Acton Commentary

Bureaucratic Arrogance at the EPA


Tomorrow, Eric Schaeffer, the recently resigned director of the Environmental Protection Agency's Office of Regulatory Enforcement, is set to testify before the Senate's Governmental Affairs Committee. This previously scheduled hearing was slated as a routine review of Bush administration environmental policy, but with Mr. Schaeffer's public resignation last week, the stage is set for high-stakes environmental politics that place scoring political points ahead of sound science.

In his resignation letter last week, Mr. Schaeffer exhibited the bureaucratic conceit typical of those who think that only the government is capable of representing the public good. For example, he attacks the administration for attempting “to weaken rules we are trying to enforce.” No where does he ask the question that Bush administration officials have been publicly asking for some time–do the rules make sense? Do they accomplish the stated goals? The rules in question are those that govern the “New Source Review” provisions in the Clean Air Act which dictate that extremely costly pollution control technology be added to coal-fired power plants seeking to upgrade operations by installing more efficient technology.

The “New Source Review” provisions have long been a source of contention between the EPA and utility companies. While it is common for EPA enforcement officials to claim the moral high ground in their crusade to protect the public good, few of them have taken time to examine the perverse disincentives created by the New Source Review provisions. In his letter, Mr. Schaeffer offers some alarming statistics concerning the pollution produced by coal-fired power plants:

“As the scale of pollution from these coal-fired smokestacks is immense, so is the damage to public health. Data supplied to the Senate Environment Committee by the EPA last year estimate the annual health bill from 7 million tons of sulfur dioxide and nitrogen oxide: more than 10,800 premature deaths; 5,400 incidents of chronic bronchitis; more than 5,100 hospital emergency visits; and over 1.5 million lost work days.”

No doubt such statistics are disturbing, but it must be noted that these “statistics” are not really statistics at all. They are estimates based on the pre-conceived notion that these industrial by-products are going to cause threats to public health at any level of exposure . Of course, such an extreme notion falls short of sound scientific analysis. It does remain true, however, that it is a good goal to reduce the level of emissions and lowering the level of exposure. Mr. Schaeffer proposes that lawsuits initiated by the EPA were on the verge of reducing emissions, but he ignores the fact that the EPA's own studies show emissions consistently declining over the past two decades.

In studies conducted by the EPA, the use of coal in electricity generation has increased 74 percent since 1980. This is an interesting statistic, especially as it relates to other studies conducted by the EPA illustrating that under the increased use of coal in electricity generation, sulfur dioxide emissions have shown a 26 percent decrease since 1980 and nitrogen oxide emissions have fallen 19 percent during the same period. It is simply not reasonable to assert that EPA-initiated lawsuits of the past fifteen months, referred to by Mr. Schaeffer in his letter, are the cause of the long-term decrease in these emissions.

The real cause of these emission reductions is the heavy investment of the electricity industry in advanced production technology that has made electricity generation more efficient and environmentally friendly. Many of these advancements have occurred in the past two decades. Such technological advancements have been the result of consumer demand for more abundant, less-expensive, and more environmentally friendly power. These market demands have caused utility companies to invest in technology that increases production capacity, reduces emissions, and increases production efficiency. These investments are the cause of emission reductions, even as the use of coal has increased.

The disincentives of the “New Source Review” provisions of the Clean Air Act have been at least one of the reasons that emissions have not fallen sooner. According to the provisions, any routine maintenance on coal-fired plants that would substitute out-of-date equipment for more efficient equipment would trigger the costly requirements of installing pollution control technology of dubious worth. As a result, “New Source Review” provisions have led to disruptions in energy providers' operations as they await New Source Review Prevention of Significant Deterioration Permits (NSR/PSD) that would allow coal-fired plants the ability to replace old equipment with newer, more efficient equipment. The cost of such delays translates into the longer-term use of less environmentally friendly equipment and higher costs for the consumer.

As Mr. Schaeffer goes before the Senate committee tomorrow, he would do well do examine how the EPA's own policy has contributed to the situation he so bitterly laments in his resignation letter. His assumption that energy industry officials want to pollute as much as they can get away with ignores the market forces that have caused energy officials to invest in more efficient and environmentally friendly technology. EPA rulings on New Source Review provisions have prevented companies from making improvements that would be beneficial to the industry, the consumer, and the environment. This is a truly lamentable and self-defeating policy for all interested parties. We can only hope that after Mr. Schaeffer concludes his testimony on behalf of the “public interest,” someone will stand up and speak for everybody else–those who suffer the costs associated with such bureaucratic arrogance.