Air Regulations & Industry November 14, 2013 Peter Tomasi - PDF document

11/14/2013 www.quarles.com Air Regulations & Industry November 14, 2013 Peter Tomasi Quarles & 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 2 1

11/14/2013 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 3 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 2

11/14/2013 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 5 Industrial, Commercial, and Institutional (ICI) Boiler MACT 6 3

11/14/2013 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 Code adopted, no longer in effect. 7 Reasons Rule Vacated  Did not impose emission limits for all HAPs emitted by boilers.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. 8 4

11/14/2013 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) 9 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. 10 5

11/14/2013 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 11 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 12 6

11/14/2013 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 13 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” 14 7

11/14/2013 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) 15 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 16 8

11/14/2013 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 17 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? 18 9

11/14/2013 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 20 10

11/14/2013 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) 21 Urban Air Toxics 22 11

11/14/2013 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 2 3 Area Source Categories Include . . . Autobody Refinishing Institutional/Commercial Boilers Chromium Electroplating (decorative Miscellaneous Coatings and hard) Dry Cleaning Facilities Misc. Organic Chemical Manufacturing (MON) Fabricated Metal Products (9 types) Pharmaceutical Production Foundries (Aluminum, Copper, Iron, Plating & Polishing Steel, Nonferrous) Gasoline Distribution Stage I Publicly Owned Treatment Works Industrial Boilers Stationary Internal Combustion Engines Industrial Chemical Manufacturing Wood Preserving 24 12

11/14/2013 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 25 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 26 13