Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

In my prior post, I discussed the recent federal court ruling with found EPA's self-imposed stay of the Boiler MACT illegal.  Following the Court's ruling, concern was immediately raised by industry that they would be subject to the original deadlines that appear in the 2011 rulemaking. 

Yesterday, Administrator Jackson responded to a letter from Senator Ron Wyden regarding the EPA's position in light of the Court's ruling:

Regarding the impact of the recent court decision, we have carefully reviewed the effect that vacating the stay may have on new and existing sources and plan to address potential impacts. Specifically, using our enforcement discretion, the EPA will issue a no action assurance letter shortly, informing sources that EPA will not enforce any of the administrative notification requirements for new or existing boilers and incinerators in the 2011 Rules for a period of time while the EPA works to take final action on the proposal to reset these dates. For existing boilers and incinerators, these administrative notification requirements are the only obligations sources would otherwise have under the 2011 Rules prior to when the EPA intends to finalize the reconsideration process.

EPA also intends to reset the compliance clock once the final rule is issued:

Finally, the EPA recognizes that industry needs sufficient time to comply with these standards. As a result, the reconsideration proposal included a provision that would set new, later deadlines for meeting the standards set forth in the reconsideration proposal. While this is subject to the public comment
process, it was the EPA's intent in the proposed rule to allow the compliance clock to "reset" to provide the industry the full length of time - three years - provided in the Clean Air Act for compliance with the rules once they are finalized.

For a copy of Administrator Jackson's letter to the Senator, click here

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On February 11, 2011, EPA issued two rules regulating hazardous air pollutants (HAPs) from thousands of industrial sources.  First, the "Boiler MACT" imposed standards on industrial, commercial and institutional boilers and process heaters.  Second, the "CISWI" imposed standards on commercial and industrial solid waste incinerators.   

Both rules were very controversial due to their wide coverage and cost of compliance.  Industry complained that EPA, on prior versions of the rules, failed to analyze real world data regarding standards.  Their failure resulted in standards that industry charged no facility had actually achieved in practice.

Environmental groups alleged that the rules were long overdue and EPA was simply delaying the rules due to pressure from industry.  When the rules were issued in February 2011, the Sierra Club filed challenged in the Court of Appeals.  EPA also announced that it was reconsidering the rules to take more time to analyze the data provided by industry during the comment period.

On May 18, 2011, two days before the rules were to take effect, EPA self-imposed a stay on the effectiveness of both rules.  EPA's stay was referred to as its "Delay Notice."  In the federal register announcement regarding the Delay Notice, EPA said the stay would be effective until judicial review proceedings were over or it completed its reconsideration of the rules, whichever occurred earlier.

EPA said the Delay Notice was necessary in order to avoid requiring thousands of facilities to comply with standards that soon may change.  EPA argued that once facilities began making investments to meet the standards, those investments would be irreversible.

The Court did not find any of EPA's justifications for the Delay Notice valid.  The Court even denied EPA's request to remand the Delay Notice so that EPA could provide better justification for the action.  The Court threw out the stay and issued an order requiring EPA to take immediate action to comply with its order. (Click here for Court's decision throwing out the stay of the Boiler MACT)

EPA had indicated it was going to complete is reconsideration by April 2012.  Therefore, it was able to delay the rules for most of the period it originally intended to complete its reconsideration.  However, now EPA will have no choice but to issue both rules.  More importantly, thousands of faculties across the country will likely be facing compliance deadlines with the clock beginning to tick this Spring.

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On March 21, 2011, U.S. EPA issued final air toxic standards for industrial and commercial boilers.  The rules regulated emissions of hazardous air pollutants (HAP) from industrial, commercial, and institutional boilers and process heaters located at major sources of HAP emissions (the "Major Source Boiler MACT").  The EPA also issued final rules regulating emissions from commercial and industrial solid waste incineration units (the "CISWI Rule"). 

While the rules were issued, EPA also announced that it would reconsider the rules to address certain technical issues.  Some of those technical issuesunder EPA review include:

• Revising major subcategories in the major source rule;
• Establishing work practice standards for limited use major source boilers;
• Standards for biomass and oil-fired source boilers based on available control technology; and
• Providing an affirmative defense for malfunction events.

The effective date for each of the new rules was supposed to be May 20th.  However, the industry has provided significant input that the standards are not realistic and will be too costly. A number of business associations filed motions for reconsideration and requested a stay of the effective date while EPA completed its reconsideration of the rules.

Yesterday, EPA announced it  has issued a temporary stay of their effectiveness and will seek comments through July 15, 2011. 

Thus, the long and winding road of this rule package just got a little longer.  The Agency consistently seems to miss the mark necessitating pulling back from its proposals and gathering more data. 

Below is a portion of U.S. EPA's announcement:

Following the April 2010 proposals, the agency received more than 4,800 comments from businesses and communities, including a significant amount of information that industry had not provided prior to the proposals. Based on this input, EPA made extensive revisions to the standards, and in December 2010 requested additional time for review to ensure the public’s input was fully addressed. The court only granted EPA 30 days, resulting in the February 2011 final rules. The agency is reconsidering the standards because the public did not have sufficient opportunity to comment on these changes, and, as a result, further public review and feedback is needed.

EPA will accept additional data and information on these standards until July 15, 2011.

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On June 4, 2010, U.S. EPA released its much anticipated proposed standards for industrial boilers to reduce hazardous air pollutants ("HAPs").   Since their release, EPA has faced an outcry that the proposed standards are "fundamentally flawed" or "unachievable."

So what is the controversy?

EPA's boiler standards are supposed to reflect the application of the maximum achievable control technology (“MACT”). 

What is MACT?

MACT requires the maximum reduction of hazardous emissions, taking cost and feasibility into account.  The MACT must not be less than the average emission level achieved by controls on the best performing 12 percent of existing sources, by category of industrial and utility sources.

I highlighted a couple key terms in U.S. EPA's definition. 

Cost and Feasibility-  Unlike other EPA standards, cost and feasibility in achieving the standards are relevant.  Many argue cost of compliance with proposed standards will be dramatically too high.

Best Performing 12%-  As discussed below, many assert EPA's methodology for developing the top 12% performing sources is fundamentally flawed.  They assert EPA simply "cherry picked" certain sources and unfairly based its limits on too small of a data pool.

Controversy Builds

On August 2nd, 100 members of Congress submitted a letter to Administrator Jackson asking EPA reconsider its proposed boiler MACT standards:

EPA should use a method to set emission standards that is based on what real world best performing units can achieve.  EPA should not ignore biases in its emissions database, the practical capabilities of controls or the variability in operations, fuels and testing performance across many regulated sectors.

Impact on Biomass Industry

One group strongly opposing EPA is proposal is the biomass industry which believes the proposal unfairly lumps biomass in with all other fuels.  The biomass industry has indicated the standards, if finalized, could prevent the development of additional biomass sources.  The National Alliance of Forest Owners (NAFO) provides the following description of EPA's flawed MACT methodology:

EPA explains that “[f]or each pollutant, we calculated the MACT floor for a subcategory of sources by ranking all the available emissions data from units within the subcategory from lowest emissions to highest emissions, and then taking the numerical average of the test results from the best performing (lowest emitting) 12 percent of sources.” 75 Fed. Reg. at 32019.This “pollutant-by-pollutant ” approach to determining MACT is not appropriate because it results in standards that do not reflect the performance of the best performing boilers for any fuel source. 

The CAA requires that EPA set standards based on the performance of actual
“sources.” Yet EPA’s analysis does not reflect the performance of any actual sources. Instead, it is a compilation of the best data, for each pollutant, regardless of which source the data came from. As a result, the proposed rule’s limits are unnecessarily stringent. They do not reflect the variability that occurs in real-world.

There is no denying EPA failed to look at fuel types when establishing standards.  Rather, EPA went pollutant by pollutant and looked for the smallest emissions without considering the fuel being used in the boiler.

Genreal Industry Concerns

The biomass industry is just one of many industry sectors strongly opposing the rules.  The American Chemistry Council described the rules as "fundamentally flawed" in their comments:

“EPA’s faulty methodology begins with pollutant-by-pollutant analyses that select a different set of ‘best performing sources’ for each pollutant. In other words, EPA ‘cherry picks’ the best data in setting each standard, without regard for sources. The result is a set of standards achieved by a hypothetical set of ‘best performing’ sources able to maximize emission reductions for each hazardous air pollutant (HAP), rather than standards representative of actual performance of real sources. EPA’s approach produces unachievable standards."

How is EPA cherry picking its data?  Industry says EPA uses a limited data set of emissions from sources in establishing the standards. EPA has failed to test enough sources to truly reflect each category of sources.  Without a full or adequate data set, EPA is skewing the top 12% of best performing sources. It really becomes the top 12% of sources EPA tested, which can be a small percentage of boilers in use.

Furthermore, Industry argues EPA failed to account for variations critical when establishing a MACT standard.  Boilers can vary in design, pollution controls and fuels utilized. Industry argues these variations should have been considered in evaluating the top 12% performing sources.

[For more insight into industry's general concerns here is a link to Ohio Chamber Comments]

Regulators Echo Industry Concerns

Industry is not alone in strongly criticizing EPA proposal.  Ohio EPA filed its own comments on the U.S. EPA proposed boiler MACT standards supporting the notion EPA's methodology is flawed:

Limited Data Concerns:

[EPA's] analysis seems to only utilize emission performance data from a limited number of sources and in some cases as few as one or two sources.  At a minimum a NESHAP standard needs to be based on the performance of five sources or all sources if fewer than five in a category.

Emission Standard Methodology

The emission limits proposed in the rule seem to be based on the lowest demonstrated emission rates within a source category (based on a limited number of sources) and does not directly evaluate control efficiency of equipment.  Using the emission rate approach may not identify the sources demonstrating the highest control efficiencies, but rather may simply reflect low fuel content of the pollutants.  In this case, resulting emission limits can be more stringent than achievable for sources utilizing certain fuels.

Impact on Fuel Types

EPA's approach may be eliminating certain fuels from use in industrial boilers.  For example, midwest coal with higher sulfur or mercury content.  Or in the case of biomass, wood feed stocks that have already have lower hydrogen chloride (HCL) content, may not be able to remove additional quantities to achieve the low standards EPA is proposing.

Conclusion

EPA's rule impacts such a huge portion of industry and commercial operations.  It should be carefully crafting a set of standards that are achieveable as well as flexible. Two final points:

•  Not all pollution controls are appropriate for every sized boiler;
• Restricting fuel types by establishing standards that discount pollutant content of those fuels does not reflect "real world" practices that NESHAP standards are intended to reflect.

(Photo:  U.S. EPA website)

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All the recent climate change related litigation has overshadowed major activity around control of hazardous air pollutants (HAPs) from coal plants.  Mercury is one such HAP.  Back in February 8, 2008  in New Jersey v. EPA, the D.C. Circuit Court of Appeals threw out U.S. EPA's cap and trade program for mercury, known as the Clean Air Mercury Rule (CAMR).  

EPA's decision to create a cap and trade program for mercury was very controversial.  Those opposed said cap and trade was not meant to control toxic pollutants like mercury.  In response, a number of states rejected the CAMR rule and adopted state programs that established control requirements for every coal plant within their borders.

While the federal court declared CAMR illegal, it also made an important determination as it relates to control of HAPs from coal plants.  In order to create the cap and trade program, the Bush Administration had to undue the efforts of the Clinton Administration to establish facility specific control standards for coal plants under Section 112 of the Clean Air Act. 

In December 2000, the Clinton EPA decided to list electric generating units (EGUs) under section 112.  By listing this source category under Section 112, all existing and new plants must meet Maximum Available Control Technology Standards (MACT) for controlling emissions of HAPs.  MACT is emission controls equal to the "average emission limitation achieved by the best performing 12 percent of the existing sources."

In order to create its cap and trade program, the Bush Administration tried to de-list EGUs as a source category regulated under Section 112.  The federal court in New Jersey v. EPA found this action to be illegal.  This means that EPA must move forward with rules establishing a MACT standard for EGUs.  To date, EPA has failed to take such action.  As reported in the Charleston Gazette this week, groups have sued EPA to compel such action. 

A coalition of environmental groups has filed a lawsuit trying to force the federal government to comply with a 6-year-old mandate to reduce toxic chemical emissions from coal-fired power plants.

The suit, filed Thursday in federal court in Washington, asks for a court order requiring the U.S. Environmental Protection Agency to set limits for mercury and dozens of other hazardous air pollutants.

The new lawsuit follows a major decision by a federal court in North Carolina (Southern Alliance for Clean Energy v. Duke) that invalidated a permit for construction of a new coal plant because the permit failed to show compliance with MACT for HAPs.  The main issue in the case was whether the MACT standards apply to the on-going construction of a coal plant following the New Jersey decision.  Notably, the Court ruled that MACT did apply even though the permit was issued and construction had already began on the new source.

While mercury and other HAPs won't be controlled from existing plants until EPA finalizes its MACT standards for EGUs, at least one federal court has said new plants must meet the yet to be established standard.  This presents another avenue for environmentalists to challenge air permits for coal plants, even permits issued prior to the February 8, 2008 decision.

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