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Industrial Boiler Battles Heat Up Again

On Dec. 20, 2012, the U.S. Environmental Protection Agency finalized changes to the National Emission Standards for Hazardous Air Pollutants (also known as NESHAP) for industrial, commercial and institutional boilers and process heaters located at major and area sources of hazardous air pollutants. The adjusted standards, originally finalized in March 2011, have been marked by controversy, litigation and numerous delays that created long-running uncertainty for affected sources and potentially affected sources. The latest iteration of the rules is the product of the EPA’s reconsideration of the March 2011 version.

The tumultuous history behind NESHAP

The tumultuous history of these rules goes back to at least September 2004 when the EPA first established the NESHAP rules for new and existing boilers and process heaters at major and area sources of hazardous air pollutants. The rules were challenged, and in June 2007 the U.S. Court of Appeals for the D.C. Circuit vacated the rules and remanded them to the EPA. New versions of the major source rule (Boiler MACT) and the area source rules (Boiler GACT) were issued in March 2011. At the same time, the EPA announced it would reconsider certain aspects of the rule and subsequently stayed the compliance dates of the Boiler MACT. In December 2011 the EPA proposed reconsidered versions of the rules.

In January 2012, the U.S. Court of Appeals reinstated the Boiler MACT compliance dates. In response, the EPA issued memoranda stating it would exercise enforcement discretion for major source boilers and process heaters missing initial notification deadlines and for area source boilers and process heaters missing the initial tuneups or compliance notification deadlines until the earlier of: (1) the effective date of a new final rule, or (2) Dec. 31, 2012. The final rule was published in the Federal Register on Jan. 31, 2013, and the amendments became effective on April 1, 2013.

Some of the key changes to the Boiler MACT include:

  • Creation of separate subcategories for light and heavy industrial liquid-fired units and addition of a new subcategory for fluidized bed units with an integrated fluidized bed heat exchanger designed to burn coal. There are now 19 fuel type/boiler subcategories. All but three subcategories are subject to numeric emission limits.

  • A single particulate matter emission limit for all coal/solid fossil fuel subcategories and emission limits based on particulate matter as a combustion-based pollutant for each biomass fuel and liquid fuel subcategory.

  • Changes to the emission limits for carbon monoxide. For existing units, 11 subcategories are less stringent and three are more stringent. For new units, 11 are less stringent, two are more stringent and one remains unchanged.

  • The addition of stack testing requirements when alternative total selective metals emissions limits are used in lieu of particulate matter as a surrogate.

  • Replacing numeric dioxin emissions limits with workplace standards in all subcategories.

  • Revisions to the definitions of “startup” and “shutdown.” Startup ends when any of the steam or heat from the boiler or process heater is supplied for heating and/or generating electricity or for any other purpose. Shutdown begins when either no steam or heat is supplied for heating and/or generating electricity or for any other purpose or no fuel is being fired. Shutdown ends when there is no heat or steam being supplied and no fuel being fired.

  • Changes to the definition of the “limited use” subcategory, from no more than 876 hours of annual operation, to a unit with a federally enforceable operating limit of less than or equal to 10 percent of an average annual capacity factor.

  • Clarification that the affirmative defense is only available where an event that causes a violation of the emissions standard meets the definition of a malfunction.

Industry and environmentalist groups outline lingering issues

The deadline for petitions seeking judicial review of the amended rule was April 1, 2013. While some have acknowledged that the amended rule is an improvement over the 2011 version, 11 industry groups, two individual businesses and a coalition of five environmental groups have filed petitions in the U.S. Court of Appeals for the D.C. Circuit seeking review of the amended rule. In addition, certain industry petitioners, including the Council of Industrial Boiler Owners, the American Chemistry Council, American Municipal Power, the National Association of Manufacturers, the U.S. Chamber of Commerce and the American Wood Council, as well as the environmentalist coalition, have petitioned the EPA to reconsider a number of key provisions of the amended rule. The petitions for judicial review are not required to identify the issues of concern; however, the reconsideration petitions filed with the EPA provide some insight into the issues likely to be brought before the D.C. Circuit Court.

Industry petitioners have identified several problem areas, including the following:

  • Changes are needed to the definition of “startup” to recognize that the procedures and time necessary to safely complete startup are site specific and vary by boiler fuel, design and controls.

  • Expansion of the list of clean fuels allowed by the startup work practice requirement.

  • Changes to the definition of “startup” and “shutdown” to recognize some boilers use steam as an energy efficient means of driving feedwater pumps, preheating feedwater and operating de-aerators during startup and shutdown.

  • The need for a 30-day averaging period for the operating load parameter to account for variability in boiler and process heater operations.

  • The lack of authority to impose energy assessment requirements on operations served by a covered boiler or process heater.

  • Removal of the requirement to certify particulate matter continuous parametric monitoring systems.

  • Replacing the carbon monoxide emission limit for coal-fired boilers with a work practice standard.

The environmentalist coalition’s petition asserts that the EPA improperly weakened the emission limits and impermissibly expanded the limited-use unit category that qualifies for an exemption from emission limitations in the amended rule.

Key dates for existing major source and area source boilers

The challenges and petitions reintroduce uncertainty that may not be resolved for several years. In the meantime, existing major source boilers and process heaters have until May 31, 2013 to submit initial notifications and until Jan. 16, 2016, to comply with the Boiler MACT. Existing area source boilers and process heaters covered by the rule have until Jan. 20, 2014 to submit initial notifications and a March 21, 2014 compliance deadline. A one-year extension may be granted where necessary for the installation of controls. New sources (i.e., sources which commenced construction or reconstruction on or after June 4, 2010) must comply by Jan. 31, 2013 (the date the rule was published in the Federal Register), or upon startup, whichever is later. More information concerning the Boiler MACT and the rule for area sources can be found at http://www.epa.gov/airquality/combustion/actions.html.

If you have questions about the Boiler MACT and how these key changes could impact you or your business, please contact the author or any other member of the Environmental and Natural Resources Group at Bingham Greenebaum Doll LLP.

DISCLOSURE REQUIRED BY CIRCULAR 230. This Disclosure may be required by Circular 230 issued by the Department of Treasury and the Internal Revenue Service. If this article, including any attachments, contains any federal tax advice, such advice is not intended or written by the practitioner to be used, and it may not be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. Furthermore, any federal tax advice herein (including any attachment hereto) may not be used or referred to in promoting, marketing or recommending a transaction or arrangement to another party. Further information concerning this disclosure, and the reasons for such disclosure, may be obtained upon request from the author of this article. Thank you.

  • Partner

    Andy has provided environmental legal services to industrial, commercial and governmental clients for over 30 years. Andy's practice is concentrated in environmental law. He assists clients with permitting, remediation ...

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