Barton bill to overhaul NSR rules, extend ozone compliance period

Washington (Platts)--26Sep2005

Draft legislation released Monday by the House Energy and Commerce
Committee Chairman Joe Barton would overall the Clean Air Act's New Source
Review requirements to give electric generating stations, refineries and other
energy facilities "maximum legal flexibility" to comply.
     Provisions to revise the NSR requirements and extend deadlines for areas
to reduce their ozone levels were tucked into a draft bill geared at relief
for the oil and gas industry in the wake of Hurricane Katrina that will be
marked up by the committee Wednesday.
     The proposal calls for one definition of plant "modification" under the
law's NSR and New Source Performance Standards program and exempts
maintenance, repair and replacement projects that are considered "routine"
industry-wide from NSR requirements. These requirements include obtaining
permits and installing equipment to reduce a facility's air pollution.
     Barton's bill also contains provisions to allow cities or regions to seek
more time to achieve compliance with the law's ozone restrictions if they can
prove their lack of compliance stems from downwind pollution from another
area.
     The draft bill calls on the Environmental Protection Agency administrator
to "reform" the law's NSR requirements considering the "urgent need to
increase efficiency and availability and to improve reliability" of the energy
supply to consumers. 
     In doing so, the administrator should "utilize and draw upon the maximum
legal flexibility available under existing law," the legislation said.  
     Environmental groups said the legislation stands to gut current law's
controls for harmful emissions from power plants and other energy and
industrial facilities.
     Barton's language "repeals the NSR program for all industrial sources in
the country," said John Walke, clean air director for the Natural Resources
Defense Council. The proposed legislation also would codify the "maximum
hourly achievable rate test," and basically apply the Fourth Circuit Court of
Appeal's decision that favored Duke Energy, he said.
     The Fourth Circuit Court earlier in 2005 ruled in favor of Duke Energy in
an EPA 2000 lawsuit against the utility for alleged NSR violations at upgraded
coal-fired power plants. 
     The court ruled that Congress intended NSR and NSPS to share the same
definition of modification under the Clean Air Act and that violations be
based on increases in hourly emissions of modified power plants.
     "NSR would cease to exist for existing plants if [Barton's language] is
adopted," said Walke. The legislation contains "loopholes to what is
considered a change in the facility and what is considered a pollution
increase and thereby allows massive capital projects and even more massive
pollution to escape any controls at all."
                                           --Cathy Cash, cathy_cash@platts.com

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