Environmental policies for natural gas utilities.

Recent public debate about the existence and extent of global climate change has focused attention on a variety of strategies to promote environmental protection and a strong economy. Natural gas provides the strongest bridge between these ambitious but reachable goals because it attacks several

Behind the scenes, there is a different set of environmental considerations. While promoting a clean, inherently efficient, domestic fuel, executives of local natural gas utilities and pipelines understand that their day-to-day operations affect the environment, and they are spending an increasing amount of resources to manage those responsibilities.

The American Gas Association's strategic management plan for 1998 contains several initiatives related to environmental protection, including advocating improvements in federal laws and regulations that would promote environmental quality while easing the compliance burden on distribution and transmission companies. In addition, we are helping member companies to become more competitive by providing information on effective practices and technologies and enhancing public recognition of good environmental citizens.

Advocacy: Through advocacy, A.G.A. continues to seek improvements and refinements in federal laws and regulations governing the environmental activities of distribution and transmission companies. Member companies provide substantial input on our environmental advocacy through participation in the Environmental Regulatory Action Committee and the Government Relations Policy Committee.

Three environmental issues rank among the top advocacy priorities for A.G.A. during 1998, according to recent surveys of decision-makers at our member companies.

1. Management of MGP Sites: One of the highest priority advocacy goals for A.G.A. this year is to change federal hazardous waste and "Superfund" regulations to make it easier and less expensive for companies to manage, clean up and redevelop manufactured gas plant (MGP) sites. In other words, we want to make sure the regulations neither discourage voluntary clean-ups, nor force clean-ups not necessary to protect human health and the environment.

MGP site management can cost millions of dollars. By advocating appropriate risk-based and flexible management strategies, A.G.A. can help reduce environmental mitigation costs and ensure a reasonable approach for individual sites. A.G.A. is working on Capitol Hill and at EPA to achieve this goal.

On the legislative front, A.G.A. has been participating in an industry coalition that is preparing consensus language for "rifle-shot" legislation that would reform the major federal hazardous waste law, the Resource Conservation and Recovery Act (RCRA). A bipartisan group of Senate and House leaders is committed to reforming RCRA's site remediation provisions by the end of this Congress. Our position is bolstered by a General Accounting Office report which found that the hazardous waste program is better designed for industrial process wastes - not management of contaminated soil and other site clean-ups. It also reported that the law's burdensome provisions actually inhibit site clean-up, and recommended changing the law to exempt site clean-up wastes from the traditional hazardous waste program.

At EPA, our staff has been working for several years to persuade EPA to give gas utilities broad flexibility to choose among nearly a dozen possible ways to manage MGP sites. A.G.A. has worked cooperatively with the Edison Electric Institute to persuade EPA to provide such flexibility, and it appears likely that EPA will accept our suggestions. At our urging, EPA has already abandoned its earlier plan to impose a restrictive list of "presumptive remedies" for MGPs.

2. Emission Standards for Turbines, Engines and Boilers: An issue with significant implications for both the operations and marketing departments of local natural gas utilities is a pending EPA proposal to impose air emission standards on new industrial and commercial combustion units (turbines, engines and boilers). The Clean Air Act requires EPA to develop new standards to govern hazardous air pollutants by the year 2000. A.G.A.'s public policy goal is to ensure reasonable, least-cost controls for natural gas-fired units.

Until recently, EPA supported policies that imposed stricter emission standards on natural gas-fired boilers than on coal or oil boilers, thus providing a perverse economic incentive for large customers to use a dirtier fuel.

Now, after years of advocacy, A.G.A. has persuaded EPA to adopt a different approach: a "fuel-neutral" standard. EPA-proposed New Source Performance Standards for new coal, oil and natural gas-fired industrial boilers would limit N[O.sub.x] emissions to 0.20 pounds per million Btu. These standards would apply to large s