Originally created 01/19/00

Rogue EPA exceeds authority with 'nuisance lawsuits'



(Editor's note: The writer, Paul A. Cleveland, is associate professor of economics at Birmingham-Southern College in Birmingham.)

AS IF ITS stringent motor vehicle emission controls were not enough, the Environmental Protection Agency has triggered one of the largest environmental lawsuits in U.S. history. In November it sued seven large utilities, including the Southern Company, claiming that the utilities violated the Clean Air Act by failing to upgrade pollution controls when alleged modifications were made to coal-fired power plants dating back to the early 1980s. As a result, the EPA claims that the public has been exposed illegally to contaminated air.

If the EPA is successful in its lawsuit, the utilities involved could face hundreds of millions of dollars in fines and would be required to install extensive pollution controls at more than 30 power plants. This would result in mandated capital expenditures amounting to billions of dollars that would in turn require higher electricity rates for millions of customers. Clearly, for all people living in Georgia and Alabama, as in other targeted states, this would result in a reduction in their economic wherewithal and would also reduce their future economic opportunities.

This latest exercise in environmental vigilance arises out of the EPA's unethical practice of using government lawsuits to achieve policy goals that have been opposed by Congress. Since 1997, a bipartisan coalition of more than 100 Republicans and Democrats has supported bills in the House and Senate that would impose a limited moratorium on the administration's new clean-air rules and would require the EPA to complete scientific reviews of the health effects of ozone and particulate matter. The fact is we simply do not possess all the knowledge needed to make a proper assessment of the relative risks involved.

LAST MAY, A U.S. Circuit Court of Appeals struck down the EPA's air-quality standards for ozone and particulate matter. The decision was a victory for common sense over the forces of bureaucracy. The court ruled that the EPA's standards were not based on sound science. For instance, the EPA blames ozone smog levels for asthma problems in children. But the evidence linking outdoor air pollution with the increased incidence and severity of asthma is tenuous at best. Studies by the Centers for Disease Control in Atlanta attribute the worsening asthma problem primarily to indoor air contaminants, cigarette smoke, indoor allergens and poor prenatal care.

The court further said that the EPA had violated what is known as the "non-delegation doctrine" which courts use to enforce the clause "giving all legislative powers" to Congress. In other words, the court said that the EPA did not have unfettered license to set whatever air-quality standards it chose.

Despite that ruling, the EPA in December imposed the ozone and particulate standards on power plants throughout the South and Midwest. This action seems blatantly extra-legal, as was its suit against the seven utilities.

In the suit, the EPA claimed that routine maintenance activities over the last 20 years at 32 coal-fired power plants were actually major modifications under the Clean Air Act. By this definition, if a utility undertakes a major overhaul at a power plant that causes any significant increase in emissions, the project can require extensive and costly permitting requirements under the "new source review" requirements of the Clean Air Act. The maintenance and repair efforts, however, were not performed surreptitiously but were part and parcel of ongoing, visible and recorded efforts known to government inspectors. From the early 1980s, these inspections included an awareness of numerous instances of changes characterized as "routine maintenance" with no significant criticisms.

INDEED, IN 1996, the EPA stated that "routine maintenance, repair and replacement" did not mean that utilities were doing anything wrong. To keep their plants running, utilities have routinely maintained, repaired, and replaced items such as turbine blades and coal pulverizers without being subject to new source review provisions. Yet now, the EPA is rewriting history by insisting that utilities have been violating the Clean Air Act for the past two decades by undertaking routine maintenance.

What's more, the EPA's actions ignore significant progress utilities have made in reducing emissions. EPA reports note emissions of nitrogen oxides, a precursor of ozone, have decreased from 6.7 million tons in 1990 to a projected 4.6 million tons in 2000. These same reports also indicate that emissions of sulfur dioxide have fallen from 17.5 million tons in 1980 to 13.1 millions tons in 1997, with additional reductions expected in the next few years. Importantly, these significant reductions in power-plant emissions have occurred even as U.S. electricity production keeps rising.

The problem is that the administrators at the EPA seem unwilling to consider the underlying tradeoffs involved. Instead, they consistently press for more stringent regulatory control regardless of the costs that would inevitably be imposed upon the people involved.

For instance, in his book titled Lost Rights, James Bovard points to a case filed against an aviation company in Arkansas. The company was accused of disposing 0.0003 percent of the solvent methylene chloride in its waste water thereby violating federal law. The jury quickly acquitted the firm when it learned that more of that chemical is present in decaffeinated coffee than was disposed of in the company's waste water. Nevertheless, the firm was forced to bear the cost of defending itself against an obviously frivolous law suit.

THE EPA'S nuisance lawsuits against utilities may force the closing of a number of power plants unless Congress takes action. In order to rein in this rogue organization, Congress should at the very least approve legislation that would mandate cost-benefit analysis for all regulatory programs. In this way, the relative costs of proposed regulations would be made known in a public setting and the scientific evidence used to determine those costs and benefits could be examined.