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 ------- 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 ------- 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. ------- 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. ------- 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. ------- 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. ------- 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. ------- |