Adirondack Park Might Get Some Relief From Acid Rain

ALBANY, New York, May 13, 2004 (ENS) - The day that Adirondack Council Executive Director Brian Houseal has been waiting 10 years to see has arrived. Some electric power plants in upstate New York are installing pollution controls because it costs more to avoid cleanup of air emissions by purchasing pollution credits than it does to actually reduce the emissions.

“The price of a pollution allowance has doubled from just one year ago and has reached an all-time high," said Houseal. "It now costs more to avoid cleanup than it does to install a pollution control device on many of the power plants causing acid rain in the Adirondack Park.”

On May 7, the price of a federal sulfur dioxide pollution allowance reached $326. In January, the price was $228.50. One year ago, the price was $168, or about half of today’s price. When the program began in 1995, the price of an allowance was $56.

For the first time since the federal acid rain program with its sulfur dioxide trading system began in 1995, market forces are starting to work in favor of the environment.

Two recent developments in federal pollution controls have rebalanced the economics, Houseal said. “First, the final phase of the acid rain cuts required under the Clean Air Act Amendments of 1990 is limiting the total number of available allowances.

Second, the proposed Interstate Air Quality Rule is expected to be approved by the U.S. Environmental Protection Agency later this year," he said. "That would mean another 70 percent cut in sulfur dioxide pollution and a corresponding drop in the number of available allowances.”

New York’s six million acre Adirondack Park is experiencing the worst acid rain damage in the United States.

Acid rain occurs when the gases sulfur dioxide (SO2) and nitrogen oxides (NOx) react in the atmosphere with water, oxygen, and other chemicals to form acidic compounds. Sunlight increases the rate of most of these reactions. The result is a mild solution of sulfuric acid and nitric acid.

In the United States, about two-thirds of all SO2 and one-quarter of all NOx comes from electric power generation that relies on burning fossil fuels like coal, according to the U.S. Environmental Protection Agency.

The Adirondack Council has been pressing federal officials for a solution to the acid rain problem since the late 1970s. As a result of decades of acid rain, more than 500 of the Adirondack Park’s 2,800 lakes and ponds are too acidic to support their native life.

Thousands of acres of high elevation red spruce and fir forests have been wiped out. In addition, mercury contamination has been documented in more than 20 Adirondack lakes, making the fish unfit to eat.

“The basic idea behind pollution allowance trading is to use the laws of supply and demand to reward those who clean up their emissions faster and deeper than the law requires,” Houseal said.

Companies can find their own methods for reducing pollution, but they must turn in one allowance each year for each ton of sulfur dioxide they emit. The slow ones buy leftover allowances from the faster ones, until they can catch up to federal standards. But the price keeps rising.

“Over time, the EPA decreases the number of allowances it issues until the reduction goals are met. As a result, the price continues to climb. After awhile, the cost of avoiding cleanup gets too high,” Houseal explained. “Then, it makes more financial sense for the company to install pollution control equipment.

In most states, the Public Service Commission or Public Utility Control Board will force power company officials to choose the least costly option.

On January 13, 2004 securities brokerage house Merrill Lynch released a study that concluded, “We believe that allowances prices over $300/ton makes scrubbing a very attractive alternative and will be keeping a close eye on prices … We believe that any price over $300 makes construction of a scrubber economic.”

“We have seen announcement after announcement in the past couple of months from power companies whose emissions affect the Adirondacks,” Houseal said. “Each one touts the health benefits and environmental benefits of their decisions to clean up emissions. But for most of them, it was a simple question of dollars and sense.”

For instance, American Electric Power and Buckeye Power announced April 26 that they are investing in new environmental controls at the jointly owned Cardinal Power Plant in Brilliant, Ohio, about 500 miles southwest of the Adirondack Mountains in upstate New York.

The flue gas desulfurization scrubbers reduce sulfur dioxide emissions, a contributor to acid rain, by up to 98 percent. Early estimates are that the scrubbers will cost about $200 million per unit, said American Electric Power and Buckeye Power.

“This is a real turning point for the Adirondack Park in terms of acid rain,” Houseal concluded. “If the Interstate Air Quality Rule is finalized and goes into effect in early next year, we can expect an end to acid rain damage in the Adirondacks by 2010. Then, the long, complex process of recovery can begin. Stopping the damage is the first step.”