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Prepared Witness Testimony The House Committee on Energy and Commerce
'Bump-Up' Policy Under Title I of the Clean Air Act
Subcommittee on Energy and Air Quality
The Honorable Bobby Simpson
1. Introduction Thank you Mr. Chairman and Members of the Committee for the opportunity to speak with you today about the reclassification ("bump-up") provisions of Title I of the Clean Air Act and the consequences of their application to the Baton Rouge area. I have closely followed and been involved with the Baton Rouge ozone nonattainment issue for over a decade - first as a member of the Transportation Policy Committee of the Capital Region Planning Commission and, more recently, as Mayor-President of the City of Baton Rouge and East Baton Rouge Parish. I have worked closely with the Presidents of the other four parishes of the Baton Rouge Ozone Nonattainment Area on this issue. We all understand the importance of attainment of the National Ambient Air Quality Standards (NAAQS) for the health of our citizens and the vitality of our local economy. We have watched with pride the determined effort our community has made in improving our air quality and the progress we've made toward attainment of the ozone standard. The Baton Rouge area is home to Louisiana state government, a number of major petrochemical industries, two major universities, a major marine port, and a commercial jet airport. Our 5-parish community consists of a population of over 600,000. Threading through our community is the Mississippi River with its heavy marine traffic, a concentration of railway assets servicing our community, and a very busy east-west interstate highway. Additionally, we've learned that at times we are affected by transport of air pollutants into our area from upwind sources. Thus, you can understand the challenges we've faced and our pride at being in attainment for all established NAAQS except for ozone, and for the progress we've made toward attainment of the ozone standard. Our ozone design value in 1999 was 126 ppb, only two (2) parts per billion above the attainment criterion. We've had only one or two exceedance days in three of the last four years. If we were reclassified today according to the classification system of the Clean Air Act Amendments of 1990, we would be classified as "marginal". Halfway through this summer's ozone season we find ourselves still with an opportunity to achieve attainment of the 1-hour ozone standard, as well as the more stringent 8-hour ozone standard. Thus, you can understand the outrage we feel for the reclassification of our area to "severe". When we should be celebrating our progress and focusing on the final distance to attainment, it appears we are being punished with the "severe" classification stigma and distracted with the additional onerous and inappropriate requirements the classification brings. The reclassification to "severe" and accompanying requirements will bring us enormous cost and inconvenience, but will not measurably improve our air quality; nor will it advance the date for attainment of the ozone standard. While I've been close to the Baton Rouge ozone nonattainment situation for a number of years, I must still rely on our trusted local air quality experts for information concerning the technical aspects of the ozone issue. These experts, both in the private sector and with the Louisiana Department of Environmental Quality (DEQ), have assisted with development of the information I am providing in this statement. 2. Baton Rouge Area Ozone Progress As a result of high ozone levels recorded in the late 1980's, the Baton Rouge area was originally classified as a "serious" area under the provisions of the Clean Air Act Amendments of 1990. Since then, the area has progressed significantly in mitigating its ozone problem. For example: · The area's ozone season has declined from 12 months, where we might have an exceedance of the standard at any time during the year, to only the warmer summer months of May through September. · Annual maximum ozone values have declined considerably. · Numbers of days of exceedances experienced each year have declined from around 20 to only 1 or 2. · Duration and intensity of episodes of elevated ozone have declined. Number of hours of exceedances in ozone episodes have declined from 4 or more to only 1 or 2. · During the past four years, we have been, at times, 2 ppb or one exceedance day away from achieving attainment. · At the end of 2002, our design value for the 8-hour ozone standard was 86 ppb, only two ppb away from attainment. Under EPA's proposed implementation plan, we would be classified as "marginal" under the more stringent 8-hour standard. · At halfway through this summer's ozone season, we are still on track for possible attainment of both the 1-hour and 8-hour ozone standards. 3. Failure to Attain Even before passage of the Clean Air Act Amendments of 1990, a Joint DEQ-Industry Ozone Technical Task Force (OTF) was established to work on the Baton Rouge area ozone problem. Over three million dollars was invested in monitoring, modeling, and research. Over the course of the early 1990's DEQ worked and complied with a plethora of EPA rulemaking and guidance flowing from the CAAA of 1990. Following EPA rules and guidance and using EPA's preferred scientific tools, DEQ and the OTF put together a comprehensive plan State Implementation Plan (SIP) to bring the Baton Rouge area into attainment for the 1-hour ozone standard by November 1999. This plan and all its supporting elements were submitted to EPA in August 1998. All the scientific tools employed during this process led very clearly to the conclusion that VOC emissions would have to be reduced to lower ozone levels and achieve attainment. The tools also showed a disbenefit (or ozone increase) if nitrogen oxides (NOx) reductions were made. In its July 1999 federal register notice of formal approval of DEQ attainment SIP and supporting elements for the Baton Rouge area, EPA writes that it has determined that the State "adequately demonstrated the modeled control strategy would provide for attainment of the ozone NAAQS by the statutory attainment date". Further, they write that "Through photochemical grid modeling, the State has demonstrated to the EPA's satisfaction that the VOC reductions in the 15% and Post-1996 plans (34.8 and 21.4 tons per day, respectively) are sufficient to demonstrate attainment of the ozone NAAQS by the statutory deadline." The Baton Rouge area not only achieved the total 56.2 tons per day specified in the attainment plan, it achieved considerably greater reductions than called for in the plan. The total man-made VOC inventory in the five-parish Baton Rouge Ozone Nonattainment area in 1990 was 234 tons per day. By 1999, the area had reduced emissions to 143 tons per day - a decrease of over 91 tons per day. And yet we failed to attain. Now, we find in the latest round of attainment planning using the latest scientific tools and guidance that we need a substantial reduction of NOx emissions (around 30%) to achieve attainment. Also employing these latest tools we find that if we reduced VOCs an additional 30% we would only get about a 1 ppb decline in ozone levels. In essence, we can't, and quite possibly could never, get to attainment with a VOC control strategy alone. We were set up to fail by EPA's imperfect understanding of the dynamics of ozone control strategies and consequent flawed guidance. Newer, scientifically superior modeling tools have now replaced the ones we employed. The DEQ and the Baton Rouge community did everything they were directed to do and more. Yet, we failed to attain and are being reclassified to "severe" by operation of law. This is not a failure of the Baton Rouge community; this is the result of the application of imperfect planning tools and flawed guidance. But, it is the Baton Rouge community that will suffer the consequences of this failure. 4. Extended Attainment Deadline Under EPA's Transport Policy In a May 10, 2000 letter from Governor Mike Foster to EPA Region 6 Administrator, Gregg Cooke, a request was made for an extension of the attainment date for the Baton Rouge area based on transported air pollution. EPA replied that in order for EPA to approve an extension of the attainment date based on transport, the State would have to: 1. Submit a formal demonstration that the Baton Rouge area's air quality is, in fact, affected by transport from an upwind area in another state that significantly contributes to Baton Rouge's continued nonattainment; 2. Submit an approvable attainment demonstration SIP showing the Baton Rouge area will attain the 1-hour ozone standard as "expeditiously as practicable", but no later than the statutory attainment date of the upwind nonattainment area; 3. Submit in the attainment demonstration SIP, as adopted measures, all additional local control measures needed for expeditious attainment; 4. Demonstrate that all applicable local measures required under the Baton Rouge's "serious" classification have been satisfied; and 5. Provide that all newly adopted control measures will be implemented as "expeditiously as practicable". The Baton Rouge Ozone Task Force (OTF2) was formed in the late summer of 2000 to provide the Louisiana Department of Environmental Quality (DEQ) with assistance in complying with the requirements set forth by EPA in its 1998 Extension Policy guidance. Specifically, it's goals were: (1) to provide technical and financial resources to support the development of sound, cost-effective emission control strategies to bring the Baton Rouge area into attainment for the ozone standard; (2) to engage the various stakeholders in the research, analysis, and decision-making processes for the Attainment Demonstration and SIP revision; and (3) to promote communication between DEQ, the regulated community, and the public. A steering committee (SC) provided oversight and direction to the OTF2 efforts. The new ozone attainment demonstration was prepared through an open and collaborative process involving DEQ, EPA, and the OTF2. The Ozone Task Force was comprised of representatives of major stakeholders within the Baton Rouge community including local governments, planning agencies, Chamber of Commerce, commercial and industrial trade organizations, electric utilities, and environmental organizations. EPA was intimately involved throughout the entire process of SIP development, with staffers regularly attending the OTF2 Steering Committee meetings. There were also the regular SIP conference calls along with several meetings of DEQ and EPA staff to discuss SIP issues. Through the OTF2 SIP development process, the new attainment plan for Baton Rouge was developed using: · A very open process with good participation · A thorough examination of available control measures · Considerable effort to assure good emissions inventories · Sound modeling protocol · Heavy modeling effort to test control strategies and model sensitivities and performance · Judicious selection of control strategies, and · A robust attainment demonstration The concerted efforts of DEQ, the OTF2, and EPA produced a reasonable and scientifically sound plan that the Baton Rouge community felt would lead us to cleaner air and attainment of the ozone standard by 2005. The requirement to demonstrate that the Baton Rouge area was affected by transported pollutants was met through research conducted by Science Applications International, Inc. (SAI), a nationally recognized meteorology and air quality research firm. SAI concluded from their research that "transport of ozone and precursor emissions from southeast Texas contributes to daily maximum ozone concentrations in the Baton Rouge area." They quantified this contribution as ranging from 2 to 6 ppb, although under certain conditions the impacts could be as large as 10 ppb. Analysis of meteorological parameters for 5- and 10-year periods using a variety of techniques indicated the potential for transport exists on approximately 10 to 30 percent of the Baton Rouge exceedance days. In their report to DEQ, SAI concluded that given the design value of 126 (as in 1999) for Baton Rouge, "these results suggest that but for transport of ozone and precursor pollutants from Houston, Baton Rouge would have attained the 1-hour ozone standard in 1999." In an October 2, 2002 Federal Register notice, EPA approved the Baton Rouge Transport SIP and all its elements as well as the transport demonstration, and extended the attainment date for the Baton Rouge area to November 15, 2005. Of course, as a result of litigation, EPA has conceded it did not have the authority under the Clean Air Act to extend attainment dates. This prompted EPA to request a remand of the attainment date extension for the Baton Rouge area, to publish a notice of the area's failure to attain the standard, and to reclassify the area from "serious" to "severe". The reclassification became effective on June 23, 2003. 5. Consequences of the "Severe" Classification on the Baton Rouge Area With reclassification to "severe", the Baton Rouge area will be tagged with a stigma of having a "severe" air quality problem, although monitored results show we have at worst a "marginal" problem. It is difficult to quantify this impact because it is manifest primarily in opportunities lost, many of which we may never know of. It will become more difficult to recruit new businesses and employees to the area because of the perception of severe air quality problems. Even the citizens within our own community may be unnecessarily concerned about the health implications for their families, even though the air we breathe now has considerably improved over the past decade. With reclassification, the Baton Rouge area will also be confronted with a number of new requirements of the "severe" classification. These include: reformulated gasoline; enforceable transportation control measures; redefinition of major source from 50 to 25 tons per year (tpy); increased offset requirements from 1.2 to 1 to 1.3 to 1; and Section 185 penalty fees to be imposed on major sources if the area fails to attain by the 2005 attainment date. Reformulated Gasoline At 12 months following the effective date of reclassification (i.e. June, 2004), the five-parish Baton Rouge ozone nonattainment area becomes subject to year-round reformulated gasoline (RFG). Local fuel experts tell us that RFG will cost around an additional 10 to 15 cents per gallon. Using gasoline sales statistics for the 5-parish area it is estimated that RFG will cost Baton Rouge consumers an additional $48 to $72 million dollars per year. There will also be significant redistribution of sale of gasoline and convenience store items around the periphery of the nonattainment area. Using the latest mobile emissions model, DEQ has estimated that RFG will result in a reduction in VOC emissions of a little under 2 tons per day. Although we are now employing a NOx control strategy, RFG provides negligible NOx-reduction benefits. Sensitivity analyses conducted during recent Urban Airshed Model suggests there would be no measurable ozone benefits from RFG. At $24 to $36 million per ton of VOC reduction and negligible ozone benefits, this presents an absurd cost-benefit ratio. Enforceable Transportation Control Measures The Clean Air Act requires "severe" areas to offset increases in emissions resulting from growth in vehicle miles traveled (VMT). Fortunately, an initial review by DEQ suggests that Baton Rouge may not have to implement mandatory transportation control measures to offset VMT growth. Redefinition of Major Source The reclassification of the Baton Rouge area to "severe" will require the redefinition of major source from the present 50 tons per year (tpy) to 25 tpy. DEQ projects that this change will impact around 40 to 50 businesses in the 5-parish area. These previously unregulated businesses will become subject to having to submit Title V permit applications, monitoring and reporting of their emissions, and enforcement inspections by DEQ. This will represent a significant increase in the cost of business for these facilities, and may result in the closure of some. An initial analysis by DEQ suggests there will be little emissions reductions benefits that correlate with the requirement to submit Title V permit applications. There may be some later benefit associated with offset requirements if a business expands. This addition of a new population of Title V permits is going to add significant new burdens to DEQ's permit review and processing staffs. Increased Offsets It is expected that the increased offset ratio will be required for all permits not deemed administratively complete prior to the effective date of the bump-up. The total fiscal impact of this requirement has not been estimated; however, because of the diminishing availability of offsets, this new requirement will undoubtedly affect the decisions on expansions and/or modifications to local industries. Section 185 Penalty Fees If the Baton Rouge area does not achieve attainment by November 15, 2005, DEQ must impose emission fees of $5,000 (1990 dollars adjusted for inflation - now around $7,700) per ton of VOC and NOx emitted above 80% of an operating baseline from each major source. Using 2000 emissions data for the 5-parish area, it is estimated that the annual cost of the penalties to major sources will be about $100 million. These annual penalty fees will continue until we achieve attainment. The Baton Rouge Ozone Task Force looked at these "severe" measures during attainment planning and discarded them because they presented little benefit for the cost and inconvenience of implementation in the Baton Rouge area. Reclassification of the Baton Rouge area will require reconstitution of DEQ's SIP resources for analysis and planning related to accommodation of the new "severe" classification requirements. EPA has already specified that additional Urban Airshed Modeling will have to be done to reflect the new requirements. It could take anywhere from 6 to 12 additional months to complete analysis, modeling, and rulemaking for the new "severe" SIP. DEQ and the Baton Rouge Ozone Task Force working with EPA have developed and submitted a competent ozone attainment plan for the Baton Rouge area. Why jeopardize this work, impose the "severe" area requirements that are clearly inappropriate for the area, and delay the process that could already be improving air quality? 6. Uncertainty Discussions with EPA have revealed a large amount of uncertainty concerning requirements and timing of implementation of the new "severe" area requirements. Although other areas have been bumped-up in the past, Baton Rouge will apparently be the first into the chute following the reversal of EPA's attainment date extension policy. In EPA's recently proposed implementation rules for the new 8-hour ozone standard it is proposed the 1-hour standard be revoked one year following attainment designations for the new standard (thus revocation in April, 2005). Should DEQ be required to work simultaneously on attainment planning for the 1-hour and the 8-hour ozone standards? Should DEQ be required to develop and submit the new "severe" SIP for the 1-hour standard when the standard might be revoked the following year? The reconciliation of bump-up requirements for areas with previously extended attainment dates for the 1-hour ozone standard with the implementation of the new 8-hour ozone standard is going to be a regulatory nightmare for areas such as Baton Rouge. 7. Conclusion In spite of a challenging emissions inventory and periodic influence of ozone and ozone precursors transported into the region, the Baton Rouge area has made good progress toward attainment of the 1-hour ozone standard. Through a collaborative process involving the major stakeholders within our community, a sound plan (transport SIP) has been developed to achieve attainment of the ozone standard by November 15, 2005. The bump-up to a "severe" classification is expected to result in great cost and inconvenience to Baton Rouge area citizens, while providing negligible air quality benefits. Since the approved transport SIP had already planned for a November 2005 attainment date, the bump-up does nothing to shorten the time to attainment. Given these circumstances I respectfully request that strong consideration be given to amending the Clean Air Act to give EPA the authority to extend attainment dates as was initially intended under the Transport Policy. Further, I request that any amendment be made retroactive to accommodate areas such as Baton Rouge that already have been, or soon will be, bumped-up as a result of the recent court decisions. Summary of Major Points 1. In spite of a challenging emissions inventory and periodic influence of ozone and ozone precursors transported into the region, the Baton Rouge area has made good progress toward attainment of the 1-hour ozone standard. 2. The Baton Rouge area came within 2 ppb of achieving attainment in 1999, and last year came within only one exceedance day of attainment. Nonetheless, it failed to achieve attainment by its attainment date prescribed in the Clean Air Act. 3. In the spring of 2000, the area availed itself to the opportunity of an extended attainment date under EPA's 1998 "Guidance on Extension of Attainment Dates for Downwind Transport Areas". 4. In December, 2001 the Louisiana DEQ submitted a completed Transport SIP package to EPA Region 6. This package included a demonstration that the area was affected by transport from the Houston area in southeast Texas as well as a revised SIP and attainment plan showing the area would attain the 1-hour ozone standard by November 2005. 5. EPA approved all elements of the ozone attainment plan and the transport demonstration in October, 2002. 6. As a result of the federal courts' reversal of EPA's authority to grant attainment date extensions, the Baton Rouge area was reclassified from a "serious" to a "severe" classification effective June 23, 2003. Since the area's approved Transport SIP had already specified attainment by November 2005, there was no change in attainment date for the area as a result of the reclassification. 7. The new "severe" area requirements imposed with the reclassification are ill suited for the Baton Rouge area. They are expected to produce negligible ozone reduction benefits, while inflicting enormous cost and economic development impacts on the area. 8. Considerable thought and research went into the development of EPA's transport policy. It was designed to accommodate situations, such as in Baton Rouge, where attainment efforts are impeded by influences of pollutants transported from upwind sources. 9. The Clean Air Act should be amended to give EPA the authority to implement its transport policy and extend attainment dates. Any such amendment of the Clean Air Act should be made retroactive to provide relief to areas such as Baton Rouge that had been granted approved attainment date extensions under the EPA transport policy and that have now been reclassified.
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