Regional Reports: Region 3

Kathryn B. Thomson
Sidley, Austin, Brown & Wood LLP
Washington, DC
Kthomson@sidley.com

This report summarizes significant developments over the past several months in EPA Region 3 and states within that region.

EPA Region 3

Title V. EPA Region 3 has updated its Title V Permit Program statistics. It reports that as of April 2002, the following number of final permits have been issued in the Region 3 States: 34 in the District of Columbia, 76 in Delaware, 120 in Maryland, 655 in Pennsylvania, 192 in Virginia and 115 in West Virginia. The only new Title V permits issued in the third quarter of 2002 were issued in Pennsylvania and Virginia.

Summary of Impacts on Clear Skies Initiative in Region 3 States. EPA Region 3 recently issued a report summarizing the anticipated effects of President Bush's Clear Skies Initiative in Region 3 states should the proposal become law. According to EPA Region 3, if enacted as proposed, the Clear Skies Initiative would result in an 81 percent reduction in SO2 emissions, a 75 percent reduction in NOx emissions, and an 81 percent reduction in mercury emissions from power plants in Region 3 by 2020. EPA Region 3 also estimates that the proposal would have significant other environmental and human health benefits that would not be realized under existing Clean Air Act programs. For example, Region 3 estimates that 5 counties would come into attainment with the fine particulate standard by 2010, 1 county would come into attainment with the 8-hour ozone standard by 2010, and 4 additional counties would come into attainment with the 8-hour ozone standard by 2020. Region 3 also expects that the Clear Skies initiative would result in significantly fewer premature deaths, cases of chronic bronchitis, asthma attacks, hospitalizations and lost work days. Finally, Region 3 estimates that sulfur deposition in most of the Region 3 states would decrease approximately 30-60 percent more than it would under currently existing programs.

EPA Region 3 also estimates the impact that Clean Skies would have on electricity generation and coal usage in the Region 3 states. The agency anticipates that electric generation from coal-fired utilities in Region 3 would likely increase slightly by 2010 and then begin to decrease slightly by 2020. Region 3 further expects that 84 percent of the region's coal-fired generation will come from units with state-of-the-art emission controls by 2010 and that the percentage of controlled coal-fired units will increase to 93 percent by 2020.

The ten largest generation companies in Region 3 likely to be affected by Clear Skies should it become law are PECO Energy Co., Pennsylvania Power and Light, Baltimore Gas and Electric, Virginia Electric and Power Co. and West Penn Power Co.

State Developments

A. District of Columbia

On July 2, 2002, the D.C. Circuit ruled that EPA had acted in violation of the Clean Air Act by extending, by nearly 6 years, the metropolitan Washington region's deadline for complying with the nonattainment requirements of the Act. Sierra Club v. EPA, D.C. Cir. 01-1070. The metropolitan area, which was designated as a "serious nonattainment area" in 1991, includes Washington, D.C. and several surrounding counties in Maryland and Virginia. Specifically, the court rejected EPA's argument that it had the authority to grant exemptions in order to give effect to the "broader congressional intent" and take into consideration the impacts from upwind sources. The court found that EPA also erred in approving the metropolitan region's revised SIP because the SIP did not include any "reasonably available control measures" or any rate of progress reductions in emissions for the years after 1999 as required by the Act.

B. Delaware

Pursuant to the terms of a settlement agreement between Sunoco Inc. and the State of Delaware, Sunoco will pay a $390,000 civil penalty and will improve certain equipment and operations at its Claymont, Delaware refinery. DiPasquale v. Sunoco Inc., Del. Super. Ct., No. 02C-05-273 SCD (May 29, 2002). The consent agreement settles alleged violations of Delaware air pollution control laws. The company was alleged to have flared hydrogen sulfide gas on multiple occasions between Dec. 28, 2001, and the present in violation of the refinery's air permit. Among other things, the settlement requires Sunoco to minimize flaring and to implement an environmental management system modeled after ISO 14001.

C. Maryland

On June 11, 2002, EPA approved revisions to the Maryland SIP that establish the exemption of certain intermittent visible emissions at Federal facilities, amend burning distance limitations, and create requirements for safety determinations at federal facilities.

In response to EPA's release of its nationwide air toxics assessment, which identifies estimated exposure to and health risk associated with urban air toxics, MDE issued a statement emphasizing that the data should not be used to evaluate local conditions and exposure. MDE stressed that it has a strong air toxics program in place that includes technology and risk assessment requirements designed to protect public health.

See also discussion of Pennsylvania below.

D. Pennsylvania

In response to EPA's proposed NSR reforms, Pennsylvania announced that some of the proposed reforms are already in current DEP regulations. Pennsylvania also expressed its intent to actively participate in the NSR rulemaking process and to ensure that any revisions are environmentally sound and clearly enforceable.

Recently, Maryland and Pennsylvania joined 8 Northeastern states in filing a motion in the D.C. Circuit seeking to intervene in an appeal concerning EPA's NOx SIP Call and CAA Section 126. On May 1, 2002, EPA published a rule in the Federal Register retaining the original growth projections for electric generating units that were used to establish NOx budgets imposed on 22 states and the District of Columbia. West Virginia and a coalition of industry groups filed an appeal of the May 1 rule. The NOx SIP Call and Section 126 rules are part of EPA's ozone transport program that is intended to reduce the regional transport of ozone into the Northeast within the next several years. Maryland and Pennsylvania seek to intervene on behalf of EPA.

Sunoco will pay a $7,100 penalty and will fund a $22,000 Community Environmental Project in order to resolve alleged air quality violations at three Delaware County, Pennsylvania service stations under the terms of a June 4, 2002 consent agreement. The allegations arose from inspections undertaken by DEP in 2000 and 2001 which revealed deficiencies in the gasoline vapor recovery systems and equipment at each of the three stations. The Community Environmental Project funded by Sunoco will allow the Delaware County Emergency Public Safety Radio System to purchase a portable emergency generator.

EPA plans to approve proposed revisions to Pennsylvania's SIP. The revisions are aimed at reducing emissions of volatile organic compounds from solvent cleaning operations using solvents containing more than 5 percent VOC content by weight. Pennsylvania anticipates that more than 70,000 cold cleaning machines and a small number of vapor cleaning machines will be affected by the rule if approved. The proposed rule, among other things, will make requirements consistent with current technology and specify volatility limits for solvents used in cold cleaning machines. Pennsylvania has also proposed revising the rules to require improved operating practices.

On June 6, EPA published a direct final rule approving Pennsylvania's request for an extension of the federal deadline for incorporating electronic checks on on-board diagnostic computer systems of 1996 and newer vehicles into the Commonwealth's inspection and maintenance program. Under the extension, Pennsylvania will have until 2003 to comply. The original deadline was Jan. 1, 2002.

On June 26, 2002, EPA approved revisions to Pennsylvania's SIP that will establish and require the use of reasonably available control technology for Hershey Chocolate USA (a major source of NOx) and the Pennsylvania Power Company, New Castle Plant (a major source of NOx and VOCs).

On June 11, EPA approved changes to Pennsylvania's SIP that will, among other things, make the Commonwealth's regulations consistent with federal requirements and apply Pennsylvania's monitoring requirements in a consistent fashion for all affected sources.

After a notice-and-comment period, DEP issued a new 10-year operating permit to Wheelabrator, a company that operates a resource recovery facility in Morrisville, Bucks County on May 28, 2002. No changes were made to the facility's operating hours or process or maximum amounts of wastes that can be accepted.