Mark Squillace, Professor of Law
University of Toledo College of Law
3336 Brookside Road
Toledo, OH 43606
e-mail: mark.squillace@utoledo.edu
Environmental Protection Agency
Docket A-2002-04
Comments on Proposed Rules
The following are my personal comments and do not necessarily reflect the views of my employer, the University of Toledo College of Law. My affiliation with the University of Toledo is provided for identification purposes only.
I appreciate the opportunity to comment on EPA's proposed rules published at 67 Fed. Reg. 80290 (2002). These proposed rules would amend the current rules governing routine maintenance, repair, and replacement (RMRP), and the extent to which such activities should be excepted from the New Source Review (NSR) program. In general, I oppose the proposed rules because they fail to promote clean air, and fail to adhere to the spirit, if not the letter, of the Clean Air Act. My reasons follow.
1. The proposed rules are at fundamental odds with congressional intent under the Clean Air Act. One of the more problematic aspects of the Clean Air Act as passed by Congress in 1970, and as amended in 1977, was its failure to impose any specific emission limits on existing sources of air pollution. While states could mandate pollution control in their state implementation plans, in many cases, existing facilities faced few, if any, controls. As a result, emission limits under the NSR and NSPS programs were generally imposed only on new facilities, or those facilities that were modified in such a way as to cause an increase in air emissions. While this dichotomy between new and existing sources was arguably unfair, Congress assumed that over a relatively short period of time, most facilities would either be retired or modified in such a way that most if not all would fall under one or both of the point source emission programs.
To help promote this result, Congress defined "modification" at Section 111(a)(4) to encompass "any ...change ...which increases the amount of air pollution emitted...." The statute provides no exception for "routine maintenance, repair, or replacement." Moreover, this is not a situation where the language of the statute is unclear, such that the courts should defer to EPA=s construction of the law, as it did in the Chevron case. The statute flatly prohibits any change which increases emissions.
Even today, Congress' assumption that changes at existing facilities would bring most or all major facilities under the umbrella of the new source program seems eminently reasonable. Yet EPA's proposed rules continue a long-standing and failed policy of promoting life-extension projects for facilities that should have been retired or brought into the mainstream of air pollution regulation years ago. Providing existing pollution sources with increasingly generous ways to avoid new source status negatively impacts the entire air pollution control system. It grants existing and more polluting sources a powerful incentive to extend the life of their existing facilities. And, because they are not required to install and maintain modern air pollution control equipment, it gives these sources a significant competitive advantage over facilities that are subject to new source standards. As a result, older, more polluting facilities remain on-line long beyond what would otherwise have been their useful life, while newer sources, which must comply with strict pollution control requirements, remain at an economic disadvantage.
The Clean Air Act provides that when existing sources change their facilities in ways that increase their emissions they should be treated as new sources. That should be the end of the matter. The Clean Air Act was passed to protect public health and Congress was well aware that in accomplishing this goal some existing sources might be forced to shut down. (1) EPA should enforce the plain language of the statute. If changes at a facility will cause an increase in emissions, then the facility should chose either to meet the standards for new sources or shut down.
2. The proposed rule is wholly unnecessary to address routine changes and maintenance at existing facilities. The fundamental premise of the proposed rules (and indeed, the existing rules), is that some accommodation is needed to address the routine maintenance, repair, and replacement changes that frequently occur at air pollution sources. But if the changes are truly routine, then someone should explain to the public why these changes are causing an increase in air pollution. If the changes are merely replacing existing parts or maintaining pre-existing operational efficiency, one would not expect air pollution to increase. Moreover, at least two other aspects of EPA's current rules freely accommodate minor increases in pollution that might result from those maintenance and repair matters that are truly "routine"
The first such rule is the one that allows changes at a source that increase air emissions without being treated as a "modification" subject to the NSR program so long as the increase is not "significant" as defined under the EPA rules. (2) The threshold for significance under these rules is very generous to existing facilities, and arguably at odds with the Court of Appeals decision in Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1979). (3) Thus, truly minor increase in pollution that are caused by routine maintenance and repair are accommodated by these generous allowances for "de minimis" increases.
The second rule that accommodates increases that might result from routine maintenance and repair is that adopted under the final rules promulgated on the same day that these rules were proposed. Under these rules, an existing source may determine its baseline emissions, from which increases are calculated, using any two consecutive years during the preceding 10 year period. 67 Fed. Reg. 80189. Thus, the routine maintenance, repair, or replacement of worn or defective components that might improve operational efficiency, and thereby increase emissions, would not be treated as a modification if these changes simply restored the operational efficiency of the system as it existed for any two-year period over the preceding ten years.
In those cases where these generous allowances are inadequate to allow a facility that has made changes to avoid being treated as a new source, that facility may still accommodate additional pollution increases, and avoid NSR, by using a facility-wide bubble and netting out of such review. The routine maintenance, repair, and replacement exception is wholly unnecessary to accommodate truly routine changes at a facility. Moreover, it is fundamentally at odds with the language of the Clean Air Act, and congressional intent under that Act. Accordingly, EPA should simply scrap its routine maintenance, repair, and replacement rules and insist that facilities comply with new source requirements whenever they make changes that increase their emissions.
3. The proposed rules introduce an unnecessary and overly-complex accounting requirement into the rules, that will divert attention from the underlying legal issue. Under the proposed rules each air pollution source is allowed "a percentage of the replacement value of the process unit as a threshold for applying the equipment replacement provision." 67 Fed. Reg. 80296 (2002). Replacements that are truly "replacements" and do not exceed this cost threshold would automatically be treated as RMRR. Id.
As noted above, if all the facility is doing is restoring the original equipment to working order, then there is no reason that air emissions should increase sufficiently to trigger the modification requirements of the law. If, on the contrary, the replacements are causing significant increases in emissions then there is no lawful basis for allowing a facility to avoid treatment as a new source. Under EPA's proposal, however, a facility can "replace" equipment in an manner that increases emissions by virtually any amount, so long as it can show that its expenditures on the replacement equipment do not exceed a certain "threshold" amount. Thus, instead of focusing on whether the change is truly routine - the original intent behind these rules - the proposed rules would shift the focus to what the changes cost and whether they exceed a certain threshold as determined under an elaborate accounting system that would be established under the new rules. Offering comments on a proposed system that is so at odds with the statute only lends credence to them. Suffice it to say that the last thing that the Clean Air Act needs is another complex program that will invite conflict and litigation, and provide myriad opportunities for creative accounting, and perhaps even fraud. EPA needs to revisit this entire issue.
4. The proposed rules are inconsistent with the existing rules that define "reconstruction."
For many years EPA had defined "reconstruction" for purposes of the NSPS program to mean replacement of a substantial portion of an existing facility's components. 40 C.F.R. ' 60.15 (2000). A reconstruction is defined as .... A reconstruction is treated as a new source irrespective of the impact that any changes to the facility may have on emissions. Id. Yet, EPA's proposed rules appear to allow changes that could eventually result in reconstruction of an entire facility without treating that facility as a new source. Thus, the proposed rules appear to be inconsistent with the existing rules that define reconstruction. Unlike the proposed rules, the existing rules plainly recognize that at some point, the changes to a facility become so substantial that it is unreasonable to allow the facility to avoid new source standards.
EPA=s reconstruction rules seem to have fallen into desuetude in recent years. EPA should rediscover these rules and avoid the promulgation of new rules that would allow a facilty to effectively avoid the reconstruction rules.
5. EPA should convene an advisory committee, perhaps in conjunction with the National Academy of Sciences, to rethink the Clean Air Act.
The problems with the current rules are emblematic of the problems with the Clean Air Act itself. As originally adopted in 1970 the Act was a relatively coherent, if somewhat flawed, piece of legislation. In the more than 30 years that has followed, the EPA and Congress have stuck with the structure of the original law, even while they were fundamentally changing it. The result is a patchwork of increasingly complex and detailed requirements that are sometimes innovative and effective but that too often lack coherence. Moreover, the historic practice of patching rather than rethinking the law has resulted in a set of laws and regulations that are far more complex and cumbersome than is necessary. Why, for example does the law define "major stationary source" and "major emitting facility" to mean the same thing in one part of the law (Section 302(j), but then redefine the same terms to mean something different from the original definition as well as something different from each other (Sections 169(1), 169A(g)(7), 182(c), (d), and (e). How can the public possibly be expected to participate meaningfully in a program that has grown so confusing and unwieldy?
Another example of unnecessary complexity comes from the NSR program itself. In the 1977 Amendments, Congress established separate permitting and SIP standards for PSD and nonattainment areas. Since nonattainment areas are pollutant specific, and since every area of the country is a PSD area for some criteria pollutants, the PSD provisions essentially set a floor for all areas that must be exceeded only for those pollutants for which an area is out of attainment. While Congress might not have foreseen how the law would evolve, the benefit of more than 25 years of experience suggests that it would now make more sense to develop a single NSR program that addresses both PSD and nonattainment issues. The permitting requirements might be moved to Title V; SIP requirements could be moved to Section 110.
The important public policies that are promoted by the Clean Air Act merit broad participation by the interested public, but the public's ability to participate meaningfully is hampered by a law that has grown out of control. To be sure, the issues addressed in the Clean Air Act are complex and cannot all be addressed with simple requirements. But the law does not need to be as complicated or confusing as it is.
From its inception, the Clean Air Act has served as a testing ground for new ideas and programs. The law should be called on again to test the possibility of a simpler and more coherent regulatory scheme. EPA should convene an advisory committee, perhaps with the assistance of the National Academy of Sciences, and assign to it the task of drafting a content-neutral revision of the law and regulations that avoids unnecessary complexity. The task will be daunting but the alternative road of ever-increasing complexity and confusion, has to end.
I appreciate the opportunity to submit these comments and I hope that the EPA will find them helpful as it considers further action on its proposal.
Respectfully submitted,
Mark Squillace
1. 1 S. Rep. No. 91-1196, 91st Cong., 2d Sess. at 2-3 (1970). (Commenting on the problem posed by existing sources for ambient air quality, the Senate Committee stated that "existing" sources of pollutants either should meet the standard of the law or be closed down.") See also, Union Electric v. EPA, 427 U.S. 246 (1976).
2. 2 40 C.F.R. 51.166(b)(23). Under these rules, sources can make changes to a facility that increase emission of NOx, SO2, or VOCs by 40 tons per year, PM10 by 15 tons per year, PM by 25 tons per year, and CO by 100 tons per year, without being treated as a new source. 3 In Alabama Power, the court struck down the EPA=s definition of Amajor modification@. That definition would have allowed changes at an air pollution source without making it subject to the NSR program so long as any increase in emissions did not exceed the 100 ton per year or 250 ton per year threshold for major emitting facilities established under Section 169(1) of the Clean Air Act. The court held that "no reasonable basis can be found in the statute" to support this rule. "[T]he term "modification" is nowhere limited to physical changes exceeding a certain magnitude." 636 F2d. at ???. The court went on to indicate that the EPA had discretion to exempt from PSD review emission increases on the grounds of de minimis or administrative necessity. It is not at all clear, however, that the increase allowed in the current rules, which are described in note 1 above, meet this standard.