Air Permit Costs Cheaper Than Expected

John Toon

A study of more than 500 U.S. manufacturers found that the cost to apply for air emissions permits under new national regulations is lower than industry estimates. Meanwhile, the new regulations benefit businesses, according to The Georgia Institute of Technology, Atlanta, study, which is believed to be the first detailed examination of the costs to apply for permits under Title V of the 1990 Clean Air Act Amendments.

Title V requires companies that emit certain amounts of air pollutants - including solid waste facilities - to list their emission sources, air pollution control equipment and regulatory requirements in a single document.

The goals of the regulations were to help enforce air quality standards, help companies understand and comply with them, and help citizens monitor industry compliance.

"Before Title V was implemented, industry officials were concerned that the law would be costly, with no benefit to them," says Dr. Barry Bozeman, lead author of the study and a researcher in Georgia Tech's State Data and Research Center. "But results show that this is not the case. More often than not, the cost is modest and complying companies found positive aspects to the law."

Corporate environmental managers who responded to the survey reported their firms spent an average of $113 per employee to apply for air emissions permits. For an average 566-person company, that translates to $63,958 per facility. For the estimated 20,000 facilities covered by Title V, the total bill for national compliance will be approximately $1.3 billion.

These numbers are lower than the estimates reported recently by an industry group, says Leisha DeHart-Davis, a co-author of the study and a research associate in Georgia Tech's Air Quality Laboratory.

An April 1999 report released by Washington, D.C., law firm Morgan, Lewis & Bockius LLP estimated that the average company would spend $100,000 per facility, with a total bill of $2 billion for all locations.

The Georgia Tech study, sponsored by the U.S. Environmental Protection Agency (EPA), Washington, D.C., provides a direct measure of permit application costs for manufacturers. The most significant costs were for outside consultants, but others included company personnel's time and expenses for new administrative systems.

Researchers used a mail survey to contact environmental managers at 1,614 randomly selected companies in Georgia, Oregon, South Carolina and Wisconsin. These states were chosen to provide a cross-section of industry types and sizes.

State response rates for the confidential surveys ranged from 31 percent to 43 percent, and yielded 542 completed questionnaires.

Other key findings include:

* The companies considered two aspects of the regulations to be beneficial.

Seventy-seven percent of the respondents cited operational flexibility that allowed them to make minor process changes without obtaining a new permit. Seventy-three percent cited Title V's protection against enforcement action during the application process.

* State agencies charged with administering the regulations received good grades from the regulated companies for helping them navigate the process.

* The survey produced conflicting data on whether Title V encouraged the adoption of new technology or pollution prevention techniques.

State regulatory officials saw little evidence that the new regulations brought changes in this area. Although 68 percent of companies applying for a simpler class of permits reported using a technological fix to limit emissions, many used existing technology to reduce them, DeHart-Davis says.