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Bar News - September 14, 2012

Environmental & Natural Resources: Pressure Rising? New Boiler Rules Coming a School, Hospital or Commercial Building Near You


For many years, the Environmental Protection Agency (EPA) has regulated "major source" boilers, such as those found in power plants and large industrial plants, to ensure their boiler emissions are in compliance with the federal Clean Air Act. Recently, however, the EPA has turned its attention toward the regulation of smaller sources of air emissions, and has introduced rules affecting smaller "area source" boilers, such as those found in schools, hospitals and commercial buildings.

Under the EPA’s new "Area Source Boiler Rule," published on March 21, 2011, thousands of facilities such as schools, hospitals, and shopping malls will now be subject to stricter emissions regulation. Several parties petitioned the EPA to reconsider or delay enforcement of the rule changes, citing a shortage of qualified individuals to prepare boilers for newly required tune-ups and confusion as to what boilers were affected and how the new rules aligned with existing permitting requirements, among other concerns. Therefore, enforcement of the new regulation has been postponed. The EPA’s "No Action Assurance" will continue until either the final reconsideration rule is issued and becomes effective, or until December 31, 2012, whichever date comes first.

However, owners and operators of area source boilers should be prepared to comply with the new standards involving boiler tune-ups, tighter emission controls, assessment, and reporting requirements – perhaps as early as this year.

Section 112(a) of the Clean Air Act governs hazardous air pollutants, and requires the EPA to establish national emissions standards for both major and areas sources. It defines "area source" as a stationary source of hazardous air pollutants (such as arsenic compounds, formaldehyde, lead, mercury, and nickel) that is not a "major source." Any stationary source that has the potential to emit less than 10 tons of any single hazardous air pollutant or less than 25 tons of any combination of hazardous air pollutants per year is considered an "area source."

Residential boilers are excluded. According to the EPA, the new area source rule covers approximately 187,000 boilers nationwide. Boilers subject to the rule are those that burn coal, oil, wood, or other "biomass" products to produce steam or hot water, which is used for energy or heat. Boilers that burn gas and solid waste, electric boilers, hot water heaters, and heat recovery steam generators are not subject to the new rule.

The rule published in 2011 sets forth specific National Emission Standards for Hazardous Air Pollutants (NESHAP) for area source boilers. The rule applies to new and existing industrial, commercial, and institutional boilers. Industrial boilers are usually found in manufacturing, processing, mining, refining, or other industrial facilities. Commercial and institutional boilers are commonly used in medical centers, educational facilities, churches, apartments, laundries, hotels, restaurants, shopping malls, nursing homes, prisons, courthouses, and municipal buildings. Most area source boilers are operated by small entities, and the new rule may have a significant economic impact on these commercial or institutional entities. Costs may include installing emission controls, testing, and monitoring. Many facilities will need to conduct periodic tune-ups and some will need to perform energy audits.

Owners and operators of area source boilers should look to the final rule (40 CFR 63.11193 of subpart JJJJJJ) to determine what regulatory changes affect them. The rule requirements vary depending on the boiler’s fuel type, construction date, and size. Based on these factors, owners and operators may be required to conduct initial and/or repeated performance tests, develop testing plans and monitoring plans, conduct initial and/or repeated fuel analysis, monitor and collect data to demonstrate compliance, conduct performance evaluations, conduct energy assessments, and/or conduct periodic tune-ups. They may also be required to submit notifications to certify that they have completed the necessary assessments or tune-ups by the required deadlines. Boiler owners and operators are responsible for submitting an initial Notification of Applicability and initial Notification of Compliance Status, providing information about their boilers, identifying the relevant standards that apply to each boiler, their anticipated compliance date, identification of air pollutants emitted, and other information. The EPA offers compliance assistance for businesses who want help interpreting the regulations and determining which part of the rule applies to them, and recommends consulting either an applicable air permit authority or an EPA regional representative.

The individual emissions of area source boilers may be small, but their combined emissions have significant impacts. The EPA estimates that the final rule will reduce emissions of air toxics from area source boilers by as much as 330 tons per year, and reduce emission of particulate matter by as much as 2,500 tons per year. The agency believes that these improvements will lead to a reduction in health conditions such as chronic bronchitis, heart attacks, asthma, and other respiratory symptoms, resulting in reduced need for medical care and greater workforce productivity. It calculates the value of these benefits at $210 million to $520 million in the year 2014 alone.

Sherilyn Burnett Young and Attorney Rachel Hawkinson practice with the law firm of Rath, Young and Pignatelli, P.C.

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