Spencer Fane LLP Logo

Will You Be Ready When the New Clean Air Act Regulations Hit Your Company?

While much recent attention under the Clean Air Act has focused on what Congress or EPA may do to control greenhouse gas emissions, the business community must not overlook other significant new air regulations for traditional air pollutants, including nitrogen oxide, sulfur dioxide, mercury, carbon monoxide, particulates, and ground-level ozone. These have the potential to affect thousands of businesses of all sizes, dramatically and quickly.

Before spring 2011 EPA is on schedule to issue a wide array of new regulations, including first-time controls on “area source” boilers – small to mid-size boilers that serve as the source of heat and sometimes power for schools, hotels, hospitals, office buildings, and other similar facilities. Additionally, EPA’s revisions to the National Ambient Air Quality Standards for ground-level ozone likely will move dozens of metropolitan areas (including Kansas City, Wichita, and Springfield, Missouri) from attainment to non-attainment status, with corresponding increased control of air pollution sources in those areas. Finally, EPA’s new Transport Rule will reduce emissions limits to protect downwind states from upwind sources of particulates and ozone precursors, again likely imposing new costs on businesses with air pollution permits.

“Area Source” Boiler Regulations Will Impact Commercial and Institutional Boilers. Pursuant to a court order, by December 16, 2010, EPA must finalize its area source boiler regulations. If finalized as proposed, EPA’s regulations will impact a large number of relatively small commercial and institutional boilers (see proposed rule at 75 Fed. Reg. 31896, Jun. 4, 2010). Historically, EPA regulated hazardous air pollutants (HAPs) only from “major sources,” that is, sources that emit or have the potential to emit 10 tons per year (tpy) of any individual HAP or 25 tpy of any combination of HAPs. Area sources, on the other hand, are sources of HAPs that emit less than these 10 tpy/25 tpy threshold levels. EPA has always possessed the dormant authority to regulate such area sources under the Clean Air Act.

EPA estimates there are 183,000 existing boilers at 92,000 separate facilities that will be covered by the Area Source final rule, 85 percent of which EPA considers to be small businesses or entities. These Area Source rule locations encompass a variety of commercial businesses, such as hotels and office buildings, as well as institutional entities, including schools, hospitals, and prisons. Existing “large” boilers (i.e., those with a heat input capacity equal to or greater than 10 million Btu per hour) that burn coal will be required to meet emission limits for mercury and carbon monoxide (CO), while existing large boilers burning biomass or oil will need to limit CO emissions. New large boilers will have even more stringent operating standards, including limits on particulate matter (PM) emissions. The Area Source rule will exempt smaller boilers (less than 10 million Btu heat input capacity per hour) from emission limits, but such boilers will be subject to a work practice standard of a boiler tune-up every two years. Certain natural gas-fired area source boilers will be exempt from the new rule.

The new Area Source boiler rule is separate from, but related to, two other EPA actions regulating emissions from boilers. In the June 2010 Federal Register noted above EPA also proposed stringent standards for major sources (referred to as the Boiler MACT), as well as a new proposed rule to reduce air toxics from Commercial and Industrial Solid Waste Incinerators (CISWIs). EPA must finalize all three of these boiler rules by December 16, 2010.

New Ozone Requirements to Reduce NOx and VOCs. EPA is in the process of revising the National Ambient Air Quality Standards (NAAQS) for ground-level ozone, the primary component of smog. Even though EPA ratcheted down the 8-hour ozone standard in 2008 to 0.075 ppm, EPA is again tightening the 8-hour standard to a limit of between 0.060 ppm and 0.070 ppm (see proposed rule at 75 Fed. Reg. 2938, Jan. 19, 2010). The rule is likely to become final in October or possibly November 2010 after the mid-term election season. The net effect of a change to the NAAQS will mean a number of counties in the Midwest no longer will be in attainment for ozone. For example, counties in the metropolitan areas of Kansas City (Missouri and Kansas), Springfield, Missouri, Wichita, Kansas, and counties in Iowa and Nebraska that are currently in attainment, will no longer be in attainment based on air quality data from 2006 to 2008. Counties that become nonattainment for ozone will face stringent limits on emissions, including potential limits on growth in certain industries. A recent industry study cited the loss nationwide of 7.3 million jobs and costs of more than $1 trillion per year if EPA were to select 0.060 ppm as the new ozone standard. The big impact from these most recent ozone limits will be the nonattainment status of several of our region’s mid-sized communities, as opposed to the largest ones. This will bring air emission limits to those areas like never seen before.

Transport Rule – NOx and SO2. Finally, in late summer EPA issued its proposed Transport Rule, intended to replace the 2005 Clean Air Interstate Rule (CAIR), which was remanded by the D.C. Circuit Court of Appeals in 2008 (see proposed rule at 75 Fed. Reg. 45210, Aug. 2, 2010). The Transport Rule is intended to assist downwind states in meeting ozone and fine PM2.5 standards by placing lower annual caps on certain pollutants from upwind states. Emission reductions will take effect by 2012 with anticipated emission limits for sulfur dioxide (SO2) of 71 percent below 2005 levels and nitrogen oxide (NOx) of 52 percent of 2005 limits. All four states in EPA Region 7 will be covered by the new rule. Missouri, Iowa, and Nebraska will be subject to fine PM controls, while Kansas will be subject to both PM2.5 and ozone season NOx reductions.

Spencer Fane is prepared to work with facilities, their business managers, leaders, and technical teams to advise facilities on how these new rules will affect their organizations and how they can plan for the changes that are coming. For more information on any of these rules, or other recent air regulatory developments, please contact Andrew Brought at abrought@spencerfane.com, Mike Hockley at mhockley@spencerfane.com, any other member of the Environmental Law Practice Group, or your regular Spencer Fane contacts, at 1-800-526-6529.