In what appears to be part of a broad effort to reshape air regulation, OMB’s Office of Information and Regulatory Affairs (OIRA) apparently forced EPA to withdraw two proposed emissions standards for stationary internal combustion engines and industrial boilers, insisting that the agency make changes that may be inconsistent with the Clean Air Act. Specifically, OIRA is pressuring EPA to provide exemptions from all new clean air standards if facilities can show their emissions are below a certain level, as first reported by Air Daily, a trade publication, on July 12. The use of such “risk-based exemptions” appears to violate the Clean Air Act, which calls on facilities to make upgrades and cut air pollution using the best available technology. With a risk threshold, particularly a high one, this could negate the need for facilities to make such upgrades and render the standards meaningless. In the case of EPA's standard on internal combustion engines, Inside EPA reports that as many as 40 percent fewer emissions sources would be regulated. Bush political appointees at EPA appear to be complicit in this effort, with agency staff objecting that it is illegal. Not surprisingly, industry has weighed in heavily for the exemptions, and has apparently convinced EPA's assistant administrator for air, Jeffrey Holmstead, who previously worked on behalf of industry in opposing strong clean air standards. Industry has also worked to enlist OIRA's help. In one of a number of meetings on recent clean air standards, the Council of Industrial Boiler Owners -- including General Motors, ALCOA, Georgia Pacific, and the American Forestry & Paper Assn., which states its case in three white papers provided here -- pressed risk-based exemptions with OIRA on June 24, shortly before EPA was forced to withdraw its boiler standard on July 3. Already, OIRA has pushed such exemptions in two other proposed EPA air toxics standards for plywood and auto-painting facilities. Both were cleared by OIRA with the necessary changes on July 9, but have yet to be published in the Federal Register for public comment. On July 22, EPA published a proposed rule on air pollution from brick and clay manufacturers that also includes risk-based exemptions, a first for such a standard. But as a non-major rule, this did not require OIRA approval, and it is unclear whether OIRA factored into EPA's decision. Meanwhile, in what EPA calls an “unusual collaboration,” OIRA, under the leadership of John Graham, will actually help develop -- from the very beginning -- regulations on air pollution from non-road diesel engines. Since its beginning in the early 1980s, OIRA has reviewed agency regulations, but never before has it actually been in the position of crafting regulation from scratch, which in the case of air emissions, Congress has delegated exclusively to EPA. Indeed, OIRA has no statutory authority at all over agency rules; this power flows from Executive Order 12866, and this only covers regulatory review. Yet clearly, this has not deterred Graham from hijacking clean air policy, both through the review process and now by taking, in Graham’s words, an “up front” role. Alarmingly, because this new role is not covered under the executive order, OIRA will be functioning without any disclosure requirements; for instance, OIRA could potentially meet with affected interests and dictate the substance of the rule without ever having to disclose this to the public. Graham began his tenure at OIRA by implementing new disclosure measures that helped make OIRA more accountable, releasing a memo on Oct. 18, 2001, outlining his vision for transparency. Yet OIRA now appears to be headed in the wrong direction, even in the context of its traditional review role. When a rule is withdrawn from OIRA review by an agency -- as EPA’s boiler standard was -- there is no reason provided for the withdrawal, and OIRA’s docket on the rule, and its possible role in the decision to withdraw, is withheld from the public. Earlier in his tenure, Graham made use of “return letters,” clearly stating OIRA’s reason for rejecting an agency rule. Between July 20, 2001, and Feb. 12, 2002, Graham issued 17 such letters; since then, however, none have been issued. The last of these letters, on tire-pressure monitoring, proved to be highly controversial and undoubtedly generated political headaches for Graham. It may be that this has discouraged the use of return letters, and instead OIRA has forced EPA to withdraw rules in place of return letters, avoiding public attention and possible embarrassment for the administration. Where a rule is approved with change -- such as EPA’s air standard for plywood -- OIRA labels the rule “consistent with change.” Yet OIRA makes no indication as to the nature of the change. For instance, a rule receives the same label whether changes are made for simple clarity or whether they are made for substance, altering the very nature of the rule. Under Executive Order 12866, agencies are supposed to document changes made to rules while at OIRA, but as the General Accounting Office has found, this documentation is inconsistent and frequently inadequate -- which becomes especially problematic as OIRA assumes a more aggressive role in dictating regulatory policy across federal agencies.