Coal and Energy Commission

May 12, 1997, Abingdon

The commission's first meeting of the year, held in conjunction with the Virginia Coal Council's 19th Annual Conference and Exposition, focused on Clean Air Act issues.

Representatives from Virginia Power made presentations on two different but related Clean Air Act issues that affect the electric power and fuel supply industries. The first issue was the work of the Ozone Transport Assessment Group (OTAG), a group of 37 state environmental agency officials that was formed with the encouragement of the United States Environmental Protection Agency (EPA). The group is addressing the possibility that, because ozone and ozone precursors are mobile in the atmosphere, some regions of the country may not be able to attain the air quality standard for ozone unless additional emissions reductions are imposed in other regions of the country. The second issue was the proposed revision of the national ambient air quality standards for ozone and particulate matter.

Ozone Transport Assessment Group

The commission has been monitoring the OTAG process since its inception. At meetings in 1995 and 1996, the commission and its subcommittees heard different presentations from representatives of the Center for Energy and Economic Development, (a nonprofit organization dedicated to promoting coal as an energy source), OTAG and the Virginia Department of Environmental Quality (DEQ). The Virginia Power presentation at the May 1997 meeting provided an update.

OTAG's objective is "to identify and recommend a strategy to reduce transported ozone and its precursors which, in combination with other measures, will enable attainment and maintenance of the ozone standard in the OTAG region." The group has no regulatory authority. It has been utilizing a model in an attempt to determine how ozone transport is affecting ozone levels in various parts of the 37-state region, and how additional controls on emissions might increase air quality in the various regions. It is scheduled to complete its work in June 1997.

According to Virginia Power, the results of the modeling effort indicate that additional emissions controls in the entire region will provide little benefit (reductions of 2 to 6 parts per billion) in reducing peak ozone levels in the Northeast corridor, most of which is not in compliance with the air quality standard for ozone. While such controls will provide some areas with reductions of 20 or more parts per billion, this will occur primarily in areas which have already attained the standard. OTAG is now examining the effects of imposing controls in smaller geographic zones.

Northern Virginia is in the same region as the rest of the Northeast corridor, while the rest of Virginia has been placed in a "buffer zone" in which controls could be imposed that would not be imposed on states to the west and south of Virginia. DEQ has performed modeling that indicates that applying such stricter controls would provide minimal benefits (reductions of 2 to 3 parts per billion) in ozone levels in the Northeast at a very high potential cost.

In January, EPA published a notice of intent to require states to submit amendments to their Clean Air Act state implementation plans "to ensure that emission reductions are achieved as needed to prevent significant transport of ozone pollution across state boundaries in the Eastern United States." Virginia Power questions why the agency took this action prior to the completion of OTAG's work.

Virginia Power has a number of other concerns about the OTAG process and EPA's proposal to require states to implement the alternatives being evaluated by OTAG before the group makes its recommendations. According to Virginia Power, the time constraints under which the group has been operating are resulting in compromises in sound science and judgment. The model that the group has been using was made public late in the process, in November 1996, and there are questions about the accuracy of the model and the emissions inventories being relied upon. Virginia Power's position is that OTAG's heavy focus on the utility sector is unfounded and that the costs that are likely to be imposed on the utility sector as well as other industries may be very large.

Proposed Air Quality Standards

EPA is under a court order to reevaluate the national ambient air quality standard for ozone, due to a lawsuit filed by the American Lung Association, because EPA failed to examine the standard within the time frame required by the Clean Air Act. The agency has proposed to toughen the standard and change the way that ozone levels are measured. Simultaneously, EPA has proposed changing the particulate matter (soot) standard in a similar way. Virginia Power questions whether the scientific information available on the health effects of these two pollutants indicates that the standards should be changed. Virginia Power pointed out that of the 32 health studies cited by EPA in the particulate matter proposal, 20 were done at one institution, the Harvard School of Public Health. Some of these studies have not been released to the public. EPA estimates that the costs of the particulate matter proposal will be about $6 billion per year. It has been estimated that the costs of the new ozone standard in the Chicago area alone will be between $2.5 and $7 billion per year. Under the new proposals, EPA projects that 229 areas in the United States will newly become nonattainment areas for ozone and 167 areas will become nonattainment areas for particulate matter.

EPA, which has been confronted with increased Congressional opposition to both of the proposed new standards, is scheduled to make final decisions on them in July. Virginia Power's position on the two standards is that the current ozone standard is adequate to protect public heath and that the particulate matter standard should not be changed without more research on its health effects.

Commission Response

Commission members requested that the chairman write letters on behalf of the commission to the Administrator of the EPA, the President and Vice-president, and Virginia's Congressional delegation expressing concern about both EPA's ozone transport proposal and the new standards for ozone and particulate matter.

Other Issues

Other issues raised at the meeting included the transmission line that is proposed to be located between Oceana, West Virginia, and Cloverdale, Virginia. American Electric Power representatives briefed the commission on the need for the line. Representatives of the Virginia Oil and Gas Association (VOGA) raised several issues that had been discussed prior to the 1997 session by the Oil and Gas Subcommittee but not resolved. The primary issue of concern to VOGA is the ability of owners of coal to effectively veto coalbed methane development. This and other issues may be the subject of Oil and Gas Subcommittee meetings in the coming year. Finally, the issue of global warming was raised. The commission agreed to discuss the issue at its next meeting and to focus on effects that proposed controls would have on the coal industry and other fuel suppliers and on the utility sector.