIDENT'S PROPOSAL WOULD PUT
THE UNITED STATES ON THE PATH TOWARD
DRAMATICALLY CLEANER AIR BY THE END
OF THE CENTURY:
--
ACID RAIN POLLUTANTS WOULD BE CUT BY
NEARLY HALF;
--
MOST URBAN AREAS IN THE COUNTRY
WOULD FINALLY ATTAIN NATIONAL CLEAN
AIR STANDARDS;
- 13 -
--
AND TOXIC AIR POLLUTANTS WOULD BE
SLASHED BY TENS OF MILLIONS OF POUNDS
A YEAR
O
THE PRESIDENT'S PROPOSAL AIMS HIGH
ENVIRONMENTALLY - AND IT ALSO MEETS
THE ECONOMIC CHALLENGE
--
IT REDUCES EMISSIONS BY THE MOST COST-
EFFECTIVE MEANS AVAILABLE, USING
MARKET-BASED PRINCIPLES AND
INNOVATIVE PROGRAMS WHENEVER
POSSIBLE
--
NOW, IF YOU'VE BEEN FOLLOWING THE
CLEAN AIR DEBATE SO FAR, YOU'RE
PROBABLY WONDERING WHAT TO BELIEVE
ABOUT THE COSTS AND BENEFITS OF THE
VARIOUS PROPOSALS NOW BEFORE THE
CONGRESS
- 14 -
:
THE ESTIMATES ARE ALL OVER THE LOT:
:
INDUSTRY GROUPS ARE SAYING THAT SOME
PROPOSALS WILL COST MORE THAN $100
BILLION AND WILL LEAD TO WIDESPREAD
INDUSTRIAL SHUT-DOWNS AND LOSS OF
PRODUCTIVITY
:
THE AMERICAN LUNG ASSOCIATION, ON THE
OTHER HAND, HAS ESTIMATED THE HEALTH
COSTS FROM MOTOR VEHICLE POLLUTION
ALONE AT AS MUCH AS $50 BILLION A YEAR
- 15 -
--
AND ONE REPORT, BY TWO INDUSTRY
CONSULTANTS WRITING IN REGULATION
MAGAZINE, PEGGED THE COST OF THE
PRESIDENT'S PROPOSALS FOR CONTROLLING
TOXIC AIR POLLUTION FROM INDUSTRIAL
SOURCES AT BETWEEN $4 BILLION AND $9
BILLION TO AVOID JUST ONE CASE OF
CANCER!
--
I MUST SAY THIS BATTLE OF NUMBERS
REMINDS ME OF THE TIME PRESIDENT
LINCOLN AND HIS ADVISORS WERE
DISCUSSING CIVIL WAR MANPOWER AND
RESOURCES
--
SOMEONE ASKED LINCOLN HOW MANY MEN
THE CONFEDERATES HAD IN THE FIELD
- 16 -
--
AND TO THE ASTONISHMENT OF EVERYONE
PRESENT, HE PROMPTLY ANSWERED,
"TWELVE HUNDRED THOUSAND" - FULLY
THREE TIMES THE NUMBER OF UNION
TROOPS
--
"YOU SEE," LINCOLN EXPLAINED, "ALL OUR
GENERALS, EVERY TIME THEY GET
WHIPPED, THEY TELL ME THAT THE ENEMY
OUTNUMBERED THEM AT LEAST THREE TO
ONE, AND I MUST BELIEVE THEM
--
"WE HAVE FOUR HUNDRED THOUSAND MEN
IN THE FIELD, AND THREE TIMES FOUR
EQUALS TWELVE. SO THE CONFEDERATES
HAVE TWELVE HUNDRED THOUSAND MEN.
NO DOUBT ABOUT IT!"
- 17 -
:
WELL, I THINK WE'D BE WISE TO TAKE A
SIMILARLY SKEPTICAL VIEW OF SOME OF
THE NUMBERS NOW BEING BANDIED ABOUT
WITH RESPECT TO CLEAN AIR
O
WE IN THE ADMINISTRATION HAVE OUR
OWN NUMBERS; AND THEY FALL BETWEEN
THE TWO EXTREMES
--
THE BEAUTY OF THE PRESIDENT'S
PROPOSAL IS THAT BY ALLOWING
FLEXIBILITY AND INCORPORATING
INNOVATIVE MARKET INCENTIVES, IT WILL
ACHIEVE THE POLLUTION REDUCTIONS WE
NEED IN THE MOST COST-EFFECTIVE WAY
POSSIBLE
- 18 -
--
THE ACID RAIN PROVISIONS, FOR EXAMPLE,
COUPLE A MARKET-BASED TRADING
SYSTEM WITH A CAP ON EMISSIONS THAT
CAUSE ACID RAIN; THIS APPROACH HAS
STRONG SUPPORT IN BOTH THE HOUSE AND
THE SENATE, AND ITS ENACTMENT WILL BE
A REAL BREAKTHROUGH IN MARRYING
ENVIRONMENTAL REGULATION AND
MARKET EFFICIENCIES
--
WITH RESPECT TO SMOG, THE
ADMINISTRATION'S PROPOSAL WOULD
REQUIRE A THREE PERCENT PER YEAR
REDUCTION IN EMISSIONS THAT
CONTRIBUTE TO OZONE FORMATION
- 19 -
--
THIS IS COUPLED WITH AN INNOVATIVE
ALTERNATIVE FUELS PROGRAM THAT
CHALLENGES OIL AND AUTO
MANUFACTURERS TO PRODUCE CLEANER
CARS THAT OPERATE ON CLEANER FUELS
--
BY THE YEAR 2010, THE ADMINISTRATION'S
AUTO CONTROLS (BOTH FUELS AND
TAILPIPE EMISSIONS) WILL PROVIDE A 26.2
PERCENT REDUCTION IN VOLATILE
ORGANIC COMPOUNDS, OR VOCS
--
THE BILL REPORTED OUT BY THE SENATE
ENVIRONMENT AND PUBLIC WORKS
COMMITTEE WOULD PRODUCE A 28.7
PERCENT REDUCTION - AND THE
DIFFERENCE IS EVEN SMALLER IN 2005
- 20 -
--
AND THIS ADDITIONAL 2.5 PERCENT
REDUCTION WILL COST MORE THAN $8
BILLION A YEAR
:
MOREOVER, THE ADMINISTRATION'S
ALTERNATIVE FUELS PROPOSAL WOULD
CLOSE MOST OF THE GAP IN REDUCTIONS,
REDUCING EMISSIONS AN ADDITIONAL 1.6
PERCENT AT LITTLE ADDITIONAL COST
--
THE ALTERNATIVE FUELS PROGRAM WILL
ALSO PROVIDE THE STRUCTURE FOR EVEN
GREATER LONG-TERM BENEFITS; THESE
COULD OCCUR AS ADDITIONAL CITIES
DECIDE TO JOIN THE PROGRAM OR THOSE
ALREADY PARTICIPATING DECIDE TO
INCREASE THEIR INVOLVEMENT
- 21 -
O
THE AIR TOXICS PROVISIONS IN THE SENATE
BILL ALSO PROVIDE LITTLE OR NO
ADDITIONAL ENVIRONMENTAL BENEFIT,
BUT AT A SUBSTANTIALLY HIGHER COST
--
OUR COST ANALYSES SHOW THAT THE
ADMINISTRATION'S AIR TOXICS PROVISION
WILL COST ABOUT $4.6 BILLION PER YEAR IN
ITS SECOND PHASE
--
THE AIR TOXICS PROVISIONS IN THE SENATE
BILL WILL COST ABOUT $10 BILLION - MORE
THAN DOUBLE THE COST OF THE
ADMINISTRATION'S PROPOSAL
--
BOTH THE PRESIDENT'S PROPOSAL AND THE
SENATE BILL USE A SIMILAR TECHNOLOGY.
BASED APPROACH FOR THE FIRST PHASE OF
REQUIRED AIR TOXICS REDUCTIONS
- 22 -
--
THIS IS CLEARLY THE MOST EFFECTIVE
WAY TO DEAL WITH THIS COMPLEX
PROBLEM
--
BUT THE SENATE BILL ALSO INCLUDES A
SECOND PHASE EMISSIONS REDUCTION
REQUIREMENT -- A "RESIDUAL RISK"
PROVISION -- WHICH SERIOUSLY THREATENS
THE EXISTENCE OF KEY PLANTS AND
INDUSTRIES
--
THIS PROVISION WOULD REQUIRE
FACILITIES TO REDUCE THEIR EMISSIONS TO
A SO-CALLED "BRIGHT LINE" INDIVIDUAL
RISK LEVEL
- 23 -
--
RATHER THAN GIVING EPA THE
FLEXIBILITY TO ADDRESS ON A CASE-BY-
CASE BASIS THE RISK THAT REMAINS AFTER
CONTROLS ARE APPLIED, AS THE
ADMINISTRATION'S PROPOSAL ENVISIONS
FOR THE SECOND PHASE OF AIR TOXICS
REDUCTIONS ENVISIONS
--
UNDER THE SENATE BILL, ANY SOURCE
THAT POSES A LIFETIME CANCER RISK
GREATER THAN ONE IN 10,000 TO THE
"MAXIMUM EXPOSED INDIVIDUAL" IN ITS
VICINITY WOULD HAVE TO CONTROL ITS
EMISSIONS BELOW THAT LEVEL OR SHUT
DOWN
--
THIS "BRIGHT LINE" REQUIREMENT WOULD
RELY ON THE MISUSE OF ONE ELEMENT OF
A RISK ASSESSMENT
- 24 -
--
A "BRIGHT LINE" APPROACH TAKES ONE
WORST-CASE NUMBER OUT OF A RISK
ASSESSMENT AND MISUSES IT IN TWO WAYS:
--
FIRST, IT TREATS THAT NUMBER AS A TRUE
RISK, WHEN IT IS IN FACT A WORST-CASE
ESTIMATE THAT IS ONLY AS RELIABLE AS
THE UNDERLYING DATA
--
AND SECOND, IT TREATS THE NUMBER AS
THE SOLE CORRECT MEASURE OF PUBLIC
HEALTH, WHEN IT IS ONLY ONE PIECE OF
INFORMATION IN AN EXAMINATION THAT
SHOULD COVER ALL ASPECTS OF PUBLIC
HEALTH
- 25 -
--
so THE "BRIGHT LINE" NUMBER IGNORES
MANY "REAL-WORLD" CONSIDERATIONS,
SUCH AS THE NUMBER OF PEOPLE WHO
ARE ACTUALLY AT RISK, AND IT FAILS TO
TAKE INTO ACCOUNT MANY OTHER
FACTORS AND UNCERTAINTIES THAT EPA
MUST CONSIDER
--
SUCH A STANDARD COULD LEAD TO
UNACCEPTABLE ECONOMIC AND SOCIAL
COSTS, INCLUDING THE CLOSING OF
FACILITIES AND THE LOSS OF HUNDREDS
OR THOUSANDS OF JOBS, WITHOUT
COMPARABLE ENVIRONMENTAL BENEFITS
--
THE ADMINISTRATION'S BILL WOULD
ELIMINATE APPROXIMATELY 80 PERCENT OF
THE TOXIC SUBSTANCES EMITTED FROM
STATIONARY SOURCES IN ITS FIRST PHASE
- 26 -
--
THE SENATE BILL PURPORTS TO ELIMINATE
ALL REMAINING RESIDUAL RISKS IN PLANTS
THAT HAVE ALREADY INSTALLED THE BEST
TECHNOLOGY
--
THE PRESIDENT'S BILL, TOO, WOULD
ADDRESS WHATEVER RISKS REMAIN
--
BILL ROSENBERG, EPA'S ASSISTANT
ADMINISTRATOR FOR AIR AND RADIATION.
RECENTLY DESCRIBED TO ME HIS VISIT TO
A NATIONAL STEEL PLANT IN DETROIT
--
THAT 30-YEAR-OLD PLANT WAS RECENTLY
RENOVATED, INCLUDING AN INVESTMENT
OF MILLIONS OF DOLLARS FOR POLLUTION
CONTROL
- 27 -
--
IT NOW EMPLOYS 5,000 PEOPLE, INCLUDING
MANY WOMEN AND MINORITIES, WHO EARN
$25 AN HOUR IN A REGION THAT IS
OTHERWISE ECONOMICALLY DISTRESSED
--
NOW, I THINK DECISIONS ABOUT THE
FUTURE CONTROL OF SUCH A PLANT, WHEN
ITS VERY SURVIVAL IS AT STAKE, SHOULD
BE BASED ON A FULL CONSIDERATION OF
REAL, NOT THEORETICAL WORST CASE,
PUBLIC HEALTH FACTORS
--
THE COMMUNITY'S, AND THE NATION'S,
INTEREST IN THAT PLANT, AND OTHERS
LIKE IT, IS LARGE ENOUGH THAT WE DARE
NOT DESTROY IT ON PURE SURMISE
--
YET AS IT NOW READS, THE SENATE BILL
COULD CAUSE THAT PLANT TO SHUT DOWN
- 28 -
--
IS THIS GOOD PUBLIC POLICY? TO MAKE
DECISIONS PUTTING PEOPLE OUT OF WORK
WITHOUT CONSIDERING THE PUBLIC
HEALTH AS A WHOLE, WITHOUT
CONSIDERING THE RISK ASSESSMENT
UNCERTAINTIES, THE POTENTIAL FOR
FUTURE DEVELOPMENT OF CONTROL
TECHNOLOGIES, WITH ALL THE DISTRESS OF
AN ECONOMIC CALAMITY FOR THOUSANDS
OF PEOPLE, FOR AN ENTIRE COMMUNITY,
POSSIBLY A WHOLE INDUSTRY?
--
I THINK IT'S IMPORTANT FOR THE EPA
ADMINISTRATOR TO WEIGH ALL OF THESE
FACTORS; TO MAKE SURE THAT WE
CONSIDER EVERYTHING THAT'S IMPORTANT
TO PEOPLE'S WELL-BEING, AND TO BE
ALLOWED TO INCLUDE ECONOMIC AND
HEALTH FACTORS IN THE FINAL SHUTDOWN
CALCULUS
- 29 -
O
so MY MESSAGE TO INDUSTRY IS, WORK
WITH US TO BRING RISKS TO HEALTH
DOWN, AND DOWN SHARPLY
--
HELP US SOLVE THIS PROBLEM PROMPTLY
AND FINALLY
--
AND MY MESSAGE TO ENVIRONMENTALISTS
IS, RECOGNIZE THAT WE WILL WANT TO DO
MANY THINGS IN THE YEARS AHEAD -- --
SOME OF WHICH WILL INVOLVE NEW
LEGISLATION AND MORE MONEY
--
LET'S DON'T SPEND IT ALL ON CLEAN AIR,
WITHOUT GETTING THE COMMENSURATE
GAINS
- 30 -
O
THE PRESIDENT'S CLEAN AIR PROPOSALS, BY
CAPTURING MARKET FORCES AND PUTTING
THEM TO WORK ON BEHALF OF CLEAN AIR,
WILL BRING ABOUT BOTH ENVIRONMENTAL
IMPROVEMENTS AND HEALTHY ECONOMIC
GROWTH OVER THE LONG TERM
--
THESE ARE GOALS I THINK WE ALL CAN
SHARE, AND I HOPE YOU WILL WORK WITH
US TO SECURE A NEW CLEAN AIR ACT THAT
ACHIEVES BOTH ENVIRONMENTAL
PROTECTION AND ENVIRONMENTALLY
SOUND, SUSTAINABLE ECONOMIC GROWTH
--
THANK YOU
ID #.
CU
WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
O OUTGOING
H INTERNAL
I . INCOMING
Date Correspondence
Received (YY/MM/DD)
/
/
Name of Correspondent: Elaine L. Chao
MI Mail Report
User Codes: (A)
(B)
(C)
Subject: Clean air act - Statement of administration
Position on the Sercate Version of the Clean
air act amendments
ROUTE TO:
ACTION
DISPOSITION
Tracking
Type
Completion
Action
Date
of
Date
Office/Agency
(Staff Name)
Code
YY/MM/DD
Response
Code
YY/MM/DD
Croze
ORIGINATOR 90,01,19
/
/
Referral Note:
Cuat 17
A 90,01.19
590/01/25
Referral Note:
Cuat 02
I
/
/
/
/
Referral Note:
Cugray
Il
/
/
/
/
Referral Note:
/
/
/
/
-
Referral Note:
ACTION CODES:
DISPOSITION CODES:
A Appropriate Action
I - Info Copy Only/No Action Necessary
A Answered
C Completed
C Comment/Recommendation
R - Direct Reply w/Copy
B Non-Special Referral
S Suspended
D Draft Response
S For Signature
F Furnish Fact Sheet
X Interim Reply
to be used as Enclosure
FOR OUTGOING CORRESPONDENCE:
Type of Response = Initials of Signer
Code = "A"
Completion Date = Date of Outgoing
Comments:
No action required Jet 2/14/90
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
Always return completed correspondence record to Central Files.
Refer questions about the correspondence tracking system to Central Reference, ext. 2590.
5/81
Subject
Clean Air
Act - ben.
01/19/90
15:02
202 366 7127
DOT OST POLICY
002
OF
DEPARTMENT
THE DEPUTY SECRETARY OF TRANSPORTATION
WASHINGTON, D.C. 20590
UNITED STATES of AMERICA
JAN I 9 1990
MEMORANDUM FOR:
C. BOYDEN GRAY
Counsel to the President
The White House
FROM:
State Elaine L.
Chao
SUBJECT:
Clean Air Act
I understand that things are moving rapidly in the formulation of
a Statement of Administration Position on the Senate version of
the Clean Air Act Amendments. Knowing your keen interest in CAA
issues, I want to be sure that you are familiar with the concerns
of the Department of Transportation with the Senate bill.
We have recently provided our comments to OMB through the normal
legislative clearance process. A copy of our letter is attached
for your information.
I also understand that some consideration is being given to an
indication of those concerns that could result in a recommendation
that the President veto the bill. From our perspective, the first
two items on our list--the CO2 standard and the impacts on the
Federal-aid highway program-should be considered as possible veto
concerns.
I would be pleased to discuss these issues with you, if you wish.
Attachment
01/19/90
15:02
202 366 7127
DOT OST POLICY
1
003
U.S. Department of
General Counsel
400 Seventh St., S.W.
Transportation
Washington. D.C. 20590
January 17, 1990
The Honorable Richard G. Darman
Director
Office of Management and Budget
Washington, D.C. 20503
This responds to your request for the views of the Department of
Transportation as input to the floor position on S. 1630, a bill
"To amend the Clean Air Act to provide for
attainment and maintenance of health protective
national ambient air quality standards, and for
other purposes."
The Department of Transportation supports the Administration's
proposed Clean Air Act amendments. S. 1630 differs substantially
from the Administration bill. The Department is seriously
concerned about the impacts of a number of provisions of the bill
on the Department's programs and on transportation entities. Our
major concerns are as follows:
Carbon Dioxide Standards ($206). S. 1630 would require the
Environmental Protection Agency to issue fleetwide average
carbon dioxide (CO₂) standards for light duty vehicles
(defined in $201 of the bill to include cars, vans and light
trucks under 3750 pounds). This effectively requires a
higher fuel economy standard. The bill would set an
emissions standard of 266 grams per mile for MY 1996-99
vehicles, effectively requiring fuel economy of 33 mpg, and
220 grams per mile for MY 2000 and beyond, effectively
requiring fuel economy of 40 mpg.
The Department strongly objects to this provision. First, we
do not believe vehicle CO₂ emissions should be regulated when
no comparable regulation of other major sources of CO2 is
proposed. Second, we believe that such a stringent fuel
economy requirement would have a major adverse impact on U.S.
auto manufacturers and employment. Since the provision would
apply to a significant percentage of light trucks, it would
be particularly difficult to meet the stringent standard
proposed by the bill. The language of the bill has no
provision for consideration of technical feasibility or
01/19/90
15:03
202 366 7127
DOT OST POLICY
5
004
- 2 -
economic practicality, comparable to the Corporate Average
Fuel Economy (CAFE) program. The bill's mandate for specific
fleet CO₂ emission levels in effect supersedes the
Department's authority to administer the CAFE program, and
undermines DOT's discretion under the Motor Vehicle
Information and Cost Savings Act.
Impact on Urban Highway Construction. S. 1630 contains
several provisions which would cause serious disruption and
delays in highway planning and construction in urban areas.
The bill would give the EPA Administrator authority to set
standards for transportation planning (S106(f)). It would
expand the imposition of highway funding sanctions beyond the
Administration's proposal to include failure to implement any
provision of the state implementation plan or to achieve
required emission reductions and would make imposition of
sanctions mandatory. The bill would give EPA approval of
certain sanction exemptions, including safety and bridge
rehabilitation projects ($106(g)). The bill would also
establish a cumbersome and completely unworkable process for
determining that individual highway projects conform with
clean air plans ($106(h)).
we strongly oppose any changes in the planning, sanctions and
conformity provisions from those in the Administration's
bill. We particularly object to the provisions in the
sanctions section (5106(g)) which would make all highway
apportionments to a state "available without limitation" to
implement transit, air quality improvement and vehicle
occupancy programs, with a state matching requirement not to
exceed 10 percent. Collectively, these provisions will
transfer the transportation decisionmaking authority from DOT
to EPA in air quality nonattainment areas. As the Department
charged by statute with implementing the highway and mass
transit legislation, it is unacceptable to DOT to cede
authority over implementation of those programs to another
agency not charged with that responsibility.
o
Highway Trust Fund Impacts ($218). S. 1630 would require
3.1 percent oxygen content of fuel sold in carbon monoxide
nonattainment areas. Gasohol, a mixture of 90 percent
gasoline and 10 percent ethanol which is exempt from 6 cents
of the 9.1 cent per gallon Federal fuel tax, is the only fuel
which currently meets this requirement. The requirement for
3.1 percent oxygen content could result in revenue losses up
to $1 billion annually from the Highway Trust Fund, in
addition to current Trust Fund losses of some $480 million
annually due to the ethanol and other alternate fuel
exemptions.
01/19/90
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DOT OST POLICY
005
We are not aware of any justification for setting a specific
3.1 percent oxygen standard. We recognize that the bill
would allow EPA to promulgate guidelines allowing the
exchange of marketable oxygen credits among sellers of fuels.
Nevertheless, the Department objects strongly to the proposed
3.1 percent requirement. We prefer the Administration's
proposal, which would provide that serious CO nonattainment
area plans require sale of fuels which contain "such level
of oxygen necessary, in combination with other measures, to
provide for attainment."
Bus Emission Standards ($201). S. 1630 would require new
"heavy duty buses" to meet a particulate matter standard of
0.10 grams per brake horsepower hour (gbh) in 1991. The
transit industry and manufacturers have indicated that it is
unlikely that such a standard can be met under current
technology and market conditions. Thus, the requirement
would be a major problem for the transit and intercity bus
industries. Further, heavy duty diesel trucks would be
required to meet a less stringent standard of .25 gbh between
1991 and 1994. We believe that trucks and buses should meet
the same standard.
We strongly object to a .10 gbh particulate standard for
buses in 1991, and instead support the Administration's
proposed requirement of a .10 gbh particulate standard in
1994, together with a requirement for phased-in purchase of
clean fueled buses in large urban areas beginning in 1991.
Onboard/Stage II Vapor Controls ($203). S. 1630 would
require vehicle onboard systems for gasoline refueling vapor
recovery, as well as Stage II pump controls in ozone
nonattainment areas. There is no provision for consideration
of the safety of onboard systems or consultation with the
Department of Transportation in establishing requirements for
onboard systems.
The Department of Transportation objects strongly to the
requirement for onboard systems. The Department has stated
repeatedly that safety concerns about proposed onboard
refueling vapor recovery systems have not been satisfactorily
resolved. A recent independent evaluation of the safety of
onboard refueling vapor recovery systems concluded that
"there is adequate evidence to support the position that
there are indeed potential safety risks associated with
onboard systems. It is too early in the development process
to adequately and completely assess risks, which can only be
fully addressed after more comprehensive development and
01/19/90 15:04
202 366 7127
DOT OST POLICY
1
006
testing." The Department recommends that the Administration
oppose the requirement for onboard systems.
The Department appreciates the opportunity to provide these
comments. Additional technical comments are provided in an
attachment.
Sincerely,
of Bady
Attachment
01/19/90
15:04
202 366 7127
DOT OST POLICY
007
ATTACHMENT
DEPARTMENT OF TRANSPORTATION
TECHNICAL COMMENTS ON S. 1630
Vessel Loading Emissions. Section 107 of S. 1630 would amend the
Act by adding a new section 185(b) requiring the Administrator to
publish control technique guidelines for vessel loading and
unloading of petroleum products. Individual states could issue
varying standards, which would result in confusion and economic
impact on vessel owners. The section does not provide for
consultation with the Coast Guard or the Secretary with respect to
the safety of such guidelines. Section 107 refers to vessels
rather than marine tank vessels, which are the source of VOC
emissions. In addition, the section refers to vessel loading or
unloading. Current and proposed state regulations address VOC
emissions from tank vessel loading and ballasting, rather than
unloading, because those operations are the source of VOC
emissions.
We recommend that Section 107 be revised to provide for exclusive
Federal standards, developed by the Administrator in consultation
with the Secretary of the Department in which the Coast Guard is
operating. We also recommend that the language be revised to
address emissions from "loading and ballasting of marine tank
vessels."
Non-Road Engines. Section 210 of S. 1630 would authorize the
Administrator to promulgate regulations for emissions from non-
road engines and non-road vehicles. As defined in Section 210 (a),
it appears that vessel engines could be considered non-road
engines. We believe that this is not the intent, since there is
no reference to vessel engines elsewhere in the bill, and we
recommend that vessel engines be explicitly excluded.
Simple Negligence Standard ($601). S. 1630 would amend $113 of
the Clean Air Act to authorize a wide range of enforcement methods
including civil and criminal sanctions. The criminal enforcement
provisions contain a simple negligence standard. Criminal
statutes normally require gross negligence, willful acts or
aggravated circumstances. We recommend limiting simple negligence
to civil penalties and setting a higher standard for the
imposition of criminal penalties.
Fuel Volatility
Section 214 of the bill would amend $211 of the CAA to require
significant reductions in fuel volatility and would allow gasoline
with a 10 percent ethanol content to have a Reid vapor pressure of
01/19/90 15:05
202 366 7127
-
DOT - OST POLICY
1
008
&
10 pounds, one pound greater than the 9 pounds allowed for other
fuels. Reducing volatility has safety benefits. However, a
proviso in subsection (h) (4) allows a gasoline/ethanol blend to be
considered as complying if the gasoline by itself has a Reid vapor
pressure of 9 pounds and the ethanol has received a waiver for
emissions purposes. Since the addition of ethanol to gasoline
typically has much more than a one-pound effect on the gasoline's
vapor pressure, the effect of the proviso is to remove any limits
on the Reid vapor pressure of a 90/10 gasoline/ethanol blend. We
believe this proviso significantly detracts from the goal of
reducing fuel volatility and therefore recommend the deletion of
the proviso in subsection (h) (4).