Regulation of Air Quality: Who is Leading Whom? Some States Have Adopted Greater Restrictions While Others Are Believed to Lag Far Behind

REGULATION OF AIR QUALITY: WHO IS LEADING WHOM? Some States Have Adopted Greater Restrictions While Others Are Believed to Lag Far Behind

LEE DEHIHNS, Deputy Regional Administrator, Region IV, U.S. EPA

MICHAEL BARR, Pillsbury, Madison & Sutro

V. JOHN WHITE, V. John White & Associates

LEE DEHIHNS: Rather than discuss the Clean Air Act amendments from the view of their relationship to the states, let me review some of the history of our federal air act legislation to illustrate how it frames our present situation. You will see in the history the underpinning of some of the proposed amendments. You also will see that the proposed amendments still won't solve the federal/state dilemma.

The first federal clean air legislation was passed in 1955.¹

Its primary intent was to assign responsibility to state governments to prevent, abate and control air pollution. The Act established the federal role as one of research, training and technical assistance to the states.

The next major federal foray towards the current Clean Air Act came in 1963.² This Act continued the premise of state responsibility, but strengthened the federal role by calling for the [22 ELR 10022] first time for states to receive federal grant monies to aid them in developing and improving air pollution programs and by requiring the federal government to develop and publish non-mandatory air quality criteria.

From 1963 to 1970, the amount of grant funds to the states averaged about $ 20 million, with the state contribution being slightly higher than half of the total. The Act was amended again in 1967, giving the federal government a more extensive role but still maintaining a primary state role.³

As former Senator Muskie commented recently on the twentieth anniversary of the Clean Air Act, the action in 1967, of which he was a primary participant, was necessary because there was broad agreement that local and state efforts were inadequate. That the nation's air quality and the accompanying threat to public health continued to worsen justified further federal intrusion into the field.

The 1967 Act required states to define air sheds called air quality control regions. It also required the federal government to establish air quality criteria goals for those air sheds and to develop air pollution control techniques. It required both the states and the federal government to set standards to comply with the criteria.

While the Act also permitted the federal government to initiate federal enforcement actions where interstate problems were evident, it was the first federal air legislation that required states to conduct analysis, set standards, and take enforcement actions as well.

Another major feature of the 1967 Act was federal preemption of the authority of states to establish automobile emissions standards, with California being the sole exception.

Then the major rewrite of the Clean Air Act occurred, with the Clean Air Act Amendments of 1970.⁴

The amendments required EPA to promulgate national air quality standards. They required the states to develop strategies to reach and maintain those standards, and to submit their plans to EPA as state implementation plans (SIPs). They also required EPA to develop and promulgate national emission standards for new sources and for hazardous air pollutants.

This Act still placed primary responsibility for air pollution control with the states, but required federal approval of the plans and regulations and mandated federal actions where state governments failed to achieve compliance.

Compliance with the national ambient air quality standards (NAAQS) at that time was to be achieved by 1975. Federal grant money to the states increased from $ 20 million to $ 35 million, reaching $ 55 million a year by 1977, while over the same period, state funding increased from $ 45 million to $ 95 million by 1977.

By 1977, many areas of the country still had not attained the NAAQS, particularly regarding ozone. Since the statutory deadline had passed, Congress enacted new major provisions to the Clean Air Act.⁵ Again they gave EPA a more extensive role by requiring EPA approval of the new SIPS designed to achieve ambient air quality standards by 1982 in nonattainment areas and to achieve the standards for ozone and carbon monoxide in urban areas by 1987.

For the first time, the Act established sanctions against states for failure to submit attainment plans and to implement the plans by the statutory deadlines. The Act also newly required EPA to develop plans to prevent significant deterioration in attainment areas — the PSD program.

While the 1977 amendments continued the policy established twenty years previously, placing primary responsibility with the states, the amendments continued to move EPA into a direct role where states failed to take action, and required EPA to be more prescriptive in order to ensure attainment.

With the Act came a significant increase in federal grant money, which in 1981 had grown to $ 87 million. By 1990 federal support to the states had reached almost $ 200 million.

Even with this increase in funding at both the state and federal levels, resources are insufficient to tackle ozone SIPS, the increased pressure EPA is placing on the states in enforcing a number of criteria such as asbestos, and the extra burdens that EPA passed on to the states for primary responsibility in controlling air toxics. We also are asking the states to enhance their ambient monitoring programs and to begin to think about tackling indoor air pollution.

Here we are in 1990, fifteen years after the original attainment date, with 100 ozone nonattainment areas and pending new clean air legislation. While emissions have been reduced dramatically and air quality has improved, people are still breathing unhealthy air. The proposed Clean Air Act is more prescriptive, not only in setting goals, but also in outlining how to achieve them. It enhances federal enforceability of a number of these requirements and opens up many more state actions to EPA oversight. In the case of acid deposition, EPA plays a central role.

Legislation has become more prescriptive in the last twenty years chiefly because we still have numerous nonattainment areas. To some degree, Congress also has continued to have misgivings about the states and EPA's resolve to solve these problems which are both very costly and very complicated.

Except for ozone, control measures have, however, been successful in bringing about attainment in most areas of the country. Plans to achieve the ambient standards were left primarily to the states to tailor compliance plans to match the degree of the problem. This provided the states great degrees of flexibility to devise the plans and, again, except for ozone and CO, they have worked. Although federal efforts such as reduced tailpipe emissions and state regulations for stationary sources of VOC emissions have been implemented, areas still are not attaining the ozone standard.

The 1977 Act required all nonattainment areas to adopt reasonably available control measures for stationary sources. To promote consistency in the regulations, EPA published a series [22 ELR 10023] of control techniques guidelines called CTG documents for 26 categories of stationary sources.

These documents were designed to inform regional, state and local air pollution control agencies of techniques available for reducing volatile organic compounds (VOC) emissions for existing stationary sources. CTGs and corresponding model regulations recommended specific limits that EPA determined were achievable at a reasonable cost. The documents were meant to serve only as a guideline, however, as states were allowed flexibility in development of regulations for the 26 categories.

In fact, the 1987 analysis of all CTG regulations in nonattainment areas revealed a huge disparity in the way these regulations were developed and implemented. For instance, agencies with severe ozone problems in California adopted regulations with much tighter limits than those recommended in the CTGs. Other agencies in the country adopted CTG limits that allow the directors of the air pollution agencies to approve alternative limits and control strategies on a case-by-case basis. This disparity potentially can have severe negative effects.

Less stringent or unenforceable regulations can interfere with an area's ability to attain the air standard. Industries will generally use less stringent CTG regulations as criteria in considering relocation or growth. Finally, coating manufacturers might not have consistent limits for applying coatings due to different interpretations of the CTGs.

In an effort to address these issues, as part of the development of its ozone policy as a precursor to the Administration's Air Act, EPA began requiring states to revise their regulations to contain limits that are at least as stringent as the CTG limits. Additionally, we are requiring removal of much of the discretion accorded the directors of implementation by these regulations. The removal of discretion is driven in part by a number of adverse rulings in federal enforcement cases.

The most notable case here is a Fifth Circuit case pitting the U.S. EPA against General Motors.⁶

In General Motors, the court faced an interpretation of an alternative method of control provisions of the VOC regulations in the Texas SIP.

Texas approved a control method allowing General Motors to use a paint with a higher VOC content than the SIP allowed so long as the transfer efficiency was greater. EPA interpreted the SIP as requiring each method of control to be approved separately by EPA.

The court concluded that the SIP did not give EPA the authority to approve each alternative method. Furthermore, the court stated that even if the SIP were ambiguous, the state's interpretation must prevail. The court concluded that EPA had no discretion to interpret the Texas SIP and must rely on the state's interpretation.

Certainly, such court decisions have impaired EPA's ability to enforce its previous views of the Clean Air Act. Thus, we have taken the position that much of the discretion accorded state agencies in the past will not likely be allowed in the future. Many states find this posture a serious departure from the so-called partnership role that EPA previously had believed existed.

Another bone of contention has been the PSD program, which mandates a requirement called the best available control technology (BACT) for attainment areas. This was designed to be flexible and subjective, since economics play an important role in setting BACT.

EPA has taken exception to many state BACT determinations and has asked the states to begin a new way of applying BACT controls in their state. Again, the courts have played a role in EPA's ability to oversee the state interpretation of BACT. The Solar Turbines case in the District Court of Pennsylvania involved issuance of a PSD permit to construct a co-generation facility.⁷ Pennsylvania did not require NOX controls as part of the PSD permit. EPA issued an order against the company under the Clean Air Act, insisting that NOX controls be installed. The company sued EPA in federal court. The court concluded that EPA could not take the action contemplated, because the PSD program had been delegated to the state. The state had issued a permit in compliance with the PSD delegation of authority and EPA had no authority to second-guess the state's determination. The court further said that EPA could bring an order directly against the state if it chose, but not against the source.

Since the Department of Justice has decided not to appeal this case, the ruling stands as an impairment to the programs in the regions and states.

As for what the future holds, some BACT determinations are pending in my region. In the last three months, however, we have allowed the state to take entire control of the BACT determination, and we are not imposing additional requirements. Further, the BACT issue will not be resolved by the Clean Air Act amendments.

One area where the states have taken a lead, primarily because EPA has passed it over to them, has been in air toxics. Everyone is aware that EPA has had a slow time of it in developing its rules. This is due to the complexity and no-risk aspects spelled out in the present Clean Air Act. California, New Jersey, and other states have developed and implemented excellent air toxics control programs.

States also have taken strong leadership in infectious and biological waste incineration. EPA applauds these initiatives where the federal government has not stepped in to solve the problem.

The proposed Clean Air Act requires a massive infusion of federal efforts to develop new air toxic standards for a host of chemicals, and the timeframe under the statute varies anywhere from two years to up to ten years. What do the states do in the meantime? Do they wait to establish their own air toxics programs, thereby postponing solutions to serious air pollution problems? Do they establish regulations, running the risk that [22 ELR 10024] EPA will develop standards more stringent than those of the states?

This places the states in the difficult position of being criticized by the public if they wait and by industry if they proceed. The proposed Act attempts to give the states that have taken action some flexibility to establish standards; but the risk of having to do more remains.

A number of the new Clean Air Act provisions that will affect state relationships, such as NESHAPS and tail pipe emission standards, will still be needed at the federal level. There is a consensus that an EPA oversight function is needed. More so than any previous Act, the new Act maintains a strong role for EPA, but at the same time reiterates that the states will have primary responsibility for control of their pollution.

Every Act since 1955 has maintained that concept, and one can see how it has evolved over the intervening 35 years. But because areas of the country remain out of attainment, the Act will set a timeframe for attainment, establish mandatory measures for achieving attainment and set state milestones for implementing the requirements.

Outside of choosing the control techniques that apply to their particular situation, the states have limited flexibility in meeting the milestones. The Act will include a permanent program to be implemented by the states. Depending on how the veto provision comes to fruition, it may or may not be a permanent program with federal involvement.

The Clean Air Act amendments, at least as they currently exist, contain two messages that address the state/federal relationship. The first is that we have a problem of regional, national and international scope that the federal government is going to be taking an increasingly stronger role in resolving. The other message is that, with the large number of nonattainment areas, the states will retain certain primary responsibilities.

The Clean Air Act will solve a long-standing problem in one area: the amount of resources to be devoted to solving air pollution problems will remain within state control. A solution is the pro-rated fee process. If that provision is enacted, with permit fees ranging anywhere from $ 300 to $ 500 million of new money, we will be able to aid the states in implementing the Clean Air Act.

The roles of EPA and the states in the air arena have changed considerably since the early 1950s, particularly in terms of who holds primary responsibility. But the central roles of EPA and the states do not change considerably from Act to Act. The states still must deal with their citizens and industries and run the permit programs on a daily basis. EPA still performs an oversight function.

Whether this oversight function will bring us closer or move us further away from a partnership remains to be seen.

The Air Act amendments are the product of a long overdue system in Congress to address issues that have been dealt with through state and federal action or inaction over the years.

If the 1990 amendments come about, a good assessment of whether the federal-state relationship will remain the same or will worsen or improve depends on which side of the table you are on.

MICHAEL BARR: I do not think you will have to wait long for such an assessment.

At the global, international, and inter-regional level the problems are global warming, the ozone layer, acid rain, and nonattainment problems, including smog.

At the regional and state levels, the problems are smog and visibility, with regional haze levels. There is also carbon monoxide, not quite so much because of the geographic scope of nonattainment, but because of how it is generated. Finally, at the local level, the most interesting problem of all is air toxics.

Federal, state and local conflicts exist potentially at all levels. In fact, the announcement for this program characterized the situation as a tug-and-pull between the different layers of government.

At the global level, nations are contending among themselves for control. There is not much federal, state and local conflict here yet, except for places like Santa Monica, which, having banned CFCs, has weighed in on one side of the debate.

We have the most elaborate balance at the regional and state levels. Much of the Clean Air Act amendments are a further explanation of the relationship between the federal and state governments on the subject of the bill. The SIP process under the Clean Air Act also is being repeated, at least in California, at the state level. Between the state and the regional authorities are areas called local air quality management districts or local air pollution control districts.

The new California Clean Air Act⁸ anticipates the nonattainment provisions, Title I, of the federal Clean Air Act. It provides for percent reduction; alternative indicators of air quality; and the state authority developing criteria for determining attainment and setting many regulations. The California Act also provides deadlines. It provides increasing levels of controls, from moderate areas which must attain by 1994, to serious areas which must attain by 1997, and severe areas which must attain after that date. Given that we developed this three or four years ago, I think it served as a guide to the federal government in developing at least that title of the Clean Air Act amendments.

Some of the California provisions still will be more sophisticated technically and more effective in controlling air pollution than many of the provisions on which the United States Congress is able to agree.

The SIP process has been criticized, but the Clean Air Act amendments are "SIP plus": everything that was in the SIPs before, plus a great deal more. Many of the SIPs will be written, in effect, by the Congress for many different areas.

That model has been extended. One way to think about the acid rain control title is that the acid rain control allowances are like a regional SO2 and NOX state implementation plan. An interesting feature of the acid rain title is that other types of sources and other utilities that are not listed as subject to the acid [22 ELR 10025] control title can opt into it. Because it is and will be a successful system, many sources will opt into it, much to the surprise of many of the observers who have called it an awful program.

The interstate transport provisions in Title I also are an elaboration of the SIP system. They are connectors between different SIPs.

Local problems and solutions in air quality, of course, have the greatest potential for federal, state, and local conflict, due primarily to their land-use implications. While federal and state governments tend to have the information, the tools and the resources to control some of those problems, it is the local officials who have actual control over them because of their control over land-use and/or the presumption that they will be controlling those problems.

For example, the air toxics problem is not in its scope a national, international or global problem. Its scope is local and often involves the effect of a single plant on a single neighborhood. Many industrial plants in America are simply too close to homes. The cities, plants, and farmers grew too greedy a long time ago and brought home developments close by. Perhaps the homeowners knew or should have known of a problem in the area. But they are increasingly effective in organizing, rallying, picketing, and particularly, voting.

As a former chair of my city planning commission in California, I view air toxics essentially as a zoning problem. But we are left with historical zoning problems. The air toxics solutions in California have run the gamut of ideas. Historically, they were regulated under nuisance authority, like odors. Of course, that body of law in this country has had a state and local orientation. The legal scheme developed for smells and acute toxic risk, like the escape of cyanide or some other toxic gas, does not work well for carcinogens.

Although the nuisance approach has been used in California by different air pollution control districts, the districts have been searching for a different approach. The Clean Air Act Amendments of 1970 added the program for national emissions standards for hazardous air pollutants.⁹ But that was a clumsy attempt at using federal resources in this area, and it failed for lack of a federal constituency.

The rise of state programs has been fascinating to watch. There are many state air toxics programs. There have been many experimental approaches in air toxics programs, some of which have worked quite well.

They come in all sizes and shapes, which is fine, certainly from the point of view generally of the regulated community across the country. In California, we have tried everything. We have tried to imitate the 1970 Clean Air Act approach of a listing process; that has produced a California list of ten rather than a federal list of seven or eight compounds.

Numerically, we have done a better job, but a great deal of dissatisfaction remains. In response, we have carried out a SARA Title III type of inventory that will lead to source-by-source risk assessments. This is a fascinating case study in how an inventory process leading to source-by-source risk assessment raises many issues and takes much effort to resolve them.

The next step will be retrofits of existing sources to control their toxic emissions to reduce their risk. We have not yet quite determined how to achieve this in California, but we are working on it as part of the new source review section.

Additionally, the South Coast Air Quality Management District in Los Angeles recently consideredRule 1401, and we have pending air toxics legislation aimed at protecting special populations like schools.

For the federal parallel, see Title III of the proposed Clean Air Act amendments. The amendments are considerably longer and clumsier than the President's simple approach. They include just about everybody's idea for regulating air toxics. They include a list of lists of hazardous air pollutants — some 200 compounds, a requirement for maximum achievable control technology, retrofits for hundreds of different types of source categories, and a basic technology-based approach to take effect over the next ten years. They include a residual risk section and a new federally invented risk assessment and risk management test called the maximum exposed actual person or maximum exposed population. They are an encyclopedia of different ideas that have developed at the state and federal levels over the years.

While there is no preemption of stricter state programs, enactment will have a preemptive effect. States will let the federal government regulate air toxics at the local level even though most of their problems are local in scope and effect.

That's one reason why many an industry will accept the Title III program — because they believe it will bring a considerable degree of uniformity across the country.

This will be the most intrusive and expensive title of the federal Clean Air Act amendments. It will have effects at local, state and federal levels, and the international community is watching this too.

V. JOHN WHITE: Let me describe the differences in the evolution of the California Clean Air Act, because the Act has influenced the shape of the federal law, and the evolution reflects a bit of our experience in regulating on the cutting edge, with the worst ozone nonattainment areas in the country, as well as a desire to be not just tough but also successful.

Tactical and even strategic victories on behalf of clean air are fine, but if they do not clean up the air, what have we gained?

Particularly in the West, in recent years we have seen how growth can undermine attainment of goals. We have to step back and look at both California's success and our influence on the rest of the country in the context of our growth rates. In some ways, we are the laboratory of technology and scientific inquiry in this field. That is due to the poor quality of our air. But for growth in California, we have done an extraordinary job at removing emissions from the air.

State inventories require attention. We must track inventories and the interaction of pollutants. We have a lot to learn about atmospheric chemistry.

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In the West, in places like Denver, Phoenix, Sacramento and Los Angeles, there is a dynamic that has not yet been touched on in this debate or in the Clean Air Act. It occurs where you have vehicle miles traveled increasing at a rate double that of the population. It seems you can't regulate enough of the people to overturn that trend. So one result is that we occasionally have found some common cause with the regulated community, which at least in California knows that it can run but not hide from the sweep of the regulator.

As an example of the level of political consciousness on this issue, the two Democratic candidates for governor — the moderate and the liberal — have both endorsed what has been termed the Big Green Initiative. This initiative would impose a ban on CFCs by1997, require a 20 percent reduction in CO2 emissions by the year 2,000 and require a number of other sweeping reforms in forest regulation. If it passes, it will be the final culmination of either the irrationality or the effectiveness of the initiative process, depending on your point of view.

The Republican candidate for governor, Senator Pete Wilson, has hung his hat on opposing this initiative on the simple premise that he does not think the environmental commissioner should be elected. He thinks that office should be a governor's appointment. Other than that, he has said little about what else is wrong with the initiative.

With respect to pesticides — the other target area and one in which the agriculture community in California has in many ways protected itself more effectively than any other segment of regulated industry — agriculture is about to receive a shock under this initiative. Senator Wilson has not spoken against the pesticide provision. In fact, he has offered his own proposal to reorganize pesticides in a manner that observers four years ago would have found incredible. Oddly enough, the Republican candidate for governor is advocating removal of pesticide regulation from the Department of Food and Agriculture and placement in the environmental side of the Department of Health Services.

Senator Wilson also has voted with the Sierra Club and NRDC on every single major Clean Air Act vote on the floor and in the Senate. He has played a leading role with the alternative fuels amendment. Simply put, Senator Wilson has about as good a vote on clean air as there has been in the U.S. Senate.

That gives you an idea of the level of public support and why the regulated community in California has been forced to the table to determine how not only to address their particular concerns but also to have a successful program. Without the involvement of the regulated community in the negotiations on the California Clean Air Act, we would not have passed the statute.

To be successful, the regulated community had to want a reasonably strong bill and to understand that the initiative threat was real. More than that, there was a recognition that if the air did not become cleaner, they would be subjected to even greater pressures.

One of the positive results of that debate — and a lesson for the federal program — is that we have tried to bring everybody under the tent in California. In a state like ours, and in many other parts of the country, attacking solely the large point sources is not the way to attain clean air. This is not to say that the large point sources are not very important. In the Midwest and Southeast areas, however, you still have a lot of relatively uncontrolled point sources, particularly with respect to nitrogen oxide, that have a much bigger job to do. But in California, for quite some time, our industry sector has been under fairly significant pressure.

What had to occur in the South Coast Air Quality Management District, and in the state as a whole, was an attempt to get a handle on the other parts of the inventory. That has meant putting at risk the political constituents for clean air. In this instance, it may have been big industry's intention all along to move the regulators towards the more difficult areas of conflict with small businesses and with the barbecue owners.

Yet if we are going to allow people in Southern California to spray petroleum distillate on their charcoal briquettes, we must not be serious about cleaning up the air. It sounds ludicrous, but the amount of emissions from barbecue lighter fluid consumed in the South Coast air basin is roughly proportional to the amount emitted by a well-controlled oil refinery. From a technical standpoint, you ignore that at your peril; politically it may be unwise not to ignore it. The politician's crisis is the perception, to coin a phrase, "use a barbecue, go to jail."

From this we can see the future: for example, the painting contractors are saying that people will not be able to use high gloss enamels. If we are to be honest about trying to clean up the air, we must confront these issues.

We are trying. Our regulatory construct provides a mechanism with a percentage reduction standard and some ranking on the basis of cost-effectiveness to ensure that we do not miss targets that, while more difficult to get at, are in the aggregate very important. We also have placed a premium on developing alternative technologies. We have a reputation for technology-forcing standards.

Lately, we presided over an intriguing competition between the oil companies and the alternative fuel producers. Regardless of the outcome, we have advanced the state of emission control with respect to mobile sources by looking at not just the tail pipe component but also the imputs into the fuel in a way that has produced a substantial amount of innovation by the petroleum industry.

We have reformulated gasoline introduced by Arco in Southern California. This would not have happened absent the pressure of alternative fuels. Unfortunately for the oil companies, the ethanol industry has taken up the gauntlet and decided to have Congress write a recipe for reformulating gasoline that will provide certain advantages for them in the form of market guarantees.

That is a hazard of our political system, at least in Congress. We must find a way politically to strike a balance between the pressure of a sense of inevitability that the federal government can exert on states to move them forward and the cost-effectiveness of forced actions.

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On the other hand, federal pressure does wonders for a sector's willingness and ability to come to the table and get down to business. The key is that they have a sense that something is going to happen, and that there isn't a way out.

The bottom line concerns still have to be resolved to address our problems — such as the dollars per ton issues. We have to move away from that mentality. If we are going to change the standards, as recognized with air quality, the whole inventory has to be the subject. We must move beyond the "other guy" mentality.

The federal role is important in certain areas, particularly in parts of the country where the local political influence of the industrial community exceeds that of those who are breathing the air. The federal influence is also important where there are inter-regional conflicts.

With respect to regional conflicts, the scientific evidence is mounting on the importance of regional transport. EPA's current policy is to draw a circle around the metropolitan area, calculate an urban transport hydrocarbon rollback and instruct the regions to reduce hydrocarbon emissions to solve the problem, while paying little or no attention to reducing oxides of nitrogen (NOX). We are reaching the point where that is not going to work, yet the ability of the federal government to impose solutions on regional areas outside of individualmetropolitan areas is relatively untested. Lee DeHihns's comments on the recent court decisions indicate that this is a hampered role.

Generally, the environmental community must be careful not to rely exclusively on developments at the federal level. The last several years has seen a tremendous amount of dynamism and creativity at the state and local levels on air quality issues. In places as diverse as Southern California, Sacramento, Denver, and Phoenix, we have seen innovative approaches to nonattainment, particularly in the transportation sector.

In many of these local areas, particularly Denver, the business community has viewed cleaning up the air as a vital business objective. To the extent that air quality becomes a dominant value in the public's mind, it becomes important to the health of the regional economy to clean it up. That creates a dynamic different from the traditional one where business was perceived as opposing clean air.

Another aspect we must face in the next several years, which has not been addressed in the Clean Air Act so far, is the essential role of the transportation system in future air quality problems. We cannot sustain the annual increase in vehicle miles traveled (VMT) that we see in so many parts of the country and maintain our progress towards clean air.

While we can successfully impose other controls on areawide sources, for example placing controls on certain consumer products such as roll-ons and sprays, we must focus on transportation systems, because we see the global warming issue ultimately tied to transportation and energy use.

We must begin to find ways to encourage both energy efficiency and the development of different kinds of transportation systems. Presently, the federal funding formulas push states towards highway capacity additions and reward expansion of roadways.

The experience of the states has much to offer. We found in California that if we waited for Congress or EPA to tell us how to develop our clean air program we still would be waiting.

The ability to stay the course over a sustainable period and to create an atmosphere of regulatory certainty and fairness is one goal we have not yet realized. We do not know whether imposing sustained regulatory pressure across the board is a prescription for cleaning up the air or for eroding the political support for these regulatory programs.

Yet we do not have a choice but to pursue the clean air issue on all fronts, knowing that it will take us into some areas of political peril even while it has a substantial payoff. This will be a continuing evolution.

DISCUSSION

DEHIHNS: Florida illustrates John White's point about transportation sources as a problem. Given the growth in Florida, vehicle miles travelled are outstripping the benefit of all the new emission control programs for automobiles.

In Virginia, signs announce that millions of dollars are being spent to widen and expand the highways around Fairfax County to meet the area's enormous growth. Eighty million dollars of that money is from private developers pressing for what they want to build. Governmental parties in this country have to recognize that while letting the developers pay for the highway expansion avoids taxes on the citizens, it does so at the cost of air pollution.

WHITE: That is a cogent point because clearly the developer is going to have be brought under the air quality tent.New source review should not apply only to the power plants and refineries. That is an area fraught with political controversy. But we can begin imposing mitigation and integration requirements on the transportation and development community.

In California, some interesting new pressures were self-imposed in Sacramento. The city's land-use plan was incorporated into the SIP in 1982 as a control measure. The developers who persuaded the city council to change their zoning found themselves in federal court arguing on consistency determinations. This led to a compromise development agreement that held the developer responsible for trip reductions, for providing mass transit improvements along with highway improvements. Ultimately, it requires the developer to look at different kinds of development.

It is hard to achieve that level of detail where pressures from the real estate development community on the local government are difficult to overcome. Further, there is no good model for federal intervention on those kinds of issues. But we are going to have to find a way to face up to it.

MICHAEL LAST: We probably do have to bring more people under the umbrella of control, because constantly ratcheting down on major sources has its limits, which we are starting to reach quickly or have already reached.

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My concern is that once you bring in smaller sources you have a tough implementation challenge. These are sources that frequently lack compliance managers and certainly do not have compliance engineers. You face a problem of trying to help them to understand control technology, not to mention the associated issue of obtaining the necessary capital.

What educational or capital assistance in the form of bonds or other means might be available to make this work once the regulations are enacted?

WHITE: You correctly summarize the disadvantage of moving into that area. We have seen opponents put this issue on the table as a way of weakening an overall regulatory effort: highlighting the impacts as a means of slowing down the control effort. I take that challenge seriously.

The South Coast Air Quality Management District is implementing legislation (AB 2444 by Assemblyman Willie Brown) pased last year to create a capital assistance program for small business. Education is important, and the smaller the source the more necessary the effort.

To some extent, new source review also has promoted the disaggregation of sources. Many companies are subcontracting out work that they used to do themselves as a way to reduce their tons per day, so there has been a shift towards small sources independent of the regulators' need to go after them.

Southern California has an outreach initiative to pool the compliance resources of sectors like auto body paint shops, furniture manufacturers, and restaurants (if we get to the charcoal grills, which we probably will). We will use their trade associations and provide financial assistance, not so much to provide direct loans but as pooled financing to reduce their compliance costs.

Because EPA has an interest in helping small businesses with compliance, EPA also has an interest in helping them gain access to financing. For example, some portion of the tax-exempt status for financing should be restored in the Clean Air Act, at least for the small sectors. If we are going to move on those sources, we need to do so in a way different from the traditional regulatory framework. Otherwise these sources will not be able to comply.

DEHIHNS: The federal government must provide assistance. But we also need to look at the small sources not just as air pollution sources. Many of the same small sources we are talking about picking up under the Air Act are the small quantity generators under RCRA and under our increased efforts as part of our pollution prevention program.

As we have done at GM and Ford with respect to water-based paint and transfer efficiencies, we are going to provide research and technical assistance to the furniture companies, the printing plants, and the automotive plants. We must enable them to do something different to solve their problems, reduce their air pollution and small-quantity RCRA generator wastes.

BARR: The Air Act amendments will order EPA to develop small business compliance assistance regulations and at least look for sources of funding. This is a major step forward and a recognition of the problem.

DEHIHNS: Perhaps, depending on the volume of money states will receive as part of the current fees, in time you will see the states finding a way to begin loan programs and/or grant programs.

1. Air Pollution Control-Research & Technology Assistance Act of 1955, Pub. L. No. 84-159 (1955).

2. Clean Air Act, Pub. L. No. 88-206, 77 Stat. 392 (1963).

3. Air Quality Act of 1967, Pub. L. No. 90-148, 81 Stat. 485.

4. Pub. L. No. 91-604, 84 Stat. 1676 (1970).

5. See Pub. L. No. 95-95, 91 Stat. 701 (1977)

6. General Motors Corp. v. Environmental Protection Agency, 871 F.2d 495 (5th Cir. 1989).

7. United States v. Solar Turbines, Inc., 732 F. Supp. 535 (M.D. Pa. 1989).

8. See California Health & Safety Code, Section 39000 et seq.

9. Pub. L. No. 91-604 § 4(a), 84 Stat. 1685 (1970) (current version at 42 U.S.C. § 7412 (1989)).