ENVIRONOTES

U.S. EPA Establishes Air Emission Limitations for Existing Combustion Ignition Engines
U.S. EPA Determines Lake and Porter Counties Meet Ozone Standard
Purchaser of Emission Unites Insulated from Liability for Alleged NSR Violations
Private Passenger Motor Vehicles Involved in Automobiles Accidents Are Not "Facilities" Under CERCLA
IDEM Release Interim Recreational Closure Levels for Direct Contact to Soil Exposure Scenario
U.S. EPA Proposes End to PM10 Surrogacy Policy

U.S. EPA Establishes Air Emission Limitations for Existing Combustion Ignition Engines
By Andy Bowman, Chair, Environmental Law Department, Bingham McHale LLP

On February 17, 2010, the U.S. EPA issued a final rule regulating hazardous air pollutant (“HAP”) emissions (e.g., formaldehyde, acetaldehyde, acrolein, and methanol) from existing diesel-powered stationary reciprocating internal combustion engines (“RICE”). 75 Federal Register 9647 (March 3, 2010). RICE are also known as combustion ignition (“CI”) engines. Typically, RICE are used to generate electricity for compressors and pumps or used as emergency generators to power pumps for flood and fire control.

This is the third set of regulations governing HAP emissions from RICE. In 2004 U.S. EPA established National Emission Standards for Hazardous Air Pollutants (“NESHAP”) for existing, new and reconstructed stationary RICE that have a site rating greater than 500 HP located at major sources of HAP emissions (sources that emit or have potential to emit 10 tons per year (“tpy”) or more of any single HAP or 25 tpy or more of any combination of HAP emissions). In 2008 U.S. EPA promulgated NESHAP for new stationary RICE that are either located at area sources of HAP emissions (an area source is a source that is not a major source) or that have a site rating of less than or equal to 500 HP and are located at a major source of HAP emissions that were constructed or reconstructed after June 12, 2006. These regulations are found at 40 CFR Part 63, Subpart ZZZZ.

U.S. EPA’s latest rule now adds the following two categories of RICE to the coverage of Subpart ZZZZ:

• Existing stationary RICE less than or equal to 500 HP located at major sources that were constructed or reconstructed before June 12, 2006; and
• All existing stationary RICE located at area sources that were constructed or reconstructed before June 12, 2006.

The new rule also finalizes emission standards for existing non-emergency RICE greater than 500 HP located at major sources that were constructed or reconstructed before December 19, 2002. Finally, the new rule revises Subpart ZZZZ to address emissions during periods of startup, shutdown and malfunction for all categories of RICE.

RICE subject to the NESHAP must comply with the applicable emission limitations and operating limitations by May 3, 2013. In addition, the rule establishes notification, monitoring, maintenance, reporting, testing and record keeping obligations. The rule is available at: www.epa.gov/ttn/oarpg/new.html. The new rule becomes effective on May 3, 2010. U.S. EPA plans to promulgate standards for existing spark ignition engines in a separate rulemaking by August 10, 2011.

U.S. EPA Determines Lake and Porter Counties Meet Ozone Standard
By Jennifer K. Thompson, Partner, Environmental Law Department, Bingham McHale LLP

On March 12, 2010 U.S. EPA published its determination in the 75 Federal Register 12087 (March 12, 2010) that the Indiana portion (Lake and Porter Counties) of the Chicago-Gary-Lake County, Illinois-Indiana area has attained the 1997 eight-hour ozone National Ambient Air Quality Standard (“NAAQS”). Additionally, U.S. EPA published its proposed rule to approve Indiana’s request to redesignate Lake and Porter Counties to attainment with the NAAQS. The area was designated as moderate nonattainment for the 1997 ozone NAAQS in April 2004, and was given until June 15, 2020 to attain the NAAQS.

An area is considered to be attainment with the 1997 eight-hour ozone NAAQS if there are no violations of the NAAQS in the most recent consecutive three years of quality-assured air quality monitoring data at all ozone monitoring sites in the area and at any nearby ozone monitor outside of the area with ozone concentrations impacted by Volatile Organic Compound (“VOC”) and Nitrogen Oxides (“NOx”) emissions from the area. The Indiana Department of Environmental Management (“IDEM”) showed that the 2006-2008 ozone design values for all monitoring sites for the area were below the 0.084 ppm ozone attainment level, and U.S. EPA has determined that Lake and Porter Counties and the State of Indiana have met all the State Implementation Plan (“SIP”) requirements for purposes of redesignation under the Clean Air Act (“CAA”).

In connection with the finding, U.S. EPA has: (1) approved Indiana’s request to exempt sources of NOx in Lake and Porter Counties from CAA Reasonably Available Control Technology (“RACT”) requirements; (2) proposed to approve revisions to Indiana’s SIP designed to maintain the eight-hour ozone standard in Lake and Porter Counties and in the Chicago-Gary-Lake County, Illinois-Indiana ozone nonattainment area through 2020; (3) proposed to approve VOC and NOx emission inventories for Lake and Porter Counties as a revision to Indiana’s SIP; and (4) proposed to approve Indiana’s 2010 and 2020 Motor Vehicle Emission Budgets for Lake and Porter Counties.

U.S. EPA’s determination becomes effective on April 12, 2010 and comments on the proposed redesignation and SIP revisions are due on or before April 12, 2010. For more information go to: www.access.gpo.gov/su_docs/fedreg/a100312c.html.

Purchaser of Emission Units Insulated from Liability for Alleged NSR Violations
By Larry Kane, Partner, Environmental Law Department, Bingham McHale LLP

In a novel development, a federal district court has held that the purchaser of six coal-fired power plants bears no liability for alleged PSD violations associated with the power plants that would have occurred prior to the purchaser’s acquisition. See United States of America v. Midwest Generation, LLC, 2010 U.S. Dist. Lexis 22729, (N.D.Ill., March 9, 2010). The court granted a motion to dismiss the claims of plaintiff environmental organizations that the purchaser was legally responsible for the previous owner’s alleged PSD violations for unpermitted major modifications to the power plants. In doing so, the court rejected the plaintiffs’ contentions that the operation of the power plants by the new owner was continuing violations of the Clean Air Act’s PSD requirements. The court held, consistent with the majority of courts to address the issue, that the PSD provisions (42 U.S.C. § 7475) apply only to the failure to permit the construction of a major source and do not apply to subsequent operation. Since the purchaser had not constructed the alleged source modifications, it was not liable under the PSD provisions. Consequently, there is no claim for civil penalties or injunctive relief in regard to alleged violations of § 7475.

Private Passenger Motor Vehicles Involved in Automobile Accidents Are Not “Facilities” Under CERCLA
By Katherine L. Shelby, Partner, Environmental Law Department, Bingham McHale LLP

Emergency Services Billing Corporation (“ESBC”) offers services as a billing agent for paid and volunteer fire departments to seek the expenses incurred by them when dispatched to vehicular accidents. The Westville Volunteer Fire Department responded to several vehicular accidents which allegedly presented the potential for a fire and the release, or potential release, of hazardous materials into the air. When the drivers of the vehicles, and their insurers, refused to pay some or all of the invoices for Westville Volunteer Fire Department’s services of traffic control, response to the accidents, and assessing “the potential release of hazardous materials into the air,” ESBC filed a lawsuit against the owners of the vehicles and their insurers under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”). Emergency Services Billing Corporation, Inc. v. Allstate Insurance Co., et al., No. 4:09-cv-45-RL-APR (N.D. Ind. March 19, 2010).

In order to establish liability under CERCLA, a private plaintiff must show that the site is a “facility” and that the defendant is a responsible person for the release or threatened release of a hazardous substance that caused the plaintiff to incur responses costs. The Defendants moved to dismiss the Plaintiff’s Complaint on the basis that the vehicles did not constitute “facilities” under CERCLA.

Although “facility” is broadly defined under CERCLA, which definition expressly includes the term “motor vehicle,” CERCLA also contains an exclusion to the definition of “facility” for “any consumer product in consumer use.” 42 U.S.C. § 9601(9). However, the statute does not define “consumer product” and Congress did not discuss the consumer product exception to any significant degree when adopting the language. Therefore, the District Court was required to interpret the term “consumer product.”

ESBC argued that negligently operated motor vehicles involved in accidents are not “consumer products in consumer use.” The District Court disagreed. Referring to the definition of “consumer product” found in Black’s Law Dictionary and the Magnuson-Moss Warranty Act of “tangible personal property which is distributed in commerce and which is normally used for personal, family or household purposes,” the District Court found that a personally owned vehicle is a consumer product.

ESBC cited to the Consumer Product Safety Act’s definition of “consumer product” as any article produced or distributed for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation, or otherwise. The District Court found that the personal motor vehicles at issue in the lawsuit would still be deemed consumer products under that definition. Because the definition of consumer products under the Consumer Product Safety Act excluded from the definition motor vehicles, as defined by the National Traffic and Motor Vehicle Safety Act, ESBC argued that motor vehicles similarly would not fall within the term of “consumer products” under CERCLA. The District Court dismissed this argument, stating that Congress could have excluded motor vehicles from CERCLA’s consumer product exception if it had wanted to do so. Furthermore, motor vehicles are not included in the Consumer Product Safety Act because safety standards for motor vehicles are enacted under the National Traffic and Motor Vehicle Safety Act.

The District Court further noted that the Environmental Protection Agency, in its discussion of a proposed rule (adopted at 40 C.F.R. §302.3) concerning the consumer products exception to the definition of facility under CERCLA, stated that “the Consumer Product Safety Act defines that term as, generally, any article sold to a consumer for the person’s use, consumption or enjoyment in or around a household, residence, school, in recreation or otherwise” and that “[t]his definition will apply for notification under CERCLA.” 48 Fed.Reg. 23552-01, 23553 (May 25, 1983). Congress has not amended CERCLA since the adoption of this regulation.

The District Court dismissed the Complaint, finding that “’consumer product in consumer use’ refers to its ordinary meaning, which includes the private passenger motor vehicles specifically at issue in this case being used for personal purposes.” The issue not addressed by this decision is whether company-owned automobiles, as opposed to semi-trucks or tanker trucks, used by employees will fall within the definition of a consumer product in consumer use. Certainly corporations can be and are consumers of automobiles. However, the fact that the consumer product is used by a corporation, as opposed to an individual, may be sufficient to distinguish the use and to find that the automobile is a “facility” under CERCLA.

IDEM Releases Interim Recreational Closure Levels for Direct Contact to Soil Exposure Scenario
By E. Ryan Murray, Attorney, Environmental Law Department, Bingham McHale LLP

On February 4, 2010 the IDEM released interim nondefault recreational closure levels (“RCLs”) for the direct contact to soil exposure scenario. The Interim RISC Nondefault Recreational Closure Levels document (“RCL Document”) provides nondefault RCLs for soil direct contact exposure scenarios associated with specified recreational areas and facilities. The RCLs were originally developed in 2007 as interim closure levels pending their incorporation into a revised RISC Technical Guide. Until the RCL Document was published, IDEM had made the RCLs available to responsible parties upon request. Due to an increasing demand for the RCLs, the IDEM decided to release the RCL Document which contains both the RCL summary tables and the associated methodology used by the IDEM to calculate the RCLs.

According to the RCL Document, the RCLs may be applied to recreational areas and facilities with some limited exceptions. Specifically, the RCLs may be applied to soils in the following recreational areas and facilities: parks, trails, walkways, sports complexes and other open recreational areas. According to the RCL Document, the RCLs are not appropriately applied to areas of localized or concentrated uses by young children such as playground equipment and swing sets. In addition to this limitation, the RCL Document indicates that the following points should be noted regarding the RCL summary tables:

1. The RCLs were derived using RISC industrial soil direct contact closure levels as a cap in order to ensure that the levels are protective of employees working in recreational areas;
2. Age-dependent adjustment factors were utilized when calculating the RCLs for mutagenic carcinogens; and
3. Subsurface soil and groundwater contamination remain subject to appropriate residential or industrial closure levels or risk-based remediation objectives.
4. A copy of the February 4, 2010 RCL Document, including the RCL summary tables and source equations, is available at http://www.in.gov/idem/files/risc_interim_nondefault_rec_levels.pdf.

U.S. EPA Proposes End to PM10 Surrogacy Policy
By Matt Gernand, Attorney, Environmental Law Department, Bingham McHale LLP

On February 11, 2010, the U.S. EPA proposed to end U.S. EPA’s longstanding policy that allows sources to demonstrate compliance with the prevention of significant deterioration (“PSD”) requirements for PM2.5 by using PM10 as a surrogate.

The policy began shortly after the U.S. EPA established a national ambient air quality standard (“NAAQS”) for PM2.5 in 1997. After promulgation of the new NAAQS standard, the U.S. EPA recognized that there were “significant technical difficulties” that existed with respect to PM2.5 implementation and that due to these difficulties the U.S. EPA would allow PM10 to be used as a surrogate for PM2.5 in meeting PSD requirements until the difficulties could be resolved. See, Interim Implementation for the New Source Review Requirements for PM2.5. (John S. Seitz, U.S. EPA, October 23, 1997). The U.S. EPA has since promulgated its PM2.5 implementation rules in a piecemeal fashion.

The first PM2.5 implementation rule, promulgated on April 25, 2007, contained the requirements for attainment dates, SIP submittals, and reasonable further progress, but did not include any NSR implementation provisions. On May 16, 2008, the U.S. EPA issued its rule entitled “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5)”, which finalized some of the elements needed for implementation of the NSR program for PM2.5, such as the major source threshold, significant emissions rate and offset ratios. This rule did not, however, include some of the elements needed to fully implement the NSR program such as PSD increments, significant impact levels (“SILs”) and significant monitoring concentrations. These omitted elements were set out in a proposed rule on September 21, 2007, but have not yet been finalized.

The preamble to the May 16, 2008 rule provides that PM10 may be used as a surrogate until the U.S. EPA has finalized all elements of the implementation rule. Further, the 2008 rulemaking contained two provisions relating to the transition to the use of PM2.5. First, it contained a “grandfathering provision” under the Federal PSD program which allowed PM10 to be used as a surrogate for PM2.5 for permit applications submitted before the July 15, 2008 effective date of the rule. Second it contained a provision allowing states three years from the date of publication of the rule to submit revised state implementation plans (“SIPs”) for regulating PM2.5 and, during the transition period, allowed states to continue to use U.S. EPA’s 1997 guidance by which a PSD analysis based on PM10 can be used as a surrogate for analysis based on PM2.5.

On February 11, 2010, acting on a petition for reconsideration, the U.S. EPA proposed to repeal the "grandfathering" provision and to end the use of the PM10 surrogacy policy in SIP-approved states. 75 Fed. Reg. 6827 (February 11, 2010). The U.S. EPA states that this proposal will affect new or major modified sources in SIP-approved states that have not yet received a final and effective permit authorizing the source to commence construction and that, if the proposal is finalized, new or major modified sources would thereafter be required to conduct permit-related analysis on PM2.5 rather than PM10. U.S. EPA states that it is not proposing that the repeal of the surrogacy policy apply retroactively to sources that have already obtained their PSD permits. Id. at 6628.

The U.S. EPA justifies its proposed repeal of the surrogacy policy by citing to various court decisions which have held that a surrogate may only be used when it has been found reasonable to do so. The U.S. EPA states that the permitting record for any permits that continue to use the surrogacy policy must fully support the use of PM10 as a surrogate for PM2.5 and would need to address the differences between PM10 and PM2.5 and “demonstrate that PM10 is nonetheless an adequate surrogate for PM2.5.” Additionally, the U.S. EPA states that "a source or permitting authority seeking to rely on the PM10 surrogacy policy should identify any technical difficulties that exist to justify the application of the policy in each specific case." Id. at 6831-6832. However, the U.S. EPA states that the technical difficulties in the application of the PM2.5 standard have been "largely resolved to a degree sufficient for the owners and operators of sources and permitting authorities to conduct meaningful permit-related PM2.5 analyses."

Finally, the U.S. EPA addresses the impact of ending the surrogacy policy in SIP-approved states. The U.S. EPA recognized that the use of the surrogacy policy in SIP-approved states was intended to allow states time to update their state laws and make their SIP submissions. In the proposed rule, the U.S. EPA states that this additional time may not be necessary as many states already have the legal authority in their existing SIPs to address PM2.5. For example, the U.S. EPA states that most states have adopted U.S. EPA's definition of "regulated NSR pollutant" allowing PM2.5 to be regulated because it is a pollutant for which a NAAQS has been established. Id. at 6834. Additionally, the U.S. EPA states that the lack of a significant emission rate for PM2.5 should not preclude states from implementing a full PM2.5 program as most states, including Indiana, have adopted U.S. EPA's definition of "significant emissions rate" which states that, for pollutants in which a significant emission rate has not been established, any increase is deemed significant. Id.

The U.S. EPA argues that these provisions should provide states the legal authority needed to implement the PM2.5 program. The U.S. EPA recognized that the “most significant implication of [the use of these existing provisions] may be that some sources making modifications that increase PM2.5 emissions in amounts less than 10 tons per year may have to undertake additional PSD review that would not be required” if the state's SIP were amended to include the significant emission rate established in the May 2008 final rule. Id. However, the U.S. EPA did not address the impact of the other regulatory elements missing from the 2008 rule needed to fully implement the NSR program such as PSD increments, SILs and significant monitoring concentrations.

Any Indiana sources wishing to take advantage of the PM10 surrogacy policy will need to act quickly in order to get the project permitted before the rule takes effect and should be prepared to fully justify its continued use of the surrogacy policy.