This legislation, introduced by Senator Jim Inhofe (R-OK) in the
Senate and Representative Joe Barton (R-TX) in the House, is a Bush
administration initiative to amend the Clean Air Act of 1977.
The changes primarily affect power plants, although any facility
that generates its own power could be included in the new
regulations. Power plants account for 67% of the sulfur
dioxide, 25% of the nitrogen oxides, 33% of the mercury, and 40% of
the carbon dioxide emitted into our air.
One thing the Clear Skies Act does is reform New Source Reviews
(NSR) law. NSRs were written into the Clean Air Act to ensure
that, as older power plants modernized, they also improved air
quality standards. Any upgrade involving over 20% of the
plant had to include scrubber technology that met more stringent
emission standards. Consequently, some companies kept their
investments low to avoid costly pollution control upgrades.
During the 1990s, the EPA became more aggressive with these
regulations and at the turn of the century, they had over 100 plants
under investigation or charged with violations. Since taking
office, the Bush administration has relaxed restrictions and
reclassified former modernization activities as routine maintenance
activities. They also decided not to pursue the pending
lawsuits and investigations. As a result, 15 states and
numerous cities are suing the EPA.
Instead of penalties, through Clear Skies, the Bush
administration hopes to offer incentives for plants to undertake
more aggressive modernization. Furthermore, rather than
dictate what measures must be taken, this Act allows companies to
manage their own responsibilities through a system of limits and
allowances that is called a "cap and trade" program.
Qualifying power-generating organizations are given pollution
allowances. "The Administrator shall allocate annual
allowances for an affected unit." These limits cap the
amount of sulfur dioxide, nitrogen oxide and mercury that a plant
may emit. There is no provision for carbon dioxide.
A company can transfer or trade these allowances from one
unit to another. For example, an efficient plant in one part
of the state may come in well below its allotted emissions.
It can then transfer its unneeded allowance to a sister plant
elsewhere that is emitting more than its allotment. As long
as a company doesn't exceed its total allotments, there are no
penalties. Also, if a company has an excess one year, it can
use the leftover allotments in future years. It's the power
equivalent of rollover minutes.
Overall, this bill is designed to encourage the production of new
energy that's cost-efficient and environmentally friendly.
There are also certain exclusions for power plants that are seen as
necessary to the reliability of an area. As it's written,
this bill does not limit a state's ability to pass and enforce
stricter regulations on plants within its borders. However,
it does limit a state's leverage with its neighbors.