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Both PSM and Program 3 of RMP require compliance with similar elements which include the:
Although the two programs have significant overlap, each has its own focus. PSM is an occupational health program intended to protect workers; RMP is intended to protect the environment and the community. PSM is an OSHA program, whereas RMP is an EPA program.
Another big difference is that RMP (the program) requires development of a RMP (the plan). RMP requires a hazard analysis to estimate the offsite impact due to worst-case and alternate releases. See 40 CFR 68 Subpart B. These analysis shall be updated every five years or within six months of a significant change. See 40 CFR 68.36. The owner or operator must submit a Risk Management Plan (“RMP”) that includes the worst case and alternate release scenarios, a five-year accident history, information concerning the facility emergency response plan, and more. See 40 CFR 68 Part G. Updates of the RMP are required at least every five years, or as circumstances occur that materially affect the regulatory status of the process. Those circumstances are listed at 40 CFR 68.190(b).
Applicability threshold criteria are different for the two programs. For example, the threshold quantity for hydrogen sulfide under PSM is 1500 pounds, whereas under RMP, the threshold is 10,000 pounds. The RMP threshold for ammonia is 20,000 pounds, but only for solutions where the concentration is above 20%; the OSHA threshold for ammonia solutions is 15,000 pounds for solutions with an ammonia concentration above 44%. The RMP applicability list contains some compounds that are not located on the PSM list (e.g., Allyl alcohol); likewise, some compounds that result in PSM applicability, don’t case RMP applicability (Ammonium Perchlorate).
The EPA recently issued a Request for Information (“RFI”) requesting comment on potential revision to the RMP. In this RFI, EPA mentioned other significant, as applied, differences in applicability under PSM and RMP. For example, approximately 4000 bulk chemical distributors claim they are exempt from PSM based on OSHA’s “retail facility” exemption in 29 CFR 1910.19(a)(2)(i). Also, wastewater facilities in states without federally-delegated, state run OSHA programs are generally not subject to PSM requirements. See RFI, pages 59-60 of 113. As a result, these facilities are usually RMP Program 2, whereas the same plant with a federally-delegated OSHA program is RMP Program 3. See RFI, pages 60-61 of 113.
After the team makes a recommendation, the first step is to resolve the team’s finding. If the resolution is to accept the recommendation, the employer must complete the actions as soon as possible. See 29 CFR 1910.119(e)(5).
OSHA expects that accepted recommendation be completed as soon as possible which usually means with one to two years. OSHA however “notes that in unusual circumstances, longer completion periods may be necessary. 57 Fed. Reg at 6379. According to OSHA guidance:
As soon as possible means that the employer shall proceed with all due speed, considering the complexity of the recommendation and the difficulty of implementation. OSHA expects employers to develop a schedule for completion of corrective actions, to document what actions have been taken, and to document the completion of those actions as they occur.
Process Safety Management of Highly Hazardous Chemicals – Compliance Guidelines and Enforcement Procedures, CPL 02-02-045
Furthermore, OSHA added:
Certainly, all of the recommendations from a process hazard analysis needs to be addressed or resolved, but it may not be necessary in every case to complete all of the recommendations prior to startup.
57 Fed. Reg. at 6388.
OSHA took the position that “as soon as possible” meant one-two year test in supporting citations issued to BP Products North America (“BPP”) and BP-Husky and the subsequent administrative law case. Please note that this case is not a final order of the Review Commission and it is pending Commission review. In that case, the employer had set in motion a multi-year plan to fully address facility siting issues applying an “inside-out” strategy (addressing the highest risk areas closest to the process first). At the time of the inspection, the employer had substantially implemented their program, however it was not complete. OSHA’s citation was vacated based on the employer’s ability to show progress on a long term solution, where the employer focused on the highest risk areas and was moving toward the lower risk sites. Secretary of Labor vs. BP Products North America., & BP-Husky Refining, LLC., See pp 41-46.
When an agency believes that implementation has not been on a sufficiently enough fast-track, they will often cite a provision in the mechanical integrity section. Following is the OSHA requirement; the EPA requirement is the same except it references §68.65.
The employer shall correct deficiencies in equipment that are outside acceptable limits (defined by the process safety information in paragraph (d) of this section) before further use or in a safe and timely manner when necessary means are taken to assure safe operation.
29 CFR 1910.119(j)(5) and 40 CFR 68.73(e).
When proposed, this provision simply said correct the deficiency before further use. Commenters expressed concern, stating that such would in all cases cause a shutdown of the process. In response, OSHA replied:
The purpose of this proposed requirement was to require equipment deficiencies to be corrected promptly if the equipment was outside the acceptable limits specified in the process safety information. The comments have convinced OSHA that there may be many situations where it may not be necessary that the deficiencies be corrected “before further use” as long as the deficiencies are corrected in a safe and timely manner when necessary means are taken to assure safe operation.
57 Fed. Reg. at 6391
Thus, at the time of rulemaking, OSHA recognized that interim measures may be taken which allow for the continued use until such time that the deficiency can be corrected. OSHA took a different position within citations issued to BPP and BP-Husky. Both BPP and BP-Husky conceded that a couple of facility relief valves were under-sized and a citation was upheld for the failure to document RAGAGEP. However, the “further use” citation was vacated as they put in place interim controls pending permanent solution by car-sealing open adjacent process valves (to allow relief to other locations). See Secretary of Labor vs. BP Products North America., & BP-Husky Refining, LLC., See pp 22-25.
A PHA team must have the following expertise:
Employers must have a written plan to include employees and their representatives on the conduct and development of PHAs. 29 CFR 1910.119(c) and 40 CFR 68.83(b). Employee participation is to be a two-way dialog with employees using their experience to participate and in development of PHA recommendations. When inspecting a site, OSHA and EPA usually look for evidence of employee participate by asking for the names of participating employees and interviewing those employees. OSHA intended for the term “their representatives” to be read broadly, and include union representatives, or in the case of a non-union plant, any person designated by employees. See OSHA guidance, CPL 02-02-045.
There is only one level of PSM applicability; either you are in or out. Processes are subject to PSM if they contain the threshold amount of a Chemical found in Appendix A to the rule, or if it has more than 10,000 pounds of a flammable gas or liquid. See 29 CFR 1910.119(a). PSM applicability has five important exceptions: non-refrigerated storage of flammable liquids in atmospheric storage tanks, fuels used for workplace consumption, retail facilities, oil and gas well drilling or servicing operations, and normally unoccupied remote buildings.
A “covered process” under RMP is a process that contains more than a threshold quantity, as listed in 40 CFR 68.130, using calculation methods listed in §68.115. If a process is covered, requirements will be based on classification with one of three “program” levels. Program 3 applicability is the most demanding, the Program 2, with Program 1 being the least demanding. Applicability criteria for the three programs is found at 40 CFR 68.10.
One of the lesser-known requirements for a patent is that it must claim a “definite” invention. The issue of definiteness lies primarily with the patent draftsperson, often a patent attorney or agent that is hired to expand the scope of an invention as broadly as possible without crossing the line into indefiniteness. Nevertheless, as patent litigation continues to develop, alleged infringers are growing ever wiser that claims can be invalidated for stretching too far, rendering them indefinite. On June 2, 2014, the Supreme Court issued its decision in Nautilus, Inc. v. Biosig Instruments, Inc., relaxing the standard for a court to find a patent claim invalid as indefinite.
By statute, the definiteness requirement mandates that each patent must “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention.” [1] Courts have struggled throughout the years to balance the inherent limitations of written language with the need to limit the monopolistic rights granted through a patent for a clear invention. In so doing, Courts have mandated that the notion of definiteness is to be evaluated in light of the specification (the written description of the invention) and prosecution history from the perspective of a person skilled in the relative art at the time the patent was filed.
For over a decade, the Federal Circuit has erred on the side of validity for claim definiteness, questioning whether patent claims were “amenable to construction” or “insolubly ambiguous.” Under these guidelines the Federal Circuit would hold that “if reasonable efforts at claim construction result in a definition that does not provide sufficient particularity and clarity to inform skilled artisans of the bounds of the claim, the claim is insolubly ambiguous and invalid for indefiniteness.” [2] The United States Patent and Trademark Office interpreted this standard to mean that “the validity of a claim will be preserved if some meaning can be gleaned from the language.” [3]
That standard is no more. In Nautilus, the Supreme Court held that the concepts of “insolubly ambigu[ity]” and “amenab[ility] to construction” are not apt standards for definiteness. The Court sought to mandate clarity of patent claims, while recognizing that absolute precision is unobtainable. Under this reasoning, the Court returned to traditional notions, holding that a patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.
It can be noted that the Nautilus decision does not create any breakthroughs in patent invalidation. In reality, the Supreme Court rendered no new standard as it returned to a more barebones, traditional approach to the definiteness standard. Rather, the decision lessens the burden for patent and patent claim invalidation for lack of definiteness and acts as a subtle hint to the Federal Circuit and lower courts that a definiteness challenge shouldn’t necessarily err on the side of validity. Thus, the decision opens the gate for further validity challenges based on indefinite claims.
[1] 35 U.S.C. 112, Paragraph 2
[2] Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1371; see, also. ExxonResearch & Eng'g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001) (“Only when a claim remains insolubly ambiguous without a discernible meaning after all reasonable attempts at construction must a court declare it indefinite.”)
[3] See, MPEP 2173.02
On May 21, 2014, Senate Judiciary Committee Chairman Patrick Leahy pulled the plug on the latest bill aimed at fighting patent trolls. The term “patent troll” is an aptly coined name for non-practicing entities, companies formed to hold and collect royalties on patent rights without manufacturing, using, or otherwise selling the patented products or processes. The news of the judiciary committee’s removal of patent reform from the agenda has left many wondering about the future of patent reform. While some are predicting that patent reform will not be addressed until the next term, another branch of government has recently begun issuing rulings that affect the American patent law sector, potentially making patent infringement litigation costlier to trolls.
On April 29, 2014, the United States Supreme Court issued opinions in both Octane Fitness, LLC v. Icon Health & Fitness, Inc. and Highmark v. Allcare Health Management System, Inc. In both Octane Fitness and Highmark, the Supreme Court was presented with the nearly identical issue of when attorney’s fees can be awarded to the winning party of a patent infringement suit. These two opinions are the first decisions in a line of several patent cases currently on the Supreme Court’s intellectual property-heavy docket.
The Patent Act permits district courts to award attorney’s fees to prevailing parties in “exceptional circumstances;” however, the Patent Act does not provide a definition or examples of what would constitute those “exceptional circumstances.” 35 U.S.C. § 285. Though early decisions had taken a holistic, equitable approach to awards of attorney’s fees, in the 2005 case Brooks Furniture Manufacturing, Inc. v. Dutailier Int’l, Inc., the Federal Circuit Court adopted a rigid and mechanical formulation for determining if such fees would be awarded. 393 F.3d 1378 (2005). Under Brooks Furniture, a prevailing party could recovery attorney’s fees only when: (1) the opposing party engaged in misconduct during the litigation or in securing the patent; or (2) when the claim of infringement is objectively baseless and brought in bad faith. The Federal Circuit Court has subsequently stated that a claim is “objectively baseless” only when the claim is “so unreasonable that no reasonable litigant could believe it would succeed,” and that litigation is brought in bad faith only when the plaintiff “actually know[s]” the claim is objectively baseless. iLOR, LLC v. Google, Inc., 631 F.3d 1372, 1378 (2011). Last, the Brooks Furniture decision stated that the evidence of this bad faith must be “clear and convincing,” the most burdensome legal standard of proof.
By requiring this rigid, nearly-impossible standard for the award of attorney’s fees, the Brooks Furniture decision insulated patent trolls from the costly repercussions of their highly litigious behavior. The typical modus operandi of a patent troll commences with a demand letter sent to an alleged infringer demanding payment of a licensing fee for the allegedly impermissible use of the patent trolls’ patented technology. In an overwhelming number of cases the patent trolls’ claims of infringement are extremely weak and may even be invalidated if brought to trial. However, the high cost of patent litigation often renders it more economical to pay the licensing fee or settle, further promulgating the patent trolls’ ability to collect funds on extremely weak claims. As stated by Apple, Inc. in an amicus curiae brief to the Supreme Court, the opening line of many negotiations with patent trolls is some form of “What we are asking for is less than it will cost you to litigate this case to judgment.”
The Supreme Court, in its Octane Fitness and Highmark decisions, recognized that the Brooks Furniture framework is unnecessarily rigid, and that it impermissibly encumbers the district courts’ discretion. In Octane Fitness, the Court held that the term “exceptional” should be given its ordinary meaning; thus, an “exceptional” case is “one that stands out from the others with respect to the substantive strength of the party’s litigating position or the unreasonable manner in which the case was litigated.” This definition permits the district court to look to the totality of the circumstances in determining whether the case is one that would be described as “exceptional.” In so doing, the Court rejected the requirement that patent litigants establish their entitlement to fees by “clear and convincing evidence” and instead adopted a more relaxed standard. Further, in Highmark, the Supreme Court noted that because attorney’s fees were within the district court’s discretion, the Federal Circuit Court can only review that award for an “abuse of discretion.”
These opinions will likely have several positive effects against the more nefarious behaviors of patent trolls. Under this relaxed standard for attorney’s fees, the district courts will now have a greater ability to impose costs upon parties whom they believe have brought unreasonable claims. With that flexibility reinstated, an increase in attorney’s fees awards for patent litigation may be anticipated. Further, the Highmark decision has greatly hindered the Federal Circuit Court’s role in the determination to award attorney’s fees. Because the Federal Circuit Court can only review the decisions to determine whether they are an abuse of the district court’s discretion, the Federal Circuit Court can no longer reverse awards of attorney’s fees on the basis that the case does not include “exceptional” circumstances. Therefore, if a party is granted attorney’s fees by the district court, there may be less danger that the award will be reversed on appeal.
The impact of these decisions is already starting to take shape. Wasting no time, the Supreme Court put these opinions into action with its recent decision in Kobe Properties v. Checkpoint Systems. The district court in Kobe Properties issued a $6.6 million award of attorney’s fees against the patent owner. Using the now defunct standard, the Federal Circuit Court reversed the district court’s award because it found that the patent owner’s lawsuit was not “objectively baseless.” Under the decisions of Octane Fitness and Highmark, the award has now been reinstated and the case remanded back to the Federal Circuit Court for reconsideration in light of these decisions. However, the Federal Circuit Court’s hands may now be tied as it will have to consider the award under the “abuse of discretion” model, and not on the merits.
CMS issued a proposed rule on May 28, 2014 designed to reduce the rate of medically unnecessary DMEPOS items supplied to beneficiaries. According to CMS, reports issued by GAO and HHS OIG, including Comprehensive Error Rate Testing (CERT) reports, show that DMEPOS claims had a 66% improper payment rate, accounting for approximately 20% of the overall Medicare FFS improper payment rate, although Medicare FFS DMEPOS expenditures represents only 3% of all Medicare FFS expenditures.
In response to these reports, CMS proposes to establish a prior authorization requirement for certain DMEPOS items that meet the three criteria set forth in the proposed rule. CMS proposes to define “unnecessary utilization” as the furnishing of items that do not comply with one or more of Medicare’s coverage, coding, and payment rules, as applicable. To identify those items that would require a prior authorization, CMS has proposed a “Master List” of DMEPOS items that meet the following criteria: 1) the item has been identified in a GAO or HHS OIG report that is national in scope and published in 2007 or later as having a high rate of fraud or unnecessary utilization; 2) the item is listed in the 2011 or later Comprehensive Error Rate Testing (CERT) program’s Annual Medicare FFS Improper Payment Rate Report DME Service Specific Overpayment Rate Appendix; and 3) the item meets a payment threshold amount of an average purchase fee of $1,000 or greater or an average rental fee schedule of $100 or greater. Items included on the Master List would remain on the list for ten years, subject to certain criteria for early removal. The Master List would be self-updated annually, to include any items in future OIG or GAO reports that meet the criteria. CMS proposes to make prior authorization for some of the items a national requirement, if claims data analysis shows that unnecessary utilization of the item is widespread and occurs across multiple geographical areas. On the other hand, if claims data shows the unnecessary utilization is localized to a specific geographic region, the prior authorization requirement may be limited to that geographic region.
The proposed rule includes the initial Master List of items that would require prior authorization. However, the list includes Power Mobility Devices that are already subject to a prior authorization requirement, and that would not change. The proposed initial Master List also includes such as items as respiratory assist and CPAP devices, semi-electric hospital bed with mattress, certain pressure mattresses for the beds, negative therapy wound pressure equipment, lightweight wheel chairs, and certain orthotics equipment.
According to CMS, the proposed prior authorization requirement would not create new clinical documentation requirements. It would simply require the same clinical information earlier in the process. Prior to furnishing the item and prior to submitting a claim for the item, the prior authorization requestor would submit evidence that the item complies with all coverage, coding and payment rules. After receipt of all required documentation, CMS or its contractors would conduct a medical review and notify the requestor whether the request for prior authorization was affirmed or non-affirmed. CMS proposes that it or its contractors would make reasonable efforts to communicate this decision within ten (10) days of receipt of all applicable information. A requestor could submit a request for expedited prior authorization by also submitting documentation to show that the standard time frame for a decision would jeopardize the life or health of the beneficiary. In that case, CMS proposes that it or its contractors would make reasonable efforts to communicate the decision within two (2) days of receipt of all applicable information.
The affirmation of a request for prior authorization is provisional. Claims receiving a provisional affirmation may still be denied based on technical requirements that cannot be evaluated until after the claim has been submitted, such as submission of a duplicate claim. A prior authorization request that is not affirmed is not an initial determination on a claim for payment for items furnished and would not be appealable. A request for prior authorization may be submitted multiple times. CMS and its contractors would use reasonable efforts to communicate the decision on a re-submitted request within twenty (20) days of receiving all applicable information.
CMS proposes to automatically deny payment for a claim for an item on the Required Prior Authorization list that is submitted without a prior authorization decision. A requestor who submits a claim for a non-affirmed prior authorization request, or for which no prior authorization request was submitted, is afforded appeal rights on the denial of the claim.
After promulgation of a final rule governing the prior authorization requirement, CMS or its contractor will presume the supplier knows Medicare would automatically deny the claim for which the supplier failed to request a prior authorization but would presume the beneficiary does not know and cannot reasonably be expected to know that Medicare will deny or did deny payment. In that case, the supplier bears the financial responsibility for the denied claim and is obligated to refund any money paid by the beneficiary. When the beneficiary insists on getting the item without affirmation of the prior authorization decision, while the decision is pending, or where the prior authorization request was non-affirmed, the supplier must issue an Advanced Beneficiary Notice of Noncoverage (ABN) to the beneficiary, and the beneficiary must agree to pay for the item and sign the ABN, in order to shift the financial responsibility for the item to the beneficiary.
On May 15, 2014, the Environmental Protection Agency (“EPA”) announced that it intended to publish a proposed rule to amend the national emission standards governing petroleum refineries. [1] The emission standards impacted by this proposed rulemaking are:
The EPA’s stated reason for amending the petroleum refinery emission standards was to address the risk remaining after application of the standards promulgated in 1995 and 2002. The EPA proposes to amend the petroleum refinery emission standards to account for developments in practices, processes, and control technologies and also to include new monitoring, recordkeeping and reporting requirements. The EPA further proposes new requirements related to emissions during periods of startup, shutdown and malfunction (“SSM”) to ensure that the emissions standards are consistent with court opinions issued since promulgation of the standards.
The source categories affected by the EPA’s proposed rule include petroleum refineries engaged in converting crude oil into refined products, including liquefied petroleum gas, gasoline, kerosene, aviation fuel, diesel fuel, fuel oils, lubricating oils and feedstocks for the petrochemical industry.
Current regulations recognize the Delayed Coking Units (“DCU”) steam vent as a process vent; however, it is exempt at drum pressures below 15 psi, a pressure well in excess of industry practices. As a result, the EPA determined that direct atmospheric releases from the Delayed Coking Units (“DCU”) decoking operations are currently unregulated emissions and proposed a work practice standard of depressuring to 2 psi prior to opening the vessel. NSPS Subpart Ja currently allows a maximum pressure of 5 psi prior to depressuring. The EPA is requesting comment on whether depressurizing to 2 psig prior to venting to the atmosphere is the appropriate Maximum Achievable Control Technology (“MACT”) limit and whether it is appropriate to include restrictions for decoking operations draining, deheading and coke cutting, in the MACT requirements.
Over the last couple of years, the EPA has devoted significant enforcement resources to correcting alleged regulatory non-compliance of flares often citing federal requirements for equipment operator’s general duty under NSPS and NESHAPs. [2] The EPA appears to be shifting away from its enforcement reliance on the general duty as the proposed rules acknowledge that existing “regulatory requirements are insufficient to ensure that refinery flares are operating consistently with the 98-percent HAP destruction efficiencies.” As a result, the EPA is proposing significant changes to standards for operations of flares, including that “refinery flares operate pilot flame systems continuously and with automatic re-ignition systems and that refinery flares operate with no visible emissions.” “Owners or operators of flares [must] monitor visible emissions at a minimum of once per day using an observation period of 5 minutes” with additional monitoring in the event of a single one minute visual observation. Further, the EPA is proposing to merge velocity requirements for steam and air assisted flares into a single standard and is proposing “new operational and monitoring requirements related to the combustion zone gas.” This requirement includes equipment that “fine-tune and control the amount of assist steam or air introduced at the flare tip such that combustion efficiency of the flare will be maximized.” “The proposed rule would allow the owner or operator flexibility to select the form of the combustion zone operational limit (i.e., net heating value, lower flammability limit, or total combustibles fraction) with which to comply in order to provide facilities the option of using monitors they may already have in place.” Also of interest, the EPA rejected including a requirement to maintain a maximum steam or air to fuel ratio in the standard as by itself it was inadequate to assure efficient operation.
The EPA is “proposing to revise Refinery MACT 1 for storage tanks to cross-reference the corresponding storage vessel requirements in the Generic MACT (including requirements for guidepole controls and other fittings as well as inspection requirements), and to revise the definition of Group 1 storage vessels to include storage vessels with capacities greater than or equal to 20,000 gallons but less than 40,000 gallons if the maximum true vapor pressure is 1.9 psia or greater and to include storage tanks greater than 40,000 gallons if the maximum true vapor pressure is 0.75 psia or greater.”
Also of significance, the EPA does not propose to change the fluid catalytic cracking unit (“FCCU”) limits found in the MACT standard other than to make them consistent with NSPS Subpart Ja. However, the EPA is proposing to require an FCCU performance test once every 5 years. The EPA also did not propose changes to the leak definitions applicable to the leak detection and repair (“LDAR”) program, changes to standards for gasoline loading racks, cooling towers/heat exchangers, wastewater treatment, reformer regenerations, and sulfur recovery units.
The EPA also recognizes that, in many cases, it is impractical to directly measure emissions from fugitive emission sources at refineries. For this reason, the EPA believes that it is appropriate under the Clean Air Act (“CAA”) section 112(d)(6) to require refiners to monitor, and, if necessary, take corrective action to minimize fugitive emissions, to ensure that facilities appropriately manage emissions of HAP from fugitive sources. The EPA proposes that a HAP concentration be monitored in the ambient air around a refinery that, if exceeded, would trigger corrective action to minimize fugitive emissions. The fenceline concentration action level would be set at a level such that no facility in the category would need to undertake additional corrective measures if the facility’s estimate of emissions from fugitive emissions is consistent with the level of fugitive emissions actually emitted. As part of the fenceline monitoring approach, the EPA seeks to develop a not-to-be exceeded annual fenceline concentration, above which refinery owners or operators would be required to implement corrective action to reduce their fenceline concentration. The EPA is soliciting comment on the application of the following alternative monitoring techniques that it has deemed to be “technically feasible and appropriate for monitoring organic HAP from fugitive emission sources at the fenceline of a petroleum refinery on a long-term basis”: (1) passive diffusive tube monitoring networks; (2) active monitoring station networks; (3) ultraviolet differential optical absorption spectroscopy (“UV-DOAS”) fenceline monitoring; and (4) open-path Fourier transform infrared spectroscopy (“FTIR”). Because there is no current EPA test method for passive diffusive tube monitoring, as part of this action, the EPA is proposing specific monitor citing and sample collection requirements as EPA Method 325A of 40 CFR part 63, Appendix A, and specific methods for analyzing the sorbent tube samples as EPA Method 325B of 40 CFR part 63, Appendix A.
The EPA is proposing to establish an ambient concentration of benzene at the fenceline that would trigger required corrective action. [Benzene is considered a surrogate for organic HAP from wastewater treatment systems at petroleum refineries, as it is present in nearly all refinery process streams.] Further, the EPA is proposing to require the reporting of raw fenceline monitoring data, and not just the highest fenceline concentration (“HFC”), on a semiannual basis. The EPA also proposes that facilities be required to conduct fenceline monitoring on a continuous basis, even if benzene concentrations, as measured at the fenceline, routinely are substantially lower than the concentration action level. To reduce the cost burden on facilities to comply with this rule, the EPA is soliciting comment on approaches for reducing or eliminating fenceline monitoring requirements for facilities that consistently measure fenceline concentrations below the concentration action level, and the measurement level that should be used to provide such relief.
The EPA is also proposing to remove the SSM exemptions for the petroleum refinery emission standards. As a result, affected units would be subject to an emission standard during such events. The EPA believes that the applicability of a standard during such events will ensure that sources have ample incentive to plan for and achieve compliance and thus the SSM plan requirements are no longer necessary. However, the EPA is proposing alternate standards for startup and shutdown periods for a few select emission sources. Generally speaking, the EPA expects that facilities can meet “nearly all” of the emission standards in Refinery MACT 1 and 2 during startup and shutdown. For Refinery MACT 1 and 2, however, the EPA has identified three emission sources for which specific startup and shutdown provisions may be needed. First, due to safety concerns associated with operating an electrostatic precipitator (“ESP”) during startup of the FCCU, the EPA is proposing specific particulate matter (“PM”) standards for startup of FCCU controlled with an ESP under Refinery MACT 2. Second, as many FCCU operate in “complete combustion” mode without a post-combustion device (i.e., for FCCU without a post-combustion device, organic HAP are controlled by the FCCU itself, so there is no separate air pollution control device (“APCD”) that could be operating during startup), the EPA is proposing specific carbon monoxide (“CO”) standards for startup of FCCU without a post-combustion device under Refinery MACT 2. Third, the EPA is proposing specific standards for sulfur recovery units (“SRU”) during periods of shutdown. The SRU essentially acts as the ACPD for the fuel gas system at the facility and would be operating if the refinery is operating, including during startup and shutdown events. However, there are typically multiple SRU trains at a facility, and different trains can be taken off-line as sour gas production decreases to maintain optimal operating characteristics of the operating SRU during startup or shutdown of a set of process units. Thus, the sulfur recovery plant is expected to run continuously and would only shut down its operation during a complete turnaround or shutdown of the facility. In such situations, the 12-hour averaging time provided for the SRU emissions limitation under Refinery MACT 2 may not be adequate time in which to shut down the unit without exceeding the emissions limitation.
In several prior rules, the EPA had included an affirmative defense to civil penalties for violations caused by malfunctions, to ensure adequate compliance while simultaneously recognizing that, despite the most diligent of efforts, emission standards may be violated under circumstances entirely beyond the control of the source. Under the EPA’s regulatory affirmative defense provisions, if a source could demonstrate in a judicial or administrative proceeding that it had met the requirements of the affirmative defense in the regulation, civil penalties would not be assessed. However, the recent court decision NRDC v. EPA, No. 10-1371 (D.C. Cir. April 18, 2014), 2014 U.S. App. LEXIS 7281, vacated affirmative defense provisions in the CAA section 112(d). In NRDC, the D.C. Circuit found that the EPA lacked authority to establish an affirmative defense for private civil suits and held that, under the CAA, the authority to determine civil penalty amounts lies exclusively with the courts, not the EPA. In light of NRDC, the EPA has declined to include a regulatory affirmative defense provision in this rulemaking. If a source is unable to comply with emissions standards as a result of a malfunction, the EPA may use its case-by-case enforcement discretion to provide flexibility, as appropriate.
[1] Consolidated Petroleum Refinery Rulemaking Repository, found at http://www.epa.gov/ttn/atw/petref.html (last visited May 28, 2014).
[2] See EPA Enforcement Targets Flaring Efficiency Violations, Enforcement Alert, Vol. 10, No. 5, August 2012.
As public awareness and growing concerns surrounding hydraulic fracturing (“fracking”) operations increases, regulatory agencies are taking a closer look at the process and are soliciting help from both public and industry stakeholders to better understand fracking operations. On May 19, 2014, the Environmental Protection Agency (“EPA”) solicited comments from the public and from industry stakeholders on obtaining data on the chemical make-up of fluids used in fracking operations, known as “fracking fluids,” as well as the potential health and safety risks of exposure to those fluids to human health and the environment.
Fracking is not a new process. According to the U.S. Department of Energy, as of 2013 at least two million oil and gas wells have been fracked in the U.S in the last sixty years.
However, public awareness has recently grown because the use of fracking has increased significantly in the last ten years due to new horizontal drilling technologies that improve access to natural gas and oil deposits. Fracking involves injection of large volumes of fluids at high pressure into a perforated well to create fractures in the source rock formation. The fracking fluid is typically water-based and contains various chemicals, including proppants, bactericides, buffers, stabilizers, fluid-loss additives and surfactants. After injection, large portions of the fracking fluids are recovered and recycled; however, there is normally some fracking fluid loss within the oil or gas bearing strata. Over the years, this technique has greatly increased domestic natural gas and oil production by allowing wells to reach previously inaccessible natural resources.
In many cases, fracking companies claim that disclosing their fracking fluid ingredient list, in whole or in part, would damage their ability to compete in the market. In many states, the companies can apply for trade secret status with the appropriate state regulating agency, and if approved, the identities of the chemicals are exempt from disclosure. Other states do require disclosure of fracking fluid ingredients to the state regulators, however the state regulators do not make those lists of chemicals public, again claiming the ingredients are trade secrets that vary from company to company. Id. A few states, such as Louisiana, require operators to disclose all additives used in fracking fluids and the names and concentrations of chemicals which are subject to Occupational Safety and Health Administration Hazard Communication requirements (29 CFR 1910.1200) on a publically available chemical disclosure registry, called FracFocus. Id. However, additives deemed to be trade secret are exempt from that reporting requirement. Id. A report issued by, the U.S. Department of Energy’s Secretary of Energy Advisory Board on February 24, 2014, titled the Task Force Report on FracFocus 2.0, confirmed that full disclosure is not made by most companies reporting on FracFocus, and that companies still rely on the trade secret exemption found in federal regulation (29 C.F.R. §1910.1200(i)(1)), in making disclosures on FracFocus.
This non-disclosure of the chemical make-up of the fracking fluids has caused a different problem for the industry – public fear. Many concerns have been voiced by the public relating to the alleged “chemical cocktail” within the fluids and the potential for fracking fluids to contaminate drinking water. States like New York and Colorado have completely banned fracking all together in response to public fear. The news media is full of pictures of people across the U.S. holding up signs at public meetings with phrases opposing fracking.
This issue of public disclosure of the chemical make-up of fracking fluid is a significant issue at the state and federal level and has been one of the most contentious issues. Environmentalists argue that the public lacks adequate information to assess whether chemicals used in fracking represent threats to human health and/or the environment. Earthjustice, a public interest law firm, and 114 other organizations petitioned the EPA under Section 21 of the Toxic Substances Control Act to adopt a rule that would require, among other things, mandatory disclosure and reporting of the chemicals used in oil and gas exploration and production activities. In response to this petition, on May 19th, the EPA released an Advanced Notice of Proposed Rulemaking (“ANPR”). The ANPR seeks public comment on over fifty specific questions, including questions such as whether the disclosure should be mandatory or voluntary, whether the EPA should employ incentives for disclosure of the information, what types of information should be disclosed, what types of health and safety studies should be disclosed, whether a third-party certification and collection should be required, and how data that is claimed to be trade secrets or confidential business information could be reported and then aggregated and disclosed to the public while protecting the identities of the individual products and firms.
This is the EPA’s first official step toward creating a federal regulatory program that would require disclosure and reporting concerning chemicals used in fracking fluids. Such a regulatory program will affect companies in the oil and gas and chemical manufacturing industries, particularly those that use, manufacture, import, process or distribute chemical substances used in fracking treatments. EPA rests authority for such a regulatory program on TSCA section 8(d) which authorizes the Agency to require manufacturers, processors, and distributors of any chemical substance or mixture, and persons who propose to manufacture, process or distribute in commerce any chemical substance or mixture, to submit health and safety studies to EPA. It is expected that the EPA will receive a very large number of comments on this ANPR. All comments must be submitted on or before August 18, 2014.
