EPA’s NESHAP Remanded, but Still in Effect
A three-judge panel of the U.S. Appeals Court for the DC Circuit delivered several important legal interpretations in an opinion on EPA’s September 9, 2010, national emission standards for hazardous air pollutants (NESHAP) from the Portland cement manufacturing industry and new source performance standards (NSPS) for Portland cement plants. The opinion will impact both the cement standards themselves and probably how EPA will implement these two Clean Air Act programs in the future.
The major element in the opinion affects the way EPA developed the inventory or data set of sources that would be used as a basis for the NESHAP. The court ordered EPA to modify that inventory by shifting a substantial number of sources out of the orbit of the existing cement NESHAP and into the reach of separate CAA rule affecting industrial incinerators. NESHAPs are technology-based. To establish a NESHAP floor, or minimum emission reductions that must be achieved, EPA looks at the reductions achieved by the best performing sources in an industrial category. Whether or not removal of one-third of the sources could substantially modify the requirements of the 2010 rule was less important to the court than the fact that the data set was simply incorrect. The court remanded the NESHAP to EPA, allowing it to remain in effect while the Agency completes its reconsideration.
Other parts of the opinion address the regulation of clinker storage piles at Portland cement plants, how the quality of material that “happens” to be available to plants rather than emission controls exclusively should be factored into the NESHAP, the use of continuous emission monitoring systems (CEMS), and whether or not EPA considered the full range of treatment technologies in writing the NSPS. The Portland Cement Association (PCA) initiated a law suit challenging the manner in which EPA addressed each of these issues in the rules. The judicial panel also dismissed a second petition from environmental groups that asked the court to require that the Portland cement NSPS compel sources to control emissions of GHGs.
Outline on the Rules
The 2010 NESHAP and NSPS require substantial reductions of HAPs by 2013 from about 181 Portland cement kilns at 100 plants nationwide. Stronger regulation of these HAPs, which include mercury, particulate matter (PM) hydrochloric acid, and hydrocarbons, had been long sought by environmental groups. EPA finally signed a settlement and agreed to take action. According to the Agency, the final rules would reduce kiln emissions of mercury by 16,600 pounds, a 92 percent reduction; total hydrocarbons by 10,600 tons, an 83 percent reduction; PM by 11,500 tons, a 92 percent reduction; acid gases measured as hydrochloric acid by 5,800 tons, a 97 percent reduction; SO2 by 110,000 tons, a 78 percent reduction; and NOx by 6,600 tons, a reduction of 5 percent. To achieve these limits, many plants would be required to install new pollution control equipment such as wet scrubbers, fabric filters, and activated carbon injection.
In addition to taking issue with some of legal, technical, and jurisdictional aspects of the rules, PCA emphasized the detrimental economic impact. EPA estimated the benefits of the rules will range from $6.7 billion to $18 billion annually in 2013, avoid 960 to 2,500 premature deaths, and cost as little as $350 million annually in 2013 and as much as $950 million annually in 2013 if indirect social costs are added to cost of installing control equipment. But according to PCA, compliance would not be economically feasible for 18 cement plants, which would be forced to close. Overall, PCA estimated that compliance would cost more than $3.4 billion, compared to $6.5 billion in annual revenues for the sector. At least 1,800 jobs would be lost as a direct result, and a minimum of $26 would be added to the per ton cost of domestic concrete production by 2020.
Under the NESHAP, EPA established emission standards for new and existing major and area sources of mercury, total hydrocarbons, PM, and hydrochloric acid (for major sources only). Under the NSPS, limits were placed on NOx, SO2, and PM for all cement kilns that are new or newly-modified after June 16, 2008. New testing and monitoring requirements were also part of the two-rule package. When writing the NESHAP, EPA conceded that an ongoing rulemaking to define nonhazardous secondary materials would probably influence the NESHAP inventory. Once that definition was issued, kilns that combusted waste in the manufacture of Portland cement would be removed from the NESHAP inventory and regulated under more stringent incinerator standards.
NESHAP and CISWI Rule
EPA proposed its commercial and industrial solid waste incineration units (CISWI) definitions rule 10 months after the close of the NESHAP comment period but three months before the final NESHAP was issued. PCA argued that EPA improperly ignored the ongoing CISWI rulemaking when the Agency set the NESHAP. The court agreed.
“EPA realized the CISWI definition could potentially impact the NESHAP rule since under the proposed definition, EPA could reclassify close to a third of all cement kilns out of the NESHAP and into the CISWI rule,” states the court. “EPA was unconcerned that its NESHAP floor-setting calculations might include sources that actually would not be subject to the NESHAP standard once the rules were completed. Instead of treating the two rules as truly interdependent efforts and acknowledging their close correlation, EPA let each run its own course regardless of the collateral impact.” The court found that EPA’s “ostrich-like approach” to categorization under the rules was arbitrary, although not in violation of the CAA.
While EPA mentioned the possibility that some unknown number of kilns might be classified as CISWI sources, the court found that the Agency was too vague. Neither did the court accept EPA’s explanation that the Agency could not “prejudge” the outcome of the CISWI rulemaking and could only base its NESHAP on the emissions information available. As the court saw it, EPA failed to meet the requirement to consider relevant data and engage in reasoned decision making. The court also rejected EPA’s explanation that it was forced by a court order to complete the NESHAP. The Agency could have begun the CISWI process much sooner, countered the court. “It takes a certain amount of chutzpah for EPA to claim it had no time to be careful – after 10 years of work on the NESHAP – when it waited to propose a CISWI definition until after the NESHAP comment period had closed,” said the court.
EPA has pointed out that the final CISWI definition resulted in about 23 kilns being reclassified and that removing these kilns from the NESHAP calculations did little to relax the ultimate standards. In fact, one emission standard would even become more stringent after removing these kilns from the data set. “Perhaps,” the court commented, “PCA would be better off had they not brought this issue to our attention.” But the court said that ultimately it was not interested in whether the rule becomes more or less stringent upon reconsideration. “Our province is simply to ensure that agencies do not act arbitrarily or capriciously,” said the court. And in this case, the ruling was that EPA had.
Additional Rulings
Input quality. PCA argued that EPA violated the CAA when the Agency premised the NESHAP standard on only bare emissions data rather than on data that specifically isolated the effect of technology by controlling for variations in input quality, which in this case refers to kilns that can lower their emissions because of the “happenstance” of being located near cleaner clay. The court agreed, referring to its 2007 decision in Sierra Club v. EPA, in which it stated, “EPA's decision to base floors exclusively on technology even though non-technology factors affect emission levels…violates the Act.”
CEMS. PCA contended that adoption of a CEMS requirement rather than a sampling standard for PM was not a logical outgrowth of the proposed rule. The court disagreed, stating that EPA sought feedback on a CEMS requirement in its first proposal, and PCA even commented on it. “Moreover, any individual hardship resulting from the CEMS requirement is mitigated by the fact that a kiln may employ ‘alternative monitoring’ if it demonstrates the ‘technical or economic infeasibility’ of installing CEMS,” said the court.
Clinker storage piles. Portland cement clinker is a dark grey nodular material made by heating ground limestone and clay at a temperature of about 1400 C – 1500 C. The nodules are ground up to a fine powder to produce cement, with a small amount of gypsum added to control the setting properties. The NESHAP imposed work practice standards that can be achieved by enclosing the piles to control emissions of fugitive dust emissions; an opacity standard was also imposed. PCA stated that EPA had not given sufficient notice of these standards. Further the Agency did not grant PCA’s subsequent request for a reconsideration. The court agreed with PCA, stating that comments EPA receives could change the standards substantially and industry should not have to build expensive new containment structures until the standard is fairly determined. The court stayed the clinker storage pile requirement pending reconsideration by EPA.
NSPS.
PCA argued that in setting its PM and SO2 limits EPA failed to adequately consider the range of relevant designs at cement plants, particularly older plants. Instead, PCA claimed, EPA illegitimately focused solely on kilns with the most modern and efficient technology, specifically preheater/precalciner kilns that are equipped with both preheater towers and a combustion vessel that removes moisture and undesirable compounds. The court disagreed, indicating that EPA based the limits on control technologies that can be applied to any kiln type and achieve the same control levels that would be expected with a new kiln at similar costs. The court also rejected PCA’s contention that EPA did not meet its CAA requirement that cost be considered in the NSPS, specifically the cost of the PM standard. The Agency has properly considered the cost of the PM standard, which is the same in both the NESHAP and the NSPS, when developing the NESHAP, explained the court.
GHGs. Environmental groups contended that several statements by EPA in the final NSPS, indicating that there are cost-effective ways to control GHG emissions for Portland cement facilities, compelled the Agency to issue GHG emission limits. The court disagreed, stating that EPA had clearly explained the need for more data before issuing such a standard and that, lacking that data, there was nothing under law that compelled the Agency to act prematurely. The court added that it has jurisdiction under the CAA to review only “final” Agency actions, and there was nothing “final” in EPA’s decision to collect additional information before proposing GHG emission standards.
The DC Circuit’s opinion in PCA v. EPA is at http://www.cadc.uscourts.gov/internet/opinions.nsf/22F878254A7E52F885257961005BCA9A/$file/10-1358-1346764.pdf.