http://www.commondreams.org/headlines03/0831-03.htm
Published on Sunday,
August 31, 2003 by the Los Angeles Times
Relaxed Air Rules Choke an Industry
The pollution-control business, once booming,
sees lean years ahead under new Bush policy
by Elizabeth Shogren
QUOTE:
"The public should be outraged.", S. William Becker
executive
director of the State and Territorial Air Pollution Program
Administrators
DURHAM, N.C. - Cormetech Inc.'s state-of-the-art manufacturing
plant makes big pollution-control devices that clean millions
of tons of smog-producing nitrogen oxides from the smoke that
billows out of power plants.
But on Friday, like all Fridays these days, most of the factory's
machines were still. Since June, the Durham-based company has
cut its workforce and production by more than half and shrunk
its workweek from seven days to three or four.
Business is very slow
for companies like Cormetech. And it is
about to get even slower, industry experts say.
The Bush administration
on Wednesday announced a relaxation
of the Clean Air Act's requirement that older facilities install
modern pollution-control devices when they modify their plants
in ways that significantly increase emissions.
The new policy was
the second step of the administration's
reform of the "new source review" portion of the Clean
Air Act,
and it had been in the making for two years. The prospect of
this reform had already weakened the market for pollution-control
equipment, experts said.
Industry representatives,
state officials and environmentalists
agree that under the new rule, coal-fired power plants, the
nation's biggest polluters by far, will rarely if ever trigger
this requirement to install pollution-control devices.
"It looks like
we will have a lot of lean years here," said
David Foerter, executive director of the Institute of Clean
Air Companies, which represents 80 firms that produce
pollution-control devices.
The companies that
belong to the trade group, which account
for a third of the industry, booked about $1 billion in sales
in 2001. In 2002, sales fell to $800 million, and in the
first half of this year revenues plunged to $75 million.
"Orders for the
future are almost nonexistent," Foerter
said. "It's like falling off a cliff."
Companies did not expect
these to be tough times.
Just a few years ago,
it looked like aggressive enforcement
would make all the dirtiest, pre-1970-vintage plants clean up,
said Robert McIlvaine, an industry analyst. Starting in 1999,
the Clinton administration brought lawsuits against 51 power
plants as well as a number of refineries and wood-processing
plants.
Many of the refineries
settled and have started cleaning up.
But the power plants, a much bigger market for pollution-control
companies, balked.
Some of the biggest
polluting utilities had signed agreements
in principle in 2000, but after the Bush administration took
office and launched its reforms, those potential agreements
stalled. A few utilities have reached agreements with the
government, but most opted to go to court.
The administration's
new policy makes it easier for electric
utilities, refineries and manufacturing plants to update
or repair their facilities without having to install modern
pollution-control devices as part of the process.
The idea is to give
industry greater flexibility to modernize
its plants without being penalized for it financially. Some
utilities, for example, say they have been reluctant to install
advanced steam turbines that let them make more power from less
coal - a clean-air benefit in itself - because doing so might
force them to install costly new pollution-control equipment.
But environmentalists
warn that the change allows dirty industrial
facilities to keep polluting. Their chief concern is coal-fired
power plants.
Thirty-three years
after the Clean Air Act was passed, the
majority of coal-fired electricity generators in the U.S.
still have not installed pollution-control devices, industry
officials said.
They're responsible
for the lion's share of the pollution
from the power industry, whose emissions account for a quarter
of the nitrogen oxides and two-thirds of the acid-rain producing
sulfur dioxides emitted nationally.
The effect of the new
policy might be limited in California,
which has led the nation in requiring pollution controls.
The California Air Resources Board considers its new source
review program very effective at forcing industrial polluters
to install new control equipment. It plans to fight to keep
using its own program.
California is one of
the few parts of the country without
coal-fired power plants, and the rest of its industrial
facilities are cleaner than in most states. Cormetech was
busy retrofitting gas boilers in California in 1993 and 1994,
years before it did similar projects in the East.
For companies like
Cormetech, air pollution control is a
potentially massive market that has never been fully realized.
Business had been strong
for Cormetech in recent years,
because the company was busy helping some older coal-fired
power plants reduce emissions of nitrogen oxides. But that
work is almost completed, said Fred Maurer, Cormetech's
president.
Maurer said his company
is still turning a profit, but
it has not been easy. In addition to the layoffs and
cutbacks, Cormetech recently cut costs by moving office
staff out of a downtown office building and into its plant
in a leafy industrial area about 20 miles from Durham.
"Right now people
are downsizing and just trying to hold on,"
Maurer said.
Cormetech produces
huge honeycomb-shaped ceramic filters
known as selective catalytic reduction machines.
To reduce nitrogen
oxide emission by as much as 90%, ammonia
is added to exhaust before it flows through the honeycombs.
A chemical reaction turns most of the gas into water and
nitrogen. It can cost a plant $40 million to $50 million
to install one machine.
Maurer remains optimistic.
It's not as if regulation of
plant emissions is disappearing; Congress is weighing
legislative proposals that would require power plants
to reduce pollution.
Republicans and Democrats
support the general concept,
but the Bush administration and Senate Democrats have
very different ideas about how deep the cuts in pollution
should be, and most Washington observers see little chance
of a bill passing this session.
Even with the Bush
Clear Skies plan, which is the least
aggressive, industry experts believe that about half the
nation's coal-fired power plants would be retrofitted with
pollution controls, up from about a third now, Foerter said.
And even without such
a bill, there are regulations in the
works that could require deep reductions.
But the pollution-control
industry worries that these
regulations, like past regulations, will be delayed for
years by legal challenges.
Jeffrey Holmstead,
the assistant Environmental Protection
Agency administrator for air programs, said that if the
president's plan were to pass, about 85% of electricity
from coal-fired power plants would come from plants with
advanced-control technology.
Even if it does not
pass, Holmstead believes that the
market for pollution-control equipment will be good.
"There is a misperception
that somehow the new source
review is the only program that requires people to install
technology controls," he said.
But many local and
state officials charged with cleaning up
the air believe that the new administration policy will make
it much easier for industries to avoid updating.
Said S. William Becker,
executive director of the State
and Territorial Air Pollution Program Administrators and
the Assn. of Local Air Pollution Control Officials:
"We are very concerned it will postpone the achievement
of our health-based standards, and the public should be
outraged."
Copyright 2003 Los
Angeles Times
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