Under the Clean Air Act, EPA has set air quality standards for six principal pollutants—the so-called “criteria pollutants”—to protect public health. These are carbon monoxide, lead, nitrogen dioxide, particulate matter, and sulfur dioxide, as well as ground-level ozone. The latter is not directly emitted by stationary sources but is formed by the airborne reaction of heat and sunlight with nitrogen oxides and volatile organic compounds, which are emitted by the sources. For the criteria pollutants, EPA sets limits—called “national ambient air quality standards”—on the acceptable levels in the ambient air anywhere in the United States. These limits are intended to ensure that all Americans have the same basic health and environmental protections. In addition to the six principal pollutants, EPA regulates 188 hazardous pollutants known as “air toxics.” People exposed to toxic air pollution— which can be highly localized near industrial sources—have an increased chance of getting cancer and experiencing other serious health effects. Under the Clean Air Act, EPA specifies a limit on emissions of air toxics that is based on the achievable control technology. EPA is also to evaluate the residual risk to human health after the adoption of the technology standards and, if necessary, establish more stringent health-based standards. Industrial facilities emit over 100 million tons of pollutants into the air of the United States each year. Many of these sources are large stationary sources, such as chemical manufacturers and electric utilities. For the purpose of the Clean Air Act, these facilities fall into two categories: major sources and minor sources. Generally, under the Clean Air Act, major sources are facilities that annually emit or have the potential to annually emit (1) 10 or more tons of any one toxic air pollutant, (2) 25 tons of any combination of toxic air pollutants, or (3) 100 or more tons of any of the six principal pollutants. Minor sources are those facilities that emit below these thresholds. Some minor sources are referred to as “synthetic minors.” While not defined in the act, synthetic minors are facilities that, according to EPA, have the potential to emit pollutants at the same levels as major sources but choose to limit their operations, thus reducing their emissions to levels below those of major sources. According to an EPA air quality official, as of January 2001, about 19,880 major sources had already received or expected to receive title V permits. According to EPA officials, the agency does not maintain information on the total number of minor sources. As shown in figure 1, large stationary sources accounted for varying portions of the nation’s emissions of certain regulated air pollutants in 1998. They accounted for 86 percent of the sulfur dioxide emissions and 38 percent of nitrogen oxide emissions in 1998. On the other hand, large stationary sources emitted only 4 percent of particulate matter, 6 percent of carbon monoxide, and 12 percent of volatile organic compound emissions in 1998. In addition, major sources accounted for nearly 24 percent of the emissions of toxic air pollutants in 1996 (the most recent year for which EPA has data). In monitoring air quality, regulators look at the levels of pollutant emissions—the amounts being emitted into the air—as well as measured concentrations—the levels detected in ambient air. According to EPA’s data, national emissions of carbon monoxide, lead, sulfur dioxide, and volatile organic compounds decreased from 1990 through 1998, while emissions of nitrogen oxides and particulate matter increased. According to data from EPA’s national network of air quality monitors, the concentrations of all six pollutants, on an aggregate national basis, decreased from 1990 through 1999. These improvements ranged from a 4- percent decrease in ground-level ozone to a 60-percent decrease in lead concentrations. Despite these improvements, in 1999, approximately 23 percent of Americans (62 million) lived in areas that did not meet federal ambient air quality standards for at least one of the six principal pollutants. Subject to EPA’s oversight, state agencies are responsible for administering air quality programs. The Clean Air Act Amendments of 1990 provide for these agencies to issue title V permits to major stationary sources within their jurisdictions. According to an EPA official who manages the title V permit program, all 113 state and local agencies have federally approved title V permit programs. Title V permits contain emissions-related, record-keeping, and monitoring requirements. Emissions-related requirements can include limitations on emissions per year or per hour, or on total production levels. In addition, some facilities have no limits on the amount of total pollution they emit but, instead, have efficiency standards that require them to remove a certain proportion of the pollution they generate by using specific pollution control equipment. For example, a facility might be required to operate control equipment that removes 90 percent of the pollution generated by a particular process or production line. Record-keeping and monitoring requirements specify activities that facilities must perform to demonstrate compliance with their title V or state permit. For example, a permit may require a facility to maintain information on its operating conditions, such as the amount of raw materials used or outputs produced. According to EPA officials responsible for overseeing states’ permit programs, these agencies finance their title V permit programs (including permits for and inspections of major sources) with fees paid by regulated facilities. An EPA official responsible for overseeing states’ title V permit programs stated that, as of December 2000, the national average fee paid by major sources was $28 per ton of pollution emitted. According to EPA officials responsible for developing emissions inventories and air quality policies, in addition to serving as the basis for fees, the emissions reports are used in developing emissions inventories. These officials also explained that the inventories inform regulatory decision-making at the local, state, and federal levels. For example, regulators use them to develop control strategies and to establish permit requirements. Each year, EPA and states perform thousands of inspections at large facilities to monitor their compliance with requirements contained in title V and state permits. However, because of the limitations of routine inspections and suspected noncompliance, EPA initiated intensive investigations within four industries. These intensive investigations found indications of significant noncompliance with provisions of the Clean Air Act that routine inspections do not generally address. While inspections and intensive investigations are used to monitor compliance, title V permits hold company officials at major sources accountable for compliance by requiring those officials to submit at least once a year a statement certifying as to their compliance status with all applicable clean air requirements. Major sources must also report every 6 months on all deviations from the permit’s requirements. A company official must attest to the truth, accuracy, and completeness of the statements. Routine inspections, which focus on compliance with the permits, address emissions-related, record-keeping, and monitoring requirements. According to EPA’s guidance, a routine inspection must include the following three components: Observing visible emissions. This inspection technique can indicate whether the measures to control certain pollutants emitted from a facility are being properly operated and maintained. Observing and recording data on control devices and operating conditions. This enables inspectors to compare observed operating conditions (such as temperature or production levels) with those specified in a facility’s permit. Reviewing records and log books on the facility’s operations. These records provide information on a facility’s operating conditions during times when inspectors are not present at the facility. Nationally, EPA and state officials conducted routine and other inspections at 17,812 large sources in 1999, according to EPA’s data. Of these, 88 percent (15,618 facilities) were found to be in compliance with their permit, while 12 percent (2,194 facilities) did not fully comply. EPA’s data for 1998 show similar national results: 89 percent (15,805 facilities) were in compliance, and 11 percent (1,997 facilities) were not. EPA does not maintain data on the extent to which facilities found in noncompliance directly violated emissions-related requirements rather than record- keeping or monitoring requirements. An EPA Air Enforcement Division official told us that administrative and record-keeping violations sometimes conceal emissions-related violations. For example, the official said that if a facility has a limit on its emissions per unit of production but fails to maintain production records, an inspector might not be able to determine if excess emissions had occurred. In such a case, the inspector might cite the facility for noncompliance with a record-keeping provision. The six inspections we observed (at a chemical manufacturer, a diesel engine manufacturer, a fiberboard manufacturer, a municipal waste incinerator, an absorbent material manufacturer, and a steel mini mill) illustrate the limitations of routine inspections. The permits for the six facilities contained various limits on emissions and production levels. All six facilities had production-based and hourly emissions limits for at least some of their production lines. The permits for five of the six facilities imposed aggregate annual limits for some or all of the pollutants that the facilities emit. For example, the permit for the diesel engine manufacturer specified an annual limit on benzene (a toxic air pollutant) emissions from on-site generators and diesel engine test booths, while the permit for the absorbent material manufacturer had limits on hourly emissions, total annual emissions, and annual production levels. In contrast, the fiberboard manufacturer had no annual emissions limits. The inspectors whom we accompanied checked for visible emissions, reviewed facility records, and checked equipment at all six facilities. At the waste incinerator, the inspector observed a source test conducted in accordance with a state-approved sampling plan. The inspectors determined that while four facilities were in compliance, the other two facilities were out of compliance. At the steel mini mill, the inspector noted that the facility lacked records on the readings of visible pollutants; lacked records on the functioning of various control devices for a 22- lacked information on the sulfur content in certain raw materials used; did not maintain a certain emissions capture system, which caused visible emissions to leak from gaps and holes in the building. The inspector also noted an apparent disparity between the amount of nitrous oxides emitted annually from one furnace. For permit purposes in 1998, the facility estimated the amount was 31 tons.