Significant business impacts of EPA’s final amendments to air toxics regulations

Which federal laws have been changed?

The U.S. Environmental Protection Agency (EPA) has issued its latest set of air emissions regulations for organic chemical producers and petroleum refineries with chemical production units. The changes are intended to reduce emissions of hazardous air pollutants (HAPs) beyond the controls and monitoring programs already in place under existing regulations, and to monitor ambient concentrations of certain HAPs at the perimeter of the facility’s fence.

This group of rules applies to major HAP sources and certain types of emission sources that have been constructed or modified. The regulatory package includes 40 Code of Federal Regulations (CFR) 63, Subparts F, G, H, and I, collectively known as Hazardous Organic Substances NESHAP, “HON”, 40 CFR 63 Subparts U and W, Polymer and Resin Groups I and II, and 40 CFR 60, Subparts VV, VVa, VVb, NNN, NNNa, RRR, RRRa, NSPS for the Synthetic Organic Substances Manufacturing Industry or “SOCMI”. Here you will find a list of EPA facilities potentially impacted by the HON/SOCMI rule package.

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The HON/SOCMI rules package will have new impacts on capital and operating expenditures for affected sources and may create risks associated with new compliance programs, particularly shoreline monitoring requirements.

What are the main implications of the final rule and what actions should stakeholders implement now?

The HON/SOCMI package ensures that affected sources achieve the enhanced levels of control and monitoring provided for in other recent legislation affecting refineries, the ethylene sector and various organic production sectors, including the elimination of start-up, shutdown, malfunction and force majeure allowances and the prohibition of bypassing control devices. Although EPA has made some changes between the proposed and final regulations, the rule package still results in numerous monitoring and work practice requirements that will require significant investments in capital expenditures for inspections and operational expenditures for additional work resources.

Affected facilities should immediately assess the impacts of the final rule package and plan for these costs in their annual capital, operating and environmental budgets.

The new regulatory package includes extensive new requirements for ambient monitoring and subsequent reporting of certain HAP concentrations at the perimeter of affected facilities. Chemical companies should be aware that reports with border monitoring data will be visible in the public domain and susceptible to verification. In addition to the potential costs of fencing mitigation, in an era of social and environmental justice concerns, requiring fencing monitoring may pose risks to public perception and increased scrutiny from interveners regarding future plant improvements or expansions. While the policy package provides for 2 years to initiate border-to-border monitoring, this time will be needed to adequately pilot the monitoring program, prepare for compliance, and gain a risk-mitigation advantage.

Affected facilities should consider immediately pilot testing fence line monitoring programs – to understand where hotspots are to be better planned and to mitigate risks before these requirements go into effect (approximately 2 years after publication of the final rule package in the Federal Register) . The Environmental Protection Agency (EPA) has indicated that in some cases, compliance with regulatory emissions controls for the specific source or sources affected may not be enough to meet its expectations of what protects the public at the fence line.

Changes from the proposed rule that may be problematic include a 90-day deadline for monitoring existing neoprene production sources and establishing two levels of chloroprene fence line monitoring activities, depending on whether one is for HON-affected sources or Subpart AT.

How can ERM help?
ERM’s air quality experts are ready to help your company prepare to implement these new rules and address the upcoming challenges and additional costs that future compliance will bring to your impacted sites. The first set of preparations sources can undertake is a gap analysis, evaluation of the new policy package, development of a compliance strategy, and possible changes to regulatory compliance programs. This includes not only an accounting of the various components affected by the facility (pressure relief valves, tank fittings, etc.), but also an assessment of ongoing monitoring and operational procedures (flare management, continuous parameter monitoring systems, and others) that may need to be modified in order to ensuring future compliance. This assessment will allow your company to understand and prepare for future operating costs. Each affected facility will have its own unique challenges and solutions for future compliance, so business leaders need to understand these issues as soon as possible.

The second critical step that affected properties should consider is a fence line monitoring pilot program. As detailed above, data collected under these border monitoring programs will be publicly available, significantly increasing the risks associated with public participation in future permitting. When planning capital and operational expenditures for your facility, it will also be key to determine the scale and scope of your fence line monitoring program as early as possible and to use a period of approximately 2 years before compliance monitoring begins to detect and mitigate potential hotspots on your fence lines.

Download the full policy alert