Court ruling to spark refinery improvements
Jun 27, 2005 12:31 PM
US refineries are expected to continue with improving and updating emissions technology after a June 24 ruling by a Washington DC appeals court that upholds one of the rules in the Clean Air Act.
"These NSR (New Source Review) reform rules allow refineries to proceed with pollution-preventing activities and installation of new technology that helps reduce emissions," the National Petrochemical and Refiners Association said in a press release. "These reforms also consider industry plant operations as a whole, an important step to more efficient environmental regulation. The result should be a more effective Clean Air program."
The 2002 NSR rule had been challenged by New York and other states as it applies to determining baseline emissions and other environmental factors.
According to the appeals court records, Justice Stephen Williams wrote in concurring with the ruling: "It need not show that the system chosen will achieve perfect NSR compliance -- a showing that I do not believe we could lawfully demand. Perfection is often too costly to be sensible."
The appeals court found:
•For the use of past emissions and projected future actual emissions, rather than potential emissions, in measuring emissions increases.
•For the use of a 10-year lookback period in selecting the two-year baseline period for measuring past actual emissions.
•The use of a five-year look-back period in certain circumstances.
•The abandonment of a provision authorizing states to use source-specific allowable emissions in measuring baseline emissions.
•The exclusion of increases due to unrelated demand growth from the measurement of projected future actual emissions.
•The Plantwide Applicability Limitations (PAL) program. (PAL, an EPA program, is a voluntary option that allows a major stationary source to manage emissions without triggering major new source review. If the emissions are maintained below a plantwide actual emissions cap, the facility may avoid the major NSR permitting process when it makes facility alterations.)
"On a broader note, this case illustrates some of the painful consequences of reliance on command-and-control regulation in a world where emission control is typically far more expensive, per unit of pollution, when accomplished by retrofitting old plants than by including state-of-the-art control technology in new ones," Williams wrote. "In the interests of reasonable thrift, such regulation inevitably imposes more demanding standards on the new. But that provides an incentive for firms to string out the life of old plants. Indefinite plant life is impossible without modifications, however, so the statute conditions modifications on the firmís use of technological improvements.
"This in turn replicates the original dilemma: a broad concept of modification extends both the scope of the mandate for improved technology and the incentive to keep the old. By contrast, emissions charges or marketable pollution entitlements provide incentives for firms to use -- at any and every plant -- all pollution control methods that cost less per unit than the emissions charge or the market price of an entitlement, as the case may be."
The court also said that the Environmental Protection Agency (EPA) erred in promulgating the Clean Unit applicability test, which measures emissions increases by looking to whether emissions limitations have changed.
"Congress directed the agency to measure emissions increases in terms of changes in actual emissions," the court said. "EPA also erred in exempting from NSR certain pollution control projects that decrease emissions of some pollutants but cause collateral increases of others. The statute authorizes no such exception. EPA acted arbitrarily and capriciously in determining that sources making changes need not keep records of their emissions if they see no reasonable possibility that these changes constitute modifications for NSR purposes. The agency failed to provide a reasoned explanation for how, absent such records, it can ensure compliance with NSR."
The DC Court opinion can be accessed by clicking here for the Web site at cadc.uscourts.gov.
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