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1 **E STABLISHING**  **W ORK**  **P RACTICES FOR**  **A REA**  **S OURCE**  **,**

**C OAL**  **- F**  **IRED S**  **EASONAL B**  **OILERS** Overview In EPA’s reconsideration of the final rule for area source industrial boilers (“Area Source Boiler Rule”), EPA determined that it was appropriate to create a subcategory for seasonal boilers that burn oil or biomass as fuel. Under the Clean Air Act (“CAA”), EPA has the authority to appl y the same tune - up requirement to area source coal - fired boilers used for seasonal agricultural purposes such as the processing of sugarbeets (“seasonal coal - fired boilers”). 1 The expansion of the seasonal boiler area source subcategory to include similar coal - fired boilers is appropriate because these seasonal, coal - fired agricultural boilers are few in number, located in remote areas, and op erated to process a perishable, agricultural crop . Thus, these boilers need not be subject to maximum achievable control technology (“MACT”) standards in order for EPA to satisfy the section 112(c)(6) requirement that it regulate 90 percent of certain pol lutants from area sources through MACT. In the alternative, EPA also has the authority to impose work practice standards under section 112(h) for area source seasonal coal - fired boilers, similar to the generall y available control technology (“GACT”) requi rements EPA proposed for biomass - fired and oil - fired seasonal boilers. As discussed in more detail below, the unique circumstances of the seasonal coal - fired boilers located at these area source agricultural facilities meet the criteria for section 112(h) work practices. Summary of Legal Authority **1. Application of MACT standards to seasonal coal**  **- fired boilers is not**  **necessary to meet EPA’s obligations under section 112(c)(6).** CAA section 112(c)(6) requires that EPA list categories and subcategories of so urces such that sources accounting for not less than 90 percent of the aggregate emissions of seven specified hazardous air pollutants (“HAP”) are subject to standards under section 112(d)(2) or (d)(4) of the CAA. Mercury and pol yc yc lic organic matter (“ POM”) are two of the HAP for which 90 percent of aggregate emissions must be regulated, and EPA has determined in the rule that coal - fired area source boilers must be regulated under section 112(d)(2) or (d)(4) in order to meet the 90 percent threshold. 2 While EPA has a statutory obligation to meet the 90 percent threshold, the Agency will still meet this requirement even with the application of a work practice GACT standard to seasonal area source boilers. During the rulemaking establishing requirements fo r area source industrial boilers, EPA determined that it did not need to regulate mercury or POM from biomass - 1 USBSA has suggested that the definition of “seasonal boiler” to be as follow s : Seasonal boiler means either a boiler that undergoes a shutdown for a period of at least 7 consecutive months (or 210 consecutive days) due to seasonal market conditions , or a boiler operated to provide energy for the seasonal processing of a perishable agricultural crop (e.g. , sugarbeets, sugarcane) . This definition applies to boilers that would otherwise be included in the biomass, oil, or coal subcategories . 2 76 Fed. Reg. 15,554, 15,556 (Mar. 21, 2011).**5/1 7** **/2012**

2 fired or oil - fired boilers using a MACT standard because these sources were not necessary to reach the required 90 percent threshold. 3 The Agency , therefore, applied a GACT standard to these subcategories as authorized under section 112(d)(5). Under the same reasoning, seasonal coal - fired boilers (particularly those used in sugar beet processing) at area sources would not be necessary to reach the 90 percent emissions threshold and therefore should be regulated under GACT instead of MACT. According to recent data included in the rulemaking record, the area source category consisting of all coal - fired boilers onl y represents 0.7 percent of emissions of mercury . 4 Seasonal coal - fired boilers represent a small subset of this category . Including seasonal coal - fired boilers in the subcategory for seasonal boilers subject to GACT will, therefore, not prevent the agency from meeting its required 90 percent threshold. As the agency itself stated in the final rule, “the statute does not limit EPA’s discretion as to how it fulfills its obligations under CAA section 112(c)(6) ... w e are not promulgating MACT based regulations at this time [for biomass - fired and o il - fired boilers] because they are unnecessary

to meet the requirements of CAA section 112(c)(6) .” 5 Therefore, because EPA does not need to regulate POM or mercury emissions from seasonal, agricultural coal - fired area sources to meet the 90 percent thresho ld, EPA has the authority to appl y a similar work practices GACT standard rather than a MACT standard, as it has done for other source categories that are deemed to be unnecessary to meet the 90 percent requirement. Indeed, EPA is aware that area sources h ave inherently lower levels of pollution and are often comprised of smaller enterprises that could suffer economically under a heav y regulation burden. The Agency states in the final rule: “The facts here support the reasonableness of EPA’s approach [in o nly setting a MACT standard if needed to meet the 90 percent requirement] . Area source boilers are included in source categories listed under section 112(c)(6) for regulation under section 112(d)(2) solel y due to its mercury and POM emissions. There is s pecial statutory sensitivity to regulation of area source categories in section 112 . For example, an area source category may be listed for regulation under section 112 if EPA makes an adverse effects finding pursuant to Section 112(c)(3) or if EPA determ ines that the area source category is needed to meet its section 112(c)(3) obligations to regulate urban HAP or its section 112(c)(6) obligations to regulate certain persistent bioaccumulative HAP. ” 6 As explained by

EPA in the above preamble language, ar ea sources are regulated by the Agency

under MACT standards only if such regulation is needed to meet the 112(c)(6) or 112(c)(3) requirements. In the absence of such necessity , EPA has the discretion and the authority to appl y a GACT standard to an area s ource subcategory . 3 76 Fed. Reg. at 15,556 (March 21, 2011) . 4 See Memorandum to docket ID EPA - HQ - OAR - 2004 - 0505 , “ Emission Standards for Meeting the Ninety Percent Requirement Under Section 112(c)(6) of the Clean Air Act ,” Nathan E. Topham, Environmental Engineer Metals and Minerals Group, SPPD (D243 - 02), February 18, 2011 , available at: http://www.regulations.gov/#!documentDetail;D=EPA - HQ - OAR - 2006 - 0790 - 2312 , docket ID EPA - HQ OAR - 2006 - 0790 . The precise percentage of POM emissions resulting from seasonal coal - fired boilers cannot be determined from EPA’s data, but is expected to be of similar scale. 5 76 Fed. Reg. 15554 , 15566 ( March 21, 2011 ). 6 76 Fed. Reg. 15554, 15567 (March 21, 2011) (emp hasis added) .**5/1 7** **/2012**

3 EPA created a separate subcategory for seasonal, agricultural boilers in light of unique operations and circumstances. Area source coal - fired seasonal boilers, such as those used to process sugarbeets, are similar to those industrial b oilers already in the area source seasonal boiler subcategory and should therefore be included. This subcategory represents an extremely small slice of the total emissions of concern, certainly less than the 0.48% which represents the amount EPA has regul ated above the 90 percent requirement. Therefore, imposing work practices on such sources will not cause the EPA to run afoul of the 90 percent requirement. As the Agency itself makes clear, necessity to meet the 90 percent requirement is the only reason that area sources are included in the MACT standards, and without such necessity , EPA has the discretion to address that subcategory

under a GACT standard instead. **2. Even if EPA**  **determines section 112(c)(6) require**  **s MACT standards for**  **area source seasona**  **l coal**  **- fired boilers, EPA**  **may satisfy this requirement**  **by prescribing**  **work practice standards under section 112(h)**  **.** If EPA determines that area source seasonal coal - fired boilers must be subject to MACT standards pursuant to section 112(c)(6), EPA has the discretion to impose work practices that are similar to the GACT standards EPA has proposed for seasonal oil - and biomass - fired boilers. Section 112(h) authorizes EPA to issue work practice standards where “the application of measurement methodology to a particular class of sources is not practicable due to technological and economic limitations.” 7 Such work practice standards are included in the various ty pes of requirements that can be imposed under section 112(d)(2), and therefore would satisfy EPA’s obligations under section 112(c)(6). In determining whether to issue work practice standards for a given category or subcategory

of sources, EPA has broad latitude to decide what overall combination of factors make the application of measurement methodolo gy “not practicable.” The statute also does not limit EPA’s discretion as to the relative weight to be given to technological and economic factors in determining whether the application of measurement methodology

is “not practicable.” The D.C. Circuit has interpreted section 112(h) to allow EPA to “ substitute work practice standards for emission floors only if measuring emission levels is technologicall y or economically impracticable.” 8 In Sierra Club, the D.C. Circuit reversed an EPA rule that establishe d work practice standards for a class of ceramics kilns, on the grounds that EPA had not made the requisite finding of impracticability . However, Sierra Club does not limit EPA’s discretion as to what degree of technological or economic impracticability j ustifies a work practice standard. In the rule challenged in Sierra Club, EPA made no findings regarding the practicability of measurement methodology

for the ceramics kilns

– instead issuing work practice standards because it lacked data on emissions fro m these sources.

7 42 U.S.C. § 7412(h)(2)(B). 8 Sierra Club v. EPA, 479 F.3d 875 (D.C. Cir. 2007) (emphasis added).**5/1 7** **/2012**

4 Here, b y contrast, there are adequate grounds for EPA to make a finding of impracticability . Like the area source seasonal oil - and biomass - fired boilers for which EPA has prescribed a tune - up requirement, seasonal coal - fired boilers such as those used in sugar beet processing are not currently equipped to continuously monitor carbon monoxide and ox ygen (for purposes of demonstrating compliance with the CO standard). Moreover, EPA’s proposed CEMS requirements for CO and O 2 require stri ct adherence to the installation, operation, maintenance, and performance testing requirements set forth in Part 60, Appendix B (Performance Specifications 3, 4, 4A, and 4B). 9 Meeting these requirements would require area source seasonal coal - fired boilers to procure costly

CEMS equipment and h ire specialized personnel to install and operate CEMS. Most s ugarbeet facilities are not currentl y required b y state agencies to have CEMS for criteria pollutants. Inaddition to costly CEMS equipment, s ome boiler s also may require phy sical modifications in order to meet the exacting installation requirements in Part 60, Appendix B . These costs are likel y to be especially high for seasonal coal - fired boilers located in remote rural areas, especially given the likely increase in nationwide demand for both CEMS equipment and compliance personnel that will follow the finalization of the Area Source Boiler Rule as well as the standards for major sources and the requirements for boilers at electric generating units . In addition, fuel sampling for mercury is not practical for these sources. The fuel for most of these area source , agricultural boilers is delivered by truck because the ir size and location makes rail delivery

infeasible. The fuel is dropped by rail in an open, outdoor location and then loaded onto trucks, a process that does not lend itself to ASTM procedures. The costs of compliance would impose a severe burden on the small , area source agricultural processing facilities that utilize seasonal coal - fired boilers. Such facilities were not designed for the ty pe of sampling and measurement techniques required by the rule. Therefore, the costs of compliance are not in proportion to the environmental significance of emissions from seasonal coal - fired boilers − which are generally few in number, located far from population centers, and operated onl y for a portion of the year. Regulating seasonal coal - fired boilers in the same way as other industrial, commercial, and institutional boilers is inappropriate in l ight of the special features of seasonal coal fired boilers. Given these factors , EPA is justified in exercising its authority to prescribe a tune - up requirement identical to the proposed GACT standards for oil and biomass fired seasonal boilers, on the grounds that technological and economic limitations make the application of measurement methodologies impracticable for seasonal coal - fired boilers.

9 76 Fed. Reg. 80,532, 80,545 (proposed 40 C.F.R. 63.11224(a))