Implications for Industry of Oregon DEQ's Final Nuisance Odor Strategy

by Stoel Rives LLP
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For regulated companies and Associated Oregon Industry members, the publication of the Oregon Department of Environmental Quality's (DEQ) final nuisance odor strategy this past August brought mixed blessings. Among the positives, the final policy (available at www.oregon.gov/deq/docs/NuisanceOdorReport.pdf) clearly reflects much of the input provided by industry and AOI during the draft policy's public comment period. However, several industry concerns remain unaddressed and the final policy also includes changes unfavorable to the regulated community.

What Changed in the Final Nuisance Strategy?

The final policy uses more even handed language to describe how DEQ should identify potential sources of odor. DEQ eliminated the assumption that complainants can correctly connect odors to sources. The final policy includes an important new threshold for triggering an in-depth odor investigation. The policy directs an in-depth investigation only after receiving 10 complaints from different addresses over 60 days. This threshold will help minimize DEQ's potential workload and will reduce the potential for the policy to apply to relatively minor odors or to complaints from one or a few individuals by. However, we expect that aggressive activists will have little difficulty recruiting the ten complainants necessary to trigger DEQ action. The policy also directs DEQ to prioritize its resources with emphasis on the more extreme complaints using a scoring system in the guidance. This aspect will encourage complainants to overstate the odor and its effects, but they are apt to do that anyway.

As with the draft policy, the final policy recommends that two DEQ inspectors personally observe and evaluate the odor as part of the detailed inspection. New to the final policy is use of the Odor Intensity Referencing Scale from ASTM E544 (erroneously referred to as ASTM E554 in the final policy). This method uses a 5-point scale to compare the intensity of the odor against the reference concentrations of n-butanol. The ASTM method prescribes detailed procedures for an odor panel to evaluate odor samples in a laboratory environment. However, according to our conversations with DEQ staff, DEQ does not plan to follow the ASTM method; instead it intends to make similar comparisons to n-butanol reference concentrations in the field using two DEQ staff members, not an odor panel. DEQ appears to have only vague ideas about how this might be done and has not developed written procedures.

Industry Implications

Of some concern to the regulated community, the policy encourages DEQ to invite both complainants and source representatives to accompany DEQ on its inspections. Presumably, this aspect of the policy is limited to public spaces where odors may be observed. The policy, however, might be read the policy to suggest that DEQ will invite complainants on inspections of a source's facility. We do not believe DEQ's statutory authority to inspect a source's facility extends to inviting the public to participate. Although we doubt this is what DEQ intends, complainants are likely to read the policy as granting them the opportunity to go wherever DEQ goes.

Although softened slightly from the draft, the final policy continues to encourage sources to negotiate directly with complainants to develop terms for a best work practices agreement. This action is recommended as an informal step before DEQ actually issues a formal notice of suspected nuisance.

The DEQ decision to issue a formal notice of suspected nuisance is to be made by a DEQ Nuisance Panel. The final policy specifies that this panel is to be staffed by DEQ senior or executive managers. The notice will give the source the opportunity to submit a proposal to abate the odors. If the source does not make a proposal within two months, the matter is to be referred to enforcement, but DEQ can extend this deadline for good cause. In our experience, two months is unlikely to ever be an adequate period to develop an abatement strategy for an odor problem that rises to the level that would warrant this action.

Still problematic, the final policy does not provide the source an opportunity at the notice of suspected nuisance stage to defend itself by showing it is not the source or that the odor does not warrant action. The policy only provides for such due process once a formal enforcement action is initiated. Although the policy specifies numerous opportunities for complainants to push their agenda, it does not specify opportunities for sources to respond to allegations or to provide other input. Certainly, sources can assert defense arguments at any point, but it is not clear that DEQ must consider them.

If the source elects to negotiate a best work practices agreement with DEQ, the policy directs DEQ to weigh costs and benefits in those negotiations. However, the policy also gives complainants considerable input into the negotiations and again encourages direct negotiations between the source and complainants.

Conclusion

On balance, the final policy represents an improvement over the policy as first proposed. It also lends structure to the informal processes that DEQ has variously used in the past. Nevertheless, application of this new policy has the potential to be costly for sources and to pressure sources into taking measures that are not cost effective or proportionate to the odors they cause. Given activist interest in odorous emissions, we expect to see the new policy called to action in the next year. We will be watching with interest to see how DEQ actually applies the policy.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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