Prof. Powers comments on EPA’s struggle to regulate “upset emissions”
Amanda Peterka, E&E reporter
Published: Thursday, October 16, 2014
Texas environmentalists faced off in court this year against a coal-fired power plant with more than 6,500 alleged exceedances of the federal Clean Air Act limits on opacity, an indicator of fine airborne soot.
The Sierra Club was seeking more than $330 million in civil penalties from Luminant Generation’s Big Brown unit.
It got nothing.The court ruled the pollution exceedances were covered by Texas’ “affirmative defense” shield, which uses a Clean Air Act provision that lets states exempt industries from penalties for emissions during equipment malfunctions or plant startups and shutdowns.
And now the industry shield for “upset emissions” is in jeopardy. U.S. EPA has moved to weaken or strike affirmative defense provisions from the Clean Air Act and from state compliance plans. Spurred by an April federal court ruling and largely unnoticed in the shadow of more politically provocative EPA draft rules for curbing greenhouse gases, the proposals could boost pollution enforcement.
“It’s fair to say that EPA is trying to eliminate the affirmative defense so that the enforcement authorities will have more power to go after cases in which a source might argue the exceedance was due to startup, shutdown and malfunction,” said Craig Oren, a professor of environmental law at Rutgers University.
At issue are long-running EPA efforts to account for technology shortcomings in a pollution law that demands continuous emissions reductions.
When a power plant, refinery or chemical plant starts or stops unexpectedly – such as in preparation for a hurricane – air emissions rise because pollution-control devices require stable, higher temperatures to operate properly. Emissions also rise during unexpected outages caused by equipment breakdowns or power outages.
These “off-the-book” emissions, environmentalists say, often go unreported and cause facilities to exceed permit limits.
“As long as these exemptions and these affirmative defenses are in the rules, it makes it a lot easier for plants to just pump pollution into the air, force their neighbors to breathe it and say, ‘Sorry, nothing we can do here, not our fault,’” said Seth Johnson, a senior associate attorney at Earthjustice who represents the Sierra Club in the issue.
But industry argues it shouldn’t be penalized for unavoidable emissions caused by technology shortfalls. Furthermore, it says, there’s no proof such emissions have degraded the air quality beyond federal standards. In the Texas case, the Luminant plant exceeded opacity limits in 1.5 percent of its total operating time, according to court documents.
EPA’s weakening of affirmative defense could lead to more enforcement actions against facilities for emissions that are neither foreseeable nor controllable, as well a higher burden on state regulators, said Rich Alonso, former head of the air enforcement branch at EPA.
“This is basically a windfall for the citizen enforcement community because everybody knows that you can’t meet your permit limits during startup and shutdown and malfunction,” said Alonso, who now represents manufacturers and energy companies at Washington, D.C., law firm Bracewell & Giuliani.
‘A release here, a release there’
There’s little data on how often facilities collectively release excess emissions during equipment startups, shutdowns and malfunctions.
There’s also scant information about the size of the pollution releases or how many such emission events are linked to planned maintenance versus unplanned breakdowns.
The most complete information comes from Texas, which for more than a decade has required companies to report permit-limit exceedances and maintains a database of sector-specific data.
In a 2004 report based on available data, the nonprofit Environmental Integrity Project estimated that upset emissions from 37 facilities in Texas and Louisiana in one year exceeded 63 million pounds of carbon monoxide (CO), volatile organic compounds (VOCs), sulfur dioxide (SO2), nitrogen oxides and hydrogen sulfide.
The group found that more than half of the facilities had upset emissions of one pollutant or more that were at least 25 percent of their total reported emissions of that pollutant. The report included both malfunctions and their associated startup and shutdown events, as well as planned maintenance, in its definition of upset events.
“Sometimes for hours you see these flares going, or there’s black smoke coming out of a smokestack because some boiler, some huge heater is warming up – that’s when you often see the biggest smoke of toxic emissions,” said Ilan Levin, the Environmental Integrity Project’s associate director in Texas.
The group’s follow-up report on Texas found that upset emissions from chemical plants, refineries and natural gas operations totaled 42,000 tons of SO2 and 50,000 tons of VOCs between 2009 and 2011.
In 2012 alone, Texas industrial facilities reported more than 4,000 individual upset-emissions events, according to public comments filed last year by the University of Texas Environmental Law Clinic, which has represented the Environmental Integrity Project on the issue.
Court documents and public comments spell out other cases aside from the Texas one where individual facilities have exceeded permit limits for various pollutants thousands of times because of startups, shutdowns and malfunctions.
A Sierra Club lawsuit in the early 2000s, for example, accused a Georgia Power facility of exceeding opacity standards during about 4,000 six-minute intervals from 1998 to 2002. The power company argued that all exceedances occurred during startups, shutdowns and malfunctions and were permitted under state regulations.
Environmentalists say the releases, when taken as a whole, represent a serious air quality problem and that affirmative defense hinders enforcement.
“Things happen. I’ve never been in a facility where it’s run perfectly. That’s life,” said Jalonne White-Newsome, a former environmental manager at refineries in Texas and current federal policy analyst at the nonprofit We Act for Environmental Justice.
“It might be a release here, a release there, a couple of releases a week, but if you look at that over a full year, those things add up, and they need to be accounted for and controlled,” she said.
‘Categories of excuses’
EPA has long struggled with how to regulate upset emissions.
Melissa Powers, an environmental law professor at Lewis & Clark Law School, said EPA effectively created the category of upset emissions as “excuses” for permit holders that couldn’t meet pollution limits that apply in a “continuous basis.”
The penalty shield first appeared in the 1970s, environmental law experts say, shortly after passage of the Clean Air Act, when states began submitting plans detailing how they would comply with national air quality standards.
EPA, which must approve or reject state implementation plans (SIPs), says it allowed affirmative defense and “overly broad” provisions governing excess emissions because it was overwhelmed with the workload in the first few years of the Clean Air Act.
“Because the EPA was inundated with proposed SIPs and had limited experience processing them, not enough attention was given to the adequacy, enforceability and consistency of these provisions,” the agency explained in a 1982 memo.
In 1999, EPA issued a guidance to states on how best to include the defense against civil penalties in their pollution plans, laying out criteria for facilities that want to show they worked to minimize the air pollution during startups and shutdowns.
Industry says affirmative defense has worked well in the state context, resulting in cooperation between regulators and facilities to address excess emissions.
“States have had affirmative defenses in their state implementation plans since the 1970s, and they’ve been operating just fine,” Alonso said. “Obviously, industry does not want malfunctions, clearly, because that means they lose product and whatnot, and they want to start up and shut down as little as possible because they want to be able to make their product. So they have an incentive to avoid malfunctions and startup and shutdowns. Traditionally, those have been dealt with by the states, working case by case, using the discretion of the state agency that really knows the system.”
The 5th U.S. Circuit Court of Appeals upheld EPA’s decision last year to allow facilities to claim affirmative defense from penalties for unplanned malfunctions in Texas and likewise affirmed the agency’s decision to not allow affirmative defense for emissions violations during planned maintenance.
The way states have handled affirmative defense has varied, despite the EPA guidance.
Few require public reporting as Texas does. Some states have extended affirmative defense to not only civil penalties but also to injunctive relief.
During the Clinton administration, EPA exempted facilities from hazardous air pollution standards during startups, shutdowns and malfunctions but decided to require that facilities develop and implement publicly available plans to address hazardous emissions during those periods.
EPA called it a “reasonable bridge” between compliance with standards during breakdowns and a blanket exemption from emission limits.
But the George W. Bush administration launched a series of actions that weakened the requirements.
In 2002, EPA retracted the requirement that plans be incorporated into operating permits.
A year later, it said plans didn’t need to be publicly available.
And in 2006, the agency went a step further and eliminated the requirement that sources actually comply with the plans during startups, shutdowns and malfunctions (SSMs).
“This happened over a period of several years and rule revisions, where the SSM provisions basically turned into ‘have a plan, we don’t care what it says, you don’t have to comply with it, and you don’t have to produce it,’” Powers of Lewis & Clark Law School said.
The Sierra Club sued, and in 2008, the U.S. Appeals Court for the District of Columbia Circuit said EPA could not automatically exempt sources from emission requirements during SSMs. The Clean Air Act, the court ruled, requires continuous emission standards.
EPA took that ruling as a signal that it needed to shift course, and this time it drew on its experience with state implementation plans.
“In 1999, EPA said, ‘Hey, you know what, this approach of allowing affirmative defense, that’s only good for SIPs,’” Earthjustice’s Johnson said. “Starting in 2010, they said, ‘Actually, on second thought we’d like to do that.’”
Beginning with its hazardous air emission standards for cement kilns, EPA began replacing automatic exemptions in its Clean Air Act rules with affirmative defense. It wrote affirmative defense into about 30 rules governing hazardous air pollutants and New Source Performance Standards, according to a recent petition from the Sierra Club that identifies the rules where they’re located.
The agency was still in the middle of replacing automatic exemptions with affirmative defense language in April, when the D.C. Circuit struck down the language in the cement kiln rule upon a challenge by the Natural Resources Defense Council. The court found that affirmative defense ran counter to the separation of powers of the Constitution and the Clean Air Act, which gives final say on penalties to the judicial branch.
Now, in the face of the court decision, EPA has decided to again shift course.
“EPA has determined that sections 111 and 112 of the law (performance standards and air toxics emissions standards) do not require EPA to take into account malfunctions in setting emission standards and that it is impracticable to do so,” EPA said in emailed response to questions from Greenwire.
In recent months, EPA has proposed to eliminate affirmative defense language as various Clean Air Act rules come up for review. Among those are recent proposed updates to standards for oil and gas operations and grain elevators. It also clarified in proposed new standards for landfills that the standards would apply at all times, even during startup, shutdown and malfunction.
And in early September, on a petition from the Sierra Club, EPA went a step further, telling states that plans containing affirmative defense for unavoidable malfunctions were also illegal under the Clean Air Act. EPA last February had proposed to eliminate affirmative defense for startup and shutdown periods and retain it for malfunctions in state implementation plans, but the agency said it changed its mind in light of the NRDC case.
Interpreting the ruling
Experts think that it’s the beginning of the end of affirmative defense in the context of the entire Clean Air Act.
Environmental groups are applauding. It’s “a major step forward in closing an air pollution loophole that has been a menace to families living next to polluting facilities,” said Mary Anne Hitt, Sierra Club’s Beyond Coal campaign director.
While individual states have opposed EPA’s actions, the National Association of Clean Air Agencies – which represents state air regulators – also said that the agency was “justified” in its proposal.
“Many states have looked the other way when it comes to dealing with SSM emissions,” said Richard Stedman, co-chairman of the National Association of Clean Air Agencies’ enforcement committee. “Eliminating the affirmative defense exemptions helps level the playing field and move toward greater consistencies among the regions.”
But industry maintains EPA has interpreted both the 2008 Sierra Club decision and this year’s NRDC decision too broadly by stripping away both exemptions and affirmative defense from all its rules. EPA should be looking at ways to use the Clean Air Act to release facilities from liability during SSM events, said Russell Frye, an attorney representing trade groups calling themselves the SSM Coalition.
“Rather than respond to the case involving portland cement standards by saying, ‘OK, we’ll just get rid of all these affirmative defense provisions,’ what EPA ought to be doing is looking for a way to accomplish the same thing in a way that would be within their jurisdiction of the Clean Air Act,” Frye said.
Industry groups have asked EPA to include workplace standards for startups, shutdowns and breakdowns in its standards for solid waste incineration and boilers, but EPA concluded that the Clean Air Act prohibited it from adding those to the rules. The legality of workplace standards for startup, shutdown and malfunction events is currently playing out in litigation in the U.S. Court of Appeals for the D.C. Circuit.
Environmental groups say that the Sierra Club and NRDC court rulings are clear and that EPA is required to eliminate all liability SSM protections from the Clean Air Act.
“If it was illegal there in the cement rule, it’s illegal everywhere else. EPA acknowledges this,” Earthjustice’s Johnson said. “I mean, industry could try to distinguish the case, say, ‘Well, the cement kiln rule came out on a Monday, all these other rules came out on a Tuesday – it’s totally different.’ But that’s a ridiculous explanation.”
More citizen lawsuits?
Alonso of Bracewell & Giuliani predicted that EPA’s proposal would allow environmental groups to launch more enforcement suits against industrial facilities for breaching permit limits during startup, shutdown and malfunction events.
“You look at the data. Did you exceed your permit limit? Yes. OK, now pay me a fine,” Alonso said. “The enforcement case is really that easy.”
To bar “ridiculous” lawsuits, Alonso said air permit holders will likely try to resolve startup, shutdown and malfunction issues through formal enforcement proceedings with state regulators. The burden on state regulators could increase “tenfold,” especially as EPA considers tighter pollution limits and it results in an erosion of trust between EPA and the states, he said.
NACAA’s Stedman also said that the proposals will likely increase the workload for states.
“States will have to account for SSM emissions as continuous in their permits. Upsets will not be excused and may be subject to enforcement actions,” he said. “However, these states would probably have to do this work anyway if SSM emissions are contributing to violations” of air standards.
EPA says it doesn’t anticipate state regulators will be forced to do more work with the elimination of affirmative defense.
“No increase in burden on states should result, because the elimination of affirmative defense provisions and exemptions does not alter the enforcement discretion of states,” the agency says in its email. “States, like EPA, retain enforcement discretion to decide whether to bring an enforcement action. In the event a judicial enforcement action is filed, the EPA or the state still may choose what remedies or penalties to seek and may make recommendations to the court concerning those remedies or penalties.”
Environmental groups said they doubted there would be a rash of lawsuits against individual facilities for violating permit limits if the proposals go through. They say the citizens living near polluters generally don’t have the resources to take on big companies in court, and that EPA’s actions won’t change that. But the agency’s actions could mean more successful citizen suits, said Kelly Haragan, director of the University of Texas Environmental Law Clinic.
“There aren’t that many citizen suits just because they’re expensive and they’re hard for local groups to bring, but I think this will make it cleaner and groups can really evaluate the likelihood of success,” she said. “And so I think you will see more successful citizen suits if this proposal goes through.”
Both environmentalists and EPA say the proposals will lead to cleaner air, but Lewis & Clark’s Powers said that’s not a certainty.
“Right now, we have a lot of anecdotes on both sides,” she said. “It’ll be interesting to see what happens.”