DINSMORE & SHOHL LLP • LEGAL COUNSEL • DINSMORE.COM/ENVIRONMENTAL May 2016 Issue PERMITTING Startup Shutdown Malfunction Update Carolyn M. Brown | (859) 425-1092 | [email protected] In a final determination published in or if EPA finds the submittal inadequate, the the June 12, 2015 Federal Register, EPA finding will trigger an obligation for EPA to acted on a Petition for Rulemaking filed impose a Federal Implementation Plan (FIP) INSIDE THIS ISSUE by the Sierra Club asserting that the State within 24 months. Additionally, mandatory STATE REGULATIONS Implementation Plans (SIP) of 39 states, sanctions will be triggered, including including Kentucky, were inadequate due restrictions on highway funding. Pages 3-4 to their treatment of excess emissions NAAQS associated with startup, shutdown and EPA suggested that states could either Pages 4-6 malfunction events. EPA found that the SIP remove the particular identified offending PERFORMANCE STANDARDS provisions of 36 states were “substantially provision from the SIP, replace the provision inadequate” and issued a SIP Call for each with an alternative emission limitation Page 7 of these states, including West Virginia, such as work practice standards that REPORTING Kentucky, Illinois, Ohio, and Colorado. would apply during startup or shutdown Pages 7-10 Many of the state rules have been in place or rewrite the entire regulatory provision. GREENHOUSE GAS EMISSIONS since the late 1970s. In broad terms, EPA The final determination provides examples concluded that provisions treating excess of how states should approach alternative Pages 10-11 emissions during periods of startup, emission limitations and recommends that AIR TOXICS shutdown and malfunction (SSM) as the states review the statement of EPA’s Pages 11-13 excluded from emission limitations and not updated SSM SIP Policy as of 2015. ENFORCEMENT in violation of emission standards are at Seventeen states filed suit in the D.C. Circuit odds with the Clean Air Act. Pages 13-17 challenging EPA’s final determination, OTHER SIGNIFICANT NOTES The revised SIP submittals are due by including Kentucky, Ohio and West Pages 17 November 22, 2016. If the state fails to Virginia. Individual industry petitioners submit a revision to its SIP by the deadline and certain industry groups also filed suit, Article continues › DINSMORE & SHOHL LLP • LEGAL COUNSEL Page 2 | May 2016 Issue PERMITTING Startup Shutdown Malfunction Update › Continued from page 1 and environmental groups intervened. practice standards to be followed during Environmental Integrity Project regarding The cases were consolidated with the lead SSM events since EPA’s determination is the Title V permit issued to Pirkey Power case being Walter Coke, Inc. v. U.S. EPA, Case clear that work practice standards are Plant in Texas. The Petition concerned No. 15-1166. The court has set a briefing emission limitations. North Carolina has the incorporation by reference of a 2012 schedule with final briefs due October 19, issued a proposed regulation following NSR permit and how the limits for opacity 2016. Given this schedule, a decision on the this approach. The North Carolina proposal and particulate matter were addressed challenge is not expected until after the establishes separate requirements for during planned maintenance or startup deadline for the states to respond to the treatment of malfunction events and and shutdown activities. EPA concluded SIP Call. treatment of startups and shutdowns. For that the permit should be revised to malfunctions, the approach offers sources make it clear that the SIP opacity and PM States are evaluating how best to respond. an opportunity to seek a source specific limits apply during periods of planned For Kentucky, EPA found Section 1(1) of malfunction work practice standard maintenance, startup, and shutdown. This 401 KAR 50:055 deficient. Kentucky has permit limit. Alternatively, if the source is despite the fact that the 2012 NSR permit identified five options and has sought does not pursue a source specific limit, the established alternative BACT limits for stakeholder input on those options. Agency director is authorized to exercise such periods. In making its decision, EPA enforcement discretion. Additionally, commented on the fact that it had issued a 1. Amend 401 KAR 50:055 and remove certain types of sources are required to SIP Call to Texas. provisions identified as deficient have malfunction abatement plans, which from the SIP. In another example of the scope of the Agency director must approve. With EPA’s focus on this issue, EPA announced 2. Remove provisions identified as respect to startup and shutdown, the North that it was revising the Arizona BART deficient from the SIP and keep Carolina proposal also includes options, determination under the regional haze provisions as state only (state origin such as compliance with the applicable SIP rule with respect to the Coronado Plant. requirements). emission limit or permit limit, compliance Specifically, EPA determined that the with one of the general work practice 3. Amend 401 KAR 50:055 to provide affirmative defense provision should be standards identified in the regulation, enforcement discretion. removed, quoting discussion in the SIP Call. compliance with a work practice standard Coronado had argued that the affirmative 4. Revise the regulations to establish in a federal rule or compliance with a defense provision was an integral part of emission limits/work practice source specific work practice standard the proposed emission limitations. EPA standards. permit limit. Texas has also issued a noted that it had issued the SSM SIP Call proposal to establish alternative work 5. Make no amendments to the to Arizona. Echoing comments made practice standards that would apply in the regulations or the SIP and require in the SSM SIP Call determination, EPA event of exceeding numerical emission EPA to issue a FIP. noted that “if Coronado were to violate limits during upsets, maintenance or a BART emission limitation due to a These options are still in the preliminary startup and shutdown malfunction, [Coronado] retains the ability discussion phase and have not proceeded Even as the litigation over the SSM SIP to defend itself in an enforcement action to proposed rulemaking at this point. A Call proceeds and the affected states are and to oppose imposition of particular stakeholder meeting to further discuss evaluating regulatory changes and their remedies…” 81 Fed. Reg. 21744. these options was held on April 19, 2016. response to the SIP Call, the ramifications We will continue to follow these issues One of the options under consideration of the SIP Call are being felt in other as states must make decisions on SIP Call by Kentucky is the development of a areas. For example, on February 3, 2016, responses by November of this year. regulation that would provide for work EPA granted in part a Petition from the DINSMORE & SHOHL LLP • LEGAL COUNSEL NEXT › © 2016. All rights reserved. Page 3 | May 2016 Issue STATE UPDATES Kentucky Ohio Aims for 2008 OzoneStandard Regulatory Update Attainment, while EPA Rolls out Stricter Robin B. Thomerson (859) 425-1094 • [email protected] 2015 Standard Michael J. Gray • (513) 977-8361 • [email protected] On April 14, 2016, the Kentucky Division for Air Quality filed two sets of regulations to bring state air quality As Ohio continues to pursue extension allows Ohio to use 2013- regulations current with federal regulations attainment with the 2008 ozone 2015 monitoring data as opposed to and designations. First, 401 KAR 51:010 was standard, EPA has moved to further 2012-2015 data for the Cleveland area filed with various amendments to bring reduce ozone. In 2008, EPA adopted a and could allow the area to move from area designations in the state regulations standard of 75 ppb for ozone. Under this marginal nonattainment to attainment current with federal designations. Second, standard, Ohio classified the Cleveland, for the 2008 standard changes to 401 KAR 53:010 were filed Columbus, and Cincinnati areas as being on the same day to update the National in “marginal” nonattainment. On January However, the area will still have to meet Ambient Air Quality Standards that have 28, 2016, Ohio proposed to redesignate the more stringent 2015 standard of 70 been finalized by EPA. Last, on March 4, the Cincinnati area as being in ppb for ozone. Within a year, Ohio must 2016 rules regarding Stage II controls for attainment with the 2008 standard. The recommend designations of attainment, gas dispensing facilities became final. proposed redesignation request covers nonattainment, or unclassifiable under the 2015 8-hour ozone standard The Louisville Air Pollution Control District Butler, Clermont, Clinton, Hamilton for all areas of the state. Given the is also promulgating changes to its Stage and Warren counties. According to downward trend in ozone levels, Ohio II rules for vapor recovery, Rule 6.04. The information from the U.S. EPA Air Quality will not likely have to take dramatic proposed changes are currently out for System, ozone levels trended downward public comment until May 13, 2016 with a for 2012-2015, with the region hitting action such as expanding the E-Check hearing set for May 18, 2016. Information 75 ppb or lower on average at all program (currently only implemented regarding public comments can be found monitoring locations in 2014. On in the Cleveland area) to meet the new at: https://louisvilleky.gov/government/ April 11, 2016, EPA issued a final rule standard. EPA is expected to make final air-pollution-control-district/services/ giving the Cleveland area a one-year designations in 2017. proposed-actions-apcd. extension to achieve attainment. This Wood Stove Revolt Kills Environmental Rules Package in West Virginia John S, Gray • (304) 357-9954 • [email protected] To become effective, all proposed changes, additions This year, the West Virginia Department of Environmental or deletions to West Virginia’s environmental rules and Protection (WVDEP) “rules bundle” would have implemented more regulations must be approved by the state legislature.