EPA Promulgates Air Toxics Rule For Industrial, Commercial, And Institutional Boilers And Process Heaters Under The Clean Air Act

Thursday, April 1, 2004 - 01:00

On February 27, 2004, EPA promulgated a new national emission standard for hazardous air pollutants ("HAPs") for boilers and process heaters under section 112 of the Clean Air Act (the "Heater and Boiler MACT").1 EPA estimates that 58,000 existing and 800 new boilers and process heaters from 40 industries will be subject to the new rule, including chemical manufacturers; companies that extract crude oil and natural gas; petroleum refineries; pulp and paper mills; manufacturers of rubber and plastic products; steel works and blast furnaces; electroplating, plating, polishing, anodizing and coloring facilities; manufacturers of automobiles and accessories; electric, gas and sanitary services; and hospitals and universities.2

The Heater and Boiler MACT is one of 96 MACT standards promulgated by EPA under the 1990 amendments to the Clean Air Act ("CAA" or the "Act") for over 160 categories of industrial sources. When fully implemented, these rules will collectively reduce HAP emissions by 1.7 million tons per year (tpy) compared to 1990 baseline emission levels.

The Heater and Boiler MACT also contains a controversial alternative compliance option that allows eligible facilities to comply with health-based emissions requirements rather than technology-based standards for certain non-carcinogenic threshold pollutants.3 After a brief summary of how MACT standards are developed, we discuss below the specific terms of the Heater and Boiler MACT, and then describe in detail the alternative compliance option.

Development Of MACT Standards

The 1990 amendments to Section 112 of the Clean Air Act listed nearly 200 hazardous air pollutants. CAA §112(b)(1). The Act then required EPA to list the industrial sources that emit these pollutants, CAA §112(c), and in 1992 EPA listed over 160 such source categories.4 Section 112 next required EPA to promulgate MACT standards for new and existing sources in those categories. CAA §112(d).

MACT standards for new sources must reflect the maximum degree of reduction in emissions deemed achievable for new sources, and cannot be less stringent than the emissions actually achieved in practice by the best controlled similar sources. CAA §112(d)(3). MACT standards for existing sources may be less stringent than for new sources, but must generally at least reflect the average of the best performing 12 percent of existing sources for which EPA has data.

Emission Limits Under The Heater And Boiler MACT

The Heater and Boiler MACT establishes emission limits for nine subcategories of units and four categories of HAP emissions. Specifically, new and existing process heaters and boilers are divided into three size-based categories - large, small, and limited use units, and further divided into three categories based on fuel type - solid, liquid, and gaseous fuels.5

EPA grouped HAP emissions from heaters and boilers into four categories Ñ mercury, non-mercury metallic HAP, organic HAP, and inorganic HAP. Except for mercury, EPA then promulgated emission limits based on surrogates for each category of HAP. EPA used particulate matter ("PM") as the surrogate for non-mercury metallic HAP emissions because such emissions are often attached to flue gas fly-ash, a type of particulate matter. However, recognizing that some sources generate insignificant levels of non-mercury metallic HAP, but produce sufficient PM emissions to be regulated, EPA provided an alternative compliance option under which qualifying entities will be regulated based on their actual non-mercury metallic or "total selected metal" HAP emissions.6

EPA used hydrogen chloride ("HCl") as the surrogate for inorganic HAP emissions because HCl is the primary acid gas present in inorganic HAP. Additionally, EPA stated that the HCl emissions controls effectively reduce other inorganic HAP emissions.7

EPA used carbon monoxide ("CO") as a surrogate for organic HAP emissions (including dioxins) because CO is a common byproduct of the inefficient combustion of organic materials and correlates directly to the production of organic HAP emissions.8

New and existing sources must also comply with testing, monitoring, and reporting requirements that are generally consistent with most MACT standards. These requirements provide facilities with the option to demonstrate compliance through performance tests or fuel analysis, which vary depending on the subcategory of the regulated unit, the type of equipment used, and the type of emissions.9

New sources must comply immediately upon publication of the rule in the Federal Register or by the start up date of the new unit (whichever is later), while existing sources have three years from the date of publication in the Federal Register to comply.10

Health-Based Compliance Alternative

The Heater and Boiler MACT contains controversial health-based compliance alternatives. Section 112(d)(4) of the Act authorizes the Administrator to consider a "threshold" level "[w]ith respect to pollutants for which a health threshold has been established, . . . with an ample margin of safety, when establishing emission standards under this section."11 A "threshold" level is a well-defined "concentration or dose below which adverse effects are not expected to occur over a lifetime of exposure."12 Based on congressional intent that carcinogenic pollutants be considered non-threshold pollutants, EPA presumptively limits the application of threshold levels under the section 112(d)(4) exemption to non-carcinogens.13 In the Heater and Boiler MACT, EPA takes the position that Section 112(d)(4) authorizes risk-based standards for pollutants with established threshold levels. Based on analyses under EPA's Exposure Assessment Guidelines, EPA determined that the threshold levels for two of the non-carcinogenic HAP emissions surrogates (HCl and manganese) justified a departure from the MACT floor, and accordingly, EPA issued health-based emissions limits for certain sources of these pollutants. Any affected source14 may qualify for these alternate emissions limits upon making the requisite health-based eligibility demonstration set forth in Appendix A of the rule.15

Each new and existing boiler and process heater that emits organic or non-mercury metallic HAP may present EPA with a demonstration of eligibility to use the health-based compliance alternative. The rule provides two methods for sources to demonstrate eligibility with health-based emissions standards:

• Conduct a "look-up table analysis," which means providing emissions test results demonstrating that the total maximum hourly HCl and chlorine and/or manganese emissions rate does not exceed the rate set forth in the "look-up tables" in Appendix A, or that the maximum hazard index for HCl and chlorine, or hazard quotient for manganese, at a location where people live, is less than or equal to 1.0;16 or

• Conduct a site-specific compliance demonstration that indicates that the facility is not likely to cause chronic inhalation exposure of the threshold pollutant in excess of the applicable hazard index or quotient.17

To conduct a "look up table" analysis a source must conduct emission tests for each Subpart DDDDD unit at the facility, and then calculate the total maximum hourly mass equivalent emissions rate for the applicable parameter (i.e., HCl or manganese). If the source's HCl- or manganese-equivalent emissions rate does not exceed the health-based emissions rate set forth in the table, then the source may qualify to use the health-based compliance alternative.18

A source choosing the alternative of demonstrating eligibility through a site-specific modeling test may utilize any "scientifically-accepted peer-reviewed risk assessment methodology."19 The results of the assessment must show that emissions from the facility of the applicable parameter are unlikely to cause chronic inhalation exposure, and do not exceed the applicable hazard index or quotient of 1.0.20

These health-based alternative emissions standards are controversial. Environmental groups argue that use of risk based concepts to "evade MACT applicability" is contrary to the intent of Section 112(d), which, they argue, requires a technology-based floor level of control, and does not provide exclusions for risk or secondary impacts from applying the MACT floor. They also argue that EPA has adopted legal positions in other rulemakings and lawsuits that contradict the risk based approach in this rule. Finally, they say that the preamble discussion of the risk based approach of the proposed rule was not sufficient to allow for complete public comment, and therefore it was not appropriate for EPA to finalize those provisions.21

EPA responds that Section 112(d)(4), on its face, provides the Administrator with the discretion to consider established health thresholds, with an ample margin of safety, when it promulgates MACT standards. Since there are established health thresholds for HCl and manganese, EPA argues that it has the authority to develop health-based compliance alternatives for those threshold pollutants. This does not, EPA argues, fundamentally alter the MACT program. Rather, it represents EPA availing itself, in appropriate circumstances, of the authority Congress granted it in Section 112(d)(4).22

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It will be important to follow the implementation of this MACT standard because of its unusually widespread impact on American industry. 1 See National Emissions Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters, 69 Fed. Reg. ___ (forthcoming 2004) (to be codified at 40 C.F.R. Parts 63.7480 to 63.7575), at http://www. epa.gov/airlinks/boilersfinalrule.pdf. These standards are commonly referred to as "MACT" standards because, as discussed below, they must be based on EPA's determination of the "maximum achievable control technology."
2 Id. at 3-4, 151. Section 63.7485 makes the rule applicable to all industrial, commercial, and institutional boilers and process heaters that are part of, or located at, major sources of HAP, except for those sources specifically excluded by §63.7491. Id. at 199.
3 Id. at 49-54, 210 (to be codified at §63.7507), 336-347 (to be codified as Appendix A to Subpart DDDDD).
4 57 Fed. Reg. 31576 (July 16, 1992).
5 Id. at 203 (to be codified as §63.7499). Large units are boilers or heaters that have a rated capacity of greater than 10 million Btu/hour heat input and an annual capacity factor greater than ten percent. Id. at 281 (to be codified at §63.7575). Small units are those that have a rated capacity less than or equal to 10 million Btu/hour heat input. Id. at 285-6. Limited use units are those with a rated capacity of greater than 10 million Btu/hour heat input and a federally enforceable average annual capacity factor of less than or equal to ten percent. Id. at 282-3.
6 Id. at 210 (to be codified at §63.7507).
7 Id. at 28-29.
8 Id. at 29.
9 Id. at 210-273 (to be codified at §§63.7510 - 63.7560).
10 Id. at 202 (to be codified at §63.7495). The rule also provides eligible sources with the option of demonstrating compliance with emissions standards through emissions averaging. Specifically, the rule allows existing large solid fuel boilers to demonstrate compliance by averaging emissions between such units, provided the facility is located in a state that has not excluded emission averaging. Id. at 220-21 (to be codified at §63.7522(a)). New sources are excluded from the emissions averaging option. Id. at 119.
11 42 U.S.C. § 7412(d)(4).
12 Office of Air Quality Planning and Standards, EPA, Regulatory Impact Analysis of the Proposed Industrial Boilers and Process Heaters NESHAP: Final Report, at 1-xxxi (Nov. 2002).
13 National Emissions Standards for Hazardous Air Pollutants; Proposed Standards for Hazardous Air Pollutants From Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone Semichemical Pulp Mills, 63 Fed. Reg. 18754, 18765-18766 (Apr. 15, 1998).
14 An "affected source" is defined for existing sources as the collection of "all industrial, commercial, and institutional boilers and process heaters within a subcategory located at a major source . . .", and for new sources as "each new or reconstructed boiler or process heater located at a major source . . . ." Id. at 199-200 (to be codified at §63.7490). Section 63.7490 includes provisions also clarifying the meaning of new, existing, and reconstructed sources.
15 Id. at 137-8, 336-9, 345 (Subpart DDDDD, Appendix A,§§ 2, 5, & 10).
16 Id. at 339-41, 350 (Subpart DDDDD, Appendix A, §§ 5 & 6 and Tables 2 & 3). The "look up" table in Appendix A of the rule provides an index of emissions rates that varies depending on stack height and the distance from the unit to the facility property boundary. Id. at 350-351.
17 Id. at 341-2 (Subpart DDDDD, Appendix A, §7).
18 Id. at 339-341 (Subpart DDDDD, Appendix A, §§5-6).
19 Id. at 341-4 (Subpart DDDDD, Appendix A, §§7-8).
20 Id. Appendix A, §§ 7 and 8 also detail the required calculations and information that a site-specific compliance demonstration must contain for a facility to be deemed eligible. Section 9 sets forth the requirements regarding submission of the eligibility demonstration. Id. at 344-5.
21 Id. at 125.
22 Id. at 122-123, 126-128, 136-138; CAA § 112(d)(4).

David Friedland is a Director of Beveridge & Diamond, P.C.'s Washington, DC office, and the Chair of the Firm's Air Practice Group. Holli Feichko is an Associate at Beveridge & Diamond, P.C.'s Washington, DC office.

Please email the authors at dfriedland@bdlaw.com and hfeichko@bdlaw.com with questions about this article.