Director of the Air Resources Division,
New Hampshire Department of Environmental Services
Committee on Environment and Public Works
United States Senate
November 1, 2001
Good morning. My name is Ken Colburn. I am the Director of New Hampshire’s air pollution control program, and I appreciate the opportunity to share with the Committee some ideas regarding multi-pollutant approaches to reduce emissions from power plants. I applaud the Chairman and Ranking Member for your leadership in tackling this issue due to its importance not only to public health and our natural environment, but also to our nation’s economic future and global competitiveness, and what burdens the states will face in wrestling with these pollutants in the future.
A reassessment is timely, since it’s been more than a decade since the last major amendments to the Clean Air Act. We’ve made significant progress. Overall pollution from power plants is declining – and air quality in many places is improving – despite substantial increases in economic activity and a near-doubling of coal consumption. In short, the Clean Air Act remains one of the most successful and important pieces of environmental legislation ever passed by Congress.
At the same time, the Act – and its implementation – must continue to evolve and improve in order to afford the public and industry the benefit of our collective learning since the 1990 Amendments. We should build on the successes of the past ten years, particularly the Acid Rain Program’s cap-and-trade approach, which – through cost-effective, market-based approaches – has shown that environmental and economic interests can be aligned, rather than at odds. And we need to rectify several shortcomings, like how the Act ignores wind and how resistant some of its provisions have been to embracing new scientific developments and innovative pollution control approaches.
Most important, we need to improve its results. Many areas of the country still violate health-based air quality standards. Forests and aquatic ecosystems throughout the Northeast continue to suffer acid rain damage. And growing scientific evidence points to the profound health effects of fine particles in the body, the long-term consequences of toxic metals like mercury building up in the environment, and climate altering effects of carbon dioxide building up in the atmosphere.
Fortunately, multi-pollutant approaches like S.556 promise to address all of these needs simultaneously. That’s why the Northeast states strongly support the Committee’s efforts to draft comprehensive legislation to further reduce power sector emissions of SO2, NOx, mercury and carbon dioxide. Only a comprehensive, “4-P” approach can give industry the investment and planning certainty it needs, while ensuring a reliable electricity supply and promoting a smooth transition to the mix of resources and technologies that will be needed to improve public health, sustain environmental progress, and enable continued economic growth in the future.
Note that a “3-P” approach will not accomplish this goal. Scientifically and politically, it is clearer than ever that climate change cannot be ignored. At some point, it will be necessary to not only hold the line against emissions increases, but to begin to decrease our contribution to the global burden of climate-forcing gases. In this regard, my understanding is that based on the Energy Information Administration’s (EIA) analysis (of the Smith, Voinovich, Brownback proposal) – which is apt to represent a relatively conservative estimate – prices for CO2 would be as low as $10 per ton, and could go even lower with the inclusion of sequestration activities and non-CO2 gases. The bottom line is that control programs for just three pollutants – if they result only in additional smokestack controls – will not provide industry with meaningful, long-term investment certainty, nor will it spur development in the U.S. of new, advanced energy technologies and renewable power sources to meet the global market demands of a carbon-constrained world.
In short, we won’t gain on the future by wedding ourselves to the technologies and policies of the past. Ultimately, in the marathon of global competition, energy efficiency will win out over inefficiency – it’s just a question of how much technology opportunity and competitive advantage we will squander by delaying. So, whether to provide existing utilities with greater certainty, or to give technology developers a clear reason to move forward, high-technology states like New Hampshire believe that action today on a multi-pollutant approach is economically (let alone environmentally) superior to inaction. Note that these views aren’t limited to state air officials – many of the nation’s largest utilities concur with this assessment.
States also have a more direct economic interest in federal action now. All of us want to deal with upcoming attainment dates and designations in the most cost-effective way possible. States can do a lot of things better than the federal government, but adopting consistent regulations that effectively and equitably address the multi-state impacts of an industry involved in aggressive inter-state competition is not a task best left to the separate states. Addressing power plants emissions – the largest, most cost-effectively controlled sources – through a nationally consistent, output-based approach – will take the smallest “bite” out of the nation’s economy. Any emission reductions not achieved through an aggressive federal multi-pollutant approach will have to be secured by imposing additional burdens on state and local governments to impose additional regulatory burdens on other, smaller sources. Failure to adopt effective, national 4-P legislation is a recipe for adding cost and needlessly burdening the economy in pursuit of the same environmental and public health objectives. Further, since federal preemption puts substantial obstacles in the way of state efforts to control other major pollution sources (e.g., vehicles and fuels), small businesses will bear the brunt of achieving the emission reductions not secured through multi-pollutant legislation.
States like New Hampshire are also interested in the combined economic, health, and environmental benefits that a federally-inspired technology push will provide. Specifically, energy reliability, energy cost savings, and energy security can be better served by energy efficiency and distributed generation technologies than by resorting to the historical practice of erecting vulnerable power plants and pipelines.
In addition, we’d like to address the persistent problem of transported air pollution in a more constructive fashion than the Act now allows. The Clean Air Act provided a mechanism – albeit an incomplete, cumbersome, and exhausting one – to address some transported pollution (i.e., that from stationary sources only). Although admirable in its intent, this mechanism has divided the country into bitterly opposing “upwind” and “downwind” camps, and wasted scarce state resources pursuing or responding to incessant litigation. Congressional inaction now will force states to continue to rely upon divisive interstate petitions under Section 126 and Section 110 of the Act to protect the health of our citizens. Dramatically reducing power plant pollution – through aggressive federal multi-pollutant legislation using proven market mechanisms to produce economically efficient choices and provide regulatory flexibility – seems unquestionably more productive and cost-effective than burdening the states with solving interstate pollution transport problems through inherently litigious means.
Speaking of regulatory flexibility, New Source Review (NSR) has been the focus of much recent attention. Over the past decade, when many old, grandfathered power plants not only did not retire (as premised in Clean Air Act deliberations), but actually increased their output, the NSR program accomplished two very important things. First, it enabled states to secure much-needed pollution reductions at new sources that a business-as-usual approach could not have achieved. Second, NSR gave rise to the development and application of new and better emission control technologies. The application of NSR to modifications at existing sources has been more controversial, leading to contentious enforcement actions by EPA and several states.
The fact that a law is sometimes violated, however, doesn’t mean we don’t need it. The New England states unequivocally support the ongoing enforcement actions against companies that violated NSR requirements in the past, and feel strongly that any new legislation must not impede those actions or provide a pretext for letting past violators off the hook.
Going forward, however, there may be opportunity for consensus in making NSR improvements. Constructive progress is most likely to occur if we take a “systems approach” to the interlocking provisions of the Act. The ultimate lens we will use to evaluate the resulting combination of new provisions will be whether they guarantee substantially greater public health protection than the current statute. Specifically, states will be more willing to entertain greater regulatory relief if emission reduction commitments are larger, timely, certain (i.e., “locked down”), and become progressively more protective over time. We will not support relief today in exchange for promises of future reductions. In addition, the full suite of existing state authorities to go beyond federal requirements when necessary to protect public health and the environment must not be abridged.
In conclusion, several states are already moving ahead to create an energy future that is cheaper, cleaner, more secure, provides greater competitive advantage, and more opportunity for technology jobs. We recommend that country as a whole do likewise by adopting an aggressive, national, 4-pollutant emission reduction strategy reflecting the core concepts of S.556. The Northeast states have developed a set of general, consensus principles for such legislation – a copy of which is attached to my testimony – and I’d be pleased to discuss targets and timelines if you wish.
Thanks again for the opportunity to share these thoughts. I look forward to any questions you may have.
Kenneth A. Colburn
Director, Air Resources Division
NH Department of Environmental Services
6 Hazen Drive
Concord, NH 03302-0095
(603) 271-1381 Fax
Summary of Northeast States’ Perspective on
National Legislation to Reduce Power Plant Emissions
September 7, 2001
Northeast States agree that federal efforts to achieve integrated reductions in multiple power plant pollutants should be implemented on an annual, output-basis with caps to limit overall pollutant levels. Possible reduction targets and timeframes are identified below. To ease comparison with other proposals they are presented in terms of a cap target and equivalent output-based emissions rate. However, this presentation is not intended to preclude discussion of dynamic or declining caps, a concept that we continue to explore, or of more aggressive targets than those described here.
SO2 Target: National annual cap of approximately 4 million tons by 2004-7, with a further reduction to 2 million tons in the 2009-12 timeframe. These caps translate to average emissions rates of approx. 3.0 and 1.5 lbs/MWh, respectively and represent a 55 to 78 percent reduction from eventual 8.9 million ton Acid Rain cap. Implications of existing allowance “bank” must be addressed in developing SO2 requirements.
NOx Target: National annual cap of approximately 2 million tons by 2004-7, with a further reduction to 1.3 million tons in the 2009-12 timeframe. These caps translate to average emissions rates of about 1.5 lb/MWh and 1.0 lb/MWh, respectively and represent a 70 to 80 percent reduction from current annual emissions of approx. 7 million tons. The 2 million ton cap can be achieved by annualizing NOx SIP Call requirements.
Mercury Target: National reductions greater than 70 percent by 2004-7 with a reduction goal of 85-95 percent by 2009-12. Further work needed to determine how to set standards that will achieve desired goals and to explore feasibility/acceptability of using market mechanisms to implement mercury reductions.
CO2 Target: Return power sector emissions to 1990 levels by 2010 with an additional reduction of at least 10% to be achieved by 2020. Additional work is needed to explore possible role of flexibility mechanisms (e.g. trading, early action, off-sector credits, etc.), cost caps, implications of recent international developments, etc.
Other Power Plant Pollutants: In the interests of regulatory certainty and comprehensiveness, other important power plant pollutants – such as primary particulate matter, other air toxics and carbon monoxide – may need to be addressed as part of multi-pollutant legislation. NE States are exploring potential options/targets appropriate to these pollutants.
Other Key Issues
As indicated above, a number of details concerning each of the targeted pollutants must still be addressed. In addition, the Northeast States are coordinating to develop specific recommendations in four broad issue areas likely to be closely linked to the multi-pollutant debate:
· Interaction of multi-pollutant legislation with New Source Review (NSR), Prevention of Significant Deterioration (PSD) and other existing or pending regulatory programs (e.g. BART, mercury MACT determination, etc.). Under no circumstances should new federal legislation obstruct or limit enforcement actions undertaken to remedy violations of existing NSR requirements.
· Interaction of federal multi-pollutant requirements with existing or future state requirements. Because states bear ultimate responsibility for meeting ambient air quality standards and protecting public health, any new federal legislation must maintain the full scope of existing state authority to adopt more protective requirements.
· Addressing local pollution concerns and their implications for the design of future regulatory requirements (such as trading). States must retain the authority to respond as they deem necessary to remedy adverse local impacts. Provisions must also be included that require a federal response to remedy local impacts of an inter-state nature.
· The ability to include additional provisions to address long-term clean energy needs, including: ensuring the reliability of power grids, promoting clean distributed generation, encouraging renewable energy resources, continuing demand-side management, promoting combined heat and power, and supporting systems benefits programs.
Delaying optimal energy path decisions puts our competitive advantage at risk.
The economic and environmental fortunes of states appear to be positively correlated, contrary to conventional wisdom that suggests they are mutually exclusive:
In addition, electricity costs do not appear to determinative of economic well-being – as measured by per capita income – also contrary to conventional wisdom:
 The Conference of the New England Governors and Eastern Canadian Premiers have committed to the long-term goal of reducing society-wide emissions of greenhouse gas by 75-85%. To meet these targets, it is likely that declining caps will need to be employed.