EnviroNotes

February 2009

U.S. EPA Approves Alternative Approach for Conducting All Appropriate Inquiry for Purchase of Large Rural and Agricultural Properties
U.S. EPA “Clarifies” its NSR Aggregation Policy
EPA Delays Effective Date of SPCC Rule Changes
IDEM Plans Technical Workgroup Meetings for RISC Technical Guide Revisions
EPA Objections to Air Permits for Big Stone Power Plant Project Focuses on Lack of BACT Limits for Start-up. Shutdown and Malfunction Emissions and Inadequate Netting Procedure

U.S. EPA Approves Alternative Approach for Conducting All Appropriate Inquiry for Purchase of Large Rural and Agricultural Properties

By Andy Bowman, Chair, Environmental Law Department, Bingham McHale LLP

On December 23, 2008, U.S. EPA published a final rule amending the so-called “All Appropriate Inquiries Rule” to incorporate newly released ASTM International E2247-08 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property.”

Persons purchasing 120 acres or more of underdeveloped rural property or forested land or with a developed use of only managed forestland and/or agriculture may, but are not required to, use ASTM E2247-08. The prospective purchase may elect to use the ASTM E1527-05 standard or the AAI Rule at 40 CFR Part 312 to guide an appropriate inquiry. Under E2247-8, the 120 acres need not be contiguous and may include isolated areas of non-forested or non-rural property.

The ASTM E2247-08 standard is quite similar to the AAI Rule and E1527-05; however, there are few important differences, including:

• E2247-08 has a more stringent standard for historical records reviews than the AAI Rule. The AAI Rule requires that the historical records review cover a period from the present back until when the property first contained structures or was first used for residential, agricultural commercial or industrial uses. E2247-08 requires the historical records review back to 1940 or the property’s first developed use, including agricultural or forestry uses or placement of fill.

• Under the AAI Rule, the person seeking the environmental site assessment is required to search for liens but is not required to share the information with the environmental professional. E2247-08 states that the lien information shall be provided to the environmental professional.

• E2247-08 includes a more comprehensive list of governmental and historical records to be reviewed than the AAI Rule.

The amendment will become effective on March 23, 2009. The final rule can be reviewed at 73 Federal Register 78651 (December 23, 2008).

U.S. EPA “Clarifies” its NSR Aggregation Policy

By Jennifer Thompson, Partner, Environmental Law Department, Bingham McHale LLP

On September 14, 2006 (71 Fed. Reg. 54235) the United States Environmental Protection Agency (“U.S. EPA”) proposed three improvements to its New Source Review (“NSR”) permitting program. The proposed changes were to address debottlenecking, project netting, and aggregation. However, U.S. EPA has decided not to move forward as proposed in 2006.

U.S. EPA published notice in the January 15, 2009 Federal Register that it is: (1) withdrawing its proposed rule revisions regarding debottlenecking (74 Fed. Reg. 2460); (2) not taking action on the project netting proposal “at this time” and fully disclaims the project netting text of the 2006 proposal as U.S. EPA’s interpretation of the current rules; and (3) taking final action on NSR aggregation without promulgating the proposed rule or changing anything in the existing rule. 74 Fed. Reg. 2376

To better explain its NSR aggregation policy and to ease implementation of the current rule, U.S. EPA moved forward with its final action on the aggregation portion of the above-referenced proposed rulemaking without revising the current text of the regulation. The interpretative text is intended to provide interpretative guidance, which up until now did not exist in a single document.

Despite being guidance, the new interpretative text for when emissions at a source should be aggregated into a single project for purposes of determining NSR applicability is to be applied prospectively from the effective date of the notice. The original effective date of February 17, 2009 has been stayed by U.S. EPA until May 18, 2009 while it reviews a petition for reconsideration filed by the Natural Resources Defense Council. Generally, the text provides a discussion of the following guidance:

1. Activities should be aggregated when they are substantially related:

a. when a technical or economic interconnection exists between the physical and/or operational changes; or

b. a complimentary relationship exists (benefits of an otherwise independent activity is significantly reduced without the other activity).

2. The timing of activities in and of themselves is not determinative in a decision to aggregate activities.

3. A time-based rebuttable presumption for nonaggregation exists if a previous physical or operational change has operated for three or more years.

Despite moving forward with the final action on NSR aggregation, U.S. EPA adds that the interpretative text is unlikely to lead to appreciably different outcomes. Thus the final action differs significantly from the bright line criteria originally proposed which was intended to eliminate the need for case-by-case aggregation determinations and provide more certainty and efficiency in regulatory decisions.

EPA Delays Effective Date of SPCC Rule Changes

By Matt Gernand, Attorney, Environmental Law Department, Bingham McHale LLP

On January 29, 2009, the U.S. EPA announced a 60-day delay of the effective date of the amendments to the Spill Prevention, Control and Countermeasures (“SPCC”) regulations that were published in the Federal Register on December 5, 2008. The amendments will now be effective on April 4, 2009. In addition, the U.S. EPA is again allowing comments on the final rule. Comments must be received on or before March 5, 2009.

The SPCC regulations apply to facilities that have above-ground oil storage capacity of greater than 1,320 gallons or underground storage of greater than 42,000 gallons. The rule requires these facilities to prepare and implement SPCC Plans. The amendments to the rule exempt certain facilities from the SPCC requirements and provide additional flexibility for certain facilities when preparing their SPCC plans. Specifically, the amendments exempt the following containers from the SPCC requirements:

• Hot-mix asphalt and hot-mix asphalt containers;
• Residential heating oil containers used solely at single-family residences;
• Pesticide application equipment and related mix containers;
• Underground oil storage tanks that supply emergency diesel generators at nuclear power generation facilities;
• Intra-facility gathering lines subject to the pipeline regulations of the U.S. Department of Transportation and
• Produced water containers that do not contain oil in harmful quantities (as certified by a professional engineer).

The amendments also provide a new provision that allows certain smaller facilities to prepare a less burdensome “SPCC Plan template” rather than a full SPCC plan. Under the 2006 amendments to the rule, the owners and operators of “qualified facilities,” facilities with less than 10,000 gallons of above-ground storage, were given the option of self-certifying their SPCC plans rather than requiring that the plans be reviewed and certified by a professional engineer. The 2008 amendment splits the “qualified facility” definition into two categories – Tier I and Tier II qualified facilities. Tier 1 qualified facilities are facilities that have no individual aboveground storage containers with a capacity greater than 5,000 gallons. These Tier I facilities may use the streamlined “SPCC Plan template” rather than preparing a full SPCC plan. The template can be found in Appendix G of the revised rule.

Other changes to the rule include:

• A revised definition of the term “facility” to clarify the facilities boundaries;
• A new definition of the term “loading/unloading rack” to clarify when these units are subject to the rule;
• Amendments to the general secondary containment requirement;
• Exemption for non-transportation-related tank trucks from sized secondary containment requirements;
• Amendments to the security measure provisions to allow facilities to tailor the security measures to the specific characteristics of the facility; and
• Amendments to the integrity testing requirements for bulk storage containers to allow greater flexibility in the use of industry standards at all facilities.

The December 8, 2008 final rule required facilities subject to the SPCC regulations, other than farms and oil production facilities, which were operating on or before August 16, 2002 to maintain their existing SPCC Plan and update the Plan to incorporate the amendments no later than November 20, 2009. However, the notice announcing the 60-day delay stated that the U.S. EPA is reviewing these dates and will address the dates in a later notice.

IDEM Plans Technical Workgroup Meetings for RISC Technical Guide Revisions

By E. Ryan Murray, Attorney, Environmental Law Department, Bingham McHale LLP

In cooperation with the Midwestern States Environmental Consultants Association, the Indiana Department of Environmental Management (“IDEM”) announced its intention to form focused technical workgroups to address various topics related to revisions of the IDEM’s Risk Integrated System of Closure (“RISC”) Technical Guide. The IDEM is seeking to identify subject matter experts to provide input and information in developing the technical basis for RISC policy and guidance on the following issues: contaminant plume stability, background constituent levels, closure levels, and site characterization. The IDEM seeks two to three external subject matter experts on each topic who will participate in the technical workgroups along with IDEM subject matter experts, representatives of the IDEM’s RISC policy decision-making group (Bruce Oertel – Remediation Services Branch Chief; Laura Steadham – Science Services Branch Chief; Michael Anderson – Senior Risk Assessor and RISC policy expert; and Jeff Sewell – Risk Services Section Chief), and IDEM’s Risk Assessor and lead RISC Technical Guide editor, Mike Habeck. According to the IDEM, the work groups are intended to provide stakeholder input prior to the IDEM drafting guidance that will be released for comment by RISC stakeholders at large.

If you are interested in participating as a subject matter expert in a technical workgroup, or would like to recommend a subject matter expert to the IDEM, contact Jeff Sewell at jsewell@idem.in.gov. For additional information regarding the RISC Technical Guide and to contact IDEM staff regarding RISC revisions, click here.

EPA Objections to Air Permits for Big Stone Power Plant Project Focuses on Lack of BACT Limits for Start-up. Shutdown and Malfunction Emissions and Inadequate Netting Procedure

By Larry Kane, Partner, Environmental Law Department, Bingham McHale LLP

In late January, 2009, EPA, Region 8, issued objections to a proposed Title V permit renewal for the Big Stone Power Plant located in South Dakota. The Title V permit includes conditions of a PSD permit recently issued to the plant owner for construction of a new generating unit, Big Stone II.

Among the principal reasons for the objections are: (i) the failure to include all PSD permit provisions in the Title V permit renewal; (ii) the failure to perform a proper PSD applicability analysis for SO2 and NOx for the source modification to add Big Stone II; and (iii) the failure to include adequate monitoring to make various limits practically enforceable, including limits that would assure the synthetic minor HAP source status of the plant.

In addition to these objections, the EPA expressed serious concern that the proposed Title V permit conditions does not assure that BACT limits will be applicable during periods of start-up, shutdown and malfunction (“SSM”). EPA indicated that the State agency did not establish secondary BACT limits for SSM periods nor did the State justify that good work practices were BACT for SSM emissions.

EPA’s objections to the provisions of the proposed Title V permit regarding determinations that PSD was not applicable to SO2 and NOx are based on the point that specific limits were not placed on Big Stone Unit I to assure the emission reductions needed to keep net emissions from the modified source below significance levels for these two polluants. The PSD permit included plantwide SO2 and NOx limits that were set up as emission caps but which were not referred to as Plantwide Applicability Limits (PALs) nor did they satisfy regulatory requirements for establishment of PALs. Finally, no test methods or test frequencies were specified in the proposed Title V permit for limits set in the permit to restrict hydrogen chloride and hydrogen fluoride emissions below levels that would make the source major for HAPs.

The positions taken by EPA on BACT limitations for SSM events and the PSD applicability provisions have potential ramifications for other industrial sectors in addition to the utility sector and should be monitored for further developments.

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