11/14/2013

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www.quarles.com

Air Regulations & Industry

November 14, 2013

Peter TomasiQuarles & Brady LLP

Federal and Tribal Rulemakings

Industrial Boiler MACT (Major and Area Source) NHSM Rule Urban Air Toxics Rules NAAQS Update Tribal AQRVs OSHA-Silica

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Strange Days

Ambient air quality standards usually are the primary driver for air regulations

HAP requirements, Class I protection, and seldom-used existing source standards are now significant drivers

OSHA silica rule—potential broad application

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CAA Section 112--Air Toxics

1990 Clean Air Act Amendments listed 187 Hazardous Air Pollutants (HAP), i.e., chemicals known or suspected to cause cancer or other serious health effects

Maximum Achievable Control Technology (MACT) Regulations Required for source categories (i.e., pharmaceutical manufacturers)

EPA has completed over 90 MACT regulations covering over 170 industry categories for major sources

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Major and Area Sources

Major sources—HAP emissions greater than 10 tons individual HAP, 25 tons total HAP

Area sources—HAP emissions less than 10 tons individual, 25 tons total

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Industrial, Commercial, and Institutional (ICI) Boiler MACT

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Industrial/Commercial/Institutional (ICI) Boilers

In 2004: EPA promulgated Subpart DDDDD, establishing MACT for ICI Boilers – 69 Fed. Reg. 55,218 (Sept. 13, 2004).

Applied to: boilers, hot water heaters, process heaters, if located at a major source of HAPs, with two exemptions:– New or reconstructed small gas-fired Boilers (< 10 MMBtu/hr)

– Existing small boilers (<10 MMBtu/hr) solid fuel, liquid, & gas-fired

In 2007: U.S. Court of Appeals vacated and remanded Subpart DDDDD. NRDC v. EPA, 489 F.3d 1250 (D.C. Cir. 2007).

Chapter NR 462, Wis. Admin. Code adopted, no longer in effect.

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Reasons Rule Vacated

Did not impose emission limits for all HAPs emitted by boilers.

Rule allowed alternatives to standard emission limits and compliance tests, such as risk assessments for HCl emissions.

Finally, court concerned regarding whether C&D waste, sludge, or manure a fuel subject to Section 112, or incineration of a solid waste, subject to CAA Section 129 (boilers versus CISWIs).

Court remanded rules for industrial boilers and for CISWIs to address Section 112/129 overlap.

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Revised Boiler MACT & CISWI Rules

EPA issues four rulemakings to address 2007 remand:

– Standards for new and existing major ICI boilers (MACT) – 78 Fed. Reg. 7186 (Jan. 31, 2013)

– Standards for new and existing minor ICI boilers (i.e., area sources) (MACT/GACT) – 78 Fed. Reg. 7812 (Feb. 1, 2013)

– Non-hazardous "Secondary Materials" considered subject to Section 112 – 78 Fed. Reg. 9112 (Feb. 7, 2013)

– NSPS Standards under Section 129 for CISWIs –78 Fed. Reg. 9112 (Feb. 7, 2013)

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Final Major Source Boiler MACT Rule

On January 31, 2013, EPA finalized rules for Major Sources – 78 Fed. Reg. 7186 (Jan. 31, 2013).– Established numeric emission limits for all other new/existing boilers

and process heaters at major sources

– Huge regulatory driver for industry

Revised numeric emission limits for mercury, dioxin, PM (surrogate for non-Hg metals), HCl (surrogate for acid gases), and CO (surrogate for non-dioxin organic air toxics).

Required combination of monitoring to assure compliance with limits, and energy assessment.

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Revised Boiler MACT (Major)

Compliance date: 3 years from publication (Jan. 31, 2016)

Particulate matter (PM) emission limits for biomass fueled boilers set by subcategory

New carbon monoxide limits to address variability (CO CEMS-based limits for most subcategories, CO limits for several subcategories revised to reflect a threshold level (130 ppm@ 3%O2)

Allows metals emission limits as an alternative to using PM limit as a surrogate for metallic air toxics

Dioxin limit replaced with work practice standards

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Major Source Boiler MACT

August 2013: EPA announces reconsideration on following issues:

– Startup and shutdown definitions, and applicable work practice standards

– Applicable carbon monoxide (CO) limits

– Parametric monitoring requirements and implications of exceeding required parameter

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Area Source Boiler MACT

On February 1, 2013, EPA finalized Boiler MACT rules for Area Sources 78 Fed. Reg. 7812 (Feb. 1, 2013).

– Established standards addressing Hg, PM (surrogate for non-mercury metals), and CO (surrogate for organic air toxics).

Initial notification deadline for existing area source boilers: no later than January 20, 2014.

Existing area source boilers will have until March 21, 2014 to comply with these standards.

August 5, 2013 issues subject to reconsideration:– Startup and shutdown

– Limited use boiler subcategory

– Elimination of certain PM performance testing

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Compliance Options

Billion dollar compliance question for industry: install advanced controls on solid fuel boilers, or convert to natural gas?

Complicated where solid fuel boilers major, but once on gas an area source

Huge impacts to industry, no consensus on “right path”

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Non-Hazardous Secondary Materials (NHSM) Rule

78 Fed. Reg. 9112 (Feb. 7, 2013)

Issued under Subtitle D of Resource Conservation & Recovery Act (RCRA)

Determines whether sources are subject to the industrial boiler MACT (CAA s. 112) or CISWI NSPS (CAA s. 129)

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RCRA Subpart D

Solid Waste Under RCRA:

– Subpart C “cradle to grave” coverage for hazardous solid waste

– Subpart D less restrictive requirements for non-hazardous solid wastes

Subpart C detailed definition under Subpart C (40 CFR s. 261.2) (proposed revisions at 76 Fed. Reg. 44094 (July 22, 2011))

NHSM rule EPA’s first detailed guidance defining solid waste under Subpart D

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Need for NHSM

For decades, industry has burned secondary materials

– Biomass (shredded pallets)

– Scrap tires

– Waste plastics

– Paper mill sludge

Lower energy cost, lower tipping fees

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Fuel vs. Waste

If materials considered fuel, then s. 112 boiler MACT governs

If materials are waste, then s. 129 standards apply

– CISWI standards more restrictive, difficult to comply with

– Who wants to be an incinerator?

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Avoiding CISWI Status

Materials determined to be treated as a fuel:

Traditional fuels-40 CFR § 242.1

– Historically managed as fuel

– Alternate fuels developed from virgin materials (coal waste, cellulosic biomass)

Categorically determined non-waste

– Scrap tires (not discarded)

– Resinated Wood

– Coal refuse

– Dewatered pulp and paper sludges (what if previously disposed of as waste)

Prior practice?19

Other materials as fuel

“Within control of the generator”– Generated and combusted at facilities under

common control

Legitimacy criteria 40 CFR s. 241.3(d)(1)(i-iii)– Valuable commodity (how stored, how long

stored, how contained?)

– Meaningful heating value (5,000 Btu/lb guideline)

– Contaminates at comparable level to traditional fuels

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Implications for Industry

If relying on second option, must document how determined (40 CFR ss. 60.2175, 60.2740)

Failure to do so may make unit a CISWI (40 CFR ss. 60.2265, 60.2875)

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Urban Air Toxics

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Urban Air Toxics Strategy

July 19, 1999 Urban Air Toxics Strategy

– EPA required to list 30 Hazardous Air Pollutants (HAPs) from area sources which pose the greatest potential public health threat in urban areas

– EPA must regulate area sources categories accounting for 90 percent of the emissions of 30 listed HAPs

– EPA developed rules for 68 area source categories (including Area Source Boiler Rule)

Not limited to metropolitan areas

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Area Source Categories Include . . .

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Autobody Refinishing Institutional/Commercial Boilers

Chromium Electroplating (decorative and hard)

Miscellaneous Coatings

Dry Cleaning Facilities Misc. Organic Chemical Manufacturing (MON)

Fabricated Metal Products (9 types) Pharmaceutical Production

Foundries (Aluminum, Copper, Iron, Steel, Nonferrous)

Plating & Polishing

Gasoline Distribution Stage I Publicly Owned Treatment Works

Industrial Boilers Stationary Internal Combustion Engines

Industrial Chemical Manufacturing Wood Preserving

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Build it and they will come . . .

EPA significantly increasingly enforcement under area source NESHAPs

Minor recordkeeping violations without any emissions; exceedance still result in penalty

Most resolved through CAFOs

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Area Source NESHAPs

Impact to industry:

– Small and medium-size facilities at greatest risk of enforcement

– Lean manufacturing-limited manpower to ensure recordkeeping always completed

– No limit to size of source (one chrome or nickel tank triggers MACT applicability)

Green Tier status irrelevant to EPA

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NAAQS Reviews

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NAAQS Review Timeline

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PollutantFinal NAAQS

Date (or Projection)

Infrastructure SIP Due

Designations

Effective

Attainment Demonstration

Due

Attainment Date

PM2.5 (2006) Oct 2006 Oct 2009 Dec 2009 Dec 2012Dec

2014/2019

Pb Oct 2008 Oct 2011Dec

2010/2011

June

2012/2013Dec

2015/2016

NO2 (primary) Jan 2010 Jan 2013 Feb 2012 none none

SO2 (primary) June 2010 June 2013 TBD TBD TBD

Ozone (2008) Mar 2008 Mar 2011 July 2012 2015 2015/2032

PM(current review)

Dec 2012 Dec 2015 Early 2015 2018 2020/2025

Ozone(current review)

2014 2017 2016 2019 2019/2036

Credit: EPA September 2012.

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Final Revised PM2.5 Standards

D.C. Circuit remanded 2006 PM2.5

standard to EPA in American Farm Bureau Federation v. EPA, 559 F. 3d 512. (D.C. Cir. 2009)

EPA revised to address this remand in January. (78 Fed. Reg. 3086 (Jan. 15, 2013))

– Annual – 12 ug/m3

– 24-hour – 35 ug/m3

Most areas attain new annual standard.

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PM2.5 Implementation

PM2.5 implementation rules remanded in NRDC v. EPA, No. 08-1250 (Jan. 4, 2013)

PM2.5 SIL and SMC remanded Sierra Club v. EPA, No. 10-1413 (Jan. 22, 2013)

We read § 165(e)(2) of the Act as an “extraordinarily rigid” mandate that a PSD permit applicant undertake preconstruction monitoring. Do all PSD sources need to conduct 1

year of monitoring before applying for a permit?

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1 hour SO2

New 1-hr SO2 NAAQS finalized on June 3, 2010, at 75 ppb on a 1-hour average.

Compliance determined through a 3-year average of the 99th percentile of daily maximum 1-hour average concentrations at each monitor.

EPA initially proposed modeling to determine compliance with standard: now preparing guidance to consider monitoring.

Industry challenge rejected: still awaiting EPA guidance.

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1 hour NO2

In 2010, primary NO2 NAAQS revised to 100 ppb on a 1-hour average (was 53 ppb annual average).

Primary focus on roadways: urban areas with a population greater than 500,000 must install monitors.

Entire country unclassifiable/attainment. Industry challenges not successful. Pursuant to March 31, 2013 rule, monitors will be phased in between 2014 and 2017.

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Tribal Air Quality Related Values

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Tribal Class I Air Quality Regions

Tribes and states can request redesignation to Class I status, under CAA Section 164.

In addition to compliance with the NAAQS and visibility, Class I areas protected from impacts to "air quality-related values" (AQRVs).

AQRVs are resources that the Class I area manager wishes to protect and that may be impacted by air emissions.

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AQRVs

AQRVs can include limits designed to protect visibility, standards for acid deposition or airborne concentrations, protection of vegetation, or other standards determined by a land manager to be protective of an area.

New Source Review Workshop Manual page E.12, "When a proposed major source's or major modification's modeled emissions may affect a Class I area, the applicant analyzes the source's anticipated impact on visibility and provides the information needed to determine its effect on the area's other AQRVs."

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FCPC Class I Area

Forest County Potawatomi Community (FCPC) entered into agreements with WDNR in 1999 and 2010.– In 1999, FCPC adopted Water Quality and Aquatic Systems as

AQRVs.

– In 2010, FCPC and WDNR agreed that FCPC could update the 1999 AQRVs.

– In 2012, developed Threshold Exposure Levels (TELs) for the 1999 AQRVs, and two new AQRVs – Vegetation and Visibility.

Bad River Community currently seeking its own Class I authority.

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FCPC AQRV

The new AQRVs and TELs became effective at the end of the review period, without need for DNR or EPA approval.

While the AQRV/TEL development documentation does not describe the practical impacts of the standards, development documents suggest that current deposition levels may exceed TELs.

Reach of review unclear under NR 405.19(1), Wis. Admin. Code.

OSHA--Revised Silica Standard

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OSHA Proposed Silica Rule

Occupational Safety and Health Administration (OSHA) establishes limits for worker exposure to airborne substances.

OSHA has proposed a revised Personal Exposure Limit (PEL) for silica for the first time since 1974.

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What is silica?

SiO2 is the most abundant mineral on earth.

Regulated by U.S. EPA and DNR as a component of PM10 and PM2.5.

Most likely sources of occupational exposure:

– Construction

– Aggregate/nonmetallic processing

– Foundry operations40

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What would the proposed rule require?

PEL of 50 μg/m3, averaged over an 8-hour day.

The proposed rule also includes: – Framework for measurements of worker exposure,

– access limitations to areas above PEL,

– required controls to minimize silica exposure,

– medical exams for workers with high silica exposures, and

– hazard training.

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Impacts of Rule

Foundries, construction facilities, and nonmetallic transfer facilities face significant challenges to meet rule

Nonmetallic mines likely not impacted

– MHSA has exclusive jurisdiction within active mine areas, not OSHA.

– Fugitive controls already required by air permits.

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Status of Rulemaking

At request of industry, comment period extended to January 27.

Deadline for filing a request to appear at “informal hearing” on rule extended to December 16.

Small foundries, construction workers highest initial impacts from rule.

Potential significant new source of enforcement going forward.

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Questions?

Peter Tomasi

Quarles & Brady LLP

peter.tomasi@quarles.com

414-232-8911

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