LEGAL SESSION:
An Overview of Changes in
Environmental Regulations of Vessels –
Emission Control Areas, the Next Vessel General
Permit, Ballast Exchange and Ship Scrapping
Barry M. Hartman
K&L Gates LLP
202.778.9338
barry.hartman@klgates.com
21 March 2012
Copyright © 2011 by K&L Gates LLP. All rights reserved.
Clean Air Act
Greenhouse Gases
Air Emissions
Clean Water Act
VGP
National Invasive Species Act
Oil Pollution Act
Toxic Substances Control Act
Enforcement
1
Clean Air Act
Greenhouse Gases
 EPA has made formal finding of endangerment
under Clean Air Act with respect to GHG
 EPA has begun phasing-in consideration of GHG
emissions in new source review for large
stationary sources
 No discussion of vessels under this program yet,
but there will be
 Case challenging GHG endangerment finding
was argued two weeks ago.
2
Clean Air Act
Vessel Air Emissions
Designated Emissions Control Areas off U.S. Coast
 IMO designated U.S. Atlantic, Pacific, Gulf and
Hawaiian Coasts as Emission Control Areas under
MARPOL IV
 EPA will enforce fuel standards, which require yearover-year improvements
in NOx and sulfur
emissions
 July 2011 – Waters
around Puerto Rico and
the U.S. Virgin Islands
included as ECAs
3
Clean Air Act
Air Emissions from
Marine Tank Vessel Loading Operations
EPA Revised NESHAP for MTVL
 7/7/2010 – Suit by environmental groups settled by
consent decree
 EPA required to review standards for air emissions
from marine tank loading facilities
 10/21/2010 – EPA proposed broadening base of
applicability of the NESHAP to all facilities loading
more than 1 million bbl per year
 4/21/2011 – EPA issued Final Rule
4
Clean Water Act
Vessel General Permit 1.0
Legal challenge to VGP 1.0 rejected in part
 Held that agency could not rely on state notice and
comment procedures instead of federally required
APA procedures
 Concluded that agency had no power to reject state
conditions even if conflicting
 Did not decide if EPA should have done the
certification itself instead of allowing many states to
certify because issue was not raised during the
comment period
5
Clean Water Act
Vessel General Permit 2.0
 Draft VGP 2.0 issued on 11/30/2011
 Comments were due 2/21/2012
 Final VGP 2.0 expected on or about 11/30/2012
 Effective Date on or about 12/19/2013
6
VGP 2.0 – Plans for Renewal
 EPA proposed numeric standards to control the
release of non-indigenous invasive species in
ballast water discharges consistent with IMO limits
 Updated conditions for mechanical systems that
may leak lubricants and exhaust gas scrubber
washwater
 Proposed more stringent bilgewater discharge
requirements
 Proposed installation schedule for new technology
impossible to meet?
 Requires ballast water exchange and treatment
7
Vessel General Permit
Compliance and Enforcement





Coast Guard/EPA Memorandum of
Understanding
February 11, 2011
CG will incorporate VGP into existing
inspection protocols
EPA retains enforcement and inspection
authority
Shift from compliance/education to
enforcement regulators
CG enforcement of state rules
8
Clean Water Act
Marine Sanitation Devices
EPA Has Solicited Comment on MSD Performance
 MSDs are required on vessels under Section 312
of the CWA
 Environmental groups petitioned EPA to revise
performance standards for MSDs in April 2009
 Seeks updated standards, including monitoring
and reporting requirements
 7/12/2010 - EPA solicited comments on the
petition regarding revision of these standards
and “is reviewing and considering” the comments
9
Sewage Discharges off California Coast
 February 27, EPA
published the Final Rule
designating a No
Discharge Zone (NDZ) for
ocean-going vessels
extending three miles
from the California
coastline and covering all
California coastal waters
 The new rules and
applicable prohibition on
discharge will be effective
on March 28, 2012
10
National Invasive Species Act
(Coast Guard Ballast Water Treatment)
CG Ballast Water Discharge Standard
 This is separate from and in addition to the VGP
 Derives from authority under National Invasive
Species Act
 Bill (H.R. 2838) passed in House, no action in
Senate
 Would set ballast water discharge treatment
standards in line with IMO
 Would preempt state action
11
This Just In
March 16,2012 – CG Ballast Water discharge standard for
living organism
Requires treatment of ballast water in waters of the US to
international standards – IMO
Rejected imposing 1000x international standard
Does not apply to vessels operating exclusively in US waters
Docket USCG-2001-10486
Regulations.gov
12
Toxic Substances Control Act
PCB Remediation and Vessel Transactions
MarAd and EPA Arrangement Could Delay Sales
 Under informal agreement between MarAd and
EPA, MarAd informs EPA regional offices of
proposed foreign transfers of U.S.-flagged
vessels
 MarAd will not approve such transfers until EPA
is satisfied that PCBs are not present on vessel
 EPA requires rigorous inspecting/testing to
satisfy inquiry
 Only triggered for foreign flagged vessels
13
Wind Farms in Shipping Lanes
Mid-2012: Coast Guard to issue public findings of Port
Access Route Study (PARS) for the entire U.S. Atlantic
Coast (Maine to Florida)
 Purpose: determine how offshore wind energy installations may
be made compatible with safe and efficient navigation
 Revised proposed lease areas off of Maryland, Virginia,
Massachusetts, New Jersey, and Delaware to ensure that they do
not conflict with high-density commercial vessel traffic/ensure
adequate buffers
 Further modifications are likely to occur after the Coast Guard
PARS is published
14
According to one report, 25% of all
environmental criminal cases involve
vessels
15
2011 Vessel Cases (announced)
Puerto Rican-based Shipping Company Sentenced to Pay $700,000
Penalty for Intentional Cover-Up of Oil Pollution
German Shipping Company Sentenced in Puerto Rico to Pay
$800,000 Penalty for Intentional Cover-Up of Oil Pollution
Ship Owners and Operators to Pay $44 Million in Damages and
Penalties for 2007 San Francisco - Oakland Bay Bridge Crash and Oil
Spill
New Zealand Fishing Company Indicted for Environmental Crimes
and Obstruction of Justice
Greek Shipping Company, Master and Chief Engineer of M/V Agios
Emilianos Convicted for Intentional Cover-Up of Oil Pollution and
Obstruction of Justice
16
Lead Headline on DOJ website last week
17
Recent Enforcement Actions
 United States announced
civil complaint against BP
for Deepwater Horizon;
criminal investigation
continues
 Bill earmarks fines for use
in Gulf
 Civil enforcement case
still pending
 Criminal investigation
continues
18
Fallout from the Deepwater Horizon –
Legislative Action on OPA?
 Prior to 2010 election, Congress had been
debating raising cap under OPA90 and other
changes to oil spill prevention, response and
enforcement
 Election year politics makes legislation less likely
but not impossible
 National Oil Spill Commission recommendations
reported in January 2011 included lifting cap
 Hearings on Deepwater Horizon continue
19
Korean Shipping Company, Chief Engineer
and Assistant Engineer Convicted of
Environmental Crimes - January 11, 2012
 Keoje Marine Co. Ltd. and two
engineers
 Magic pipe/obstruction, October
2011
 $1.15 million fine
 Chief Engineer – 3 years
probation/banned
from US
 First Assistant - same
 Environmental Compliance Plan
 Independent monitor
20
Two Shipping Corporations Plead
Guilty/Sentenced - January 25, 2012
Efploia Shipping – technical manager of M/V Aquarosa
Aquarosa Shipping – owner of NEW vessel
 Obstruction of Justice/Environmental Crimes
 Discharges of waste oil and plastic garbage
 Implement government approved environmental plan
 Includes independent audits/review by a court
appointed monitor
 Each to pay $1.2 million, including $550,000 to benefit
Chesapeake Bay
21
Indictment – Another Magic Pipe Case
March 5, 2012
Bottiglieri Challenger, January 2012
 Chief engineer Vito La Forgia
 Alleged conspiracy/failure to maintain an accurate
oil record book
 Alleges obstruction of Coast Guard’s inspection by
ordering removal of alleged magic pipe prior the
vessel’s arrival in Mobile
 Alleges defendants obstructed the inspection by
having one of the waste tanks rinsed out with sea
water before reaching the port in Mobile
22
QUESTIONS?
Barry M. Hartman
K&L Gates LLP
barry.hartman@klgates.com
202.778.9338
Christine Jochim Boote
christine.boote@klgates.com
202.778.9222
http://www.klgates.com/barry-m-hartman/#bio582ba71f-6628-40ca-a5b7a428ba5a72c0
23
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 9, 2011
Decided July 22, 2011
No. 09-1001
LAKE CARRIERS' ASSOCIATION,
PETITIONER
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
CENTER FOR BIOLOGICAL DIVERSITY, ET AL.,
INTERVENORS
Consolidated with 09-1010, 09-1076, 09-1115
On Petitions for Review of a Final Action
of the Environmental Protection Agency
Barry M. Hartman argued the cause for petitioners. With
him on the briefs were Christopher R. Nestor and Shaun M.
Gehan. David E. Frulla entered an appearance.
Joel C. Mandelman was on the brief for amicus curiae
Nutech 03, Inc. in support of petitioners.
2
Martin F. McDermott, Attorney, U.S. Department of
Justice, argued the cause and filed the brief for respondents.
Deborah A. Sivas, Allison LaPlante, Daniel P. Mensher,
and Thomas Cmar were on the brief for intervenors Northwest
Environmental Advocates, et al. in support of respondents.
Eric T. Schneiderman, Attorney General, Office of the
Attorney General for the State of New York, Barbara D.
Underwood, Solicitor General, Monica B. Wagner, Assistant
Solicitor General, Lisa Burianek, Deputy Bureau Chief, Michael
Myers, Section Chief, Bill Schuette, Attorney General, Office of
the Attorney General for the State of Michigan, John J. Bursch,
Solicitor General, and Robert P. Reichel, Assistant Attorney
General, were on the brief for amici curiae States of New York
and Michigan.
Before: GARLAND and GRIFFITH, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed Per Curiam.
PER CURIAM: Trade associations representing commercial
ship owners and operators petition for review of a nationwide
permit issued by the Environmental Protection Agency (EPA)
for the discharge of pollutants incidental to the normal operation
of vessels. The petitioners raise a number of procedural
challenges, all related to EPA’s decision to incorporate into the
permit conditions that states submitted to protect their own
water quality. Because we find that the petitioners have not
shown that the additional procedures they request would have
had any effect on the final permit, we deny the petition for
review.
3
I
Section 301(a) of the Clean Water Act (CWA) prohibits
“the discharge of any pollutant by any person” into the waters of
the United States, except in compliance with the terms of the
Act. 33 U.S.C. § 1311(a). Section 402(a) provides one way in
which such discharges may take place without violating the
CWA. Under that section, EPA may issue a National Pollutant
Discharge Elimination System (NPDES) permit “for the
discharge of any pollutant . . . , notwithstanding section [301(a)]
. . . , upon condition that such discharge will meet . . . all
applicable requirements . . . of [the CWA].” Id. § 1342(a)(1).
EPA regulations explain that permits may be individual
(covering discharges from a single source, 40 C.F.R. § 122.21),
or general (covering “one or more categories or subcategories of
discharges . . . within a geographic area,” id. § 122.28(a)). Each
permit must set out the specific conditions necessary to ensure
that the permit holder’s discharge of pollution will comply with
the water standards mandated by the CWA. 33 U.S.C.
§ 1342(a)(2).
In conjunction with the permitting process, the CWA gives
states an express role in approving or barring discharges into
their navigable waters, and in setting out the conditions under
which such discharges may occur. Section 401 of the CWA
states that any applicant for a federal permit to conduct any
activity that “may result in any discharge into the navigable
waters, shall provide the . . . permitting agency a certification
from the State in which the discharge originates or will
originate . . . that any such discharge will comply with” national
and EPA-approved state water quality standards. 33 U.S.C.
§ 1341(a). The state must also set forth in its certification “any
effluent limitations and other limitations . . . necessary to
assure” that the permit holder “will comply” with CWA
standards “and with any other appropriate requirement of State
4
law.” Id. § 1341(d). These limitations “shall become a
condition” on any federal permit, id., and no “permit shall be
granted if certification has been denied,” id. § 1341(a).
The CWA defines “discharge of a pollutant” as, inter alia,
“any addition of any pollutant to navigable waters from any
point source.” 33 U.S.C. § 1362(12). A “point source” includes
a “vessel or floating craft,” id. § 1362(14), and “pollutant” is
defined to include “sewage from vessels,” id. § 1362(6). Thus,
discharges from vessels are regulated by the permitting and
certification scheme set out above.
Shortly after the CWA was enacted, EPA promulgated a
regulation exempting incidental vessel discharges from the
permitting (and therefore the certification) requirements of the
Act. Exempted discharges included “sewage from vessels,
effluent from properly functioning marine engines, laundry,
shower, and galley sink wastes, or any other discharge incidental
to the normal operation of a vessel.” 40 C.F.R. § 122.3(a). The
regulation was in force for more than thirty years. Then, in
2008, the Ninth Circuit affirmed a district court decision
vacating the regulation, finding that EPA lacked authority to
exempt incidental vessel discharges.
Northwest Envtl.
Advocates v. EPA, 537 F.3d 1006 (9th Cir. 2008). After a stay
to allow EPA time to implement a means of issuing permits for
vessel discharges, the regulation was finally vacated on
February 6, 2009.
In response to the Ninth Circuit’s decision, EPA developed
a general permit, pursuant to section 402 of the CWA, to cover
the incidental vessel discharges previously exempted by the
regulation. See Final National Pollutant Discharge Elimination
System (NPDES) General Permit for Discharges Incidental to
the Normal Operation of a Vessel, 73 Fed. Reg. 79,473 (Dec. 29,
5
2008).1 The agency estimated that the Vessel General Permit
(VGP) would cover discharges from approximately 61,000
domestic-flagged commercial vessels and 8,000 foreign-flagged
vessels. Id. at 79,481. And unlike the majority of permits
issued under section 402, which cover discharges originating in
only a single state, the VGP would cover discharges in
waterways throughout the United States.
EPA published a draft VGP on June 17, 2008, and
established a 45-day comment period. Draft NPDES General
Permits for Discharges Incidental to the Normal Operation of a
Vessel, 73 Fed. Reg. 34,296 (June 17, 2008). The draft permit
set out all of the general EPA-mandated conditions for vessel
discharges, and indicated that the agency was seeking
certifications from each of the states pursuant to section 401.
U.S. EPA, PROPOSED GENERAL PERMIT (2008), at 53 (J.A. 286);
see Draft NPDES General Permits, 73 Fed. Reg. at 34,302. The
draft permit did not, however, include any of the certification
conditions to be imposed by the states pursuant to section 401.
73 Fed. Reg. at 34,302.
EPA received more than 170 comments on the draft permit.
Many suggested that, because state water standards differ, the
state certifications might result in conflicting conditions being
attached to the permit, thus unduly hindering vessels seeking to
remain in compliance as they move between the waters of
1
Also in response to the Ninth Circuit’s decision, Congress
passed two acts that exempted small boats and recreational and
commercial fishing vessels from the CWA’s permitting requirements.
See Clean Boating Act of 2008, Pub. L. No. 110-288, 122 Stat. 2650
(exempting recreational vessels); Permits for Discharges from Certain
Vessels, Pub. L. No. 110-299, 122 Stat. 2995 (2008) (granting a twoyear exemption for vessels less than 79 feet long and all commercial
fishing vessels).
6
different states. Some comments suggested that a single
uniform standard was necessary to minimize the burden on
interstate commerce. EPA acknowledged these comments, but
responded that the statute required certifications by the states in
which the discharges would originate and mandated that EPA
attach to the permit any conditions the states deemed necessary
to meet their specific water quality standards. Therefore, EPA
concluded, it could neither evade the certification process nor
alter certification conditions imposed by the states. EPA
Response to Comments, at 14 (J.A. 1052-91).
Twenty five states, two tribes, and one territory certified the
draft VGP and attached state-specific conditions. (The other
states, with the exception of Alaska and Hawaii, either certified
without conditions or waived their right to certify.) On
December 19, 2008, EPA’s final VGP became effective. Final
NPDES General Permit, 73 Fed. Reg. at 79,474. Part VI of the
permit, which was not included in the draft VGP, is composed
of approximately 100 state certification conditions. U.S. EPA,
VESSEL GENERAL PERMIT (VGP) (2008), at 62-104 (J.A. 82567). Vessels covered by the permit are required to adhere to the
general provisions of the VGP with respect to all discharges, and
are further required to adhere to any Part VI certification
condition imposed by a state into the waters of which the vessel
is discharging pollutants.
In 2009, Lake Carriers’ Association, Canadian Shipowners
Association, and American Waterways Operators filed petitions
for review of the final VGP. The petitions were consolidated
into the single suit now before us. The trade associations raise
three challenges. First, they contend that EPA erred in failing to
provide notice and an opportunity for comment on the final
VGP, which contained the state certification conditions.
Second, they charge that it was arbitrary and capricious for EPA
to issue the permit without considering the possible ill-effects of
7
the state certification conditions. Finally, they allege that EPA
failed to consider the costs of compliance with state conditions
in assessing the impact of the permit on small businesses, as
required by the Regulatory Flexibility Act (RFA), 5 U.S.C.
§ 601 et seq.2 The standard of review for these challenges is
governed by the Administrative Procedure Act (APA), pursuant
to which we determine whether the agency’s actions were
“arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law,” 5 U.S.C. § 706(2)(A), and whether the
permit was promulgated “without observance of procedure
required by law,” id. § 706(2)(D). See Owner-Operator
Independent Drivers Ass’n, Inc. v. Fed. Motor Carrier Safety
Admin., 494 F.3d 188, 198 (D.C. Cir. 2007).
II
The petitioners’ primary contention is that EPA failed to
provide notice and an opportunity for comment before
promulgating the final permit, as required by the APA, 5 U.S.C.
§ 553. EPA did provide for notice and comment regarding the
draft VGP, but the petitioners argue that this was insufficient
because the draft contained only the general EPA-mandated
conditions for vessel discharges; it contained none of the more
than 100 state certification conditions that were appended to the
final permit. The petitioners allege that they were therefore
deprived of the opportunity to comment regarding the potential
conflicts and burdens created by the cumulative effects of the
state conditions.
2
The petitioners satisfy the requirements for associational
standing because at least one member of each association would have
standing to sue in its own right; the interests they seek to protect are
germane to their purpose; and neither the claim asserted nor the relief
requested requires that an individual member participate in this suit.
Sierra Club v. EPA, 292 F.3d 895, 898 (D.C. Cir. 2002).
8
A
EPA’s first response to this contention is that section 401(a)
of the CWA excuses it from providing an additional round of
notice and comment regarding state certification conditions.
Section 401(a) requires that a certifying state “shall establish
procedures for public notice . . . and, to the extent it deems
appropriate, procedures for public hearings” in connection with
certification applications. 33 U.S.C. § 1341(a). EPA maintains
that this statute-specific state review procedure supplants the
APA’s notice-and-comment requirements.
This argument is unpersuasive. The APA instructs that a
“[s]ubsequent statute may not be held to supersede or modify
[the APA’s requirements] . . . except to the extent that it does so
expressly.” 5 U.S.C. § 559. Accordingly, although an agency
is excused from § 553’s mandate when a subsequent statute
“plainly expresses a congressional intent to depart from normal
APA procedures.” Asiana Airlines v. FAA, 134 F.3d 393, 398
(D.C. Cir. 1998), “[w]e have looked askance at agencies’
attempts to avoid the standard notice and comment procedures,
holding that exceptions under § 553 must be ‘narrowly
construed and only reluctantly countenanced,’” id. at 396
(quoting New Jersey v. EPA, 626 F.3d 1038, 1045 (D.C. Cir.
1980)). We doubt that section 401’s requirement that states
provide for notice and comment regarding proposed conditions
constitutes the requisite “plain express[ion]” of congressional
intent to supersede the APA’s requirements.3
3
EPA also contends that the APA’s notice-and-comment
requirements do not apply to the Vessel General Permit because it is
not a rule. As the agency recognizes, this contention runs headlong
into our decision in National Ass’n of Home Builders v. U.S. Army
Corps of Engineers, in which we held that a nationwide permit issued
under a different provision of the CWA was a rule within the meaning
9
B
We do find persuasive, however, EPA’s argument that the
petitioners have failed to show that EPA has power to amend or
reject the state certifications at issue in this case, and have thus
failed to establish that additional opportunity for comment
would have served any purpose. Notably, the petitioners never
argued that the certifications failed to “compl[y] with the terms
of section 40l,” City of Tacoma v. FERC, 460 F.3d 53, 67 (D.C.
Cir. 2006), by overstepping the traditional bounds of state
authority to regulate interstate commerce. We therefore need
not consider whether EPA has authority to reject state conditions
under such circumstances. Instead, the petitioners contend that
providing for notice and comment would not be purposeless in
this case on two other grounds, neither of which is availing.
1. First, they maintain that “[t]he plain language of sections
401 and 502 of the CWA instruct[s] that a section 401
certification” for a permit covering mobile point sources with
discharges in multiple states must be made by the Administrator
of EPA instead of by the states. Reply Br. 13. For such a
permit, they contend, the Administrator may accept input from
affected states but is not bound to include state-specific
certification conditions. Pet’rs Br. 38. In support, the
petitioners cite a sentence in section 401(a)(1) that provides: “In
any case where a State or interstate agency has no authority to
give such a certification, such certification shall be from the
Administrator.” 33 U.S.C. § 1341(a)(1). They also note that
section 401 repeatedly uses the terms “state” and “certification”
in the singular. And they further cite section 401(a)(2), which,
although it establishes a procedure for dealing with cases in
of the APA. 417 F.3d 1272, 1284-85 (D.C. Cir. 2005). In light of the
conclusion we reach in the following paragraphs, we need not address
EPA’s efforts to distinguish that decision.
10
which “a discharge” originating in the waters of one state
“affect[s] . . . the quality of the waters of” another, does not give
section 401 certification authority to the affected state. Id. at
§ 1341(a)(2); see Pet’rs Br. 36-37.
The long answer to this argument would require an analysis
of the statutory language. EPA argues that the cited sentence
from section 401(a)(1) gives the Administrator power to certify
a permit when a state lacks authority to do so under its own law,
not where no single state can certify for multistate discharges.4
In any event, the agency continues, no single state does certify
for multistate discharges under the VGP. Each state’s
certification applies only to discharges in its own waters, and a
state does not lose authority to certify such a discharge simply
because a vessel moves and then discharges in another state as
well. Nor, the agency maintains, is the fact that section 401 is
written in the singular persuasive: The Dictionary Act states
that, “unless the context indicates otherwise -- words importing
the singular include and apply to several persons, parties, or
things.” 1 U.S.C. § 1. Finally, EPA notes, section 401(a)(2) is
not relevant to this question: It applies when a single point of
discharge in one state may affect the waters of another state
(when, for example, a pollutant is carried downstream across
4
Cf. United States v. Marathon Dev. Corp., 867 F.2d 96, 99101 (1st Cir. 1989) (rejecting a claim that section 401(a)’s
certification requirement “applies only to individual permits, not
to general [nationwide] permits,” and holding that a Corps of
Engineers nationwide permit was inapplicable to discharges in
Massachusetts because the state had denied the requisite
certification); id. at 99-100 (finding that “Congress intended to
give the states veto power over the grant of federal permit
authority for activities potentially affecting a state’s water
quality”).
11
state lines), not when a vessel makes repeated discharges into
the waters of several states.
But there is a short answer to the petitioners’ textual
argument: they did not make it before the agency, and they have
therefore waived it. The petitioners’ comments on the draft
VGP did not contain any of the textual arguments they now
raise. Although the petitioners are correct that “[m]any
commenters requested that EPA avoid the practical issues posed
by numerous state conditions through a single promulgation,”
Reply Br. 25, none offered an interpretation of section 401 that
would have permitted EPA to issue the certification in place of
the states. And as we said in Natural Resources Defense
Council v. EPA:
We have previously held that failure to raise a
particular question of statutory construction before an
agency constitutes waiver of the argument in court.
See, e.g., Ohio v. EPA, 997 F.2d 1520, 1528 (D.C. Cir.
1993); Linemaster Switch Corp. v. EPA, 938 F.2d
1299, 1308 (D.C. Cir. 1991). In those cases, the parties
were not saved by the fact that they had made other
“technical, policy, or legal” arguments before the
agency.
25 F.3d 1063, 1074 (D.C. Cir. 1994); see Orion Reserves Ltd.
Partnership v. Salazar, 553 F.3d 697, 707 (D.C. Cir. 2009);
Nevada v. Dep’t of Energy, 457 F.3d 78, 88 (D.C. Cir. 2006);
Nat’l Mining Ass’n v. Dep’t of Labor, 292 F.3d 849, 874 (D.C.
Cir. 2002).
2. The petitioners also argue that providing notice and an
opportunity for comment would not have been “pointless”
because “there are at least two ways that the state conditions,
when considered together, create significant constitutional issues
12
that EPA failed to consider prior to issuing the VGP.” Reply Br.
9, 11. “First, the VGP appears to require that some regulated
entities violate one provision of the permit in order to comply
with another, a conundrum prohibited by fundamental principles
of due process.” Pet’rs Br. 46. Second, the petitioners contend
that the VGP may raise a problem under the “dormant
Commerce Clause[,] [which] prohibits states from adopting laws
that unduly burden interstate commerce.” Id. at 47 (citing
Kassel v. Consol. Freightways, 450 U.S. 662, 678 (1981)).
We are uncertain about exactly what the petitioners are
arguing here. They do not contend that the CWA itself is
unconstitutional, even as EPA construes it. Nor do they argue
on this appeal that the VGP is unconstitutional, even as EPA has
promulgated it.5
5
We recognize that the petitioners are attempting to chart a
difficult course on this appeal, which may account for the
awkwardness of some of their arguments. As they explain in their
brief, once the Ninth Circuit vacated the exemption for discharges
incidental to the normal operation of vessels, such discharges “became
subject to the discharge prohibition of section 301(a) of the CWA, 33
U.S.C. § 1311(a), unless covered under an NPDES permit.” Pet’rs Br.
7. If EPA had “chose[n] not to create a permit system at all, these
discharges, some of which inevitably occur . . . , would be illegal in
their entirety under the CWA[,] . . .[and] shipping and other marine
transportation would have come to a complete halt.” Id. at 7-8. To
avert such an outcome, “EPA decided to propose a nationwide general
NPDES permit program for incidental vessel discharges,” rather than
utilizing vessel-by-vessel or state-by-state permits. Id. at 8. The
advantage of a nationwide permit for companies that operate in
multiple states is obvious, and may explain why the “[p]etitioners are
not at this time challenging EPA’s use of a CWA nationwide general
permit,” but instead “focus on the procedure followed by EPA in
issuing the VGP.” Id. at 34 n.14.
13
As to the due process contention, the petitioners are careful
throughout to say only that it “might be impossible to comply
with one [state’s] condition without violating another,” Pet’rs
Br. 18 (emphasis added), not that it is impossible.6 But without
an inconsistency that makes it literally impossible to adhere to
one state’s requirements without breaching another’s, it is hard
to detect a due process violation on the face of the VGP.7
Indeed, it is hard to imagine how an inconsistency of such
magnitude could ever arise, given that “the state-specific
conditions” in the VGP only “apply in the waters of the state
that provided the conditions.” EPA Response to Comments, at
14-2 (J.A.1053).
As to the dormant Commerce Clause, the petitioners claim
only that “[a]llowing the specter of multiple states imposing
differing requirements on vessels that move through their
respective waters creates a . . . potentially impermissible[]
burden on commerce.” Pet’rs Br. 22 (emphasis added). We
note that even the italicized caveat is understated. Dormant
Commerce Clause doctrine applies only to burdens created by
state law. See, e.g., Kassel, 450 U.S. at 678. At issue here is a
federal statute, the CWA, and a federal regulation, the VGP. It
is true, as the petitioners observe, that Wyoming v. Oklahoma
6
See also Pet’rs Br. 18 (asserting that the “requirements added to
the final VGP contain potentially conflicting requirements” (emphasis
added)); id. at 45 (stating that the final VGP requirements are
“potentially inconsistent” (emphasis added)); id. at 46 (observing that
“the VGP appears to require that some regulated entities violate one
provision of the permit in order to comply with another” (emphasis
added)).
7
EPA, the intervenors, and the state amici vigorously dispute the
claim that Part VI of the VGP contains any such “‘impossible’
compliance dilemmas.” EPA Br. 43; see Intervenors’ Br. 37-38;
States of New York and Michigan Amicus Br. 27-30.
14
held that it takes an “unambiguous” expression of intent for
Congress to authorize a state to burden interstate commerce in
a way that would otherwise transgress the dormant Commerce
Clause. 502 U.S. 437, 458 (1992). But in Wyoming it was a
state law that was challenged, and the question was whether a
federal statute had authorized it. Here, it is a federal regulation
that is at issue.8 The CWA does not merely authorize state
certifications; it incorporates those certifications into federal
law. See Reply Br. 12 (acknowledging that, when the conditions
attached by each state “are aggregated in the final VGP[,] [they]
become federal requirements”); cf. Arkansas v. Oklahoma, 503
U.S. 91, 110 (1992).
Some passages in the petitioners’ brief suggest that they
may be making a “constitutional avoidance” argument,
contending that EPA must “construe and apply section 401 in a
manner” that avoids “creat[ing] significant constitutional
issues.” Pet’rs Br. 45-46 (citing, e.g., Edward J. DeBartolo v.
Fl. Gulf Coast Bldg. Constr. Trades Council, 485 U.S. 568, 57475 (1988)). But that canon comes into play only when a
contrary construction would raise “grave and doubtful
constitutional questions.” Rust v. Sullivan, 500 U.S. 173, 1908
In addition, the state statute at issue in Wyoming violated the
dormant Commerce Clause not simply by unduly burdening interstate
commerce, as is claimed here, but by discriminating against it. 502
U.S. at 458. The Supreme Court scrutinizes statutes of the latter kind
far more strictly than those of the former, id. at 454-55 & n.12, and
there are suggestions in Wyoming that the “unambiguous” expression
test was only intended for the latter, see id. (declaring that “Oklahoma
has not met its burden of demonstrating a clear and unambiguous
intent on behalf of Congress to permit the discrimination against
interstate commerce occurring here,” and that “Congress must
manifest its unambiguous intent before a federal statute will be read
to permit . . . such a violation of the Commerce Clause as Oklahoma
here seeks to justify” (emphases added)).
15
91 (1991). It has no applicability in a case like this one, in
which “there is nothing to avoid” from a constitutional
perspective. Cablevision Sys. Corp. v. FCC, No. 10-1062, 2011
WL 2277217, at *11 (D.C. Cir. June 10, 2011).
Perhaps the petitioners mean only to argue that EPA should
have construed section 401 so as to avoid creating
inconsistencies and burdens, even if such problems do not rise
to the constitutional level. But if that is what the petitioners
mean, they do not say so. More important, they do not point to
any text that could be construed to this end. The only text to
which they advert in this portion of their brief is section 101 of
the CWA, which states that the policy of the statute is to
“recognize, preserve, and protect the primary responsibilities
and rights of States to prevent, reduce, and eliminate pollution.”
33 U.S.C. § 1251(b). From this they infer that “section 401’s
certification process is designed to preserve state authority, not
to expand it.” Pet’rs Br. 48 (internal quotation marks omitted).
Whatever the validity of that inference, it still does not explain
how the text of section 401 might be read to permit EPA to alter
state certifications. Cf. Am. Trucking Ass’n v. EPA, 600 F.3d
624, 628 (D.C. Cir. 2010) (rejecting a challenge to EPA’s
approval of California vehicle standards because the petitioners
were “seeking improperly to engraft a type of constitutional
Commerce Clause analysis onto EPA’s . . . decision[] that is
neither present in nor authorized by the statute” (internal
quotation marks omitted)).9
9
In a footnote to their reply brief, the petitioners observe that
section 103 of the CWA tasks EPA to “‘encourage the enactment of
improved and, so far as practicable, uniform State laws relating to the
prevention, reduction and elimination of pollution.’” Reply Br. 13 n.5
(quoting 33 U.S.C. § 1253). The petitioners acknowledge that they
did not mention this provision in their comments during the
rulemaking, Oral Arg. Recording at 47:37, and, in any event,
16
Before concluding this Subpart, we note that EPA’s
resolution of this matter does not leave the petitioners without
recourse. If they believe that the certification conditions
imposed by any particular state pose an inordinate burden on
their operations, they may challenge those conditions in that
state’s courts. See Roosevelt Campobello Int’l Park Comm’n v.
EPA, 684 F.2d 1041, 1056 (1st Cir. 1982) (noting that “the
courts have consistently agreed . . . that the proper forum to
review the appropriateness of a state’s certification is the state
court”); see also City of Tacoma, 460 F.3d at 67. If they believe
that a particular state’s law imposes an unconstitutional burden
on interstate commerce, they may challenge that law in federal
(or state) court. See Am. Trucking Ass’n, 600 F.3d at 628 n.1.
And if neither of these avenues proves adequate, they are free to
ask Congress to amend the CWA, perhaps by reimposing the
exemption for incidental vessel discharges. See supra note 1
(noting that, in response to the Ninth Circuit’s decision vacating
the exemption, Congress passed two acts that exempted small
boats and recreational and commercial fishing vessels from the
CWA’s permitting requirements).
C
In sum, given the case law and the arguments that EPA had
before it, the agency correctly concluded that it did “not have the
ability to amend or reject conditions in a [state’s] CWA 401
certification.” EPA Response to Comments, at 14-11 to 14-12
(J.A. 1062-63) (citing Am. Rivers, Inc. v. FERC, 129 F.3d 99,
107, 110-11 (2d Cir. 1997)). Under those circumstances,
providing notice and an opportunity for comment on the state
arguments not raised until the reply brief are waived, see United States
v. $6,976,934.65, Plus Interest, 554 F.3d 123, 133 n.4 (D.C. Cir.
2009).
17
certifications would have served no purpose, and we decline to
remand to require EPA to do a futile thing.10
III
The petitioners’ remaining arguments fail for the same
reason that their notice-and-comment argument fails.
1. The petitioners maintain that EPA acted arbitrarily and
capriciously by not properly considering comments it received
regarding the draft permit. It is true that an agency acts
arbitrarily and capriciously when it “fail[s] to consider an
important aspect of the problem.” Motor Vehicle Mfrs. Ass’n v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). And it
is also true that “the opportunity to comment is meaningless
10
See Hispanic Info. & Telecomm. Network, Inc. v. FCC, 865 F.2d
1289, 1294 (D.C. Cir. 1989) (declining to require additional
administrative procedures when “it would be a pointless formality in
which the result was preordained”); Metzenbaum v. FERC, 675 F.2d
1282, 1291 (D.C. Cir. 1982) (refusing to require notice-and-comment
review of “nondiscretionary acts,” as such review “was ‘unnecessary,’
and . . . a futile gesture”); see also Nat’l Ass’n of Home Builders v.
Defenders of Wildlife, 551 U.S. 644, 659-60 (2007) (declining to
remand where the alleged error “could have had no effect on the
underlying agency action”); PDK Labs. Inc. v. U.S. DEA, 362 F.3d
786, 799 (D.C. Cir. 2004) (noting that, “[i]f the agency’s mistake did
not affect the outcome, . . . it would be senseless to vacate and remand
for reconsideration”); City of Waukesha v. EPA, 320 F.3d 228, 246
(D.C. Cir. 2003) (noting that, “[t]he APA requires petitioners to show
prejudice from an agency procedural violation,” and that “[i]n making
such a showing in the context of a violation of notice-and-comment
requirements, petitioners may be required to demonstrate that, had
proper notice been provided, they would have submitted additional,
different comments that could have invalidated the rationale” for the
rule).
18
unless the agency responds to significant points raised by the
public.” Home Box Office, Inc. v. FCC, 567 F.2d 9, 35-36 (D.C.
Cir. 1977).
The comments that the petitioners allege the agency ignored
concerned “the prospect that [varying state certification]
requirements would be likely to present serious problems” for
vessel operators moving from state to state. Pet’rs Br. 39. EPA
did not, however, fail to respond to those comments. To the
contrary, it told the commenters the same thing it has told this
court: that under the CWA, “it is not possible to have a ‘single
nationwide system’ that does not accommodate the states’
ability to include state-specific requirements to implement their
own water quality standards and requirements.” EPA Response
to Comments, at 14-5 (J.A. 1056); see also id. at 14-3 to 14-6
(J.A. 1053-57). Because on this record, EPA was correct in its
assertion that it lacked authority to alter or reject certification
conditions even if they presented difficulties for the operators,
see supra Part II, further consideration or response was
unnecessary. Cf. City of Portland v. EPA, 507 F.3d 706, 714-15
(D.C. Cir. 2007) (holding that an agency has no obligation to
respond to comments that are “incapable of affecting the final
rule”).11
11
The petitioners also argue that “EPA’s failure to consider . . .
the resulting patchwork created by the varying section 401
requirements, run[s] afoul of the uniformity principles of federal
maritime law that trace their roots to Medieval times and the Laws of
Oleron.” Pet’rs Br. 42. But EPA responded to this argument as well,
noting that “it is well established that a federal agency does not have
the ability to amend or reject conditions in a [state’s] CWA 401
certification,” and that CWA § 401 “expressly grants States . . . the
right to add conditions to federally issued NPDES permits as
necessary to assure compliance with state water quality standards.”
EPA Response to Comments, at 14-11 to 14-12 (J.A. 1062-63). The
chief case upon which the petitioners rely, United States v. Locke, 529
19
The petitioners further contend that EPA’s failure to address
the commenters’ concerns was arbitrary in light of “the agency’s
own earlier, express acknowledgment that if such discharges
were subject to the NPDES permit program, ‘every vessel
engaged in interstate commerce would be required to apply for
and obtain a different, and potentially conflicting, NPDES
permit for each of the various State waters through which they
travel.’” Pet’rs Br. 39 (quoting EPA Decision on Petition for
Rulemaking to Repeal 40 C.F.R. 122.3(a), at 12 (Sept. 2, 2003)
(J.A. 179)). But EPA made that earlier acknowledgment in the
course of explaining its 2003 decision to deny a petition to
repeal the exemption for discharges incidental to the normal
operation of a vessel. EPA said it was denying the petition
because it thought -- just as it thinks now -- that “[t]here is no
provision under the CWA that would enable EPA to issue any
type of general permit to establish consistent, nationwide
standards for vessels in State waters.” EPA Decision on Petition
for Rulemaking to Repeal 40 C.F.R. 122.3(a), at 12. As we
discussed in Part I, the Ninth Circuit struck that exemption down
in 2008, and the petitioners do not challenge the Ninth Circuit’s
decision here.
2. Finally, the petitioners assert that EPA acted arbitrarily
and capriciously with respect to the analysis it conducted
pursuant to the Regulatory Flexibility Act, 5 U.S.C. § 601 et seq.
To conform with the requirements of that Act, EPA certified that
the VGP “is not likely to have a significant economic impact on
a substantial number of small entities.” 73 Fed. Reg at 79,481;
see 5 U.S.C. § 605. The petitioners contend that EPA’s
regulatory flexibility analysis was arbitrary and capricious in
U.S. 89 (2000), holds only that state laws may be preempted by
comprehensive federal maritime regulation. As EPA pointed out, the
restrictions that the petitioners challenge here are the consequence of
a federal law -- the CWA.
20
failing to consider the costs of complying with the state
conditions that the final VGP would impose.
It is true that EPA’s economic analysis did not consider the
costs of complying with state conditions. See EPA Br. 59-60
(articulating EPA’s understanding that it was not necessary to
consider those costs). But the petitioners did not object to that
omission below, notwithstanding that it was clear from the
analysis that accompanied the draft VGP that EPA did not plan
to consider such costs. Although some comments did urge that
“the Economic and Benefits Analysis upon which EPA relies
contains serious flaws,” the flaws enumerated in those
comments did not include the failure to consider the costs of
state certification conditions. Chamber of Shipping and
INTERTANKO Comments, at 36 (J.A. 687).12 Accordingly,
this objection is waived. See, e.g., Military Toxics Project v.
EPA, 146 F.3d 948, 956 (D.C. Cir. 1998).
IV
Because the petitioners have failed to establish that EPA
can alter or reject state certification conditions, the additional
agency procedures they demand would not have afforded them
the relief they seek. The petition for review is therefore
Denied.
12
See id. at 24-26 (J.A. 675-77) (articulating defects in EPA’s
analysis of the costs of particular EPA-imposed permit conditions, but
making no mention of state certification requirements); Lake Carriers’
Association Comments, at 5 (J.A. 713) (objecting to EPA’s
determination of the cost of compliance with the Best Management
Practices provision of the draft VGP, but not suggesting that EPA
must factor the costs of state certifications into the analysis).
22566
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 63
[EPA-HQ-OAR -2010-0600; FRL-9291-3]
RIN 2060-AO91
National Emission Standards for
Hazardous Air Pollutant Emissions:
Group I Polymers and Resins; Marine
Tank Vessel Loading Operations;
Pharmaceuticals Production; and the
Printing and Publishing Industry
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
EPA is taking final action for
four national emission standards for
hazardous air pollutants (NESHAP) that
regulate 12 industrial source categories
evaluated in our risk and technology
review. The four NESHAP include:
National Emissions Standards for Group
I Polymers and Resins (Butyl Rubber
Production, Epichlorohydrin Elastomers
Production, Ethylene Propylene Rubber
Production, HypalonTM Production,
Neoprene Production, Nitrile Butadiene
Rubber Production, Polybutadiene
Rubber Production, Polysulfide Rubber
Production, and Styrene Butadiene
Rubber and Latex Production); Marine
Tank Vessel Loading Operations;
Pharmaceuticals Production; and The
Printing and Publishing Industry.
For some source categories, EPA is
finalizing our decisions concerning the
residual risk and technology reviews.
SUMMARY:
TABLE
For the Marine Tank Vessel Loading
Operations NESHAP and the Group I
Polymers and Resins NESHAP, EPA is
finalizing emission standards to address
certain emission sources not previously
regulated under the NESHAP. EPA is
also finalizing changes to the
Pharmaceuticals Production NESHAP to
correct an editorial error. For each of the
four NESHAP, EPA is finalizing
revisions to the regulatory provisions
related to emissions during periods of
startup, shutdown, and malfunction and
promulgating provisions addressing
electronic submission of emission test
results.
DATES: This final action is effective on
April 21, 2011.
ADDRESSES: EPA has established a
docket for this action under Docket ID
No. EPA-HQ-OAR-2010-0600. All
documents in the docket are listed on
the http://www.regulations.gov Web
site. Although listed in the index, some
information is not publicly available,
e.g., confidential business information
(CBI) or other information whose
disclosure is restricted by statute.
Certain other material, such as
copyrighted material, is not placed on
the Internet, and will be publicly
available only in hard copy form.
Publicly available docket materials are
available either electronically through
http:// www.regulations.gov , or in hard
copy at the EPA Docket Center, EPA
West Building, Room Number 3334,
1301 Constitution Ave., NW.,
Washington, DC. The Public Reading
OECA contact 1
Group I Polymers and Resins ............................
Marcia
For
specific information regarding the
modeling methodology, contact Ms.
Elaine Manning, Office of Air Quality
Planning and Standards, Health and
Environmental Impacts Division, Air
Toxics Assessment Group (C539-02),
U.S. Environmental Protection Agency,
Research Triangle Park, NC 27711;
telephone number: (919) 541-5499; fax
number: (919) 541-0840; and e-mail
address: manning.elaine@epa.gov. For
information about the applicability of
these four NESHAP to a particular
entity, contact the appropriate person
listed in Table 1 to this preamble.
SUPPLEMENTARY INFORMATION:
Mia
OAQPS contact 2
(202)
564-7042,
mia.marcia @epa.gov.
Marine Tank Vessel Loading Operations ...........
Maria
Malave,
Pharmaceuticals Production ...............................
Marcia
Mia,
(202)
564-7027,
Rafael
Sanchez,
Parsons,
(919)
541-5372,
par-
(202)
Steve
(919)
Shedd,
541-5397,
shedd.steve @epa.gov .
564-7042,
mia.marcia @epa.gov.
The Printing and Publishing Industry .................
Nick
sons.nick@epa.gov.
malave.maria @epa.gov.
Nick
Parsons,
(919)
541-5372,
par-
sons.nick@epa.gov.
(202)
564-7028,
sanchez.rafael@epa.gov.
1
FOR FURTHER INFORMATION CONTACT: For
questions about this final action, contact
Ms. Mary Tom Kissell, Office of Air
Quality Planning and Standards, Sector
Policies and Programs Division,
Refining and Chemicals Group (E14301), U.S. Environmental Protection
Agency, Research Triangle Park, NC
27711; telephone number: (919) 5414516; fax number: (919) 685-3219; and
e-mail address: kissell.mary@epa.gov .
For additional contact information, see
the following SUPPLEMENTARY
INFORMATION section.
1—LIST OF EPA CONTACTS FOR THE NESHAP ADDRESSED IN THIS ACTION
NESHAP for:
2
Room hours of operation are 8:30 a.m.
to 4:30 p.m. Eastern Standard Time
(EST), Monday through Friday. The
telephone number for the Public
Reading Room is (202) 566-1744, and
the telephone number for the Air and
Radiation Docket and Information
Center is (202) 566-1742.
David
Salman,
(919)
541-5402,
saiman. dave @epa.gov,
OECA stands for EPA's Office of Enforcement and Compliance Assurance.
OAQPS stands for EPA's Office of Air Quality Planning and Standards.
Background Information Document.
On October 21, 2010 (75 FR 65068), EPA
proposed revisions to six NESHAP that
regulate 16 industrial source categories
evaluated in our risk and technology
review. The six NESHAP and industrial
source categories are: National
Emissions Standards for Hazardous Air
Pollutant Emissions: Hard and
Decorative Chromium Electroplating
and Chromium Anodizing Tanks; Group
I Polymers and Resins; Marine Tank
Vessel Loading Operations;
Pharmaceuticals Production; The
Printing and Publishing Industry; and
Steel Pickling HCI Process Facilities
and Hydrochloric Acid Regeneration. In
this action, we are finalizing decisions
for four of these NESHAP—Group I
Polymers and Resins; Marine Tank
Vessel Loading Operations;
Pharmaceuticals Production; and The
Printing and Publishing Industry. We
will finalize our decisions for the Hard
and Decorative Chromium
Electroplating and Chromium
Anodizing Tanks NESHAP and the Steel
Pickling—HCI Process Facilities and
Hydrochloric Acid Regeneration in a
future rulemaking. 1 A summary of the
public comments on the proposal, and
EPA's responses to the comments, is
I We addressed two additional source categories
as part of this proposed rule, Hard and Decorative
Chromium Electroplating and Chromium Anodizing
Tanks and Steel Pickling—HC1 Process Facilities
and Hydrochloric Acid Regeneration, and we plan
to take final action on those two source categories
in June 2011.
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
available in Docket ID No. EPA–HQOAR-2010-0600.
Organization of This Document. The
following outline is provided to aid in
locating information in the preamble.
I. General Information
A. Does this action apply to me?
B. Where can I get a copy of this
document?
C. Judicial Review
II. Background
11I. Summary of the Final Rules
A. What are the final rule amendments for
the Group I Polymers and Resins source
categories?
B. What are the final rule amendments for
the Marine Tank Vessel Loading
Operations (MTVLO) source category?
C. What are the final rule amendments for
the Pharmaceuticals Production source
category?
D. What are the final rule amendments for
the Printing and Publishing Industry
source category?
E. What are the requirements during
periods of startup, shutdown, and
malfunction?
F. What are the requirements for
submission of emissions test results to
EPA?
G. What are the effective and compliance
dates of the standards?
IV. Summary of Significant Changes Since
Proposal
A. What changes did we make to the risk
assessments for these source categories
since proposal?
B. What changes did we make to the Group
I Polymers and Resins MACT since
proposal?
C. What changes did we make to the
Marine Tank Vessel Loading Operations
MACT since proposal?
V. Summary of Significant Comments and
Responses
A. EPA's Authority Under CAA Section
112
B. Group I Polymers and Resins
C. Marine Tank Vessel Loading Operations
D. Startup, Shutdown, and Malfunction
(SSM) Requirements
VI. Impacts of the Final Rules
VII. Statutory and Executive Order Reviews
A. Executive Orders 12866: Regulatory
Planning and Review, and Executive
Order 13563: Improving Regulation and
Regulatory Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
22567
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
G. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
H. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
1. National Technology Transfer and
Advancement Act
J. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
K. Congressional Review Act
A red-line version of the regulatory
language that incorporates the changes
in this action is available in the docket.
I. General Information
A. Does this action apply to me?
Regulated Entities. Categories and
entities potentially regulated by this
action include:
TABLE 2— NESHAP AND INDUSTRIAL SOURCE CATEGORIES AFFECTED BY THIS FINAL ACTION
NESHAP and source category
( NAICS 1 code
Group I Polymers and Resins:
Butyl Rubber Production ................................................................................................... ...............................
Epichlorohydrin Elastomers Production ............................................................................ ...............................
Ethylene Propylene Rubber Production ............................................................................ ...............................
HypalonTMProduction ....................................................................................................... ...............................
NeopreneProduction ......................................................................................................... ...............................
Nitrile Butadiene Rubber Production ................................................................................. ...............................
Polybutadiene Rubber Production ..................................................................................... ...............................
PolysulfideRubber Production .......................................................................................... ...............................
Styrene Butadiene Rubber and Latex Production ............................................................ ...............................
Marine Tank Vessel Loading Operations ................................................................................. ...............................
Pharmaceuticals Production ..................................................................................................... ...............................
The Printing and Publishing Industry ....................................................................................... ...............................
1
2
325212
325212
325212
325212
325212
325212
325212
325212
325212
4883
3254
32311
I
MACT 2 code
1307
1311
1313
1315
1320
1321
1325
1332
1339
0603
1201
0714
North American Industry Classification System.
Maximum Achievable Control Technology.
Table 2 is not intended to be
exhaustive, but rather provides a guide
for readers regarding entities likely to be
affected by the final action for the
source categories listed. To determine
whether your facility would be affected,
you should examine the applicability
criteria in the appropriate NESHAP. If
you have any questions regarding the
applicability of any of these NESHAP,
please contact the appropriate person
listed in Table 1 of this preamble in the
preceding FOR FURTHER INFORMATION
CONTACT section.
B. Where can I get a copy of this
document?
In addition to being available in the
docket, an electronic copy of this final
action will also be available on the
World Wide Web (www) through the
Technology Transfer Network (TTN).
Following signature, a copy of the final
action will be posted on the TTN's
policy and guidance page for newly
proposed and promulgated rules at the
following address: http://www.epa.gov/
ttn/atw/rrisk/rtrpg.html. The TTN
provides information and technology
exchange in various areas of air
pollution control.
Additional information is available on
the residual risk and technology review
(RTR) Web page at http://www.epa.gov/
ttn/atw/rrisk/rtrpg.html. This
information includes source category
descriptions and detailed emissions and
other data that were used as inputs to
the risk assessments.
C. Judicial Review
Under section 307(b)(1) of the Clean
Air Act (CAA), judicial review of this
final action is available only by filing a
petition for review in the United States
Court of Appeals for the District of
Columbia Circuit by June 20, 2011.
Under section 307(b)(2) of the CAA, the
requirements established by these final
rules may not be challenged separately
in any civil or criminal proceedings
brought by EPA to enforce the
requirements.
Section 307(d)(7)(B) of the CAA
further provides that "[o]nly an
objection to a rule or procedure which
was raised with reasonable specificity
during the period for public comment
(including any public hearing) may be
raised during judicial review." This
22568
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
section also provides a mechanism for
us to convene a proceeding for
reconsideration, "[i]f the person raising
an objection can demonstrate to EPA
that it was impracticable to raise such
objection within [the period for public
comment] or if the grounds for such
objection arose after the period for
public comment (but within the time
specified for judicial review) and if such
objection is of central relevance to the
outcome of the rule." Any person
seeking to make such a demonstration to
us should submit a Petition for
Reconsideration to the Office of the
Administrator, U.S. EPA, Room 3000,
Ariel Rios Building, 1200 Pennsylvania
Ave., NW., Washington, DC 20460, with
a copy to both the person(s) listed in the
preceding FOR FURTHER INFORMATION
CONTACT section, and the Associate
General Counsel for the Air and
Radiation Law Office, Office of General
Counsel (Mail Code 2344A), U.S. EPA,
1200 Pennsylvania Ave., NW.,
Washington, DC 20460.
II. Background
Section 112 of the CAA establishes a
two-stage regulatory process to address
emissions of hazardous air pollutants
(HAP) from stationary sources. In the
first stage, after EPA has identified
categories of sources emitting one or
more of the HAP listed in section 112(b)
of the CAA, section 112(d) calls for us
to promulgate NESHAP for those
sources. "Major sources" are those that
emit, or have the potential to emit, any
single HAP at a rate of 10 tons per year
(TPY) or more, or 25 TPY or more of any
combination of HAP. For major sources,
these technology-based standards must
reflect the maximum degree of emission
reductions of HAP achievable (after
considering cost, energy requirements,
and non-air quality health and
environmental impacts), and are
commonly referred to as maximum
achievable control technology (MACT)
standards.
For MACT standards, the statute
specifies certain minimum stringency
requirements, which are referred to as
floor requirements, and may not be
based on cost considerations. See CAA
section 112(d)(3). For new sources, the
MACT floor cannot be less stringent
than the emission control that is
achieved in practice by the best
controlled similar source. The MACT
standards for existing sources can be
less stringent than floors for new
sources, but they cannot be less
stringent than the average emission
limitation achieved by the bestperforming 12 percent of existing
sources in the category or subcategory
(or the best-performing five sources for
categories or subcategories with fewer
than 30 sources). In developing MACT,
we must also consider control options
that are more stringent than the floor,
under CAA section 112(d)(2). We may
establish standards more stringent than
the floor, based on the consideration of
the cost of achieving the emissions
reductions, any non-air quality health
and environmental impacts, and energy
requirements. In promulgating MACT
standards, CAA section 112(d)(2) directs
us to consider the application of
measures, processes, methods, systems,
or techniques that reduce the volume of
or eliminate HAP emissions through
process changes, substitution of
materials, or other modifications;
enclose systems or processes to
eliminate emissions; collect, capture, or
treat HAP when released from a process,
stack, storage, or fugitive emissions
point; and/or are design, equipment,
work practice, or operational standards.
In the second stage of the regulatory
process, we undertake two different
analyses, as required by the CAA:
Section 112(d)(6) of the CAA calls for us
to review these technology-based
standards, and to revise them "as
necessary (taking into account
developments in practices, processes,
and control technologies)" no less
frequently than every 8 years; and
within 8 years after promulgation of the
technology standards, CAA section
112(f) calls for us to evaluate the risk to
public health remaining after
application of the technology-based
standards and to revise the standards, if
necessary, to provide an ample margin
of safety to protect public health or to
prevent, taking into consideration costs,
energy, safety, and other relevant
factors, an adverse environmental effect.
In doing so, EPA may adopt standards
equal to existing MACT standards if
EPA determines that the existing
standards are sufficiently protective.
NRDCv. EPA, 529 F.3d 1077, 1083 (D.C.
Cir. 2008).
On October 21, 2010, EPA published
a proposed rule and supplemental
notice of proposed rulemaking in the
Federal Register for these four NESHAP
that took into consideration the RTR
analyses. For these NESHAP—Group I
Polymers and Resins, Marine Tank
Vessel Loading Operations,
Pharmaceuticals Production, and The
Printing and Publishing Industry—this
action provides EPA's final
determinations pursuant to the RTR
provisions of CAA section 112. In
addition, we are promulgating
amendments as follows:
• For the Marine Tank Vessel Loading
Operations NESHAP and Group I
Polymers and Resins NESHAP, pursuant
to CAA section 112(d)(2) and (3), EPA
is finalizing revisions to address certain
emission sources not currently regulated
under the standards.
• For the Pharmaceuticals Production
NESHAP, EPA is finalizing changes to
correct an editorial error.
• For each of the four NESHAP, EPA
is finalizing revisions to requirements in
each NESHAP related to emissions
during periods of startup, shutdown,
and malfunction (SSM).
• For each of the four NESHAP, EPA
is finalizing revisions to requirements in
each NESHAP related to electronic
reporting.
III. Summary of the Final Rules
A. What are the final rule amendments
for the Group I Polymers and Resins
source categories?
The National Emission Standards for
Hazardous Air Pollutant Emissions:
Group I Polymers and Resins were
promulgated on September 5, 1996
(62 FR 46925), and codified at 40 CFR
part 63, subpart U. The Group I
Polymers and Resins MACT standards
apply to major sources and regulate
HAP emissions from nine source
categories: Butyl Rubber Production,
Epichlorohydrin Elastomers Production,
Ethylene Propylene Rubber Production,
HypalonTM Production, Neoprene
Production, Nitrile Butadiene Rubber
(NBR) Production, Polybutadiene
Rubber Production, Polysulfide Rubber
Production, and Styrene Butadiene
Rubber and Latex Production.
The Group I Polymers and Resins
MACT standards regulate HAP
emissions resulting from the production
of elastomers (i.e., synthetic rubber). An
elastomer is a synthetic polymeric
material that can stretch to at least twice
its original length and then return
rapidly to approximately its original
length when released. Elastomers are
produced via a polymerization/
copolymerization process, in which
monomers undergo intermolecular
chemical bond formation to form a very
large polymer molecule. Generally, the
production of elastomers entails four
processes: (1) Raw material (i.e.,
solvent) storage and refining; (2)
polymer formation in a reactor (either
via the solution process, where
monomers are dissolved in an organic
solvent, or the emulsion process, where
monomers are dispersed in water using
a soap solution); (3) stripping and
material recovery; and (4) finishing (i.e.,
blending, aging, coagulation, washing,
and drying).
Sources of HAP emissions from
elastomers production include raw
material storage vessels, front-end
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
process vents, back-end process
operations, wastewater operations, and
equipment leaks. The "front-end"
processes include pre-polymerization,
reaction, stripping, and material
recovery operations; and the "back-end"
process includes all operations after
stripping (predominantly drying and
finishing). Typical control devices used
to reduce organic HAP emissions from
front-end process vents include flares,
incinerators, absorbers, carbon
adsorbers, and condensers. Emissions
from storage vessels are controlled by
floating roofs or by routing them to a
control device.
While emissions from back-end
process operations can be controlled
with control devices such as
incinerators, the most common method
of reducing these emissions is the
pollution prevention method of
reducing the amount of residual HAP
that is contained in the raw product
going to the back-end operations.
Emissions from wastewater are
controlled by a variety of methods,
including equipment modifications
(e.g., fixed roofs on storage vessels and
oil water separators; covers on surface
impoundments, containers, and drain
systems), treatment to remove the HAP
(steam stripping, biological treatment),
control devices, and work practices.
Emissions from equipment leaks are
typically reduced by leak detection and
repair work practice programs, and in
some cases, by equipment
modifications.
For these five Group I Polymers and
Resins 2 source categoriesEpichlorohydrin Elastomers Production;
HypalontM Production; Polybutadiene
Rubber Production; Styrene Butadiene
Rubber and Latex Production; and NBR
Production—we have determined that
the current MACT standards reduce risk
to an acceptable level, provide an ample
margin of safety to protect public health,
and prevent adverse environmental
effects. We are, therefore, re-adopting
the existing MACT standards to satisfy
section 112(f) of the CAA. We have also
determined that there have been no
significant developments in practices,
processes, or control technologies since
promulgation of the MACT standards,
and that, therefore, it is not necessary to
revise the MACT standard pursuant to
CAA section 112(d)(6). 3
2 We previously re-adopted the existing MACT
standards to satisfy section 112(f) of the CAA for
four Group I Polymers and Resins source
categories—Neoprene Rubber Production; Ethylene
Propylene Rubber Production; Butyl Rubber
Production; and Polysulfide Rubber Production. See
73 FR 76220, published December 16, 2008.
3 We note there are no longer any operating
facilities in the United States that produce
Hypalon'TM, and we do not anticipate that any will
begin operation in the future.
22569
We are eliminating the subcategories
in the Butyl Rubber source category
(Butyl Rubber and Halobutyl Rubber)
because the technical differences that
distinguished the subcategories when
the original rule was developed no
longer exist. The existing requirements
for facilities producing either butyl
rubber or halobutyl rubber as the
primary product are identical, and,
therefore, the removal of the
subcategory distinction does not affect
these requirements. The source category
remains named Butyl Rubber
Production. We are establishing
standards at the MACT floor level of
control for previously unregulated
hydrochloric acid (HCI) emissions from
front-end process vents in the Butyl
Rubber and Ethylene Propylene Rubber
source categories. We are also
establishing standards at the MACT
floor level of control for previously
unregulated back-end process
operations in the Epichlorohydrin
Elastomers, NBR, Neoprene, and Butyl
Rubber source categories.
The numerical emission standards
that are being finalized in this action for
new and existing major source facilities
in the Group 1 Polymers and Resins
source categories are shown in Table 3
of this preamble.
BILLING CODE 6560-50-P
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Table 3 - Numerical Emission Standards for Existing and New Major Source of HAP in Group 1
ii
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Polymers and Resins Source Categories
Process
Type
Front-end
process
vents
P&P. I Source
Category
Emissions Standard
Limit of Mg HC1 per Mg elastomer produced
Butyl Rubber
Production
(ffc
1, 7ib
7Qcc
Ethylene
Propylene
Rubber
Production
Back-end
process
operations
-
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Limit of Mg organic HAP per Mg elastomer produced
Butyl Rubber
Production
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Epichlorohydrin
Elastomers
Production
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Neoprene Rubber
Production
-
NBR Production
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Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
We are finalizing changes to the
Group I Polymers and Resins MACT
standards to eliminate the SSM
exemption. These changes revise Table
1 in 40 CFR part 63, subpart U to
indicate that several requirements of the
40 CFR part 63 General Provisions
related to periods of SSM do not apply.
We are adding provisions to the Group
I Polymers and Resins MACT standards
to operate in a manner that minimizes
emissions, removing the SSM plan
requirement, removing the explanation
of applicability of emissions standards
during periods of SSM, revising the
definition of initial start-up to remove
references to malfunctions, clarifying
the required conditions for performance
tests, and revising the SSM-associated
monitoring, recordkeeping, and
reporting requirements to require
reporting and recordkeeping for periods
of malfunction. We are also adding
provisions to provide an affirmative
defense against civil penalties for
exceedances of emission standards
caused by malfunctions, as well as
criteria for establishing the affirmative
defense.
We are also requiring the electronic
submittal of performance test data to
increase the ease and efficiency of data
submittal and to improve data
accessibility. Specifically, owners and
operators of Group I Polymers and
Resins facilities are required to submit
electronic copies of applicable reports of
performance tests to EPA's WebFIRE
database through an electronic
emissions test report structure called the
Electronic Reporting Tool (ERT). This
requirement to submit performance test
data electronically to EPA does not
require any additional performance
testing, and applies only to those
performance tests conducted using test
methods that are supported by the ERT.
We anticipate that the front-end
process vent limits will not require
additional control to meet the floor-level
standards for HCl emissions from frontend process operations at the facilities
in the Butyl Rubber and Ethylene
Propylene Rubber source categories. We
anticipate that facilities in the Butyl
Rubber, Epichlorohydrin Elastomers,
Neoprene Rubber, and NBR source
categories will not require additional
control to meet the floor-level standards
for the back-end process operations.
To demonstrate compliance with the
front-end process vent HCl emissions
provisions of the final rule, the facility
owner or operator will be required to
submit an initial notification of the
calculated front-end HCl limit for the
facility and to perform and record
monthly calculations of the mass of HCl
emissions and the mass of elastomer
product produced. These recorded
monthly calculations are required to be
submitted in the semi-annual
compliance reports already required by
existing provisions of the rule.
To demonstrate compliance with the
back-end process operation provisions
of the final rule, the facility owner or
operator will be required to submit an
initial notification of the calculated
back-end limit for the facility, and to
perform and record monthly
calculations of the mass of HAP
emissions and the mass of elastomer
product produced. These recorded
monthly calculations are required to be
submitted in the semi-annual
compliance reports already required by
existing provisions of the rule.
The final changes to the Group I
Polymers and Resins MACT standards
are not expected to result in substantial
emissions reduction or economic
impacts. We have determined that
facilities in the Group 1 Polymers and
Resins categories can meet the
applicable emissions limits at all times,
including periods of startup and
shutdown, with the exception of the
organic HAP emissions limits applicable
to front-end process vents at facilities in
the Butyl Rubber and Ethylene
Propylene Rubber source categories. We
have determined that facilities in the
Butyl Rubber and Ethylene Propylene
Rubber source categories cannot meet
the applicable organic HAP emission
limits applicable to continuous frontend process vents during periods of
shutdown. Therefore, we are
establishing alternative emissions limits
during these periods. No substantial
changes in costs to industry are
predicted.
B. What are the final rule amendments
for the Marine Tank Vessel Loading
Operations (MTVLO) source category?
MTVLO are loading operations
conducted at marine terminals in which
liquid commodities, such as crude oil,
gasoline, and other fuels or chemicals,
are pumped from the terminal's large,
above-ground storage tanks through a
network of pipes into a storage
compartment (tank) on the vessel.
Emissions occur as vapors are displaced
from the tank as it is being filled. Most
MTVLO facilities are either independent
terminals or are associated with
synthetic organic chemical
manufacturers or with petroleum
refineries (although MTVLO at
petroleum refineries are part of the
Petroleum Refinery source category).
For these MTVLO facilities, we have
determined that the current MACT
standards reduce risk to an acceptable
level, provide an ample margin of safety
22571
to protect public health, and prevent
adverse environmental effects. We are,
therefore, re-adopting the existing
MACT standards to satisfy section 112(f)
of the CAA. We have also determined
that the costs of the only significant
development in practices, processes, or
control technologies since promulgation
of the MACT standards is
disproportionate to the emission
reduction that would be achieved, and
we are not adopting additional
technology standards pursuant to CAA
section 112(d)(6).
We are finalizing changes to the
MTVLO MACT standards to require
standards for two subcategories of
MTVLO facilities for which the current
MTVLO MACT standards do not
include emission standards. These
subcategories are facilities with MTVLO
that emit less than 10/25 TPY of HAP
that are located at a major source of
HAP emissions and facilities located
more than 0.5 miles from shore. For
these source categories, we are adding a
requirement for the facilities to perform
submerged fill. This requirement is the
MACT floor level of control.
We are finalizing changes to the
MTVLO MACT standards to eliminate
the SSM exemption. These changes
revise Table 1 in 40 CFR part 63,
subpart Y to indicate that several
requirements of the 40 CFR part 63
General Provisions related to periods of
SSM do not apply. We are adding
provisions to the MTVLO MACT
standards to operate in a manner that
minimizes emissions, clarifying the
required conditions for performance
tests, and revising the SSM-associated
monitoring, recordkeeping, and
reporting requirements to require
reporting and recordkeeping for periods
of malfunction. We are also adding
provisions to provide an affirmative
defense against civil penalties for
exceedances of emission standards
caused by malfunctions, as well as
criteria for establishing the affirmative
defense.
Additionally, we are requiring the
electronic submittal of performance test
data to increase the ease and efficiency
of data submittal and to improve data
accessibility. Specifically, owners and
operators of MTVLO are required to
submit electronic copies of applicable
reports of performance tests to EPA's
WebFIRE database through an electronic
emissions test report structure called the
ERT. This requirement to submit
performance test data electronically to
EPA does not require any additional
performance testing, and applies only to
those performance tests conducted
using test methods that are supported by
the ERT. The final changes to the
22572
Federal Regi st er/Vol. 76, No. 77/Thursday, April 21, 2011/Rules and Regulations
MTVLO MACT standards will have
little or no impact on HAP emissions or
costs because facilities currently use
submerged fill, as required by Coast
Guard regulations. 4
provisions to provide an affirmative
defense against civil penalties for
exceedances of emission standards
caused by malfunctions, as well as
criteria for establishing the affirmative
defense.
C. What are the final rule amendments
We are also requiring the electronic
for the Pharmaceuticals Production
submittal of performance test data to
source category?
increase the ease and efficiency of data
The pharmaceutical manufacturing
submittal and to improve data
process consists of chemical production accessibility. Specifically, owners and
operations that produce drugs and
operators of Pharmaceuticals Production
medications. These operations include
facilities are required to submit
chemical synthesis (deriving a drug's
electronic copies of applicable reports of
active ingredient) and chemical
performance tests to EPA's WebFIRE
formulation (producing a drug in its
database through an electronic
final form). Emissions occur from
emissions test report structure called the
breathing and withdrawal losses from
ERT. This requirement to submit
chemical storage tanks, venting of
performance test data electronically to
process vessels, leaks from piping and
EPA does not require any additional
equipment used to transfer HAP
performance testing, and applies only to
compounds (equipment leaks), and
those performance tests conducted
volatilization of HAP from wastewater
using test methods that are supported by
streams.
the ERT.
For the reasons provided in the
We are also finalizing a correction to
proposed rule and in the support
an editorial error in 40 CFR
documents in the docket, we have
63.1257(e)(2)(iii)(A)(6)(ii). This section
determined that the current MACT
incorrectly provides that only one of the
standards for Pharmaceutical
three listed criteria must be met for the
Production facilities reduce risk to an
inlet to the equalization tank to be
acceptable level, provide an ample
considered the inlet to the biological
margin of safety to protect public health, treatment process. The final correction
and prevent adverse environmental
specifies that all of the criteria must be
effects. We are, therefore, re-adopting
met.
the existing MACT standards to satisfy
These revisions to the Pharmaceutical
section 112(f) of the CAA. We have also Production MACT standards are not
determined that there have been no
expected to result in substantial
significant developments in practices,
emissions reduction or economic
processes, or control technologies since
impacts. We have determined that
promulgation of the MACT standards,
facilities in this source category can
and that, therefore, it is not necessary to meet the applicable emissions standards
revise the MACT standards pursuant to
at all times, including periods of startup
CAA section 112(d)(6).
and shutdown, are in compliance with
We are finalizing changes to the
the current MACT standard. No
Pharmaceutical Production MACT
substantial changes in costs to industry
standards to eliminate the SSM
are predicted. The correction to the
exemption. These changes revise Table
editorial error may result in minimal
1 in 40 CFR part 63, subpart GGG to
costs to add or move equipment and
indicate that several requirements of the may also result in some small amount
40 CFR General Provisions related to
of emission reductions for any facility
periods of SSM do not apply. We are
that was meeting only one or two of the
adding provisions to the
three listed criteria. However, as the
Pharmaceuticals Production MACT
intent of the current MACT standards at
standards to operate in a manner that
the time they were promulgated was to
minimizes emissions, removing the
require facilities to meet all three
SSM plan requirement, removing the
criteria, the costs and emission
exemption provisions for periods of
reductions associated with this
SSM in 40 CFR 63.1250(g), requiring
requirement were factored into the
that delay of equipment leak repair
impacts of the MACT standards at the
plans be contained in a separate
time the standards were promulgated in
document, clarifying the required
1998. See 63 FR 50287.
conditions for performance tests, and
D.
What are the final rule amendments
revising the SSM-associated monitoring,
for the Printing and Publishing Industry
recordkeeping, and reporting
source category?
requirements to require reporting and
recordkeeping for periods of
Printing and publishing facilities are
malfunction. We are also adding
those facilities that use rotogravure,
flexography, and other methods, such as
46 CFR 153.282,
lithography, letterpress, and screen
4
printing, to print on a variety of
substrates, including paper, plastic film,
metal foil, and vinyl. The Printing and
Publishing Industry MACT standards
include two subcategories: (1)
Publication rotogravure printing and (2)
product and packaging rotogravure and
wide-web flexographic printing.
Emissions occur from the evaporation of
solvents in the inks and from cleaning
solvents. The emission points include
printing presses and associated dryers
and ink and solvent storage.
For the reasons provided in the
proposed rule and in the support
documents in the docket, we have
determined that the current MACT
standards for Printing and Publishing
facilities reduce risk to an acceptable
level, provide an ample margin of safety
to protect public health, and prevent
adverse environmental effects. We are,
therefore, re-adopting the existing
MACT standards to satisfy section 112(f)
of the CAA. We have also determined
that the costs of the only significant
development in practices, processes, or
control technologies since promulgation
of the MACT standards is
disproportionate to the emission
reduction that would be achieved, and,
therefore, we are not adopting
additional technology standards
pursuant to CAA section 112(d)(6).
We are finalizing changes to the
Printing and Publishing Industry MACT
standards to eliminate the SSM
exemption. These changes revise Table
1 in 40 CFR part 63, subpart KK to
indicate that several requirements of the
40 CFR part 63 General Provisions
related to periods of SSM do not apply.
We are adding provisions to the Printing
and Publishing Industry MACT
standards requiring sources to operate
in a manner that minimizes emissions,
removing the SSM plan requirement,
clarifying the required conditions for
performance tests, and revising the
SSM-associated monitoring,
recordkeeping, and reporting
requirements to require reporting and
recordkeeping for periods of
malfunction. We are also adding
provisions to provide an affirmative
defense against civil penalties for
exceedances of emission standards
caused by malfunctions, as well as
criteria for establishing the affirmative
defense.
We are also requiring the electronic
submittal of performance test data to
increase the ease and efficiency of data
submittal and to improve data
accessibility. Specifically, owners and
operators of printing and publishing
facilities are required to submit
electronic copies of applicable reports of
performance tests to EPA's WebFIRE
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
database through an electronic
emissions test report structure called the
Electronic ERT. This requirement to
submit performance test data
electronically to EPA does not require
any additional performance testing, and
applies only to those performance tests
conducted using test methods that are
supported by the ERT.
These revisions to the Printing and
Publishing Industry MACT standards
are not expected to result in substantial
emissions reduction or economic
impacts. We have determined that
facilities in this source category can
meet the applicable emissions standards
at all times, including periods of startup
and shutdown, are in compliance with
the current MACT standards. No
substantial changes in costs to industry
are predicted.
EPA has not established different
standards for periods of startup and
shutdown for three of the four NESHAP
addressed in this rule because we
believe compliance with the standards
is achievable during these periods. In
the case of MTVLO, loading of marine
tank vessels occurs in "batches," and
general practice is for the loading
operators to test out the vapor control
system before it is attached to the tank
vessel. In the case of the
Pharmaceuticals Production MACT
standards, we expect the difference in
emission levels during periods of
startup and shutdown are insignificant
and that facilities in this source category
should be able to comply with the
standards during these times. In the case
of the Printing and Publishing MACT
standards, we believe there are
sufficiently long averaging times
E. What are the requirements during
incorporated into the emissions limits
periods of startup, shutdown, and
that facilities should be able to comply
malfunction?
during periods of startup and shutdown.
In the case of Group I Polymers and
The United States Court of Appeals
Resins, one commenter stated that
for the District of Columbia Circuit
organic HAP emissions that are required
vacated portions of two provisions in
to be sent to emissions control
EPA's CAA section 112 regulations
equipment (i.e., flares) may not be able
governing the emissions of HAP during
periods of SSM. Sierra Club v. EPA, 551 to comply with the MACT standards
during periods of shutdown. The
F.3d 1019 (DC Cir. 2008), cert. denied,
commenter stated that they may not
130 S. Ct. 1735 (U.S. 2010). Specifically,
always be able to route some of their
the Court vacated the SSM exemption
process vents to a flare during periods
contained in 40 CFR 63.6(f)(1) and
of shutdown due to the low pressure or
40 CFR 63.6(h)(1), that is part of a
low heating value in the process vent.
regulation, commonly referred to as the
EPA agrees with the commenter that it
"General Provisions Rule," that EPA
is not possible to comply with the
promulgated under section 112 of the
applicable standard during periods of
CAA. When incorporated into CAA
shutdown, and has provided an
section 112(d) regulations for specific
alternative standard applicable during
source categories, these two provisions
exempt sources from the requirement to these times.
comply with the otherwise applicable
Periods of startup, normal operations,
CAA section 112 emission standards
and shutdown are all predictable and
during periods of SSM.
routine aspects of a source's operations.
While the Court's ruling in Sierra
However, by contrast, malfunction is
Club v. EPA, 551 F.3d 1019 (DC Cir.
defined as a "sudden, infrequent, and
2008), did not directly affect all the
not reasonably preventable failure of air
NESHAP rules being addressed, the
pollution control equipment, process
legality of source category-specific SSM equipment, or a process to operate in a
provisions, such as those in all four
normal or usual manner * * *" (40 CFR
NESHAP rules, are called into question
60.2). EPA has determined that CAA
based on the reasoning in that decision.
section 112 does not require that
We have eliminated the SSM
emissions that occur during periods of
malfunction be factored into
exemptions in these four NESHAP.
Consistent with Sierra Club v. EPA,
development of CAA section 112
standards. Under CAA section 112,
EPA's standards in these rules will
apply at all times. We have eliminated
emissions standards for new sources
or revised certain recordkeeping and
must be no less stringent than the level
reporting requirements that were related "achieved" by the best controlled similar
to the SSM exemption that no longer
source, and for existing sources,
applies. EPA has attempted to ensure
generally must be no less stringent than
that we have not included in the
the average emission limitation
regulatory language any provisions that "achieved" by the best performing 12
are inappropriate, unnecessary, or
percent of sources in the category. There
redundant in light of the removal of the
is nothing in CAA section 112 that
SSM exemption.
directs the Agency to consider
22573
malfunctions in determining the level
"achieved" by the best performing or
best controlled sources when setting
emission standards. Moreover, while
EPA accounts for variability in setting
emissions standards consistent with the
CAA section 112 case law, nothing in
that case law requires the Agency to
consider malfunctions as part of that
analysis. CAA Section 112 uses the
concept of "best controlled" and "best
performing" unit in defining the level of
stringency that CAA section 112
performance standards must meet.
Applying the concept of "best
controlled" or "best performing" to a
unit that is malfunctioning presents
significant difficulties, as malfunctions
are sudden and unexpected events.
Further, accounting for malfunctions
would be difficult, if not impossible,
given the myriad different types of
malfunctions that can occur across all
sources in the category, and, given the
difficulties associated with predicting or
accounting for the frequency, degree,
and duration of various malfunctions
that might occur. As such, the
performance of units that are
malfunctioning is not "reasonably"
foreseeable. See, e.g., Sierra Club v.
EPA, 167 F. 3d 658, 662 (DC Cir. 1999)
(EPA typically has wide latitude in
determining the extent of data-gathering
necessary to solve a problem. We
generally defer to an agency's decision
to proceed on the basis of imperfect
scientific information, rather than to
"invest the resources to conduct the
perfect study. See also, Weyerhaeuser
v. Costle, 590 F.2d 1011, 1058 (DC Cir.
1978) ("In the nature of things, no
general limit, individual permit, or even
any upset provision can anticipate all
upset situations. After a certain point,
the transgression of regulatory limits
caused by `uncontrollable acts of third
parties,' such as strikes, sabotage,
operator intoxication or insanity, and a
variety of other eventualities, must be a
matter for the administrative exercise of
case-by-case enforcement discretion, not
for specification in advance by
regulation. In addition, the goal of a
best controlled or best performing
source is to operate in such a way as to
avoid malfunctions of the source, and
accounting for malfunctions could lead
to standards that are significantly less
stringent than levels that are achieved
by a well-performing nonmalfunctioning source. EPA's approach
to malfunctions is consistent with CAA
section 112, and is a reasonable
interpretation of the statute.
In the event that a source fails to
comply with the applicable CAA section
112 standards as a result of a
").
").
22574
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
malfunction event, EPA would
determine an appropriate response
based on, among other things, the good
faith efforts of the source to minimize
emissions during malfunction periods,
including preventative and corrective
actions, as well as root cause analyses
to ascertain and rectify excess
emissions. EPA would also consider
whether the source's failure to comply
with the CAA section 112 standard was,
in fact, "sudden, infrequent, not
reasonably preventable" and was not
instead "caused in part by poor
maintenance or careless operation."
40 CFR 63.2 (definition of malfunction).
Finally, EPA recognizes that even
equipment that is properly designed and
maintained can sometimes fail, and that
such failure can sometimes cause an
exceedance of the relevant emission
standard. (See, e.g., State
Implementation Plans: Policy Regarding
Excessive Emissions During
Malfunctions, Startup, and Shutdown
(Sept. 20, 1999); Policy on Excess
Emissions During Startup, Shutdown,
Maintenance, and Malfunctions (Feb.
15, 1983)). EPA is, therefore, adding to
the final rules an affirmative defense to
civil penalties for exceedances of
emission limits that are caused by
malfunctions. See 40 CFR 63.482 (Group
I Polymers and Resins), 63.561
(MTVLO), 63.822 (The Printing and
Publishing Industry), 63.1251
(Pharmaceuticals Production). The
regulations define "affirmative defense"
to mean, in the context of an
enforcement proceeding, a response or
defense put forward by a defendant,
regarding which the defendant has the
burden of proof, and the merits of which
are independently and objectively
evaluated in a judicial or administrative
proceeding. We also have added other
regulatory provisions to specify the
elements that are necessary to establish
this affirmative defense. See 40 CFR
63.480 (Group I Polymers and Resins),
40 CFR 63.560 (MTVLO), 40 CFR 63.820
(The Printing and Publishing Industry),
40 CFR 63.1250 (Pharmaceuticals
Production). The source must prove by
a preponderance of evidence that it has
met all of the elements set forth in
affirmative defense. See 40 CFR 22.24.
The criteria ensure that the affirmative
defense is available only where the
event that causes an exceedance of the
emission limit meets the narrow
definition of malfunction in 40 CFR 63.2
(sudden, infrequent, not reasonable
preventable and not caused by poor
maintenance and/or careless operation).
For example, to successfully assert the
affirmative defense, the source must
prove by a preponderance of the
evidence that excess emissions "[where
caused by a sudden, infrequent, and
unavoidable failure of air pollution
control and monitoring equipment,
process equipment, or a process to
operate in a normal or usual manner
* * *" The criteria also are designed to
ensure that steps are taken to correct the
malfunction, to minimize emissions in
accordance with 40 CFR 63.6(e)(1)(i),
and to prevent future malfunctions. For
example, the source must prove by a
preponderance of the evidence that
"[r]epairs were made as expeditiously as
possible when the applicable emission
limitations were being exceeded * * *"
and that "[a]11 possible steps were taken
to minimize the impact of the excess
emissions on ambient air quality, the
environment and human health * * *"
In any judicial or administrative
proceeding, the Administrator may
challenge the assertion of the affirmative
defense, and, if the respondent has not
met its burden of proving all of the
requirements in the affirmative defense,
appropriate penalties may be assessed
in accordance with section 113 of the
CAA (see also 40 CFR part 22.77).
F. What are the requirements for
submission of emissions test results to
EPA?
EPA must have performance test data
to conduct effective reviews of CAA
sections 112 and 129 standards, as well
as for many other purposes, including
compliance determinations, emission
factor development, and annual
emission rate determinations. In
conducting these required reviews, EPA
has found it ineffective and time
consuming, not only for us, but also for
regulatory agencies, and source owners
and operators, to locate, collect, and
submit performance test data because of
varied locations for data storage and
varied data storage methods. In recent
years, though, performance test data in
electronic format have become readily
available, making it possible to move to
an electronic data submittal system that
would increase the ease and efficiency
of data submittal and improve data
accessibility.
In this action, as a step to increase the
ease and efficiency of data submittal
and improve data accessibility, EPA is
requiring the electronic submittal of
select performance test data.
Specifically, EPA is requiring owners
and operators of sources subject to these
MACT standards to submit electronic
copies of applicable reports of
performance tests to EPA's WebFIRE
database. The WebFIRE database was
constructed to store performance test
data for use in developing emission
factors. A description of the WebFIRE
database is available at http://
cfoub ,epa.gov/oarweb/
index.cfm?action fire.main. Data entry
will be through an electronic emissions
test report structure called the ERT.
The ERT will be able to transmit the
electronic report through EPA's Central
Data Exchange (CDX) network for
storage in the WebFIRE database.
Although ERT is not the only electronic
interface that can be used to submit
performance test data to the CDX for
entry into WebFIRE, it makes submittal
of data very straightforward and easy. A
description of the ERT can be found at
http://www.epa.gov/ttn/chief/ert/
ert tool.html.
The requirement to submit
performance test data electronically to
EPA would not require any additional
performance testing, and would apply to
those performance tests conducted
using test methods that are supported by
the ERT. The ERT contains a specific
electronic data entry form for most of
the commonly used EPA reference
methods. A listing of the pollutants and
test methods supported by the ERT is
available at http://www.epa.gov/ttn/
chief/ert/erttool.html. When a facility
submits performance test data to CDX,
there will be no additional requirements
for performance test data compilation.
Moreover, we believe that industry will
benefit from this new electronic data
submittal requirement. Having these
data, EPA will be able to develop
improved emission factors, make fewer
information requests, and promulgate
better regulations. The information to be
reported is already required for the
existing test methods, and is necessary
to evaluate the conformance to the test
method.
One major advantage of submitting
performance test data through the ERT
is a standardized method to compile
and store much of the documentation
required to be reported by this rule that
also clearly states what testing
information would be required. Another
important benefit of submitting these
data to EPA at the time the source test
is conducted is that it should
substantially reduce the effort involved
in data collection activities in the
future. When EPA has performance test
data in hand, there will likely be fewer
or less substantial data collection
requests in conjunction with
prospective required residual risk
assessments or technology reviews. This
results in a reduced burden on both
affected facilities (in terms of reduced
manpower to respond to data collection
requests) and EPA (in terms of preparing
and distributing data collection requests
and assessing the results).
Federal Register /Vol. 76, No. 77 /Th u r sday, April 21, 2011 /Ru l e s a n d Regulations
State, local, and tribal agencies will
benefit from electronic data submission
as their review of the data will be more
streamlined and accurate, because they
would not have to re-enter the data to
assess the calculations and verify the
data entry. Finally, another benefit of
submitting data to WebFIRE
electronically is that these data will
greatly improve the overall quality of
the existing and new emission factors by
supplementing the pool of emissions
test data upon which the emission factor
is based, and by ensuring that data are
more representative of current industry
operational procedures. A common
complaint heard from industry and
regulators is that emission factors are
outdated or not representative of a
particular source category. By receiving
and incorporating data for most
performance tests, EPA will be able to
ensure that emission factors, when
updated, represent the most current
range of operational practices. In
summary, in addition to supporting
regulation development, control strategy
development, and other air pollution
control activities, having an electronic
database populated with performance
test data will save industry, State, local,
and tribal agencies, and EPA significant
time, money, and effort while improving
the quality of emission inventories, and,
as a result, air quality regulations.
G. What are the effective and
compliance dates of the standards?
The revisions to the MACT standards
being promulgated in this action are
effective on April 21, 2011. For the
MACT standards being addressed in this
action, the compliance date for the
revised SSM requirements is the
effective date of the standards, April 21,
2011. The electronic reporting
requirements for the four MACT
standards being addressed in this action
are effective on January 1, 2012. For the
Group 1 Polymers and Resins MACT
standards, the compliance date for
existing sources for the new MACT
standards applicable to front-end and
back-end process operations is 1 year
from the effective date of the standards,
April 23, 2012. For the Marine Tank
Vessel Loading Operations MACT
standards, the compliance date for the
new requirements for submerged fill is
1 year from the effective date of the
standards, April 23, 2012. The
compliance date for the corrected
provision in the Pharmaceuticals
Production MACT standards is the
effective date of the standards, April 21,
2011. Beyond the revised SSM and
electronic reporting requirements, there
are no changes to The Printing and
Publishing Industry MACT standards.
IV. Summary of Significant Changes
Since Proposal
A. What changes did we make to the
risk assessments for these source
categories since proposal?
CAA section 112(f)(2) requires us to
determine whether certain emissions
standards reduce risk to an acceptable
level, and once we have ensured that
the risk is acceptable, whether the
standards provide an ample margin of
safety to protect public health and
prevent an adverse environmental
effect. First we determine whether there
is an acceptable risk. EPA generally
presumes that, if the maximum
individual risk (MIR) is no higher than
100-in-1 million, that risk is acceptable.
In addition to MIR, EPA also considers
a series of other health measures and
factors to complete an overall judgment
on acceptability. In some cases, these
health measures and factors taken
together may provide a more realistic
description of the magnitude of risk in
the exposed population than MIR alone.
If the risk is unacceptable, EPA must
require additional controls, without
consideration of cost, to ensure an
acceptable level of risk. After
determining that the level of risk is
acceptable, EPA evaluates whether the
standards provide an ample margin of
safety by considering costs and
economic impacts of controls,
technological feasibility, and other
relevant factors, in addition to those
health measures and factors considered
to determined acceptability.
Considering all of these factors, EPA
ensures that the standard is set at a level
that provides an ample margin of safety
to protect public health, as required by
CAA section 112(f).
At proposal, we conducted risk
assessments that provided estimates of
the MIR posed by the allowable and
actual HAP emissions from each source
in a category, the distribution of cancer
risks within the exposed populations,
cancer incidence, hazard index (HI) for
chronic exposures to HAP with noncancer health effects, and hazard
quotient (HQ) for acute exposures to
HAP with non-cancer health effects. We
found that the residual risks to public
health from all source categories subject
to these four MACT standards are
acceptable, and, further, that the
existing standards provide an ample
margin of safety to protect public health
and pose no adverse environmental
effects. Thus, we proposed that no
additional controls would be required to
address such risks. Specifically, we
found that the lifetime cancer risk to the
individual most exposed to emissions
from each of these seven source
22 57 5
categories 5 was less than 100-in -1
million for both the actual emissions
and the emissions that would occur if
emissions from the source categories
were at the maximum levels allowed by
the standards. Additional analyses
showed that the cancer incidence and
number of people with cancer risk over
1-in-1 million were low. In addition, a
review of the acute non-cancer
exposures showed that none of these
seven source categories posed an
appreciable risk of acute non-cancer
health effects. We also determined that
HAP emissions from these source
categories were not expected to result in
adverse environmental effects.
To support our decisions regarding
acceptability and ample margin of safety
in the proposal, we also conducted risk
assessments that accounted for HAP
emissions from entire facilities at which
a source covered by one of the standards
under review was located. With the
exception of two facilities with MTVLO
on-site that had facility-wide risks
greater than 100-in -1 million, based on
the data we had at that time, we
concluded, for purposes of the proposal,
that the facility-wide risk for sources in
the four source categories was also
relatively low. As a result of data and
information received from commenters
on the proposal, we now project the
highest facility-wide risk with MTVLO
on-site is approximately 90-in -1 million.
Uncertainty and the potential for bias
are inherent in all risk assessments,
including those performed for the
source categories addressed in these
final rules. Although uncertainty exists,
we believe that our approach, which
used conservative tools and
assumptions, ensures that our decisions
are health-protective. A discussion of
the uncertainties in the emissions
datasets, dispersion modeling,
inhalation exposure estimates, and
dose-response relationships is provided
in the preamble to the proposed rule.
See 75 FR 65081-65083.
s The seven source categories for which we
conducted RTR are Epichlorohydrin Elastomers
Production; Polybutadiene Rubber Production;
Styrene Butadiene Rubber and Latex Production;
and NBR Production; Marine Tank Vessel Loading
Operations, Pharmaceuticals Production; and
Printing and Publishing. We did not conduct RTR
for four of the Group I Polymers and Resins source
categories (Butyl Rubber Production; Ethylene
Propylene Rubber Production; Polysulfide Rubber
Production; and Neoprene), because we previously
cc adopted the existing MACT standard to satisfy
section 112(f) of the CAA. See 73 FR 76220,
published December 16, 2008. In addition, we did
not conduct RTR for Hypalon'M Production,
because there are no longer any facilities operating
in the United States.
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Federal Register/Vol. 76, No. 77 /Thurs day, April 21, 2011 /Rules and Regulations
B. What changes did we make to the
Group I Polymers and Resins MACT
since proposal?
We are eliminating the subcategories
(i.e., Butyl Rubber and Halobutyl
Rubber) in the Butyl Rubber source
category because we agree with
commenters who stated that both
facilities in the Butyl Rubber source
category now produce halobutyl rubber
as the primary product, and the
technical differences that distinguished
the subcategories no longer exist. The
current MACT standards for facilities in
this source category are not affected by
the removal of the subcategory
distinction because the existing
standards are identical for each
subcategory. In October 2010, we
proposed the same standards for both
subcategories for the front-end process
operations. However, we proposed
different standards for each subcategory
for the back-end process operations.
Considering that both facilities would
now be identified as being part of one
source category by primary product
determination, it would not be
appropriate to finalize the proposed
requirements that were based on
analyses of each facility in its own
subcategory. To address the two
facilities together in one Butyl Rubber
source category, we re-evaluated the
emissions reductions, costs, and other
impacts of controls for both the backend operations and the front-end
process vents for these two facilities.
For the front-end process vents, we had
proposed beyond-the-floor standards for
both the Butyl Rubber subcategory and
the Halobutyl Rubber subcategory, along
with the Ethylene Propylene Rubber
source category. Based on our revised
analyses, we are setting requirements for
the combined Butyl Rubber source
category at the MACT floor level of
control. The requirements for the
Ethylene Propylene Rubber source
category are also being set at the MACT
floor level of control. For the back-end
process operations, we had proposed
beyond-the-floor standards for the Butyl
Rubber subcategory, and the MACT
floor level of control for the Halobutyl
Rubber subcategory. Based on our
revised analyses, we are setting
requirements for the combined Butyl
Rubber source category at the MACT
floor level of control.
We are finalizing our proposal to set
standards at the MACT floor level of
control for back-end process operations
in the Epichlorohydrin Elastomers,
NBR, and Neoprene source categories.
However, based on information we
received during the comment period, we
have revised some of the MACT floor
limits for these source categories.
Information received for the only
facility in the Neoprene Rubber
Production source category corrected
the emissions rate of one HAP emissions
source, and we have revised the MACT
floor limit for that source category to
reflect the corrected emissions rate. We
also received information during the
comment period for the one facility in
the NBR source category, which showed
that, due to the different grades of
product produced, the rate of emissions
per unit of production varies. Similarly,
the one facility in the Epichlorohydrin
Elastomers source category also
expected to have variations in the rate
of emissions per unit of production,
based on its different grades of product
produced. Considering this variation in
emissions, we increased the limit of the
MACT floor for these source categories
to allow for the observed variability in
emissions per unit of production. We
also added factors to account for
variation in emissions per unit of
production for the Butyl Rubber and
Ethylene Propylene Rubber source
categories, based on information
received for the facilities in this source
category.
V. Summary of Significant Comments
and Responses
In the proposed action, we requested
public comments on our residual risk
reviews, our technology reviews,
proposed amendments to delete the
startup and shutdown exemptions and
the malfunction exemption, the control
of unregulated HAP, and clarification of
rule provisions. We received written
comments from 104 commenters. Our
responses to the public comments that
changed the basis for our decisions or
are otherwise significant are provided
below.6
A. EPA's Authority Under CAA
Section 112
Comment: We received comments
both in favor of and objecting to EPA's
consideration of various factors in
determining acceptable risk. Some
commenters argue that the two-step
process developed to address residual
risk and determine "ample margin of
safety" in the Benzene NESHAP should
be preserved. Commenters also request
that EPA continue to use its discretion
to determine that a maximum cancer
risk of 100-in -1 million is acceptable.
Another commenter supports EPA's
commitment to avoid establishing
C. What changes did we make to the
Marine Tank Vessel Loading Operations inflexible decision points for acceptable
risks or ample margin of safety.
MACT since proposal?
Commenters also debate whether EPA
has the authority to evaluate, or should,
We proposed the MACT floor as
submerged fill for the two subcategories as a matter of policy, evaluate facilitywide risk, demographic assessments,
not previously regulated (facilities
and risks based on actual or allowable
emitting less than 10/25 TPY of HAP
emissions.
from MTVLO, and those "offshore"
Response: For the four rules we are
facilities located more than 0.5 miles
finalizing, our evaluation of facilityfrom shore). Additionally, under the
wide risk, demographics, and allowable
CAA section 112(d)(6) technology
emissions did not change our decisions
review of the existing MTVLO MACT,
about acceptability and ample margin of
and as setting the beyond-the-floor
safety. Therefore, comments on how
MACT standards for the two
these factors were used by EPA in
subcategories not previously regulated,
determining acceptable risks are not
we proposed that existing facilities
germane to these final rules. We note,
loading 1 million barrels per year (bbl/
however, that section 112(f)(2) of the
yr) of gasoline install vapor controls,
either meeting 97-percent control, or the CAA expressly preserves our use of the
two-step process for developing
equivalent emission limit of 10
standards to address residual risk and
milligrams per liter (mg/1).
interpret "ample margin of safety" as
We are finalizing the proposed MACT developed in the Benzene NESHAP. 7 In
floor work practice to require
both the Benzene NESHAP and our
submerged fill of liquids into marine
tank vessels at those previously
See Summary of Public Comments and
unregulated sources. However, as a
Responses for Group I Patymers and Resins, Marine
result of information received during
Tank Vessel Loading Operations, Pharmaceutical
Production, and The Printing and Publishing
the comment period, we are not
(March 2011), for summaries of other
finalizing the requirements we proposed NESHAP
comments and our responses to them.
under the technology review
See National Emission Standards for Hazardous
requirements of CAA section 112(d)(6),
Air Pollutants: Benzene Emissions from Maleic
Anhydride Plants, Ethylbenzene/Styrene Plants,
the beyond the floor and technology
Benzene Storage Vessels, Benzene Equipment
review requirements for vapor control
Leaks, and Coke By-Product Recovery Plants
technology for facilities loading 1
(Benzene NESHAP) (54 FR 38044, September 14,
million bbl/yr.
1989).
6
Federal Register / Vol. 76, No. 77/ Thursday, April 21, 20 11 / Rules and Regulations
Residual Risk Report 8 to Congress, we
explain that we do not define "rigid
line(s) of acceptability" and that we will
consider a series of other health
measures and factors in determining if
risk is acceptable. Our authority to use
the two-step process laid out in the
Benzene NESHAP, and to consider a
variety of measures of risk to public
health is discussed more thoroughly in
the preamble to the proposal. See 75 FR
65071-65073.
Comment: Some commenters state
that our review under CAA section
112(d)(6) should be limited to only
advances in work practices and control
technologies, and should not include
emission points not regulated by the
existing MACT standard. Expanding
rule applicability should not be
considered, as it has nothing to do with
developments in practices, processes, or
control technologies and is not
indicated in the CAA as a basis for the
technology review. The commenter
states that EPA already made
applicability determinations in the
original MACT rules by evaluating the
floor and beyond-the-floor options, and
nothing in the CAA warrants review of
these determinations. The commenters
also state these changes should only be
considered in the CAA section 112(f)
risk review to reduce risks.
Some commenters stated that a review
under CAA section 112(d)(6) is not
required if the post-MACT emissions
levels result in risks that are deemed to
be protective of public health with an
ample margin of safety. Furthermore,
they stated that EPA should exempt
source categories from CAA section
112(d)(6) review once this level has
been achieved. They add that the review
under CAA section 112(d)(6) should be
considered an extension of the main
purpose of CAA section 112, which is
to reduce the public's exposure to air
toxics, and not to impose new
technology just because it is available.
One commenter states that it was the
intent of Congress for the MACT
standards to ultimately reduce risk from
sources to a level considered acceptable,
and there is no legislative history to
suggest that Congress expected EPA to
revise MACT standards after these
levels had been achieved.
Another commenter states an
opposing view, saying that, in keeping
with the context of CAA section 112(d),
which requires technology-based
standards that reflect the maximum
degree of emission reduction
achievable, CAA section 112(d)(6)
serves as an on-going ratchet to
continually require EPA to update
standards to keep pace with new
technology. The commenter states that
the decision of the Court in the
Hazardous Organic NESHAP (HON)
ruling, while not requiring recalculation
of the floor for that standard, did so only
for that MACT because there were no
new developments in practices,
processes, or control technologies, and
expressly declined to decide whether
EPA was required to recalculate the
floors for other instances where there
were such developments.
Response: We note that we do not
consider unregulated emission points
under CAA section 112(d)(6). To the
extent there are unregulated emission
points, we set standards under CAA
sections 112(d)(2) and (3). We are not
revising any of the four MACT rules in
this notice pursuant to the CAA section
112(d)(6) review. Instead, for the newly
regulated emissions points in the Group
I Polymers and Resins source categories
and in the Marine Tank Vessel Loading
Operations source category we are
promulgating MACT standards under
CAA sections 112(d)(2)–(3).
In our CAA section 112(d)(6) review
of pre-existing standards, we consider
both improvements in practices,
processes, or control technologies that
we may have previously considered, as
well as practices, processes, or control
technologies that are new, or were
unknown to us when the original MACT
rule was developed. Because
incremental changes in the practices,
processes, or control technologies can
have a significant impact on emissions,
these changes are considered in our
analysis of whether to revise the MACT
standards under CAA section 112(d)(6).
In considering both existing and new
practices, processes, and control
technologies, we consider costs and
other factors in determining whether it
is "necessary" to revise the existing
standard.
We disagree with the view that a
determination under CAA section 112(f)
of an ample margin of safety and no
adverse environmental effects alone
will, in all cases, cause us to determine
that a revision is not necessary under
CAA section 112(d)(6). In some cases,
even if risk factors remain the same
from one round of CAA section
112(d)(6) review to another, changes in
costs or availability of control
technology may be sufficient to alter a
previous conclusion about whether to
impose further controls. We also
disagree with the assertion that the HON
Court's ruling that CAA section
c See Residual Risk Report to Congress, EPA-453/
R-99-001 (March 1999).
' NRDC and LEAN v. EPA. 529 F.3d 1077 (D.C.
Cir. 2008).
`3
22577
112(d)(6) does not require re-calculation
of MACT floors was limited to instances
in which there have not been
developments in practices, processes, or
control technologies. In fact, the Court
was quite clear on this point, and
declined to rule only on whether it was
appropriate for EPA to consider costs
and risks in conducting CAA section
112(d)(6) reviews, as the issue was
rendered moot by the litigants' failure to
preserve it. See NRDC v. EPA, 529 F.3d
at 1084 ("It has been argued that EPA
was obliged to completely recalculate
the maximum achievable control
technology—in other words, to start
from scratch. We do not think the words
`review, and revise as necessary' can be
construed reasonably as imposing any
such obligation. Even if the statute did
impose such an obligation, petitioners
have not identified any post-1994
technological innovations that EPA has
overlooked.
Comment: Commenters state that EPA
does not have the authority under CAA
section 112(d)(2) or (3) to later review
and possibly revise the MACT
determination once a MACT
determination has been made for a
source category. Several commenters
state that EPA only has the authority to
revisit the rulemaking if a timely legal
challenge to the standard is lodged. The
commenters further note they are not
aware of any instance where EPA has
revisited a beyond-the-floor analysis in
the absence of a Court decision, rule
vacatur, or settlement agreement.
Commenters also state that reassessing
MACT standards and imposing more
stringent requirements would also be
inconsistent with Congress's desire for
finality evident in the judicial review
provisions of CAA section 307(b), which
provides that challenges to MACT
standards must be raised within 60 days
of their promulgation, assuring that
regulated entities, EPA, and the public
know what emissions limitations will
apply to a source rather than having
those limitations be subject to flux.
In contrast, one commenter states that
it is appropriate and essential that EPA
establish control for all emissions
sources, including sources that
previously had "no control" floors,
under CAA section 112(d)(6). The
commenter states that EPA should
continue to do this for all MACT
standards.
Response: Under CAA section
112(d)(2), the EPA must promulgate
technology-based standards that reflect
the maximum degree of emission
reductions of HAP achievable (after
considering cost, energy requirements,
and non-air quality health and
environmental impacts). Nothing in the
").
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Federal Register / Vol. 76, No. 771 Thursday, April 21, 2011 / Rules and Regulations
CAA or its legislative history suggests
that EPA is prohibited from reviewing
and revising MACT standards, except as
part of the CAA section 112(d)(6) or
CAA section 112(f) reviews. Where we
identify emission points that were
erroneously not previously regulated
under a MACT rule, we may identify
MACT floor and beyond-the-floor
control options for existing and new
sources. An agency generally remains
free to revise improperly promulgated or
otherwise unsupportable rules, even in
the absence of a remand from a Court.
United Gas Improvement Co. v. Gallery
Props., Inc., 382 U.S. 223, 229 (1966)
("An agency, like a court, can undo what
is wrongfully done by virtue of its
order."); Macktal v. Chao, 286 F.3d 822,
825-26 (5th Cir. 2002) ("[I]t is generally
accepted that in the absence of a
specific statutory limitation, an
administrative agency has the inherent
authority to reconsider its decisions.
Agencies have particularly broad
authority to revise their regulations to
correct their errors. Last Best Beef, LLC
v. Dudas, 506 F.3d 333, 340 (4th Cir.
2007); Friends of the Boundary Water
Wilderness v. Bosworth, 437 F.3d 815,
823 (8th Cir. 2006) ("It is widely
accepted that an agency may, on its own
initiative, reconsider its interim or even
final decisions, regardless of whether
the applicable statute and agency
regulations expressly provide for such
review.") (citations omitted). Moreover,
an agency may reconsider its
methodologies and application of its
statutory requirements and may even
completely reverse course, regardless of
whether a court has determined that its
original regulation is flawed, so long as
the agency explains its bases for doing
so. Motor Vehicle Mfrs. Ass'n v. State
Farm Mutual Auto Ins. Co., 463 U.S. 29,
42 (1983); FCC v. Fox Television
Stations, Inc., 129 S. Ct. 1800, 1810
(2009); Nat'l Cable & Telecomms. Assn
v. Brand X Internet Servs., 545 U.S. 967,
981-82 (2005) (internal citations
omitted): ("An initial agency
interpretation is not instantly carved in
stone. On the contrary, the agency
* * * must consider varying
interpretations and the wisdom of its
policy on a continuing basis,' Chevron,
supra at 863-864[], for example, in
response to changed factual
circumstances, or a change in
administration. That is, no doubt, why
in Chevron itself, this Court deferred to
an agency interpretation that was a
recent reversal of agency policy.")
Here, both the Polymers and Resins I
and the Marine Tank Vessel Loading
Operations NESHAP, as originally
promulgated, did not contain MACT
").
standards for certain significant HAP
emissions points, and, we are, therefore,
appropriately promulgating standards
for those emissions points under CAA
sections 112(d)(2)—(3) for the first time.
CAA section 112(d)(6) and CAA section
112(f)(2) do not govern the initial
establishment of the MACT standards.
This approach is consistent with other
recent actions that establish MACT
standards for the first time for
significant emissions points that had not
been previously addressed by CAA
section 112 (d) standards. See, e.g.,
National Emission Standards for
Hazardous Air Pollutants from
Petroleum Refineries; Final Rule, 74 FR
55670, 556773-74 (October 28, 2009).
B. Group 1 Polymers and Resins
Comment: One commenter states that,
due to changes made at a facility since
MACT promulgation, the facility would
no longer fall into the Butyl Rubber
subcategory, based on the primary
product made, and would be in the
Halobutyl Rubber subcategory. (The
Butyl Rubber and Halobutyl Rubber
subcategories comprise the Butyl
Rubber source category.) However, the
unit at this facility that produces
halobutyl rubber as the primary product
is a flexible operations unit that
produces three major products, one of
which is still butyl rubber, and,
therefore, emits significantly different
emissions from the only other halobutyl
rubber facility in the United States,
which produces halobutyl rubber
exclusively. Commenters recommend
EPA revise the Butyl Rubber source
category descriptions to distinguish
between halobutyl rubber-only and
flexible units, and to apply primary
product determinations only at the
category level, and not the subcategory
level. The commenters further state that,
if these facilities are not separated into
different subcategories and are both
included in the Halobutyl Rubber
subcategory, the current proposal and
supporting analyses will not be
applicable, and new analyses and
proposal will be needed.
Response: Currently there are only
two facilities in the United States that
produce either butyl or halobutyl
rubber. Since one of these facilities can
produce both butyl rubber and
halobutyl rubber, and since halobutyl
rubber is the primary product for both
of these facilities, we have concluded
that there is no longer a need to
maintain the subcategory distinction in
the Butyl Rubber source category in the
current MACT standards. Therefore, we
have removed the subcategories of
Halobutyl Rubber and Butyl Rubber in
the Butyl Rubber source category, and
both facilities that were in these
subcategories will now be included in
the Butyl Rubber source category. The
Group I Polymers and Resins MACT
standards create separate source
categories or subcategories by requiring
different standards for different types of
primary products. In the final rule, we
have removed the language that
distinguishes halobutyl rubber as a
separate product type, which has the
effect of removing the subcategories
from the Butyl Rubber source category.
While the existing MACT standards
have identical requirements for the
Butyl and Halobutyl Rubber
subcategories, we proposed different
requirements for these subcategories for
back-end process operations, and
common requirements for the front-end
process vents at proposal.
With the removal of the subcategory
distinction, we have revised our
analyses of the emissions reductions,
costs, and other impacts of controls for
both the front-end and back-end process
operations for these two facilities. Based
on these analyses, we determined that
the beyond-the-floor standards for frontend process operations that were
proposed separately for both the Butyl
Rubber and Halobutyl Rubber
subcategories, which are a 98-percent
reduction in organic HAP, and a 99percent reduction in hydrogen halides
and halogens, are not cost-effective for
the Butyl Rubber source category. We
are setting requirements for the
combined front-end process operations
for the Butyl Rubber source category at
the MACT floor level of control. For the
back-end process operations, we
proposed beyond-the-floor standards for
the Butyl Rubber subcategory, and the
MACT floor level of control for the
Halobutyl Rubber subcategory. Based on
our revised analyses, the beyond-thefloor level of control, which is a 98percent reduction in organic HAP, is not
cost-effective for the Butyl Rubber
source category. We are setting
requirements for the combined back-end
process operations for the Butyl Rubber
source category at the MACT floor level
of control. The current MACT standards
are not affected by the removal of the
subcategory distinction because the
existing standards are identical for each
subcategory.
Comment: One commenter stated that,
if a facility was subject to MACT
standards limiting HCl emissions from
its front-end process vents in the Butyl
Rubber source category and the
Ethylene Propylene Rubber source
category, then it would be unacceptable
business practice to route those
emissions to the proposed shared
control device. A shared control device
Federal Register/Vol. 76, No. 77/Thursday, April 21, 2011/Rules and Regulations
would limit operating flexibility, cause
lost business due to shutdown of both
units for expected maintenance of
thermal oxidizers and halogen
scrubbers, and the potential for lost
business, excess emissions, and dual
violations from both units from
unplanned shutdowns. The commenter
states that EPA, therefore, needs to
consider separate controls for each unit,
a spare thermal oxidizer and halogen
scrubber, or the significant lost business
and other costs and emission impacts of
having a shared control device in the
beyond-the-floor costs analysis for the
proposed control. The commenter
estimates that the costs for the units to
be controlled separately are $20,600 /ton
HCl emissions reduced for the unit in
the Butyl Rubber source category (note
that the commenter refers to this as the
halobutyl rubber unit, since that is the
product being produced), and $51,000/
ton HCl emissions reduced for the unit
in the Ethylene Propylene Rubber
source category. Commenters also stated
that the proposed beyond-the-floor
MACT standards to control front-end
process vents in the Butyl Rubber and
Ethylene Propylene Rubber source
categories are not cost-effective and
should not be finalized. One commenter
provided data showing costs to range
from $16,900 /ton of HAP emissions
reduced to $80,100 /ton of HAP
emissions reduced to meet the proposed
front-end process vent MACT standards.
Response: We disagree with the claim
that the CAA precludes our taking note
of the co-location of these units in
estimating the costs to control the HCl
from these units. Nevertheless, based on
information received during the
comment period, we recalculated
separate source category cost estimates
for control of HCl from ethylene
propylene rubber and butyl rubber units
for the one facility where these units are
co-located. The changes from the
estimate at proposal primarily include
using a recuperative thermal oxidizer
rather than a direct flame incinerator,
and including additional ductwork and
pumps needed to convey emissions to
the control devices. We estimate that,
considered separately, the cost to
control the ethylene propylene rubber
front-end process vents would be
approximately $19,000 /ton HCl
emissions reduced, and the cost to
control the butyl rubber front-end
process vents would be approximately
$12,000 /ton HCl emission reduced.
Comment: Commenters state that the
proposed beyond-the-floor MACT
standards to control the back-end
process vents in the Butyl Rubber
source category are not cost-effective,
and should not be finalized. One
commenter provided data showing costs
to range from $72,300 /ton of HAP
emissions reduced to $75,600 /ton of
HAP emissions reduced to meet the
proposed back-end process vent MACT
standards.
Response: With the removal of the
subcategory distinction, we revised our
analyses of the emissions reductions,
costs, and other impacts of the beyondthe-floor option identified at proposal.
This beyond-the-floor option would
require the ducting of emissions from
the uncontrolled back-end process
operations to a control device for the
two facilities now in the Butyl Rubber
source category. In this revised analysis,
we considered information provided
during the comment period regarding
the types of oxidizers and ducting
equipment that would be needed for the
facilities in this source category for the
beyond-the-floor control option, as well
as the provided information on process
flow rates. From the revised analysis,
we estimate that thermal oxidizers
would achieve an emissions reduction
of 98 percent, resulting in a decrease in
hexane emissions of approximately 66
TPY. The capital costs of this option are
estimated to be approximately $3.5
million, total annual costs are estimated
to be approximately $1.5 million, and
the cost-effectiveness values would be
approximately $23,000 per ton of HAP
emissions reduced. We believe the costs
of this beyond-the-floor option are not
reasonable, given the level of emission
reduction. Therefore, we are finalizing
the MACT floor level of emissions. We
have determined that the MACT floor
level of control for the source category
is a production-based limit reflecting
each source's organic HAP emissions
divided by its total elastomer product
leaving the stripper in 2009, multiplied
by a variability factor of 1.35. In
establishing the floor-level limit, the
variability factor was included to
account for the historic variability in the
amount of emissions per unit of
production at these facilities.
Comment: Commenters noted that the
emissions from back-end process
operations for facilities in the
Epichlorohydrin Elastomers, NBR, and
Butyl Rubber source categories, and HCl
emissions from front-end process
operations in the Ethylene Propylene
Rubber and Butyl Rubber source
categories will vary only by the mass of
polymer product produced, because
there is only one facility in each source
category. The commenters note that the
proposed MACT standards were based
on emissions data and associated
production levels for certain years.
These commenters state that it is not
appropriate to set the standards in this
22 5 7 9
way, as it does not allow for variability
in the manufacturing process, or the
potential for the production of different
product mixes and volumes in the
future. One commenter suggests using
2008 emissions, and, perhaps, other
recent years of data in setting the limits.
Another commenter suggests that EPA
look at the statistical variation over
time, and, if EPA revisits the current
subcategorization scheme within the
Butyl Rubber source category, then EPA
should also consider variability in
source design and operation. The
commenter also notes that, over the last
10 years, emissions from back-end
process vents varied by up to 43 percent
from their levels in 2006 due to factors
such as weather conditions, grade slate
changes (such as product grade or slight
variations in product type), and process
and control device reliability/service.
Both commenters submitted additional
emissions data for EPA's consideration.
Response: We have adjusted the
emissions limits in the final rule to
better account for process variability
and other factors for the front-end
process vent MACT limits in the Butyl
Rubber and Ethylene Propylene Rubber
source categories and the back-end
MACT limits for the Butyl Rubber,
Epichlorohydrin Elastomers, and NBR
source categories. 10 For the Butyl
Rubber source category, up to 10 years
of annual emissions and annual
production data were submitted for the
two facilities in the source category.
These data showed that the emissions
per unit production varied up to 74
percent higher for HCl from front-end
process vents than that reported in
2010, and varied up to 35 percent higher
for back-end process vents than that
reported for 2009. To account for this
variability, we included a variability
factor of 74 percent over the HCl
emissions per unit production in 2010
in the front-end process operations
limit, and a variability factor of 35
percent over the emissions per unit
production in 2009 in the back-end
process operations limit for this source
category. For the Ethylene Propylene
Rubber source category, historical
annual emissions and annual
production data were submitted for the
one affected facility in the source
category. These data showed that the
emissions per unit production varied up
to 39 percent higher for HCl from frontend process vents than reported in 2010.
To account for this variability, we
included a variability factor of 39
percent over the HCl emissions per unit
production in 2010 in the front-end
1 ' See Regulatory Alternative Impacts for Group
1 Polymers and Resins (March 2011) in the docket.
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Federal Register / Vol. 76, No. 77 1 Thursday, April 21, 2011 /Rules and Regulations
process operations limit. Similarly, for
the NBR source category, historical
annual emissions and production data
were submitted after the comment
period for the one facility in the source
category. While this facility recently
installed emissions control systems
beyond those required to meet the
current MACT requirements, after these
control were in place, the data showed
that emissions per unit production
varied up to 42 percent higher than that
reported for 2009. To account for this
variability, we included a variability
factor of 42 percent over the emissions
per unit production in 2009 in the backend process operations limit for this
source category. For the
Epichlorohydrin Elastomers source
category, historical annual emissions
indicative of the expected variation of
emissions was unavailable. Due to the
similarities between the NBR and
Epichlorohydrin Elastomers facilities in
the equipment used, and how they
operate their back-end processes,
however, the same 42-percent
variability factor was applied to the
emissions per unit production in 2009
in the back-end process operations
limit.
Comment: Commenters stated that
EPA should provide an allowance for
maintenance of any thermal oxidizer
required to be installed. One commenter
notes that a regenerative thermal
oxidizer (RTO) requires maintenance
that sometimes necessitates that the
RTO be bypassed. The commenter notes
that back-end process vents at existing
sources in the Butyl Rubber source
category are currently permitted to
allow bypass emissions during
maintenance work on the control device
up to the permitted limit with the use
of purchased Emission Reduction
Credits in Texas, and an allowance for
bypass emissions is included in the unit
operating permit in Louisiana. The
commenter suggests that the MACT
standards for the back-end process vents
should recognize that bypassing
currently occurs for RTO-controlled
emissions, and allow for it in the MACT
standards.
Response: We recognize that
bypassing currently occurs. However,
the Court has made clear that MACT
standards must apply at all times. See
Sierra Club v. EPA, 551 F.3d 1019 (D.C.
Cir. 2008), cert. denied, 130 S. Ct. 1735
(U.S. 2010). The emission limits we are
finalizing for the back-end process
operations are in the format of a 12month rolling average, and, therefore,
facilities may bypass only provided that
they are in continuous compliance with
the standards.
Comment: Commenters requested that
EPA clarify the definition of back-end
processes specifically to exclude
operations that have essentially no HAP
emission potential, such as handling
and storage of finished products. They
stated that it would also be helpful for
the Agency to clarify that surge control
vessels, equipment leaks, storage
vessels, and wastewater, which are
regulated by the Group I Polymers and
Resins MACT, are not included in the
definition of back-end processes.
Response: We agree with the
commenters that the proposed
definition of back-end processes was
unclear, and that surge control vessels,
equipment leaks, storage vessels, and
wastewater are regulated in the existing
Group I Polymers and Resins MACT
standards, and that handling and storage
of finished products is not part of the
back-end process operations. We have
revised the language in the final rule
accordingly.
Comment: Commenters request
clarification that, in the absence of
allowing 4 years for compliance, the
first compliance demonstration would
be 24 months after the publication date
for emission limits, based on a
12-month rolling average. This would
allow for data collection to begin in the
first month after the compliance date
(13th month after promulgation) and
provide for 1 year of data to be used in
the compliance demonstration. One
commenter requested that compliance
not be determined on less than a 12month basis, because this would limit
the variability allowed for in the rolling
12-month limit.
Response: We agree with the
commenter that compliance should be
determined on a 12-month basis. The
first time 12 months of data will be
available will be in the 13th month after
the compliance date, which is the 25th
month after the publication date. To
demonstrate compliance, the 12-month
rolling average information must be
included in the first periodic report that
occurs after 12 months of data have
been collected. We have clarified the
timing of the compliance demonstration
in the final rule language.
C. Marine Tank Vessel Loading
Operations
Comment: Commenters stated that
there were errors in the 2005 National
Emissions Inventory (NEI) data set, and
that EPA significantly overestimated the
MIR for the MTVLO source category for
each of these facilities due to data
errors.
Response: At proposal, we found that
the current MACT-based standards both
provide an ample margin of safety to
protect public health and prevent
adverse environmental effects, and,
therefore, did not make any changes to
the existing standards due to the risk
analysis. We found that three facilities
had MIR greater than 1-in-1 million
(values of 10-, 20-, and 20-in-1 million)
for the MTVLO source category. We
identified two facilities with facilitywide MIR greater than 100—in-1 million
(each with values of 200). Using new
data obtained since proposal, we
corrected the errors noted by the
commenters for both MTVLO emission
sources and other emission sources at
the facilities. We found incorrect
latitudes and longitudes for some
emission sources, incorrect emissions
reported for some sources, or incorrectly
identified HAP. We updated the 2005
NEI data sets for each facility with
corrected data, and conducted a
reanalysis of the risk using the corrected
data set. The revised risk assessment
results show no facilities with MTVLO
have a facility-wide risk of greater than
100-in-1 million. 11 Based on 2005
emissions data, MTVLO source category
emissions from one facility result in a
MIR of 50-in-1 million (20 percent from
benzene and 80 percent from
butadiene), however, this facility reports
in its public comments an 89- percent
reduction in benzene emissions and a
97-percent reduction in butadiene
emissions between years 2006 and 2009.
Based on this information, the revised
MIR associated with actual MTVLO
emissions from this facility is less than
1-in-1 million. 12 No other facility has
MTVLO emissions resulting in a MIR
greater than 1-in-1 million. The
corrections to the emission data files
and risk results are included in
memoranda in the docket.
Comment: One commenter noted that
it is not clear whether offshore loading
terminals at refineries would be exempt
from proposed changes to MTVLO
MACT. The commenter recommended
rule text changes for 40 CFR
63.560(d)(6). The commenter noted that
their facility may be one of the few (or
only) offshore loading terminals in the
United States, meaning the cost analysis
and controls selected for this
subcategory by the MTVLO MACT
proposal are likely to set a precedent in
the Refinery RTR rule process.
11
Of the two facilities with MTVLO that
previously showed facility-wide risks exceeding
100-in-1 million, the revised risk assessment results
show one facility has facility-wide risks of 70-in-1
million, and the other has facility-wide risks of 40in-1 million.
~ 2 For this facility, reported actual and allowable
emission are the same; therefore, the MIR is the
same for both,
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
Response: We have considered the
comment and agree that the proposed
rule was not clear. Therefore, this final
rule clarifies applicability for petroleum
refineries.
Comment: Three commenters
supported submerged fill requirements.
One commenter supported the
requirement for submerged fill for
previously-exempt subcategories, and
stated that submerged fill is costeffective. One commenter agreed with
EPA's decision to establish submerged
fill as the MACT floor. The Commenter
noted that submerged fill, as defined by
the Coast Guard, has been standard
industry practice for some time, reduces
HAP emissions, and eliminates static
electricity from free-falling cargo,
thereby enhancing operational safety.
One commenter suggested that if
additional control is needed, a work
practice standard (submerged fill)
should be adopted for the offshore
loading subcategory instead of 99percent efficient vapor control systems.
Response: The commenters agree with
the proposal to require submerged fill as
the floor level of control for the two
subcategories not previously regulated
(those facilities emitting less than 10/25
TPY of HAP from MTVLO, and those
facilities located more than 0.5 miles
from shore). We have included the
submerged fill requirement in the final
rule.
Comment: One commenter noted the
discussion in the preamble is confusing
concerning whether the proposed
1 million bbl/yr threshold is a MACT
measure, or a reasonably available
control technology (RACT) measure.
The preamble states that the existing
MACT standards require vapor recovery
control for at least 10 million bbl/yr of
gasoline, however, this provision is in
the RACT provisions of the existing
rule. Furthermore, the commenter
asserts that the proposal preamble
justifies the proposed new 1 million
bbl/yr threshold on a volatile organic
compounds (VOC) RACT basis rather
than a HAP (MACT) basis, and describes
the lower threshold as a beyond-thefloor MACT measure for the two
previously-exempt subcategories. In
addition, the commenter noted that the
throughput threshold for a major source
is 5 million bbl/yr, and asked how a
facility only loading 1 million bbl/yr
could be considered a major source, and
subject to MACT. The commenter stated
that the preamble discussion should be
consistent with both the basis presented
for justification of this measure, and the
language of the rule.
Response: The proposed and final
rules only pertain to the MACT
requirements in the rule that address
major sources of HAP; no changes were
proposed for the RACT requirements)
While the commenter noted that a
particular throughput would be required
to define a major source of HAP, the
throughput levels for MTVLO were not
defined with the intent of identifying a
major source. Applicability for the
current rule is two-fold: (1) Is the
facility, as a whole, a major source of
HAP; and (2) does the facility conduct
MTVLO.
We agree that the discussion in the
proposed preamble regarding the
gasoline throughput thresholds used to
analyze the proposed 1 million bbl/yr
gasoline threshold was not clear (75 FR
65115). As discussed below, we have
not included a requirement for MTVLO
facilities with a throughput of 1 million
bbl/yr of gasoline to install and operate
vapor recovery controls in the final rule.
Comment: Two commenters stated
that EPA's cost-effectiveness
determination for the beyond-the-floor
MACT is flawed/not accurate, and noted
concerns that the cost analysis is based
on information from one vendor, for one
control technology, for a single facility,
and assumed installation costs. One
commenter stated that EPA's cost
information was limited. One
commenter indicated that beyond-thefloor MACT options must be costeffective in reducing HAP, and since
EPA's estimated cost was $74,000/ton
HAP emissions reduced, it is not costeffective, and, thus, illegal to
promulgate this requirement as a MACT
measure. The commenter stated that the
real cost, based on corrected values of
HAP content, would be $180,000/ton
HAP emissions reduced. The
commenter requested that EPA rescind
the proposed action.
Commenters stated that the EPA does
not have the authority to consider nonHAP emission reductions in conducting
a review of existing MACT standards
under CAA section 112(d). The
commenters noted that, in setting
MACT standards, the CAA expressly
forbids EPA from considering the cobenefits of non-HAP emissions
reductions, and the MACT floor must be
based on the HAP emission reductions
achieved; any beyond-the-floor standard
may be based only on consideration of
the cost of achieving HAP emission
reductions, and any non-air quality
health and environmental impacts and
energy requirements.
Response: As discussed earlier, we
established and proposed the MACT
RACT and MACT requirements are both
included in 40 CFR part 63, subpart Y—National
Emission Standards of Marine Tank Vessel Loading
Operations.
' 3
22581
floor as submerged fill for the two
subcategories not previously regulated
(facilities emitting less than 10/25 TPY
of HAP from MTVLO, and those
"offshore" facilities located more than
0.5 miles from shore). Additionally,
under the CAA section 112(d)(6)
technology review of the existing
MTVLO MACT, and as setting the
beyond-the-floor MACT standards for
the two subcategories not previously
regulated, we proposed that existing
facilities loading 1 million bbl/yr of
gasoline, install vapor controls either
meeting 97-percent control, or the
equivalent emission limit of 10 mg/l (10
milligrams of total organic compound
emissions per liter of gasoline loaded).
At proposal, we estimated the cost and
emissions reductions for installing
vapor controls for facilities loading
1 million bbl/yr of gasoline, and we
estimated a cost of $74,000/ton HAP
emissions reduction (190 TPY HAP
emissions reduction) and $5,500/ton
VOC emissions reduction (2,600 TPY
VOC emissions reduction).
As discussed in the cost section of the
response to comment and the cost
memoranda in the docket, we received
and considered the comments on the
control costs, emission rate differences
for ships and barges, additional costs for
offshore facilities, and the HAP content
in gasoline. All those factors change the
cost-effectiveness calculations. Based on
information received as part of the
comments, we reevaluated the costs
used at proposal. The revised costs and
emissions for the proposed threshold of
1 million bbl/yr gasoline are as high as
$500,000 per ton of HAP emissions
reduced (1.9 tons of HAP reduced
annually per facility) for loading ships
offshore. Looking at a less stringent
threshold for the final rule of 7 million
bbl/yr of gasoline loaded would likely
achieve little or no HAP or VOC
emission reductions, since many
facilities near that threshold were
required to install controls under the
current rule. We agree with commenters
that these costs are unreasonable.
Therefore, we are not including the
proposed vapor controls for loading 1
million bbl/yr of gasoline requirement
in the final rule. We disagree with the
commenter that we cannot consider
VOC benefits, but, given that we are not
requiring these additional vapor
controls for HAP, the issue is now moot.
Comment: One commenter stated that
VOC and HAP emission rates from ships
and barges at their facility are lower
than EPA uses in its cost-effectiveness
determinations. EPA used the
uncontrolled gasoline loading emissions
factor for barges (3.4 pounds (lb) VOC/
1,000 gallons (gal) loaded), but should
22582
Federal Register/Vol. 76, No. 77 / Thursday , April 21, 2011 / Rules and Regulations
use the emissions factor for ocean-going
ships and barges (1.8 lb VOC/1,000 gal
loaded); AP-42 notes in Chapter 5 that
vapor saturation is much lower in ship
and barge loading.
Response: We agree with the
commenter that the emission factors for
ships and barges, as applicable to the
type of marine vessel being loaded,
should be considered for estimating
VOC and HAP emissions. We have
revised the emission estimates using the
barge and ship emission factors from
AP-42.
Comment: One commenter noted that
HAP content in the vapor phase is 3.0
percent, and not the 7.3 percent
determined by EPA in the proposal. The
commenter provided the analysis
showing the calculations, based on
conventional gasoline, where the
commenter assumed no methyl tertiary
butyl ether (MTBE) in the gasoline; no
change to the total partial pressure; and
benzene concentration of 1.8 percent.
Another commenter stated the HAP
emissions factor is approximately 50
percent of the EPA factor.
Response: In the proposal, we
determined that the HAP content in the
vapor phase of gasoline of 7.3 percent
(based on 2006 gasoline composition)
was appropriate, and used 7.3 percent
in our emissions estimates for gasoline
loading at MTVLO. We reviewed and
considered the data provided by the
commenter, and reviewed HAP content
information from several other sources
that have more recent gasoline
composition data. We conducted a
reanalysis of the HAP content, looking
at both conventional and reformulated
gasoline, considering the phase-out of
MTBE and the requirements for reduced
benzene content. Based on the revised
analysis, we concluded that a good
typical value for HAP content in the
vapor is 5.0 percent. The revised
analysis of HAP content in gasoline is
in a memorandum in the docket.
Comment: Commenters argued that
lean oil absorption technology is not
capable of meeting the rule efficiency, is
not in common use for MTVLO, and
must be demonstrated as an effective
technology for MTVLO. One commenter
cited an instance where lean oil
absorption installed on MTVLO was
unable to meet control requirements in
their permit. The commenter stated that
lean oil absorption is typically used in
smaller applications. Commenters stated
that EPA must provide actual
performance data for lean oil absorption
technology in the MTVLO source
category.
Response: Lean oil absorption systems
are not new control technologies for
MTVLO. Lean oil absorption was
discussed as a vapor recovery device, in
addition to refrigeration (condenser)
systems and carbon adsorption systems,
for marine vessel loading in the 1987
emissions standards for new sources
must be no less stringent than the level
"achieved" by the best controlled similar
source, and for existing sources,
National Research Council, Committee
generally, must be no less stringent than
on Control and Recovery of
the average emission limitation
Hydrocarbons Vapors from Ships and
"achieved" by the best performing 12
Barges report, Controlling Hydrocarbon
percent of sources in the category. There
Emissions from Tank Vessel Loading.
is nothing in CAA section 112 that
Lean oil absorption also was discussed
directs the Agency to consider
in the 1992 proposal, Technical Support malfunctions in determining the level
Document for MTVLO (EPA-450/3-92"achieved" by the best performing or
001a), and has been installed as vapor
best controlled sources when setting
recovery devices for MTVLO. While we
emission standards. Moreover, while
have not selected a beyond-the-floor
EPA accounts for variability in setting
option as MACT, we would like to
emissions standards consistent with the
clarify that lean oil absorption systems
CAA section 112 case law, nothing in
were included in the cost analysis for
that case law requires the Agency to
the beyond-the-floor option, because
consider malfunctions as part of that
lean oil absorption systems achieving an analysis.
emission reduction efficiency of 97
CAA section 112 uses the concept of
percent are used by at least one MTVLO "best
controlled" and "best performing"
facility, and because the units are a
unit
in
defining the level of stringency
relatively less expensive control
that CAA section 112 performance
technology option that has the added
standards must meet. Applying the
benefit of recovered product.
concept of "best controlled" or "best
D. Startup, Shutdown, and Malfunction
performing" to a unit that is
(SSM) Requirements
malfunctioning presents significant
difficulties, as malfunctions are sudden
Comment: Two commenters state that
and unexpected events. Accounting for
EPA offers little support for the
malfunctions would be difficult, if not
assertion that it is reasonable to
impossible, given the myriad different
interpret CAA section 112 as not
types of malfunctions that can occur
requiring EPA to account for
across all sources in the category, and
malfunctions in setting emissions
given the difficulties associated with
standards, or that malfunctions are not
predicting or accounting for the
a distinct operating mode. The
frequency, degree, and duration of
commenters state that it does not make
various malfunctions that might occur.
sense for EPA to assert that
As such, the performance of units that
malfunctions are part of normal
are malfunctioning is not "reasonably"
operations, but then exclude emissions
from these parts of normal operations in foreseeable. See, e.g., Sierra Club v.
EPA, 167 F. 3d 658, 662 (D.C. Cir. 1999)
the determination of the emissions
(EPA typically has wide latitude in
limits. The commenters state that, due
determining the extent of data-gathering
to the unplanned nature and variety of
necessary to solve a problem. We
potential malfunctions, it would be
generally defer to an agency's decision
difficult, if not impossible, for EPA to
to proceed on the basis of imperfect
gather data and set an emissions
scientific information, rather than to
standard for periods of malfunction.
"invest the resources to conduct the
Due to these difficulties, the
perfect study. See also, Weyerhaeuser
commenters suggest that, under the
v. Costle, 590 F.2d 1011, 1058 (D.C. Cir.
authority of CAA section 112(h), EPA
prescribe alternative design, equipment, 1978) ("In the nature of things, no
general limit, individual permit, or even
work practice, or operational standards
any upset provision can anticipate all
where it is not feasible to set or enforce
a numerical emissions limit. The
upset situations. After a certain point,
the transgression of regulatory limits
commenters add that there are work
practices that can be identified as being
caused by `uncontrollable acts of third
the best to minimize emissions during a parties,' such as strikes, sabotage,
malfunction, and EPA must
operator intoxication or insanity, and a
acknowledge the fact that even the best- variety of other eventualities, must be a
matter for the administrative exercise of
performing sources experience
malfunction events.
case-by-case enforcement discretion, not
Response: EPA has determined that
for specification in advance by
CAA section 112 does not require that
regulation. In addition, the goal of a
emissions that occur during periods of
best controlled or best performing
malfunction be factored into
source is to operate in such a way as to
development of CAA section 112
avoid malfunctions of the source, and
standards. Under CAA section 112,
accounting for malfunctions could lead
").
").
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
to standards that are significantly less
shin ;nut than levels that are achieved
by a well-performing nonmalfunctioning source. EPA's approach
to malfunctions is consistent with CAA
section 112, and is a reasonable
interpretation of the statute.
Comment: Several commenters argued
that emissions limits should not apply
during SSM events, while other
commenters stated that SSM emissions
should be included in calculations of
emissions and standards. Commenters
suggested that requiring continuous
compliance during periods of SSM
constitutes beyond-the-floor
requirements, and the Agency should
have to justify this more stringent level
of control, because facilities would need
to install redundant control systems and
bypass systems. They further stated that,
in order to assure that SSM are
appropriately accommodated, EPA must
either assure that the data on which the
standard is based include representative
data from such periods, or, alternatively,
set a separate work practice standard to
properly accommodate SSM, and they
cited case law supporting establishment
of special SSM provisions. Further,
several commenters stated that
compliance with emissions standards
during malfunction events will be
difficult to gauge since emissions testing
during such events is nearly impossible,
given the sporadic and unpredictable
nature of malfunctions. The commenters
contended that the rules could have the
effect of forcing units to choose between
safety and compliance with emissions
requirements. The commenters stated
that, for some affected units,
malfunctions, by their very nature,
create unsafe conditions which can lead
to excessive combustible mixtures that
can result in explosions, equipment
damage, and personnel hazards.
Commenters also noted that some of the
MACT standards included in this action
did not rely exclusively upon the
General Provisions, and, thus, were not
immediately affected by the Court's
vacatur of the SSM exemptions in the
General Provisions. The commenters
pointed out that, given that these
categories were not immediately
affected, EPA is not compelled to
remove the exemptions that are
established within these individual
category-specific MACT standards.
Other commenters expressed support
for requiring continuous compliance
with the MACT standards, including
periods of SSM. They noted that
malfunctions are also preventable, and,
thus, there should be no relief from the
standards during these events.
Response: At this time, we are not
promulgating separate emission
22583
standards for periods of startup and
that EPA is not proposing any new
shutdown for three of the four categories paperwork requirements is false if a
addressed in this rule, because we
facility wants to claim an affirmative
believe compliance with the standards
defense. The affirmative defense
is achievable during these periods. In
provision contains much more onerous
the case of the Pharmaceuticals
reporting and implied recordkeeping
Production MACT standards, we expect requirements than the existing rules.
the difference in emission levels during
The commenters state that EPA needs to
periods of startup and shutdown are
account for the information collection
insignificant, and that facilities in this
burden associated with affirmative
source category should be able to
defense in the Information Collection
comply with the standards during these Request (ICR) for the SSM portion of the
times. In the case of the Printing and
Group I Polymers and Resins MACT,
Publishing MACT standards, we believe and otherwise comply with the
there are sufficiently long averaging
Paperwork Reduction Act.
times incorporated into the emissions
Response: As discussed in section
limits that facilities should be able to
VILB of this preamble, EPA is providing
comply during periods of startup and
the public with an estimate of the
shutdown. In the case of MTVLO,
relative magnitude of the burden
loading of marine tank vessels occurs in associated with an assertion of the
"batches," and general practice is for the affirmative defense position adopted by
loading operators to test out the vapor
a source, and is providing
control system before it is attached to
administrative adjustments to the ICR
the tank vessel. In the case of Group I
for the MACT standards subject to these
Polymers and Resins, one commenter
final rules that show what the
stated that organic HAP emissions that
notification, recordkeeping, and
are required to be sent to emissions
reporting requirements associated with
control equipment (i.e., flares) may not
the assertion of the affirmative defense
be able to comply with the MACT
might entail.
standards during periods of shutdown.
Comment: Two commenters note that,
The commenter stated that they may not in making changes
to the rules to
always be able to route some of their
exclude the SSM exemption and add the
process vents to a flare during periods
duty clause to the MACT
of shutdown due to low pressure or low general
standards, three of the six MACT
heat content in the process vent. EPA
standards in the proposal include the
agrees with the commenter that it is not
statement that "the general duty to
possible to comply with the applicable
minimize emissions does not require the
standard during periods of shutdown,
and is establishing alternative emissions owner or operator to make any further
efforts to reduce emissions if levels
standards that apply during these
required by this standard have been
periods.
Periods of startup, normal operations, achieved," but the other three do not
(i.e., Group I Polymers and Resins,
and shutdown are all predictable and
routine aspects of a source's operations. MTLVO, and Printing and Publishing
Industry MACT standards). The
However, by contrast, malfunction is
commenters state that this clarifying
defined as a "sudden, infrequent, and
not reasonably preventable failure of air language should be included in all six
standards.
pollution control equipment, process
Response: We agree that this language
equipment, or a process to operate in a
normal or usual manner * * *" (40 CFR should be included in each of the six
MACT standards, and we have added
60.2). EPA has determined that
malfunctions should not be viewed as a this clarifying language to 40 CFR
63.823(b) in the Printing and Publishing
distinct operating mode, and, therefore,
Industry MACT standards and 40 CFR
any emissions that occur at such times
63.562(e) in the MTVLO MACT
do not need to be factored into
standards. However, we find that 40
development of CAA section 112
CFR 63.483 in the Group 1 Polymers
standards, which, once promulgated,
and Resins MACT standards already
apply at all times. Also refer to section
includes this language, and we have not
IILE of this preamble, and the response
revised the proposed language.
to comments document available in the
docket for this action for additional
VI. Impacts of the Final Rules
discussion of this issue.
Comment: Commenters on the Group
The final changes to the Group I
I Polymers and Resins MACT disagreed Polymers and Resins, MTVLO,
with EPA's statement that the proposed
Pharmaceuticals Production, and the
Printing and Publishing Industry MACT
rules will reduce the reporting burden
associated with having to prepare and
standards are not estimated to have any
submit an SSM report. The commenters significant emission reductions, costs,
also state that the claims EPA makes
or other impacts.
22584
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules a n d Reg ulations
VII. Statutory and Executive Order
Reviews
malfunction in 40 CFR 63.2 (sudden.
infrequent, not reasonable preventable,
and not caused by poor maintenance
A. Executive Orders 12866: Regulatory
and or careless operation) and where the
Planning and Review, and Executive
source took necessary actions to
Order 13563: Improving Regulation and
minimize emissions. In addition, the
Regulatory Review
source must meet certain notification
Under Executive Order 12866 (58 FR
and reporting requirements. For
51735, October 4, 1993), this action is a
example, the source must prepare a
"significant regulatory action." This
written root cause analysis and submit
action is a significant regulatory action
a written report to the Administrator
because it raises novel legal and policy
documenting that it has met the
issues. Accordingly, EPA submitted this conditions and requirements for
action to the Office of Management and
assertion of the affirmative defense.
Budget (OMB) for review under
For two of the rules promulgated,
Executive Order 12866 and Executive
National Emissions Standards for Group
Order 13563 (76 FR 3821, January 21,
I Polymers and Resins (Butyl Rubber
2011), and any changes made in
Production, Epichlorohydrin Elastomers
response to OMB recommendations
Production, Ethylene Propylene Rubber
have been documented in the docket for Production, HypalonTM Production,
this action.
Neoprene Production, NBR Production,
Polybutadiene Rubber Production,
B. Paperwork Reduction Act
Polysulfide Rubber Production, and
The information collection
Styrene Butadiene Rubber and Latex
requirements in the final rules have
Production); and Pharmaceuticals
been submitted for approval to OMB
Production, EPA is adding affirmative
under the Paperwork Reduction Act, 44 defense to the estimate of burden in the
U.S.C. 3501, et seq. The information
ICR. To provide the public with an
collection requirements are not
estimate of the relative magnitude of the
enforceable until OMB approves them.
burden associated with an assertion of
The information requirements are
the affirmative defense position adopted
based on notification, recordkeeping,
by a source, EPA has provided
and reporting requirements in the
administrative adjustments to these two
NESHAP General Provisions (40 CFR
ICR that show what the notification,
part 63, subpart A), which are
recordkeeping, and reporting
mandatory for all operators subject to
requirements associated with the
national emission standards. These
assertion of the affirmative defense
recordkeeping and reporting
might entail. EPA's estimate for the
requirements are specifically authorized required notification, reports, and
by section 114 of the CAA (42 U.S.C.
records, including the root cause
7414). All information submitted to EPA analysis, totals $3,141, and is based on
pursuant to the recordkeeping and
the time and effort required of a source
reporting requirements for which a
to review relevant data, interview plant
claim of confidentiality is made is
employees, and document the events
safeguarded according to Agency
surrounding a malfunction that has
policies set forth in 40 CFR part 2,
caused an exceedance of an emission
subpart B.
limit. The estimate also includes time to
These final rules would require
produce and retain the record and
maintenance inspections of the control
reports for submission to EPA. EPA
devices, but would not require any
provides this illustrative estimate of this
notifications or reports beyond those
burden, because these costs are only
required by the General Provisions. The incurred if there has been a violation,
recordkeeping requirements require
and a source chooses to take advantage
only the specific information needed to
of the affirmative defense.
determine compliance.
Given the variety of circumstances
When a malfunction occurs, sources
under which malfunctions could occur,
must report them according to the
as well as differences among sources'
applicable reporting requirements of 40 operation and maintenance practices,
CFR part 63, subparts U, Y, KK, and
we cannot reliably predict the severity
GGG. An affirmative defense to civil
and frequency of malfunction-related
penalties for exceedances of emission
excess emissions events for a particular
limits that are caused by malfunctions is source. It is important to note that EPA
available to a source if it can
has no basis currently for estimating the
demonstrate that certain criteria and
number of malfunctions that would
requirements are satisfied. The criteria
qualify for an affirmative defense.
ensure that the affirmative defense is
Current historical records would be an
available only where the event that
inappropriate basis, as source owners or
causes an exceedance of the emission
operators previously operated their
limit meets the narrow definition of
facilities in recognition that they were
exempt from the requirement to comply
with emissions standards during
malfunctions. Of the number of excess
emission events reported by source
operators, only a small number would
be expected to result from a malfunction
(based on the definition above), and
only a subset of excess emissions caused
by malfunctions would result in the
source choosing to assert the affirmative
defense. Thus, we believe the number of
instances in which source operators
might be expected to avail themselves of
the affirmative defense will be
extremely small. For this reason, we
estimate no more than 2 or 3 such
occurrences for all sources subject to 40
CFR part 63, subparts U and GGG over
the 3 -year period covered by this ICR.
We expect to gather information on such
events in the future, and will revise this
estimate as better information becomes
available.
With respect to MTVLO and Printing
and Publishing source categories,
operations would not proceed or
continue if there is a malfunction of a
control device, and, thus, it is unlikely
that a control device malfunction would
cause an exceedance of any emission
limit. The existing MTVLO rule requires
the vapor displaced during loading of
the vessel be sent to vapor processors
that meet specified efficiency standards.
In discussions with industry, and at
plant visits, the industry reports that
marine vessels are not allowed to start
loading until the vapor collection and
processor system has been thoroughly
checked for proper operation. If the
loading equipment, and the vapor
collection and possessor system are not
properly operating, the vessel is not
allowed to load. In addition, if processor
system settings are not maintained
during vessel loading, loading is
automatically stopped. Therefore, we
believe there is no burden to the
industry for the affirmative defense
provisions added to the final rule.
Additionally, an ICR document (number
1679.08) was prepared and submitted
for the October 21, 2010, proposed rule
that included burdens associated with
testing, reporting, and recordkeeping for
the proposed lowering of the threshold
for when additional vapor collection
and processor systems are required. In
this action we are not requiring the
lower threshold for additional vapor
collection and processor systems.
However, submerged fill requirements
are added in the final rule, and are
already being met under Coast Guard
rules; thus, there is no additional ICR
burden associated with the final rule for
MTVLO.
For Printing and Publishing, we do
not believe that printing and publishing
Federal Regist er/ Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
facilities have excess emissions caused
by malfunctions. Printing presses and
control devices are interlocked. If the
control device is not operating, the press
cannot start printing. If the control
device stops operating, the press stops
printing. Also, given the characteristics
of the affected units at printing and
publishing sources, EPA does not
believe that any other type of
malfunction could conceivably cause
excess emissions.
Therefore, sources within these two
source categories are not expected to
have any need or use for the affirmative
defense. Thus, for these source
categories, EPA is not assigning any
burden associated with affirmative
defense.
For the Group I Polymers and Resins
MACT standards, an ICR document
prepared by EPA for the amendments to
the standards has been assigned EPA
ICR number 2410.02, which has been
revised since the proposed estimate
assigned EPA ICR number 2410.01.
Burden changes associated with these
amendments result from the reporting
and recordkeeping requirements of the
affirmative defense provisions added to
the rule; the reporting and
recordkeeping requirements associated
with the new back-end process
operation emission limits for
Epichlorohydrin Elastomers, Neoprene
Rubber, NBR, and Butyl Rubber
Production source categories; and the
reporting and recordkeeping
requirements associated with the new
HCl emission limits for the front-end
process vents for the Ethylene
Propylene Rubber and Butyl Rubber
Production source categories. The
respondents' annual reporting and
recordkeeping burden for this collection
(averaged over the first 3 years after the
effective date of the standards) for these
amendments is estimated to be 251
labor hours at a cost of $12,222 per year.
The annual burden for the Federal
government (averaged over the first
3 years after the effective date of the
standard) for these amendments is
estimated to be 9 labor hours at a cost
of $408 per year.
For the Pharmaceuticals Production
MACT standards ICR document
prepared by EPA, which has been
revised to include the amendments to
the standards, has been assigned EPA
ICR number 1781.06. Burden changes
associated with these amendments
result from the reporting and
recordkeeping requirements of the
affirmative defense provisions added to
the rule. The change in respondents'
annual reporting and recordkeeping
burden associated with these
amendments for this collection
(averaged over the first 3 years after the
effective date of the standards) is
estimated to be 20 labor hours at a cost
of $2,094 per year. There is no estimated
change in annual burden to the Federal
government for these amendments.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid OMB
control number. The OMB control
numbers for EPA's regulations in 40
CFR are listed in 40 CFR part 9. When
these ICR are approved by OMB, the
Agency will publish a technical
amendment to 40 CFR part 9 in the
Federal Register to display the OMB
control numbers for the approved
information collection requirements
contained in the final rules.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
generally requires an agency to prepare
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements under the
Administrative Procedure Act, or any
other statute, unless the agency certifies
that the rule will not have a significant
economic impact on a substantial
number of small entities. Small entities
include small businesses, small
organizations, and small governmental
jurisdictions.
For purposes of assessing the impact
of these final rules on small entities,
small entity is defined as: (1) A small
business as defined by the Small
Business Administration's regulations at
13 CFR 121.201; (2) a small
governmental jurisdiction that is a
government of a city, county, town,
school district, or special district with a
population of less than 50,000; and
(3) a small organization that is any notfor-profit enterprise which is
independently owned and operated and
is not dominant in its field.
After considering the economic
impacts of these final rules on small
entities, I certify that this action will not
have a significant economic impact on
a substantial number of small entities.
This final action will not impose any
requirements on small entities. These
final rules will not change the level of
any emission standard, or impose
emission measurements or reporting
requirements on small entities beyond
those specified in existing regulations.
D. Unfunded Mandates Reform Act
These rules do not contain a Federal
mandate that may result in expenditures
of $100 million or more for State, local,
and tribal governments, in the aggregate,
or the private sector in any one year.
Thus, these rules are not subject to the
22585
requirements of sections 202 or 205 of
UMRA.
These rules are also not subject to the
regulatory requirements that might
significantly or uniquely affect small
governments. They contain no
requirements that apply to such
governments or impose obligations
upon them.
E. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
direct effects on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government, as specified in
Executive Order 13132. These final
rules primarily affect private industry,
and do not impose significant economic
costs on State or local governments.
Thus, Executive Order 13132 does not
apply to this action.
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This action does not have tribal
implications, as specified in Executive
Order 13175 (65 FR 67249, November 9,
2000). It will not have substantial direct
effect on tribal governments, on the
relationship between the Federal
government and Indian tribes, or on the
distribution of power and
responsibilities between the Federal
government and Indian tribes, as
specified in Executive Order 13175.
Thus, Executive Order 13175 does not
apply to this action.
G. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
This action is not subject to Executive
Order 13045 (62 FR 19885, April 23,
1997), because it is not economically
significant as defined in Executive
Order 12866, and because the Agency
does not believe the environmental
health or safety risks addressed by this
action present a disproportionate risk to
children. This action will not relax the
control measures on existing regulated
sources, and EPA's risk assessments
(included in the docket for the proposed
rules) demonstrate that the existing
regulations are health protective.
H. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a "significant energy
action" as defined in Executive Order
13211 (66 FR 28355 (May 22, 2001)),
because it is not likely to have a
22586
F ed eral Regist er/Vol.
significant adverse energy effect on the
supply, distribution, or use of energy.
This action will not create any new
requirements for sources in the energy
supply, distribution, or use sectors.
Further, we have concluded that these
final rules are not likely to have any
adverse energy effects.
I. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104113, 12(d) (15 U.S.C. 272 note) directs
EPA to use voluntary consensus
standards (VCS) in its regulatory
activities, unless to do so would be
inconsistent with applicable law or
otherwise impractical. VCS are
technical standards (e.g., materials
specifications, test methods, sampling
procedures, and business practices) that
are developed or adopted by VCS
bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations
when the Agency decides not to use
available and applicable VCS.
This action does not involve technical
standards. Therefore, EPA did not
consider the use of any VCS.
J. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
Executive Order 12898 (59 FR 7629,
February 16, 1994) establishes Federal
executive policy on environmental
justice. Its main provision directs
Federal agencies, to the greatest extent
practicable and permitted by law, to
make environmental justice part of their
mission by identifying and addressing,
as appropriate, disproportionately high
and adverse human health or
environmental effects of their programs,
policies, and activities on minority
populations and low-income
populations in the United States.
EPA has determined that these final
rules will not have disproportionately
high and adverse human health or
environmental effects on minority or
low-income populations, because they
do not affect the level of protection
provided to human health or the
environment. To examine the potential
for any environmental justice issues that
might be associated with each source
category, we evaluated the distributions
of HAP-related cancer and non-cancer
risks across different social.
demographic, and economic groups
within the populations living near the
facilities where these source categories
are located. Our analyses also show that,
for all the source categories evaluated,
there is no potential for an adverse
76, No. 77 /Thursday, April 21, 2011/Rules and Regu lations
environmental effect or human health
multipathway effects, and that acute
and chronic non-cancer health impacts
are unlikely. Our additional analysis of
facility-wide risks showed that the
maximum facility-wide cancer risks for
all source categories are within the
range of acceptable risks, and that the
maximum chronic non-cancer risks are
unlikely to cause health impacts. Our
additional analysis of the demographics
of the exposed population may show
disparities in risks between
demographic groups for all three
categories, but EPA has determined that,
although there may be a disparity in
risks between demographic groups, no
group is exposed to unacceptable level
of risk.
The rules will not relax the control
measures on emissions sources
regulated by the rules, and, therefore,
will not increase risks to any
populations exposed to these emissions
sources.
K. Congressional Review Act
The Congressional Review Act, 5
U.S.C. 801, et seq., as added by the
Small Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that, before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing these final rules and
other required information to the United
States Senate, the United States House
of Representatives, and the Comptroller
General of the United States prior to
publication of the final rules in the
Federal Register. A major rule cannot
take effect until 60 days after it is
published in the Federal Register. This
action is not a "major rule" as defined
by 5 U.S.C. 804(2). The final rules will
be effective on April 21, 2011.
List of Subjects for 40 CFR Part 63
Environmental protection,
Administrative practice and procedures,
Air pollution control, Hazardous
substances, Intergovernmental relations,
Reporting and recordkeeping
requirements.
Dated: March 31, 2011.
Lisa P. Jackson,
Administrator.
For the reasons stated in the
preamble, the Environmental Protection
Agency amends title 40, chapter I, of the
Code of Federal Regulations as follows:
PART 63—[AMENDED]
• 1. The authority citation for part 63
continues to read as follows:
Authority: 42 U.S.C. 7401, et seq.
Subpart U—[Amended]
• 2. Section 63.480 is amended by
revising paragraph (j) to read as follows:
§63.480 Applicability and designation of
affected sources.
(j) Applicability of this subpart.
Paragraphs (j)(1) through (4) of this
section shall be followed during periods
of non-operation of the affected source
or any part thereof.
(1) The emission limitations set forth
in this subpart and the emission
limitations referred to in this subpart
shall apply at all times except during
periods of non-operation of the affected
source (or specific portion thereof)
resulting in cessation of the emissions to
which this subpart applies. However, if
a period of non-operation of one portion
of an affected source does not affect the
ability of a particular emission point to
comply with the emission limitations to
which it is subject, then that emission
point shall still be required to comply
with the applicable emission limitations
of this subpart during the period of nonoperation. For example, if there is an
overpressure in the reactor area, a
storage vessel that is part of the affected
source would still be required to be
controlled in accordance with the
emission limitations in § 63.484.
(2) The emission limitations set forth
in subpart H of this part, as referred to
in § 63.502, shall apply at all times,
except during periods of non-operation
of the affected source (or specific
portion thereof) in which the lines are
drained and depressurized, resulting in
cessation of the emissions to which
§ 63.502 applies.
(3) The owner or operator shall not
shut down items of equipment that are
required or utilized for compliance with
this subpart during times when
emissions (or, where applicable,
wastewater streams or residuals) are
being routed to such items of equipment
if the shutdown would contravene
requirements of this subpart applicable
to such items of equipment.
(4) In response to an action to enforce
the standards set forth in this subpart,
an owner or operator may assert an
affirmative defense to a claim for civil
penalties for exceedances of such
standards that are caused by a
malfunction, as defined in § 63.2.
Appropriate penalties may be assessed,
however, if the owner or operator fails
to meet the burden of proving all the
requirements in the affirmative defense.
The affirmative defense shall not be
available for claims for injunctive relief.
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
(i) To establish the affirmative defense
in any action to enforce such a limit, the
owners or operators of a facility must
timely meet the notification
requirements of paragraph (j)(4)(ii) of
this section, and must prove by a
preponderance of evidence that:
(A) The excess emissions were caused
by a sudden, infrequent, and
unavoidable failure of air pollution
control and monitoring equipment, or a
process to operate in a normal and usual
manner; and could not have been
prevented through careful planning,
proper design, or better operation and
maintenance practices; did not stem
from any activity or event that could
have been foreseen and avoided, or
planned for; and were not part of a
recurring pattern indicative of
inadequate design, operation, or
maintenance;
(B) Repairs were made as
expeditiously as possible when the
applicable emission limitations were
being exceeded. Off-shift and overtime
labor were used, to the extent
practicable to make these repairs;
(C)The frequency, amount, and
duration of the excess emissions
(including any bypass) were minimized
to the maximum extent practicable
during periods of such emissions;
(D) If the excess emissions resulted
from a bypass of control equipment or
a process, then the bypass was
unavoidable to prevent loss of life,
personal injury, or severe property
damage;
(E) All possible steps were taken to
minimize the impact of the excess
emissions on ambient air quality, the
environment, and human health;
(F) All emissions monitoring and
control systems were kept in operation,
if at all possible, consistent with safety
and good air pollution control practices;
(G)All of the actions in response to
the excess emissions were documented
by properly signed, contemporaneous
operating logs;
(H) At all times, the facility was
operated in a manner consistent with
good practices for minimizing
emissions; and
(I) The owner or operator has
prepared a written root cause analysis,
the purpose of which is to determine,
correct, and eliminate the primary
causes of the malfunction and the
excess emissions resulting from the
malfunction event at issue. The analysis
shall also specify, using the best
monitoring methods and engineering
judgment, the amount of excess
emissions that were the result of the
malfunction.
(ii) Notification. The owner or
operator of the facility experiencing an
exceedance of its emission limit(s)
during a malfunction shall notify the
Administrator by telephone or facsimile
(FAX) transmission as soon as possible,
but no later than 2 business days after
the initial occurrence of the
malfunction, if it wishes to avail itself
of an affirmative defense to civil
penalties for that malfunction. The
owner or operator seeking to assert an
affirmative defense shall also submit a
written report to the Administrator
within 45 days of the initial occurrence
of the exceedance of the standard in this
subpart to demonstrate, with all
necessary supporting documentation,
that it has met the requirements set forth
in paragraph (j)(4)(i) of this section. The
owner or operator may seek an
extension of this deadline for up to 30
additional days by submitting a written
request to the Administrator before the
expiration of the 45 day period. Until a
request for an extension has been
approved by the Administrator, the
owner or operator is subject to the
requirement to submit such report
within 45 days of the initial occurrence
of the exceedance.
• 3. Section 63.481 is amended by
revising paragraph (c) to read as follows:
§ 63.481 Compliance dates and
relationship of this subpart to existing
applicable rules.
(c) With the exceptions provided in
paragraphs (c)(1) through (3) of this
section, existing affected sources shall
be in compliance with this subpart no
later than June 19, 2001, as provided in
§ 63.6(c), unless an extension has been
granted as specified in paragraph (e) of
this section.
(1) Existing affected sources
producing epichlorohydrin elastomer,
butyl rubber, neoprene rubber, and
nitrile butadiene rubber shall be in
compliance with the applicable
emission limitation in § 63.494(a)(4) no
later than April 23, 2012.
(2) Existing affected sources
producing butyl rubber and ethylene
propylene rubber shall be in compliance
with § 63.485(q)(1) no later than April
23, 2012.
(3) Compliance with § 63.502 is
covered by paragraph (d) of this section.
*
*
*
*
*
• 4. Section 63.482 is amended by
removing the definition of "halobutyl
rubber," adding in alphabetical order a
definition for "affirmative defense,"
revising the definitions of "back-end,"
"butyl rubber." "elastomer product,"
"initial start-up," and "product" in
paragraph (b) to read as follows:
22587
§ 63.482 Definitions.
(b) * * *
Affirmative defense means, in the
context of an enforcement proceeding, a
response or a defense put forward by a
defendant, regarding which the
defendant has the burden of proof, and
the merits of which are independently
and objectively evaluated in a judicial
or administrative proceeding.
*
*
*
Back-end refers to the unit operations
in an EPPU following the stripping
operations. Back-end process operations
include, but are not limited to, filtering,
coagulation, blending, concentration,
drying, separating, and other finishing
operations, as well as latex and crumb
storage. Back-end does not include
storage and loading of finished product
or emission points that are regulated
under §§ 63.484, 63.501, or 63.502 of
this subpart.
Butyl rubber means a copolymer of
isobutylene and other monomers.
Typical other monomers include
isoprene and methylstyrene. A typical
composition of butyl rubber is
approximately 85- to 99-percent
isobutylene, and 1- to 15-percent other
monomers. Most butyl rubber is
produced by precipitation
polymerization, although other methods
may be used. Halobutyl rubber is a type
of butyl rubber elastomer produced
using halogenated copolymers.
*
*
*
*
*
Elastomer product means one of the
following types of products, as they are
defined in this section:
(1) Butyl Rubber;
(2) Epichlorohydrin Elastomer;
(3) Ethylene Propylene Rubber;
(4) Hypalon 'i'm;
(5) Neoprene;
(6) Nitrile Butadiene Rubber;
(7) Nitrile Butadiene Latex;
(8) Polybutadiene Rubber/Styrene
Butadiene Rubber by Solution;
(9) Polysulfide Rubber;
(10) Styrene Butadiene Rubber by
Emulsion; and
(11) Styrene Butadiene Latex.
Initial start-up means the first time a
new or reconstructed affected source
begins production of an elastomer
product, or, for equipment added or
changed as described in § 63.480(i), the
first time the equipment is put into
operation to produce an elastomer
product. Initial start-up does not
include operation solely for testing
equipment. Initial start-up does not
include subsequent start-ups of an
affected source or portion thereof
Federal Register/Vol. 76, No. 77/Thursday, April 21, 2011/Rules and Regulations
22588
following shutdowns, or following
changes in product for flexible
operation units, or following recharging
of equipment in batch operation.
(9) Section 63.506 for general
reporting and recordkeeping
requirements.
(q)(1)(iii)(A) and (B) of this section
divided by the base year elastomer
product that leaves the stripping
*
*
• 6. Section 63.484 is amended by
revising paragraph (b)(4) to read as
follows:
operation (or the reactor(s), if the plant
has no stripper(s)). The limitation shall
be calculated and submitted in
accordance with paragraph (q)(1)(iv) of
this section.
(A)For butyl rubber, the HCI emission
limitation shall be calculated using the
following equation:
*
*
*
Product means a polymer produced
using the same monomers, and varying
in additives (e.g., initiators, terminators,
etc.); catalysts; or in the relative
proportions of monomers, that is
manufactured by a process unit. With
respect to polymers, more than one
recipe may be used to produce the same
product, and there can be more than one
grade of a product. As an example,
styrene butadiene latex and butyl rubber
each represent a different product.
Product also means a chemical that is
not a polymer, is manufactured by a
process unit. By-products, isolated
intermediates, impurities, wastes, and
trace contaminants are not considered
products.
*
*
*
*
*
■ 5. Section 63.483 is amended by
revising paragraph (a) to read as follows:
§ 63.483 Emission standards.
(a) At all times, each owner or
operator must operate and maintain any
affected source subject to the
requirements of this subpart, including
associated air pollution control
equipment and monitoring equipment,
in a manner consistent with safety and
good air pollution control practices for
minimizing emissions. The general duty
to minimize emissions does not require
the owner or operator to make any
further efforts to reduce emissions if
levels required by this standard have
been achieved. Determination of
whether such operation and
maintenance procedures are being used
will be based on information available
to the Administrator which may
include, but is not limited to,
monitoring results, review of operation
and maintenance procedures, review of
operation and maintenance records, and
inspection of the source. Except as
allowed under paragraphs (b) through
(d) of this section, the owner or operator
of an existing or new affected source
shall comply with the provisions in:
(1) Section 63.484 for storage vessels;
(2) Section 63.485 for continuous
front-end process vents;
(3) Sections 63.486 through 63.492 for
batch front-end process vents;
(4) Sections 63.493 through 63.500 for
back-end process operations;
(5) Section 63.501 for wastewater;
(6) Section 63.502 for equipment
leaks;
(7) Section 63.504 for additional test
methods and procedures;
(8) Section 63.505 for monitoring
levels and excursions; and
*
§ 63.484 Storage vessel provisions.
*
*
*
*
(b) * * *
(4) Storage vessels located
downstream of the stripping operations
at affected sources subject to the backend residual organic HAP limitation
located in § 63.494(a)(1) through (3),
that are complying through the use of
stripping technology, as specified in
§ 63.495;
*
*
*
*
*
• 7. Section 63.485 is amended by:
• a. Revising paragraphs (q)
introductory text, and (q)(1)
introductory text;
• b. Adding paragraphs (q)(1)(iii)
through (q)(1)(vi); and
• c. Adding paragraph (w) to read as
follows:
§ 63.485 Continuous front-end process
vent provisions.
*
*
*
*
*
(q) Group 1 halogenated continuous
front-end process vents must comply
with the provisions of § 63.113(a)(1)(ii)
and § 63.113(c), with the exceptions
noted in paragraphs (q)(1) and (2) of this
section.
(1) Group I halogenated continuous
front-end process vents at existing
affected sources producing butyl rubber
or ethylene propylene rubber using a
solution process are exempt from the
provisions of § 63.113(a)(1)(ii) and
§ 63.113(c) if the conditions in
paragraphs (q)(1)(i) and (ii) of this
section are met, and shall comply with
the requirements in paragraphs
(q)(1)(iii) through (vi) of this section.
Group I halogenated continuous frontend process vents at new affected
sources producing butyl rubber or
ethylene propylene rubber using a
solution process are not exempt from
§ 63.113(a)(1)(ii) and § 63.113(c).
*
*
*
*
*
(iii) The average HCI emissions from
all front-end process operations at
affected sources producing butyl rubber
and ethylene propylene rubber using a
solution process shall not exceed the
limits determined in accordance with
paragraphs (q)(1)(iii)(A) and (B) of this
section for any consecutive 12-month
period. The specific limitation for each
elastomer type shall be determined
based on the calculation or the
emissions level provided in paragraphs
BRHCIEL =
HCI fl1 ~
* 1. 74
p2o16
Where:
HCI2 010 = HCI emissions in 2010, megagrams
per year (Mg/yr)
BRHCIEL = Butyl rubber HCl emission limit,
Mg HCl emissions/Mg butyl rubber
produced
P2010 = Total elastomer product leaving the
stripper in 2010, Mg/yr
1.74 = variability factor, unitless
(B) For ethylene propylene rubber
using a solution process, the HCI
emission limitation, in units of Mg HCI
emissions per Mg of ethylene propylene
rubber produced, shall be calculated by
dividing 27 Mg/yr by the mass of
ethylene propylene rubber produced in
2010, in Mg.
(iv) If the front-end process operation
is subject to a HC1 emission limitation
in paragraph (q)(1)(iii) of this section,
the owner and operator must submit the
information specified in paragraphs
(q)(1)(iv)(A) and (B) of this section.
(A) The applicable HCl emission
limitation determined in accordance
with paragraphs (q)(1)(iii)(A) and (B) of
this section shall be submitted no later
than 180 days from the date of
publication of the final rule
amendments in the Federal Register.
(B) Beginning with the first periodic
report required to be submitted by
§ 63.506(e)(6) that is at least 13 months
after the compliance date, the total mass
of HCl emitted for each of the rolling
12-month periods in the reporting
period divided by the total mass of
elastomer produced during the
corresponding 12-month period,
determined in accordance with
paragraph (q)(1)(v) of this section.
(v) Compliance with the HC1 emission
limitations determined in accordance
with paragraph (q)(1)(iii) of this section
shall be demonstrated in accordance
with paragraphs (q)(1)(v)(A) through (E)
of this section.
(A) Calculate your HCl emission
limitation in accordance with
paragraphs (q)(1)(iii)(A) and (B) of this
section, as applicable, record it, and
submit it in accordance with paragraph
(q)(1)(iv) of this section.
Federal Register/Vol. 76, No, 77 /Thursday, April 21, 2011 /Rules and Regulations
(B) Each month, calculate and record
the HCl emissions from all front-end
process operations using engineering
assessment. Engineering assessment
includes, but is not limited to, the
following:
(1) Use of material balances;
(2) Estimation of flow rate based on
physical equipment design, such as
pump or blower capacities;
(3) Estimation of HCl concentrations
based on saturation conditions; and
(4) Estimation of HCl concentrations
based on grab samples of the liquid or
vapor.
(C) Each month, record the mass of
elastomer product produced.
(D) Each month, calculate and record
the sum of the HCl emissions and the
mass of elastomer produced for the
previous calendar 12-month period.
(E) Each month, divide the total mass
of HCl emitted for the previous calendar
12-month period by the total mass of
elastomer produced during this
12-month period. This value must be
recorded in accordance with paragraph
(q)(1)(vi) of this section and reported in
accordance with paragraph (q)(1)(iv) of
this section.
(vi) If the front-end process operation
is subject to an HCl emission limitation
in paragraph (q)(1)(iii) of this section,
the owner or operator shall maintain the
records specified in paragraphs
(q)(1)(vi)(A) through (D) of this section.
(A) The applicable HC1 emission
limitation determined in accordance
with paragraphs (q)(1)(iii)(A) and (B) of
this section.
(B)The HCl emissions from all frontend process operations for each month,
along with documentation of all
calculations, and other information used
in the engineering assessment to
estimate these emissions.
(C)The mass of elastomer product
produced each month.
(D)The total mass of HCl emitted for
each 12-month period divided by the
total mass of elastomer produced during
the 12-month period, determined in
accordance with paragraph (q)(1)(v) of
this section.
*
*
*
*
*
(w) Shutdown. (1) During periods of
shutdown, a Group 1 continuous frontend process vent at an existing affected
source producing butyl rubber or
ethylene propylene rubber using a
solution process must be routed to a
flare until either the organic HAP
concentration in the vent is less than 50
ppmv, or the vent pressure is below
103.421 kPa.
• 8. Section 63.489 is amended by
revising paragraph (b)(4)(ii)(C) to read as
follows:
§ 63.489 Batch front-end process vents—
monitoring equipment.
(b) * * *
(4) * * *
(ii) * * *
(C) The owner or operator may
prepare and implement a gas stream
flow determination plan that documents
an appropriate method which will be
used to determine the gas stream flow.
The plan shall require determination of
gas stream flow by a method which will
at least provide a value for either a
representative or the highest gas stream
flow anticipated in the scrubber during
representative operating conditions. The
plan shall include a description of the
methodology to be followed and an
explanation of how the selected
methodology will reliably determine the
gas stream flow, and a description of the
records that will be maintained to
document the determination of gas
stream flow. The owner or operator
shall maintain the plan as specified in
§ 63.506(a).
*
*
*
*
*
• 9. Section 63.491 is amended by
revising paragraph (e)(2)(ii) to read as
follows:
§ 63.491 Batch front-end process vents recordkeeping requirements.
(e) * * *
(2) * * *
(ii) Monitoring data recorded during
periods of monitoring system
breakdowns, repairs, calibration checks,
and zero (low-level) and high-level
adjustments shall not be included in
computing the batch cycle daily
averages. In addition, monitoring data
recorded during periods of nonoperation of the EPPU (or specific
portion thereof) resulting in cessation of
organic HAP emissions shall not be
included in computing the batch cycle
daily averages.
*
*
*
*
*
• 10. Section 63.493 is revised to read
as follows:
22589
provisions of §§ 63.494 through 63.500
do not apply to the back-end operations
dedicated to the production of one or
more latex products, or to the back-end
operations during the production of a
latex product. Table 8 to this subpart
contains a summary of compliance
alternative requirements for the
emission limits in §63.494(a)(1)–(3) and
associated requirements.
• 11. Section 63.494 is amended by:
• a. Revising the section heading;
• b. Revising paragraph (a) introductory
text;
• c. Revising paragraph (a)(4);
• d. Revising paragraph (a)(5)
introductory text;
• e. Adding paragraph (a)(6);
• f. Revising paragraph (b);
• g. Revising paragraph (c); and
• h. Revising paragraph (d) to read as
follows:
§ 63.494 Back-end process provisions—
residual organic HAP and emission
limitations.
(a) The monthly weighted average
residual organic HAP content of all
grades of styrene butadiene rubber
produced by the emulsion process,
polybutadiene rubber and styrene
butadiene rubber produced by the
solution process, and ethylenepropylene rubber produced by the
solution process that is processed, shall
be measured after the stripping
operation (or the reactor(s), if the plant
has no stripper(s)), as specified in
§ 63.495(d), and shall not exceed the
limits provided in paragraphs (a)(1)
through (3) of this section, as applicable.
Owners or operators of these affected
sources shall comply with the
requirements of paragraphs (a)(1)
through (3) of this section using either
stripping technology, or control or
recovery devices. The organic HAP
emissions from all back-end process
operations at affected sources producing
butyl rubber, epichlorohydrin
elastomer, neoprene, and nitrile
butadiene rubber shall not exceed the
limits determined in accordance with
paragraph (a)(4) of this section, as
applicable.
§ 63.493 Back-end process provisions.
*
Owners and operators of new and
existing affected sources shall comply
with the requirements in §§ 63.494
through 63.500. Owners and operators
of affected sources whose only
elastomer products are latex products,
liquid rubber products, or products
produced in a gas-phased reaction
process, are not subject to the provisions
of §§ 63.494 through 63.500. If latex or
liquid rubber products are produced in
an affected source that also produces
another elastomer product, the
(4) The organic HAP emissions from
back-end processes at affected sources
producing butyl rubber,
epichlorohydrin elastomer, neoprene,
and nitrile butadiene rubber shall not
exceed the limits determined in
accordance with paragraphs (a)(4)(i)
through (iv) of this section for any
consecutive 12-month period. The
specific limitation for each elastomer
type shall be determined based on the
calculation or the emissions level
provided in paragraphs (a)(4)(i) through
*
*
*
*
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 201.1 /Rules and Regulations
22 59 0
(iv) of this section divided by the base
year elastomer product that leaves the
stripping operation (or the reactor(s), if
the plant has no stripper(s)). The
(i) For butyl rubber, the organic HAP
emission limitation shall be calculated
using the following equation:
limitation shall be calculated and
submitted in accordance with
§ 63.499(f)(1).
Ce2009 + Be24as ± UCe20 ag *
,
BREL =
~
.
F2009
Where:
Be2009 = Bypass emissions in 2009, Mg/yr
BREL = Butyl rubber emission limit, Mg
organic HAP emissions/Mg butyl rubber
produced
Ce2aw = Controlled emissions in 2009,
Mg/yr
P2009 = Total elastomer product leaving the
stripper in 2009, Mg/yr
UCe2509 = Uncontrolled emissions in 2009,
Mg/yr
1.35 = variability factor, unitless
(ii) For epichlorohydrin elastomer, the
organic HAP emission limitation, in
units of Mg organic HAP emissions per
Mg of epichlorohydrin elastomer
produced, shall be calculated by
dividing 51 Mg/yr by the mass of
epichlorohydrin elastomer produced in
2009, in Mg.
(iii) For neoprene, the organic HAP
emission limitation, in units of Mg
organic HAP emissions per Mg of
neoprene produced, shall be calculated
by dividing 30 Mg/yr by the mass of
neoprene produced in 2007, in Mg.
(iv) For nitrile butadiene rubber, the
organic HAP emission limitation, in
units of Mg organic HAP emissions per
Mg of nitrile butadiene rubber
produced, shall be calculated by
dividing 2.4 Mg/yr by the mass of nitrile
butadiene rubber produced in 2009, in
Mg.
)
15
For EPPU that produce both an
elastomer product with a residual
organic HAP limitation listed in
paragraphs (a)(1) through (3) of this
section, and a product listed in
paragraphs (a)(5)(i) through (iv) of this
section, only the residual HAP content
of the elastomer product with a residual
organic HAP limitation shall be used in
determining the monthly average
residual organic HAP content.
*
*
*
*
(6) There are no back-end process
operation residual organic HAP or
emission limitations for Hypalon TM and
polysulfide rubber production. There
are also no back-end process operation
residual organic HAP limitations for
latex products, liquid rubber products,
products produced in a gas-phased
reaction process, styrene butadiene
rubber produced by any process other
than a solution or emulsion process,
polybutadiene rubber produced by any
process other than a solution process, or
ethylene-propylene rubber produced by
any process other than a solution
process.
(b) If an owner or operator complies
with the residual organic HAP
limitations in paragraph (a)(1) through
(3) of this section using stripping
technology, compliance shall be
demonstrated in accordance with
§ 63.495. The owner or operator shall
also comply with the recordkeeping
provisions in § 63.498, and the reporting
provisions in § 63.499.
(c) If an owner or operator complies
with the residual organic HAP
limitations in paragraph (a)(1) through
(3) of this section using control or
recovery devices, compliance shall be
demonstrated using the procedures in
§ 63.496. The owner or operator shall
also comply with the monitoring
provisions in § 63.497, the
recordkeeping provisions in § 63.498,
and the reporting provisions in § 63.499.
(d) If the owner or operator complies
with the residual organic HAP
limitations in paragraph (a)(1) through
(3) of this section using a flare, the
owner or operator of an affected source
shall comply with the requirements in
§ 63.504(c).
• 12. Section 63.495 is amended by:
• a. Revising the section heading;
• b. Revising paragraph (a);
• c. Revising paragraph (b)(5); and
• d. Adding paragraph (g) to read as
follows:
§ 63.495 Back-end process provisions—
procedures to determine compliance with
residual organic HAP limitations using
stripping technology and organic HAP
emissions limitations.
(a) If an owner or operator complies
with the residual organic HAP
limitations in § 63.494(a)(1) through (3)
using stripping technology, compliance
shall be demonstrated using the
periodic sampling procedures in
paragraph (b) of this section, or using
the stripper parameter monitoring
procedures in paragraph (c) of this
section. The owner or operator shall
determine the monthly weighted
average residual organic HAP content
for each month in which any portion of
the back-end of an elastomer production
process is in operation. A single
monthly weighted average shall be
determined for all back-end process
operations at the affected source.
(b) * * *
(5) The monthly weighted average
shall be determined using the equation
in paragraph (f) of this section. All
representative samples taken and
analyzed during the month shall be
used in the determination of the
monthly weighted average.
(g) Compliance with the organic HAP
emission limitations determined in
accordance with § 63.494(a)(4) shall be
demonstrated in accordance with
paragraphs (g)(1) through (5) of this
section.
(1) Calculate your organic HAP
emission limitation in accordance with
§ 63.494(a)(4)(i) through (iv), as
applicable, record it, and submit it in
accordance with § 63.499(f)(1).
(2) Each month, calculate and record
the organic HAP emissions from all
back-end process operations using
engineering assessment. Engineering
assessment includes, but is not limited
to, the following:
(i) Previous test results, provided the
test was representative of current
operating practices.
(ii) Bench-scale or pilot-scale test data
obtained under conditions
representative of current process
operating conditions.
(iii) Design analysis based on
accepted chemical engineering
principles, measurable process
parameters, or physical or chemical
laws or properties. Examples of
analytical methods include, but are not
limited to:
(A) Use of material balances;
(B) Estimation of flow rate based on
physical equipment design, such as
pump or blower capacities;
(C) Estimation of organic HAP
concentrations based on saturation
conditions; and
(D) Estimation of organic HAP
concentrations based on grab samples of
the liquid or vapor.
(3) Each month, record the mass of
elastomer product produced.
(4) Each month, calculate and record
the sums of the organic HAP emissions
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Ru les and Regulations
and the mass of elastomer produced for
the previous calendar 12-month period.
(5) Each month, divide the total mass
of organic HAP emitted for the previous
calendar 12-month period by the total
mass of elastomer produced during this
12-month period. This value must be
recorded in accordance with § 63.498(e)
and reported in accordance with
§ 63.499(f)(2).
• 13. Section 63.496 is amended by:
• a. Revising the section heading;
• b. Revising paragraph (a);
• c. Revising paragraph (c)(2); and
• d. Revising paragraph (d) to read as
follows:
§ 63.496 Back-end process provisions—
procedures to determine compliance with
residual organic HAP limitations using
control or recovery devices.
(a) If an owner or operator complies
with the residual organic HAP
limitations in § 63.494(a)(1) through (3)
using control or recovery devices,
compliance shall be demonstrated using
the procedures in paragraphs (b) and (c)
of this section. Previous test results
conducted in accordance with
paragraphs (b)(1) through (6) of this
section may be used to determine
compliance in accordance with
paragraph (c) of this section.
*
*
*
*
(c) * * *
(2) A facility is in compliance if the
average of the organic HAP contents
calculated for all three test runs is below
the residual organic HAP limitations in
§ 63.494(a)(1) through (3).
(d) An owner or operator complying
with the residual organic HAP
limitations in § 63.494(a)(1) through (3)
using a control or recovery device, shall
redetermine the compliance status
through the requirements described in
paragraph (b) of this section whenever
process changes are made. The owner or
operator shall report the results of the
redetermination in accordance with
§ 63.499(d). For the purposes of this
section, a process change is any action
that would reasonably be expected to
impair the performance of the control or
recovery device. For the purposes of this
section, the production of an elastomer
with a residual organic HAP content
greater than the residual organic HAP
content of the elastomer used in the
compliance demonstration constitutes a
process change, unless the overall effect
of the change is to reduce organic HAP
emissions from the source as a whole.
Other examples of process changes may
include changes in production capacity
or production rate, or removal or
addition of equipment. For the purposes
of this paragraph, process changes do
not include: Process upsets;
unintentional, temporary process
changes; or changes that reduce the
residual organic HAP content of the
elastomer.
• 14. Section 63.497 is amended by:
• a. Revising the section heading;
• b. Revising paragraph (a) introductory
text; and
• c. Revising paragraph (d) introductory
text to read as follows:
§ 63.497 Back-end process provisions —
monitoring provisions for control and
recovery devices used to comply with
residual organic HAP limitations.
(a) An owner or operator complying
with the residual organic HAP
limitations in §63.494(a)(1) through (3)
using control or recovery devices, or a
combination of stripping and control or
recovery devices, shall install the
monitoring equipment specified in
paragraphs (a)(1) through (6) of this
section, as appropriate.
*
(d) The owner or operator of an
affected source with a controlled backend process vent using a vent system
that contains bypass lines that could
divert a vent stream away from the
control or recovery device used to
comply with § 63.494(a)(1) through (3),
shall comply with paragraph (d)(1) or
(2) of this section. Equipment such as
low leg drains, high point bleeds,
analyzer vents, open-ended valves or
lines, and pressure relief valves needed
for safety purposes are not subject to
this paragraph.
• 15. Section 63.498 is amended by:
• a. Revising paragraph (a) introductory
text;
• b. Revising paragraph (a)(3);
• c. Adding paragraph (a)(4);
• d. Revising paragraph (b) introductory
text;
• e. Revising paragraph (b)(3);
• f. Revising paragraph (c) introductory
text;
• g. Revising paragraph (d) introductory
text;
• h. Revising paragraph (d)(5)(ii)(B);
• I. Revising paragraph (d)(5)(ii)(E); and
• j. Adding paragraph (e) to read as
follows:
§ 63.498 Back-end process provisions recordkeeping.
(a) Each owner or operator shall
maintain the records specified in
paragraphs (a)(1) through (4), and
paragraphs (b) through (e) of this
section, as appropriate.
*
*
*
*
*
(3) If the back-end process operation
is subject to a residual organic HAP
22591
limitation in § 63.494(a)(1) through (3),
whether compliance will be achieved by
stripping technology, or by control or
recovery devices.
(4) If the back-end process operation
is subject to an emission limitation in
§ 63.494(a)(4), the organic HAP emission
limitation calculated in accordance with
§ 63.494(a)(4)(i) through (iv), as
applicable.
(b) Each owner or operator of a backend process operation using stripping
technology to comply with a residual
organic HAP limitation in § 63.494(a)(1)
through (3), and demonstrating
compliance using the periodic sampling
procedures in § 63.495(b), shall
maintain the records specified in
paragraph (b)(1), and in paragraph (b)(2)
or paragraph (b)(3) of this section, as
appropriate.
(3) If the organic HAP contents for all
samples analyzed during a month are
below the appropriate level in
§ 63.494(a), the owner or operator may
record that all samples were in
accordance with the residual organic
HAP limitations in § 63.494(a)(1)
through (3), rather than calculating and
recording a monthly weighted average.
(c) Each owner or operator of a backend process operation using stripping
technology to comply with a residual
organic HAP limitation in § 63.494(a)(1)
through (3), and demonstrating
compliance using the stripper parameter
monitoring procedures in § 63.495(c),
shall maintain the records specified in
paragraphs (c)(1) through (3) of this
section.
(d) Each owner or operator of a backend process operation using control or
recovery devices to comply with a
residual organic HAP limitation in
§ 63.494(a)(1) through (3), shall
maintain the records specified in
paragraphs (d)(1) through (5) of this
section. The recordkeeping
requirements contained in paragraphs
(d)(1) through (4) pertain to the results
of the testing required by § 63.496(b), for
each of the three required test runs.
(5) * *
(ii) * * *
(B) Monitoring data recorded during
periods of monitoring system
breakdowns, repairs, calibration checks,
Ind zero (low-level) and high-level
adjustments, shall not be included in
computing the hourly or daily averages.
In addition, monitoring data recorded
during periods of non-operation of the
EPPU (or specific portion thereof)
resulting in cessation of organic HAP
emissions, shall not be included in
22592
Federal Register/Vol. 76, No. 77/Thursday, April 21, 2011/Rules and Regulations
computing the hourly or daily averages.
Records shall be kept of the times and
durations of all such periods and any
other periods of process or control
device operation when monitors are not
operating.
(E) For flares, records of the times and
duration of all periods during which the
pilot flame is absent, shall be kept rather
than daily averages. The records
specified in this paragraph are not
required during periods when emissions
are not routed to the flare.
(e) If the back-end process operation
is subject to an organic HAP emission
limitation in § 63.494(a)(4), the records
specified in paragraphs (e)(1) through
(4) of this section.
(1) The applicable organic HAP
emission limitation determined in
accordance with § 63.494(a)(4)(i)
through (iv).
(2) The organic HAP emissions from
all back-end process operations for each
month, along with documentation of all
calculations and other information used
in the engineering assessment to
estimate these emissions.
(3) The mass of elastomer product
produced each month.
(4) The total mass of organic HAP
emitted for each 12-month period
divided by the total mass of elastomer
produced during the 12-month period,
determined in accordance with
§ 63.495(g)(5).
• 16. Section 63.499 is amended by:
• a. Revising paragraph (a)(3);
• b. Revising paragraph (b) introductory
text;
• c. Revising paragraph (c) introductory
text;
• d. Revising paragraph (d) introductory
text; and
• e. Adding paragraph (f) to read as
follows:
§ 63.499 Back-end process provisions—
reporting.
(a) * * *
(3) If the back-end process operation
is subject to a residual organic HAP
limitation in § 63.494(a)(1) through (3),
whether compliance will be achieved by
stripping technology, or by control or
recovery devices.
(b) Each owner or operator of a backend process operation using stripping to
comply with a residual organic HAP
limitation in § 63.494(a)(1) through (3),
and demonstrating compliance by
stripper parameter monitoring, shall
submit reports as specified in
paragraphs (b)(1) and (2) of this section.
*
*
*
*
*
(c) Each owner or operator of an
affected source with a back-end process
operation control or recovery device
that shall comply with a residual
organic HAP limitation in § 63.494(a)(1)
through (3), shall submit the
information specified in paragraphs
(c)(1) through (3) of this section as part
of the Notification of Compliance Status
specified in § 63.506(e)(5).
*
*
*
*
(d) Whenever a process change, as
defined in § 63.496(d), is made that
causes the redetermination of the
compliance status for the back-end
process operations subject to a residual
organic HAP limitation in § 63.494(a)(1)
through (3), the owner or operator shall
submit a report within 180 days after
the process change, as specified in
§ 63.506(e)(7)(iii). The report shall
include:
(f) If the back-end process operation is
subject to an organic HAP emission
limitation in § 63.494(a)(4), the owner
and operator must submit the
information specified in paragraphs
(f)(1) and (2) of this section.
(1) The applicable organic HAP
emission limitation determined in
accordance with § 63.494(a)(4)(i)
through (iv), shall be submitted no later
than 180 days from the date of
publication of the final rule
amendments in the Federal Register.
(2) Beginning with the first periodic
report required to be submitted by
§ 63.506(e)(6) that is at least 13 months
after the compliance date, the total mass
of organic HAP emitted for each of the
rolling 12-month periods in the
reporting period divided by the total
mass of elastomer produced during the
corresponding 12-month period,
determined in accordance with
§ 63.495(g)(5).
• 17. Section 63.501 is amended by
revising paragraph (c)(2) to read as
follows:
§63.501 Wastewater provisions.
*
*
*
*
*
(c) * * *
(2) Back-end streams at affected
sources that are subject to a residual
organic HAP limitation in § 63.494(a)(1)
through (3) and that are complying with
these limitations through the use of
stripping technology.
• 18. Section 63.502 is amended by
revising paragraphs (a) and (b)(4) to read
as follows:
§ 63.502 Equipment leak and heat
exchange system provisions.
(a) Equipment leak provisions. The
owner or operator of each affected
source, shall comply with the
requirements of subpart H of this part,
with the exceptions noted in paragraphs
(b) through (m) of this section. Surge
control vessels required to be controlled
by subpart H may, alternatively, comply
with the Group 1 storage vessel
provisions specified in § 63.484.
(b) * * *
(4) Surge control vessels and bottoms
receivers located downstream of the
stripping operations at affected sources
subject to the back-end residual organic
HAP limitation located in § 63.494(a)(1)
through (3) that are complying through
the use of stripping technology, as
specified in § 63.495;
*
*
*
*
§ 63.503—[Amended]
• 19. Section 63.503 is amended by
removing and reserving paragraph (f)(1).
• 20. Section 63.504 is amended by
revising paragraph (a)(1) introductory
text to read as follows:
§ 63.504 Additional requirements for
performance testing.
( a) * * *
(1) Performance tests shall be
conducted at maximum representative
operating conditions achievable during
one of the time periods described in
paragraph (a)(1)(i) of this section,
without causing any of the situations
described in paragraph (a)(1)(ii) of this
section to occur. Upon request, the
owner or operator shall make available
to the Administrator such records as
may be necessary to determine the
conditions of performance tests.
• 21. Section 63.505 is amended by:
• a. Revising paragraph (e)(4);
• b. Revising paragraph (g)(1)
introductory text;
• c. Revising paragraph (g)(1)(v)(A);
• d. Revising paragraph (g)(1)(v)(B);
• e. Removing paragraphs (g)(1)(v)(C)
through (g)(1)(v)(E);
• f. Revising paragraph (g)(2)(ii)(B)
introductory text; and
• g. Adding paragraph (j) to read as
follows:
§ 63.505 Parameter monitoring levels and
excursions.
( e) * * *
(4) An owner or operator complying
with the residual organic HAP
limitations in paragraphs (a)(1) through
(3) of § 63.494 using stripping, and
demonstrating compliance by stripper
parameter monitoring, shall redetermine
the residual organic HAP content for all
affected grades whenever process
changes are made. For the purposes of
this section, a process change is any
action that would reasonably be
Federal Register/Vol. 76, No. 77/Thursday, April 21, 2 011/Rules and Regulations
expected to impair the performance of
the stripping operation. For the
purposes of this section, examples of
process changes may include changes in
production capacity or production rate,
or removal or addition of equipment.
For purposes of this paragraph, process
changes do not include: Process upsets;
unintentional, temporary process
changes; or changes that reduce the
residual organic HAP content of the
elastomer.
(g) * * *
(1) With respect to storage vessels
(where the applicable monitoring plan
specifies continuous monitoring),
continuous front-end process vents,
aggregate batch vent streams, back-end
process operations complying with
§ 63.494(a)(1) through (3) through the
use of control or recovery devices, and
process wastewater streams, an
excursion means any of the three cases
listed in paragraphs (g)(1)(i) through
(g)(1)(iii) of this section.
(v) * * *
(A) Monitoring system breakdowns,
repairs, calibration checks, and zero
(low-level) and high-level adjustments;
or
(B) Periods of non-operation of the
affected source (or portion thereof),
resulting in cessation of the emissions to
which the monitoring applies.
(2) * * *
(ii) * * *
(B) Subtract the time during the
periods of monitoring system
breakdowns, repairs, calibration checks,
and zero (low-level) and high-level
adjustments from the total amount of
time determined in paragraph
(g)(2)(ii)(A) of this section, to obtain the
operating time used to determine if
monitoring data are insufficient.
*
*
*
*
*
(j) Excursion definition for back-end
operations subject to § 63.494(a)(4). An
excursion means when the total mass of
organic HAP emitted for any
consecutive 12-month period divided by
the total mass of elastomer produced
during the 12-month period, determined
in accordance with § 63.495(g), is
greater than the applicable emission
limitation, determined in accordance
with § 63.494(a)(4)(i) through (iv) and
submitted in accordance with
§ 63.499(f)(1).
• 22. Section 63.506 is amended by:
• a. Revising paragraph (b)(1)
introductory text;
• b. Revising paragraph (d)(7);
• c. Revising paragraph (e)(3)
introductory text;
• d. Removing and reserving paragraph
(e)(3)(viii);
• e. Revising paragraph (e)(3)(ix)(B);
• f. Revising paragraph (e)(6)(iii)(E);
• g. Revising paragraph (h)(1)(i);
• h. Revising paragraph (h)(1)(ii)(C);
• i. Revising paragraph (h)(1)(iii);
• j. Revising paragraph (h)(2)(iii);
• k. Removing and reserving paragraph
(h)(2)(iv)(A); and
• 1. Adding paragraph (i) to read as
follows:
§63.506 General record keeping and
reporting provisions.
(b) * * *
(1) Malfunction records. Each owner
or operator of an affected source subject
to this subpart shall maintain records of
the occurrence and duration of each
malfunction of operation (i.e., process
equipment), air pollution control
equipment, or monitoring equipment.
Each owner or operator shall maintain
records of actions taken during periods
of malfunction to minimize emissions in
accordance with § 63.483(a)(1),
including corrective actions to restore
malfunctioning process and air
pollution control and monitoring
equipment to its normal or usual
manner of operation.
*
*
*
*
(d)* *
(7) Monitoring data recorded during
periods identified in paragraphs (d)(7)(i)
and (ii) of this section shall not be
included in any average computed
under this subpart. Records shall be
kept of the times and durations of all
such periods and any other periods
during process or control device or
recovery device operation when
monitors are not operating.
(i) Monitoring system breakdowns,
repairs, calibration checks, and zero
(low-level) and high-level adjustments;
or
(ii) Periods of non-operation of the
affected source (or portion thereof),
resulting in cessation of the emissions to
which the monitoring applies.
( e) * * *
(3) Precompliance Report. Owners or
operators of affected sources requesting
an extension for compliance; requesting
approval to use alternative monitoring
parameters, alternative continuous
monitoring and recordkeeping, or
alternative controls; requesting approval
to use engineering assessment to
estimate emissions from a batch
emissions episode, as described in
§ 63.488(b)(6)(i); wishing to establish
parameter monitoring levels according
to the procedures contained in
§ 63.505(c) or (d); shall submit a
Precompliance Report according to the
schedule described in paragraph (e)(3)(i)
22593
of this section. The Precompliance
Report shall contain the information
specified in paragraphs (e)(3)(ii) through
(vii) of this section, as appropriate.
*
*
(viii) [Reserved]
(ix) * * *
(B) Supplements to the Precompliance
Report may be submitted to request
approval to use alternative monitoring
parameters, as specified in paragraph
(e)(3)(iii) of this section; to use
alternative continuous monitoring and
recordkeeping, as specified in paragraph
(e)(3)(iv) of this section; to use
alternative controls, as specified in
paragraph (e)(3)(v) of this section; to use
engineering assessment to estimate
emissions from a batch emissions
episode, as specified in paragraph
(e)(3)(vi) of this section; or to establish
parameter monitoring levels according
to the procedures contained in
§ 63.505(c) or (d), as specified in
paragraph (e)(3)(vii) of this section.
*
*
*
( 6) * *
(iii) * *
(E) The number, duration, and a brief
description for each type of malfunction
which occurred during the reporting
period and which caused or may have
caused any applicable emission
limitation to be exceeded. The report
must also include a description of
actions taken by an owner or operator
during a malfunction of an affected
source to minimize emissions in
accordance with § 63.483(a)(1),
including actions taken to correct a
malfunction.
(h) * *
( 1) * * *
(i) The monitoring system is capable
of detecting unrealistic or impossible
data during periods of normal operation
(e.g., a temperature reading of — 200 °C
on a boiler), and will alert the operator
by alarm or other means. The owner or
operator shall record the occurrence. All
instances of the alarm or other alert in
an operating day constitute a single
occurrence.
(ii) * * *
(C) The running average reflects a
period of normal operation.
(iii) The monitoring system is capable
of detecting unchanging data during
periods of normal operation, except in
circumstances where the presence of
unchanging data is the expected
operating condition based on past
experience (e.g., pH in some scrubbers),
and will alert the operator by alarm or
other means. The owner or operator
shall record the occurrence. All
instances of the alarm or other alert in
22594
Federal Register / Vol. 76, No. 77/Thursday, April 21, 2011 / Rules and Regulations
an operating day constitute a single
occurrence.
*
(2) * * *
(iii) The owner or operator shall retain
the records specified in paragraphs
(h)(1)(i) through (iii) of this section, for
the duration specified in paragraph (h)
of this section. For any calendar week,
if compliance with paragraphs (h)(1)(i)
through (iii) of this section does not
result in retention of a record of at least
one occurrence or measured parameter
value, the owner or operator shall
record and retain at least one parameter
value during a period of normal
operation.
(iv)
* * *
(A) [Reserved]
*
*
*
*
(i)(1) As of January 1, 2012, and
within 60 days after the date of
completing each performance test, as
defined in § 63.2 and as required in this
subpart, you must submit performance
test data, except opacity data,
electronically to EPA's Central Data
Exchange by using the Electronic
Reporting Tool (ERT) (see http://
www.epa.gov/ttn/chief/ert/ert
tool.html/) or other compatible
electronic spreadsheet. Only data
collected using test methods compatible
with ERT are subject to this requirement
to be submitted electronically into
EPA's WebFIRE database.
(2) All reports required by this
subpart not subject to the requirements
in paragraphs (i)(1) of this section must
be sent to the Administrator at the
appropriate address listed in § 63.13. If
acceptable to both the Administrator
and the owner or operator of a source,
these reports may be submitted on
electronic media. The Administrator
retains the right to require submittal of
reports subject to paragraph (i)(1) of this
section in paper format.
• 23. Table 1 to Subpart U of part 63 is
amended by:
• a. Removing entry 63.6(e);
• b. Revising entries 63.6(e)(1)(i) and
63.6(e)(1)(ii);
• c. Revising entry 63.6(e)(2);
• d. Adding entry 63.6(e)(3);
• e. Removing entries 63.6(e)(3)(i)
through 63.6(e)(3)(ix);
• f. Revising entry 63.6(f)(1); and
• g. Revising entries 63.7(e)(1) and
63.10(d)(5)(i) to read as follows:
TABLE 1 TO SUBPART U OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO SUBPART U AFFECTED SOURCES
Reference
Applies to subpart U
§63.6(e)(1)(i) ........................................................No .............................
Explanation
See §63.483(a)(1) for general duty requirement. Any cross reference
to § 63.6(e)(1)(i) in any other general provision incorporated by ref-
erence shall be treated as a cross reference to §63.483(a)(1).
§63.6(e)( 1 )(ii) ........................................................No.
§63.6(e)(2) ............................................................ No .............................
§63.6(e)(3) ............................................................No.
§ 63.6(f)(1) .............................................................
No.
[Reserved.].
§63.7(e)(1) ............................................................No .............................
See §63.504(a)(1). Any cross-reference to §63.7(e)(1) in any other
general provision incorporated by reference shall be treated as a
cross-reference to § 63.504(a)(1).
63.10(d)(5)(i) .........................................................
No.
• 24. Table 5 to Subpart U of part 63 is
revised to read as follows:
TABLE 5 TO SUBPART U OF PART 63—KNOWN ORGANIC HAP EMITTED FROM THE PRODUCTION OF ELASTOMER
PRODUCTS
[Known organic HAP emitted from the production of elastomer products]
Elastomer product/subcategory
I
Organic HAP/Chemical name (CAS
No.)
BR
Acrylonitrile (107131) ....................... ............
1,3 Butadiene (106990) ................... ............
............
Carbon Disulfide ...............................
Carbon Tetrachloride (56235) .......... ............
Chlorobenzene (108907) ................. ...........
Chloroform (67663)
(
Chloroprene (126998) ...................................
Epichlorohydrin (106898) ................. ............
X
Ethylbenzene (100414) ....................
Ethylene Dichloride (107062) ........... ............
Ethylene Oxide (75218) ...................
Formaldehyde (50000) ..................... ............
EPI
EPR
...
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
X
............
............
X
X
HYP
NEO
............ ............
............ ............
............ ............
X
............
X
X
............
............
X
............ ............
............ ............
............
.........................
............ (............ . ............
NBL
NBR
X
X
X
............
X
X
X
............
PBR/
PSR
SBL
SBRE
X
X
............
............
X
X
X
X
............
.......I....
............
............
............
............
............
............
............
............
............
............
.....I....I.
X
............
............
............
............
............
............
............
............
............
............
X
X
X
SBRS
............
............
~
............
............
Federal Register/Vol. 76, No. 77/Thursday, April 21, 2011/Rules and Regulations
TABLE
5
TO SUBPART
U
OF PART
22 595
63—KNOWN
ORGANIC HAP EMITTED FROM THE PRODUCTION OF ELASTOMER
PRODUCTS —Continued
[Known organic HAP emitted from the production of elastomer products]
Elastomer product/subcategory
Organic HAP/Chemical name (CAS
No.)
BR
EPI
EPR
Hexane (110543) .............................
Methanol (67561) ...................................X
Methyl Chloride (74873) ...................X
Propylene Oxide (75569) ................. .....X .....
Styrene (100425) .............................
Toluene (108883) .............................
............
............
Xylenes (1330207) ...........................
Xylene(m-) (108383) .......................
Xylene (o-) (95476) ..........................
Xylene(p-) (106423) ........................
X
X
HYP
NEO
NBL
X
NBR
X
X
.. .....
............
X
......
X
............
............
............
.........
............
............
.
..........I.
............
X
PSR
SBL
.......
.................
.......
..............
i
X
............
X
SBRS
........I...
...........
X
X
............
............
SBRE
.
I .
.............
...........
............
............
............
............
............
..........
............
X
....
............
............
............
............
............
......I.....
............
............
............
X
............
............
............
............
.......
............
............
CAS No. = Chemical Abstract Service Number.
BR = Butyl Rubber.
EPI = Epichlorohydrin Rubber.
EPR = Ethylene Propylene Rubber.
HYP = HypalonTM.
NEO = Neoprene.
NBL = Nitrile Butadiene Latex.
NBR = Nitrile Butadiene Rubber.
PBR/SBRS = Polybutadiene and Styrene Butadiene Rubber by Solution.
PSR = Polysulfide Rubber.
SBL = Styrene Butadiene Latex.
SBRE = Styrene Butadiene Rubber by Emulsion.
Subpart Y—[Amended]
• 25-26. Section 63.560 is amended by:
• a. Adding paragraph (a)(4);
• b. Revising paragraph (d)(6); and
• c. Adding paragraph (e)(1)(iv) to read
as follows:
• d. Table 1 to subpart Y of part 63 is
amended by:
• 1. Revising entry 63.6(f)(1);
• 2. Removing entry 63.7(e);
• 3. Adding entries 63.7(e)(1) and
63.7(e)(2)–(4);
• 4. Removing entries 63.8(c)(1)(i),
63.8(c)(1)(ii), and 63.(c)(1)(iii);
• 5. Adding entry 63.8(c)(1);
• 6. Removing entry 63.10(b)(2)(i);
• 7. Adding entry 63.10(b)(2)(i)–(ii);
• 8. Removing entry 63.10(b)(2)(ii)–(iii);
TABLE 1 OF
• 9. Adding entry 63.10(b)(2)(iii);
• 10. Removing entry 63.10(c)(10)–(13)
and
• 11. Adding entries 63.10(c)(10)–(11)
and 63.10(c)(12)–(13).
The additions and revisions read as
follows:
§63.560 Applicability and designation of
affected source.
(6) The provisions of this subpart do
not apply to marine tank vessel loading
operations at existing offshore loading
terminals, as that term is defined in
§ 63.561, however existing offshore
loading terminals must meet the
submerged fill standards of 46 CFR
153.282.
( e) * * *
(1) * * *
(a) * * *
(4) Existing sources with emissions
less than 10 and 25 tons must meet the
submerged fill standards of 46 CFR
153.282. This submerged fill
requirement does not apply to
petroleum refineries.
*
*
*
*
*
(d) * * *
(iv) Existing sources with emissions
less than 10 and 25 tons, and existing
offshore loading terminals, shall comply
with the submerged fill requirements in
paragraph (a)(4) and (d)(6) of this
section by April 23, 2012.
*
*
*
*
*
§ 63.560— GENERAL PROVISIONS APPLICABILITY TO SUBPART Y
Reference
Applies to
affected sources in
subpart Y
63.6(f)(1) ...............................................................
No.
63.7(e)(1) ..............................................................
No .............................
63.7(e)(2)–(4) ........................................................
63.8(c)(1) ..............................................................
Yes.
No.
63 . 10 (b)(2)(i) –(ii) ...................................................
No .............................
Comment
See 63.563(b)(1). Any cross reference to 63.7(e)(1) in any other
general provision incorporated by reference shall be treated as a
cross-reference to 63.563(b)(1).
See 63.567(m).
22596
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
TABLE 1 OF § 63.560—GENERAL PROVISIONS APPLICABILITY TO SUBPART Y—Continued
Reference
6 3. 10 (b)(2 )(iii)
Applies to
affected sources in
subpart Y
Comment
.......................................................Yes.
63.10(c)(10)-(11) ..................................................No .............................
63.10(c)(12)-(13) ..................................................Yes.
• 27. Section 63.561 is amended by
adding in alphabetical order a definition
for "affirmative defense" to read as
follows:
§63.561 Definitions.
Affirmative defense means, in the
context of an enforcement proceeding, a
response or a defense put forward by a
defendant, regarding which the
defendant has the burden of proof, and
the merits of which are independently
and objectively evaluated in a judicial
or administrative proceeding.
• 28. Section 63.562 is amended by:
• a. Revising paragraph (e) introductory
text; and
• b. Adding paragraph (e)(7) to read as
follows:
§ 63.562 Standards.
(e) Operation and maintenance
requirements for air pollution control
equipment and monitoring equipment
for affected sources. At all times, owners
or operators of affected sources shall
operate and maintain a source,
including associated air pollution
control equipment, in a manner
consistent with safety and good air
pollution control practices for
minimizing emissions. Determination of
whether acceptable operation and
maintenance procedures are being used
will be based on information available
to the Administrator which may
include, but is not limited to,
monitoring results, review of operation
and maintenance procedures, review of
operation and maintenance records, and
inspection of the source.
(7) In response to an action to enforce
the standards set forth in this subpart,
you may assert an affirmative defense to
a claim for civil penalties for
exceedances of such standards that are
See 63.567(m) for reporting malfunctions. Any cross-reference to
63.10(c)(10) or 63.10(c)(11) in any other general provision incorporated by reference shall be treated as a cross-reference to
63.567(m).
caused by a malfunction, as defined in
§ 63.2. Appropriate penalties may be
assessed, however, if the respondent
fails to meet its burden of proving all
the requirements in the affirmative
defense. The affirmative defense shall
not be available for claims for injunctive
relief.
(i) To establish the affirmative defense
in any action to enforce such a limit, the
owners or operators of a facility must
timely meet the notification
requirements of paragraph (e)(7)(ii) of
this section, and must prove by a
preponderance of evidence that:
(A) The excess emissions were caused
by a sudden, infrequent, and
unavoidable failure of air pollution
control and monitoring equipment, or a
process to operate in a normal and usual
manner; and could not have been
prevented through careful planning,
proper design or better operation and
maintenance practices; and did not stem
from any activity or event that could
have been foreseen and avoided, or
planned for; and were not part of a
recurring pattern indicative of
inadequate design, operation, or
maintenance;
(B)Repairs were made as
expeditiously as possible when the
applicable emission limitations were
being exceeded. Off-shift and overtime
labor were used, to the extent
practicable to make these repairs;
(C)The frequency, amount and
duration of the excess emissions
(including any bypass) were minimized
to the maximum extent practicable
during periods of such emissions;
(D)If the excess emissions resulted
from a bypass of control equipment or
a process, then the bypass was
unavoidable to prevent loss of life,
personal injury, or severe property
damage;
(E) All possible steps were taken to
minimize the impact of the excess
emissions on ambient air quality, the
environment, and human health;
(F) All emissions monitoring and
control systems were kept in operation
if at all possible, consistent with safety
and good air pollution control practices;
(G)All of the actions in response to
the excess emissions were documented
by properly signed, contemporaneous
operating logs;
(H)At all times, the affected facility
was operated in a manner consistent
with good practices for minimizing
emissions; and
(I) The owner or operator has
prepared a written root cause analysis,
the purpose of which is to determine,
correct, and eliminate the primary
causes of the malfunction and the
excess emissions resulting from the
malfunction event at issue. The analysis
shall also specify, using the best
monitoring methods and engineering
judgment, the amount of excess
emissions that were the result of the
malfunction.
(ii) Notification. The owner or
operator of the facility experiencing an
exceedance of its emission limit(s)
during a malfunction shall notify the
Administrator by telephone or facsimile
(FAX) transmission as soon as possible,
but no later than 2 business days after
the initial occurrence of the
malfunction, if it wishes to avail itself
of an affirmative defense to civil
penalties for that malfunction. The
owner or operator seeking to assert an
affirmative defense shall also submit a
written report to the Administrator
within 45 days of the initial occurrence
of the exceedance of the standard in this
subpart to demonstrate, with all
necessary supporting documentation,
that it has met the requirements set forth
in paragraph (e)(7)(i) of this section. The
owner or operator may seek an
extension of this deadline for up to 30
additional days by submitting a written
request to the Administrator before the
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 / Rules and Regulations
expiration of the 45 day period. Until a
request for an extension has been
approved by the Administrator, the
owner or operator is subject to the
requirement to submit such report
within 45 days of the initial occurrence
of the exceedance.
• 29. Section 63.563 is amended by
revising paragraph (b)(1) to read as
follows:
§ 63.563 Compliance and performance
testing.
*
*
(b) * * *
(1) Initial performance test. An initial
performance test shall be conducted
using the procedures listed in § 63.7 of
subpart A of this part according to the
applicability in Table 1 of § 63.560, the
procedures listed in this section, and
the test methods listed in § 63.565. The
initial performance test shall be
conducted within 180 days after the
compliance date for the specific affected
source. During this performance test,
sources subject to MACT standards
under § 63.562(b)(2), (3), (4), and (5),
and (d)(2) shall determine the reduction
of HAP emissions, as VOC, for all
combustion or recovery devices other
than flares. Performance tests shall be
conducted under such conditions as the
Administrator specifies to the owner or
operator based on representative
performance of the affected source for
the period being tested. Upon request,
the owner or operator shall make
available to the Administrator such
records as may be necessary to
determine the conditions of
performance tests. Sources subject to
RACT standards under § 63.562(c)(3),
(4), and (5), and (d)(2) shall determine
the reduction of VOC emissions for all
combustion or recovery devices other
than flares.
• 30. Section 63.567 is amended by
adding paragraphs (m) and (n) to read as
follows:
§63.567 Recordkeeping and reporting
requirements.
(m) The number, duration, and a brief
description for each type of malfunction
which occurred during the reporting
period and which caused or may have
caused any applicable emission
limitation to be exceeded shall be stated
in a semiannual report. The report must
also include a description of actions
taken by an owner or operator during a
malfunction of an affected source to
minimize emissions in accordance with
§ 63.562(e), including actions taken to
correct a malfunction. The report, to be
22597
certified by the owner or operator or
from any activity or event that could
other responsible official, shall be
have been foreseen and avoided, or
submitted semiannually and delivered
planned for; and were not part of a
or postmarked by the 30th day following recurring pattern indicative of
the end of each calendar half.
inadequate design, operation, or
(n)(1) As of January 1, 2012 and
maintenance;
(ii) Repairs were made as
within 60 days after the date of
expeditiously as possible when the
completing each performance test, as
defined in § 63.2, and as required in this applicable emission limitations were
being exceeded. Off-shift and overtime
subpart, you must submit performance
labor were used, to the extent
test data, except opacity data,
practicable to make these repairs;
electronically to EPA's Central Data
(iii) The frequency, amount, and
Exchange by using the ERT (see
duration of the excess emissions
http://wvnv.epa.gov/ttn/chief/ert/ert
(including any bypass) were minimized
tool.html/) or other compatible
to the maximum extent practicable
electronic spreadsheet. Only data
collected using test methods compatible during periods of such emissions;
(iv) If the excess emissions resulted
with ERT are subject to this requirement
from a bypass of control equipment or
to be submitted electronically into
a process, then the bypass was
EPA's WebFIRE database.
unavoidable to prevent loss of life,
(2) All reports required by this
personal injury, or severe property
subpart not subject to the requirements
damage;
in paragraph (n)(1) of this section must
(v) All possible steps were taken to
be sent to the Administrator at the
minimize
the impact of the excess
appropriate address listed in § 63.13. If
emissions on ambient air quality, the
acceptable to both the Administrator
environment, and human health;
and the owner or operator of a source,
(vi) All emissions monitoring and
these reports may be submitted on
control systems were kept in operation,
electronic media. The Administrator
if at all possible, consistent with safety
retains the right to require submittal of
and good air pollution control practices;
reports subject to paragraph (n)(1) of
(vii) All of the actions in response to
this section in paper format.
the excess emissions were documented
by properly signed, contemporaneous
Subpart KK—[Amended]
operating logs;
(viii) At all times, the facility was
• 31. Section 63.820 is amended by
operated in a manner consistent with
adding paragraph (c) to read as follows:
good practices for minimizing
§63.820 Applicability.
emissions; and
*
*
*
(ix) The owner or operator has
(c) In response to an action to enforce prepared a written root cause analysis,
the standards set forth in this subpart,
the purpose of which is to determine,
an owner or operator may assert an
correct and eliminate the primary
affirmative defense to a claim for civil
causes of the malfunction and the
penalties for exceedances of such
excess emissions resulting from the
standards that are caused by a
malfunction event at issue. The analysis
malfunction, as defined in § 63.2.
shall also specify, using the best
Appropriate penalties may be assessed,
monitoring methods and engineering
however, if the owner or operator fails
judgment, the amount of excess
to meet the burden of proving all the
emissions that were the result of the
requirements in the affirmative defense. malfunction.
(2) Notification. The owner or
The affirmative defense shall not be
available for claims for injunctive relief. operator of the facility experiencing an
(1) To establish the affirmative
exceedance of its emission limit(s)
defense in any action to enforce such a
during a malfunction shall notify the
limit, the owners or operators of a
Administrator by telephone or facsimile
facility must timely meet the
(FAX) transmission as soon as possible,
notification requirements of paragraph
but no later than 2 business days after
(c)(2) of this section, and must prove by the initial occurrence of the
a preponderance of evidence that:
malfunction, if it wishes to avail itself
(i) The excess emissions were caused
of an affirmative defense to civil
by a sudden, infrequent, and
penalties for that malfunction. The
unavoidable failure of air pollution
owner or operator seeking to assert an
control and monitoring equipment, or a affirmative defense shall also submit a
process to operate in a normal or usual
written report to the Administrator
manner; and could not have been
within 45 days of the initial occurrence
prevented through careful planning,
of the exceedance of the standard in this
proper design or better operation and
subpart to demonstrate, with all
maintenance practices; and did not stem necessary supporting documentation,
Federal Register/Vol. 76, No. 77 /Thursday, April 21, 2011 /Rules and Regulations
22598
that it has met the requirements set forth
in paragraph (c)(1) of this section. The
owner or operator may seek an
extension of this deadline for up to 30
additional days by submitting a written
request to the Administrator before the
expiration of the 45 day period. Until a
request for an extension has been
approved by the Administrator, the
owner or operator is subject to the
requirement to submit such report
within 45 days of the initial occurrence
of the exceedance.
• 32. Section 63.822 is amended by
adding in alphabetical order a definition
for "affirmative defense" to paragraph (a)
to read as follows:
adding introductory text to read as
follows:
§ 63.827 Performance test methods.
Performance tests shall be conducted
under such conditions as the
Administrator specifies to the owner or
operator based on representative
performance of the affected source for
the period being tested. Upon request,
the owner or operator shall make
available to the Administrator such
records as may be necessary to
determine the conditions of
performance tests.
(a) * * *
• 35. Section 63.829 is amended by
adding paragraphs (g) and (h) to read as
follows:
Affirmative defense means, in the
§63.829 Recordkeeping requirements.
§ 63.822 Definitions.
context of an enforcement proceeding, a
response or a defense put forward by a
defendant, regarding which the
defendant has the burden of proof, and
the merits of which are independently
and objectively evaluated in a judicial
or administrative proceeding.
*
■ 34. Section 63.827 is amended by
*
*
*
*
• 33. Section 63.823 is revised to read
as follows:
§ 63.823 Standards: General.
(a) Table 1 to this subpart provides
cross references to the 40 CFR part 63,
subpart A, general provisions,
indicating the applicability of the
general provisions requirements to this
subpart KK.
(b) Each owner or operator of an
affected source subject to this subpart
must at all times operate and maintain
that affected source, including
associated air pollution control
equipment and monitoring equipment,
in a manner consistent with safety and
good air pollution control practices for
minimizing emissions. Determination of
whether such operation and
maintenance procedures are being used
will be based on information available
to the Administrator, which may
include, but is not limited to,
monitoring results, review of operation
and maintenance procedures, review of
operation and maintenance records, and
inspection of the source,
*
*
*
*
(g) Each owner or operator of an
affected source subject to this subpart
shall maintain records of the occurrence
and duration of each malfunction of
operation (i.e., process equipment), air
pollution control equipment, or
monitoring equipment.
(h) Each owner or operator of an
affected source subject to this subpart
shall maintain records of actions taken
during periods of malfunction to
minimize emissions in accordance with
§ 63.823(b), including corrective actions
to restore malfunctioning process and
air pollution control and monitoring
equipment to its normal or usual
manner of operation.
• 36. Section 63.830 is amended by:
• a. Removing and reserving paragraph
(b)(5);
• b. Adding paragraph (b)(6)(v); and
• c. Adding paragraph (c) to read as
follows:
§63.830 Reporting requirements.
*
*
*
*
( b) * * *
( 6) * * *
(v) The number, duration, and a brief
description for each type of malfunction
which occurred during the reporting
period and which caused or may have
caused any applicable emission
limitation to be exceeded. The report
must also include a description of
actions taken by an owner or operator
during a malfunction of an affected
source to minimize emissions in
accordance with § 63.823(b), including
actions taken to correct a malfunction.
(c)(1) As of January 1, 2012, and
within 60 days after the date of
completing each performance test, as
defined in § 63.2 and as required in this
subpart, you must submit performance
test data, except opacity data,
electronically to EPA's Central Data
Exchange by using the ERT (see
http://www.epa.gov/ttn/chief/ert/ert
tool.html/) or other compatible
electronic spreadsheet. Only data
collected using test methods compatible
with ERT are subject to this requirement
to be submitted electronically into
EPA's WebFIRE database.
(2) All reports required by this
subpart not subject to the requirements
in paragraph (c)(1) of this section must
be sent to the Administrator at the
appropriate address listed in § 63.13. If
acceptable to both the Administrator
and the owner or operator of a source,
these reports may be submitted on
electronic media. The Administrator
retains the right to require submittal of
reports subject to paragraph (c)(1) of this
section in paper format.
• 37. Table 1 to Subpart KK of part 63
is amended by:
• a. Removing entry 63.6(e);
• b. Adding entries 63.6(e)(1)(i),
63.6(e)(1)(ii); 63.6(e)(1)(iii), 63.6(e)(2),
and 63.6(e)(3);
• c. Removing entry 63.6(f);
• d. Adding entries 63.6(f)(1) and
63.6(f)(2)–(f)(3);
• e. Removing entry 63.7;
• f. Adding entries 63.7(a)–(d),
63.7(e)(1), and 63.7(e)(2)–(e)(4);
• g. Removing entry 63.8(d)–(f);
• h. Adding entries 63.8(d)(1)–(2),
63.8(d)(3), and 63.8(e)–(f);
• i. Removing entries 63.10(b)(1)–(b)(3),
63.10(c)(10)–(c)(15). and 63.10(d)(4)–
(d)(5);
• j. Adding entries 63.10(b)(1),
63.10(b)(2)(i), 63.10(b)(2)(ii),
63.10(b)(2)(iii), 63.10(b)(2)(iv)–(b)(2)(v),
63.10(b)(2)(vi)–(b)(2)(xiv), 63.10(b)(3),
63.10(c)(10), 63.10(c)(11), 63.10(c)(12)–
(c)(14), 63.10(c)(15), 63.10(d)(4), and
63.10(d)(5) to read as follows:
TABLE 1 TO SUBPART KK OF PART 63—APPLICABILITY OF GENERAL PROVISIONS TO SUBPART KK
General provisons
reference
Applicable to subpart KK
Comment
§63.6(e)(1)(i) ..................................No ..................................................See 63.823(b) for general duty requirement. Any cross-reference to
63.6(e)(1)(i) in any other general provision incorporated by reference shall be treated as a cross-reference to 63.823(b).
MEMORANDUM OF UNDERSTANDING
BETWEEN THE
U.S. ENVIRONMENTAL PROTECTION AGENCY,
OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE
AND THE
U.S. COAST GUARD,
OFFICE OF MARINE SAFETY, SECURITY AND STEWARDSHIP
For Collaboration on
Compliance Assistance, Compliance Monitoring, and Enforcement of
Vessel General Permit Requirements on Vessels
I.
PURPOSE/OBJECTIVES/ GOALS
The purpose of this Memorandum of Understanding (MOU) is to establish cooperation and
coordination between the United States Environmental Protection Agency (EPA) and the United
States Coast Guard (USCG) for implementing and enforcing the Vessel General Permit (VGP)
requirements on vessels. EPA issued the VGP on December 18, 2008, 73 FR 79473, December
29, 2008 and February 12, 2009, 74 FR 7042 (for Alaska and Hawaii), pursuant to Clean Water
Act (CWA) authority under the National Pollutant Discharge Elimination System (NPDES)
program. VGP implementation will benefit from collaboration on compliance monitoring and
enforcement of the VGP and compliance assistance efforts for the industry.
This MOU authorizes EPA and the USCG (Agencies) to utilize each other’s expertise to further
the goals and objectives of the VGP. By leveraging the strengths of the Agencies regarding
technology, science, regulations and policy, compliance and enforcement, and knowledge of
vessels, and by integrating activities, collaborative projects may be initiated which are of mutual
interest.
Sharing of information, expertise, and technical assistance for VGP implementation is intended
to reduce redundancy in government oversight of vessel activities and increase the effectiveness
of each Agency's ability to accomplish its mission. The collaborative efforts initiated pursuant to
this MOU are intended to be mutually beneficial and to enhance environmental protection.
II.
BACKGROUND
The VGP was issued in response to a District Court ruling that vacated, as of February 6, 2009, a
long-standing EPA regulation that excluded discharges incidental to the normal operation of a
vessel from the need to obtain an NPDES permit. As a result, all such discharges are prohibited
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unless authorized by an NPDES permit. Section 301 of the CWA prohibits the discharge of any
pollutant from a point source into waters of the United States, including the contiguous zone or
ocean, unless otherwise authorized under the CWA, such as in a permit issued under EPA’s
NPDES program. Certain discharges are not subject to the NPDES permit requirement because
they are authorized under other statutory provisions. Sewage from vessels, for example, is
regulated pursuant to a separate program and is not addressed in NPDES permits. However,
unlike the discharge of other pollutants, discharges incidental to the normal operation of a vessel
do not require an NPDES permit when discharged into the waters of the contiguous zone or
ocean.
The VGP applies to specific discharges, which are identified in the VGP, that are incidental to
the normal operation of a vessel and are discharged from non-recreational vessels of 79 feet or
greater in length. In addition, the ballast water discharge provisions apply to any nonrecreational vessel of less than 79 feet or commercial fishing vessel of any size discharging
ballast water. If a vessel is greater than or equal to 300 gross tons or has the capacity to hold or
discharge more than 8 cubic meters (2113 gallons) of ballast water, the owner/operator must
submit a Notice of Intent (NOI) to be covered under the permit in accordance with the
requirements of Part 10 of the VGP.
The VGP incorporates the USCG’s mandatory ballast water management and exchange
standards, adds additional ballast water management practices and provides effluent limits for
other types of discharges including, but not limited to, deck runoff, bilge water, gray water, antifouling hull coatings and other discharge types. The VGP also establishes specific corrective
actions, inspection and monitoring requirements, as well as recordkeeping and reporting
requirements.
III.
STATUTORY AUTHORITY
Section 501 of the CWA, 33 U.S.C. § 1361, authorizes the Administrator of EPA, with the
consent of the head of any other agency of the United States, to utilize such officers and
employees of such an agency as may be found necessary to assist in carrying out the purpose of
the CWA.
14 U.S.C. § 141 authorizes the USCG to utilize its personnel and facilities to assist any federal
agency, such as EPA, to perform any activity for which such personnel and facilities are
especially qualified.
14 U.S.C. § 93(a)(20) authorizes the Commandant of the USCG to enter into cooperative
agreements with other Federal agencies.
Section 104 of the CWA, 33 U.S.C. § 1254, instructs the Administrator of EPA to, among other
things, cooperate with other Federal, State and local agencies to conduct and promote the
coordination and acceleration of investigations, training, demonstrations, surveys and studies
relating to the causes, effects, extent, prevention, reduction, and elimination of pollution.
EPA issued the VGP pursuant to authority in the CWA section 402, 33 U.S.C. 1342.
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Sections 308 and 309 of the CWA, 33 U.S.C. §§ 1318 & 1319, authorize EPA to obtain
information and investigate noncompliance with permits issued pursuant to this authority, to
enforce against violations of such permits and take action to require a violator to return to
compliance.
IV.
ARTICLES OF AGREEMENT
A. Interagency Coordination
The USCG and EPA, respectively, agree to cooperate on requests by the other Agency for
available information, documents or testimony that may be useful in carrying out its
responsibilities regarding vessel discharges under the VGP.
EPA and the USCG agree to communicate regularly to ensure the joint activities are conducted
as expeditiously and as efficiently as possible and to resolve questions or issues in a timely
manner. The Agencies agree that representatives from their respective headquarters offices
should meet at least annually in order to, among other things, confirm effective progress in
implementation of this MOU, resolve any concerns that have arisen since the previous meeting,
and maintain continuity in communications between the Agencies. EPA Regions and USCG
Districts and/or Sectors are also encouraged to meet regularly with their counterparts to
coordinate efforts and share information.
Each Agency will make available to the other current lists of points of contact on the VGP. The
list will include the title, office name, current address and phone number for points of contact at
headquarters offices and in each EPA Region and USCG District. The current list is attached as
Appendix I to this MOU. The Agencies agree to promptly inform each other when changes are
made to the titles, offices, addresses and phone numbers. The Agencies agree to inform each
other of the name of the designated point of contact, to the extent practicable.
EPA is responsible for interpretations of the VGP and the terms of the VGP. EPA intends to
provide guidance and technical information to assist with VGP implementation.
B. Information Sharing and Data Tracking
The USCG and EPA agree to work jointly and cooperatively to develop reporting forms, USCG
job aids, instructions for filling out job aids or other training materials, annual reports on
compliance monitoring and resulting enforcement, and materials for industry including fact
sheets and compliance assistance materials.
EPA and the USCG agree to assist each other with reports on vessel exams, deficiencies found
and yearly numbers of exams, ideas to improve the compliance policy and guidance documents
for vessels, and methods to notify the vessel owners of deficiencies and violations.
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The USCG and EPA agree to provide technical expertise and support the exchange of
information that each Agency maintains in data bases, information systems, clearing houses and
other means that are not available to the other Agency, as necessary and appropriate and in
accordance with the Freedom of Information Act (5 U.S.C. § 552), the Privacy Act (5 U.S.C. §
552a) and each Agency’s Public Affairs Office.
EPA and the USCG agree to share information, including any information regarding vessel
owners or operators, any samples and testing results, photographs, and inspection or screening
logs, that may be useful in carrying out their respective responsibilities regarding vessel
discharges under the VGP.
C. Training
EPA and the USCG intend to develop and make available training materials (web based, CDrom, etc.) on the VGP compliance for Agency staff who will be involved in VGP
implementation. The Agencies will also work together to identify available training materials
that may help to ensure the personal safety of EPA inspectors and enforcement officers who may
board vessels to verify compliance with the VGP.
D. Compliance Monitoring
EPA and the USCG agree to work together to develop job aids, Navigation and Vessel
Inspection Circulars, and other documents to assist inspectors with identification of deficiencies
of the VGP requirements.
The USCG agrees to incorporate a component into its existing inspection and Port State Control
exam protocols and procedures that verify vessel compliance with safety, security, and pollution
prevention regulations to assist with the verification of compliance of the VGP for domestic and
foreign vessels. The scope of USCG inspections may be identified in USCG policy and
guidance and associated checklists/job aids. The inspections may include review of inspection
records, visual inspections, evaluation of compliance with effluent limits and taking samples.
The USCG agrees to notify EPA when it identifies deficiencies.
The USCG and EPA agree to explore electronic methods to track deficiencies and share this
information.
EPA and USCG retain the right to conduct compliance and enforcement inspections as each is
authorized by law. EPA and the USCG agree to facilitate joint inspection efforts as appropriate.
E. Addressing Deficiencies and Enforcement
EPA intends to develop, with assistance from the USCG as appropriate, informal enforcement
documents for the VGP, including letters or notices of deficiency or notices of violation. EPA or
the USCG may use these documents to inform a vessel owner/operator of deficiencies of the
VGP and encourage the owner/operator to address the identified problems. The USCG should
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also inform the vessel owner/operator that it informs EPA of deficiencies and any actions taken
or planned by the vessel operator to correct those deficiencies and that further enforcement
action may be taken. EPA’s enforcement authority under the CWA to address VGP violations
and unauthorized discharges includes administrative orders, administrative penalties, and judicial
action.
F. Compliance Assistance/Outreach
EPA and the USCG will work together to develop and disseminate outreach materials to inform
the public of the existence of the VGP and its requirements, and to assist in compliance outreach.
The USCG and EPA intend to develop schedules and protocols for distribution of these materials
on board vessels, at ports, and through other means of outreach to the regulated community and
other members of the public.
EPA will make information on VGP compliance available to EPA and USCG inspectors and
enforcement officers and will also post information on the VGP on EPA’s website (currently at
www.epa.gov/npdes/vessels). The USCG may post publicly available information on its website
and may develop links from its website to information on EPA’s website.
EPA and the USCG agree that handling complex inquiries from the public through a single
repository will ensure national consistency on VGP interpretation and implementation. EPA has
established a general email box at commercialvesselpermit@epa.gov to provide a central address
for complex questions on the VGP. The Agencies agree to work together to develop a process to
streamline handling of public inquiries to provide responses as promptly and accurately as
possible. Initially, inquiries should be forwarded to this email box for development of a
response, unless the inquiry has been previously raised and a response already developed. The
USCG and EPA agree to work together to develop additional procedures, as needed, to handle
inquiries on the VGP or other NPDES requirements.
G. Support Agreements
EPA and the USCG may develop Support Agreements, as needed, to assist with implementation
of this MOU and accomplish tasks in accordance with this MOU. Support Agreements are
detailed agreements that are negotiated by the USCG and EPA to work on specific issues under
this MOU (Support Agreements). Support Agreements may contain specific roles,
responsibilities and time lines that further define the activities or aspects described in this MOU,
including sharing of information, compliance monitoring, compliance assistance, notification
procedures, data collection and handling, identifying and addressing deficiencies, facilitating
enforcement, and training. Support Agreements may provide additional guidance or protocols on
any aspect of this MOU. Support Agreements may also include interagency agreements,
contracts, and assistance agreements between USCG and EPA.
In addition to Headquarters Support Agreements, EPA Regions and USCG Districts may also
develop Support Agreements to establish coordination and assistance efforts.
Regional/District/Local Support Agreements must be approved at EPA at a level no lower than
the Branch Chief responsible for VGP compliance and enforcement in the appropriate region or
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at Headquarters. For the USCG, Regional/District/Local Support Agreements must be approved
at a level no lower than the USCG Sector Commander.
The USCG and EPA will, where appropriate, reference this MOU in any Support Agreement,
amendments or letters of agreement that implement this MOU.
V.
DEFINITIONS
For purposes of this MOU, the following definitions apply. Terms not defined here shall have
the meaning provided in the VGP, 40 CFR Part 122, and the CWA.
Job Aid: A listing of items that may be examined as part of a VGP inspection.
Deficiency: A potential violation of the VGP.
Vessel General Permit (VGP): A permit issued by EPA pursuant to the CWA and 40 CFR
Section 122.28 that became effective on February 6, 2009 and any subsequent EPA permits that
modify, replace, or reissue that one.
VI.
LIMITATIONS
A. EPA and the USCG agree that this MOU does not affect their existing authorities under
any laws.
B. As required by the Anti Deficiency Act, 31 U.S.C. §§ 1341 and 1342, all commitments
made by the USCG and EPA in this MOU are subject to the availability of appropriated funds
and each Agency’s budget priorities. Nothing in this MOU, in and of itself, obligates EPA or the
USCG to expend appropriations or to enter into any contract, assistance agreement, interagency
agreement, Support Agreement, or other financial obligation. Furthermore, nothing in the MOU
exempts the Agencies from following their respective, as well as the other Agency’s, policies
governing competition of assistance agreements or contracts. Except as otherwise agreed to in
advance in an interagency agreement (IA), the USCG and EPA agree not to submit a claim for
compensation for services rendered to each other or any other Federal agency for activities either
Agency undertakes in carrying out this MOU.
C. This MOU is neither a fiscal nor a funds obligation document. Any endeavor involving
transfers, reimbursement or contribution of funds between the Agencies related to this MOU will
be handled in accordance with applicable laws, regulations, and procedures and will be subject to
separate subsidiary agreements that will be effected in writing by representative of both
Agencies.
D. The cooperative measures set forth in this MOU are intended exclusively for the guidance
of Federal government personnel. These policies and procedures may be superseded, modified,
or terminated at any time without public notice. EPA and the USCG reserve the right to change
the terms of this MOU without prior public notice.
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E. This MOU does not create any right or benefit, substantive or procedural, enforceable by
law or equity, by persons who are not party to this agreement, against the USCG or EPA, their
officers or employees, or any other person. This MOU does not direct or apply to any person
outside of EPA and the USCG.
F. Except as provided in Section VIII, “Intellectual property,” this MOU is not legally
binding.
VII.
PROPRIETARY AND CONFIDENTIAL INFORMATION
To carry out the joint work resulting from this MOU, the Agencies may need to disclose
proprietary or confidential information to one another. For the purpose of this MOU,
“proprietary or confidential information” is defined as information that an affected business
claims to be business confidential or that is otherwise requested to be protected under applicable
law and regulation. Effluent data is not “proprietary or confidential information.” Each of the
Agencies agrees to clearly identify in writing any proprietary or confidential information that
was initially disclosed verbally. The Agencies agree not to disclose or otherwise make available
in any form whatsoever to any other person, firm, corporation, partnership, association or other
entity information designated as proprietary or confidential information except as such
information that may be subject to disclosure under the Freedom of Information Act (5 USC §
552) and EPA regulations at 40 CFR Part 2, or as otherwise authorized by law and regulation.
Decisions on disclosure of proprietary or confidential information to the public under the
Freedom of Information Act shall be made by the Agency to whom the information was
originally submitted, consistent with applicable regulations.
VIII. INTELLECTUAL PROPERTY
The USCG and EPA patent and intellectual property policies shall apply to any work performed
hereunder and appropriate patent and intellectual property provisions shall be included in any
agreement entered into in order to implement a Support Agreement accepted under this MOU.
Rights to inventions made by Federal employees shall be determined by the employee’s Agency.
Rights in inventions and other intellectual property of technology vendors and contractors,
subcontractors and cooperators shall be governed by provisions of their respective agreements
with the USCG or EPA.
IX.
DISPUTE RESOLUTION
It is the intent of the Agencies to resolve disagreements arising under this MOU or amendments
and/or revisions to it, at the lowest appropriate level. However, if the Agencies are unable to
resolve disagreements at the level of each party’s point of contact, it is the Agencies’ intent to
state each Agency’s position in writing and present it to the other Agency’s Director or
equivalent level for consideration and/or resolution.
X.
EFFECTIVE DATE
This MOU is effective on the date of the last signature by the Agencies and shall remain
effective from the signature date unless terminated in accordance with the terms set forth herein.
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XI.
MODIFICATION
This MOU may be modified at any time upon mutual written consent of the Agencies. Upon
request by either Agency, Support Agreements will be reviewed by the appropriate headquarters
office responsible for enforcement, compliance assistance or compliance monitoring policy to
assure that they continue to reflect the appropriate understandings and procedures to provide for
current needs and capabilities to carry out the responsibilities and roles set forth in this MOU.
XII.
TERMINATION
Either Agency may terminate its participation in this MOU at any time by providing written
notice to the other Agency at least 90 days in advance of the desired termination date.
If termination occurs, work under any active Support Agreement will be completed in
accordance with the terms of the Support Agreement up to the end of the fiscal year in which the
termination occurs.
APPROVED BY:
For U.S. Coast Guard
For U.S. Environmental Protection Agency
By: ______________________________
Kevin S. Cook
RADM, U. S. Coast Guard
Director of Prevention Policy
By: ______________________________
Cynthia Giles
Assistant Administrator
Enforcement and Compliance Assurance
Date: _____________________________
Date: _____________________________
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ATTACHMENT I
Contacts
The USCG and EPA contact offices are:
USCG:
For the USCG VGP Program Manager:
Commandant
United States Coast Guard
2100 Second Street, S.W. STOP 7581
Washington, DC 20593-7581
Office of Vessel Activities (CG-543)
Phone # (202) 372-1220 (direct)
Phone # (202) 372-1251 (main)
CG543@uscg.mil
EPA
For Compliance Monitoring, Compliance Assistance, and Data Issues:
United States Environmental Protection Agency
Water Branch
Monitoring, Assistance, and Media Programs Division
Office of Compliance (2223A)
1200 Pennsylvania Ave NW
Washington DC 20460
Phone # (202) 564-2300
For Enforcement Issues:
United States Environmental Protection Agency
Water Enforcement Division (2243A)
Office of Civil Enforcement
1200 Pennsylvania Ave NW
Washington DC 20460
Phone # (202) 564-2240
EPA Regional Offices - VGP Enforcement/ Compliance Contact List
Region 1 – Boston (serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island,
and Vermont)
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Office of Environmental Stewardship
EPA New England Headquarters
5 Post Office Square
Boston, MA 02109-3912
617-918-1850
Region 2 – New York (serving New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands)
Division of Enforcement and Compliance Assistance
EPA Regional Office
290 Broadway
New York, NY 10007-1866
212-637-4268
Region 3 – Philadelphia (serving Delaware, District of Columbia, Maryland, Pennsylvania,
Virginia, and West Virginia)
Water Protection Division
EPA Region 3 Regional Office
1650 Arch Street
Philadelphia, PA 19103-2029
215- 814-2097
Region 4 – Atlanta (serving Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina,
South Carolina, and Tennessee)
Water Protection Division
US EPA, Region 4
Sam Nunn Atlanta Federal Center
61 Forsyth Street, SW
Atlanta, GA 30303
404-562-9756
Region 5 – Chicago (serving Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin)
Water Division
US EPA Region 5
Ralph Metcalfe Federal Building
77 West Jackson Blvd.
Chicago, IL 60604
312-886-0148
Region 6 – Dallas (serving Arkansas, Louisiana, New Mexico, Oklahoma, and Texas)
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Compliance Assistance and Enforcement Division
EPA Region 6 Main Office:
1445 Ross Avenue, Suite 1200
Dallas, Texas 75202
214-665-6579
Region 7 - Kansas City (serving Iowa, Kansas, Missouri, and Nebraska)
Water Enforcement
US EPA, Region 7
901 N 5th Street
Kansas City, KS 66101
913- 551-7354
Region 8 – Denver (serving Colorado, Montana, North Dakota, South Dakota, Utah, and
Wyoming)
Office of Enforcement, Compliance and Environmental Justice
US EPA, Region 8
1595 Wynkoop Street
Denver, CO 80202-1129
303-312-6393
Region 9 - San Francisco (serving Arizona, California, Hawaii, Nevada, American Samoa,
Commonwealth of the Northern Mariana Islands, Federated States of Micronesia, Guam,
Marshall Islands, and Republic of Palau)
Water Division
U.S. EPA Region 9
75 Hawthorne Street
San Francisco, CA, 94105
415-972-357
Region 10 – Seattle (serving Alaska, Idaho, Oregon, and Washington)
Office of Compliance and Enforcement
U.S. EPA, Region 10
1200 Sixth Avenue, Suite 900
Seattle, WA 98101
206-553-1146
11
ou r exp erien ce
Maritime
K&L Gates offers the U.S. and international maritime industry significant legal,
transactional, legislative, and regulatory capabilities. Our wealth of knowledge and
experience is a valuable asset for any business or association related to the maritime
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whenever and wherever our clients’ needs may arise. However, the breadth of our
experience is not reflected merely in the geographic span of our work, but also in our
experience in and understanding of the maritime industry. Our team brings optimal
levels of practical experience and industry insight into each engagement to help our
clients achieve their goals.
Our maritime practice dates back more than 35 years. Today, the group represents owners
and operators in all major sectors of the maritime industry — containerships, roll-on/rolloff vessels, liquid and dry bulk cargo vessels, passenger cruise vessels, and specialized
vessels such as power-generating barges, tugs, mobile offshore drilling units, offshore
supply vessels, fishing, dredging, and recreational boats. Our maritime clients also
include ports, marinas, shipyards, investment and financing entities, maritime insurers,
and a variety of industry groups and associations, as well as shippers and others with
maritime-related needs.
On behalf of our clients, we are actively involved in matters ranging from U.S. legislation
and industry-related rulemakings to ship sale and purchase, shipbuilding, repair
conversion, and construction contract matters. The maritime group is especially skilled at
handling complex international maritime arbitrations, mediations, adjudications, and
other forms of alternative dispute resolution. It also regularly represents clients before
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construction contracts, credit agreements, secured vessel financings, project financings,
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Additionally, the tremendous scope of services available through the worldwide firm
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AREAS OF PRACTICE
Transactions Taxation, and Financing
Our lawyers have completed a wide range of maritime transactions, including
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and negotiates vessel construction contracts (including complex cruise ship contracts
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transactions and bankruptcy proceedings including multi-jurisdictional proceedings
involving maritime interests. Our lawyers have advised large shipping concerns on
corporate and vessel-specific tax structuring.
Trade
We represent clients before the U.S. Congress, the administration, or executive branch
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of grand jury or other government investigations and resulting litigation in court and
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With the increasing severity and scope of potential violations that can face maritime
clients, the maritime group includes significant resources skilled in conducting internal
investigations for companies and other entities. Included among the resources available
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international governmental agencies.
Commercial Litigation, Dispute Resolution, and Arbitration
At K&L Gates we frequently deal with high-profile, high-stakes commercial litigation.
We have the resources, sophistication, and track record to obtain successful results in
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The strength of the firm’s litigation and arbitration practice lies in the quality and breadth
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have been involved in arbitrations in many countries across the world, including both
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from maritime disputes to Middle Eastern property investment to Latin American
offshore oil extraction and from complex insurance coverage disputes to software
disputes. Those maritime arbitrations include disputes regarding shipbuilding contracts,
marine insurance, oil and gas, and international sale of goods/trade finance.
Public Policy and Law
Decisions made by governments and international bodies around the world have
tremendous impact on success in the maritime industry.
K&L Gates’ Public Policy and Law practice represents maritime interests before the U.S.
Congress, the administration and its executive branch agencies, various state
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with our clients to understand and achieve their business and policy goals. Maritime
group professionals have years of experience in Congress and executive branch agencies
which helps us to understand the complex issues affecting the maritime industry
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solutions to legislative, administrative, and judicial issues. We assist clients in presenting
effective responses to government initiatives, both regulatory and legislative, in all
matters affecting the industry. Coastwise laws, vessel documentation, customs duties,
maritime promotional programs, export restrictions, antitrust analysis of the industry, tax
matters affecting maritime clients, and many other issues are routine matters for the
maritime group.
Environmental
In the complex maze of environmental law, simply identifying the applicable
requirements can be difficult, and implementing the requirements in a cost-efficient and
effective manner is even more challenging. Considering the complexities of the law and
the consequences of noncompliance, including criminal exposure for companies and their
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within their own organizations.
K&L Gates lawyers have experience in various maritime environmental matters. We
have assisted clients in developing effective compliance programs and systems. We help
clients anticipate and avoid problems before they impede their objectives or result in
needless, costly litigation. Our lawyers have conducted internal investigations of
potential violations and successfully negotiated with the authorities to avoid prosecution
on numerous occasions. When necessary, we forcefully litigate problems that cannot
otherwise be resolved.
K&L Gates also represents individual clients or coalitions before the U.S. Congress, the
administration, or executive branch agencies on matters related to the Oil Pollution Act of
1990, Clean Water Act; MARPOL and the Act to Prevent Pollution from Ships; Ocean
Dumping Ban Act; Resource Conservation and Recovery Act; Comprehensive
Environmental Response, Compensation, and Liability Act; and Clean Air Act. We
represent clients before the U.S. Coast Guard and the U.S. Environmental Protection
Agency on matters related to the development and enforcing of federal regulations under
these acts. We represent clients before the U.S. Environmental Protection Agency, the
U.S. Coast Guard, or federal courts on specific matters or investigations arising from
those acts or implementing regulations. We also advise clients on matters relating to
various international conventions and treaties including MARPOL.
REPRESENTATIVE EXPERIENCE
Transactions and Financing
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Advising clients on major ship construction projects exceeding $1 billion in vessels
and related public and private financings.
Representing non-U.S. banking institutions in structuring and closing lease financing
transaction of U.S. vessels.
Negotiating terms and advising clients in connection with acquisitions and
divestitures of major shipping companies.
Structuring mezzanine debt financing transactions for both existing ships and
newbuild deliveries.
Advising the largest operator of U.S.-flag cruise vessels on the acquisition and
integration of a foreign-built vessel into its coastwise cruise operations.
Representing a major international carrier in a cross-border insolvency proceeding
including competing priorities of in personam and in rem claims.
Designing a corporate restructuring to enable client to take advantage of the Vessel
Lease Financing provisions of U.S. law.
Advising a Middle East client in relation to claims relating to a premature
cancellation of a charter party for a new building contract in China.
Advising clients on opportunities for increased trade or service with Cuba.
Advising port authority client on long-term lease concessions for marine terminal.
Legislative Representations
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Coordinating the largest coalition of maritime interests - unions, companies, and
associations - ever assembled to prevent changes to the maritime cabotage laws.
Obtaining legislative authority to restore U.S-flag ocean-going cruise ship service to
the domestic industry.
Obtaining congressional approval for issuance of work permits for non-resident
aliens to be employed in steward services of the domestic cruise industry.
Representing an industry-wide coalition with respect to excluding maritime matters
from a GATT Services Agreement and NAFTA.
Representing individual clients, industry trade associations, and coalitions in the
establishment and implementation of major maritime promotional programs in the
United States.
Representing a coalition of the majority of vessel owners in the U.S. shipping
industry in re-writing the laws governing the economic regulation of ocean shipping.
Arbitration/Dispute Resolution
Representing a client in multi-defendant arbitration proceeding on behalf of
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shipbrokers defending a negligence claim in relation to an investment in a container
ship company.
Representing a client in claims arising out of the conversion of a semi-submersible
drilling rig.
Representing a client in arbitration proceedings arising out of the construction of two
jack-up rigs.
Advising a global commodity trader in relation to the detention of a tanker in
Indonesia following allegations of smuggling and irregularities with vessel and cargo
documentation.
Advising a Canadian shipowner in relation to the premature termination of a time
charter party by Japanese charterers in a Hong Kong arbitration.
Litigation
Defending a day-cruise operator against a charge by federal authorities that
operations were in violation of the Coastwise Laws.
Representing maritime associations in a suit against the U.S. Environmental
Protection Agency relating to requirements imposed by the Vessel General Permit.
Representing a leading international shipping company in a challenge to restrictive
interpretations of U.S. laws governing maritime promotional programs to open the
way for increased participation in the programs.
Representing a German bank in a mortgage enforcement action relating to a Turkish
fleet of vessels that required coordinating litigation against the owners in the United
States, Turkey, Sweden, South Africa, Singapore, Hong Kong, and China.
Represented a client in a dispute over the building of an FPSO which resulted in
year-long litigation in Norway and subsequent settlement negotiations.
Environmental
Representing shipowners and operators on matters relating to oil spill, hazardous
waste, and ship scrapping issues.
Defending a pilot accused of negligence in an oil spill in California.
Representing an industry association and shipowner on matters involving U.S.
Emission Control Area and greenhouse gas emissions.
Advising several shipowners and maritime organizations on compliance issues raised
by the Vessel General Permit.
Representing a major ship owner in a federal investigation relating to improper
disposal of plastic from a U.S.-flag vessel.
Representing a shipowner relating to the sale of a vessel and disposal of PCB
contaminated materials.
Conducting training for vessel crew members relating to environmental
requirements.
Advising private port operators and container carriers on carbon trading aspects of
port development projects and vessel operations.
International Trade




Successfully appealing the application of U.S. customs duties on ship repairs under
the Tariff Act of 1930.
Advising on the use of a Foreign Trade zone or Customs Bonded Warehouse for
shipboard spares for vessels operating in international commerce.
Advising shipowners and operators on export restrictions applicable to U.S.-flag
vessels and U.S. companies.
Obtaining licenses needed to address issues raised by maritime piracy.
K&L Gates Maritime Practice
K&L Gates’ sophisticated and wide-ranging maritime practice offers the maritime industry
significant legal, transactional, legislative, and regulatory capabilities on a global
platform. Our knowledge and experience can be a valuable asset for any business or
association related to the maritime industry. Because of our global presence, we can offer
that knowledge throughout the world wherever our clients’ needs may arise. However, the
breadth of our experience is reflected not merely in the geographic span of our work, but
also our experience in and understanding of the maritime industry. Our team brings optimal
levels of practical experience and industry insight to each engagement to achieve our
clients’ goals.
The K&L Gates maritime practice dates
back more than three decades. Because the
complex issues that affect the maritime industry
nationally and internationally often touch more
than one branch of government, the group has
developed extensive experience working with
every branch of government and is able to
provide its clients with effective and creative
solutions to legislative, administrative, or
judicial issues.
The firm draws on a wide range of legal
capabilities to benefit its maritime clients.
These include antitrust counseling and
litigation, acquisitions and divestitures of
shipping companies and/or their divisions,
financing of both U.S.-registered and non-U.S.registered ships, environmental compliance
audits, investigations and litigation (including
emergency response and criminal defense
representation), negotiations of charter parties
and ship management arrangements, structuring
of shipping businesses to achieve maximum
tax efficiency, resolving international trade and
customs duties and tariff issues, and government
contracting counseling and litigation.
Helping clients successfully
Because we are a truly full-service firm
possessing experience in all areas of the law
faced by businesses in today’s world, we can
also service our maritime clients’ legal needs
which may not include traditional maritime
matters. K&L Gates offers representation in
capital markets and securities law matters,
labor and employment law, real estate
transactions, international transactions of every
form, commercial litigation, bankruptcy and
workout matters, construction law, insurance
coverage disputes, intellectual property law
issues, litigation, technology matters, corporate
governance, and employee benefits.
navigate legal,
financing, and legislative challenges to
achieve their goals.
Industry Segments
Maritime Transactions and Financing
K&L Gates represents owners and operators in
all major sectors of shipping.
Our professionals have completed a wide
range of maritime transactions, including
acquisitions of major shipping companies and
several of the largest maritime financings in
the United States. The group also provides
maritime clients advice on and negotiates vessel
construction contracts (including complex cruise
ship contracts valued at $400 million each),
credit agreements, secured vessel financings,
project financings, leveraged lease transactions,
international structured financial transactions,
and public financing of maritime projects.
Many of our financings involve multiple states
and multiple countries. We have closed nonmaritime financings involving several billions
of dollars. We also represent creditors and
borrowers in restructuring transactions and
bankruptcy proceedings including multi-jurisdictional
proceedings involving maritime interests.
• Breakbulk
• Containerships
• Liquid and dry bulk cargo vessels
• Passenger cruise vessels
• Specialized vessels such as power
generating barges, tugs, mobile offshore
drilling units, offshore supply vessels, dive
support vessels, pipe and cable laying
vessels, and fishing, dredging, and
recreational boats.
Our maritime clients also include ports,
marinas, shipyards, and a variety of industry
associations and coalitions, as well as shippers
or other industries with maritime-related needs.
K&L Gates’ practice of maritime law takes
a variety of forms in accordance with the
requirements and goals of our global clients.
Our ability to provide a combination of
maritime-related legislative, regulatory,
transactional, and legal experience tailored
to our clients’ specific strategic needs gives
meaning to our motto of “helping clients
successfully navigate legal, financing, and
legislative challenges to achieve their goals.”
Representative Projects
• Representation of a major foreign financial
institution acting as residual value
guarantee provider in relation to multiple
ship finance transactions involving a
major Japanese shipping line and a major
Japanese leasing company.
• Representation of Nippon Export and
Investment Insurance (NEXI) in connection
with its provision of commercial risk and
political risk insurance to the lenders
extending financing in relation to a limited
recourse LNG ship finance transaction.
• Representation of a major bank on a ship
finance transaction, e.g., residual value
support provider for vessels on lease to
international shipping line.
• Serving as lead counsel on new vessel
financing to several major U.S.-flag carriers
and major inland barge companies.
To learn more about our Maritime Practice group please
visit klgates.com or contact:
Robert M. Kritzman
Partner
+1.305.539.3303
robert.kritzman@klgates.com
Jorge Romero
Of Counsel
+1.202.661.3815
jorge.romero@klgates.com
Darrell L. Conner
Government Affairs Counselor
+1.202.661.6220
darrell.conner@klgates.com
Anchorage Austin Beijing Berlin Boston Brussels Charleston Charlotte Chicago Dallas Doha Dubai Fort Worth Frankfurt Harrisburg
Hong Kong London Los Angeles Miami Moscow Newark New York Orange County Palo Alto Paris Pittsburgh Portland Raleigh
K&L Gates includes lawyers practicing out of 40 offices located in North America, Europe, Asia, South America,
and the Middle East, and represents numerous GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in
addition to growth and middle market companies, entrepreneurs, capital market participants and public sector
entities. For more information about K&L Gates or its locations and registrations, visit www.klgates.com.
This publication 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 a lawyer.
©2012 K&L Gates LLP. All Rights Reserved.
100423_4066
Research Triangle Park San Diego San Francisco São Paulo Seattle Shanghai Singapore Spokane Taipei Tokyo Warsaw Washington, D.C.
K&L Gates Maritime Practice in Asia
K&L Gates offers the international maritime industry significant legal, transactional, legislative,
and regulatory capabilities. In Asia, K&L Gates provides a broad range of dispute resolution
capabilities to maritime clients, including handling complex international commercial arbitrations,
mediations, adjudications, and other forms of alternative dispute resolution. The team also
provides domestic litigation supervision, management, and control, building on over two
decades of litigation experience across Asia. Further, the team serves as the Asian component
of the firm’s regulatory, compliance, and anticorruption investigation network.
Thanks to our global presence, we offer our
services throughout the world, whenever and
wherever our clients’ needs may arise. The
breadth of our experience is not reflected merely
in the geographic span of our work, but also
in our experience in and understanding of the
maritime industry. Our team brings optimal
levels of practical experience and industry
insight into each engagement to help our clients
achieve their goals.
Complex Cross-Border Disputes
• Banking, finance, investment funds, and
general corporate commercial disputes.
•Commodities, natural resources, and the
international sale of goods and services.
•Construction, infrastructure, and civil/marine
engineering.
•Power and energy with a particular
emphasis on offshore oil and gas matters
• Marine insurance
•Bilateral investment treaties and foreign
investment disputes
Maritime Experience Overview
Our clients include owners, operators, charterers
and ship managers and their P&I, FD&D and
H&M insurers. We have acted for and advised
clients on a wide array of complex high-value
contentious and non-contentious matters.
•A
dvised on numerous MOA and ship
sale and purchase matters including new
buildings, scrap sales, on-sales, second
hand tonnage and fleets covering terms
and conditions, inspections, buyers/sellers
remedies, documentation, closings, flag
state, title, warranties, financing, and
delivery issues.
• Advised on numerous ship financing, loans,
deeds of covenants, mortgages, assignments
of earnings, insurances, guarantees,
re-flagging and insurance coverage for
lenders including advising on numerous ship
and fleet mortgage enforcements worldwide,
workouts, restructurings, and insolvencies
in the shipping sector including specific
experience throughout Asia, the Middle East,
North/South America, and Europe in the
arrest of vessels, posting security, organizing
judicial sales by way of private treaty and/or
public auction, determination of priorities, and
payment out of the proceeds of sale.
• Advised on numerous shipbuilding, repair,
conversion, and construction contract matters
including issues arising under standard
forms, specifications and description, design,
delays, variations, liquidated damages, class
and delivery and warranties.
• Advised on numerous marine insurance claims
both P&I, H&M, as well as FD&D.
• Provided advice in relation to marine
casualties (fires, explosions, groundings,
collisions etc), pollution, and piracy incidents.
Thanks to our global presence, we offer
our services throughout the world, whenever
and wherever our clients’ needs may arise.
• Provided advice in relation to pooling,
competition, and consortium issues including
regulatory control by port states, class, flag
states, ITF including advice in relation to
shipping investments, shipping distressed debt
funds, ownership/management structures,
and flag state issues.
• Acted in London arbitration proceedings,
for the owners of a vessel which was put
aground following a shift of its iron ore cargo.
Advising and assisting owners with regard to
the salvage claim, cargo issues, prospective
claim against shippers, wreck removal, and
detention of the crew.
• Advised on numerous charterparties (time,
voyage, trip charters, COAs etc), cargo
claims relating to a wide range of issues
including short landing, quality, damage,
contamination, title, demurrage, off-hire,
unsafe port/berth, re-delivery and withdrawal
claims and related trade financing issues
arising from bills of lading, letters of credit,
INCOTERMS, etc.
• Advised Japanese owner in relation to nondelivery of a ship being built by Chinese
shipyard. Included advising on issues, such
as frustration, in relation to a sales purchase
agreement and long-term time charter.
• Provided advice in relation to ship
management and crewing issues,
technical managers, commercial managers,
brokers, agents, crew claims, employment
contracts, etc.
Representative Matters
• Advised various owners on issues concerning
piracy in the Gulf of Aden.
• Advised in relation to a claim under a Hull
and Machinery policy concerning damage to
ship’s main engine. Principal issues included
policy interpretation and cause of damage.
• Advised Hong Kong party in relation to the
drafting and negotiation of shipbuilding
contracts with Korean and Japanese parties
for a series of large container ships.
• Advised ship owners of their liability/
obligation/claims arising out of a fire
which broke out in a cargo carried by one of
their vessels during a voyage from Indonesia
to India.
• Advising lessor in US$120M disputes under
Lease for large newbuild/conversion FPSO
vessel for offshore Australia. Further advising
on contractual issues connected with delays
following blow out and fire at offshore field,
Western Australia.
• Acting for Vietnamese shipyard in
arbitration involving disputes with buyer
and main supplier concerning delays, price
and delivery.
• Advising Vietnamese agricultural product
trader in relation to disputes with its supplier
concerning cargo quality problems.
In Asia, K&L Gates provides a broad
range of dispute resolution capabilities to
maritime clients, including handling complex
international commercial arbitrations,
mediations, adjudications, and other forms of
alternative dispute resolution.
For more information on our Maritime practice in Asia, please contact:
Singapore
Raja Bose
+65.6507.8125
raja.bose@klgates.com
Singapore/Tokyo
Robert Melson
+65.6507.8115 Singapore
+81.3.6860.8399 Tokyo
robert.melson@klgates.com
Hong Kong
Stephen K.P. Lo
+852.2230.3588
stephen.lo@klgates.com
Dubai
Patricia Tiller
+971.4.427.2711
patricia.tiller@klgates.com
Singapore
Michael Pollen
+65.6507.8120
mike.pollen@klgates.com
Anchorage Austin Beijing Berlin Boston Brussels Charlotte Chicago Dallas Dubai Fort Worth Frankfurt Harrisburg Hong Kong London
Los Angeles
San Diego
Miami
Moscow
San Francisco
Newark
Seattle
New York
Shanghai
Orange County
Singapore
Palo Alto
Paris
Spokane/Coeur d’Alene
Pittsburgh
Taipei
Tokyo
Portland
Raleigh
Research Triangle Park
Warsaw Washington, D.C.
K&L Gates comprises multiple affiliated entities: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and maintaining offices
throughout the United States, in Berlin and Frankfurt, Germany, in Beijing (K&L Gates LLP Beijing Representative Office), in Brussels, in Dubai, U.A.E., in Shanghai
(K&L Gates LLP Shanghai Representative Office), in Tokyo, and in Singapore; a limited liability partnership (also named K&L Gates LLP) incorporated in England
and maintaining offices in London and Paris; a Taiwan general partnership (K&L Gates) maintaining an office in Taipei; a Hong Kong general partnership (K&L
Gates, Solicitors) maintaining an office in Hong Kong; a Polish limited partnership (K&L Gates Jamka sp.k.) maintaining an office in Warsaw; and a Delaware
limited liability company (K&L Gates Holdings, LLC) maintaining an office in Moscow. K&L Gates maintains appropriate registrations in the jurisdictions in which its
offices are located. A list of the partners or members in each entity is available for inspection at any K&L Gates office.
This publication 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 a lawyer.
©2011 K&L Gates LLP. All Rights Reserved.
110124_4991
K&L Gates includes lawyers practicing out of 37 offices located in North America, Europe, Asia and the Middle
East, and represents numerous GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in addition to growth
and middle market companies, entrepreneurs, capital market participants and public sector entities. For more
information, visit www.klgates.com.
Ship Mortgage Enforcement, Restructuring &
Workout Experience
Overview
Few if any maritime loans are entered into with the possibility of default and enforcement to the fore, but
shipping loans and investments are among the highest-risk adventures with high “casualty” rates from failing
shipowners. Shipping loans are among the most difficult to enforce, due to the ability of the security asset –
the ship – to move out of jurisdictions and out of range of seizure.
In uncertain economic times, lenders must be prepared to deal with borrowers who find themselves in financial
difficulties - this may lead to them being unable to service loans or perform obligations under their financial
agreements. It is imperative that lenders are proactive in understanding the financial condition of its ship
owner client.
Lenders and secured investors are understandably slow to accelerate a loan and enforce their security given
the associated difficulties and costs with any enforcement exercise. Various other means are tried first:
restructuring, refinancing, and extending additional funds being the most common. Whilst sometimes this
helps a borrower through a difficult period till their earnings or cash flow improves, in the current economic
climate, a possible result is that the lender has dug itself even deeper into the mire.
Why K&L Gates
 We have more than 20 years of experience dealing with ship mortgage enforcement, restructurings and
workouts. Because we understand what we are doing, we can anticipate and identify problems before
they occur, propose the most sensible cost-effective action (including doing nothing and writing off the
loan) and move quickly once a decision has been made.
 We provide a comprehensive preliminary overview of a lender’s rights in relation to non-performing
shipping loans and formulate a risk assessment and proposed enforcement strategy should that be the
recommended course of action including a cost/benefit analysis of the different enforcement options,
jurisdictional impact & costing reports.
 If required, we can have a member of our team on board a vessel anywhere in the world within 24 to 48
hours of being instructed.
 Any enforcement exercise requires a combination of skill sets including maritime lawyers, technical and
commercial managers, ship agents, ship brokers, underwriters, and cargo recovery consultants. We
maintain an extensive and up to date network of local shipping lawyers, hull and machinery underwriters,
crewing agents, ship managers, brokers, and ship agents in most major ports. This enables us to put
together an efficient team covering all aspects of an enforcement exercise.
Specific Experience
At K&L Gates, we have more than two decades of experience assisting banks and financial institutions
navigate numerous instances of default, restructuring, workouts, and enforcements. We understand the interrelationships between the ‘bundle’ of security rights typically structured in such transactions and the order,
sequence and management of enforcing rights under the principal security over the vessel, the pledges of
shares in management/ownership companies, assignments of insurances and charterparties as well as
personal and corporate guarantees.
Our experience spans the Americas, Asia, the Middle East, Europe and Africa, and covers all aspects
of a lender dealing with non-performing shipping/offshore asset loans and securities. The strength of
our practice experience is supported by our ability to coordinate action through our network of offices
and other professionals with whom we have established relationships, including local counsel, ship
managers, crewing agents, and brokers.
We have particular experience dealing with:
 Pre-enforcement strategy, options & costing reports
 Drafting Notices of default, acceleration and demand and advice on how to handle negotiations to seek a
cooperative enforcement exercise with the owners
 Crew negotiations, settlement and payment of wages, repatriation & skeleton crew placements
 Maintaining vessels in lay-up and obtaining protection for the advancement of maintenance costs
 Mortgagee protection insurance & port risk cover and pursuing claims for loss/damage of pre-existing
claims against hull and machinery underwriters
 Negotiation and settlement of cargo, charterparty and 3rd party claims
 Exercising rights of constructive or actual possession enabling repossession and movement to favorable
jurisdictions
 Undertaking vessel arrests worldwide
 Private treaty sales, judicial sales by closed/sealed bids or public auctions
 Dealing with maritime liens, possessory liens and the order of priorities leading under different civil and
common law regimes to a final payment out of the proceeds of sale.
We typically seek to move vessels to jurisdictions which are favorable from a lenders’ point of view when it
comes to selling a vessel such as Bahamas, the UK, Gibraltar, Singapore, or Hong Kong.
We have a proven track record of being able to get vessels out of difficult jurisdictions that include: France,
Portugal, Spain, Morocco, Tunisia, Sierra Leone, Ghana, Nigeria, Turkey, Iran, Yemen, UAE, Pakistan, India,
Sri Lanka, Bangladesh, Thailand, Indonesia, Korea, Japan and China, to name but a few.
Contacts:
Washington, D.C.
Jorge Romero
+1.202.661.3815
jorge.romero@klgates.com
Singapore
Raja Bose
+65.6507.8125
raja.bose@klgates.com
Mike Pollen
+65.6507.8120
mike.pollen@klgates.com
Ian Fisher
+65.6507.8117
ian.fisher@klgates.com
K&L Gates Finance Practice
As the global financial markets continue to evolve and regulatory changes take effect,
K&L Gates’ Finance group is well positioned to help clients achieve their financing objectives,
mitigate transaction risks, and comply with new regulations.
Our finance lawyers are located in key financial
capitals across four continents and have a
broad-based understanding of local laws, current
market terms, and complex multi-jurisdictional
financing transactions. We advise lenders and
borrowers on all aspects of mainstream secured,
unsecured, asset-based, cash flow, and other
commercial lending and commercial real estate
financing transactions. We handle financings
in almost every industry, including commodities,
mining, manufacturing, distribution, media,
telecommunications, entertainment, hospitality,
healthcare, retail, and the service sector.
Our Practice
Acquisition and Leveraged Finance
Acquisition and leveraged finance are
hallmarks of our practice. We represent
lenders and borrowers in senior credit
facilities, private placements, first lien/
second lien and last out deals, subordinated
debt issuances, and seller financings for
dividend recapitalizations, public company
acquisitions, and private equity-backed
leveraged buyouts. These deals often involve
multiple domestic and foreign jurisdictions,
complex capital structures, and a variety of
intercreditor arrangements.
Asset-Based Lending
We frequently represent clients in asset-based
financing transactions ranging from traditional
inventory, equipment, and receivables
financings to more esoteric loans secured by
bullion, secured loans, leases, securities and
other investment property, tax obligations,
natural resources, intellectual property, and
governmental licenses. We also represent
lenders and borrowers in structuring assetbased loan transactions to facilitate acquisitions
and leveraged buyouts.
Commodity Finance
We advise financial institutions, commodity
producers, trading companies, and
governments in structuring and documenting
commodity-linked financing transactions; risk
management in credit, trading and commodity
related investment transactions; and dispute
resolution and recovery. The matters we
handle are typically performed in connection
with syndicated agented working capital
credit facilities, single and multi-lender assetbased loans, large single and multiple cargo
financings, import and export trade finance
transactions, asset securitizations, and
tax-advantaged leasing transactions.
Loans Trading, Claims Trading,
and Derivatives
We represent both domestic and international
buyers and sellers of par and distressed
commercial loans with claims in bankruptcy,
including trade receivable and tax indemnity
claims. Our experience extends to the
derivative products generally related to the
loan trading business, including total return
swaps, loan only credit default swaps, and
other related products. We are also involved
with LMA, LSTA, and ISDA, all active industry
associations in this field.
Structured Finance and
Asset Securitization
Our lawyers regularly work closely with
industry leaders to structure, negotiate, and
document sophisticated asset-backed financing
transactions. We advise clients on synthetic
lease transactions, sale/leasebacks, leveraged
lease transactions, project financing, industrial
revenue bonds and other tax-exempt debt
issuances. We handle securitizations involving
the pooling of various types of debt and other
assets (including inventory, credit card and
other receivables, residential and commercial
mortgage loans, leases, consumer loans,
corporate loans, project finance debt, trade
receivables, collateralized bond obligations,
non-performing assets, and real estate tax liens)
and the sale of interests in the pools in the
form of bonds, securities, and other financial
instruments in capital markets across the globe.
6-Mezzanine Finance
Workouts, Restructuring, and Bankruptcy
Equipment Leasing
Our lawyers structure, document, and
negotiate mezzanine debt transactions,
subordinated debt issuances, and structured
loan participations. We assist clients with
warrants, convertible notes, and equity coinvestments. We deal regularly with complex
intercreditor and equity holder arrangements
in these transactions, and bring to our clients a
keen market awareness of differing standards
for debt and lien subordination terms. As a
result of numerous debt restructurings for our
clients, we have first-hand experience in the
practical application of these arrangements.
Our lawyers assist lenders and borrowers
with bankruptcy, restructuring, and workout
issues both in formal bankruptcy proceedings
and out-of-court. We help lenders navigate
difficult workout negotiations with debtors,
stakeholders and other creditors, consummate
debt restructurings, provide debtor-in-possession
financing, and, when necessary, liquidate
impaired loan assets, enforce remedies, and
maximize recoveries. We advise debtors
in strengthening management, streamlining
the balance sheet, abandoning worthless
properties, structuring compromises and
settlements with creditors, and negotiating
with lenders for new or restructured financing.
We advise on strategic acquisitions of
troubled loans.
We help clients realize the associated tax,
financial, and balance sheet benefits of
equipment leasing transactions. We represent
lessors, lessees, and lenders in true leases,
finance leases, leases intended as security
devices, synthetic leasing arrangements,
leveraged leases, tax-driven leases, and
structured leasing transactions. Our clients
include leasing subsidiaries of national banking
institutions, specialty leasing companies,
Fortune 500 companies, and middle
market companies.
Mezzanine Finance
Our lawyers structure, document, and
negotiate mezzanine debt transactions,
subordinated debt issuances, and structured
loan participations. We assist clients with
warrants, convertible notes, and equity coinvestments. We deal regularly with complex
intercreditor and equity holder arrangements
in these transactions, and bring to our clients a
keen market awareness of differing standards
for debt and lien subordination terms. As a
result of numerous debt restructurings for our
clients, we have first-hand experience in the
practical application of these arrangements.
Real Estate Finance
We handle the full spectrum of real property
financing, ranging from straightforward
bilateral and syndicated mortgage facilities to
transactions involving highly complex vehicles,
structures, and financing techniques. These
include multi-property, cross-collateralized, and
cross-border financings, as well as traditional
single-asset mortgage financings, real estate
development, and commercial leasing.
We also represent clients in connection
with the financing of industrial, commercial,
multi-family, hotel, leisure, public, and
infrastructure developments.
Private Wealth
We represent the private wealth management
and investment advisory arms of a number
of banking institutions in financings for family
offices, foundations, trusts, estates, and
high-net-worth individuals. These confidential
transactions often involve a high degree of
individualized attention, and a wide range of
collateral including marketable securities and
other investment property, high-end real estate,
closely held business interests, artwork, aircraft,
luxury and collectible automobiles, pleasure
craft, and other unique and specialized assets.
Specialty Finance
Many of our engagements involve the
financing for specialized assets and lending
arrangements, including:
• Aircraft, rolling stock, and maritime assets
• Public transportation
As part of structuring and documenting
complex financing transactions across
the globe, we routinely work with lawyers
across diverse practice areas.
• Power generation facilities
• Municipal tax and utility liens
• Letters of credit and other credit
enhancement facilities
• ESOP loans
• Conduit loan programs
• Warehouse lines of credit
• Loan portfolio acquisitions
• Structured loan participations
• Loans to regulated industries
• Factoring loans
For more information on our Finance practice, please visit
www.klgates.com or contact:
New York
Steven H. Epstein
+1.212.536.4830
steve.epstein@klgates.com
Chicago
Michael L. Owen
+1.312.807.4235
michael.owen@klgates.com
Anchorage Austin Beijing Berlin Boston Brussels Charleston Charlotte Chicago Dallas Doha Dubai Fort Worth Frankfurt Harrisburg
Hong Kong London Los Angeles Miami Milan Moscow Newark New York Orange County Palo Alto Paris Pittsburgh Portland Raleigh
K&L Gates includes lawyers practicing out of more than 40 fully integrated offices located in North America, Europe,
Asia, South America, and the Middle East, and represents numerous GLOBAL 500, FORTUNE 100, and FTSE 100
corporations, in addition to growth and middle market companies, entrepreneurs, capital market participants and
public sector entities. For more information about K&L Gates or its locations and registrations, visit www.klgates.com.
This publication 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 a lawyer.
©2012 K&L Gates LLP. All Rights Reserved.
100406_3980
Research Triangle Park San Diego San Francisco São Paulo Seattle Shanghai Singapore Spokane Taipei Tokyo Warsaw Washington, D.C.
a ddit ion a l mat eria ls
December 9, 2011
Practice Groups:
Maritime,
Environmental, Land
and Natural
Resources
EPA Issues Draft of the Next Vessel
General Permit for Public Review –
Comments Due By February 21, 2012
By Barry M. Hartman, Christopher R. Nestor, Christine J. Boote
On December 8, 2011, the United States Environmental Protection Agency (EPA) published for
comment in the Federal Register a new, draft federal Clean Water Act Vessel General Permit (VGP)
that would regulate discharges from commercial vessels greater than or equal to 79 feet in length,
1
excluding military and recreational vessels. If finalized, this draft VGP would succeed the current
2
VGP, which was issued in December 2008 and expires on December 19, 2013. This alert describes
the key new features of the draft VGP, some of the issues that it raises, and the process for
commenting on it.
A key feature of the draft VGP is numeric ballast water discharge limits for most vessels, as opposed
to the full suite of best management practices for ballast water discharges contained in the current
VGP. As explained below, EPA has established the ballast water discharge limits at the United States
Coast Guard (USCG) Phase I proposed discharge standard/International Maritime Organization (IMO)
standard with a rolling implementation schedule, similar to that established by the USCG proposal and
IMO.
The draft VGP, as well as the draft fact sheet and economic analysis for the permit, is subject to a 75day comment period that ends on February 21, 2012. EPA has indicated its intention to issue the final
VGP in November 2012, a year in advance of the expiration of the current VGP, in order to allow
vessel owners and operators time to prepare for new permit requirements, and to provide sufficient
time to consider state conditions that might be added to the VGP pursuant to the state certification
3
process in Section 401 of the Clean Water Act.
Background of the VGP
The current, and first, VGP was issued by EPA on December 18, 2008 and published in the Federal
4
Register on December 29, 2008. A brief description of the Clean Water Act regulatory background
and history of events that led to the creation of the VGP can be found in our prior alert, EPA Issues
5
Final Clean Water Act Permit for Incidental Discharges From Vessels (Jan. 2009). Twenty-six
different types of incidental discharges, ranging from ballast water to deck runoff, were covered by the
1
76 Fed. Reg. 76716 (Dec. 8, 2011).
EPA is also proposing a new, draft Clean Water Act Small Vessel General Permit (sVGP) to authorize
discharges incidental to the normal operation of non-military and non-recreational vessels less than 79 feet in length
because the P.L. 110-299 moratorium (subsequently extended by P.L. 111-215) expires on December 18, 2013. These
laws generally provide that no Clean Water Act permits are required for incidental discharges (except discharges of
ballast water) from vessels less than 79 feet and commercial fishing vessels. This alert focuses on the draft VGP, not the
draft sVGP.
3
33 U.S.C. § 1341.
4
73 Fed. Reg. 79473 (Dec. 29, 2008).
5
Available at:
http://www.klgates.com/resources/xpqPublicationDetailKNLG.aspx?xpST=PubDetail&pub=5211.
2
EPA Issues Draft of the Next Vessel General Permit for
Public Review – Comments Due By February 21, 2012
permit. The VGP was a “first” for the maritime community as, for the prior three decades, these
incidental discharges were exempt from federal Clean Water Act permitting requirements.
There have been several major issues surrounding EPA’s regulation of incidental vessel discharges
historically exempt from federal Clean Water Act permitting requirements. One such issue was
whether the agency should use the general permit process or the individual permit process. Because
of the short time that EPA had to issue the first VGP, the agency’s decision was to propose a
nationwide general permit program for incidental vessel discharges previously covered by the
exclusion, rather than issuing vessel-by-vessel individual permits or having states develop and seek
approval of state permit programs for these discharges. To date, no individual permit process has
been created by EPA for incidental vessel discharges. A second issue was whether EPA would use
specific numeric limitations or “best management practices,” or “BMPs,” for the covered incidental
discharges. Most of the standards in the current VGP, including those related to ballast water
discharges, are expressed as BMPs rather than specific numeric limitations. A third issue was how to
deal with potentially conflicting state standards that can be added to the VGP pursuant to the state
certification process in Section 401 of the Clean Water Act. In the current VGP, dozens of potentially
conflicting state Section 401 conditions were added to the final permit after the public comment
period had closed.
Litigation over the current VGP in the D.C. Circuit Court of Appeals resulted in a settlement that,
among other things, called for EPA to:
· Include in the next draft VGP numeric concentration-based effluent limits for discharges of ballast
water expressed as organisms per unit of ballast water volume.
· Propose the next draft VGP by November 30, 2011, and issue the final VGP by November 30,
2012, a full year before the current permit is scheduled to expire in order to provide the regulated
community with time to familiarize itself with the new permit and take appropriate measures to
come into compliance with new requirements.
· Provide states with at least six months after publication of the new, draft VGP to grant, grant with
condition, deny or waive certification under Section 401 of the Clean Water Act.
In connection with the VGP litigation and settlement, EPA jointly commissioned two scientific studies
with the USCG to better inform EPA’s understanding of ballast water discharges. The first study was
led by the National Academy of Sciences National Research Council (NAS). EPA and the USCG
requested the study to inform their efforts to derive environmentally protective numeric ballast water
6
discharge limits under their respective regulatory programs. The second study was led by EPA’s
Science Advisory Board (SAB). This study evaluated the status of ballast water treatment
technologies. Information from both the NAS and SAB reports was considered by EPA in developing
7
the ballast water limits in the proposed draft VGP, discussed below.
The Proposed Draft VGP
The proposed draft VGP would continue to regulate twenty-six specific discharge categories that are
contained in the current VGP, and for the first time, would authorize the discharge of fish hold
6
A copy of this study is available at:
http://www.epa.gov/npdes/pubs/nas_final_report_prepublication_version.pdf.
7
A copy of this study is available at:
http://yosemite.epa.gov/sab/sabproduct.nsf/fedrgstr_activites/6FFF1BFB6F4E09FD852578CB006E0149/$File/EPASAB-11-009-unsigned.pdf.
2
EPA Issues Draft of the Next Vessel General Permit for
Public Review – Comments Due By February 21, 2012
effluent (which was previously exempt by Public Law 111-215). Significant proposed changes to the
current VGP have been grouped by EPA as follows: changes to ballast water requirements, changes to
other incidental discharge effluent requirements, and changes to administrative requirements.
Changes to Ballast Water Requirements. EPA is proposing, for the first time, more stringent
numeric technology-based effluent limitations that are applicable to vessels with ballast water tanks.
These numeric effluent limitations will largely replace the non-numeric effluent limitations (BMPs)
for ballast water in the current VGP. EPA has expressed the numeric effluent limit for ballast water
discharges as numbers of living organisms per cubic meter (i.e., as a maximum acceptable
concentration). Those numeric limits, as set forth in Section 2.2.3.5 of the draft VGP, are:
1. For organisms greater than or equal to 50 micrometers in minimum dimension: discharge must
include fewer than 10 living organisms per cubic meter of ballast water.
2. For organisms less than 50 micrometers and greater than or equal to 10 micrometers: discharge
must include fewer than 10 living organisms per milliliter (mL) of ballast water.
3. Indicator microorganisms must not exceed:
(i) For Toxicogenic Vibrio cholerae (serotypes O1 and O139): a concentration of less than 1
colony forming unit (cfu) per 100 mL.
(ii) For Escherichia coli: a concentration of fewer than 250 cfu per 100 mL.
(iii) For intestinal enterococci: a concentration of fewer than 100 cfu per 100 mL.
As noted, these proposed technology-based numeric effluent limits for the discharge of living
organisms in ballast water are equivalent to the USCG Phase I proposed discharge standard, which is
the same standard adopted by the IMO in 2004, “International Convention for the Control and
8
Management of Ships’ Ballast Water and Sediments.” According to EPA, it has established the
limits because several treatment technologies have been shown to be safe, reliable and effective at
reducing viable living organisms in ballast water discharges to meet these limits. Further, according
to EPA, it has been demonstrated that several of these technologies are commercially available for
shipboard installation and their use is economically achievable.
EPA has proposed a staggered implementation schedule for certain existing vessels for achieving the
numeric limitation by the first drydocking after January 1, 2014 or January 1, 2016 (depending upon
vessel size), which may extend beyond the permit term for some vessels. Vessels newly constructed
after January 1, 2012 that are subject to the numeric limitation must meet those limits upon entering
U.S. waters upon the effective date of the permit.
Under the draft VGP, vessel owner/operators subject to the concentration-based numeric discharge
limitations would be able to meet their obligations in one of four ways: discharge ballast water
meeting the applicable numeric limits of the VGP; transfer the ship’s ballast water to a third party for
treatment at an NPDES permitted facility; use treated municipal/potable water as ballast water; or not
discharge ballast water. Vessel owner/operators using a ballast water treatment system must use a
system which has been shown to be effective by testing in accordance with the EPA-ETV protocol for
the verification of ballast water treatment technology conducted by an independent third party
laboratory, test facility or test organization. As in the 2008 VGP, vessels enrolled in, and meeting the
8
See 74 Fed. Reg. 44632, 44634 (Aug. 28, 2009) (“Standards for Living Organisms in Ships’ Ballast Water
Discharged in U.S. Waters,” USCG Notice of Proposed Rulemaking).
3
EPA Issues Draft of the Next Vessel General Permit for
Public Review – Comments Due By February 21, 2012
requirements of the USCG’s Shipboard Technology Evaluation Program (STEP) would be deemed to
be in compliance with the numeric limitations.
The numeric concentration-based treatment limits for ballast water discharges would not apply to
some vessels. Special requirements would apply to the following vessel classes: vessels operating
exclusively within a limited area on short voyages; unmanned, unpowered barges; and existing bulk
carrier vessels (commonly known as “Lakers”) built before January 1, 2009 that operate exclusively in
the Great Lakes upstream of the Welland Canal (referred to as existing “confined Lakers”). All
confined Lakers built after January 1, 2009, however, would be required to meet ballast water
treatment numeric technology-based effluent limits found in the VGP.
The draft VGP would impose several BMPs for vessels until they are required to meet the numeric
ballast water limits that EPA has found to be available, practicable and economically achievable.
These interim requirements are substantially similar to those in the current VGP.
EPA has included in the draft VGP three management measures specific to existing confined Lakers.
These include developing sediment management measures, minimizing the amount of ballast water
taken in nearshore environments, and requiring inspection of sea chest screens and repair as necessary.
EPA believes these requirements are economically practicable and achievable, and represent common
sense approaches to managing ballast water discharges for vessels when they have not installed ballast
water treatment systems. If existing confined Lakers are retrofitted to meet the numeric effluent limits
in the draft VGP, these vessels would no longer be required to perform these management measures.
Changes to Other Incidental Discharge Effluent Requirements. With respect to non-ballast water
discharges, the draft VGP:
· contains best management practices for discharges of oil to sea interfaces, requiring that all
“powered new build” vessels (those constructed after December 19, 2013) must use
“environmentally acceptable lubricants” in their oil-to-sea interfaces;
· authorizes the discharge of fish hold effluent and establishes appropriate best management
practices for this discharge type;
· includes numeric limits for exhaust gas scrubber effluent that are consistent with those established
by IMO guidelines for this discharge type;
· specifically seeks input as to whether to include more stringent numeric limits for bilgewater for
certain vessels, which would decrease the amount of oil (and potentially other pollutants)
discharged into U.S. waters; and
· contains monitoring requirements for certain larger vessels for ballast water, graywater, and
exhaust gas scrubber effluent if they discharge into waters subject to the permit.
Changes to Administrative Requirements. On the administrative front, the draft VGP, among other
proposed changes:
· clarifies that electronic recordkeeping is allowed under the permit, stating that “records may be
kept electronically” if the records are (1) in a format that can be read in a similar manner as a paper
record, (2) legally dependable with no less evidentiary value than their paper equivalent, and (3)
accessible to the inspector during an inspection to the same extent as a paper copy stored on the
vessel would be, if the records were stored in paper form;
4
EPA Issues Draft of the Next Vessel General Permit for
Public Review – Comments Due By February 21, 2012
· requires permittees not required to submit a notice of intent (NOI) to be covered by the permit to
complete and keep a Permit Authorization and Record of Inspection (PARI) Form onboard their
vessel at all times;
· would consolidate the one-time report and annual noncompliance report into one annual report;
and
· would authorize a combined annual report for unmanned, unpowered barges if they meet specified
criteria to maximize efficiency and reduce burden on a significant portion of the regulated
universe.
EPA is specifically requesting comment on the administrative changes in the draft VGP and is
soliciting suggestions for other efficiency improvements. Many of these provisions were addressed in
a series of “Frequently Asked Questions” that EPA issued in connection with the current VGP.9
Comment Period and Public Meetings
As noted above, EPA is soliciting comments on the draft VGP, as well as the draft fact sheet and
economic analysis for the permit. The comment period is open for 75 days from the December 8,
2012 Notice announcing the draft VGP in the Federal Register, with comments due to EPA on or
10
before February 21, 2012. Instructions for submitting comments are included in the Notice. EPA
has already scheduled a public hearing (January 11, 2012 – Washington, D.C.) and a public meeting
(January 23, 2012 – Chicago). Depending on interest, an additional public meeting may be scheduled.
EPA has indicated its intention to schedule a webcast in the latter part of January 2012 to provide
information on the draft VGP and to answer questions for interested parties that are unable to attend
the public hearing or meeting. Further information regarding the public hearing, meeting and webcast
can be found in the Notice and on EPA’s website for the draft VGP http://cfpub.epa.gov/npdes/vessels/vgpermit.cfm.
Authors:
Barry M. Hartman
barry.hartman@klgates.com
+1. 202.778.9338
Christopher R. Nestor
christopher.nestor@klgates.com
+1. 717.231.4812
Christine Jochim Boote
Christine.boote@klgates.com
+1. 202.778.9222
9
Those “Frequently Asked Questions” can be viewed at:
http://cfpub.epa.gov/npdes/faqs.cfm?program_id=350.
10
76 Fed. Reg. at 76716.
5
EPA Issues Draft of the Next Vessel General Permit for
Public Review – Comments Due By February 21, 2012
6
Maritime Alert
August 18, 2010
Authors:
Spillover from the Spill
Susan B. Geiger
susan.geiger@klgates.com
+1 202.661.3818
Barry M. Hartman
barry.hartman@klgates.com
+1 202.778.9338
Yvette T. Wissmann
yvette.wissmann@klgates.com
+1 202.661.3829
K&L Gates includes lawyers practicing out
of 36 offices located in North America,
Europe, Asia and the Middle East, and
represents numerous GLOBAL 500,
FORTUNE 100, and FTSE 100
corporations, in addition to growth and
middle market companies, entrepreneurs,
capital market participants and public
sector entities. For more information,
visit www.klgates.com.
Congressional response to the DEEPWATER HORIZON explosion and resulting
spill could have a profound impact on the maritime industry. Determined to create
laws to prevent a similar disaster in the future, Congress has introduced a number of
bills to not only respond to the spill and clean-up efforts, but also to impose new and
more stringent regulations on industries involved in both offshore and onshore oil
and gas production and exploration. These legislative responses are drafted quite
broadly; consequently, many have far-reaching implications for the maritime,
energy, and insurance industries as well.
Recently, the U.S. House of Representatives approved two legislative proposals,1
totaling more than 250 pages, that could have far-reaching consequences for the
maritime industry, the offshore oil industry, onshore oil facilities, the maritime
insurance industry, and beyond. The Senate is still working on its own version of
this legislation. Wrapped within the many changes relating to spill response plans,
and changes in liability for offshore spills, are a number of provisions that could
bring major changes to these industries.
Possible changes for the offshore oil industry start at the top. Under the legislation
passed by the House of Representatives, the offshore oil industry would become
subject to a CEO certification requirement that is far more stringent – and therefore
bears a far greater potential for personal liability – than required for other industries.
Before any drilling permit is approved, the applicant’s CEO would have to certify
that the company “is in compliance with all environmental and natural resource
conservation laws.”2 This is more stringent than even the CEO certification under
Sarbanes-Oxley, in that it appears to impose on the CEO the obligation to know that
compliance has been achieved, rather than to assure that systems are in place to
reasonably assure compliance.
Even the long-standing protection limits on investor liability contained within
corporate business structures (as well as other limited liability structures) could be
wiped away for offshore facilities. Under an amendment adopted during floor debate
on the bill in the House, any person, other than an individual, who owns 25 percent
or more, directly or indirectly, of a vessel, onshore or offshore facility, deepwater
port, or pipeline would be deemed a “responsible party” for the clean-up costs and
damages resulting from an oil spill, if the assets of the entity spilling the oil are
insufficient to pay the claims owed as a result of the spill.3
1
H.R. 3534, the Consolidated Land, Energy, and Aquatic Resources Act of 2010, approved
by the U.S. House of Representatives on July 30, 2010 and H.R. 5503, Securing Protections for the
Injured from Limitations on Liability Act, approved by the U.S. House of Representatives on July 1,
2010.
2
H.R. 3534, Section 212(i).
3
H.R. 3534, Section 731.
Maritime Alert
All “responsible parties” are required to provide
financial assurance of their ability to pay and
provide a spill control plan before undertaking the
regulated activity and are exposed to penalties for
failure to do so. The bill, however, deems minority
owners responsible based on facts that arise only
after a spill occurs, but does not excuse the
preexisting financial assurance and spill plan
requirements, raising serious questions regarding
how this provision will be implemented.
Another provision in the House legislation affects
any entity that spills oil and causes natural resource
damages. Natural resource damages are paid to
trustees of resources and are different from, and in
addition to, economic losses suffered by private
entities from the loss of those resources. Under
current law, the government’s assessment of natural
resource damages is entitled to a “rebuttable
presumption” that it is correct in any subsequent suit
brought under the Oil Pollution Act for natural
resource damages.4 This evidentiary presumption
can be rebutted by new evidence introduced at a trial
that the assessment is flawed. Under section 706 of
the House bill, the natural resource damage
assessment developed by the lead trustee may only
be challenged under the Administrative Procedures
Act, where the only basis for the challenge is that the
assessment is arbitrary, capricious and inconsistent
with law. This provision would likely not permit the
introduction of new evidence of those damages at a
subsequent trial. Further, this provision could also
impact private economic damage claims based on
those lost resources. This will create extraordinary
pressure on private parties to participate in the
natural resource damage assessment process, which
is controlled by the trustees.
In addition to the provision that greatly narrows the
opportunity to challenge the government natural
resource damage assessment, the House amendment
to section 1006(d) could substantially increase
natural resource damage costs. Under current law,
there is no specific requirement that any of the
remedies for addressing natural resource damages restoration, rehabilitation, replacement or acquisition
of replacement resources, is preferred. Under
regulations governing natural resource damages,
4
15 C.F.R. § 990.13.
restoration includes natural restoration. The
regulations do provide for evaluation of the various
options (restoration, acquisition, rehabilitation or
replacement) based on a number of factors, and all
other things being equal, the most cost effective one
is to be chosen.5 There is often a battle over
whether natural recovery, which is the most cost
effective, should be chosen. Under the House bill, it
appears that the discretion to choose the most cost
effective alternative may have been eliminated and
the discretion to choose acquisition of replacement
resources (often the second least expensive option)
is only permitted if the substitute resource can
provide “substantially greater likelihood of
improving the resilience of the lost resource and
supports local ecological processes.” This appears
to be a standard that would discourage this
alternative.
Tackling one of the most politically sensitive issues
relating to liability, the House bill eliminates any
limit on liability for an oil spill by an offshore
facility. Liability for clean-up and removal costs
would remain unlimited, as it is under current law,
but liability for damages, whether from a vessel or a
facility, is currently subject to a potential cap,
assuming certain conditions are met. While creating
this unlimited liability regime, the House bill retains
the requirement that entities provide certificates of
financial assurance, and while those amounts are
significantly increased under the bill, they are not
unlimited. Subjecting the offshore industry to
unlimited liability for damages has been a
particularly difficult issue in the Senate. An
alternative proposal that would involve a shared
liability scheme, much like the way in which
nuclear power plants are insured, is being
considered as an alternative approach. .6
Another major change for the maritime industry
would be created by provisions in the House bill
that would require all activities on the Exclusive
5
15 C.F.R. 990.54.
The Senate is aware that there needs to be
consistency between financial assurance and liability
provisions. See, Testimony of Barry M. Hartman before the
Senate Environmental and Public works, Committee, June 9,
2010;
http://epw.senate.gov/public/index.cfm?FuseAction=Hearings.
Hearing&Hearing_ID=fdf49728-802a-23ad-40c642b02815d1e5.
6
August 18, 2010
2
Maritime Alert
Economic Zone to be subject to U.S.-flag
requirements. This provision would affect not only
rigs but all of the various types of vessels supporting
that industry or simply conducting operations within
the zone. The House bill would require vessels to
be: (1) under U.S.-flag registry; (2) owned by an
entity that is at least 75 percent owned by U.S.
citizens; and (3) built in the United States. Foreignowned vessels and companies would no longer be
able to operate within the zone. The Obama
Administration has noted its concern with the
implications of this provision on international trade.
Among many other provisions of the House
legislation are provisions that would require
substantial changes to oil spill response plans,
including requiring redundancy plans and vetting by
impartial experts, expansion of the damages for
which a responsible party is liable to include
damages to human health, including mental health,
and the expansion of removal costs, for which there
is no limit on liability, to include all costs of federal
enforcement activities relating to removal costs.
As a result of the deaths from the explosion of the
rig, expanding liability for personal injury and death
has also been passed by the House (H.R. 5503).
Amendments to the Jones Act, the Death on the
High Seas Act, and the Limitation of Shipowners’
Liability Act are included in the House-passed bill
and similar provisions are being considered by the
Senate. These amendments would open up these
liability schemes for punitive damages and other
non-pecuniary damages, potentially resulting in
major changes for owners’ liability and costs.
Whether any or all of these changes will be
incorporated into any final bill passed by Congress
and approved by the President remains to be seen.
Congress remains under political pressure to “do
something” about the spill and its aftermath, making
it certain that oil spill legislation will remain on the
agenda following the August recess. The impact of
these changes could be substantial. In 1990, the Oil
Pollution Act focused on vessels because it was
largely a response to the Exxon Valdez spill. Other
sectors involved in production of oil were carried
along with this wave of reform. The current effort
may well have the same impact on the maritime
industry, and others, beyond deepwater offshore
drilling. Affected industries need to make their
voices heard in this process.
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Washington, D.C.
K&L Gates includes lawyers practicing out of 36 offices located in North America, Europe, Asia and the Middle East, and represents numerous
GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in addition to growth and middle market companies, entrepreneurs, capital market
participants and public sector entities. For more information, visit www.klgates.com.
K&L Gates comprises multiple affiliated entities: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and
maintaining offices throughout the United States, in Berlin and Frankfurt, Germany, in Beijing (K&L Gates LLP Beijing Representative Office), in
Dubai, U.A.E., in Shanghai (K&L Gates LLP Shanghai Representative Office), in Tokyo, and in Singapore; a limited liability partnership (also named
K&L Gates LLP) incorporated in England and maintaining offices in London and Paris; a Taiwan general partnership (K&L Gates) maintaining an
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entity is available for inspection at any K&L Gates office.
This publication 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 a lawyer.
©2010 K&L Gates LLP. All Rights Reserved.
August 18, 2010
3
Maritime and Environmental, Land and
Natural Resources Alert
July 28, 2010
Authors:
Susan B. Geiger
susan.geiger@klgates.com
+1.202.661.3818
Maritime Industry Faced with New Proposals for
Regulating Air and Water Discharges As a Result
of Environmental Group Action; Comment
Opportunities Limited
Barry M. Hartman
barry.hartman@klgates.com
+1.202.778.9338
Stephen P. Roberts
steve.roberts@klgates.com
+1.202.778.9357
Christopher R. Tate
christopher.tate@klgates.com
+1.202.778.9246
The U.S. Environmental Protection Agency (“EPA”) is continuing its efforts to
expand and change how it regulates the environmental impact of maritime
operations. One effort addresses water pollution issues while vessels are underway,
while the other addresses air pollution issues when at shore. The water pollution
proposal seeks comments on whether it should grant a request for rulemaking that
seeks to vastly change and upgrade marine sanitation devices. Comments are due by
November 9, 2010. In the air pollution proposal, the agency plans to settle a lawsuit
by proposing that it reconsider its current regulations of hazardous air pollutants
(HAPs) emitted from tank vessel loading operations. Comments in this proposal
settlement are due by August 13, 2010. Both initiatives were triggered by
environmental groups. This alert discusses each of these new initiatives.1
Potential New Requirements for Marine Sanitation Devices
K&L Gates includes lawyers practicing out
of 36 offices located in North America,
Europe, Asia and the Middle East, and
represents numerous GLOBAL 500,
FORTUNE 100, and FTSE 100
corporations, in addition to growth and
middle market companies, entrepreneurs,
capital market participants and public
sector entities. For more information,
visit www.klgates.com.
Asserting that current marine sanitation devices (“MSDs”) are inadequate to protect
U.S. waters, Friends of the Earth (“FOE”) filed a petition in April 2009 with EPA,
asking the agency to require substantial changes in the standards governing
discharges from MSDs.2 Based on information gathered several years ago from a
voluntary sampling program by cruise ships in Alaskan waters, FOE supports its
petition by noting “the average concentration of fecal coliform in MSD effluent
exceeded the [current] EPA standard by 10,200 times.” The agency is now asking
for industry comments on the petition and whether it should begin a rulemaking to
change standards governing MSDs.3
Although based on a sampling program in the cruise industry, FOE asks EPA to
update the standards for all Type II MSDs and require advanced wastewater
treatment systems for all vessels discharging treated sewage. In addition, the petition
seeks to have EPA consider upgrades to this technology including biological
1
For descriptions of the dozen new regulatory initiatives over the last two years that targeted the
maritime industry, see http://www.klgates.com/practices/vessel_discharge_resources/.
2
Clean Water Act Section 312(b): Notice Seeking Stakeholder Input on Petition and Other Requests
to Revise the Performance Standards for Marine Sanitation Devices, 75 Fed. Reg. 39,683 (Jul. 12,
2010). http://www.klgates.com/FCWSite/ballast_water/other/CleanWaterAct_312b_07122010.pdf.
3
See Maritime and Environmental Alert: Déjà Vu All Over Again: Environmentalists Petition for
Unprecedented Expansion of Requirements for Vessel Sewage Discharges, (May 11, 2009) by Barry
M. Hartman, Susan B. Geiger, Christopher R. Tate. It does not appear that industry opposed this
petition when it was filed in 2009. Filing such a petition is the same procedure that environmental
groups used to ultimately remove the regulatory exemption for incidental discharges from vessels,
which resulted in the new Vessel General Permit. See Maritime and Environmental Alert: EPA Issues
Final Clean Water Act Permit for Incidental Discharges From Vessels, (Jan. 2009);
http://www.klgates.com/newsstand/Detail.aspx?publication=5211.
Maritime Alert
nitrification, ion exchange, reverse osmosis and
chemical precipitation to achieve reductions in the
levels of ammonia, nitrogen, phosphorus and metals.
Sewage discharges from vessels are regulated under
the Clean Water Act, which requires vessels to
install an MSD approved by the Coast Guard for
treatment of such discharges. Currently, vessel
sewage discharges are not subject to Clean Water
Act permitting requirements because such
discharges are specifically regulated under other
provisions of the Act. Under current regulations,
vessels need only have a Coast Guard-approved
MSD installed on-board that is designed to meet
discharge performance standards.
As noted in the petition, vessel operators are not
required to monitor sewage discharges on a
continual basis or to record compliance throughout
the life cycle of their MSDs. FOE is asking EPA to
establish monthly monitoring and reporting of
discharges from Type II MSDs as well as daily
observations of treatment equipment operation.
Requiring more extensive testing, sampling, and
recording of data relating to these discharges could
result in a major new responsibility for vessel
operators.
In response to this petition, EPA issued a request for
information relating to MSDs. Many of the
highlighted questions are addressed to equipment
manufacturers, but vessel owners should note the
following questions:
•
Whether EPA should revise the existing
performance standards for MSDs, and if so,
what should be the basis for those revisions?
•
What revisions to the existing performance
standards are necessary for each type of MSD?
•
What are the likely impacts of revising MSD
performance standards?
•
What are the practical limitations or burdens
associated with implementing testing,
monitoring or reporting of sewage discharges
from vessels, in particular the costs associated
with complying with these requirements or
vessel retrofitting for testing and monitoring?
Comments are due on November 9, 2010. It is
important to note that EPA has been considering
this petition for over a year. It must now decide
whether to formally propose regulations to revise
the program. The regulated community has only a
few months to respond. Whether and how the
agency will decide to grant this petition and proceed
with rulemaking will be heavily influenced by
comments received during this period.
Possible New Hazardous Air Pollutant
Standards for Tank Vessel Loading
Operations
On July 7, 2010, EPA and numerous environmental
groups lodged a proposed consent decree in the
United States District Court for the Northern
District of California, settling a deadline suit over
EPA’s alleged failure to review and revise National
Emission Standards for Hazardous Air Pollutants
(“NESHAP”) for 28 categories of sources, including
marine tank vessel loading operations.4 The suit,
filed by the Sierra Club, alleged that EPA violated
the Clean Air Act (“CAA”) by failing to review and
revise the NESHAPs for these source categories
over the previous eight years as required by
Sections 112(d)(6)5 and 112(f)(2)6 of the CAA.
EPA filed the notice of the Consent Decree in the
Federal Register on July 14, 2010.7 The potential
for changes to the tank vessel loading NESHAP
instigated by this Consent Decree is significant.
The NESHAP for tank vessel loading operations
was issued on September 19, 1995.8 (40 C.F.R. Part
63 Subpart Y).9 The rule is concerned with the
potential for the discharge of benzene, toluene,
hexane, xylene, and ethylbenzene from gasoline and
crude oil as it is loaded into a tank vessel.10
4
See Consent Decree, Sierra Club v. Jackson, No. 09-cv00152 SBA (N.D. Cal. July 7, 2010) (“Consent Decree”).
http://www.klgates.com/FCWSite/ballast_water/other/Consent
Decree_SeirraClub_07072010.pdf.
5
42 U.S.C. § 7412(d)(6) (2006).
6
Id. § 7412(f)(2).
7
75 Fed. Reg. 40827 (July 14, 2010).
8
60 Fed. Reg. 48399 (Sept. 19, 1995).
9
Note that this rule applies to loading operations for marine
tank vessels. Unloading is not included in the rule. Moreover,
the NESHAP standards are limited to terminals with
throughputs of 10M barrels of gasoline or 200M barrels of
crude oil.
10
See 59 Fed. Reg. 25004, 25013 (May 13, 1994) (proposed
rule).
July 28, 2010 2
Maritime Alert
Basically, it requires marine terminals to reduce
emissions of HAPs and volatile organic compounds
(“VOCs”) by certain percentages based upon when
the terminal began operations and the amount of
emissions currently created by loading operations
Existing terminals (those online before November
1994) that were emitting more than 10 tons of any
individual HAP or more than 25 tons of combined
HAPs,11 and handling commodities with a vapor
pressure of 1.5 psia or greater, were required to
reduce their emissions of HAPs by 97 percent by
September 1999.12 New terminals in a location that
emit greater than the 10/25 ton threshold (even if the
terminal itself is not responsible for all of these
emissions) are required to reduce emissions by
between 95 and 98 percent upon startup.13
offshore terminals are between two and five times
more expensive than comparable onshore control
techniques.”17 Similarly, when considering whether
to permit averaging of emissions from loading
operations collocated with refinery operations, EPA
cited “more cost effective emission reduction” and
the fact that “emission calculation procedures for
loading are well established and that adding marine
loading to the averaging provisions will not
appreciably increase the complexity of
enforcement” as support for averaging emissions.18
Given that these determinations were made 15 years
ago, it is almost certain that changes in technology,
costs and other processes could well alter the
agency’s view regarding whether and how these
parameters will continue.
In both cases, EPA requires marine terminals
exceeding that threshold to implement maximum
achievable control technology (“MACT”) for
reducing these emissions. Marine terminals not
exceeding that threshold are required only to use
reasonably available control technology (“RACT”),
except for the Alyeska Pipeline Valdez Terminal,
which is subject to its own requirements.14 Notably,
existing minor source terminals (i.e., those that do
not meet the throughput limits), as well as existing
major source terminals located more than 0.5 miles
offshore, are not required to meet the MACT
requirements.15 Moreover, terminals collocated at
petroleum refineries (regulated by a separate
NESHAP) are permitted to average their emissions
with the refinery operations.16
Comments on the proposed Consent Decree are due
to EPA by August 13, 2010. This would include
comments regarding whether the timeframe under
which the agency has agreed to review these rules is
sufficient. The Consent Decree, if approved, would
require EPA to propose changes to the marine tank
vessel loading operations NESHAP and residual
risk standards by September 14, 2010,19 and a final
rule by March 31, 2011.20 There will be a separate
comment period sometime after September 14,
2010, but it has not yet been scheduled. Changes to
the rule could revisit the criteria by which a facility
is subject to MACT requirements, revise or
eliminate the rules related to averaging emissions at
a particular location, or even impose more stringent
requirements on the entire industry. While the
Consent Decree gives the EPA the option of
declaring that changes to the marine tank vessel
loading operations NESHAP are unnecessary, it is
somewhat likely that any such decision would be
subject to challenge by the same environmental
groups that brought the deadline suit in the first
place. Indeed, to protect their victory in obtaining
this Consent Decree, it is likely that plaintiffs will
actively participate in the rulemaking process for
this and other NESHAPs subject to the Consent
Decree. Industry members should consider
participating as well.
Many of the requirements and exclusions included in
the original NESHAP responded to feedback from
industry through the comment process. For
example, EPA based its decision to choose a “no
control” level for offshore operations on the fact that
“[c]omments in response to this request indicated
that these types of vessel loading operations face
significant challenges in controlling emissions that
were different from land-based, contiguous loading
operations,” and “[d]ata submitted by commenters
showed that the costs associated with the control of
11
40 C.F.R. § 63.561 (2009).
40 C.F.R. § 63.562(b).
40 C.F.R. § 63.562(b)-(c).
14
40 C.F.R. § 63.562(d).
15
40 C.F.R. § 63.562(b)(2).
16
40 C.F.R. § 63.560(d).
12
13
17
60 Fed. Reg. 48388, 48393.
Id. at 48394.
19
Consent Decree at 5.
20
Id. at 6.
18
July 28, 2010 3
Maritime Alert
Anchorage Austin Beijing Berlin Boston Charlotte Chicago Dallas Dubai Fort Worth Frankfurt Harrisburg Hong Kong London
Los Angeles Miami Moscow Newark New York Orange County Palo Alto Paris Pittsburgh Portland Raleigh Research Triangle Park
San Diego San Francisco Seattle Shanghai Singapore Spokane/Coeur d’Alene Taipei Tokyo Warsaw
Washington, D.C.
K&L Gates includes lawyers practicing out of 36 offices located in North America, Europe, Asia and the Middle East, and represents numerous
GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in addition to growth and middle market companies, entrepreneurs, capital market
participants and public sector entities. For more information, visit www.klgates.com.
K&L Gates comprises multiple affiliated entities: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and
maintaining offices throughout the United States, in Berlin and Frankfurt, Germany, in Beijing (K&L Gates LLP Beijing Representative Office), in
Dubai, U.A.E., in Shanghai (K&L Gates LLP Shanghai Representative Office), in Tokyo, and in Singapore; a limited liability partnership (also named
K&L Gates LLP) incorporated in England and maintaining offices in London and Paris; a Taiwan general partnership (K&L Gates) maintaining an
office in Taipei; a Hong Kong general partnership (K&L Gates, Solicitors) maintaining an office in Hong Kong; a Polish limited partnership (K&L
Gates Jamka sp.k.) maintaining an office in Warsaw; and a Delaware limited liability company (K&L Gates Holdings, LLC) maintaining an office in
Moscow. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners or members in each
entity is available for inspection at any K&L Gates office.
This publication 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 a lawyer.
©2010 K&L Gates LLP. All Rights Reserved.
July 28, 2010 4
Maritime Alert
April 2010
Authors:
Susan B. Geiger
susan.geiger@klgates.com
+1.202.661.3818
Barry M. Hartman
International Maritime Organization (“IMO”)
Approves Authority for U.S. to Impose
Stringent New Air Emission Standards for
Large Oceangoing Vessels
barry.hartman@klgates.com
+1.202.778.9338
Mark Ruge
mark.ruge@klgates.com
+1.202.661.6231
Yvette T. Wissmann
yvette.wissmann@klgates.com
The final piece of authority relied upon to impose stringent new fuel and engine
emission standards on large oceangoing vessels operating in U.S. waters was
confirmed on March 26, 2010 when IMO approved the U.S.-Canada Emission
Control Area (“ECA”) proposal. The ECA will become enforceable in August 2012.
The ECA Joins the Clean Air Act as the Basis for Stringent
New Standards
+1.202.661.3829
K&L Gates includes lawyers practicing out
of 36 offices located in North America,
Europe, Asia and the Middle East, and
represents numerous GLOBAL 500,
FORTUNE 100, and FTSE 100
corporations, in addition to growth and
middle market companies, entrepreneurs,
capital market participants and public
sector entities. For more information,
visit www.klgates.com.
When the United States Environmental Protection Agency (“EPA”) issued new air
emission standards for large vessels on December 22, 2009, it cited as the basis of its
authority to issue such standards both the Clean Air Act and the then-pending ECA
(A K&L Gates e-alert outlining EPA’s August 2009 proposed vessel air emissions
rules can be found at:
http://www.klgates.com/newsstand/Detail.aspx?publication=5834). The ECA
proposal had been submitted to IMO for approval in March 2009 under the terms of
the International Convention for the Prevention of Pollution from Ships
(“MARPOL”), which allows signatory countries to designate specific portions of
sovereign waters as ECAs. ECAs are subject to stricter standards than the
international waters governed by the other provisions of MARPOL. The U.S.Canada (or “North American”) ECA was proposed by EPA, in conjunction with
Environment Canada, in order to “dramatically reduce air pollution from ships and
deliver substantial air quality and public health benefits that extend hundreds of
miles inland.”1
The new air emission standards for larger vessels issued by EPA in 2009 affect both
the fuel used on board the vessel and the pollutants allowed to be emitted from the
vessel’s engine. The nitrogen oxide (“NOx”) standard is applicable to new engines
and the sulfur oxide (“SOx”) standard requires the use of low sulfur fuel while in
U.S. waters, including internal waters.
1
United States Environmental Protection Agency, Designation of North American Emission Control
Area to Reduce Emissions from Ships Regulatory Announcement. March 2010.
Maritime Alert
Where Do These New Rules Apply?
The ECA extends up to 200 nautical miles from the U.S. and Canadian coasts, but does not extend into
marine areas subject to the sovereignty or jurisdiction of Mexico. The ECA includes waters adjacent to the
Pacific coast, the Atlantic/Gulf coast and the eight main Hawaiian Islands.2 The Great Lakes and other U.S.
internal waters were included in the ECA by EPA regulatory action last year.
Above: Area of the North American ECA (Source: U.S. EPA)
What New Standards Will Apply?
In October 2008, the IMO member states, including the United States, agreed to amend MARPOL Annex VI
and adopted new tiers of NOx and fuel sulfur controls.3 The most stringent emission standards were
reserved for ships operating in designated ECAs, including the newly-designated ECA in North America.
International Ship Engine and Fuel Standards (MARPOL Annex VI)
Emission Control
Area
Global
Year
Current to July 2010
After July 2010
2015
2016
Today to January
2011
2011
Today to January
2012
2012
20204
Fuel Sulfur Limit
15,000 ppm*
10,000 ppm
1,000 ppm
NOx Limit
Tier III (Aftertreatment-forcing)
Tier I (Engine-based controls)
Tier II (Engine-based controls)
45,000 ppm
35,000 ppm
5,000 ppm
* ppm = parts per million
2
The main Hawaiian Islands include the islands of Hawaii, Maui, Oahu, Molokai, Niihau, Kauai, Lanai, and Kahoolawe.
MARPOL Annex VI sets limits on NOx and SOx emissions from ship exhausts, and prohibits deliberate emissions of ozone
depleting substances.
4
Subject to a fuel availability study in 2018; requirement may be extended to 2025.
3
April 2010
2
Maritime Alert
The EPA states that the 2015 fuel standard of 1,000 ppm is expected to reduce particulate matter and SOx
emissions more than 85 percent from present day levels. The standard is expected to be met through fuel
switching (vessels on international voyages need to switch to low sulfur fuel only for the time they are in
ECAs within U.S. waters). The EPA says that most ships have existing capability to store two or more fuels,
but recognizes that some vessels may require modification to accommodate additional distillate fuel storage
capacity. Vessel operators may also equip their vessels with exhaust gas cleaning devices (also known as
“scrubbers”) as an alternative to using lower sulfur fuel.
For NOx emissions, the Tier II standards applicable to vessels built in 2011 and beyond represent a 20
percent NOx reduction below Tier I. The Tier III standards, applicable in ECAs, represent an 80 percent
reduction in NOx below Tier I. EPA anticipates that ship operators will meet the Tier III standards through
the use of high-efficiency aftertreatment technology.
Compliance Costs Are Substantial for Vessel Operators; Fuel Availability and
Safety Concerns Exist
EPA estimates the total costs of improving air emissions from vessels operating primarily in the ECA from
current performance to ECA standards will be around $3.2 billion in 2020. The EPA Technical Support
Document submitted to IMO with the ECA proposal states that, based on world modeling, the average
increase in costs associated with switching from marine residual to distillate fuel will be $145 per tonne;
EPA estimates that of this amount, $6 per tonne is the cost increase associated with distillate
desulfurization.5 The agency also expects a modest economic impact associated with program compliance
for ships engaged in the international trade.
For all affected vessel owners, however, the fuel standard continues to raise significant issues. The cost of
low sulfur fuel is a primary concern. Fuel with 1,000 ppm is expected to be 40 percent more expensive than
marine fuel currently in use. For vessels that operate a substantial portion of their time in U.S. waters, the
cost of low sulfur fuel will be a major new expense. Additionally, fuel availability is a concern. Due to
concerns associated with the production capacity available for low sulfur fuel, many vessel owners do not
believe the quantity of low sulfur fuel necessary for their vessel operations in ECAs will be readily available.
Other vessel owners are concerned about the safety of fuel switching. Last summer, the Harbor Safety
Committee of the San Francisco Bay Region found that propulsion failures are increasing due to fuel
switching under the California Air Resources Board’s (“CARB”) low sulfur fuel standards, which took
effect July 1, 2009.6 During an August 2009 Harbor Safety Committee Navigation Work Group meeting,
U.S. Coast Guard Captain Paul Gugg, Captain of the Port, Sector San Francisco, said that the Coast Guard
has documented an increase in vessel power loss, particularly on diesel-powered vessels, due to fuel
switching. From September 2008 to June 2009, of the 8,630 deep draft ship arrivals, 11 casualty
investigations of propulsion failures were related to fuel switching (an average of one a month). Since the
CARB regulations took effect, of the 720 arrivals in July, 6 casualty investigations were initiated by the
Coast Guard.7 Captain Gugg also issued a letter to vessel operators operating in the Port of San Francisco
noting that the Coast Guard has seen an increase in the number of vessels experiencing propulsion losses and
fuel-related equipment failures since the July 1, 2009 implementation of the CARB low sulfur
requirements.8
5
United States Environmental Protection Agency, Proposal to Designate an Emission Control Area for Nitrogen Oxides, Sulfur
Oxides and Particulate Matter, Technical Support Document, Chapter 5. April 2009.
6
Harbor Safety Committee of the San Francisco Bay Region, Navigation Work Group Meeting Minutes. August 12, 2009.
7
Harbor Safety Committee of the San Francisco Bay Region, Navigation Work Group Meeting Minutes. August 12, 2009.
8
United States Coast Guard, Fuel Switching/Port of San Francisco. Letter to Vessel Operators, November 2, 2009.
April 2010
3
Maritime Alert
Additionally, in June 2009, the U.S. Coast Guard issued a Marine Safety Alert regarding propulsion loss
from fuel switching.9 The Marine Safety Alert notes that some ships have experienced propulsion losses
linked to fuel switching, including fuel oil incompatibility. The Coast Guard provided vessel owners and
operators with an American Petroleum Institute paper that discusses problems that lead to propulsion loss
while switching fuel.10
The new NOx standard also raises questions for vessel owners. For example, if an engine is certified at
specified load levels, variable loads (such as harbor maneuvering) could result in short bursts of emissions
that violate the new standards.
Despite these questions and concerns, EPA says the ECA is expected to yield significant health and welfare
benefits by reducing ship-related adverse health impacts. Additionally, EPA claims that the reduction in
health issues will result in monetized health benefits in 2020 to between $47 and $100 billion in 2006 U.S.
dollars, assuming a 3 percent discount rate.
Future ECA Designations
The EPA is also investigating whether other areas of the United States and its territories may benefit from
ECA designation. The agency is currently analyzing whether Puerto Rico and the U.S. Virgin Islands would
benefit from ECA designation. Other areas for future consideration include the Pacific U.S. territories,
smaller Hawaiian Islands, and Western Alaska. Should the EPA decide to pursue ECA designations for any
or all of these areas, a separate proposal would be submitted to the IMO for approval.
For More Information
Additional information on the EPA’s air emissions program for oceangoing vessels, including documents
cited in this alert, can be found at: http://www.klgates.com/practices/vessel_discharge_resources/ and
http://www.epa.gov/otaq/oceanvessels.htm.
9
United States Coast Guard, Avoiding Propulsion Loss from Fuel Switching: American Petroleum Institute Technical
Considerations. Marine Safety Alert, June 16, 2009.
10
American Petroleum Institute, Technical Considerations of Fuel Switching Practices. June 3, 2009.
April 2010
4
Maritime Alert
Anchorage Austin Beijing Berlin Boston Charlotte Chicago Dallas Dubai Fort Worth Frankfurt Harrisburg Hong Kong London
Los Angeles Miami Moscow Newark New York Orange County Palo Alto Paris Pittsburgh Portland Raleigh Research Triangle Park
San Diego San Francisco Seattle Shanghai Singapore Spokane/Coeur d’Alene Taipei Tokyo Warsaw
Washington, D.C.
K&L Gates includes lawyers practicing out of 36 offices located in North America, Europe, Asia and the Middle East, and represents numerous
GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in addition to growth and middle market companies, entrepreneurs, capital market
participants and public sector entities. For more information, visit www.klgates.com.
K&L Gates is comprised of multiple affiliated entities: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and
maintaining offices throughout the United States, in Berlin and Frankfurt, Germany, in Beijing (K&L Gates LLP Beijing Representative Office), in
Dubai, U.A.E., in Shanghai (K&L Gates LLP Shanghai Representative Office), in Tokyo, and in Singapore; a limited liability partnership (also named
K&L Gates LLP) incorporated in England and maintaining offices in London and Paris; a Taiwan general partnership (K&L Gates) maintaining an
office in Taipei; a Hong Kong general partnership (K&L Gates, Solicitors) maintaining an office in Hong Kong; a Polish limited partnership (K&L
Gates Jamka sp. k.) maintaining an office in Warsaw; and a Delaware limited liability company (K&L Gates Holdings, LLC) maintaining an office in
Moscow. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners or members in each
entity is available for inspection at any K&L Gates office.
This publication 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 a lawyer.
©2010 K&L Gates LLP. All Rights Reserved.
April 2010
5
USDOJ: Environment and Natural Resources Division : Vessel Pollution Enforcement
Page 1 of 2
Home » Agencies » ENRD » About the Division » Organization » ECS » Initiatives » Vessel Pollution Enforcement
Environment & Natural
Resources Division
VESSEL POLLUTION ENFORCEMENT
About the Division
What We Do
Organization
History
Our Partners
Meet the AAG
Press Room
Proposed Consent Decrees
Employment
Selected Publications
ENRD FOIA
Contact the Division
The Environmental Crimes Section (ECS) was intimately involved in the criminal
prosecution of Exxon Shipping Company for 1989 discharge of 11 million gallons of
crude oil from the T/V Exxon Valdez in Prince William Sound Alaska. Virtually
every member of the section worked on that prosecution which culminated in a $1.1
billion comprehensive criminal and civil settlement. Since that time, ECS has been
involved in other vessel casualty cases such the criminal prosecution stemming
from the 1994 discharge of 750,000 gallons of oil from the Emily S tugboat and
Morris J. Berman tank barge grounded off Escambron Beach, Puerto Rico, that,
after trial, resulted in a total criminal fine of $25 million against Bunker Group
Puerto Rico, Bunker Group, Inc. and New England Marine Services for a total
criminal fine of $75 million.
At the same time, ECS was focusing on the prosecution of individuals and
corporations involved in deliberate pollution from ships, including oil and garbage,
and the deliberate falsification of official ship records designed to conceal illegal
pollution. This focus has commonly been referred to as the Vessel Pollution
Initiative.
The United States is the leading country in enforcing MARPOL, a widely accepted
maritime environmental treaty to which the United States is a party, but to which there is widespread non-compliance. MARPOL
was implemented in United States law by the Act to Prevent Pollution from Ships (APPS). ECS has been actively involved training
law enforcement officials in the United States and abroad as a result of its MARPOL enforcement. United States criminal
prosecutions have resulted in cases against key segments of the commercial maritime industry, including cruise ships, container
ships, oil and chemical tankers, and bulk cargo vessels.
ECS’s vessel pollution prosecutions have honed prosecution theories developed in
earlier cases and obtained results oriented toward obtaining greater deterrence.
Vessel cases have also involved coordination with multiple jurisdictions and with
other countries. Over the past ten years, the criminal penalties imposed in vessel
pollution cases have totaled over $200,000,000 and responsible shipboard officers
and shore-side officials have been sentenced to more than 17 years of incarceration.
The sentences have typically involved detailed and comprehensive maritime
environmental compliance plans that have required equipment modifications to
prevent and detect future discharges, outside independent audits, and a courtappointed monitor as a condition of probation. The compliance terms in these cases
have set new international standards and are being adopted by many companies and
industry organizations.
Vessel prosecutions have also addressed routine and intentional discharges which are
a significant source of pollution – estimated to annually result in 8 times the amount
from the Exxon Valdez oil spill and to kill hundreds of thousands of seabirds. Many of
these prosecutions have involved continuing discharges of large quantities of waste
over an extended period and in some cases, from multiple vessels within a fleet. In
some cases, the defendants have been convicted more than once: United States v.
Ionia Management et al., (D. Conn., E.D.N.Y., S.D. Fla., D.V.I.) (prosecutions in 2007
and 2004); United States v. Boyang (Busan) Ltd. (D. Alaska) (prosecutions in 2005
and 2002); United States v. Royal Carribean Cruises, Ltd. (prosecutions in 1998 and
1999). Some of the significant cases involving deliberate pollution from ships include:
United States v. Evergreen International, S.A. (C.D. Calif., D.N.J., D. Ore.,
D.S.C.,W.D. Wash.) ($25 million total penalty); United States v. The National
Navigation Company (D. Ore., W.D. Wash., E.D. La.) ($7.25 million total penalty);
United States v. MSC Ship Management et al., (D. MA) ($10.5 million total penalty);
United States v. Ionia Management et al., (D. Conn.) ($4.9 million fine); United States v. Clipper Marine Services et al., (D.N.J.)
http://www.justice.gov/enrd/3395.htm
3/12/2012
USDOJ: Environment and Natural Resources Division : Vessel Pollution Enforcement
Page 2 of 2
($4.75 million total penalty); United States v. Wallenius Ship Management, Pte., Ltd., et al. (D.N.J.) ($6.5 million penalty); United
States v. Rick Stickle et al. (S.D. Fla.) (33 month sentence against Chairman of Sabine Transportation for conspiracy to dump 442
tons of oil contaminated grain, as well convictions of other corporate officers and the Sabine Transportation Company); United
States v. OMI et al. (D.N.J.) ($4.2 million fine).
Last Updated: November 2010
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http://www.justice.gov/enrd/3395.htm
3/12/2012
ou r t ea m
Barry M. Hartman
AREAS OF PRACTICE
WASHINGTON OFFICE
202.778.9338
TEL
202.778.9100
FAX
barry.hartman@klgates.com
Mr. Hartman engages in a national litigation and counseling practice, with an
emphasis on matters involving environmental issues, the regulation of chemical and
biological materials, and wastes. He represents companies in criminal and civil
investigations, trials, and appeals primarily involving federal environmental laws and
regulations. He also conducts independent internal investigations, counsels clients
regarding corporate compliance programs, and homeland security matters relating to
the environment, and represents clients in Congressional investigations regarding
lobbying, ethics, and related issues.
Recent matters include:
ƒ American Vanguard Corporation v. Jackson, No. 10-cv-01459 (D.D.C.).
Representing pesticide manufacturer in first appellate challenge to unprecedented
EPA action attempting to use a unilateral “stop sale” order as a means of
effectively suspending an approved registration to sell an approved pesticide,
without providing prior notice and opportunity to respond as required by the
Federal Insecticide, Fungicide, and Rodenticide Act, the Administrative
Procedure Act, and the Due Process Clause of the Fifth Amendment.
ƒ Ferguson et al. v. Barack Obama, et al. (No. 10-1052) (D.C. Cir.). Representing
businessmen challenging decision by President to abandon development of Yucca
Mountain as a permanent repository for high level nuclear waste, in violation of
the Nuclear Waste Policy Act, National Environmental Policy Act, and
Administrative Procedures Act. Oral argument is set for March 22, 2010.
ƒ United States v. Mark David Radley, et al. (No. 09-20699) (5th Cir.).
Representing individual in multi-defendant matter alleging conspiracy, wire
fraud, manipulation and attempted manipulation under the Commodity Futures
Trading Act and Title 18. (Indictment dismissed; dismissal affirmed on appeal,
Jan. 27, 2010.)
ƒ Lake Carriers Association, et al. v. EPA (No. 09-1001) (D.C. Cir.) Representing
domestic maritime industry in challenge to legality of Clean Water Act Vessel
General Permit program.
ƒ United States v. John Cota (No. CR-08-0160) (N.D. Ca.). Represented pilot of
Cosco Busan in criminal proceeding arising from Cosco Busan spill in San
Francisco Bay.
ƒ United States v. Frank (New Jersey; New York). Co-lead counsel in six-week
criminal trial alleging violations of the Toxic Substance Control Act (PCB
labeling, storage and disposal) and Title 18 (conspiracy to defraud an agency of
the United States). Clients acquitted of all charges.
PROFESSIONAL BACKGROUND
Prior to joining K&L Gates in 1992, Mr. Hartman served in a number of positions in
the United States Department of Justice, including Acting Assistant Attorney General
for the Environment and Natural Resource Division (1991-92), Deputy Assistant
Attorney General (1989-91) and Deputy Assistant to the Attorney General (1989). As
Acting Assistant Attorney General, Mr. Hartman was responsible for overseeing U.S.
government litigation under federal environmental, natural resource, energy and
Barry M. Hartman
related laws, including the civil and criminal prosecutions arising from the Exxon
Valdez oil spill. He also represented President George H.W. Bush in a challenge to
the President’s authority to conduct negotiations for the North American Free Trade
Agreement under the National Environmental Policy Act (NEPA). Mr. Hartman was
responsible for directing a wide variety of other environmental litigation, including the
defense of regulations issued by federal agencies such as the Environmental Protection
Agency and the Department of Interior, Fifth Amendment “takings” cases, mineral
leasing royalty claims, Endangered Species Act matters, and was responsible for
eleven cases in the United States Supreme Court. He also served on several seniorlevel administration policy groups, including the Domestic Policy Council Wetlands
Task Force and the Department of Energy Environmental Restoration Interagency
Review Group.
Mr. Hartman has testified before Congressional committees regarding the 1990 Clean
Air Act Amendments and, most recently, proposed changes to the Oil Pollution Act.
Mr. Hartman was a member of the Attorney General’s Judicial Selection Committee.
In 1992 he received the Edmund J. Randolph Award for outstanding service.
Mr. Hartman served in state government, as Chief Counsel to the Pennsylvania
Department of Labor and Industry, and Deputy General Counsel to the Governor of
Pennsylvania.
He was the Editor-in-Chief of The EPA Enforcement Manual (Thompson Publishing
Company) and has published and lectured for numerous organizations, including the
National Legal Center for the Public Interest, the Washington Legal Foundation,
Corporate Legal Times, the National Law Journal, the Environmental Law Institute,
and the American Bar Association. He has also been interviewed by CBS Evening
News, Frontline, Fox News, PBS Nightly Business Report, and The Wall Street
Journal. He currently serves on the Editorial Advisory Board for Environmental
Law 360.
PROFESSIONAL/CIVIC ACTIVITIES
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Environmental Law Institute
American Bar Association
BAR ADMISSIONS
District of Columbia
Pennsylvania
EDUCATION
J.D., George Washington University Law School (1979)
B.A., University of Pennsylvania (1976)
Jeffrey S. King
AREAS OF PRACTICE
BOSTON OFFICE
617.261.3179
TEL
617.261.3175
FAX
jeffrey.king@klgates.com
Mr. King’s practice has concentrated in complex commercial litigation in a variety of
areas, including business disputes, product liability, toxic tort, environmental, real
estate, admiralty, and transportation matters. His admiralty experience includes
personal injury defense (Jones Act and Longshoremen’s and Harbor Workers’
Compensation Act), cargo damage, equipment damage, charter dispute, collision,
allision, pollution (OPA and state law), and USCG regulatory matters. He has also
represented various companies in connection with rail service disruption claims and
air and motor carrier cargo damage claims. His toxic tort experience has involved the
representation of defendants in asbestos, silica, and lead pigment matters. He is
currently on a national coordinating counsel team defending an equipment
manufacturer against asbestos exposure claims, including those arising from shipboard
and shipyard exposure, and trying cases nationwide. His environmental experience
includes representing companies in regulatory and private cost recovery matters
involving Massachusetts (M.G.L. c. 21E) and federal (CERCLA) laws. His product
liability experience has included defense of personal injury/wrongful death claims
involving various products, including automobiles, industrial machinery and
equipment, medical devices, and consumer products, and he has regularly counseled
automobile and other clients on product liability, warranty, consumer fraud, and recall
matters. He has acted as national counsel for an automobile manufacturer regarding
its product liability and product-related regulatory compliance matters. Mr. King has
tried cases in various state and federal courts including in Massachusetts, New York,
Pennsylvania, Illinois, and South Carolina, and has prepared appeals to the United
States Supreme Court, Court of Appeals for the First Circuit, Massachusetts Supreme
Judicial Court, Appeals Court of Massachusetts, and the Superior Court of
Pennsylvania.
REPRESENTATIVE/SIGNIFICANT MATTERS
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Obtained defense verdict after 2-week trial for equipment manufacturer in
wrongful death action involving asbestos exposure on Navy ships and at landbased facilities. Mulcahy v. Crane Co., et al., Circuit Court of Cook County,
Illinois, 08-L-6223.
Obtained summary judgment on behalf of owner of motor yacht in limitation of
liability proceeding, defending against claims arising from fire at marina and
resulting property damage and environmental (oil spill) claims. In the Matter of
the Complaint of Robert L. Stanton, as owner of the Vessel “MISTY LADY” for
Exoneration from or Limitation of Liability, United States District Court (D.
Mass.) 02-cv-10408-GAO.
Represented vessel owner in a cargo damage action which involved the
preparation of a successful motion to stay pending arbitration, Vimar Seguros y
Reaseguros, S.A. v. M/V Sky Reefer, 1993 WL 137483 (D. Mass. 1993), followed
by successful appeal to the First Circuit, 29 F.3d 727 (1st Cir. 1994), and to the
United States Supreme Court, 115 S. Ct. 2322 (1995).
Represented bridge “owner” to recover for damages to bridge from allisions. In
one matter, arranged for arrest of vessel and conducted expedited discovery
before vessel left port. Middlesex Corp. v. M/V AGIOS NEKTARIOS, United
Jeffrey S. King
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States District Court (D. Mass.) 02-cv-10208-EFH. Another matter involved the
M/V PRINCESS VANYA, a vessel being escorted by three tugs owned and
operated by Baystate, which struck the bridge fender system. Middlesex Corp. v.
Baystate Towing Co., United States District Court (D. Mass.) 01-cv-11634-EFH.
Acted as special maritime counsel in connection with sale of domestic steel
company to foreign interests. Addressed structuring aspects of the deal to allow
the foreign company to continue exclusive use of U.S. flag vessels in the ore trade
attendant to the steel company’s business.
Represented over 100 claimants in connection with the 1996 NORTH CAPE oil
spill off of Rhode Island, which resulted in a $10 million settlement, in addition to
the approximately $2 million previously obtained in settlements with the
responsible parties and from the federal Oil Spill Liability Trust Fund. ABC
Lobster, Inc., et al. v. Eklof Marine Corp., et al., United States District Court
(D.R.I.) 99-024T.
Represented chemical companies in connection with claims arising out of the
Union Pacific/Southern Pacific rail crisis. Recovered tens of millions of dollars
for clients that suffered damages because of delays in shipments to and from their
chemical plants.
Represented client whose equipment was damaged (constructive total loss) during
ocean transit. Asserted claims under the Carriage of Goods by Sea Act
(COGSA), contract claims, and common law claims for damage to the cargo
against various entities and their insurers, including the freight forwarder that
arranged the shipment from England to New York. Settled before filing suit.
Represented freight forwarder in action involving Warsaw Convention, contract,
and common law claims for damage to military cargo in air transit from Denmark
to New York. Settled after completed depositions of airline personnel. BAE
Systems Information & Electronic Systems Integration, Inc., et al. v. DFDS
Transport (Denmark) A/S, et al., United States District Court (S.D.N.Y.) 05 Civ.
646 (SAS) (GWG).
Provided counsel to ferry operator regarding potential claims against
manufacturer for defects in marine engines.
Represented clients in connection with Rule B attachment issues in the Southern
District of New York.
Represented owner of custom motor yacht in action asserting claims against yacht
and propulsion system manufacturer arising out of the poor performance of the
yacht, which was resolved through mediation. Peter T. Boyle v. Hood
Enterprises, Inc., et al., United States District Court (D.R.I.) 02-015S.
Represented offshore petroleum platform project company in analyzing potential
claims against sellers for defects in VLCC vessels being retrofitted into FPSOs
(floating petroleum processing and storage platforms), claims against shipyard
performing the retrofit work, and developing a strategy to secure the release of the
vessels in light of expected possessory liens by the shipyards.
PROFESSIONAL/CIVIC ACTIVITIES
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Maritime Law Association (Proctor Member)
Holds active United States Coast Guard Third Mate License (unlimited tonnage)
United States Navy Reserve (Commander)
Jeffrey S. King
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Greater Boston Diabetes Society (currently on Board of Directors, past President)
Greater Boston Guild for the Blind (currently on Board of Directors)
COURT ADMISSIONS
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Massachusetts State Courts
United States Court of Appeals for the First Circuit
United States District Court for the District of Massachusetts
Numerous pro hac vice admissions in various state and federal courts
BAR MEMBERSHIP
Massachusetts
EDUCATION
J.D., Harvard Law School, 1991
B.S., United States Merchant Marine Academy, Kings Point, NY, 1986 (Highest
Honors; Valedictorian)
ADDITIONAL INFORMATION
ACHIEVEMENTS
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Martindale-Hubbell Peer Review Rating - AV® Preeminent™
Selected as a “Massachusetts Super Lawyer” by SuperLawyers Magazine in 2011
PUBLICATIONS
Getting the Deal Through – Shipping 2012, United States chapter; Jeffrey S. King,
Robert M. Kritzman, Eugene P. Miller, October 2011 (contributing editor:
Jonathan Lux). www.GettingTheDealThrough.com.
The Economic Damages Expert: Business Valuation in Expert Witness Answer Book
2012, Jeffrey S. King (PLI 2012).
Getting the Deal Through – Shipping 2011, United States chapter; Jeffrey S. King,
Robert M. Kritzman, Susan B. Geiger, September 2010 (contributing editor:
Jonathan Lux). www.GettingTheDealThrough.com.
Jorge Romero
AREAS OF PRACTICE
WASHINGTON, D.C. OFFICE
202.661.3815 TEL
Mr. Romero is a transactional corporate lawyer with over 25 years of experience
focused on maritime financing and related contracts, such as charter bareboat and time
charters, contracts of affreightment, carriage contracts for ocean-going and inland
waterways vessels, construction contracts, and sale and purchase contracts. He also
concentrates on structuring vessel-owning entities to comply with maritime laws. In
addition, Mr. Romero advises non-profits and associations on corporate, contractual,
and governance matters.
Highlights of transactions and representations:
202.331.1024 FAX
jorge.romero@klgates.com
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Lead counsel on new vessel financings for several major U.S.-flag carriers.
Outside counsel on vessel transactions and documentation to leading inland
waterways carrier with fleet of approximately 4,000 vessels.
Special maritime counsel on vessel transactions and regulatory matters to U.S.based international specialty cruise company.
Represented project company in co-financing between two federal government
agencies of a 124 MW electric power plant in Puerto Quetzal, Guatemala.
Represented project company in co-financing 185 MW electric power plant
mounted on two Panamanian-flag barges in Puerto Plata, Dominican Republic.
Special U.S. maritime counsel to project company in financing of barge-mounted
50MW electric power plant in Puerto Plata, Dominican Republic.
Represented international multilateral lender financing of a barge-mounted,
110MW electric power plant in Puerto Quetzal, Guatemala.
Primary outside counsel to development-stage company with design for nextgeneration lift-boat responsible for financing, chartering, and corporate matters.
Special U.S. maritime counsel to major diversified entertainment company in
financing two 85,000 grt cruise ships.
Acted as special U.S. maritime counsel to lessor in sale-leaseback of two
Brazilian oil production platforms.
Acted as Special U.S. maritime counsel to major domestic oil producer in sale
leaseback of its half-interest in Panamanian-flag deepwater oil production facility
in the Gulf of Mexico.
Primary outside counsel to leading third-party certifier of women-owned
businesses for supplier diversity programs.
PROFESSIONAL BACKGROUND
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Of Counsel, K&L Gates 2007 present
Of Counsel, Preston, Gates, Ellis and Rouvelas Meeds 1998 to 2007
Associate, Fort & Schlefer 1992 to 1998
PROFESSIONAL/CIVIC ACTIVITIES
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Chair, Fund for the Future of Our Children
Member, Connecticut Maritime Association
Member, Propeller Club of Washington, D.C.
Jorge Romero
RECENT SPEECHES AND PRESENTATIONS
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Presentation on government guaranteed ship financing in 2009 North America's
Marine Highways Conference, Jacksonville, Florida.
BAR MEMBERSHIPS
District of Columbia
New York
EDUCATION
J.D., Columbia Law School, 1983
B.A., Columbia College, 1976 (cum laude)
LANGUAGES SPOKEN
Spanish
James A. Sartucci
PROFESSIONAL BACKGROUND
Mr. Sartucci, a government affairs counselor in K&L Gates’ Washington, D.C. office,
has over 13 years of practical experience on Capitol Hill working inside the legislative
process on issues including homeland security, transportation, oceans, fisheries and
science programs and policy.
WASHINGTON, DC OFFICE
202.778.9374
TEL
202.778.9100
FAX
jim.sartucci@klgates.com
Prior to joining K&L Gates, Mr. Sartucci spent nine years working for Senator Trent
Lott (R-MS) where he served as Legislative Director. He has considerable experience
in the areas of tax, land and water infrastructure, appropriations, disaster, offshore
energy, environmental, and telecommunications policy. Mr. Sartucci's experience
includes involvement in the enactment of the National Defense Authorization Act for
Fiscal Years 2000 and 2004-2007 (maritime title), SAFE Port Act of 2006, PostKatrina Emergency Management Reform Act of 2006, Magnuson-Stevens Fishery
Conservation and Management Reauthorization Act of 2006, Gulf of Mexico Energy
Security Act of 2006, Energy Policy Act of 2005, NASA Authorization Act of 2005,
Coast Guard and Maritime Transportation Security Acts of 2004 and 2006, JOBS Act
of 2004, Maritime Transportation Security Act of 2002, Pipeline Safety Improvement
Act of 2002, National Homeland Security and Combating Terrorism Act of 2002,
Aviation and Transportation Security Act of 2001, Air Transportation Safety and
Stabilization Act of 2001, Electronic Signatures in Global and National Commerce
Act, Aviation Investment and Reform Act for the 21st Century, and the Satellite
Home Viewer Improvements Act of 1999.
Mr. Sartucci also served as a Professional Staff Member and Coast Guard Fellow on
the U.S. Senate Committee on Commerce, Science and Transportation where he was
involved in merchant marine and maritime issues and legislation and supported Coast
Guard, oceans, and fisheries legislation. During this time, he was involved in the
enactment of the Ocean Shipping Reform Act of 1998, Coast Guard Authorization
Acts of 1998 and 1996, and Maritime Security Act of 1996.
Prior to his work with the U.S. Senate, Mr. Sartucci spent 17 years as a commissioned
officer in the United States Coast Guard, holding a variety of operational and staff
assignments during that time, including six years of sea duty.
PROFESSIONAL/CIVIC ACTIVITIES
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Assistant Scoutmaster, Boy Scouts of America Troop 773, Potomac, MD
EDUCATION
M.P.A, George Washington University, 1994
B.S., United States Coast Guard Academy, 1980
REPRESENTATIVE EXPERIENCE
MARITIME
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Assisted offshore supply vessel operators in enacting changes in law and Coast
James A. Sartucci
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Guard regulations and policy concerning limits on the size and operations of
offshore supply vessels and their crews.
Assisting a maritime trade association enact legislation to require that the full
amount of Harbor Maintenance Trust Fund revenues be spent each year for
currently authorized purposes.
Assisted a major cruise line on compliance and enforcement of coastwise
passenger trade laws and regulations.
Counseled a major tanker operator regarding litigation and legislation concerning
limits on foreign rebuilding of coastwise trade eligible vessels.
Assisting a major tanker operator with tax legislation to support increased
investment in U.S. flag vessels.
Assisting a major tanker operator with expediting the processing of federal loan
guarantee applications.
TRANSPORTATION
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Assisting a transit benefit service company with ensuring federal agency
compliance with tax laws and regulations.
Assisting an Alaska Native Corporation with obtaining ferry service for its region
FISHERIES
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Representing a major environmental organization on efforts to improve fisheries
management and conservation provisions, including specifically the
implementation of catch share programs.
Assisting environmental interests in defeating legislative initiatives in
appropriations and authorizing bills that could result in overfishing or
overcapitalizing in U.S. fisheries.
Providing policy and political advice to fishermen and environmental
organizations regarding fisheries management and conservation measures,
including specifically measures contained in the Magnuson-Stevens Fishery
Conservation and Management Act.
Assisting an Alaska native corporation comment on proposed critical habitat
designation for an endangered species.
DEFENSE AND HOMELAND SECURITY
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Counseled a U.S. river terminal operator on the process for obtaining a security
requirements waiver regarding the handling of certain cargoes.
Counseled a U.S. terminal operator on U.S. Coast Guard facility security
requirements.
Counseled a lifesaving equipment component manufacturer regarding U.S. Coast
Guard certification requirements.
FEDERAL FUNDING
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Represented a biomedical company in seeking federal funding for infectious
disease diagnostic tools.
Represented a government contractor in seeking federal funding for a biological
agent detection system.
James A. Sartucci
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Assisting an Alaska Native Corporation increase funding for Alaska Native
wildlife habitat enhancement projects.
Christine Jochim Boote
AREAS OF PRACTICE
Christine Jochim Boote is an associate in the firm’s Washington, D.C. office. Ms.
Boote’s practice focuses on energy, environmental, and natural resources litigation
and government enforcement.
WASHINGTON, D.C. OFFICE
*Admitted to practice only in the State of Maryland. Practicing under the
supervision of Barry M. Hartman, a member of the D.C. Bar.
202.778.9222 TEL
202.778.9100 FAX
PROFESSIONAL BACKGROUND
christine.boote@klgates.com
Prior to joining the firm in November 2011, Ms. Boote served as an attorney for the
United States Nuclear Regulatory Commission (NRC). While at the NRC, Ms. Boote
represented agency staff in enforcement actions regarding potential violations of NRC
laws, regulations, and license conditions through Alternative Dispute Resolution
mediation sessions and Pre-Enforcement Conferences. Ms. Boote represented the
NRC staff in administrative litigation before the Atomic Safety & Licensing Board
Panel on both safety and environmental matters involving in situ uranium recovery,
enrichment, and power reactor facilities. Ms. Boote also represented the agency
before the Federal Labor Relations Authority in a unit clarification petition.
Ms. Boote received her legal degree, with a Certificate of Concentration in
Environmental Law, from the University of Maryland Francis King Carey School of
Law (J.D., 2008), where she served as co-president of the Maryland Environmental
Law Society, a senator for the law school on the University Student Government
Association, and as a representative on the Student Bar Association. Ms. Boote was
awarded the Dean’s Leadership Award for outstanding leadership, accomplishments,
and public service to the law school community, as well as the William P.
Cunningham Award for exceptional achievements and service to the school.
During law school, Ms. Boote served as a legal intern in the Environmental Crimes
Section of the United States Department of Justice’s Environment & Natural
Resources Division and was a student attorney for the University of Maryland’s
Environmental Law Clinic, where she worked on cases concerning wastewater
treatment, Concentrated Animal Feeding Operations, and hazardous waste.
Concurrent with her legal studies, Ms. Boote obtained a Master of Public Health, with
a concentration in environmental and occupational health, from the University of
Maryland School of Medicine (M.P.H., 2008). Prior to law school, Ms. Boote worked
as a legal assistant for the health care practice group of a Washington, D.C., law firm
and as an intern to a United States Senator. Ms. Boote earned her undergraduate
degree from Hamilton College (B.A., cum laude, 2003), with a concentration in
government and a minor in environmental studies.
Christine Jochim Boote
PROFESSIONAL/CIVIC ACTIVITIES
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American Bar Association, Section of Environment, Energy, and Resources,
Special Committee on Nuclear Power
BAR MEMBERSHIPS
Maryland
EDUCATION
J.D., University of Maryland School of Law, 2008 (William P. Cunningham Award,
Dean’s Leadership Award)
M.P.H, University of Maryland School of Medicine, 2008
B.A., Hamilton College, 2003 (cum laude)