Dirty Old Grandfathered Plants: The Clean Air Act's Lung-Charring Loophole

by Fred Richardson and Andrew Wheat

Texas governor -- and probable presidential candidate -- George W. Bush rarely agrees with Texas environmentalists. But, at a time when Texas is displacing California as the nation's smog capital, both Bush and the environmentalists say people should judge the governor's environmental record by his air policies.

"The air quality in Texas this year has been worse than California's," says Jayne Mardock, director of the Washington, D.C.-based Clean Air Network (CAN). Texas -- home of the U.S. oil and petrochemical industries -- boasts the worst ozone non-compliance record in the country, Mardock says. "I don't understand how your big sources [of air pollution in Texas] are getting off the hook the way they are."

Local environmentalists have a hunch about what fouled up the air in a state that leads the nation most years in toxic air emissions. In the early 1970s, the Texas legislature followed the federal lead by exempting then-existing industrial facilities from new smokestack permits that the state imposed when it implemented the federal Clean Air Act. The rationale behind such so-called "grandfather" exemptions was that these dirty old facilities would be replaced by cleaner new plants. Three decades later, the assumption that industry voluntarily would spend the money needed to replace these filthy old plants looks naive.

"This grandfathered problem is a huge national issue," says Neil Carman, a nationally recognized expert on the matter who directs the Clean Air Program of the Lone Star Chapter of the Sierra Club. "I've communicated with people all over the country on this for six years and all of them have these kinds of problems," Carman says. "These plants operate at the fringe of the law. If they don't have a state permit, it's like there is no emissions speed limit. It's as if you're barreling along in a 1965 truck and a cop pulls you over and you say, 'It's all right, officer, I'm grandfathered.'"

Governor Bush and the Texas legislature have responded to this problem by inviting grandfathered polluters to voluntarily embrace modern pollution-control limits. They call their voluntary approach the Clean Air Responsibility Enterprise (CARE) program.

"The governor regards this as his crowning environmental achievement," says Debbie Head, a Bush spokesperson. "This is something that no other state has tackled and it is emblematic of the governor's belief that government should work with industry, not against it."

In contrast to likely presidential contender Al Gore, who wrote a book on the environment and has racked up six years of policies in the Clinton-Gore White House, Bush cut his teeth in the oil industry, never holding public office before becoming governor in 1995. Few defining green moments characterized Bush's first gubernatorial administration, which winds up this year. Except for the CARE program, Bush has kept a low profile on the environment, letting his appointees to the Texas Natural Resources Conservation Commission (TNRCC) [see "Businesslike Appointees"] lead on contentious environmental issues.

Texas Clean Water Action's Dwayne "Sparky" Anderson gives Bush a D- for his overall environmental record. "An F would be for an all-out attack on the environment and public participation," Anderson explains. "A D grade recognizes a more selective, methodical attack benefitting the regulated community."

On his trademark environmental issue, however, Bush presents himself as a strong leader who is leading the state -- and its smokestack industries -- out of the smog. "You finally had a governor who stood up and got Texas industry to respond," Bush says, responding to criticism of his CARE program. "They didn't have to respond, and I led, and I said, 'Respond,' and they did." 

Granny Dumping

In contrast, environmentalists characterize Bush's CARE program as the latest indulgence of the biggest grandfathered air polluters. Nationwide and in Texas, environmentalists are just beginning to quantify the scale of the problem. A 1997 report by the Clean Air Network, "Poisoned Power," concluded that, "Of the approximately 1,000 [U.S.] power plants operating today, 600 were built before modern pollution-control regulations went into effect in the 1970s." CAN's Feliz Stadler says that these old plants often are allowed to emit up to 10 times as much harmful pollutants as newer power plants.

The Sustainable Energy and Economic Development (SEED) Coalition issued another report last year, "The Granddaddy of All Loopholes," which tracked 66 grandfathered power plants in Texas (11 percent of the old plants studied in the CAN's national study). The SEED study found that these clunkers emit 274,694 tons of air pollution a year, or 28 percent of state power plant emissions, according to Peter Altman, the director of SEED's Texas office.

Although utilities were thought to be the single-biggest grandfather polluters, the TNRCC, which collects Texas emissions data, never fully accounted for all the grandfathered pollution in Texas (the agency promised to release such a report this fall). Stepping into the breach, the Sierra Club and the Galveston-Houston Association for Smog Prevention (GHASP) obtained raw agency data and crunched the numbers themselves. In April, they released a ground-breaking report, "Grandfathered Air Pollution: the Dirty Secret of Texas Industries."

"Grandfathered Air Pollution" found that 1,070 of Texas' largest industrial plants are grandfathered from compliance with modern pollution-control regulations that protect public health.

These plants emitted close to one million tons of harmful EPA-monitored "criteria" pollutants in 1995, the most recent year for which data is available. These plants -- primarily owned by the utility, oil and petrochemical industries -- produce 37 percent of all industrial emissions in Texas, including twice as much smog-forming nitrogen oxide as the state's 9 million cars.

"The failure of Texas industries [to reduce grandfathered emissions to a level protective of public health] after almost three decades," the report concludes, "makes it likely that state officials will have to force the issue."

Reactions of key state officials to the report, however, suggest that they have no intention of changing their age-old policy of indulging the grandfathers.

Belittling the report in a press release, the chair of the House environmental committee, Representative Warren Chisum, R-Pampa, said, "I understand that environmental groups sometimes intentionally scare people so they can raise money."

Campaign Coughers

Inspired by Representative Chisum, Texans for Public Justice, a group that tracks money in Texas politics, analyzed state political expenditures by grandfathered polluters. A June report, "Dirty Air, Dirty Money," found that politicians are the real alchemists turning grandfathered air pollution into money.

"Dirty Air, Dirty Money" revealed that the political action committees of just the worst 30 worst grandfathered polluters, known as the "Dirty 30," spent more than $2.5 million on Texas politicians in 1996 and 1997. Grandfathered air polluters also kept an army of 359 lobbyists at their disposal in 1997, enough hired guns to have one twist each arm of every state legislator.

Governor Bush took more than $193,500 in contributions of $500 or more from grandfathered air polluters since 1995.

The Office of the Governor noted in response that the money cited in the report represents less than 2 percent of the governor's record-breaking war chest. In contrast, "Dirty Air, Dirty Money" found that 21 percent of all the money raised by Representative Chisum came from grandfathered polluters, with another 9 percent of his money coming from grandpa lobbyists.

Politically Painless Options

The Texas case of politicians indulging the polluters who contribute to their campaigns helps explain what happened to the air in the United States. As a result of so many years of air emissions by industrial polluters and the nation's growing fleet of vehicles, many urban areas are running into natural and regulatory limits. A 1996 Natural Resources Defense Council study, "Breathtaking: Premature Mortality Due to Particulate Air Pollution in 239 American Cities," estimated that particulate air pollution causes some 64,000 premature U.S. deaths a year. Like many predators, air pollution preys on the weakest: those who are very young, very old or who suffer from respiratory ailments.

Too many years of freewheeling air pollution also are triggering EPA regulatory limits. EPA regulators monitor smog in urban areas for a smorgasbord of harmful pollutants, forcing states to draw up compliance plans if they have cities that flunk federal standards.

These "state implementation plans" often trigger painful political choices by forcing state officials to attack one or more pollution sources, says EPA air enforcement attorney Charles Garlow. Wary of "motor voters," politicians do not want to crack down hard on vehicle emissions. Nor do they want to monkey with smokestack industries that contribute generously to their campaigns. "They will try to find a way to do it painlessly," Garlow says. But many urban areas have run out of time for painless solutions.

Back in the heart of Texas, the Bush administration and the legislature have been hatching politically "painless" responses to the gaping grandfathered air pollution loophole. Draft recommendations under consideration by a House subcommittee on grandfathered polluters include such polluter-friendly provisions as:

• An amnesty program for polluters who broke state law by not disclosing that they retrofitted a grandfathered facility and, therefore were supposed to have it permitted by the TNRCC;
  
  
• Tax abatements to shift the cost of pollution controls from polluters to regular taxpayers;
  
  
• "Streamlined" CARE applications that minimize health effects reviews and curtail public hearings and involvement; and
  
  
• Pollution-trading schemes, whereby facilities that reduce their emissions beyond what is required get brownie points that can be redeemed in the form of excessive pollution elsewhere.

The government's exclusive focus on voluntary industry responses has won the praise of polluters. "Houston Industries agrees with Governor Bush," says the internet website of this utility, which has contributed more money to the governor than any other grandfathered polluter. "The preferred method for dealing with grandfathered emissions, and perhaps many other environmental issues as well, is a well-crafted voluntary program that achieves environmental improvement but allows flexibility for businesses."

That is just hot air, say public interest groups. They note that grandfathered polluters squandered the 27 years that they had to voluntarily clean up their acts and that the emission-reduction pledges lined up under the governor's CARE program amount to just 2.5 percent of the emissions spewed by the state's grandfathered facilities. "Texas' grandfathered polluters have been on a 27-year bender," says Texans for Public Justice Director Craig McDonald. "Now they must be forced to comply with the Clean Air Act at their own cost. The public has paid too much."

Noting that half of Texas' population resides in areas that either flunk federal ozone standards or are in danger of flunking, the Sierra Club's Neil Carman says, "What they're really saying is, 'We don't care about raising your smog levels and increasing the body count.' I'd give Bush an F for his environmental record."

Differing again with environmentalists, Bush gives himself stellar marks. "Am I proud of my environmental record as governor?" Bush asked, responding to media questions about campaign contributions from grandfathered polluters. "You bet I am, and I look forward to running on it."

Fred Richardson and Andrew Wheat work for Texans for Public Justice, a non-partisan, non-profit policy and research organization dedicated to corporate responsibility.