Air General Session 2015 Another Significant Year in the 5-Year History of the Clean Air Act Major Air Permitting & Compliance Developments

Transcription

1 Air General Session 2015 Another Significant Year in the 5-Year History of the Clean Air Act Major Air Permitting & Compliance Developments Robert F. Hodanbosi, Chief, Ohio EPA, Division of Air Pollution Control, Columbus Maxine Dewbury, Manager, The Procter & Gamble Company, Cincinnati Robert L. Brubaker, Partner, Porter, Wright, Morris & Arthur, Columbus Tuesday, July 21, a.m. to 11:45 a.m.

2 Biographical Information Robert L. Brubaker, PartnerPorter, Wright Morris & Arthur 41 South High Street Columbus, OH (614) Fax: (614) Robert L. Brubaker is a partner in the Columbus office of Porter, Wright, Morris & Arthur, and is General Counsel to the Ohio Chemistry Technology Council. He has practiced in the field of environmental law since Mr. Brubaker has represented manufacturers, utilities, small businesses, trade associations, and public sector clients with regard to Clean Air Act matters, including permitting of new, modified, and existing sources; Clean Air Act compliance strategies; legislation drafting; rulemaking advocacy; briefing and arguing appeals of EPA actions; and defense of environmental enforcement actions and citizen suits. He has lectured extensively on Title V, PSD and nonattainment New Source Review, and other Clean Air Act programs. Mr. Brubaker is the past Chair of the of the American Bar Association Section of Public Utility, Communications, and Transportation Law, a Fellow of the American College of Environmental Lawyers, and a Fellow of the American Bar Foundation. He is coeditor of the Government Institutes Ohio Environmental Law Handbook. He is AV-rated by Martindale-Hubbell, has been listed for more than 20 years in The Best Lawyers in America in the area of Environmental Law, is listed in the International Who s Who of Environmental Lawyers, is recognized by the publishers of Law & Politics and Cincinnati Magazine as an Ohio Super Lawyer in the environmental practice area, and is named one of Ohio's leading environmental lawyers by Chambers USA. Mr. Brubaker is a 1972 graduate of the University of Chicago Law School. Robert F. Hodanbosi, Chief, Division of Air Pollution Control Ohio EPA, Lazarus Government Center, 50 West Town Street, Columbus, OH Fax: bob.hodanbosi@epa.state.oh.us Bob Hodanbosi joined Ohio EPA in 1973 and has held various positions within the Division of Air Pollution Control in the Northeast District Office and Central Office. Bob became Chief of the Division of Air Pollution Control (DAPC), Ohio Environmental Protection Agency (Ohio EPA) in September, His current duties include being responsible for the statewide air pollution control program and the development of the programs needed to comply with the Clean Air Act Amendments. These include the new source review program, nonattainment plan provisions, vehicle inspection/maintenance program, the Toxic Release Inventory program and the 112 (r) Risk Management Program. Bob is a member of the American Institute of Chemical Engineers and Air & Waste Management Association and is a registered Professional Engineer in the State of Ohio. He is Chairman of the National Association of Clean Air Agencies (NAACA) Permitting Committee. At Cleveland State University, Bob received both his Masters of Science degree in Chemical Engineering in 1977 and his Bachelor s degree in Chemical Engineering in Maxine D. Dewbury, Environmental Regulatory & Regional HSE Manager The Procter & Gamble Company, 8256 Union Centre Boulevard, West Chester Ohio, Fax: dewbury.md@pg.com Maxine Dewbury is U.S. Environmental Regulatory and Regional HSE Manager for The Procter & Gamble Company. Maxine has been responsible for U.S. Federal Environmental Regulatory influence, focused on Clean Air Act issues for the past 16 years. In addition to working with trade associations and U.S. EPA on regulations, Maxine is responsible for helping P&G sites and regional resources obtain air permits and meet regulatory requirements. Prior to this assignment, Maxine has held a variety of positions in her 35 year career with P&G. These include Risk Manager at P&G s Oxnard, California site; Plant Quality Manager at the Flint River, Georgia Pulp Mill; Environmental Manager for the Cellulose & Specialties Division; and several process and project engineering assignments. Maxine graduated in 1979 from Louisiana Tech University with a B.S. in Chemical Engineering.

3 25 th Annual Conference on Air & Water Permits Environmental Permitting in Ohio From the 20 th to the 21 st Century 25 th year of the Environmental Permitting in Ohio Conference 25 th anniversary of the Clean Air Act Amendments of th year since the last major federal environmental legislation

4 Bob Hodanbosi Division of Air Pollution Control

5 Particulate Matter Air Quality Standard SO2 Update Ozone Progress/Proposal Regulation of coal utilities 111(d) plan Permit Statistics

6 Air pollution problems more visible in the past Severe air pollution episodes in the certain parts of the world and this country Donora, PA October 1948, 20 people died, hundreds hospitalized, thousands sickened

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8 In early 70s, Ohio had air pollution alerts Alerts made national news Ohio Governor ordered facilities to cut back operations immediately Occurred in Steubenville, Cleveland, and Youngstown for Particulates, Sulfur Dioxide or the combination of the two pollutants

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10 Clean Air Act of 1970 set up federal/state partnership Federal government sets national air quality standards States have responsibility for developing plans to meet standards Plans known as State Implementation Plans or SIPs

11 U.S. EPA has developed standards for six specific contaminants Sulfur dioxide primary source; coal fired power plants Carbon monoxide primary source: cars and trucks Lead primary source; individual industrial facilities Nitrogen oxides primary source; any type of combustion, utilities, industrial boilers, vehicles

12 The entire state is attainment for nitrogen dioxide, and carbon monoxide. Ohio has nonattainment areas for Ozone, SO2 and lead PM2.5 is currently nonattainment for the 12.0 ug/m3 (Cleveland area) and 15.0 ug/m3 standard (Cincinnati area)

13 Particulate matter less than 2.5 micron (PM2.5) very small particulate U.S. EPA has promulgated a series of standards both annual and 24-hour standard U.S. EPA completes designations for both Designations are done independently for each standard

14 March 2013, U.S. EPA adopted revisions to the NAAQS for PM2.5 Adopted new annual standard of 12.0 ug/m3 No change in 24 hour PM2.5 standard No change in 24 hour PM10 standard New nonattainment designations issued in December 2014 Effective date April 15, 2015

15 City Akron Canton 35* 34* Cleveland Columbus Cincinnati Dayton Steubenville Toledo Youngstown *Incomplete Data Standard 35 ug/m3 Lost site new site <1 yr. data Old site 2+ yrs. data.

16 City Akron Canton 14.8* 14.3* Cleveland Columbus Cincinnati Dayton ** Steubenville Toledo Youngstown *Incomplete Data Standard 12.0 ug/m3 ** Lost site, have a new site but no 3 yrs. of data at our site

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19 U.S. EPA published rules in January 15, 2015 Federal Register Effective date is April 15, 2015 U.S. EPA allowed states to submit most recent data Ohio EPA did Cincinnati area and Canton area should be dropped from nonattainment designation Only nonattainment area for 12.0 ug/m 3 annual standard is Cleveland area (Cuyahoga and Lorain Counties)

20 Sierra Club appealed the redesignation of Hamilton County area 15.0 ug/m 3 standard Two issues if Cap & Trade is enforceable & RACT/RACM is needed Court agreed that RACT/RACM must be in part of plan Not a trivial effort will take time Now back to non-attainment so Cincinnati is attainment of 12.0 ug/m 3 standard, nonattainment for 15.0 ug/m 3 standard

21 U.S. EPA adopted new standard of 75 ppb, 1- hour average in 2010 Some areas measure nonattainment Need to develop plan for areas exceeding standard Plans were due April 4, 2015, working with affected companies (two or three)

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23 Ohio SO2 Nonattainment Areas NA Area Townships Lake County, OH ALL (Entire County) Cross Creek (OH) Warren (OH) Steubenville, OH WV Wells (OH) Steubenville(OH) Cross Creek Tax District (WV) Center Twshp (Morgan County) Muskingum River, OH Waterford Twshp (Washington County) Pierce Twshp (Clermont County, OH) Campbell County, KY OH 5 Census Tracts in Campbell County, KY

24 Finalize control strategies for nonattainment areas Complete modeling, develop rules, hold public hearings - underway

25 U.S. EPA held stakeholder meetings at the end of May of 2013 Purpose was to obtain additional information/ comments on revised draft SO2 implementation policy Dropped requirement that all attainment areas must be modeled but modeling or monitoring will be required around large sources U.S. EPA recently signed consent decree with Sierra Club to take action earlier Zimmer Plant and Gavin Plant (Kyger Creek) on fast track

26 For large sources of SO2 modeling or monitoring will be required Monitoring plan completed by June 2016 Monitoring must be started no later than January 1, 2017 Sounds like a long time.. but it is not Need to work on how many, where, purchase equipment, etc. U.S. EPA has yet to finalize rules Ohio EPA met with affected companies to get work started.

27 Kyger Creek OVEC General J.M. Gavin AEP Miami Fort Station Dynegy P.H. Glatfelter Comp. W.H. Zimmer Station Conesville AEP City of Orrville DPU W.H. Sammis First Energy J.M. Stuart DP&L Killen DP&L Carmeuse Lime Inc. Maple Grove Morton Salt Inc. KRATON Polymers DTE (formerly DEGS) of St. Bernard The Medical Center Comp. Cleveland Thermal Avon Lake Power Plant NRG Bay Shore First Energy Ashtabula First Energy Lake Shore First Energy Picway AEP

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29 U.S. EPA adopted ozone standard in ppm eight-hour average Cincinnati, Cleveland, Columbus designated nonattainment Attainment date Cincinnati and Columbus met standard Ohio EPA requested one year extension for Cleveland

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31 Year ppm 1-Hour ppm 8-Hour ppm 8-Hour None None None None None None None None None None None 0 13

32 Proposal for new standard between ppm ppm Taking comments as low as ppm Ohio EPA filed comments data supports keeping standard ppm

33 A. November 26, 2014 U.S. EPA announces that they will propose more restrictive ozone B. C. Mid-December 2014 Federal Register notice appears with 90-day comment period. Three public hearings to be announced soon. Mid-March 2015 Close of comment period

34 D. October 1, 2015 U.S. adopts new standards E. October 1, 2016 States submit recommendations for nonattainment areas F. October 1, 2017 U.S. EPA finalizes nonattainment areas

35 G. October 1, 2020 Attainment date for marginal nonattainment areas H. October 1, 2023 Attainment date for moderate nonattainment areas

36 Revised Ozone Standard % above standard ( ) City Data Data Data at 70 ppb at 65 ppb at 60 ppb Canton % 7.7% 16.7% Cleveland % 20.0% 30.0% Columbus % 15.4% 25.0% Cincinnati % 15.4% 25.0% Dayton % 10.8% 20.0% Lima % 9.2% 18.3% Toledo % 9.2% 18.3% Youngstown- Warren % 10.3% 20.0%

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39 Particulate controls in early 1970s Needed to meet particulate air quality standards Electrostatic Precipitators Cold-side Hot-side Some early baghouse installations

40 Sulfur dioxide became issue in late 1970s 1977 Clean Air Act Amendments prohibited excess credit for tall stocks High sulfur coal showed violation of standards Some plants started using washed or cleaner coals/others started building scrubbers

41 In late 1980 s, acid rain was labeled as large environmental threat Dead lakes in Northeast U.S. and Canada Canada made films about acid rain United States government designated the film propaganda, created much controversy 1990 Clean Air Act Amendments required sizeable reductions of SO2/NOx to reduce acid rain allowed for marketable credits/trading

42 New ozone and particulate matter air quality standards developed in 1990s Northeast states complained that mid-west utilities prevented attainment of ozone standard due to long-range transport U.S. EPA promulgated NOx SIP call and Clean Air Interstate Rule (CAIR) that reduces NOx and SO2 emissions from utility plants More restrictive air quality standards required U.S. EPA to reduce more-cross State Air Pollution Rule (CSAPR)

43 After acid-rain and long range transport the next large environmental threat was mercury from coal-fired plants Ohio has a recommendation of reduced fish consumption in major waterways due to mercury contamination U.S. EPA promulgated the mercury and air toxics rule (MATS) to require control of mercury and acid gases/hcl

44 Utilities need to install carbon injection or have high efficiency sulfur dioxide controls to meet standard. A result of MATS rule, Ohio utilities will close 6111 MW of capacity out of MW with MW total coal capacity remaining U.S. Supreme Court sent MATS rule back to appeals court do not expect any plants to restart

45 Climate Change now in forefront CO2 emissions are focus U.S. EPA proposes plan that requires 30% reduction in emissions of CO2 under 111(d) of Clean Air Act 111(d) is a stationary source rule Control technology not practical Parasitic load penalty alone of almost 30% Only way to reduce emissions is to reduce coal usage Need to build more renewable energy sources and natural gas plants

46 Each state has individual goal based on four elements Ohio required reduction about 29% Increase efficiency at coal-fired power plants Re-dispatch of energy generation Build and use renewables Increase energy efficiency Last three are outside the fenceline approaches areas where Ohio EPA traditionally does not regulate

47 Increase efficiency of coal-fired power plants Require heat rate improvements that equate to an overall 4-6% efficiency improvement at coalfired power plants nationwide U.S. EPA misapplied a study on possible improvements that identified at least 15 different items to produce heat rate improvements Concern: most of these improvements have been completed at remaining coal-fired fleet after MATS 5% of 30% needed reductions

48 Employ emission dispatch for power plants Make natural gas plants generate more base load electricity; and make coal plants generate less electricity Minimum of 70% utilization of natural gas plants Replaces current least cost dispatch model with least carbon emissions model Concern: Plant dispatch is dictated by a organization called PJM not Ohio EPA or PUCO 5% of 30% of needed reductions

49 Increase amount of renewables built and used States required to mandate renewable energy programs U.S. EPA must approve Ohio s plan Emissions monitoring and verification likely incompatible with Ohio s Renewable Portfolio Standard Concern: U.S. EPA proposal would make Ohio Plan federally enforceable - Ohio would have to ask US EPA to approve any future changes to the plan Concern: U.S. EPA did not consider how states are obtaining out-of-state renewable targets when individual state goals were developed 10% of 30% of needed reductions

50 Deploy energy efficiency projects States required to develop programs to reduce demand-side power consumption Must directly reduce electricity usage from power plants Concern: Who is the regulated entity in this stationary source power plant rule? 10% of 30% of required reductions

51 June (d) Proposed rule Summer (d) Rule finalized Summer 2015 U.S. EPA proposes Federal Implementation Plan for State facility to submit State plan July (d) State plans due (one or two year extensions possible)

52 Summer 2016 U.S. EPA issues final federal plan Summer 2017 States individual plans due with extension Summer 2018 States multi-state plans due with extension January 2020 First round of reductions must be implemented January 2030 Final compliance date

53 Ohio EPA prepared extensive comments in response to the proposal See

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56 Environmental Permitting In Ohio 25 th Annual Conference Elimination of Longstanding SSM Provisions in SIPS Maxine Dewbury July 21, 2015

57 Key Developments since 1990 CAA - Technology Based Standards Background: Establishment of Technology Based Standards Experience with need for startup/shutdown exclusions Changes to SSM Policy & Regulations Outcome

58 Establishment of Technology Based Standards NSPS Standards Limits set based on stack testing Compliance Testing based on Stack Tests steady state conditions the general provisions of NSPS at CFR Part 60.8 (c), highlights that emission limits do not apply during startup, shutdown and malfunction. (c) Performance tests shall be conducted under such conditions as the Administrator shall specify to the plant operator based on representative performance of the affected facility Operations during periods of startup, shutdown, and malfunction shall not constitute representative conditions for the purpose of a performance test nor shall emissions in excess of the level of the applicable emission limit during periods of startup, shutdown, and malfunction be considered a violation of the applicable emission limit unless otherwise specified in the applicable standard. Surrogates for continuous monitoring E.g. water to fuel ratio for gas turbines, 40 CFR 60 Subpart GG

59 Establishment of Technology Based Standards, Gas Turbines Changes to Technology Standards Development of CEMS technology NOx, CO, O2 Tighter, short-term limits for BACT Gas Turbine Experience 3 hr average BACT limits NOx, CO Voluntary Installation of CEM Necessitated rulemaking for startup, shutdown and load change provisions in RACT rule and permit in order to meet limitations

60 SSM History Policy on SSM Provisions in SIP 1999 EPA guidance & 2001 Clarification of prospective applicability EPA action in states to force SIP revisions Sierra v EPA Decision in NESHAP general provisions Sierra Club Petition to EPA issue a finding of inadequacy and SIP call re SSM provisions EPA SSM SIP Call Proposal Findings of inadequacy and SIP call NRDC v EPA Decision on Portland Cement NESHAP s affirmative defense provisions EPA Supplemental Rule revising SSM Proposal to change its policy on approvability of SIPs containing affirmative defense provisions and reapplying Portland Cement case findings to all SIPs EPA SSM SIP Call Final Rule - Findings of Inadequacy, SIP Call

61 Start-up/Shutdown/Malfunction Developments Policy on Excess Emissions during Startup, Shutdown, Maintenance and Malfunctions Enforcement Discretion Approach SIP Limitations Adequate to attain Ambient Standards: EPA can approve SIP revisions which incorporate the enforcement discretion approach. Such an approach can require the source to demonstrate that the excess emissions, though constituting an violation, were due to an unavoidable malfunction.in determining whether enforcement action is appropriate the following criteria should be considered: Equipment operated and maintained consistent with good practices to minimize emissions. Repairs were expeditious once operator knew limit was being exceeded. Amount and duration of excess emissions minimized All possible steps taken to minimize ambient air quality impact Excess emissions are not part of a recurring pattern indicative of inadequate design, operation or maintenance.

62 Start-up/Shutdown/Malfunction Developments Policy on Excess Emissions during Startup, Shutdown, Maintenance and Malfunctions Startup and Shutdown are part of normal operation of a source and should be accounted for in the planning, design and implementation of operating procedures for process and control equipment.however, for a few sources there may exist infrequent short periods of excess emissions during startup and shutdown which cannot be avoided. Excess emissions during these infrequent short periods need not be treated as violations providing that the source adequately shows that the excess could not have been prevented through careful planning and design and that bypassing of control equipment was unavoidable to prevent loss of life, personal injury or severe property damage. Similarly, scheduled maintenance is a predictable event which can be scheduled and which can, therefore, be made to coincide with maintenance on production equipment, or other source shutdowns. Consequently excess emissions during periods of scheduled maintenance should be treated as a violation unless a source can demonstrate that such emissions could (not) have been avoided through better scheduling for maintenance or through better operation and maintenance practices.

63 Reflections on Early Guidance re Startups and Shutdowns 1982 Policy written when NSPS compliance was demonstrated only with Stack test during steady-state operation NSPS General Provisions clarify that emissions in excess of the level of the applicable emission limit during periods of startup, shutdown, and malfunction shall not be considered a violation of the applicable emission limit Normal operation did include startup or shutdown but emissions during those time periods were not measured. CEMS were not widely available to measure continuous compliance. Emission limitations were much less stringent than today where multiple controls must be employed to meet a limitation and various temperature and other conditions are required for controls to be effective Since SIP rules had exclusions for SSM periods and emissions during those periods were not measured, less care was taken to write rules with startup exclusions or ensure permit conditions could be met 24/7

64 Start-up/Shutdown/Malfunction Developments 1999 SSM Guidance EPA Issued SIP Guidance: Policy regarding Excess Emissions During Malfunctions, Startups and Shutdowns Updated policy reaffirmed and supplemented guidance to clarify the types of excess emissions provisions that states may incorporate into SIPS States policy that all excess emissions are CAA violations. Thus, any provisions that automatically exempt excess emissions from being considered a violation are not allowed. Clarified that excess emissions that occur during startups and shutdowns are reasonably foreseeable and should not be excused, though for some source categories, even the best available emissions control systems might not be consistently effective during startup or shutdown periods. Technological limitations may be addressed in the underlying standards through narrowly tailored SIP revisions

65 Start-up/Shutdown/Malfunction Developments 1999 SSM Guidance Affirmative Defenses for Malfunctions are approvable if the source must demonstrate that: 1. The excess emissions were caused by a sudden, unavoidable breakdown of technology, beyond the control of the owner or operator; 2. The excess emissions (a) did not stem from any activity or event that could have been foreseen and avoided, or planned for, and (b) could not have been avoided by better operation and maintenance practices; 3. To the maximum extent practicable the air pollution control equipment or processes were maintained and operated in a manner consistent with good practice for minimizing emissions; 4. Repairs were made in an expeditious fashion when the operator knew or should have known that applicable emission limitations were being exceeded. Off-shift labor and overtime must have been utilized, to the extent practicable, to ensure that such repairs were made as expeditiously as practicable; 5. The amount and duration of the excess emissions (including any bypass) were minimized to the maximum extent practicable during periods of such emissions; 6. All possible steps were taken to minimize the impact of the excess emissions on ambient air quality; 7. All emission monitoring systems were kept in operation if at all possible; 8. The owner or operator s actions in response to the excess emissions were documented by properly signed, contemporaneous operating logs, or other relevant evidence; 9. The excess emissions were not part of a recurring pattern indicative of inadequate design, operation, or maintenance; and 10. The owner or operator properly and promptly notified the appropriate regulatory authority.

66 Start-up/Shutdown/Malfunction Developments 1999 SSM Guidance Startups and Shutdowns Source Category Specific Rules for Startup & Shutdown are approvable if: 1. The revision must be limited to specific, narrowly defined source categories using specific control strategies (e.g., cogeneration facilities burning natural gas and using selective catalytic reduction); 2. Use of the control strategy for this source category must be technically infeasible during startup or shutdown periods; 3. The frequency and duration of operation in startup or shutdown mode must be minimized to the maximum extent practicable; 4. As part of its justification of the SIP revision, the state should analyze the potential worst-case emissions that could occur during startup and shutdown; 5. All possible steps must be taken to minimize the impact of emissions during startup and shutdown on ambient air quality; 6. At all times, the facility must be operated in a manner consistent with good practice for minimizing emissions, and the source must have used best efforts regarding planning, design, and operating procedures to meet the otherwise applicable emission limitation; and 7. The owner or operator's actions during startup and shutdown periods must be documented by properly signed, contemporaneous operating logs, or other relevant evidence.

67 Start-up/Shutdown/Malfunction Developments 1999 SSM Guidance Startups and Shutdowns Affirmative Defenses Provisions for Startup & Shutdown enforcement discretion approach 1.The periods of excess emissions that occurred during startup and shutdown were short and infrequent and could not have been prevented through careful planning and design; 2.The excess emissions were not part of a recurring pattern indicative of inadequate design, operation, or maintenance 3.If the excess emissions were caused by a bypass (an intentional diversion of control equipment), then the bypass was unavoidable to prevent loss of life, personal injury, or severe property damage; 4.At all times, the facility was operated in a manner consistent with good practice for minimizing emissions; 5.The frequency and duration of operation in startup or shutdown mode was minimized to the maximum extent practicable; 6.All possible steps were taken to minimize the impact of the excess emissions on ambient air quality; 7.All emission monitoring systems were kept in operation if at all possible; 8.The owner or operator s actions during the period of excess emissions were documented by properly signed, contemporaneous operating logs, or other relevant evidence; and 9. The owner or operator properly and promptly notified the appropriate regulatory authority.

68 Start-up/Shutdown/Malfunction Developments 1999 SSM Guidance 2001 Clarification - The Sept guidance was not intended to alter status of any existing malfunction, startup or shutdown provision in a SIP that has been approved by EPA. - Similarly, the Guidance was not intended to affect existing permit terms or conditions regarding malfunctions, startups and shutdowns that reflect approved SIP provisions, including opacity provisions or to alter the emergency defense provisions at 40 CFR 70.6 (g). - EPA did not intend the Guidance to be legally dispositive with respect to any particular proceedings in which a violation is alleged to have occurred. Rather, it is in the context of future rulemaking actions, such as the SIP approval process, that EPA will consider the Guidance and the statutory principles on which the Guidance is based. - Questions also have been raised regarding the effect of the September 20, 1999 Guidance as it relates to enforcement discretion and affirmative defenses. The Guidance confirms that EPA and States may always exercise enforcement discretion with respect to excess emissions that occur during malfunctions, startups or shutdowns. This Guidance further confirms that States may provide in SIPs appropriately tailored affirmative defenses, consistent with the September 20, 1999 Guidance that would be available in enforcement actions brought by States, EPA or citizens.

69 Key Developments SSM Provisions in NESHAP NESHAP Standards Technology Based Standards generally set based on stack testing data, work practice standards and other provisions. SSM Provisions March Rule Sources exempted from numerical limits during SSM; Meet general duty to minimize emissions Develop and follow SSM provisions to minimize emissions 2002, 2003, 2006 minor changes to SSM plan provisions Didn t need to be part of Title V permit Provided to public if specific reasonable request

70 Key Developments SSM Litigation Sierra v EPA NESHAP Decision Sierra Club Litigation Never objected to 1994, 2002, 2003 rules CAA must file within 60 days of final rule Following 2006 rule revision Sierra Club claimed: The exemption from compliance with emissions standards during SSM events is unlawful and arbitrary and the 2002, 2003 and 2006 rules unlawfully and arbitrarily fail to assure compliance with applicable requirements under Title V. Asserted reopening doctrine to challenge 1994 SSM rule provisions which exempted emissions during SSM periods from the requirement to meet numerical emission limits. DC Circuit 2008 Vacated provisions in EPA s Section 112 General Provision regulations which exempt sources from the requirement to comply with the otherwise applicable mission standards during SSM events.

71 2011 Sierra Club Petition to EPA & EPA Rulemaking actions Sierra Club Petition to EPA issue a finding of inadequacy and SIP call re SSM provisions EPA SSM SIP Call Proposal Findings of inadequacy and SIP call NRDC v EPA Decision on Portland Cement NESHAP s affirmative defense provisions EPA Supplemental Rule revising SSM Proposal to change its policy on approvability of SIPs containing affirmative defense provisions and reapplying Portland Cement case findings to all SIPs EPA Final Rule Findings of Inadequacy and SIP call

72 Sierra Petition 2011 Sierra Club Petition & 2013 EPA Response Evaluated Existing Approved SIPs based on 1999 Policy for SSM Asked EPA to make a finding of inadequacy where existing approved SIPs did not meet EPA s SSM policy which was to be applied to new or revised rules EPA Response Denied Request to Prohibit Affirmative Defense Continued previous policy to allow affirmative defenses in SIPs for excess emissions from malfunctions but NOT for excess emissions from planned shutdowns or startups Granted Sierra s request to issue a SIP call in 36 of 39 states because they do not meet requirements of the CAA

73 Key Developments SSM Litigation NRDC v EPA Portland Cement NESHAP Decision Rejected EPA s authority to provide an affirmative defense for excess emissions that occur due to an unavoidable malfunction EPA-created affirmative defenses could legally extend only to administrative penalties, not to civil penalties. Courts, not EPA can determine whether penalties should be assessed for CAA violations. The court noted we do not here confront the question whether an affirmative defense may be appropriate in a State Implementation Plan.

74 EPA Response to Court Decision Supplemental Rule Reapply the Portland Cement Case findings to all SIPs. Change longstanding EPA policy on approvability of SIPs containing affirmative defense provisions. Extend SIP call to more states and actions EPA Final Rule ( FR) Finding of Inadequacy of SIPs Issues SIP call 180 days to respond

75 Reflections on Early Guidance re Startups and Shutdowns 1982 SSM Policy written when NSPS compliance was demonstrated only with Stack test during steady-state operation NSPS General Provisions clarify that emissions in excess of the level of the applicable emission limit during periods of startup, shutdown, and malfunction shall not be considered a violation of the applicable emission limit Normal operation did include startup or shutdown but emissions during those time periods were not measured. CEMS were not widely available to measure continuous compliance. Emission limitations were much less stringent than today where multiple controls must be employed to meet a limitation and various temperature and other conditions are required for controls to be effective Since SIP rules had exclusions for SSM periods and emissions during those periods were not measured, less care was taken to write rules with startup exclusions or ensure permit conditions could be met 24/7 Policy has only gotten more stringent, while emission limitations, permit conditions and continuous monitoring technology have changed

76 Where does this leave us? Startups & Shutdowns Many emission limits cannot be met during startup or shutdown. For example: Limits written as a percent reduction requirement may be unachievable when the pollution load to the control device is low. Limits written as a maximum allowable concentration - the concentration may be exceeded at low load or when the unit is shutting down, even though the mass emission is much lower than normal operations (e.g. Boiler CO emissions) Control devices may need to be heated to specific temperature by exhaust gases before control devices can reduce emissions (e.g. SCR used to reduce NOx) Specific example Turbines when added CEMS Unit using steam and SCR needed 2 hr startup, 1 hr shutdown, 2 hr load change provision

77 Where does this leave us? Startups & Shutdowns Where agencies relied on general SSM provision rules rather than narrow targeted specific rules which are allowed Facilities in compliance jeopardy unless and until states promulgate specific rules Important to get appropriate conditions in any new rules and in permits for BACT (e.g. boiler turndown CO lb/hr limits at low load)

78 Where does this leave us? Malfunctions: A process generates potentially explosive gases that cannot safely be directed to control device until the concentration of those explosive gases exceeds the Upper Explosive Limit (during startup) or has fallen below the Lower Explosive Limit (during shutdown) Need to be able to avoid safety risks and operate safely while minimizing emissions Do not want operator to worry about violation in these situations.

79 Where does this leave us? EPA has eliminated longstanding reasonable SSM provisions that have been in the SIPs for many decades. Despite whether the SIP Call will stand up to court challenge, the sanction clock will proceed SIP call will impose tremendous resource demands on state air programs Thousands of facilities now subject to burdensome administrative proceedings, large new potential liabilities and costly new constraints on operations.

80 Environmental Permitting In Ohio 25 th Annual Conference CLEAN AIR ACT COURT DECISIONS Robert L. Brubaker Porter Wright Morris & Arthur LLP July 21, 2015

81 Environmental Law and Policy All Three Branches Have Roles to Play

82 : The Beginnings Of Modern U.S. Environmental Law Jan. 1, 1970 National Environmental Policy Act of 1969 (NEPA) Apr. 22, 1970 Earth Day Dec. 2,1970 EPA created by Executive Order of President Richard Nixon Dec. 31,1970 The Clean Air Act Amendments of 1970 (the prototype federal environmental statute) Oct. 18,1972 The Federal Water Pollution Control Act

83 Major Federal Environmental Protection Statutes Enacted During the 1970s 1970 NEPA 1970 Clean Air Act 1972 Federal Water Pollution Control Act 1972 Federal Insecticide, Fungicide, and RodenticideAct 1972 Noise Control Act 1972 Coastal Zone Management Act 1972 Marine Mammal Protection Act 1973 Endangered Species Act 1974 Safe Drinking Water Act 1974 Forest Rangeland Renewable Resources Planning Act 1975 Federal Coal Leasing Act Amendments 1976 Toxic Substances Control Act 1976 Resources Conservation and Recovery Act 1976 National Forest Management Act 1976 Federal Land Policy and Management Act 1976 Magnuson-Stevenson Fisheries Management Act 1977 Clean Air Act Amendments 1977 Clean Water Act Amendments 1977 Surface Mining Control and Reclamation Act 1978 Outer Continental Shelf Lands Act

84 The Second Decade of Environmental Statutes Comprehensive Environmental Response, Compensation & Liability Act (Superfund) Emergency Planning and Community Right to Know Act Alaska National Interest Lands Conservation Act Hazardous and Solid Waste Act Amendments of 1984 Safe Drinking Water Act Amendments of 1986 Superfund Amendments and Reauthorization Act of 1986 Water Quality Act of 1987 Medical Waste Tracking Act of 1988 Oil Spill, Pollution, Prevention Act of 1990 Clean Air Act Amendments of 1990

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86 Chevron deference - statutes Chevron v. NRDC, 467 U.S. 837 (1984) Landmark CAA case decided by the Supreme Court in 1984 Case won by industry, allowing netting to avoid NNSR LAER and offsets Provides the framework for judicial analysis of agency interpretations, in notice-and-comment rulemaking, of ambiguous enabling legislation

87 Chevron deference - statutes Establishes a highly deferential standard of review for courts A two-part test: 1. Is the intent of Congress clear from the text and context of the statutory provision in question? (If so, the agency must give effect to the unambiguously expressed intent of Congress. ) 2. If not, is the agency s resolution of the statutory ambiguity reasonable, rational, and based on relevant factors?

88 Chevron deference - statutes Chevron deference is premised upon the theory that a statute s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps. In exceptional cases, courts must determine the correct reading of the statute instead of applying Chevron deference. Example: The Supreme Court s June 25, 2015 decision on the Affordable Care Act (King v. Burwell).

89 Michigan v. EPA U.S. Supreme Court, decided June 29, 2015 Holds that EPA interpreted 112(n)(1)(A) of the Clean Air Act unreasonably when it deemed cost irrelevant to the decision that it was appropriate and necessary to regulate HAP emissions from power plants EPA estimated the costs to comply with the power plant Mercury and Air Toxics Standard (MATS) rule to be $9.6 billion per year, and the benefits of the HAP emission reductions to be $4 to $6 million per year EPA estimated ancillary benefits of PM 2.5 emission reductions to be $37 to $90 billion per year, but EPA conceded that the ancillary benefits played no role in the decision that it was appropriate and necessary to regulate power plant HAP emissions

90 Michigan v. EPA Chevron directs courts to accept an agency s reasonable resolution of an ambiguity in a statute that the agency administers, but EPA strayed far beyond those bounds. Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not license interpretive gerrymandering under which an agency keeps parts of statutory context it likes while throwing away parts it does not.

91 More and More EPA Regulations 33 volumes in the Code of Federal Regulations 25,831 pages of regulations Even more voluminous guidance, interpretations, and policies

92 Auer deference - regulations Auer v. Robbins, 519 U.S. 452 (1997) A unanimous decision, authored by Justice Scalia Not an environmental case; a labor law case involving salary-based disqualification for overtime pay Accords heightened deference to an agency s interpretation of its own regulations An agency s interpretation of its own regulations is controlling unless plainly erroneous or inconsistent with the regulation. "

93 Perez v. Mortgage Bankers Assn. U.S. Supreme Court, decided March 9, 2015 Another labor law overtime pay case, not an environmental case Notice-and-comment rulemaking is not necessary when an agency changes its interpretation of its regulations Heightened [Auer] deference is extended to changed interpretations of an Agency s regulations Concurring opinions of Justices Scalia, Thomas, and Alito suggest that Auer deference should be revisited

94 It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to day, can guess what it will be to morrow. James Madison The Federalist, no. 62

95 Murray Energy Corp. v. EPA and West Virginia et al. v. EPA U.S. Court of Appeals for the D.C. Circuit, decided June 9, 2015 Related challenges to EPA s authority to regulate GHG emissions from existing electric generating units under 111(d) of the Clean Air Act Petitioners argued that 111(d) prohibits EPA from adopting emission guidelines for a source category regulated under 112, and that EPA s proposal to do so was subject to judicial review prior to finalization of that proposal The Court refused to consider, for the first time ever, an appeal of a proposed rule, and told the petitioners to wait to appeal the final rule, due out imminently

96 Sierra Club v. EPA U.S. Court of Appeals for the 6 th Circuit, decided March 18, 2015 RACT/RACM that is not necessary for actual NAAQS attainment is nevertheless required for a redesignation to attainment Technology for the sake of technology Cincinnati area is now designated attainment for the more stringent 2012 PM-2.5 NAAQS, but nonattainment for the less stringent 1997 standard

97 Pending 6 th Circuit CAA Cases to Watch Merrick v. Diageo and Kathy Little, et al. v. Louisville Gas & Electric Co. Oral argument in both cases set for August 6, 2015 Does the CAA preempt common law nuisance liability for permitted emissions? USA v. DTE Energy Co. ( DTE IV ) Second time before the 6 th Circuit Briefing is complete; oral argument expected soon Leading case in the U.S. interpreting the 2002 NSR Reform rules How does one distinguish minor modifications exempt from PSD from major modifications subject to PSD, based on Projected Actual Emissions?

98 Trends over the past 25 years Better air quality, fewer emissions More rules and more complexity Increased assertion of federal power Scientific and technological advances More national enforcement initiatives More migration of environmental regulation into energy and economic policy Greater ENGO litigation and influence The rise of climate change as the top priority Fewer manufacturing jobs The shale gas revolution States more sharply divided Growth in electronic data exchange and storage