The Future of Startup, Shutdown, and Malfunction

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ALL4 teamed up with Thompson Hine in order to give a presentation about the regulations regarding period of startup, shutdown, and malfunction (SSM) at facilities. There have been many changes regarding these periods, and requires a close watch moving forward. Please check out the corresponding webinar at http://www.all4inc.com/the-future-of-startup-shutdown-and-malfunction.

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  • A 1999 policy provided another reaffirmation, as well as a supplement to the 1982 and 1983 policies, with clarifications on the types of excess emission provisions states may incorporate into SIPs. The primary topic of the 1999 policy related to if a state may go beyond its enforcement discretion approach and include in its SIP a provision that would excuse a source from penalties if the source can demonstrate that it meets certain objective criteria, referred to as an affirmative defense. Affirmative defense has become a hot topic lately, particularly with respect to MACT standards, and we’ll go for a deeper dive into these in later slides.

    The 1999 policy clarified that states have the discretion to provide a defense to actions for penalties brought for excess emissions that arise during certain startup, shutdown, and malfunction events. An affirmative defense provision may only apply to actions for penalties, but not to actions for injunctive relief. This restriction ensures that authorities remain able to protect air quality standards and PSD increments.

    The affirmative defense approach is only appropriate only when the respective contributions of individual sources to pollutant concentrations in ambient air are such that no single source or small group of sources has the potential to cause an exceedance of the NAAQS or PSD increments (which is evaluated through modeling or through actual air monitoring data). Where the potential exists for a single source or small group of sources to cause an exceedance of the NAAQS or PSD increments, EPA believes an affirmative defense approach will not be adequate to protect public health and the environment, and the only appropriate means of dealing with excess emissions during startup, shutdown, and malfunction episodes is through an enforcement discretion approach. Let’s think about this for a moment – your facility’s operations and emissions are not necessarily enough to take advantage of the affirmative defense approach – now you have to know who your neighbors are and if they could be the smoking gun of a single source that has the potential to cause an exceedance of the NAAQS or PSD increments. Where would potential exist? It is most likely going to be associated with sulfur dioxide or lead emitting sources such as power plants, refineries, and metal smelters. Compiling a local source inventory used to be solely associated with PSD permitting but it may have been unknowingly part of SSM provisions since the late 20th century.

    This sets the stage for our last slide on SIPs, which takes us to our present day challenges….
  • Additional policies in the early 2000s continued to reaffirm previous policies and guidance. However, in 2004, the U.S. District Court for the Northern District of Georgia made an unwieldy process even more so. The District Court ruled that a series of EPA policy memoranda (that is, the ones we just reviewed) superseded part of Georgia’s EPA-approved SIP that allowed, under certain conditions, excess emissions that occur during startup, shutdown and malfunction events. Why was this decision a big deal? More than ½ of states across the country had (and still have to this day) SIPs that included a provision similar to the Georgia SSM provisions. Moreover, as we touched on earlier, in addition to state regulations with excess emission exemptions, there are federal standards such as NSPS that include similar exemptions.

    On February 12, 2013, U.S. EPA issued a ‘SIP Call,’ in which a large number of states will have 18 months to rewrite and submit a revised SIP in hopes of U.S. EPA approval. In the proposed rule, U.S. EPA no longer allows facilities to emit excess pollution during periods of planned startup and shutdown, but DOES permit facilities to continue to allow excess emissions during unplanned malfunction events.  In the case of a malfunction event that causes excess emissions, the facility must submit an ‘affirmative defense’ to U.S. EPA in order to shield themselves from penalties.  This approach is consistent with recent actions related to SSM events as specified in the General Provisions in Part 63, Subpart A of the National Emission Standards for Hazardous Air Pollutants (NESHAP), as we will explore in depth in later slides.

    But first, let’s look at the relationship between NSPS and SSM events…..
  • Recall that NSPS is a technology-based federal regulatory program that is not necessarily intended to attain/maintain NAAQS compliance, which results in a disconnect in that many states adopt and implement NSPS as part of their SIP programs designed to achieve compliance with NAAQS. NSPS has startup shutdown and malfunction exemptions within its general provisions as well as within certain standards. In fact, some standards have varying exemption provisions within the standards themselves. For example, Subpart Dc, which is a familiar standard that applies to commercial and industrial size boilers, contains emission standards for sulfur dioxide, particulate matter, and opacity. The PM and opacity standards do not apply during periods of startup, shutdown and malfunction yet the sulfur dioxide standards apply at all times. So are you confused yet?

    Under NSPS, sources have a general duty to maintain and operate equipment in a manner to minimize emissions. Sources are required to submit semiannual reports on excess emissions that include the magnitude of excess emissions; the date, time and duration; and the nature and cause of malfunctions and corrective actions taken.

    Again, US EPA has reiterated that an affirmative defense provision in a SIP cannot extend to direct federal regulations such as NSPS that the air agency may elect to adopt into its SIP, or to incorporate by reference into its SIP, in order to receive delegation of federal authority. This distinction provides a challenge to sources at a facility that are subject to NSPS as well as a NESHAP (for example a recovery furnace at a pulp mill that is subject NSPS Subpart BB and the Pulp and Paper MACT II standards of Subpart MM).

  • The Future of Startup, Shutdown, and Malfunction

    1. 1. The Future of Startup, Shutdown, and Malfunction April 16, 2014 @ALL4INC @ThompsonHine #SSMFuture
    2. 2. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 2  Origin & Implementation of Startup, Shutdown, and Malfunction (SSM) Exemption Provisions  MACT SSM Litigation  Operating Permit SSM Considerations  Future Implications  Facility SSM Action Items  Regulatory and Judicial “Hot Topics” Agenda
    3. 3. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 3 Origin & Implementation of Startup, Shutdown, and Malfunction (SSM) Exemption Provisions Mark Wenclawiak – ALL4
    4. 4. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 4  Regulatory programs of focus for excess emissions (EE) during SSM events – State Implementation Plans (SIPs) – New Source Performance Standards (NSPS; 40 CFR Part 60) – National Emission Standards for Hazardous Air Pollutants (NESHAPs; 40 CFR Parts 61 and 63) Origin & Implementation of SSM Exemptions
    5. 5. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 5  EE provisions were part of original SIPs approved in early 1970s  1978 EE policy disallowed automatic exemptions; provided states with enforcement discretion approach  1982 EE policy (Kathleen Bennett) reiterates 1978 policy Origin & Implementation – SIPs
    6. 6. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 6  1983 EE policy (Kathleen Bennett) clarifies 1982 policy, specifically concerning periods of startup and shutdown – Startup and shutdown are part of normal operation – Bypass of control device may not be a violation  1993 U.S. EPA memorandum (John Rasnic) addressed automatic exemptions under PSD – Not allowed (in line with 1982 policy) – Contrasts with NSPS (technology based standards) Origin & Implementation – SIPs
    7. 7. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 7  1999 EE policy (Steven Herman) reaffirms and supplements 1982 policy, and clarifies issues of interpretation that have arisen – EE provisions states may incorporate into SIPs – Beyond “enforcement discretion” approach and affirmative defense – EE that occur during startup and shutdown should be addressed Origin & Implementation – SIPs
    8. 8. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 8  December 14, 2004 U.S. District Court for the Northern District of Georgia – More than half of states have similar SIP provisions, questioning the basis of the SIP process in general  2011 Sierra Club petition – U.S. EPA February 2013 SIP Call Origin & Implementation – SIPs
    9. 9. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 9  NSPS represent an inconsistency with SIP. Why? – Technology-based program – Many states adopt and implement NSPS as part of SIP program designed to achieve compliance with NAAQS – SSM exemptions in its general provisions as well as within certain standards – Reporting requirements Origin & Implementation – NSPS
    10. 10. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 10  1994 NESHAP SSM provisions based on general duty to minimize emissions during SSM events  2008 D.C. Circuit Court vacated SSM exemption provisions of §§63.6(f)(1) (non-opacity standard) and (h)(1) (opacity standards) – Inconsistent with §112(d) of CAA because CAA requires such standard to apply continuously  2009 Kushner Guidance Letter – vacatur affects only those standards that incorporate §§63.6(f)(1) and (h)(1) and contain no other text that provides SSM protections Origin & Implementation – NESHAPs
    11. 11. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 11 MACT SSM Litigation Wray Blattner – Thompson Hine
    12. 12. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 12 Startup, Shutdown, and Malfunctions  Most states provide relief from otherwise applicable limits under certain circumstances during periods of operational startup, shutdown, and/or malfunctions – Exemptions and/or defenses typically apply if the emission source  Minimizes/limits emissions  Demonstrates efforts to avoid malfunctions – Rationale  Often not feasible to operate air pollution control equipment during startups/shutdown without damaging equipment; safety issues  Difficult to meet emission limits at low temperatures and/or low combustion efficiencies  Malfunctions are usually unanticipated and unforeseen
    13. 13. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 13 History of SSM Rules  1970’s: EPA determined that excess emissions during SSM are not violations of New Source Performance Standards (CAA Section 111) Facilities have a “general duty,” to the extent practicable, to operate emission sources and pollution control equipment in a manner consistent with good air pollution control practice for minimizing emissions  1994: EPA adopts similar SSM exemptions for National Emission Standards for Hazardous Air Pollutants regulations (CAA Section 112) But: – Each source must develop and implement an SSM Plan, and – The SSM Plan must be incorporated into the source’s Title V permit
    14. 14. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 14 History of SSM Rules (continued)  2002: EPA removes requirement that Title V permits incorporate SSM Plans; rather, the Permit must simply require that facilities adopt and abide by an SSM Plan  2006: EPA removes requirement that facilities implement SSM Plans during SSM But “general duty” to minimize emissions remains intact  2008: Sierra Club sues EPA; U.S. Court of Appeals for the D.C. Circuit rules in favor of Sierra Club, vacates the NESHAP SSM exemption. Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008)
    15. 15. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 15 History of SSM Rules (continued)  2011: Sierra Club files a “petition for rulemaking,” seeking to force EPA to act with respect to State’s SIP rules regarding SSM  February 22, 2013: EPA issues proposed SIP call (78 Federal Register 12460); if finalized, 36 states must submit revised SIPs eliminating most SSM relief
    16. 16. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 16 State Implementation Plans (“SIPs”)  SIPs must contain “emission limitations” and other “control measures” to meet the National Ambient Air Quality Standards (CAA §110(a)(2)(A))  “Emission limitations” must be imposed on a “continuous basis” (CAA §302(k))  EPA may issue a SIP call when state rules are “substantially inadequate” to attain or maintain a NAAQS (CAA §110(k)(5))  EPA Current Position: Exceptions/exemptions during SSM renders the emission limitations non-continuous; therefore, SIPs with such exceptions/exemptions are “substantially inadequate”
    17. 17. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 17 SIPs (continued)  “Emission Limitation”: “…a requirement established by the State or the Administrator which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous basis, including any requirement relating to the operation or maintenance of a source to assure continuous emission reduction and any design, equipment, work practice or operational standard promulgated under [the Act].” (CAA §302(k)) – Allows for alternatives to numeric limits – “Limits…on a continuous basis” over what time period? – “Limits” = less than uncontrolled potential to emit? Assure no exceedance of NAAQS?
    18. 18. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 18 Proposed SIP Call – February 22, 2013  No “Automatic Exemptions” during SSM events  No affirmative defenses for civil penalties that might result from excess emissions during planned startups or shutdowns  Affirmative defenses for civil penalties that result from excess emissions during qualifying malfunctions  EPA’s Current Schedule: issue a “Final” SIP Call by May 15, 2014  Once SIP Call becomes Final, states have 18 months to submit revised SIPs
    19. 19. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 19 Proposed SIP Call (continued)  Affirmative Defenses To Civil Penalties in Event of Excess Emissions During Malfunctions – Sudden, unavoidable and unpredictable malfunctions – Emissions source must be appropriately designed, operated, and maintained – Air pollution controls must have been maintained and operated properly – Must have taken all practicable steps to prevent malfunction and to minimize excess emissions – Repairs must be made promptly and the amount of excess emissions and duration of excess emissions minimized to maximum extent practicable
    20. 20. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 20 Proposed SIP Call (continued)  Affirmative Defenses (continued) – Not a recurring event – Prompt notification of Agency – Defense applies only to monetary penalties, NOT injunctive relief or citizen suit awards – Defense does NOT apply with respect to excess emissions associated with startup after a malfunction – Burden is on Source owner/operator to prove the elements of the affirmative defense
    21. 21. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 21 Startup, Shutdown, and Malfunctions  Industry View: – There is no evidence that emissions during startup, shutdown, and malfunctions have resulted in exceedances of a NAAQS or otherwise caused a threat to public health and safety – The rule was promulgated in an undemocratic and non- transparent fashion  Rule is product of an EPA-Sierra Club settlement in which States had no input  Public given only 30 days to comment
    22. 22. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 22 Startup, Shutdown, and Malfunctions (continued)  Industry View (continued): – Will create major burden – reissuance of all air permits? – Rule is akin to requiring motor vehicles to meet fuel mileage standards during acceleration – To extent SIP call proceeds, a blend of good engineering/work practice standards during SSM should be sufficient to meet CAA requirements, rather than otherwise applicable numeric limits, provided a reasonable measure of “continuous reduction” is achieved – “EPA shall disapprove a SIP revision only if the revision would interfere with any applicable requirement concerning attainment of NAAQS or any other applicable requirement of the Clean Air Act. Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir. 2013)
    23. 23. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 23 Operating Permit SSM Considerations Jon “JP” Kleinle – ALL4
    24. 24. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 24  Title V Operating Permit (TVOP) Content – Why and how SSM requirements may be included in your TVOP – Examples of critical SSM conditions that may or may not be found in your TVOP  Operating Permit Renewal, Re-openings, and Revisions – Implications of provisions for re-opening and/or revising TVOPs due to MACT SSM vacatur Operating Permit Considerations
    25. 25. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 25  40 CFR Part 70 Requirements for TVOP Content – All “applicable requirements” including SIP, NSPS, NESHAP/MACT, etc. – Methods for demonstrating compliance with all applicable requirements – Monitoring, recordkeeping, and reporting requirements Operating Permit Considerations
    26. 26. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 26  40 CFR 70.6—Permit Content – 40 CFR 70.6(a)(1)—Standard permit requirements  Permits must include operational requirements and limitations that assure compliance with all applicable requirements at the time of permit issuance – 40 CFR 70.6(a)(3)—Monitoring and related recordkeeping and reporting requirements  Permits must incorporate all applicable monitoring, recordkeeping, and reporting requirements Permit Content
    27. 27. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 27  40 CFR 70.6—Permit Content (Cont’d) – 40 CFR 70.6(a)(2)—Permit duration  Permits are issued for a fixed term of 5 years (except MWC 12 years w/5 yr review) Permit Content
    28. 28. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 28  SIP, NSPS, and NESHAP/MACT standards should be included in TVOP as applicable requirements  SSM provisions may be included in TVOPs in different ways: – As emission unit or group specific applicable requirements – Under monitoring, recordkeeping, or reporting requirements – Under source-wide requirements – Other??? Permit Content
    29. 29. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 29  On October 16, 2009, the U. S. District of Columbia Circuit Court issued a mandate vacating the MACT SSM exemption provisions  40 CFR 63.6(f)(1) and (h)(1) — Part 63 Subpart A General Provisions that provided exemption from emission standards required by the relevant MACT during SSM events MACT SSM Vacatur
    30. 30. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 30  Some NESHAP/MACT Subparts included specific language exempting SSM events  Other NESHAP/MACT Subparts only included references to the General Provision’s SSM exemptions MACT SSM Vacatur
    31. 31. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 31 MACT SSM Vacatur NESHAPs Affected by Vacatur* NESHAPs Not Affected By Vacatur* Subparts S & MM: Pulp & Paper Subparts F, G, H, I: HON for SOCMI Subpart T: Halogenated Solvent Cleaners Subpart GGG: Pharmaceutical Mfg Subpart X: Secondary Lead Smelting Subparts CC and UUU: Petroleum Refineries Subpart GG: Aerospace Manufacturing Subpart DDDD: Plywood & Composite Wood Products Subpart KK: Printing & Publishing Subpart FFFF: MON Subpart LLL: Portland Cement Subpart YYYY: Combustion Turbines Subpart RRR: Secondary Aluminum Subpart ZZZZ: RICE Subpart JJJJ: Paper & Other Web Coating Subpart DDDDD: Major Source Boilers Several area source NESHAPs in the metals, chemicals, and coating subcategories Subpart JJJJJJ: Area Source Boilers * At the time of the issuance of the mandate (2009).
    32. 32. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 32  MACT Standard Not Immediately Affected – As a result of the litigation surrounding the vacatur, U.S. EPA is addressing the vacatur by revising MACT standards that included specific SSM exemption provisions as part of the CAA Section 112(d)(6) eight year review process – These MACT standard sources need to be following rule development and promulgation and addressing new SSM accordingly MACT SSM Vacatur
    33. 33. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 33  MACT Standards Immediately Affected – Immediately following issuance of the court mandate, facilities subject to a MACT standard that only referenced the General Provision’s SSM exemption were required to be in compliance with emission limits at all times, even during SSM events….maybe MACT SSM Vacatur
    34. 34. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 34  MACT Standards Immediately Affected Cont’d – One could argue that SSM exemption provisions remain in effect during the TVOP term if The TVOP includes  Specific SSM exemption provision language (i.e., not a reference), and  Part 70 Permit Shield provisions MACT SSM Vacatur
    35. 35. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 35 Example of a NESHAP/MACT Subpart that was immediately affected by vacatur TABLE 1 TO SUBPART MM (PULP & PAPER) OF PART 63—GENERAL PROVISIONS APPLICABILITY MACT Subpart Example General Provisions Reference Summary of Requirements Applies to Subpart MM 63.6(f) Compliance with nonopacity emissions standards Yes 63.6(h) Compliance with opacity and visible emissions (VE) standards Yes
    36. 36. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 36 Example of a NESHAP/MACT Subpart that was not immediately affected by vacatur TABLE 7 TO SUBPART YYYY (COMBUSTION TURBINES) OF PART 63— GENERAL PROVISIONS APPLICABILITY MACT Subpart Example General Provisions Reference Summary of Requirements Applies to Subpart MM 63.6(f)(1) Applicability of standards except during startup, shutdown, or malfunction (SSM) Yes 63.6(h) Opacity and visible emission standards No - Subpart YYYY does not contain opacity or visible emission standards. §63.6105(a) You must be in compliance with the emission limitations and operating limitations which apply to you at all times except during startup, shutdown, and malfunctions.
    37. 37. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 37  What is the effect of the MACT SSM Vacatur on your operating permit? – NESHAP Subparts that were immediately effected:  Likely permit already required re-opening and/or revision – NESHAP Subparts that were not immediately effected (i.e., explicitly contain exemption):  Likely your permit will require re-opening and/or revision soon, if not already Renewal, Re-openings, & Revisions
    38. 38. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 38  40 CFR 70.7(f)(1)(i)—Reopening for Cause – Agency requirement – Permits must be reopened prior to the expiration of the permit to address new applicable requirements for a Part 70 source with a remaining permit term of 3 or more years Renewal, Re-openings, & Revisions
    39. 39. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 39  40 CFR 70.5(b)—Duty to Supplement or Correct Application – Applicant requirement – Applicant shall provide additional information as necessary to address any requirements that become applicable to the source after the date it filed a complete application but prior to release of a draft permit Renewal, Re-openings, & Revisions
    40. 40. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 40  40 CFR 70.5(c)(4)(i)—Standard Application Form and Required Information – Applicant requirement – Citation and description of all applicable requirements Renewal, Re-openings, & Revisions
    41. 41. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 41  40 CFR 70.5(c)(8)—Standard Application Form and Required Information – Applicant requirement – A compliance plan for all part 70 sources that contains a description of the compliance status of the source with respect to all applicable requirements Renewal, Re-openings, & Revisions
    42. 42. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 42  40 CFR 70.7(e)(4)—Significant modification procedures – Applicant requirement – Significant permit modifications shall meet all Part 70 requirements including those for applications – 70.5(c)(4)(i) application requirement to include citation and description of all applicable requirements Permit Modifications
    43. 43. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 43  Key question: Did the vacatur of 40 CFR 63.6(f)(1) and (h)(1) create new applicable requirements required to be incorporated into facility TVOPs? MACT SSM Vacatur
    44. 44. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 44 Future Implications Steve Axtell – Thompson Hine
    45. 45. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 45 Shifting Landscape: Which Rules Apply Now and Later?  SIP call proposal – February, 2013  Final SIP call – expected in 2014 (May?) – Will provide impacted states 18 months to submit revised SIP – Generally expected state revisions would be final before SIP submittal  What about when State promulgates implementing rule… – … but before SIP revision submitted? – … after revision submitted but before federal EPA approves?
    46. 46. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 46 Shifting Landscape: Which Rules Apply Now and Later? (continued)  Federal EPA action on revised SIPs – Expected within 24 months of SIP revision submittals – What if revised SIP approved? disapproved?  What if FIP rule is in place (or not)?
    47. 47. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 47 Enforcement  Who can bring enforcement? – Federal - EPA – State Agencies – Local Air Pollution Control Authorities – Citizens, Citizen (Public Interest) Groups  Potential Triggers for Enforcement – Routine inspections for air or other media – Clues arise from other mandated reports/notifications to agencies – Incidents drawing regulatory attention – Disgruntled employees contacting regulators
    48. 48. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 48 Enforcement  What are the potential consequences? – Civil penalties  gravity component  economic benefit component – Criminal penalties – Suspension and Debarment (government contractors) – Injunctive Relief (action forcing remedies)  Penalty policies – Federal EPA and many states have them – Potential road map for negotiating settlement
    49. 49. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 49 Citizen Enforcement  Authority, Procedure – Clean Air Act – State statutes – 60-day notice required  Potential recovery – Civil penalty bar – But damages and attorney fees can be pursued
    50. 50. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 50 Citizen Enforcement (continued)  Strategies to manage potential citizen suit liabilities – Consider pursuing “friendliER” settlement with state or federal authorities – Leverage legal and procedural uncertainties toward minimal settlements
    51. 51. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 51 Managing Potential Liability  Implement and document best efforts to manage, curtail event – Seek to satisfy affirmative defense criteria as act of good will even where rule vacated - for use in negotiating potential enforcement  Consider self-disclosure to regulators if available – Federal – “Audit Policy”  EPA de-emphasizing Policy but still in use – State equivalent policies  Many, but not all states  Beware: criteria may vary
    52. 52. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 52 Self-Disclosure – Federal Audit Policy  Criteria for gravity-based penalty forgiveness eligibility  Cannot be relieved from Economic Benefit liability through self-disclosure – Timely (21 days from discovery) – Systematic discovery – Voluntary disclosure – satisfying this criterion could be problematic – Discovery and disclosure independent of enforcers – Correction and remediation – Recurrence prevention – No repeat violations – Excluded violations – Cooperation
    53. 53. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 53 Facility SSM Action Items Jon “JP” Kleinle – ALL4
    54. 54. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 54  Action Items Related to TVOPs – Understand what MACT standard(s) are applicable to your facility – Determine if those MACT standard(s) incorporate the General Provisions SSM exemption by reference or contain a similar exemption within the specific MACT standard – Determine if your MACT standard(s) have been revised since the vacatur SSM Action Items
    55. 55. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 55  Action Items Related to TVOPs Cont’d – Review your operating permit for SSM related conditions – Compare your operating permit conditions to the current MACT standard(s) – Determine if operating permit changes were/are warranted SSM Action Items
    56. 56. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 56  Action Items Related to TVOPs Cont’d – Determine if your Part 70 applications submitted after the mandate addressed the SSM vacatur:  TVOP renewals  TVOP significant modifications (including those incorporating construction permits) SSM Action Items
    57. 57. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 57  Action Items Related to SSM Plan (SSMP) – If you still operate under a SSMP  Verify requirement still in effect  Consider converting to Malfunction Plan to address Affirmative Defense  Evaluate semi-annual MACT reporting procedures to insure SSM events are correctly addressed SSM Action Items
    58. 58. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 58  Action Items Related to SSM Plan (SSMP) – Understand startup/shutdown emissions and limits – Understand startup/shutdown procedures – Make sure training and plans are up to date – Consider 3rd party SSM audit – Track SIP changes, take advantage of process SSM Action Items
    59. 59. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 59 Regulatory and Judicial “Hot Topics” Wray Blattner – Thompson Hine
    60. 60. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 60 Hot Topics Up in the Air  Greenhouse Gas New Source Performance Standards for Power Plants – Proposed Rule January 8, 2014 – 1,100 lbs CO2/MWhr – will require “carbon capture and sequestration” (most efficient coal-burning units achieve 1,800 lbs CO2/MWhr) – Implications:  Will CCS be deemed BACT for GHG  Once NSPS rule is final, Clean Air Act requires EPA to issue guidelines to states for CO2 standards for existing power plants  Other industries?
    61. 61. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 61 Hot Topics Up in the Air (continued)  Boiler National Emission Standards for Hazardous Air Pollutants (“Boiler MACT”) – January 2013 final rules for “Area” and “Major” Sources – Major Source compliance deadline: January 31, 2016 (possible 1-year extension)  19 subcategories based on fuel use  Numeric and work practice standards – Area Source compliance deadline: March 21, 2014 (possible 1- year extension)  Gas-fired sources are not regulated  Coal-fired and large oil-fired sources are subject to numeric limits for mercury, carbon monoxide
    62. 62. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 62 Hot Topics Up in the Air (continued)  Revisions to National Ambient Air Quality Standards – Ozone standard currently 75 ppb – EPA considering lowering standard to 60-70 ppb range – If 60 ppb: 85% of nation would be “non-attainment,” triggering the tightening of state volatile organic compound and other ozone precursor emission limits
    63. 63. The Future of Startup, Shutdown, and Malfunction @ALL4INC @ThompsonHine #SSMFuture 63 Speaker Email Phone Mark Wenclawiak ALL4 mwenclawiak@all4inc.com 678.460.0324 x202 Wray Blattner Thompson Hine wray.blattner@thompsonhine.com 937.443.6539 Jon “JP” Kleinle ALL4 jkleinle@all4inc.com 610.933.5246 x120 Steve Axtell Thompson Hine stephen.axtell@thompsonhine.com 937.443.6877 Speakers

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