By R. Lee Vail, P.E, Ph.D.

On May 30, 2018, the Environmental Protection Agency (EPA) published proposed revisions to the Risk Management Program (RMP) rules that would largely undo changes to the (stayed) final rule published on January 13, 2017.  See 83 Fed. Reg. 24850 (May 30, 2018).  Although not a complete one hundred eighty degree U-turn, the revised proposed rule pretty much guts most of the 2017 changes.  Rather than spending time parsing out what stayed from what was removed, I thought it would be more useful to consider the underlying message.

  • EPA has no ongoing obligation to modify RMP. EPA notes that section 112(r) of the Clean Air Act (CAA) contains four provisions that require EPA to promulgate regulations.  EPA believes that they have “met all of its regulatory obligations under section 112(r) prior to promulgating the RMP Amendments rule.”  83 Fed. Reg. at 24856 – 57.  EPA further explains that changes to the rule are allowed, but such changes are discretionary.
  • Discretionary changes to RMP should be coordinated with OSHA and reflect costs. The RMP prevention program requirements, from its initial promulgation in 1966 until the 2017 (stayed) rulemaking, were effectively identical to the Occupational Health and Safety Administration’s (OHSA) Process Safety Management (PSM) program rules.  This is not surprising as EPA is obligated to coordinate with OSHA pursuant to CAA section 112(r)(7)(D).  “While EPA has amended the Risk Management Program several times after 1996 without corresponding OSHA amendments to its PSM standard, these changes did not involve the prevention program provisions, thus precluding any need for coordination with OSHA.”  83 Fed. Reg. at 24864.  Although the EPA recognizes that “at times divergence between the RMP rule and the PSM standard may make sense given the agencies’ different missions,” the 2017 amendment “constitute a divergence from that longstanding practice.”   Further, most of the anticipated costs associated with the new rule are aligned with OSHA preventive program requirements.  Given the cost, coupled with the understanding that changes to the RMP program are discretionary, EPA action is a policy choice.  Id.
  • An enforcement-led approach is preferred to over-regulation. EPA notes that only 8% of RMP covered facilities had reportable accidents and that 2% of the facilities reported 48% of such incidents.  See 83 Fed. Reg at 24872.  Accordingly, instead of burdening all facilities with new rules, EPA believes that it would be more efficient to fulfill the goal of RMP through an enforcement-led approach.  Accordingly, “the RMP Amendments missed the opportunity to better target the burdens of STAA [Safer Technology and Alternatives Analysis] to the specific facilities that are responsible for nearly half of the accidents associated with regulated substances at stationary sources subject to the RMP rule.” 83 Fed. Reg. at 24872.
  • Reporters of RMP incidents beware. See above.
  • Process safety information (PSI) may have no regulatory purpose other than information required to conduct a Process Hazard Analysis (PHA). The 2017 Amendment added a requirement that process safety information be kept up to date.  This requirement was removed without any explanatory discussion.  Arguably, by adding and removing this requirement, the only obligation is to have up-to-date PSI at the beginning of a PHA.  If so, any violation should be a one-time, single-day, violation.
  • Information release should be limited to that which is necessary for developing and implementing emergency response plans. Perhaps just semantics, but EPA modified the requirement to share information with local emergency planning and response organizations from relevant information to information necessary to develop and implement (fearing that the original language was too open-ended).    See 83 Fed. Reg. at 24853.  Arguably, the only true “relevant” reason to request such information would be as needed to develop and implement response plans.  The revised proposed language will accomplish the goal and is less ambiguous.
  • EPA should not require information “synthesis” that connect-the-dots for intended bad actors. Whereas information may be accessible to the public through multiple sources, added hazard may occur through compiling the information in a single source.  See 83 Fed. Reg. at 24867.

A public hearing on the proposed revisions to the RMP rules is planned for June 14, 2018 and comments must be submitted on or before July 30, 2018.

By Tokesha Collins-Wright

On December 7, 2017, the Environmental Protection Agency (“EPA”) released a memorandum entitled, “New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability.”[1] In the NSR memo, EPA announced its intention to drop its long-standing position that the Agency can use its own projections of a facility’s potential future emissions in order to determine whether a major source’s proposed modification triggers Clean Air Act (“CAA”) New Source Review (“NSR”) requirements. Instead, EPA states that now “when a source owner or operator performs a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations, and follows the applicable recordkeeping and notification requirements in the regulations, [then] that owner or operator has met the pre-project source obligations of the regulations, unless there is clear error (e.g. the source applies the wrong significance threshold).”[2] EPA continues on by stating that the Agency “does not intend to substitute its judgement [sic] for that of the owner or operator by ‘second guessing’ the owner or operator’s emissions projections.”[3] In other words, EPA will now defer to owners and operators’ pre-project NSR applicability analysis as to whether NSR applies to their proposed modification projects. EPA will step in only if there is “clear error” in this analysis.

The NSR memo further indicates that, in cases where a source projects that emissions increases will be less than the NSR thresholds, EPA will focus only on the source’s post-project actual emissions in determining whether to pursue an enforcement action.[4] This means that, even though pertinent case law has confirmed EPA’s authority to pursue NSR enforcement actions based upon a source’s failure either to perform a required pre-project applicability analysis or to correctly follow the calculation requirements of the NSR regulations,[5] EPA now does not intend to pursue new enforcement cases in the absence of actual post-project emission increases that would have triggered NSR requirements.

EPA states that this memo is intended to resolve any “uncertainty” caused by recent appellate court decisions in NSR enforcement proceedings.[6] In fact, this memo is evidence that EPA has changed its stance from the one it previously took in the aforementioned NSR enforcement proceedings. In U.S. v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) and U.S. v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017), Detroit Edison (“DTE”) began modification of a unit, after determining that the project would not trigger NSR requirements. After investigating DTE’s projections, EPA filed an enforcement action, challenging DTE’s NSR calculations and insisting that DTE should have secured a preconstruction permit. After much litigation and back-and-forth, the Sixth Circuit ultimately held that DTE was subject to enforcement for failure to comply with NSR pre-construction requirements, regardless of what actual post-construction emissions data later showed.[7] The Court found that:

…actual post-construction emissions have no bearing on the question of whether DTE’s preconstruction projections complied with the regulations.… [T]he applicability of NSR must be determined before construction commences and [] liability can attach if an operator proceeds to construction without complying with the preconstruction requirements in the regulations. Post-construction emissions data cannot prevent the EPA from challenging DTE’s failure to comply with NSR’s preconstruction requirements.[8]

On July 31, 2017, DTE filed a petition for writ of certiorari with the Supreme Court, challenging the Sixth Circuit’s ruling. On December 11, 2017, the Supreme Court denied the writ, which upholds the Sixth Circuit’s ruling (and the older EPA position) that actual post-construction emissions data does not prevent EPA from challenging a source’s failure to comply with NSR’s preconstruction requirements.

In the NSR memo, EPA states that the guidance document is not legally binding and is not legally enforceable. EPA also notes that, in the CAA scheme of cooperative federalism, state NSR programs may be more stringent than the federal program and states have primacy over the program once approved by EPA. Environmental groups have denounced EPA’s new stance on NSR permitting requirements, announcing that they may consider challenging EPA’s action in issuing the memo in court.[9]

For any owner or operator that intends to rely on the NSR memo to guide future NSR permitting decisions, please keep in mind that, regardless of the memo, citizens could still bring citizen suits for perceived NSR violations if EPA declines to do so. As such, any pre-project NSR applicability analysis should be well-documented and supported and owner/operators should follow the applicable recordkeeping and notification requirements set forth in the CAA regulations.

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[1] A copy of the memorandum is available at https://www.epa.gov/sites/production/files/2017-12/documents/nsr_policy_memo.12.7.17.pdf.

[2] Id. at p. 8.

[3] Id.

[4] See id.

[5] See U.S. v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) (“DTE I”); U.S. v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017), cert. denied, No. 17-170, 2017 WL 3324982 (U.S. Dec. 11, 2017) (”DTE II”).

[6] NSR Memo, at p. 1.

[7] DTE II, 845 F.3d at 741.

[8] DTE II, 845 F.3d at 741 (internal citations omitted).

[9] See, e.g., https://www.nrdc.org/experts/john-walke/trump-epa-abdicates-law-enforcement-gives-polluters-amnesty.

By R. Lee Vail, P.E., Ph.D. and Lauren J. Rucinski

On August 30, 2017 the D.C. Circuit denied environmental and labor groups’ request to stay the Tump EPA’s final rule delaying the Obama-era amendments to the EPA’s Risk Management Program (“RMP”) rule. The RMP rule implements Section 112(r) of the Clean Air Act and requires facilities that use extremely hazardous substances to develop and update a Risk Management Plan.

In June, the EPA Administrator Scott Pruitt signed a final rule to further delay the effective date of the RMP rule amendments until February 19, 2019 (“the Delay Rule”).  The delay allows EPA to conduct a reconsideration proceeding to review objections raised by petitioners to the final RMP amendments rule.[1]

Environmental and labor groups challenged the Delay Rule in the D.C. Circuit and then moved to stay the Delay Rule until the court takes full review of it. The groups’ motion requests a stay of the stay of the RMP rule until the court can review the merits of the Delay Rule—which stays the RMP rule. Try to say that five time fast. In any event, the D.C Circuit denied the groups’ motion to stay the Delay Rule. In denying the request for a stay, the D.C. circuit held that the environmental and labor groups had not “satisfied the stringent standards for a stay pending court review.”[2] Thus the Delay Rule will remain in effect while the D.C. Circuit reviews the merits of the groups’ challenge.

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[1] 82 Fed. Reg. 27133 (June 14, 2017).

[2] The Court also denied EPA’s motion for additional briefing time on the merits of the groups’ challenge.

EPA

By Brittany Buckley Salup

The Environmental Protection Agency (EPA) announced in March that it is in the process of developing new regulations to curb methane emissions from existing oil and gas facilities.  The EPA will formally require companies operating existing oil and gas sources to provide information to assist in the development of comprehensive regulations to reduce methane emissions.  Methane is a potent greenhouse gas with a higher global warming potential than carbon dioxide.  As a preliminary step in the process of developing methane regulations for already-existing oil and gas facilities, EPA plans to present an Information Collection Request (ICR) for public comment (via notice in the Federal Register) by the end of April 2016.

An ICR is a formal records request that requires the recipient(s) to provide reporting, records, or other specified information directly to the EPA.  Such ICRs are authorized by Section 114(a) of the Clean Air Act (CAA), which provides EPA broad authority to request information, provided the requested information is for one of three approved purposes: (1) to assist the Agency in developing rules or regulations; (2) to determine whether “any person is in violation” of any CAA requirement; or (3) to carry out “any provision of this chapter[.]” The EPA is in the process of developing an ICR that will help it identify and target significant sources of methane emissions at existing facilities.  The ICR will likely call for mandatory record-sharing, equipment surveys, and/or emissions monitoring.  Recipients of the ICR will generally be required to provide the requested information to EPA and will be required to attest that their responses are accurate.  Members of the oil and gas industry can expect to receive this ICR later this year, after public comment and final administrative approval.

EPA’s recently-announced plan is the latest in a series of moves to limit methane emissions from oil and gas facilities; however, this is the first significant proposal to target already-installed wells and other existing oil and gas equipment.  In 2012, EPA adopted regulations that limit methane and other emissions from new hydraulically fractured and re-fractured natural gas wells. EPA proposed rules for reduction of methane and volatile organic carbon emissions from new oil and gas facilities on September 18, 2015.  80 Fed. Reg. 56593.  The proposed rules for new facilities imposed methane reduction measures on oil and natural gas well sites, natural gas gathering and boosting stations, gas processing plants and natural gas transmission compressor stations.  The March 2016 announcement for existing facilities indicates that the ICR will apply to these same types of sources “as well as additional sources.”  This latest announcement has fueled concerns that the forthcoming regulations could, as a practical matter, require the industry to retrofit or replace existing production and processing equipment to achieve compliance.

For more information, see EPA Administrator, Gina McCarthy’s blog post on this topic here.

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By Lee Vail

Both OSHA’s Process Safety Management (“PSM”) and EPA’s Chemical Accident Prevention regulations are regulatory programs developed to address process safety in the “Process Industry.” A “Process” is defined broadly and includes any activity that uses, stores, manufactures, handles or moves hazardous chemicals. Since the definition is broad, it includes much more than refineries and chemical plants, and unless exempt, includes any facility with an inventory of hazardous chemicals above an established threshold.

PSM, which was promulgated in 1992 under authority of the Section 304 of the Clean Air Act (“CAA”), is administrated by the Occupational Safety and Health Administration. PSM regulations are codified at 29 CFR 1910.119. In addition to other requirements, the EPA’s Chemical Accident Prevention regulations (colloquially referred to as the Risk Management Program or “RMP”) require the development of a Risk Management Plan (confusingly also abbreviated as “RMP”). RMP (the program) was promulgated in 1996 under Section 114(r) of the CAA and the Emergency Planning and Community Right-to-Know Act of 1986 (“EPCRA”) by the Environmental Protection Agency (“EPA”). RMP regulations are codified at 40 CFR Part 68. Although different regulations developed by different agencies under separate authority, these programs contain a lot of overlap.

More on PSM, RMP, RAGAGEP, PSI and PHA: