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August 05, 2013 Articles

Clean Air Act's Boiler MACT and Area-Source Rules Now in Force

Make a plan now to comply with the new regulations.

By Lauren E. Godshall – August 5, 2013

On January 31, 2013, the Environmental Protection Agency (EPA) published its new Boiler MACT (Maximum Achievable Control Technology) rule in the Federal Register. The next day, the agency published its new area-source rule. The publication of these two new rules in final form has set in motion a new regulatory regime that will impact hundreds of thousands of facilities nationwide that have a boiler or a process heater on site.

The new rules, which were a result of a decade of rulemaking attempts by the agency and related litigation, public comment, and political effort, appear in 78 Federal Register 7138 (Jan. 31, 2013 and 78 Federal Register 7488 (Feb. 1, 2013). The source of these new requirements lies in the Clean Air Act, which required the EPA to establish “National Emissions Standards for Hazardous Air Pollutants” for both “major” and “area” sources of hazardous air pollutants. A major source is a stationary source that emits or can emit 10 or more tons per year of any single hazardous air pollutant, or 25 tons or more per year of any combination of the 187 hazardous air pollutants subject to regulation. Major sources generally must install and operate maximum achievable control technology (MACT) to limit emissions.

For new sources, MACT-based emissions standards cannot be less stringent than the emissions control achieved in practice by the best-controlled similar source. An area source is a stationary source that does emit hazardous air pollutants, but not to the level that would make it a major source. The pollutants that will be controlled under the final rules include mercury, particulate matter (which is measured as a surrogate for non-mercury metals), and carbon monoxide (as a surrogate for organic air toxics). In addition, dioxin and hydrogen chloride are also controlled under the final rule for major sources.


Rulemaking and Litigation: How the Rules Evolved
In 1990, Congress overhauled the air-quality program in the Clean Air Act, replacing an older risk-based approach to pollution control with a “technology-based emissions controls scheme that limited EPA’s discretion and that set strict requirements and deadlines for the promulgation of emission standards.” Sierra Club v. Jackson (Sierra Club I), No. 01-1537, 2011 WL 181097 (D.C. Cir. Jan. 20, 2011). The statutory deadlines for setting these new technology-based emissions standards was to be November 15, 2000. 42 U.S.C. § 7412(e)(1)(E).

Despite those “strict deadlines” in the statute, it took the EPA until 2013 to promulgate limits and compliance deadlines. Once the 2000 emissions-standards deadline passed without any rulemaking by the agency, the Sierra Club filed numerous suits against the EPA in 2001, all alleging that the EPA failed to discharge its duties to set emissions standards. Sierra Club v. Johnson, No. 01-1537, 444 F. Supp. 2d 47, 48 (D.C. Cir. Aug. 2, 2006). The suits were all consolidated.

In 2005, with the consolidated suit still lingering and no final action by the EPA, the Sierra Club filed a motion for summary judgment asking the court to set a deadline for the EPA’s rulemaking. The court of appeals granted the motion and ordered the EPA to discharge its rulemaking duties by June 15, 2009. Sierra Club v. Johnson, No. 01-1537, 2006 WL 889801 (D.D.C. Mar. 31, 2006). The EPA got extensions to fulfill this duty through January 2011. Finally, on April 29, 2010, the EPA signed proposed emissions standards; however, it then extended the public-comment period for the rules. After thousands of comments were received, the EPA went back to the court to request more time. The court denied the request, stating that the EPA had not demonstrated impossibility in complying with the deadline.Sierra Club I, 2011 WL 181097 at 5. The court went on to lecture the agency that “[in] light of Congress’ express directive on the deadline for the promulgation of [Hazardous Air Pollutants] regulation, the focus must be on ‘substantively adequate regulations’—notperfect regulations.” Id. at 7 (emphasis in original).

Final rules for MACT standards were signed on February 21, 2011, and published in the Federal Register (76 Fed. Reg. 15,608), but then withdrawn subject to the EPA’s announcement the next month that it was going to reconsider the Major Source MACT. 76 Fed. Reg. 15,266, 15,267. The agency then issued a “delay notice,” which stayed the effective date of the new regulations. 76 Fed. Reg. 28,662 (May 18, 2011). The Sierra Club sued again, challenging the validity of this delay notice. The D.C. district court agreed, holding that the delay notice was arbitrary and capricious, and vacated the notice. Sierra Club v. Jackson, No. 11-1278, 833 F. Supp. 2d 11, 34 (D.C. Cir. Jan. 9, 2013).

Shortly thereafter, the need for continued litigation appeared to have been mooted by the final, long-anticipated publication of the Boiler MACT and Area Source Rules in the Federal Register.

Major Sources, Major Changes
The new Boiler MACT rule for major sources of hazardous air pollutants will affect new and existing boilers and process heaters at many industrial, commercial, and institutional facilities. The new rule requires greater emission reductions for some pollutants, including mercury, hydrogen chloride, and sulfur dioxide, while reducing current emissions limits for other pollutants, including particulate matter and volatile organic compounds. Emissions limits vary depending on fuel source and whether the unit is “new” or “existing.” For example, an “existing” boiler fueled via coal stoker has an emissions limit of 0.040 pound per million British thermal units (lb./MMBtu) for particulate matter, 0.022 lb./MMBtu for hydrogen chloride, and 160 parts per million (ppm) of carbon monoxide (at 3 percent oxygen). In contrast, a “new” boiler, which is defined as a boiler that was not built until after June 4, 2010, also fueled via coal stoker, has an emissions limit of 0.0011 lb./MMBtu for particular matter, the same 0.022 lb./MMBtu for hydrogen chloride as required in existing boilers, and 130 ppm of carbon monoxide (at 3 percent oxygen).

The EPA estimates that compliance costs will reach $2.2 billion nationally. The agency further estimates that 12 percent of the major-source boilers covered by the regulations will not be able to comply with the new emissions limitations unless their operators install new pollution-control equipment or make other changes to curtail air emissions. Facilities with boilers and process heaters subject to the new emissions limits will now need to make difficult economic decisions about whether to install emission-control upgrades, switch fuels, or even shut down to achieve compliance with the new emissions standards. Even those facilities already within emissions limits will still need to review their procedures and start the process of certifying, inspecting, and tuning up their boilers and heaters. A significant problem for many facilities is that they do not currently have adequate data on hand about their emissions to assess their compliance status or options.

There is good news for states, such as Louisiana, where the majority of boilers rely on natural gas instead of coal or oil. Gas-fired boilers are not subject to emissions limits under the Boiler MACT Rule, although they will now be subject to work-practice standards and will be required to perform an annual boiler tune-up (which must be proven by certification). Similarly, new and existing boilers, using any type of fuel but that, have a heat-input capacity of less than 10 million British thermal units per hour (MMBtu/hr.) are subject to work-practice standards and will need to certify that biennial boiler tune-ups are completed.

Some units have been entirely exempted from the regulations—including the tune-up and other non-emission-related requirements. These include residential boilers, hot-water heaters, heat-recovery steam generators, electric boilers, and electric-utility steam-generating units.

Boilers and heaters that use coal, oil, biomass, or other non-waste materials as their fuel source and have a heat input of more than 10 MMBtu/hr., however, will fall under the new emissions limits and compliance monitoring. And all existing major sources—even natural-gas boilers—will be required to conduct a one-time energy assessment. This assessment is due by January 31, 2016, and must be performed by a “qualified energy assessor.” The assessment includes visual inspections of the system, review of fuel usage and facility procedures, recommendations for improvements to the facility’s energy-management practices, and a list of cost-effective energy-conservation measures that are within the facility’s control.

How to Comply: An Overview
The first step that a facility must take is to determine whether the new rules apply to its boilers and process heaters, by looking at the existing fuel sources and heat-input capacity. Keep in mind that each boiler or process heater is evaluated individually under the rule to determine which standards apply to that unit. If the boilers and process heaters do fall under the new regulation, a facility must prepare an initial notification. This is a form that can be found on the EPA’s website and filled in online, and informs the agency about the nature of the regulated boilers and heaters on site. For sources that were built and in operation by June 4, 2010, the initial notification is not due until January 20, 2014. Importantly, however, for “new sources,” which are defined as any source in which construction commenced after June 4, 2010, the initial-notification form is due to the EPA within 120 days after start-up. So for a facility with a 2011-built oil-fired boiler with a heat-input capacity of over 10 MMBtu/hr., the requisite initial-notification form technically might have been due to the EPA by May 31, 2013 (i.e., 120 days after this regulation went into force). Commentary on the EPA’s website indicates that the agency does not expect initial notifications of any kind to be filed until January 20, 2014, but a reading of the regulation itself seems to indicate that “new” boilers already in operation need to have sent in their forms within the first 120 days of the rule going into force.

Following initial notification, facilities subject to the rule have until January 31, 2016, to achieve compliance, although a one-year extension to come into compliance may be applied for if special circumstances can be shown. This means that they must have measured and controlled the emissions on any boiler or process-heater units subject to the Boiler MACT emission limitations before January 31, 2016. Operators must also develop and follow a site-specific testing plan and site-specific monitoring plan, and conduct an initial fuel analysis for each type of fuel used, if the mercury constituents in the fuel are greater than half of the mercury-emission limits. The one-time energy assessment is also due by the same date. Facilities can submit a “notification of compliance status” that will document their fulfillment of the initial compliance requirements and provide general facility information.

Then, stack testing is required to prove maintained compliance with emissions limits within 180 days of the initial compliance date. Then there is a set schedule for periodic tune-ups, depending on the boiler capacity. Quarterly fuel analyses must also be performed, for certain fuels, and performance stack tests must be repeated every three years. The rule also calls for operators to minimize boiler start-ups and shut-downs, to follow manufacturers’ recommended procedures during start-ups and shut-downs, and to monitor and collect data to demonstrate compliance with operating limits. Although getting boilers and process heaters initially compliant with the new rules will be a cumbersome and potentially costly task, the ongoing data collection, testing, and reporting requirements will continue to extend the costs of compliance indefinitely.

In terms of reporting, the initial notification must be submitted no later than January 20, 2014. The notification of compliance status, certifying completion of energy assessments and/or tune-ups, must be submitted via the EPA’s online Central Data Exchange. A “compliance certification report” must be completed by March 1, 2014, and every year thereafter in which a tune-up is required for boilers not subject to emissions limits (such as natural-gas-fired boilers) and must be submitted annually for all boilers subject to emissions limits. Additional reports may also be required if fuel sources are changed, new boilers are constructed, or emissions limits are exceeded during stack testing.

Area Sources Also Subject to New Regulation
In a separate rulemaking, the EPA also issued new regulations applying to “area source” boilers. These are boilers that are located at an industrial, institutional, or commercial facility that is an “area source” of hazardous air pollutants—which means that the facility emits fewer than 10 tons per year of any single regulated hazardous air pollutant, and less than 25 tons per year of any combination of hazardous air pollutants. Coal, biomass, oil, and seasonal or limited-use boilers are covered by this rule. Process heaters are excluded from this rule. Gas-fired boilers, hot-water heaters, solid-waste-combustion boilers, and residential boilers, among others, are specifically exempted from the rule as well.

Area-source boilers need to incorporate “Generally Available Control Technology” (GACT) as opposed to the MACT standards applicable to the larger boilers and process heaters under the major-source rules. However, much like the major-source rules, emissions limits and work-practice standards also apply to area sources, and the same one-time energy assessment must be complete by March 21, 2014. The same initial notification must be received by January 20, 2014. The initial tune-up and emissions-limit compliance must also be completed by March 21, 2014, and the first post-compliance performance-stack testing is to be performed no later than September 18, 2014. The emissions limits under the area-source rules are less stringent than those set under the major-source rules and apply to a smaller set of hazardous air pollutants. They too, however, vary by type of boiler and fuel source.

Planning Ahead and Starting Today
Although the first major compliance-related deadline is three years off, the clock is officially ticking. Thousands of boilers and process heaters throughout the country will need to undergo analysis, energy assessments, and tune-ups. This includes natural-gas-fueled boilers and process heaters. Also, for those boilers and process heaters that require major structural, operational, or engineering changes to meet emissions limits, the time to begin the process of achieving compliance is now.

All facility operators should take the earliest opportunity to review the new rules and determine on a unit-by-unit basis whether some or all of the new requirements are applicable. Initial notification for subject boilers and process heaters can be prepared now, and stack testing needs can be identified. There are many deadlines for compliance activities in the new rules, as well as reporting and recordkeeping requirements. A plan and a schedule should be established now to take maximum advantage of the three-year window for getting into compliance.

Keywords: environmental litigation, EPA, pollutants, Sierra Club v. Jackson, area source, major source

Lauren E. Godshall is a senior associate attorney with Curry & Friend in New Orleans, Louisiana.

Copyright © 2013, 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).