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\ 0 2 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460



# JUL 2 2 2009

Charles H. Knauss Shannon S. Broome Sandra P. Franco Bingham McCutchen LLP 2020 K Street, NW Washington D.C. 20006 Leslie A. Hulse Assistant General Counsel American Chemistry Council 1300 Wilson Boulevard Arlington, VA 22209 Gregory Scott National Petrochemical & Refiners Association 1667 K Street, NW, Suite 700 Washington, D.C. 20006 Jan Poling American Forest & Paper Association 1111 19`" Street, NW, Suite 800 

### Washington, D.C. 20036 OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE 

### Harry M. Ng John P. Wagner American Petroleum Institute 1220 L Street, NW Washington, D.C. 20005

Thomas J. Graves Alison A. Keane National Paint & Coatings Association, Inc. 1500 Rhode Island Avenue, NW Washington, D.C. 20005 William H. Lewis, Jr. Morgan, Lewis & Bockius, LLP 1 l 11 Pennsylvania Avenue, NW Washington, D.C. 20004 Susan T. Conti Alliance of Automobile Manufacturers 1401 Eye Street, NW, 9`' Floor Washington, D.C. 20005 Re: Vacatur of Startup, Shutdown, and Malfunction (SSM) Exemption (40 C.F.R. §§ 63.6(f)(1) and 63.6(h)(1)) Dear Counsel: In Sierra Club v. EPA, 

### 551 F.3d 1019 (D.C. Cir. 2008), the United States Court of Appeals for the District of Columbia Circuit vacated two provisions in EPA's Section 112 regulations governing the emissions of hazardous air pollutants during periods of startup, shutdown, and malfunction ("SSM"). Specifically, the Court vacated 40 C.F.R. §§ 63.6(f)(1) and 63.6(hx 1), that are part of a regulation, commonly referred to as the "General Provisions Rule," that EPA promulgated under Section 112 of the Clean Air Act. When incorporated into Clean Air Act Section 112(d) regulations for specific source categories, these two provisions exempt sources from the requirement to comply with the otherwise applicable Section 112(d)

Internet Address (URL) • http://www.epa.gov Recycled/Recyclable • Printed with Vegetable Oil Based Inks on 100%, Postconsumer, Process Chlorine Free Recycled Paper

### emission standard during periods of SSM. Representatives of various industries subject to

Section 112(d) rules have raised concerns to EPA about the impact of the Sierra Club 

### decision and the potential enforcement exposure a source faces if it fails to comply with a Section 112(d) emission standard during an SSM event. The purpose of this letter is to address those concerns.

Until the Court issues the mandate in Sierra Club v. EPA, 

### 40 C.F.R. §§ 63.6(f)(1) and (h)(1) remain in effect Once the mandate issues, 40 C.F.R. §§ 63.6(f)(1) and (h)(l) will become null and void. The vacatur will immediately and directly affect only the subset of Section 112(d) rules that incorporate 40 C.F.R. §§ 63.6(f)(1) and (h)(1) by reference, and that contain no other regulatory text exempting or excusing compliance during SSM events. Table 1, attached, contains a list of the source category rules that EPA believes will be immediately affected once the mandate issues in Sierra Club, 

### as these rules do nothing more than incorporate 40 C.F.R. §§ 63.6(f)(1) and (hx 1) by reference and contain no other regulatory text exempting or excusing compliance during SSM events. EPA's initial analysis of the Section 112(d) source category rules indicates that the majority of the rules include specific regulatory text that exempts or excuses compliance during SSM events, and such regulatory text is in addition to, or in lieu of, a cross-reference to 40 C.F.R. §§ 63.6(f)(1) and (h)(1).' See 

### Table 2(attached) (identifies the source category rules that EPA believes will not be impacted when the mandate issues in Sierra Club). 

### The vacatur does not have a direct impact on such source category-specific SSM provisions because those provisions were not challenged and were not before the court in Sierra



### ' There is a great deal of variation in the specific regulatory text used in such rules to exempt or otherwise excuse a source from compliance with the applicable Section 112(d) standard during periods of SSM. The following examples are illustrative of the different formulations that EPA has identified in its Section 112(d) source category rules, but are by no means exclusive. See, e.g., 

### 40 C.F.R. § 63.762(a) ("The provisions set forth in this subpart shall apply at all times except during startups or shutdowns, during malfunctions. ...."); 40 C.F.R. § 63.654(g)(6) ("periods of excess emissions shail be identified in the Periodic Reports and shall be used to determine compliance with the emission standards. ...(iii) Periods of startup and shutdown that meet the definition of § 63.641, and malfunction that meet the definition in § 63.2 and periods of performance testing and monitoring system calibration shall not be considered periods of excess emissions. ..."); 40 C.F.R. § 63.1570 (a), (b) and (g) (contains a cross-reference to 63.6(f)(1) and (h)(1) in 63.1570(a) and (b), respectively, but also has regulatory text in 63.1570(g) excusing deviations that occur during SSM. Section 63.1570(g) provides " Consistent with §§ 63.6(e) and 63.7(e)(1), deviations that occur during a period of startup, shutdown, or malfunction are not violations if you demonstrate to the Administrator's satisfaction that you were operating in accordance with § 63.6(e)(1)."); 40 C.F.R. § 63.695(e)(6)(i) ("An excursion is not a violation nor does it count toward the number of excused excursions allowed under paragraph (e)(6)(ii) of this section when the excursion occurs during any one of the following periods: (A) During a period of startup, shutdown, or malfunction when the affected facility is operated during such period in accordance with § 63.6(e)(1)"). -2-

### Sierra Club. 

### EPA recognizes, however, that the legality of such source category-specific SSM

provisions may now be called into question, and EPA intends to evaluate each of them in light of the court's decision. The tables attached to this letter are based on EPA's initial analysis and are, therefore, subject to change. 2 Even if a source is subject to a Section 112(d) standard that does no more than incorporate by reference 40 C.F.R. §§ 63.6(f)(1) and (h)(1) and contains no other regulatory text exempting or excusing compliance during SSM events (see Table 1), the impact of the vacatur will vary depending on the source category, and may not be immediate for sources in many categories. EPA's initial evaluation of the subset of Section 112(d) rules that do nothing more than cross-reference 40 C.F.R. §§ 63.6(f)(1) and (h)(1) indicates that most of these rules should not present compliance issues for sources during SSM events. There are various reasons for this. For example, certain Section 112(d) standards can be achieved despite SSM events because the performance of pollution control equipment is not affected by SSM events. Other Section 112(d) standards are expressed as an average over a relatively long period of time (e.g., 

### a yearly rolling average) and expected startup and shutdown events and any malfunctions over that period are not likely to result in an exceedance ofthe standard. Further, certain Section l 12(d) standards impose only work practice requirements with which a source should be able to comply during SSM events. Compliance with Section 112(d) standards during SSM periods should also be less problematic for those sources that are operating in compliance with 40 C.F.R. § 63.6(e)(1)(I), which requires sources to minimize emissions at all times, including periods of SSM, consistent with safety and good air pollution control practices. Sources subject to Section 112(d) standards that only cross-reference the exemption in 40 C.F.R. §§ 63.6(f)(1) and (h)(1) of the General Provisions Rule should, in many instances, be able to minimize their exposure to violations of the applicable Section 112(d) standards by adjusting their operating practices or by adding emission controls or measures to reduce or eliminate excess emissions during SSM periods. EPA recognizes, however, that some sources subject to Section 112(d) standards that only cross-reference the exemption in 40 C.F.R. §§ 63.6(f)(1) and (h)(1) of the General Provisions Rule may be unable to comply with such standards during SSM events despite their best efforts, including adherence to 40 C.F.R. § 616(e)(1)(1). For a source that fails to comply with the applicable Section 112(d) standards during SSM events, EPA will determine an appropriate response based on, among other things, the good faith efforts of the source to minimize emissions during SSM periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions, and whether the source has developed and implemented an SSM plan to minimize such emissions. See 

### 40 C.F.R. § 63.6(e)(3)(i). We intend to closely scrutinize any claim that a Section 112(d) standard cannot be

2 

### There are some Section 112(d) source category rules that do not appear in either table because the rules do not contain any SSM exemption. The Sierra Club 

### decision has no impact on such rules. -3-

### met during a malfunction to determine whether the event was in fact "sudden, infrequent, not

reasonably preventable" and was not instead "caused in part by poor maintenance or careless operation." 40 C.F.R. § 63.2 (definition of malfunction). We encourage sources that anticipate compliance difficulties to contact EPA or the appropriate state regulatory authority. By engaging with regulators early, sources can identify their compliance concerns and engage in a meaningful dialogue with EPA or the appropriate state regulatory authority about the individual circumstances presented by a particular facility, including any information on the nature and extent of the excess emissions that occurred or are expected to occur during SSM events. In appropriate cases, EPA or the state may be able to take action to resolve a source's compliance concerns. Such actions may include, for example, issuance of an Administrative Order on Consent that includes a schedule for the source to achieve compliance during SSM events. EPA is cunently evaluating, in light of the Sierra Club 

### decision, which Section 112(d) source category standards should be revised, and of these, which should be revised on an expedited basis. As we engage in the process of evaluating and revising rules, we will evaluate any information that we have, and that we may receive from industry or other sources, on emissions during periods of SSM. See, e.g., Clean Air Act Section 112(d)(3)(A) (existing source standards are based on the average emission limitation achieved by the best performing 12 percent of sources "for which the Administrator has emissions information"). EPA will endeavor to promptly address concerns raised with respect to specific Section 112(d) source category standards where the Agency determines that sources within a source category may have a limited ability to comply with those standards during periods of SSM. EPA intends to give highest priority to reviewing and revising those Section 112(d) source category standards that may be difficult for sources to meet during an SSM period given the technological limitations of the processes involved. Sincerely,

Adam M. Kushner, Director Office of Civil Enforcement cc: William Becker, NACAA Steve Page, OAR Regional Air Division Directors Regional Air Enforcement Managers

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### Table 1— Section 112(d) Source Category Rules That Will Be Affected Once The

Mandate Issues in Sierra Club v EPA, 551 F.3d 1019 (D.C. Cir. 2008), Vacating the Startup, Shutdown, and Malfunction Exemptions in 40 C.F.R. § 63.6(f)(1) and (h)(1) 4 Relevant Source Category Part 63 Subpart R Gasoline Distribution S Pulp and Paper T Halogenated Solvent Cleaners X Secondary Lead Smelting Y Marine Loading Operations GG Aerospace Manufacturing II Shipbuilding and Ship repair KK Printing and Publishing LL Primary Aluminum MM Combustion Sources at Pulp Mills CCC Steel Pickling lII Flexible Polyurethane Foam Production LLL Portland Cement NNN Wool Fiberglass RRR Secondary Aluminum TTT Primary Lead vW Publicly Owned Treatment Works X3QC Ferroalloy Production 

### ' This Table presents the Clean Air Act Section 112(d) source category rules that EPA currently believes will be directly affected once the mandate issues in Sierra Club v. EPA, 551 

### F.3d 1019 (D.C. Cir. 2008). The rules identified in this Table incorporate 40 C.F.R. Sections 63.6(f)(1) and (h)(1) by reference and contain no other regulatory text exempting or excusing compliance during startup, shutdown or malfunction events. The information in this Table is based on EPA's initial analysis and is, therefore, subject to change. -5-

### Table 1(Continued) — Section 112(d) Source Category Rules That Will Be Affected

Once The Mandate Issues in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008), Vacating the Startup, Shutdown, and Malfunction Exemptions in 40 C.F.R. 

### § 63.6(f)(1) and (h)(1) Relevant Source Category Part 63 Subpart AAAA Municipal Solid Waste Landfills JJJJ Paper and Other Web Coating RRRR Metal Furniture VWV Boat Manufacturing YYYYY Electric Arc Fumaces — area sources ZZZZZ Iron and Steel Foundries — area sources EEEEEE Primary Copper

— area sources FFFFFF Secondary Copper

— area sources GGGGGC' Primary Nonferrous metals

— area sources HI-IFHII-TH Paint Stripping and Miscellaneous Coating

— area sources LLLLLL Acrylic/Modacrylic fibers

— area sources NNNNNN Chromium Compounds

— area sources 000000 Flexible Polyurethane Foam Production and Fab

— area sources PPPPPP Lead Acid Batteries

— area sources RRRRRR Clay ceramics

— area sources TTTTTT Secondary Nonferrous metals

— area sources YYYYYY Ferroalloys Production

— area sources



### on

### Table 

### 2— Section 112(d) Source Category Rules That Will Not Be Affected When

the Mandate Issues in Sierra Club v EPA, 551 F.3d 1019 (D.C. Cir. 2008) 5 Relevant Source Category Part 63 Subpart F, G, H, I Hazardous Organic NESHAP for Synthetic Organic Chemical Manufacturing L Coke Oven Batteries N Chromium Electroplating O Ethylene Oxide Sterilizers S Pulp and Paper (some emissions standards only) U Polymers and Resins I W Polymers and Resins II AA Phosphoric Acid Manufacturing BB Phosphate Fertilizer Production CC Petroleum Refineries DD Off-site Waste and Recovery HH Oil and Natural Gas Production 00-YY Generic MACT (8 categories) DDD Mineral Wool EEE Hazardous Waste Combustors GGG Pharmaceutical Manufacturing

5 

### This Table presents the Clean Air Act Section 112(d) source category rules that will not be immediately affected by the vacatur in Sierra Club v. EPA, 551 

### F.3d 1019 (D.C. Cir. 2008). These rules contain specific regulatory text that exempts or excuses compliance during SSM events, and such regulatory text is in addition to, or in lieu of, a cross-reference to 40 C.F.R. Sections 63.6(f)(1) and (h)(1). Although these provisions will remain in effect following the issuance of the mandate in Sierra Club, 

### EPA recognizes that the legality of such source category-specific SSM provisions may now be called into question, and EPA intends to evaluate them in light of the court's decision.

-7-

### Tabie 2(Continued) — Section 112(d) Source Category Rules That Will Not Be

Affected When the Mandate Issues in Sderra Club v EPA, 551 

### F.3d 1019 (D.C. Cir. 2008) Relevant Source Category Part 63 Subpart HIII-I Natural Gas Transmission and Storage JJJ Polymers and Resins IV MMM Pesticide Manufacturing 000 Polymers and Resins III PPP Polyether Polyols QQQ Primary Copper Smelting UW Petroleum Refineries 11 CCCC Nutritional Yeast DDDD Plywood and Composite Wood Products EEEE Organic Liquids Distribution FFFF Miscellaneous Organic NESHAP C' ,GGG Vegetable Oil Extraction HIIHH Wet-formed Fiberglass Mat IIIl Auto and Light Duty Truck Coating KKKK Metal Can Coating NA1MM Miscellaneous Metal Parts Coating NNNN Large Appliances Coating 0000 Fabric Printing, Coating, and Dyeing PPPP Plastic Parts Coating QQQQ Wood Building Products RRRR Metal Furniture Coating SSSS Metal Coil Coating UUUU Cellulose Production 

### 10

### Table 2(Continued) — Section 112(d) Source Category Rules That Will Not Be

Affected When the Mandate Issues in Sierra Club v. 

### EPA, 551 F.3d 1019 (D.C. Cir. 2008) Relevant Source Category Part 63 Subpart W W W W Reinforced Plastics Composites Manufacturing XXXX Rubber Tire Manufacturing YYYY Gas Turbines ZZZZ Reciprocating Internal Combustion Engines AAAAA Lime Manufacturing BBBBB Semiconductor Manufacturing CCCCC Coke Ovens DDDDD Industrial Boilers EEEEE Iron and Steel Foundries FFFFF Integrated Iron and Steel Production GGGGG Site Remediation HHHHH Miscellaneous Coating IIIII Mercurv Cell Chlor-alkali Plants JJJJJ Brick and Clay Manufacturing KKKKK Clay Ceramics LLLLLL Asphalt Roofing and Processing MMMMM Flexible Polyurethane Foam Fabrication NNNNN HCl Production PPPPP Engine 1'est Cells/Stands QQQQQ Friction Materials Manufacturing RRRRR Taconite Ore Production SSSSS Refractory I'roducts 

### ul

### Table 2(Continued) — Section 112(d) Source Category Rules That Will Not Be

Affected When the Mandate 

## Issues in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008) Relevant Source Category Part 63 Subpart TTTTT Primary Magnesium Production BBBBBB Gasoline Distribution — area sources MMMMMM Carbon Black Production — area sources SSSSSS Glass Manufacturing — area sources

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