July 9, 2010
EPA proposed regulations under the Clean Air Act (“CAA”) for maximum achievable control technologies (“MACT”) for boilers, process heaters and solid waste incinerators on April 29. The regulations have been published in the Federal Register[1] and are available for hearing and public comment through August 3, 2010.
Boilers burn fuels including natural gas, coal, wood, and oil to produce steam for electricity or heat. Process heaters are used in industrial processes to heat raw or intermediate materials. Both are used at facilities such as refineries, chemical and manufacturing plants, and paper mills, and may also be used to provide heat for large complexes such as shopping malls or universities. Incinerators are used to burn waste for disposal, and some recover energy in the process.
EPA has proposed this regulatory action for boilers and commercial/industrial solid waste incinerators (“CISWI”) together since similar units may be considered boilers or CISWI depending on what material they burn. As part of this regulatory proposal, EPA included a new rule under the Resource Conservation and Recovery Act (“RCRA”) defining which non-hazardous secondary materials are considered fuel and which are considered solid waste. The regulatory action is the result of a 2007 court order following NRDC’s petition for review of EPA’s old standards for boiler and incinerator emissions, as well as the CISWI definitions rule.[2]
MACT standards for major source boilers and process heaters affect sources emitting greater than 10 tons per year of any one hazardous air pollutant[3] (“HAP”) or more than 25 tons per year of combined HAPs.[4] The standard for existing sources is based on the average emission limitation achieved by the best performing 12 percent of existing sources, and new sources must match the best-controlled similar source.[5]
Area sources are any stationary source of HAPs that are not major sources, and are subject to a different set of MACTs.[6] For all coal-fired boilers and process heaters, new or existing, EPA is proposing emissions limits for mercury, particulate matter (“PM”) and carbon monoxide. Biomass and oil-fired area sources would also have to meet emissions standards for PM and carbon monoxide. Both area sources and major sources would be required to conduct a one-time energy-saving assessment to analyze cost-effective energy saving practices. Additionally, the standards for both major and area sources would apply at all times, including times of malfunction, start-up and shut-down.
Small boilers and process heaters (those with a capacity of less than 10mm BTU/hr) and boilers and process heaters using natural gas or refinery gas will be subject to a less stringent work practice standards including periodic tune-ups rather than emissions limitations. EPA has proposed that these sources would have to come into compliance within three years of the final rule’s publication in the Federal Register.
CISWI are subject to more stringent emissions limits under the Proposed Rule for mercury, lead, cadmium, hydrogen chloride, PM, carbon monoxide, dioxins/furans, nitrogen oxides and sulfur dioxide. In addition, the proposed rules require that CISWI units have stacks tested and monitored along with annual inspections of emissions control devices.
States would have to submit revised State Implementation Plans (“SIPs”) within one year of the promulgation of the revised standards. Following the submission of the new SIPs, CISWI units would have a three year period to demonstrate compliance with the SIP. Alternatively, CISWI will have five years to demonstrate compliance after the final regulations are promulgated if a SIP is not submitted.
Overall, these proposed rules if adopted would constitute much more stringent regulation of boilers and incinerators because the emissions limitations apply at all times. The energy-saving assessment required for all boilers and incinerators is a facility-wide assessment, which could serve as a predecessor to energy-saving requirements for greenhouse gases as well.
As noted above, comments are being received on the proposed regulations until August 3.
Maggie Macdonald is a summer associate at Sive, Paget & Riesel, P.C.
[1] National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial and Institutional Boilers and Process Heaters, 75 Fed. Reg. 32,006 (June 4, 2010) (to be codified at 40 C.F.R. pt. 63); National Emissions Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial and Institutional Boilers, 75 Fed. Reg. 31,896 (June 4, 2010) (to be codified at 40 C.F.R. pt. 63); Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units, 75 Fed. Reg. 31,938 (June 4, 2010) (to be codified at 40 C.F.R. pt. 60); Identification of Non-Hazardous Secondary Materials that Are Solid Waste, 75 Fed. Reg. 31,844 (June 4, 2010) (to be codified at 40 C.F.R. pt. 241).
[2] NRDC v. EPA, 489 F.3d 1250 (D.C. Cir. 2007).
[3] Hazardous air pollutants are listed in the CAA § 112(b).
[4] CAA § 112(a)(1).
[5] Id. § 112(d)(3).
[6] Id. §§ 112(a)(2), (d)(5).
June 8, 2010
Last week, the Environmental Defense Fund (“EDF”) and Kohlberg Kravis Roberts & Co. L.P. (“KKR”), a leading private equity firm, announced that a program to implement environmental best practices at several KKR portfolio companies yielded $160 million in savings over the past two years. KKR’s Green Portfolio Program launched in 2008 in conjunction with EDF’s Green Returns program, an initiative that aims to improve both environmental and business performance in companies owned by private equity firms.
According to EDF, the first eight KKR-owned companies to enroll in the Green Portfolio Program, which include such well-known names as Sealy and HCA, collectively avoided “over $160 million in operating costs, 345,000 metric tons of CO2 emissions, 8,500 tons of paper, and 1.2 million tons of waste.”
EDF reports that the Green Portfolio Program has expanded from its initial eight companies “to include approximately 20 percent of the companies in KKR’s global private equity portfolio.” In addition to its work with KKR, EDF has also collaborated with the Carlyle Group, another major private equity firm, to create an environmental due diligence screening tool which helps to identify opportunities for environmental improvements in prospective portfolio companies.
The recent success of the Green Portfolio Program has implications beyond the involved portfolio companies and their investors at KKR. It suggests that for any business, enlightened environmental management can improve profitability. Private equity firms, in particular, are focusing on sound environmental stewardship as an essential ingredient to the success of their portfolio companies.
For more information about environmental management strategies, contact Jeffrey Gracer.
June 4, 2010
The New York State Electronic Equipment Recycling and Reuse Act was signed into law by Governor Paterson on May 28, 2010. Beginning April, 2, 2011, the Act requires manufacturers to accept electronic waste for collection, handling, and recycling or reuse. Covered electronic equipment includes computers (as well as accessories such as monitors, keyboard and printers), televisions, and “small electronic equipment,” which includes portable digital music players, video recorders and video game consoles. The Act sets state-wide collection standards that slowly increase over the first three years. In addition, the Act sets manufacturer-specific acceptance standards based on their market share. The Act requires “convenient collection” from consumers, but does not include the “direct collection” requirement that was the focus of industry’s litigation concerning similar electronic waste legislation passed by the City of New York in 2008.
The Firm represented the Natural Resources Defense Council in connection with an amicus brief filed by NRDC in the litigation challenging the City law. NRDC has been a staunch supporter of producer responsibility principles. The State Act preempts the challenged City law, effectively mooting that litigation. A copy of the Act is available here.
May 26, 2010
The U.S. Green Building Council (“USGBC”) recently released a certification system for green neighborhood development, known as LEED-ND.[1] LEED-ND expands the well-known LEED system for green buildings to larger-scale projects ranging in size from two buildings to multiple buildings on sites up to 320 acres. The system incorporates the principles of new urbanism, emphasizing mixed-use planning and walkable neighborhoods, and was developed in concert with the Natural Resources Defense Council and the Congress of the New Urbanism. While LEED-ND is primarily designed for neighborhood-scale projects, it may also apply to campus-style developments, such as university campuses, military bases, resort developments, religious retreat centers or summer camps.
Some notable features of the LEED-ND system include:
- Each project must have at least one certified green building;
- A project’s site must be contiguous property, but may include “conclaves of non-conforming properties” that may be exempt from LEED-ND requirements;
- Project sponsors should have control over or title to 50% or more of the project land area.
Projects are evaluated based on a number of prerequisites and credits, earned by incorporating design elements which are grouped by category, including:
- Smart location and linkage – relates to transportation, location, and land preservation;
- Neighborhood pattern & design – relates to community character, mix of uses, and walkability;
- Green infrastructure and buildings – examines building design and construction with regard to energy and water use, and sustainable best practices;
- Innovation and design process – grants credits for “exemplary and innovative” performance, beyond existing credit structures;
- Regional priority – allows credits unique to a project’s local environmental priorities.
The LEED-ND certification process takes place in three stages:
- Stage 1 – conditional approval of plans, to enable projects to build local support;
- Stage 2 – pre-certified plans, intended for projects that have received necessary permits or are under construction, and may assist in securing funding or tenants;
- Stage 3 – to be formally certified projects must have completed construction, and have achieved all prerequisites and credits sought in the first two stages of review, subject to any intervening changes in the LEED-ND system.
Generally LEED-ND applies to newly-constructed projects, but substantial renovations of 50% or more of existing square footage may allow existing neighborhoods to apply for certification.
Implementing LEED-ND may raise a series of legal issues, because the rating system operates at a scale that has traditionally been governed by zoning laws and municipal comprehensive plans. The USGBC warns that LEED-ND should not be used a substitute for comprehensive planning, but project applicants and municipalities should be aware that implementing LEED-ND may itself trigger the need for revisions to a municipal plan or zoning code. Some of the potential issues that LEED-ND implementation may face include:
- Project applicants and municipalities need to assess the consistency of existing zoning with LEED-ND requirements. Qualifying for credits based on mixed-use neighborhood character may be rendered impossible by pre-existing single-use zoning.
- Municipalities wishing to mandate compliance with LEED-ND may create the unintended consequence of rendering significant portions of land undevelopable. This could expose a government to potential litigation, including takings claims.
- Any revisions to zoning codes to enable use of LEED-ND would require environmental review as appropriate, and should be assessed for consistency with the applicable comprehensive plan for consistency. See, e.g., NY Town Law § 272-a(c)(11) (requiring that “[a]ll town land use regulations must be in accordance with a comprehensive plan adopted pursuant to this section”).
- Site-specific rezonings to enable LEED-ND—even on large parcels—may face litigation risk in the form of spot-zoning claims.
- Large-scale projects face a risk of the LEED-ND system itself changing over time. Applicants to the USGBC should carefully note that projects are not grandfathered to LEED-ND as it existed at the time of its original application. Rather, at each new stage of review a project may be required to comply with intervening changes in LEED-ND credits and prerequisites.
One recent example of municipal incorporation of LEED-ND in the planning process is the Willets Point Development Plan (the “Willets Point Plan”) proposed in northern Queens, New York, where SPR is representing the City of New York and its Economic Development Corporation (“EDC”). According to Final Generic Environmental Impact Statement published for the project, the Willets Point Plan envisions redevelopment of a current industrial area into a mixed-use neighborhood through an Urban Renewal Plan and a rezoning tailored to the Plan’s goals. The EDC, which is sponsoring the project through acquisition of the land within the proposed development district and issuance of a Request for Proposals to potential developers, has developed an illustrative site plan designed to comply with current LEED-ND requirements, and intends to require the chosen development to achieve LEED-ND certification.
[1] LEED stands for Leadership for Energy and Environmental Design.
May 3, 2010
EPA has issued four new proposed rules to amend the Mandatory Greenhouse Gas (“GHG”) Reporting Rule. Three of the proposed rules would expand the applicability of the existing rule to cover petroleum and natural gas systems, industries that emit fluorinated GHGs, and facilities that inject and store carbon dioxide underground for the purposes of geologic sequestration or enhanced oil and gas recovery. These newly covered sources would be required to begin collecting emissions data on January 1, 2011 and to submit the first annual reports on March 31, 2012.
In addition, EPA proposes to add three reporting requirements applicable to all facilities, requiring provision of the following information: (1) the name, address, and ownership status of the reporter’s U.S. parent company, (2) the reporter’s primary and all other applicable North American Industry Classification System (“NAICS”) code(s), and (3) an indication of whether or not any of the reported emissions are from a cogeneration unit.
EPA plans to finalize all four of these proposed rules this year. Comments are due by June 11, 2010. More information can be found here.
April 29, 2010
On April 28, 2010, Secretary of the Interior Ken Salazar approved Cape Wind Associates, LLC’s proposed $1 billion, 130-turbine wind farm off the coast of Cape Cod in Nantucket Sound, about five miles from the nearest shoreline. The project, when constructed, would be the first wind energy project on the Outer Continental Shelf, and would generate enough energy to power more than 200,000 homes in Massachusetts. The scale of the project is significant; it would cover approximately 25 square miles, and the tip of the highest blade of each turbine would reach 440 feet above the surface of the water.
Supporters, including the Sierra Club and Greenpeace, argue that the project would provide a clean, renewable source of energy and hundreds of construction jobs, and would decrease the region’s reliance on fossil fuels and benefit the environment by lowering emissions of greenhouse gases.
Opponents have focused on negative impacts to natural beauty and the surrounding area’s historic landmarks. In addition, they claim that infrastructure improvements will result in sharply increased costs over those for conventional power. The Wampanoag tribe, which requires unobstructed views of the sunrise for sacred ceremonies, has announced that it will challenge the project for violations of tribal rights.
In response to concerns expressed during the consultations with tribes and the Advisory Council on Historic Preservation, the Department of the Interior (“DOI”) required the developer to change the design and configuration of the wind farm to mitigate potential visual and historic impacts.
This is not the final hurdle that this project must clear, however. The Federal Aviation Administration has yet to make a final determination on the project and the developer has not yet entered into a contract with the local utility, National Grid, to carry the power. Nine state and local permits are being appealed in the courts, and nearly a dozen parties have filed notices of intention to sue for violations of various environmental laws and regulations.
Despite the remaining steps before construction may begin, DOI’s approval of the Cape Wind project is seen as a positive sign for several other proposed offshore wind projects along the eastern seaboard. Each project will face its own complex federal, state and local permitting issues, but DOI’s action on Cape Wind will likely provide valuable political momentum to other proposed offshore wind projects.
Read the full DOI press release here.
April 9, 2010
DEC recently released its proposed policy document DER-31: Green Remediation, which sets forth DEC’s preference for remediating sites in a way that promotes sustainability. The new policy would apply to the investigation and remediation of sites under DEC’s Spill Response Program, the Inactive Hazardous Waste Disposal Site Remedial Program, the Environmental Restoration Program, the Brownfield Cleanup Program and the Voluntary Cleanup Program. It would apply to all activities at new sites and to subsequent phases of investigation or remediation at sites currently in those programs.
The draft identifies the major green concepts to be considered, which include reducing greenhouse gas (“GHG”) emissions, increasing energy efficiency, reducing waste and increasing recycling, and maximizing habitat value and creating habitat where possible. In addition, DEC identifies specific techniques that could be employed to “green” a remedial option, such as utilizing clean diesel to reduce emissions, incorporating green building design and utilizing native vegetation to reduce water usage. DEC repeatedly emphasizes that concepts of green remediation cannot be used to justify the “no action” alternative or to support a less protective remedy.
Notably, for state-funded cleanups, DEC would now require the use of renewable energy and/or the purchase of renewable energy credits to offset 100% of the electricity required to implement a remedy. For other remedial projects, DEC would “strongly encourage[e]” compliance with this requirement, unless a site-specific evaluation demonstrated that it was impracticable or favored an alternative green approach.
All remedial alternatives analysis and decision documents would be required to describe those green remediation principles considered in the remedy selection process. In addition, such documents would now have to include an analysis of GHG emissions and options to minimize such emissions. Final engineering reports would also need to include a discussion of the green remediation techniques utilized in the remedial program.
A copy of the proposed policy is available here (pdf). DEC is accepting comments on the draft until April 30, 2010.
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