The Bush administration manipulated the development of the U.S. Environmental Protection Agency’s proposal to cut mercury emissions from coal fired power plants in order to ease the impact of the rule on the industry, the agency’s inspector general said Thursday.

The development of the rule "was compromised," said EPA Inspector General Nikki Tinsley, "... inconsistent with expected and past practices, including a failure to fully assess the rule’s impact on children’s health."

Nikki Tinsley has been EPA Inspector General since 1998. She was the recipient of the 2004 Distinguished Federal Leadership Award from the Association of Government Accountants. (Photo courtesy EPA)

In a written response to the report, administration officials said the report contains a slew of "inaccuracies and flaws" and the overall critique of the rule’s development "rings hollow."

The rule is still under development, officials said, but will proceed as planned - the EPA is under a court order to finalize a mercury rule for utilities by March 15, 2005.

Mercury emissions from the nation’s 1,100 coal fired power plants are currently unregulated - these facilities emit some 48 tons of mercury each year, accounting for about 40 percent of the nation's mercury pollution.

Exposure to mercury, usually through eating contaminated fish, can cause permanent harm neurological damage in humans and reproductive harm in wildlife – 45 states now have fish consumption advisories for mercury.

Young children whose brains are still developing, and women of childbearing age are most at risk.

Ohio Edison's Niles Power Station at Niles, Ohio is fired by coal. A $31 million clean coal catalyst installed in 1996 to clean flue gases removes sulfur dioxide and nitrogen oxides, but almost all the mercury escapes. (Photo courtesy DOE)

Under the Clean Air Act, the agency must develop a floor for its regulation based on emission reductions achieved by the top performing 12 percent of utilities.

The EPA said this analysis found the industry could cut emissions to 34 tons by 2008 using maximum available control technology (MACT).

That figure was then used to justify the Bush administration’s favored approach, which would set an unspecified cap in 2010 on mercury emissions and employ a trading plan to bring emissions under a cap of 15 tons by 2018 – a 70 percent reduction.

Tinsley said the 34 ton finding was the result of pressure from "EPA senior management" who instructed agency staff to match the number to the standard.

"The standard likely understates the average amount of mercury emissions reductions achieved by the top performing 12 percent of utilities," according to the report. "It does not provide a reasonable basis for determining whether the MACT or cap-and-trade approach provides the better cost benefit."

Senator Patrick Leahy, a Vermont Democrat – one of seven lawmakers who asked for an investigation of the mercury proposal - said the report "confirms the rule violates the Clean Air Act and put special interests ahead of protecting the public." Leahy features a "Mercury Primer" on his website with and overview of basic facts about mercury emissions.

Senator Patrick Leahy of Burlington, Vermont was elected to the United States Senate in 1974 and remains the only Democrat elected to this office from Vermont. (Photo courtesy Office of Senator Diane Feinstein)

Environmentalists note that 34 tons is the amount of mercury pollution power plants would emit if they installed no new mercury controls, but merely complied with provisions of the Clean Air Act that require pollution cuts of other emissions.

That figure is also the amount included in the administration’s "Clear Skies" plan, which Senate Republicans are currently trying to push out of committee.

Opponents of the plan say there is evidence the EPA could impose a far more stringent MACT standard.

They cite a presentation in 2001 by EPA officials to an industry trade group that indicated a MACT standard could reduce utility mercury emissions 90 percent – to 5.5 million tons – four years after a rule is finalized.

"EPA’s proposed mercury rule is an illegal farce designed solely to benefit an energy industry that gives millions of dollars each year to the Republican Party," said Scott Edwards, legal director of the environmental group Waterkeeper. "There is not a court of law in the land that will allow this rule to stand as written."

Arizona's Springerville Generating Station, operated by Tucson Electric Power, is fired by coal. (Photo courtesy Tucson Electric Power)

A cap-and-trade program does not require individual power plants to cut emissions of the toxic metal instead it calls on the industry as a whole to cut emissions.

Several studies indicate this could create local hot spots of mercury pollution, disproportionately impacting some communities – a concern Tinsley said the agency did not fully consider.

Proponents of the mercury cap and trade plan questioned the accuracy of the 54 page report and criticized the EPA’s inspector general.

"[Tinsley] has no policymaking or legal background, and yet the report opines in those areas," said Scott Segal, director of the Electric Reliability Coordinating Council, an electric utility lobbying group.

Segal said the 70 percent reduction called for by the Bush cap and trade plan "frankly pushes the envelope of technical feasibility" and further reductions would cause greater fuel switching to natural gas, a shift that would harm the economy.

Scott Segal, director of the Electric Reliability Coordinating Council, is a partner in the Government Relations and Strategy Section of the law firm of Bracewell & Patterson. (Photo courtesy ERCC)

"EPA should tell the political operatives to butt out and develop power plant mercury emissions reduction standards that are based on a thorough, rigorous scientific analysis of how far mercury emissions can be reduced cost effectively and how much public health, especially children, would benefit," said Jim DiPeso, REP America policy director.

"We are disturbed that EPA allowed politics to interfere with setting mercury emissions standards for power plants," DiPeso said. "EPA succumbed to political pressure and short circuited the technical and health benefits analysis necessary for setting a defensible pollution reduction standard."

DiPeso said the EPA should follow the inspector general’s recommendations, do a more thorough analysis, and "develop mercury emissions reduction standards that protect the health of our children, families, and communities."

The EPA inspector general’s report can be found here.