Fourth Quarter 2012 I N S I D E T H I S I S S U E EPA Issues Memorandum Regarding Policy on Single Source Determinations Following U.S. Court of Appeals Summit Decision, p. 1 New Indiana Environmental Rules Board Established January 1, 2013, p. 4 EPA Revises NAAQS for Fine Particulate Matter, p. 5 U.S. Court of Appeals for the D.C. Circuit Remands EPA’s Implementation Rule for its PM 2.5 NAAQS and Separately Vacates PM 2.5 Significant Impact Levels and Significant Monitoring Concentrations, p. 6 EPA Issues Final Rule Designating Kentucky Portion of Ashland-Huntington Area as Attainment for 1997 PM 2.5 NAAQS, p. 7 EPA Denies Indiana’s Request for Reconsideration of Nonattainment Designation for Lake and Porter Counties, p. 7 EPA Finalizes Latest Iteration of Boiler Rules, p. 8 EPA Issues Final Rule for NESHAP for the Nine Chemical Manufacturing Area Source Categories in Response to Petition for Reconsideration, p. 9 EPA Policy on SIP Actions and Redesignation Requests in the Wake of Court Decision Vacating CSAPR and Potential Impact of Subsequent Denial of EPA’s Petition for Rehearing, p. 10 EPA Issues Proposed Rule Announcing Reconsideration of Mercury Air Toxics Standards and Utility NSPS, p. 12 EPA Amends Widely Applicable Air Emission and Performance Standards Applicable to Stationary Internal Combustion Engines, p. 12 EPA Reports 2012 Enforcement Data and Announces Several Key Air Enforcement Priorities for 2013, p. 13 KDAQ Releases 2012 Annual Report, p.13 P E R M I T T I N G EPA Issues Memorandum Regarding Policy on Single Source Determinations Following U.S. Court of Appeals Summit Decision By Kelly D. Bartley, Attorney, Bingham Greenebaum Doll LLP As reported in the third quarter issue of the Air Quality Letter, on August 7, 2012 the U.S. Sixth Circuit Court of Appeals concluded in Summit Petroleum Corp. v. EPA that the term “adjacent,” for purposes of determining whether a group of air emissions sources constitute a single stationary source under Clean Air Act Title V program requirements, relates only to physical proximity. Accordingly, the court determined that an EPA determination considering the functional interrelatedness of sources to determine adjacency was improper. EPA sought rehearing of the court’s decision, but by order issued October 29, 2012, that request was denied. On December 21, 2012, EPA issued a memorandum to all EPA Regional Air Division Directors advising that it does not intend to change its long-standing practice of considering interrelatedness in EPA single source determinations in jurisdictions outside the Sixth Circuit. EPA advised that outside the Sixth Circuit, the agency will continue to make single source determinations on a
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Fourth Quarter 2012
I N S I D E T H I S I S S U E
EPA Issues Memorandum Regarding Policy on
Single Source Determinations Following U.S. Court
of Appeals Summit Decision, p. 1
New Indiana Environmental Rules Board
Established January 1, 2013, p. 4
EPA Revises NAAQS for Fine Particulate Matter, p.
5
U.S. Court of Appeals for the D.C. Circuit Remands
EPA’s Implementation Rule for its PM2.5 NAAQS
and Separately Vacates PM2.5 Significant Impact
Levels and Significant Monitoring Concentrations,
p. 6
EPA Issues Final Rule Designating Kentucky
Portion of Ashland-Huntington Area as Attainment
for 1997 PM2.5 NAAQS, p. 7
EPA Denies Indiana’s Request for Reconsideration
of Nonattainment Designation for Lake and Porter
Counties, p. 7
EPA Finalizes Latest Iteration of Boiler Rules, p. 8
EPA Issues Final Rule for NESHAP for the Nine
Chemical Manufacturing Area Source Categories in
Response to Petition for Reconsideration, p. 9
EPA Policy on SIP Actions and Redesignation
Requests in the Wake of Court Decision Vacating
CSAPR and Potential Impact of Subsequent Denial
of EPA’s Petition for Rehearing, p. 10
EPA Issues Proposed Rule Announcing
Reconsideration of Mercury Air Toxics Standards
and Utility NSPS, p. 12
EPA Amends Widely Applicable Air Emission and
Performance Standards Applicable to Stationary
Internal Combustion Engines, p. 12
EPA Reports 2012 Enforcement Data and
Announces Several Key Air Enforcement Priorities
for 2013, p. 13
KDAQ Releases 2012 Annual Report, p.13
P E R M I T T I N G
EPA Issues Memorandum Regarding Policy on Single Source Determinations Following U.S. Court of Appeals Summit Decision
By Kelly D. Bartley, Attorney, Bingham
Greenebaum Doll LLP
As reported in the third quarter issue of the Air
Quality Letter, on August 7, 2012 the U.S. Sixth Circuit
Court of Appeals concluded in Summit Petroleum Corp.
v. EPA that the term “adjacent,” for purposes of
determining whether a group of air emissions sources
constitute a single stationary source under Clean Air Act
Title V program requirements, relates only to physical
proximity. Accordingly, the court determined that an
EPA determination considering the functional
interrelatedness of sources to determine adjacency was
improper. EPA sought rehearing of the court’s decision,
but by order issued October 29, 2012, that request was
denied.
On December 21, 2012, EPA issued a memorandum
to all EPA Regional Air Division Directors advising that
it does not intend to change its long-standing practice of
considering interrelatedness in EPA single source
determinations in jurisdictions outside the Sixth Circuit.
EPA advised that outside the Sixth Circuit, the agency
will continue to make single source determinations on a
Air Quality Letter – Fourth Quarter 2012
THIS IS AN ADVERTISEMENT 2
case by case basis and, with regard to determinations of
adjacency, will consider both proximity and functional
interrelatedness of the sources at issue. EPA advised
that only in areas under the jurisdiction of the Sixth
Circuit, i.e., Michigan, Ohio, Tennessee and Kentucky,
will EPA no longer consider functional interrelatedness
in determining adjacency. The memorandum advises
that EPA is still assessing how to implement the Summit
decision in permitting actions in the Sixth Circuit.
As reported in the third quarter 2012 issue of the Air
Quality Letter, the other two factors relevant to
determining whether a group of buildings, structures or
facilities may be considered a single stationary source,
and thus their emissions aggregated for purposes of
determining whether emission levels trigger Title V
permitting requirements, are whether the sources are
under common control and whether the sources belong
to the same major industrial grouping. See 40 CFR 70.2.
If pollutant emitting activities fail to satisfy any one of
the three criteria they are considered separate stationary
sources and their emissions cannot be aggregated to
meet the Title V major source threshold.
KDAQ Permitting Status
By Kelly D. Bartley, Attorney, Bingham
Greenebaum Doll LLP
At the close of Fiscal Year 2012, the Kentucky
Division for Air Quality (KDAQ) reported that it had
201 applications pending for review. Of those, 23
applications were reported as being beyond regulatory
time frames.
IDEM Permitting Status
By Jennifer Kahney Thompson, Attorney, Bingham
Greenebaum Doll LLP
The Indiana Department of Environmental
Management (IDEM) reports that it issued the following
permit decisions from October 8, 2012 to January 6,
2013: 112 Title V Permits; 59 Federally Enforceable
State Operating Permits; 43 Minor Source Operating
Permits; 11 Source Specific Operating Agreements; and
26 Registrations.
IDEM also had the following permit applications
submitted during this same time frame: 96 Title V
Permit Applications; 51 Federally Enforceable
Operating Permit Applications; 46 Minor Source
Operating Permit Applications; 25 Source Specific
Operating Permit Applications; 21 Registration
Applications; and 28 applications not yet classified.
IDEM’s Permitting Branch is currently operating
with 43 permit writers, six section chiefs, 11
administrative personnel, two environmental specialists,
and one branch chief.
LMAPCD Permitting Status
By Bradley E. Dillon, Attorney, Bingham
Greenebaum Doll LLP
The Louisville Metro Air Pollution Control District
(LMAPCD) continues to have a significant backlog of
permit applications. According to Lauren Anderson,
Director of the LMAPCD, a recent EPA audit of the
LMAPCD’s Title V program recommended that the
agency focus on reissuing expired Title V permits.
Companies with expired permits should expect activity
on these permit applications in the near future. Of the 35
Title V sources in Jefferson County, 11 facilities are
currently operating under timely renewal applications.
As discussed below, the LMAPCD is proposing some
significant changes to its permitting programs in 2013.
STATE RE G U L A T I O N S
Status of Pending Changes to KDAQ Regulations
By Kelly D. Bartley, Attorney, Bingham
Greenebaum Doll LLP
Amendments to KDAQ New Source Review
regulations 401 KAR 51:001, 51:017 and 51:052 became
effective as a matter of state law on December 7, 2012.
The amendments revise the requirements necessary to
determine whether a construction project’s emissions
will cause or contribute to a violation of the PM2.5
NAAQS to reflect current federal new source program
regulations. Further details regarding the amendments
can be found in the second and third quarter issues of the
Air Quality Letter. No other changes to KDAQ
regulations are pending at this time.
Bingham Greenebaum Doll LLP
THIS IS AN ADVERTISEMENT 3
Status of Pending Changes to LMAPCD Regulations
By Bradley E. Dillon, Attorney, Bingham
Greenebaum Doll LLP
In December 2012, the LMAPCD proposed for
informal comment a series of regulations that would
significantly revise the permitting process. Most
significantly, LMAPCD would completely rewrite
Regulation 2.02 Air Pollution Regulation Requirements
and Exemptions, clarifying what sources are exempt
from permitting, creating an exemption for sources
emitting less than five tons per year, and a new
“registration” process for sources meeting certain
criteria. These changes would align the LMAPCD
regulations much more with KDAQ’s regulations for the
first time.
The regulations being considered would also
significantly revise Regulation 2.08 Fees, which could
lead to a substantial increase in the fees associated with
Federally Enforceable District Origin Operating Permits,
while Title V sources may not be affected significantly.
It is expected that this regulatory package will greatly
simplify the permitting process in Jefferson County, and
reduce the backlog that has existed for years. The
informal comment period ended January 24, 2013 and
the LMAPCD staff estimates that the entire package,
after a formal comment period and response to
comments, could be reviewed and approved by the
LMAPCD Board by July of 2013.
Final Indiana Air Pollution Control Board Actions
By Jennifer Kahney Thompson, Attorney, Bingham
Greenebaum Doll LLP
The Indiana Air Pollution Control Board (APCB) met
for the last time on November 7, 2012. The APCB
approved the following rulemakings:
(1) Readoption of LSA #12-467(E), Emergency
Rule Amending the federal designation for part of
Dearborn County including Lawrenceburg Township,
Lake County and Porter County to Nonattainment of the
2008 8-hour ozone National Ambient Air Quality
Standards (NAAQS).
(2) Final Adoption of Amendments to Rules
Concerning Attainment of the Lead NAAQS, LSA #11-
774, which: (a) amends the attainment classifications at
326 IAC 1-4 consistent with EPA’s final
unclassifiable/attainment designations in Indiana and
nonattainment designation in Delaware County; (b)
includes administrative changes to 326 IAC 15,
including deleting sources that are no longer operating;
(c) adds emission standards for secondary lead smelters
at 326 IAC 20-13.1; (d) makes changes to address the
National Emission Standards for Hazardous Air
Pollutants (NESHAP) for Secondary Lead Smelting;
and (e) includes an expedited compliance schedule of
certain NESHAP requirements for Exide Technologies,
Inc. in Delaware County.
(3) Final Adoption of the volatile organic
compounds (VOC) Organic Solvent Degreasing
Operations Rule, LSA #07-352, which: (a) extends the
material requirements for cold cleaner degreasers at 326
IAC 8-3-8 to all cold cleaner degreasers located in any
county in the state; (b) eliminates the grandfathering of
organic solvent degreasing operations in Indiana at 326
IAC 8-3-1; (c) amends applicability of 326 IAC 8-3-1,
repeals sections 326 IAC 8-3-2, -3, and -4 and
consolidates requirements into 326 IAC 8-3-5, -6, and -
7; (d) exempts solvent degreasing operations not located
in Clark, Floyd, Lake or Porter Counties from the
following: (i) the operational and control requirements
of 326 IAC 8-3-5, -6, and -7 if subject to 326 IAC 20-6-
1 (NESHAP for Halogenated Solvent Cleaning) or if
uses only organic solvents that contain less than 1
percent VOCs by weight; (ii) the material requirements
of 326 IAC 8-3-8 if the cold cleaner degreaser is subject
to 326 IAC 20-15-1 (NESHAP for Aerospace
Manufacturing and Rework Facilities) or if uses aqueous
cleaning solvents as defined in 326 IAC 8-3-0.5.
(4) Final Adoption of LSA #12-510, Amendments
to 326 IAC 1-3-4, Ambient Air Quality Standards: (a)
amends 326 IAC 1-3-4 to incorporate portions of 40
CFR 50.11 to update its references to the primary and
secondary NAAQS for oxides of nitrogen, with NO2 as
the indicator; (b) amends 326 IAC 1-3-4 to incorporate
portions of 40 CFR 50.5 to update its references to the
secondary NAAQS for sulfur oxides (SO2); (c) amends
326 IAC 1-3-4 to revise the 24-hour PM2.5 standard; (d)
amends 326 IAC 1-3-4 to remove the annual PM10
secondary standards; and (e) amends 326 IAC 1-4-1 to
add a definition of PM2.5 to the rules concerning
attainment designations.
Air Quality Letter – Fourth Quarter 2012
THIS IS AN ADVERTISEMENT 4
The following rulemakings previously adopted by the
APCB became effective in the fourth quarter of 2012:
(1) Sewage Sludge Incineration Rule, LSA #11-586,
which incorporates by reference the emission guidelines
for existing sources of sewage sludge incineration units
located at wastewater treatment facilities designed to
treat domestic sewage sludge, 40 CFR Part 60, Subpart
MMMM, 76 Fed. Reg. 15372 (excluding the New
Source Performance Standards (NSPS) and the sections
dealing with the state implementing a state plan) into
326 IAC 11-10-1 and -2 (effective November 1, 2012);
and (2) Air Curtain Destructors Rule, LSA #11-317,
which amends the definition of “air curtain destructors”
in 326 IAC 1-2-2.5, to include the operation of units
with refractory lined boxes and amends 326 IAC 4-1-7
to allow for the operation of portable self-contained air
curtain destructors (effective November 10, 2012).
New Indiana Environmental Rules Board Established January 1, 2013
By Jennifer Kahney Thompson, Attorney, Bingham
Greenebaum Doll LLP
Pursuant to IC 13-13-8 the Indiana Air Pollution
Control Board, Solid Waste Management Board and
Water Pollution Control Board were all abolished
effective January 1, 2013. A new consolidated
Environmental Rules Board was established and became
effective on that same day.
The new appointees to the Indiana Environmental
Rules Board (“Board”) are as follows:
Chairperson of the Board
General public representative: Beverly Gard,
Greenfield, former Indiana State Senator and former
Chair of the State Senate Energy and Environmental
Affairs Committee.
Vice Chair of the Board
Small business representative: Bill Etzler, LaOtto,
Vice President and Regional Manager for Aqua
Indiana.
Members
Local government representative: Joanna
Alexandrovich, Evansville, Ozone Officer at the
Vanderburgh County Health Department.
Environmental interests representative: Tom
Anderson, Michigan City, owner of Conservation
Connections, LLC, a conservation consulting group.
Manufacturing representative: Gail Boydston,
Indianapolis, Manager of Environmental Services at
Eli Lilly.
Public utility representative: Kelly Carmichael,
Merrillville, Director of Environmental Policy and
Permitting at NiSource, Inc.
Solid waste management industry representative:
Cal Davidson, Clayton, Recycling Manager at
Ray’s Trash Service.
Labor representative: Chris Horn, Lynnville,
recently retired from ALCOA Aluminum.
Health professional representative: Ted Niemiec,
East Chicago, Medical Director and Manager of
Health Services at ArcelorMittal Indiana Harbor.
General public representative: Gary Powdrill,
former member of the Indiana Water Pollution
Control Board and Indiana State Chamber of
Commerce Environmental Committee.
Agricultural representative: Ken Rulon, Arcadia,
operates a family owned farm, Rulon Enterprises.
Terms expire December 31, 2016.
Additionally the Board will include the following ex
officio members:
the Commissioner of the State Department of
Health;
the Commissioner of the Indiana Department of
Environmental Management (non-voting member);
the Director of the Indiana Department of Natural
Resources;
the Indiana Lieutenant Governor; and
the Indiana Secretary of Commerce.
Pursuant to IC 13-13-8 the Board is to be comprised
of 16 members, 11 of whom are gubernatorial
Bingham Greenebaum Doll LLP
THIS IS AN ADVERTISEMENT 5
appointees from various industries and the general
public, and five ex officio members. No more than six
of the appointed members of the board may be members
of the same political party. Eight members of the
Environmental Rules Board, five of whom must be
appointed members, constitute a quorum for rulemaking
purposes.
The Board is expected to meet for the first time in
February 2013. However, shortly after Governor Mike
Pence’s inauguration on January 14, 2013, he issued an
executive order placing a moratorium on new
regulations, and announced plans to initiate a process to
review all existing regulations, with the exception of
federal mandates not subject to a waiver request, rules
needed to reduce the cost or burden on job creation, and
rules to address emergency health or safety concerns.
Therefore, the new Board will face additional hurdles in
promulgating rules.
N A A Q S
EPA Revises NAAQS for Fine Particulate Matter
By Jack C. Bender, Attorney, Bingham
Greenebaum Doll LLP
On December 14, 2012 EPA signed a final rule that
increases the stringency of the National Ambient Air
Quality Standard (NAAQS) for fine particulate matter
(PM2.5). It was published in the Federal Register on
January 15, 2013. The revised PM2.5 standard will
become effective on March 18, 2013. In particular, the
final rule strengthens the primary annual PM2.5 standard
from 15 micrograms per cubic meter (ug/m3) to 12
ug/m3. The existing annual standard was set in 1997.
In finalizing the rule, EPA determined to retain the
existing 24-hour primary standard for PM2.5 at 35 ug/m3.
The 24-hour standard was last revised in 2006. EPA has
also retained the existing secondary standards for PM2.5,
which are essentially set at the same level as the existing
primary PM2.5 standards. The existing secondary 24-
hour PM standards are intended to protect against
visibility impairment. Finally, EPA has retained the
existing coarse particulate matter (PM10) 24-hour
primary and secondary standards, which are 150 ug/m3.
Information available from EPA indicates that 66
counties on a nationwide basis have ambient air
monitors that currently do not show compliance with the
12 ug/m3 annual PM2.5 standard based upon ambient air
monitoring data from 2009 through 2011. Based upon
particulate matter emission reductions required by
current rules, EPA predicts that only seven counties
located in California will not meet the new PM2.5 annual
standard of 12 ug/m3 by 2020. In Kentucky and Indiana,
EPA projects 11 counties would be designated as
nonattainment based upon data from existing monitors in
those counties. In Indiana, this includes the counties of
Clark, DuBois, Floyd, Lake, Marion, Spencer,
Vanderburgh, and Vigo. In Kentucky, the potential
nonattainment counties include Bullitt, Daviess, and
Jefferson. It should be noted, however, that the three-
year annual design value of PM2.5 in ambient air in many
counties in both states is above 11.0 ug/m3, and thus, are
close to the new standard. States will have a year to
make recommendations for areas to be designated as
attainment and nonattainment for the new annual PM2.5
standard.
Because the new annual PM2.5 standard, when
effective, would apply for purposes of prevention of
significant deterioration (PSD) permitting, EPA has
included a grandfathering provision in the final rule to
ensure that changes to the PM2.5 standard do not delay
issuance of pending PSD permits and to reduce potential
permitting burdens. In particular, the grandfathering
provision provides that PSD review based upon the
existing annual PM2.5 standard will be available for any
draft PSD permit or preliminary determination that has
been published for public notice prior to the March 18,
2013 effective date of the revised PM2.5 standard (i.e., 60
days after publication of the final rule in the Federal
Register) and for PSD permit applications that have been
deemed complete by the permitting agency as of the time
of signing of the final rule (December 14, 2012). For
permit applications that do not meet one of these two
criteria, the permit application will be reviewed to ensure
compliance with the revised annual PM2.5 standard. The
grandfathering provision does not apply to any other
pollutants.
EPA explained in the preamble to the final rule that it
is not proposing and is not finalizing any changes to the
existing PM2.5 significant emission rates (SERs),
significant impact levels (SILs), and significant
monitoring concentrations (SMCs). Accordingly, these
screening tools, which establish de minimis thresholds
for PSD permitting purposes, would have remained the
same as promulgated in EPA’s May 16, 2008 and
October 20, 2010 final rules. However, as discussed
Air Quality Letter – Fourth Quarter 2012
THIS IS AN ADVERTISEMENT 6
elsewhere in this issue of the Air Quality Letter, the
October 20, 2010 final rule establishing these screening
tools was vacated by the U.S. Court of Appeals on
January 22, 2013. Also, the May 16, 2008
implementation rule for the PM2.5 standard was
remanded to EPA on January 4, 2013 by the U.S. Court
of Appeals for the D.C. Circuit, but that court ruling is
not expected to affect the 10-ton per year SER
established for PM2.5 in attainment areas.
Finally, the preamble to the final rule also discusses
modeling tools and guidance applicable to modeling
impacts of PM2.5 emissions. EPA references its March
23, 2010 guidance memorandum from Stephen Page as
containing interim procedures to address the fact that
compliance with the 24-hour PM2.5 standard is based
upon a particular statistical form and to address the
complications associated with the impacts of secondarily
formed PM2.5 due to precursors. To provide more detail
and guidance on those issues, EPA stated in the
December 14, 2012 rule that it intended to issue final
guidance on modeling of PM2.5 impacts from stationary
sources for permitting purposes by the end of calendar
year 2012. As of the date of this publication, that
guidance has not been issued and may be delayed due to
complications from the above referenced Court of
Appeals rulings. EPA states it expects the revised
guidance will address most, if not all, of the remaining
issues relating to PM2.5 air quality impact demonstrations
under the PSD program at least until EPA takes
additional steps to improve existing regulatory models
and procedures.
U.S. Court of Appeals for the D.C. Circuit Remands EPA’s Implementation Rule for its PM2.5 NAAQS and Separately Vacates PM2.5 Significant Impact Levels and Significant Monitoring Concentrations
By Jack C. Bender, Attorney, Bingham
Greenebaum Doll LLP
On January 4, 2013, the U.S. Court of Appeals for
the District of Columbia Circuit ruled that two EPA final
rules establishing implementation requirements for the
PM2.5 NAAQS were inconsistent with the Clean Air Act.
The two rules at issue were EPA’s April 25, 2007 and
May 16, 2008 implementation rules and specifically, the
components of those rules that applied to nonattainment
New Source Review (NSR).
In promulgating the implementation rules, EPA relied
upon the general nonattainment NSR provisions of
Subpart 1 of Part D of Title I of the Clean Air Act, rather
than the particulate-matter specific provisions of Subpart
4 of Part D of Title I. The Natural Resources Defense
Council and Sierra Club challenged the rulemakings on
the basis that the more specific and more stringent
provisions of Subpart 4 of Part D should have been
applied. Under Subpart 1, EPA has more flexibility in
extending the deadlines for achieving attainment with
the NAAQS.
EPA argued that because Subpart 4 of Part D
repeatedly refers to PM10 rather than to PM2.5 or
particulate matter, it was reasonable for it to interpret
Subpart 1 as applying to nonattainment implementation
provisions for the PM2.5 NAAQS. The court, however,
found that PM10 includes PM2.5 and therefore, under a
plain reading of Subpart 4, it applies to PM2.5. Because
the court found the statute is plain on its face, EPA’s
interpretation was not entitled to deference. The court
therefore remanded to EPA the two rulemakings to
repromulgate the nonattainment NSR provisions
pursuant to Subpart 4 of Part D, consistent with the
court’s opinion. Because the court did not invalidate the
rulemakings, which also included provisions relating to
PSD review in attainment areas, the ruling should not
affect the aspects of the regulations that relate to PSD
review of permit applications with respect to PM2.5.
On January 22, 2013, the U.S. Court of Appeals ruled
on the challenge brought by the Sierra Club to the
significant impact levels (SILs) and significant
monitoring concentration (SMC) established for PM2.5 in
EPA’s October 20, 2010 rulemaking. The court found
there is no authority for SMCs under the Clean Air Act,
and therefore, vacated the PM2.5 SMC. The SMCs that
have been established for other pollutants were not at
issue in the case and were not addressed by the court’s
ruling. However, assuming the ruling stands, it creates
uncertainty as to what action EPA may take in the future
with respect to existing SMCs. The ruling calls into
question EPA’s authority to preclude promulgation of
new SMCs for any pollutant.
With respect to the PM2.5 SIL, the court vacated and
remanded the SIL to EPA, at the agency’s request. EPA
noted the SIL may not be protective of the PM2.5
NAAQS in all circumstances, such as where PM2.5
concentrations in ambient air are already close to the
NAAQS, and the court agreed with that assessment. The
Bingham Greenebaum Doll LLP
THIS IS AN ADVERTISEMENT 7
Sierra Club argued SILs were universally invalid and
unauthorized under the Clean Air Act, but the court
found that issue was not ripe for a decision. The claim,
however, will almost certainly be reasserted in a
challenge to any revised PM2.5 NAAQS. The SIL ruling
raises a question as to whether EPA will, in any future
rulemaking, also attempt to clarify when other SILs may
not be protective of NAAQS. SILs and SMCs have been
important screening tools that were used to prevent
unnecessary PSD permitting delays where impacts of
emissions are considered de minimis. Accordingly, the
court’s ruling will likely result in significant delays in
some major industrial projects.
EPA Issues Final Rule Designating Kentucky Portion of Ashland-Huntington Area as Attainment for 1997 PM2.5 NAAQS
By Robin B. Thomerson, Attorney, Bingham
Greenebaum Doll LLP
On December 26, 2012, EPA approved KDAQ’s
request to redesignate the Kentucky portion of the tri-
state Huntington-Ashland, West Virginia-Kentucky-
Ohio PM2.5 nonattainment area to attainment for the
1997 Annual PM2.5 NAAQS and approved the State
Implementation Plan (SIP) revision containing a
maintenance plan for that area. The area is composed of
Boyd County and a portion of Lawrence County,
Kentucky. Kentucky’s request to redesignate included
three years of complete, quality-assured ambient air
quality data to demonstrate that the standard has been
met for the entire area. The annual PM2.5 design values
for the Huntington-Ashland area have declined since
2007.
In addition to the 1997 annual PM2.5 NAAQS, EPA
has promulgated a 24-hour PM2.5 NAAQS which was
amended in 2006. All counties in Kentucky are
attainment for the 2006 24-hour PM2.5 standard. With
the redesignation for the Huntington-Ashland area, only
the Kentucky counties of Bullitt and Jefferson Counties
will remain nonattainment for the 1997 annual PM2.5
standard. EPA approved redesignation of the
Cincinnati-Hamilton area (Boone, Campbell and Kenton
counties in Kentucky) on December 15, 2011. As
reported elsewhere in this issue of the Air Quality Letter,
EPA recently revised the primary annual PM2.5 standard
from 15 micrograms per cubic meter (ug/m3) to 12
ug/m3. The revised PM2.5 standard will become effective
on March 18, 2013.
EPA Denies Indiana’s Request for Reconsideration of Nonattainment Designation for Lake and Porter Counties
By Jay R.S. Parks, Attorney, Bingham Greenebaum
Doll LLP
On January 31, 2012, EPA notified Indiana via a
letter to then Governor Mitch Daniels that it planned to
recommend that Jasper, Lake, and Porter counties be
included in the Chicago nonattainment area under the
2008 Ozone NAAQS. This was an about face from a
previous notice sent December 9, 2011 proposing to
designate these areas as attainment. The abrupt change
was based on ozone monitoring data submitted by
Illinois on December 7, 2011, which showed a
monitored violation at the Zion, Illinois monitor.
Indiana disagreed with the recommended
designations, and submitted data rebutting the inclusion
of these counties in the nonattainment area. After
reviewing the data, EPA removed Jasper County from
the list, but announced on May 31, 2012 that Lake and
Porter Counties would be designated as nonattainment.
“Air Quality Designations for the 2008 Ozone Standards
for Several Counties in Illinois, Indiana, and Wisconsin;
Corrections to Inadvertent Errors in Prior Designations”
77 Fed. Reg. 112 (June 11, 2012). On August 10, 2012,
IDEM Commissioner, Thomas Easterly, sent a letter on
behalf of the state of Indiana asking EPA to reconsider
and stay its designation of Lake and Porter counties as
nonattainment. The letter stated that Indiana believed
EPA failed to consider data submitted by the state
pertaining to the five-factor test EPA uses to determine
nonattainment areas. The letter also claimed that EPA
did not adequately respond to comments on Lake and
Porter Counties submitted by Indiana during the process
that designated these counties as nonattainment.
On December 14, 2012 EPA denied Indiana’s
Petition for Reconsideration and Request for Stay
concerning EPA’s final rule, which designated Lake and
Porter Counties as nonattainment. Even though
monitors in these counties showed attainment under the
2008 Ozone NAAQS, EPA reached the conclusion that
the counties contributed to the violation at the Zion,
Air Quality Letter – Fourth Quarter 2012
THIS IS AN ADVERTISEMENT 8
Illinois monitor and therefore, were appropriately
designated as nonattainment.
In its petition for reconsideration, Indiana claimed
that Illinois caused the violations at the Zion monitor
when it failed to maintain its vehicle emission testing
program as required by its state implementation plan.
EPA responded that it still believed that Lake and Porter
Counties contributed to the violation, and thus were
properly designated, even if the violation would have
occurred without contribution from the Indiana counties.
Indiana also challenged the meteorological data used by
EPA in its designation as not being specific to the 2009-
2011 period when violations were detected. Though
EPA agreed that the data was not period specific, it
believed that there was little variability in the data from
year to year and the data was therefore accurate and
relevant. Indiana raised several other issues including
disparate treatment of Indiana counties, insufficient time
allowed by EPA to consider newly submitted data, and
lack of benefit that could be gained by additional
pollution controls despite their high costs. EPA rejected
all of these arguments stating that it had previously
responded to the issues during the comment period for
the rulemaking, Indiana failed to raise the issues during
the comment period, or that EPA had correctly
considered data submitted by Indiana and any difference
of treatment was due to different sets of facts and data
unique to each county.
Indiana is seeking review of the nonattainment
designation in the U.S. Court of Appeals for the District
of Columbia Circuit. The case has been consolidated
with other challenges to nonattainment designations
under the 2008 Ozone NAAQS and is known as Texas
Pipeline Association v. EPA, Case No. 12-1312.
The “Designations for the 2008 Ozone NAAQS”, 77
Fed. Reg. 98 (May 21, 2012) p. 30088, are also being
challenged in the U.S. Court of Appeals for the District
of Columbia Circuit in State of Mississippi, et al. v.
EPA, Case No. 08-1200. Initially EPA had proposed
revisions to the 2008 standards, but later rescinded the
proposal, choosing instead to review the standards
during the five-year review period mandated by the
Clean Air Act beginning in 2013. The court conducted
oral argument on November 16, 2012, and the parties
await its decision.
A I R T O X I C S
EPA Finalizes Latest Iteration of Boiler Rules
By Andy Bowman, Attorney, Bingham Greenebaum
Doll LLP
On December 20, 2012, EPA finalized changes to the
National Emission Standards for Hazardous Air
Pollutants (NESHAP) for industrial, commercial and
institutional boilers and process heaters located at major
and area sources of hazardous air pollutants (HAP). 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 EPA’s
reconsideration of the March 2011 version.
The tumultuous history of these rules goes back to at
least September 2004 when EPA first established the
NESHAP rules for new and existing boilers and process
heaters at major and area sources of HAP. 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 EPA. New versions of the major
source rule (“Boiler MACT”) and the area source rules
were issued in March 2011. At the same time EPA
announced it would reconsider certain aspects of the rule
and subsequently stayed the compliance dates of the
Boiler MACT. In December 2011 EPA proposed
reconsidered versions of the rules.
In January 2012 the U.S. Court of Appeals reinstated
the Boiler MACT compliance dates. In response 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 tune-ups
or compliance notification deadlines until the earlier of:
(1) the effective date of a new final rule, or (2)
December 31, 2012. The final rule was published in the
Federal Register on January 31, 2013, and the
amendments become effective on April 1, 2013.
Presumably, EPA will extend its enforcement discretion
until the effective date of the rule, but is has not yet
announced its plans.
Bingham Greenebaum Doll LLP
THIS IS AN ADVERTISEMENT 9
Some of the key adjustments 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 subcategories. All but
three subcategories are subject to numeric emission
limits.
Single particulate matter (PM) emission limit for all
coal/solid fossil fuel subcategories and emission
limits based on PM 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.
Addition of stack testing requirements when
alternative total selective metals emissions limits are
used in lieu of PM as a surrogate.
Replacing numeric dioxin emissions limits with
work place 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 limited use subcategory
from no more than 876 hours of 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.
Existing major sources must be in compliance with
the Boiler MACT by January 31, 2016. 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 January 31, 2013, the date
the rule was published in the Federal Register, or upon
startup, whichever is later. Petitions seeking judicial
review of the rule may be filed by April 1, 2013. Only
time will tell whether this rule will be subject to further
that CMPUs include the processes and equipment used
to produce a “family of materials.”
EPA agreed to reconsider the six provisions and
published its proposed rule provision on January 30,
2012. As the compliance date for the previous 2009
Final Rule was scheduled for October 29, 2012 and
because the EPA was still finalizing the reconsideration
action, a brief stay was published on October 25, 2012.
EPA published the revised final rule in the December
21, 2012 Federal Register (2012 Final Rule). The
revised 2012 Final Rule did not change the
environmental emissions requirements but rather
focused on the issues of flexibility and clarity. The final
rule includes the following revisions in response to the
Petition for Reconsideration: (1) area sources required to
obtain a Title V permit are limited to those synthetic area
sources which installed a federally-enforceable air
pollution control device on an affected CMPU (Title V
applications must be submitted by December 21, 2013);
(2) sources are still required to comply with the most
stringent rule if there are overlapping provisions in the
CMAS rule and other NESHAPs; (3) direct and
proximal leak inspection requirements were removed,
instead quarterly sensory inspections of all equipment
and process vessels are acceptable as long as the sensory
inspection can detect leaks within the CMPU; (4) the
cover lid must be in place and closed at all times when a
process vessels is in organic HAP service or metal HAP
service except during manual operations, such as
material addition, removal, sampling, inspection or
cleaning; (5) leak inspections of a CMPU that contains
metal HAP as a particulate must still be conducted while
in metal HAP service but if the CMPU does not contain
metal, the inspection may occur during VOC service;
and (6) the definition of “family of materials” was
altered to coincide with the CMAS rule and it was
revised to only apply to products whose production
involves emission of the same Table 1 HAP.
Although EPA did not eliminate the Title V permit
requirement for all area sources it explained that the
Title V Permit Program already allows for flexibility in
production. The EPA referenced the “Alternative
Operating Scenarios” and “Approved Replicable
Methodologies” as two programs available to chemical
manufacturers to avoid permit revisions and stressed the
importance of implementing these programs in
conjunction with obtaining their Title V permits.
The new compliance date for existing sources is
March 21, 2013. The compliance date for new sources
was not extended and remains October 29, 2012.
EPA Policy on SIP Actions and Redesignation Requests in the Wake of Court Decision Vacating CSAPR and Potential Impact of Subsequent Denial of EPA’s Petition for Rehearing
By Larry Kane, Attorney, Bingham Greenebaum
Doll LLP
The August 2012 decision of the U.S. Court of
Appeals for the District of Columbia in EME Homer
City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir.
2012), invalidating and vacating EPA’s Cross-State Air
Pollution Rule (CSAPR) has, for the second time, left
the nation without a regulatory framework to address the
interstate transport of nitrogen oxides (NOx) and sulfur
dioxide (SO2).1
Among the ramifications of the EME Homer City
decision was the uncertainty created for various State
Implementation Plans (SIPS) for attaining National
Ambient Air Quality Standards (NAAQS) for ozone or
PM2.5 that were dependent in part on reductions of
emissions of NOx or SO2 to be achieved under CSAPR
and had already been approved or were pending for
approval at the time of the decision. Similarly impacted
are pending requests by states for redesignation of
nonattainment classifications that also were predicated in
part on the emission reductions to come from
implementation of CSAPR.
EPA filed a petition for rehearing of the EME Homer
City case with the Court of Appeals but recognized a
need to continue to take action on pending regulatory
filings while awaiting a decision on the rehearing
petition. To that end, EPA’s Assistant Administrator for
the Office of Air and Radiation, Gina McCarthy, issued
a policy memorandum dated November 19, 2012,
1 The first EPA rule to address interstate transport of air
pollutants, the Clean Air Interstate Rule (CAIR) adopted by
the agency in 2005, was previously invalidated by the same
U.S. Court of Appeals several years earlier. Recognizing the
significant regulatory gap resulting from its decision in EME
Homer City, the Court of Appeals took the unusual step of
resuscitating CAIR from the regulatory ash heap as an interim
measure to fill the gap.
Bingham Greenebaum Doll LLP
THIS IS AN ADVERTISEMENT 11
directed to the agency’s Regional Air Division Directors
describing how EPA intends to proceed. This policy
memorandum is referred to for purposes of this article as
the “Interim CSAPR Policy”. Acting with alacrity, the
Court of Appeals, en banc, denied the pending petitions
for rehearing on January 24, 2013. The remainder of
this article will address the elements of the EPA’s
interim policy and explore what impact the denial of the
rehearing petition may have on policy implementation.
The first element of the Interim CSAPR Policy builds
upon the Court’s decision to reinstate CAIR as an
interim measure for mitigation of interstate pollution
transport. EPA will rely on NOx and SO2 emission
reductions required by CAIR as “permanent and
enforceable” in reviewing and acting upon pending
requests by states for approval of attainment SIPs,
redesignation requests, and maintenance SIPs that, as
designed, were dependent, at least in part, upon pollutant
emission reductions to be achieved through CSAPR.
EPA’s OAR staff are directed to work with Regional
offices to “identify, prioritize, and act promptly” on any
pending redesignation requests and SIP submittals that
rely upon CSAPR reductions. According to the Interim
CSAPR Policy, this reliance by EPA upon CAIR
emission reductions in making decisions on pending
state requests may continue until a valid rule replacing
CSAPR is adopted and SIPs complying with any such
new rule are submitted by states and acted upon by EPA.
It does not appear that the denial of the rehearing
petitions will have any significant impact on this aspect
of the Interim CSAPR Policy.
Second, the Interim CSAPR Policy references a
pending action on an unidentified state plan that relies
on CAIR reductions in emissions as the basis of
satisfying regional haze program requirements and
indicates that it will be appropriate to approve the
submitted state plan.
A third component of the Interim CSAPR Policy
provides that, pending a decision on EPA’s petition for
rehearing, EPA will defer reconsideration of certain
categories of actions taken by EPA on regional haze
plans prior to the EME Homer City decision.
As the fourth point of the Interim CSAPR Policy,
EPA announced that, during the pendency of its
rehearing petition, EPA will refrain from making
findings that a SIP is deficient for failing to meet the
good neighbor obligations of Section 110(a)(2)(D)(i)(I)
of the Clean Air Act. This aspect of the Interim CSAPR
Policy is effectively mooted by the Court’s denial of the
petition for rehearing since EPA now will have no
option but to comply with the Court’s holding that a SIP
cannot be considered deficient for failing to fulfill the
good neighbor obligation until EPA first quantifies the
obligation and affords the state an opportunity to act
upon it. The interim continuation of CAIR’s provisions
under the EME Homer City decision seems to suggest
that pollutant reductions required under that statute may
be utilized as a means of addressing the good neighbor
obligations.
In sum, the Interim CSAPR Policy would appear to
be unaffected by denial of rehearing with respect to the
approach outlined for proceeding with SIP reviews that
involve reliance on reductions of NOx and SO2
emissions required under CAIR. In contrast, it is
unclear what effect the denial of rehearing may have on
EPA’s approach toward reconsideration of certain past
agency decisions on regional haze reduction plans.
Finally, the Interim CSAPR Policy’s provisions relating
to EPA’s past approach on implementing the Clean Air
Act’s good neighbor obligations has been mooted by the
Court’s denial of rehearing petitions and EPA will have
to revise its approach to comport with the EME Homer
City Generation decision.
More importantly, however, uncertainty will continue
to plague the issue of interstate pollution transport for
many years to come. States proceeding with SIPs
relying on CAIR reductions are confronted with the
prospect of yet another round of SIP development and
implementation once (if) a replacement for CSAPR and
CAIR is developed and adopted. Power plant owners
contemplating decisions on controls for NOx and SO2 to
address emission reductions required by SIPs relying on
CAIR will have to wrestle and, perhaps, gamble with
problematic considerations over whether those decisions
will be cost-effective and compatible with requirements
of an eventual replacement rule.
Air Quality Letter – Fourth Quarter 2012
THIS IS AN ADVERTISEMENT 12
EPA Issues Proposed Rule Announcing Reconsideration of Mercury Air Toxics Standards and Utility NSPS
By Robin B. Thomerson, Attorney, Bingham
Greenebaum Doll LLP
On November 30, 2012, EPA published proposed
rules that reconsider certain aspects of the National
Emissions Standards for Hazardous Air Pollutants from
Coal-and Oil-Fired Electric Utility Steam Generating
Units (known as the Mercury Air Toxic Standards or
MATS) and the Standards of Performance for Fossil-
Fuel-Fired Electric Utility, Industrial-Commercial-
Institutional and Small Industrial-Commercial-
Institutional Steam Generating Units (known as the
Utility NSPS). The proposed rules are in response to
petitions received by EPA for reconsideration of the
MATS and Utility NSPS final rules published on
February 16, 2012. The reconsideration addresses a
limited set of issues: (1) revision of certain MATS new