y    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
           I                        WASHINGTON D.C. 20460
                                                            OFFICE OF THE ADMINISTRATOR
                                                              SCIENCE ADVISORY BOARD

                                   September 15, 2006

EPA-COUNCIL-CON-06-007

The Honorable Stephen L. Johnson
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Subject:  EPA Advisory Council on Clean Air Compliance Analysis (Council) Consultation
         on Estimating Future Emissions for Stationary Non-electricity Generating Units
Dear Administrator Johnson:

       In July 2006, EPA's Office of Air and Radiation (OAR) requested an expedited
review of a methodological assumption to be used in the regulatory impact analysis that will
accompany EPA's upcoming rulemaking on the PM NAAQS standard.  In particular, OAR
was attempting to correct the historical problem of overestimating future emissions for the
stationary non-electricity generating unit (EGU) sector.  Specifically, OAR proposed, as an
interim method, to delete the economic growth term from the estimation of future emissions
for the stationary, non-electricity generating unit (EGU) sector.

       In response to this request, members of the Council and Air Quality Modeling
Subcommittee held a public teleconference to discuss these issues on August 31, 2006. The
Council recommends an alternative to OAR's interim method. The alternative preferred by
the Council would capture the underlying technological change that is likely driving the
decline in emissions, i.e. the efficiency gains in production processes and improvements in
air pollution control technologies that can be expected over time.  Since the omission of
technological change has likely resulted  in the historical overestimation of emissions in the
non-EGU sector, the Council believed that deleting economic growth from the forecasting
equation would not correct for the overestimation problem appropriately or credibly.
Instead, OAR could develop surrogate metrics to capture this underlying technological
change. Data from the National Emissions Inventory in the 1990's could be used to estimate
a declining "emissions intensity" as it relates to changes in the level of output by sector. To
do this, OAR would first need to factor out any decline in emissions that could be attributed

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to Clean Air Act regulations that governed this sector during the 1990's. The remaining
portion could be attributed to technological progress. As a default assumption, OAR could
assume this historical rate of decline (the portion attributed to technological change, not
regulation induced) would continue to be constant in future years. This alternative approach
could be accomplished in the near future and would mitigate the overestimation of future
emissions in a more credible fashion. In offering this alternative approach, the Council
recognizes OAR's time constraints and the limitations that may result.

      Detailed recommendations for the longer term were also discussed, and are included
in the meeting minutes of the August teleconference which are posted on the SAB Web site.
On behalf of the entire Council and the Air Quality Modeling Subcommittee, we appreciate
this opportunity to provide timely advice to the Agency.  We hope these comments are
helpful to the Office of Air as it proceeds with this important work.
                                  Sincerely,
       /signed/                                        /signed/

Dr. Trudy Cameron, Chair                       Dr. David T. Allen, Chair
Advisory Council on Clean Air                   Air Quality Modeling Subcommittee
 Compliance Analysis                           Advisory Council on Clean Air
                                                 Compliance Analysis

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                                      NOTICE

       This report has been written as part of the activities of the EPA Advisory Council on
Clean Air Compliance Analysis (Council), a public advisory group providing extramural
scientific information and advice to the Administrator and other officials of the
Environmental Protection Agency. The Council is structured to provide balanced, expert
assessment of scientific matters related to problems facing the Agency. This report has not
been reviewed for approval by the Agency and, hence, the contents of this report do not
necessarily represent the views and policies of the Environmental Protection Agency, nor of
other agencies in the Executive Branch of the Federal government, nor does mention of trade
names of commercial products constitute a recommendation for use. Reports of the Council
are posted on the EPA website at http://www.epa.gov/sab.

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                   U.S. Environmental Protection Agency
            Advisory Council on Clean Air Compliance Analysis
CHAIR
Dr. Trudy Ann Cameron, University of Oregon, Eugene, OR
MEMBERS
Dr. David T. Allen, University of Texas, Austin, TX

Dr. Dallas Burtraw, Resources for the Future, Washington, DC

Ms. Lauraine Chestnut, Stratus Consulting Inc., Boulder, CO

Dr. Charles T. Driscoll, Jr., Syracuse University, Syracuse, NY

Dr. Wayne Gray, Clark University, Worcester, MA

Dr. James K. Hammitt, Harvard University, Boston, MA

Dr. F. Reed Johnson, Research Triangle Institute, Research Triangle Park, NC

Dr. Katherine Kiel, College of the Holy Cross, Worcester, MA

Dr. Nino Kuenzli, University of Southern California, Los Angeles, CA

Dr. Virginia McConnell, Resources for the Future, Washington, DC

Dr. Bart Ostro, California Office of Environmental Health Hazard Assessment, Oakland,
CA

Dr. V. Kerry Smith, Arizona State University, Tempe, AZ

Dr. Chris Walcek, State University of New York, Albany, NY
SCIENCE ADVISORY BOARD STAFF
Dr. Holly Stallworth, Designated Federal Officer, Washington, DC
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                   U.S. Environmental Protection Agency
            Advisory Council on Clean Air Compliance Analysis
                    Air Quality Modeling Subcommittee
CHAIR
Dr. David T. Allen, University of Texas, Austin, TX


MEMBERS
Dr. David Chock, Ford Motor Company, Dearborn, MI

Dr. D. Alan Hansen, Electric Power Research Institute (EPRI), Palo Alto, CA

Dr. Paulette Middleton, Panorama Pathways, Boulder, CO

Mr. Ralph Morris, Environ International Corporation, Novato, CA

Dr. James Price, Texas Commission on Environmental Quality, Austin, TX

Dr. Armistead (Ted) Russell, Georgia Institute of Technology, Atlanta, GA

Dr. Chris Walcek, State University of New York, Albany, NY
SCIENCE ADVISORY BOARD STAFF
Dr. Holly Stallworth, Designated Federal Officer, Washington, DC
                                     in

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