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DRAFT - FOR DISCUSSION PURPOSES

EFFECTIVE ENVIRONMENTAL STRATEGIES:

OPPORTUNITIES FOR INNOVATION AND

FLEXIBILITY UNDER FEDERAL

ENVIRONMENTAL LAW

June, 1993

Prepared By

Bradley I. Raffle, Esq.,
Hutcheson & Grundy L.L.P.

Houston, Texas

Debra F. Mitchell, Esq.,
Amoco Corporation

Chicago, Illinois

The authors also acknowledge the assistance of J.B. Ruhl, Eva Fromm and Charles E. Sullivan, Jr., Fulbright & Jaworski L.L.P.

DRAFT - FOR DISCUSSION PURPOSES

FOREWORD

The Yorktown Project (a joint study conducted by the United States Environmental Protection Agency and Amoco Oil Company at Amoco's Yorktown Virginia Refinery) demonstrated that it was possible for industry and government to work together to achieve more cost effective and more environmentally effective results than either group could achieve separately.

A key question from the Yorktown study was "why don't we reach these results more consistently and frequently?" The Project Workgroup identified several institutional obstacles. Of concern for this report is the continued use of a "command-and-control," "one-size-fits-all" approach to environmental legislation and regulation. This approach essentially dictates which pollutants and sources to control, to what extent, and which technology to use for a broad spectrum of industrial facilities. Innovation--one of America's greatest strengths--is neither encouraged nor rewarded in a command-and-control framework.

Environmental protection is complex and becoming more so. While early efforts to reduce pollution were successful, they did not deal with the unintended consequences of these activities. We now know our current, fragmented administrative approach is not well suited to addressing the fully integrated, multimedia environment in which we live and work. Yesterday's administrative methods are at times poorly equipped for dealing with today's (and tomorrow's) more subtle and complex environmental issues -- issues that cross national boundaries and physical air-water-land interfaces.

As a followup to the Yorktown Project, this report identifies opportunities for new approaches to environmental management under existing federal environmental statutes. The report identifies and discusses 17 such options. Four other options are identified that would also provide innovative approaches to managing complex industrial facilities, but would almost certainly require some new statutory authority. We are encouraged by the range of possibilities suggested by this limited analysis and hope this report will be a starting point for further discussion about opportunities for environmental innovation, new regulatory policy approaches and improved environmental performance.

We offer this report as a draft, a starting point for further discussions with the many people and organizations who share our concern about achieving real environmental protection and a healthy economy--state and federal regulatory agencies, Congress, the environmental community, business concerns, policy institutes, the environmental law profession, and many others. We look forward to working together with you.

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INTRODUCTION
1.1 Purpose and Scope .
1.2

The Yorktown Project .
1.3 Statutory Barriers to Regulatory Flexibility Under Federal

Environmental Laws

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THE CLEAN AIR ACT

12 2.1 Overview of the Purposes and Structure of the Clean Air Act ("CAA").. 12 2.2 Flexibility vs. Command and Control Under the CAA

13 2.2.1 Definition of "Source"

13 2.2.2 Emission Standards vs. Design Specifications

14 2.2.3 Emissions Trading

17 2.2.4 Market Incentives

18 2.2.5 Pollution Prevention

18 2.3 Specific CAA Program Analyses

19 2.3.1 Flexibility Under State Implementation Plans (SIPS) 1. Flexibility for Establishing SIP "Emission Limitations" 20 A. Generic Bubbles

20 B. Other SIP Economic Incentive Strategies ..

22 C. Trades Between Mobile and Stationary Sources 23 2. Flexibility Under the RACT Requirement in Nonattainment Areas

26 . Flexibility Under the CAA New Source Review Program 28 A. Pollution Control Exclusion

29 B. Fuel and Raw Material Switching

33 C. Emissions Increase

33 D. Stationary Source

36 E. Plant Wide Emissions Caps

38 4. State Flexibility in SIP Development

38 2.3.2 Flexibility Under Section 112 of the Clean Air Act

39 1. Emissions Averaging to Achieve MACT Compliance

40 2. Residual Risk Source Category Deletions

44 2.3.3 NSPS Innovative Technology Waivers

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DRAFT - FOR DISCUSSION PURPOSES

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THE CLEAN WATER ACT (CWA)
3.1 Overview of CWA Pollutant Discharge Standards

3.1.1 Point Source Discharges ..
3.1.2 POTW Pretreatment Standards
3.1.3 Water Quality Standards
3.1.4 Anti-Backsliding

3.1.5 Antidegradation
3.2 Variance and Modification Provisions

3.2.1 Section 301(n) "FDF" Variances
3.2.2 Section 301(c) Economic Capability Modifications
3.2.3 Section 301(g) "No Unacceptable Impact" Modifications
3.2.4 Section 301(k) Innovative Technology Variances
3.2.5 Section 302(b) Water Quality-Based Modifications

3.2.6 The Bubble Concept Under The CWA
3.3 Flexibility Under CWA ..

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THE RESOURCE CONSERVATION AND RECOVERY ACT (RCRA)
4.1 The Current Hazardous Waste Regulatory Structure .
4.2 Flexibility vs. Command and Control Under RCRA

4.2.1 Statutory Flexibility

4.2.2 Regulatory Limitations
4.3 Opportunities for Flexibility Under RCRA

4.3.1 Definition of Solid Waste/Recycling
4.3.2 Definition of Hazardous Waste
4.3.3 Remediation
4.3.4 Permitting
4.3.5 Innovative Technologies

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MULTIMEDIA IMPLICATIONS
5.1 Rulemaking Consistency Within the CAA, CWA and RCRA Programs
5.2 Consideration of Cross-Media Impacts In Media-Specific Rulemaking

Under the CAA, CWA and RCRA
5.3 Providing Incentives For Multimedia Approaches

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