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Environmental Groups Challenge EPA Refinery Rule

Environmental groups continue their attack on long-standing rule provisions under the Clean Air Act that limit or exclude liability related to “startup, shutdown, and malfunction” events. Historically, USEPA has acknowledged that it may be impracticable, if not impossible, for industry to meet emissions standards during certain periods, including during startup, shutdown or malfunction events, when emissions are typically higher than during normal operation. However, in May 2015, in response to prior challenges, USEPA instructed 36 states to revise their implementation plans with regard to SSM events.

Last week, 11 environmental groups continued their attack by filing a petition seeking judicial review of USEPA’s recent rulemaking addressing emissions at petroleum refineries.[1] USEPA originally proposed to completely eliminate the longstanding exemption for malfunction-related emissions from petroleum refineries. However, in the final rule (published December 1, 2015), USEPA backed off of the absolute dissolution of the malfunction exemption, instead promulgating three limited malfunction exemptions. Specifically, the final rule requires that malfunction-related emissions be counted towards a source’s compliance with applicable emission standards except during any of the following:

  1. Up to two releases from each pressure relief device (PRD) during a three-year period;

  2. Up to two instances of visible emissions by each flare during a three-year period; OR

  3. Releases caused by force majeure events like natural disasters, terrorism, or loss of utility service.

In their petition for review, environmental groups argue that all three of these limited malfunction exemptions are unlawful. First, the groups contend that the exemptions for PRD releases and visible flaring are unlawful, based on two recent D.C. Circuit cases that struck down both USEPA’s original broad SSM exemption and affirmative defenses available in citizen suits for violations as a result of malfunctions.[2] Additionally, the groups claim that these exemptions may encourage refineries to install unnecessary PRDs and engage in excessive flaring. The groups argue that, together, these two narrow exemptions grant refineries “a free pass to pollute.”

Next, the environmental groups challenge the force majeure exemption. This exemption allows for emissions where certain events occur that are completely outside a refinery’s ability to control. They claim that the concept of force majeure does not exist in the context of federal environmental law. Force majeure, they argue, can only be used in voluntary contracts, not binding regulations. Further, the groups complain that the “[force majeure] exemption is so broad that it could swallow all of the standards themselves.”

[1] Air Alliance Houston, et al. v. USEPA, No. 16-1035 (D.C. Cir. filed Feb. 1, 2016).

[2] Sierra Club v. USEPA, 551 F.3d 1019 (D.C. Cir. 2008); Natural Resources Defense Council v. USEPA, 749 F.3d 1055 (D.C. Cir. 2014).

© 2020 Schiff Hardin LLPNational Law Review, Volume VI, Number 39


About this Author

Ryan Granholm Litigation Attorney Schiff Hardin

Ryan C. Granholm assists clients with complex compliance and litigation matters involving local, state, and federal environmental rules. He regularly advocates for his clients in a variety of different jurisdictions and venues, from county circuit court, to state administrative agencies, to federal district and appellate courts.

Ryan believes the best lawyers are flexible. He tailors his approach to his clients’ needs and goals—from answering pressing compliance questions to crafting long-term litigation strategies. Employing technical, legal, and negotiation-based approaches, Ryan...

J. Michael Showalter, Litigator, Schiff Hardin LLP

Mike Showalter is a litigator whose practice is focused on resolving complex disputes. Mr. Showalter's past clients span diverse industries including manufacturing, mining, power generation and transmission, oil and gas, the financial and insurance sectors, and process outsourcing.

Mr. Showalter's practice has focused on distilling complicated technical information into a format where it can be understood by decision makers. He has worked with experts in fields including medicine, economics, history, physical sciences, industrial hygiene, toxicology, environmental engineering and risk assessment.