Environmental JULY 2003 MACT Hammer to Strike — Again Many industrial entities are now required to furnish Part 2 of the applications seeking “case-by-case” establishment and implementation of maximum achievable control technology (“MACT”) to curtail air emissions. The socalled “MACT hammer” which went into effect on May 15, 2002, but for which the EPA delayed certain filing requirements for two years, is now the subject of a settlement between the EPA and the Sierra Club, by which the time schedule for the delayed filing requirements will be accelerated. Accordingly, it is critical that those who have been affected by the MACT hammer take appropriate action in preparation to meet the Part 2 filing deadlines. This Alert is intended to provide a general understanding of the MACT requirements as effected by the settlement agreement, to publicize the approaching deadlines, and to assist in providing an outline for an appropriate course of action. The Alert updates the previous Alert of April 2002, “MACT Hammer Poised to Strike.” MACT BACKGROUND MACT is the technology standard by which the Clean Air Act regulates sources of Hazardous Air Pollutants. Under the Clean Air Act Amendments of 1990, Pub. L. 101-549 (Nov. 15, 1990) (“the Act”), EPA is required to publish and regularly amend a list of source categories and subcategories of all major and area sources of HAPs. 42 U.S.C. § 7412(c)(1). For each category and subcategory, EPA is to establish NESHAPs (National Emission Standards for Hazardous Air Pollutants), to be achieved through implementation of MACT at all major HAP sources. 42 U.S.C. § 7412(d). MACT applies to both new sources and existing sources of HAPs. For new sources, MACT requires the achievement of the maximum degree of emissions reductions that has been achieved in practice by the best-controlled similar source. 42 U.S.C. § 7412(d)(3). For identified existing sources, the emissions standards may be slightly less stringent, but in any event not less stringent than the average achieved by the best performing twelve percent of existing sources within each source category. 42 U.S.C. § 7412(3)(A). MACT standards may require reductions in a variety of ways, including the use of material substitutions or enclosed systems, the capture and removal of hazardous air pollutants, or specific equipment design or operator training requirements. 42 U.S.C. § 7412(d)(2). THE SETTLEMENT To ensure EPA’s swift and diligent compliance with the requirements to establish NESHAPs and MACT, the Clean Air Act Amendments imposed the so-called “MACT hammer.” 42 U.S.C. § 7412(j). The MACT hammer provided that if, by November 15, 2001, a MACT standard for a particular category or subcategory was not established, each owner or operator of a major source within that category or subcategory would need to submit a Title V permit application to the proper Clean Air Act authority (in most cases, the State) by May 15, 2002. As of April 2002, EPA recognized that approximately 60 source categories and subcategories would be affected by the MACT hammer. Responding to industry concern, the EPA published a final rule in April 2002 that eased the permit application burden to some extent. 67 Fed. Reg. 16582 (April 5, 2002). The final rule provided that facilities subject to the MACT hammer would be required to submit a Title V permit application in two parts – Part 1 by May 15, 2002, and Part 2 by no later than 2 years after submission of Part 1. Part 1 required limited, identifying information regarding the source. Part 2 requires more detailed information regarding the identity and emission rate of HAPs emitted Kirkpatrick & Lockhart LLP by the source, control technology in place at each emission point, relevant information to establishing the MACT floor, and any existing limitations (Federal, State or local) applicable to the source. Alleging that EPA’s decision to grant a two-year extension to sources subject to the MACT hammer was impermissible, the Sierra Club filed suit in the District of Columbia Circuit. Sierra Club v. U.S. EPA, No. 02-1135 (D.C. Cir. 2002). After successful negotiations, the parties proposed a settlement agreement to the Court of Appeals by which the Part 2 application deadline would be accelerated, to as soon as May 15, 2003. See http:// www.epa.gov/airlinks/112j.html (text of proposed settlement agreement). The settlement agreement was published as a proposed rule on December 9, 2002, 67 Fed. Reg. 72875, for which a public comment period was open until January 20, 2003. As part of the settlement agreement, however, EPA agreed to publish a final rule by April 27, 2003. EPA reviewed the numerous comments received on the proposed rule and published the final rule on May 30, 2003. 68 Fed. Reg. 32586 – 32603 (May 30, 2003). The final rule provides that facilities subject to the Part 2 permitting requirement (i.e., subject to MACT and required to submit Part 1 in 2002) will be responsible for submitting Part 2 of the application by a set of rolling dates dependent upon the source category into which the facility falls. Under the rule, 12 source categories face an October 30, 2003 deadline; four categories face an April 28, 2004 deadline; and two categories face an August 13, 2005 deadline. Those source categories are listed in the table below. It is important to note that the applicability to certain source categories and the deadlines have significantly changed from the proposed rule, in large part because many MACTs were established for source categories between the proposed and final rule, making a Part 2 application for these sources unnecessary. 2 In a previous suit brought by the Sierra Club challenging the failure of EPA to promulgate MACT standards by the May 15, 2002 deadline, EPA and the Sierra Club reached an agreement by which a schedule for promulgating the MACT standards still lacking was established. Sierra Club v. Whitman, 01-1337 (D.D.C.). The proposed dates for the Part 2 applications were established to parallel these dates, such that a facility would not be required to submit an expensive and time-consuming Part 2 application that would subsequently be defunct because a final, applicable MACT rule was promulgated during the review period of the Part 2 application. The final rule specifically provides that once a final MACT standard has been promulgated, a facility is no longer required to submit the Part 2 application. 68 Fed. Reg. 32586, 32593. Indeed, several of the source categories listed in the settlement agreement have already been the subject of a final MACT rule, and thus it is unnecessary for these sources to submit Part 2 applications.1 In addition, all of the categories and subcategories that lacked a NESHAP as of May 15, 2002 (and thus became the subject of the settlement) now have a proposed NESHAP.2 It is crucial to note that source categories, while currently the subject of proposed rules establishing NESHAPs, remain subject to the MACT hammer unless and until a final rule is promulgated. SOURCE CATEGORIES AND SUBCATEGORIES SUBJECT TO PART II ACCELERATION (AS LISTED IN 40 C.F.R. PART 63, SUBPART B) October 30, 2003 Combustion Turbines Lime Manufacturing Site Remediation Iron and Steel Foundries Taconite Iron Ore Processing Miscellaneous Organic Chemical Manufacturing Manufacture of Paints, Coatings, and Adhesives Alkyd Resins Production Maleic Anhydride Copolymers Production Polyester Resins Production 1 These sources include Municipal Solid Waste Landfills, Paper & Other Webs (Surface Coating), Flexible Polyurethane Foam Fabrication Operations, Coke Ovens: Pushing, Quenching and Battery Stacks, Reinforced Plastic Composite Production, Semiconductor Manufacturing, Refractories Manufacturing, Clay Products Manufacturing, Brick and Structural Clay Products Manufacturing, Clay Ceramics Manufacturing, Asphalt Roofing Manufacturing, Asphalt Processing, Integrated Iron and Steel Manufacturing, Hydrochloric Acid Production and Fumed Silica, Engine Test Facilities and Rocket Testing Facilities, Metal Furniture (Surface Coating), Printing, Coating and Dyeing of Fabrics, and Wood Building Products (Surface Coating). 2 For Federal Register citations and other information pertaining to the proposed rule for each source category, see EPA’s air toxics website at http://www.epa.gov/ttn/atw/mactprop.html. KIRKPATRICK & LOCKHART LLP ENVIRONMENTAL ALERT Polymerized Vinylidene Chloride Production Polymethyl Methacrylate Resins Production Polyvinyl Acetate Emulsions Production Polyvinyl Alcohol Production Polyvinyl Butyral Production Ammonium Sulfate Production – Caprolactam By-Product Plants Quaternary Ammonium Compounds Production Benzyltrimethylammonium Chloride Production Carbonyl Sulfide Production Chelating Agents Production Chlorinated Paraffins Production Photographic Chemicals Production Phthalate Plasticizers Production Rubber Chemicals Manufacturing Symmetrical Tetrachloropyridine Production Ethylidene Norbornene Production Explosives Production Hydrazine Production OBPA/1,3 – Diisocyanate Production Organic Liquids Distribution Primary Magnesium Refining Metal Can (Surface Coating) Plastic Parts and Products (Surface Coating) Chlorine Production Miscellaneous Metal Parts and Products Surface Coating Asphalt / Coal Tar Application – Metal Pipes April 28, 2004 Industrial Boilers, Institutional / Commerical Boilers and Process Heaters (that burn no hazardous waste). Plywood and Composite Wood Products Reciprocating Internal Combustion Engines Auto and Light-Duty Truck (Surface Coating) August 13, 2005 Industrial Boilers, Institutional / Commerical Boilers and Process Heaters (that burn hazardous waste). Hydrochloric Acid Production WHAT HAPPENS NEXT: AN APPROPRIATE COURSE OF ACTION WHEN THE MACT HAMMER IS APPLICABLE 1. Determine your facility’s source category and be aware that a final MACT standard may be promulgated before the Part 2 date applicable to your facility. As noted above, the Part 2 application due dates parallel the MACT standards promulgation schedule agreed to by JUNE 2002 the Sierra Club and EPA. As such, a final MACT standard may be promulgated prior to the Part 2 due date, obviating the time and expense involved in preparation of Part 2 of the application. Frequent monitoring of the individual MACT applicable is therefore recommended. The EPA has recognized that the time between the deadline for the promulgation of the MACT and the Part 2 due date is short (60 days), and thus will try to provide “prompt advance notice to affected sources and to permitting authorities” if the deadline will be missed and Part 2 applications are necessary. 2. Begin taking steps to collect the information necessary to complete Part 2 of the Application. Although EPA may promulgate a final MACT before the deadline for the Part 2 application, such action is not assured. In the final April 5, 2002 Rule, EPA noted that “compiling a Part 2 application for simple sources containing only a small number of emission points may not be particularly onerous, but the burden on more complex sources containing numerous sources and emission points could be significant.” 67 Fed. Reg. 16589 - 90 (April 5, 2002). For this reason, as the deadline approaches and if a MACT standard is not yet in place, it is wise to begin to collect information in anticipation of the necessity to complete Part 2. The Part 2 application requires the following information: ■ For new sources, the anticipated day of startup; ■ Identification of the HAPs emitted by each affected source in the relevant source category and an estimated total controlled and uncontrolled emission rate for each HAP; ■ Any existing Federal, State or local limitations or requirements applicatble to the affected source; ■ Identification of control technology in place for each affected emission point; ■ Any information relevant to establishing a MACT floor, and at the option of the source owner or operator, a recommended MACT floor; and ■ Any other information reasonably needed at the discretion of the permitting authority. Given the constant flux of the status of MACT rules, however, a facility’s appropriate course of action is subject to sudden changes. Kirkpatrick & Lockhart LLP 3. What if the facility has an Applicability Determination pending before EPA? Facilities that question whether a particular source category subject to the MACT applies to them can submit an “Applicability Determination” under 40 C.F.R. § 63.52(e)(2)(i) to EPA. That provision outlines a process by which the applicability of the source category to the facility will be made. For facilities potentially subject to the MACT hammer, facilities were permitted to file applicability determinations prior to the Part 1 deadline – May 15, 2002. If a facility filed such a determination, the Part II deadline was effectively deferred indefinetly. See 67 Fed. Reg. 72875, 72883 (Dec. 9, 2002). As a result, EPA has hundreds of such requests pending – both which “reflect a genuine uncertainty…[and those] which do not present genuine applicability issues.” days after EPA publishes a proposed MACT standard for the applicable category, whichever is later. 68 Fed. Reg. 32586, 32595; 40 C.F.R. § 63.52(e)(2). The new request must contain a discussion of the relation between the source in question and the applicability provision in the proposed MACT standard for the category or subcategory and an explanation of why there may still be uncertainties that require a determination of applicability. As mentioned above, it is crucial to closely monitor publication of the MACT standards as the Part 2 deadlines approach. EPA maintains a regularly-updated table of final and proposed rules on its Air Toxics Website,3 and more timely information can be found in the daily publication of the Federal Register. R. TIMOTHY WESTON, ESQ. tweston@kl.com 717.231.4504 For these reasons, EPA is requiring parties who previously submitted an Applicability Determination before May 15, 2002, and who still wish to pursue a determination, to resubmit and supplement the request by either July 29, 2003 (60 days after the date of the final rule) or within 60 3 TIFFANY M. CARTWRIGHT, ESQ. tcartwright@kl.com 717.231.4514 http://www.epa.gov/ttn/atw/mactfnl.html (final rules) and http://www.epa.gov/ttn/atw/mactprop.html (proposed rules). FOR MORE INFORMATION about this Alert or Kirkpatrick & Lockhart’s environmental practice, please contact the authors or one of the K&L office contacts below. You may also visit our website at www.kl.com. Roger C. Zehntner Boston 617.261.3149 rzehntner@kl.com Robert Everett Wolin Dallas 214.939.4909 rwolin@kl.com R. Timothy Weston Harrisburg 717.231.4504 tweston@kl.com Frederick J. Ufkes Los Angeles 310.552.5079 fufkes@kl.com Daniel A. Casey Miami 305.539.3324 dcasey@kl.com William H. Hyatt, Jr. Newark 973.848.4045 whyatt@kl.com Warren H. Colodner New York 212.536.3912 wcolodner@kl.com Richard W. Hosking Pittsburgh 412.355.8612 rhosking@kl.com Edward P. Sangster San Francisco 415.249.1028 esangster@kl.com Barry M. Hartman Washington 202.778.9338 bhartman@kl.com ® Kirkpatrick & Lockhart LLP Challenge us. ® www.kl.com BOSTON ■ DALLAS ■ HARRISBURG ■ LOS ANGELES ■ MIAMI ■ NEWARK ■ NEW YORK ■ PITTSBURGH ■ SAN FRANCISCO ■ WASHINGTON ......................................................................................................................................................... This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without&first consulting lawyer. KIRKPATRICK LOCKHART LLPaENVIRONMENTAL ALERT 4 © 2003 KIRKPATRICK & LOCKHART LLP. 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