US ACC backs Bush on market-based mercury regulations

30 June 2004 16:56  [Source: ICIS news]

WASHINGTON (CNI)--The American Chemistry Council (ACC) has advised US environmental regulators to take a market-based approach to reduce mercury emissions at utilities and avoid measures that squeeze natural gas supplies.

 

ACC added its recommendations to nearly 600 000 public comments reportedly sent to the Environmental Protection Agency (EPA) this year as the Bush administration considers the merits of two separate proposals to reduce mercury emissions from power plants. The comment period ended yesterday.

 

ACC endorsed a proposal favoured by the White House that takes a more flexible “cap-and-trade” approach to reducing mercury in the air and water.

 

The system sets a mandatory, declining cap on emissions, but it allows cleaner utilities to trade “emissions credits” with plants that make fewer reductions. The plan would result in a nationwide mercury reduction of 70% by 2018, according to the Bush administration.

 

That approach is the alternative to a plan put into motion late in the Clinton administration that would require plants to install pollution controls known as “maximum achievable control technologies” (MACT). Individual plants would be required to begin meeting reduction targets by 2007.

 

The way in which the EPA goes about reducing emissions at power plants could affect not only electricity prices but the availability and cost of natural gas. The chemicals industry fears that stringent MACT standards would trigger a wholesale move by utilities to abandon coal-fired generation in favour of cleaner natural gas, with resulting supply and price pressures on the US petrochemical industry’s principal feedstock.

 

“EPA’s final decision regarding how to achieve mercury reductions needs to demonstrate that our nation’s continued fuel diversity will not be undermined,” the ACC said in comments signed by air-quality director Ted Cromwell.

 

ACC said: “EPA’s regulatory decisions should not nudge facilities toward fuel-switching as a means of meeting standards based on a particular fuel input. Rather, EPA should provide these facilities with reasonable and cost-effective control options, including market-based programs, for existing coal-fired capacity.”

 

After facing heavy criticism from environmentalists for shelving the Clinton plan and concerns in Congress that the Bush plan undermines the Clean Air Act, the agency decided late last year to provide an extended comment period and consider both approaches.

 

The EPA is expected to release a final rule early next year.

 

The member firms of Arlington, Virginia-based ACC account for some 90% of US basic industrial chemicals production capacity.

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