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Saturday, January 31, 2004 - Page updated at 12:00 A.M.
Mercury rules proposal bears mark of industry
By Eric Pianin
The three approaches that the administration published for public comment would regulate for the first time airborne emissions of mercury, which can enter the food chain and cause developmental damage to infants whose mothers eat mercury-tainted fish.
A side-by-side comparison of one of the three proposed rules and the memorandums prepared by Latham & Watkins one of Washington's premier corporate environmental law firms shows that at least a dozen paragraphs were lifted, sometimes verbatim, from the industry suggestions.
Environmental Protection Agency officials dismissed the matter as largely an interagency snafu that had little to do with shaping the centerpiece proposal for requiring power plants to reduce mercury emissions 70 percent by 2018. They said the law-firm language that turned up in the proposed rule published in the Federal Register related to an alternative proposal that the administration doesn't support.
"That's not typically the way we do things, borrowing language from other people," said Jeffrey Holmstead, head of the EPA air-policy office. "But it came to us through the interagency process."
Latham & Watkins was among the law firms and utility-industry groups that lobbied the administration last year during deliberations over mercury rules in the Clean Air Act. The firm represents Cinergy and other utilities and energy companies with a major interest in the outcome of the rulemaking. Holmstead, an assistant EPA administrator, and his chief counsel, Bill Wehrum, worked for Latham & Watkins before joining EPA.
There is nothing unusual about industry groups peppering government agencies with position papers and recommendations. Indeed, lawyers for Latham & Watkins served on an EPA mercury advisory group and submitted two detailed memos one dated March 8, 2002, that dealt with the challenges of regulating different grades of coal, and the other, dated Sept. 4, 2003, that outlined a number of regulatory legal theories. However, some former EPA officials said it's rare for the agency to insert large chunks of an industry analysis into a proposed rule.
"The regulations are supposed to be drafted by the staff the people in the science program and regulatory branches," said Robert Perciasepe, who headed the EPA air-policy office during the Clinton administration. "I think it would be inappropriate" for the agency to borrow heavily from an industry memorandum, he said, "unless it was from a government contractor."
Martha Keating, an air-toxins scientist with the Clean Air Taskforce and a former EPA employee, was the first to discover the similarities between parts of the proposed rule and the law firm's memos. "It just illustrates the inside track the industry groups and some of these law firms have with the administration," she said.
Claudia O'Brien, lead writer of the Latham & Watkins memos, said it was "gratifying" that EPA found the firms' analysis persuasive, but "we didn't ask EPA to cut and paste our analysis into their preamble."
"It was a long rulemaking process, and it's a big document done under a tight time frame," she said. "If they found an analysis persuasive, they adopted the analysis."
Instead, the administration has embraced a mandatory "cap and trade" program, similar to the program used to combat acid rain. The plan, intended to reduce mercury emissions by nearly 70 percent by 2018, would let utilities buy emission "credits" from cleaner-operating plants to meet an overall industry target without having to install new scrubbers on every plant.
In order to comply with a consent agreement, EPA also proposed a modest MACT standard to reduce mercury emissions by 29 percent by 2008 although Holmstead said that was not the administration's preference.
A third proposal would use a more novel legal interpretation of the Clean Air Act to launch a cap-and-trade program. In describing this alternative, EPA borrowed heavily from one of the Latham & Watkins memos. According to Holmstead, the law firm's language was part of the public record and was passed along to EPA by the White House budget office and the Energy Department.
EPA used the other memo to describe at length plans to rank and regulate coal in "subcategories" based on the amount of mercury pollution they emit.
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