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Going, going… EPA Eliminates Another Source of Startup, Shutdown and Malfunction Exemptions from Clean Air Act

36 States Ordered to Remove SSM and Affirmative Defense Provisions from Their Rules

On June 12, EPA published its final regulatory action under the Clean Air Act (CAA) requiring 36 states to remove provisions from their State Implementation Plans (SIPs) allowing exemptions from emission limitations during startup, shutdown and malfunction (SSM) events. This action also requires 17 states to remove affirmative defenses from the SSM provisions of their SIPs. Affected states must submit their SIP revisions to EPA for approval by Nov. 22, 2016. By removing the long-standing SSM provisions, the revised state provisions may impact the operating burdens of many facilities that have SSM exemptions in their CAA operating permits and may also increase their liability exposure to government and citizen enforcement actions.

As previously reported, EPA first proposed this action (SIP Call) in 2013 as a result of the Sierra Club’s June 30, 2011, petition following the environmental organization’s successful challenge to EPA’s General Provisions regarding SSM exemptions for National Emission Standards for Hazardous Air Pollutants (NESHAPs): Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008). EPA supplemented and revised the original proposal in 2014 after the D.C. Circuit Court held that EPA may not create an affirmative defense against civil penalties for toxic air emissions by Portland cement manufacturers, even in the event of an unavoidable malfunction. NRDC v. EPA, 749 F.3d 1055, 1063 (D.C. Cir. 2014). Although the holding in that case only applied to CAA citizen suits, EPA extended this holding to all SIPs rendering those that contain affirmative defenses in their SSM provisions invalid because they could potentially limit the jurisdiction of federal courts to assess civil penalties under the CAA.

The SIP Call also contained EPA’s updated position regarding the use of SSM exemptions and affirmative defenses. As explained by EPA in the final action, the agency asserts that the CAA prohibits automatic SSM exemptions and affirmative defenses, but does allow enforcement discretion by air agency personnel exercised on a case-by-case basis. It also allows emissions during SSM events to be regulated using alternative numerical limitations or other technological control or work practice requirements.

With the elimination of automatic SSM exemptions and affirmative defenses, sources may consider permit amendments that establish these alternative numerical limits or work practice requirements in their air permits for periods of startup and shutdown to establish normal operating scenarios for these events. EPA also defended its ability to rely on state interpretive letters regarding a state’s SIP when taking action on SIP submissions, over the objection raised by the Sierra Club. This allows states to continue clarifying potentially ambiguous provisions in their SIPs with letters instead of having to resubmit the plan for EPA approval through the time-consuming formal administrative process.

As required by CAA Section 110, the final SIP Call specifies the sections of each state plan that EPA found deficient. Every state in EPA Region V, except Wisconsin, is included among the 36 states affected by the SIP Call. These states must amend the following provisions to bring their SIPs into compliance with EPA’s revised interpretation of the CAA:

1. Illinois:

  • Ill. Admin. Code tit. 35 § 201.261, which allows sources to include during the permit application process “[a] request for permission to continue to operate during a malfunction or breakdown,” including when air emissions standards “will be violated during startup[;]”

  • Ill. Admin. Code tit. 35 § 201.262, which establishes the criteria a state official must consider before granting that advance permission; and

  • Ill. Admin. Code tit. 35 § 201.265, which provides that the “granting of permission to operate during a malfunction or breakdown, or to violate . . . standards . . . during startup” is a “prima facie defense to an enforcement action.”

2. Indiana:

  • 326 Ind. Admin. Code 1-6-4(a), which allows sources operating under registrations or minor source operating permits to avoid penalties for excess emissions during malfunction periods provided they meet a number of conditions.

3. Michigan:

  • Mich. Admin. Code r. 336.1916, which provides an affirmative defense for violations of applicable emission limitations during SSM periods.

4. Minnesota:

  • Minn. R. 7011.1415, which provides exemptions for excess emissions due to flared gas from relief valve leakage at petroleum refineries.

5. Ohio:

  • Ohio Admin. Code 3745-15-06(A)(3), which allows owners and operators of air pollution sources to request authorization to continue operating the sources during maintenance of air pollution control equipment “in cases where a complete source shutdown may result in damage to the air pollution sources or is otherwise impossible or impractical[;]”

  • Ohio Admin. Code 3745-15-06(C), which grants the director responsibility for determining whether the source meets the requirements to qualify for the SSM exemption;

  • Ohio Admin. Code 3745-17-07(A)(3)(c) and 3745-17-07(B)(11)(f), which provide visible particulate emission limit exceptions during SSM periods; and

  • Ohio Admin. Code 3745-14-11(D), which provides SSM exemptions for emissions from certain types of Portland cement kilns.

The remaining 31 jurisdictions with SIPs that must be amended as specified in EPA’s final action are: Maine, New Hampshire, Rhode Island, New Jersey, Delaware, Virginia, West Virginia, Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Arkansas, Louisiana, New Mexico, Oklahoma, Iowa, Kansas, Missouri, Colorado, Montana, North Dakota, South Dakota, Wyoming, Arizona, Alaska, Washington, and the District of Columbia.

A copy of the federal register notice of the final EPA SIP Call action is available online here.

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume V, Number 163


About this Author

Joel Bowers Environmental Attorney

Environmental lawyer Joel Bowers is dedicated to finding creative solutions to even the most difficult enforcement proceedings and complex deals. Joel is experienced in transforming technical analysis into practical legal counsel that takes into account big-picture client objectives.

Joel focuses his practice on environmental compliance and enforcement, including air quality and chemical regulation. He advises on remediation, corrective action and voluntary cleanups, as well as cost recovery defense.

In addition, Joel advises on environmental diligence for commercial and real...

Charles Denton Environmental Attorney

Charlie Denton represents an array of clients in environmental and toxic tort litigation, enforcement defense, regulatory compliance solutions and pollution insurance coverage disputes. He also serves as an alternative dispute resolution (ADR) neutral mediator and arbitrator. Persistent and highly collaborative, Charlie can take complicated issues and challenges and then identify a strategic path to achieve the client’s objectives.

Charlie’s representation of industrial, municipal, institutional, educational and individual clients includes judicial and administrative environmental proceedings at the federal, state and local levels. He also represents policyholders involved in environmental coverage claim disputes and litigation with millions of dollars in the balance.

In addition, Charlie assists clients with managing environmental risks in commercial transactions, mergers, acquisitions and divestitures, as well as ISO 14000 environmental management systems. He advises on lender liability issues and environmental audits to assess potential facility contamination and regulatory compliance for the acquisition and financing of real estate, as well as waste management and remedial actions, environmental permits enforcement, and defense of citizens’ suits.

Charlie serves as a zealous advocate for his clients, focusing on their specific strategic goals and finding solutions that solve their immediate and long-term challenges. Charlie makes a point of understanding his clients’ core objectives from the onset of representation to keep their environmental matter in perspective.

Charlie serves as a federal court arbitrator/mediator/neutral evaluator, a state court facilitative mediator, and an arbitrator and mediator for private ADR proceedings. When serving as a neutral, Charlie remains personally dedicated to finding a balanced approach to dispute resolution that meets the needs and interests of the parties involved. Charlie is valued for his thoughtful understanding of the underlying business and legal issues that permeate every dispute, as well as for his calming approach to resolving the people challenges and emotional aspects that underlie most acrimony. An active listener, Charlie serves as a catalyst to working constructively with even the most disparate parties to achieve a reasonable outcome.

Charlie is actively involved with key industry, legal and environmental associations, often in leadership roles. He is the author and co-author of several publications highlighting environmental law topics, and gives frequent presentations for the American Bar Association, Michigan Chamber of Commerce, and State Bar Associations for Georgia, Michigan and Wisconsin

Michael Elam Environmental Energy Attorney

Veteran attorney Michael Elam brings more than three decades of experience in environmental, energy, infrastructure and natural resource law in both the private and public sectors. He structures creative agreements and helps secure approvals and financing for complex national and international agreements involving the development, remediation and financing of environmentally challenged or controversial projects surrounding energy and sensitive water bodies or sources.

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Cheryl A. Gonzalez is a staff attorney in the Indianapolis office of Barnes & Thornburg. She is a member of the firm’s Environmental Department.

Ms. Gonzalez focuses her environmental practice primarily on state and federal regulatory issues related to the Clean Air Act and Clean Water Act, but her experience includes numerous areas of environmental law, including asbestos concerns, solid and hazardous waste matters, site remediation and underground storage tanks.