Representing the Interests of America’s Industrial Energy Users since 1978

May 20, 2011

VIA E-DOCKET

The Honorable Lisa P. Jackson

Administrator

Room 3000 U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington, D.C. 20460

Re: Petition for Administrative Stay of (1) the Nation al Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commer cial, and Institutional Boilers, 76 Fed. Reg. 15,554 (Mar. 21, 2011) (Docket No. EPA-HQ -OAR-2006-0790) and (2) the Identification of Non-Hazardous Secondary Mater ials That Are Solid Waste, 76 Fed. Reg. 15,456 (Mar. 21, 2011) (Docket No. EPA-HQ -RCRA-2008-0329).

Dear Administrator Jackson:

The Council for Industrial Boiler Owners (CIBO) res pectfully requests a stay of (1) the National

Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial, and Institutional Boilers, 76 Fed. Reg. 15,554 (Mar. 21 , 2011) (Docket No. EPA-HQ-OAR-2006-0790) (the Area Source rule) and (2) the Identification of Non-Hazardous Secondary Materials That Are Solid Waste, 76 Fed. Reg. 15,456 (Mar. 21, 2011) (D ocket No. EPA-HQ-RCRA-2008-0329) (the NHSM rule) pending reconsideration. CIBO joined th e April 27, 2011 Joint Industry Petition to stay the Boiler MACT and CISWI rules, 1 which was granted by EPA May 16, 2011. 2 Nevertheless, due to the interdependency of all four rules, and the harm imposed by the Area Source and NHSM rules, CIBO urges EPA to stay the Area Source and NHSM rul es as well.

CIBO is a broad-based association of industrial boi ler owners, architect-engineers, related equipment manufacturers, and university affiliates with membe rs representing 20 major industrial sectors. CIBO

1 76 Fed. Reg. 15,608 (Mar. 21, 2011) (Boiler rule); 76 Fed. Reg. 15,704 (Mar. 21, 2011) (CISWI rule).

2 Industrial, Commercial, and Institutional Boilers a nd Process Heaters and Commercial and Industrial Solid Waste Incineration Units, Final ru les; Delay of effective dates , --Fed. Reg.—(Web Release May 16, 2011).2

members have facilities in every region of the coun try and a representative distribution of almost every type of boiler and fuel combination currently in operation. CIBO was formed in 1978 to promote the exchange of information within the indu stry and between industry and government relating to energy and environmental equipment, tec hnology, operations, policies, law and regulations affecting industrial boilers. Since its formation, CIBO has been active in the development of technically sound, reasonable, cost-effective energ y and environmental regulations for industrial boilers. CIBO supports regulatory programs that pr ovide industry with enough flexibility to modernize – effectively and without penalty – the n ation's aging energy infrastructure, as modernization is the key to cost-effective environm ental protection.

SUMMARY OF PETITION

On March 21, 2011, EPA promulgated four interrelate d rules – the Boiler MACT, Area Source, CISWI and NHSM rule – that combined impose an unpre cedentedly complex and costly set of requirements on boilers and process heaters. EPA r ecognized in promulgating these final rules that

there were old issues that were not addressed and n ew issues the Agency failed to address, to such an extent that EPA announced in advance of publication of the rules that it would reconsider certain aspects of 3 of the 4 rules Clean Air Act (CAA) §30 7(d)(7)(B).

In advance of releasing the final rules and announc ing a reconsideration, EPA formally expressed concerns that the judicial deadlines would restrict its ability to promulgate coherent, well-developed rules. EPA received over 4,800 comments in response to the proposed rules, many of which raised issues that EPA had not fully considered and that p rovided substantial additional data. That data now raises questions about some of the Agency's initial conclusions. In the lawsuit unrelated to the meri ts of the rules, in which EPA had joined with environm ental plaintiffs to recommend deadlines for the rules’ completion, EPA sought from the D.C. Distric t Court a 16-month extension so that it could more fully analyze and address the technical implic ations raised by the commenters. EPA cautioned

the court that the un-reviewed data in the comments "may materially affect important decisions relating to source categories and coverage for the final emissions standards." 3 Unfortunately, the Court denied this request, although an extension wo uld have best served the public interest and given EPA an opportunity to ensure that the final rules w ere logical outgrowths of the proposals and that th e standards were attainable by covered sources.

On March 21, 2011, EPA finalized the rules accordin g to the timeline EPA had negotiated with environmental plaintiffs. However, EPA also issued a Notice of Reconsideration of certain issues of the Boiler MACT, Area Source, and CISWI rules. 76 Fed. Reg. 15,266. In announcing its decision to reconsider parts of the rules under §307(d)(7)(B ) of the Clean Air Act, 42 U.S.C. §7607(d)(7)(B), EPA emphasized that it was seeking additional input on difficult technical issues identified during th e public comment period, as well as comments on sever al centrally relevant issues in the final rules which arose after the public comment period had end ed. EPA did not notice a reconsideration of the

NHSM.

3 Sierra Club v. Lisa P. Jackson, Adm'r, EPA, No. 01-1537 (D. D.C. filed Dec. 07, 2010) (EPA's Mem. in Supp't of Motion to Amend Order of M arch 31, 2006 at 2).3

The concurrent announcement of a final rule and its reconsideration is to our knowledge unprecedented in the history of EPA rulemaking. It is not unsual for EPA to delay deciding on reconsideration petitions until well into the litig ation challenge of the rule. The recent Portland Cement MACT (PC MACT) rulemaking proceedings reflec ts that practice. On May 11, 2011, EPA released its decision granting reconsideration of c ertain provisions of the PC MACT rule, just days

before the date on which Petitioners must file thei r opening brief in the case. Here, however, EPA was so certain of the procedural irregularities and lack of confidence in the substance of its rulemak ing

that it announced reconsideration sua sponte upon the signing of the rule.

The final Area Source and NHSM rules will take effe ct May 20, 2011, triggering compliance obligations and a three-year period for all covered sources to come into compliance with the emission standards and only one year for Area Source units t o comply with the tune-up requirement. The emission standards apply to new sources for which c onstruction began after the June 4, 2010 proposal date of the rules. Notwithstanding that EPA itself determined a need for reconsideration of the rules

due to the existence of "certain issues of central relevance to these rules [that] arose after the per iod for public comment or [that] have been impracticable to comment upon," 4 EPA did not stay the compliance period or new source applicability dates in conjunction with its notice of reconsideration. The continued running of this compliance period now and while the rules are being reconsidered will require CIBO members to take action and expend reso urces to comply with rules that EPA has already declared is subject to change. A stay will best advance the public interest by enabling cover ed sources to allocate resources toward complying with the actual standards, rather than potentially interim standards. Staying the effectiveness of th e rules will not diminish the environmental protections that EPA aims to accomplish under eithe r the current or the reconsidered rule.

Considering this and for the reasons stated more fu lly below, EPA should use its authority under §301(a) and §307(d) of the Clean Air Act, and §705 of the Administrative Procedure Act to stay the Area Source rule and NHSM rule requirements for aff ected sources to allow the full three-year compliance period to begin only once a final decisi on on reconsideration is reached.

I. EPA HAS AUTHORITY TO GRANT A STAY OF THE AREA SO URCE AND

NHSM RULES

.

Pursuant to CAA §307(d)(7)(B), Congress authorized EPA to stay the effectiveness of rules promulgated under the Clean Air Act for up to three months to accommodate the time needed for

administrative reconsideration. 5 In its March 21, 2011 Notice of Reconsideration, EPA specified deficiencies in the Boiler, the Area Source, and CI SWI rules. Invoking CAA §307(d)(7)(B), EPA provided several justifications. EPA noted that “r econsideration and additional opportunity for publi c review and comment should be obtained” for some pro visions and for others, “further revisions may be warranted because they involve issues of central relevance that arose after the period for public comment or may have been impracticable to comment o n.” 76 Fed. Reg. 15,267. EPA also noted that

some issues raise “difficult technical issues that we believe may benefit from additional public

involvement.” Id. EPA has acknowledged that its sua sponte objections to the rules satisfy the CAA §307(d)(7)(B) standard for reconsideration. CIBO an d other parties will petition EPA to reconsider

4 76 Fed. Reg. 15,267.

5 42 U.S.C. §7607(d)(7)(B).4

other aspects of these rules as well. Considering this, a stay is clearly warranted for the Area Sour ce and NHSW rules.

Congress granted EPA additional independent authori ty to grant a stay beyond 3 months. CAA §301(a)(1) authorizes EPA to "prescribe such regula tions as are necessary to carry out his functions under the Act." A stay of the rule is necessary fo r EPA to conduct the reconsideration rulemakings fo r these 4 interrelated rules, without which the rules will impose compliance obligations that may not be consistent with the final outcomes of the rules, as suming those outcomes are not pre-judged.

Furthermore, under §705 of the Administrative Proce dural Act (APA), EPA may "postpone the effective date of action taken by it, pending judic ial review" when "justice so requires." 6 The Boiler and CISWI rules are pending judicial review. 7 With respect to the Area Source and NHSM rules, petitions for review, if not already filed, will be on file with the D.C. Circuit by the time EPA make s its decision on the stay of those rules. For the r easons stated below, justice requires that EPA stay the

Area Source and NHSM rules.

In considering whether to grant a stay of its rules , EPA has applied criteria used by courts to judge the appropriateness of a stay of a rule: likelihood of success on the merits, irreparable harm to petitio ner if the stay is not granted, harm to other parties inte rested in the proceeding, and consideration of the public interest. These criteria are considered by courts when deciding whether to stay final action taken by and authorized by other branches of govern ment (action by the executive branch implementing laws adopted by the legislature). The judicial standard for a stay is therefore appropriately restrictive. However, the CAA and AP A do not impose this standard on decisions by agencies when determining whether to stay their own rulemakings, but provide broad discretion. The CAA authority is bounded only by an implicit standa rd of rationality; the APA requires only that the agency concludes that “justice so requires” the sta y. In any event, the present circumstances meet both the CAA/APA discretionary and the more restric tive judicial standards for a stay. Justice requires a stay. In addition, CIBO members will be irreparably harmed absent a stay, other interested parties will benefit by the stay and staying the ru le is consistent with the public interest. EPA sho uld base its decision whether to grant a stay on the st andard Congress provided when deciding whether to stay its own regulatory decisions while undertaking further related regulatory action.

II. JUSTICE REQUIRES EPA STAY THE RULE.

By its concurrent final rule/reconsideration notice , EPA acknowledges that it failed to meet its procedural obligations under CAA §307 in promulgati ng the rules. The EPA notice plainly states that issues of central relevance arose after the period for public comment. Among the issues EPA identified as central and arising after the period for public comment are elements as fundamental as standards and definitions, for example, the dioxin emission limit and testing requirement for major source boilers, PM standards for oil-fired area sou rce boilers; the definition of “homogenous waste” under the CISWI rule, which is a key term to defini ng applicability of the rule to sources; and

6 5 U.S.C. §705.

7 See United States Sugar Corp. v. EPA , D.C. Cir., No. 11-1108 (Apr. 4, 2011 ); American Forest & Paper Association, et. al. v. EPA, D.C. Cir., No. 11-1124 (Apr. 29, 2011); and American Forest & Paper Association, et. al. v. EPA, D.C. Cir., No. 11-1125 (Apr. 29, 2011).5

requiring sources to meet the criteria of affirmati ve defense for malfunction events for major and are a source units and CISWI units. 76 Fed. Reg. 15,267.

Under CAA §307(7)(B), where it can be demonstrated that the standard for reconsideration is met, the Administrator “shall convene a proceeding for recon sideration of the rule.” The law goes on to require that the Administrator “provide the same pr ocedural rights as would have been afforded had

the information been available at the time the rule was proposed.” Procedural rights include the opportunity to review the agency’s proposal and und erlying data and analysis, submit comment on the proposal, an agency decision based on information s ubmitted during the comment period. Implicit in these rights is an administrative process whose out come is not pre-judged. CAA §307. Once the rule is promulgated and effective, the rule affects the rights and obligations of sources to which it appli es. Sources must comply with the rule “[a]fter the effe ctive date of any emissions standard. . . promulgated under this section. . .” CAA §112(i)(3 ).

Therefore, procedural rights ensure that affected p arties have the opportunity to participate in the rulemaking process prior to taking on the compliance obligations of the final rule, which permanently alter their legal obligations and liabilities. Her e, EPA admittedly failed to meet its CAA obligation s, finalized the rules, announced reconsideration, but thus far has failed to provide any remedy for the sources subject to the compliance obligations and l iabilities imposed by the rule. If the highly unus ual circumstances of these rulemakings do not meet the CAA deferential standard and the APA standard of “as justice so requires,” what circumstances wou ld?

EPA’s failure to protect the procedural rights of s ources relate to foundational elements of the rule. For example, for small power production and cogener ation qualifying facilities that burn homogenous waste that are now expressly exempt from CISWI §129 standards (pursuant to CAA §129(g)(1)), EPA failed to protect their procedural rights in defini ng “homogenous waste” in the final rule. The resul t is dramatic, because those sources are now not certain whether they remain under the statutory exemption of §129. If indeed the outcome of EPA’s reconsideration proceeding is not pre-judged, and there is a possibility that the definition of homog enous waste will be amended to provide certainty th at sources will remain exempt from §129, then consiste nt with its protection of procedural rights, EPA should ensure that the improperly promulgated rules will not be effective and require those sources to comply with §129 in advance of a truly final decisi on on its applicability to those sources.

Another dramatic outcome that EPA should address fu lly before sources must comply is the possibility that existing major and area source boi lers now subject to §112 standards could become subject to §129 standards immediately upon the effe ctiveness of the NHSM rule. A CISWI unit is defined as a unit that “combusts. . . any solid was te.” 76 Fed. Reg. 15,762. Both the CISWI and NHSM rules take effect on May 20, 2011. In the ord inary course, a boiler operator would make the decision to burn a solid waste with knowledge that the unit would subsequently be classified as a CISWI unit and there would be some planned-for tran sition period into that source category. However, sources are legitimately concerned that un der a plain reading of the rules, major and area source boilers that combust a material being newly classified as "solid waste" as of May 20, 2011

could be considered CISWI units as of that date. F urther, even with EPA's May 16, 2011 stay of the effective date of the CISWI Rule, it remains unclea r whether units making the boiler MACT to CISWI unit transition would immediately be subject to the CISWI standards promulgated in 2000, subsequently implemented by the states or other reg ulatory authorities, and currently in effect prior to

SIP revisions which will include the revised CISWI requirements.6

In addition to these and other foundational element s of the rules such as the dioxin/furan emission limits for major source boilers already identified by EPA, are many that have been and will be identified by affected sources in petitions for rec onsideration. EPA will review these petitions and carefully discern which issues are appropriate for reconsideration. In the meantime, however, the rules continue to apply to new sources and existing sources that have no choice but to plan for compliance with flawed rules while EPA first decide s which issues should be reconsidered and then undertakes that process. Covered sources are not i n a state of suspension while EPA rewrites portions of the rules, but must adapt to new compliance obli gations or risk rule violation.

III. CIBO MEMBERS WILL BE IRREPARABLY HARMED ABSENT A STAY DUE TO

UNCERTAINTY AND THE INTERDEPENDENCY OF THE BOILER M ACT, AREA SOURCE, CISWI AND NHSM RULES.

A. Changed Contained Gas Definition Upends Current Source Category Applicability.

CIBO members will be irreparably harmed pending EPA ’s resolution of the definition of "contained gas." In the final CISWI rule, and without any ind ication of this significant change in agency interpretation during the rulemaking process, EPA r emoved a key definition from existing CISWI regulations that defines how EPA views “solid waste ” with respect to contained gases. In addition, in its Response to Comments (RTC) on the NHSM Rule, EP A suggests that gases in pipelines are solid wastes under RCRA unless specifically exempted. Th is contradicts EPA’s longstanding position that gases in pipelines are not “contained” gases that a re solid waste under RCRA.

This change in interpretation effectively redefines boilers, process heaters, and other combustion devices (e.g., thermal oxidizers, vapor incinerator s, and other devices) that combust process vent streams and other gases as CISWI units (as opposed to Boiler MACT units) if the gas that is combusted does not meet the legitimacy and generato r control criteria. This interpretation was not in the proposed rules and EPA provided no notice of th is change during the rulemaking process. Industries planning to start up new sources would h ave to expend significant, unplanned effort and capital to meet CISWI requirements because of an un precedented interpretation of the definition of

solid waste. Affected industries must have certain ty that this interpretation of the regulation will not change before having to make additional steps to co mply with requirements of a different CAA provision.

On May 13, 2011, EPA released a letter addressing t his issue and apparently indicating that it did not intend to alter its longstanding definition of cont ained gas and the treatment of uncontained gas streams under RCRA. This interpretive letter appar ently signals EPA’s intended resolution of this issue, and CIBO appreciates EPA’s swift response to this concern. However, EPA must still address the issue in a revised final rule, to ensure consis tent regulatory treatment of contained gas and remo ve any possible doubt about EPA’s interpretation. Mor e importantly, this issue could be raised in judici al challenges to the rules, and EPA’s interpretation s hould be made formal final agency action for that

purpose.7

B. Sources May Be Redefined Into Standards That May Change During

Reconsideration.

When effective, the NHSM rule will define the bound aries for many categories of units subject to standards found in the Boiler, Area Source, and CIS WI rules. It is not clear whether or how the underlying standards will change post-reconsiderati on. As pointed out in the Joint Industry Petition to Stay the Boiler and CISWI rules, certain major sour ces will become CISWI units depending on the final definition of solid waste. While many of the se are boilers and indirect-fired process heaters t hat otherwise would be subject to the Boiler rule, othe rs are currently subject to existing MACT standards such as direct-fired process heaters subject to the PCWP MACT, and have made investments to and are complying with those MACTs. Certain area sourc es could also be forced into the CISWI category

based on the final definition of solid waste. Thes e units should not be forced to make capital expenditure decisions based on a solid waste defini tion that will not be truly final until after reconsideration. It is unreasonable for EPA to put the owners of all industrial, commercial and

institutional boilers nationwide in a situation of compelled decision-making in the face of such extreme uncertainty.

Most companies have limited supplies of capital ava ilable for each budget cycle. Capital investment decisions are made in different ways by different e ntities. Generally, however, industrial decisionmaking comes down to individual facility and produc t economics, and whether continuing operation can support such investment or whether other altern atives (including shutdown) are in order. With each emission standard EPA promulgates, businesses need to decide, in accordance with their resource allocation schedule, whether to install em issions controls, whether to shutdown units for which controls will be too expensive, or whether to replace units determined to be unable to meet the

emissions limits with new combustion units and emis sions control devices. These decisions require significant lead-time (especially if new units must be procured) and will result in higher capital cos ts than installing control technology. Companies will be forced to expend significant investments to design and secure the equipment, permits, and infra structure necessary to meet the final rule. For example, companies switching to natural gas may nee d to secure permits for a pipeline corridor to transmit natural gas to the facility through a newl y constructed pipeline, may need to secure transportation on interstate pipelines. For those interstate natural gas pipelines that lack sufficie nt capacity, the process whereby capacity may be offer ed or constructed is regulated by FERC to protect

residential and other critical consumers and is ind ifferent to the deadlines established by the CAA. This takes significant capital, and also significan t time to secure permits and construct the new pipeline. If the standards or key elements of the final rules are adjusted on reconsideration, these excess costs/expenditures may well have been render ed unnecessary, and may not even result in compliance. At that point, because of the unnecess ary capital expenditures already made, companies will have even fewer resources to apply toward comp liance.

C. EPA’s CISWI And NHSM Rules And “Other Gas 1” Fu el Category.

In the preamble to the NHSM rule, EPA discusses bur ning of manure and digester gas and concluded that “if manure is processed into biofuels (for exa mple, by anaerobic digesters), such biofuels would be considered a legitimate non-waste fuel that has been processed from a non-hazardous secondary material provided ‘‘the biofuel’’ meets the legitim acy criteria”. 76 Fed. Reg. 15,479. EPA’s response to comment 3a-B2-1 states that “Biofuels that are p roduced from non-hazardous secondary materials can have contaminants that are somewhat higher than the traditional fuel that otherwise would be8

burned and still qualify as being comparable, and w ould not be considered a solid waste.” How does one determine when the contaminants are too high th at the biofuel no longer meets the legitimacy

criteria?

The use of biofuels produced from other organic mat erials such as wastewater is not specifically addressed in EPA’s responses in the rule, therefore it is surmised that these type fuels might also ne ed to meet the legitimacy criteria.

In the NHSM rule, EPA clarifies that it is defining the term ‘‘contaminant,’’ as constituents that wil l result in emissions of the air pollutants identifie d in CAA §112(b) and the nine pollutants listed und er CAA §129(a)(4) when such non-hazardous secondary ma terials are burned as a fuel or used as ingredients, including those constituents that coul d generate products of incomplete combustion. 76 Fed. Reg. 15,524. The air pollutant SO2 is one of the nine pollutants listed in CAA §129(a)(4). Therefore, H2S as a contaminant in the non-hazardou s secondary materials being burned presumably would need to be considered in the legitimacy crite ria. This requirement is extremely restrictive sin ce the rule could be interpreted to require that the H 2S level of biogas would need to be compared to the H2S level in the traditional fuel, natural gas. Ma ny owners of existing units fueled by biogas will f ace adding expensive equipment necessary to clean the b iofuels to natural gas levels which is economically infeasible and will force many owners to cease firing the units with the renewable

biofuel.

In the Boiler rule, EPA has determined that to the extent that process gases are comparable to natural gas and refinery gas, combustion of those gases in boilers and process heaters should be subject to th e same standards as combustion of natural gas and ref inery gas (Other Gas 1 rather than Gas 2). (76 Fed. Reg. 15,639). EPA then defined the concentrat ion levels for “Other Gas 1” fuel as 4 parts per million (ppm) H2S and 40 micrograms per cubic meter (ug/m3) of mercury notwithstanding the fact that refinery gas is known to contain concentration s of H2S up to 160 ppm. 8

Literature indicates that the typical range of anae robic digester gas is 200 to 3000 ppm of H2S. An EPA Best Available Control Technology (BACT) determ ination identified that digester gas meeting a concentration of 200 ppm is BACT. The EPA Boiler M ACT database indicates the average biogas sulfur level to be 2100 ppm. Therefore a very larg e number of fuels from anaerobic digesters will not meet the legitimacy criteria in the NHSM rule or Ot her Gas1 category under the Boiler rule.

The result of the NHSM rule and the Other Gas1 cate gory under the Boiler rule is to discourage the development of biogas technology and other clean ca rbon-neutral fuels as viable renewable fuels which is counter to the Agency’s policy to encourag e the use of renewable fuels.

The CO limit established for the Gas 2 (other) subc ategory whether new (3 ppmvd) or existing (9 ppmvd) is much too low, as are the CO limits under CISWI (36 ppmvd @ 7% O2, or 36 ppmvd @ 3% O2 for liquid/gas ERUs). A facility had an indi rect-fired process heater combusting biogas and was tested under the EPA’s §114 Request for additio nal information where the CO was tested at about 90 ppm. It will be uneconomical to control the CO emissions to the above CO emission limits. The facility will have to either flare the biogas or di scontinue the use of that renewable fuel. The EPA

8 CIBO addresses the H2S limit in its Petition for R econsideration and does not take a position in this Stay Request on the appropriateness of the limit.9

should be encouraging the use of biogas and other r enewable fuels without placing in doubt the regulatory viability of the continued use of these fuels. The net effect of these rules will strongly discourage the use of renewable fuels such as bioga s, landfill gas, and other resources where the clea r policy direction from Congress in RCRA, EPA's own p rograms such as the Landfill Methane Outreach Program, and policy commitment of this Adm inistration is to encourage the use of

renewable fuels.

D. Some CIBO Members Will Be Subject To The 2000 C ISWI Rules If The Solid

Waste Definition Becomes Effective.

Certain CIBO members burn process emissions waste g as and other materials without energy recovery and, although unclear, it appears that upo n the effective date of the NHSM rule they may be subject to regulation under the CISWI 2000 standard requirements prior to state or other delegated authority implementation of the revised CISWI rules . Considering this dilemma, unless EPA stays the effective date of the NHSM rule, without allowing f or time for reconsideration before it takes effect, and for some allowance for the inherent delay in st ate regulatory changes, many sources will be forced to comply with different standards than those to wh ich they are presently subject or to which they wil l eventually be subject. 9 This would be the case even though the standards and definitions could change through the reconsideration process. EPA un dertook coordinated drafting for all four of the

rules referenced in this document. The record does not reflect that EPA anticipated units newly subject to CISWI would be subject to the 2000 CISWI rule.

E. The Uncertainty Surrounding the Rules Could Resu lt in Covered Sources Making Contractual Obligations With Unintended Cons equences.

CIBO members must plan expenditures, contracts, and business relationships in advance. Many CIBO members must make relatively long-term contrac ts for the supply of fuel materials to be burned in their boilers. With the uncertainty surrounding the four rules, some members may unknowingly contract for, depending on the outcome of reconside ration and litigation petitions, what could eventually be considered any of 3 fuel material cla ssifications –(1) non-hazardous secondary materials that are solid wastes, (2) non-hazardous secondary materials that are fuels , or (3) "traditional fuel s." Some members could wind up subject to CISWI rules w hen they thought they were contracting for traditional fuels simply because aspects of the rul es changed during the interim period. The compliance preparation and implementation activitie s, such as engineering costs, testing and equipment capital costs, will vary widely depending on which of those fuel material classifications a company ends up with, since the fuel material class ification largely determines which air emission regulation –a MACT or CISWI- will have to be met. T his is far too much uncertainty with significant potential for stranded and lost cost implications f or companies to reasonably bear. This kind of situation can cause irreparable harm to the contrac ting entities which could be prevented with a coordinated stay of all four rules.

9 For example, the final emissions from combustion-b ased control devices used to meet the PCWP MACT process emissions standards.10

IV. A STAY IS IN THE INTERESTS OF OTHER PARTIES AND THE PUBLIC

Other parties interested in the outcome of these ru lemakings will benefit from a rational process for first completing the reconsideration of these rules and then making the rules effective. As EPA has already noticed that it will reconsider certain pro visions of the rules and potentially others that ar e the subject of petitions, a stay will ensure that compl iance timeframes across the sources covered by the

rules are coordinated in time and can be monitored in an orderly fashion, including early rule requirements and the 3- or 4-year emissions standar d compliance requirement, and single facility compliance deadlines for major sources and co-locat ed area sources. An orderly, comprehensive reconsideration process should also permit EPA to f ocus on completing the rulemaking process before focusing resources on compliance-related issues, wh ich will inevitably arise across every affected sector, and will require EPA to respond to sector- and source-specific questions, develop interpretive guidance, and interpret aspects of its final rules that do not arise until the practical implementatio n of new emission limits and regulatory requirements. A n orderly allocation of EPA resources will increase the ability of interested parties to stay informed about interpretive developments and increa se EPA accountability in how the final rules are imple mented.

The public will also be served by a stay. The publ ic has an interest in adherence by agencies to CAA, APA or other applicable laws governing their admini strative processes, especially regarding the public’s procedural right to participate in rulemak ing and other agency decision-making. Where an agency, as EPA did here, announces at the same time as a final rule, that the agency failed to protect basic right of the public to participate, on very f undamental aspects of the rulemaking, the public ha s an interest in an appropriate remedy and avoidance of deprivation of their rights in the future. Unde r these highly unusual circumstances, an appropriate remedy is to stay the rule until EPA conducts a reconsideration process that includes full particip ation by the public. Given its commitment to environmental protection, EPA unquestionably will b e committed to conducting a procedurally sound, efficient reconsideration process. The increased e nvironmental protections from the revised rule will be delayed only a short time over the longer term a s sources come into compliance over the course of 3-4 years. Some sources will undoubtedly comply in advance of that timeframe, and some will shut down, as EPA has predicted, both of which would yie ld earlier emissions reductions.

It is also in the public’s interest that facilities coming into compliance with the rule wisely alloca te resources, and not be forced to divert scarce resou rces to compliance planning, procurement contracting and other commitments, until they have certainty regarding their compliance obligations. These rules are national in scope of coverage as we ll as in economic impact. EPA estimates there to be 13,000 affected sources, and that sources will s pend $5.1 billion in capital and $1.8 billion in annual costs to comply with the Boiler MACT rule al one. 10 EPA estimates there are almost 183,000 existing affected Area Source boilers that will be required to spend $435 million in annualized costs to comply with the Area Source Rule. 11 EPA estimates there are 100 existing CISWI source s that would be required to spend $706 million in capital and $2 80 million per year in annual costs to comply with

10 CIBO has carefully reviewed EPA’s cost analysis an d inventory data of sources and controls required for compliance, and estimates the capital costs of the Boiler rule to be at least $1 0 billion, at least two times greater than what EPA e stimates.

11 76 Fed. Reg. 15,579 (Mar. 21, 2011).11

the CISWI rule. 12 “Sources” are workplaces across the nation’s citi es and towns and rural areas. Capital used for regulatory compliance is capital n ot allocated to product development and growth of publicly traded companies. When EPA writes regulat ions that directly mandate capital outlays of this magnitude, it is certainly in the public’s interest that the regulatory process be transparent with fu ll public participation before facilities nationwide must begin to allocate those resources.

CONCLUSION For all the foregoing reasons, CIBO respectfully re quests EPA stay, in addition to the Boiler MACT and CISWI rules, the Area Source and the NHSM rules

.

Sincerely yours,

/s/ Robert D. Bessette

Robert D. Bessette

President

12 U.S. EPA, Regulatory Impact Analysis: Standards of Perfomance for New Stationary Sources and Emission Guidelines for Existing Source s: Commercial and Industrial Solid Waste Incineration Units, at 2-2, February 2011.