Message-ID: <4617517.1075840267511.JavaMail.evans@thyme> Date: Tue, 17 Oct 2000 09:15:00 -0700 (PDT) From: cdemuth@aei.org To: harvey.golub@aexp.com, neill@alcoa.com, jricketts@ameritrade.com, amworks@aol.com, blountwm@aol.com, hertogrz@bernstein.com, bk@caxton.com, hcrow@crowholdings.com, john_snow@csx.com, wsstav@dow.com, henwendt111@earthlink.net, klay@enron.com, mfleischer@ffca.com, tfriedman@fflpartners.com, jcannon@geneva.com, robeg@kkr.com, ed.rust.atei@statefarm.com, john.w.rowe@ucm.com, martin_koffel@urscorp.com, george.priest@yale.edu Subject: S m o k e a n d S m e a r s Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: "Christopher DeMuth" X-To: harvey.golub@aexp.com, paul.o'neill@alcoa.com, jricketts@ameritrade.com, amworks@aol.com, blountwm@aol.com, hertogrz@bernstein.com, bk@caxton.com, hcrow@crowholdings.com, john_snow@csx.com, Wsstav@dow.com, henwendt111@earthlink.net, klay@enron.com, mfleischer@ffca.com, tfriedman@fflpartners.com, jcannon@geneva.com, taylor@interenet, robeg@kkr.com, ed.rust.atei@statefarm.com, john.w.rowe@ucm.com, martin_koffel@urscorp.com, george.priest@yale.edu X-cc: X-bcc: X-Folder: \Kenneth_Lay_Dec2000\Notes Folders\Notes inbox X-Origin: LAY-K X-FileName: klay.nsf S m o k e a n d S m e a r s Christopher DeMuth and Steven Hayward October 17, 2000 In the closing weeks of the presidential campaign, Vice President Gore is= =20 returning to the theme that Governor Bush=02=07s Texas has become an abysma= l place=20 to live. It is a hard case to make=02=05Texas is today the fifth fastest gr= owing=20 state and fifth in net influx of Americans from other states, and Mr. Bush = is=20 one of the nation=02=07s most popular governors. Mr. Gore=02=07s earlier attacks on the governor=02=07s education record we= re set aside=20 following the July release of a comprehensive RAND study showing that Texas= =20 has become the nation=02=07s top state in achievement test scores. His subs= equent=20 assertions about the number of Texans lacking health insurance seem to have= =20 fizzled as well (it turns out that the number of uninsured has been falling= =20 in Texas while rising in the nation as a whole). That leaves environmental= =20 quality, where the Vice President and his ad writers have leveled a fusilla= de=20 of dramatic allegations about increasing pollution in Texas=02=07s cities a= nd=20 streams. Environmental quality presents rich opportunities for misleading data and= =20 rhetoric. Measuring air and water pollution involves a host of variables: o= ne=20 can measure pollution by emissions or by the quality of the air and water,= =20 and measurements of air and water quality depend on the placement of=20 monitors, the use of *peak* versus average levels, and adjustments for=20 population exposure and for the widely differing health and amenity effects= =20 of different kinds of pollution. Rankings among states are much more=20 problematic than rankings of school performance or health care, because all= =20 states that are more urbanized and industrialized have higher pollution=20 levels. Texas accounts for 60 percent of the nation=02=07s petrochemical=20 production capacity and 25 percent of oil refining, and it is the only stat= e=20 with two metropolitan areas (Houston and Dallas-Ft. Worth) among the nation= =02=07s=20 top ten. Measured by simple gross quantities, Texas, California, and New=20 Jersey will have *more pollution* than most other states under any=20 circumstances; the rest of us can enjoy the products without having to both= er=20 so much with the pollution-control challenges. Mr. Gore=02=07s charges exploit these opportunities to the hilt, combining= =20 misleading statistics with a few outright fabrications to create an=20 impression that bears little relationship to reality. The charges are,=20 however, easy to debunk, and it is surprising that they been reported with= =20 little scrutiny by a media that has otherwise grown wary of the Vice=20 President=02=07s loose ways with facts. The Gore campaign=02=07s favorite charge is that Houston has passed Los An= geles=20 to become *the smog capital of the United States,* *No. 1 in air pollution,= *=20 and *the dirtiest city in the nation.* (We will ignore Democratic National= =20 Committee Chairman Joe Andrew=02=07s claim that Houston has become *the dir= tiest=20 city in the world,* which was evidently uttered in a fit of enthusiasm for= =20 the latest party line.) The charge is false. According to the U.S.=20 Environmental Protection Agency, air quality in Houston is improving and is= =20 unambiguously better than in Los Angeles, and is also better than in many= =20 other cities. The Houston charge is based on 1999 city data on ambient levels of ozone= =02=05one=20 of six *criteria* air pollutants regulated under the national Clean Air Act= =02=05 as measured by numbers of days of *exceedences*of the EPA=02=07s national= =20 standard. Ozone levels are highly sensitive to weather conditions, especial= ly=20 temperature. They have been essentially flat in Houston in recent years (an= d=20 other southern cities such as Atlanta), but they fell sharply in Los Angele= s=20 in 1999 due to unusually cool summer weather. As a result, Houston topped L= os=20 Angeles (and all other cities) in ozone exceedences=02=05but its air qualit= y was=20 nevertheless better than LA=02=07s. Houston=02=07s ozone level was 10 perce= nt higher=20 than in Los Angeles, but its particulates level was 20 percent lower=20 (particulates are the other major component of *smog,* and according to the= =20 EPA a far more serious health risk than ozone; there is no separate measure= =20 of *smog*). Houston did vastly better than LA for three of the four other= =20 Clean Air Act pollutants: 63% lower for nitrogen oxides, 64% lower for carb= on=20 monoxide, and 78% lower for lead (the cities=02=07 sulphur dioxide levels w= ere=20 identical). While Houston was out of compliance with EPA=02=07s national st= andard=20 for only one pollutant, ozone, LA was out of compliance for three: ozone,= =20 particulates, and carbon monoxide. We hasten to add that we are comparing Houston with Los Angeles only to=20 demonstrate the falsity of Mr. Gore=02=07s allegation. If Houston is not nu= mber=20 one in air pollution, neither is it number two or even number six (Houston = is=20 the nation=02=07s sixth largest metropolitan area). According to the EPA A= ir=20 Quality Index, which aggregates levels of all six air pollutants and weight= s=20 them according to the health risks of each, air quality in Houston is bette= r=20 than in ten other metropolitan areas. Houston also bests ten other cities o= n=20 a separate EPA index of ozone alone. (These data are for 1998, the most=20 recent year available; rankings for 1999 and 2000 will probably be similar.= ) A related charge, and particularly egregious falsehood, is Vice President= =20 Gore=02=07s assertion that Governor Bush *made key air pollution rules in T= exas=20 voluntary.* In 1999, Governor Bush signed two laws concerned with=20 *grandfathered* sources of air pollution. Under the Clean Air Act and almos= t=20 all state air pollution programs, old power plants and industrial facilitie= s=20 are subject to much more lenient emissions standards than new ones. It is a= =20 serious loophole that has been bad for the economy as well as the environme= nt=02=05 inducing firms to maintain old facilities (both less efficient and more=20 polluting than new ones) for longer then they otherwise would, and leading = to=20 protracted litigation over the difference between renovating an old facilit= y=20 and building a new one. Under the 1999 legislation, Texas became one of the= =20 first three states to begin closing the loophole through tighter standards= =20 for old facilities. The step was praised by environmental groups and helped= =20 coax Mr. Gore, who had not previously confronted the problem as a legislato= r=20 or Vice President, to propose a national program of his own for old power= =20 plants. (Mr. Bush has also advanced a national proposal.) But there was a wrinkle in the Texas initiative: the law covering utilitie= s=20 enacted mandatory standards (which will result in huge reductions in power= =20 plant emissions over the next three years), but the law covering industrial= =20 facilities enacted a *voluntary* compliance schedule coupled with increased= =20 fees for noncompliance. There is legitimate disagreement over just how=20 effective the fee-incentive program will turn out to be; there have been so= me=20 initial reductions in the first year, apparently of about 25,000 tons of ai= r=20 pollution, but the program is too recent to estimate likely future=20 reductions. What is not in dispute is that both the *mandatory* and=20 *voluntary* prongs of the Texas program constitute an extension and=20 tightening of air pollution controls=02=05and an innovation that powerful b= usiness=20 opposition has thwarted at the national level and in most states. Nor is it= =20 disputed that the use of economic incentives rather than regulatory mandate= s=20 may significantly improve the effectiveness of our environmental laws and a= re=20 worth a try; indeed, that is precisely the approach of the Vice President= =02=07s=20 national proposal for old utilities, which consists not of mandatory=20 standards but *voluntary* tax incentives. For Mr. Gore=02=05a self-described environmentalist and reformer=02=05now = to turn on=20 the Texas reforms and describe them as having weakened existing pollution= =20 standards (*Bush made key air pollution rules voluntary*) is an act of=20 striking mendacity. His latest campaign ad adds a particularly ruthless=20 twist: it couples the *made voluntary* fabrication with the Houston air=20 quality fabrication to produce a triple falsehood=02=05that air pollution g= ot=20 worse in Houston because Governor Bush weakened air pollution standards. The Vice President=02=07s most plenary change is that, under Governor Bush= , Texas=20 has become *last among all states in air quality,* *No. 1 in industrial air= =20 pollution,* and *No. 3 in water pollution.* Although the Gore campaign has= =20 occasionally relied on newspaper articles and rankings produced by=20 environmental groups, its primary and only official source for these claims= =20 is an EPA compilation called the Toxics Release Inventory. The TRI, however= ,=20 is not a useful measure of air or water pollution and is not a measure of= =20 environmental quality at all. Instead, it measures *releases* of certain=20 substances that the EPA classifies as toxic=02=05and *releases* includes no= t only=20 those that pollute the air and water but also those that are properly=20 disposed of through EPA-approved hazardous waste management and water=20 treatment practices. The agency=02=07s annual TRI reports warn that its est= imates=20 *reflect releases and other waste management activities of chemicals, not= =20 exposures of the public to those chemicals,* and that they are not sufficie= nt=20 to determine exposure or harm to the environment or public health. So the TRI numbers cannot possibly support Mr. Gore=02=07s assertions. But= even=20 in their own terms, they tell a story that is the opposite of what the Vice= =20 President would like voters to believe. Texas has always been near the top = of=20 the various TRI ratings, reflecting the state=02=07s huge share of national= =20 petrochemical and refining capacity. But it did not become No. 1 in the=20 overall ranking under Governor Bush, as the Gore campaign insinuates. Rathe= r,=20 Texas was No. 1 under Mr. Bush=02=07s predecessor, Democratic Governor Ann= =20 Richards, and it has improved significantly since he took office. The EPA= =02=07s=20 1999 release of TRI data through 1997 noted that *Texas, the state with the= =20 largest production-related waste managed in 1997, was also the state=20 projecting the largest absolute reduction . . . over the next two years.* T= he=20 data for 1998, released earlier this year, shows Texas leading the nation i= n=20 reduction of toxic releases=02=05with 43 million pounds eliminated between = 1995=20 (the first year of Mr. Bush=02=07s governorship) and 1998. The new report a= lso=20 finds Texas leading all other states in energy recovery and waste treatment= ,=20 and second in on-site recycling. Due in part to these improvements, Texas h= as=20 now dropped from first to fifth place in the TRI composite index. Environmental quality in Texas has improved under Governor Bush according = to=20 virtually every useful measure. Here are a few selected statistics of our= =20 own: According to the Texas Natural Resources Conservation Commission,=20 industrial air emissions in Texas fell 11% from 1994 through 1998. Accordin= g=20 to the EPA, ambient air quality in Texas improved for five of the six=20 national air pollutants for the same period, all Texas cities but one now= =20 meet the national standards for four or more of the six pollutants (the=20 exception, El Paso, due to cross-border pollution from Mexico), and half of= =20 Texas=02=07s cities are now below the national average for all six pollutan= ts.=20 According to the EPA, Texas=02=07s proportion of rivers and streams classif= ied as=20 *impaired* is better than the national average. And according to=20 Environmental Defense, which prepares a comprehensive index of water qualit= y=20 aggregating 15 Clean Water Act pollution measures, Texas is not *No. 3 in= =20 water pollution* but No. 37=02=05its overall water quality is better than i= n 36=20 other states. Governor Bush does not get all of the credit for this record; it is also d= ue=20 to the progressive tightening of national environmental standards and,=20 perhaps even more, to progressive improvements in production technologies.= =20 But he gets a share of it, due to his own decisions and those of his=20 appointees. And in several critical areas of environmental policy, he has= =20 been a national leader=02=05closing the old plants loophole, redeveloping= =20 *brownfields* laid waste by the perverse incentives of the Superfund progra= m,=20 providing positive incentives to businesses for *pollution prevention* and = to=20 private landowners for conservation and species protection, and improving t= he=20 financing of public parks and recreation areas. *Texas-style environmental= =20 regulation,* which the Gore campaign invites us to fear, is, like Texas-sty= le=20 school reform, something Americans can look forward to. _____________________ Mr. DeMuth is president of the American Enterprise Institute in Washington,= =20 D.C. and Mr. Hayward is a senior fellow at the Pacific Research Institute i= n=20 San Francisco. Both are policy advisers to Texas Governor George W. Bush. - Enviro.wpd