Senators Ask EPA Inspector General To Investigate Mercury Rule

WASHINGTON (Mon., April 12) - In a letter sent to Environmental Protection Agency (EPA) Inspector General Nikki Tinsley today, U.S. Sens. Jim Jeffords (I-Vt.), Patrick Leahy (D-Vt.), Joe Lieberman (D-Ct.), Hillary Rodham Clinton (D-NY), Barbara Boxer (D-Ca.), Tom Carper (D-Del.), and Ron Wyden (D-Or.) urged the Inspector General to investigate the EPA's proposed mercury rule package for procedural improprieties.

The seven Senators have asked the Inspector General to examine four serious concerns with how the EPA prepared its proposed rule to regulate mercury emissions from power plants: 1) the Agency failed to perform an analysis of a range of regulatory options, which is required by a standing Executive Order; 2) interagency reviewer(s) appear to have scrubbed the rule's language to downplay scientific evidence about the hazards of mercury pollution; 3) the Agency appears to have taken action against senior career staff after EPA Children's Health Advisory Committee criticized the rule; and 4) the rule contains verbatim or very similar language to what is in industry documents. The proposed rule, the Senators said, has been tainted by industry influence and scientific dishonesty.

A bipartisan group of 45 senators also recently sent a letter to EPA Administrator Michael Leavitt urging him to withdraw the mercury proposal and re-propose something stronger. As evidence of the serious health threat that mercury-laced emissions pose, the Senators cited an EPA report that concluded that the number of infants with unsafe levels of mercury in their blood had doubled from EPA's original estimates, to 630,000 newborns.

"Congress and the public need to know whether EPA's rulemaking process can be trusted to put the public's health first," said Jeffords. "The health of hundreds of thousands of American children is in jeopardy because of mercury pollution. We must be able to rely on the federal government to serve and protect the public, not just the special interests. But so far the Bush Administration has attempted to shut down our efforts to conduct oversight of its air pollution policies. I urge the EPA Inspector General to investigate quickly to discover any improprieties, so they can be resolved and EPA can produce a better, more credible rule."

"The Administration's credibility and EPA's independence in making these decisions about mercury are so dubious by now that only a top-to-bottom review can get to the bottom of this," said Leahy. "How and why was this industry-ghostwritten, scientifically bankrupt mercury mess created? The American people deserve to know the answers, and the public deserves a mercury plan that will put their interests over the special interests."

"Once again, President Bush has decided to distort science to justify a policy that was tailor made for industry," said Clinton. "We already know that language written by industry lobbyists was cut-and-pasted directly into the proposed rules, and the President's staff doctored the proposal to down play the health threat posed by mercury. New Yorkers deserve a full, independent investigation as soon as possible."

"Mercury kills," said Boxer. "It is a neuro-toxin that is especially devastating to children. We need to know if the EPA cut corners, ignored science or otherwise catered to special interests in industry to weaken protections against mercury poisoning."

"Many of us in Congress have been saying for months now that the administration's rule on mercury is deeply flawed and will not sufficiently protect the public's health," said Carper. "I am troubled that the EPA rulemaking process for the mercury rule may have been politicized. If so, children and adults who deserve the best mercury rule are being put at risk. We should get to the bottom of what happened and how this rule was developed as soon as possible so we can take the right steps to remedy this issue."

The letter asks the EPA Inspector General to provide a report of her findings before December 2004, when the Agency is required to finalize a mercury rule.

[Click here for a PDF version of the letter, complete with signatures]
Otherwise, text of the letter follows along with appendicies:

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April 12, 2004

The Honorable Nikki L. Tinsley
Inspector General
Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C. 20460-0001

Dear Inspector General Tinsley:

We write to respectfully request that you conduct an investigation into the apparent serious irregularities in the process that the U.S. Environmental Protection Agency used to develop its proposed alternatives for emissions standards for mercury emitted by electric utility plants - the so-called Utility MACT (maximum achievable control technology) and trading rule. We believe that any of EPA's proposals, if finalized, would violate the spirit and the letter of the Clean Air Act because they fail to require mercury emissions limits for these plants that reflect the maximum achievable reductions from this industry.

But, perhaps more importantly, the deeply flawed process by which this proposal was developed, as detailed below, threatens to undermine the integrity of the regulatory process of setting MACT standards generally under the Clean Air Act. EPA seemingly ignored the requirements of the statute, executive orders, and EPA's own guidance, and instead proposed mercury emissions limits and alternative trading budgets targets based on the Administration's proposed "Clear Skies" legislation, and then performed a post-doc justification of those numbers. There is strong evidence that EPA career staff members were directed by political appointees not to follow the normal regulatory development procedures, and that the affected industry had an undue influence over the entire process. Finally, it appears that White House officials systematically went through the proposed rule and edited it to weaken scientific evidence demonstrating the health risks of mercury exposure.

EPA currently is required by a court-approved settlement to issue a final rule by December 2004. If EPA is to have an opportunity to take fully into account your final report and recommendations in this matter and take whatever corrective action is necessary in finalizing the rule, it is crucial that this investigation be completed and the report and recommendations issued by that time. We ask that you set a date that is sufficiently prior to December 2004 that EPA will have an opportunity to consider and incorporate your report's findings and recommendations.

Some of the specific irregularities that warrant investigation include the following:

Setting a MACT standard involves setting a technology "floor" based on the actual reductions achieved by the best-performing units in the industry. The floor is the minimum amount of reductions that can be required. Once a floor is established, the standard is then developed based on assessments of control technologies, precombustion techniques, design, equipment or workplace standards for emissions reductions, among other methods, systems or techniques, to evaluate whether a standard that is more stringent or "beyond the floor" is justified on a feasibility, cost-effectiveness, or other societal evaluation basis. A standing executive order requires EPA to identify and evaluate regulatory alternatives, select from among them, and explain why its proposed option is justified. The proposal and docket reveal no effort to comply with this requirement. A recent press account of conversations with at least five current EPA staff members indicates that they were directed not to undertake the normal scientific and economic studies that should have been used to evaluate the proposed MACT alternatives, and to evaluate the MACT alternative against the proposed cap and trading options. See Appendix A. We would like you to determine whether this allegation is accurate, who made the decision, and how it was communicated to staff.

In August 2001, EPA formed an advisory group for the MACT proposal known as the Utility MACT Working Group constituted under the Federal Advisory Committee Act (FACA). The group consisted of industry, state, and environmental community representatives, and was charged with "provid[ing] input to the EPA regarding Federal MACT regulations" for the listed industry coal- and oil-fired electric utility steam generating units. The Working Group held 14 meetings over a period of 18 months. In March 2003, EPA scheduled an April 2003 meeting. The April meeting was abruptly cancelled and was never rescheduled. In fact, although the purpose of the group was to advise EPA as it formulated its proposal, the group never met again prior to the EPA Administrator signing the proposed rule in December 2003. To date, there has been no explanation for the dissolution of the working group.

Our concerns that EPA's regulatory development process failed to follow even the most routine procedures are heightened by the discovery that the proposal contains entire sections of text that appear to have been lifted verbatim from memos prepared by firms representing industry participants, and which were not presented to the Working Group, but were provided to the Agency quite late in the regulatory development process.

A standing executive order requires EPA to evaluate the environmental and safety effects of a proposed regulation on the nation's children. A December 2003 EPA draft of the proposal circulated for interagency review describes the rationale why this executive order does not apply to the proposal. In comments received by EPA from the Office of Management and Budget of the White House, OMB deleted this rationale and replaced it with language asserting that the evaluation requirement had been satisfied. A search of the proposal and docket reveals no indication that any such evaluation was ever performed.

Documents indicate that a significant number of changes were made to the proposed rule package to weaken the language and scientific understanding of health effects of mercury exposure to sensitive populations, such as women of childbearing age, fetuses and infants. In other places, edits appear to have been made to argue that the proposed strategies are preferable to other alternatives instead of original language stating that Executive Order 13045 on protecting children from environmental health risks and safety risks did not apply.

Recent press accounts indicate that two senior career staff may have been demoted from leadership roles in recent weeks for allowing EPA's Children's Health Protection Advisory Committee to publicly criticize the Administration's utility rule. See Appendix N. We would like you to determine whether this allegation is accurate, who made the decision, and how it was communicated to committee members.

The record reflects a pattern of pressure to develop a rule package that subverts the Act's requirements in favor of industry arguments and outcomes driven by the Administration's Clear Skies legislative proposals. For example: (1) EPA staffers were directed not to follow statutory and executive order requirements; (2) federal advisory committee activities were abruptly curtailed without explanation; (3) results-oriented analyses were undertaken, apparently beginning with the conclusion that "Clear Skies" dates and caps had to be replicated in the standard; (4) claims appeared on the record that required analysis had been satisfied when it had not; (5) EPA lifting large portions of the regulatory proposal from memos written by lawyers representing the regulated industry and outside the established federal advisory committee proposal; and, (6) the White House edited the proposed rule package to weaken scientific information on the health effects of mercury exposure. If true, these are sure signs of a regulatory process gone awry. The facts as they appear today suggest fundamental problems with the way EPA has conducted its business with respect to these rule proposals. In order to gain a better understanding of the extent of the procedural irregularities that occurred during the rule development process, we have prepared a list of questions (with relevant attachments) that we believe should form the core of your investigation.

In accordance with your responsibility to keep the Administrator and Congress fully informed concerning problems, abuses and deficiencies relating to the administration of EPA's programs, please provide us with a report of your findings and recommendations by a date appropriately in advance of the December 2004 date for the finalization of the mercury rule. Thank you for your attention to this matter.

Sincerely, <signed>

Senators: James M. Jeffords, Patrick J. Leahy, Joseph I. Lieberman, Hillary Rodham Clinton, Barbara Boxer, Tom Carper, Ron Wyden

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Suggested Questions Concerning the Development of the Proposed MACT for Utility Units.

Purpose: To determine whether EPA's actions and decisions were consistent with applicable statutes, regulations, policies, guidance and Agency practice or were subject to undue industry influence.

A. Executive Order 12866

According to Executive Order 12866 (Economic Analysis of Federal Regulations), the economic analysis (EA) that the agency prepares should satisfy the requirements of the "Unfunded Mandates Reform Act of 1995" (P.L. 104-4). Section 202(a) of this statute directs agencies to provide a qualitative and quantitative assessment of the anticipated costs and benefits of a federal mandate resulting in annual expenditures of $100 million or more, including the costs and benefits to State, local, and tribal governments or the private sector. Section 205(a) of this statute requires that for those regulations for which an agency prepares a statement under Section 202, "the agency shall [1] identify and consider a reasonable number of regulatory alternatives and [2] from those alternatives select the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the proposed rule."

Executive Order 12866 goes on to say that the EA should show that the agency has considered the most important alternative approaches to the problem and provide the agency's reasoning for selecting the proposed regulatory action over such alternatives. The preamble to the proposed mercury MACT rule does not identify regulatory alternatives. It does identify different statutory alternatives, but provides no analysis of regulatory alternatives that would serve as the basis for the selected emission limits.

According to press accounts (e.g., Los Angeles Times, March 16, 2004), EPA staff were told not to undertake the scientific and technical analyses called for "under a standing executive order" by EPA political appointees. (See Attachment A.)

1. Did EPA management direct the EPA staff not to perform scientific and technical analyses that would have fulfilled the requirements of Executive Order 12866? If so, which individual or individuals made this decision? Which individual or individuals communicated it to staff and how was it communicated?

2. If EPA management did not issue directions that directed staff not to conduct additional analyses, were additional, more stringent, regulatory alternatives identified and analyzed? If not, why not? If so, by whom were they done, and why do the results of these analyses not appear in the proposal notice or the docket?

3. How will the Agency analyze which of the proposed emission limits is the least costly, most cost-effective or least burdensome alternative without these analyses? How has the Agency reached its view expressed in the proposal that the trading options are the least costly or more cost-effective alternatives if other alternatives were not considered?

In the mercury MACT proposal, the Agency proposes less stringent emission rates for utility units firing subbituminous and lignite coals compared to the emission rates proposed for bituminous coal-fired units. Executive Order 12866 states that "in general, both the benefits and costs associated with a regulation will increase with the level of stringency (although marginal costs generally increase with stringency, whereas marginal benefits decrease). It is important to consider alternative levels of stringency to better understand the relationship between stringency and the size and distribution of benefits and costs among different groups."

4. Did the Agency analyze the difference in costs and benefits as a result of less stringent emission standards for subbituminous and lignite-fired boilers, as compared with the emissions standards for bituminous-fired boilers? If so, how do these compare with the costs and benefits of the more stringent emission limitation on bituminous-fired boilers? If not, why not?

Executive Order 12866 discusses alternative effective dates of compliance. The Order says: "The timing of a regulation may also have an important effect on its net benefits. For example, costs of a regulation may vary substantially with different compliance dates for an industry that requires a year or more to plan its production runs efficiently. In this instance, a regulation that provides sufficient lead time is likely to achieve its goals at a much lower overall cost than a regulation that is effective immediately, although the benefits also could be lower." In the mercury MACT proposal, the Agency solicits comment on whether a one-year extension in the compliance date should be granted for facilities required to install controls in order to comply with the proposed rule.

5. Did the Agency perform an independent analysis of how many plants would be required to install controls in order to comply with the proposed rule? If so, is there any evidence that a one-year extension is necessary for all plants to install the controls? What are the specific limitations in terms of potential labor and equipment shortages that would prevent all plants from complying with the standard in the statutory timeframe?

6. Did the Agency determine the costs and benefits of a one-year extension compared to not granting an extension? If so, what are the Agency's findings?

7. To what extent, in proposing the extension, did the Agency rely on the memorandum prepared by Latham and Watkins entitled "A Global Compliance Extension for Electric Utility Steam Generating Units - Legal and Policy Basis"? (See Attachment B.)

Executive Order 12866 requires that the benefits and costs of each alternative must be measured against a baseline. The baseline should be the best assessment of the way the world would look absent the proposed regulation. EPA has modeled the mercury MACT rule separate from the Interstate Air Quality Rule (IAQR) as if the IAQR did not and will not exist. The IAQR shows mercury co-benefits on the order of a 30% reduction in current emissions.

8. Does the EPA plan to go forward with the proposed IAQR, even if it does not finalize the mercury MACT rule? If so, should not the mercury co-benefits calculated for the IAQR be considered the baseline case for the mercury MACT rule? If not, why not?

9. Has the Agency modeled the mercury MACT rule using the IAQR as a baseline case? If so, what were the results (including, but not limited to emission reductions, costs), and are they found in the docket? If not, why not?

10. How many model runs did the EPA perform in order to select a regulatory alternative? How many model runs were performed by EPA's consultants? How many model runs were performed by outside interests and provided to the Agency?

11. Was "back-calculating" the mercury emission rates to get a result equivalent to a national emission rate of 34 tons per year among the purposes of the model runs were conducted by EPA or by others?

B. Intra-Agency Review

Under Section 515(a) of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Public Law 106-554; H.R. 5658), the Office of Management and Budget (OMB) requires federal agencies to develop policy and procedural guidance for ensuring and maximizing the quality of information they disseminate to the public. In response to this directive, EPA developed Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by the Environmental Protection Agency. These Guidelines apply to "information" EPA disseminates to the public. According to EPA's guidelines, "Information," generally includes any communication or representation of knowledge such as facts or data, in any medium or form. EPA's guidance states that "It is EPA's policy that all of the information it distributes meets a basic standard of information quality, and that its utility, objectivity, and integrity be scaled and appropriate to the nature and timeliness of the planned and anticipated uses."

12. Does the information developed either internally or externally and used by EPA to support scientific, technical, or economic analysis or policy decisions in the mercury MACT rule conform to the requirements of EPA's information quality guidelines? How did EPA ensure and maximize the quality of influential information used in this rule making?

In addition to the information quality system, EPA's Peer Review Policy provides that major scientifically and technically based work products (including scientific, engineering, economic, or statistical documents) related to Agency decisions should be peer-reviewed.

13. Which influential scientific and technical analyses conducted in support of this rule were peer reviewed? If none were reviewed, why not? How did EPA address the peer review comments? Are there analyses developed either internally or externally and used to support the rule that were not peer reviewed? If not, why were they not peer reviewed?

The Agency's Action Development Process also serves to ensure and maximize the quality of EPA disseminated information. Top Agency actions and Economically Significant actions as designated under Executive Order 12866 are developed as part of the Agency's Action Development Process. The Action Development Process ensures the early and timely involvement of senior management at key decision milestones to facilitate the consideration of a broad range of regulatory and non-regulatory options and analytic approaches. Of particular importance to the Action Development Process is ensuring that EPA scientists, economists, and others with technical expertise are appropriately involved in determining needed analyses and research, identifying alternatives, and selecting options. Program Offices and Regional Offices are invited to participate to provide their unique perspectives and expertise. Effective consultation with policy advisors (e.g., Senior Policy Council, Science Policy Council), coregulators (e.g., States, Tribes, and local governments), and stakeholders is also part of the process. Final Agency Review (FAR) generally takes place before the release of substantive information associated with these actions. The FAR process ensures the consistency of any policy determinations, as well as the quality of the information underlying each policy determination and its presentation.

14. Was there an intra-agency work group for this regulatory action? If yes, which EPA program offices were involved in the work group? If no, why was there no workgroup? What comments did the program offices provide the regulation manager during development of the rule? How were they addressed? When it came time to close the development process and publish the final proposed rule which EPA program offices concurred or nonconcured during Final Agency Review and what were their comments? How were those comments addressed?

C. Interagency Review

According to the Regulatory Procedures Manual for the Emission Standards Division of the Office of Air Quality Planning and Standards, the procedure for a rulemaking calls for the formation of an interagency workgroup. The workgroup is to be kept informed of the progress of the rulemaking and resolve significant issues between offices. Prior to submittal of the proposal to the Office of Management and Budget, the workgroup is to sign off on the regulatory package.

15. Was an interagency workgroup formed to review the Utility MACT rulemaking? If not, why not? If so, which offices were represented, when did the workgroup meet and what were their comments? How were the workgroup comments, if any, addressed in the proposal? What changes were made to the proposed rule after workgroup closure? Was the workgroup informed of these changes? Did all workgroup members formally concur with the final proposal? If not, why not?

16. Which federal agencies or offices (including the White House) were included in development of the proposed rule? Which federal agencies or offices were included in the process or referring the proposal during and after OMB review?

The docket for the proposed rulemaking contains faxed and emailed comments from OMB to EPA. These comments contain evidence of an apparent pattern of altering the language that describes mercury health effects. For example, one reviewer removes the word "confirmed" wherever it appears in reference to mercury health effects e.g., the phrase "confirmed health effects" is changed to "health effects". (See Docket Item number OAR-2002-0056-0107. Facsimile comments from Interagency review. Sample pages are included in Attachment C.)

17. Which reviewer or reviewers made changes to the health effects characterization in the preamble? Did EPA scientists review and approve these changes to the EPA's characterization of mercury health effects? If not, why not?

Executive Order 13045 at 5-501 states: "For each covered regulatory action submitted to OMB's Office of Information and Regulatory Affairs (OIRA) for review pursuant to Executive Order 12866, the issuing agency shall provide to OIRA the following information developed as part of the agency's decision-making process, unless prohibited by law: (a) an evaluation of the environmental health or safety effects of the planned regulation on children; and (b) an explanation of why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the agency.

In the December 11, 2003 draft of the preamble to the proposed rule (page 365), the EPA describes a rationale as to why the action the Agency was proposing is not subject to this executive order. This language was deleted and the following text (which subsequently appeared in the Federal Register page 4715) was added: "In accordance with the Order, the Agency evaluated the environmental, health and safety effects of the proposed rule and for the reasons explained above, the Agency believes that the proposed strategies are preferable to other potentially effective and reasonably feasible alternatives." (See Attachment D.)

18. Which reviewer or reviewers provided this language to the EPA? Did the EPA in fact conduct an analysis to evaluate the effect of the proposed rule on children? What other "potentially effective and reasonably feasible alternatives" did the EPA assess? What were the results of these analyses and why do they not appear in the docket for the proposed rule?

D. Utility MACT Working Group

In August 2001, the EPA formed an advisory group for the MACT proposal - the Utility MACT Working Group - under the NSR/Permits/Air Toxics Subcommittee of the Clean Air Act Advisory Committee. The Working Group was charged to "provide input to the EPA regarding Federal MACT regulations for coal-fired and oil-fired electric utility steam generating units." The Working Group held 14 meetings over a period of 18 months. In March of 2003, EPA scheduled an April 2003 meeting with the Working Group for the purpose of discussing the results of EPA's Integrated Planning Model (IPM). The April meeting was abruptly cancelled and was not rescheduled.

19. Who made the decision to cancel the Working Group meeting in April 2003? Why was it cancelled? Why was the meeting not rescheduled? Has EPA formally dissolved the Working Group? Has EPA had any contact with the Working Group, as a whole, since March 2003?

20. What stakeholder or industry groups has the EPA met with since the Working Group's last meeting in March 2003? Were the materials distributed at these meetings shared with the entire Working Group? If not, why not?

According to the Utility MACT Working Group meeting records, all stakeholder groups represented on the Utility MACT Working submitted written suggestions for various Integrated Planning Model (IPM) runs for the EPA to perform.

21. Did EPA or it contractors perform all of the model runs recommended by any of the stakeholders on the Utility MACT Working Group? If not all runs were performed, which runs were performed and how was the decision made regarding which runs to perform? Did other outside interests perform any of the model runs recommended by any stakeholder, or any other IPM model runs, and provide the results of those runs to the Agency prior to December 15, 2003? If so, which model runs were performed and by whom were they recommended? How were the inputs to the model runs performed/selected? If EPA did not intend to perform any model runs itself, why did the EPA ask the Working Group for recommendations?

E. Procedures Followed in Setting the MACT Floor

Section 112(d) of the Clean Air Act as amended in 1990 (CAA) requires EPA to promulgate emission standards for existing sources that reflect the "average emission limitation achieved by the best performing 12 percent of the existing sources (for which the Administrator has emissions information)". According to the Regulatory Policy Notebook of the Emissions Standards Division (Office of Air Quality Planning and Standards), the EPA's Office of General Counsel (OGC) has indicated a preference (in calculating the MACT level) for averaging the emission limitations of the best 12% using the arithmetic mean (see Regulatory Policy Notebook Document #13(a) SP 9/17/93). The mercury MACT proposal sets emission rates for 3 coal subcategories that are roughly 2 to 16 times higher than either the average or median emission rates of the top 12% of the best performing units in each subcategory. For waste coal-fired units and integrated gasification combined cycle (IGCC) units, the proposed MACT emission limits are roughly 5 times higher than the emission rate of the worst performer in each of these subcategories. To arrive at the proposed floor emission rates for existing units, the Agency relied on a statistical analysis of the variability of the emissions test data. The EPA relied on the same analysis to derive the floor rates for new units, which under the Act must be based on the performance of "the best controlled similar source. "

22. Why did the Agency employ a multi-part statistical analysis to account for variability, rather than relying on the other methods for dealing with variability recommended by the Working Group?

23. Based on test data and/or estimated emission rates, how many facilities currently meet the proposed standards? How many facilities would have to reduce their current emission rates by 10%, 25% 50%, 75%, or more than 75%?

24. Who developed the variability method that is contained in the proposed rule and on which the proposed floors are based?

25. Was the Agency's statistical method to address variability developed after any MACT floor emission rates were calculated or chosen, or after an overall level of emissions was targeted?

In an August 8, 2002 presentation to the Utility MACT Working Group, EPA described several ways the Agency could address variability in floor-setting. The methods described were: worst-case performance, averaging time, control technology parameters, format of the standard, mercury correlations, and statistical approaches. The EPA stated that more analyses on each of these potential approaches was warranted and welcomed advice and recommendations from Working Group members. (See Attachment E.)

26. Which of the above methods to address variability did EPA independently analyze? What were the results of those analyses? Were analyses performed outside the Agency, either by its contractors or other interested parties?

27. What methods to address variability were recommended by the Working Group stakeholder groups? Which of these recommendations did the Agency adopt?

In the preamble to the proposed rule, EPA describes its variability analysis using verbatim language from a memorandum provided to the Agency by West Associates (see "Multivariable Method to Estimate the Mercury Emissions of the Best-Performing Coal-Fired Utility Units under the Most Adverse Circumstances which can Reasonably be Expected to Occur"). (See Attachment F for the memorandum and Attachment G for side-by-side language comparison.)

28. Did EPA officials or staff insert this language verbatim into the preamble or did representatives of other agencies or other offices of the government provide this language to the EPA during interagency review? If so, which interagency reviewer or other government representative provided the language? Did outside law firms have any opportunity to review the draft preamble and/or insert the verbatim language?

29. How does the statistical analysis provided by West Associates differ from the analysis provided by EPA's technical contractor (Research Triangle Institute) and what is the impact of using one approach over another on the resulting MACT levels? (See Attachment H: Jeffrey Cole, Research Triangle Institute to Bill Maxwell, U.S. EPA, August 28, 2002.)

30. In articulating a legal rationale for, or otherwise justifying the use of a multivariable statistical method to derive the MACT floors, to what extent did the Agency rely on the June 11, 2003 memorandum prepared by Latham and Watkins entitled: "Legal and Policy Basis for use of West Associates Proposed Mercury MACT Floors"? (See Attachment I.)

In addition to incorporating statistical variability, the proposed MACT rule addresses variability by providing an alternative format (i.e., either meet the emission rate or a percent reduction requirement), facility-wide emissions averaging, and an annual averaging period for demonstrating compliance.

31. What analyses did EPA perform to assess how all of these approaches, alone and in the aggregate, accommodate the variability in emissions? Were any such analyses performed by others outside the Agency and provided to the Agency? By whom were they performed? How did the Agency select one approach over another? How did the Agency select the combination of approaches contained in the proposal?

The MACT proposal contains an alternative proposal to allow emissions trading under 112(n). Certain passages of the proposal contain wording that is essentially taken verbatim from language contained in a September 4, 2003 memorandum by Latham and Watkins entitled "A System-Wide Compliance Alternative for Mercury Emissions from Electric Utility Steam Generating Units - Legal and Policy Basis." (See Attachment J for memorandum and Attachment G for side-by-side language comparison.)

32. During the course of developing the proposed rule prior to September 2003, did EPA staff develop a regulatory alternative that included emissions trading under 112(n)? Did EPA staff brief EPA management on this alternative?

33. Did EPA officials or staff insert this language verbatim into the preamble or was it provided to the EPA during interagency review? If so, which interagency reviewer provided the language? Did outside law firms have any opportunity to review the draft preamble and/or insert the verbatim language?

34. At the outset of the Utility MACT Working Group process, EPA stated that emissions trading was not allowed under section 112 (see Attachment K: August 1, 2001 EPA presentation #1). Was EPA considering emissions trading under 112(n) at this time, and if so was this raised for discussion with the Utility MACT Working Group over the 18 months this group met?

35. The preamble to the proposed rule also contains a completely different approach for the Utility MACT rulemaking from the 112(d) MACT development approach.. The Agency proposes to rescind its finding that a 112(d) rule is "appropriate and necessary", and to delist coal- and oil-fired electric utility generating units from the 112(c) list from which the 112(d) rules must be developed. Instead the Agency proposes to address power plant air toxic emissions under CAA section 111. Was this alternative approach discussed with the Utility MACT Working Group? If not, why not?

36. Who made the decision that regulating power plants under CAA Section 111 would be included as an alternative regulatory approach? Where did this approach originate? When was this decision made? How was this decision communicated to EPA staff? Did the process used to decide to include this approach in the proposed rule differ from the standard process used to determine if a regulatory alternative should be included in a proposed rule?

37. Did EPA management consult with EPA's Office of General Counsel regarding the legal risk of deviating from the Agency's December 2000 regulatory determination and proposing the alternative CAA 111(d) and 112(n) trading proposals? If so, how did they characterize the risk?

According to the preamble to the proposed rule (69 FR 4702), the EPA says it has "considered the possibility" that the 111(d) and 112(n) emissions trading alternatives could result in deposition hotspots, but that the cap-and-trade system will effectively address local risks.

38. What information does EPA have to support this assertion? What analyses were performed to support this assertion? Why is such information or analyses results not discussed in the preamble to the proposed rule or included in the docket?

F. Regulation of Non-Mercury HAPs

The record for the Utility MACT Working Group illustrates a great deal of effort went into describing and discussing the issue of whether the EPA had sufficient data or authority to regulate non-mercury hazardous air pollutants (HAPs). In the proposal, the EPA dismisses the regulation of non-mercury HAPs as contrary to congressional intent.

39. In drafting the regulatory proposal, to what extent did the Agency rely on the August 5, 2002 memorandum by Latham and Watkins entitled "Legal and Policy Basis for EPA to Forego the Regulation of Non-Mercury HAP Emissions from Utility Boilers"? (See Attachment L for memorandum and Attachment G for side-by-side language comparison.)

The MACT proposal states that subsequent to the December 2000 regulatory determination, the EPA performed additional analyses of exposure to hydrogen chloride and hydrogen fluoride emissions.

40. When were these additional analyses performed? Given the interest of the Utility MACT Working Group, why were these analyses not discussed with, or presented to, the Utility MACT Working Group?

41. Did the EPA perform additional analyses of any other pollutants identified in the 2000 Regulatory Determination as "pollutants of concern" (e.g., arsenic, dioxin)? If not, why not?

In a December 17, 2001 memorandum from the environmental group stakeholders on the Utility MACT Working Group to the Working Group co-chairs, the issue is raised as to whether EPA has adequate data to calculate a MACT emission rate for the non-mercury HAPs. The memorandum also asks whether the EPA intends pursue additional data for the non-mercury HAPs. (See Attachment M for memorandum.)

429. Ding of the proposed rule package to weaken scientific information on the health effects of mercury exposure. not apply.ste. Did EPA gather any additional data on the non-mercury HAPs which would inform additional analyses? When was the decision made not to regulate non-mercury HAPs and who made this decision? Did EPA staff recommend to EPA management that the non-mercury HAPs be dropped from consideration? At any time were non-mercury HAPs included in any regulatory alternatives? If so, why were they eliminated from consideration? If not, why not?

G. Beyond-the-Floor MACT Analyses

In the MACT proposal (see page 4676), EPA states that the use of sorbent injection technology is not commercially available and does not provide a viable basis for setting a more stringent MACT standard that is "beyond-the [proposed MACT] floor". However, various air pollution control vendors have submitted information to Senator Jeffords indicating that mercury sorbent control technologies are available today for power plants. In addition, the vendors report that other multipollutant technologies, capable of achieving significant mercury reduction, will be commercially available within 2 years.[1] EPA also recently added to the docket after the January 30 proposal publication date and after the public hearings on the proposal meeting notes and presentation materials from a meeting it held with Sorbent Technologies, a vendor of its pollution control technique

43. How does EPA reconcile its position on sorbent injection technology (or activated carbon injection) with the position of the air pollution control vendors?

44. How does EPA justify its position given that the IPM - the model that EPA has based its emission reduction and cost estimates on - assumes availability of activated carbon injection and further assumes this technology capable of reducing mercury emissions by 90%?

According to reports by EPA's Office of Research and Development[2] (ORD), conventional technologies such as wet scrubbers, fabric filters, NOx controls and various configurations of these technologies decrease mercury emissions by more than 90% on some power plants. In addition, one of these reports describes how conventional controls can be optimized to improve their mercury capture.

45. Did the EPA conduct an analysis of the effectiveness and cost of requiring conventional technologies on existing boilers? If not, why not?

46. Did EPA conduct an analysis of the effectiveness and cost of optimizing conventional technologies on existing boilers? If not, why not?

47. How does EPA reconcile its position that reducing mercury emissions by as much as ninety percent is not possible[3] with the findings of these ORD reports? What is EPA's evidence to support this position, and was this ever reviewed by EPA staff or the Working Group?

48. Were the two ORD papers written entirely by ORD technical staff, or did the Agency's political appointees write portions of them? Were the papers reviewed by political appointees?

H. Editing of Scientific Findings

49. When and by whom were edits made to the scientific findings of the proposed rule package?

50. Were Agency science experts consulted on the proposed changes and did they concur on them?

51. On page 522 of the docket, it appears that the Agency originally asserted that the proposed rule package was not subject to Executive Order 13045 but that this was changed to indicate that the proposed strategies are preferable to other alternatives. Did the Agency conduct analysis to justify this assertion. If so, when was it conducted, was it made available to the intra- and interagency work groups for review? Was there concurrence?

[1] Statement of James M. Jeffords, Ranking Member, Senate Environment and Public Works Committee. Pending EPA Proposal to Deregulate Mercury. December 3, 2003. [2] U.S. EPA, 2002. Control of mercury emissions from coal-fired electric utility boilers: Interim report including errata dated 3-21-02. Office of Research and Development. EPA-600/R-01-109. April. Also, U.S. EPA, 2004. Control of mercury emissions from coal-fired electric utility boilers. Office of Research and Development. http://www.epa.gov/ttn/atw/utility/hgwhitepaperfinal.pdf.

[3] See Administrator Leavitt's oral response to questions in the draft transcript of the April 1, 2004, hearing on National Ambient Air Quality Standards in the Senate Committee on Environment and Public Works. Specifically, Administrator Leavitt said:

The third fiction is that someone previously had indicated we could do it by as much as 90 percent. . [T]hey were misinformed. .. [A]s optimistic as I am about the mercury specific technology, particularly activated carbon injection, which I think is clearly the way we will get to large scale reductions, that it will not be adequately tested, nor widely deployable, until 2010. That is as close to a fact as I can provide you.

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Appendices