OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Evaluation Briefing Report 

Assessment of EPA’s Projected 

Pollutant Reductions Resulting from 

Enforcement Actions and Settlements 

 Report No. 2007-B-00002 

 July 24, 2007 
Report Contributors: Rick Beusse 

 Ira Brass

 Hilda Canes Garduño 

 Bao Chuong 

 Dan Engelberg 

 James Hatfield

 Tim Roach

 Michael Wagg 

Abbreviations 

CAA Clean Air Act 

CCDS Case Conclusion Data Sheet 

CEMS Continuous Emission Monitoring System 

CWA Clean Water Act 

EPA U.S. Environmental Protection Agency 

FY Fiscal Year 

ICIS Integrated Compliance Information System 

lbs. Pounds 

OECA Office of Enforcement and Compliance Assurance 

OIG Office of Inspector General 

Cover photos: Images of water pollution (top) and air pollution (bottom) 

(photos courtesy Iowa Department of Natural Resources 

and U.S. EPA, respectively). 
U.S. Environmental Protection Agency 2007-B-00002

Office of Inspector General July 24, 2007

At a Glance


Catalyst for Improving the Environment 

Why We Did This Review 

We conducted this review at 

the request of the Office of

Management and Budget. We 

were asked to assess (1) the 

accuracy and reliability of the 

U.S. Environmental Protection 

Agency’s (EPA’s) Office of 

Enforcement and Compliance 

Assurance (OECA) pollution 

reduction projections for 

enforcement actions and 

settlements, and (2) whether the 

reported projected pollution 

reductions were achieved. 

Background 

OECA’s enforcement actions 

can result in facilities agreeing

to install pollution controls or 

take other measures to reduce 

pollutant emissions or 

discharges. In accordance with 

the Government Performance 

and Results Act, OECA 

annually reports on the amount 

of pollutants expected to be

reduced, treated, or eliminated 

as a result of these actions. 

OECA only reports 1 year’s 

worth of estimated pollutant

reductions, though reductions 

may occur for years into the 

future. The reductions are 

reported in the fiscal year that 

an enforcement case is 

concluded, not necessarily the 

year in which the projected 

reductions will be fully

realized. 

For further information, contact 

our Office of Congressional and 

Public Liaison at (202) 566-2391. 

To view the full report, 

click on the following link: 

www.epa.gov/oig/reports/2007/ 

20070724-2007-B-00002.pdf 

Assessment of EPA’s Projected Pollutant Reductions 

Resulting from Enforcement Actions and Settlements 

What We Learned 

The accuracy and reliability of EPA’s projected pollutant reductions for Fiscal 

Years 2003-2006 were dependent on the specific program in which the 

enforcement action took place. For example, more reliable data were available to 

project reductions from oil spill and power plant cases than other Clean Water Act 

(CWA) and Clean Air Act (CAA) cases, respectively. EPA has improved its 

internal control process for ensuring more accurate pollutant reduction estimates 

from concluded enforcement cases. The accuracy of estimated reductions from 

CWA enforcement actions has likely improved as a result of these internal control 

changes. However, we noted some inconsistencies in the calculation of projected 

CAA emission reductions. For example, three of the six power plant cases we 

reviewed did not include estimates for particulate matter reductions, thereby 

underreporting reductions. Also, different methodologies were used to estimate 

post-compliance emissions from power plant cases. Further, three of the six 

regions we surveyed did not independently review the basis for the projected 

reductions for some CAA cases as called for by OECA’s guidance. 

EPA’s annual projected reductions were heavily influenced by a few large cases. 

Less than 1 percent of the CWA cases accounted for 52 percent of the projected 

pollutant reductions from concluded CWA enforcement actions. Similarly, a few 

large power plant cases resulted in a marked increase in total estimated CAArelated reductions for Fiscal Years 2004-2005. For example, two power plant 

cases accounted for over 600 million pounds in reductions, about 78 percent of 

the Fiscal Year 2004 total. 

Facilities were on target to meet the projected reductions for the CAA cases we 

reviewed. However, it will take years to complete all corrective actions in these 

cases. Consequently, we could not determine whether they had achieved their 

total projected reductions. Projected reductions have already been achieved for at 

least one CWA case, and other CWA cases were making progress toward meeting 

their projected reductions. EPA’s 2006 Annual Report used terms such as 

“achieved,” “reduced,” and “actual” to describe emission reductions for that year 

even though the reductions were often only projected amounts, since it can take 

years for reductions to occur. OECA agreed to use more precise wording in 

future reports. 

We presented the results of our review to OECA on May 23, 2007. We clarified 

parts of our presentation based on OECA’s feedback. OECA generally agreed 

with our findings and stated that it would address the issues disclosed. We make 

no recommendations in this report. 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

INSPECTOR GENERAL 

July 24, 2007 

MEMORANDUM 

SUBJECT: Assessment of EPA’s Projected Pollutant Reductions 

Resulting from Enforcement Actions and Settlements 

Report No. 2007-B-00002 

Assistant Inspector General for Program Evaluation 

FROM: Wade T. Najjum 

TO: Granta Y. Nakayama 

Assistant Administrator for Enforcement and Compliance Assurance 

This is our briefing report on the accuracy of pollution reduction projections resulting from 

Office of Enforcement and Compliance Assurance enforcement actions and settlements, 

conducted by the Office of Inspector General (OIG) of the U.S. Environmental Protection 

Agency (EPA). This briefing represents the opinion of the OIG and does not necessarily 

represent the final EPA position. Final determinations on matters in this briefing will be made by 

EPA managers in accordance with established resolution procedures. 

The estimated cost of this project – calculated by multiplying the project’s staff days by the 

applicable daily full cost billing rates in effect at the time – is $397,274. 

Action Required 

Since this briefing report contains no recommendations, you are not required to respond to it. 

We have no objections to the further release of this briefing report to the public. This report will 

be available at http://www.epa.gov/oig. 

If you or your staff have any questions regarding this briefing report, please contact Rick Beusse, 

Director for Program Evaluation, Air Issues, at (919) 541-5747 or beusse.rick@epa.gov; or 

Dan Engelberg, Director for Program Evaluation, Water Issues, at (202) 566-0830 or 

engelberg.dan@epa.gov. 
cc: Office of the Administrator 

Assistant Administrator for Air and Radiation 

Assistant Administrator for Water 

Agency Followup Official (CFO) 

Agency Followup Coordinator 

Office of General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Audit Liaison, Office of Enforcement and Compliance Assurance 

Acting Inspector General 
OIG Assessment of EPA’

Projected Pollutant Reducti

Briefing for OECA Originally PresenteMay 23, 2007 
Objectives

z How accurate and reliable are OECA’s 

pollutant reduction projections for enforcement actions and settlements? 

z Were the projected pollutant reductions 

reported for selected enforcement actioand settlements actually achieved? 

2 
What We Learned

The reliability of estimated pollutant reductions is dependent on the specific program in which the enforcement actiotakes place. 

• Projected pollutant reductions from Oil Pollution Ac

tend to be more reliable than those associated with types of CWA enforcement actions. 

• Projected pollutant reductions for power plant cases 

based on more reliable methods [i.e., Continuous EMonitoring System (CEMS)] than projections for othcases. 3 
What We Learned

There have been improvements in the internal control process EPA uses to gepollutant reduction estimates. 

• OECA issued new guidance in August 2004. • Standard calculation methodologies have been exp

cover more types of enforcement actions. 

4 
What We Learned

Projected pollutant reductions have beare being achieved in most of the casereviewed. However, because of the letime needed for required corrective actis not possible to make a determination cases. 

5 
What We Learned

The settlement of a few large power plcases resulted in a marked increase in estimated reductions for Fiscal Years (2004 – 2005. For example: 

• 2 power plant cases in FY 2004 account for over 6

lbs. in reductions – approximately 60% of the FY 2

• 2 other power plant cases in FY 2005 account for o

535 million lbs. in reductions – 

almost 50% of the F

total. 

6 
What We Learned

z EPA’s FY 2006 Performance and 

Accountability Report uses terms such “achieved,” “reduced,” and “actual” in describing pollutant reductions (pp. 9, 

z These descriptions should be revised t

reflect that results are based on estimaprojections of future pollutant reductionare not actual reductions. 

7 
What We Learned

Excerpt from EPA’s FY 2006 Performance and Accountability Rep

ort 

8 
9 

Background 

Estimated Pollutant Reductions by Environmental Media 

FYs 2003 − 2006 

64% 

34% 

2% 

Air WateOthe
Background

Overall Reported Pollutant Reductions -

FYs 2003 − 2006 

0 

200 400 600 800 

1000 1200 

2003 2004 2005 2006

 Fiscal Year 

Pollutant Reduction

 (million lbs.) 

10 
Background

z Regions record enforcement case 

information - including estimated pollutreductions - on the Case Conclusion DSheet (CCDS). 

z CCDS information is entered into the 

Integrated Compliance Information Sys(ICIS). 

11 
Background

z OECA contractor to develop a methodo

for verifying projected pollutant reductio

z OECA contractor to pilot test methodol

petroleum refinery cases. 

z Completion date is September 30, 200

12 
Clean Water Act Enforcem

Summary Inform
14 

Projected CWA PollutantReductions FYs 2003 – 2006

78% 

22% - OIG Sample 

Total CWA Projected Pollutant Reductions – 1.2 billion lbs. Total OIG Sample – 271 million lbs. 
CWA Review Methodology

• Selected eight cases for review. • Evaluated processes used to calculate

pollutant reductions against existing Agguidance. 

• Determined how Agency tracks compli

with the enforcement order. 

• Determined, if possible, whether projec

reductions were occurring. 

15 
CWA Cases Reviewed

Case E

PA 

Re

gion 

Date Fin

al O

rder 

Entered 

CWA S

C

ooper L

and 

D

evelopm

e

nt, I

n

c. 7 2/17/2006 301/

Midwest Feedin

g Compa

ny 7 11/7/2003 301/

J

o

e I

vie Hog F

a

rm 6 3/25/2003 301/

Explor

e

r Pipeline 6 10/8/2004 311 

Galveston, Cit

y of 6 12/10/1996 30

H & W Petrole

um Compan

y, In

c. 6 6/2/2006 311 

South Sta

r Oil & Gas 6 5/20/2005 30

Wal-Ma

rt HQ 9/22/2005 301/

Total Projected Reductions = 270,874,329 lbs. 

16 
17 

Most Projected Pollutant Reductions fCWA Enforcement Actions are Modest (1,000 – 100,000 pounds) 

Frequency of Pollutant Reductions 

(FYs 2003 − 2006) -C WA

 n

 = 2,632 

0 

400 800 

1,200 1,600 

0 -1, 00

1,000 -

100, 00

100,000 -

1,000, 00

1,000,000 -

10,000, 00 >

10,000,000

Pollutants Reduced (lbs.) 

Number of Cases 
Projected Pollutant Reductions are

Concentrated in a Small Number of CWA Enforcement Actions 

Just 23 of 2,632 cases accounted for 52 percent of the projected pollutant reductions from concluded CWA enforcement actions. 

18 
Conclusions – CWA

The accuracy and reliability of pollutant reduction estimates vary based on the information available to enforcement sta

• Estimates for oil spill removals, for example, are mo

accurate because better monitoring data are availab

• Enforcement actions requiring volumetric estimates 

(e.g., holding ponds) may be less accurate.

19 
Conclusions – CWA 

The accuracy and reliability of pollutanreduction estimates have likely improveas a result of changes to EPA’s quality assurance process. 

• Updated OECA guidance (2004) encouraged grea

standardization of pollutant reduction calculations. 

• Reported pollutant reduction estimates are receivin

increasing levels of scrutiny. 

20 
Conclusions - CWA

z Where corrective action has been com

field inspections have been used to vethat pollutant reductions have been achieved. 

z Where corrective action has not yet be

completed, site inspections and progrereports are used to gauge interim prog

21 
Clean Air Act Enforcemen

Summary Inform
Background

z Projected emission reductions are reporte

the fiscal year in which the case is conclu(e.g., date an administrative order is issuenot necessarily in the year(s) the benefit is expected to occur. 

z Projected pollutant reductions are the diffe

between annual emissions prior to a settleagreement and annual emissions once corrective actions are taken. 

23 
Background

z Between FYs 2004 – 2006, emission reductio

from power plants decreased from 93% to 30

• During same period, emission reductions from petroleum 

refineries increased from 4% to 50%. 

z Methods for estimating projected emission 

reductions less reliable for non-utility industry sectors (CEMS data generally not available). 

• For example, projected reductions for one case were ba

on several emission estimation methods of varying reliab

24 
Projected CAA Emission Redu

FYs 2003 – 

2006 

Food Oth

er

Production 7%

8%

Refineries 43%

18% 

Utilities 

67% 

Total CAA Reductions = 2.3 billion lbs.

Total OIG Sample = 1.3 billion lbs. 25 
Projected CAA Emission Redu

FY 2003 

Chemicals 

Production 

4% Other 

7% 

Mo

bile

Sources

10%

Utilities 

41% 40% 

O

Food

Pr

o

duction

38%

Total CAA Reductions = 320.4 million lbs.

Total OIG Sample = 193.6 million lbs.

26 
Projected CAA Emission Redu

FY 2004 

Oth

er

3%

Refineries

4% 22% 

O

Utilities 

93% 

Total CAA Reductions = 781.9 million lbs. 

Total OIG Sample = 607.9 million lbs. 

27 
Projected CAA Emission Redu

FY 2005 

Oth

er 

Refineries 3% 17% 13% 

Utilities OIG 

84% 

Total CAA Reductions = 642.2 million lbs.

Total OIG Sample = 536.2 million lbs.

28 
Projected CAA Emission Redu

FY 2006 

Oth

er

10

%

F

ood prod

u

ctio

n

10

%

Refin

eries 

50% 

Total CAA Reductions = 583.2 million lbs. 

Total OIG Sample = NA 

Utilities 

30% 

29 
CAA Review Methodology

z Selected two largest CAA cases from e

of FYs 2003, 2004, and 2005. 

z Also selected one large case from FY 2

Case identified through OIG query of Odatabase. 

30 
CAA Review Methodology

z For each sample case: 

• Determined how the estimated reduction was calcu• Compared process followed to CCDS guidance. • Determined how compliance with the enforcement

agreement is tracked. 

• Determined whether projected reductions were occ

31 
CAA Cases Reviewed

Ohio Edison Co. 7/11/05 2012 

Total Projected Reductions 

Illinois Power Co. 5/27/05 2013 South Carolina Public 6/24/04 2012 Service Authority Virginia Electric and Power 10/3/03 2013 Co. 

Archer Daniels Midland Co. 8/21/03 2012 Alcoa Inc. 7/28/03 2011 PSEG Fos

sil Inc. 7/26/02 2010 

Complia

nce 

Date 

Date Final Order 

Entered 

Case 

32 
Quality Assurance/Quality Co

for the CCDS Process 

Basic steps in CCDS Quality AssuranceQuality Control process: 

• Complete the CCDS form. • Conduct independent review of data on the form. • Reconcile inconsistencies and incomplete entries a• Enter CCDS data into ICIS. • Certify that the data is complete and accurate at mi

end-of-year. 

33 
Compliance with CCDS Qualit

Assurance/Quality Control Ste

Case Complete Independent Reconcile Enter i

CCDS Data Review ICIS 

PSEG Yes No Yes Yes 

Alcoa No No No Yes 

ADM Yes Yes Yes Yes 

VEPCO Yes Yes Yes Yes 

SCPSA Yes Yes Yes Yes IL Power Yes No Yes Yes 

OH Edison Yes No Yes Yes 

34 
Emission Estimation Methods 

Power Plants Cases

Sulfur Dioxide (SO2) Nitrogen Oxides (NO

X) Particu

Case PreCompliance 

Bas

eline 

PostCompliance Reported Emissions 

PreCompliance Bas

eline 

PostCompliance Reported Emissions 

PreCompliaBas

eline 

PSEG CEMS Removal 

Efficiency 

CEMS Emission 

Rate 

Not Pro

Alcoa EPA 

Inventory 

Removal Efficiency 

EPA Inventory 

Removal Efficiency 

EPA Invento

VEPCO CEMS Removal 

Efficiency 

CEMS Annual 

Cap 

Not Pro

SCPSA CEMS Removal 

Efficiency 

CEMS Emission 

Rate 

Stack T

IL Power CEMS Emission 

Rate 

CEMS Emission 

Rate 

Not Docume

35 

OH Edison CEMS Annual C

ap CEMS Annual 

Cap 

Not Pro
Emission Estimation Methods – 

A

Daniels Midland Food Production 

Reductions Projected for: Sulfur Dioxide (SO

2), Nitrogen Oxides (NO

X), Particulate M

atte

r (P

Volatile O

rganic Compounds (VOCs), and Carbon Monoxide (CO) 

Pre-Compliance Baseline Post-Compliance Reported 

Emissio

ns 

Various methods including: 

• Stack tests • CEMS • Material balance • Emissio

n factors 

• Screening data 

Removal efficiencies 

36 
Methods Used to Track Complian

with Interim Emission Requireme

Case Interim 

Reduction Met? 

CEMS Stack 

Test 

On-site Inspection 

CoRe

PSEG Yes Yes Yes Yes YeAlcoa Yes N/A Yes Yes YeADM Yes Yes Yes Yes YeVEPCO Yes Yes Yes Yes YeSCPSA Yes Yes Yes Yes YeIL Power Yes Yes Yes Yes YeOH Edison 

Yes Yes Yes Yes Ye

37 
Conclusions – CAA 

z For time period reviewed the majority of

projected reductions came from power placases. 

z FYs 2004 – 2005 spike in projected reduc

came from a few large power plant cases

z Projected reductions for power plants are 

on more reliable data – CEMS. 

z Cases reviewed are on schedule to meet 

projected emissions reductions. 

38 
Conclusions – CAA 

z Inconsistencies in how projected reduc

were calculated: 

• Not all regions included estimates for particulate m

reductions from power plant cases. 

• Final compliance emissions based on different met

o Post-compliance annual cap. o Post-compliance emission rate used to estimate ann

emissions (assumes no change in production). 

39