United States 10019855
Environmental Protection
Agency
Washington DC 20460
Assessing and Managing
Risks
in the Real World
Address by
Lee M. Thomas
Administrator
U.S. Environmental Protection Agency
be/ore the
National Petroleum Refiners Association
San Antonio, Texas
March 25, 1985
U.S.
401 M Street, s.W. "
Washington, DC 20460
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It is a pleasure for me to be here this morning to share
with you my thoughts on the state of our environment
and how we go about protecting it. During the 'two years
or so that I have been with EPA, I have learned a great
deal about the'complexity of this process.
Managing an agency such as EPA is a tremendous
challenge. On the one hand, we have a clear mission
from Congress and the support of all Americans. On the
other, we must be able to see beyond that mission in its
abstract sense to appreciate the impact of our decisions.
It is not uncommon, in making regulatory decisions, to
find ourselves between the proverbial rock and hard
place. For every issue, there seems to be a corps of vocal
advocates and a cadre of equally vocal opponents. The
problem is that these groups tend to change from issue
to issue. And, of course, the issues themselves never
seem to end.
Now I know why Bill Ruckelshaus had a smile on his
face the day he handed me the keys to the
Administrator's office.
The rulemaking process at EPA today is really a series
of tradeoffs. There is a general realization among all who
actively participate in this process—environmentalists,
the regulated community, and even the media — that we
must find an optimum pathway to our goals. That
pathway must ensure that we continue to enjoy
economic prosperity and growth, but not at the expense
of our environment.
We achieve these objectives by carefully assessing the
risks we face as an industrial society,.and managing
those risks effectively.
To assess the risk at hand, we gather as many facts as
possible about the problem. This is a scientific process
in which experts thoroughly review the extent of our
knowledge and carefully design and conduct
experiments to expand that knowledge. This scientific
process gives us a basis for understanding the risk we
face. It tells us what the risk is, what we know about it,
and who is exposed.
Then comes the hard part—risk
management—deciding what to do about a problem once
we are sure there is one. Based upon our assessment of
the nature and extent of the risk, we must devise a way
of dealing with it. The options before us include such
things as new regulations, additional reporting
requirements, new outreach programs or some
combination of these and other approaches.
Our recent decision to take most of the lead out of
gasoline is a very important example of how the risk
assessment/risk management process works. The
increasing evidence of the injury done to children by
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airborne lead is undeniable. We know lead threatens
hundreds of thousands of children, particularly in the
inner city.
We are not alone in our assessment of this risk. The
Centers for Disease Control recently lowered the level of
lead in blood it says constitutes serious toxicity. And,
beyond the problem with children, there are new
indications emerging that lead may increase high blood
pressure in adults.
Last month, I signed regulations that will phase down
the lead content of gasoline by more than 90% this year.
The process will take place in two steps. And by January
1986, lead in gasoline will be limited to no more than
one tenth of a gram per gallon.
As a result, we will substantially reduce the
concentration of airborne lead, 80% of which comes
from gasoline. We hope our requirements will help to
equalize the price of leaded and unleaded gasolines.
This, in turn, should minimize any financial incentive
for motorists to put leaded fuel in cars designed for
unleaded, thereby increasing the emission of other
pollutants as well as lead.
Misfueling has been a problem in the past. We
estimate as many as 16% of all vehicles designed to use
unleaded gas are fueled illegally with cheaper leaded
gas.
Our standard is a stringent one. But it is justified by
the substantial benefits to be gained by all Americans.
And we are convinced that the refining industry can
meet the standard.
Bear in mind, this may not be the end of the line for
the lead-in-gasoline issue. We are looking closely at
whether lead should be banned entirely as a gasoline
additive.
The rule we have adopted will provide net benefits of
more than a billion dollars a year when we compare
health-related savings and lower auto maintenance costs
with increased production costs. And it is very possible
that we have understated the full benefits of lead
reduction.
If new data on the relationship between blood lead
and blood pressure hold up, the medical value of our
standard will increase by several billion dollars per year.
This is a highly cost-effective regulation.
I am aware that implementing this rule will bring with
it a certain amount of disruption to the refining industry.
Our objective, of course, is to substantially cut lead
levels in our air, and to do it as soon as possible. We
want to work with your industry to accomplish this goal
as efficiently as possible.
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To ease the potential for capacity problems, I am
announcing today that I have signed final rules to allow
the banking of lead rights. These rules will extend the
successful lead trading program through 1987, and
would give refineries more flexibility in meeting the new
standard without reducing its effectiveness.
Banking will allow refiners to cut lead use now, ahead
of schedule, and use that lead later in meeting the new
standard. We estimate it will save refiners more than
$200 million without increasing the amount of lead in
gasoline. Our banking provisions are retroactive to
January 1, 1985. We will give you full credit for the
reductions you have already achieved.
A related risk-management decision of importance to
your industry deals with achieving the 1987 attainment
date for ozone extension areas, which embrace about
half of the country's population. We are convinced the
lead rule will help, as will expanded inspection and
maintenance programs.
They are not going to solve the entire problem,
however, and we are exploring alternatives. One
problem is that many vehicles are not meeting our
evaporative emission standards. This increases
hydrocarbon loadings and thereby ozone. As much as
one-half of the hydrocarbons come from motor vehicles,
and now up to half of those are evaporative emissions.
Two factors may be contributing to this situation.
First, controls may not be as effective as we had
expected. They may need improvement. Second, the
volatility of gasoline is higher than that of the test fuels
used to certify vehicles. We are exploring a range of
options.
We are releasing test results and soliciting public
comments, in preparation for workshops as early as this
summer. At the same time, we are sensitive to the
interaction between our new lead rule and the costs of
volatility control.
Other options for vapor recovery are also bci.'ig
studied, including controls at service stations and on
vehicles. We've received many comments on a study
released last fall. Not surprisingly, those in the
petroleum industry think onboard controls make sense,
while the auto manufacturers find a lot to like about
Stage II controls at service stations.
There are a number of other EPA programs with
important implications for the refining industry where
we must apply our risk assessment/risk management
skills. I will be very honest with you. In some areas, we
are moving in the right direction. We have sound,
obtainable objectives. In others, I'm not as certain.
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I've already cited our lead regulation as one I believe
is a sound product of the risk assessment/risk
management process. It is one we initiated based upon
reliable data, thorough analysis, and careful assessment
of costs and benefits.
We cannot always be sure that the impact of our
efforts is so clearly positive. This is particlarly true
when we are carrying out a statutory mandate that,
however well intended, may have been enacted on the
basis of limited information.
For example, when it enacted amendments to the
Resource Conservation and Recovery Act last year,
Congress imposed a number of important new
responsibilities on EPA. Not all of them will pay such
obvious benefits as our lead rule.
RCRA now broadens the reach of EPA's hazardous
waste regulatory program to those businesses generating
relatively small quantitites of regulated wastes. On the
surface, this would seem to be a good idea.
Until the new amendments were developed, our
cradle-to-grave regulations applied only to those who
generated more than 1,000 kilograms of hazardous waste
each month. We know of approximately 15,000 such
generators. Combined, they produce some 264 million
metric tons of waste annually. That's about 99.5% of all
hazardous wastes generated in this country.
RCRA's new small-quantity-generator provisions bring
into the regulatory system another 175,000 firms. Yet
they generate only half of one percent of the total
volume. So, as a result of statutory requirements, we
now must vastly and rapidly expand the size of our
regulated universe. In so doing, we pick up a very small
amount of wastes which had escaped our net in the first
place.
My concern is this kind of requirement may serve only
to make our overall hazardous waste management
program less effective. We must devote substantial
resources to the small-quantity-generator program on the
assumption that a problem exists, with severe
constraints in the law, requiring a full regulatory
solution. Additionally, a portion of our enforcement
resources will now have to be oriented toward these
175,000 generators.
I question whether our limited resources are best spent
on these activities. I question whether the American
people are best served by the requirement for such a
program before we have fully defined the problem to be
addressed and determined how best to manage it, i.e.
risk assessment/risk management.
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Another new RCRA provision about which I have
reservations is the underground storage tank program.
There are more than 2 million underground tanks in the
U.S.today; about 100,000 new ones are installed each
year. Congress, in the new RCRA law. told us to develop
specific rules and performance standards for these tanks
in a relatively short lime-frame, although we are just
beginning the data collection effort needed to determine
the extent of the problem they pose.
The program is'bound to become a massive,
resource-intensive undertaking. It will involve a long and
complicated regulatory process. It will probably be very
difficult to implement and enforce, due in part to our
lack of expertise in this area and because of its sheer
size.
Both the small-quantity generator and underground
storage tank programs are examples of major regulatory
responsibilities imposed on EPA by Congress in the
absence of sound risk assessment/risk management
proceedings. I am uncertain at this point as to how well
we can implement either given the specificity and time
frames in the law.
This is not to suggest that everything in the new RCRA
statute is ill-conceived. To the contrary, regulation of
small quantity generators and underground storage tanks
may be necessary, but we will need time to assess risks
and recommend solutions before the law mandates
remedies. Another important provision of RCRA calls on
EPA to move forward with efforts to ban the land
disposal of many hazardous wastes.
We have learned the hard way over the years that land
disposal is the least desirable method of hazardous
waste management. We have the data we need to assess
the risks of land disposal. The agency was preceding
with land disposal bans on its own, even in the absence
of this specific Congressional mandate.
Finally, I think we should look for a moment at our
Superfund program as an example of how EPA has
employed a Congressional mandate effectively. We have
used many principles of risk assessment and risk
management to build the Superfund cleanup program
We will continue to do so.
First of all, in developing our list of national priority
sites requiring long-term cleanup, we assess each
potentially hazardous site. If it poses an immediate
threat to human health or the environment, we take
emergency steps to eliminate the danger. At the same
time, we do detailed studies at those sites that appear to
pose long-term hazards. Where we determine sites
represent a chronic hazard, we place them on our
priority list.
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After a slow start, our cleanup program has during the
last two years made substantial progress. By the end of
the current fiscal year, we will have taken emergency
actions at nearly 650 sites. Long-term cleanup will have
begun at nearly 500.
A month ago, President Reagan sent to Congress a
proposal to reauthorize Superfund for another five years.
The $5.3 billion package would triple the size of the
current fund. It would also focus Superfund's authorities
on the most serious problems first — uncontrolled
hazardous waste dumps. In addition, the President's
program strengthens our enforcement tools and provides
for a reliable source of adequate funding through 1990.
All of this brings me back to the philosophical
question I started to ask in the beginning. Once we have
decided that a given risk needs managing, exactly what
do we do about it? And if we can't create a risk-free
society, how do we determine an acceptable level of
risk? How much do we spend to reduce risk?
There are no fast, cheap or easy answers to these and
other questions dealing with risk. What we must do is
address all of our environmental challenges squarely,
assess the relative risks of each, and determine who best
to manage them. To do this effectively, we must involve
the public in the risk-management process.
We must build trust among our citizens. They must
know that EPA, industry, environmental organizations
and others are working together to address the most
serious hazards facing the American environment.
We will spend billions on environmental and health
protection over the next couple of decades. That's a
major investment, most of it funded by taxpayers and
purchasers of products. We should make certain that
every penny is spent to get real, solid, measurable
results. That's our bottom line at EPA. That's what we
are trying to achieve.
Thank you very much.
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