Bush Mercury Plan Rests on Flawed Analysis

By J.R. Pegg

WASHINGTON, DC, March 9, 2005 (ENS) - The U.S. Environmental Protection Agency’s economic analysis of its proposal to regulate mercury emissions from coal-fired power plants is seriously flawed and should be revised, the Government Accountability Office said Tuesday. Shortcomings in the analysis make it useless for comparing policy options for regulating mercury pollution, the nonpartisan investigative arm of the U.S. Congress concluded.

The EPA analysis presents a biased case for the Bush administration’s controversial plan to implement a mercury emissions trading plan, said the Government Accountability Office (GAO) report.

"Unless EPA conducts and documents further economic analysis, decision makers and the public may lack assurance that the agency has evaluated the economic trade offs of each option and taken the appropriate steps to identify which mercury control option would provide the greatest net benefits," the GAO said.

The report comes only a week before the agency is set to finalize the mercury rule under the terms of a court order and in the wake of recent report by the EPA’s Inspector General that found senior agency officials manipulated the development of the mercury rule in order to favor the emissions trading plan.

power plant

Coal-fired Abbott Power Plant in Champaign, Illinois (Photo courtesy ISGS)
The nation’s 1,100 coal-fired power plants emit some 48 tons of mercury each year, accounting for about 40 percent of the nation's mercury pollution, and are the largest remaining unregulated source of mercury emissions.

Exposure to mercury, usually through eating contaminated fish, can cause permanent harm neurological damage in humans and reproductive harm in wildlife.

Young children whose brains are still developing, and women of childbearing age are most at risk from the toxic metal.

In December 2003, the Bush administration offered two proposals – a cap and trade emissions trading plan and a regulation that would require power plants to install maximum available control technology (MACT).

Proposed MACT standards are supposed to reduce mercury emissions from coal-fired power plants to 34 tons nationwide by December 31, 2007. This would achieve a 29 percent reduction in mercury emissions, as compared with 2001 levels.

The cap and trade program would proceed in two phases, with the first phase achieving the proposed MACT control levels by 2010. The second phase would cap nationwide emissions of mercury at 15 tons by 2018.

It is no secret that the administration and the utility industry favor the emissions trading plan.

A cap and trade program does not require individual power plants to cut mercury emissions but instead compels the industry as a whole to cut the toxic emissions.

Proponents say it is more efficient and cheaper than forcing each plant to cut emissions at the same time, but the cap and trade plan is opposed by environmentalists, public health officials, state pollution control officers and some lawmakers.

Critics argue the Bush plan is too lenient and say a MACT standard is a more appropriate and effective form of regulation for mercury.

The Government Accountability Office report finds the EPA’s analysis failed to consistently analyze each option or provide a complete accounting of costs and benefits.

For example, the analysis of the cap and trade plan included benefits from the proposed Clean Air Interstate Rule – a separate regulation also announced in December 2003 and set to enter into effect this month.

That EPA analysis predicted annual net benefits of $55 to $68 billion, compared to predicted annual net benefits of only $13 billion from the MACT proposal.

But the EPA's analysis of the MACT standard did not included the benefits of the Clean Air Interstate Rule, the Congressional investigators found.

“As a result, EPA’s estimates are not comparable and are of limited use for assessing economic trade-offs,” the GAO report said.


A front loader piles coal at NRG's Dunkirk steam station in located on a peninsula of Lake Erie, in New York State. (Photo by David Parsons courtesy NREL)
The Congressional investigators also criticized the EPA for failing to fully estimate the human health benefits of mercury reductions and for not following principles of "full disclosure and transparency.”

The EPA’s written response to the report indicated “additional analyses” are being conducted and cited “time and resource constraints” for the different comparisons of the emissions trading and MACT proposals.

EPA spokeswoman Cynthia Bergman said the report unfairly characterized the “process as incomplete before the process has even finished.”

The rule is still under development, Bergman said, and will be the first “to require power plants to reduce their mercury emissions.”

No one argues the proposal is the first official attempt by the federal government to curb these emissions, but there is widespread disagreement about the approach the administration favors.

Environmentalists are expected to file suit to block the rule if the administration finalizes it, and there is growing pressure on the White House to scrap its mercury plan.

"The current EPA proposals are not going far enough to address this pressing public health issue, putting millions of Americans - especially women and children - at risk of serious harm,” said Maine Senator Olympia Snowe, a Republican.

The Snowe and 28 other senators sent a letter Monday to EPA Acting Administrator Steven Johnson urging him to strengthen the mercury rule.

"This report and our letter demonstrate the very real and continuing concern that the Bush administration's mercury proposal was written for and by the big energy companies," said Senator James Jeffords, a Vermont Independent. “Everything we have seen and heard from this administration amounts to delaying enforcement of the Clean Air Act and ignoring the resulting public health damage.”

power plant

American Electric Power's John E. Amos coal-fired power plant on the Kanawha River. (Photo by Tim Smith courtesy USACE)
But American Electric Power, the nation's largest electricity generator, says if the MACT option is chosen, "it will be nearly impossible for the industry to meet the EPA's compliance deadline, regardless whether it is the end of 2007 or the end of 2008."

A number of utilities have warned that reliability issues could arise from plants being taken off line to have emission reduction technology retrofitted; or plants being prematurely retired without sufficient time to build replacement capacity.

"Reducing mercury emissions is a tremendous challenge inasmuch as there are no commercially available technologies that are specifically designed to capture mercury emissions from the wide range of coal-fired units and variety of coal types used in the industry," says American Electric Power (AEP.

New technologies are being developed, but their reliability is still being evaluated in field studies, although AEP projects they should be ready in time for compliance with the second phase of the cap and trade program in 2018.

The GAO report comes as new evidence is published that mercury pollution from Midwest coal-fired power plants is contaminating ecosystems in New England.

Dr. Eric Miller, president of the Ecosystems Research Group in Vermont, coauthored the four year study, encompassing 21 peer reviewed papers. Appearing in the April 1 issue of the journal “Ecotoxicology,” it identifies nine New England hot spots where fish, birds, and mammals are contaminated with high levels of mercury.

Miller says his study illustrates that “atmospheric mercury deposition is much higher in rural areas of the New England than previously estimated by the U.S. EPA and other groups … and is linked to air arriving from areas with high mercury emissions."

Research reported by Miller found mercury contamination in the Bicknell’s thrush, a bird that inhabits forests high in the mountains far from potential aquatic sources of the toxic metal.

Metallic mercury and inorganic mercury compounds enter the air from mining ore deposits, burning coal and waste, and from manufacturing plants. It is deposited on soil and water where bacteria transform it into methylmercury, which then builds up in the tissues of fish. Larger and older fish tend to have the highest levels of mercury.

The findings of Miller's study demonstrate that “no ecosystem is sheltered from mercury,” said Felice Stadler, a policy specialist with the National Wildlife Federation, “and provides a compelling case for reducing mercury pollution today.”

“Every other industry in the United States is doing their part to reduce mercury pollution," Stadler said. "It is time to make power plants do the same.”