Assuring Compliance With Air Emissions Limits

Fortnightly Magazine - March 15 1998

THE U.S. ENVIRONMENTAL PROTECTION AGENCY HAD A novel idea: For power plants and sources relying on devices to control air emissions, rather than attempt to monitor the actual physical emissions to determine compliance with federal law, it simply would require inspections and tests of the performance of the control device. %n1%n

This strategy was formalized in the EPA's compliance assurance monitoring (CAM) rule signed Oct. 17, 1997. The EPA's theory is that if the control device is working properly, it is likely pollutant emissions fall within the required limits. %n2%n

The CAM rule, added as part 64 to title 40 of the Code of Federal Regulations, forms one more part of the new Clean Air Act enforcement model envisioned by the 1990 amendments. Under CAM, air emissions sources would submit operating data that at least indirectly reflects the facility's compliance status on an ongoing basis. Taken with the relaxed standard for proof of violations and facility-specific permit requirements, a CAM-type rule should make federal enforcement easier.

Nevertheless, many questions arise regarding the formula that triggers the rule's application, plus its effectiveness and accuracy. Can utilities rely on equipment monitoring to produce trustworthy results? Will it actually become more difficult for utilities to certify that they meet emissions standards?

Other questions stem from the shift from reference tests to enforcement based upon any proffered credible evidence. This aspect has caused significant problems for industry.

All of the data from these tests will be available to EPA and citizens groups for evaluation. If their experts evaluate the data differently, and believe that it shows noncompliance, the source may be subject to enforcement based upon a "battle of the experts." Moreover, the CAM data may comprise only part of the data admitted into evidence by the reviewing court. Under the "credible evidence rule," a court is allowed to consider any credible evidence relevant to whether the source is in compliance. %n3%n Presumably, violation allegations could be proved though the CAM data is inconclusive. For instance, CAM reporting may show an excursion from the indicator ranges of its control device, but it may not confirm conclusively that a source is not in compliance.

Legislative History: In Search of a Fair Test

Prior to the 1990 amendments to the Clean Air Act, as a federal matter, major sources of air pollutants were not subject to monitoring, except when the source performed required tests. Between tests, sources were required to operate the equipment properly but were not required to monitor actual emissions. The assumption was that if the equipment tested within emissions limits and was operated properly, the emissions would remain within permitted limits.

Many states nevertheless imposed emissions monitoring requirements, often under the name "continuous emissions monitoring." Yet even if CEM data suggested a violation of the Act, the source was not subject to federal enforcement unless the data came from a required federal test. Since EPA could only detect violations by requesting a reference test, or after a source performed a scheduled test, the results were derived under controlled conditions that may not accurately represent typical operations. When the 1990 amendments were adopted, many were urging Congress to require CEM-type monitoring of actual emissions. %n4%n

EPA's CAM rule stands as a product of the 1990 amendment to section 114(a) of the Act that allowed EPA to require "enhanced monitoring" and "compliance certifications." The legislative history is not definitive, but appears to suggest that Congress intended that the EPA could require CEM, along with periodic compliance certification. The legislative history also includes a statement that the monitoring data and certifications could be used as evidence of a violation.

The CAM rule was thought necessary to solve the difficult problem of federal emissions enforcement. In general, the government could prove violations of the Clean Air Act only by carrying out a scheduled reference test already spelled out in the regulation defining the applicable emissions limit. The EPA would be obliged to call on the source to perform the test. Moreover, any such test performed under controlled conditions might not accurately depict typical operations.

This difficulty encountered in devising a fair test to enforce the Clean Air Act stands in marked contrast to enforcement practice under the Clean Water Act. Under the CWA, each discharger of wastewater into navigable waters is required to have a facility-specific permit with established discharge limits that are periodically monitored. The results are made public on "discharge monitoring reports." Under the CWA, the permittee self-monitors and self-reports violations of its permit. Facility operators are required to certify as to compliance with the permit restrictions. Enforcement is much easier than proving a violation by infrequently calling for the performance of an elaborate, highly detailed and well-controlled test.

In enacting the 1990 amendments to the Clean Air Act, argued some in the debate, Congress adopted the CWA enforcement model. %n5%n Air pollutant sources would be required to self-monitor actual emissions and self-report violations. Source operators would be required to certify the compliance status of the facility, just like for wastewater dischargers. Enforcement would prove faster, better and cheaper because proving violations would involve pointing to the source's own monitoring results. With this scheme in mind, the EPA chose first in 1993 to propose an "enhanced monitoring" rule that would have established that program. %n6%n

The reaction from industry was dramatic and negative. %n7%n Air emissions measurement and control was thought too complex and difficult for monitoring equipment results to identify a violation of the Act definitively. The EPA quickly withdrew the enhanced monitoring rule, and jettisoned the idea of continuous monitoring of actual emissions. In its place, EPA published the first of two proposed CAM rules. %n8%n

Rather than monitor and report actual emissions, the CAM proposals would require the monitoring and reporting of operations of the source's air pollution control equipment. Rather than report "deviations" from air permit limits (and, likely, demonstrate Act violations), the source would report "exceedances" of emissions limitations and "excursions" from the acceptable operating ranges of its pollution control equipment. Exceedances and excursions may identify equipment or operation problems that must be fixed, but they may not actually show Act violations. After several rounds of public comment, numerous stakeholder meetings and significant rule rewrites, EPA produced the final CAM rule. %n9%n

The rule requires major sources of emissions to submit for approval a plan to monitor performance indicators for air pollution control equipment. The source must include its plan and the acceptable performance indicator ranges in its Title V federal operating permit. %n10%n Reported excursions from the acceptable ranges may trigger corrective action requirements, but they may not necessarily be Act violations. The consequences of repeated excursions illustrate the difference. Under the rule, the source must submit a quality improvement plan that suggests an evaluation procedure to find the reason for the excursions and a series of steps to correct any problems. Although repeated excursions may prove relevant evidence, it is not conclusive evidence of a violation of an emissions limitation or standard under the Act.

Dealing With Compliance: Who, What, When

The CAM rule targets emissions units that achieve compliance by using an active control device. EPA believes that a control device that is not properly operated or maintained would result in significant emissions. CAM applies to pollutants that, lacking a control device, would exhibit a "potential-to-emit" equal to or greater than the "major-source" limitations for an operating permit under part 70 of C.F.R. title 40. %n11%n

Q. Who is covered? "Control device" is equipment used to destroy or remove pollutants, as distinguished from inherent process equipment. For example, the CAM rule preamble notes that duct work and roof vents are not control devices, but a burner operating at a higher efficiency than required by the process to control emissions is a control device. %n12%n Application of CAM requirements is evaluated based on each regulated pollutant from each emissions unit, and not the facility. One facility may have several emissions units for different pollutants.

EPA's regulatory analysis estimates that 10 percent of the processes at major industrial facilities contain active control devices. Of those, the CAM rule will cover about 60 percent, which accounts for more than 97 percent of emissions from sources using control devices.

Q. What to submit? In general, the source must submit a plan for monitoring its control device, indicator ranges of acceptable operation, performance and operating criteria for the monitoring device, and a form and frequency of reporting of monitoring results. In addition, the source must certify compliance at least annually. %n13%n The submittal is focused on the four fundamental requirements of the rule: (1) monitor the control device to obtain data that allows certification of compliance, (2) take corrective action if the data suggests a problem, (3) report the results to the permitting authority and (4) maintain copies of the records.

As an example, in the rule preamble, EPA recites a hypothetical monitoring plan for a Kraft pulp mill. The mill will monitor the combustion temperature in the incinerator, recording it continuously using a strip chart. It will determine compliance with the indicator range of the incinerator over a five-minute rolling average. (The thermocouple used to measure the combustion temperature must be accurate to within 1 percent.) The mill will perform operational checks daily. Each year, the mill will measure the accuracy of the thermocouple and strip chart. %n14%n

EPA notes that the indicator range may be proposed with the plan based on equipment specifications or prior equipment use, or the source may propose establishing the indicator range after operation and testing of the control device. %n15%n

Q. What is monitored? CAM monitoring is required for any "emission limitation or standard," which denotes a limitation or requirement that is federally enforceable in an operating permit. An emissions limitation or standard may be pounds per hour of a pollutant, or as a relationship between different numbers or as a work practice or procedure. %n16%n

The final CAM rule exempts several categories of emissions, some of which may be relevant to industrial sources. Emissions limitations or standards under the New Source Performance Standards program proposed after Nov. 15, 1990 are exempt. EPA intends that future federal rulemaking will include monitoring requirements as part of the standard that would satisfy the CAM rule. Emissions limitations that apply to an emissions trading program are exempt since monitoring requirements already apply. Also exempt are emissions limitations in a Part 70 operating permit that includes continuous compliance monitoring, stratospheric ozone protection requirements and acid rain program requirements. %n17%n

Besides monitoring the control device, CAM also requires monitoring of any emission capture device and control device bypass system. Both systems are important to the proper functioning of the control device. The final rule eliminates monitoring, however, for fugitive emissions. By definition, fugitive emissions do not pass through a control device so the operation of the control device is not relevant to controlling fugitive emissions. %n18%n

Q. What to report? The CAM rule requires at least semiannual reporting of any problems with the control device and a certification as to compliance of the source with applicable requirements. The report must identify any "exceedances," (an emissions limitation was exceeded) and any "excursions," (a departure from the indicator range established in the Part 64 monitoring plan for the device). %n19%n The report must also describe action taken to correct an exceedance or excursion and any downtimes or incidents with the monitoring equipment.

Sources must certify that compliance was "continuous or intermittent," which means only that the source has CAM data available that, because of the type of monitoring performed, can show compliance on a continuous or an intermittent basis. %n20%n (By contrast, the 1993 proposed rule would have interpreted the term "continuous or intermittent" to require the source to determine whether compliance was in fact continuous (em essentially requiring self-reporting of violations, rather than simply self-reporting of evidence capable of showing a violation.)

Q. When are plans due? Part 64 monitoring plans must be submitted as part of the Part 70 operating permit application if by April 20, 1998 the source has not applied for an operating permit or the permitting agency has not determined the application is complete. If the source already has a Part 70 operating permit, then the Part 64 monitoring plan must be submitted when the source applies for a significant permit revision or renewal of the operating permit.

Q. What if an exceedance or excursion occurs? In case of an exceedance or excursion the source must return the control device to its usual manner of operation "as expeditiously as practicable." Corrective action must be implemented to prevent the recurrence of the malfunction. %n21%n Under the rule, after reporting the exceedance or excursion, the permitting authority will determine whether the response and corrective action was acceptable.

Besides enforcement for a violation, if there is an exceedance or excursion, the permitting authority can require a quality improvement plan (QIP). %n22%n A QIP seeks out the cause of a problem and makes appropriate changes to ensure the process or equipment is working properly. The QIP must be implemented within 180 days, or the source must notify the permitting authority that it will take longer than 180 days. The final rule allows the permitting authority to include a threshold to trigger a QIP, specifically suggesting 5 percent, of an accumulation of exceedances or excursions during the control device's operating time during the previous reporting period. %n23%n The EPA made clear in its final rule that exceedances and excursions are evidence of a violation of the Act and repeated problems may lead to enforcement as to the QIP or required changes to the QIP. %n24%n (By contrast, the proposed rule would have treated a second required QIP during the term of the permit as a violation of the Act.)

Q. If no excursions, then a safe harbor? Although operation of the control devices within the indicator ranges does not act as a shield against a violation of the Act, EPA will presume an emission unit is in compliance and will not be a target for enforcement. Upon approval of the monitoring, the permitting authority can extend the permit shield to the source's obligation to comply with Part 64 monitoring requirements. %n25%n

Q. What if my part 70 operating permit already has monitoring requirements? Part 70 operating permits were required to have periodic monitoring requirements if the source did not already have sufficient monitoring requirements. For any emissions units covered, the Part 64 monitoring requirements will supplant and satisfy any Part 70 periodic monitoring requirements. EPA acknowledges that some sources may just have adopted Part 70 periodic monitoring that may be discarded to satisfy Part 64. %n26%n

The Wrench: Hung by Credible Evidence?

At first glance, industry might appear satisfied with the outcome of the CAM rule. The required monitoring should assure that a source with a properly operating control device is satisfying requirements. At the same time, the rule preserves use of special protocols, called "reference test methods," to measure actual emissions. Unlike the CWA model, these test results do not conclusively prove a violation has occurred because the tests do not measure actual emissions. If CAM data shows a control device is functioning properly, proving a violation of emissions limitations or standards will be very difficult.

Yet the CAM rule still presents several problems.

The most important impact of the CAM rule is the interplay between CAM and the "credible evidence rule." Given that interplay, the enforcement provisions of CAM rule still trouble industry. %n27%n

The EPA sees the package of permits, credible evidence and compliance assurance monitoring as the foundation for an enforcement-friendly permit scheme. Rather than wait for the results of a reference test, the EPA expects to use the CAM data along with any other credible evidence to prove violations of specific permit requirements. %n28%n

Already, however, the EPA has had to declare in the preamble to the credible evidence rule that the source need not search out and review all data concerning compliance in order to make the compliance certification. It had said the same thing in the preamble to the CAM rule. (That no duty is imposed on the owner or operator "to assess every possible piece of information that may have some undetermined bearing on compliance.") Industry's point is two-fold: (1) What data will now be available that is relevant to compliance, and (2) once the data is assembled, what does it mean about compliance?

In all likelihood, industry will be required to evaluate the CAM data to determine whether it shows non-compliance with enforceable emissions limitations. In that case, excursions outside the permitted range of the pollution control equipment must be evaluated before the source can certify compliance.

Moreover, that same data will be available to the EPA and to citizens groups for a similar evaluation. Indeed, in a lawsuit filed against the EPA challenging the CAM rule, an environmental group argues that the CAM rule as promulgated does not provide enough data for citizens' suits against alleged violators.

Two federal District Court decisions demonstrate the likely impact of the credible evidence rule and CAM data on enforcement proceedings: Sierra Club v. Public Service Co. of Colorado, 894 F.Supp. 1455 (D. Colo. 1995); and Unitek Environmental Services Inc. v. Hawaiian Cement, Case No. 95-00723 (D. Haw. Aug. 7, 1996). Both cases suggest that proving a violation of emissions limitations and standards in the Act will become a "battle of the experts," using any available data including CAM data. Rather than carry out enforcement in a carefully controlled reference test, enforcement could depend upon a supposition: If a reference test had been performed, would it have indicated a violation?

Under the EPA's interpretation, many more sources will be exposed to this ambiguity than necessary. EPA's formula for triggering CAM application (i.e., emissions would be a major source if uncontrolled) is unsatisfactory. There is no good rationale for applying CAM requirements to sources that apply 90 percent to 95 percent controls to emissions and are significantly below the "major-source" threshold. Short of a catastrophic failure of the pollution control equipment, fluctuations in the equipment operating performance will not lead to major source emissions levels. In view of the ongoing difficulties EPA has experienced with its potential-to-emit definition and the corresponding requirement of federally enforceable permit limitations, it is a poor test upon which to establish CAM requirements.

Finally, industry also is concerned with the cost of implementing the CAM rule compared with its environmental benefits. Title V facilities have just finished the federal operating permit process and corrective action required. CAM will be expensive to comply with and resource intensive for state agencies to administer. F

James P. O'Brien is a partner in the international partnership of Baker & McKenzie in Chicago office. O'Brien concentrates his practice on environmental and energy law.

Identifying Sources

By Pollutant & Control Device

THE EPA uses several tests to determine which control devices and what specific pollutants from those devices fall under the CAM rule.

CONTROL DEVICES. The EPA uses three criteria to distinguish process equipment from pollution control devices: (1) Is the primary purpose of the equipment to control air pollution? (2) Where the equipment is recovering a product, how do the cost savings from the product compare to the cost of the equipment? (3) Would the equipment be installed if no air quality regulations were in place?

TYPES OF POLLUTANTS. CAM applicability is determined with respect to each pollutant at an emissions unit separately. For example, a coal-fired boiler emitting through a single stack could make up several pollutant-specific emissions units, such as for particulate matter, sulfur dioxide, nitrogen oxide and carbon dioxide.

So Who's Covered Anyway?

Overlaps and Exemptions Cloud the Issue

THE Acid Rain Program already has monitoring requirements. Many operating permits include continuous emissions monitoring requirements. Recently promulgated New Source Performance Standards have monitoring requirements. There is so much overlap, it is sometimes difficult to determine what equipment CAM actually covers.

The CAM requirements apply to active pollution control devices that control emissions of specific pollutants on individual air emission units. The applicability of the CAM requirements should be evaluated for the following typical devices or practices.


•  Electrostatic precipitators for particulates

•  Flue gas desulfurization units

•  Bag filters for coal handling and ash management for fugitive dust

•  Combustion techniques that do not improve the efficiency of the system

•  Cyclonic separators for coal handling

•  Flue gas recirculation techniques

•  Selective catalytic reduction equipment with ammonia injection


•  Steam or water injection for NOx control

•  Selective catalytic reduction equipment with ammonia injection for NOx

•  Dry-low NOx combustion operation

1 The rule was added as Part 64 of title 40 of the Code of Federal Regulations. Unless otherwise indicated, section cites below reference title 40 of the code.

2 62 Fed. Reg. at 54902&54907.

3 The credible evidence rule was published by EPA on Feb. 27, 1997 at 62 Fed Reg 8314.

4 An environmental group has filed suit against EPA claiming that the CAM rule requiring monitoring of control equipment does not satisfy the mandate of the 1990 amendments to the Act that EPA require monitoring of actual emissions. Natural Resource Defense Council v. EPA, Case No. 97-1727, pending in the U.S. Court of Appeals for the District of Columbia (filed Dec. 19, 1997). The suit alleges that the legislative history of the 1990 amendments shows Congress intended EPA require monitoring of actual emissions.

5 The legislative history for the 1990 amendments is unclear. Supporters and opponents of CWA enforcement model inserted contradictory statements into the legislative record. Litigation of the credible evidence rule is likely to indicate the views of the federal D.C. Court of Appeals.

6 EPA's proposal to monitor actual emissions is referred to as the "enhanced monitoring" proposed rule and was published Oct. 22, 1993 at 58 Fed. Reg. 54648.

7 According to the CAM rule preamble, EPA received 2,000 comments on the enhanced monitoring proposed rule. 62 Fed. Reg. 54901.

8 EPA prepared two CAM-type proposals. The first was prepared in September 1995, but was not published in the Federal Register. After soliciting comments at stakeholder meetings, EPA published its second CAM proposal on Aug. 13, 1996 at 61 Fed. Reg. 41991.

9 The discussion of the rulemaking history in the preamble is helpful to understand the development of the CAM rule. 62 Fed. Reg. 54901-54902.

10 §§ 64.3 and 64.6.

11 § 64.2.

12 62 Fed. Reg. 54913.

13 §§ 64.4 & 64.9.

14 62 Fed. Reg. at 54929. This is an example of the level of detail for the basic monitoring approach EPA believes should be part of the source's Part 70 operating permit. As part of streamlining its requirements, EPA revised the final CAM rule to leave out of the permit the day-to-day monitoring operations maintained by the facility operator. EPA, "Fact Sheet Compliance Assurance Monitoring," Oct. 3, 1997, p. 2.

15 62 Fed. Reg. 54928.

16 § 64.1.

17 § 64.2(b).

18 62 Fed Reg at 64920.

19 § 64.9. The final rule deleted the definition and requirement to report a "deviation." A deviation is a failure to meet an emissions standard. Industry was concerned that the definition of deviation was so close to constituting a violation of the Act, that essentially, the source would have been required to self-report a violation. 62 Fed. Reg. 54908. Reporting an exceedance or excursion is different; while either may constitute evidence of a violation, neither conclusively proves a violation.

20 The requirement to certify compliance on a "continuous or intermittent" basis was part of the 1990 amendments. Section 114(a)(3); 42 U.S.C. Section 7414(a)(3). Although consistent with the CWA model, EPA's initial interpretation that the source self-report periods of noncompliance drew substantial industry criticism.

21 § 64.7(d).

22 § 64.8.

23 Id.

24 62 Fed. Reg. 54907; § 64.8(d). Subsection (e) of § 64.8 provides that implementation of a QIP does not act as a permit shield for violations of emissions limitations or standards.

25 EPA, "Fact Sheet Compliance Assurance Monitoring," Oct. 3, 1997. 62 Fed. Reg. 54907.

26 62 Fed. Reg. 54904-54905.

27 See 62 Fed. Reg. 8314 (Feb. 24, 1997).

28 See infra, note 3; see also Bureau of National Affairs, "Environmental Group Sues Over CAM Rule, Claims EPA Did Not Follow Air Act Mandate," 247 Daily Environmental Report, Dec. 24, 1997. In the CAM rule preamble, EPA notes: "[F]ailure to stay within an indicator range does not automatically indicate a failure to satisfy applicable requirements." 62 Fed. Reg. 54919.


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