Facing opposition from a number of business groups and trade organizations and resistance from Capitol Hill, the Environmental Protection Agency (EPA) announced on Monday, May 16, 2011, that it was staying indefinitely the effective dates for the new emission standards for boilers (i.e. the boiler maximum achievable control technology (MACT) standards) that the EPA issued in February of this year.
Ordered by the courts to take action under the Clean Air Act on emissions generated by commercial and industrial boilers, the EPA initially promulgated proposed regulations that most in the business community viewed as extremely burdensome if not impossible. Whether in response to pressure from the business community or from Capitol Hill or in response to President Obama’s executive order requiring all federal agencies to review their regulations to ensure they are not overly burdensome (or likely a combination of all of three), the EPA tried to rework the regulations to ease the burden on those industries, businesses, and other facilities that operate boilers. Facing a looming court deadline, the EPA sought a 15 month extension of the court’s deadline for issuing a final rule, which the court denied (the judge gave them just 30 days to issue a final regulation).
Having been denied an extension, the EPA went ahead and issued the final regulation (as the regulations were rewritten). However, because the final regulations were so different from the initial proposed rule, the EPA immediately issued a reconsideration notice and agreed to continue to receive public comments. This left the regulated community in the untenable position of investing a significant amount of money into technology to comply with the final regulation, when the EPA was still reviewing the final regulations and therefore the requirements could change (in which case one may have invested significant money into an unnecessary technology, or worse yet, a technology that does not bring them into compliance).
Generally, the final boiler MACT addresses hazardous-air-pollutant emissions by imposing limits on five “surrogate” pollutants—mercury, hydrogen chloride, particulate matter, carbon monoxide, and dioxins/furans. Of particular concern to the regulated community, the new standards would regulate pollutants on a pollutant-by-pollutant basis, meaning that one would have to reconfigure his or her boiler to meet the best performing emission rate for each of the five pollutants. Industry representatives argue that in some cases this approach is impossible due to the fact that, in some instances, the technologies that enable the required reduction in one pollutant result in an increase in one of the other five. Some industry groups also argue that regulating a source on a pollutant-by-pollutant basis is inconsistent with the Clean Air Act, arguing that the Clean Air Act requires the EPA to establish MACT standards for performing sources taking into account all pollutants (not pollutant-by-pollutant-specific technology). Such requirements also undermine some of the efforts to find alternative fuels, in that biomass would be significantly affected by the proposed regulations.
With an effective date for the new regulations of May 20, 2011, several industry groups, including the National Association of Manufacturers, the American Petroleum Institute, the American Chemistry Council, and the U.S. Chamber of Commerce, petitioned the EPA for a stay of the effective date. A stay would extend the effective date of any new regulations beyond the deadline provided under the Clean Air Act. The EPA, however, agreed that it needed an opportunity to seek additional public comment on the proposed regulations and consider the comments it has received since “finalizing” the regulation in February 2011 before requiring facilities to make significant investment in technology that ultimately may not be required or may be misdirected. Acting under the authority provided in the Administrative Procedures Act that allows an agency to delay new rules “when justice so requires,” the EPA agreed to stay the new regulations. The EPA also announced that it will continue to collect data and comments from stakeholders until July 15 of this year, at which point it will start reworking the new rules. It will be interesting to see how the EPA proceeds from here, particularly whether they wait until after the presidential elections in November before readdressing this very touchy subject or whether the courts force them to take action sooner.
Karen Aldridge Crawford and Stacy Kirk Taylor are partners with Nelson Mullins Riley & Scarborough in Columbia, South Carolina.
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