Order Code IB10065
CRS Issue Brief for Congress
Received through the CRS Web
Clean Air Act Issues in the 107th
Congress
Updated January 2, 2001
James E. McCarthy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Issues in the 107th Congress
MTBE and Reformulated Gasoline
Implementation of the National Ambient Air Quality Standards
Emissions from Coal-Fired Power Plants
Regulation of Diesel Fuel / Emissions
Sanctions and “Conformity”
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING
CRS Issue Briefs
CRS Reports

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Clean Air Act Issues in the 107th Congress
SUMMARY
As the 107th Congress convenes, a new
control emissions from coal-fired power
Administration, a new Chairman of the House
plants. In addition to implementing acid rain
Commerce Committee, and possible new
controls targeting sulfur dioxide emissions
leadership of the Senate Environment clean air
from such plants, the Agency has promulgated
subcommittee may all affect congressional
new rules to control nitrogen oxide emissions,
attitudes and priorities regarding air quality
has initiated enforcement actions against
issues. A number of air issues from the 106th
several major utilities, and has announced
Congress remain on the new Congress’s
plans to regulate mercury emissions. Electric
agenda. How these are dealt with should give
utilities are also major sources of the leading
early indications of the new leadership’s views
“greenhouse” gas, carbon dioxide, as yet
and priorities.
unregulated. Many parties in industry, the
Congress, and in both the outgoing and incom-
Since mid-1999, bills to diminish the use
ing Administrations have suggested the time is
of MTBE, a gasoline additive, have been at the
ripe for comprehensive, multi-pollutant legisla-
top of the clean air agenda. MTBE is used to
tion to regulate utility emissions.
meet Clean Air Act requirements that gasoline
sold in the nation’s worst ozone nonattainment
The last Congress also expressed an
areas contain at least 2% oxygen, but the
interest in the degree to which plans for new
additive has been implicated in numerous
highways must conform to emission budgets
incidents of ground water contamination. On
under the Clean Air Act. This “conformity”
September 28, 2000, the Senate Environment
issue may also remain on the agenda.
and Public Works Committee reported S. 2962
to ban MTBE use, waive the oxygen require-
Congress last enacted major amendments
ment, and provide additional funding for
to the Clean Air Act in 1990, and EPA is still
ground water cleanup (S.Rept. 106-426), but
implementing numerous provisions of those
no further action was taken.
amendments. Recent efforts include develop-
ment of tighter emission standards for diesel
Revisions to the air quality standards for
engines and fuels, implementation of controls
ozone and particulates, promulgated by the
on sources of 188 air toxics, and review of
Environmental Protection Agency in 1997,
state implementation plans for attaining ozone
may also command renewed attention in the
air quality standards. EPA decisions regarding
107th Congress. The standards were chal-
implementation of these and other programs
lenged in the courts, and implementation is
mandated by the Clean Air Act will provide
currently in limbo, pending resolution of ap-
opportunities for oversight and possible legis-
peals to the Supreme Court. The Court heard
lation in the 107th Congress.
oral arguments November 7, 2000, and a
decision is expected in spring 2001. The
Note: This Issue Brief does not discuss the
decision is likely to stimulate congressional
greenhouse effect or most issues related to
oversight, and perhaps legislation.
global climate change. For a discussion of
those issues, see CRS Issue Brief IB89005,
A third set of issues on the congressional
Global Climate Change, updated regularly.
agenda concerns recent efforts by EPA to
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On December 21, 2000, EPA Administrator Carol Browner signed final rules requiring
emission reductions of greater than 90% from diesel engines, beginning in Model Year 2007.
To facilitate the use of new pollution control equipment, the rules also require a 97%
reduction in allowable sulfur in highway diesel fuel, beginning in mid-2006.
On October 27, 2000, the President signed H.R. 4635 (P.L. 106-377), the VA-HUD-
Independent Agencies appropriation for FY2001. The bill prohibits the Environmental
Protection Agency from designating ozone nonattainment areas prior to a decision by the
Supreme Court in American Trucking Associations v. EPA, or June 15, 2001, whichever
occurs first. The action was intended to prohibit the Agency from moving forward with
implementation of its new 8-hour ozone standard before the Supreme Court decides a case
challenging the Agency’s authority to promulgate the standards. Oral arguments in the case
were heard November 7. The appropriation bill also delays for one year the application of
transportation conformity requirements after any such areas are designated.
BACKGROUND AND ANALYSIS
The Clean Air Act requires the Environmental Protection Agency (EPA) to establish
minimum national standards for air quality, and assigns primary responsibility to the states to
assure compliance. Areas not meeting the standards, referred to as nonattainment areas, are
required to implement specified air pollution control measures. The Act requires federal
emission standards for autos and other mobile sources of air pollution, for sources of 188
hazardous air pollutants, and for sources of acid rain. It establishes a comprehensive state-run
permit system for all major sources of air pollution. It also addresses the prevention of
pollution in areas with clean air, as well as protection of the stratospheric ozone layer.
The last comprehensive amendments to the Act, enacted November 15, 1990 (P.L.
101-549), included the program to control acid rain, new standards for emissions of
hazardous air pollutants, new requirements for motor vehicles and fuels; stringent new
requirements for nonattainment areas; and the comprehensive permit program.
Many of these provisions (notably the acid rain and air toxics provisions, and some of
the requirements for autos and fuels) were strenuously debated, but most have not been
subject to controversy since enactment. The new provisions on acid rain, air toxics, and
automobiles have generally been implemented on schedule, in many cases at less cost than
anticipated. There have also been noticeable improvements in air quality in recent years: of
98 metropolitan areas not attaining the 1-hour ozone standard in 1990, two-thirds now do so.
Even greater progress has been achieved with carbon monoxide: 36 of the 42 areas not in
attainment in 1990 now meet the standard. Nevertheless, major controversies remain
concerning implementation of the Act.
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Issues in the 107th Congress
At least five air quality issues are on the agenda at the outset of the 107th Congress: 1)
whether Congress should modify Clean Air Act requirements that have led to the use of a
substance called MTBE in gasoline, in response to a growing number of ground water
contamination incidents involving the substance; 2) how or whether Congress should respond
to a Supreme Court decision expected in spring 2001 regarding the setting of air quality
standards; 3) whether Congress should enact new legislation to address in a comprehensive
fashion emissions from coal-fired electric power plants; 4) whether Congress should respond
to new EPA regulations governing diesel engines and fuel; and 5) whether Congress should
modify the sanction and conformity provisions of the Clean Air Act, which seek to ensure
state and local government compliance with the Act’s planning provisions.
MTBE and Reformulated Gasoline
Whether Congress should modify the requirements of the reformulated gasoline program
or regulate use of the substance MTBE in gasoline in response to incidents of ground water
contamination by the substance is an issue that has grown in importance over the last four
years. Under the Clean Air Act Amendments of 1990, numerous areas with poor air quality
are required to add chemicals called “oxygenates” to gasoline as a means of improving
combustion and reducing emissions. The Act has two programs that require the use of
oxygenates, but the more significant of the two is the reformulated gasoline (RFG) program,
which took effect January 1, 1995. Under the RFG program, areas with “severe” or
“extreme” ozone pollution (82 counties with a combined population of 55 million) must use
reformulated gas; areas with less severe ozone pollution may opt into the program as well,
and many have. In all, portions of 17 states and the District of Columbia use RFG, and a little
more than 30% of the gasoline sold in the United States is RFG.
The law requires that RFG contain at least 2% oxygen by weight. Refiners can meet this
requirement by adding a number of ethers or alcohols, any of which contains oxygen and
other elements. By far the most commonly used oxygenate is MTBE. In 1999, 87% of RFG
contained MTBE. MTBE has also been used since the late 1970s in non-reformulated
gasoline, as an octane enhancer, at lower concentrations. As a result, gasoline with MTBE
has been used virtually everywhere in the United States, whether or not an area has been
subject to RFG requirements.
State and local environmental agencies and EPA attribute marked improvements in air
quality to the use of oxygenated and reformulated gasoline. The improvements in air quality
have not come without controversy. In Alaska and Wisconsin, residents complained of a
wide array of effects, including headaches, dizziness, nausea, sore eyes, and respiratory
irritation, from exposure to gasoline/MTBE exhaust, before refiners switched to alternative
gasoline formulations using ethanol. MTBE from a number of sources, including leaking
underground storage tanks, has also been linked to contamination of drinking water supplies.
For a variety of reasons, concerns over MTBE have focused on California for much of
the past 4 years. California has the most extensive reformulated gasoline requirements in the
country, with state requirements separate and in addition to the federal. In addition, it has
experienced the most significant contamination of drinking water by MTBE. The incidents
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of drinking water contamination led the state legislature in October 1997 to enact legislation
to require state standards for MTBE in drinking water and to require the University of
California (UC) to conduct a study of the health and environmental effects of MTBE. The
UC report, issued in November 1998, recommended a gradual phase-out of MTBE use in the
state. Based on the report and on subsequent public hearings, on March 25, 1999, Governor
Davis of California signed an Executive Order to require a phase-out of MTBE use in the
state by December 31, 2002, and requested a waiver of federal requirements to use
oxygenates in reformulated gasoline. (Seven other states – Iowa, Arizona, Colorado, New
York, Connecticut, Michigan, and Minnesota – have subsequently passed legislation to limit
or phase out MTBE.)
The California request for a waiver of the oxygen requirement resulted in months of
negotiation between EPA and the state, with EPA initially expressing skepticism that it had
authority to grant a waiver under the circumstances. Nearly 2 years later, a decision on the
request is still awaited. Without a waiver, ozone nonattainment areas in the state would be
required to substitute another oxygenate (most likely, ethanol) when the MTBE ban takes
effect.
In response to concerns over MTBE, EPA Administrator Carol Browner appointed a
Blue-Ribbon Panel on Oxygenate Use in Gasoline, composed of industry representatives,
state and local officials, environmentalists, academics, and others. In July 1999, the panel
recommended that Congress remove the RFG program’s oxygenate requirement and clarify
state authority to regulate gasoline components. Subsequently, on August 4, 1999, the
Senate adopted by voice vote Senator Boxer’s amendment to the FY2000 Agriculture
appropriations bill (S. 1233) expressing the sense of the Senate that use of MTBE should be
phased out. Since then, congressional committees have conducted hearings and marked up
MTBE legislation, but floor action on legislation to change the Clean Air Act requirements
or ban the substance has not occurred.
The principal issues for Congress are whether Clean Air Act provisions concerning
oxygenate use in reformulated gasoline should be waived to allow refiners to discontinue or
lessen their use of MTBE and whether stronger steps, such as a ban on MTBE use, should
be considered. Legislation to provide a waiver for California refiners (H.R. 11 / S. 266) had
the nearly unanimous support of that state’s congressional delegation in the 106th Congress.
The legislation would have removed the oxygenate requirement for refiners and marketers of
RFG provided that the fuel continued to meet all performance (i.e., emission reduction)
standards. The bill would have applied in California only — not in other states.
The House Commerce Subcommittee on Health and Environment approved H.R. 11,
with an amendment, September 30, 1999. Amendments to phase out the use of MTBE, to
apply the bill’s provisions to areas outside California, and to address international trade issues
related to MTBE phase-out were offered and withdrawn during markup. A hearing on these
issues was held March 2, 2000, by the Health and Environment Subcommittee. Separate
legislation allowing additional flexibility in all states was also introduced, as were numerous
bills that would phase-out or ban the use of MTBE in gasoline.
While support for waiving the oxygen requirement now is widespread among
environmental groups, the petroleum industry, and states, a potential obstacle to enacting
legislation lies among agricultural interests. About 6% of the nation’s corn crop is used to
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produce a competing oxygenate, ethanol. If MTBE use is reduced or phased out, but the
oxygen requirement remains in effect, ethanol use would likely soar, increasing demand for
corn. Conversely, if the oxygen requirement is waived by EPA or legislation, not only would
MTBE use decline, but so, likely, would demand for ethanol. Thus, Members of Congress
and Governors from corn-growing states have taken a keen interest in MTBE legislation.
Unless their interests are addressed, they might pose a potent obstacle to its passage.
Reflecting these dual concerns, EPA Administrator Carol Browner and Agriculture
Secretary Dan Glickman called on Congress at a press conference, March 20, 2000, to amend
the Clean Air Act to “significantly reduce or eliminate” the use of MTBE and to require the
use of ethanol in all gasoline. EPA also announced that it would begin the process of
requiring a phase-out of MTBE under Section 6 of the Toxic Substances Control Act, a
process likely to take “several years” in EPA’s estimation.
Legislation to mandate the use of ethanol while allowing limits on MTBE use (S. 2503
and S. 2971) was subsequently introduced in the 106th Congress, and Senator Smith of New
Hampshire, Chairman of the Environment and Public Works Committee, introduced S. 2962,
which preserved a role for ethanol as well. The committee ordered Senator Smith’s bill
reported with an amendment in the nature of a substitute on September 7. (The report
[S.Rept. 106-426] was filed September 28.) This legislation is considered a possible starting
point for debate on the MTBE issue in the 107th Congress.
As reported, the bill would have given the EPA Administrator authority to phase down
use of MTBE in gasoline. Whether or not the Administrator used this authority, the bill
would have banned MTBE use within 4 years of enactment. The bill allowed Governors to
waive the RFG program’s oxygenate requirement, and would have set new standards for toxic
substance and aromatic content of RFG in areas where the waiver was exercised. It would
have stimulated the use of ethanol and clean vehicles: each fuel supplier would have had the
option of using an increasing percentage of renewable fuel (ethanol) in each year between
2002 and 2011, or could have used credits generated by the manufacture and sale of zero
emission or “super ultra low” emission vehicles. The report noted that this requirement could
nearly triple the consumption of ethanol by 2011. The bill would have provided additional
authority to EPA to regulate fuel additives and emissions. It also would have authorized a
one-time appropriation of $200 million from the Leaking Underground Storage Tank Trust
Fund to clean up MTBE leaks from tanks, and authorized another $200 million over 6 years
for states to use to oversee and enforce tank leak prevention and detection regulations.
As the deadlines for state phaseout of MTBE move closer, investment decisions
involving hundreds of millions of dollars hang on the regulatory framework of the post-
MTBE gasoline market. Thus, pressure for congressional action on this issue is likely to be
high in the 107th Congress. Whether this pressure will produce enacted legislation is less
clear. (For additional discussion of the MTBE issue, see CRS Report 98-290, MTBE in
Gasoline: Clean Air and Drinking Water Issues.)
Implementation of the National Ambient Air Quality Standards
Another issue that Congress has followed closely for some time is that of the revised air
quality standards promulgated by EPA in 1997. The standards have been challenged in the
courts, with the case reaching the Supreme Court in the current term. How or whether
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Congress should respond to a Supreme Court decision regarding the standards could be a
major issue later this year.
Under the Clean Air Act, EPA sets national standards for ambient (outdoor) air quality
and is directed to review the standards every 5 years. On July 18, 1997, the Agency
completed its review of two of the six standards, promulgating a new standard for fine
particulates (referred to as PM ) and revised standards for ozone and coarse particles
2.5
(PM ). (For background on the standards, see CRS Report 97-8, Air Quality: Background
10
Analysis of EPA’s 1997 Ozone and Particulate Matter Standards.)
The net impact of the promulgated standards would be increased stringency. For the
new ozone standard, 332 counties have pollutant concentrations above the standard, as
compared to 189 counties under the old standard. The new particulate standard is expected
to bring at least 100 new counties into nonattainment status, as well. Such an increase in the
number of nonattainment areas would have broad implications for the states, affected
industries, economic sectors such as agriculture and transportation, and individuals. As a
result, Congress has remained interested in the standards and decisions regarding their
implementation, and numerous groups have sued EPA to overturn them.
On May 14, 1999, the U.S. Court of Appeals for the D.C. Circuit, in a case filed by the
American Trucking Associations and other plaintiffs, remanded both the ozone and particulate
standards to EPA. In a split decision (2-1), the court ruled that EPA had unconstitutionally
usurped legislative powers. In Sections 108 and 109 of the Clean Air Act, Congress directed
EPA to establish ambient air quality standards necessary to protect public health with an
adequate margin of safety. But the court found that EPA exercised legislative discretion in
actually setting the ozone and PM standards, since it was not clear from the statute or from
EPA’s interpretation of it where the standard should be set. “Although the factors EPA uses
in determining the degree of public health concern associated with different levels of ozone
and PM are reasonable, EPA appears to have articulated no ‘intelligible principle’ to channel
its application of these factors; nor is one apparent from the statute,” according to the
opinion.
The court also considered several other issues — rejecting five arguments the plaintiffs
made regarding both standards, but finding in favor of the plaintiffs on various issues specific
to one or the other standard. Regarding ozone, the court ruled that the 1990 Clean Air Act
Amendments preclude EPA from enforcing a revised ozone standard as a result of language
in Section 181(a) that requires all nonattainment areas to be classified on the basis of the old
1-hour ozone standard. The court also held that the Agency erred in not considering possible
benefits of ground-level ozone in its analysis of the health effects of the pollutant. Regarding
particulates, the court concluded that EPA’s choice of PM as the indicator for coarse
10
particles was arbitrary and capricious. The court concluded that there was “ample support”
for the Agency’s decision to regulate coarse particles, but argued that the Agency needed to
choose an indicator such as PM
(particles smaller than 10 microns but larger than 2.5)
10-2.5
rather than PM (all particles smaller than 10 microns, including fine particles) in its
10
regulations aimed to control the coarse fraction.
The 105th Congress held a number of oversight hearings on standards-related issues and
enacted legislation (P.L. 105-178, Title VI) to address some of the concerns raised. The
legislation codified EPA’s announced implementation schedule, giving the Agency until July
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2000 to designate ozone nonattainment areas and December 2005 to designate PM areas.
2.5
Despite remanding the standards to EPA, the Appeals Court left these deadlines for
designation of nonattainment areas intact.
Designation of areas as nonattainment sets in motion more stringent requirements for
permits and a requirement that plans for transportation projects demonstrate that they will
“conform” to the area’s plan to attain the air quality standard. As a result, many in Congress
expressed concern that EPA was moving ahead with the designation process, arguing that
designation would force state and local governments and the private sector to dedicate
resources toward meeting standards that could be rendered null and void by the courts. On
June 21, 2000, Representatives Collins and Linder offered an amendment to the VA-HUD-
Independent Agencies Appropriation for FY 2001(H.Amdt. 859 to H.R. 4635) to prohibit
EPA from using any funds in the bill prior to June 15, 2001 to designate nonattainment areas
under the 8-hour ozone standard. The amendment passed, 225-199. An amendment by
Senator Boxer (S.Amdt. 4308), to strike the language from the Senate version of the bill,
failed, 63-32, on October 12. The final version of the bill, which was signed into law October
27, 2000 (P.L. 106-377), prohibits designating 8-hour ozone nonattainment areas prior to a
Supreme Court decision or June 15, 2001, whichever occurs first. The conferees also agreed
to language delaying the application of conformity requirements until one year after an area
is designated nonattainment.
Meanwhile, the case has continued to move through the courts. After reviewing the
appeals court’s May 1999 decision, EPA and the Department of Justice decided to appeal the
ruling. Since numerous environmental statutes give discretion to the EPA Administrator
similar to that termed unconstitutional in this decision, the decision — if left unchallenged —
could reshape dramatically EPA’s authority to promulgate regulations. Acting on EPA’s
behalf, the Justice Department requested a rehearing by the full (en banc) Court of Appeals;
the court rejected that request October 29, 1999. An appeal to the Supreme Court was
accepted on May 22, 2000, however, with oral argument scheduled for November 7. On May
30, the Court also accepted an appeal from the American Trucking Associations and the U.S.
Chamber of Commerce, who asked the Court to determine whether EPA must ignore non-
health factors, including cost, when it sets National Ambient Air Quality Standards. Oral
argument on this appeal also took place November 7. A decision is expected in spring 2001.
(For a further discussion of the appeals court ruling, see CRS Report RS20228, Clean Air
Standards: the Supreme Court Agrees to Review American Trucking Associations v. EPA,
December 5, 2000.)
Congress will almost certainly wish to consider the implications of a Supreme Court
decision in this case. Thus, oversight hearings are likely following the court’s ruling.
Emissions from Coal-Fired Power Plants
Over the past several years, EPA has taken numerous regulatory and enforcement
actions to reduce emissions from coal-fired electric power plants. The regulation of sulfur
dioxide and some nitrogen oxide emissions to reduce acid precipitation, required under Title
IV of the Clean Air Act, had statutory deadlines in 1995 and 2000. The other regulatory
actions are expected to be implemented beginning in 2003 or 2004.
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The number and variety of the prospective regulations has suggested to many in industry,
the Congress, and in both the outgoing and incoming Administrations that the time may be
ripe for comprehensive, multi-pollutant legislation to regulate utility emissions. These other
actions include:
! the Ozone Transport Rule (also called the “NOx SIP call”) promulgated by
EPA on October 27, 1998. It requires power plants in 21 eastern states and
the District of Columbia to reduce emissions of nitrogen oxides during the
summer ozone season, beginning May 31, 2004;
! petitions under Section 126 of the Act, four of which were approved by EPA
on January 18, 2000. These require the same actions to control emissions of
NOx by a subset of the NOx SIP call utilities in 12 states and D.C., beginning
in May 2003;
! enforcement actions against nine utilities alleging that they modified existing
power plants without installing the best adequately demonstrated emission
control technology, in violation of Section 111 of the Act (the “New Source
Review” requirement). Three of these suits have been settled as of
December 2000, with utilities agreeing in each case to spend at least $1
billion on pollution reductions over the coming decade; and
! a decision announced in December 2000 to go forward with regulation of
mercury from electric utilities, using authority under Section 112 of the Act.
These regulations are expected to be proposed in 2003, with an effective
date of 2007 or 2008.
In addition to the above actions, two other uncertainties regarding pollution controls
could affect coal-fired electric power plants. Electric utilities are major sources of the leading
“greenhouse” gas, carbon dioxide (CO ), which is, as yet, unregulated. Substantial
2
controversy surrounds implementation of measures to reduce greenhouse gas emissions
(particularly measures that could be seen as implementing the Kyoto Protocol on Global
Climate Change, which has not been presented to the Senate for consideration); but the
United States is voluntarily committed under an earlier treaty ratified by the Senate in 1992
(the United Nations Framework Convention on Climate Change) to reduce emissions of
greenhouse gases to the levels emitted in 1990. As a result, utilities fear that CO regulation
2
lies somewhere in their future. Legislative proposals increasingly see regulation of carbon
dioxide as part of any comprehensive approach to the regulation of utility emissions.
Whether to regulate more stringently coal-fired power plants has also arisen as an issue
in the debate over deregulation of electricity markets. In the Northeast, the prospect of
economic deregulation of electricity utilities has raised fears that older coal-fired Midwestern
power plants with fewer emission control requirements may be able to sell electricity more
cheaply than gas- and oil-fired plants in the Northeast, which tend to meet stricter emission
standards. Thus, Northeastern Senators and Representatives tend to favor stricter emission
controls for electric utilities as a necessary part of an electric restructuring legislation.
In the Congress, leading Republicans and Democrats, including Senator Bob Smith of
New Hampshire, Chairman of the Environment and Public Works Committee, and Senators
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Leahy and Jeffords of Vermont, as well as Representatives Henry Waxman and Sherwood
Boehlert in the House, have introduced or plan to introduce legislation to control a broad
spectrum of power plant emissions. Senator Smith announced in a statement December 18,
2000, that a four-pollutant utility emissions bill will be among his top priorities in the 107th
Congress. Both President Clinton and Governor Bush have also recently stated their support
for a four-pollutant approach to electric utility regulation. (For additional information on
regulation of electric utility emissions, see CRS Report RS20553, Air Quality and Electricity:
Initiatives to Increase Pollution Controls. For legislation introduced in the 106th Congress,
see CRS Report RS20326, Electricity Restructuring and Air Quality: Comparison of
Proposed Legislation.)
Regulation of Diesel Fuel / Emissions
Another issue raised in the last Congress that is likely to be of continuing interest early
in the 107th is the regulation of diesel engines and fuel. A Senate Environment and Public
Works subcommittee held oversight hearings on proposed EPA rules on this subject in June
and September, 2000. On December 21, 2000, the EPA signed final rules, similar in most
respects to those that the Agency had proposed. Powerful industries, including petroleum
refiners and marketers and most elements of the trucking industry, are strongly opposed to
the new rule, and at least one senator has suggested that the rule should be disapproved under
the provisions of the Congressional Review Act. Thus, at the least, some congressional
oversight of the Agency’s decision is expected early in the new Congress.
Diesel emissions have been among the least regulated major sources of air pollution.
While automobiles have been required to reduce emissions more than 90% since the 1970s
and face even tighter controls under standards promulgated February 10, 2000, diesel
emissions faced relatively few controls until the 1990s.
On May 17, 2000, EPA began the latest and most far-reaching step in changing this
situation, proposing a greater than 90% reduction in allowable emissions from new diesel
engines beginning in 2007. Because sulfur interferes with the effectiveness of the likely
emission control technologies, the Agency also proposed a 97% reduction in the allowable
sulfur content of diesel fuel, from 500 to 15 parts per million (ppm), effective in June 2006.
Engine manufacturers and manufacturers of emission control equipment were largely
satisfied with the proposed rule, but refiners, service station owners, and the trucking industry
have generally argued that achieving the proposed fuel standards would be difficult and
costly, could result in refinery closures, and could cause shortages of diesel fuel. Instead of
15 ppm, trade associations representing refiners have backed a 50 ppm sulfur standard; EPA
and the engine manufacturers say that would not be sufficiently stringent to permit optimal
operation of pollution controls. EPA agrees that meeting the sulfur reduction standard will
result in increased cost, but places the cost at 3-4 cents per gallon, vs. estimates of price
spikes as high as 15 to 50 cents per gallon by some in industry.
As EPA’s proposal noted, “The diesel engine is a vital workhorse in the United States,
moving much of the nation’s freight, and carrying out much of its farm, construction, and
other labor.” As a result, this proposal affects an unusually large number of economic
sectors, and has generated substantial controversy. The Agency held five public hearings in
New York, Chicago, Atlanta, Los Angeles, and Denver during the month of June 2000, took
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public comments until August 14, and negotiated with interested parties inside and outside
the Administration before reaching its final decision in December.
While some have suggested that the Congressional Review Act could be invoked to
overturn the Agency’s decision, it is not clear that the new Administration would want so
controversial a step to mark its first months in office. Absent the Administration’s support,
the odds against congressional action would appear formidable. Continued congressional
oversight of the rules and their implementation is considered likely, however.
Sanctions and “Conformity”
A final air quality issue that might be on the agenda of the 107th Congress is whether
Congress should modify the sanction and conformity provisions of the Clean Air Act, which
seek to ensure state and local government compliance with the Act’s planning provisions,
making continued funding of federal highway projects dependent on the approval and
implementation of such plans.
Two Clean Air Act provisions can result in denial of federal highway funding to local
areas: sanctions and a lapse in what is called “conformity.” The sanction authority is found
in Sections 179 and 110(m) of the Act. Under these sections, the EPA Administrator is
required to impose highway fund and other sanctions on areas 18 - 24 months after reaching
a finding that an area has not submitted or not implemented adequate plans to attain air
quality standards. The Act authorizes EPA to use two types of sanctions: 1) imposing what
are called “2:1 offsets” on new or modified sources of emissions; and 2) withholding certain
federal highway funds. Under the sanction regulations, EPA first imposes the offset sanction,
18 months after reaching a finding (unless the deficiency has been corrected). If the
deficiency has still not been corrected 6 months later, both sanctions are applied. It is not
failure to attain air quality standards that leads to sanctions, but failure to submit an
acceptable plan or to implement the measures identified therein.
When highway fund sanctions are imposed, not all funding is affected. Projects are
exempt from sanctions when the Department of Transportation determines that the principal
purpose is an improvement in safety. In addition, despite sanctions, DOT may approve
several types of projects geared toward improvement of air quality, including transit projects,
HOV lanes, breakdown lanes, projects to improve traffic flow, and park-and-ride lots.
The threat of sanctions is a powerful tool; but, perhaps because the threat is powerful,
the imposition is a rare event. Since 1990, only 2 areas have had highway sanctions imposed.
Conformity requirements, found in Section 176 of the Act, have been invoked more
frequently. This section prohibits federal departments and agencies from approving,
permitting, or providing financial support to transportation improvements in areas that have
not attained air quality standards, unless such improvements conform with the State
Implementation Plan for achieving air quality. Conformity determinations are also a powerful
tool — one meant to integrate transportation and air quality planning. Areas in 29 states
have experienced a lapse of conformity at some time since 1993, and 5 areas, the largest of
which is Atlanta, currently have lapsed conformity.
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Conformity lapses operate in a fashion similar, in some respects, to highway fund
sanctions. As with sanctions, exceptions are provided for highway projects that will improve
safety or air quality. Further limiting their impact, conformity lapses, until recently, were
applied only to new projects. In many cases, an area simply waited until the next revision of
its Transportation Improvement Program (TIP) or its State Implementation Plan to revise the
proposed project or through other measures return to conformity. Thus, until recently, few
areas lost funding despite a conformity lapse.
On March 2, 1999, however, the U.S. Court of Appeals for the District of Columbia
Circuit ruled that the Clean Air Act limits grandfathering of funding in conformity situations,
overturning EPA’s regulations. This action considerably raised the stakes for Atlanta and
other areas that are subject to a conformity lapse, denying federal funding for billions of
dollars in highway projects that were ready for construction. EPA and the Department of
Transportation subsequently reached agreement on procedures to implement the court’s
decision, and the Agency announced on April 16, 1999, that it would not appeal the decision.
That decision and another case involving the St. Louis area aroused congressional
interest in the sanctions and conformity issues. Seven bills were introduced in the 106th
Congress to repeal the highway fund sanction provisions, restore the grandfather provisions
of the conformity rule, or provide funding to certain transportation projects during a
conformity lapse.
The Senate Environment and Public Works Committee held a hearing on the conformity
issue July 14, 1999, and reported S. 1053, with substantial amendments, February 2, 2000.
As amended, the bill would have restored the grandfather provisions in effect prior to the
March 1999 court decision for a period of one year while EPA wrote new regulations. The
bill also stipulated that certain projects, including any project approved prior to the court
decision, could be implemented even if conformity lapsed. It would have established new
requirements regarding approval of emissions budgets by EPA, allowed the use of non-federal
funds for right-of-way acquisition and highway design during periods of conformity lapse, and
delayed the application of conformity to areas that might be designated nonattainment under
the pending 8-hour ozone standard. No further action was taken on the bill.
Whether sanctions and conformity will continue to be issues in the 107th Congress
remains to be seen. A provision delaying for one year the application of conformity in areas
newly designated nonattainment was attached to the VA-HUD-Independent Agencies
FY2001 appropriation (H.R. 4635), which was signed by the President, October 27, 2000
(P.L. 106-377). This measure may have addressed the conformity issue of broadest potential
impact. The specific problems faced by Atlanta and St. Louis have also been largely resolved,
through local negotiations. In these circumstances, it is unclear whether Congress will
continue its interest, or will consider the issues settled. (For additional background on
sanctions and conformity, see CRS Report RL30131, Highway Fund Sanctions and
Conformity Under the Clean Air Act, updated October 15, 1999.)
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LEGISLATION
This selective list of legislation from the 106th Congress includes enacted bills and
legislation on topics discussed in this Issue Brief.
P.L. 106-40, S. 880 (Inhofe)
Amends the Clean Air Act to remove flammable fuels from the list of substances with
respect to which reporting and other activities are required under the risk management plan
program of Section 112(r). Introduced April 26, 1999; referred to Committee on
Environment and Public Works. Reported, amended, June 9, 1999 (S.Rept. 106-70). Passed
Senate June 23, 1999. Passed House, amended, July 21, 1999. Senate agreed to House
amendments, August 2, 1999. Signed into law August 5, 1999.
P.L. 106-377, H.R. 4635 (Walsh)
H.Amdt. 859 to this bill, which makes appropriations for the Departments of Veterans
Affairs and Housing and Urban Development, and for independent agencies (including EPA)
for the fiscal year ending September 30, 2001, as further modified by conferees, would
prohibit EPA from designating nonattainment areas under the 8-hour ozone air quality
standard prior to a decision by the Supreme Court in American Trucking Associations v.
EPA, or June 15, 2001, whichever occurs first. Bill was reported as an original measure, June
12, 2000 (H.Rept. 106-674). H.Amdt. 859 and bill passed House, June 21, 2000. Received
in the Senate and referred to the Committee on Appropriations, June 22. Reported,
September 13, 2000 (S.Rept. 106-410). S.Amdt. 4308, to strike prohibition on designation,
defeated, October 12, 2000. Bill passed Senate, October 12, 2000. Conference report
(H.Rept. 106-988) filed October 18. Conference report also included language delaying the
application of conformity requirements until one year after an area is designated
nonattainment. House and Senate agree to conference report, October 19, 2000. Signed into
law (P.L. 106-377) October 27, 2000.
H.R. 11 (Bilbray)
Amends the Clean Air Act to permit exclusive application of California state regulations
regarding reformulated gasoline in federal RFG areas within the state. Introduced January
6, 1999; referred to Committee on Commerce. Hearing held, May 6, 1999, by Subcommittee
on Health and Environment. Approved, amended, by Subcommittee on Health and
Environment, September 30, 1999.
H.R. 25 (Boehlert)
To reduce acid deposition by requiring additional controls on sources of sulfur dioxide
and nitrogen oxides and to provide for a study and controls on emissions of mercury.
Introduced January 6, 1999; referred to Committee on Commerce.
H.R. 657 (Sweeney)
To reduce acid deposition. Similar to H.R. 25. Introduced February 9, 1999; referred
to Committee on Commerce.
H.R. 1367 (Franks)
Amends the Clean Air Act to prohibit the use of the fuel additive MTBE in gasoline.
Introduced April 12, 1999; referred to Committee on Commerce.
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H.R. 1398 (Pombo)
Amends the Clean Air Act to prohibit the use of the fuel additive MTBE in gasoline.
Introduced April 14, 1999; referred to Committee on Commerce.
H.R. 1626 (Baker)
Amends the Clean Air Act to repeal the highway fund sanctions. Introduced April 29,
1999; referred to Committee on Commerce.
H.R. 1705 (Pallone)
Amends the Clean Air Act to waive the oxygenate requirement for reformulated gasoline
and to phase out the use of the fuel additive MTBE in gasoline; requires a study by the
National Academy of Sciences on the health and environmental effects of all gasoline
oxygenates. Introduced May 5, 1999; referred to Committee on Commerce.
H.R. 1876 (Talent)
Amends the Clean Air Act to incorporate the grandfather provisions of the
transportation conformity regulations, as in effect on March 1, 1999. Introduced May 19,
1999; referred to Committee on Commerce.
H.R. 2667 (Allen)
Omnibus Mercury Emissions Reduction Act of 1999. Amends the Clean Air Act to
establish requirements for operation of fossil fueled electric utility generators, commercial and
industrial boilers, incinerators, chlor-alkali plants, and Portland cement plants to reduce
mercury emissions. Introduced August 2, 1999; referred to Committee on Commerce.
H.R. 2900 (Waxman)
Clean Smokestacks Act of 1999. Amends the Clean Air Act to require reductions in
emissions of sulfur dioxide, nitrogen oxides, mercury, and carbon dioxide from electric power
plants and to subject older power plants to New Source Performance Standards. Introduced
September 21, 1999; referred to Committee on Commerce.
H.R. 2980 (Allen)
Clean Power Plant Act of 1999. Amends the Clean Air Act to require reductions in
emissions of sulfur dioxide, nitrogen oxides, mercury, carbon dioxide, and hazardous air
pollutants from electric power plants and to provide assistance for workers and communities
adversely affected by reduced consumption of coal. Introduced September 30, 1999; referred
to Committees on Commerce, on Education and the Workforce, on Transportation and
Infrastructure, on Banking and Financial Services, and on Science.
H.R. 3449 (Greenwood)
Amends the Clean Air Act to provide that petitioning states may waive the requirements
concerning the oxygen content of RFG and to provide for a scheduled phasedown of MTBE
use. Introduced November 18, 1999; referred to Committee on Commerce.
H.R. 3583 (Linder)
Amends the Clean Air Act to exempt mass transit projects from the conformity
determinations required under Section 176(c) of the Act. Introduced February 8, 2000;
referred to Committee on Commerce.
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H.R. 3686 (Lewis)
Amends the Clean Air Act and titles 23 and 49, U.S. Code, to provide for continued
authorization of funding of transportation projects after a lapse in transportation conformity.
Introduced February 16, 2000; referred to Committees on Commerce and on Transportation
and Infrastructure.
H.R. 3798 (Forbes)
Amends Section 211 of the Clean Air Act to prohibit the use of MTBE as a fuel additive;
also amends the Solid Waste Disposal Act to accelerate the cleanup of MTBE released from
leaking underground storage tanks, and the Safe Drinking Water Act to assist communities
with MTBE contamination in drinking water supplies. Introduced March 1, 2000; referred
to Committee on Commerce.
H.R. 4011 (Ganske)
Amends Section 211 of the Clean Air Act to prohibit the use of MTBE, to provide
flexibility within the oxygenate requirement of the RFG program, and to promote the use of
renewable ethanol. Introduced March 16, 2000; referred to Committee on Commerce.
H.R. 4120 (Shadegg)
Safe Water and Clean Air Attainment Act. Amends the Clean Air Act to permit states
to waive the RFG program’s oxygenate requirement. Introduced March 29, 2000; referred
to Committee on Commerce.
H.R. 4303 (Ewing)
MTBE Elimination Act. Similar to S. 2233. Introduced April 13, 2000; referred to
Committee on Commerce.
H.R. 4859 (Taylor)
To reduce emissions from TVA electric powerplants. Introduced July 13, 2000; referred
to Committee on Commerce.
H.R. 4861 (Lazio)
To address the acid rain and greenhouse gas impacts of electric utility restructuring and
to encourage the development of renewable energy resources. Introduced July 13, 2000;
referred to Committee on Commerce.
S. 266 (Feinstein)
Senate counterpart to H.R. 11. Introduced January 20, 1999; referred to Committee on
Environment and Public Works.
S. 495 (Bond)
Repeals the highway fund sanction provisions of the Clean Air Act. Introduced March
2, 1999; referred to Committee on Environment and Public Works.
S. 645 (Feinstein)
Amends the Act to waive the oxygen content requirement for reformulated gasoline.
Introduced March 17, 1999; referred to Committee on Environment and Public Works.
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S. 673 (Leahy)
Amends the Clean Air Act to establish requirements concerning the operation of fossil
fuel-fired electric utility steam generating units, commercial and industrial boiler units, solid
waste incineration units, medical waste incinerators, hazardous waste combustors, chlor-alkali
plants, and Portland cement plants to reduce emissions of mercury. Introduced March 19,
1999; referred to Committee on Environment and Public Works.
S. 1037 (Boxer)
Amends the Toxic Substances Control Act to provide for reduction in the use of MTBE.
Introduced May 13, 1999; referred to Committee on Environment and Public Works.
S. 1053 (Bond)
Amends the Clean Air Act to incorporate the grandfather provisions of the
transportation conformity regulations, as in effect on March 1, 1999. Introduced May 14,
1999; referred to Committee on Environment and Public Works. Reported, amended,
February 2, 2000 (S.Rept. 106-228).
S. 1369 (Jeffords)
Clean Energy Act of 1999. Requires EPA to set aggregate nationwide emission limits
for carbon dioxide, mercury, nitrogen oxides, and sulfur dioxide from electric generation
facilities beginning in calendar year 2002, and establishes a National Electric System Public
Benefits Fund to support renewable energy, energy conservation and efficiency, and other
purposes. Introduced July 14, 1999; referred to the Committee on Energy and Natural
Resources.
S. 1731 (Chafee)
Amends the Clean Air Act to provide that certain environmental reports shall continue
to be required to be submitted. Introduced October 14, 1999; referred to Committee on
Environment and Public Works. Reported October 14 (S.Rept. 106-191). Passed Senate
March 27, 2000.
S. 1886 (Inhofe)
Permits Governors to waive the oxygen requirements for reformulated gasoline, and
allows the development of voluntary standards to control the release of MTBE from
underground storage tanks. Introduced November 9, 1999; referred to Committee on
Environment and Public Works.
S. 1949 (Leahy)
Clean Power Plant and Modernization Act of 1999. Promotes the modernization and
efficiency of electric power generation capacity, requires reduction of emissions of mercury,
carbon dioxide, nitrogen oxides, and sulfur dioxide, requires that all fossil fuel-fired electric
utility generating units meet new source review requirements, and promotes the use of clean
coal technologies and alternative energy sources. Introduced November 17, 1999; referred
to Committee on Finance.
S. 2088 (Cleland)
Similar to H.R. 3686. Introduced February 23, 2000; referred to Committee on
Environment and Public Works.
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S. 2233 (Fitzgerald)
MTBE Elimination Act. Prohibits the use of MTBE and provides for remediation of
water contaminated by it. Introduced March 8, 2000; referred to Committee on Environment
and Public Works.
S. 2362 (Voinovich)
Air Quality Standard Improvement Act of 2000. Amends the Clean Air Act to direct
the EPA Administrator to consider risk assessments and cost-benefit analyses as part of the
process of establishing a new or revised air quality standard. Introduced April 5, 2000;
referred to Committee on Environment and Public Works.
S. 2503 (Daschle)
Amends the Clean Air Act to authorize States to regulate harmful fuel additives and to
require fuel to contain fuel made from renewable sources. Introduced May 4, 2000; referred
to Committee on Environment and Public Works.
S. 2546 (Bond)
Amends the Clean Air Act to prohibit the use of MTBE, to provide flexibility within the
oxygenate requirement of the RFG program, and to promote the use of renewable ethanol.
Introduced May 11, 2000; referred to Committee on Environment and Public Works.
S. 2723 (Inhofe)
Amends the Clean Air Act to permit the Governor of a State to waive the oxygen
content requirement for reformulated gasoline, to encourage development of voluntary
standards to prevent and control releases of MTBE from underground storage tanks, and to
establish a program to phase out the use of MTBE. Introduced June 13, 2000; referred to
Committee on Environment and Public Works.
S. 2962 (B. Smith)
Amends the Clean Air Act to ban the use of MTBE within 4 years of enactment, to allow
Governors to waive the RFG program’s 2% oxygen requirement, and to provide $200 million
from the LUST Trust Fund for MTBE cleanup. Introduced July 27, 2000; referred to
Committee on Environment and Public Works. Reported, amended, September 28, 2000
(S.Rept. 106-426).
S. 2971 (Harkin)
Amends the Clean Air Act to phase out the use of MTBE in fuels or fuel additives and
to promote the use of renewable fuels. Introduced July 27, 2000; referred to Committee on
Environment and Public Works.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee on Commerce. Subcommittee on Health and
Environment. H.R. 11. May 6, 1999.
––-. National Implementation of the Reformulated Gasoline (RFG) Program. March 2,
2000.
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U.S. Congress. House. Committee on Science. Subcommittee on Energy and Environment.
Reducing Sulfur in Gasoline and Diesel Fuel. July 21, 1999.
U.S. Congress. Senate. Committee on Environment and Public Works. Conformity
Regulations. July 14, 1999.
U.S. Congress. Senate. Committee on Environment and Public Works. Subcommittee on
Clean Air, Wetlands, Private Property, and Nuclear Safety. MTBE. October 5, 1999.
––-. Clean Air Act Reauthorization. October 14, 1999 and September 27, 2000.
––-. Environmental Benefits and Impacts of Ethanol Under the Clean Air Act. June 14,
2000.
––-. Highway Diesel Sulfur Regulations. June 15 and September 21, 2000.
FOR ADDITIONAL READING
CRS Issue Briefs
CRS Issue Brief IB97003. Stratospheric Ozone Depletion: Implementation Issues, by Larry
B. Parker. (Updated regularly)
CRS Reports
CRS Report 98-236. Air Quality: EPA’s Ozone Transport Rule, OTAG, and Section 126
Petitions — A Hazy Situation?, by Larry Parker and John Blodgett. Updated July 14,
2000. 25 p.
CRS Report RS20553. Air Quality and Electricity: Initiatives to Increase Pollution
Controls, by Larry B. Parker and John E. Blodgett. November 30, 2000. 6 p.
CRS Report RL30737. Diesel Fuel and Engines: An Analysis of EPA’s Proposed
Regulations, by Brent D. Yacobucci, James E. McCarthy, John W. Fischer, Alejandro
E. Segarra, and Lawrence C. Kumins. November 16, 2000. 23 p.
CRS Report RL30131. Highway Fund Sanctions and Conformity Under the Clean Air Act,
by James E. McCarthy. Updated October 15, 1999. 8 p.
CRS Report 98-290. MTBE in Gasoline: Clean Air and Drinking Water Issues, by James
E. McCarthy and Mary Tiemann. Updated October 2, 2000. 23 p.
CRS Report RS20228, Clean Air Standards: the Supreme Court Agrees to Review American
Trucking Associations v. EPA, by Robert Meltz and James E. McCarthy. Updated
December 5, 2000. 6 p.
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