Order Code IB10107
CRS Issue Brief for Congress
Received through the CRS Web
Clean Air Act Issues in the 108th Congress
Updated October 10, 2003
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 108th Congress
New Source Review (NSR)
Clear Skies / Multi-Pollutant Legislation
MTBE
Conformity of Transportation Plans and SIPs
Deadlines for Achieving the Ozone and PM Air Quality Standards
LEGISLATION
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING

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Clean Air Act Issues in the 108th Congress
SUMMARY
The most prominent air quality issue in
bill, with the latter amendment, February 20
recent months has been what to do about
(P.L. 108-7).
emissions from coal-fired electric power
plants. The Administration and several mem-
A holdover issue from several previous
bers of Congress have proposed legislation on
Congresses concerns regulation of the gaso-
the subject – a group of bills referred to as
line additive MTBE. MTBE is used to meet
“multi-pollutant” legislation. The Adminis-
Clean Air Act requirements that gasoline sold
tration version (the Clear Skies Act, H.R.
in the nation’s worst ozone nonattainment
999/S. 485) proposes to replace numerous
areas contain at least 2% oxygen, to improve
existing Clean Air Act requirements with a
combustion. The additive has been implicated
national cap and trade program for sulfur
in numerous incidents of ground water con-
dioxide, nitrogen oxides, and mercury. Sena-
tamination, and 17 states have taken steps to
tor Jeffords, Senator Carper, Representative
ban or regulate its use. The most significant
Sweeney, Representative Waxman, and Rep-
of these bans (in California and New York)
resentative Bass have also introduced bills (S.
take effect at the end of 2003, leading many to
366, S. 843, H.R. 203, H.R. 2042, and H.R.
suggest that Congress revisit the issue before
3093 respectively). These bills are all more
then to modify the oxygen requirement and set
stringent than Clear Skies, and four of the five
more uniform national requirements regarding
would regulate carbon dioxide in addition to
MTBE and its potential replacements (princi-
the other pollutants. Senate and House sub-
pally ethanol). H.R. 6, the energy bill that
committees have held hearings on the subject,
passed the House April 11, addresses some of
but as of early October, markup had not been
these issues, eliminating the oxygen require-
scheduled.
ment, providing funds for the cleanup of
MTBE in ground water and for conversion of
Controversy has also arisen over EPA’s
MTBE production facilities, and requiring the
proposed and promulgated changes to the
use of renewable fuels such as ethanol in
Clean Air Act’s New Source Review (NSR)
gasoline. It would not ban the use of MTBE,
requirements. NSR imposes emission con-
however. The Senate version of H.R. 6, which
trols on modifications of power plants and
passed July 31, would ban MTBE use in
other major facilities. Since December 31,
motor fuels 4 years after the date of enact-
2002, EPA has promulgated several changes
ment, except in states that specifically autho-
to streamline (and, many argue, weaken) the
rize its use. As of early October, a conference
NSR requirements. In debate on the omnibus
committee was still considering proposals to
FY2003 appropriation bill (H.J.Res. 2), Janu-
reconcile the House and Senate versions.
ary 22, the Senate narrowly defeated an
amendment that would have delayed imple-
Other clean air issues that might be
mentation of changes to the NSR requirements
considered in the 108th Congress are the con-
pending a study by the National Academy of
formity of metropolitan area transportation
Sciences (NAS). The Senate did approve a
plans with the Clean Air Act, and whether to
separate amendment directing NAS to conduct
modify the Act’s requirements for areas that
such a study, but not delaying implementation
have not met deadlines for attainment of the
of the standards. The President signed the
ozone air quality standard.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On August 27, Acting EPA Administrator Marianne Lamont Horinko signed regulations
changing the Clean Air Act’s New Source Review program. The new regulations will
exempt power plants, refineries and other major sources of air pollution from the
requirement that they install the best available pollution control technology when they
replace equipment at existing facilities, provided that the new equipment is valued at 20%
or less of the current replacement value of the process unit. The new regulations, which are
expected to be challenged in court by several states, clarify (or weaken, depending on one’s
point of view) NSR provisions that were the basis of numerous EPA enforcement actions
now moving through the courts.
In another regulatory decision, on August 28, EPA announced that it would not regulate
carbon dioxide emissions from motor vehicles under the Clean Air Act. The Agency was
responding to a petition filed by a number of environmental groups in October 1999.
In September, a conference committee began work on comprehensive energy legislation
(H.R. 6), which, among other things, amends the Clean Air Act’s reformulated gasoline
(RFG) program. On July 31, the Senate passed its version of the bill. It would eliminate the
Clean Air Act requirement that RFG contain 2% oxygen, establish a new requirement that
an increasing percentage of gasoline contain renewable fuels such as ethanol, and ban use
of the additive MTBE in motor fuels, except in states that specifically authorize its use. The
House version of H.R. 6, which passed April 11, contains similar language, but it would not
ban MTBE.
Bills to regulate emissions of multiple pollutants from electric power plants, including
the Administration’s Clear Skies bill and several competing bills, have been introduced in
both the House and Senate. The Clean Air subcommittee of Senate Environment and Public
Works held hearings on Clear Skies April 8, May 8, and June 5. The Energy and Air Quality
Subcommittee of House Energy and Commerce held its first hearing on the subject July 8.
BACKGROUND AND ANALYSIS
Despite steady improvements in air quality in many of the United States’ most polluted
cities, the goal of clean air continues to elude the nation: 107 areas with a combined
population of 97.8 million were classified as “nonattainment” for one or more of the National
Ambient Air Quality Standards (NAAQS) as of December 2002. Two pollutants account for
the vast majority of nonattainment areas: ozone — 36 areas with 85.5 million people — and
particulate matter (PM) — 61 areas with 24.9 million people. Thirty-nine areas with 18.4
million people have failed to achieve standards for carbon monoxide, sulfur dioxide, or lead.
The standards for these pollutants are health-based: the statute requires that EPA set
them at levels necessary to protect the public health with an adequate margin of safety, based
on a review of the scientific literature. From time to time (every 5 years according to the
statute, but less frequently in reality), the Agency reviews the latest scientific studies and
either reaffirms or modifies the standards. The most recent changes (a strengthening of the
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ozone and PM standards) were promulgated in 1997. Due to legal challenges and other
delays, the new standards have not yet been implemented. When they are implemented (now
expected in 2004), they are likely to double the number of areas in nonattainment.
National Ambient Air Quality Standards drive many of the Clean Air Act’s programs.
The need to attain them sets in motion State Implementation Plans that establish detailed
requirements for sources of air pollution, including: the imposition of Reasonably Available
Control Technologies on stationary sources of pollution; the requirement that new sources
of pollution in nonattainment areas “offset” their emissions by reductions in pollution from
other sources; the operation of inspection and maintenance programs for auto emission
controls; the requirement to use cleaner burning reformulated gasoline as a means of
reducing emissions; and the necessity of demonstrating that new highway and transit projects
“conform” to the State Implementation Plan for the area in which they will be constructed.
Other provisions of the Act are separate from the State Implementation Plans, and are
for the most part national in scope. These include emission standards for cars, trucks, and
other mobile sources of pollution; standards for new major stationary sources of pollution;
emission standards for sources of hazardous air pollutants; standards for prevention of
significant deterioration in areas where air quality is better than the NAAQS; acid rain and
regional haze programs; and stratospheric ozone provisions.
Issues in the 108th Congress
Several of the clean air issues facing the 108th Congress are holdovers that were
discussed at length, but not resolved, in the 107th. Changes to the Act’s reformulated
gasoline program, for example, including a ban on use of the gasoline additive MTBE,
reached a conference committee in the 107th Congress as part of the comprehensive energy
bill (H.R. 4); and legislation was reported on the regulation of emissions from electric power
plants (S. 556). Ultimately, neither bill was enacted, leaving these issues for consideration
in the 108th.
In the remainder of this Issue Brief, we look in more detail at five prominent air issues
that have been of interest in the 108th Congress: New Source Review, multi-pollutant (or
Clear Skies) legislation, MTBE, transportation conformity, and deadlines for achieving the
ozone air quality standard.
New Source Review (NSR). The most prominent air quality issue for much of this
year has been whether to modify the Clean Air Act’s New Source Review requirements.
EPA promulgated changes to these rules on December 31, 2002 and August 27, 2003, the
net effect of which will be to allow modification of numerous existing major sources of air
pollution without subjecting them to current emission standards.
The controversy over the NSR process stems from EPA’s application of New Source
Performance Standards to existing stationary sources of air pollution that have been
modified. The Clean Air Act states that new sources (subject to NSR) include modifications
of existing sources as well as plants that are totally new. Industry has generally avoided the
NSR process, however, by claiming that changes to existing sources were “routine
maintenance” rather than modifications. In the 1990s, EPA began reviewing records of
electric utilities, petroleum refineries, and other industries to determine whether the changes
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were routine. As a result of these reviews, since late 1999, EPA and the Department of
Justice have filed suit against 15 electric utilities, claiming that they made major
modifications to 58 plants in 15 states, extending their lives and increasing their electric
generating capacity without undergoing required New Source Reviews and without installing
best available pollution controls. With two exceptions, these suits were filed during the
Clinton Administration.
Five of the 15 utilities charged with NSR violations (Tampa Electric, PSEG of New
Jersey, Dominion Resources/Virginia Electric Power, Wisconsin Electric Power, and
Southern Indiana Gas and Electric) have settled with EPA, agreeing to spend more than $3.1
billion over the next decade on pollution controls or fuel switching in order to reduce
emissions at their affected units. One other utility (Cinergy) reached agreement in principle
more than two-and-a-half years ago to spend more than $1 billion to resolve NSR violations,
but final settlement negotiations have not been concluded. A seventh utility, the Tennessee
Valley Authority, has announced plans to spend $1.5 billion to reduce emissions at four of
its plants, although not as part of a settlement agreement. Between July 25, 2000 and
December 20, 2001, the Agency also reached agreement with nine petroleum refiners
representing more than 30% of industry capacity. The refiners agreed to settle potential
charges of NSR violations by paying fines and installing equipment to eliminate 153,000 tons
of pollution.
Most of the utilities have not settled with EPA. They and other critics of the Agency’s
enforcement actions claim that EPA reinvented the rules. A strict interpretation of what
constitutes routine maintenance, they contend, will prevent them from making changes that
were previously allowed, without a commitment of time and money for permit reviews and
the installation of expensive pollution control equipment. This provides disincentives for
power producers, refiners, and others to expand output at existing facilities, they maintain.
The first case involving one of the non-settling utilities went to trial in February 2003.
In an August 7 decision, U.S. District Judge Edmund Sargus found that Ohio Edison had
violated the Clean Air Act 11 times in modifying its W.H. Sammis power plant. Penalties
will be determined in a separate trial scheduled to begin in March 2004.
EPA has promulgated five sets of changes to NSR. First, it will allow facilities to use
Plantwide Applicability Limits, rather than emissions from the individual units being
replaced, to determine whether emissions will increase from a plant modification (this is
expected to make it easier to modify facilities without triggering NSR). Second, certain
environmentally beneficial pollution control and prevention projects will be allowed to
proceed without NSR permits, upon submission of a notice to the permitting authority.
Third, plants that install state-of-the-art pollution controls (referred to as “clean units”) will
be allowed to modify their facilities during the ensuing 10 years without undergoing further
review, provided they meet emission limits specified in their permit. And fourth, the
methodology used to calculate whether emissions will increase (triggering NSR) will be
changed — for example, facilities other than power plants will be able to compare projected
emissions after a modification to the highest emission levels reached during any 24-month
period during the previous 10 years. (On July 25, 2003, EPA announced that it will
reconsider parts of the NSR rule finalized on December 31, 2002. The Agency is soliciting
comments on its environmental analysis, on whether it should allow sources to maintain
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“clean unit” status if an area is redesignated from attainment to nonattainment, and on four
other issues.)
In addition to the changes promulgated in December, the Agency also proposed new
regulations defining what constitutes routine maintenance, which is exempt from review.
These changes were finalized August 27, 2003. The new regulations will exempt industrial
facilities from undergoing NSR if they are replacing safety, reliability, and efficiency rated
components with new, functionally equivalent equipment, and if the cost of the replacement
components is less than 20% of the replacement value of the process unit.
This change is highly controversial. Those who see the rule as permanently
“grandfathering” older, more polluting facilities from ever having to meet the clean air
standards required of newer plants (including a number of states with poor air quality) are
considered likely to file suit to block the rule. Implementation of the rule also raises
questions about the Agency’s ongoing NSR enforcement actions. While the Agency states
in the new rule that “we do not intend our actions today to create retroactive applicability for
today’s rule,” continued pursuit of the enforcement actions filed during the Clinton
Administration would create a double standard for utilities, with one set of rules applicable
to those utilities unlucky enough to have been cited for violations prior to promulgation of
the new rule, and a different standard applicable afterwards. Whether Congress will be asked
to address these issues is an open question. (For additional information, see CRS Report
RS21608, Clean Air and New Source Review: Defining Routine Maintenance.)
The proposed and promulgated changes have been characterized by the Administration
as a streamlining or improvement of the program, and by environmental groups and a
number of states as a significant weakening. On the day the first set of changes were
promulgated (December 31, 2002), nine Northeastern states filed suit to overturn the
changes; thus, the exact nature of the NSR rules is likely to remain uncertain for the
immediate future. In the meantime, the prospect of an NSR rollback, critics argue, has
caused utilities to withdraw from settlement negotiations over the pending lawsuits, delaying
emission reductions that could have been achieved in the near future. (For additional
discussion of NSR issues, see CRS Report RL31757, Clean Air: New Source Review Policies
and Proposals.)
On January 22, the Senate narrowly defeated an amendment offered by Senator
Edwards (S.Amdt. 67 to H.J.Res. 2) that would have delayed implementation of changes to
the NSR requirements for 6 months pending a study by the National Academy of Sciences.
The Senate did approve a separate amendment offered by Senator Inhofe (S.Amdt. 86)
directing NAS to conduct such a study, but not delaying implementation of the standards.
The amendment was enacted as Section 356 of the Omnibus Appropriations bill (P.L. 108-7).
Perhaps further complicating the issue, on April 21, 2003, the National Academy of
Public Administration released a report commissioned by Congress that made sweeping
recommendations to modify NSR. The report concluded that the NSR permitting process
works as Congress intended for new industrial facilities, but has not been effective in
reducing air pollution when changes at existing sources are likely to increase emissions.
“Instead — contrary to Congressional intent — many large, highly polluting facilities have
continued to operate and have expanded their production (and pollution) over the past 25
years without upgrading to cleaner technologies,” the report states. The study panel
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recommended that Congress end the “grandfathering” of major air emission sources, by
requiring all major sources that have not obtained an NSR permit since 1977 to install Best
Available Control Technology or Lowest Achievable Emissions Rate control equipment. In
the interim, the NAPA panel concluded, EPA and the Department of Justice should continue
to enforce NSR vigorously, especially for changes at existing facilities.
Clear Skies / Multi-Pollutant Legislation. In addition to its proposed and
promulgated regulatory changes in NSR, the Administration has asked Congress to modify
Clean Air Act requirements for power plants by enacting “Clear Skies” or “multi-pollutant”
legislation. A number of multi-pollutant bills have been introduced.
Depending on the bill’s author, such legislation comes in 3- or 4-pollutant versions. The
3-pollutant bills would set standards for sulfur dioxide, nitrogen oxides, and mercury. The
4-pollutant bills add carbon dioxide to the mix.
Such legislation, it is argued — whether in 3- or 4-pollutant form — would both reduce
emissions and encourage investment in new plants by providing certainty regarding future
regulatory requirements. In some proposed bills, the new requirements would replace
numerous existing regulatory programs, including NSR, New Source Performance Standards,
Prevention of Significant Deterioration, Lowest Achievable Emission Rate standards, Best
Available Retrofit Technology, and regulations under development to control mercury
emissions from electric utilities.
The number of these current and prospective regulations on power plant emissions has
suggested to many in industry, environmental groups, Congress, and the Administration that
the time is ripe for such comprehensive legislation. The key questions are how stringent the
controls will be, and whether carbon dioxide (CO ) will be among the emissions subject to
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controls.
Regarding the stringency issue, bills introduced in the 108th Congress would require
reduction of NOx emissions to 1.5 or 1.7 million tons per year (a 70% - 80% reduction from
1998 levels) and reduction of sulfur dioxide emissions to 2.23 - 3.0 million tons per year
(also a reduction of 70% - 80% versus 1998). Regarding mercury, the bills would either
require EPA to determine the level of reductions, or require reductions of 70% - 90% from
current levels of emissions (from 48 to 5, 10, or 15 tons annually, depending on the bill). In
the most stringent of the bills (Senator Jeffords’ S. 366 and Representative Waxman’s H.R.
2042), these reductions would take place by 2008 or 2009. Four of the bills (Senator
Jeffords’, Representative Waxman’s, Senator Carper’s S. 843, and Representative Bass’s
H.R. 3093) would also set caps on CO emissions, at the level emitted in 1990 or 2000. (For
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additional information and a detailed comparison of the legislative proposals, see CRS
Report RL31779, Air Quality: Multi-Pollutant Legislation in the 108th Congress and CRS
Report RL31881, Mercury Emissions to the Air: Background and Legislative Proposals.)
The Administration’s “Clear Skies” bill (H.R. 999 / S. 485) envisions less stringent
standards than those in the other bills, phased in over a longer period of time. For NOx, the
Administration would reduce emissions to 1.7 million tons per year by 2018, with an
intermediate limit of 2.1 million tons in 2008. For sulfur dioxide, the limit would be 3.0
million tons annually in 2018, with an intermediate limit of 4.5 million tons in 2010. For
mercury, the limit would be 26 tons per year in 2010, declining to 15 tons in 2018. “Clear
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Skies” and most of the other bills envision a system like that used in the acid rain program,
where national or regional caps on emissions are implemented through a system of tradeable
allowances.
The Administration opposes controls on CO , viewing them as a step towards
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implementing the Kyoto Protocol to the United Nations Framework Convention on Climate
Change, which it opposes. The absence of CO from the mix leads to different strategies for
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achieving compliance, preserving more of a market for coal, and lessening the degree to
which power producers might switch to natural gas or renewable fuels as a compliance
strategy.
Four hearings on multi-pollutant legislation were held by the Senate Environment and
Public Works Committee in the 107th Congress, and the Committee narrowly approved
Senator Jeffords’ 4-pollutant bill, with amendments, June 27, 2002 (S. 556, S.Rept. 107-
347). Opposed by the Administration and by the electric utility and coal industries, the bill
died without reaching the Senate floor. Senator Jeffords has reintroduced this bill in the
108th Congress as S. 366.
Prospects for Clear Skies and other multipollutant bills are complicated. The House,
with its larger Republican majority and more formal rules, could presumably pass Clear
Skies if the leadership decided to make it a priority. In the Senate, however, consensus has
yet to emerge in the Environment and Public Works Committee, to which the bill and other
multipollutant bills have been referred. At least at present, Clear Skies does not enjoy the
support of a majority of the Committee’s members. Faced with this obstacle, some have
suggested that the Senate leadership take the bill directly to the Senate floor, bypassing the
committee; but it might face determined opposition there, as well. For now, the Environment
Committee and the Energy and Commerce Committee are proceeding with hearings and the
Administration continues to say the bill is a high priority, but the prospects for action remain
unclear. (For additional information on regulation of electric utility emissions, see CRS
Report RS20553, Air Quality and Electricity: Initiatives to Increase Pollution Controls.)
MTBE. Another holdover issue from previous Congresses concerns regulation of the
gasoline additive MTBE (methyl tertiary butyl ether). This issue appears to be on a faster
track, with the House having passed legislation to address it in April, and the Senate having
done so in late July.
MTBE is used to meet Clean Air Act requirements that reformulated gasoline (RFG),
sold in the nation’s worst ozone nonattainment areas, contain at least 2% oxygen, to improve
combustion. Under the RFG program, areas with “severe” or “extreme” ozone pollution (90
counties with a combined population of 64.8 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 about 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, a number since reduced to about 70%. MTBE has also been used since
the late 1970s in non-reformulated gasoline, as an octane enhancer, at lower concentrations.
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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.
MTBE leaks, generally from underground gasoline storage tanks, have been implicated
in numerous incidents of ground water contamination. The substance creates taste and odor
problems in water at very low concentrations, and some animal studies indicate it may pose
a potential cancer risk to humans. For these reasons, 17 states have taken steps to ban or
regulate its use. The most significant of the bans (in California and New York) take effect
at the end of 2003, leading many to suggest that Congress revisit the issue before then to
modify the oxygenate requirement and set more uniform national requirements regarding
MTBE and its potential replacements (principally ethanol).
Support for eliminating the oxygen requirement on a nationwide basis is widespread
among environmental groups, the petroleum industry, and states. In general, these groups
have concluded that gasoline can meet the same low emission performance standards as RFG
without the use of oxygenates. But a potential obstacle to enacting legislation to remove the
oxygen requirement lies among agricultural interests. Nearly 10% of the nation’s corn crop
is used to produce the competing oxygenate, ethanol. If MTBE use is reduced or phased out,
but the oxygen requirement remains in effect, ethanol use would soar, increasing demand for
corn. (In fact, ethanol use is already growing as MTBE begins to be phased out.) 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 could pose a potent obstacle to its passage.
Relying heavily on legislation that reached a conference committee in the 107th
Congress, the 108th Congress has moved quickly to address the MTBE and ethanol issues.
On April 11, the House passed H.R. 6, a comprehensive energy bill. Title VII of the bill
would amend the Clean Air Act to eliminate the requirement that RFG contain 2% oxygen
and establish a new requirement that an increasing amount of gasoline contain renewable
fuels such as ethanol. The bill would require more than a doubling of ethanol use by 2015.
The bill would also authorize $850 million for MTBE cleanup, authorize $750 million to
assist the conversion of merchant MTBE production facilities to the production of other fuel
additives, preserve the reductions in emissions of toxic substances achieved by the RFG
program, and provide a “safe harbor” from liability lawsuits for producers of MTBE. The
bill would not ban the use of MTBE, however. Two days earlier, the Senate Environment
and Public Works Committee ordered similar, but not identical provisions reported in S. 791.
Among the differences, the Senate bill would ban the use of MTBE in motor fuels 4 years
after the date of enactment, except in states that specifically authorize its use. It also would
not provide a safe harbor for MTBE producers. Provisions similar to S. 791 were offered on
the Senate floor as S.Amdt. 850 during debate on S. 14, the Senate’s comprehensive energy
bill, June 5, and passed the Senate by a 67-29 margin. Ultimately, however, S. 14 was
replaced by an amended version of H.R. 6, that consisted of the Senate-passed energy bill
from the 107th Congress (reintroduced as S.Amdt. 1537). In this form, the Senate passed the
bill, 84-14. As passed, the bill contains provisions similar to those in S. 791, including a ban
on MTBE 4 years after the date of enactment, except in states that specifically authorize its
use. (For a detailed comparison of the House and Senate provisions, see CRS Report
RL31912. Renewable Fuels and MTBE: Side-by-Side Comparison of House and Senate
Energy Bills.)
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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
remain high. 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. For information on ethanol, see CRS Report RL30369, Fuel
Ethanol: Background and Public Policy Issues.)
Conformity of Transportation Plans and SIPs. A fourth clean air issue that
might be considered in the 108th Congress is the conformity of metropolitan area
transportation plans with the Clean Air Act. Under the Act, areas that have not attained one
or more of the six National Ambient Air Quality Standards must develop State
Implementation Plans (SIPs) demonstrating how they will reach attainment. As of December
2002, 107 areas with a combined population of 97.8 million people were subject to the SIP
requirements. Section 176 of the Clean Air Act prohibits federal agencies from funding
projects in these areas unless they “conform” to the SIPs. Specifically, projects must not
“cause or contribute to any new violation of any standard,” “increase the frequency or
severity of any existing violation,” or “delay timely attainment of any standard.” Because
new highways generally lead to an increase in vehicle miles traveled and related emissions,
both the statute and regulations require that an area’s Transportation Improvement Program
(TIP), which identifies major highway and transit projects an area will undertake,
demonstrate conformity each time it is revised (i.e., at least every 2 years). Highway and
transit projects cannot receive federal funds unless they are part of a conforming TIP.
The impact of conformity requirements is expected to grow in the next few years for
several reasons. The growth of emissions from SUVs and other light trucks and greater than
expected increases in vehicle miles traveled have both made it more difficult to demonstrate
conformity; recent court decisions have tightened the conformity rules; and the scheduled
implementation of more stringent air quality standards in 2004 will mean that additional
areas are subject to conformity. Thus, numerous metropolitan areas could face a temporary
suspension of highway and transit funds unless they impose sharp reductions in vehicle,
industrial, or other emissions. In a recent survey, the General Accounting Office found that,
over the past 6 years, only 5 metropolitan areas have had to change transportation plans in
order to resolve a conformity lapse; but about one-third of local transportation planners
surveyed expected to have difficulty demonstrating conformity in the future. (See U.S.
GAO, Environmental Protection: Federal Planning Requirements for Transportation and
Air Quality Protection Could Potentially Be More Efficient and Better Linked, April 2003,
for additional detail.)
Of particular concern to areas facing a potential conformity lapse may be the fact that
the Clean Air Act provides no authority for waivers or grace periods during a lapse. Only
a limited set of exempt projects (mostly safety-related or replacement and repair of existing
transit facilities) can be funded in lapsed areas: the rules do not even allow funding of new
projects that might reduce emissions, such as new transit lines. These limitations are among
the issues of concern to those seeking to amend the conformity provisions. In addition, many
have raised concerns about a mismatch between the SIP, TIP, and long range transportation
planning cycles, and have called for less frequent, but better coordinated demonstrations of
conformity. In its recent report, the General Accounting Office recommended that “relevant
federal agencies (1) consider extending the 3-year time frame between required [long range]
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transportation plan updates and asking the Congress to amend the Clean Air Act to change
the conformity rules to match, and (2) assess the advantages and disadvantages of statutorily
requiring that the emissions budgets in air quality plans be regularly updated with new travel
data and emissions models.” At least the first of these recommendations appears to be
generally supported by transportation planners and highway builders, but opposed by
environmental groups and air quality planning officials.
In the 108th Congress, H.R. 673 would repeal the existing conformity regulations and
require EPA to promulgate revised criteria and procedures for conformity within one year
of enactment. Conformity provisions have also been introduced in the Administration’s
highway and transit legislation (H.R. 2088 / S. 1072); Section 6001 of the bill would require
conformity demonstrations every 5 years instead of every 2, and would shorten the planning
horizon over which conformity must be demonstrated to 10 years in most cases, instead of
the current 20 years. (For additional information, see CRS Report RL32106, Transportation
Conformity Under the Clean Air Act: In Need of Reform?)
Conformity issues have also been raised by the Department of Defense in the
Pentagon’s Readiness and Range Preservation Initiative, discussed as part of the fiscal year
2004 defense authorization bill (H.R. 1588, S. 1050) currently moving through Congress.
(H.R. 1588 passed the House May 22; S. 1050 passed the Senate the same day.) As part of
an effort to ease environmental restrictions on the use of active military ranges, DOD
proposed that the Department be allowed to conduct military readiness activities that might
otherwise be prohibited under the conformity requirement. While these and other elements
of the readiness and range initiative were much discussed, neither the House nor the Senate
bill contains the conformity provisions. In hearings, many Members indicated that DOD had
not provided sufficient justification and requested that the Department provide quantitative
data in support of its request. As a result, as passed by the House, H.R. 1588 provides for
the Secretary of Defense to conduct a study on the impact, if any, of compliance by the
Department of Defense with State Implementation Plans for air quality under the Clean Air
Act.
Deadlines for Achieving the Ozone and PM Air Quality Standards. A fifth
set of issues that were discussed, in part, as a possible amendment to the Omnibus
Appropriations bill in early January concerns the deadlines for achievement of the ozone air
quality standard. Under the 1990 Clean Air Act Amendments, ozone nonattainment areas
were classified in one of five categories (Marginal, Moderate, Serious, Severe, or Extreme)
depending on the concentration of ozone recorded by air quality monitoring equipment in the
3 years preceding passage of the 1990 amendments. Areas with higher concentrations of the
pollutant were required to implement more stringent controls on emissions; they were also
given more time to reach attainment. Failure to reach attainment by the specified deadline
was to result in reclassification of an area to the next highest category and the imposition of
more stringent controls. Areas classified as Serious, for example, were required to reach
attainment by 1999. If they did not do so, the law requires that they be reclassified as Severe,
with a new deadline of 2005, and more stringent emission controls, including the imposition
of controls on smaller sources of air pollution. (A more complete explanation of the
categories, deadlines, and requirements is contained in CRS Report RL30853, Clean Air Act:
A Summary of the Act and Its Major Requirements.)
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For a variety of reasons, EPA has generally not reclassified areas when they failed to
reach attainment by the statutory deadlines. The Agency’s website currently lists 21
Marginal areas, 9 Moderate areas, and 14 Serious areas, most of which should be categorized
as Severe had the Agency adhered to the statutory requirements. In some cases, the Agency
granted additional time to reach attainment on the grounds that a major cause of an area’s
continued nonattainment was pollution generated outside the area and transported into it by
prevailing winds. The Agency has been sued over its failure to reclassify several areas. It
has lost all three of the suits that have gone to trial (Washington, D.C., St. Louis, and
Beaumont-Port Arthur, Texas).
While it might seem reasonable to give areas extra time to attain the standards if their
air quality is substantially affected by upwind sources, the Clean Air Act makes no provision
for such extensions. Lacking such authority, EPA will be under increased pressure in the
future to bump up additional areas. In response to such pressure, at a July 22, 2003 hearing,
EPA Assistant Administrator for Air and Radiation, Jeffrey Holmstead, said the Agency
would support legislation to extend the attainment deadlines for areas not meeting NAAQS
because of emissions transported from upwind areas. As of early October 2003, no such
legislation had been introduced, but several members, including the Chair of the House
subcommittee of jurisdiction, have expressed support for the concept.
Another deadline issue concerns the implementation of new standards for ozone and
fine particles that EPA promulgated in 1997. Due to legal challenges and other delays, the
new standards have not yet been implemented, but when they are implemented (now
expected in 2004), they are likely to double the number of areas in nonattainment. In
response to an initiative from the State of Texas, in 2002, EPA approved a protocol under
which areas can avoid designation as nonattainment for ozone until December 31, 2007, if
they voluntarily commit to enforceable early action compacts with their state and EPA. The
protocol sets out a number of milestones that areas must meet to qualify. Thirty-five areas
met the first of these requirements by submitting signed compacts to EPA by December 31,
2002.
The Administration has proposed an additional modification of the requirements for
areas not meeting the new ozone and fine particle standards in its Clear Skies bill (H.R. 999
/ S. 485). In Section 3, Clear Skies would allow EPA to avoid designating 8-hour ozone and
PM areas as nonattainment until 2016, provided that the area demonstrates that it will
2.5
attain the standards by December 31, 2015. Areas fitting into this new “transitional”
category could avoid additional regulatory controls, including the requirement to demonstrate
conformity, if they could demonstrate that attainment will be achieved through the
imposition of federal controls on utilities, diesel engines, automobiles, and other sources.
(For additional information on nonattainment deadline issues, see CRS Report RS21611,
Ozone and Particulate Air Quality: Should Deadlines for Attainment Be Extended?)
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LEGISLATION
(This listing does not include bills whose principal purpose is to address global climate
change. For information on that subject, including a list of bills introduced, see CRS Issue
Brief IB89005, Global Climate Change.)
H.R. 6 (Tauzin)
Energy Policy Act of 2003. Title VII amends the Clean Air Act to remove the oxygen
content requirement for RFG, to increase production and use of renewable fuels such as
ethanol, to provide a “safe harbor” from lawsuits for producers of renewable fuels and
MTBE, to provide assistance for conversion of merchant MTBE production facilities, and
to prevent backsliding on emissions of toxic air pollutants from RFG. Also amends the Solid
Waste Disposal Act to authorize funding for cleanup of MTBE. Incorporates provisions
of H.R. 1644 (Barton), reported April 8, 2003 (H.Rept. 108-65, Part 1 — see Title IX). H.R.
6 introduced April 7, 2003; referred to the Committees on Energy and Commerce, Science,
Ways and Means, Resources, Education and the Workforce, Transportation and
Infrastructure, Financial Services, and Agriculture. Passed the House, 247-175, April 11,
2003. Received in the Senate, April 29, 2003. Amended by S.Amdt. 1537 and passed, 84-14,
July 31, 2003. Senate version bans the use of MTBE in motor fuels four years after the date
of enactment, except in states that specifically authorize its use, and does not provide a safe
harbor for MTBE producers. Otherwise, the Senate version contains MTBE and renewable
fuel provisions similar to those in the House bill.

H.R. 185 (Serrano)

Amends the Internal Revenue Code of 1986 to provide a business credit relating to the
use of clean-fuel vehicles by businesses within areas designated as nonattainment areas under
the Clean Air Act. Introduced January 7, 2003; referred to Committee on Ways and Means
H.R. 203 (Sweeney)
Amends the Clean Air Act to reduce emissions of sulfur dioxide, nitrogen oxides, and
mercury from electric powerplants. Introduced January 7, 2003; referred to Committee on
Energy and Commerce.
H.R. 244 (Issa)
Amends the Clean Air Act to permit the exclusive application of California State
regulations regarding reformulated gasoline in federal RFG areas within the State.
Introduced January 7, 2003; referred to Committee on Energy and Commerce.
H.R. 427 (Sensenbrenner)
Fuel Price Stability Act of 2003. Amends the Clean Air Act to allow the Governors of
Illinois, Indiana, and Wisconsin to permit the sale of conventional gasoline in a reformulated
gasoline area if the Governor finds that reduced availability of RFG has resulted in, or is
likely to result in, a significant price increase in that area. Introduced January 28, 2003;
referred to Committee on Energy and Commerce.
H.R. 673 (K. Brady)
Safe Highways and Roads Act of 2003. Repeals the existing transportation conformity
regulations, replacing them with those in effect prior to a March 1999 court decision, and
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requires EPA to promulgate revised criteria and procedures for conformity within one year
of enactment. Introduced February 11, 2003; referred to Committee on Energy and
Commerce.
H.R. 837 (C. Peterson)
Fuels Security Act of 2003. Amends the Clean Air Act to ban MTBE from the U.S.
fuel supply not later than 4 years after the date of enactment, to eliminate the oxygen content
requirement for reformulated gasoline while maintaining reductions in emissions of toxic air
pollutants, to increase production and use of renewable fuels such as ethanol to 5 billion
gallons per year by 2012, to provide a “safe harbor” from liability resulting from the use of
renewable fuels, to require federal agencies to purchase gasoline containing at least 10%
ethanol and diesel fuel containing biodiesel provided they are available at a generally
competitive price, to authorize $400 million from the Leaking Underground Storage Tank
Fund for remediation of MTBE contamination, and to authorize $750 million in grants for
conversion of merchant MTBE production facilities. Introduced February 13, 2003; referred
to Committee on Energy and Commerce.
H.R. 999 (Barton, by request)
Clear Skies Act of 2003. The Administration’s multi-pollutant legislation for electric
utility emissions of sulfur dioxide, nitrogen oxides, and mercury. Introduced February 27,
2003; referred to Committee on Energy and Commerce. Hearing, Subcommittee on Energy
and Air Quality, July 8, 2003.
H.R. 1020 (P. Ryan)
Amends the Clean Air Act requirements relating to gasoline to prevent future supply
shortages and price spikes in the gasoline market by reducing the proliferation of “boutique
fuels.” Introduced February 27, 2003; referred to Committee on Energy and Commerce.
H.R. 1891 (Paul)
Amends the Clean Air Act to prohibit liability for the effects of emissions resulting
from or caused by an act of nature including: volcanic eruptions and dust storms; accident;
war; terrorism; or fires that occur beyond a local jurisdiction related to land clearing,
agriculture and ecological restoration and management. Introduced April 30, 2003; referred
to Committee on Energy and Commerce and Committee on the Judiciary.
H.R. 2042 (Waxman)
Clean Smokestacks Act of 2003. Amends the Clean Air Act to reduce emissions of
sulfur dioxide, nitrogen oxides, mercury, and carbon dioxide from electric powerplants.
Introduced May 8, 2003; referred to Committee on Energy and Commerce.
H.R. 2136 (P. King)
Amends the Clean Air Act to prohibit the use of MTBE as a gasoline additive and to
repeal the oxygenate requirement for reformulated gasoline, and to provide funding for the
clean up of underground storage tanks. Introduced May 15, 2003; referred to Committee on
Energy and Commerce.
H.R. 2253 (Pombo)
Amends the Clean Air Act to require EPA to ban the use of MTBE in gasoline as soon
as practicable and to prohibit any gasoline additive unless it has been determined (through
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scientific testing and peer review) not to have any adverse effects on the public. Introduced
May 22, 2003; referred to Committee on Energy and Commerce.
H.R. 2865 (Cardoza)
Clean Air Incentive Act of 2003. Amends the Internal Revenue Code of 1986 to provide
a credit for qualified clean-fuel vehicles which are used in serious, severe, or extreme ozone
nonattainment areas. Introduced July 24, 2003; referred to Committee on Ways and Means.
H.R. 3093 (Bass)
Clean Air Planning Act of 2003. House version of S. 843. Introduced September 16,
2003; referred to Committee on Energy and Commerce.
H.Amdt. 338 to H.R. 2861 (Allen)
Amends the VA, HUD, Independent Agencies Appropriation bill to prohibit EPA from
placing a lower statistical value on the lives of older Americans than the lives of other adults
when conducting statistical analyses of the costs and benefits of Clean Air Act regulations.
Offered July 25, 2003; agreed to by voice vote.
S. 366 (Jeffords)
Clean Power Act of 2003. Amends the Clean Air Act to reduce emissions of sulfur
dioxide, nitrogen oxides, mercury, and carbon dioxide from electric powerplants. Introduced
February 12, 2003; referred to Committee on Environment and Public Works.
S. 385 (Daschle)
Fuels Security Act of 2003. Amends the Clean Air Act to ban MTBE from the U.S.
fuel supply not later than 4 years after the date of enactment, to eliminate the oxygen content
requirement for reformulated gasoline while maintaining reductions in emissions of toxic air
pollutants, to increase production and use of renewable fuels such as ethanol to 5 billion
gallons per year by 2012, to provide a “safe harbor” from liability resulting from the use of
renewable fuels, to require federal agencies to purchase gasoline containing at least 10%
ethanol and diesel fuel containing biodiesel provided they are available at a generally
competitive price, to authorize $400 million from the Leaking Underground Storage Tank
Fund for remediation of MTBE contamination, and to authorize $750 million in grants for
conversion of merchant MTBE production facilities. Introduced February 13, 2003; referred
to Committee on Environment and Public Works.
S. 484 (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 to the
environment. Introduced February 27, 2003; referred to Committee on Environment and
Public Works.
S. 485 (Inhofe, by request)
Clear Skies Act of 2003. The Administration’s multi-pollutant legislation for electric
utility emissions of sulfur dioxide, nitrogen oxides, and mercury. Introduced February 27,
2003; referred to Committee on Environment and Public Works.
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S. 791 (Inhofe)
Reliable Fuels Act. Amends the Clean Air Act to remove the oxygen content
requirement for RFG, to eliminate MTBE from the U.S. fuel supply except in states that
specifically authorize its use, to increase production and use of renewable fuels such as
ethanol, to provide a “safe harbor” from lawsuits for producers of renewable fuels, and to
prevent backsliding on emissions of toxic air pollutants from RFG. Also amends the Solid
Waste Disposal Act to authorize funding for cleanup of MTBE. Introduced April 3, 2003;
referred to Committee on Environment and Public Works. Reported, with amendments
(S.Rept. 108-57), June 3, 2003 . Similar language was added to S. 14, June 5, 2003, by
S.Amdt. 850.
S. 843 (Carper)
Clean Air Planning Act of 2003. Amends the Clean Air Act to reduce emissions of
sulfur dioxide, nitrogen oxides, mercury, and carbon dioxide from electric powerplants.
Introduced April 9, 2003; referred to Committee on Environment and Public Works.
S. 1407 (Edwards)
Concentrated Livestock Existing Alongside Nature Act. Among other purposes,
amends the Clean Air Act to direct EPA to promulgate national primary ambient air quality
standards for hydrogen sulfide and ammonia as measured at any point on the property line
of a concentrated animal feeding operation (CAFO). Introduced July 15, 2003; referred to
Committee on Agriculture, Nutrition, and Forestry .
S.Amdt. 67 (Edwards)
Requires a study by the National Academy of Sciences of the effects of the final rule
relating to New Source Review promulgated December 31, 2002, to determine whether it
would result in any increase in air pollution or any adverse effect on human health. Delays
implementation of EPA’s changes to the NSR program for 6 months to allow completion of
the study. Amendment was not agreed to, by a vote of 46 - 50. Record Vote Number 12.
S.Amdt. 86 (Inhofe)
Requires a study by the National Academy of Sciences of the effects of the final rule
relating to New Source Review promulgated December 31, 2002, and requires an interim
report to Congress no later than March 3, 2004. Amendment was agreed to, by a vote of 51-
45. Record Vote Number 11. Enacted as Section 356 of H.J.Res. 2 (P.L. 108-7).
S.Amdt. 850 (Frist)
Similar to S. 791. Introduced June 4, 2003. Amendment was agreed to June 5, 2003,
during debate on S. 14, by a vote of 67-29.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee on Energy and Commerce. Subcommittee on Energy
and Air Quality. Comprehensive National Energy Policy. March 13, 2003. Panel 3,
on Fuels, including MTBE and Ethanol Issues.
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------. The Clear Skies Initiative: A Multipollutant Approach to the Clean Air Act. July 8,
2003.
U.S. Congress. Senate. Committee on Environment and Public Works. Subcommittee on
Clean Air, Climate Change, and Nuclear Safety. CMAQ and Conformity Programs.
March 13, 2003.
------. Fuel Additives and Renewable Fuels. March 20, 2003
------. Clear Skies Act of 2003, S. 485. April 8, May 8, and June 5, 2003.
FOR ADDITIONAL READING
CRS Report RS21424. Air Pollution: Legal Perspectives on the “Routine Maintenance”
Exception to New Source Review, by Robert Meltz.

CRS Report RL30432. Air Quality and Electricity: Enforcing New Source Review, by Larry
B. Parker and John E. Blodgett.
CRS Report RS20553. Air Quality and Electricity: Initiatives to Increase Pollution
Controls, by Larry B. Parker and John E. Blodgett.
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.
CRS Report RL31779. Air Quality: Multi-Pollutant Legislation in the 108th Congress, by
Larry Parker and John Blodgett.
CRS Report RL31515. Air Toxics: What Progress Has EPA Made in Regulating Hazardous
Air Pollutants? by Anne L. Hardenbergh.
CRS Report RL30853. Clean Air Act: A Summary of the Act and Its Major Requirements,
by James E. McCarthy.
CRS Report RS21608. Clean Air and New Source Review: Defining Routine Maintenance,
by Larry Parker.
CRS Report RL31757, Clean Air: New Source Review Policies and Proposals, by Larry
Parker.
CRS Report 97-458. Clean Air Permitting: Status of Implementation, by Claudia Copeland.
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.
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CRS Report RL30878. Electricity Generation and Air Quality: Multi-Pollutant Strategies,
by Larry Parker and John Blodgett.
CRS Report RL30369. Fuel Ethanol: Background and Public Policy Issues, by Brent D.
Yacobucci and Jasper Womach.
CRS Report RL31881. Mercury Emissions to the Air: Background and Legislative
Proposals, by James E. McCarthy.
CRS Report 98-290. MTBE in Gasoline: Clean Air and Drinking Water Issues, by James
E. McCarthy and Mary Tiemann.
CRS Report 21611. Ozone and Particulate Air Quality: Should Deadlines for Attainment
Be Extended?, by James E. McCarthy.
CRS Report RL31531. Particulate Matter Air Quality Standards: Background and Current
Developments, by Anne L. Hardenbergh.
CRS Report RL31912. Renewable Fuels and MTBE: Side-by-Side Comparison of House
and Senate Energy Bills, by James E. McCarthy, Mary E. Tiemann, and Brent D.
Yacobucci.
CRS Report RL31149. Snowmobiles, Environmental Standards, and Access to National
Parks: Regulatory and Legislative Issues, by James E. McCarthy.
CRS Report RS20860. The Supreme Court Upholds EPA Standard-Setting Under the Clean
Air Act: Whitman v. American Trucking Ass’ns, by Robert Meltz and James E.
McCarthy.
CRS Report RL32106. Transportation Conformity Under the Clean Air Act: In Need of
Reform? by James E. McCarthy.
National Academy of Public Administration. A Breath of Fresh Air: Reviving the New
Source Review Program. April 2003.
U.S. General Accounting Office. Environmental Protection: Federal Planning
Requirements for Transportation and Air Quality Protection Could Potentially Be More
Efficient and Better Linked. GAO-03-581. April 2003.
------. EPA Should Use Available Data to Monitor the Effects of Its Revisions to the New
Source Review Program. GAO-03-947. August 2003.
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