Beveridge & Diamond
 
Related Practices
Related Practices

EPA Issues Guidance to Regulated Community on Startup/Shutdown/Malfunction Vacatur

Beveridge & Diamond, P.C., July 28, 2009

On July 22, 2009, the U.S. Environmental Protection Agency (“EPA”) issued guidance clarifying which startups, shutdowns, and malfunctions (“SSM”) are exempt from applicable Maximum Achievable Control Technology (“MACT”) standards in the wake of Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008).   The MACT standards have long contained language in the general provisions of Part 63, Subpart A, exempting SSM events from compliance with MACT emission limits.  See 40 C.F.R. § 63.6(f) and (h) (the “SSM Exemption”).  In its December 2008 decision in Sierra Club, however, the U.S. Court of Appeals vacated the SSM Exemption.  The vacatur has not yet taken effect, pending the procedural issuance of a mandate by the Court. 

The ruling in the Sierra Club decision was based upon a reading of Section 112(d) of the Clean Air Act that requires MACT standards to assure continuous emission reduction, and a conclusion that the blanket exemption for SSM events found in the SSM Exemption did not comport with this requirement because it allowed periods of operation during SSM events when no MACT emissions standards apply.  Consequently, the Court ordered vacatur of the SSM Exemption provision.

The Sierra Club decision has created substantial confusion and concern among the thousands of air emission sources that are subject to the MACT standards and that rely upon the SSM Exemption to ensure continuous compliance.  The existing MACT standards were developed with the assumption that the SSM Exemption would address emissions during SSM events.  Because technology is inherently fallible, facilities may not have the capability to maintain continuous compliance with strict MACT standards during non-steady state operating events.  Many MACT emissions limits do not take this variability into account and are based on short-term steady state operating data that do not consider SSM emissions. For some source categories, the technological capability to maintain compliance with current standards during SSM events may not even exist.  Consequently, the vacatur of the SSM Exemption creates uncertainty and concern about how the MACT standards will be interpreted once the vacatur takes effect, assuming the Court denies a pending motion for rehearing en banc and issues a mandate for the vacatur.

By letter of July 22, 2009, Adam Kushner, the Director of the Office of Civil Enforcement at EPA, issued guidance on how EPA intends to interpret the Sierra Club vacatur in the short term (the “Kushner Letter.”)  The Kushner Letter states EPA’s position that the SSM Exemption will immediately affect only those MACT standards that both (i) incorporate the SSM Exemption by reference and (ii) contain no other text that provides SSM protections.  For now, EPA believes that because many MACT standards that contain separate source-specific SSM exemption language were not at issue in Sierra Club, they will not be affected by the vacatur of the general SSM Exemption provision in Subpart A.  The Kushner Letter identifies in two tables which MACT standards EPA believes will be immediately affected by the vacatur (See Kushner Letter, Table 1), and which standards EPA believes will not be affected (See Kushner Letter, Table 2). 

The Kushner Letter contains an important caveat.  EPA recognizes that the source category-specific SSM protections may be challenged separately.  The Agency states that it intends to further evaluate its position and that its initial analysis is therefore subject to change.   

The Kushner Letter also provides some important insight into the manner in which EPA intends to evaluate excess emission cases under this new guidance.  Recognizing that some sources will not be able to comply with MACT standards during SSM events, the Kushner Letter states that EPA intends to determine its enforcement response “based on, among other things, the good faith efforts of the source to minimize emissions during SSM periods, including preventive and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions, and whether the source has developed and implemented an SSM plan to minimize such emissions.”  In reviewing such defenses, EPA intends to closely scrutinize claims that a standard could not be achieved due to malfunctions, by considering whether events actually meet the definition of malfunction in the MACT rule (i.e., “sudden, infrequent, not reasonably preventable” and not “caused in part by poor maintenance or careless operation”).  In light of the Agency’s trend towards adopting a narrow view of what constitutes a malfunction, facilities may want to carefully evaluate the strength of such a defense.

Finally, the Kushner Letter states that EPA is evaluating which MACT standards should be revised, and in particular which should be revised on an expedited schedule.  EPA offers that it intends to give the highest priority to revising those standards where technological limitations make continuous compliance difficult.

Note:  The D.C. Court of Appeals issued the mandate vacating the SSM Exemption on October 16, 2009.

For further information on the SSM Exemption and EPA’s interpretation of the Sierra Club vacatur, please contact Stephen Richmond at SRichmond@bdlaw.com; Laura McAfee at LMcAfee@bdlaw.com; David Friedland at DFriedland@bdlaw.com; or Madeleine Kadas at MKadas@bdlaw.com

Overview

News

Presentations

Media Contact





Attorney Contacts
Attorney Contacts