Enactment of the Senate's Clean Air Act amendments would hamper U.S. energy production, ARCO charged last week.
J.S. Morrison, ARCO executive vice-president, told a Senate energy committee hearing the bill's rules on nonattainment, air toxics, and permitting would hurt the oil industry's ability to find and produce oil and to develop and manufacture new products that are environmentally improved.
Meanwhile, Sen. Don Nickles (R-Okla.) complained that the bill has been crafted only with an environmental focus, without adequate regard for other equally valid national concerns such as international competitiveness, economic growth, energy security, inflation, and federal deficit reduction.
"Nor does the bill appear to demonstrate adequate regard for the technological and financial resources of the petroleum, electric utility, and automobile industries," Nickles said.
He plans to offer an amendment to strike the bill's provisions establishing carbon dioxide auto emission limits. He said the provisions are essentially a new corporate average fuel economy standard of 33 mpg by the 1996 model year and 40 mpg by the 2000 model year and should not be in the bill.
Nickles also plans to offer an amendment to revamp the program that would require permits for every air emission source. A state agency and the Environmental Protection Agency would have to approve the permits.
ARCO'S CRITICISM
Morrison said enactment of the Senate measure would freeze the status of petroleum technology, stifle the ability to innovate, eliminate flexibility to operate in the most economic way possible, and ultimately drive petroleum production and products manufacturing to foreign countries.
He said, "One of our chief concerns is that the provisions of the bill create a contradiction by mandating product changes while eliminating the flexibility needed to obtain permits to make those changes voluntarily or involuntarily.
"The restrictions even apply to changes that would improve air quality, such as the manufacture of reformulated gasoline."
The air toxics provisions would subject the exploration and production sector to costly controls "even though the remoteness of their operations may pose little, if any, threat to public health."
Morrison said, "The stringent and inflexible requirements of 'residual risk' based controls for refineries and chemical plants, coupled with an overly conservative enforcement could, according to the EPA, shut down all refineries and chemical plants in the U.S."
The bill would shift jurisdiction over Outer Continental Shelf emissions from the Interior Department to EPA, direct EPA to control those sources as if they were located onshore, and delegate authority to state agencies.
Morrison said those controls could cost industry more than $300 million during 5 years in the Gulf of Mexico alone "without any demonstration that OCS operations were adversely impacting onshore air quality."
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
