EPA proposes elimination of current MACT policy

On Jan. 3, 2007, the US Environmental Protection Agency (EPA) published a proposed rule in the Federal Register that would eliminate its “once in, always in” policy on maximum achievable control technology (MACT) standards.1 If promulgated, reversal of this decade-old policy will allow facilities currently subject to MACT standards to be exempt from MACT upon reducing emissions below major source thresholds for hazardous air pollutants (HAPs).

Under existing policy, if a facility is a “major source” of HAP emissions on the first substantive compliance date of the MACT standard, it will always be subject to the MACT standard. With several MACT standards already in place for the oil and gas industry and others being considered, the new rule would give facilities flexibility to determine how best to control HAP emissions, rather than the “one-size fits all” MACT standards.

Clean Air Act, HAPs

Section 112 of the Clean Air Act provides that any stationary source that has the potential to emit more than 10 tons/year of any of the 188 listed HAPs, or 25 tons/year of any combination of HAPs, is considered a “major source” and subject to technology-based regulations, referred to as MACT standards.

Sources that have a potential to emit less than the HAP thresholds are “area sources,” which are subject to lesser controls or no controls depending on the particular industry.

EPA’s policy

On May 16, 1995, EPA’s Director of the Office of Air Quality Planning and Standards John S. Seitz distributed a guidance memorandum to EPA’s regional offices. This memorandum clarified that “when a major source of hazardous air pollutants can become an area source-by obtaining federally enforceable limits on its potential to emit-rather than comply with major source requirements.”2

The memorandum indicated that EPA had received a number of requests for clarification on “when facilities may limit their potential to emit to avoid applicability of major source requirements of promulgated MACT standards.”2

One such timing question involved facilities that were subject to a MACT standard on the “first compliance date” on account of being a major source but had since fallen below HAP emission thresholds and wanted to be area sources not subject to MACT regulatory requirements.

The memorandum set forth EPA’s “once in, always in” interpretation: “EPA is today clarifying that facilities that are major sources for HAPs on the ‘first compliance date’ are required to comply permanently with the MACT standard to ensure that maximum achievable reductions in toxic emissions are achieved and maintained.”2

According to EPA, a “once in, always in policy ensures that MACT emissions reductions are permanent, and that health and environmental protection provided by MACT standards is not undermined.”

As a consequence of this policy, facilities that have reduced emissions below the thresholds are permanently subject to MACT requirements such as equipment leak detection, work practice measures, housekeeping, testing, monitoring, recordkeeping, and reporting procedures, etc. Furthermore, by remaining subject to a MACT standard, the facility must obtain and continue to maintain a Part 70 operating permit.2 3

EPA’s proposed rule

The proposed rule to eliminate the “once in, always in” interpretation was under development within EPA for some time. The Natural Resources Defense Council (NRDC) publicly released the draft proposed rule in April 2006, claiming that the rule would “weaken nearly 100 toxic air pollution standards and allow industrial plants across the country to emit significantly greater amount of toxins.”4

The preamble to the Jan. 3, 2007, proposal differs from the draft released by NRDC in April 2006 by being less dismissive of earlier criticisms and inviting public comment on those topics that have raised so much controversy. In addition, the proposed rule contains some additional caveats regarding switching from a major source to an area source and reverting from area source back to a major source.

EPA currently proposes replacing the May 16, 1995, “once in, always in” policy with amendments to 40 CFR Part 63.5 The regulatory amendments, if made final after the public notice and comment period, will “allow a major source of HAP emissions to become an area source at any time by limiting its PTE [potential to emit] for HAPs below the major source thresholds.”1

According to EPA, “there is nothing in the CAA that compels the conclusion that a source cannot attain area source status after the first substantive compliance date of a MACT standard,” and that the US Congress “placed no temporal limitations on the determination of whether a source emits or has the potential to emit HAPs in sufficient quantity to qualify as a major source.”1

EPA contends that its proposed amendments are wholly consistent with the Clean Air Act’s definition of “major source” found in Section 112(a)(1) of the CAA and solicits comment on this position.

EPA justifies the proposed amendments, explaining that it has received feedback from the State and Territorial Air Pollution Program Administrators and the Local Air Pollution Control Officials that the “once in, always in” policy “provides no incentive for sources, after the first substantive compliance date for a MACT standard, to implement P2 [Pollution Prevention] measures in order to reduce their emissions to below major source thresholds because there are no benefits to be gained, e.g., no reduced monitoring, recordkeeping, and reporting, and no opportunity to get out of major source requirements.”1

EPA also acknowledges hearing from others that the policy “serves as a disincentive for sources to reduce emissions of HAP beyond the levels actually required by an applicable standard.”1

EPA disagrees with environmental groups and other opponents of the proposed amendment “that a source that currently emits at levels below the major source threshold as the result of compliance with a MACT standard would increase its emissions in response to this rule.”1

NRDC, for example, argues that the proposed rule “would seriously erode existing standards under the Clean Air Act by permitting thousands of oil refineries, hazardous waste incinerators, chemical plants and steel mills to increase their emissions by as much as 50,000 lb/year.”4

EPA concludes that such an outcome is unlikely because:

• Pollution control devices installed to meet MACT standards are designed to operate a certain way and cannot be operated at a level that achieves only a partial emission reduction.
• Sources will maintain the level of emission reduction associated with the MACT standard because the level is required to meet other requirements of the Clean Air Act.
• Sources have no incentive to establish their PTE limit too close to the major source threshold because repeated or frequent exceedances above the PTE could result in an enforcement action.
• Permitting authorities will likely encourage emission reduction maintenance and impose more stringent PTE terms and conditions on the source the closer the source’s PTE is to the major source thresholds.
• Many sources that take a PTE limitation to become an area source will ultimately be subject to area source standards.

Despite EPA’s justifications, organizations such as NRDC will likely submit comments in opposition to the proposed rule and, if the rule is made final, may challenge the rule in the US Court of Appeals for the District of Columbia Circuit.

The proposed rule includes some caveats on switching from a major source to an area source and reverting from an area source back to a major source.

First, once a source switches from major source status to area source status, it may not switch back to major source status to avoid having to meet the MACT standard for an additional 3 years, the amount of time generally allowed for existing sources to attain compliance, unless the “major source standard has changed such that the source must undergo a physical change, install additional controls and/or implement new control measures.”1

EPA specifically solicits comment on this proposed “immediate compliance” rule and whether there are additional exceptions that would necessitate an extension of the time period. Furthermore, EPA has asked for comments on whether it should allow all sources that revert to major source status to have a specific period of time to comply with the MACT standard rather than requiring immediate compliance.

Second, when a major source switches to area source status, it must comply immediately with equivalent or less-stringent area source standards if the first substantive compliance date has passed. If different emission control points, however, are controlled or different controls are necessary to comply with the area source standard or other physical changes are needed to comply with the standard, additional time, not to exceed 3 years, may be granted by the permitting authority if adequate supporting data is provided by the source.

Lastly, major sources that are subject to enforcement actions or investigations cannot escape liability by becoming area sources. Similarly, becoming a major source does not absolve a source subject to an enforcement action or investigation for area source violations or infractions.

EPA’s proposal to eliminate the “once in, always in” policy is a welcome change that will offer facilities greater flexibility in reducing HAP emissions. Environmental organizations will oppose the proposed amendments, arguing that industry sources currently meeting MACT standards will increase emissions so as barely to fall below the current HAPs thresholds.

EPA’s proposed rule addressees these concerns and seeks comments that describe specific factual scenarios that would likely result in such emission increases. EPA will need to address these factual scenarios to establish a strong administrative record to support future challenges to any final rule.

Industry will certainly take the opportunity to submit responsive, well-written comments that support EPA’s proposal. EPA is accepting public comments through Mar. 5, 2007. EPA’s careful consideration of these comments and documentation of them will make the rule-making less vulnerable to being overturned by a federal court.

References

1. “National Emission Standards for Hazardous Air Pollutants: General Provisions,” Federal Register, Vol. 72, No. 1, Jan. 3, 2007, p. 69.
2. Seitz, John S., memorandum to EPA regional offices, May 16, 1995.
3. US Code of Federal Regulations, Title 40, Vol. 15, Part 70.
4. “Secret EPA Rule Would Allow More Carcinogens in the Air,” National Resources Defense Council, Apr. 3, 2006, http://www.nrdc.org/media/pressreleases/060403.asp.
5. US Code of Federal Regulations, Title 40, Vol. 15, Part 63.

The authors