Opinion ID: 4020089
Heading Depth: 2
Heading Rank: 2

Heading: the major boilers, area boilers,

Text: AND CISWI RULES On March 21, 2011, the EPA issued the first iteration of all three rules under review. That same day, however, the EPA announced that it intended to reconsider certain aspects of each rule. Not long after, multiple parties filed the petitions for review that we now address. Earlier, the EPA had concluded its reconsideration and issued the most recent iteration of the three rules. Because of this procedural quirk, each “rule” we address is in fact two separate rules—the EPA’s “final” 2011 version and its “final” 2013 version. The EPA’s analyses remained mostly consistent from 2011 to 2013 and we indicate, where necessary, the instances in which the EPA changed course in a significant way.
The Major Boilers Rule sets HAPs emission caps for all industrial, commercial, and institutional boilers that emit a large volume of HAPs. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,611. The EPA further divided the major boiler categories into subcategories based on the primary fuel 14 combusted by the boilers in the subcategory (e.g., coal, biomass, gas, etc.) and, for some subcategories, based on the method used to “feed” the fuel into the boiler. See 2013 Major Boilers Rule, 78 Fed. Reg. at 7,144. For most of the subcategories, the EPA set a numeric MACT standard for four different HAPs: particulate matter (PM); hydrogen chloride (HCl); mercury (Hg); and carbon monoxide (CO). See id. at 7,142 tbl.3; No. 11-1108 EPA Br. 9. The EPA used some of these HAPs—particularly CO—as a surrogate (or proxy) to set emissions limits for others on the section 7412(b) HAPs list. See 2013 Major Boilers Rule, 78 Fed. Reg. at 7,144-45. For the other major boiler subcategories, the EPA set a workpractice standard (specifically, a tune-up requirement) in lieu of numeric MACT standards. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613.7 The EPA also established a tune-up work-practice standard to control for dioxin/furan emissions across all major boiler subcategories. 2013 Major Boilers Rule, 78 Fed. Reg. at 7,138. In addition to these emission standards, the Major Boilers Rule includes several other provisions relevant to the current petitions for review.
Several factors complicate the process of setting MACT floors. The first is the CAA itself, which mandates that all MACT floors (1) must be achievable, see 42 U.S.C. 7 The four major boiler subcategories for which the EPA established work-practice standards include “[n]ew and existing units that have a designed heat input capacity of less than 10 MMBtu/hr, and new and existing units in the Gas 1 (natural gas/refinery gas) subcategory and in the metal process furnaces subcategory.” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613. 15 § 7412(d)(2); (2) must ensure continuous regulation of the covered sources, see id. § 7602(k); and (3) must be no less stringent than the emissions levels being achieved by the bestcontrolled sources, see id. § 7412(d)(3). The second is that no source emits any HAP at a constant level; rather, HAP emissions fluctuate over time and for many reasons, including, e.g., “operation of control technologies, variation in combustion materials and combustion conditions, variation in operation of the unit itself, and variation associated with the emission measurement techniques.” Memorandum from Stephen D. Page, EPA Director of Air Quality Planning and Standards, EPA’s Response to Remand of the Record for Commercial and Industrial Solid Waste Incineration Units (Page Mem.) (July 14, 2014), at 3 (No. 11-1125 J.A. 1316). Finally, most sources do not measure their HAP emissions at all times and under all conditions.8 Id. at 6. Instead, data are usually gathered when a source conducts a “three-run stack test.” Id. This test provides three “snapshots” of a source’s emissions in a limited set of conditions and, accordingly, it fails to demonstrate accurately a source’s emissions during all times and under all conditions. Id. To compensate for the lack of adequate emissions data, the EPA uses a statistical tool known as the “upper prediction limit” (UPL) to account for the expected variability in emissions levels. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,630. The UPL, in turn, allows the Agency to set a MACT floor that is continuously achievable. Id. We discuss the UPL mechanics at greater length below, see infra § IV.C, but, in short, the EPA: (1) ranks all sources in a given 8 As discussed below, however, the EPA does allow sources to demonstrate MACT compliance by use of “continuous monitors.” See infra § IV.I. 16 category based on their three-run stack-test data; (2) determines the HAP emissions level of the “best controlled similar source” to establish standards for new sources, 42 U.S.C. § 7412(d)(3), and determines the average HAP emissions levels of the best performing 12 per cent of sources to establish standards for existing sources, id. § 7412(d)(3)(A); and then (3) applies the UPL methodology to provide the cushion necessary to account for the expected peaks and valleys in HAP emissions not reflected in the threerun stack-test “snapshots.” See Page Mem. 4, 6.
In identifying the best performing sources in a given category, often the EPA could not identify a single source that controlled all HAPs better than all other sources. Instead, the EPA found that one source effectively controlled emissions from one HAP but was nonetheless one of the worst- performing sources at controlling emissions from a different HAP. For this reason, the EPA adopted a “pollutant-bypollutant” approach in setting MACT floors for major boiler subcategories. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,622-23. That is, instead of identifying the one source that, on balance, best controlled all HAPs in the aggregate, the EPA used one source to set the MACT floor for, e.g., PM, and used a different source to set the MACT floor for, e.g., HCl. For at least two subcategories of major boilers—new heavy oil-fired units and existing stoker coal-fired units—the EPA’s pollutant-by-pollutant approach resulted in MACT floors that no source had achieved in toto.
The EPA found it difficult to account for HAP emissions when sources start up, shut down, and malfunction. All three 17 occurrences alter HAP emissions and, historically, the EPA exempted sources from normal numeric MACT-standard compliance when these events occurred. See, e.g., Standards of Performance for New Stationary Sources, 42 Fed. Reg. 57,125 (Nov. 1, 1977). Nevertheless, concluding that the Act “require[s] that there must be continuous section [7412]- compliant standards” and observing that the exemption meant that “no section [7412] standard governs these events,” in 2008 we vacated the exemption for startups, shutdowns, and malfunctions when the issue arose in a case challenging a different rule. Sierra Club v. EPA (Sierra Club III), 551 F.3d 1019, 1027-28 (D.C. Cir. 2008) (emphasis added). In response to the Sierra Club III vacatur, the EPA established a work-practice standard in lieu of a numeric MACT standard during startup and shutdown periods (but not during malfunctions) when it promulgated the Major Boilers Rule. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613.9 It did so after determining that the “physical limitations and the short duration of startup and shutdown periods” made it technologically infeasible to conduct the requisite testing for numeric emissions limits. Id. A work-practice standard sufficed, in the EPA’s view, because “[p]eriods of startup, normal operations, and shutdown are all predictable and routine aspects of a source’s operations.” Id. 9 Specifically, the startup and shutdown work-practice standard requires a source to follow “the manufacturer’s recommended procedures for minimizing periods of startup and shutdown.” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613. “If manufacturer’s recommended procedures are not available,” the Major Boilers Rule provided that “sources must follow recommended procedures for a unit of similar design for which manufacturer’s recommended procedures are available.” Id. at 15,642. 18 But because a malfunction is “sudden, infrequent, and not reasonably preventable,” id. (quoting 40 C.F.R. § 63.2), the EPA declined to treat a malfunction as a “distinct operating mode,” id. As a result, the EPA did not account for malfunctions when it set the MACT floors and it required sources to comply with all MACT floors even during periods of malfunction. Id. At the same time and recognizing that even the best equipment can fail and that such failure can spike emissions, the EPA added to the Major Boilers Rule “an affirmative defense to civil penalties for exceedances of numerical emission limits that are caused by malfunctions.” Id. In reviewing a challenge to a different EPA rule, however, we vacated a materially identical affirmative-defense provision and held that the EPA has no power under the CAA to create a defense to civil liability. See Natural Res. Def. Council v. EPA (NRDC III), 749 F.3d 1055, 1062-64 (D.C. Cir. 2014). Here, the EPA defends its decision not to address malfunctions by asserting that it will use its enforcement discretion regarding malfunctions on a case-by-case basis.
The EPA also promulgated a “beyond-the-floor” requirement for all facilities with existing major boilers. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613. Specifically, the Major Boilers Rule mandates a “a one-time energy assessment . . . on the affected boilers and facility to identify any cost-effective energy conservation measures,” id., which assessment includes, inter alia, a review of fuel usage, energy management practices, and conservation measures, see 2013 Major Boilers Rule, 78 Fed. Reg. at 7,198-99. In some respects, the energy assessment is limited: it (1) need occur only one time, see 40 C.F.R pt. 63, subpt. DDDDD tbl.3; (2) is “based on energy use by discrete 19 segments of a facility and not by a total aggregation of all individual energy using elements of a facility,” 2013 Major Boilers Rule, 78 Fed. Reg. at 7,146; and (3) does not require an owner or operator to implement any of the energy-saving findings the assessment makes. In one respect, however, it is expansive—it requires owners and operators to assess not only the boilers themselves but also other components “located on the site of the affected boiler that use energy provided by the boiler,” including “compressed air systems” as well as “facility heating, ventilation, and air conditioning systems.” 40 C.F.R. § 63.11237.
Although the EPA set numeric MACT standards to control HCl emissions, see 2013 Major Boilers Rule, 78 Fed. Reg. at 7,193-98 tbls.1 & 2, in an earlier iteration of the Major Boilers Rule, the EPA did not set MACT standards for HCl. See National Emission Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (2004 Boilers Rule), 69 Fed. Reg. 55,218, 55,227 (Sept. 13, 2004). Instead, the Agency opted for a less stringent health-based emissions limit under section 7412(d)(4). See id. The EPA changed course after concluding that HCl emissions posed health concerns the Agency had not previously considered—in particular, the EPA feared the “potential cumulative public health and environmental effects” of HCl emissions, 2011 Major Boilers Rule, 76 Fed. Reg. at 15,643-44 (emphasis added)—and after recognizing that it did not have the requisite data to weigh adequately the newly identified health risks. 20
In the Area Boilers Rule, the EPA set emissions limits for the same three boiler categories it controlled in the Major Boilers Rule, see supra § I.B.1: industrial, commercial, and institutional boilers. See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,488. It further split the categories into seven subcategories, see id., and set emissions limits for three of them, see id. at 7,517-18 tbls.1 & 2.10 These include: (1) coal-fired boilers (i.e., “any boiler that burns any solid fossil fuel and no more than 15 percent biomass,” 40 C.F.R. § 63.11237); (2) oil-fired boilers (i.e., “any boiler that burns any liquid fuel and is not in either the biomass or coal subcategories,” id.); and (3) biomass-fired boilers (i.e., “any boiler that burns any” “biomass-based solid fuel that is not a solid waste” and “is not in the coal subcategory,” id.). See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,517-18 tbls.1 & 2. For these subcategories, the EPA set emissions limits for three HAPs: Hg, PM, and CO, with PM functioning as a surrogate for non-Hg urban metals and CO functioning as a surrogate for polycyclic organic matter (POM). See 2011 Area Boilers Rule, 76 Fed. Reg. at 15,586. Because Hg and POM are both listed in section 7412(c)(6), the EPA had to set MACT standards for Hg and for CO (as surrogate for POM) for any area source category that, in the EPA’s view, required 10 As noted above, see supra § I.A.1.a, the EPA has some discretion in promulgating emissions limits for area HAP sources. Exercising its discretion, the EPA had previously determined that natural gas-fired area boilers did not emit HAPs at a level necessitating regulation. See National Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial, and Institutional Boilers (2010 Proposed Area Boilers Rule), 75 Fed. Reg. 31,896, 31,900 (June 4, 2010). 21 MACT control to assure a 90 per cent reduction in the aggregate emissions of these two HAPs. See 42 U.S.C. § 7412(c)(6). The Agency complied, setting numeric MACT standards for Hg and CO emissions from large coal-fired boilers and a MACT work-practice standard (specifically, a tune-up requirement) for emissions from small coal-fired boilers. See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,488, 7,517-18.11 It did not, however, set MACT standards for Hg and POM emissions from biomass or oil-fired boilers, finding it unnecessary to assure a 90 per cent reduction in aggregate emissions of those two HAPs. See 2011 Area Boilers Rule, 76 Fed. Reg. at 15,566. Thus, with the exception of Hg and CO emissions from coal-fired boilers, the EPA had discretion to promulgate GACT standards for all other HAPs in all other source subcategories. See 42 U.S.C. § 7412(d)(5). Exercising this discretion resulted in the following standards: 11 As used in the Area Boilers Rule, the difference between “large” and “small” units depends on the heat-input capacity of the unit. See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,488. It is not the same as the difference between “major” and “area” sources, which is based on the volume of HAPs a source emits. See 42 U.S.C. § 7412(a). 22 Boiler Hg Hg Size Age Subcategory Limit Type New Numeric MACT Large Existing Numeric MACT New Tune- MACT Coal Up Small Existing Tune- MACT Up New --- --- Large Existing --- --- Biomass New --- --- Small Existing --- --- New --- --- Large Existing --- --- Oil New --- --- Small Existing --- --- Boiler CO CO Size Age Subcategory Limit Type New Numeric MACT Large Existing Numeric MACT Coal New Tune-up MACT Small Existing Tune-up MACT New Tune-up GACT Large Existing Tune-up GACT Biomass New Tune-up GACT Small Existing Tune-up GACT New Tune-up GACT Large Existing Tune-up GACT Oil New Tune-up GACT Small Existing Tune-up GACT 23 Boiler PM PM Size Age Subcategory Limit Type New Numeric GACT Large Existing Tune-up GACT Coal New Tune-up GACT Small Existing Tune-up GACT New Numeric GACT Large Existing Tune-up GACT Biomass New Tune-up GACT Small Existing Tune-up GACT New Numeric GACT Large Existing Tune-up GACT Oil New Tune-up GACT Small Existing Tune-up GACT 2013 Area Boilers Rule, 78 Fed. Reg. at 7,488-89, 7,517-19. The Area Boilers Rule shares many of the same features as the Major Boilers Rule; for example, the Area Boilers Rule treats startups, shutdowns, and malfunctions in the same fashion as the Major Boilers Rule, see supra § I.B.1.c—i.e., the Area Boilers Rule creates work-practice (or managementpractice) standards for startup and shutdown periods but does not account for malfunctions at all, save for the Agency’s commitment to consider malfunctions on a case-by-case basis. See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,496; 2011 Area Boilers Rule, 76 Fed. Reg. at 15,560-61. Additionally, the Area Boilers Rule imposes the same one-time energyassessment requirement for existing large area boilers that the Major Boilers Rule imposes for existing major boilers. See supra § I.B.1.d; see also 2013 Area Boilers Rule, 78 Fed. Reg. at 7,500; 2011 Area Boilers Rule, 76 Fed. Reg. at 24 15,560, 15,567-68. There are, however, two unique features of the Area Boilers Rule that warrant brief discussion.
After the EPA promulgated the 2011 Area Boilers Rule but before it promulgated the 2013 version, it proposed an amendment to 40 C.F.R. § 63.11195 that added temporary boilers to the list of those boilers not regulated by section 7412. See National Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial, and Institutional Boilers (2011 Proposed Area Boilers Rule on Reconsideration), 76 Fed. Reg. 80,532, 80,535 (Dec. 23, 2011). The EPA created the exclusion because, in its view, temporary boilers are “insignificant sources[] and were not included in the EPA’s analysis of the source category.” Id. The Agency eventually defined “temporary boiler” as “any gaseous or liquid fuel boiler that is designed to, and is capable of, being carried or moved from one location to another by means of, for example, wheels, skids, carrying handles, dollies, trailers, or platforms.” See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,491 (quoting 40