March 14, 2012 Articles

The Long, Winding Journey of Boiler MACT and CISWI Rules

The development of these regulations has much in common with cross-country vacations in the family station wagon.

By Karen Aldridge Crawford and Stacy Kirk Taylor – March 14, 2012

Many of you probably remember the days of loading up the Country Squire station wagon (or the Family Truckster for fans of National Lampoon’s Vacation, or minivan for the younger generation) for that childhood rite of passage—the cross-country family vacation. Some of you may have fond memories of joyous trips through picturesque countrysides and winding roads through the mountains with brief stops at roadside apple stands for fresh apples and jams or jellies. Most, however, would probably regale you with stories of trips that felt as if they would never end soon enough, ones with this familiar refrain being repeatedly voiced from the back seat . . . “Are we there yet?”

You might ask (and rightfully so) what this has to do with the Boiler MACT (which regulates emissions from commercial and industrial boilers and process heaters) and the CISWI rules (which regulate emissions from commercial and industrial solid waste incineration units). Well, the journey of these regulations brings to mind such cross-country family vacations, and not the joyous, picturesque kind, but instead the ones of legend, complete with yelling, quarreling, getting lost, asking for directions, turning around, and breaking down (and hopefully reaching the final destination). But quoting Dad's response from the front seat, "We're almost there" . . . whether or not that indeed was ever the case.

The 1990 Amendments to the Clean Air Act
In the 18 years following the original enactment of the Clean Air Act, the U.S. Environmental Protection Agency (EPA) had, according to many, failed to achieve the intended goals of the original act because the EPA had only implemented regulations governing some of the sources of a list of only seven chemicals. Therefore, Congress, on November 15, 1990, enacted a sweeping overhaul of the Clean Air Act, creating a technology-based regulatory structure that drastically limited the EPA’s discretion and established specific requirements and deadlines for the implementation of emissions standards. Pub. L. No. 101-549, 104 Stat. 2399. This is where, for the purposes of this article, the family vacation really begins.

For a basic primer, the 1990 amendments to the Clean Air Act consider two basic sources of hazardous air pollutants (HAPs): 1) “major sources” and 2) “area sources.” 42 U.S.C. § 7412(a)(1) and (2). As most readers of this publication will know, a “major source” is defined as “any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit considering controls . . . 10 tons per year or more of any hazardous air pollutants or 25 tons per year or more of any combination of hazardous air pollutants.” 42 U.S.C. § 7412(a)(1). The term “area source” is then defined as “any stationary source of hazardous air pollutants that is not a major source,” basically everything else. 42 U.S.C. § 7412(a)(2).

The 1990 amendments imposed two overarching duties upon the EPA concerning area sources. The EPA was required to regulate 1) area sources of the 30 most dangerous HAPs and 2) area sources of seven specific HAPs, without regard to their inclusion on the list of 30. 42 U.S.C. § 7412(c)(3), (c)(6), and (k)(3). With both the list of 30 and the seven specific HAPs, the EPA was required to “identify the source categories or subcategories . . . accounting for 90 per centum or more of the aggregate emissions” within 5 years of the date of the enactment of the amendments and then, no later than 10 years from the date the amendments were enacted in 1990, implement emission standards for all such source categories or subcategories (which would have been November 15, 2005). Id.

Although the lists have since been revised several times, the EPA dutifully identified the source categories or subcategories that account for 90 percent or more of emissions, having issued the list of area source categories for the 30 most dangerous HAPs in 1999 (64 FR 38,706) and the list of source categories for the seven specific HAPs in 1998 (63 FR 17,838). This, however, is where the EPA’s efforts stalled and the litigation began.

The Sierra Club Files Suit
To continue the family vacation theme, with the passing of the November 15, 2005, deadline, the EPA just kept driving right past its exit, prompting the Sierra Club to demand that the EPA pull the car over and ask for directions. Specifically, the Sierra Club filed seven different complaints against the EPA, seeking to enforce different deadlines and obligations provided in the 1990 amendments (including, among other obligations, the requirements that the EPA implement regulations governing the area source categories listed for the 30 most dangerous HAPs and for the seven specific HAPs as mentioned above). See Sierra Club v. Johnson, 444 F. Supp. 2d 46 (D.D.C. 2006) (Sierra Club—006). These cases were then consolidated and stayed while the parties sought mediation.

Through almost three years of mediation, the parties were able to resolve some issues but were still unable to resolve all of them. Critically, the parties were unable to agree upon a schedule for implementing the regulations required under the 1990 amendments. The parties therefore filed cross-motions for summary judgment, in which the EPA actually conceded that it had failed to discharge all of its mandatory duties. The EPA, however, vehemently opposed the schedule sought by the Sierra Club for implementation of the regulations as impracticable. The Sierra Club schedule provided for the implementation of regulations for a certain number of source categories each year, with the last regulations being implemented by June 2008. The EPA responded with a schedule of its own, which, interestingly, provided for the last regulations to be completed in 2012 (which, as becomes apparent below, could explain some of the court’s later frustration with the EPA’s tactics).

The court ultimately granted the Sierra Club’s motion for summary judgment and ordered the EPA to draft and implement the required regulations. The court, however, determined that the Sierra Club’s proposed schedule was “simply too compressed at [that] stage to afford any reasonable possibility of compliance” and therefore extended the schedule proposed by the Sierra Club so that all regulations were to be completed by June 2009 (still three years short of the EPA's proposed 2012 deadline). Id. at 58.

The Court’s 2006 Holding in the Sierra Club Litigation
As an aside, for those of you not familiar with the district court’s 2006 opinion in Sierra Club, the court’s explanation is worth some discussion. As one would expect, the basis for the court’s decision was that the EPA’s duty was a nondiscretionary one imposed by Congress. Therefore, as a fundamental matter, if the EPA had a concern with the schedule set by the 1990 amendments, its remedy was with Congress, not the courts. That being said, however, the court did recognize that courts can decline to impose deadlines where those deadlines are impossible to satisfy.

Emphasizing that the EPA bore a heavy burden in demonstrating that compliance was impossible, the court was generally unreceptive to the EPA’s arguments. Primarily, the EPA emphasized the complexity of the issues in drafting the regulations, the potential impacts to the public and to the regulated community, and therefore the need to implement sound and thorough regulations. As the EPA explained, the development of such regulations required a thorough process of public meetings, collection and review of information and comments, drafts and rewriting, etc. The court, however, disregarded the EPA’s complaints, stating that “[b]y all appearances, the EPA’s failure to promulgate the required standards owes less to the magnitude of the task at hand than to ‘the footdragging efforts of a delinquent agency’ . . . or an attempt by the EPA to prioritize its own regulatory agenda over that set by Congress.”Id. at 58. (quoting NRDC v. Train, 510 F.2d 692, 713 (D.C. Cir. 1974)).

What is interesting is the court’s more general response. The court’s ultimate position was that, irrespective of the merits of the EPA’s efforts, the EPA needed to be more concerned with promptly implementing the regulations, as opposed to the soundness of the regulations. As the court explained, the EPA’s efforts, even if not “footdragging,” were “indicative of ‘a level of thoroughness and scientific certainty not within the contemplation of Congress at the time it mandated the regulation of hazardous air pollutants.’” Id. at 56. (quoting Sierra Club v. Gorsuch, 551 F. Supp. 785, 788–89 (N.D. Cal. 1982)). In other words, a flawed but prompt regulation was more important than a sound, well-developed one.

Furthermore, the court stated that the EPA should have shifted its personnel and resources to satisfy Congress’s deadlines. As a specific example, the court noted that, rather than devoting the substantial resources that the EPA devoted to discretionary rulemakings, such as amending (and arguable improving) other regulations, the EPA should have dedicated such resources to the development of regulations (whether flawed or not) in compliance with Congress’s deadline. (The court then offered that, in its view, many of these discretionary efforts were undertaken to simply make existing regulations “more congenial to industry.”) Id.at 57.

Round II of the Sierra Club Litigation
Although the court provided the parties clear directions, the EPA apparently returned to the station wagon and just kept driving. Initially, the Sierra Club sat quietly in the passenger seat, actually consenting to the EPA’s requests to delay the various deadlines (the last one of which extended the final deadline to January 21, 2011). Eventually, however, the Sierra Club balked, refusing the EPA’s request to extend the January 21, 2011, deadline an additional 15 months to April 13, 2012. Faced with a looming deadline, the EPA was therefore forced to file a motion with the court in December 2010 requesting an extension. Sierra Club v. Jackson, 2011 U.S. Dist. LEXIS 5316 (D.D.C. Jan. 20, 2011). In case you have not noticed, the EPA was now pushing for a 2012 compliance deadline, which is basically the compliance deadline that the EPA was seeking in the 2006 hearing and that was rejected by the court, which one can only assume did not sit well with the court.

By this point, however, only four source categories remained: 1) certain area source boilers, 2) major source boilers, 3) commercial and institutional solid-waste incineration (these three referred to collectively by the court as “the Three Air Rules”), and 4) gold mine ore processing and production (which was finalized on December 16, 2010, leaving only the Three Air Rules outstanding). The EPA had actually issued proposed standards for the Three Air Rules on April 29, 2010 (which were then published in the Federal Register on June 4, 2010). The regulations as drafted, however, were vehemently opposed by the industrial community as unachievable, causing the EPA to extend the comment period by an additional month and ultimately forcing the EPA to go back to the drawing board. As the EPA explained to the court, “‘the purpose of section 112(c)(6) and the public interest [would] be best served if the Agency’s deadline . . . [was to] extend to April 13, 2012, so that the EPA [could] re-propose the rules for further public comment to ensure that the final rules [were] logical outgrowths of the proposals.’” Id. at *14 (quoting from the EPA’s brief). In the alternative, the EPA requested that the court at least extend the deadline to June 15, 2011, to provide time to respond to the 4,800 comments received.

As one might expect, the court was not very open to such a request. Echoing its 2006 decision, the court responded that “[i]n light of Congress’ express directive on the deadline for the promulgation of HAP regulations, the focus must be on ‘substantively adequate regulations’—not perfect regulations.”Id. at *19. Moreover, the court, as it had done in its 2006 decision, again challenged the EPA’s dedication of resources to completing the regulations. According to the court, “it is of course not the case that an agency can fail to act with ‘the fullest use of resources’ and then claim, at the last minute, that compliance is impossible.” The court, however, did agree to extend the deadline an additional month to February 21, 2011. Id. at *18.

With the court’s refusal to grant an extension, the EPA was forced to sign into effect the Boiler MACT and CISWI rules on March 21, 2011, regulations that the EPA maintained still warranted additional public input. 76 FR 15,608 and 15,704. This would have 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). The EPA announced in conjunction with the issuance of the new Boiler MACT and CISWI rules that it was initiating an administrative reconsideration process pursuant to § 307(d)(7)(B) of the Clean Air Act (which provided only a three-month stay). 76 FR 15,267. Then, with the regulations set to go into effect on May 20, 2011, the EPA issued a subsequent notice of delay on May 18, 2011, pursuant to 5 U.S.C § 705 of the Administrative Procedures Act to provide the agency time to complete its rewrite of the regulations. 76 FR 28,622.

The Final(?) Versions of the Boiler MACT and the CISWI Rules
As discussed in greater detail below, the Sierra Club responded by filing (along with other parties) a petition for review with the court-of-appeals, challenging substantive aspects of the new regulations and then by filing a new lawsuit with the district court, challenging the validity of the stay. Sierra Club v. Jackson, 2011 U.S. Dist. LEXIS 109693 (D.D.C. Sept. 27, 2011).

In the meantime, the EPA continued to move forward with its revisions to the Boiler MACT and CISWI rules, and on December 23, 2011 published the revised standards. 76 FR 80,532 and 80,598. Providing a 60-day public-comment period, the EPA expects to finalize the regulations in spring 2012 (likely April). Therefore, unless the comments received, the pending litigation, continued pressure from certain members of Congress, and pressure on Congress for a legislative “fix” trigger more changes, this may be, after 22 years, the final version of the Boiler MACT and CISWI rules, and, as this version appears to be the final one, a brief overview of the changes to the regulations is warranted.

Boiler MACT
According to the EPA, the regulations as now proposed will still achieve significant reductions in toxic air pollutants, while increasing the rule's flexibility, addressing compliance concerns raised by industry and labor groups, and ultimately cutting the cost of implementation by nearly 50 percent from the original 2010 proposed rules. Specifically, the boiler MACT standards as now proposed provide greater flexibility and reduce the number of boilers to which the regulations would actually apply. As the EPA explains, the major-source proposal, which is the part of the proposed regulations that impose actual control technology, covers approximately 14,000 boilers (less than 1 percent of the boilers in the United States). For boilers located at smaller facilities, such as universities, hospitals, and commercial buildings, only a very small number would actually have to take any additional steps to comply with the proposed rule; the vast majority would simply be required to perform maintenance and routine tune-ups.

What do the new proposed regulations require? In reworking the regulations, the EPA revisited the data upon which the prior version of the regulations was based, reviewed a significant amount of additional data, and also revised its calculation methodologies somewhat in response to concerns over accuracy and detection levels. As a result, although many of the limits ended up just as stringent (and in some instances, more stringent) than the limits contained in the prior version of the regulations, the limits were completely reworked based on the new data.

Specifically, the proposed regulations retain the strict emissions limits for mercury, hydrogen chloride, particulate matter, and carbon monoxide (the last two of which serve as surrogates for metallic and organic pollutants) but, nonetheless, impose new limits. The new regulations, however, eliminate the numeric emission limit for dioxins/furans, noting in the preamble that the level previously proposed could not be accurately measured with existing technology. Instead, the new regulations tackle dioxin/furan emissions by imposing work-practice standards that include periodic tune-ups to ensure good combustion.

As for the four pollutants for which express limits were developed, the overall scheme remains the same—setting limits based upon the type of pollutant and the type of boiler. Under the proposed Boiler MACT standards, pollutants are divided into two categories. Mercury and hydrogen chloride are characterized as fuel-based pollutants as the emission levels are generally dictated by the content of the fuel. For these two pollutants, the EPA has proposed limits for solid fuel and for liquid fuel without any distinction being made for the type of boiler.

Particulate matter and carbon monoxide, on the other hand, are characterized as combustion-based pollutants because the design of the boiler has a greater impact on the resulting emission. Accordingly, particulate matter and carbon monoxide are where the new regulations being proposed become complicated. The new regulations have increased the subcategories of boilers or boiler technology to 41, and, because the Clean Air Act requires more stringent standards for new units, the regulations include a second set of lower emissions for new units under each type of boiler and pollutant. Again, although some of the limits are less stringent, such as the limits for particulate matter in most of the categories, most are just as stringent as those provided in the prior version, and some, such as most of the limits for mercury and carbon monoxide, are actually more stringent.

The new regulations being proposed do, however, provide greater flexibility than was previously allowed by providing for the use of a variety of alternative emissions limits and compliance demonstration methods. For example, a facility with more than one boiler can now choose to average emissions as long as the source as a whole is less than 90 percent of the applicable standard. The EPA also eliminated its efforts to require continuous monitors for particulate matter. Importantly, the EPA is also proposing to revise the compliance deadlines, providing three years from publication of the final rule to comply. The June 4, 2010, date of the initial proposed regulations, however, will remain the date for determining whether a unit is considered a new or an existing unit.

CISWI Rules
As for the CISWI Rules, the EPA revised both the CISWI rules and the non-hazardous secondary material (NHSM) rules. Specifically, in response to significant concerns regarding use of non-hazardous secondary material as non-waste fuel and how to demonstrate compliance with the criteria, the EPA rewrote the criteria to provide greater clarity and flexibility as to what types of secondary materials constitute a non-waste fuel. The changes to the regulations also expressly classify a number of secondary materials as non-wastes when used as fuel and provide a mechanism for requesting such a determination from the EPA for other materials.

Are We There Yet?—Where Things Currently Stand
Industry Opposition
If you remember from those family trips, sometimes the last 10 miles felt like the longest part of the trip. Everyone was tired and ready to get out of the car, but you still had a little ways to go. Specifically, although the EPA has issued final proposed regulations and apparently intends to issue the final regulations in April 2012, the challenges to those efforts from both the environmental groups and from industry groups continue, leaving the ultimate outcome still in question. In fact, the EPA’s “concessions” have done little to actually quell industry opposition (which is what forced the EPA to ignore the court’s mandate and revise the rules in the first place) and the efforts by certain industry sectors to push for a legislative remedy.

Emphasizing the added expense that even the reworked regulations will impose on goods manufactured in the United States and thus the impacts to the U.S. economy, groups, such as the National Association of Manufacturers, have continued their campaign against the proposed regulation and continued their push for a legislative fix should the EPA fail to adequately address industry’s concerns. In response to the EPA’s issuance of the proposed rules, Senator James Inhofe (R-Okla.) of the Senate Committee on Environment and Public Works stated that, although he appreciated the EPA’s acknowledgment of the potential economic impacts and efforts to revise the rules, the revised rules would still have too great an economic impact on the United States. Senator Inhofe then pressed Senate Majority Leader Harry Reid (D-Nev.) to allow a vote on the House-passed EPA Regulatory Relief Act. (Inhofe Comments on the EPA Boiler MACT Announcement, U.S. Senate Committee on Environment and Public Work’s website.)

Sierra Club’s Opposition and New Lawsuit
At the same time, the Sierra Club is also challenging the EPA’s latest efforts. As mentioned above, while the EPA was rewriting the regulations, the Sierra Club was suing them over the new regulations. Soon after the revised regulations were published, multiple parties, including the Sierra Club, filed petitions for review on substantive grounds with the court of appeals. See Sierra Club v. Jackson, 2011 U.S. Dist. LEXIS 109693, at *5 (D.D.C. Sept. 27, 2011). Then, in response to the EPA’s stay, the Sierra Club also filed a lawsuit on July 14, 2011, seeking to enjoin the stay. Id. at *7. The petitions before the court of appeals were then consolidated and held in abeyance pending the decision in the Sierra Club’s challenge to the stay. Id. at *7.

The EPA initially sought to have the case before the district court dismissed on jurisdictional grounds, arguing that under § 307(b)(1) of the Clean Air Act, the court of appeals (and not the district court) had jurisdiction over substantive rulemaking issues (the district court’s prior rulings were expressly limited to the deadlines and refrained from touching upon the actual merits or substance of the regulations). Id. According to the EPA, the changing of deadlines through a stay or otherwise constituted a substantive change to the applicable regulations and therefore should be heard by the court of appeals pursuant to the exclusive jurisdiction provided it under section 307(b)(1) of the Clean Air Act. In a September 27, 2011, decision, however, the court rejected the EPA’s arguments. (Are you starting to see a pattern yet?) As the court explained, the EPA did not ultimately stay the regulations under the Clean Air Act because such a stay would have been limited to three months. Instead, the notice that the EPA issued was issued pursuant to the Administrative Procedure Act (APA), over which the district court does have jurisdiction. See 28 U.S.C. § 1331.

Then, on January 9, 2012, the court issued its final opinion on the stay, declaring the stay unlawful and remanding the notice back to the agency (although the court noted that it seriously doubted whether the EPA would actually be able to justify the stay on remand).Sierra Club v. Jackson, 2012 U.S. Dist. LEXIS 2457 (D.D.C. Jan. 9, 2012). The court agreed with the EPA that the agency has the authority to rely upon 5 U.S.C. § 705 of the APA and that, contrary to the Sierra Club’s arguments, no notice and public-comment period was required before the issuance of such a stay. The court, however, determined that the EPA did not have the authority to issue such a stay in this instance.

Applying the “arbitrary and capricious” standard, the court emphasized that the standard of review under section 760 of the APA is a “highly deferential one” that “presumes agency action to be valid.” Id. at *14. The court, however, still held that the EPA failed to adequately justify the decision to issue a stay.

Specifically, the court held that, due to the agency’s precedent of employing the same four-part test applied by the courts in determining whether interim injunctive relief is warranted, the EPA was required to use that test here (which the EPA had not done), unless the agency could provide a reasoned decision otherwise (which the EPA had not done either). Id. at *50. Under the four-part test, the EPA was to consider 1) the likelihood that the party seeking the stay will prevail, 2) the likelihood that the moving party will be irreparably harmed absent a stay, 3) the prospect that others will be harmed absent a stay, and 4) the public interest in granting a stay. Id. at *52 (citing Cuomo v. U.S. Nuclear Regulatory Comm'n, 772 F.2d 972, 974 (D.C. Cir. 1985).

Moreover, the court held that section 705 of the APA authorizes an agency to stay an action “pending judicial review” and that therefore the stay must have been based on the underlying litigation in the court of appeals (the case that the court of appeals was holding in abeyance pending this court’s decision), which was not the case. According to the court, the real purpose of the stay (regardless of the fact that the notice played “lip service to the pending litigation” in the court of appeals) was to stay the rules pending reconsideration, not litigation. Id. at *62. Furthermore, the court again voiced its continued displeasure with the EPA, stating that the EPA was effectively using section 705 of the APA to try to grant itself the very extension that the court had expressly rejected. Id. at *67.

The interesting issue is what this ruling means to the question of compliance. With the stay lifted on a regulation whose effective date was May 20, 2011, does this mean that the prior version of the regulations applies? According to the court, the answer is yes. As the court explains in response to this issue, industry “will finally, more than 12 years after a clear Congressional mandate, have to comply with overdue Clean Air Act emission standards.” Id.at 68. However, as the compliance deadlines provided in the regulation allows industry three years to comply, what does this ultimately mean? According to the EPA, apparently nothing.

The EPA’s Letter
With the court’s decision, the EPA issued a letter on January 18, 2012, to Senator Ron Wyden, setting forth the agency’s position on compliance issues. Specifically, the EPA emphasized that the applicable regulations will be the new version of the regulations. To address compliance concerns, the EPA explained that the compliance dates will be reset with the finalization of the new regulations to provide industry the full three years provided in the Clean Air Act for compliance. Otherwise, the only compliance deadlines of concern due to the court’s lifting the stay are the administrative-notification requirements, which the EPA in its letter said it was not going to enforce. The EPA said that it will issue a formal no-action assurance letter soon. As for potential lawsuits by private parties, the EPA emphasized the 60-day notice period required for citizen suits, which the agency said would provide it sufficient time to “take more definitive steps” (whatever that means). Basically, the EPA is saying that it is ignoring the court’s directive and that by the time any meaningful deadlines would have gone into effect, the new regulations will be finalized.

Disneyland 10 Miles Ahead—The End Might Be in Sight
The kids are fighting in the back seat, and everyone wants out of the car, but it looks like this long and arduous journey may be nearing its end (or is it?). Specifically, the EPA has rather ardently expressed its support for the most recent version of the regulations. Therefore, the regulated community can likely expect that the current regulations being reviewed by the EPA will ultimately govern their operations. But at the same time, concerns still exist about the risk of a citizen suit under the Clean Air Act before the new regulations are finalized or an appeal of the new regulations. Moreover, the EPA is still faced with an edict from the court that the agency is ignoring, a pending appeal before court of appeals, comments submitted but not reviewed, and some efforts in Congress again to intervene. Thus, the question remains, “will we ever get there?”

Keywords: environmental litigation, Clean Air Act, Sierra Club, maximum achievable control technology, commercial/industrial solid waste incinerators


Karen Crawford and Stacy Taylor are both partners of Nelson Mullins Riley & Scarborough LLP.


Copyright © 2012, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).