DRAFT CAIR Replacement Rule

Discussions between NGOs and EPA

March 31, 2009

I. Introduction

On Tuesday, March 31, 2009, EPA held a meeting with nongovernmental organizations 

(NGOs) concerned with environmental and health issues to discuss the CAIR replacement rule. 

NGOs at the meeting included the Clean Air Task Force (CATF), Natural Resources Defense 

Council (NRDC), Sierra Club, National Parks Conservation Association (NPCA), and the 

American Lung Association.

The summary that follows covers the key issues discussed during the call. More detailed 

notes, including a list of call participants, are being prepared. 

II. EPA Opening Comments

Sam Napolitano, CAMD, began with a short introduction, explaining that EPA was 

beginning the process of creating a replacement rule for CAIR. The Agency is reviewing all 

options, setting up analyses, and preparing technical models. The goal is to finalize a 

replacement rule within two years. 

The primary objectives are to help states comply with the NAAQS and to reduce 

interstate transport. Therefore, EPA has decided that it would be best to start working with states

and other stakeholders immediately. EPA would like to hear from the stakeholders about what 

type of replacement rule would most help states meet air quality requirements. Sam stressed that 

this is the beginning of a dialogue process, and that EPA intends to continue these types of 

discussions throughout the rule development process. 

This is a chance for the NGOs to talk to the key EPA staff that will actually develop and 

write the rules, as well as the OGC attorneys assigned to the rule development. Sam stressed that 

EPA is interested in hearing the participants' thoughts and concerns. Everything is on the table 

as EPA puts together ideas for the new Assistant Administrator for Air and Radiation, who 

should arrive within the next couple of weeks. 

III. NGO Opening Comments 

Conrad Schneider, CATF, thanked EPA for the opportunity to share suggestions on how 

to move forward with a CAIR replacement program. The CATF and other participants look 

forward to working closely with EPA throughout the rule development process. 

Conrad began by suggesting that EPA take a step back from CAIR and rather look at the 

entire power sector in a holistic manner given the myriad regulatory requirements applicable to 

the sector that are long overdue. The control programs that affect the sector include, but are not 

limited to: the CAIR replacement rule, the EGU HAP MACT rule, RACT, 110, 126, SO2 

NAAQS, PM NAAQS, CO2 NSPS, CO2 NSR, etc., and several upcoming legal settlements will 
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have effects on emissions as well. It is important to approach further EGU control in a 

coordinated and comprehensive manner. The NGO groups stressed that, in particular, because it 

is national in scope and likely will require unit-by-unit installation of flue gas desulfurization 

technology, EPA should closely coordinate the formulation of the CAIR replacement rule with

the EGU HAP MACT rule development process. EPA should look at each requirement in the 

Clean Air Act individually and make a determination as to what program would satisfy each 

requirement, rather than trying to see how many requirements one program can satisfy. 

Claiming that one program satisfies multiple requirements has been a legal weakness in the past. 

The main point that all the NGO participants stressed was coordination. Beyond simply 

coordinating the program with other EPA programs, the Agency needs to coordinate emission 

control efforts with other larger administration efforts to reshape the power industry. Laying out 

a regulatory road map early in the process will allow companies to make comprehensive long 

term plans.

IV. General Discussion

Conrad then invited other NGO participants to share thoughts and concerns. For the most 

part the discussion focused on macro level ideas and did not delve too deeply into the specific 

issues related to CAIR that EPA set out in the agenda. 

1. Trading

The D.C. Circuit Court's decision created a number of problems for the current approach. 

Thus, a new approach may be required to construct a rule that will stand up to the inevitable 

legal challenges. Specifically, in reading the court decision, it does not appear that trading is a 

viable option. 

Bruce Nilles, Sierra Club, and Janice Nolen, American Lung Association noted the 

negative effect that trading has on residential neighborhoods. Small EGUs, usually located in 

those neighborhoods, often find it prohibitively expensive to put on controls. Therefore, those 

units, which are frequently located in minority or low-income neighborhoods, continue polluting 

and harming public health. Trading exacerbates this situation. 

There was general agreement in the expression of opposition to trading and that 

uncontrolled coal-fired power plants should no longer be allowed. Plants should be required to 

put on controls, retire, or re-power. The public health cost is too high to justify continued 

uncontrolled operation, and trading makes it possible for many of those plants to continue 

without controls. 

2. Scope

The NGO participants all suggested that EPA should widen the scope in an effort to get 

smaller power plants, which have historically avoided putting on controls due to cost, to either 

shut down or re-power. The participants felt that EPA has a rare chance to significantly change 

the structure of the power generating sector. They also suggested that closing down smaller, 
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very dirty plants and shifting generation to renewable and green sources would clearly be in-line 

with the Obama Administration's priorities. 

The investment required for these small plants to put on controls is so high that, were the 

plants required to participate in a control program, most would shut down or re-power. This 

would have a large effect on public health because, as noted earlier, many of the smaller plants 

are located in residential neighborhoods. 

The NGOs said that any CAIR replacement program should be national in scope and 

again emphasized the importance of coordination. When expanding the scope of the programs, it 

is important to create a roadmap of what EPA and the Administration imagine the power sector 

will look like in the future. It is important to at least consider coordination and the impact of any

NOx or SO2 program on CO2 emissions.

Finally, everyone agreed that it was important to consider ICI boilers. Cement kilns were 

also mentioned as a possible source category. EPA noted that the states had been encouraging 

EPA to look at a broad set of source categories, which could include area sources, mobile 

sources, and possibly consumer products. The NGOs were supportive of considering the wider 

range of source categories but urged EPA not to get bogged down in considering those sources. 

The NGOs indicated that industrial boilers should not be included in a program through a trading 

mechanism, however. Separate rules may be needed to address other sources. EPA indicated 

that the states had also emphasized quick, immediate emissions reductions followed by other 

programs that might look at the wider range of sources. 

In considering other sectors to control Sam Napolitano shared with the group a set of 

graphs and data showing that eastern power plants have a fair amount of control especially parts 

of the Midwest. Although there are still some reductions to be gained by further controlling the 

power sector, EPA presented the argument that achieving the tighter standards will most likely

require controls in other sectors. The NGOs agreed that controlling other sectors would be an 

important part of meeting increasingly strict standards. However, there was also some concern 

that responsibilities not get shifted because there are clearly important reductions remaining from 

the EGU sector to be achieved from, for example, smaller plants near residential areas. 

3. Timing

With regard to timing, NGOs said that it is understandable that a CAIR replacement rule 

might take at least two years to develop, and that it is good that EPA understands the urgency

and is on an accelerated timetable. However, there is no reason to wait to enforce SIP 

requirements for haze and BART. Past delays in rulemaking and enforcement are having a 

serious public health effect now. Therefore it is critical EPA take any immediate actions 

available to reduce emissions, while simultaneously constructing future programs to meet the air 

quality standards. 

NGOs stressed the importance of coordinated timing, which would encourage sources to 

make smart comprehensive investments rather than the type of serial investments that have been 

made in response to an ever-changing regulatory landscape. Many small units have avoided 

shutting down or re-powering and continue to operate because the owners have no clear idea of 
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future operational costs. A comprehensive timeline of regulations and programs that EPA 

foresees promulgating would drive generation companies to implement comprehensive emission 

reduction plans.

Furthermore, by outlining upfront the projected compliance costs, EPA could encourage 

generation companies to make the large investment required for newer, more efficient power 

plants. Knowing the high cost of compliance might also drive many companies to consider more 

seriously alternative energy sources. All of this would be in line with the Obama 

Administration's publicly stated goals for the next four years. 

4. Standards

Janice Nolen noted that the court had sent the 2006 PM standard back to EPA for 

reconsideration because it had determined that the Agency had not considered all the relevant 

science when making the initial determination. Most observers expect the standards will be 

tightened; thus, it is important that EPA develop a program that helps states meet tighter 

standards. 

Sam Napolitano asked whether the NGOs would rather see EPA develop a rule based on 

the 1997 standards or the 2006 PM (and possibly even 2008 ozone) standards with the 

understanding that developing a rule based on the later standards would probably take longer. 

The NGOs said they did not agree that such a trade off was required and suggested that 

EPA could proceed using, for example, the MACT authority to develop a program. The 

specifics could be adjusted later to meet the updated ambient standards. Janice pointed out that 

using the stricter standards would also bring in more units and possibly help expand the scope to 

include the smaller units that can impact residential areas, as discussed earlier. 

5. Authority and Significant Contribution

In response to questions from EPA about authority, the NGOs suggested the Agency

move away from only considering section 110(a)(2)(D). The NGOs suggested EPA consider 

section 111 or 112 authority (NSPS and MACT). They suggested that EPA step back from the 

section 110(a)(2)(D) consideration, which is based on a finding of failure on the states' part to 

submit implementation plans that demonstrate how each state will address significant 

contribution. Moving away from the significant contribution requirements will help EPA avoid 

some of the pitfalls noted in the court's decision. 

EPA should look at the Clean Air Act and define the full range of tools available under 

the Act. Then the Agency should choose which tools best solve each problem. There are often 

multiple avenues available for dealing with one issue, for example transport. Whenever possible, 

EPA should construct a rule that rests on as many statutory bases as possible. This will also help 

the rule stand up to legal challenges and ensure that EPA is taking full advantage of the legal 

authority granted in the Clean Air Act. 
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6. NGO Final Points

The NGOs concluded by re-emphasizing the importance of a comprehensive approach 

that takes into consideration the full range of statutory possibilities, along with a broad view of 

how the power generation sector should look in the future. A clean environment is interrelated 

with other Administration priorities, such as clean energy and a green economy. It is important 

that EPA set out a regulatory roadmap showing how regulations will clean up the environment 

and also help drive the movement towards cleaner energy.

Generation companies must be able to make comprehensive investment and control 

decisions with a clear understanding of how emissions control regulations fit into a broader view 

of the future of power generation in America. 

V. EPA Response and Conclusion

Sam Napolitano indicated that EPA heard the NGOs' concerns, specifically about 

coordination and taking a broader view. EPA appreciates the NGOs' willingness to think aloud 

and understands that positions and ideas outlined in this discussion may not be each NGO's 

official position. The states have also been willing to think aloud and outline concerns and 

suggestions. The process of gathering ideas and hearing concerns is very helpful for the Agency, 

and it looks forward to working with all stakeholders in the future. 
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APPENDIX: PROGRESS OF ARP, NBP, CAIR through 2008
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