Transcript TCEQ's Contested Enforcement Process

STATE AND FEDERAL
ENVIRONMENTAL HOT TOPICS:
AIR ISSUES and ENFORCEMENT
Pamela M. Giblin
29th Annual Corporate Counsel Institute
May 11, 2007
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AIR: STATE ISSUES
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Texas State Implementation Plan
Event Reporting
Title V Reporting
Emissions Inventory Reporting
Regional Haze
Fuel Requirements
Climate Change Legislation
Other State Legislation
Texas SIP:
Map of Texas' Ozone Nonattainment/Near-Nonattainment Areas
Source: www.tceq.state.tx.us
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Texas SIP
 Upcoming SIP Timeline:
 May 2007: Agenda to consider adoption of the HGB 8-Hour
Ozone Attainment Demonstration
 May 2007: Agenda to consider adoption of the HGB Rate-ofProgress SIP
 June 2007: Agenda to consider proposal of El Paso PM10
Redesignation and Maintenance SIP Revision
 July 2007: Agenda to consider adoption of General
Conformity SIP Revision
 November 2007: Agenda to consider adoption of the
Regional Haze SIP
 December 2007: Agenda to consider adoption of the El Paso
PM10 Redesignation and Maintenance SIP Revision
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Event Reporting
 Applies to all unauthorized emissions:
 Emission Events (i.e., "upsets" or "malfunctions")
 Maintenance, Start-up and Shutdown ("MSS") Emissions
 Reportable quantity ("RQ") for every possible air contaminant:
 Incorporates CERCLA/ECPRA RQs for listed substances
 100 lb. RQ default for all non-listed substances
 Record or report all events:
 Report if > RQ/24 hours
 Record if < RQ/24 hours (records available for inspection)
 Prompt electronic reporting
 Initial Report as soon as practicable, but not > 24 hours
 Follow-up Report in 2 Weeks
 Ready public access to reporting data
 Searchable reporting data lodged on TCEQ website
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Event Reporting: Compliance
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Emission events constitute violations
Source "demonstration" for penalty relief:
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Does not affect injunctive relief/order authority
Source has burden of proof
Correct reporting/recording is a prerequisite
TCEQ review and makes determination
Substantive demonstration criteria mirror criteria in EPA's SIP guidance
"Excessive emission events" determination
 TCEQ Executive Director makes determination
 Based on several factors, e.g., frequency, cause and duration
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Source options:
 Corrective action plans (CAPs)
 Obtain authorization (if available)
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"Chronic excessive emissions events" determination
 Commission makes determination
 Separately affects "compliance history" status
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Title V Reporting
 Semi-annual "deviation" reporting certified by a
responsible official
 Emission events constitute deviations
 Reporting or recording errors constitute deviations
(when reporting rules are incorporated as applicable
requirement)
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Emissions Inventory Reporting
 Annual report required of all major sources
 Report must include and identify emission events and
MSS emissions
 Emissions inventory data used in SIP process
 Planning & modeling
 Rule development
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Regional Haze
 EPA's Regional Haze rule requires the states, in coordination with
the EPA, the National Park Service, the U.S. Fish and Wildlife
Service, the U.S. Forest Service, and other interested parties, to
develop and implement air quality protection plans to reduce the
pollution that impairs visibility.
 Texas has two Class 1 areas located in the western part of the state:
Big Bend National Park and Guadalupe Mountains National Park.
 The Regional Haze revision to the Texas SIP is due to EPA by
December 17, 2007.
 Best Available Retrofit Technology (BART) and the Clean Air
Interstate Rule (CAIR) are other federal regulations expected to
improve air quality and regional haze.
 The Texas BART rule was adopted in January 2007.
 The Texas CAIR was adopted in July 2006.
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Fuel Requirements
 The TCEQ requires use of various fuel mixtures:
 Reformulated gasoline year-round in the HGB and DFW areas
 Low Reid vapor pressure gasoline each summer in East and Central
Texas and El Paso
 Oxygenated gasoline each winter in El Paso
 Low-emission diesel fuel in East and Central Texas, including
Houston-Galveston, Dallas-Fort Worth, and Beaumont-Port Arthur
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Texas Climate Change Legislation
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Three primary climate bills have been filed in the Texas Legislature
 SB 945, filed by Sen. Rodney Ellis (D-Houston)-- Texas Global Warming
Solutions Act
 Would require Greenhouse Gas emission reductions to 1990 levels by 2021 based on
calculating Statewide 1990 GHG emissions by January 1, 2009
 Would require TCEQ to publish a list of early reduction actions by June 30, 2008 and
rules implementing early reduction actions by January 1, 2010
 Would require TCEQ to prepare a comprehensive plan detailing achievement of
reduction goal by January 1, 2010
 Would require TCEQ to adopt rules by January 1, 2012 setting GHG emission limits and
reduction measures for sources or source categories
 HB 2143, filed by Rep. Eddie Rodriguez (D-Austin) -- Texas Global Warming
Solutions Act
 Would require GHG emission reductions to 1990 levels by 2020 based on calculating
Statewide 1990 GHG emissions by June 30, 2008
 HB 2073, filed by Rep. Elliott Naishtat (D-Austin)
 Would require the TCEQ to prepare a report listing strategies to reduce GHG emissions
in Texas and adopt rules implementing the strategies by June 1, 2009
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Other Proposed Texas Legislative Bills
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Other air-related legislative bills that have been filed this Session
 HB 1740, filed by Rep. Ellen Cohen (D-Houston)
 Would amend the Texas CAA to allow the TCEQ to impose more stringent requirements
at permit renewal, where the facility is permitted to emit an air contaminant that has the
potential to produce adverse health effects or odors..."
 HB 1745, filed by Rep. Sylvester Turner (D-Houston)
 Would amend the emissions event reporting provisions of the Texas CAA to change the
RQ-event reporting deadline from 24 hours to 1 hour
 Would establish a fee in the amount of $1/ton for emissions events over 10,000 lbs/year
by a regulated entity
 HB 1252, filed by Rep. Dennis Bonnen (R-Angleton)
 Would authorize the TCEQ to renew a preconstruction permit when a permit
amendment that requires public notice is submitted no more than 36 months before the
date the permit expires
 Would authorize the TCEQ, for cause, to establish a permit term for a preconstruction
permit issued for a nonfederal source not to exceed 10 years
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AIR: FEDERAL ISSUES
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Federal Air Programs
Exceptional Events
Upcoming Federal Deadlines
Federal NSR Reform
NSR Supreme Court Cases
Climate Change
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Federal Air Programs
 State Implementation Plans: Final PM2.5 Rule
 Sets forth the requirements states must meet in their SIPs to ensure
that nonattainment areas will attain the PM2.5 standard as
expeditiously as practicable, but no later than 2015.
 Clean Air Interstate Rule
 On March 10, 2005, EPA issued the Clean Air Interstate Rule, which
permanently caps emissions of sulfur dioxide and nitrogen oxides in
the eastern United States.
 Clean Air Mercury Rule
 On March 15, 2005, EPA issued the Clean Air Mercury Rule to
permanently cap and reduce mercury emissions from coal-fired
power plants. This rule made the United States the first country in
the world to regulate mercury emissions from utilities.
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Exceptional Events
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Earlier this year, EPA published its Exceptional Events rule, which
establishes criteria and procedures for determining whether air quality
monitoring data has been influenced by exceptional events.
72 Fed. Reg. 13,560 (March 22, 2007).
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Exceptional Events are:
 unusual or naturally occurring events that can affect air quality but are not
reasonably controllable or preventable;
 events caused by human activity that is unlikely to recur at a particular
location or natural event; and
 are determined by EPA to be an exceptional event.
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This rule requires states to take reasonable measures to mitigate the
impacts of an exceptional event.
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The effective date of this rule is May 21, 2007.
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Federal Regulatory Deadlines
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Ozone SIPs for 8-hr NAAQS
Attainment for 8-hr ozone NAAQS
Regional Haze SIPs
Revised Ozone NAAQS final rule
PM2.5 SIPs for 1997 standards
CAIR NOx (Phase I)
CAIR SO2 (Phase I)
CAMR (Phase I)
Designations for 2008 Ozone NAAQS
Attainment of 1997 PM2.5 NAAQS
Designations for 2006 24-hr PM2.5 NAAQS
Ozone SIPs for 2008 NAAQS
Attainment of 2006 Ozone NAAQS
PM2.5 SIPs for 2006 24-hr NAAQS
Compliance with Regional Haze SIPs
Phase II CAIR (NOx and SO2)
Attainment of 2006 PM2.5 24-hr NAAQS
Phase II CAMR
June 15, 2007
June 2007-2024*
December 17, 2007
March 12, 2008
April 2008
January 1, 2009
January 1, 2010
January 1, 2010
March 2010*
April 2010
April 2010*
March 2011*
March 2012-2029*
April 2013*
2013-2018
January 1, 2015
April 2015*
January 1, 2018
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NSR: Supreme Court Cases
 Environmental Defense v. Duke Energy Corp.
 On April 2, 2007, the Supreme Court issued a decision in which it held that
the Fourth Circuit's determination in Duke Energy was inconsistent with
the language of the PSD regulations
 The decision confirms that the emissions tests for modifications under
NSPS and PSD are independent
 U.S. v. Cinergy
 7th Circuit decision that NSR requires annual emissions test
 criticized 4th Circuit Duke decision
 Cinergy appealed decision to Supreme Court
 New York II
 D.C. Circuit vacated equipment replacement rule
 NSR applies to "any" physical change that increases emissions so
EPA can only adopt de minimis exclusions
 EPA and UARG appealed decision to Supreme Court
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Climate Change
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The U.S. government has established a comprehensive policy to address
climate change. The three basic components of this policy are:
 Slowing the growth of emissions;
 Strengthening science, technology and institutions; and
 Enhancing international cooperation
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To implement its climate policy, the U.S. government is using both voluntary and
incentive-based programs to reduce emissions.
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The climate change initiative incorporates expertise from many federal
agencies, including EPA, as well as from the private sector.
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Climate Change: Supreme Court Decision
 Massachusetts v. EPA
 On April 2, 2007, the U.S. Supreme Court ruled that EPA has
authority under the Federal CAA to regulate greenhouse gas
emissions from cars
 Petitioners have standing to challenge EPA's denial of their petition
for rulemaking on greenhouse gas emissions from new cars
 Greenhouse gases fit within the CAA's broad definition of air
pollutant, so EPA has authority to regulate them
 On remand, EPA must ground its reasons for action or inaction in
the statute
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Federal Climate Change Legislation
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Two pieces of proposed Federal legislation specifically target utilities:
 Electric Utility Cap-and-Trade Act
 utility industry-specific GHG cap-and-trade plan
 plan starts with a 15% auction of emission credits in 2011, and
progresses to a 100 % auction by 2036
 Clean Air Planning Act
 utility industry-specific, targets controls for CO2, SO2, NOx and
mercury emissions from coal-fired power plants
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Additional Federal Legislation
 Global Warming Pollution Reduction Act
 Climate Stewardship and Innovation Act
 Safe Climate Act
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ENFORCEMENT ISSUES
 State (TCEQ)
 Responses to Executive Director's Preliminary Report and Petition
(EDPR)
 Timeline for Enforcement Actions
 Compliance Histories
 Field Citation Pilot Program
 Federal (EPA)
 Most Common Enforcement Matters
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Responses to EDPR
 General Denial vs. "Kitchen Sink"
 Determine whether raise specific defenses or simply plead a general denial
 Specific defenses can "send a message" to the other side
 Affirmative Defenses
 Can be raised at any time
 Different than civil litigation
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TCEQ Enforcement Timeline
Action
Pre-Enforcement
Process Review
Post-Enforcement
Process Review
Assignment of Enf.
Coordinator
No enforced time limit
7 Days after referral to
Enf. Division
Mailing of Proposed
Order and PCW
120 days after referral
to Enf. Division
60 days after referral to
Enf. Division
Referral to Litigation
Division
60 days after mailing of
order
30 days after mailing of
order
No enforced time limit
45 days after referral to
Litigation Division
Referral to SOAH/
Filing of EDPRP
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Compliance Histories
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The TCEQ rates the compliance history of every owner or operator of a
facility regulated under any of the following State laws:
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Texas Water Code, Chapter 26 - Water Quality
Texas Water Code, Chapter 27 - Injection Wells
Texas Health & Safety Code, Chapter 361 - Texas Solid Waste Disposal Act
Texas Health & Safety Code, Chapter 382 - Texas Clean Air Act
Texas Health & Safety Code, Chapter 401 - Texas Radiation Control Act
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A compliance history entails both positive and negative factors related
to the environmental performance at a site over the past 5 years.
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State regulations (30 T.A.C. Chapter 60, Compliance History) set forth
the procedure for quantifying each factor in the compliance history; the
resulting rating is a measure of the customer's distance from
compliance
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Compliance Histories, cont.
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Ratings are converted to classifications, as follows:
 If the calculated rating is below 0.10, the performance is classified as HIGH,
meaning that, at this site, the customer complies with environmental regulations
extremely well
 If the calculated rating is 0.10 - 45.00, the performance is classified as AVERAGE,
meaning that, at this site, the customer generally complies with environmental
regulations
 If the calculated rating is 45.01 or greater, the performance is classified as POOR,
meaning that, at this site, the customer fails to comply with a significant portion of
the relevant environmental regulations.
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The assigned rating of 3.01 is classified as average by default.
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Ratings and compliance classifications are updated each September 1st.
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Field Citation Pilot Program
 This pilot program covers violations regarding:
 Petroleum storage tanks
 Stage I and II vapor recovery
 Storm water (industrial)
 Occupation certification
 The TCEQ implemented this pilot program statewide on March 13,
2006
 The TCEQ investigator may cite certain clear-cut violations on the
field citation form
 This program is intended to promote a quick resolution for specific
violations documented during a TCEQ investigation, while offering a
reduced penalty as compared to a penalty calculated through the
traditional enforcement process
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Enforcement Issues: Federal
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Listing of the most commonly encountered federal environmental laws enforced by the EPA:
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Asbestos Hazard Emergency Response Act (AHERA)
Clean Air Act
Clean Water Act
Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA/SUPERFUND)
Emergency Planning and Community Right-to-Know Act (EPCRA)
National Environment Policy Act
Oil Pollution Act
Resource Conservation and Recovery Act
Solid Waste Disposal Act
Rivers and Harbors Act
Toxic Substances Control Act
LONDON
WASHINGTON
AUSTIN
DALLAS
HOUSTON
MOSCOW
NEW YORK
RIYADH
DUBAI
HONG KONG