Industry says NSR reforms to continue as US EPA reopens comments on final rule

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, July 30 -- Industry officials don't expect federal regulators to revise the way refiners meet clean air emissions targets even though the US Environmental Protection Agency announced July 25 it is soliciting more comment on a 2002 rule.

The agency's Federal Register notice solicits comments related to the agency's rulemaking on certain portions of its New Source Review Program that became final this March. The agency last December issued proposed and final revisions to its NSR program, which has been part of the Clean Air Act since 1977.

Limited issues
EPA officials stressed that their decision to reconsider what they call six "limited" issues does not mean the agency has decided to change any aspect of the rule at this time.

The agency said it is "soliciting comments on these six issues and will make a final decision about whether to change anything in those areas after the close of the comment period (Aug. 25)." EPA also plans a public hearing Aug. 14 in Research Triangle Park, NC.

NSR requires refiners and other industrial plants to upgrade pollution-control equipment when major changes are made to a facility. Both regulators and those being regulated say the program's permitting process over time has become so complex that the rules need updating (OGJ, Dec. 2, 2002, p 34).

But the devil is in the details and EPA has struggled for more than a decade to reach consensus between state regulators, plant operators, and environmental groups.

The final NSR rule includes incentives that industry says will encourage manufacturers to undertake pollution control and prevention projects. Under the rule, a refinery should be able to modernize without triggering a new permit review, provided it operates within site-wide emissions caps, called Plantwide Applicability Limits (PALs).

NPRA view
EPA's second look at a portion of the final rule is not a big concern for refiners, according to an industry trade group.

Bob Slaughter, president of the National Petrochemical and Refiners Association said EPA's decision reflects the "long deliberative process" the agency has followed trying to update the rules over the past two presidential administrations.

"We don't believe there is any second guessing on this rule," he said, adding that PALs "are definitely in NSR's future."

Revisits, recriminations
Among the areas EPA plans to revisit include the way it calculates air emissions for PALs. It will seek more comment on what emission guidelines should be used for those process units built after the 24-month baseline period used to benchmark PAL emission limits.

EPA will also solicit more comment on its decision to allow a PAL to supersede existing emissions limits established under prior NSR programs. Environmental groups and state air pollution officials have criticized both PAL plans; they argue the updated PALs allow a refinery to pollute virtually at will. Industry disagrees, saying PALs make it easier for refiners to make the kind of upgrades that will lower emissions and clean up the air.

Environmental views
Meanwhile environmental groups are keen to comment on another area the agency wants more feedback on: EPA's report on the environmental benefits of NSR reform. That report found NSR reforms would result in greater environmental benefits than what was previously on the books. Environmental groups have challenged the validity of that report, calling it more of a political than technical document.

The rules—both the final one and a pending proposal clarifying routine repair and maintenance—are being challenged by several attorneys general, environmental and health groups on the grounds that they illegally weaken the Clean Air Act.

If EPA allows the final rule to stand in its present form, the agency will be allowing smokestack industries to pollute more—and will harm public health in the process, according to Frank O'Donnell, executive director of the Clean Air Trust.

He argued that EPA's move suggests the Bush administration realizes it has a weak legal case.

"EPA is now soliciting public comments on six topics, including, significantly, a report EPA issued some months ago, which asserted that the contested EPA rules would result in greater environmental benefits. What this means is that the (Department of Justice) believes the EPA analysis is so flawed that it is unwilling to defend it," he said.

Industry rebuttal
Industry groups argue EPA has a strong legal case and is just trying to cover its bases to give all stakeholders enough time for comment.

"The decision to allow for more comment is just evidence of the abundance of caution the EPA has had regarding the NSR rules," said Scott Segal of the Electric Reliability Coordinating Council. "Over the last decade, NSR rules have been the subject of tens of thousands of comments on the record, many public hearings in each region of the country, and many meetings with groups reflecting a broad spectrum of views. The process has been open, fair, and thorough," he said.

Segal said, "The state attorneys general have already lost their motion in court to stay the final NSR rule. Today, most elements of the administrative petitions have been dismissed. We anticipate that EPA will successfully defend their rules. ERCC hopes that the state attorneys general and their political allies in the environmental movement can stop their attempts to delay clarification of the NSR program. By discouraging energy efficiency and pollution prevention, their efforts ultimately undermine environmental protection, workplace safety, and electric reliability."

Contact Maureen Lorenzetti at Maureenl@ogjonline.com.

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