The following article was originally published on Law360.com on July 29, 2014. Posted with permission.
The U.S. Environmental Protection Agency has warned industry using flaring for pollution control that it is targeting flaring violations nationwide to reduce the release of hazardous air pollutants. The EPA has been aggressively pursuing flaring violations and has shown, through recent settlements, that it will seek significant penalties for flaring noncompliance under its Clean Air Act authorities. This article discusses flaring, explains how it is regulated and summarizes recent EPA settlements associated with alleged violations. We encourage companies that operate flares to take proactive steps to ensure compliance with applicable law and prevent any EPA enforcement action.
Generally speaking, flaring is used by industry to combust waste gases. It is used to destroy volatile organic compounds (“VOCs”) and other air pollutants that may be generated in connection with oil production, at landfills and in a variety of industrial settings, including at petroleum refineries and chemical plants.
The EPA recognizes flaring as an effective method of pollution control, particularly for intermittent or fluctuating waste streams. Flaring can be to economically address sudden releases of large quantities of gas without the use of auxiliary fuel for combustion.
While flaring has the potential to effectively destroy an array of harmful gases and curb significant air pollution, a flare is only as good as its efficiency. If a flare is not properly designed or operated, a significant amount of waste gases may not be destroyed and instead will be vented to the environment. Flaring efficiency is based on a number of factors, including temperature, residence time in the combustion zone, turbulent mixing and availability of oxygen. Combustion is complete if all VOCs are converted to carbon dioxide and water. The EPA’s rule of thumb is that 98 percent or greater combustion efficiency indicates a properly designed and operated flare.
The EPA has identified problems with flares that may reduce combustion efficiency and cause excess emissions of hazardous chemicals, which could result in enforcement. These include:
Over steaming and excess aeration: Federal regulations prohibit extended periods of smoking (i.e., visible emissions) at flares. The addition of steam or air can prevent the generation of excessive smoke, but using too much steam or air in a flare can reduce flare performance.
High-wind conditions: Operating a flare during high crosswinds can impair flare dimensions and shape, resulting in reduced flare performance and the potential for permanent damage to flaring equipment.
Flame liftoff: Operating a flare with excess space between the flare tip and the bottom of the flame due to excessive air induction and/or high flare gas and steam exit velocities can reduce flare performance and may result in an extinguished flame.
EPA Targets Flaring Violations
In August 2012, the EPA issued an enforcement alert announcing it would be “devoting significant enforcement resources to correcting regulatory noncompliance at flares.”
The enforcement alert indicates that “EPA investigations have found flares that were operated so poorly that there was likely no combustion taking place at all. In these circumstances, the flare was merely venting pollution directly to the atmosphere.” In its alert, the EPA provided visuals comparing a “well-operating flare” to a “poorly operated/over steamed flare.”
The EPA’s targeting of flaring violations arises out of one of the agency’s national enforcement priorities: “Cutting Hazardous Air Pollutants.” Certain Hazardous Air Pollutants, otherwise known as “HAPs,” are known or suspected to cause cancer or birth defects and to impact the environment. The EPA cites “improper operation of an industrial flare” as a potential source of “hundreds of tons of excess HAP emissions.”
Regulation of Flaring
Facilities that emit air pollutants often operate flares as a form of pollution control device under the CAA, 42 U.S.C. §7401 et seq. Flaring is covered under multiple sections of the CAA, including New Source Performance Standards, at 40 C.F.R. Section 60.18, and National Emission Standards for Hazardous Air Pollutants, at 40 C.F.R. Section 63.11. Applicable regulations are technical, but generally require that flares be:
designed and operated with no visible emissions (with limited exceptions);
operated with a flame present at all times, confirmed by the use of a thermocouple (or equivalent device);
used only on waste streams with an adequate net heating value (i.e., the waste stream must be adequately combustible); and
designed and operated with an exit velocity within acceptable parameters.
Facilities that operate flares must also comply with the broad General Duty Clause added to the CAA by Congress in 1990. The General Duty Clause requires that, “[a]t all times, including periods of startup, shutdown and malfunction … the operator shall operate and maintain any affected source, including associated air pollution control equipment, in a manner consistent with safety and good air pollution control practices for minimizing emissions.” See, e.g., 40 C.F.R. § 63.6(e), 40 CFR § 60.11(d). Similarly, operators of regulated flares are required by the General Duty Clause to take appropriate steps to “monitor [the] control devices to ensure that they are operated and maintained in conformance with their design.” See, e.g., 40 C.F.R. § 63.172(e), 40 C.F.R. § 60.482-10.
In addition to requirements imposed by the CAA, flaring is often regulated under facility-specific permit conditions, and pursuant to an array of other federal, state and/or local laws.
New Technology is Expected to Support Future Enforcement
Recent technological advances allow for the remote evaluation of flare efficiency and analysis of waste escaping a flare due to inadequate combustion. Examples of these systems include Solar Occultation Flux ("SOF"), Active Open-Path Fourier Transform Infrared ("OP-FTIR") and Passive Fourier Transform Infrared Spectroscopy ("PFTIR") systems.
SOF systems, for example, have been used at a distance of up to two kilometers to quantify emissions of VOCs and other chemicals. The more recently developed PFTIR technology can remotely measure the combustion efficiency of flares. The continued development and regulatory acceptance of such systems allows for the identification of noncompliant flares remotely, even from outside a facility’s fence-line, and can be expected to increasingly support future regulatory enforcement and environmental citizen suits.
The EPA is Actively Enforcing
Since issuance of its enforcement alert, the EPA has increased its enforcement activity for flaring violations. Although we are unaware of any cases that have recently gone to trial, several companies have entered into settlements requiring the payment of substantial penalties, the installation of costly pollution control equipment, the performance of supplemental environmental projects and injunctive relief.
Two recent settlements are illustrative of the broad scope of relief demanded by the EPA to settle alleged flaring violations. In July 2013, the EPA entered into a settlement with Shell Oil Co. for alleged CAA violations at a refinery and chemical plant located in Deer Park, Texas, with a processing capacity of 330,000 barrels of crude oil per day. The EPA alleged that violations in connection with the operation of 12 steam-assisted flares at the facility resulted in excess air emissions. The settlement specified a $2.6 million civil penalty, extensive corrective action, including installation of a flare gas recovery system and compliance with specified flare efficiency and minimization requirements, and performance of environmental mitigation projects and supplemental environmental projects that included fence line monitoring. The EPA estimated the cost of the additional pollution controls to be in excess of $100 million and the cost of the environmental mitigation and supplemental environmental projects to cost tens of millions.
This March, the EPA entered into a settlement with Flint Hills Resources for alleged CAA violations at a chemical plant located in Port Arthur, Texas. The EPA alleged that violations in connection with the operation of three steam-assisted flares at the facility resulted in excess air emissions. The settlement requires that FHR pay a $350,000 civil penalty, operate state-of-the-art equipment to recover and recycle waste gases and ensure that gases sent to flares are burned with at least 98 percent efficiency. The EPA estimated the cost of required injunctive measures to be nearly $44.5 million. FHR also committed to a variety of environmental mitigation projects at significant additional cost.
The EPA has stated that industry has been on notice of its flaring enforcement priority since 2012 and, as a result, future agency enforcement actions will likely be more aggressive and seek increasingly substantial penalties and broader injunctive relief to curb the release of HAPs from flaring operations.
Who is at Risk of Future EPA Enforcement?
Larger facilities operating multiple flares and larger companies with multiple facilities are likely at greatest risk of enforcement by the EPA. In addition to the air quality enforcement priority of “Cutting Hazardous Air Pollutants,” the EPA has also stated its commitment to “Reducing Air Pollution from the Largest Sources.” Recent settlements confirm that the EPA, at least in this initial stage of enforcement, has been targeting larger companies.
In particular, refineries have been an enforcement target for the EPA for the past 15 years. Since 2000, the EPA has entered into 32 settlements with companies that collectively make up 90 percent of the U.S.' petroleum refining capacity. A number of these settlements relate to flaring.
As the EPA continues to pursue its priority of reducing excess emissions from noncompliant flaring, it may seek to encourage widespread compliance by broadening the scope of its enforcement targets to other industries beyond refineries and petrochemical manufacturing. Potential future targets of EPA enforcement, therefore, include oil exploration and production facilities, chemical production facilities and landfills.
Finally, in addition to the risk of EPA enforcement, facilities face an increasing risk of CAA citizen suits arising from alleged flaring violations. For example, in 2013, the Conservation Law Foundation brought a citizen suit against the Central Landfill in Johnston, Rhode Island, alleging, among other things, the operation of deficient flares.
Take Steps to Avoid Enforcement Now
The EPA’s increasing pursuit of flaring violations is expected to continue. Technology for the remote evaluation of flare efficiency and the noncompliant release of HAPs is improving and likely to support increased regulatory enforcement. Available evidence also indicates that environmental groups are likely to increasingly target noncompliant flaring at industrial facilities, particularly those near population centers.
It is in the interest of industry to properly operate flares to prevent the release of hazardous substances. To ensure that intended pollution controls are operating as intended and to minimize the risk of enforcement, industry is advised to proactively evaluate flaring operations, confirm that flaring equipment is being maintained consistent with industry standards and manufacturer recommendations, evaluate whether flares are adequately monitored for pollution control effectiveness and confirm that facility personnel are properly and routinely trained to operate flaring equipment. The cost of a compliance audit for flaring operations, correction of deficiencies, implementation of additional training protocols and even the potential installation of new pollution control or monitoring equipment pales in comparison to the expense and consequences of an EPA enforcement action or citizen suit for alleged flaring violations.