OMB official questions pollution proposal

By Juliet Eilperin
Friday, December 4, 2009

An economist at the Office of Management and Budget who has battled environmentalists for years on issues such as climate change and smog has raised questions about the economic impact of a proposed new rule on air pollution, according to documents obtained by The Washington Post.

Randall W. Lutter, a Food and Drug Administration employee detailed to the OMB, looked at whether the rule proposed by the Environmental Protection Agency imposes higher costs on coal-fired power plants than the agency has assumed.

Documents in the EPA's public docket show he has questioned the economic assumptions underlying a rule to cut sulfur dioxide emissions. The rule, which was proposed last month and would take effect in June under a court order, would prohibit short-term spikes of sulfur dioxide, which has been linked to respiratory diseases and premature deaths.

Sulfur dioxide emissions are now measured in 24-hour and annual increments. The new rule would evaluate them every hour, prohibiting sulfur dioxide from exceeding a limit of 50 to 100 parts per billion in one hour.

In a Nov. 19 e-mail to EPA employee Charles Fulcher, Lutter questioned whether power plants, known as EGUs, or electric generation units, could reduce sulfur dioxide emissions without financial pain.

"Are these really instances of zero-cost emissions reductions, or are they instead instances of emissions reductions that should already be in the baseline?" wrote Lutter, once a resident scholar at the American Enterprise Institute. He has been examining the economic impact of federal rules as a detailee at the Office of Information and Regulatory Affairs, which is under the OMB.

OMB spokesman Kenneth S. Baer said Lutter "is a career civil servant on temporary detail from FDA" who joined the OIRA staff because "we're stretched." He added that Lutter, who worked in the OIRA under President Bill Clinton, sent the e-mail three days after the OMB finished its review of the EPA rule.

"Dr. Lutter's personal, political and ideological views are irrelevant to his position as a detailee. He provides technical economic advice," Baer said. "He has no decision-making role or authority."

Lutter's role has alarmed environmentalists, who worry about his record on air pollution and global warming. In the 1990s, Lutter questioned the merits of imposing tougher smog standards, on the grounds that they could lead to more cases of skin cancer.

He wrote an essay in a book called "Painting the White House Green," in which he criticized Carol M. Browner -- who now advises President Obama on climate change but pushed for the ozone standards as EPA administrator under Clinton -- for making "an overzealous grab for more administrative authority."

Frank O'Donnell, president of the advocacy group Clean Air Watch, said, "Putting Lutter at OMB on environmental issues is like getting Dr. Kevorkian to review health-care reforms."

But Jeffrey R. Holmstead, who headed the EPA's air and radiation office under President George W. Bush, called Lutter "a well-respected economist" familiar with air pollution issues from his earlier stint at the OMB. "If Randy is raising an issue, it will need to be taken seriously," Holmstead wrote in an e-mail.

Lutter did not return a call placed to his White House office.

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