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2004 Clean Air Act Update

For more information, contact Roger Brower at 410.312.7903.. 

On June 10, 2004, The American Bar Association and the Air and Waste Management Association sponsored a four-hour live discussion on current Clean Air Act issues. Panelists from U.S. EPA, regional and state air planning groups, industry and environmental groups focused on New Source Review reform, fine particle and 8-hr ozone standard implementation, implementation of MACT and residual risk, and emissions trading issues. The discussion was divided into several sessions. The following briefly summarizes each session.

Interview with Jeffrey Holmstead

Jeffrey Holmstead, EPA's Assistant Administrator for the Office of Air and Radiation, was asked to talk on important current programs and future plans. He discussed the status of EPA Clean Air Rules: the Clean Air Interstate Rule, the Mercury Rule, the Ozone Rules, the Fine Particulate Rule and the Nonroad Diesel Rule. Key events, plans and deadlines are: á

  • Clean Air Interstate Rule o Proposed Rule (1/30/04)
    • Supplemental Proposal (6/10/04)
    • Comments on Supplemental Proposal due 7/26/04
  • Mercury Rule o Proposed Utility Mercury Reduction Rule (1/30/04)
    • Supplemental Proposal (2/23/04)
    • Comment period closed on 6/29/04
    • Final Rule expected in March 2005
  • Ozone Rules o Final 8-hr O3 nonattainment designations (4/15/04)
    • First Phase of the Final Rule implementing the 8-hr standard (4/15/04)
  • Fine Particles Rule
    • Revised PM-2.5 nonattainment designations (6/28-29/04)
    • Proposed implementation Rule expected Fall 2004
    • Final nonattainment designations expected by end of 2004
  • Nonroad Diesel Rule
    • Proposed Rule (April 2003)
    • Final Rule (6/29/04)
    • Small nonroad engines proposal expected by end of 2004
    • Rules affecting locomotives and vessels will come in future

Also, he briefly discussed NSR reform. The final Equipment Replacement Provision Rule was published on 10/27/03, but was stayed by the Court of Appeals for the District of Columbia on 12/24/03. Petitioners requested that EPA reconsider the Rule. On 7/1/04 EPA granted the petition to reconsider, but is only reconsidering parts of the equipment replacement provision rule (including the contention that the selection of 20% for the cost limit is arbitrary and capricious and lacks sufficient record).

The Assistant Administrator for Air and Radiation indicated that EPA's view of what constitutes "routine replacement" has changed, as evidenced in the 10/27/03 final Rule. As a consequence, even under the current Rule, arguments can be put forth, using EPA's opinion as to what constitutes routine replacement, in case-by-case routine maintenance, repair and replacement applicability determinations.

Ambient Standards EPA is in the process of implementing the new air quality standards for ozone and fine particulate matter promulgated in 1997.

The control strategy timeline for this implementation includes:

  • 2004 - 8-hr ozone and PM-2.5 nonattainment area designations
  • 2005 - Phase II NOx SIPs due
  • 2006 - Marginal ozone nonattainment area strategies in place
  • 2007 - Marginal ozone nonattainment area re-attainment required
  • 2007 - Moderate ozone nonattainment areas SIPs due
  • 2007 - Phase II NOx SIP strategies in place á 2008 - Regional Haze SIPs due
  • 2009 - Moderate nonattainment area strategies in place
  • 2010 - Moderate nonattainment area re-attainment required
  • 2010 - Clean Air Interstate Rule Phase I reductions
  • 2015 - Regional Haze Rule reductions
  • 2015 - Clean Air Interstate Rule Phase II reductions.

One concern with regard to the Clean Air Interstate Rule is the misalignment of reductions timelines and ambient standard attainment demonstration timelines.

New Source Review

Recent NSR reform events have included:

  • Final NSR Rule (12/31/02) (effective in PSD-delegated States on 3/3/03)
  • Proposed Routine Maintenance, Repair and Replacement Rule (12/31/02)
  • EPA requests reconsideration of 6 issues in Final NSR Rule (7/30/03)
  • Final Equipment Replacement Provision (ERP) Rule (10/27/03)
  • Final action on NSR Rule reconsideration (11/7/03)
  • Stay Order on Final ERP Rule (12/24/03)
  • EPA requests reconsideration of 3 issues in Final ERP Rule (7/1/04)
  • Implementing SIPs due by 1/1/06.

Elements of the Final NSR Rule include baseline actual emissions, actual-to-projected actual methodology, actual PALs, and Clean Units.

Industry is showing interest in the flexibility afforded by PALs and Clean Units. As part of future NSR reform, EPA is working on other provisions, including:

  • Source aggregation
  • Debottlenecking
  • Allowable PALs
  • Routine maintenance and repair.

In the Final NSR Rule, EPA stated that States implementing the NSR Program must include the rule changes as minimum program elements. EPA recognizes that different but equivalent (equivalent environmental effectiveness) regulations may be adopted. Legal battles on implementation are expected.

Air Toxics
Panelists discussed MACT standards including residual risk.

As of February 2004, EPA has completed issuing the MACT standards required by the CAA. The industrial, commercial, and institutional boilers and process heaters MACT and the plywood and composite wood products MACT uniquely contain risk-based compliance provisions. There are no similar risk provisions in any other MACT.

With regard to mercury emissions, the Mercury Rule proposes two approaches for controlling emissions from the electric utility sector; 1) a MACT, or 2) a "cap-and-trade" program. Issues include subcategorization (such as subbituminous or lignite burning) within the MACT standard, as well as banking issues in trading.

Section 112(f) directs EPA to conduct risk assessments on each source category subject to MACT, and to determine if additional standards are needed to reduce residual risks. The first residual risk standard will be final in 2005 for the Coke Oven source category.

Emissions Trading
Emissions trading programs are becoming an integral part of new air quality programs. Based on the successful SO2 cap-and-trade model under the Acid Rain (Title IV) Program, the following programs have included emissions trading:

  • NOx Budget Program
  • NOx SIP Call.

Emissions trading is proposed in:

  • Clean Air Interstate Rule
  • Mercury Rule.

Past experiences (such as California's RECLAIM experience) have identified aspects of a successful emissions trading program, including:

  • Banking
  • Phased-in program
  • Opt-in/early reductions.