EPA's Project XL: A Paradigm for Promising Regulatory Reform

Beth S. Ginsberg and Cynthia Cummis

Beth S. Ginsberg is a member of the law firm of Bogle & Gates in Washington, D.C. Cynthia E. Cummis is Staff Advisor for the Office of Policy Development in the Office of Policy Planning and Evaluation of the U.S. Environmental Protection Agency. The views expressed in this Dialogue belong solely to the authors and do not represent the views of the U.S. Environmental Protection Agency.

[26 ELR 10059]

Much has been said and written about the impediments to environmental and economic progress that the current regulatory system presents.¹ The overly prescriptive "technology enforcing" schemes that prior Congresses created are quickly becoming anachronistic. Technological innovation has been greatly inhibited by the constraints imposed by the "one size fits all" command-and-control approach that the U.S. Environmental Protection Agency (EPA) has pursued for the past 25 years. And the increasing complexity of today's environmental problems has outpaced conventional regulation.² Even the White House has acknowledged the technological constraints of traditional "end-of-pipe" controls—limited as they are by the technology and scientific knowledge available at the time requirements are promulgated.³

Indeed, the persistent pollution problems of today are not nearly as amenable to traditional control schemes as were the major sources of air and water emissions 20 years ago.⁴ Attaining the last increments of pollution reduction is exorbitantly expensive compared to the initial reductions achieved in the first wave of regulatory and enforcement initiatives. Those interested in reform often criticize command-and-control regulations as inefficient and irrational.⁵ They argue that the existing system fails to consider costs adequately and more often than not has failed to realize the lofty goals articulated in the underlying statutory mandates. Moreover, because these environmental statutes are artificially centered around a single medium rather than the environment as a whole, they result in unnecessary complexity and regulatory redundancies.⁶

A consensus has emerged that both risk and cost-benefit analyses must be incorporated to a far greater degree to encourage a common-sense, more flexible approach to regulation.⁷ Toward this end, the republican-controlled Congress has introduced a number of legislative initiatives designed to address the regulatory excesses experienced by the regulated community. These initiatives, including H.R. 9,⁸ H.R. 1022,⁹ and S. 343¹⁰ to name a few, have been accused of rolling back the progress that the current technology forcing statutes have achieved.¹¹ Not only can the congressional initiatives be criticized as "polluter friendly," they ironically threaten to exacerbate the red tape suffocating the existing regulatory system, and in so doing, to increase compliance costs.¹² By uniformly imposing complicated analytical mandates from the top down, the pending [26 ELR 10060] regulatory reform bills similarly threaten to impede innovative and alternative schemes for companies to attain real environmental progress.

In contrast, the Administration's response to the challenges of an increasingly outdated regulatory scheme is best exemplified by EPA's Project XL, or "Excellence in Leadership" Initiative. If coupled with the legislation¹³ that is necessary to achieve its purposes, Project XL has the potential to make truly revolutionary changes in the way companies are regulated in the United States.¹⁴ Once the program is in place, individual companies will create pilot projects from the bottom up that will be based on performance standards rather than the more stifling "one size fits all" technology based controls. These projects are anticipated to foster technological innovation and reduced compliance costs while resulting in greater pollution prevention. Participating facilities will be able to use multimedia approaches and market-based controls in realizing the performance-based standards.¹⁵

This Dialogue begins by discussing the major problems that the congressional regulatory reform initiatives present. It then contrasts the possible legislative approach with the Clinton Administration's Project XL. This Dialogue highlights the enforcement concerns and the legal, technical, and political obstacles to Project XL that threaten to inhibit the realization of real reform. It concludes with a discussion of possible legislative options to overcome those roadblocks.

Regulatory Reform Initiatives

Led by House Speaker Newt Gingrich (R-Ga.) and Senator Bob Dole (R-Kan.), congressional republicans have introduced several sweeping legislative reforms focusing on risk assessment, cost-benefit analysis, and judicial review. As of this writing, the House had passed H.R. 9¹⁶ and the Senate had resurrected its previously unsuccessful attempts to bring S. 343¹⁷ to a floor vote by attaching it as a rider to the budget debate.¹⁸ President Clinton vetoed these provisions as part of the larger congressional budget package and with good reason.

Conventional wisdom dictates that while risk assessment is a necessary tool,¹⁹ its usefulness becomes severely compromised when it is applied uniformly. Risk assessment is incompatible with the prescriptive standards and uniform solutions established in S. 343. The budding science of risk assessment will be paralyzed if codified into legislation.²⁰ To be effective, individual risk assessments must be tailored to the specifics of the situation. Some assessments can be done in a day, while others, like the dioxin studies,²¹ take years. Although EPA should consider the concept of relative risk when devising costly regulations, the science of risk assessment is not amenable to either uniform standards or uniform application.²² The pending bills would require implementation of extremely costly and procedure-laden risk assessments at all Superfund cleanups, at corrective actions under the Resource Conservation and Recovery Act (RCRA), and in most permitting contexts. As their congressional sponsors have conceived them, the risk requirements are not only cumbersome and extremely costly, but are also susceptible to judicial challenge if not strictly followed.²³

As a corollary to the risk requirements, S. 343 would also require agencies to scrutinize major rules under a rigorous cost-benefit analysis.²⁴ If the benefits do not outweigh the costs, then the proposed rule would be prohibited.²⁵ Put otherwise, if the rule does not provide the greatest net benefit to society, then the agency could not promulgate it. The problem with this approach is that the difficulty inherent in quantifying certain benefits will prevent those benefits from being weighed in this analysis. The requirement of cost-benefit analysis may therefore altogether prevent some necessary rules from being issued.²⁶

The judicial review provisions of some of these bills, in addition to creating many new opportunities to challenge future rules, establish an extensive petition process that [26 ELR 10061] authorizes interested parties to reopen existing rules to force strict compliance with risk assessment and cost-benefit requirements. These provisions place courts in the unenviable position of becoming scientific and economic arbiters.

S. 343and its progeny exalt cost-benefit analyses and the developing science of risk assessment as ends in themselves, instead of using them as tools in the regulatory process. Rather than allowing for necessary flexibility in the regulatory process, the Contract With America legislation will result in obsolete science, increased costs, and associated delays, and will thus commit the same sins that it is designed to redress.

Project XL

The Administration's attempt to tackle many of the same problems of the command-and-control regulatory system is perhaps best exemplified by its recently initiated Project XL. Rather than relying on the intervention of increasingly complicated regulatory controls, Project XL is an effort to stimulate regulatory flexibility through site-specific, performance-based environmental standards developed through stakeholder negotiation. Project XL banks on the theory that flexibility will lead to more cost-effective regulation and will, in turn, engender greater environmental protection. XL projects are intended to test potential new pathways to achieving environmental performance at individual facilities and to demonstrate technologically innovative and cost-effective alternatives to underlying statutory and regulatory requirements.

What is truly revolutionary about Project XL is that it is designed to stimulate the "self-referential" capabilities of companies subject to regulation. It is based on a reflexive paradigm in which self-monitoring, public decisionmaking, and intense public scrutiny lead to better environmental results.²⁷ Theoretically, through participating in the XL program, companies will internally conduct self-critical analyses that result in minimizing both environmental costs and costs to the individual facility while maximizing environmental benefits. The advantage of a reflexive approach is that it depends on the circumstances unique to that facility. Rather than externally dictating the technical means to achieve environmental success, Project XL establishes a process for individual companies to develop unique environmental strategies for their particular facilities through collaboration with interested stakeholders.²⁸

EPA is targeting 50 XL projects for selection. To be selected, projects must meet eight specific criteria. The first and perhaps most significant requires projects to "achieve environmental performance that is superior to what would be achieved through compliance with current and reasonably anticipated future regulations."²⁹ As will be explained below, this criterion, while laudable, threatens to present significant legal and technical barriers to real reform.

Projects must also produce cost savings or economic opportunity or, at a minimum, result in a decreased paperwork burden. Moreover, applicants must obtain the support of parties with a substantial stake in the environmental impacts of the project. The key to satisfying this element is to obtain the support of the state environmental agency as well as local stakeholders. In addition, applicants are encouraged to look for innovative technological solutions and to base their projects on EPA's preference for pollution prevention. The projects should be "transferable," or amenable to implementation on a broader scale, and should be technically, administratively, and financially feasible. XL projects must have clear objectives and measurable requirements and must identify how results will be shared with affected stakeholders. Finally, EPA has insisted that XL projects comply with its environmental justice requirements to ensure that no one is subjected to unjust or disproportionate environmental impacts.³⁰

EPA Headquarters is closely coordinating the XL selection process with the EPA Regions to ensure that local communities and interested stakeholders are fully involved. An XL selection group that consists of representatives of EPA Assistant Administrators, Regional Administrators, and the state environmental commissioners nominates projects for selection. Only proposals backed by the relevant state or tribal agency are eligible.

The proposals selected to date possess certain common themes including emissions trading, facility emission caps, multimedia permitting, and elimination of obsolete requirements. For example, the Anheuser-Busch proposal suggests using a multimedia permit to establish an expanded bubble that will cap emissions from the Jacksonville brewery, the local power plant, and the wastewater treatment plant that services the brewery.³¹ Rather than installing additional pollution control equipment to comply with strict air emissions controls, the facility intends to reduce energy consumption, which will translate into reductions in air emissions at the power plant within the expanded bubble.

Similarly, 3M Company's proposal is based on "beyond compliance" multimedia permits with emission caps significantly below the levels that the existing regulations require.³² The permit for 3M's Camarillo facility will incorporate a simplified, publicly available release-reporting system that authorizes necessary process changes outside the cumbersome Clean Air Act New Source Performance Standards. In addition, the facility's emissions reductions will generate emission reduction credits that will be available through a local market-trading program.³³

The Intel Corporation is planning to construct a new semiconductor facility that will manufacture computer chips.³⁴ Because the computer industry requires frequent process changes to keep pace with rapid advances in technology, [26 ELR 10062] the company plans to develop and implement a multimedia operating contract that defines environmental performance as maximizing operational flexibility. The unique aspect of this proposal is that it is based on a facility that is currently under construction. Because it has yet to begin production, the opportunities to implement innovative pollution prevention mechanisms while preserving technological flexibility can be maximized.

The HADCO Corporation submitted a successful proposal that focused on eliminating one of the more onerous and inflexible hazardous-waste requirements.³⁵ EPA approved a trial evaluation of "delisting" the company's wastewater treatment sludge as a hazardous waste, thereby removing it from the costly RCRA requirements applicable to printed wiring-board facilities. In exchange, HADCO committed to directly recycling this waste. HADCO argued that the basis for the original hazardous-waste listing was premised on a 1970s analysis that had become obsolete in light of significant chemical processing changes that eliminated the historic threats the sludge posed.³⁶

The potential economic savings from HADCO's XL proposal are significant in light of the exorbitantly expensive cradle-to-grave treatment, storage, and disposal requirements associated with a hazardous-waste listing under RCRA. Assuming the pilot project is successful, facilities within the industry will have great incentives to directly recycle the copper-rich sludge instead of first hauling it out of the state for treatment and then transshipping it to Canada or Mexico to recycle the valuable ores within the waste. HADCO expects that the use of fossil fuels will be reduced through this delisting, as will associated nitrogen oxides and carbon monoxide emissions.

While the above proposals focus on the creation of multimedia permits and facility caps, others focus on streamlining reporting and other paperwork-intensive obligations. For example, to "replace the government's unwieldy methods of oversight,"³⁷ AT&T proposed to adopt ISO 14000 for its microelectronic facilities as a framework to simplify permitting and reporting requirements.

While the goals of these pilot projects appear theoretically sound, the challenge lies ahead, in their implementation. Below follows a brief analysis of the technical concerns and legal obstacles that threaten to undermine truly revolutionary changes to the business of environmental protection.

Technical Hurdles Presented by the XL Approach

The initial requirement for acceptance into the XL program is that the proposal will "guarantee better" environmental results. Obviously, judging what constitutes "better" is a highly subjective task susceptible to political mischief. Given that other consensus-based initiatives for administrative improvements have encountered difficulties, EPA would be wise to circumscribe the public participation, or "stakeholder," process as well as the process by which final agreement is negotiated to prevent a stalemate from occurring betweenaffected industries and environmentalists over this issue.³⁸

EPA will measure the project's success by its ability to attain performance-based goals. To measure a facility's progress, EPA will calculate the "baseline" level of pollution before implementation of the XL project and compare the baseline to the level of pollution after the project.³⁹ In addition, EPA will scrutinize available data sources to determine whether the claimed pollution reduction is properly attributable to the XL project. Questions associated with how to calculate the transfer of pollutants between mediums will undoubtedly present difficult issues for EPA in light of the differing health effects associated with the presence of a particular chemical in a particular environmental medium. Given that the calculus mandated by a performance-based approach is highly subjective, use of dispute resolution clauses in final agreements will likely be necessary.

Project XL applicants must satisfactorily address issues associated with defining and then measuring incremental gains beyond a "baseline" before project agreements can be finalized. The purpose of establishing a baseline is to determine whether the proposal's specified performance target is superior. XL proposals may seek to define environmental baselines in terms of general environmental indicators, including pollutant emissions, ambient concentrations, or even human or ecosystem impacts. Some projects may seek to segregate pollutants or media, while others may attempt to measure environmental performance across media. Recognizing the technical limitations and uncertainties in accurately defining environmental goals, EPA is encouraging proposals to focus on pollution prevention options in lieu of strict adherence to ambient standards.⁴⁰ Regardless of the form of measurement used, a baseline level of environmental performance for each facility must be established.

In addition to the facility's historic environmental performance, the baseline should account for the environmental performance that facilities be expected to achieve absent acceptance into the XL program. EPA is mandating that allowable baselines include calculation of the minimum environmental performance that the facility would be required to attain through full compliance with existing anticipated future requirements. In calculating a facility's [26 ELR 10063] baseline, EPA will assess economic, technological, or other forces impacting environmental performance under the assumption that facilities often achieve environmental results beyond that which particular regulations require.

But the Agency's strict adherence to a baseline premised on formally promulgated end-of-pipe standards is problematic because it essentially replicates the flawed command-and-control system within the XL paradigm. This will undoubtedly result in fewer and more modest proposals from XL participants than would otherwise be expected. The ability of facilities to first calculate accurate baselines, and then persuade EPA and interested stakeholders of the merits of the underlying assumptions of that calculation, presents one of the biggest hurdles to the realization of XL goals.

Related Enforcement Issues

EPA has established principles for resolving enforcement and compliance issues that may arise during the development and implementation of XL projects. First, while EPA will not target facilities for enforcement as a result of their participation in the XL program, neither will their participation fully immunize them from enforcement. EPA can and should use its discretion not to pursue particular violations at participating facilities in recognition of their good-faith efforts and the public interest promoted by Project XL. On the other hand, EPA cannot be expected to compromise its abilities to address imminent and substantial endangerments or threats to human health or the environment. Accordingly, Project XL participants may be granted a time-limited opportunity to disclose and correct such violations.⁴¹

The Agency will need to establish a policy on the use of enforcement discretion to address prospective compliance problems at facilities with final project agreements. This is especially important in light of the emphasis EPA is placing on monitoring and reporting obligations in final project agreements. Moreover, by their very design, XL projects may technically violate existing statutory or regulatory requirements during their implementation. As a general matter, the exercise of the Agency's discretion to refrain from enforcing the rules against these violations is warranted when necessary to advance the purpose of the project.⁴²

To protect XL participants, EPA and the participating entities will enter into written final agreements that specify the terms, conditions, and obligations of the projects, including the statutory and regulatory requirements that are expected to be violated. Unfortunately, the agreements may not provide as much protection as participants would like, because EPA will only choose not to pursue a participant that violates environmental requirements if it is in full compliance with the terms of its XL final agreement. And even then, EPA will only rarely exercise its discretion not to bring enforcement actions.

Other factors that may limit the desirability of XL agreements include EPA's ability to require stipulated penalties as an incentive for compliance with established schedules. In addition, assuming the XL agreement authorizes certain regulatory deviations, EPA will likely establish a phase-in period during which a facility must return to strict regulatory compliance if EPA determines that the project has not achieved its stated objectives. And, in the unlikely situation that a participant commits repeated or serious violations of a final agreement, EPA will reserve the power to terminate the agreement unilaterally.

In addition, participants always run the risk of having environmentalists or local community members sue them for noncompliance with existing statutory or regulatory requirements while implementing XL projects. In such situations, the existence of XL final agreements will not likely immunize project participants from liability. Facilities may wish to enter into binding and enforceable contracts with the Agency specifying their obligations and restricting their liability; however, it is questionable whether the Agency has authority under existing statutes to protect participants from third-party suits. It is precisely for that reason that negotiated final agreements should include all affected stakeholders with actual standing to sue. Given the potential liability risks, legislation may be required to give participants the necessary legal assurances for them to commit to truly innovative approaches to achieving performance-based results.

The Need for a Legislative Solution

Because XL projects are not required to obtain across-the-board consensus on all issues, project participants run the risk of being sued by environmentalists or other interested nongovernmental organizations for noncompliance with regard to any regulatory standard for which the company may have been granted flexibility. While XL agreements will do little to shield a particular facility from liability for regulatory departures, their existence might substantially mitigate the need to either fine the facility or require it to take proactive action. Although EPA faces a similar litigation threat, it can more easily rely on its enforcement discretion as a successful defense to such a lawsuit.

Therefore, legislation will undoubtedly be needed to affirmatively permit EPA to enter into enforceable agreements waiving regulatory requirements when necessary to achieve a performance-based objective and to insulate participating companies from ensuing citizen enforcement actions. Such legislation will also be needed to authorize issuance of multimedia permits in lieu of the single-media permits mandated by existing environmental statutes.

Any XL legislation will need to resolve the thorny issues associated with measuring environmental progress and establishing a baseline from which to measure, while simultaneously preserving the flexibility necessary for the realization of facility-specific performance-based standards. These controversial issues should be determined on the basis of sound science, incorporating risk and cost considerations. The legislation must also establish a public participation process that defines who the necessary stakeholders are and the process by which facility-specific standards will be developed and enforced. Finally, the legislation should authorize individual states to run XL programs as partof their delegated state environmental programs.

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The regulated community would be well-served by passage of a bill that grants EPA and individual states the flexibility to issue multimedia permits; to develop facility caps; and, when necessary to preserve an individual facility's ability to implement necessary process changes, to waive emissions, reporting, or monitoring requirements otherwise compelled by applicable statutes. Legislation that meets these requirements merits serious congressional consideration in the coming year, in marked contrast to the inflexible and regulatory reform bills that the 104th Congress introduced. The challenge lies ahead, in EPA working closely with industry and environmental representatives to forge a consensus-based approach for XL legislation. Such legislation must not be overly prescriptive and should maintain the necessary flexibility to allow individual facilities to develop from the bottom up, be cost-effective, and include place-based performance standards to achieve desired environmental outcomes.

1. See, e.g., WHITE HOUSE POLICY ON REINVENTING ENVIRONMENTAL REGULATION (1995) (on file with author); Jerry L. Anderson, Environmental Revolution at Twenty-Five, 26 RUTGERS L.J. 395 (1995); Eric T. Mikkelson, Earning Green for Turning Green: Executive Order 12291 and Market Driven Environmental Regulation, 42 KAN. L. REV. 243 (1993); Eric W. Ortis, Reflexive Environmental Law, 89 NW. U. L. REV. 1227 (1995); William F. Pederson Jr., Can Site-Specific Pollution Control Plans Furnish an Alternative to the Current Regulatory System and a Bridge to a New One?, 25 ELR 10486 (Sept. 1995); Fred. L. Smith Jr. & Kent Jeffreys, A Free Market Environmental Vision, in MARKET LIBERALISM: A PARADIGM FOR THE 21ST CENTURY 389-402 (David Boaz & Edward H. Crane eds., 1993).

2. Ortis, supra note 1, at 1230.

3. WHITE HOUSE POLICY ON REINVENTING ENVIRONMENTAL REGULATION, supra note 1.

4. Toward a New EPA: An Interview with Fred Hansen, Deputy Administrator of the EPA, 2 CHEMICAL HEALTH & SAFETY 15-18 (July/Aug. 1995).

5. Ortis, supra note 1, at 1236.

6. Anderson, supra note 1. Responding to the impediments presented by a statutory system that is based on a single environmental medium, EPA officials are beginning to seriously contemplate drafting a unified environmental statute. Amy Porter, Success of Waste Business Depends on Holistic Pollution Controls, Officials Say, DAILY ENV'T REP. (BNA), Nov. 14, 1995, at A-7.

7. Congressional Democrats were negotiating alternatives to the Republican's regulatory reform legislation. The alternatives incorporate concepts of risk assessment and cost-benefit analyses in a more streamlined manner but reduce opportunities for judicial review of those assessments. Senate Democrats Crafting New Alternative Regulatory Reform Bill, INSIDE EPA, Nov. 3, 1995, at 13.

8. H.R. 9, 104th Cong., 1st Sess. (1995).

9. H.R. 1022, 104th Cong., 1st Sess. (1995).

10. S. 343, 104th Cong., 1st Sess. (1995).

11. Related legislative initiatives include H.R. 926, 104th Cong., 1st Sess. (1995) and S. 291, 104th Cong., 1st Sess. (1995). These bills create additional opportunities for challenges to the risk assessment, peer review, and paperwork reduction requirements as well as the stringent cost-benefit analyses these bills mandate. In addition, Sen. Charles E. Grassley (R-Iowa) introduced amendments to the Dole Regulatory Reform Bills that impose "supermandate" cost-benefit and risk-assessment provisions that alter or supersede the underlying statutory standards.

12. John Pendergrass et al., The Environment and the Contract, 25 ELR 10351 (July 1995); EPA Administrator Carol M. Browner, Statement Before the U.S. Senate Committee on Environment and Public Works (Mar. 22, 1995).

13. EPA is engaged in discussions with business and environmental leaders regarding the possibilityof introducing legislation to codify Project XL. Cheryl Hogue, EPA Eyeing Overarching Law to Replace Media-Based Statutes, DAILY ENV'T REP. (BNA), Nov. 8, 1995, at A-6.

14. In November of 1995, the White House held a Rose Garden kick-off ceremony to announce the first eight pilot projects selected for Project XL. President Clinton referred to the Initiative as a "regulatory blueprint for the future" that could be used to address a range of other economic and social problems. Amy Phillips, Clinton, Gore Say Project XL Pilots Are Blueprint for Regulatory Reform, DAILY ENV'T REP. (BNA), Nov. 7, 1995, at AA-1.

15. EPA Administrator Carol M. Browner, Statement Before the U.S. Senate Committee of Governmental Affairs (Mar. 8, 1995).

16. H.R. 9, 104th Cong., 1st Sess. (1995).

17. S. 343, 104th Cong., 1st Sess. (1995). S. 343 was introduced on the Senate floor and was amended by Senator Grassley to include a "supermandate." The supermandate will ensure that provisions of S. 343 that conflict with existing statutes simply override those provisions.

18. In mid-November, both the House and Senate passed sweeping regulatory reform language on a larger bill that would have allowed the government to continue borrowing. Rep. Robert Walker (R-Pa.), introduced an amendment to the "debt ceiling" bill that consisted of a number of provisions from H.R. 9 and S. 343 absent the "supermandate" provision and a judicial review provision allowing challenges to existing rules. H.R. 2586, 104th Cong., 1st Sess. (1995). President Clinton vetoed the debt ceiling bill, citing the Walker Amendment as a key factor in his opposition. See Regulatory Reform Opponents Vow to Step Up Legislative Efforts, INSIDE EPA, Nov. 17, 1995, at 14-15.

19. Dr. Lynn Goldman, Assistant Administrator of the Office of Prevention, Pesticides, and Toxic Substances, Statement Before the U.S. House of Representatives Committee on Science (Feb. 3, 1995).

20. Letter from Carol M. Browner, EPA Administrator, to Hon. George Brown, Ranking Democratic member of the Committee on Science (Jan. 31, 1995) (on file with authors).

21. See 59 Fed. Reg. 46980 (Sept. 13, 1995).

22. Statement of EPA Administrator Carol M. Browner, supra note 15; Statement of Dr. Lynn Goldman, supra note 19. Administrator Browner emphasized that the bills require regulatory agencies to evaluate risks to the average population. This ignores the unique risks posed to subpopulation groups affected by special cultural, physical, or financial pressures.

23. Statement of Dr. Lynn Goldman, supra note 19.

24. Various versions of the relevant bills defined "major rule" as one imposing more than $ 50 million in costs on the affected industry, (see H.R. 9, 104th Cong., 1st Sess. § 321(15) (1995)), while others established the benchmark at $ 100 million (see S. 291, 104th Cong., 1st Sess. § 621(4)(A) (1995), S. 343 104th Cong., 1st Sess. § 621 (1995)).

25. Letter from Sally Katzen, Office of Management and Budget Administrator, to the Hon. Robert Dole (June 23, 1995) (on file with author).

26. EPA Administrator Carol M. Browner, Statement Before the U.S. Senate Committee on Environment and Public Works (Mar. 22, 1995).

27. See, e.g., Ortis, supra note 1.

28. Id. at 1266.

29. See U.S. ENVIRONMENTAL PROTECTION AGENCY, SELECTION CRITERIA FOR XL PROJECTS, PROJECT XL INFORMATION PACKAGE (1995).

30. 60 Fed. Reg. 27282 (May 23, 1995).

31. ANHEUSER BUSCH, PROJECT XL PROPOSAL RRPP I-D (July 28, 1995) (on file with authors).

32. 3M COMPANY, 3M PROPOSAL PROJECT XL (July 10, 1995) (on file with authors).

33. Another example of an innovation possible under Project XL is 3M's creation of an urban redevelopment emissions bank for the city of Chicago. Classification as a severe ozone nonattainment area made it extremely difficult for urban redevelopment and brownfield construction to occur in Chicago. Because potential manufacturers requiring emission offsets could not locate in the Chicago area, 3M and the city of Chicago jointly developed a citywide emissions bank.

34. INTEL CORPORATION, INTEL FAB-12-FACILITY BASED PROJECT XL INITIAL PROPOSAL (June 30, 1995) (on file with authors).

35. HADCO CORPORATION, FACILITY-BASED PROJECT XL PROPOSAL (July 21, 1995) (on file with authors).

36. EPA's selection of this proposal is particularly promising for those facilities caught within RCRA's unforgiving regulatory scheme as a result of obsolete factors. HADCO's proposal is especially significant in light of the fact that the hazardous waste delisting process has been historically protracted, cumbersome, and unfunded.

37. Project XL Lifts Off: Your Chance to Write the Enviro Future, ENVTL. MANAGER'S COMPLIANCE ADVISOR, Oct. 16, 1995, at 3.

38. The Common Sense Initiative (CSI) has been bogged down with process disputes as a result of the application of the Federal Advisory Committee Act process. The CSI was launched in 1993 in an effort to create "cleaner, cheaper, and smarter" regulations by forming six industrial sectors to review regulations affecting those sectors. No rules have been adopted by the CSI and the first rulemaking proposal to be presented to the CSI governing body was rejected when environmentalists raised last minute concerns about the purported benefits of the rule. See CSI Auto Group to Launch Life-Cycle Management Project With Supplies, INSIDE EPA, Nov. 17, 1993, at 9. While environmentalists threatened to insist on the adoption of a more formal process for the XL projects, EPA sided with industry participants in rejecting this approach. See Environmentalists Demand More Formal Consultation on Project XL, INSIDE EPA, Nov. 3, 1995, at 1, 8-9.

39. See Memorandum from David Gardiner, EPA Assistant Administrator of Policy, Planning, and Evaluation, Principles for Development of Project XL Final Project Agreements (Dec. 1, 1995) (on file with authors).

40. Id.

41. See EPA OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE, INTERIM POLICY ON COMPLIANCE INCENTIVES FOR SMALL BUSINESSES (1995); EPA OFFICE OF ENFORCEMENT AND COMPLIANCE ASURANCE, INTERIM POLICY ON VOLUNTARY SELF-POLICING AND SELF-DISCLOSURE (1995).

42. Memorandum from Steven A. Herman, EPA Assistant Administrator of Enforcement, Regarding OECA's Operating Principles for Project XL Participants (Oct. 2, 1995) (on file with authors).