Senator Wyden=s statement for the joint EPW and Judicial Committees= hearing on New Source Review

Businesses regulated by the New Source Review (NSR) program have legitimate interests. They want certainty, streamlining, and fairness in the permitting process.

But the only certainty I see in the Administration=s New Source Review proposal is increased air pollution.

EPA=s proposal breaks the clean air commitment made by industry, Congress and the first Bush Administration in the 1990 Clean Air Act Reauthorization. It also brazenly undercuts key enforcement actions that EPA has brought against several utilities. They are proposing a definition of Aroutine maintenance, repair, and replacement@ that would allow, for example, a $1-billion refinery to upgrade its plant by as much as $150 million per year without triggering new emission controls. EPA=s proposal is another step back in the Administration=s ongoing retreat from our country=s landmark environmental laws.

EPA has missed an opportunity to provide a win-win situation for industry and the environment. NSR done right could both increase energy efficiency and reduce pollution. It could provide certainty, quick turnaround, and protect the air.

I know this can be done because we do it in Oregon. For over 20 years, Oregon=s new source review program allows sources to make changes quickly, and it protects air quality. Oregon=s system is a APlantwide Applicability Limit@ or PAL; and it addresses all the problems that have been hashed back and forth for the last ten years in EPA=s NSR reform process.

Intel has a plant in the Portland area and they are quite happy with Oregon=s program, as you will hear from Mr. Harper today. In fact, Intel should be commended for their voluntary donation of some of their emissions of volatile organic compounds. Thanks to reductions from companies like Intel in the Portland area, we have been able to be reclassified from an ozone nonattainment area to an attainment area.

Let me be clear, however. EPA=s proposal for PAL doesn=t offer the protections and improvements that Oregon=s program does. I think it=s important to point out that Oregon wants to keep this area in attainment, and has changed its PAL program so that where companies make a substantial amount of emission reductions, the emissions Acap@ under a company=s PAL is now reduced so that company=s emission reductions are Alocked in@. The company=s limit has been reduced.

In addition, Oregon=s system doesn=t let a company increase its pollution based on phantom emission reductions nor does it allow companies to Ainflate@ its baseline emissions by selecting the highest 2-years over the past ten years.

And unlike EPA=s PAL, approach, all new sources or modifications in Oregon must go through our system. EPA offers the states a menu of options. Obviously, it should be a state=s choice to use a PAL system or not. But once a state chooses a PAL system, it should apply uniformly. Companies should not be given the option of picking the approach that allows them to minimize reductions and controls as EPA would allow them to do.

I think the Bush Administration has missed the point, and an opportunity. Rather than relaxing rules and weakening enforcement, EPA should be ensuring that the state and local agencies responsible for issuing NSR permits have the people and resources to do the job right. Sound and reasonable permitting decisions will both assure the regulatory certainty that business is seeking and maintain clean air protections.

EPA said it themselves: an EPA official recently stated many problems with NSR stem from the responsible personnel at the state and local agencies being Athe last ones hired@. They are very young, the NSR work assignment is frequently viewed Aentry level@ and undesirable and at the earliest opportunity the more ambitious personnel are Apromoted out@ of NSR. The result of this lack of experience, mentoring, and institutional memory is a cumbersome regulatory process at some state and local air permitting agencies.

EPA=s solution amounts to a AMc-NSR@ approach, where EPA is saying >We do it all for you= claiming its package makes the process easier to understand for the state and local agencies. Staff don=t have to think anymore or make difficult decisions; the regulations make it all automatic.

Rather than rewriting regulations and weakening clean air protections, the Bush Administration should be looking at the real issues associated with NSR, and real solutions. Giving bigger exemptions to some emissions sources does not solve air pollution problems. In fact, it makes it tougher for states as well as industrial sources to meet air quality goals. I, along with four other Senators, have recently signed a letter to the appropriations subcommittee that funds EPA. We have urged the subcommittee to increase funding for state and local air pollution control agencies by $25 million above the President=s proposal.

These agencies are the gatekeepers with the difficult task of balancing statutory environmental protection with economic growth. Let=s help them do this! Instead of dumbing down the law by rewriting the regulations, and endorsing a Clear Skies Initiative that essentially eliminates NSR for all power plants in the U.S., state and local air agencies and the public would be better served by investing the resources to find the smarter win-win solutions that achieve both our energy and environmental goals.