New Source Review 101 Outdated Regulation Prevents Environmental Progress

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The Environmental Protection Agency’s (EPA) New Source Review (NSR) is a complex regulation that affects manufacturing facilities and power plants in the United States. Before making modifications to existing facilities, a facility must first complete New Source Review and receive a permit to ensure that there are not significant increases in pollution.

While well-intentioned to protect air quality, NSR often discourages companies from making environmentally important improvements to facilities, due to its burdensome cost and length. In order to protect the environment, policymakers should repeal NSR or modernize it to make it more efficient.

Fact vs. Myth 

  • FACT: America’s air has become cleaner since 1990.
    • Emissions from the six most common pollutants have dropped 77% since 1990.
  • MYTH: Stringent regulations are always environmentally beneficial. 
    • Inefficient regulations, such as NSR and NEPA, can discourage climate-friendly infrastructure projects and result in environmental harm. 
  • FACT: Through sensible regulations at the appropriate level of government and policies that increase economic freedom, we can improve environmental quality
  • MYTH: The manufacturing sector is under-regulated. 

The Problems with New Source Review

  • New Source Review’s inefficiencies can and have hurt the environment.
    • From 2002 to 2014, the nationwide average to obtain an NSR permit for coal and natural gas-powered units was 420 days
    • On tribal land, 62% of minor-source NSR permits exceeded “the applicable regulatory timeframe.”
    • Excessive delays and costs, due to the NRS-permitting processes discourages companies from upgrading facilities or equipment that would benefit the environment. 
  • New Source Review is burdensome and difficult to navigate.
  • New Source Review Hurts American economic competitiveness
    • NSR imposes direct costs to businesses. 
      • Delays because of the NSR permitting process can cost companies up to $40,000 per day in contractual fees and direct costs.
    • Excessive costs on businesses hurt domestic production and often lead to outsourcing to countries with worse environmental regulations.

Markets vs. Mandates

  • The arduous cost and completion time of New Source Review disincentivizes innovative investments that can improve a plant’s productivity and reduce pollution.
  • Private sector investments have improved air quality and reduced greenhouse gas emissions. American manufacturers are committing to using cleaner technologies.

How to reform New Source Review

  • Maintain the EPA’s 2020 Project Emissions Accounting Final Ruling
    • This ruling allowed emitters to include emissions increases and decreases from a modification in the first step of the NSR permitting process. 
  • Clarify what a major modification is under the Clean Air Act. 
    • The current definition of modification that triggers NSR is vague and can vary from project to project. 
    • Having a clear definition would increase transparency and give industry a better picture of what actions trigger NSR. 
  • Conduct annual reviews to evaluate the implementation of NSR in order to ensure that permits are being completed in a timely and efficient manner.

Summary

  • New Source Review, while originally created to protect air quality, has become a burdensome regulation that hurts businesses and the environment alike. 
  • The private sector is taking significant steps to make manufacturing more efficient, competitive, and environmentally-friendly. 
  • By streamlining the process of New Source Review, we can improve air quality and encourage businesses to adopt cleaner manufacturing practices. 
Done in partnership with the American Conservation Coalition (ACC).

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