June 16, 2011

Boiler Rule on Hold

The Obama administration’s expressed desire to get federal agencies to consider the impacts of regulations on business was evident in EPA’s recent decision to delay the effective dates for significant air rules affecting boilers and incinerators.

On March 21, 2011, under a judicial deadline, EPA issued national emissions standards for hazardous air pollutants (NESHAPs) from industrial, commercial, and institutional boilers and process heaters and standards of performance for new sources (NSPS) and emissions guidelines for existing commercial and industrial solid waste incineration units (CISWI rule).

On the same day, the Agency formally announced that it would reconsider certain aspects of the rules that warranted additional public comment. The Agency said it would look specifically at subcategorization of emissions sources as well as emissions limits.

In response to the rule, the United States Sugar Corporation filed suit against EPA and the rules in the U.S. Court of Appeals for the D.C. Circuit.

Also on April 27, 2011, a coalition of 18 major industry associations petitioned the Agency to stay the May 20, 2011, effective date of the rules. The associations pointed out that facing the original effective date, many companies would be forced to make compliance decisions with potentially high costs that may ultimately be misdirected or unnecessary should the Agency find that the technical bases of its rulemaking were incorrect.

Unresolved issues, according to the petitioners, that should be resolved and considered in final rule include the new interpretation of the term contained gas, potential classification of many secondary materials (such as biomass residuals and tire-derived fuel) as solid wastes, and the corresponding changes to the CISWI rule. Uncertainties over these matters “have upended previous expectations as to what units are boilers and what units are incinerators,” according to the associations.

In delaying the rules, EPA used its authority under the Administrative Procedures Act, which, when litigation is pending, allows a federal agency to stay the effective date of a rule by more than 3 months, which is the limit of a stay under the CAA.

The Agency’s action was generally well received by industry.

“A stay of the rules is an important first step and will give the Administration another opportunity to take into account the job-destructive aspects of the rules,” stated the Donna Harman, president and CEO of the American Forest & Paper Association. “Ultimately, we believe legislation will be necessary to give EPA the full amount of time they requested and were denied by the Court.”