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An assessment of the formation of a public policy which mandates the use of oxygenated fuels as an air quality strategy

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Title:
An assessment of the formation of a public policy which mandates the use of oxygenated fuels as an air quality strategy a national precedent
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Gallagher, Gerald L
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Language:
English
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x, 191 leaves : illustrations, map, charts (6 folded leaves) ; 29 cm

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Subjects / Keywords:
Motor fuels -- Government policy -- Colorado ( lcsh )
Air quality management -- Government policy -- Colorado ( lcsh )
Air quality management -- Government policy ( fast )
Motor fuels -- Government policy ( fast )
Colorado ( fast )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

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Bibliography:
Includes bibliographical references.
General Note:
Submitted in partial fulfillment of the requirements for the degree, Doctor of Philosophy, Graduate School of Public Affairs, Department of Public Affairs
Statement of Responsibility:
by Gerald L. Gallagher.

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University of Colorado Denver
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Auraria Library
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
25726004 ( OCLC )
ocm25726004
Classification:
LD1190.P86 1990d .G35 ( lcc )

Full Text
AN ASSESSMENT OF THE FORMATION OF A PUBLIC POLICY
WHICH MANDATES THE USE OF OXYGENATED FUELS AS AN
AIR QUALITY STRATEGY: A NATIONAL PRECEDENT
by
Gerald L. Gallagher
B.S., Northern Illinois University, 1974
M.Ed., Colorado State University, 1975
A thesis submitted to the
Faculty of the Graduate School of the
University of Colorado in partial fulfillment
of the requirements for the degree of
Doctor of Philosophy
Graduate School of Public Affairs
1990
i i,
.sLf


This dissertation for the Doctor of Philosophy
degree by
Gerald L. Gallagher
has been approved for the
Graduate School of
Public Affairs
by
/
/
Date


Gallagher, Gerald L. (Ph.D., Public Administration)
An Assessment of the Formation of a Public Policy Which
Mandates the Use of Oxygenated Fuels as an Air
Quality Strategy: A National Precedent
Thesis directed by Professor Frank J. Cesario
This thesis evaluates the process and structure of
the formation and adoption of Regulation 13, which
mandates the use of oxygenated fuels as an air quality
strategy along Colorado's Front Range. Potential effects
that this process and structure will have on other state
and federal environmental policies are also examined.
Three research questions were addressed:
1. How was Regulation 13 formulated and adopted?
2. Why did the Air Quality Control Commission, an
appointed body of government which was
responsible for the development of the State
Implementation Program, adopt Regulation 13
rather than the mandate being enacted through
the general assembly, an elected body of
government?
3. What were the major public policy implications
that resulted from the adoption of Regulation
13?


A descriptive single case study methodology was
employed. Data were collected through direct observation
by the researcher in his role as a key figure in the
process as well as through review of 207 news clippings
and the interviewing of 16 other key participants.
The following conclusions were drawn:
1. Highly technical public policy issues can be
appropriately addressed by boards and
commissions.
2. The roles of the key players must be clearly
understood and accepted by the decision makers.
3. A structure to establish linkages between the
key players must be in place.
4. Developing a viable public education program is
crucial if public input is considered to be an
essential element of the policy formation
process.
5. The size and technical capacity of the
bureaucracy played a key role in the adoption
of Regulation 13.
6. Regulation 13, requiring the use of oxygenated
fuels, will become an example for other state
and federal policies.
iv


The form and content of this abst^ct are approved. I
recommend its publication.
Signed_
v


CONTENTS
CHAPTER
1. INTRODUCTION .................................... 1
Background .................................... 1
Purpose ....................................... 8
Justification ................................ 10
2. HISTORICAL REVIEW ............................. 13
Federal Environmental Policy Formation ... 13
Colorado's Environmental Policy Formation . 18
Evolution of Colorado's Oxygenated Fuels
Program........................................22
3. REVIEW OF LITERATURE.............................37
Governmental Policy Formation ................ 37
Intergovernmental Relations and Structure . 44
Summary........................................47
4. METHODOLOGY......................................49
Research Design .............................. 49
Research Questions ........................... 51
Validity and Reliability ..................... 56
5. DATA COLLECTION..................................59
Sources of Data................................59
Selection and Coding of Data...................61


6. DATA ANALYSIS...................................72
Research Question #1
How was This Public Policy Formulated
and Adopted?................................75
Research Question #2
Why did the Air Quality Control Commission,
an Appointed Body of Government, Adopt
Regulation 13 rather than the Mandate Being
Enacted Through the General Assembly, an
Elected Body of Government?..................Ill
Research Question #3
What are the Major Public Policy
Implications that Resulted from the
Adoption, Implementation and
Enforcement of Regulation 13?................120
Analysis of the Formation of Regulation 13
Using the Systems Model Approach ........... 128
7. SUMMARY & CONCLUSIONS...........................13 3
Summary of Study.............................133
Implications from This Study.................138
APPENDICES
A. Nine Colorado Front Range Counties ............. 147
B. Regulation No. 13................................148
C. Participant Observation Documentation .......... 157
D. News Clippings Documentation ................... 177
E. Interview Documentation ........................ 182
REFERENCES............................................183
vii


LIST OF FIGURES
FIGURE
1.1. Metro Denver Carbon Monoxide Contribution
By Source in 1987 .................................2
1.2. Strategies to Attain CO Standards ................ 5
1.3. Denver Air Quality Days of NAAQS Violations
for Carbon Monoxide .............................. 6
2.1. Chronological Schematic of the Formation of
Regulation 13.....................................35
3.1. The Systems Model Concept of Public
Policy Making ................................... 43
4.1. Conceptual Framework for Single Descriptive
Case Study........................................54
5.1. Participant Observation Data ................. 66
5.2. News Clippings Data...............................68
5.3. Interview Data....................................70
6.1. Areas Violating Carbon Monoxide NAAQS ........... 80
6.2. Communications & Interactions of Key Actors . . 100
6.3. Denver Post Poll.................................110
7.1. The Linkage Concept..............................142
viii


LIST OF TABLES
TABLE
2.1. Air Quality Legislation .............
6.1. Outline for the Systems Model Analysis
. 18
. . 130
IX


ACKNOWLE DGMENTS
I express sincere appreciation to my committee
chairman, Dr. Frank Cesario, and committee members for
their comments and guidance throughout the preparation of
this thesis.
As the recipient of a research fellowship, I
acknowledge the U.S. Environmental Protection Agency
(EPA) for their financial support.
To my wife, Sandy, I express my gratitude for her
support and patience, for the pressure and encouragement,
and for many, many hours of word processing. Thank you.
x


CHAPTER 1
INTRODUCTION
The grandeur of the Rocky Mountains is not the only
claim to fame of Denver and Colorado's Front Range.
Unfortunately, the "Mile High City" also has the
reputation of having one of the worst air quality
problems in the nation. Issues regarding this pollution
problem have been published in National Geographic.
August 1987, in USA Today. November 1988 and broadcast by
the "MacNeil Lehrer NewsHour," August 1988.
To help resolve this air quality problem, Colorado
was the first state in the nation to require the use of
oxygenated fuels. This thesis documents the process by
which this mandate was formulated.
Background
Carbon monoxide (CO) is the most serious air quality
problem in the Denver metropolitan area. While light
industry and wood burning are two causes of this problem,
Figure 1.1 clearly indicates that the greatest source of
contamination is the automobile, contributing 75% of the
carbon monoxide (CO) which fouls the air. In addition, a


Figure 1.1. Metro Denver Carbon Monoxide Contribution
By Source in 1987.
Source: Colorado Department of Health,
Air Pollution Control Division, 1987.
major portion of the hydrocarbons (HC) and particulate
matter in the air is also contributed by the autommobile
(White, 1872:3). These chamicals have been linked with
causing or contributing to heart and lung disease, eye
irritation and the impairment of the central nervous
system (Corman, 1978:62).
2


Rules and regulations to protect air quality in the
United States were at first enacted very slowly and
incrementally. The first federal legislation to control
air pollution came in 1955 with the adoption of the Air
Pollution Control Act (PL 84-159). This Act authorized
the expenditure of five million dollars annually for five
years to support air quality research at the federal and
state levels. The next air quality legislation to be
enacted was not until 1963 with the passage of the
Federal Clean Air Act (PL 88-206). This Act authorized
the expenditure of $95 million over a three year period
for the enforcement of state air quality regulations for
stationary (industrial) pollution sources and for further
research involving interstate environmental issues.
The 1970 Clean Air Act and subsequent Amendments
marked a sharp change in federal pollution control
philosophies and provided the basic structure for current
federal air quality policies. The Act created a two
level structure for air pollution control. First, it
established the Environmental Protection Agency (EPA) and
instructed this newly formed agency to set National
Ambient Air Quality Standards (NAAQS) that would "protect
the public health with an adequate margin of
safety" (Clean Air Act, Section 109(b)(1)). The Act also
developed standards to control emissions at the source of
3


the pollutantsboth stationary (industry) and mobile
(automobiles). For the auto industry, the EPA imposed a
90% reduction of hydrocarbons (HC), carbon monoxide (CO)
and nitrogen oxides (NOx) from the 1970 emissions levels.
Second, the Act required that states develop a State
Implementation Plan (SIP). This written plan would
describe local control strategies that would ensure
compliance with the National Ambient Air Quality
Standards (NAAQS).
In the local arena, the Colorado Clean Air Act was
also adopted in 1970. It established the Air Quality
Control Commission (AQCC) and authorized the Commission
to develop strategies within Statute declaration to
attain the nationally required carbon monoxide (CO)
standards. These strategies and their anticipated CO
reductions are shown in Figure 1.2. The efforts of
federal regulations upon the auto industry and the first
five air pollution strategies shown in Figure 1.2 (left
to right) have been credited for the improvement of
Denver's air quality from 1976 through 1987, shown in
Figure 1.3. However, Denver still had one of the highest
carbon monoxide (CO) levels when compared to other cities
in the United States (Council on Environmental Quality,
1980:147). Considering the health effects of carbon
monoxide and the federal requirements to meet these
4


Figure 1.2. Strategies to Attain CO Standards.
Source: Colorado Department of Health, 1988.


NUMBER OF DAYS
80
10 -
0-------------------------------------------------------
-10 I--1---1--1----1--1----1---1---1----1---1---1---
75 76 77 78 79 80 81 82 85 84 85 86 87 88
Figure 1.3. Denver Air Qulaity Days of NAAAQS Violations
for Carbon Monoxide.
Source: Colorado Department of Health, Air
Quality Data Report, 1987:21.
health standards, other air pollution reduction
strategies needed to be investigated.
Research was conducted by the EPA and the Colorado
Department of Health to determine if fuel control could
play a role in air quality improvement. The results of
this research indicated that controlled fuels could
improve air quality. Thus, in February, 1987 Regulation
13 was proposed by the Air Pollution Control Division
(APCD), requiring that all gasoline sold in the Front
Range counties of Colorado (in violation of the national
carbon monoxide standard) contain a minimum of 2%
6


oxygenate during the months of November through February.
A map of Colorado's nine Front Range counties is shown in
Appendix A. Regulation 13 was adopted in June, 1987. A
copy of Regulation 13 is provided in Appendix B.
The oil industry strongly opposed the "mandated"
aspect of requiring oxygenates in gasoline. It is
important at this time to explain the market share battle
among the oil industry and the producers of oxygenate
additives which constituted the basis for opposition by
the oil industry well as support from the oxygenate
suppliers for Regulation 13. First, if the formation of
this public policy could be defeated or restricted, the
oil industry would not be required to purchase the
oxygenates which would be blended into the base gasoline
thereby reducing their market share of gasoline in
Colorado and possibly other states. Despite the oil
industry's opposition, Regulation 13 was implemented,
requiring the use of an oxygenate and thus reducing the
quantity of base gasoline that would be sold. The 2%
oxygenate requirement could be met in one of two ways
which became the basis for the second market share
battle. First, gasoline can be blended with 11% of a
petroleum base product known as Methyl Tertiary-Butyl
Ether (MTBE). This product is produced by the petro-
chemical industry (not the oil industry) and has been
7


used in gasoline since the late 1970s as a substitute for
lead. The second means of meeting the 2% oxygenate level
is by blending gasoline with 10% ethanol, a grain
product. Both of these products (ethanol and MTBE) would
need to be purchased by refineries from either the petro-
chemical industry or ethanol producers. MTBE can be
blended at either the refinery and then shipped through
interstate pipelines or blended at the local storage
terminal. However, ethanol (a grain alcohol product)
because of technical constraints, cannot be shipped
through pipelines and therefore must be blended at the
local storage terminal.
It is the conflict resulting from the opposing
positions of the oil industry and the oxygenate
suppliers, the requirement of the federal government upon
state and local governments to meet the Clean Air Act
Health Standards, the question of who has the authority
to require fuel mandates, the effect of the media, plus
the technical complexity of this issue that set the stage
for this thesis. A review of the efforts expended to
adopt Regulation 13 is provided in Chapter 2.
Purpose
The purpose of this thesis was to evaluate the
formation and adoption process of Regulation 13, which
8


mandates the use of oxygenated fuels as an air quality
strategy. The thesis will also assess the effect this
process could have on the development of other state and
federal environmental policies. Three research questions
were posed:
1. How was this public policy formulated and
adopted?
2. Why did the Air Quality Control Commission, an
appointed body of government adopt Regulation
13 rather than the mandate being enacted
through the general assembly, an elected body
of government?
3. What are the major public policy implications
that resulted from the adaption, implementation
and enforcement of Regulation 13?
Data were gathered through participant observation
which included 227 technical documents available to the
researcher as a member of the Air Pollution Control
Division and the Oxygenated Fuels Task Force and through
attending the Air Quality Control Commission public
hearings. Additional data were collected through
reviewing 207 news clippings and interviews with 16 key
participants in the policy formation process. The data
were analyzed to evaluate the process of this policy
formation. The thesis identifies elements of the public
9


policy formation process that support as well as
challenge current policy formation theories. The
interactions of the key actors involved in this process
will also be documented. This thesis will not include a
technical evaluation of the air quality benefits from the
implementation of Regulation 13.
The conclusions drawn from this thesis will enable
Colorado, local counties, other states and foreign
countries to formulate public policy more efficiently and
effectively which will in turn assist in the successful
implementation of public policy. Applications of the
thesis' conclusions will provide positive results for
legislators, appointed boards and commissions and public
policy administrators.
Justification
The most significant factor of this thesis lies in
its contribution to the literature regarding
environmental policy formation. The thesis identifies
the interactions among the actors and documents the
process by which an innovative environmental policy was
introduced, formulated and adopted through an appointed
commission by addressing the following issues:
10


1.
The appropriateness of the policy being adopted
by an appointed commission rather than being
enacted through the legislative process.
2. The significance (quantity and quality) of the
information provided to the appointed
commission prior to policy formation.
3. The concerns and interactions of the elected
officials and other actors.
4. The impact this process may have on other
states and on national environmental policy
formation.
The passage of Regulation 13 established a
precedent, in that it marked the first time in the
history of the United States that public policy was
adopted at the state level through an appointed
commission to regulate the fuel industry (gasoline).
While the Environmental Protection Agency (EPA) was not
initially interested in this program, because of the
success of Colorado's program, they have since adopted
state guidelines for blended fuel programs. State
regulatory agencies responsible for pollution abatement
can consider Regulation 13 as a means to reach attainment
in areas that do not meet the National Ambient Air
Quality Standards (NAAQS). Local counties in New Mexico
and Nevada have adopted similar regulations. Also, the
11


State of Arizona has adopted laws requiring minimum
oxygen content in fuels after threat of federal
intervention. Interest in adopting similar policies for
fuel control has been expressed by New York, Alaska,
countries in western Europe and Mexico. Findings of this
study will be useful to these regions in developing their
respective environmental policies.
12


CHAPTER 2
HISTORICAL REVIEW
This chapter presents an historical review of
environmental policy formation. The review will be
divided into three sections:
1. Federal environmental policy formation.
2. Colorado's environmental policy formation.
3. The evolution of Colorado's oxygenated fuels
program as an air pollution control strategy.
The third section, which is the focus of this research,
addresses the policy formation process applied by the
Colorado Air Quality Control Commission in developing the
oxygenated fuels program, known as Regulation 13. A
chronological review of important technical developments,
political events and the interaction of key players will
be presented.
Federal Environmental Policy Formation
Prior to 1960, governmental intervention
(particularly at the federal level) in environmental
issues occurred very slowly. The earliest indication of
pollution regulation was in 1899 through a ban on dumping


debris into harbors and waterwaysan effort to assure
safe passage. Water was again the focal point of
protection in 1924 in a law that prohibited discharges of
oil into coastal waters (Advisory Commission on
Intergovernmental Relations, 1981:5). It was not until
1948 that the first federal legislation was enacted that
actually recognized water pollution as a national
problem. This decision was based on the Constitutional
justification that water flows across state boundaries.
Federal air quality control occurred at an even
slower pace than clean water legislation. This may seem
both surprising and alarming, considering that 20 deaths
and 1,440 serious illnesses were attributed to air
pollution in Donora, Pennsylvania, in 1948 in addition to
another 200 deaths in 1953 in New York City (Advisory
Commission on Intergovernmental Relations, 1981:6). In
these examples, the economy of a community which was
supported by a polluting industry was considered more
important than the health of its citizens. This
situation was especially prevalent in the Gary,
Indiana/U.S. Steel Corporation scenario during the mid-
1950s and early 1960s (Advisory Commission on
Intergovernmental Relations, 1981:6). In these air
quality problems, it should be noted that stationary
14


sources (factories) were not the only cause of air
pollution. Dating back to 1951:
Dr. Arie Haagen-Smit of the California
Institute of Technology first discovered that
the more obvious forms of pollution, such as
smoke, were less damaging to health and the
environment than the odorless, invisible
exhaust fumes from automobiles. However,
despite several attempts by individual
legislators to turn these events into
meaningful legislation, Congress as a whole
turned a deaf ear (Advisory Commission on
Intergovernmental Relations, 1981:6).
It was not until 1965 that the federal government
accepted the commitment to control air pollution caused
by vehicle emissions through the adoption of Title II of
the Clean Air Act (PL 89-272). Similar to the fact that
water flows across state boundaries, constitutional
justification was cited that vehicles are involved in
interstate commerce. Ten years later, this philosophy
was reiterated by Charles Jones who stated:
The motor vehicle presents a unique kind
of air quality problem. It represents a
pollution source which is highly mobile,
discharges contaminants and for which
satisfactory controls are not yet available.
The national level of government should exert
vigorous leadership to control this problem
(1975:38).
The federal government typically viewed
environmental problems dealing with stationary sources
such as power plants as local health issues, and for that
reason conferred the responsibility to solve such
problems upon state and local governments.
15


Unfortunately, localities were quite helpless in
controlling water pollution coming from upstream and from
preventing prevailing winds from transporting neighboring
industrial air pollution to their area. This is not to
say that the national government did not recognize
pollution as a problem. However, recognition of the
problem did not change the federal government's self-
denial attitude regarding its power to initiate possible
solutions. Laws that were enacted in the areas of both
air and water pollution control carefully limited
national responsibility to research, training and
technical assistance. A report on the above air
pollution legislation indicated:
It is primarily the responsibility of
state and local governments to prevent air
pollution. This bill does not propose any
exercise of police power by the federal
government and no provision in it invades the
sovereignty of states, counties, or cities
(Advisory Commission on Intergovernmental
Relations, 1981:6).
To summarize the environment's plight prior to 1960,
the concern for its protection was minimal due to: 1)
the lack of effective pollution controls at the state and
local levels, 2) resistance of the federal government to
become involved, 3) pressure from industry to ignore the
situation, and 4) the absence of public interest. All of
these factors, however, soon changed.
16


Beginning in the 1960s and continuing through the
early 1970s, the federal government became more involved
with the development, regulation and enforcement of
environmental standards. The main impetus for this
change was the growing public concern regarding
environmental issues. This concern was visibly expressed
on April 22, 1970, with the "Earth Day" demonstration.
In December 1970, the Environmental Protection
Agency was formed to consolidate the large number of
national administrative departments dealing with
environmental issues. This action firmly
institutionalized the federal government's role in
pollution control and protection of the environment.
Direct regulatory mandates were established to enforce
standards for clean air and water, disposal of solid
wastes and chemicals, acceptable noise levels and land
use. These regulations were imposed upon state and local
governments as well as industry.
Air Quality Regulations
The first federal legislative acts and the
subseguent amendments of 1965 through 1977 are often
collectively called the Clean Air Act. This Act and the
Amendments formed the Environmental Protection Agency
(EPA). This agency is responsible for developing
17


National Ambient Air Quality Standards (NAAQS) and
procedures for assuring such standards are met. The
process established for states to meet the standards was
to first develop a State Implementation Plan (SIP). The
requirement of the SIP solidified the federal/state
partnership in the air quality arena more than any other
element of the Clean Air Act. Table 2.1 shows the major
Acts at the federal and state levels which control air
quality regarding emissions from stationary and mobile
sources.
Table 2.1. Air Quality Legislation
Legislation Date
Federal:
Air Pollution Control Act (PL 84-159) 1955
Clean Air Act (PL 88-206) 1963
Amendments to the Clean Air Act (PL 89-272) 1965
Amendments to the Clean Air Act (PL 70-148) 1967
Amendments to the Clean Air Act 1970
Amendments to the Clean Air Act 1977
Colorado:
Colorado Air Quality Control Act 1970
Senate Bill 231 1977
Senate Bill 1 1979
Senate Bill 52 1980
House Bill 1289 1986
Colorado's Environmental Policy Formation
On the state level, Colorado passed the Air Quality
Control Act of 1970. Its purpose is:
To foster the health, welfare,
convenience, and comfort of the inhabitants of
18


the state of Colorado and to facilitate the
enjoyment of nature, scenery, and other
resources of the state, it is declared to be
the policy of the state to achieve the maximum
practical degree of air purity in every portion
of the state. To that end, it is the purpose
of this article to require the use of all
available practical methods to reduce, prevent,
and control air pollution throughout the entire
state of Colorado and to maintain a cooperative
program between the state and local units of
govern- ment. It is further declared that the
prevention, abatement, and control of air
pollution in each portion of the entire state
are matters of statewide concern and are
affected with public interest and that the
provisions of this article are enacted in the
exercise of the police powers of this state for
the purpose of protecting the health, peace,
safety, and general welfare of the people of
this state (Colorado Air Quality Control Act,
25-7-102).
To implement the requirements of this declaration,
the Air Quality Control Commission was created within the
Colorado Department of Health. The Commission's primary
role is to develop an effective air pollution control
program under the guidelines of the federal Clean Air Act
SIP requirements.
Several air quality control strategies were
developed, plus additional contingency strategies were
presented as possible control measures by the Air Quality
Control Commission. These strategies, as shown in Figure
1.2, were submitted to the EPA in Colorado's 1982 SIP.
These programs were implemented, and the SIP projected
that the air quality benefits would result in Denver
attaining federal air quality standards. The last four
19


strategies (left to right) of Figure 1.2 specifically
relate to mobile source emissions of carbon monoxide
(CO), and are further described below. The oxygenated
fuels strategy is discussed as the third section of this
chapter.
Better Air Campaign
A multi-media public education program designed to
have drivers reduce their driving during the high air
pollution season. The estimated cost of this program is
$1,000-$5,000 per ton of carbon monoxide reduction (Epel,
J. B., A. M. Michelsen, and R. D. Rowe, 1988). Recent
evaluation of this program by the Colorado Department of
Health has shown it to be ineffective and the Air Quality
Control Commission has reguested EPA not to consider it
as part of Colorado's SIP.
Transportation Control Plans
Develop traffic light synchronization, high occupant
lanes and other transportation control programs with
local governments.
Automobile Inspection Readjustment Program
Under the requirements of the 1978 Hawkins
Memorandum, which was an interpretation of EPA's
20


authority under the Clean Air Act, the automotive
inspection and maintenance (I/M) program was mandated.
This EPA inspection and maintenance regulation was the
first major federal mandate for the control of mobile
source air pollution to be implemented and enforced by
state and/or local governments. It shifted a share of
the responsibilities to clean up auto emissions from
vehicle manufacturers to state and local governments.
Jerome Ostrov documented this decade-long
intergovernmental struggle regarding the I/M program
mandate which he feels "is cost-effective and not nearly
as disruptive or intrusive as was once feared"
(1984:191). Colorado's I/M program is known as the
Automobile Inspection Readjustment (AIR) program. It
reguires all gasoline powered vehicles registered in the
Front Range of Colorado to pass carbon monoxide (CO) and
hydrocarbon (HC) standards. The estimated cost of this
program is $145-$780 per ton of carbon monoxide (CO)
reduction (Colorado Department of Health (CDH), 1988;
Epel, J. B., A. M. Michelsen, and R. D. Rowe, 1988).
A view in opposition to the I/M program is voiced by
Lawrence White (1982). While he feels that vehicle
emissions are negative externalities that reguire
government intervention, he does not support actions of
the government that disturb the market or allocation of
21


resources. The subject of market impact was not only an
issue regarding I/M programs, it also played a major role
in the oxygenated fuels program discussed below.
Evolution of Colorado's Oxygenated Fuels Program
The air quality of Colorado's Front Range cities
improved with the implementation of strategies adopted by
Colorado and the Federal government. For example, during
the time period from 1970 to 1980, the cities along the
Front Range reduced the number of times they exceeded the
National Ambient Air Quality Standards (NAAQS) for carbon
monoxide from 70 to 30 times per year. However, the
NAAQS for carbon monoxide (9 parts per million averaged
over an eight hour period) was still not being met.
The Air Pollution Control Division (APCD), which is
structured within the Colorado Department of Health,
conducted an annual review to evaluate potential air
pollution control strategies. This process was in
accordance with an EPA guidance document, "Reasonable
Further Progress" (RFP). During this review process, the
APCD evaluated all possible air pollution control
strategies that could assist in meeting the NAAQS. In
1982, the state was required by EPA to update its 1979
carbon monoxide State Implementation Plan (SIP). The SIP
22


development process requires that the AQCC hold public
meetings and conduct an air quality assessment.
During the 1982 SIP development process, the use of
oxygenated fuels was included as a contingency air
quality improvement plan, if it was determined by EPA or
the APCD that Colorado would fail to meet the 1987 Clean
Air Act deadline for the NAAQS. Following is a
documentation of the efforts and events that took place
during the formation of Regulation 13. A more detailed
analysis of these efforts and interactions of the key
actors involved in the process is provided in Chapter 6,
"Data Analysis."
State Implementation Plan (SIP) Process
The original Colorado carbon monoxide SIP was
developed in 1979, submitted to the EPA and approved.
The EPA required that the SIP be updated in 1982 and
again in 1987. The complete 1982 SIP has never been
approved by EPA because it does not demonstrate
attainment of the NAAQS, although the oxygenated fuel
element of the SIP was approved as an acceptable air
quality strategy. The SIP guidelines directed the flow
of communication and technical data among the key actors
during the formation of Regulation 13.
23


To meet the requirement of the SIP, the governor was
required to appoint a Lead Planning Organization (LPO)
within each of the non-attainment areas (those areas not
meeting the NAAQS). For the Denver area, during the
formation of Regulation 13, the Metropolitan Air Quality
Council (MAQC) was the Lead Planning Organization. The
MAQC took a lead role in supporting the efforts of the
AQCC. Other cities along the Front Range had similar
Lead Planning Organizations. The charge to the LPO was
to conduct fact-finding meetings to develop air pollution
reduction strategies. In addition, the LPO conducted
public meetings to receive input from any party with
interest in the area's air pollution abatement efforts.
A summary of these meetings was presented to the AQCC by
the LPO as Colorado's proposed SIP. The AQCC reviewed
the SIP's technical aspects, public comments and legal
considerations. The SIP was then forwarded to the
governor for presentation to the EPA.
Preliminary Studies of Oxygenated Fuels (1979-1982)
High levels of carbon monoxide occur along the Front
Range cities of Colorado during winter months. The
reasons for these high winter-time concentrations include
environmental, climatic and geographic conditions. At
high altitude, in cold temperatures, motor vehicles have
24


less efficient fuel combustion resulting in increased
levels of carbon monoxide being emitted in the exhaust.
The Colorado Department of Health, through the APCD,
initiated a literature search beginning in the late 1970s
with a review of technical papers from the Society of
Automotive Engineers (SAE) and EPA studies. One highly
relevant study was conducted by EPA in 1978 in the Denver
area. This study demonstrated significant carbon
monoxide reductions with the use of gasohol (an
oxygenated blended gasoline).
During this same period, the Gasohol Promotion
Committee was established by the Colorado General
Assembly. The primary purpose of this committee was to
explore avenues to promote the use of gasohol (an alcohol
made from corn or wheat). The gasohol promoted during
the late 1970s was an oxygenate identical to one of the
blends that would meet the requirement of Regulation 13.
In addition to the Gasohol Promotion Committee's efforts
to promote the use of grain alcohol, the state of
Colorado provided a tax rebate up to five cents per
gallon to the distributors of this fuel. The gasohol
market share during this period reached 18% of total
gasoline sales. The chairman of the Gasohol Promotion
Committee was a member of the Colorado General Assembly
and a professional within the oil industry. The APCD
25


made several presentations to the Gasohol Promotion
Committee and provided technical information on potential
air quality benefits with the use of gasohol. This
committee did not address the possibility of mandating
the use of gasohol or other oxygenates in all fuels.
High Altitude Testing (1982-1985)
The Air Pollution Control Division (APCD) is
responsible to provide technical information on air
pollution issues to appointed boards, commissions, task
forces, legislative committees and the public. The APCD
also acts as technical support to the AQCC. Because of
Colorado's high carbon monoxide levels, the APCD sought
funding from the General Assembly to establish a High
Altitude Testing Center to test and evaluate possible air
quality strategies. Through data gathered at the Testing
Center, several reports were published during 1982-1985
which confirmed earlier EPA studies regarding the use of
oxygenated fuels. These studies reported a 34% reduction
of carbon monoxide from motor vehicles using oxygenated
fuels. Technical workshops were sponsored by the
Colorado Department of Health with participants from the
auto, petroleum and oxygenates industries. These
technical workshops focused on the issues of
26


driveability, consumer costs and air quality benefits
with the use of oxygenated fuels.
The Colorado Department of Health issued its first
contract for an independent study to be conducted to
assess the cost/benefit of an oxygenated fuels program in
1985. Several technical papers were published by the
Department of Health summarizing all the data that was
collected during this period. As a result of the tests
conducted by the Air Pollution Control Division, a data
base was established on the use and air quality benefits
of oxygenated fuels. This oxygenated fuels data base
became one of the largest in the nation and has been
utilized by EPA and other states in developing their air
pollution control programs.
Industry and Government Involvement (1986)
The Air Pollution Control Division determined that
the available technical data indicated that air quality
benefits could be obtained with the use of oxygenated
fuels at high altitude. However, many questions still
remained unanswered: how was the oil refinery going to
purchase, store and blend the large amount of oxygenates
that would be required; could the oxygenate suppliers
meet the demand during the winter air pollution season;
would the fuel supply for the remainder of the state be
27


interrupted? To answer these questions, the APCD
requested former Governor Richard Lamm to appoint a fact
finding committee to identify the obstacles that would be
encountered if the use of oxygenated fuels were to be
mandated. Lamm appointed the Oxygenated Fuels Task Force
in 1986.
The membership of the Task Force later proved to be
a critical element in the formation of Regulation 13.
There were several members of the legislative body
represented, including the chairman. In addition, active
participation was sought from local representatives of
the petroleum industry (Rocky Mountain Oil and Gas
Association RMOGA) who were also members of the Task
Force. Participation in the Task Force allowed industry
an opportunity to voice concerns about the proposed
oxygenated fuels program. These concerns included the
following points:
1. The oil refining industry felt that the
recommended oxygen level was too aggressive and
supported a more conservative approach.
2. The auto dealers expressed reservations about
the failure of the recommendations to ensure
specifications on fuel quality.
3. The auto manufacturers, represented by the
Motor Vehicle Manufacturer's Association (MVMA)
28


were concerned with the effect on driveability
of using an alcohol additive.
4. The oxygenate suppliers, represented by the
ethanol industry and the petro-chemical
industry felt that the recommendations were too
conservative based on the technical information
available to the Committee (Oxygenated Fuels
Task Force Report, 1986:30).
During August 1986, the EPA made its first positive
acknowledgement of Colorado's efforts to control motor
fuels as an air quality strategy. The director of the
EPA's Auto Emission Laboratory in Ann Arbor, Michigan,
sponsored a workshop with participants from the auto
manufacturers, oxygenate suppliers, oil industry and
Colorado Department of Health. This workshop centered on
the same principles of previous workshops sponsored by
the Colorado Department of Health. This action by EPA
became the technical basis for EPA's response to
Colorado's fuel control program.
In October 1986, the Oxygenated Fuels Task Force
released its final report and recommendations to the
Governor. The report stated that oxygenated fuels should
be required as part of Colorado's SIP process because air
quality benefits could be obtained and the oxygenated
fuels program could be reasonably implemented. This
29


report became a key document in the policy formation
process of Regulation 13 because of its technical
assessment and its political endorsement. The Governor
accepted the results of the Task Force study and
recommended that the report be forwarded to the
Metropolitan Air Quality Council (MAQC) which was the
Lead Planning Organization (LPO) for improving Denver's
air.
The MAQC was responsible to review all possible air
quality strategies in developing Colorado's SIP. The
MAQC was responsible for determining cost estimates for
proposed air quality control strategies and to hold
public meetings on proposed air quality programs.
Colorado's final SIP (prepared by the MAQC), which
included the oxygenated fuels program, was then presented
to the AQCC for final adoption. The AQCC was then
responsible to develop the regulatory aspects for the
oxygenated fuels program within their authority according
to the Colorado Clean Air Act.
During this time, additional studies were being
conducted by the Colorado Department of Health at the
High Altitude Testing Laboratory. These studies were
investigating the use of other oxygenates besides
ethanol, such as MTBE, as an oxygenate fuel additive.
30


These studies showed a 24% reduction of carbon monoxide
with the use of MTBE.
Adoption of Regulation 13 (1987)
In January 1987, the AQCC initiated the formal
decision making process by establishing a Sub-committee
on Oxygenated Fuels which held several meetings prior to
the AQCC's formal Public Hearings. Sub-committees were
typically established prior to formal hearings conducted
by the AQCC. At this same time, another workshop in Ann
Arbor, Michigan, was sponsored by the EPA at the request
of the Rocky Mountain Oil and Gas Association (RMOGA).
At the EPA meeting, RMOGA presented its position on the
cost of fuel control programs which they determined to be
two to three times the Colorado Department of Health's
estimate. RMOGA also stated that supply constraints to
the oil industry would restrict fuel choice in Colorado
and surrounding states, and the air quality benefit would
be minimal.
During January 1987 the Colorado legislature made
its first of three attempts to limit or stop the AQCC
from proceeding in the formation of Regulation 13. The
first bill, which was introduced and passed in the House
Transportation Committee, lacked support and never came
to full vote in the House. The introduction of this bill
31


came as a surprise to the parties formulating Regulation
13 because many of the members of the General Assembly
had been supportive of the process and were active
members of the Gasohol Promotion Committee, Oxygenated
Fuels Task Force, MAQC and the Oxygenated Fuels Sub-
committee of the AQCC.
In June 1987 formal Public Hearings were conducted
by the AQCC. These three-day long Hearings resulted in
the adoption of Regulation 13, which required the use of
oxygenates in gasoline. The AQCC presented in the
"Statement of Purpose" that Regulation 13 would result in
a 12-16% reduction of CO at an estimated cost of $265-
$882 per ton of carbon monoxide reduced. This cost
compares favorably with other CO control programs. This
regulation established, for the first time in the nation,
the regulation of fuels by an appointed commission at the
state level for the purpose of improving air quality.
In August 1987, a special session of the Colorado
General Assembly was called to address budget issues.
This special session provided an opportunity for
legislators to make a second attempt to stop the
implementation of Regulation 13. A Colorado State
Representative requested permission from the House and
Senate Leadership to introduce a bill which would require
approval of the Colorado General Assembly on Regulations
32


adopted by the AQCC prior to the implementation of any
regulation. This bill would reduce the regulations
adopted by the AQCC to the status of a "recommendation to
the legislature." The result of this bill's passage
would have several serious public policy conseguences.
First, this requirement would only be imposed on the AQCC
and no other boards and commissions in the State.
Second, under present Colorado law, any regulation
adopted by a board or commission can be vetoed by passage
of a bill to do so. The proposed bill would reverse this
process by requiring that a bill be passed before
enactment of any regulations. A third major issue of
this proposed bill involved the SIP process. EPA
requires that all SIP elements be enforceable. If the
AQCC adopted an oxygenated fuels program as part of its
SIP strategy, yet the regulation would not be enforceable
unless adopted by law, it would not be acceptable to EPA.
A meeting was held with the Leadership of the Senate,
sponsor of the bill, the RMOGA, the Governor's office and
the Colorado Department of Health. As a result of this
meeting, the bill was not introduced. But as a
compromise, a demonstration project would be conducted by
the Colorado Department of Health under the direction of
the Oxygenated Fuels Sub-committee. The purpose of this
demonstration project was to monitor the operation of
33


vehicles under various operating conditions using
oxygenated fuels. If this demonstration project
identified major problems the AQCC would rescind or
modify the oxygenated fuels program as necessary. If no
major problems were identified, implementation of the
program would proceed. The major purpose of the
demonstration project was to establish public confidence
for the oxygenated fuels program. The demonstration
project did not identify any major problems.
Implementation of Regulation 13 (1988)
The nation's first oxygenated fuels program was
implemented in January 1988. A continuous barrage of
opposition from some members of the oil industry and a
few members of the General Assembly persisted via the
news media throughout the program implementation period.
In January 1988 a third attempt was made within the
General Assembly to stop the program. This bill, like
the previous bill, passed the Transportation Committee,
but due to heavy lobbying by the environmental community
and the oxygenated fuels industry, the bill never came to
final vote on the floor of the House. A chronological
schematic of the formation of Regulation 13 is presented
in Figure 2.1.
34


YEAR
1988
1987
AQCC
SUB-COMMITTEE
REG
IMP
DEMO.
PROJECT
REG. 13
Am ISP
LEGISLATIVE
1986
u>
ui
GOVERNOR'S
TASK FORCE!
1982
1979
SIP
CDH
EPA
STUDY
EVENTS
Figure 2.1. Chronological Schematic of the Formation of Regulation 13


As a result of the implementation of this fuel
control program and its anticipated air quality benefit,
other cities including Phoenix, Arizona; Albuquerque, New
Mexico; Las Vegas, Nevada; and Mexico City, Mexico, have
adopted similar programs.
36


CHAPTER 3
REVIEW OF LITERATURE
Policy formation, or "agenda setting," is the
process of "how" and "why" rules and regulations become
adopted and statutes become enacted. To better
understand the forces that act upon these processes, the
conceptual contexts in which policy formation activities
take place will be examined through a review of policy
formation theories and models, and intergovernmental
structure and relations.
Governmental Policy Formation
In the conceptual context of policy formation
analysis, a series of models have been developed. A
policy analysis model is a simplified version of the way
in which policy scientists and researchers look at the
governmental process. The following sections present an
overview of policy analysis models.
Elite Theory
Wright Mills (1959), in The Power Elite, views
public policy as the outcome of elite preferences. The


elite theory, as defined by Hendree Milward, suggests the
following:
1. People are apathetic and ill-informed about
public policy.
2. Elites shape mass opinion on policy questions.
3. Policies and communication flow downward from
elites to masses.
4. Conservative elites are interested in
preserving the status quo and thus their
advantage.
5. This theory deals with policy in an
incremental, reactive fashion, since change is
not generally desired (1978:10).
Group Theory
Bentley (1949), Truman (1954) and Dahl (1961) are
the major formulators of the group theory. They view
policy as the result of the philosophies of special
interest groups.
The group theory specifically states that:
1. Individuals with common interests ban together
formally or informally to press their demands
upon governments.
38


2. Individuals are important in the political
process only when they act in groups which
pursue their interests.
3. The group becomes the essential bridge between
the individual and the government.
4. Public policy is the equilibrium reached in the
group struggle which is then legitimated by the
government acting as a legitimator and
scorekeeper.
5. The equilibrium is determined by the relative
influence of interest groups (Milward,
1978:10).
In reference to the group theory, Thomas Dye notes:
The task of the political system in this
theory is to manage group conflict by: 1)
establishing rules of the game in the struggle,
2) arranging compromises and balancing
interest, 3) enacting compromises in the form
of public policy and 4) enforcing these
compromises (1975:21).
Garbage Can and Three Streams Models
In the review of policy formation the central
question of how agenda setting takes place is of specific
interest to public policy researchers. John Kingdon
describes a model by Michael Cohen, James March and Johan
Olsen (1972) as the "Garbage Can" model. The major point
of this theory is that organizations are a "collection of
39


choices looking for a problem, solutions looking for
issues to which they might be the answer and decision
makers looking for work" (1984:90).
Kingdon (1984) refines the garbage can theory by
developing the following three major processes in which
to analyze policy formation: 1) problem recognition, 2)
the formation and refining of policy proposals and 3)
political process. Kingdon (1984) contests that these
"Three Streams" of process develop and operate largely
independently of one another. His basic theory is that,
once one understands the three streams separately, the
key to understanding the agenda setting process is the
coupling of the streams. The separate streams come
together at critical times developing a window of
opportunity. "A problem is recognized, a solution is
available and the political climate makes the time right
for change" (Kingdon, 1984:93).
Incrementalism
Charles Lindblom's theory of public decision making,
or the science of "Muddling Through," envisions a slow
and incremental process of policy making (1959:87-88).
This incremental process fosters policies, practices and
programs that seek to only marginally address shifts and
changes in the needs of society.
40


James March and Herbert Simon have argued that "most
human decisions, whether made at the individual or
organizational level, are concerned with the discovery
and selection of satisfactory alternatives rather than
seeking to optimize the choice among viable alternatives
by comparative analysis against predetermined standards"
(1958:140-141).
Opponents to the practice of incrementalism charge
that it is "inept, corrupt, and resistant to change"
(Beckman, 1977). Critics further suggest that
incrementalism reinforces and perpetuates entrenched
political forces in their ability to control and
manipulate the resources of society.
Dye (1975) states that the incremental model is a
decision making process for policy formation which is
more descriptive than prescriptive, therefore it is not
useful in analyzing how the political system operates in
its totality. There is a need for public decisions to be
made in a more cognitive and rational manner,
particularly in the area of environmental policy
formation.
41


Systems Model
The Systems Model, shown in Figure 3.1, is viewed as
a response of the political system by forces from the
"environment."* The Systems Model was first introduced
into the political sciences in the fifties by David
Easton and refined later by Thomas Dye.
In this model, inputs are received into the
political system in the form of demands and supports.
The "environment" is represented by anything that is
external to the boundaries of the political system. The
political system in turn is that group of interrelated
structures and processes which function authoritatively
to allocate values for a society. Outputs of the
political system are authoritative value allocations of
the system, and these allocations constitute public
policy (Caputo, 1977:206).
A concern with the Systems Model, as identified by
Almond and Powell (1966) is that in its original
formulation, the Systems Model regards actions such as
rule making, rule application and rule adjudication as
being identified with the legislature, bureaucratic
*For the purpose of this paper, it is necessary to
clarify that the word "environment," when used in quotes,
refers to the political, social and economic arena. When
not found in quotes, environment will refer to the
conditions of air, land and water.
42


agencies and the courts. Almond and Powell (1966) state
that the Systems Model should also be used in a broader
context in the policy formation process for institutions
and perhaps even the private sector.
An additional analysis of the Systems Model by
Warren, Rose and Bergunder (1974) viewed the policy
subsystems, not the political, social and economic
"environment," as creators of demands. The policy
subsystems, through their control over resources,
information and authority have the power to structure
ENVIRONMENT
V
INPUTS
FEEDBACK
FEEDBACK

DEMANDS

DECISION
MAKING
1
OUTPUTS
1 -j SUPPORTS ^
FEEDBACK
^ FEEDBACK J
Figure 3.1. The Systems Model Concept of Public Policy
Making.
43


their own "environment" and create their own demands.
Cobb, Ross, and Ross (1976) refer to this as the "inside
access model" of agenda setting.
The Systems Model provides a unique benefit of being
able to document and analyze the policy formation
process. This is especially true in the "feedback"
portion of the model, which will allow the researcher to
assess interaction of the actors because of the policy
formation process. For these reasons, this thesis will
employ the Systems Model to assist in the documentation
and assessment of the policy formation process of the
AQCC in adopting Regulation 13.
Intergovernmental Relations and Structure
Much of the traditional literature on state politics
and policy formation is expressed in the writings of
Sharkansky, which center on issues such as the party
system, voter participation, apportionment and tax
revenue capacity. Although the above areas have a
general relationship to this study, a more detailed
review of literature focusing on the following areas will
be more relevant: 1) the structure and effects of boards
and commissions, 2) the technical capacity of the
bureaucracy and 3) the willingness of a local government
to take bold action.
44


Elazar (1966:40) discusses certain political
characteristics described as "moralist," "individualist"
and "traditionalist" cultures and how they play a basic
role in policy formation. He classifies states such as
Colorado as having the characteristics of an
"individualist" culture. This definition carries with it
a more favorable interaction of the public and private
sectors.
Crain and Vanecko (1968:125) emphasize the
importance of appointed boards in policy formation.
These authors state that boards can make harder choices
and be less concerned with economic and political
constraints. Williams and Adrian (1963:23-26, 272-288)
suggest that boards and commissions are more open to
change and have the capacity for greater professionalism
for technical issues. These philosophies regarding the
technical abilities of boards and commissions are
addressed in the second research question by
investigating how the Air Quality Control Commission
approached the complexity of the oxygenated fuels issue.
Derthick (1968:11) states that there is a "threshold
size" of a bureaucracy which allows for more options,
greater professionalism on technical issues and for
individuals within the bureaucracy to express personal
ideas. The Air Pollution Control Division of the
45


Colorado Department of Health has the capacity to collect
and analyze data pertaining to the oxygenated fuels
program. These data played a key role in the agenda
setting process.
The literature reveals that conflicts exist within
governmental levels. The structure and process of how
these conflicts are resolved play an important role in
the formation of public policy. Dye (1966:47) makes an
important point regarding the structure, relationship and
impact that state governments have on local governments
in the policy formation process. He states that the
effects of rural vs. urban interests cannot be ignored.
Because the legislative body represents both rural and
urban view points, decisions may be compromised. Whereas
boards and commissions are less influenced by this
conflict. Nagel (1934:40) brings up another issue of
conflict in policy formation with the example of urban
transportation problems vs. air pollution. Can a society
increase its industrial production and still maintain
acceptable quality of life? Nagel summarizes his public
policy theory into the following three general
categories: 1) governmental structure, 2) governmental
procedures, and 3) incentives for change.
The literature also points to another policy
formation process. Burns, Peltason and Cronin (1984:98)
46


discuss the process of "direct legislation," or policy by
the people. This process is an effort by the progressive
movement to return government to the people through
initiatives, referendums and recalls. Critics of the
direct legislation process acknowledge the people's lack
of faith in the legislative body to address many of the
complex issues facing society. However, they feel that
the voters would also not have the proper information to
decide on complex and technical issues such as the
subject of this study.
Wright (1982:229) depicts the role of the
"technocrat" in the agenda setting process. He defines
this term as a person who has the expertise in handling
technical issues and information and also possesses
implementation skills. These entrepreneurship efforts
are increasing at the state and local governmental
levels. Technocrats are playing a more important role in
stimulating the demands in the formation of public
policy.
Summary
Public policy formation, as it applies to this
thesis, will be reviewed, documented and assessed by use
of the Systems Model as defined in this chapter. The
Model's components, along with the supporting literature
47


on intergovernmental relations, provide a useful tool in
studying the complexity of the research subject.
The major determinants, or key elements, that lead
to the decision to adopt and implement Regulation 13 will
be defined in the next chapter. These determinants will
be identified with the following components of the
Systems Model: 1) inputs and demands, 2) decision making
process, 3) outputs, 4) feedback and 5) "environment."
This documentation will enable students and practitioners
of public policy to recognize obscurities that impact the
policy making process. The identification of subtleties
such as 1) the technical complexity of an issue, 2)
political pressure, 3) cultural heritage, 4) individual
values and 5) the uniqueness of the subject under study
will enhance the body of literature dealing with public
policy formation.
48


CHAPTER 4
METHODOLOGY
The research project employed a descriptive single
case study methodology. This chapter addresses the
research design (conceptual framework), the research
questions and the issues of validity and reliability.
Research Design
In analyzing the research topic, the formation of a
public policy mandating the use of oxygenated fuels as an
air quality strategy, there are many factors that lend
strong support to the case study research methodology.
The case study, as described by Yin, is a research tool
that:
1. Contributes uniquely to our knowledge of. .
political phenomena.
2. Allows for an investigation to retain the
holistic and meaningful characteristics of
real-life events.
3. Has the ability to deal with a full variety of
evidence observations, interviews,
documents, etc.


4. Investigates a contemporary phenomenon within
its real-life context.
5. Analyzes phenomenon without requiring control
over behavioral events (1984:19-25).
This literature also supports the use of a
descriptive case study format because the subject is a
revelatory case in that "the investigator has the
opportunity to observe and analyze a phenomenon
previously inaccessible to scientific investigation"
(Yin, 1984:43). The strongest rationale, however, in
selecting the descriptive case study methodology is
because the research questions seek to answer "how" and
"why" Regulation 13 was developed and adopted as public
policy in the state of Colorado.
Literature clearly supports the case study
methodology as an appropriate research format to analyze
the topic of Colorado's oxygenated fuels program
(Regulation 13). Upon further analysis of the scope of
case studies, it was determined that a descriptive single
case study should be used. The decision to employ a
descriptive rather than a comparative case study was
based on the fact that the policy formation process
presented herein is totally unique for air quality
improvement programs, and should in and of itself, be
documented as a critical chapter in the literature of
50


environmental policy formation. It was determined that
the appropriate structure would be the "global nature"
(single unit approach) of analyzing Regulation 13 vs. a
"subunit" or "subunits" (multiple unit approach) of the
program.
Research Questions
In order to thoroughly document and assess the
process and structure of public policy formation, the
"how" and "why" questions were thoroughly investigated
with the following research questions:
1. How was this public policy formulated and
adopted?
Who were the key players; what was their
perception of Denver's air quality; how did
they interact in the formation and adoption of
this public policy?
How open was the policy formation process;
did it provide adequate communication among the
key players; how beneficial was the data; was
it accurate or misleading?
How were the plans for implementation and
enforcement addressed to ensure public
acceptance?
51


2. Why did the Air Quality Control Commission, an
appointed body of government which was
responsible for the development of the State
Implementation Program, adopt Regulation 13
rather than the mandate being enacted through
the general assembly, an elected body of
government?
Why did the Air Quality Control Commission
consider fuel control as an air quality
strategy?
Why was the unique position of the Air
Quality Control Commission a factor in this
policy formation process; what influence did
lobbying by special interest groups have; what
influence did the technical complexity of the
issue have?
The primary research questions provided the emphasis
for identifying the following major issues (key
determinants) which were studied:
1) air quality issues
2) oil industry issues
3) auto industry issues
4) political issues
5) bureaucratic structure.
52


Some researchers, with interest in social
phenomenology or social anthropology, feel that the
social realities are too complex to be restrained by
conceptual maps or standardized instruments. They
advocate a more loosely structured, inductive "grounded"
theory to gather data. However, when the researcher, as
in this thesis, has an understanding of the parts of the
phenomenon that are not well understood, but knows where
to look for data, a more structured qualitative research
is appropriate (Miles, 1984:27).
The conceptual framework, as shown in Figure 4.1
identifies the determinants which influenced the policy
formation process and the relationships among them. The
conceptual framework explains graphically the primary
dimensions of the thesis and shows the limitations of the
study by identifying who and what issues will be
analyzed. It also shows that the thesis is focusing on
the output of the policy formation process.
This conceptual framework provides a structure for
the documentation of the policy formation process. The
answers to the primary research questions provide an "ex
post facto" examination of the AQCC's role in the public
policy formation process. The subordinate questions
ensure the linkage between the primary research questions
and the Systems Model.
53


Figure 4.1. Conceptual Framework for Single Descriptive Case Study


A third research question is essential if an
assessment is to be drawn from the analysis of the
collected data. Therefore, the following research
question was posed:
3. What are the major public policy
implications that resulted from the
adoption, implementation and
enforcement of Regulation 13?
What effect did this policy formation process
have on the interactions of the key players;
how could this process influence the future
actions of appointed governmental bodies?
What influence did this policy formation
process have on other governmental entities
considering fuel regulation as an air pollution
control strategy?
What are the similarities and differences
between this policy formation and the
literature on public policy?
The answer to this research question and the
subordinate questions provides an outline to evaluate the
possible future implications of this type of policy
formation. It is important to note that the thesis is
limited to the discussion of the process or the "how" and
"why" this policy was formulated and does not focus on
55


the technical content (air quality benefits) of the
regulation.
Validity and Reliability
The issues of validity and reliability were
addressed by the researcher. Internal validity is a
concern only for causal or explanatory studies where an
investigator is trying to determine whether event "X" led
to event "Y." If the investigator incorrectly concludes
that there is a causal relationship between "X" and "Y"
without knowing that some factor "Z" may actually have
caused "Y" the research would have failed to address
internal validity. In a descriptive case study, as
employed in this thesis, this logic is not applicable
because causal statements are not made. Therefore
internal validity control is not necessary for a
descriptive case study (Yin, 1984:38). However, the
issues of construct and external validity are addressed.
Construct validity establishes correct operational
measures for the concepts begin studied. External
validity establishes the domain to which a study's
findings can be generalized. This concept of external
validity is of particular interest in this thesis because
of the impact of analytical generalizations of the
research subject.
56


Construct validity was accomplished during the data
collection phase of the thesis through the use of
multiple sources of evidence, and through establishing a
chain of evidence by organizing and documenting the case
study documents, news clippings and narratives. External
validity is evident because the policy formation
procedure being studied has far-reaching application with
the possibility of being implemented at different levels
of government throughout the United States as well as in
other countries.
The purpose of ensuring reliability in the case
study is to minimize errors and biases. Yin (1984:64)
identifies four elements (as follows) that must be
present in a case study to help assure reliability of the
methodology.
1. Over view of the case study project (project
objectives and auspices, case study issues, and
relevant readings about the topic being
investigated);
2. Case study questions (the specific questions
that the case study investigator must keep in
mind in collecting data, "table shells" for
specific arrays of data, and the potential
sources of information for answering each
question);
57


3. Field procedures (credentials and access to the
study "sites," general sources of information,
and procedural reminders); and
4. Guide for the case study report (outline,
format for the narrative, and specification of
any bibliographical information and other
documentation).
Item number one, case study issues and relevant
readings, was addressed in Chapter 3. Item number two
was addressed in this chapter. In addition, to provide
for reliability, two prerequisites were met: 1) the
development of a strong case study data base and 2)
accurate documentation of the data. Items three and
four, field procedures and case study guide are topics of
the following chapter.
58


CHAPTER 5
DATA COLLECTION
Sources of Data
The case study data were collected through
participant observation (technical reports and other
documentation), a review of news clippings and interviews
with key participants involved with the policy formation
process. The research guestions and conceptual framework
presented in the previous chapter directed the data
gathering process by focusing on the issues
(determinants) and their application to the Systems Model
of public policy formation. The research questions, the
Conceptual Framework (Figure 4.1) and the Systems Model
provided the guidance for developing interview questions
and for the design of a matrix to display a portion of
the collected data.
Participant Observation
This special data collection process is unique as
well as appropriate since the researcher was an active
participant of the events being studied. Yin (1984:70)
describes this as an advantage because the researcher:


1) can gain access to data, groups, persons and
organizations which might be unaccessible to others and
provide for a more scientific study; and 2) has an
advantage of perceiving reality from the viewpoint of
someone inside the case rather than externally.
The data collected as a participant observer
included; 1) official reports and memos collected by the
Department of Health, Air Quality Control Division,
Mobile Sources Section, 2) the Oxygenated Fuels Task
Force report and 3) the transcripts and exhibits of the
Regulation 13 public hearings. A complete list of all
documents reviewed for this phase of data collection is
provided in Appendix C.
News Clippings
News clippings pertaining to this thesis spanned a
time period of approximately one year (September 1986
through August 1987). A total of 207 clippings were
collected and reviewed. The news articles were primarily
from the Denver area, although clippings from other
Colorado cities and national news papers are included in
the data base. One hundred and fifty two appeared before
June 19, 1987 and 55 appeared after that date. The data
collected from the news clippings provide a chronological
60


presentation of events leading up to the adoption of
Regulation 13 and are shown in Appendix D.
Interviews
Many actors were involved with the introduction and
formulation of Regulation 13. An interview guideline was
designed to enable the researcher to collect pertinent
data about the issues (determinants) for analysis using
the Systems Model and to identify the interactions among
the actors. Data were collected through personal and
telephone interviews with key individuals to analyze the
role of each in the adoption of this public policy. When
possible, a recording of each interview was made and
subsequently reviewed to verify interview notes during
the data analysis process. Appendix E references the
individuals and/or representatives of organizations that
were interviewed. These individuals and organizations,
plus their respective roles in the policy formation
process are detailed in Chapter 6.
Selection and Coding of Data
The case study, as a qualitative research
methodology, primarily uses words, not numbers, to
analyze the collected data. This process enables
effective description of the research data as suggested
61


by Miles who states, "Words render more meaning than
numbers and should be used in research studies"
(1984:55). However, because of the high probability of
"word overload," it is essential that a system for data
selection be developed. This data selection system also
helps to minimizes bias during the data collection and
analysis phase. The following concepts were employed for
data selection:
1. Noted quotes in articles, news clippings or
reports.
2. Statements that depict consequence.
3. Statements that are explanatory.
4. Data that established a link (strong or weak)
between processes or decision making.
5. Data that suggests multiplicity linkage of
issues. This could be between actors or any of
the determinants.
6. Data that share direction of an issue,
establish point of view or establish a
contradictory position.
7. Establish knowledge on technical issues.
8. Suggest a common threat or contrast to a stated
position on the issue (Miles, 1984:56).
62


Miles (1984) developed a "coding" system for
collecting gualitative data. This "coding" is an
abbreviation of field notes which classify the data
(words) as they relate to important issues being studied.
For the purpose of this study, the words were classified
as they related to the determinants as shown in Figure
4.1 and the elements of the Systems Model. This coding
allowed for an organization of the data as it reflected
upon the research questions and provided for data
retrieval for further analysis.
Matrix Format
The coding method employed a matrix format. Each
matrix consists of columns and rows. The columns
represent the major elements of the Systems Model (Figure
3.1) . The rows depict the major determinants (Figure
4.1) . Each of the figures presented in this chapter
represents a separate data source. Figure 5.1 shows data
gathered through participant observation. Figure 5.2
displays data from news clippings. Interview data are
presented in Figure 5.3. The specific date of each
interview is not specified in Figure 5.3. All interviews
were conducted between August 1989 and February 1990.
The data are arranged within each matrix as a means
to show the associations between the key determinants and
63


the elements of the Systems Model. The arrangement of
the data in each figure is not intended to represent any
chronological order or relative importance. The criteria
for selecting data for entry into the matrix cells from
the total data base is critical to gualitative data
analysis. The data selected represents a percentage of
all available data and followed the methods for data
selection as described in Chapter 3.
The data entry is positioned so that the left margin
is directly under its respective column. For example:
the "Report by the Dekalb County Sheriff Department" in
Figure 5.1 is data reflecting a "Demand" for public
policy. Also, the "Report by the Colorado Department of
Health on calls from citizens" reflects the "Feedback"
element of the Systems Model of policy formation. No one
data entry represents more than one element of the
Systems Model.
Analysis of the data employed the concept of
inductive inference by drawing general conclusions from
the analysis of particular instances which were then
related to elements of the Systems Model.
This thesis, in relying on the Systems Model is
different in its approach than a statistical correlation
and regression analysis. Rather, the research focuses on
the process of documentation or description. In
64


describing the linkage between the key determinants and
their impact upon the policy formation process, the
analysis implements a descriptive form, utilizing terms
such as "account for," "explains" or "produces." The
language of the Systems Model is not the same as
association language or correlation analysis describing
statistical correlation or association. In the study of
public policy formation, it is necessary to rely on
exploratory and descriptive models to further the
knowledge of public policy.
65


DEMANDS SUPPORTS DECISION OUTPUTS FEEDBACK ENVIRONMENT
MAKING
Report by Dekalb Co., NE Sheriff Dept., 6/88, "There are no negative effects. but there are environmental benefits." Letter from congressional delegation to EPA, 2/2/87, "Serious air quality problem in Colorado" Letter from EPA to MAOC, 3/24/86, "Mandatory gasohol 1s considered a reasonable effort" Report by CDH, 3/88, *2,613 calls from citizens" Report by CDH, 3/89, *260 reported calls from citizens*
AIR QUALITY ISSUES Environmental News, 8/29/88, "EPA proposed to disapprove Carbon Monoxide SIP for Oenver" Letter from U.$. Delegation to EPA, 4/8/87, "Serious air quality 1n Colo. Regulations should be developed according to Executive Order 12291" KKTV Ch. 4, Colo. Springs, 4/22/88, "Not joining 1n support even though CDH says oxy-fuel reasonable t successful"
OIL INDUSTRY ISSUES Report for oil co. by private consultant, 6/87, "Program *111 not help CO problem" Service Station Management, Letter from RMOGA to Sen. Strickland, 8/17/87, "Agreement reached by General Assembly, AQCC, APCD, Governor, auto dealers. Stop introduction of special- bill to rescend AQCC Report for CDH by consultant, 6/87, "Oil companies will continue to fignt program* Letter from Amoco to dealers, 1/88, "Dispose of CDH public Information materials" Study for CDH by consultant. 6/87, "011 co. do not believe 1n the program and will continue to fight it even after a mandate 1s Imposed"
Edltoral, 5787; Ethanol mandate 1s wrong" author!ty"
Letter from RMOGA to Gov. Romer, 12/87, "He cannot endorse any conclusions which might be reached" Statement by oil Industry at AQCC Public Hearings, 6/87, "Program 1s experimental. The AQCC program 1s an ethanol program"
Statement by GM, 4/89, "Supports Oxy-fuel for CO reduction" Statement by MVMA at EPA Workshop, Ann Arbor, MI, 8/87, "It's a state decision" Statement by repair industry mechanic to AQCC, 4/88, "Concern regarding mechanical problems"
Statement by MVMA, Clark Co. Rocky Mt. Motorist, 8/88.
AUTO INDUSTRY ISSUES NV, 10/27/88, "Stand remains neutral" Video by Ford i GM, 1988, "Little or no loss of fuel economy" "There was confusion about oxy- fuel s program" Letter fro* Ford Motor Co. to U.S. Sen. William Armstrong, 8/11/78, "Auto manufacturers will not void warranties"
Letter from EPA to Sen. Cutrd Statement by Rep. Fagan, 7/87, "1/2 of all gasoline sold will not contain alcohol" Letter from Chrysler to Rep. Pat Grant, 9/86, "Limited benefits" Letter from General Assembly Leadership to CDH, 7/27/87, "Requiring assurance that AQCC would stop Regulation 13 if dr1 viability not acceptable" Letter from Federal Trade Gaiette Telegraph, Editorial by
POLITICAL ISSUES A Fenlon, 2/86, "Support S8-134 Mandate Gasohol Sill. Bill killed In comnittee Statement by CDH to U.S. House Sub-committee. 10/23/87, "MT8E similar to gasoline. No problems are expected." Commission to U.S. Rep. Durbin, 8/8/88, Concern about anti- alcohol campaign* Rep. *Uy lowers, 8/u/, Ine decision to mandate use of gasohol should be made by the 1egi siature"
Figure 5.1. Participant Observation Data
66


POLITICAL ISSUES DEMANDS SUPPORTS DECISION MAKING OUTPUTS FEEDBACK ENVIRONMENT
Letter from U.S. Dept, of Interior to Gov. Romer, 7/29/87, "The bogles to blow engines and desolve parts fall to materialize. Greatest barrier was the fears raised by the press reporting rumors" Letter from Rep. Chris Paulson, to CDH, 7/27/87, Lot of misinformation. Many people feel Inconvlence cost outweigh the benefits"
BUREAUCRATIC STRUCTURE Letter from Attorney General to CDH, 10/86, "Confirming authority of AQCC" Report of Demonstration Project conducted by AQCC/APCD, 12/3/87, "Results show that there Is no evidence that car engines are damaged by either fuel additive EPA Workshops, Ann Arbor, MI {8/86, 5/87) Meetings of AQCC Sub- committees, 2/26/87, "Start of public hearing process" Report of Governor's Oxygenated Fuels Task Force, 10/86, "Recommendations reached by process of consensus" Meeting of CDH A Dept, of Labor, 8/24/78, "Enforcement program 1n place" Letter from CDH Lab Division to CDH APCD, 9/14/87, Lab has many positive attributes to support enforcement" Report for CDH by consultant, 8/87, "Perception of program not positive stems from limited knowledge" CDH develops public education program, 1/87
Figure 5.1. (contd.)
67


AIR QUALITY ISSUES DEMANDS SUPPORTS DECISION MAKING OUTPUTS FEEDBACK ENVIRONMENT
Loveland Reporter Herald, 9/25/86, "Denver would have to cut CO In half to hang on to J300 million 1n federal funds." Colorado Springs Gazette Te'leqraph, 10/17/86. Governor Lam states that this CO problem threatens our way of life, our quality of life, our economy." Denver Post, 2/27/87, "The oxygenated fuels program 1s the only realistic proposal." Rocky Mountain News. 7/3/87. "U.S. Senator Armstrong stated that sacrifices must be made now, or everyone 1n Colorado will suffer." Denver Post. 11/86. "The Metropolitan Air Quality Council unanimously supports the Task Force Report." Denver Post, 6/29/88. "58t of the respondents favor the program." Triangle Review, Guest Opinion, 6/W, 'Colorado oxygenated fuels program will not mandate gasohol
OIL INDUSTRY ISSUES Denver Post. 11/1/86. "Oil Industry officials said that the MAQC acted without sufficient technical data." Denver Post. P/PB/B7 representative of the RMGOA stated that they would prefer that consumers not be guinea pigs." Denver Post. 2/PB/B7 >i spokesman of the oil Industry stated that there are serious problems with the mandated use of gasohol." Denver Post, 2/28/87, "A representative of the RMGOA stated that the legislature should take responsibility for reviewing the AQCC regulation." Denver Post, 2/28/87, "A representative of the RMGOA stated that the proposed program would force the use of gasohol throughout Colorado." Oenver Post, 2/10/89, "The bill (HB 1115) was praised by oil Industry executives who believe that the legislature, not the A1r Quality Control Consul sslon, should be responsible for the mandatory oxygenated fuels program." Denver Post. 2/21/87. "A representative of the oil Industry stated that the proposal could result 1n the eventual loss of local fuel refining."
AUTO INDUSTRY ISSUES Denver Post, 2/7/87, "An auto industry spokesman said that the use of high oxygenated fuels 1n Denver would cause little change 1n vehicle performance." Denver Post. 11/16/86. "Engineers From Chrysler, American Motors. General Motors and Ford. said several potential problems for vehicles are Inherent 1n any plan that mandates-with no alternatlves- what fuels will be available."
Figure 5.2. News Clippings Data
68


POLITICAL
ISSUES
DEMANDS
SUPPORTS
Rocky Mountain Hews. 7/22/87,
"Governor Soy ft oner says he
will not try to block a program
that will force Front Range
motorists to use cleaner-
burning, high oxygen fuels next
year. Romer's comments
disappointed Senate President
Ted Strickland who met with
Romer and oil Industry
representatives Monday to
discuss proposed legislation to
delay the start of the
mandatory program.'
Rocky Mountain Hews, 7/3/87,
"Without endorsing specific
solutions, Armstrong suggested
that mandatory driving
restrictions, use of high-
oxygen fuel, extending daylight
savings time and Imposing
economic sanctions by Congress
may all be ways to reduce air
pollution."
BUREAUCRATIC
STRUCTURE
Oenver Post, 2/1/87, "It 1s
clear that second guessing (the
AQCC) would promote regulatory
chaos."
DECISION
MAKING
OUTPUTS
FEEDBACK
ENVIRONMENT
Rocky Mountain News, 2/28/87,
TegisTaior Ts shocked by
threat of sanctions 1f lawmaker
Insists on reviewing air
quality program before 1t takes
effect."
Denver Rost, 2/28/87, "EPA
stated that passage of a bill
to stop the oxygenated fuels
program would cost Colorado S61
million."
Denver Post, 12/20/87, The EPA
FTa's not done everything to
over-see the states."
Denver______Post, 1/28/87,
'Represented ve Bud Hover, a
former auto dealer, has
Introduced legislation
requiring approval by the
legislature of the AQCCs
oxygenated fuels program."
Colorado_____Springs Gazette
telegraph, 1/4/87, ^The^ Region
8 EpA Administrator stated that
for Denver, the two major
Issues are the CO deadline and
what happens 1f, or more
11kely--when, we don't wet the
standards. Some people say
that without sanctions, we'll
never get the air cleaned up.
Others think that's too harsh."
Denver Post, 2/10/89, "A member
o? tfie WOC stated that any
attempt to delay the program
would be a step backward.
Denver Post, 7/2/87, "An
organization called 'The Center
for Clean A1r Alternatives'
has begun work on oallot
Initiative to take authority
away from AQCC."
Post (Headline) 6/20/89
Ethanol In, Gasoline Out."
Figure 5.2. (contd.)
69


AIR QUALITY ISSUES DEMANDS SUPPORTS DECISION MAKING OUTPUTS FEEDBACK ENVIRONMENT
STATE REPRESENTATIVE: "The citizens demand better air. DENVER CHAMBER OF COMMERCE: "Public policy demands the regulation." OIL INDUSTRY: "Air quality is more of a political issue than a real issue." AQCC: "Many grass-roots factors came together during the decision process." OXYGENATE SUPPLIER: "People are aware that Denver's air is awful and does not meet health standards." APCD: "The NAAQS are not being met and we have implemented other control strategies." CAR DEALERS: *The primary concern was fuel quality, not the program as a
OIL INDUSTRY ISSUES RMOGA: "More political than technical issue." STATE REPRESENTATIVE: "The oil industry was against the mandated program." % ARCO: "We were concerned because of the bad press that the oxygenated fuel program was getting." ARCO: "The AQCC had more time to investigate technical Issues. Arizona's program went through the legislative process and it was a mess." OIL INOUSTRY: "The AQCC was not politically accountable." RMOGA: Press used brown cloud to get people's attention on this Issue, hut this was misleading to the public.* OXYGENATE SUPPLIER: "The Task Force Report was a critical document." OXYGENATE SUPPLIER: "Oil industry needed to stop this program so it would not start OXYGENATE SUPPLIER: "News print reacted to what they were told. They put fear into the public."
AUTO INDUSTRY ISSUES AUTO INDUSTRY: "The issue was vapor pressure, not oxygenated fuels." MVMA: "Local mandates can effect larger regions and possibly other states." MVMA: "The General Assembly is more aware of the AQCC because of this regulation." AUTO INDUSTRY: "The public would have accepted the program if it had Seen passed by the General Assembly."
Figure 5.3. Interview Data
70


POLITICAL ISSUES DEMANDS SUPPORTS DECISION MAKING OUTPUTS FEEDBACK ENVIRONMENT
STATE REPRESENTATIVE: "We have both a perceived S real air quality problem, but we need other controls. EPA: "Denver has one of the worst carbon monoxide problems 1n the nation. EPA: The technical support was a major Issue 1n the decision process. EPA: The oil Industry put down the ethanol Industry. GOVERNOR ROMER: "Integration of air quality and economic development is essential. HYMA: "The Issues were too technical and too controversial in many legislators did not want to get Involved. STATE REPRESENTATIVE: "The legislature did not want to be held responsible for the final decision. FORMER GOVERNOR LAMM: "The Commission may have over- stepped their boundaries." FORMER GOVERNOR LAMM: "Administrative law 1s well defined, but political roles are not. STATE REPRESENTATIVE: "Elected officials must make the decision. STATE REPRESENTATIVE: "Profits were the main hidden agenda."
BUREAUCRATIC STRUCTURE APCD: 'We needed an Innovative control program. We have Implemented all other controls." AQCC: Policy makers have a fear of the unknown." AQCC: "Both fuel additives needed to be on the market. The oil Industry was concerned about their market share and that other states would adopt similar programs. DENVER CHAMBER OF COWERCE: 'AQCC bent over backwards to make this an open process. AQCC: "Politics don't belong. This 1s a technical Issue." AQCC: "This Issue was very politically charged."
Figure 5.3. (contd.)
71


CHAPTER 6
DATA ANALYSIS
Thomas Dye states, "It is not an easy task to
demonstrate the independent effects of the political
system" (1976:66). It is difficult to sort out the
characteristics of the decision making process that
explain variations leading to policy formation. The
reality of Dye's statement became apparent upon analysis
of the collected data.
To present an organized analysis of the vast
quantity of data that was collected, this chapter is
divided into four sections:
1. RESEARCH QUESTION #1.
HOW WAS THIS PUBLIC POLICY FORMULATED AND
ADOPTED?
Who were the key players; what was their
perception of Denver's air quality; how did
they interact in the formation and adoption of
this public policy?
How open was the policy formation process;
what was the structure for communication among
the key players; did it provide for public


participation? How beneficial was the data;
was it accurate or misleading?
How were the plans for implementation and
enforcement addressed to ensure public
acceptance?
2. RESEARCH QUESTION #2.
WHY DID THE AIR QUALITY CONTROL COMMISSION, AN
APPOINTED BODY OF GOVERNMENT, ADOPT REGULATION
13 RATHER THAN THE MANDATE BEING ENACTED
THROUGH THE GENERAL ASSEMBLY, AN ELECTED BODY
OF GOVERNMENT?
Why did the Air Quality Control Commission
consider fuel control as an air quality
strategy?
Why was the process and structure of the Air
Quality Control Commission a factor in this
policy formation process; what influence did
lobbying by special interest groups have; what
influence did the technical complexity of the
issues have?
73


3.
RESEARCH QUESTION #3.
WHAT ARE THE MAJOR PUBLIC POLICY IMPLICATIONS
THAT RESULTED FROM THE ADOPTION, IMPLEMENTATION
AND ENFORCEMENT OF REGULATION 13?
What effect did this policy formation process
have on the interactions of the key players;
how could this process influence the future
actions of appointed governmental bodies?
What influence did this policy formation
process have on other governmental entities
considering fuel regulation as an air pollution
control strategy?
What are the similarities and differences
between this policy formation and the
literature on public policy?
4. ANALYSIS OF THE FORMATION OF REGULATION 13
USING THE SYSTEMS MODEL APPROACH.
As indicated above, the data are presented in a
format such that each of the first three sections
addresses one of the primary research questions. These
sections are further divided to answer the sub-questions
as they relate to the research questions. The fourth
section summarizes the findings of the data analysis
process by utilizing the Systems Model approach.
74


Research Question #1
Hov was this Public Policy Formulated and Adopted?
Although the first research question is discussed
exclusively in this section, the dependency of one
question upon the others cannot be severed. This is
particularly true in analyzing the key playersthe
individuals and entities involved with the formation and
adoption of Regulation 13.
Key Players Identification
Research Question #1: How was this public policy
formulated and adopted?
First Sub-questions: Who were the key players?
What was their perception
of Denver's air quality?
How did their inter-
actions influence this
policy formation process?
The key players in the formulation of Regulation 13
are listed below:
Environmental Protection Agency (EPA)
Governor's Office
Oxygenated Fuels Task Force
Colorado Legislature
Metropolitan Air Quality Council (MAQC)
75


Air Quality Control Commission (AQCC)
Air Pollution Control Division (APCD)
Oil Industry
Oxygenate Suppliers
Auto Industry
To better understand who these key players are,
following is a brief description of the role each "actor"
played. Each player's opinion regarding Regulation 13
will be presented later in the chapter.
Environmental Protection Agency (EPA): A federal
agency with the authority to enforce the Federal Clean
Air Act requirements. The Region 8 EPA office is located
in Denver. This office and the APCD hold monthly review
meetings on air quality issues.
Governor's Office; The Governor's Office of the
state of Colorado. The research period spans the time of
two Governors, Richard Lamm and Roy Romer. In every
state that violates the National Ambient Air Quality
Standards (NAAQS) as mandated by the Federal Clean Air
Act, it is the Governor's Office that is required to
submit to EPA a State Implementation Plan (SIP) to
eliminate these violations. The Governor is required to
appoint a Lead Planning Organization (LPO) in each area
of the state that is in non-attainment of the NAAQS.
76


This LPO is responsible for developing the SIP for its
respective area.
Oxygenated Fuels Task Force: Established by former
Governor Lamm on or about June 11, 1986. Was charged to
identify the obstacles to increased use of oxygenated
fuels as one strategy to mitigate the carbon monoxide
(CO) problem and to make recommendations to the MAQC and
AQCC about the best way to design and implement a program
that will overcome these obstacles. The Task Force was
to act as a fact finding committee, not to investigate
whether or not to adopt an oxygenate program.
Colorado Legislature: An elected body with
authority under the Constitution of the State of Colorado
to establish laws and create commissions and boards for
the purpose of protecting the health, peace, safety and
general welfare of the people of Colorado.
Metropolitan Air Quality Council (MAQC): An
independent committee appointed by the Governor to act as
the Lead Planning Organization (LPO) in developing the
State Implementation Plan (SIP). The Council's
membership consists of local elected officials, a
representative from business and industry, and local
citizens expressing an interest in environmental
concerns. In developing the SIP, the MAQC was to review
all available reasonable control strategies to assist the
77


state in meeting the National Ambient Air Quality
Standards (NAAQS).
Air Quality Control Commission (AQCC): A commission
established under the Colorado Air Quality Control Act
whose duties are to promulgate rules and regulations
which are consistent with legislative declaration to
protect the public health. Members are appointed by the
Governor for two years and approved by the state senate.
They are also responsible for reviewing the SIP developed
by the Lead Planning Organization and ensure it will
provide the necessary air quality improvement to meet the
NAAQS according to EPA guidelines. The AQCC is to
forward the approved SIP to the Governor for final
submission to the Region 8 EPA office. It acts
independently of the APCD during its regular process.
Air Pollution Control Division (APCD); A technical
and regulatory agency established within the Colorado
Department of Health (CDH) under the Colorado Air Quality
Control Act. The APCD plays several roles. It provides
technical support to the AQCC and implements and enforces
the AQCC regulations. The AQCC has no administrative
authority over the APCD.
Oil Industry; Represented in Colorado by the Rocky
Mountain Oil and Gas Association (RMOGA). Most oil
refineries belong to this organization. Amoco oil
78


company is one of the largest refineries. Independent
retail outlets of gasoline are not members, nor are
members of the petro-chemical industry such as ARCO.
Oxygenate Suppliers: The petro-chemical industry
(the largest being ARCO) and the ethanol industry (the
largest being Archer, Daniel & Middlenan ADM) which
produces and supplies the majority of the oxygenates to
the oil industry. ARCO supplies up to 60% of the U.S.
MTBE and ADM supplies up to 80% of the U.S. grain
alcohol.
Auto Industry: Consists of vehicle manufacturers
and new car dealers which are represented in Colorado by
the Motor Vehicle Manufacturer's Association (MVMA) and
the Colorado New Car Dealers Association, respectively.
Key Players Perception of Air Quality & Interactions
Individuals representing each of the above entities
were interviewed. The data collected from each interview
were reviewed to analyze each player's perception of
Denver's air quality and how their interactions
influenced the formation and adoption of Regulation 13.
The Environmental Protection Agency (EPA). The
passage of the 1987 Clean Air Act deadline saw many areas
still exceeding the NAAQS as shown in Figure 6.1. In May
1988, EPA notified 42 states and the District of Columbia
79


j^A
Figure 6.1. Areas Violating Carbon Monoxide NAAQS.
Source: U.S. EPA, 1988.


that their SIPs were substantially inadequate to meet
required air quality standards. The EPA wrote a letter
to the Governor's Office of each affected state mandating
that discrepancies between their state SIP and attainment
of the NAAQS be corrected (May, 1988/letter/EPA). This
letter placed Colorado in a unique position, since the
AQCC (a state entity) had already addressed the issue of
not meeting the NAAQS issue through the adoption of an
oxygenated fuels program (Regulation 13) almost one year
prior to the EPA letter (a federal level mandate). Being
ahead of the federal government's action caused confusion
and frustration to state policy makers that were involved
in this policy formation process. At the time when
Colorado was already taking action in the formulation of
Regulation 13, the EPA had not yet established its policy
on how to deal with areas of the country that were not in
attainment with the NAAQS.
EPA supported the technical fact-finding meetings
and research activities of the Colorado Department of
Health in the early stages of the regulation formation
process. However, EPA did not provide a clear policy
position to Colorado regarding the mandated use of
oxygenated fuels and at one time during a review meeting
with the APCD stated that they did not think oxygenated
fuels could play a role in reducing Denver's CO levels.
81


When a bill was introduced in January 1987 to the
Colorado legislature to delay the implementation of the
program, prior to the regulation being adopted, EPA
warned the bill's sponsor that "passage of his bill to
delay mandatory use of cleaner-burning gasolines could
cost Colorado up to $61 million yearly in federal funds."
This intervention of the federal government was
"resented" by the bill's sponsor (February 28,
1987/Denver Post). Soon thereafter, the EPA's stand was
not as clear. When the Regional EPA Office (Region 8)
approached the National EPA headquarters requesting
support for Colorado's oxygenated fuels program, the
Federal EPA denied support and stated, "We are not
interested in a blended fuel program for air quality
improvement" (Interview/EPA, Region 8). In addition,
during the AQCC public hearings, when asked by an AQCC
member about EPA's position on the required use of
oxygenated fuels, the EPA representative stated, "We have
no definite position, but I think we must look at what we
expect, (from the state) and that is: reasonable efforts
to be made toward attainment (which would prevent federal
sanctions)" (June 18, 1987/Transcript/EPA). This
reluctance by EPA to take a stand supports the statement
by C. Boyden Gray that state and local governments should
experiment with air quality control ideas and play a
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stronger role in developing control strategies to resolve
their individual problems.
Governor's Office & Oxygenated Fuels Task Force.
Colorado's air quality problems were actively addressed
under the administration of former Governor Richard Lamm
in several areas. First, he established the Metropolitan
Air Quality Council (MAQC) to act as the Lead Planning
Organization (LPO) for the Denver metropolitan area.
Lamm also appointed LPOs for Fort Collins, Greeley and
Colorado Springs. The LPOs from these cities supported
the air quality control strategies developed by the MAQC.
Governor Lamm also initiated the Oxygenated Fuels Task
Force. He charged this Task Force to provide technical
documentation regarding the use of oxygenated fuels to
the AQCC. Lamm felt that this technical documentation
might be needed to "sustain the AQCC's authority in the
area of fuel control as well as all future policy
formation activities from possible future actions of the
general assembly to eliminate such authority"
(Interview/Lamm). To provide for the continued authority
of the AQCC was important to Lamm because he felt that
the role of the AQCC may not be well defined in the area
of fuel control, particularly in the eyes of the
legislators (Interview/Lamm). The report produced by the
Oxygenated Fuels Task Force became a major document in
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the policy formation process. Members of the Task Force
included several key members of the General Assembly.
These legislators provided accurate technical information
regarding the Regulation to other members of the
legislative body. This action helped to dispel
misleading information that later appeared in the media
and that was circulated by opponents of the Regulation.
The Task Force Report, which had been prepared by the
APCD, was presented to the MAQC for consideration as an
element of Colorado's SIP. "Upon presentation of the
report to the MAQC and the AQCC, the emphasis on the
issue of fuel control moved from the technical arena into
the political arena" (Interview/Oxygenate Supplier).
Governor Romer has taken a clear stand on Denver and
Colorado's air quality. "We have to understand, that in
our policy making, it is crucial to have an integration
between environmental benefits and economic growth"
(Interview/Romer). Romer became actively involved with
the oxygenated fuels program on two specific occasions.
His first direct interaction occurred soon after the
regulation had been adopted. A bill to stop the program
was going to be introduced to the legislature at a
special session called in August of 1987. (This bill was
the second attempt to prevent the regulation of fuels.)
The Governor's Office participated in a meeting at the
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capital with the leadership of the Colorado Senate, the
sponsor of the bill, the oil and auto industries, and the
Air Pollution Control Division (APCD). The result of the
meeting was a compromise, in that the bill's sponsor
would withhold introduction of the bill pending the
results of a Demonstration Project. Governor Romer
agreed to support the oxygenated fuels program, but only
if it could be proven that the fuels would not cause
vehicle damage. Romer ordered that the Demonstration
Project be conducted by the APCD and administered through
the AQCC. The purpose of the Demonstration Project was
to address concerns about driveability and acceptance by
the public of the oxygenated fuels program. These
concerns were also an issue for certain members of both
the Colorado Senate and House of Representatives. In a
letter to the Executive Director of the Department of
Health, the House Majority Leader stated, "There is a lot
of misinformation and a lot of speculation that is
causing many people to feel that the inconvenience and
cost of the oxygenated fuels program will outweigh its
benefits" (July 27, 1987/Letter/House Majority Leader).
In this letter, the House Majority Leader requested that
the AQCC enact its emergency rule making authority to
stop the implementation of Regulation 13 if the
Demonstration Project showed negative results. With a
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commitment from the AQCC to use its emergency rule making
authority it was felt by the legislators that the
necessity for legislative intervention would be obviated.
The second direct interaction of the Governor's
Office also occurred after the regulation had already
been adopted, but directly prior to its implementation.
At a meeting in Colorado Springs, the oil industry
announced that they would sell oxygenated fuels blended
with MTBE only. The results of this announcement meant
that the ethanol industry could be "locked-out" of any
market share in Colorado. In order to blend ethanol with
gasoline, it is necessary to have a base gasoline free of
oxygenates. If this "lock-out" occurred, the ethanol
industry in Colorado would be out of business. The
Oxygenated Fuels Task Force had previously addressed this
issue. It was the recommendation of the Task Force that
"gasoline sold in Colorado be available to gasoline
distributors at 0% oxygen levels, so as to allow the
blending of either ethanol or MTBE" (October 29,
1986/Report/Oxygenated Fuels Task Force). To prevent the
oil industry from premixing MTBE into all fuels delivered
to Colorado, Governor Romer asked each of the major fuel
distributors in Colorado to meet with him individually to
discuss the availability and distribution of oxygen-free
fuel. These meetings resulted in several distributors
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agreeing to making oxygen-free fuels available to
gasoline distributors in Colorado. On several occasions,
the AQCC expressed their desire to ensure that Regulation
13 was "fuel neutral" which would allow public opinion to
determine market demand.
Colorado Legislature. Members of the Colorado
legislature had various opinions regarding Colorado's air
quality problem and the estimated effectiveness of
Regulation 13 to meet EPA's air quality standards. The
actions and interactions of these legislators with the
AQCC also had various effects on the policy's formation
and implementation. Representative Pat Grant, chairman
of the Oxygenated Fuels Task Force, was one of the
legislators who supported the adoption of Regulation 13.
He stated, "Colorado's air quality problem is both
perceived and actual. We have a problem in certain
cities. The citizens demand better air quality"
(Interview/Legislator). He felt that the AQCC was
reasonable in their actions by accepting the
recommendations of the Oxygenated Fuels Task Force
Report. This legislator did, however, propose a
limitation on the Commission's ability to mandate the
level of oxygen to be used in the fuels (March 7,
1987/Denver Post).
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Other legislators, however, were not supportive of
the program. One member of the General Assembly stated,
"I'm not convinced it (Regulation 13) is going to do much
to clean up the air" (January 28, 1987/Denver Post). In
an attempt to block the actions of the AQCC, a bill was
introduced in January 1987 to substantially limit the
AQCC authority by not allowing the program to be
implemented by the Commission unless approved by the
General Assembly. In addition, in August 1987, a second
bill was proposed to delay implementation of the program.
Also, in January 1988 a third bill was introduced in the
Colorado House of Representatives to rescind Regulation
13. The sponsor of the third bill felt that the AQCC
should be the "eyes and ears," reporting the problem and
making recommendations back to the legislative body so
that elected officials can make the final decision
(Interview/Legislator). When interviewing Representative
Tom Ratterree, the sponsor of the second bill, which was
proposed in August 1987, but not introduced, it was asked
why the first and third bills (those that had been
introduced) had been defeated. Representative Ratterree
responded, "They (the General Assembly) did not want to
be held responsible for the final decision"
(Interview/Legislator). When asked the same guestion
about the defeat of the third bill, the legislator who
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had served as Chairman of the Oxygenated Fuels Task Force
stated that the third bill was not successful because:
1) the oxygenated fuels program was already in place,
2) there was evidence that it would work, 3) the program
had media support and 4) the oxygenated fuels issue was
technically complex and better handled by the AQCC"
(Interview/ Legislator).
Metropolitan Air Quality Council (MAQC). The MAQC
accepted the Oxygenated Fuels Task Force Report. The
recommendations of the Report were included as part of
the carbon monoxide SIP which the MAQC was in the process
of developing. Public meetings were conducted,
encouraging public comments regarding the oxygenated
fuels program as well as other air quality strategies in
the proposed SIP. Since the MAQC was only authorized to
develop SIP strategies, it did not have regulatory
powers. Therefore, upon final development of the
proposed SIP, the plan was forwarded to the AQCC. When
the Executive Director of the MAQC was asked his views
concerning the attempts by the general assembly to stop
the Regulation he stated, "The metro area cannot wait
another year and a half for a program which could reduce
dangerous and federally unacceptable levels of carbon
monoxide in the air" (February 10, 1987/Denver Post). He
also stated, "Any attempt to delay the program would be a
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major step backwards in the effort to clean up the air"
(February 10, 1987/Rocky Mountain News).
Air Quality Control Commission (AQCC). The AQCC is
a nine member body appointed by the Governor, whose
appointments are confirmed by the Colorado State Senate.
The Commission is charged with the stewardship of
Colorado's air and possesses state-wide rule making
authority. The Commission has previously adopted
regulations pertaining to mobile source air quality
issues. These regulations were: the Auto Inspection and
Maintenance Program and the Diesel Opacity Inspection
Program, Regulations 11 and 12, respectively. The
Commission played the lead role in the formation and
implementation process of Regulation 13. During the time
of the policy's formation, the AQCC consisted of an
experienced core of members. Several of the members had
been reappointed to the Commission and had extensive
knowledge in the areas of automotive engineering,
environmental law and public health. This make-up of the
Commission played a key role in the formulation of
Regulation 13 by providing technical expertise
(Interview/AQCC). Upon receipt of the Oxygenated Fuels
Task Force Report (which was an element of the SIP), the
AQCC developed the Oxygenated Fuels Subcommittee to
investigate the potential benefits and costs of the
90